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104th Congress                                             Rept. 104-80
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     Part 1
_______________________________________________________________________


 
       MEDICARE PRESIDENTIAL BUDGET SAVINGS EXTENSION ACT OF 1995

                                _______


                 March 15, 1995.--Ordered to be printed

_______________________________________________________________________


    Mr. Archer, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1134]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 1134) to amend title XVIII of the Social Security 
Act to extend certain savings provisions under the medicare 
program, as incorporated in the budget submitted by the 
President for fiscal year 1996, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                                CONTENTS

                                                                   Page
 I. Introduction......................................................2
        A. Purpose and summary...................................     2
        B. Background and need for legislation...................     2
        C. Legislative history...................................     2
II. Explanation of the bill...........................................3
        A. Maintaining savings resulting from temporary freeze on     3
            payment increases for skilled nursing facilities 
            (sec. 101).
        B. Setting the part B premium at 25 percent of program        3
            expenditures permanently (sec. 201).
        C. Permanent extension of certain secondary payer             4
            provisions (sec. 301).
        D. Maintaining savings resulting from temporary freeze on     4
            payment increases for home health services (sec. 
            302).
III.
    Votes of the committee............................................5
IV. Budget effects of the bill........................................5
        A. Committee estimate of budgetary effects...............     5
        B. Statement regarding new budget authority and tax           6
            expenditures.
        C. Cost estimate prepared by the Congressional Budget         6
            Office.
 V. Other matters to be discussed under the rules of the House........8
        A. Committee oversight findings and recommendations......     8
        B. Summary of findings and recommendations of the             9
            Government Operations Committee.
        C. Inflationary impact statement.........................     9
VI. Changes in existing law made by the bill, as reported.............9

                            I. INTRODUCTION

                         A. Purpose and Summary

    H.R. 1134: (1) maintains the savings resulting from the 
temporary freeze on payment increases for Skilled Nursing 
Facility (``SNF'') services; (2) sets the part B premium at 25 
percent of program expenditures permanently; (3) permanently 
extends certain Medicare secondary payer (``MSP'') provisions; 
and (4) maintains the savings resulting from the temporary 
freeze on payment increases for Home Health services.

                 B. Background and Need for Legislation

    These proposals are extensions of Medicare law which would 
otherwise expire or not continue
    The Committee on Ways and Means marked up the bill on March 
8, 1995, and ordered H.R. 1134 favorably reported, by voice 
vote, without amendment.

                         C. Legislative History

Committee bill

    H.R. 1134 was introduced on March 6, 1995, by Mr. Thomas of 
California and referred to the Committee on Ways and Means and, 
in addition, to the Committee on Commerce. The bill as 
introduced contained four provisions: (1) maintaining the 
savings resulting from the temporary freeze on payment 
increases for Skilled Nursing Facility services; (2) setting 
the Part B premium at 25 percent of program expenditures 
permanently; (3) permanently extending certain Medicare 
secondary payer provisions; and (4) maintaining the savings 
resulting from the temporary freeze on payment increases for 
Home Health services.
    The Committee on Ways and Means marked up the bill on March 
8, 1995, and ordered H.R. 1134 favorably reported, by voice 
vote, without amendment.

Legislative hearings

    The Subcommittee on Health of the Committee on Ways and 
Means held two public hearings which reviewed several aspects 
of the provisions included in H.R. 1134. The hearing on 
February 6, 1995, focused on areas of extraordinary growth in 
Medicare costs, including home health and skilled nursing 
facility costs. The hearing on February 23, 1995, reviewed the 
Medicare provisions included in the President's fiscal year 
1996 Budget.
    Further, the Committee on Ways and Means held four public 
hearings on February 7, 1995, February 8, 1995, and February 9, 
1995. The subject of the hearings was the Administration's 
fiscal year 1996 revenue and budget proposals, including the 
Medicare provisions of H.R. 1134.

