TITLE II--MEDICARE ADVANTAGE

Subtitle C--Offering of Medicare Advantage (MA) Regional Plans; Medicare Advantage Competition

SEC. 222. COMPETITION PROGRAM BEGINNING IN 2006.

(a) SUBMISSION OF BIDDING AND REBATE INFORMATION BEGINNING IN 2006-

(1) IN GENERAL- Section 1854 (42 U.S.C. 1395w-24) is amended--

(A) by amending paragraph (1) of subsection (a) to read as follows:

`(1) IN GENERAL-

`(A) INITIAL SUBMISSION- Not later than the second Monday in September of 2002, 2003, and 2004 (or the first Monday in June of each subsequent year), each MA organization shall submit to the Secretary, in a form and manner specified by the Secretary and for each MA plan for the service area (or segment of such an area if permitted under subsection (h)) in which it intends to be offered in the following year the following:

`(i) The information described in paragraph (2), (3), (4), or (6)(A) for the type of plan and year involved.

`(ii) The plan type for each plan.

`(iii) The enrollment capacity (if any) in relation to the plan and area.

`(B) BENEFICIARY REBATE INFORMATION- In the case of a plan required to provide a monthly rebate under subsection (b)(1)(C) for a year, the MA organization offering the plan shall submit to the Secretary, in such form and manner and at such time as the Secretary specifies, information on--

`(i) the manner in which such rebate will be provided under clause (ii) of such subsection; and

`(ii) the MA monthly prescription drug beneficiary premium (if any) and the MA monthly supplemental beneficiary premium (if any).

`(C) PAPERWORK REDUCTION FOR OFFERING OF MA REGIONAL PLANS NATIONALLY OR IN MULTI-REGION AREAS- The Secretary shall establish requirements for information submission under this subsection in a manner that promotes the offering of MA regional plans in more than one region (including all regions) through the filing of consolidated information.'; and

(B) by adding at the end of subsection (a) the following:

`(6) SUBMISSION OF BID AMOUNTS BY MA ORGANIZATIONS BEGINNING IN 2006-

`(A) INFORMATION TO BE SUBMITTED- For an MA plan (other than an MSA plan) for a plan year beginning on or after January 1, 2006, the information described in this subparagraph is as follows:

`(i) The monthly aggregate bid amount for the provision of all items and services under the plan, which amount shall be based on average revenue requirements (as used for purposes of section 1302(8) of the Public Health Service Act) in the payment area for an enrollee with a national average risk profile for the factors described in section 1853(a)(1)(C) (as specified by the Secretary).

`(ii) The proportions of such bid amount that are attributable to--

`(I) the provision of benefits under the original medicare fee-for-service program option (as defined in section 1852(a)(1)(B));

`(II) the provision of basic prescription drug coverage; and

`(III) the provision of supplemental health care benefits.

`(iii) The actuarial basis for determining the amount under clause (i) and the proportions described in clause (ii) and such additional information as the Secretary may require to verify such actuarial bases and the projected number of enrollees in each MA local area.

`(iv) A description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in subsection (e)(4)(A).

`(v) With respect to qualified prescription drug coverage, the information required under section 1860D-4, as incorporated under section 1860D-11(b)(2), with respect to such coverage.

In the case of a specialized MA plan for special needs individuals, the information described in this subparagraph is such information as the Secretary shall specify.

`(B) ACCEPTANCE AND NEGOTIATION OF BID AMOUNTS-

`(i) AUTHORITY- Subject to clauses (iii) and (iv), the Secretary has the authority to negotiate regarding monthly bid amounts submitted under subparagraph (A) (and the proportions described in subparagraph (A)(ii)), including supplemental benefits provided under subsection (b)(1)(C)(ii)(I) and in exercising such authority the Secretary shall have authority similar to the authority of the Director of the Office of Personnel Management with respect to health benefits plans under chapter 89 of title 5, United States Code.

`(ii) APPLICATION OF FEHBP STANDARD- Subject to clause (iv), the Secretary may only accept such a bid amount or proportion if the Secretary determines that such amount and proportions are supported by the actuarial bases provided under subparagraph (A) and reasonably and equitably reflects the revenue requirements (as used for purposes of section 1302(8) of the Public Health Service Act) of benefits provided under that plan.

`(iii) NONINTERFERENCE- In order to promote competition under this part and part D and in carrying out such parts, the Secretary may not require any MA organization to contract with a particular hospital, physician, or other entity or individual to furnish items and services under this title or require a particular price structure for payment under such a contract to the extent consistent with the Secretary's authority under this part.

