
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 106-398 Section 1[712(a)(2)]]
[Document affected by Public Law 106-398 Section 1[712(b)-(e)]]
[Document affected by Public Law 106-398 Section 1[712(b)-(e)]]
[Document affected by Public Law 106-398 Section 1[712(f)]]
[CITE: 42USC1395ggg]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
        SUBCHAPTER XVIII--HEALTH INSURANCE FOR AGED AND DISABLED
 
                    Part D--Miscellaneous Provisions
 
Sec. 1395ggg. Medicare subvention demonstration project for 
        military retirees
        

(a) Definitions

    In this section:

                    (1) Administering Secretaries

        The term ``administering Secretaries'' means the Secretary and 
    the Secretary of Defense acting jointly.

                 (2) Demonstration project; project

        The terms ``demonstration project'' and ``project'' mean the 
    demonstration project carried out under this section.

                       (3) Designated provider

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

         (4) Medicare-eligible military retiree or dependent

        The term ``medicare-eligible military retiree or dependent'' 
    means an individual described in section 1074(b) or 1076(b) of title 
    10 who--
            (A) would be eligible for health benefits under section 1086 
        of such title by reason of subsection (c)(1) of such section 
        1086 but for the operation of subsection (d) of such section 
        1086;
            (B)(i) is entitled to benefits under part A of this 
        subchapter; and
            (ii) if the individual was entitled to such benefits before 
        July 1, 1997, received health care items or services from a 
        health care facility of the uniformed services before that date, 
        but after becoming entitled to benefits under part A of this 
        subchapter;
            (C) is enrolled for benefits under part B of this 
        subchapter; and
            (D) has attained age 65.

                  (5) Medicare health care services

        The term ``medicare health care services'' means items or 
    services covered under part A or B of this subchapter.

                   (6) Military treatment facility

        The term ``military treatment facility'' means a facility 
    referred to in section 1074(a) of title 10.

                             (7) TRICARE

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

                           (8) Trust funds

        The term ``trust funds'' means the Federal Hospital Insurance 
    Trust Fund established in section 1395i of this title and the 
    Federal Supplementary Medical Insurance Trust Fund established in 
    section 1395t of this title.

(b) Demonstration project

                           (1) In general

        (A) Establishment

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

        (B) Agreement

            The agreement entered into under subparagraph (A) shall 
        include at a minimum--
                (i) a description of the benefits to be provided to the 
            participants of the demonstration project established under 
            this section;
                (ii) a description of the eligibility rules for 
            participation in the demonstration project, including any 
            cost sharing requirements;
                (iii) a description of how the demonstration project 
            will satisfy the requirements under this subchapter;
                (iv) a description of the sites selected under paragraph 
            (2);
                (v) a description of how reimbursement requirements 
            under subsection (i) of this section and maintenance of 
            effort requirements under subsection (j) of this section 
            will be implemented in the demonstration project;
                (vi) a statement that the Secretary shall have access to 
            all data of the Department of Defense that the Secretary 
            determines is necessary to conduct independent estimates and 
            audits of the maintenance of effort requirement, the annual 
            reconciliation, and related matters required under the 
            demonstration project;
                (vii) a description of any requirement that the 
            Secretary waives pursuant to subsection (d) of this section; 
            and
                (viii) a certification, provided after review by the 
            administering Secretaries, that any entity that is receiving 
            payments by reason of the demonstration project has 
            sufficient--
                    (I) resources and expertise to provide, consistent 
                with payments under subsection (i) of this section, the 
                full range of benefits required to be provided to 
                beneficiaries under the project; and
                    (II) information and billing systems in place to 
                ensure the accurate and timely submission of claims for 
                benefits and to ensure that providers of services, 
                physicians, and other health care professionals are 
                reimbursed by the entity in a timely and accurate 
                manner.

                         (2) Number of sites

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

                           (3) Restriction

        No new military treatment facilities will be built or expanded 
    with funds from the demonstration project.

                            (4) Duration

        The administering Secretaries shall conduct the demonstration 
    project during the 3-year period beginning on January 1, 1998.

                             (5) Report

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

(c) Crediting of payments

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

(d) Waiver of certain medicare requirements

                            (1) Authority

        (A) In general

            Except as provided under subparagraph (B), the demonstration 
        project shall meet all requirements of Medicare+Choice plans 
        under part C of this subchapter and regulations pertaining 
        thereto, and other requirements for receiving medicare payments, 
        except that the prohibition of payments to Federal providers of 
        services under sections 1395f(c) and 1395n(d) of this title, and 
        paragraphs (2) and (3) of section 1395y(a) of this title shall 
        not apply.