                      II. EXPLANATION OF THE BILL

   A. Maintaining Savings Resulting from Temporary Freeze on Payment 
 Increases for Skilled Nursing Facilities (sec. 101 of the bill and 42 
                         U.S.C. sec. 1395yy(a))

Present law

    Payments for SNF services are made on a reasonable cost 
basis, subject to per diem cost limits. The limits are applied 
to the per diem routine service costs (nursing, room and board, 
administrative, and other overhead) of a facility. Freestanding 
SNF limits are set at 112 percent of the mean per diem labor-
related and nonlabor costs. Hospital-based SNF cost limits are 
set at the limit for freestanding SNFs, plus 50 percent of the 
difference between the freestanding limit and 112 percent of 
the mean per diem routine service costs of hospital-based SNFs. 
Certain SNFs can be paid at a prospective rate at 105 percent 
of the regional mean for all SNFs in the region. OBRA 93 
eliminated the update for SNF limits for cost reporting periods 
beginning in FY 1994 and FY 1995. Beginning in FY 1996, new 
cost limits would be established that do not reflect the 
effects of the freeze.

Explanation of provision

    The provision would permanently extend the savings stream 
(but not the freeze) in setting future SNF limits by not 
allowing for the inflation that occurred during the freeze 
years (FY 1994 and FY 1995). Without new legislation, the 
baseline would revert to pre-freeze levels.

Reason for change

    The provision savings would otherwise not continue.

Effective date

    The provision is effective upon enactment.

  B. Setting the Part B Premium at 25 Percent of Program Expenditures 
      Permanently (sec. 201 of the bill and 42 U.S.C. 1395(a)(3))

Present law

    Premiums under the supplementary medical insurance 
(``SMI'') program are specified in the Medicare law for years 
1991 through 1995, will be set at 25 percent of SMI program 
costs for 1996 through 1998, and will increase only by the 
Social Security cost of living adjustment (``COLA'') percentage 
for subsequent years.

Explanation of provision

    This provision would permanently set Part B premiums at 25 
percent of SMI program costs.

Reason for change

    The provision would otherwise expire.

Effective date

    The provision would be effective upon enactment.

C. Permanent Extension of Certain Secondary Payer Provisions (sec. 301 
             of the bill and 42 U.S.C. sec. 1395y(b)(5)(C))

Present law

    Under current law, Medicare is a secondary payer under 
specified circumstances when beneficiaries are covered by other 
third-party payers. Medicare is secondary payer to workers' 
compensation, automobile, medical, no-fault, and liability 
insurance. In order to identify primary payers, under these 
provisions, a data match was authorized through fiscal year 
1998, between the Health Care Financing Administration 
(``HCFA''), the Social Security Administration (``SSA''), and 
the Internal Revenue Service (``IRS''). Medicare is secondary 
payer for large group health plans in the case of disabled 
beneficiaries, and Medicare is secondary payer for 
beneficiaries with end stage renal disease (``ESRD'') for 18 
months.

Explanation of provision

    The Medicare secondary payer provisions that would 
otherwise expire in fiscal year 1998 are extended permanently.

Reason for change

    The provision would otherwise expire.

Effective date

    The provision would be effective upon enactment.

   d. maintaining savings resulting from temporary freeze on payment 
increases for home health services (sec. 302 of the bill and 42 u.s.c. 
                       sec. 1395x(v)(1)(l)(iii))

Present law

    Medicare pays for covered home health services on a 
reasonable cost basis, subject to cost limits that are updated 
annually. These limits are set at 112% of the mean labor-
related and nonlabor-related per visit costs for freestanding 
home health care agencies. The Omnibus Budget Reconciliation 
Act of 1993 (``OBRA '93'') eliminated the update for home 
health cost limits for cost reporting periods beginning on or 
after July 1, 1994, and before July 1, 1996. Beginning July 1, 
1996, new cost limits would be established that do not reflect 
the effects of the freeze.

Explanation of provision

    The provision would permanently extend the-savings stream 
(but not the freeze) in setting future home health limits by 
not allowing for the inflation that occurred during the freeze 
years (FY 1994 and FY 1995). Without new legislation, the 
baseline would revert to pre-freeze levels.

Reason for change

    The provision savings would otherwise not continue.