`(iv) EXCEPTION- In the case of a plan described in section 1851(a)(2)(C), the provisions of clauses (i) and (ii) shall not apply and the provisions of paragraph (5)(B), prohibiting the review, approval, or disapproval of amounts described in such paragraph, shall apply to the negotiation and rejection of the monthly bid amounts and the proportions referred to in subparagraph (A).'.

(2) DEFINITION OF BENEFITS UNDER THE ORIGINAL MEDICARE FEE-FOR-SERVICE PROGRAM OPTION- Section 1852(a)(1) (42 U.S.C. 1395w-22(a)(1)) is amended--

(A) by striking `IN GENERAL- Except' and inserting `REQUIREMENT-

`(A) IN GENERAL- Except'; and

(B) by striking `title XI' and all that follows and inserting the following: `title XI, benefits under the original medicare fee-for-service program option (and, for plan years before 2006, additional benefits required under section 1854(f)(1)(A)).

`(B) BENEFITS UNDER THE ORIGINAL MEDICARE FEE-FOR-SERVICE PROGRAM OPTION DEFINED-

`(i) IN GENERAL- For purposes of this part, the term `benefits under the original medicare fee-for-service program option' means those items and services (other than hospice care) for which benefits are available under parts A and B to individuals entitled to benefits under part A and enrolled under part B, with cost-sharing for those services as required under parts A and B or an actuarially equivalent level of cost-sharing as determined in this part.

`(ii) SPECIAL RULE FOR REGIONAL PLANS- In the case of an MA regional plan in determining an actuarially equivalent level of cost-sharing with respect to benefits under the original medicare fee-for-service program option, there shall only be taken into account, with respect to the application of section 1858(b)(2), such expenses only with respect to subparagraph (A) of such section.'.

(3) CONFORMING AMENDMENT RELATING TO SUPPLEMENTAL HEALTH BENEFITS- Section 1852(a)(3) (42 U.S.C. 1395w-22(a)(3)) is amended by adding at the end the following: `Such benefits may include reductions in cost-sharing below the actuarial value specified in section 1854(e)(4)(B).'.

(b) PROVIDING FOR BENEFICIARY SAVINGS FOR CERTAIN PLANS-

(1) BENEFICIARY REBATES- Section 1854(b)(1) (42 U.S.C. 1395w-24(b)(1)) is amended--

(A) in subparagraph (A), by striking `The monthly amount' and inserting `Subject to the rebate under subparagraph (C), the monthly amount (if any)'; and

(B) by adding at the end the following new subparagraph:

`(C) BENEFICIARY REBATE RULE-

`(i) REQUIREMENT- The MA plan shall provide to the enrollee a monthly rebate equal to 75 percent of the average per capita savings (if any) described in paragraph (3)(C) or (4)(C), as applicable to the plan and year involved.

`(ii) FORM OF REBATE- A rebate required under this subparagraph shall be provided through the application of the amount of the rebate toward one or more of the following:

`(I) PROVISION OF SUPPLEMENTAL HEALTH CARE BENEFITS AND PAYMENT FOR PREMIUM FOR SUPPLEMENTAL BENEFITS- The provision of supplemental health care benefits described in section 1852(a)(3) in a manner specified under the plan, which may include the reduction of cost-sharing otherwise applicable as well as additional health care benefits which are not benefits under the original medicare fee-for-service program option, or crediting toward an MA monthly supplemental beneficiary premium (if any).

`(II) PAYMENT FOR PREMIUM FOR PRESCRIPTION DRUG COVERAGE- Crediting toward the MA monthly prescription drug beneficiary premium.

`(III) PAYMENT TOWARD PART B PREMIUM- Crediting toward the premium imposed under part B (determined without regard to the application of subsections (b), (h), and (i) of section 1839).

`(iii) DISCLOSURE RELATING TO REBATES- The plan shall disclose to the Secretary information on the form and amount of the rebate provided under this subparagraph or the actuarial value in the case of supplemental health care benefits.

`(iv) APPLICATION OF PART B PREMIUM REDUCTION- Insofar as an MA organization elects to provide a rebate under this subparagraph under a plan as a credit toward the part B premium under clause (ii)(III), the Secretary shall apply such credit to reduce the premium under section 1839 of each enrollee in such plan as provided in section 1840(i).'.

