
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document affected by Public Law 106-554 Section 1(a)(6)[633]]
[Document affected by Public Law 106-554 Section 1(a)(6)[121]]
[Document affected by Public Law 106-554 Section 1(a)(6)[122]]
[Document affected by Public Law 106-554 Section 1(a)(6)[128]]
[CITE: 42USC1395b-1]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
        SUBCHAPTER XVIII--HEALTH INSURANCE FOR AGED AND DISABLED
 
Sec. 1395b-1. Incentives for economy while maintaining or 
        improving quality in provision of health services
        

(a) Grants and contracts to develop and engage in experiments and 
        demonstration projects

    (1) The Secretary of Health and Human Services is authorized, either 
directly or through grants to public or private agencies, institutions, 
and organizations or contracts with public or private agencies, 
institutions, and organizations, to develop and engage in experiments 
and demonstration projects for the following purposes:
        (A) to determine whether, and if so which, changes in methods of 
    payment or reimbursement (other than those dealt with in section 
    222(a) of the Social Security Amendments of 1972) for health care 
    and services under health programs established by this chapter, 
    including a change to methods based on negotiated rates, would have 
    the effect of increasing the efficiency and economy of health 
    services under such programs through the creation of additional 
    incentives to these ends without adversely affecting the quality of 
    such services;
        (B) to determine whether payments for services other than those 
    for which payment may be made under such programs (and which are 
    incidental to services for which payment may be made under such 
    programs) would, in the judgment of the Secretary, result in more 
    economical provision and more effective utilization of services for 
    which payment may be made under such program, where such services 
    are furnished by organizations and institutions which have the 
    capability of providing--
            (i) comprehensive health care services,
            (ii) mental health care services (as defined by section 
        2691(c) \1\ of this title),
---------------------------------------------------------------------------
    \1\ See References in Text note below.
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            (iii) ambulatory health care services (including surgical 
        services provided on an outpatient basis), or
            (iv) institutional services which may substitute, at lower 
        cost, for hospital care;

        (C) to determine whether the rates of payment or reimbursement 
    for health care services, approved by a State for purposes of the 
    administration of one or more of its laws, when utilized to 
    determine the amount to be paid for services furnished in such State 
    under the health programs established by this chapter, would have 
    the effect of reducing the costs of such programs without adversely 
    affecting the quality of such services;
        (D) to determine whether payments under such programs based on a 
    single combined rate of reimbursement or charge for the teaching 
    activities and patient care which residents, interns, and 
    supervising physicians render in connection with a graduate medical 
    education program in a patient facility would result in more 
    equitable and economical patient care arrangements without adversely 
    affecting the quality of such care;
        (E) to determine whether coverage of intermediate care facility 
    services and homemaker services would provide suitable alternatives 
    to posthospital benefits presently provided under this subchapter; 
    such experiment and demonstration projects may include:
            (i) counting each day of care in an intermediate care 
        facility as one day of care in a skilled nursing facility, if 
        such care was for a condition for which the individual was 
        hospitalized,
            (ii) covering the services of homemakers for a maximum of 21 
        days, if institutional services are not medically appropriate,
            (iii) determining whether such coverage would reduce long-
        range costs by reducing the lengths of stay in hospitals and 
        skilled nursing facilities, and
            (iv) establishing alternative eligibility requirements and 
        determining the probable cost of applying each alternative, if 
        the project suggests that such extension of coverage would be 
        desirable;

        (F) to determine whether, and if so which type of, fixed price 
    or performance incentive contract would have the effect of inducing 
    to the greatest degree effective, efficient, and economical 
    performance of agencies and organizations making payment under 
    agreements or contracts with the Secretary for health care and 
    services under health programs established by this chapter;
        (G) to determine under what circumstances payment for services 
    would be appropriate and the most appropriate, equitable, and 
    noninflationary methods and amounts of reimbursement under health 
    care programs established by this chapter for services, which are 
    performed independently by an assistant to a physician, including a 
    nurse practitioner (whether or not performed in the office of or at 
    a place at which such physician is physically present), and--
            (i) which such assistant is legally authorized to perform by 
        the State or political subdivision wherein such services are 
        performed, and
            (ii) for which such physician assumes full legal and ethical 
        responsibility as to the necessity, propriety, and quality 
        thereof;

        (H) to establish an experimental program to provide day-care 
    services, which consist of such personal care, supervision, and 
    services as the Secretary shall by regulation prescribe, for 
    individuals eligible to enroll in the supplemental medical insurance 
    program established under part B of this subchapter and subchapter 
    XIX of this chapter, in day-care centers which meet such standards 
    as the Secretary shall by regulation establish;
        (I) to determine whether the services of clinical psychologists 
    may be made more generally available to persons eligible for 
    services under this subchapter and subchapter XIX of this chapter in 
    a manner consistent with quality of care and equitable and efficient 
    administration;
        (J) to develop or demonstrate improved methods for the 
    investigation and prosecution of fraud in the provision of care or 
    services under the health programs established by this chapter; and
        (K) to determine whether the use of competitive bidding in the 
    awarding of contracts, or the use of other methods of reimbursement, 
    under part B of subchapter XI of this chapter would be efficient and 
    effective methods of furthering the purposes of that part.

For purposes of this subsection, ``health programs established by this 
chapter'' means the program established by this subchapter and a program 
established by a plan of a State approved under subchapter XIX of this 
chapter.
    (2) Grants, payments under contracts, and other expenditures made 
for experiments and demonstration projects under paragraph (1) shall be 
made in appropriate part from the Federal Hospital Insurance Trust Fund 
(established by section 1395i of this title) and the Federal 
Supplementary Medical Insurance Trust Fund (established by section 1395t 
of this title) and from funds appropriated under subchapter XIX of this 
chapter. Grants and payments under contracts may be made either in 
advance or by way of reimbursement, as may be determined by the 
Secretary, and shall be made in such installments and on such conditions 
as the Secretary finds necessary to carry out the purpose of this 
section. With respect to any such grant, payment, or other expenditure, 
the amount to be paid from each of such trust funds (and from funds 
appropriated under such subchapter XIX of this chapter) shall be 
determined by the Secretary, giving due regard to the purposes of the 
experiment or project involved.

(b) Waiver of certain payment or reimbursement requirements; advice and 
        recommendations of specialists preceding experiments and 
        demonstration projects

    In the case of any experiment or demonstration project under 
subsection (a) of this section, the Secretary may waive compliance with 
the requirements of this subchapter and subchapter XIX of this chapter 
insofar as such requirements relate to reimbursement or payment on the 
basis of reasonable cost, or (in the case of physicians) on the basis of 
reasonable charge, or to reimbursement or payment only for such services 
or items as may be specified in the experiment; and costs incurred in 
such experiment or demonstration project in excess of the costs which 
would otherwise be reimbursed or paid under such subchapters may be 
reimbursed or paid to the extent that such waiver applies to them (with 
such excess being borne by the Secretary). No experiment or 
demonstration project shall be engaged in or developed under subsection 
(a) of this section until the Secretary obtains the advice and 
recommendations of specialists who are competent to evaluate the 
proposed experiment or demonstration project as to the soundness of its 
objectives, the possibilities of securing productive results, the 
adequacy of resources to conduct the proposed experiment or 
demonstration project, and its relationship to other similar experiments 
and projects already completed or in process.