Effective date

    The provision would be effective upon enactment.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 2(l)(2)(B) of rule XI of the 
Rules of the House of Representatives, the following statements 
are made concerning the votes of the Committee in its 
consideration of the bill, H.R. 1134.

Motion to report the bill

    The bill, H.R. 1134, was ordered favorably reported, 
without amendment, by voice vote on March 8, 1995, with a 
quorum present.

Votes on amendment

    The Committee defeated an amendment (13 yeas and 21 nays) 
offered by Mr. Stark to dedicate amounts equal to the 
reductions in spending resulting from the provisions of H.R. 
1134 to the Deficit Reduction Fund established by Executive 
Order 12858 (58 Fed. Reg. 42185). The roll call vote was as 
follows:
        YEAS                          NAYS
Mr. Stark                           Mr. Archer
Mr. Jacobs                          Mr. Crane
Mr. Ford                            Mr. Thomas
Mr. Matsui                          Mr. Shaw
Mrs. Kennelly                       Mrs. Johnson
Mr. Coyne                           Mr. Bunning
Mr. Levin                           Mr. Houghton
Mr. Cardin                          Mr. Herger
Mr. McDermott                       Mr. McCrery
Mr. Kleczka                         Mr. Hancock
Mr. Lewis                           Mr. Camp
Mr. Payne                           Mr. Ramstad
Mr. Neal                            Mr. Zimmer
                                    Mr. Nussle
                                    Mr. Johnson
                                    Ms. Dunn
                                    Mr. Collins
                                    Mr. Portman
                                    Mr. English
                                    Mr. Ensign
                                    Mr. Christensen

                           IV. BUDGET EFFECTS

               a. committee estimate of budgetary effects

    In compliance with clause 7(a) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of this bill, H.R. 1134, 
as reported:
    The Committee agrees with the estimate prepared by CBO, 
which is included below.

    b. statement regarding new budget authority and tax expenditures

    In compliance with subdivision (B) of clause 2(l)(3) of 
rule XI of the Rules of the House of Representatives, the 
Committee states that the bill, H.R. 1134, extends current 
budget authority.
    The Committee further states that the bill, H.R. 1134, has 
no effect on tax expenditures.

      c. cost estimate prepared by the congressional budget office

    In compliance with subdivision (C) of clause 2(l)(3) of 
rule XI of the Rules of the House of Representatives, requiring 
a cost estimate prepared by the Congressional Budget Office, 
the following report prepared by CBO is provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 13, 1995.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1134, as ordered 
reported by the House Committee on Ways and Means on March 8, 
1995. Enactment of H.R. 1134 would affect direct spending and 
thus would be subject to pay-as-you-go procedures under section 
252 of the Balanced Budget and Emergency Deficit Control Act of 
1985.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

    1. Bill number: H.R.1134.
    2. Bill title: Medicare Presidential Budget Savings 
Extension Act of 1995.
    3. Bill status: As ordered reported by the House Committee 
on Ways and Means on March 8, 1995.
    4. Bill purpose: To amend title XVIII of the Social 
Security Act to extend certain savings provisions under the 
Medicare program, as incorporated in the budget submitted by 
the President for fiscal year 1996.
    5. Estimated cost to the Federal Government: The bill would 
affect Medicare benefits, Medicare premiums, and Medicaid. The 
following table shows projected outlays for these programs 
under current law, the changes that would stem from the bill, 
and the projected outlays for each program if the bill were 
enacted.