(2) REVISION OF PREMIUM TERMINOLOGY- Section 1854(b)(2) (42 U.S.C. 1395w-24(b)(2)) is amended--

(A) in the heading, by inserting `AND BID' after `PREMIUM';

(B) by redesignating subparagraph (C) as subparagraph (D);

(C) by striking subparagraphs (A) and (B) and inserting the following:

`(A) MA MONTHLY BASIC BENEFICIARY PREMIUM- The term `MA monthly basic beneficiary premium' means, with respect to an MA plan--

`(i) described in section 1853(a)(1)(B)(i) (relating to plans providing rebates), zero; or

`(ii) described in section 1853(a)(1)(B)(ii), the amount (if any) by which the unadjusted MA statutory non-drug monthly bid amount (as defined in subparagraph (E)) exceeds the applicable unadjusted MA area-specific non-drug monthly benchmark amount (as defined in section 1853(j)).

`(B) MA MONTHLY PRESCRIPTION DRUG BENEFICIARY PREMIUM- The term `MA monthly prescription drug beneficiary premium' means, with respect to an MA plan, the base beneficiary premium (as determined under section 1860D-13(a)(2) and as adjusted under section 1860D-13(a)(1)(B)), less the amount of rebate credited toward such amount under section 1854(b)(1)(C)(ii)(II).

`(C) MA MONTHLY SUPPLEMENTAL BENEFICIARY PREMIUM- The term `MA monthly supplemental beneficiary premium' means, with respect to an MA plan, the portion of the aggregate monthly bid amount submitted under clause (i) of subsection (a)(6)(A) for the year that is attributable under clause (ii)(III) of such subsection to the provision of supplemental health care benefits, less the amount of rebate credited toward such portion under section 1854(b)(1)(C)(ii)(I).'; and

(D) by adding at the end the following:

`(E) UNADJUSTED MA STATUTORY NON-DRUG MONTHLY BID AMOUNT- The term `unadjusted MA statutory non-drug monthly bid amount' means the portion of the bid amount submitted under clause (i) of subsection (a)(6)(A) for the year that is attributable under clause (ii)(I) of such subsection to the provision of benefits under the original medicare fee-for-service program option (as defined in section 1852(a)(1)(B)).'.

(3) COMPUTATION OF SAVINGS- Section 1854(b) (42 U.S.C. 1395w-24(b)) is further amended by adding at the end the following new paragraphs:

`(3) COMPUTATION OF AVERAGE PER CAPITA MONTHLY SAVINGS FOR LOCAL PLANS- For purposes of paragraph (1)(C)(i), the average per capita monthly savings referred to in such paragraph for an MA local plan and year is computed as follows:

`(A) DETERMINATION OF STATEWIDE AVERAGE RISK ADJUSTMENT FOR LOCAL PLANS-

`(i) IN GENERAL- Subject to clause (iii), the Secretary shall determine, at the same time rates are promulgated under section 1853(b)(1) (beginning with 2006) for each State, the average of the risk adjustment factors to be applied under section 1853(a)(1)(C) to payment for enrollees in that State for MA local plans.

`(ii) TREATMENT OF STATES FOR FIRST YEAR IN WHICH LOCAL PLAN OFFERED- In the case of a State in which no MA local plan was offered in the previous year, the Secretary shall estimate such average. In making such estimate, the Secretary may use average risk adjustment factors applied to comparable States or applied on a national basis.

`(iii) AUTHORITY TO DETERMINE RISK ADJUSTMENT FOR AREAS OTHER THAN STATES- The Secretary may provide for the determination and application of risk adjustment factors under this subparagraph on the basis of areas other than States or on a plan-specific basis.

`(B) DETERMINATION OF RISK ADJUSTED BENCHMARK AND RISK-ADJUSTED BID FOR LOCAL PLANS- For each MA plan offered in a local area in a State, the Secretary shall--

`(i) adjust the applicable MA area-specific non-drug monthly benchmark amount (as defined in section 1853(j)(1)) for the area by the average risk adjustment factor computed under subparagraph (A); and

`(ii) adjust the unadjusted MA statutory non-drug monthly bid amount by such applicable average risk adjustment factor.

`(C) DETERMINATION OF AVERAGE PER CAPITA MONTHLY SAVINGS- The average per capita monthly savings described in this subparagraph for an MA local plan is equal to the amount (if any) by which--

`(i) the risk-adjusted benchmark amount computed under subparagraph (B)(i); exceeds

`(ii) the risk-adjusted bid computed under subparagraph (B)(ii).