(Pub. L. 90-248, title IV, Sec. 402(a), (b), Jan. 2, 1968, 81 Stat. 930, 
931; Pub. L. 92-603, title II, Secs. 222(b), 278(b)(2), Oct. 30, 1972, 
86 Stat. 1391, 1453; Pub. L. 95-142, Sec. 17(d), Oct. 25, 1977, 91 Stat. 
1202; Pub. L. 96-88, title V, Sec. 509(b), Oct. 17, 1979, 93 Stat. 695; 
Pub. L. 97-35, title XXI, Sec. 2193(d), Aug. 13, 1981, 95 Stat. 828; 
Pub. L. 97-248, title I, Sec. 147, Sept. 3, 1982, 96 Stat. 394; Pub. L. 
98-369, div. B, title III, Sec. 2331(b), July 18, 1984, 98 Stat. 1088.)

                       References in Text

    Section 222(a) of the Social Security Amendments of 1972, referred 
to in subsec. (a)(1)(A), is section 222(a) of Pub. L. 92-603, Oct. 30, 
1972, 86 Stat. 1329, which is set out as a note below.
    Section 2691(c) of this title, referred to in subsec. (a)(1)(B)(ii), 
was repealed by Pub. L. 94-103, title III, Sec. 302(c), Oct. 4, 1975, 89 
Stat. 507.
    Part B of this subchapter, referred to in subsec. (a)(1)(H), is 
classified to section 1395j et seq. of this title.
    Part B of subchapter XI of this chapter, referred to in subsec. 
(a)(1)(K), is classified to section 1320c et seq. of this title.

                          Codification

    Section is comprised of subsecs. (a) and (b) of section 402 of Pub. 
L. 90-248. Subsec. (c) of such section 402 amended section 1395ll(b) of 
this title.
    Section was enacted as a part of the Social Security Amendments of 
1967, and not as a part of the Social Security Act which comprises this 
chapter.


                               Amendments

    1984--Subsec. (a)(1). Pub. L. 98-369 substituted ``grants to public 
or private agencies'' for ``grants to public or nonprofit private 
agencies'' in provisions preceding subpar. (A).
    1982--Subsec. (a)(1)(K). Pub. L. 97-248 added subpar. (K).
    1981--Subsec. (a)(1). Pub. L. 97-35, Sec. 2193(d)(1), substituted 
``this subchapter and a program established by a plan of a State 
approved under subchapter XIX of this chapter'' for ``this subchapter, a 
program established by a plan of a State approved under subchapter XIX 
of this chapter, and a program established by a plan of a State approved 
under subchapter V of this chapter''.
    Subsec. (a)(2). Pub. L. 97-35, Sec. 2193(d)(2), substituted 
reference to subchapter XIX of this chapter for reference to subchapters 
V and XIX of this chapter in two places.
    Subsec. (b). Pub. L. 97-35, Sec. 2193(d)(3), substituted reference 
to subchapter XIX of this chapter for reference to subchapters V and XIX 
of this chapter.
    1977--Subsec. (a)(1)(J). Pub. L. 95-142 added subpar. (J).
    1972--Subsec. (a). Pub. L. 92-603, Secs. 222(b)(1), 278(b)(2), 
substituted provisions spelling out in detail the purposes for which 
experiments and demonstration projects may be carried out for a general 
statement setting out the increase in efficiency and economy of health 
services as the purpose of experiments selected by the Secretary, 
inserted references to demonstration projects, and inserted references 
to the Federal Hospital Insurance Trust Fund and the Federal 
Supplementary Medical Insurance Trust Fund.
    Subsec. (b). Pub. L. 92-603, Sec. 222(b)(2), inserted references to 
demonstration projects and inserted ``, or to reimbursement or payment 
only for such services or items as may be specified in the experiment''.

                         Change of Name

    ``Secretary of Health and Human Services'' substituted for 
``Secretary of Health, Education, and Welfare'' in subsec. (a)(1) 
pursuant to section 509(b) Pub. L. 96-88, which is classified to section 
3508(b) of Title 20, Education.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-369 effective July 18, 1984, see section 
2331(c) of Pub. L. 98-369, set out as a note under section 1310 of this 
title.


                    Effective Date of 1982 Amendment

    Amendment by Pub. L. 97-248 effective with respect to contracts 
entered into or renewed on or after Sept. 3, 1982, see section 149 of 
Pub. L. 97-248, set out as an Effective Date note under section 1320c of 
this title.


 Effective Date of 1981 Amendment, Savings, and Transitional Provisions

    For effective date, savings, and transitional provisions relating to 
amendment by Pub. L. 97-35, see section 2194 of Pub. L. 97-35, set out 
as a note under section 701 of this title.


             Medicare Coordinated Care Demonstration Project

    Pub. L. 105-33, title IV, Sec. 4016, Aug. 5, 1997, 111 Stat. 343, as 
amended by Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 535], 
Nov. 29, 1999, 113 Stat. 1536, 1501A-390, provided that:
    ``(a) Demonstration Projects.--
        ``(1) In general.--The Secretary of Health and Human Services 
    (in this section referred to as the `Secretary') shall conduct 
    demonstration projects for the purpose of evaluating methods, such 
    as case management and other models of coordinated care, that--
            ``(A) improve the quality of items and services provided to 
        target individuals; and
            ``(B) reduce expenditures under the medicare program under 
        title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) 
        for items and services provided to target individuals.
        ``(2) Target individual defined.--In this section, the term 
    `target individual' means an individual that has a chronic illness, 
    as defined and identified by the Secretary, and is enrolled under 
    the fee-for-service program under parts A and B of title XVIII of 
    the Social Security Act (42 U.S.C. 1395c et seq.; 1395j et seq.).
    ``(b) Program Design.--
        ``(1) Initial design.--The Secretary shall evaluate best 
    practices in the private sector of methods of coordinated care for a 
    period of 1 year and design the demonstration project based on such 
    evaluation.
        ``(2) Number and project areas.--Not later than 2 years after 
    the date of enactment of this Act [Aug. 5, 1997], the Secretary 
    shall implement at least 9 demonstration projects, including--
            ``(A) 5 projects in urban areas;
            ``(B) 3 projects in rural areas; and
            ``(C) 1 project within the District of Columbia which is 
        operated by a nonprofit academic medical center that maintains a 
        National Cancer Institute certified comprehensive cancer center.
        ``(3) Expansion of projects; implementation of demonstration 
    project results.--
            ``(A) Expansion of projects.--If the initial report under 
        subsection (c) contains an evaluation that demonstration 
        projects--
                ``(i) reduce expenditures under the medicare program; or
                ``(ii) do not increase expenditures under the medicare 
            program and increase the quality of health care services 
            provided to target individuals and satisfaction of 
            beneficiaries and health care providers;
    the Secretary shall continue the existing demonstration projects and 
        may expand the number of demonstration projects.
            ``(B) Implementation of demonstration project results.--If a 
        report under subsection (c) contains an evaluation as described 
        in subparagraph (A), the Secretary may issue regulations to 
        implement, on a permanent basis, the components of the 
        demonstration project that are beneficial to the medicare 
        program.
    ``(c) Report to Congress.--
        ``(1) In general.--Not later than 2 years after the Secretary 
    implements the initial demonstration projects under this section, 
    and biannually thereafter, the Secretary shall submit to Congress a 
    report regarding the demonstration projects conducted under this 
    section.
        ``(2) Contents of report.--The report in paragraph (1) shall 
    include the following:
            ``(A) A description of the demonstration projects conducted 
        under this section.
            ``(B) An evaluation of--
                ``(i) the cost-effectiveness of the demonstration 
            projects;
                ``(ii) the quality of the health care services provided 
            to target individuals under the demonstration projects; and
                ``(iii) beneficiary and health care provider 
            satisfaction under the demonstration project.
            ``(C) Any other information regarding the demonstration 
        projects conducted under this section that the Secretary 
        determines to be appropriate.
    ``(d) Waiver Authority.--The Secretary shall waive compliance with 
the requirements of title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) to such extent and for such period as the Secretary 
determines is necessary to conduct demonstration projects.
    ``(e) Funding.--
        ``(1) Demonstration projects.--
            ``(A) In general.--
                ``(i) State projects.--Except as provided in clause 
            (ii), the Secretary shall provide for the transfer from the 
            Federal Hospital Insurance Trust Fund and the Federal 
            Supplementary [Medical] Insurance Trust Fund under title 
            XVIII of the Social Security Act (42 U.S.C. 1395i, 1395t), 
            in such proportions as the Secretary determines to be 
            appropriate, of such funds as are necessary for the costs of 
            carrying out the demonstration projects under this section.
                ``(ii) Cancer hospital.--In the case of the project 
            described in subsection (b)(2)(C), the Secretary shall 
            provide for the transfer from the Federal Hospital Insurance 
            Trust Fund and the Federal Supplementary Insurance Trust 
            Fund [Medical] under title XVIII of the Social Security Act 
            (42 U.S.C. 1395i, 1395t), in such proportions as the 
            Secretary determines to be appropriate, of such funds as are 
            necessary to cover costs of the project, including costs for 
            information infrastructure and recurring costs of case 
            management services, flexible benefits, and program 
            management.
            ``(B) Limitation.--In conducting the demonstration project 
        under this section, the Secretary shall ensure that the 
        aggregate payments made by the Secretary do not exceed the 
        amount which the Secretary would have paid if the demonstration 
        projects under this section were not implemented.
        ``(2) Evaluation and report.--There are authorized to be 
    appropriated such sums as are necessary for the purpose of 
    developing and submitting the report to Congress under subsection 
    (c).''


