TITLE II--MEDICARE ADVANTAGE
Subtitle E--Comparative Cost Adjustment (CCA) Program
SEC. 241. COMPARATIVE COST ADJUSTMENT (CCA) PROGRAM.
(a) IN GENERAL- Part C of title XVIII is amended
by adding at the end the following new section:
`COMPARATIVE COST ADJUSTMENT (CCA) PROGRAM
`SEC. 1860C-1. (a) ESTABLISHMENT OF PROGRAM-
`(1) IN GENERAL- The Secretary shall establish a program under this
section (in this section referred to as the `CCA program') for the
application of comparative cost adjustment in CCA areas selected under this
section.
`(2) DURATION- The CCA program shall begin January 1, 2010, and shall
extend over a period of 6 years, and end on December 31, 2015.
`(3) REPORT- Upon the completion of the CCA program, the Secretary shall
submit a report to Congress. Such report shall include the following, with
respect to both this part and the original medicare fee-for-service
program:
`(A) An evaluation of the financial impact of the CCA
program.
`(B) An evaluation of changes in access to physicians and other health
care providers.
`(C) Beneficiary satisfaction.
`(D) Recommendations regarding any extension or expansion of the CCA
program.
`(b) REQUIREMENTS FOR SELECTION OF CCA AREAS-
`(A) IN GENERAL- For purposes of this section, the term `CCA area'
means an MSA that meets the requirements of paragraph (2) and is selected
by the Secretary under subsection (c).
`(B) MSA DEFINED- For purposes of this section, the term `MSA' means a
Metropolitan Statistical Area (or such similar area as the Secretary
recognizes).
`(2) REQUIREMENTS FOR CCA AREAS- The requirements of this paragraph for
an MSA to be a CCA area are as follows:
`(A) MA ENROLLMENT REQUIREMENT- For the reference month (as defined
under section 1858(f)(4)(B)) with respect to 2010, at least 25 percent of
the total number of MA eligible individuals who reside in the MSA were
enrolled in an MA local plan described in section
1851(a)(2)(A)(i).
`(B) 2 PLAN REQUIREMENT- There will be offered in the MSA during the
annual, coordinated election period under section 1851(e)(3)(B) before the
beginning of 2010 at least 2 MA local plans described in section
1851(a)(2)(A)(i) (in addition to the fee-for-service program under parts A
and B), each offered by a different MA organization and each of which met
the minimum enrollment requirements of paragraph (1) of section 1857(b)
(as applied without regard to paragraph (3) thereof) as of the reference
month.
`(c) SELECTION OF CCA AREAS-
`(1) GENERAL SELECTION CRITERIA- The Secretary shall select CCA areas
from among those MSAs qualifying under subsection (b) in a manner
that--
`(A) seeks to maximize the opportunity to test the application of
comparative cost adjustment under this title;
`(B) does not seek to maximize the number of MA eligible individuals
who reside in such areas; and
`(C) provides for geographic diversity consistent with the criteria
specified in paragraph (2).
`(2) SELECTION CRITERIA- With respect to the selection of MSAs that
qualify to be CCA areas under subsection (b), the following rules apply, to
the maximum extent feasible:
`(A) MAXIMUM NUMBER- The number of such MSAs selected may not exceed
the lesser of (i) 6, or (ii) 25 percent of the number of MSAs that meet
the requirement of subsection (b)(2)(A).
`(B) ONE OF 4 LARGEST AREAS BY POPULATION- At least one such
qualifying MSA shall be selected from among the 4 such qualifying MSAs
with the largest total population of MA eligible individuals.
`(C) ONE OF 4 AREAS WITH LOWEST POPULATION DENSITY- At least one such
qualifying MSA shall be selected from among the 4 such qualifying MSAs
with the lowest population density (as measured by residents per square
mile or similar measure of density).
`(D) MULTISTATE AREA- At least one such qualifying MSA shall be
selected that includes a multi-State area. Such an MSA may be an MSA
described in subparagraph (B) or (C).
`(E) LIMITATION WITHIN SAME GEOGRAPHIC REGION- No more than 2 such
MSAs shall be selected that are, in whole or in part, within the same
geographic region (as specified by the Secretary) of the United
States.
`(F) PRIORITY TO AREAS NOT WITHIN CERTAIN DEMONSTRATION PROJECTS-
Priority shall be provided for those qualifying MSAs that do not have a
demonstration project in effect as of the date of the enactment of this
section for medicare preferred provider organization plans under this
part.