`(4) COMPUTATION OF AVERAGE PER CAPITA MONTHLY SAVINGS FOR REGIONAL PLANS- For purposes of paragraph (1)(C)(i), the average per capita monthly savings referred to in such paragraph for an MA regional plan and year is computed as follows:

`(A) DETERMINATION OF REGIONWIDE AVERAGE RISK ADJUSTMENT FOR REGIONAL PLANS-

`(i) IN GENERAL- The Secretary shall determine, at the same time rates are promulgated under section 1853(b)(1) (beginning with 2006) for each MA region the average of the risk adjustment factors to be applied under section 1853(a)(1)(C) to payment for enrollees in that region for MA regional plans.

`(ii) TREATMENT OF REGIONS FOR FIRST YEAR IN WHICH REGIONAL PLAN OFFERED- In the case of an MA region in which no MA regional plan was offered in the previous year, the Secretary shall estimate such average. In making such estimate, the Secretary may use average risk adjustment factors applied to comparable regions or applied on a national basis.

`(iii) AUTHORITY TO DETERMINE RISK ADJUSTMENT FOR AREAS OTHER THAN REGIONS- The Secretary may provide for the determination and application of risk adjustment factors under this subparagraph on the basis of areas other than MA regions or on a plan-specific basis.

`(B) DETERMINATION OF RISK-ADJUSTED BENCHMARK AND RISK-ADJUSTED BID FOR REGIONAL PLANS- For each MA regional plan offered in a region, the Secretary shall--

`(i) adjust the applicable MA area-specific non-drug monthly benchmark amount (as defined in section 1853(j)(2)) for the region by the average risk adjustment factor computed under subparagraph (A); and

`(ii) adjust the unadjusted MA statutory non-drug monthly bid amount by such applicable average risk adjustment factor.

`(C) DETERMINATION OF AVERAGE PER CAPITA MONTHLY SAVINGS- The average per capita monthly savings described in this subparagraph for an MA regional plan is equal to the amount (if any) by which--

`(i) the risk-adjusted benchmark amount computed under subparagraph (B)(i); exceeds

`(ii) the risk-adjusted bid computed under subparagraph (B)(ii).'.

(c) COLLECTION OF PREMIUMS- Section 1854(d) (42 U.S.C. 1395w-24(d)) is amended--

(1) by striking `PREMIUMS- Each' and inserting `PREMIUMS-

`(1) IN GENERAL- Each'; and

(2) by adding at the end the following new paragraphs:

`(2) BENEFICIARY'S OPTION OF PAYMENT THROUGH WITHHOLDING FROM SOCIAL SECURITY PAYMENT OR USE OF ELECTRONIC FUNDS TRANSFER MECHANISM- In accordance with regulations, an MA organization shall permit each enrollee, at the enrollee's option, to make payment of premiums (if any) under this part to the organization through--

`(A) withholding from benefit payments in the manner provided under section 1840 with respect to monthly premiums under section 1839;

`(B) an electronic funds transfer mechanism (such as automatic charges of an account at a financial institution or a credit or debit card account); or

`(C) such other means as the Secretary may specify, including payment by an employer or under employment-based retiree health coverage (as defined in section 1860D-22(c)(1)) on behalf of an employee or former employee (or dependent).

All premium payments that are withheld under subparagraph (A) shall be credited to the appropriate Trust Fund (or Account thereof), as specified by the Secretary, under this title and shall be paid to the MA organization involved. No charge may be imposed under an MA plan with respect to the election of the payment option described in subparagraph (A). The Secretary shall consult with the Commissioner of Social Security and the Secretary of the Treasury regarding methods for allocating premiums withheld under subparagraph (A) among the appropriate Trust Funds and Account.

`(3) INFORMATION NECESSARY FOR COLLECTION- In order to carry out paragraph (2)(A) with respect to an enrollee who has elected such paragraph to apply, the Secretary shall transmit to the Commissioner of Social Security--

`(A) by the beginning of each year, the name, social security account number, consolidated monthly beneficiary premium described in paragraph (4) owed by such enrollee for each month during the year, and other information determined appropriate by the Secretary, in consultation with the Commissioner of Social Security; and

`(B) periodically throughout the year, information to update the information previously transmitted under this paragraph for the year.

`(4) CONSOLIDATED MONTHLY BENEFICIARY PREMIUM- In the case of an enrollee in an MA plan, the Secretary shall provide a mechanism for the consolidation of--

`(A) the MA monthly basic beneficiary premium (if any);

`(B) the MA monthly supplemental beneficiary premium (if any); and

`(C) the MA monthly prescription drug beneficiary premium (if any).'.