----------------------------------------------------------------------------------------------------------------
                                                   1995       1996       1997       1998       1999       2000  
----------------------------------------------------------------------------------------------------------------
Projected spending under current law:                                                                           
    Medicare mandatory outlays \1\............    178,155    199,066    219,411    240,412    263,397    288,095
    Medicare premium receipts.................    -20,090    -20,321    -21,956    -24,494    -26,057    -27,337
    Federal Medicaid outlays..................     89,216     99,292    110,021    122,060    134,830    148,116
                                               -----------------------------------------------------------------
      Total...................................    247,281    278,037    307,475    337,977    372,170    408,874
                                               =================================================================
Proposed changes:                                                                                               
    Medicare mandatory outlays \1\............          0        -95       -514       -741     -2,083     -2,311
    Medicare premium receipts.................          0          0          0          0     -1,325     -3,883
    Federal Medicaid outlays..................          0          0          0          0        106        310
                                               -----------------------------------------------------------------
      Total...................................          0        -95       -514       -741     -3,302     -5,884
                                               =================================================================
Projected spending under H.R. 1134:                                                                             
    Medicare mandatory outlays \1\............    178,155    198,971    218,897    239,671    261,315    285,784
    Medicare premium receipts.................    -20,090    -20,321    -21,956    -24,494    -27,382    -31,220
    Federal Medicaid outlays..................     89,216     99,292    110,021    122,060    134,936    148,426
                                               -----------------------------------------------------------------
      Total...................................    247,281    277,942    306,961    337,237    368,869    402,990
----------------------------------------------------------------------------------------------------------------
\1\ Primarily payments for benefits.                                                                            

    The costs of this bill fall within budget functions 550 and 
570.
    6. Basis of estimate: Four provisions of the bill would 
have a significant budgetary impact. Their effects are 
described below and itemized in the table at the end of this 
section.
    SNF Cost Limits.--Section 101 of H.R. 1134 would maintain 
the savings from the provision in the Omnibus Budget 
Reconciliation Act of 1993 (OBRA-93) that froze the cost limits 
for Medicare payments to skilled nursing facilities (SNFs). 
Medicare's routine service payments to most SNFs are based on 
the facility's cost, subject to specified limits. Usually, the 
cost limits are computed each year so that they reflect the 
average growth in costs among skilled nursing providers. A 
provision in OBRA-93, however, froze the limits for two years 
ending on October 1, 1995. H.R. 1134 would maintain the savings 
from the freeze by ignoring cost growth during those two years 
when setting cost limits for future years.
    Home Health Cost Limits.--Section 302 would maintain the 
savings from the provision in OBRA-93 that froze the cost 
limits for Medicare payments to home health agencies (HHAs). 
Medicare's payments to HHAs are based on the agency's cost, 
subject to specified limits. Usually, the cost limits are 
computed each year so that they reflect the average growth in 
costs among home health providers. A provision in OBRA-93, 
however, froze the limits for two years ending on July 1, 1996. 
H.R. 1134 would maintain the savings from the freeze by 
ignoring cost growth during those two years when setting cost 
limits for future years.
    Medicare Secondary Payer.--Section 301 would permanently 
extend certain Medicare Secondary Payer (MSP) provisions from 
OBRA-93. Under current law, MSP for the disabled, MSP for End 
Stage Renal Disease (ESRD) patients, and the MSP data match 
would expire in 1998. These provisions make Medicare the 
secondary payer for disabled beneficiaries and those with ESRD. 
The data match provision authorizes a link between Medicare, 
Social Security, and the Internal Revenue Service to obtain 
information about cases where another primary payer exists.
    Extension of 25 Percent SMI Premium.--Section 201 would 
permanently extend the 25 percent Supplementary Medical 
Insurance premium. Under current law, the premium is set to 
cover 25 percent of the costs of the aged population in 
calendar years 1996 through 1998; in 1999 and beyond, the SMI 
premium will increase by the amount of the Social Security 
cost-of-living adjustment (COLA). Basing the premium on program 
costs, which are projected to grow much more rapidly than the 
COLA, will increase receipts from premiums in 1999 and 2000. 
Extending the 25-percent SMI premium increases costs to the 
Medicaid program, which pays the premium for the approximately 
15 percent of the Medicare population with low income.