        (B) Waiver

            Except as provided in paragraph (2), the Secretary is 
        authorized to waive any requirement described under subparagraph 
        (A), or approve equivalent or alternative ways of meeting such a 
        requirement, but only if such waiver or approval--
                (i) reflects the unique status of the Department of 
            Defense as an agency of the Federal Government; and
                (ii) is necessary to carry out the demonstration 
            project.

            (2) Beneficiary protections and other matters

        The demonstration project shall comply with the requirements of 
    part C of this subchapter that relate to beneficiary protections and 
    other matters, including such requirements relating to the following 
    areas:
            (A) Enrollment and disenrollment.
            (B) Nondiscrimination.
            (C) Information provided to beneficiaries.
            (D) Cost-sharing limitations.
            (E) Appeal and grievance procedures.
            (F) Provider participation.
            (G) Access to services.
            (H) Quality assurance and external review.
            (I) Advance directives.
            (J) Other areas of beneficiary protections that the 
        Secretary determines are applicable to such project.

(e) Inspector General

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

(f) Voluntary participation

    Participation of medicare-eligible military retirees or dependents 
in the demonstration project shall be voluntary.

(g) TRICARE health care plans

                (1) Modification of TRICARE contracts

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

                      (2) Health care benefits

        The administering Secretaries shall prescribe the minimum health 
    care benefits to be provided under such a plan to medicare-eligible 
    military retirees or dependents enrolled in the plan. Those benefits 
    shall include at least all medicare health care services covered 
    under this subchapter.

(h) Additional plans

    Notwithstanding any provisions of title 10, the administering 
Secretaries may agree to include in the demonstration project any of the 
Medicare+Choice plans described in section 1395w-21(a)(2)(A) of this 
title, and such agreement may include an agreement between the Secretary 
of Defense and the Medicare+Choice organization offering such plan to 
provide medicare health care services to medicare-eligible military 
retirees or dependents and for such Secretary to receive payments from 
such organization for the provision of such services.

(i) Payments based on regular medicare payment rates

                           (1) In general

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

                  (2) Exclusion of certain amounts

        In computing the amount of payment under paragraph (1), the 
    following shall be excluded:

        (A) Special payments

            Any amount attributable to an adjustment under subparagraphs 
        (B) and (F) of section 1395ww(d)(5) of this title and subsection 
        (h) of such section.

        (B) Percentage of capital payments

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

           (3) Periodic payments from medicare trust funds

        Payments under this subsection shall be made--
            (A) on a periodic basis consistent with the periodicity of 
        payments under this subchapter; and
            (B) in appropriate part, as determined by the Secretary, 
        from the trust funds.

                          (4) Cap on amount

        The aggregate amount to be reimbursed under this subsection 
    pursuant to the agreement entered into between the administering 
    Secretaries under subsection (b) of this section shall not exceed a 
    total of--
            (A) $50,000,000 for calendar year 1998;
            (B) $60,000,000 for calendar year 1999; and
            (C) $65,000,000 for calendar year 2000.

(j) Maintenance of effort

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

        (A) In general

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

        (B) Annual report by the Comptroller General

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

         (2) Required response in case of increase in costs

        (A) In general

            If the administering Secretaries find, based on paragraph 
        (1), that the expenditures under the medicare program under this 
        subchapter increased (or are expected to increase) during a 
        fiscal year because of the demonstration project, the 
        administering Secretaries shall take such steps as may be 
        needed--
                (i) to recoup for the medicare program the amount of 
            such increase in expenditures; and
                (ii) to prevent any such increase in the future.

        (B) Steps

            Such steps--
                (i) under subparagraph (A)(i) shall include payment of 
            the amount of such increased expenditures by the Secretary 
            of Defense from the current medical care appropriation of 
            the Department of Defense to the trust funds; and
                (ii) under subparagraph (A)(ii) shall include suspending 
            or terminating the demonstration project (in whole or in 
            part) or lowering the amount of payment under subsection 
            (i)(1) of this section.