(d) COMPUTATION OF MA AREA-SPECIFIC NON-DRUG BENCHMARK- Section 1853 (42 U.S.C. 1395w-23) is amended by adding at the end the following new subsection:

`(j) COMPUTATION OF BENCHMARK AMOUNTS- For purposes of this part, the term `MA area-specific non-drug monthly benchmark amount' means for a month in a year--

`(1) with respect to--

`(A) a service area that is entirely within an MA local area, an amount equal to 1/12 of the annual MA capitation rate under section 1853(c)(1) for the area for the year, adjusted as appropriate for the purpose of risk adjustment; or

`(B) a service area that includes more than one MA local area, an amount equal to the average of the amounts described in subparagraph (A) for each such local MA area, weighted by the projected number of enrollees in the plan residing in the respective local MA areas (as used by the plan for purposes of the bid and disclosed to the Secretary under section 1854(a)(6)(A)(iii)), adjusted as appropriate for the purpose of risk adjustment; or

`(2) with respect to an MA region for a month in a year, the MA region-specific non-drug monthly benchmark amount, as defined in section 1858(f) for the region for the year.'.

(e) PAYMENT OF PLANS BASED ON BID AMOUNTS-

(1) IN GENERAL- Section 1853(a)(1) (42 U.S.C. 1395w-23(a)(1)) (42 U.S.C. 1395w-23) is amended--

(A) by redesignating subparagraph (B) as subparagraph (H); and

(B) in subparagraph (A), by striking `in an amount' and all that follows and inserting the following: `in an amount determined as follows:

`(i) PAYMENT BEFORE 2006- For years before 2006, the payment amount shall be equal to 1/12 of the annual MA capitation rate (as calculated under subsection (c)(1)) with respect to that individual for that area, adjusted under subparagraph (C) and reduced by the amount of any reduction elected under section 1854(f)(1)(E).

`(ii) PAYMENT FOR ORIGINAL FEE-FOR-SERVICE BENEFITS BEGINNING WITH 2006- For years beginning with 2006, the amount specified in subparagraph (B).

`(B) PAYMENT AMOUNT FOR ORIGINAL FEE-FOR-SERVICE BENEFITS BEGINNING WITH 2006-

`(i) PAYMENT OF BID FOR PLANS WITH BIDS BELOW BENCHMARK- In the case of a plan for which there are average per capita monthly savings described in section 1854(b)(3)(C) or 1854(b)(4)(C), as the case may be, the amount specified in this subparagraph is equal to the unadjusted MA statutory non-drug monthly bid amount, adjusted under subparagraph (C) and (if applicable) under subparagraphs (F) and (G), plus the amount (if any) of any rebate under subparagraph (E).

`(ii) PAYMENT OF BENCHMARK FOR PLANS WITH BIDS AT OR ABOVE BENCHMARK- In the case of a plan for which there are no average per capita monthly savings described in section 1854(b)(3)(C) or 1854(b)(4)(C), as the case may be, the amount specified in this subparagraph is equal to the MA area-specific non-drug monthly benchmark amount, adjusted under subparagraph (C) and (if applicable) under subparagraphs (F) and (G).

`(iii) PAYMENT OF BENCHMARK FOR MSA PLANS- Notwithstanding clauses (i) and (ii), in the case of an MSA plan, the amount specified in this subparagraph is equal to the MA area-specific non-drug monthly benchmark amount, adjusted under subparagraph (C).

`(C) DEMOGRAPHIC ADJUSTMENT, INCLUDING ADJUSTMENT FOR HEALTH STATUS- The Secretary shall adjust the payment amount under subparagraph (A)(i) and the amount specified under subparagraph (B)(i), (B)(ii), and (B)(iii) for such risk factors as age, disability status, gender, institutional status, and such other factors as the Secretary determines to be appropriate, including adjustment for health status under paragraph (3), so as to ensure actuarial equivalence. The Secretary may add to, modify, or substitute for such adjustment factors if such changes will improve the determination of actuarial equivalence.

`(D) SEPARATE PAYMENT FOR FEDERAL DRUG SUBSIDIES- In the case of an enrollee in an MA-PD plan, the MA organization offering such plan also receives--

`(i) subsidies under section 1860D-15 (other than under subsection (g)); and

`(ii) reimbursement for premium and cost-sharing reductions for low-income individuals under section 1860D-14(c)(1)(C).

`(E) PAYMENT OF REBATE FOR PLANS WITH BIDS BELOW BENCHMARK- In the case of a plan for which there are average per capita monthly savings described in section 1854(b)(3)(C) or 1854(b)(4)(C), as the case may be, the amount specified in this subparagraph is the amount of the monthly rebate computed under section 1854(b)(1)(C)(i) for that plan and year (as reduced by the amount of any credit provided under section 1854(b)(1)(C)(iv)).