------------------------------------------------------------------------
                      1996       1997       1998       1999       2000  
------------------------------------------------------------------------
SNF cost limits..        -85       -214       -284       -317       -347
Home health cost                                                        
 limits..........        -10       -299       -457       -515       -564
Medicare                                                                
 Secondary Payer.          0          0          0     -1,250     -1,400
Extension of 25                                                         
 percent SMI                                                            
 premium:                                                               
    Medicare                                                            
     premium                                                            
     receipts....          0          0          0     -1,325     -3,883
    Medicaid                                                            
     offset......          0          0          0        106        310
                  ------------------------------------------------------
      Total......        -95       -514       -741     -3,302     -5,884
------------------------------------------------------------------------

    7. Pay-as-you-go considerations: Section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts through 1998. The pay-as-you-go effects of 
the bill are as follows:

------------------------------------------------------------------------
                                 1995       1996       1997       1998  
------------------------------------------------------------------------
Outlays.....................          0        -95       -514       -741
Receipts....................        (1)        (1)        (1)        (1)
------------------------------------------------------------------------
\1\ Not applicable.                                                     

    8. Estimated cost to state and local governments: The 
Medicaid program is financed jointly by the federal and state 
governments. The extension of the 25 percent SMI premium would 
require state and local governments to spend an additional $80 
million in 1999 and $234 million in 2000 to help pay the 
premiums of low-income beneficiaries.
    9. Estimate comparison: None.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Scott Harrison and Lori Housman.
    12. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

          a. committee oversight findings and recommendations

    With respect to subdivision (A) of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives (relating to 
oversight findings), the Committee advises that it was as a 
result of the Committee's oversight activities concerning the 
expiration of certain Medicare provisions that the Committee 
concluded that it is appropriate to enact the provisions 
contained in the bill.

    b. summary of findings and recommendations of the committee on 
                    government reform and oversight

    With respect to subdivision (D) of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives (relating to 
oversight findings), the Committee advises that no oversight 
findings or recommendations have been submitted to this 
Committee by the Committee on Government Reform and Oversight 
with respect to the provisions contained in this bill.

                    c. inflationary impact statement

    In compliance with clause 2(l)(4) of rule XI of the Rules 
of the House of Representatives, the Committee states that the 
provisions of the bill are not expected to have an overall 
inflationary impact on prices and cost in the operation of the 
national economy. As is indicated above (in Part IV of this 
report), the bill is projected to reduce federal outlays by 
$10.536 billion over fiscal years 1995-2000.

        VI. CHANGES IN EXISTING LAW MADE BY THE BILL AS REPORTED

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                          SOCIAL SECURITY ACT

          * * * * * * *

        TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

          * * * * * * *

   Part B--Supplementary Medical Insurance Benefits for the Aged and 
                                Disabled

          * * * * * * *

                           enrollment periods

    Sec. 1837 (a) * * *
          * * * * * * *
    (i)(1) In the case of an individual who--
          (A) at the time the individual first satisfies 
        paragraph (1) or (2) of section 1836, is enrolled in a 
        group health plan described in section 1862(b)(1)(A)(v) 
        by reason of the individual's (or the individual's 
        spouse's) current employment status, and
          (B) has elected not to enroll (or to be deemed 
        enrolled) under this section during the individual's 
        initial enrollment period,
there shall be a special enrollment period described in 
paragraph (3). In the case of an individual not described in 
the previous sentence who has not attained the age of 65, at 
the time the individual first satisfies paragraph (1) of 
section 1836, is enrolled in a large group health plan (as that 
term is defined in section 1862(b)(1)(B)[(iv)](iii)) by reason 
of the individual's current employment status (or the current 
employment status of a family member of the individual), and 
has elected not to enroll (or to be deemed enrolled) under this 
section during the individual's initial enrollment period, 
there shall be a special enrollment period described in 
paragraph (3)(B).
    (2) In the case of an individual who--
          (A)(i) has enrolled (or has been deemed to have 
        enrolled) in the medical insurance program established 
        under this part during the individual's initial 
        enrollment period, or (ii) is an individual described 
        in paragraph (1)(A);
          (B) has enrolled in such program during any 
        subsequent special enrollment period under this 
        subsection during which the individual was not enrolled 
        in a group health plan described in section 
        1862(b)(1)(A)(v) by reason of the individual's (or 
        individual's spouse's) current employment status; and
          (C) has not terminated enrollment under this section 
        at any time at which the individual is not enrolled in 
        such a group health plan by reason of the individual's 
        (or individual's spouse's) current employment status,
there shall be a special enrollment period described in 
paragraph (3). In the case of an individual not described in 
the previous sentence who has not attained the age of 65, has 
enrolled (or has been deemed to have enrolled) in the medical 
insurance program established under this part during the 
individual's initial enrollment period, or is an individual 
described in the second sentence of paragraph (1), has enrolled 
in such program during any subsequent special enrollment period 
under this subsection during which the individual was not 
enrolled in a large group health plan (as that term is defined 
in section 1862(b)(1)(B)[(iv)](iii)) by reason of the 
individual's current employment status (or the current 
employment status of a family member of the individual), and 
has not terminated enrollment under this section at any time at 
which the individual is not enrolled in such a large group 
health plan by reason of the individual's current employment 
status (or the current employment status of a family member of 
the individual), there shall be a special enrollment period 
described in paragraph (3)(B).
    (3)(A) * * *
    (B) The special enrollment period referred to in the second 
sentences of paragraphs (1) and (2) is the period including 
each month during any part of which the individual is enrolled 
in a large group health plan (as that term is defined in 
section 1862(b)(1)(B)[(iv)](iii)) by reason of the individual's 
current employment status (or the current employment status of 
a family member of the individual) ending with the last day of 
the eighth consecutive month in which the individual is at no 
time so enrolled.
          * * * * * * *

