TITLE II--MEDICARE ADVANTAGE

Subtitle D--Additional Reforms

SEC. 237. REIMBURSEMENT FOR FEDERALLY QUALIFIED HEALTH CENTERS PROVIDING SERVICES UNDER MA PLANS.

(a) REIMBURSEMENT- Section 1833(a)(3) (42 U.S.C. 1395l(a)(3)) is amended to read as follows:

`(3) in the case of services described in section 1832(a)(2)(D)--

`(A) except as provided in subparagraph (B), the costs which are reasonable and related to the cost of furnishing such services or which are based on such other tests of reasonableness as the Secretary may prescribe in regulations, including those authorized under section 1861(v)(1)(A), less the amount a provider may charge as described in clause (ii) of section 1866(a)(2)(A), but in no case may the payment for such services (other than for items and services described in section 1861(s)(10)(A)) exceed 80 percent of such costs; or

`(B) with respect to the services described in clause (ii) of section 1832(a)(2)(D) that are furnished to an individual enrolled with a MA plan under part C pursuant to a written agreement described in section 1853(a)(4), the amount (if any) by which--

`(i) the amount of payment that would have otherwise been provided under subparagraph (A) (calculated as if `100 percent' were substituted for `80 percent' in such subparagraph) for such services if the individual had not been so enrolled; exceeds

`(ii) the amount of the payments received under such written agreement for such services (not including any financial incentives provided for in such agreement such as risk pool payments, bonuses, or withholds),

less the amount the federally qualified health center may charge as described in section 1857(e)(3)(B);'.

(b) CONTINUATION OF MONTHLY PAYMENTS-

(1) IN GENERAL- Section 1853(a) (42 U.S.C. 1395w-23(a)) is amended by adding at the end the following new paragraph:

`(4) PAYMENT RULE FOR FEDERALLY QUALIFIED HEALTH CENTER SERVICES- If an individual who is enrolled with an MA plan under this part receives a service from a federally qualified health center that has a written agreement with the MA organization that offers such plan for providing such a service (including any agreement required under section 1857(e)(3))--

`(A) the Secretary shall pay the amount determined under section 1833(a)(3)(B) directly to the federally qualified health center not less frequently than quarterly; and

`(B) the Secretary shall not reduce the amount of the monthly payments under this subsection as a result of the application of subparagraph (A).'.

(2) CONFORMING AMENDMENTS-

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

(i) in paragraph (1), by inserting `1853(a)(4),' after `Subject to sections 1852(a)(5),'; and

(ii) in paragraph (2), by inserting `1853(a)(4),' after `Subject to sections'.

(B) Section 1853(c)(5) is amended by striking `subsections (a)(3)(C)(iii) and (i)' and inserting `subsections (a)(3)(C)(iii), (a)(4), and (i)'.

(c) ADDITIONAL CONTRACT REQUIREMENTS- Section 1857(e) (42 U.S.C. 1395w-27(e)) is amended by adding at the end the following new paragraph:

`(3) AGREEMENTS WITH FEDERALLY QUALIFIED HEALTH CENTERS-

`(A) PAYMENT LEVELS AND AMOUNTS- A contract under this section with an MA organization shall require the organization to provide, in any written agreement described in section 1853(a)(4) between the organization and a federally qualified health center, for a level and amount of payment to the federally qualified health center for services provided by such health center that is not less than the level and amount of payment that the plan would make for such services if the services had been furnished by a entity providing similar services that was not a federally qualified health center.

`(B) COST-SHARING- Under the written agreement referred to in subparagraph (A), a federally qualified health center must accept the payment amount referred to in such subparagraph plus the Federal payment provided for in section 1833(a)(3)(B) as payment in full for services covered by the agreement, except that such a health center may collect any amount of cost-sharing permitted under the contract under this section, so long as the amounts of any deductible, coinsurance, or copayment comply with the requirements under section 1854(e).'.

(d) SAFE HARBOR- Section 1128B(b)(3) (42 U.S.C. 1320a-7b(b)(3)), as amended by section 101(f)(2), is amended--

(1) in subparagraph (F), by striking `and' after the semicolon at the end;

(2) in subparagraph (G), by striking the period at the end and inserting `; and'; and

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

`(H) any remuneration between a federally qualified health center (or an entity controlled by such a health center) and an MA organization pursuant to a written agreement described in section 1853(a)(4).'.

(e) EFFECTIVE DATE- The amendments made by this section shall apply to services provided on or after January 1, 2006, and contract years beginning on or after such date.