     Informatics, Telemedicine, and Education Demonstration Project

    Pub. L. 105-33, title IV, Sec. 4207, Aug. 5, 1997, 111 Stat. 379, as 
amended by Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title IV, 
Sec. 413], Nov. 29, 1999, 113 Stat. 1536, 1501A-377, provided that:
    ``(a) Purpose and Authorization.--
        ``(1) In general.--Not later than 9 months after the date of 
    enactment of this section [Aug. 5, 1997], the Secretary of Health 
    and Human Services shall provide for a demonstration project 
    described in paragraph (2). The Secretary shall make an award for 
    such project not later than 3 months after the date of the enactment 
    of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act 
    of 1999 [Nov. 29, 1999]. The Secretary shall accept the proposal 
    adjudged to be the best technical proposal as of such date of 
    enactment without the need for additional review or resubmission of 
    proposals.
        ``(2) Description of project.--
            ``(A) In general.--The demonstration project described in 
        this paragraph is a single demonstration project to use eligible 
        health care provider telemedicine networks to apply high-
        capacity computing and advanced networks to improve primary care 
        (and prevent health care complications) to medicare 
        beneficiaries with diabetes mellitus who are residents of 
        medically underserved rural areas or residents of medically 
        underserved inner-city areas that qualify as Federally 
        designated medically underserved areas or health professional 
        shortage areas at the time of enrollment of beneficiaries under 
        the project.
            ``(B) Medically underserved defined.--As used in this 
        paragraph, the term `medically underserved' has the meaning 
        given such term in section 330(b)(3) of the Public Health 
        Service Act (42 U.S.C. 254b(b)(3)).
        ``(3) Waiver.--The Secretary shall waive such provisions of 
    title XVIII of the Social Security Act [this subchapter] as may be 
    necessary to provide for payment for services under the project in 
    accordance with subsection (d).
        ``(4) Duration of project.--The project shall be conducted over 
    a 4-year period.
    ``(b) Objectives of Project.--The objectives of the project include 
the following:
        ``(1) Improving patient access to and compliance with 
    appropriate care guidelines for individuals with diabetes mellitus 
    through direct telecommunications link with information networks in 
    order to improve patient quality-of-life and reduce overall health 
    care costs.
        ``(2) Developing a curriculum to train health professionals 
    (particularly primary care health professionals) in the use of 
    medical informatics and telecommunications.
        ``(3) Demonstrating the application of advanced technologies, 
    such as video-conferencing from a patient's home, remote monitoring 
    of a patient's medical condition, interventional informatics, and 
    applying individualized, automated care guidelines, to assist 
    primary care providers in assisting patients with diabetes in a home 
    setting.
        ``(4) Application of medical informatics to residents with 
    limited English language skills.
        ``(5) Developing standards in the application of telemedicine 
    and medical informatics.
        ``(6) Developing a model for the cost-effective delivery of 
    primary and related care both in a managed care environment and in a 
    fee-for-service environment.
    ``(c) Eligible Health Care Provider Telemedicine Network Defined.--
For purposes of this section, the term `eligible health care provider 
telemedicine network' means a consortium that includes at least one 
tertiary care hospital (but no more than 2 such hospitals), at least one 
medical school, no more than 4 facilities in rural or urban areas, and 
at least one regional telecommunications provider and that meets the 
following requirements:
        ``(1) The consortium is located in an area with a high 
    concentration of medical schools and tertiary care facilities in the 
    United States and has appropriate arrangements (within or outside 
    the consortium) with such schools and facilities, universities, and 
    telecommunications providers, in order to conduct the project.
        ``(2) The consortium submits to the Secretary an application at 
    such time, in such manner, and containing such information as the 
    Secretary may require, including a description of the use to which 
    the consortium would apply any amounts received under the project.
        ``(3) The consortium guarantees that it will be responsible for 
    payment for all costs of the project that are not paid under this 
    section and that the maximum amount of payment that may be made to 
    the consortium under this section shall not exceed the amount 
    specified in subsection (d)(3).
    ``(d) Coverage as Medicare Part B Services.--
        ``(1) In general.--Subject to the succeeding provisions of this 
    subsection, services related to the treatment or management of 
    (including prevention of complications from) diabetes for medicare 
    beneficiaries furnished under the project shall be considered to be 
    services covered under part B of title XVIII of the Social Security 
    Act [part B of this subchapter].
        ``(2) Payments.--
            ``(A) In general.--Subject to paragraph (3), payment for 
        such services shall be made for the costs that are related to 
        the provision of such services. In computing such costs, the 
        Secretary shall include costs described in subparagraph (B), but 
        may not include costs described in subparagraph (C).
            ``(B) Costs that may be included.--The costs described in 
        this subparagraph are the permissible costs (as recognized by 
        the Secretary) for the following:
                ``(i) The acquisition of telemedicine equipment for use 
            in patients' homes or at sites providing health care to 
            patients located in medically underserved areas.
                ``(ii) Curriculum development and training of health 
            professionals in medical informatics and telemedicine.
                ``(iii) Payment of telecommunications costs (including 
            salaries and maintenance of equipment), including costs of 
            telecommunications between patients' homes and the eligible 
            network and between the network and other entities under the 
            arrangements described in subsection (c)(1).
                ``(iv) Payments to practitioners and providers under the 
            medicare programs.
            ``(C) Costs not included.--The costs described in this 
        subparagraph are costs for any of the following:
                ``(i) The purchase or installation of transmission 
            equipment (other than such equipment used by health 
            professionals for activities related to the project).
                ``(ii) The establishment or operation of a 
            telecommunications common carrier network.
                ``(iii) Construction (except for minor renovations 
            related to the installation of reimbursable equipment) or 
            the acquisition or building of real property.
        ``(3) Limitation.--The total amount of the payments that may be 
    made under this section shall not exceed $30,000,000 for the period 
    of the project (described in subsection (a)(4)).
        ``(4) Cost-sharing.--The project may not impose cost-sharing on 
    a medicare beneficiary for the receipt of services under the 
    project. Project costs will cover all costs to medicare 
    beneficiaries and providers related to participation in the project.
    ``(e) Reports.--The Secretary shall submit to the Committee on Ways 
and Means and the Committee [on] Commerce of the House of 
Representatives and the Committee on Finance of the Senate interim 
reports on the project and a final report on the project within 6 months 
after the conclusion of the project. The final report shall include an 
evaluation of the impact of the use of telemedicine and medical 
informatics on improving access of medicare beneficiaries to health care 
services, on reducing the costs of such services, and on improving the 
quality of life of such beneficiaries.
    ``(f) Definitions.--For purposes of this section:
        ``(1) Interventional informatics.--The term `interventional 
    informatics' means using information technology and virtual reality 
    technology to intervene in patient care.
        ``(2) Medical informatics.--The term `medical informatics' means 
    the storage, retrieval, and use of biomedical and related 
    information for problem solving and decision-making through 
    computing and communications technologies.
        ``(3) Project.--The term `project' means the demonstration 
    project under this section.''