                          AMOUNTS OF PREMIUMS

    Sec. 1839. (a)(1) * * *
    (2) The monthly premium of each individual enrolled under 
this part of each month after December 1983 shall, except as 
provided in subsections [(b) and (e)] (b), (c), (e), and (f), 
be the amount determined under paragraph (3).
    (3) The Secretary shall, during September of 1983 and of 
each year thereafter, determine and promulgate the monthly 
premium applicable for individuals enrolled under this part for 
the succeeding calendar year. [The monthly premium shall 
(except as otherwise provided in subsection (e)) be equal to 
the smaller of--
          [(A) the monthly actuarial rate for enrollees age 65 
        and over, determined according to paragraph (1) of this 
        subsection, for that calendar year, or
          [(B) the monthly premium rate most recently 
        promulgated by the Secretary under this paragraph, 
        increased by a percentage determined as follows: The 
        Secretary shall ascertain the primary insurance amount 
        computed under section 215(a)(1), based upon average 
        indexed monthly earnings of $900, that applied to 
        individuals who became eligible for and entitled to 
        old-age insurance benefits on November 1 of the year 
        before the year of the promulgation. He shall increase 
        the monthly premium rate by the same percentage by 
        which that primary insurance amount is increased when, 
        by reason of the law in effect at the time the 
        promulgation is made, it is so computed to apply to 
        those individuals for the following November 1.] The 
        monthly premium shall be equal to 50 percent of the 
        monthly actuarial rate for enrollees age 65 and over, 
        as determined according to paragraph (1), for that 
        succeeding calendar year.
Whenever the Secretary promulgates the dollar amount which 
shall be applicable as the monthly premium for any period, he 
shall, at the time such promulgation is announced, issue a 
public statement setting forth the actuarial assumptions and 
bases employed by him in arriving at the amount of an adequate 
actuarial rate for enrollees age 65 and older as provided in 
paragraph (1) [and the derivation of the dollar amounts 
specified in this paragraph].
          * * * * * * *
    (b) In the case of an individual whose coverage period 
began pursuant to an enrollment after his initial enrollment, 
period (determined pursuant to subsection (c) or (d) of section 
1837), the monthly premium determined under subsection (a) or 
(e) shall be increased by 10 percent of the monthly premium so 
determined for each full 12 months (in the same continuous 
period of eligibility) in which he could have been but was not 
enrolled. For purposes of the preceding sentence, there shall 
be taken into account (1) the months which elapsed between the 
close of his initial enrollment period and the close of the 
enrollment period in which he enrolled, plus (in the case of an 
individual who reenrolls) (2) the months which elapsed between 
the date of termination of a previous coverage period an the 
close of the enrollment period in which he reenrolled, but 
there shall not be taken into account months for which the 
individual can demonstrate that the individual was enrolled in 
a group health plan described in section 1862(b)(1)(A)(v) by 
reason of the individual's (or the individual's spouse's) 
current employment status or months during which the individual 
has not attained the age of 65 and for which the individual can 
demonstrate that the individual was enrolled in a large group 
health plan (as that term is defined in section 
1862(b)(1)(B)[(iv)](iii)) by reason of the individual's current 
employment status (or the current employment status of a family 
member of the individual). Any increase in an individual's 
monthly premium under the first sentence of this subsection 
with respect to a particular continuous period of eligibility 
shall not be applicable with respect to any other continuous 
period of eligibility which such individual may have.
          * * * * * * *
    (e)[(1)(A) Notwithstanding the provisions of subsection 
(a), the monthly premium for each individual enrolled under 
this part for each month after December 1995 and prior to 
January 1999 shall be an amount equal to 50 percent of the 
monthly actuarial rate for enrollees age 65 and over, as 
determined under subsection (a)(1) and applicable to such 
month.
    (B)] Notwithstanding the provisions of subsection (a), the 
monthly premium for each individual enrolled under this part 
for each month in--
      [(i)](1) 1991 shall be $29.90,
      [(ii)](2) 1992 shall be $31.80,
      [(iii)](3) 1993 shall be $36.60,
      [(iv)](4) 1994 shall be $41.10, and
      [(v)](5) 1995 shall be $46.10.
    [(2) Any increases in premium amounts taking effect prior 
to January 1998 by reason of paragraph (1) shall be taken into 
account for purposes of determining increases thereafter under 
subsection (a)(3).]
          * * * * * * *