`(d) APPLICATION OF COMPARATIVE COST ADJUSTMENT-
`(1) IN GENERAL- In the case of a CCA area for a year--
`(A) for purposes of applying this part with respect to payment for MA
local plans, any reference to an MA area-specific non-drug monthly
benchmark amount shall be treated as a reference to such benchmark
computed as if the CCA area-specific non-drug monthly benchmark amount (as
defined in subsection (e)(1)) were substituted for the amount described in
section 1853(j)(1)(A) for the CCA area and year involved, as phased in
under paragraph (3); and
`(B) with respect to months in the year for individuals residing in
the CCA area who are not enrolled in an MA plan, the amount of the monthly
premium under section 1839 is subject to adjustment under subsection
(f).
`(2) EXCLUSION OF MA LOCAL AREAS WITH FEWER THAN 2 ORGANIZATIONS
OFFERING MA PLANS-
`(A) IN GENERAL- In no case shall an MA local area that is within an
MSA be included as part of a CCA area unless for 2010 (and, except as
provided in subparagraph (B), for a subsequent year) there is offered in
each part of such MA local area at least 2 MA local plans described in
section 1851(a)(2)(A)(i) each of which is offered by a different MA
organization.
`(B) CONTINUATION- If an MA local area meets the requirement of
subparagraph (A) and is included in a CCA area for 2010, such local area
shall continue to be included in such CCA area for a subsequent year
notwithstanding that it no longer meets such requirement so long as there
is at least one MA local plan described in section 1851(a)(2)(A)(i) that
is offered in such local area.
`(3) PHASE-IN OF CCA BENCHMARK-
`(A) IN GENERAL- In applying this section for a year before 2013,
paragraph (1)(A) shall be applied as if the phase-in fraction under
subparagraph (B) of the CCA non-drug monthly benchmark amount for the year
were substituted for such fraction of the MA area-specific non-drug
monthly benchmark amount.
`(B) PHASE-IN FRACTION- The phase-in fraction under this subparagraph
is--
`(ii) for a subsequent year is the phase-in fraction under this
subparagraph for the previous year increased by 1/4 , but in no case
more than 1.
`(e) COMPUTATION OF CCA BENCHMARK AMOUNT-
`(1) CCA NON-DRUG MONTHLY BENCHMARK AMOUNT- For purposes of this
section, the term `CCA non-drug monthly benchmark amount' means, with
respect to a CCA area for a month in a year, the sum of the 2 components
described in paragraph (2) for the area and year. The Secretary shall
compute such benchmark amount for each such CCA area before the beginning of
each annual, coordinated election period under section 1851(e)(3)(B) for
each year (beginning with 2010) in which the CCA area is so selected.
`(2) 2 COMPONENTS- For purposes of paragraph (1), the 2 components
described in this paragraph for a CCA area and a year are the
following:
`(A) MA LOCAL COMPONENT- The product of the following:
`(i) WEIGHTED AVERAGE OF MEDICARE ADVANTAGE PLAN BIDS IN AREA- The
weighted average of the plan bids for the area and year (as determined
under paragraph (3)(A)).
`(ii) NON-FFS MARKET SHARE- One minus the fee-for-service market
share percentage, determined under paragraph (4) for the area and
year.
`(B) FEE-FOR-SERVICE COMPONENT- The product of the following:
`(i) FEE-FOR-SERVICE AREA-SPECIFIC NON-DRUG AMOUNT- The
fee-for-service area-specific non-drug amount (as defined in paragraph
(5)) for the area and year.
`(ii) FEE-FOR-SERVICE MARKET SHARE- The fee-for-service market share
percentage, determined under paragraph (4) for the area and
year.
`(3) DETERMINATION OF WEIGHTED AVERAGE MA BIDS FOR A CCA AREA-
`(A) IN GENERAL- For purposes of paragraph (2)(A)(i), the weighted
average of plan bids for a CCA area and a year is, subject to subparagraph
(D), the sum of the following products for MA local plans described in
subparagraph (C) in the area and year:
`(i) MONTHLY MEDICARE ADVANTAGE STATUTORY NON-DRUG BID AMOUNT- The
accepted unadjusted MA statutory non-drug monthly bid
amount.