    Clarification of Secretarial Waiver Authority for Rural Hospital 
                             Demonstrations

    Pub. L. 101-508, title IV, Sec. 4008(i)(1), Nov. 5, 1990, 104 Stat. 
1388-50, as amended by Pub. L. 103-66, title XIII, Sec. 13507, Aug. 10, 
1993, 107 Stat. 579, provided that: ``The Secretary of Health and Human 
Services is authorized to waive such provisions of title XVIII of the 
Social Security Act [this subchapter] as are necessary to conduct any 
demonstration project for limited-service rural hospitals with respect 
to which the Secretary has entered into an agreement before the date of 
the enactment of the Omnibus Budget Reconciliation Act of 1989 [Dec. 19, 
1989]. The Secretary shall continue any such demonstration project until 
at least July 1, 1997.''


    Volunteer Senior Aides Demonstration Projects for Basic Medical 
    Assistance and Support to Families With Disabled or Ill Children

    Pub. L. 101-239, title X, Sec. 10404, Dec. 19, 1989, 103 Stat. 2488, 
provided that:
    ``(a) Number of Projects.--In order to determine whether, and if so, 
the extent to which, the use of volunteer senior aides to provide basic 
medical assistance and support to families with moderately or severely 
disabled or chronically ill children contributes to reducing the costs 
of care for such children, not more than 10 communities may conduct 
demonstration projects under this section.
    ``(b) Duties of the Secretary.--
        ``(1) Consideration of applications.--The Secretary of Health 
    and Human Services (in this section referred to as the `Secretary') 
    shall consider all applications received from communities desiring 
    to conduct demonstration projects under this section.
        ``(2) Approval of certain applications.--The Secretary shall 
    approve not more than 10 applications to conduct projects which 
    appear likely to contribute significantly to the achievement of the 
    purpose of this section.
        ``(3) Grants.--The Secretary shall make grants to each community 
    the application of which to conduct a demonstration project under 
    this section is approved by the Secretary to assist the community in 
    carrying out the project.
    ``(c) Requirements.--Each community receiving a grant with respect 
to a demonstration project under this section shall conduct the project 
in accordance with such requirements as the Secretary may prescribe.
    ``(d) Limitation on Authorization of Appropriations.--For grants 
under this section, there are authorized to be appropriated to the 
Secretary of Health and Human Services not to exceed--
        ``(1) $1,000,000 for each of the fiscal years 1990 and 1991; and
        ``(2) $2,000,000 for each of the fiscal years 1992, 1993, and 
    1994.
    ``(e) Effective Date.--This section shall take effect on October 1, 
1989.''


             Treatment of Certain Nursing Education Programs

    Pub. L. 100-647, title VIII, Sec. 8411, Nov. 10, 1988, 102 Stat. 
3800, as amended by Pub. L. 101-239, title VI, Sec. 6205(a)(1)(B), Dec. 
19, 1989, 103 Stat. 2243, provided that:
    ``(a) Demonstration of Joint Nursing Graduate Education Programs.--
        ``(1) The Secretary of Health and Human Services shall provide 
    for demonstration programs under this subsection in each of 5 
    hospitals for cost reporting periods beginning on or after July 1, 
    1989, and before July 1, 1994.
        ``(2) Under each demonstration project, subject to paragraph 
    (4), the reasonable costs incurred by a hospital pursuant to a 
    written agreement with an educational institution for the activities 
    described in paragraph (3) conducted as part of an approved 
    educational program that--
            ``(A) involves a substantial clinical component (as 
        determined by the Secretary), and
            ``(B) leads to a master's or doctoral degree in nursing,
    shall be allowable as reasonable costs under title XVIII of the 
    Social Security Act [this subchapter] and reimbursed under such 
    title on the same basis as if they were allowable direct costs of a 
    hospital-operated approved educational program (other than an 
    approved graduate medical education program).
        ``(3) The activities described in this paragraph are the 
    activities for which the reasonable costs of conducting such 
    activities are allowable under title XVIII of the Social Security 
    Act if conducted under a hospital-operated approved educational 
    program (other than an approved graduate medical education program), 
    but only to the extent such activities are directly related to the 
    operation of the educational program conducted pursuant to the 
    written agreement between the hospital and the educational 
    institution.
        ``(4) The amount paid under a demonstration program under this 
    subsection to a hospital for a cost reporting period may not exceed 
    $200,000.
        ``(5) The Secretary shall report to Congress, by not later than 
    January 1, 1995, on the demonstration programs conducted under this 
    subsection and on the supply and characteristics of nurses trained 
    under such programs.
    ``(b) Joint Undergraduate Education Program.--In the case of a 
hospital which (1) was paid under a waiver under section 402 of the 
Social Security Amendments of 1967 [section 402 of Pub. L. 90-248, 
enacting this section and amending section 1395ll of this title] and 
section 222 of the Social Security Amendments of 1972 [section 222 of 
Pub. L. 92-603, amending this section and section 1395ll of this title 
and enacting provisions set out below], which waiver expired on 
September 30, 1985, and (2) during its cost reporting period beginning 
in fiscal year 1985 and for each subsequent cost reporting period, has 
been and is associated with, and has incurred and incurs substantial 
costs with respect to, a nursing college with which it has shared and 
shares common directors, educational activities of the nursing college 
shall be considered to be educational activities operated directly by 
such hospital for purposes of title XVIII of the Social Security Act 
[this subchapter], and shall be allowable as reasonable costs under such 
title and reimbursed under such title on the same basis as if they were 
allowable direct costs of a hospital-operated approved educational 
program (other than an approved graduate medical education program), for 
hospital cost reporting periods beginning in fiscal years 1986 though 
1991.''


     Research on Long-Term Care Services for Medicare Beneficiaries

    Pub. L. 100-360, title II, Sec. 207, July 1, 1988, 102 Stat. 732, 
which provided for research on issues relating to the delivery and 
financing of long-term care services for medicare beneficiaries, was 
repealed by Pub. L. 101-234, title II, Sec. 201(a), Dec. 13, 1989, 103 
Stat. 1981.


            Adjustment of Contracts With Prepaid Health Plans

    For requirement that Secretary of Health and Human Services modify 
contracts with health maintenance organizations under subsec. (a) of 
this section and section 222(a) of Pub. L. 92-603, set out below, so as 
to apply to such organizations and contracts the requirements imposed by 
the amendments made by Pub. L. 100-360, see section 222 of Pub. L. 100-
360, set out as a note under section 1395mm of this title.