                    Part C--Miscellaneous Provisions

              definitions of services, institutions, etc.

    Sec. 1861. For purposes of this title--

                            Spell of Illness

    (a) * * *
          * * * * * * *

                            Reasonable Cost

    (v)(1)(A) * * *
          * * * * * * *
    (L)(i) * * *
          * * * * * * *
    (iii) Not later than July 1, 1991, and annually thereafter 
(but not for cost reporting periods beginning on or after July 
1, 1994, and before July 1, 1996), the Secretary shall 
establish limits under this subparagraph for cost reporting 
periods beginning on or after such date by utilizing the area 
wage index applicable under section 1886(d)(3)(E) and 
determined using the survey of the most recent available wages 
and wage-related costs of hospitals located in the geographic 
area in which the home health agency is located (determined 
without regard to whether such hospitals have been reclassified 
to a new geographic area pursuant to section 1886(d)(8)(B), a 
decision of the Medical Geographic Classification Review Board 
under section 1886(d)(10), or a decision of the Secretary). In 
establishing limits under this subparagraph, the Secretary may 
not take into account any changes in the costs of the provision 
of services furnished by home health agencies with respect to 
cost reporting periods which began on or after July 1, 1994, 
and before July 1, 1996.
          * * * * * * *

        exclusion from coverage and medicare as secondary payer

    Sec. 1862. (a) * * *
    (b) Medicare as Secondary Payer.--
          (1) Requirements of group health plans.--
                  (A) * * *
                  (B) Disabled individuals in large group 
                health plans.--
                          (i) In general.--A large group health 
                        plan (as defined in clause [(iv)](iii) 
                        may not take into account that an 
                        individual (or a member of the 
                        individual's family) who is covered 
                        under the plan by virtue of the 
                        individual's current employment status 
                        with an employer is entitled to 
                        benefits under this title under section 
                        226(b).
                          (ii) Exception for individuals with 
                        end stage renal disease.--Subparagraph 
                        (C) shall apply instead of clause (i) 
                        to an item or service furnished in a 
                        month to an individual if for the month 
                        the individual is, or (without regard 
                        to entitlement under section 226) would 
                        upon application be, entitled to 
                        benefits under section 226A.
                          [(iii) Sunset.--Clause (i) shall only 
                        apply to items and services furnished 
                        on or after January 1, 1987, and before 
                        October 1, 1998.
                          [(iv)](iii) Larger group health plan 
                        defined.--In this subparagraph, the 
                        term ``large group health plan'' has 
                        the meaning given such term in section 
                        5000(b)(2) of the Internal Revenue Code 
                        of 1986, without regard to section 
                        5000(d) of such Code.
                  (C) Individuals with end stage renal 
                disease.--A group health plan (as defined in 
                subparagraph (A)(v))--
                          (i) may not take into account that an 
                        individual is entitled to or eligible 
                        for benefits under this title under 
                        section 226A during the [12-month] 18-
                        month period which begins with the 
                        first month in which the individual 
                        becomes entitled to benefits under part 
                        A under the provisions of section 226A, 
                        or if earlier, the first month in which 
                        the individual would have been entitled 
                        to benefits under such part under the 
                        provisions of section 226A if the 
                        individual had filed an application of 
                        such benefits; and