`(ii) PLAN'S SHARE OF MEDICARE ADVANTAGE ENROLLMENT IN AREA- The
number of individuals described in subparagraph (B), divided by the
total number of such individuals for all MA plans described in
subparagraph (C) for that area and year.
`(B) COUNTING OF INDIVIDUALS- The Secretary shall count, for each MA
local plan described in subparagraph (C) for an area and year, the number
of individuals who reside in the area and who were enrolled under such
plan under this part during the reference month for that year.
`(C) EXCLUSION OF PLANS NOT OFFERED IN PREVIOUS YEAR- For an area and
year, the MA local plans described in this subparagraph are MA local plans
described in section 1851(a)(2)(A)(i) that are offered in the area and
year and were offered in the CCA area in the reference month.
`(D) COMPUTATION OF WEIGHTED AVERAGE OF PLAN BIDS- In calculating the
weighted average of plan bids for a CCA area under subparagraph
(A)--
`(i) in the case of an MA local plan that has a service area only
part of which is within such CCA area, the MA organization offering such
plan shall submit a separate bid for such plan for the portion within
such CCA area; and
`(ii) the Secretary shall adjust such separate bid (or, in the case
of an MA local plan that has a service area entirely within such CCA
area, the plan bid) as may be necessary to take into account differences
between the service area of such plan within the CCA area and the entire
CCA area and the distribution of plan enrollees of all MA local plans
offered within the CCA area.
`(4) COMPUTATION OF FEE-FOR-SERVICE MARKET SHARE PERCENTAGE- The
Secretary shall determine, for a year and a CCA area, the proportion (in
this subsection referred to as the `fee-for-service market share
percentage') equal to--
`(A) the total number of MA eligible individuals residing in such area
who during the reference month for the year were not enrolled in any MA
plan; divided by
`(B) the sum of such number and the total number of MA eligible
individuals residing in such area who during such reference month were
enrolled in an MA local plan described in section
1851(a)(2)(A)(i),
or, if greater, such proportion determined for individuals
nationally.
`(5) FEE-FOR-SERVICE AREA-SPECIFIC NON-DRUG AMOUNT-
`(A) IN GENERAL- For purposes of paragraph (2)(B)(i) and subsection
(f)(2)(A), subject to subparagraph (C), the term `fee-for-service
area-specific non-drug amount' means, for a CCA area and a year, the
adjusted average per capita cost for such area and year involved,
determined under section 1876(a)(4) and adjusted as appropriate for the
purpose of risk adjustment for benefits under the original medicare
fee-for-service program option for individuals entitled to benefits under
part A and enrolled under part B who are not enrolled in an MA plan for
the year, but adjusted to exclude costs attributable to payments under
section 1886(h).
`(B) USE OF FULL RISK ADJUSTMENT TO STANDARDIZE FEE-FOR-SERVICE COSTS
TO TYPICAL BENEFICIARY- In determining the adjusted average per capita
cost for an area and year under subparagraph (A), such costs shall be
adjusted to fully take into account the demographic and health status risk
factors established under section 1853(a)(1)(A)(iv) so that such per
capita costs reflect the average costs for a typical beneficiary residing
in the CCA area.
`(C) INCLUSION OF COSTS OF VA AND DOD MILITARY FACILITY SERVICES TO
MEDICARE-ELIGIBLE BENEFICIARIES- In determining the adjusted average per
capita cost under subparagraph (A) for a year, such cost shall be adjusted
to include the Secretary's estimate, on a per capita basis, of the amount
of additional payments that would have been made in the area involved
under this title if individuals entitled to benefits under this title had
not received services from facilities of the Department of Veterans
Affairs or the Department of Defense.
`(A) IN GENERAL- Except as provided in subparagraph (B), in the case
of an individual who is enrolled under part B, who resides in a CCA area,
and who is not enrolled in an MA plan under this part, the monthly premium
otherwise applied under part B (determined without regard to subsections
(b), (f), and (i) of section 1839 or any adjustment under this subsection)
shall be adjusted in accordance with paragraph (2), but only in the case
of premiums for months during the period in which the CCA program under
this section for such area is in effect.
`(B) NO PREMIUM ADJUSTMENT FOR SUBSIDY ELIGIBLE BENEFICIARIES- No
premium adjustment shall be made under this subsection for a premium for a
month if the individual is determined to be a subsidy eligible individual
(as defined in section 1860D-14(a)(3)(A)) for the month.