`(F) ADJUSTMENT FOR INTRA-AREA VARIATIONS-

`(i) INTRA-REGIONAL VARIATIONS- In the case of payment with respect to an MA regional plan for an MA region, the Secretary shall also adjust the amounts specified under subparagraphs (B)(i) and (B)(ii) in a manner to take into account variations in MA local payment rates under this part among the different MA local areas included in such region.

`(ii) INTRA-SERVICE AREA VARIATIONS- In the case of payment with respect to an MA local plan for a service area that covers more than one MA local area, the Secretary shall also adjust the amounts specified under subparagraphs (B)(i) and (B)(ii) in a manner to take into account variations in MA local payment rates under this part among the different MA local areas included in such service area.

`(G) ADJUSTMENT RELATING TO RISK ADJUSTMENT- The Secretary shall adjust payments with respect to MA plans as necessary to ensure that--

`(i) the sum of--

`(I) the monthly payment made under subparagraph (A)(ii); and

`(II) the MA monthly basic beneficiary premium under section 1854(b)(2)(A); equals

`(ii) the unadjusted MA statutory non-drug monthly bid amount, adjusted in the manner described in subparagraph (C) and, for an MA regional plan, subparagraph (F).'.

(f) CONFORMING CHANGES TO ANNUAL ANNOUNCEMENT PROCESS- Section 1853(b) (42 U.S.C. 1395w-23(b)(1)) is amended--

(1) by amending paragraph (1) to read as follows:

`(1) ANNUAL ANNOUNCEMENTS-

`(A) FOR 2005- The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), not later than the second Monday in May of 2004, with respect to each MA payment area, the following:

`(i) MA CAPITATION RATES- The annual MA capitation rate for each MA payment area for 2005.

`(ii) ADJUSTMENT FACTORS- The risk and other factors to be used in adjusting such rates under subsection (a)(1)(C) for payments for months in 2005.

`(B) FOR 2006 AND SUBSEQUENT YEARS- For a year after 2005--

`(i) INITIAL ANNOUNCEMENT- The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), not later than the first Monday in April before the calendar year concerned, with respect to each MA payment area, the following:

`(I) MA CAPITATION RATES; MA LOCAL AREA BENCHMARK- The annual MA capitation rate for each MA payment area for the year.

`(II) ADJUSTMENT FACTORS- The risk and other factors to be used in adjusting such rates under subsection (a)(1)(C) for payments for months in such year.

`(ii) REGIONAL BENCHMARK ANNOUNCEMENT- The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), on a timely basis before the calendar year concerned, with respect to each MA region and each MA regional plan for which a bid was submitted under section 1854, the MA region-specific non-drug monthly benchmark amount for that region for the year involved.'; and

(2) in paragraph (3), by striking `in the announcement' and all that follows and inserting `in such announcement.'.

(g) OTHER AMENDMENTS RELATING TO PREMIUMS AND BID AMOUNTS-

(1) IN GENERAL- Section 1854 (42 U.S.C. 1395w-24) is amended--

(A) by amending the section heading to read as follows:

`PREMIUMS AND BID AMOUNTS';

(B) in the heading of subsection (a), by inserting `, BID AMOUNTS,' after `PREMIUMS';

(C) in subsection (a)(2)--

(i) by inserting `BEFORE 2006' after `FOR COORDINATED CARE PLANS'; and

(ii) by inserting `for a year before 2006' after `section 1851(a)(2)(A)';

(D) in subsection (a)(3), by striking `described' and inserting `for any year';

(E) in subsection (a)(4)--

(i) by inserting `BEFORE 2006' after `FOR PRIVATE FEE-FOR-SERVICE PLANS'; and

(ii) by inserting `for a year before 2006' after `section 1852(a)(1)(A)';

(F) in subsection (a)(5)(A), by inserting `paragraphs (2) and (4) of' after `filed under';

(G) in subsection (a)(5)(B), by inserting after `paragraph (3) or' the following: `, in the case of an MA private fee-for-service plan,'; and

(H) in subsection (b)(1)(A) by striking `and' and inserting a comma and by inserting before the period at the end the following: `, and, if the plan provides qualified prescription drug coverage, the MA monthly prescription drug beneficiary premium'.