(k) Evaluation and reports

                     (1) Independent evaluation

        The Comptroller General of the United States shall conduct an 
    evaluation of the demonstration project, and shall submit annual 
    reports on the demonstration project to the administering 
    Secretaries and to the committees of jurisdiction in the Congress. 
    The first report shall be submitted not later than 12 months after 
    the date on which the demonstration project begins operation, and 
    the final report not later than 3\1/2\ years after that date. The 
    evaluation and reports shall include an assessment, based on the 
    agreement entered into under subsection (b) of this section, of the 
    following:
            (A) Any savings or costs to the medicare program under this 
        subchapter resulting from the demonstration project.
            (B) The cost to the Department of Defense of providing care 
        to medicare-eligible military retirees and dependents under the 
        demonstration project.
            (C) A description of the effects of the demonstration 
        project on military treatment facility readiness and training 
        and the probable effects of the project on overall Department of 
        Defense medical readiness and training.
            (D) Any impact of the demonstration project on access to 
        care for active duty military personnel and their dependents.
            (E) An analysis of how the demonstration project affects the 
        overall accessibility of the uniformed services treatment system 
        and the amount of space available for point-of-service care, and 
        a description of the unintended effects (if any) upon the normal 
        treatment priority system.
            (F) Compliance by the Department of Defense with the 
        requirements under this subchapter.
            (G) The number of medicare-eligible military retirees and 
        dependents opting to participate in the demonstration project 
        instead of receiving health benefits through another health 
        insurance plan (including benefits under this subchapter).
            (H) A list of the health insurance plans and programs that 
        were the primary payers for medicare-eligible military retirees 
        and dependents during the year prior to their participation in 
        the demonstration project and the distribution of their previous 
        enrollment in such plans and programs.
            (I) Any impact of the demonstration project on private 
        health care providers and beneficiaries under this subchapter 
        that are not enrolled in the demonstration project.
            (J) An assessment of the access to care and quality of care 
        for medicare-eligible military retirees and dependents under the 
        demonstration project.
            (K) An analysis of whether, and in what manner, easier 
        access to the uniformed services treatment system affects the 
        number of medicare-eligible military retirees and dependents 
        receiving medicare health care services.
            (L) Any impact of the demonstration project on the access to 
        care for medicare-eligible military retirees and dependents who 
        did not enroll in the demonstration project and for other 
        individuals entitled to benefits under this subchapter.
            (M) A description of the difficulties (if any) experienced 
        by the Department of Defense in managing the demonstration 
        project and TRICARE contracts.
            (N) Any additional elements specified in the agreement 
        entered into under subsection (b) of this section.
            (O) Any additional elements that the Comptroller General of 
        the United States determines is appropriate to assess regarding 
        the demonstration project.

       (2) Report on extension and expansion of demonstration 
                                   project

        Not later than 6 months after the date of the submission of the 
    final report by the Comptroller General of the United States under 
    paragraph (1), the administering Secretaries shall submit to 
    Congress a report containing their recommendation as to--
            (A) whether there is a cost to the health care program under 
        this subchapter in conducting the demonstration project, and 
        whether the demonstration project could be expanded without 
        there being a cost to such health care program or to the Federal 
        Government;
            (B) whether to extend the demonstration project or make the 
        project permanent; and
            (C) whether the terms and conditions of the project should 
        be continued (or modified) if the project is extended or 
        expanded.

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1896, as added Pub. L. 105-
33, title IV, Sec. 4015(a), Aug. 5, 1997, 111 Stat. 337.)

                       References in Text

    Parts A and B of this subchapter, referred to in subsec. (a)(4), 
(5), are classified to sections 1395c et seq. and 1395j et seq., 
respectively, of this title.
    Section 711 of the National Defense Authorization Act for Fiscal 
Year 1996, referred to in subsec. (a)(7), is section 711 of Pub. L. 104-
106, div. A, title VII, Feb. 10, 1996, 110 Stat. 374, which is set out 
as a note under section 1073 of Title 10, Armed Forces.
    Part C of this subchapter, referred to in subsecs. (d), (g)(1), and 
(i)(1), is classified to section 1395w-21 et seq. of this title.


               Implementation Plan for Veterans Subvention

    Section 4015(b) of Pub. L. 105-33 provided that: ``Not later than 12 
months after the start of the demonstration project, the Secretary of 
Health and Human Services and the Secretary of Veterans Affairs shall 
jointly submit to Congress a detailed implementation plan for a 
subvention demonstration project (that follows the model of the 
demonstration project conducted under section 1896 of the Social 
Security Act [this section] (as added by subsection (a)) to begin in 
1999 for veterans (as defined in section 101 of title 38, United States 
Code) that are eligible for benefits under title XVIII of the Social 
Security Act [this subchapter].''

                  Section Referred to in Other Sections

    This section is referred to in title 10 section 1108.