`(2) AMOUNT OF ADJUSTMENT-
`(A) IN GENERAL- Under this paragraph, subject to the exemption under
paragraph (1)(B) and the limitation under subparagraph (B), if the
fee-for-service area-specific non-drug amount (as defined in section
(e)(5)) for a CCA area in which an individual resides for a
month--
`(i) does not exceed the CCA non-drug monthly benchmark amount (as
determined under subsection (e)(1)) for such area and month, the amount
of the premium for the individual for the month shall be reduced, by an
amount equal to 75 percent of the amount by which such CCA benchmark
exceeds such fee-for-service area-specific non-drug amount;
or
`(ii) exceeds such CCA non-drug benchmark, the amount of the premium
for the individual for the month shall be adjusted to ensure,
that--
`(I) the sum of the amount of the adjusted premium and the CCA
non-drug benchmark for the area; is equal to
`(II) the sum of the unadjusted premium plus the amount of such
fee-for-service area-specific non-drug amount for the
area.
`(B) LIMITATION- In no case shall the actual amount of an adjustment
under subparagraph (A) for an area and month in a year result in an
adjustment that exceeds the maximum adjustment permitted under
subparagraph (C) for the area and year, or, if less, the maximum annual
adjustment permitted under subparagraph (D) for the area and
year.
`(C) PHASE-IN OF ADJUSTMENT- The amount of an adjustment under
subparagraph (A) for a CCA area and year may not exceed the product of the
phase-in fraction for the year under subsection (d)(3)(B) multiplied by
the amount of the adjustment otherwise computed under subparagraph (A) for
the area and year, determined without regard to this subparagraph and
subparagraph (D).
`(D) 5-PERCENT LIMITATION ON ADJUSTMENT- The amount of the adjustment
under this subsection for months in a year shall not exceed 5 percent of
the amount of the monthly premium amount determined for months in the year
under section 1839 without regard to subsections (b), (f), and (i) of such
section and this subsection.'.
(b) CONFORMING AMENDMENTS-
(A) Section 1853(j)(1)(A) (42
U.S.C. 1395w-23(j)(1)(A)), as added by section 222(d), is amended by inserting
`subject to section 1860C-1(d)(2)(A),' after `within an MA local area,'.
(B) Section 1853(b)(1)(B),
as amended by section 222(f)(1), is amended by adding at the end the following
new clause:
`(iii) BENCHMARK ANNOUNCEMENT FOR CCA LOCAL AREAS- 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 CCA area (as defined in section
1860C-1(b)(1)(A)), the CCA non-drug monthly benchmark amount under
section 1860C-1(e)(1) for that area for the year involved.'.
(A) Section 1839 (42 U.S.C.
1395r) is amended by adding at the end the following new subsection:
`(h) POTENTIAL APPLICATION OF COMPARATIVE COST ADJUSTMENT IN CCA AREAS-
`(1) IN GENERAL- Certain individuals who are residing in a CCA area
under section 1860C-1 who are not enrolled in an MA plan under part C may be
subject to a premium adjustment under subsection (f) of such section for
months in which the CCA program under such section is in effect in such
area.
`(2) NO EFFECT ON LATE ENROLLMENT PENALTY OR INCOME-RELATED ADJUSTMENT
IN SUBSIDIES- Nothing in this subsection or section 1860C-1(f) shall be
construed as affecting the amount of any premium adjustment under subsection
(b) or (i). Subsection (f) shall be applied without regard to any premium
adjustment referred to in paragraph (1).
`(3) IMPLEMENTATION- In order to carry out a premium adjustment under
this subsection and section 1860C-1(f) (insofar as it is effected through
the manner of collection of premiums under section 1840(a)), the Secretary
shall transmit to the Commissioner of Social Security--
`(A) at the beginning of each year, the name, social security account
number, and the amount of the premium adjustment (if any) for each
individual enrolled under this part for each month during the year;
and
`(B) periodically throughout the year, information to update the
information previously transmitted under this paragraph for the
year.'.
(B) Section 1844(c) (42 U.S.C.
1395w(c)) is amended by inserting `and without regard to any premium adjustment
effected under sections 1839(h) and 1860C-1(f)' before the period at the
end.
(c) NO CHANGE IN MEDICARE'S DEFINED BENEFIT
PACKAGE- Nothing in this part (or the amendments made by this part) shall be
construed as changing the entitlement to defined benefits under parts A and
B of title XVIII of the Social Security Act.