                 Case Management Demonstration Projects

    Pub. L. 101-508, title IV, Sec. 4207(f), formerly Sec. 4027(f), Nov. 
5, 1990, 104 Stat. 1388-123, as renumbered by Pub. L. 103-432, title I, 
Sec. 160(d)(4), Oct. 31, 1994, 108 Stat. 4444, provided that:
    ``(1) In general.--Notwithstanding any other provision of law, the 
Secretary of Health and Human Services shall resume the 3 case 
management demonstration projects described in paragraph (2) and 
approved under section 425 of the Medicare Catastrophic Coverage Act of 
1988 [Pub. L. 100-360, formerly set out below] (in this subsection 
referred to as `MCCA').
    ``(2) Project descriptions.--The demonstration projects referred to 
in paragraph (1) are--
        ``(A) the project proposed to be conducted by Providence 
    Hospital for case management of the elderly at risk for acute 
    hospitalization as described in Project No. 18-P-99379/5-01;
        ``(B) the project proposed to be conducted by the Iowa 
    Foundation for Medical Care to study patients with chronic 
    congestive conditions to reduce repeated hospitalizations of such 
    patients as described in Project No. P-99399/4-01; and
        ``(C) the project proposed to be conducted by Key Care Health 
    Resources, Inc., to examine the effects of case management on 2,500 
    high cost medicare beneficiaries as described in Project No. 18-P-
    99396/5.
    ``(3) Terms and conditions.--Except as provided in paragraph (4), 
the demonstration projects resumed pursuant to paragraph (1) shall be 
subject to the same terms and conditions established under section 425 
of MCCA. In determining the 2-year duration period of a project resumed 
pursuant to paragraph (1), the Secretary may not take into account any 
period of time for which the project was in effect under section 425 of 
MCCA.
    ``(4) Authorization of appropriations.--Notwithstanding section 
425(g) of MCCA, there are authorized to be appropriated for 
administrative costs in carrying out the demonstration projects resumed 
pursuant to paragraph (1) $2,000,000 in each of fiscal years 1991 and 
1992.''
    Pub. L. 100-360, title IV, Sec. 425, July 1, 1988, 102 Stat. 813, 
which directed Secretary of Health and Human Services to establish 4 
demonstration projects under which an appropriate entity agreed to 
provide case management services, was repealed by Pub. L. 101-234, title 
III, Sec. 301(a), Dec. 13, 1989, 103 Stat. 1985.


  Demonstration Projects With Respect to Chronic Ventilator-Dependent 
                           Units in Hospitals

    Pub. L. 100-360, title IV, Sec. 429, July 1, 1988, 102 Stat. 817, as 
amended by Pub. L. 100-647, title VIII, Sec. 8404(a), Nov. 10, 1988, 102 
Stat. 3800, directed Secretary of Health and Human Services, in 
consultation with the Prospective Payment Assessment Commission, to 
provide for at least 5 demonstration projects, for at least 3 years 
each, to review appropriateness of classifying chronic ventilator-
dependent units in hospitals as rehabilitation units.


   Research and Demonstration Projects on Rural and Inner-City Health 
                                 Issues

    Pub. L. 100-203, title IV, Sec. 4403, Dec. 22, 1987, 1330-226, as 
amended by Pub. L. 100-360, title IV, Sec. 411(m)(2)(A), July 1, 1988, 
102 Stat. 806, provided that:
    ``(a) Set Asides for Issues of Health Care in Rural Areas and In 
Inner-City Areas.--(1) Not less than ten percent of the total amounts 
annually appropriated to, and expended by, the Health Care Financing 
Administration for the conduct of research and demonstration projects in 
fiscal years 1988, 1989, and 1990 shall be expended for research and 
demonstration projects relating exclusively or substantially to rural 
health issues, including (but not limited to) the impact of the payment 
methodology under section 1886(d) of the Social Security Act [section 
1395ww(d) of this title] on the financial viability of small rural 
hospitals, the effect of medicare payment policies on the ability of 
rural areas (and rural hospitals in particular) to attract and retain 
physicians and other health professionals, the appropriateness of 
medicare conditions of participation and staffing requirements for small 
rural hospitals, and the impact of medicare policies on access to (and 
the quality of) health care in rural areas.
    ``(2) Not less than ten percent of the total amounts annually 
appropriated to, and expended by, the Health Care Financing 
Administration for the conduct of research and demonstration projects in 
fiscal years 1988, 1989, and 1990 shall be expended for research and 
demonstration projects relating exclusively or substantially to issues 
of providing health care in inner-city areas, including (but not limited 
to) the impact of the payment methodology under section 1886(d) of the 
Social Security Act on the financial viability of inner-city hospitals 
and the impact of medicare policies on access to (and the quality of) 
health care in inner-city areas.
    ``(b) Agenda.--The Secretary of Health and Human Services shall 
establish an agenda of research and demonstration projects, relating 
exclusively or substantially to rural health issues or to inner-city 
health issues, that are in progress or have been proposed, and shall 
include such agenda in the annual report submitted pursuant to section 
1875(b) of the Social Security Act [section 1395ll(b) of this title]. 
The agenda shall be accompanied by a statement setting forth the amounts 
that have been obligated and expended with respect to such projects in 
the current and most recently completed fiscal years.''


               Alzheimer's Disease Demonstration Projects

    Pub. L. 99-509, title IX, Sec. 9342, Oct. 21, 1986, 100 Stat. 2038, 
as amended by Pub. L. 101-508, title IV, Sec. 4164(a)(2), Nov. 5, 1990, 
104 Stat. 1388-101; Pub. L. 103-66, title XIII, Sec. 13552, Aug. 10, 
1993, 107 Stat. 591, provided that:
    ``(a) Demonstration Projects.--The Secretary of Health and Human 
Services (in this section referred to as the `Secretary') shall conduct 
at least 5 (and not more than 10) demonstration projects to determine 
the effectiveness, cost, and impact on health status and functioning of 
providing comprehensive services for individuals entitled to benefits 
under title XVIII of the Social Security Act [this subchapter] (in this 
section referred to as `medicare beneficiaries') who are victims of 
Alzheimer's disease or related disorders.
    ``(b) Services Under Demonstration Projects.--The services provided 
under demonstration projects must be designed to meet the specific needs 
of Alzheimer's disease patients and may include--
        ``(1) case management services,
        ``(2) home and community-based services,
        ``(3) mental health services,
        ``(4) outpatient drug therapy,
        ``(5) respite care and other supportive services and counseling 
    for family,
        ``(6) adult day care services, and
        ``(7) other in-home services.
    ``(c) Conduct of Projects.--The demonstration projects shall--
        ``(1) each be conducted over a period of 5 years;
        ``(2) provide each medicare beneficiary with a comprehensive 
    medical and mental status evaluation upon entering the project and 
    at discharge;
        ``(3) be conducted by an entity which either directly or by 
    contract is able to provide such comprehensive evaluations and the 
    additional services (described in subsection (b)) covered by the 
    project;
        ``(4) be conducted in sites which are chosen so as to be 
    geographically diverse and located in States with a high proportion 
    of medicare beneficiaries and in areas readily accessible to a 
    significant number of medicare beneficiaries; and
        ``(5) involve community outreach efforts at each site to enroll 
    the maximum number of medicare beneficiaries in each project.
    ``(d) Evaluation and Reports.--The Secretary shall provide for an 
evaluation of the demonstration projects and shall submit to the 
Committees on Energy and Commerce [now Committee on Commerce] and Ways 
and Means of the House of Representatives and the Committee on Finance 
of the Senate--
        ``(1) a preliminary report during the fourth year of the 
    projects, which report shall include a description of the sites at 
    which the projects are being conducted and the services being 
    provided at the different sites, and
        ``(2) a final report upon completion of the projects, which 
    report shall include recommendations for appropriate legislative 
    changes.
    ``(f) Funding.--Expenditures (not to exceed $58,000,000 for the 
projects and $5,000,000 for the evaluation of the projects) made for the 
demonstration projects shall be made from the Federal Supplementary 
Medical Insurance Trust Fund (established by section 1841 of the Social 
Security Act [section 1395t of this title]). Grants and payments under 
contracts may be made either in advance or by way of reimbursement, as 
may be determined by the Secretary, and shall be made in such 
installments and on such conditions as the Secretary finds necessary to 
carry out the purpose of this section.
    ``(g) Waiver of Medicare Requirements.--The Secretary shall waive 
compliance with the requirements of title XVIII of the Social Security 
Act [this subchapter] to the extent and for the period the Secretary 
finds necessary for the conduct of the demonstration projects.''