                          (ii) may not differentiate in the 
                        benefits it provides between 
                        individuals having end stage renal 
                        disease and other individuals covered 
                        by such plan on the basis of the 
                        existence of end stage renal disease, 
                        the need for renal dialysis, or in any 
                        other manner;
                except that clause (ii) shall not prohibit a 
                plan from paying benefits secondary to this 
                title when an individual is entitled to or 
                eligible for benefits under this title under 
                section 226A after the end of the [12-month] 
                18-month period described in clause (i). 
                [Effective for items and services furnished on 
                or after February 1, 1991, and before October 
                1, 1998 (with respect to periods beginning on 
                or after February 1, 1990), this subparagraph 
                shall be applied by substituting ``18- month'' 
                for ``12-month'' each place it appears.]
          * * * * * * *
          (5) Identification of secondary payer situations.--
                  (A) * * *
          * * * * * * *
                  (C) Contacting employers.--
                          (i) * * *
          * * * * * * *
                          [(iii) Sunset on requirement.--Clause 
                        (ii) shall not apply to inquiries made 
                        after September 30, 1998.]
          * * * * * * *
    Sec. 1888. (a) The Secretary, in determining the amount of 
the payments which may be made under this title with respect to 
routine service costs of extended care services shall not 
recognize as reasonable (in the efficient delivery of health 
services) per diem costs of such services to the extent that 
such per diem costs exceed the following per diem limits, 
except as otherwise provided in this section:
          (1) * * *
          * * * * * * *
          (4) With respect to hospital-based skilled nursing 
        facilities located in rural areas, the limit shall be 
        equal to the sum of the limit for freestanding skilled 
        nursing facilities located in rural areas, plus 50 
        percent of the amount by which 112 percent of the mean 
        per diem routine service costs for hospital-based 
        skilled nursing facilities located in rural areas 
        exceeds the limit for freestanding skilled nursing 
        facilities located in rural areas.
In applying this subsection the Secretary shall make 
appropriate adjustments to the labor related portion of the 
costs based upon an appropriate wage index, and shall, for cost 
reporting periods beginning on or after October 1, 1992, on or 
after October 1, 1995,\488\ and every 2 years thereafter, 
provide for an update to the per diem cost limits described in 
this subsection (except that such updates may not take into 
account any changes in the routine service costs of skilled 
nursing facilities occurring during cost reporting periods 
which began during fiscal year 1994 or fiscal year 1995).
          * * * * * * *
                              ----------                              


           SECTION 6103 OF THE INTERNAL REVENUE CODE OF 1986

SEC. 6103. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN 
                    INFORMATION.

    (a) * * *
          * * * * * * *
    (l) Disclosure of Returns and Return Information for 
Purposes Other Than Tax Administration.--
          (1) * * *
          * * * * * * *
          (12) Disclosure of certain taxpayer identity 
        information for verification of employment status of 
        medicare beneficiary and spouse of medicare 
        beneficiary.--
                  (A) * * *
          * * * * * * *
                  [(F) Termination.--Subparagraphs (A) and (B) 
                shall not apply to--
                          [(i) any request made after September 
                        30, 1998, and
                          [(ii) any request made before such 
                        date for information relating to--
                                  [(I) 1997 or thereafter in 
                                the case of subparagraph (A), 
                                or
                                  [(II) 1998 or thereafter in 
                                the case of subparagraph (B).]
          * * * * * * *