(2) UNIFORMITY- Section 1854(c) (42 U.S.C. 1395w-24(c)) is amended to read as follows:

`(c) UNIFORM PREMIUM AND BID AMOUNTS- Except as permitted under section 1857(i), the MA monthly bid amount submitted under subsection (a)(6), the amounts of the MA monthly basic, prescription drug, and supplemental beneficiary premiums, and the MA monthly MSA premium charged under subsection (b) of an MA organization under this part may not vary among individuals enrolled in the plan.'.

(3) PREMIUMS- Section 1854(d)(1) (42 U.S.C. 1395w-24(d)(1)), as amended by subsection (c)(1), is amended by inserting `, prescription drug,' after `basic'.

(4) LIMITATION ON ENROLLEE LIABILITY- Section 1854(e) (42 U.S.C. 1395w-24(e)) is amended--

(A) in paragraph (1), by striking `- In' and inserting `BEFORE 2006- For periods before 2006, in';

(B) in paragraph (2), by striking `- If' and insert `BEFORE 2006- For periods before 2006, if';

(C) in paragraph (3), by striking `or (2)' and inserting `, (2), or (4)'; and

(D) in paragraph (4)--

(i) by inserting `AND FOR BASIC BENEFITS BEGINNING IN 2006' after `PLANS';

(ii) in the matter before subparagraph (A), by inserting `and for periods beginning with 2006, with respect to an MA plan described in section 1851(a)(2)(A)' after `MSA plan)';

(iii) in subparagraph (A), by striking `required benefits described in section 1852(a)(1)' and inserting `benefits under the original medicare fee-for-service program option'; and

(iv) in subparagraph (B), by inserting `with respect to such benefits' after `would be applicable'.

(5) MODIFICATION OF ACR PROCESS- Section 1854(f) (42 U.S.C. 1395w-24(f)) is amended--

(A) in the heading, by inserting `BEFORE 2006' after `ADDITIONAL BENEFITS'; and

(B) in paragraph (1)(A), by striking `Each' and inserting `For years before 2006, each'.

(h) PLAN INCENTIVES- Section 1852(j)(4) (42 U.S.C. 1395w-22(j)(4)) is amended--

(1) by inserting `the organization provides assurances satisfactory to the Secretary that' after `unless';

(2) in clause (ii)--

(A) by striking `the organization--' and all that follows through `(I) provides' and inserting `the organization provides';

(B) by striking `, and' and inserting a period; and

(C) by striking subclause (II); and

(3) by striking clause (iii).

(i) CONTINUATION OF TREATMENT OF ENROLLEES WITH END-STAGE RENAL DISEASE- Section 1853(a)(1)(H), as redesignated under subsection (d)(1)(A), is amended--

(1) by amending the second sentence to read as follows: `Such rates of payment shall be actuarially equivalent to rates that would have been paid with respect to other enrollees in the MA payment area (or such other area as specified by the Secretary) under the provisions of this section as in effect before the date of the enactment of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.'; and

(2) by adding at the end the following new sentence: `The Secretary may apply the competitive bidding methodology provided for in this section, with appropriate adjustments to account for the risk adjustment methodology applied to end stage renal disease payments.'.

(j) FACILITATION OF EMPLOYER SPONSORSHIP OF MA PLANS- Section 1857(i) (42 U.S.C. 1395w-27(i)) is amended--

(1) by designating the matter following the heading as a paragraph (1) with the heading `CONTRACTS WITH MA ORGANIZATIONS- ' and appropriate indentation; and

(2) by adding at the end the following new paragraph:

`(2) EMPLOYER SPONSORED MA PLANS- To facilitate the offering of MA plans by employers, labor organizations, or the trustees of a fund established by one or more employers or labor organizations (or combination thereof) to furnish benefits to the entity's employees, former employees (or combination thereof) or members or former members (or combination thereof) of the labor organizations, the Secretary may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such MA plans. Notwithstanding section 1851(g), an MA plan described in the previous sentence may restrict the enrollment of individuals under this part to individuals who are beneficiaries and participants in such plan.'.