            Special Treatment of States Formerly Under Waiver

    For treatment of hospitals in States which have had a waiver 
approved under this section, upon termination of waiver, see section 
9202(j) of Pub. L. 99-272, as amended, set out as a note under section 
1395ww of this title.


 Extension of Certain Medicare Municipal Health Services Demonstration 
                                Projects

    Pub. L. 99-272, title IX, Sec. 9215, Apr. 7, 1986, 100 Stat. 180, as 
amended by Pub. L. 101-239, title VI, Sec. 6135, Dec. 19, 1989, 103 
Stat. 2222; Pub. L. 103-66, title XIII, Sec. 13557, Aug. 10, 1993, 107 
Stat. 592; Pub. L. 105-33, title IV, Sec. 4017, Aug. 5, 1997, 111 Stat. 
345; Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 534], Nov. 
29, 1999, 113 Stat. 1536, 1501A-390, provided that:
    ``(a) The Secretary of Health and Human Services shall extend 
through December 31, 1997, approval of four municipal health services 
demonstration projects (located in Baltimore, Cincinnati, Milwaukee, and 
San Jose) authorized under section 402(a) of the Social Security 
Amendments of 1967 [subsec. (a) of this section]. The Secretary shall 
submit a report to Congress on the waiver program with respect to the 
quality of health care, beneficiary costs, costs to the medicaid program 
and other payers, access to care, outcomes, beneficiary satisfaction, 
utilization differences among the different populations served by the 
projects, and such other factors as may be appropriate. Subject to 
subsection (c), the Secretary may further extend such demonstration 
projects through December 31, 2002, but only with respect to individuals 
who received at least one service during the period beginning on January 
1, 1996, and ending on the date of the enactment of the Balanced Budget 
Act of 1997 [Aug. 5, 1997].
    ``(b) The Secretary shall work with each such demonstration project 
to develop a plan, to be submitted to the Committee on Ways and Means 
and the Committee on Commerce of the House of Representatives and the 
Committee on Finance of the Senate by March 31, 1998, for the orderly 
transition of demonstration projects and the project participants to a 
non-demonstration project health care delivery system, such as through 
integration with a private or public health plan, including a medicaid 
managed care or Medicare+Choice plan.
    ``(c) A demonstration project under subsection (a) which does not 
develop and submit a transition plan under subsection (b) by March 31, 
1998, or, if later, 6 months after the date of the enactment of the 
Balanced Budget Act of 1997 [Aug. 5, 1997], shall be discontinued as of 
December 31, 1998. The Secretary shall provide appropriate technical 
assistance to assist in the transition so that disruption of medical 
services to project participants may be minimized.''


Demonstration Program for Reduction of Disability and Dependency Through 
         Provision of Preventive Health Services Under Medicare

    Pub. L. 99-272, title IX, Sec. 9314, Apr. 7, 1986, 100 Stat. 194, as 
amended by Pub. L. 99-509, title IX, Sec. 9344(d), Oct. 21, 1986, 100 
Stat. 2042; Pub. L. 101-508, title IV, Sec. 4164(a)(1), Nov. 5, 1990, 
104 Stat. 1388-100, provided that:
    ``(a) Demonstration Program.--The Secretary of Health and Human 
Services (hereinafter in this section referred to as the `Secretary') 
shall establish a 5-year demonstration program designed to reduce 
disability and dependency through the provision of preventive health 
services to individuals entitled to benefits under title XVIII of the 
Social Security Act [this subchapter] (hereinafter in this section 
referred to as `medicare beneficiaries').
    ``(b) Preventive Health Services Under Demonstration Program.--The 
preventive health services to be made available under the demonstration 
program shall include--
        ``(1) health screenings,
        ``(2) health risk appraisals,
        ``(3) immunizations, and
        ``(4) counseling on and instruction in--
            ``(A) diet and nutrition,
            ``(B) reduction of stress,
            ``(C) exercise and exercise programs,
            ``(D) sleep regulation,
            ``(E) injury prevention,
            ``(F) prevention of alcohol and drug abuse,
            ``(G) prevention of mental health disorders,
            ``(H) self-care, including use of medication, and
            ``(I) reduction or cessation of smoking.
    ``(c) Conduct of Program.--The demonstration program shall--
        ``(1) be conducted under the direction of accredited public or 
    private nonprofit schools of public health or preventive medicine 
    departments accredited by the Council on Education for Public 
    Health;
        ``(2) be conducted in no fewer than five sites (at least one of 
    which shall serve a rural area), which sites shall be chosen so as 
    to be geographically diverse and shall be readily accessible to a 
    significant number of medicare beneficiaries;
        ``(3) involve community outreach efforts at each site to enroll 
    the maximum number of medicare beneficiaries in the program; and
        ``(4) be designed--
            ``(A) to test alternative methods of payment for preventive 
        health services, including payment on a prepayment basis as well 
        as payment on a fee-for-service basis,
            ``(B) to permit a variety of appropriate health care 
        providers to furnish preventive health services, including 
        physicians, health educators, nurses, allied health personnel, 
        dieticians, and clinical psychologists, and
            ``(C) to facilitate evaluation under subsection (d).
    ``(d) Evaluation.--The Secretary shall evaluate the demonstration 
project in order to determine--
        ``(1) the short-term and long-term costs and benefits of 
    providing preventive health services for medicare beneficiaries, 
    including any reduction in inpatient services resulting from 
    providing the services, and
        ``(2) what practical mechanisms exist to finance preventive 
    health services under title XVIII of the Social Security Act [this 
    subchapter].
    ``(e) Reports to Congress.--(1) Not later than three years after the 
date of the enactment of this Act [Apr. 7, 1986], the Secretary shall 
submit a preliminary report to the Committees on Ways and Means and 
Energy and Commerce [now Committee on Commerce] of the House of 
Representatives and to the Committee on Finance of the Senate on the 
progress made in the demonstration program, including a description of 
the sites at which the program is being conducted and the preventive 
health services being provided at the different sites.
    ``(2) Not later than April 1, 1993, the Secretary shall submit an 
interim report to those Committees on the demonstration program and 
shall include in the report--
        ``(A) the evaluation described in subsection (d), and
        ``(B) recommendations for appropriate legislative changes to 
    incorporate payment for cost-effective preventive health services 
    into the medicare program.
    ``(3) Not later than April 1, 1995, the Secretary shall submit a 
final report to those Committees on the demonstration program and shall 
include in the report a comprehensive evaluation of the long-term 
effects of the program.
    ``(f) Funding.--Expenditures made for the demonstration program 
shall be made from the Federal Supplementary Medical Insurance Trust 
Fund (established by section 1841 of the Social Security Act [section 
1395t of this title]). Grants and payments under contracts may be made 
either in advance or by way of reimbursement, as may be determined by 
the Secretary, and shall be made in such installments and on such 
conditions as the Secretary finds necessary to carry out the purpose of 
this section. Funding for the administrative costs of the demonstration 
program shall not exceed $7,500,000 over the duration of the program and 
shall not exceed $3,000,000 for the comprehensive evaluation referred to 
in subsection (e)(3).
    ``(g) Waiver of Medicare Requirements.--The Secretary shall waive 
compliance with such requirements of title XVIII of the Social Security 
Act [this subchapter] to the extent and for the period the Secretary 
finds necessary for the conduct of the demonstration program.''
    [Section 9344(d) of Pub. L. 99-509 provided in part that amendment 
by Pub. L. 99-509 is effective as if included in section 9314 of Pub. L. 
99-272 when that section was enacted.]


     Payment for Costs of Hospital-Based Mobile Intensive Care Units

    Section 2320 of Pub. L. 98-369 provided that:
    ``(a)(1) In the case of a project described in subsection (b), the 
Secretary of Health and Human Services shall provide, except as provided 
in paragraph (2), that the amount of payments to hospitals covered under 
the project during the period described in paragraph (3) shall include 
payments for their operation of hospital-based mobile intensive care 
units (as defined by State statute) if the State provides satisfactory 
assurances that the total amount of payments to such hospitals under 
titles XVIII and XIX of the Social Security Act [this subchapter and 
subchapter XIX of this chapter] under the demonstration project 
(including any such additional amount of payment) would not exceed the 
total amount of payments which would have been paid under such titles if 
the demonstration project were not in effect.
    ``(2) Paragraph (1) shall not apply if the State in which the 
project is located notifies the Secretary, within 30 days after the date 
of the enactment of this section [July 18, 1984], that the State does 
not want paragraph (1) to apply to that project.
    ``(3) The period referred to in paragraph (1) begins on the date of 
the enactment of this section and continues so long as the Secretary 
continues the Statewide waiver referred to in subsection (b), but in no 
case ends earlier than 90 days after the date final regulations to 
implement section 1886(c) of the Social Security Act [section 1395ww(c) 
of this title] are published.
    ``(b) The project referred to in subsection (a) is the statewide 
demonstration project established in the State of New Jersey under 
section 402 of the Social Security Amendments of 1967, as amended by 
section 222(b) of the Social Security Amendments of 1972 (Public Law 92-
603) [this section], which project provides for payments to hospitals in 
the State on a prospective basis and related to a classification of 
patients by diagnosis-related groups.
    ``(c) Payment for services described in this section shall be 
considered to be payments for services under part A of title XVIII of 
the Social Security Act [part A of this subchapter].''


    Continuation of Secretary's Authority Regarding Experiments and 
                         Demonstration Projects

    Pub. L. 98-21, title VI, Sec. 603(b), Apr. 20, 1983, 97 Stat. 167, 
provided that:
    ``(1) Except as provided in paragraph (2), the amendments made by 
this title [amending sections 1320a-1, 1320c-2, 1395f, 1395i-2, 1395n, 
1395r, 1395v, 1395w, 1395x, 1395y, 1395cc, 1395mm, 1395oo, 1395rr, 
1395ww, and 1395xx of this title, enacting provisions set out as notes 
under this section and sections 1395r, 1395x, 1395y, 1395cc, and 1395ww 
of this title, and amending provisions set out as a note under section 
1395x of this title] shall not affect the authority of the Secretary to 
develop, carry out, or continue experiments and demonstration projects.
    ``(2) The Secretary shall provide that, upon the request of a State 
which has a demonstration project, for payment of hospitals under title 
XVIII of the Social Security Act [this subchapter] approved under 
section 402(a) of the Social Security Amendments of 1967 [subsec. (a) of 
this section] or section 222(a) of the Social Security Amendments of 
1972 [set out as a note below], which (A) is in effect as of March 1, 
1983, and (B) was entered into after August 1982 (or upon the request of 
another party to demonstration project agreement), the terms of the 
demonstration agreement shall be modified so that the demonstration 
project is not required to maintain the rate of increase in medicare 
hospital costs in that State below the national rate of increase in 
medicare hospital costs.''


 Alternative Care Demonstration Projects in Hospitals Short of Skilled 
                           Nursing Facilities

    Pub. L. 98-21, title VI, Sec. 603(d), Apr. 20, 1983, 97 Stat. 168, 
provided that: ``The Secretary shall conduct demonstrations with 
hospitals in areas with critical shortages of skilled nursing facilities 
to study the feasibility of providing alternative systems of care or 
methods of payment.''


   Continuation of Hospice Demonstration Projects; Report to Congress

    Section 122(i), formerly Sec. 122(h), of Pub. L. 97-248, as 
redesignated and amended by Pub. L. 97-448, title III, Sec. 309(a)(6), 
(e), Jan. 12, 1983, 96 Stat. 2408, 2410, provided that:
    ``(1) Notwithstanding any provision of law which has the effect of 
restricting the time period of a hospice demonstration project in effect 
on July 15, 1982, pursuant to section 402(a) of the Social Security 
Amendments of 1967 [subsec. (a) of this section], the Secretary of 
Health and Human Services, upon request of the hospice involved, shall 
permit continuation of the project until November 1, 1983, or, if later, 
the date on which payments can first be made to any hospice program 
under the amendments made by this section.
    ``(2) Prior to September 30, 1983, the Secretary shall submit to 
Congress a report on the effectiveness of demonstration projects 
referred to in paragraph (1), including an evaluation of the cost-
effectiveness of hospice care, the reasonableness of the 40-percent cap 
amount for hospice care as provided in section 1814(i) of the Social 
Security Act [section 1395f(i) of this title] (as added by this 
section), proposed methodology for determining such cap amount, proposed 
standards for requiring and measuring the maintenance of effort for 
utilizing volunteers as required under section 1861(dd) of such Act 
[section 1395x(dd) of this title], an evaluation of physician 
reimbursement for services furnished as a part of hospice care and for 
services furnished to individuals receiving hospice care but which are 
not reimbursed as a part of the hospice care, and any proposed 
legislative changes in the hospice care provisions of title XVIII of 
such Act [this subchapter].
    ``(3)(A) Notwithstanding the provisions of paragraph (1), the 
Secretary of Health and Human Services, upon request of the hospice 
involved, shall permit continuation of a hospice demonstration project 
described in paragraph (1) until September 30, 1986, if the hospice 
involved in such demonstration project does not provide hospice care 
directly but acts as a channeling agency for the provision of hospice 
care.
    ``(B) During the period after the date on which a hospice 
demonstration project described in subparagraph (A) would otherwise have 
terminated under the provisions of paragraph (1), and prior to September 
30, 1986, any such hospice demonstration project shall be subject to the 
same requirements as are imposed under the hospice program provided for 
under the amendments made by this section [amending sections 1395c to 
1395f, 1395h, and 1395x to 1395cc of this title and section 231f of 
Title 45, Railroads, and enacting provisions set out as notes under 
sections 1395c and 1395f of this title] with respect to reimbursement 
and benefits, other than the requirement that certain benefits be 
provided directly by the hospice involved.''


 State Medicare Hospital Reimbursement Demonstration Project Limitation

    Pub. L. 96-499, title IX, Sec. 903(c), Dec. 5, 1980, 94 Stat. 2615, 
which provided for a maximum number of six Statewide medicare hospital 
reimbursement demonstration projects, was repealed by Pub. L. 97-35, 
title XXI, Sec. 2154, Aug. 13, 1981, 95 Stat. 802.


   Study of Need for Dual Participation of Skilled Nursing Facilities

    Pub. L. 96-499, title IX, Sec. 919, Dec. 5, 1980, 94 Stat. 2627, 
required study of need for dual participation of skilled nursing 
facilities and submission of a report and recommendations to Congress 
within one year after Dec. 5, 1980.