(k) EXPANSION OF MEDICARE BENEFICIARY EDUCATION AND INFORMATION CAMPAIGN- Section 1857(e)(2) (42 U.S.C. 1395w-27(e)(2)) is amended--

(1) in subparagraph (A) by inserting `and a PDP sponsor under part D' after `organization';

(2) in subparagraph (B)--

(A) by inserting `and each PDP sponsor with a contract under part D' after `contract under this part';

(B) by inserting `or sponsor's' after `organization's'; and

(C) by inserting `, section 1860D-1(c),' after `information)';

(3) in subparagraph (C)--

(A) by inserting `and ending with fiscal year 2005' after `beginning with fiscal year 2001';

(B) by inserting `and for each fiscal year beginning with fiscal year 2006 an amount equal to $200,000,000,' after `$100,000,000,'; and

(C) by inserting `and section 1860D-12(b)(3)(D)' after `under this paragraph';

(4) in subparagraph (D)--

(A) in clause (i) by inserting `and section 1860D-1(c)' after `section 1851';

(B) in clause (ii)(III), by striking `and' at the end of subclause (III);

(C) in clause (ii)(IV), by striking `each succeeding fiscal year.' and inserting `each succeeding fiscal year before fiscal year 2006; and'; and

(D) in clause (ii), by adding at the end the following new subclause:

`(V) the applicable portion (as defined in subparagraph (F)) of $200,000,000 in fiscal year 2006 and each succeeding fiscal year.'; and

(5) by adding at the end the following new subparagraph:

`(F) APPLICABLE PORTION DEFINED- In this paragraph, the term `applicable portion' means, for a fiscal year--

`(i) with respect to MA organizations, the Secretary's estimate of the total proportion of expenditures under this title that are attributable to expenditures made under this part (including payments under part D that are made to such organizations); or

`(ii) with respect to PDP sponsors, the Secretary's estimate of the total proportion of expenditures under this title that are attributable to expenditures made to such sponsors under part D.'.

(l) CONFORMING AMENDMENTS-

(1) PROTECTION AGAINST BENEFICIARY SELECTION- Section 1852(b)(1)(A) (42 U.S.C. 1395w-22(b)(1)(A)) is amended by adding at the end the following: `The Secretary shall not approve a plan of an organization if the Secretary determines that the design of the plan and its benefits are likely to substantially discourage enrollment by certain MA eligible individuals with the organization.'.

(2) RELATING TO REBATES-

(A) Section 1839(a)(2) (42 U.S.C. 1395r(a)(2)) is amended by striking `80 percent of any reduction elected under section 1854(f)(1)(E)' and inserting `any credit provided under section 1854(b)(1)(C)(ii)(III)'.

(B) The first sentence of section 1840(i) (42 U.S.C. 1395s(i)) is amended by inserting `and to reflect any credit provided under section 1854(b)(1)(C)(iv)' after `section 1854(f)(1)(E)'.

(C) Section 1844(c) (42 U.S.C. 1395w(c)) is amended by inserting `or any credits provided under section 1854(b)(1)(C)(iv)' after `section 1854(f)(1)(E)'.

(3) OTHER CONFORMING AND TECHNICAL AMENDMENTS-

(A) Section 1851(b)(1) (42 U.S.C. 1395w-21(b)(1)) is amended--

(i) in subparagraph (B), by striking `a plan' and inserting `an MA local plan';

(ii) in subparagraph (B), by striking `basic benefits described in section 1852(a)(1)(A)' and inserting `benefits under the original medicare fee-for-service program option'; and

(iii) in subparagraph (C), by striking `in a Medicare+Choice plan' and inserting `in an MA local plan'.

(B) Section 1851(d) (42 U.S.C. 1395w-21(d)) is amended--

(i) in paragraph (3), by adding at the end the following new subparagraph:

`(F) CATASTROPHIC COVERAGE AND SINGLE DEDUCTIBLE- In the case of an MA regional plan, a description of the catastrophic coverage and single deductible applicable under the plan.';

(ii) in paragraph (4)(A)(ii), by inserting `, including information on the single deductible (if applicable) under section 1858(b)(1)' after `cost sharing';

(iii) in paragraph (4)(B)(i), by striking `Medicare+Choice monthly basic' and all that follows and inserting `monthly amount of the premium charged to an individual.'; and

(iv) by amending subparagraph (E) of subsection (d)(4) to read as follows:

`(E) SUPPLEMENTAL BENEFITS- Supplemental health care benefits, including any reductions in cost-sharing under section 1852(a)(3) and the terms and conditions (including premiums) for such benefits.'.

(C) Section 1857(d)(1) (42 U.S.C. 1395w-27(d)(1)) is amended by striking `, costs, and computation of the adjusted community rate' and inserting `and costs, including allowable costs under section 1858(c)'.

(D) Section 1851(a)(3)(B)(ii) (42 U.S.C. 1395w-21(a)(3)(B)(ii)) is amended by striking `section 1851(e)(4)(A)' and inserting `subsection (e)(4)(A)'.

(E) Section 1851(f)(1) (42 U.S.C. 1395w-21(f)(1)) is amended by striking `subsection (e)(1)(A)' and inserting `subsection (e)(1)'.