Demonstration Projects for Physician-Directed Clinics in Urban Medically 
    Underserved Areas; Report Submitted No Later Than January 1, 1981

    Pub. L. 95-210, Sec. 3, Dec. 13, 1977, 91 Stat. 1489, required the 
Secretary to provide, through demonstration projects, reimbursement on a 
cost basis for services provided by physician-directed clinics in urban 
medically underserved areas for which payment may be made under this 
subchapter and, notwithstanding any other provision of this subchapter, 
for services provided by a physician assistant or nurse practitioner 
employed by such clinics which would otherwise be covered under this 
subchapter if provided by a physician. The Secretary was to evaluate the 
relative advantages and disadvantages of reimbursement on the basis of 
costs and fee-for-service for physician-directed clinics employing a 
physician assistant or nurse practitioner, the appropriate method of 
determining the compensation for physician services on a cost basis for 
the purposes of reimbursement of services provided in such clinics, the 
appropriate definition for such clinics, the appropriate criteria to use 
for the purposes of designating urban medically underserved areas, and 
such other possible changes in the provisions of this subchapter as 
might be appropriate for the efficient and cost-effective reimbursement 
of services provided in such clinics. Grants, payments under contracts, 
and other expenditures made for demonstration projects were to be made 
in appropriate part from the Federal Hospital Insurance Trust Fund and 
the Federal Supplementary Medical Insurance Trust Fund. The Secretary 
was to submit to the Congress, no later than Jan. 1, 1981, a complete 
detailed report on the demonstration projects.


Scope of Grants for Experiments and Demonstration Projects To Determine 
     Methods for Prospective Payments to Hospitals, Skilled Nursing 
               Facilities, and Other Providers of Services

    Pub. L. 94-182, title I, Sec. 107, Dec. 31, 1975, 89 Stat. 1053, 
provided that: ``Nothing contained in section 222(a) of Public Law 92-
603 [set out below] shall be construed to preclude or prohibit the 
Secretary of Health, Education, and Welfare [now Health and Human 
Services] from including in any grant otherwise authorized to be made 
under such section moneys which are to be used for payments, to a 
participant in a demonstration or experiment with respect to which the 
grant is made, for or on account of costs incurred or services performed 
by such participant for a period prior to the date that the project of 
such participant is placed in operation, if--
        ``(1) the applicant for such grant is a State or an agency 
    thereof,
        ``(2) such participant is an individual practice association 
    which has been in existence for at least 3 years prior to the date 
    of enactment of this section [Dec. 31, 1975] and which has in effect 
    a contract with such State (or an agency thereof), entered into 
    prior to the date on which the grant is approved by the Secretary, 
    under which such association will, for a period which begins before 
    and ends after the date such grant is so approved, provide health 
    care services for individuals entitled to care and services under 
    the State plan of such State which is approved under title XIX of 
    the Social Security Act [subchapter XIX of this chapter].
        ``(3) the purpose of the inclusion of the project of such 
    association is to test the utility of a particular rate-setting 
    methodology, designed to be employed in prepaid health plans, in an 
    individual practice association operation, and
        ``(4) the applicant for such grant affirms that the use of 
    moneys from such grant to make such payments to such individual 
    practice association is necessary or useful in assuring that such 
    association will be able to continue in operation and carry out the 
    project described in clause (3).''


    Experiments and Demonstration Projects To Determine Methods for 
Prospective Payments to Hospitals, Skilled Nursing Facilities, and Other 
Providers of Services for Care and Services Furnished; Scope; Waiver of 
 Payment Requirements; Source and Manner of Payments for Grants, etc.; 
                           Reports to Congress

    Section 222(a) of Pub. L. 92-603, as amended by Pub. L. 97-35, title 
XXI, Sec. 2193(e), Aug. 13, 1981, 95 Stat. 828, provided that:
    ``(1) The Secretary of Health, Education, and Welfare [now Health 
and Human Services], directly or through contracts with, or grants to, 
public or private agencies or organizations, shall develop and carry out 
experiments and demonstration projects designed to determine the 
relative advantages and disadvantages of various alternative methods of 
making payment on a prospective basis to hospitals, skilled nursing 
facilities, and other providers of services for care and services 
provided by them under title XVIII of the Social Security Act [this 
subchapter] and under State plans approved under title XIX of such Act 
[subchapter XIX of this chapter], including alternative methods for 
classifying providers, for establishing prospective rates of payment, 
and for implementing on a gradual, selective, or other basis the 
establishment of a prospective payment system, in order to stimulate 
such providers through positive (or negative) financial incentives to 
use their facilities and personnel more efficiently and thereby to 
reduce the total costs of the health programs involved without adversely 
affecting the quality of services by containing or lowering the rate of 
increase in provider costs that has been and is being experienced under 
the existing system of retroactive cost reimbursement.
    ``(2) The experiments and demonstration projects developed under 
paragraph (1) shall be of sufficient scope and shall be carried out on a 
wide enough scale to permit a thorough evaluation of the alternative 
methods of prospective payment under consideration while giving 
assurance that the results derived from the experiments and projects 
will obtain generally in the operation of the programs involved (without 
committing such programs to the adoption of any prospective payment 
system either locally or nationally).
    ``(3) In the case of any experiment or demonstration project under 
paragraph (1), the Secretary may waive compliance with the requirements 
of titles XVIII and XIX of the Social Security Act [this subchapter and 
subchapter XIX of this chapter] insofar as such requirements relate to 
methods of payment for services provided; and costs incurred in such 
experiment or project in excess of those which would otherwise be 
reimbursed or paid under such titles [subchapters] may be reimbursed or 
paid to the extent that such waiver applies to them (with such excess 
being borne by the Secretary). No experiment or demonstration project 
shall be developed or carried out under paragraph (1) until the 
Secretary obtains the advice and recommendations of specialists who are 
competent to evaluate the proposed experiment or project as to the 
soundness of its objectives, the possibilities of securing productive 
results, the adequacy of resources to conduct it, and its relationship 
to other similar experiments or projects already completed or in 
process; and no such experiment or project shall be actually placed in 
operation unless at least 30 days prior thereto a written report, 
prepared for purposes of notification and information only, containing a 
full and complete description thereof has been transmitted to the 
Committee on Ways and Means of the House of Representatives and to the 
Committee on Finance of the Senate.
    ``(4) Grants, payments under contracts, and other expenditures made 
for experiments and demonstration projects under this subsection shall 
be made in appropriate part from the Federal Hospital Insurance Trust 
Fund (established by section 1817 of the Social Security Act [section 
1395i of this title]) and the Federal Supplementary Medical Insurance 
Trust Fund (established by section 1841 of the Social Security Act 
[section 1395t of this title]) and from funds appropriated under title 
XIX of such Act [subchapter XIX of this chapter]. Grants and payments 
under contracts may be made either in advance or by way of 
reimbursement, as may be determined by the Secretary, and shall be made 
in such installments and on such conditions as the Secretary finds 
necessary to carry out the purpose of this subsection. With respect to 
any such grant, payment, or other expenditure, the amount to be paid 
from each of such trust funds (and from funds appropriated under such 
title XIX) shall be determined by the Secretary, giving due regard to 
the purposes of the experiment or project involved.
    ``(5) The Secretary shall submit to the Congress no later than July 
1, 1974, a full report on the experiments and demonstration projects 
carried out under this subsection and on the experience of other 
programs with respect to prospective reimbursement together with any 
related data and materials which he may consider appropriate. Such 
report shall include detailed recommendations with respect to the 
specific methods which could be used in the full implementation of a 
system of prospective payment to providers of services under the 
programs involved.''

                  Section Referred to in Other Sections

    This section is referred to in sections 1395cc, 1395ll, 1395nn, 
1395ww of this title.
