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Philip Morris

Senate Finance Committee Report on 'health Security Act' As Reported by Committee

Date: 04 Aug 1994
Length: 68 pages
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Advisory Comm on Immunization Practice
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American Academy of Actuaries
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Wallop
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Bureau of Natl Affairs
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MARG, MARGINALIA
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Page 1: jni48d00
Report No. 148 Special Supplement August 4, 1994 • THURSDAY WASHINGTON, D.C. SENATE FINANCE COMMITTEE REPORT ON "HEALTH SECURITY ACT" AS REPORTED BY COMMITTEE (Note: For a report on Finance Committee action on the bill, see 127 DTR G-4, 7/6/94.) ~ 0 . . ~ ~ ~ ~ Pu6!isheC by THE BUREAU OF NATIONAL AFFAIRS, INC., Washincton, D.C. 20037 ~ ~ ~ ~
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3-2 1p2g cenpe/ Calendar No. 9PMATE HEALTH SECURITY ACT ; Oa• a I --C.lon1 la oe ryvetl Ih. NqnlNn. hCnl VM Com,RM M I'vFrca, audNetl ale LWevy NPCRf U.,(bill f71 IIte Ccaaictee en .-..ence reperta an original bill (5. _) to ichleve un-~erfal health inauran0 cav.[eqa, and for othar Furpas.a, and reonae-LS that Me bill do p.a.. TA9Lr OF CON^aN^9 i. SCM_YAR? . . . . . . . . . . . . . . . . . . . . . . . . . 2 I_. °-XPi.iNAT]aN CF PRC:':SIW's . 2/ '_'L2 : - No-AL:4 :NSt>-MNCE )ND :ELIV£RY SYSTEY R:FOR4 .. 5•abtitle A--C£^£pAL aTA.y0ARL5 FOR STATe ppp4La^-ORY ?RGG?A115 . 2._ Subtit'_e S--COCRDINATICN '.'I^1 CSXIR PRCVIS:ONS OF Iav .. . . . . ...... ...... .a ^.I^.Li II - CO'.'EPAf.£ . . 02 :ITLE III ?R£3CLY .Vlo COST-SNA2IaG AESIStAH<E 77 TI.G =V - AJY.IA:.SCRA9P.E SIMPLiFICATION ANO PBZVAC: . 31 '.I^.L2 V - MAI.iMCS:CE AND FRAUD . . . . . . . . 104 Subtitle A--FEJEIUL TOfC.' REFCRM . 10/ Subtitle S--EXPANDEL E?FOp^5 TC cCl®AT Y.LAL:H CAA£ FpaUJ AYn A9n5E APF3CP.4C FEOENAI. CL_IAY PRCORANE . L05 .I 19 VI - NEC:CA.iE, ~OICAL EEUGT:]N, ANC RDICAID . 109 SubtiCa A--Y12I:AA£ . . . . . . . . . . LC] Su.btitle 5--t2LICAL ICCCATCON . . . . 1]i Subtit'» C--i?C/6 A.YO C]qNXITY aaSr0 SERVICL . . . 142 Suttitle J--1¢OSU2C PROGPAN . . . . . . . . . . . 1H TITLH VII- dlYENCE PRCVISIOXS . . . . . . . . . 15] Subti[ls A--FIYA.NCING PROVISLONS . 15] Subtitle 3- TAX TREATM2NT OF C]SpfaYLR-PROVIDLO Wat1f Subtit:a C--9£]CC.SON FOR LNOIPDOALS FVROUSINO 0. :1EALTY INS•JFAXCf . . . . . . . . . . 183 Suv'title }-EXRORGANIZATICNS . . . 150 Su.,`tit:e E--'fAX -.NI.TYLI'r OF LOM4-TLP31 CAP2 INStFMNCE ANO SXtvICLS . . . . . . . . llf Sllbtitle F--"1J.L_^.t CkpY TRUST fIMDS . . . . . . . . ]29 SuDtiCa 6--0^Q.3 pEVENUE PROVESIONS . . . . . . . 23L . VOTES JF T8L C•IVfITTYE . . . . . . . . . . . . . . . 355 IV. 90WETARY I%FACT oP T!6 SILL . . . . . . . . . . . . . ZE2 V. RLGULA[VAY ISIDACf oP T1G. 3ILL . . . . . . . . . . . . . 2-10 tI. ClU..YGES IN ffiSSING :AN . . . . . . . . . . . . . . . . 272 I. evlnfAaY Ibe /inuoe CCUittee bill la desiqved to acbleva •.vvyarall taaah iva:¢uee covarage threugb: (1) aubsialaa for the purcbasa of Lealtb iasuraece: (21 affordable staadardLaad health iraarance; U) eliainaciev of eaclusionar} practices by bealtb inauraaca coapaoiaet (4) a yraanavt xational Eealtb care Coviuica enich, bapicaiag in leea, will aaka r aadati0va evrp t.e Iears to the Congreaa ea Gor to inereaae the atvber of people CoVered by health insuranca, (5) radueL'av of health eosts thrauyb aore apav eaapeGiti.a eartats and conttvuad ad+encee in .eeiaal educaeiea and ruearca: ud SPECIAL SUPPLEMENT (O aaaltn a e pravidad under the Medicare and x.diceid p=o4=m ua valln proSrus of the papa2daaat of Dafavsa, oepertmevt Of veterua Affaira, aad Indiaa Eeaan aerace. A. SNSL'RiyCL ZNA Me tinance Conittae bill would eetabL'ah Federal atandavds Uat s auet aeaf. Iha C-aLttee bil! would r.q~ira lnaunrs to aran[ea tama and quarantee renevel to all individvala and groups, a d a er faaily c raqa hac includas coveraqe of dapandent, u-.oa-rled children ap to age za. ITe ]!11 a-- lvita Me ability ef ieuurare to axc!ude covecnge <: pra-.:iacmq illna:aas and coodlt!ons .nd providu [cr en open -c!lsent period in vhlclf lndiv!duaia with wd!ul renditiona c puvcneae in - n vitlout any ovCLCaicn frcw c ra0e tapcaed byiSa Insu=ers would be r.qu:red to eesunity rate pelie.es co'_d c sundivlduals and buainaseas with fewer San 100 Me e '.u price could Lave lialted variatlen Iar policy heldec age and tamiLy aioe. ltatea vculd utaEliah geograpbic baundariaa fcr CcmaYnity rlting aAae- Tbasa ~Imdar!ea avat yat Federtl sta:.dards. Tne bill would require all apl%ere to affar .aplayees a choice at luat tE=ea standard health plauu and all aayiayra vouldveve tc make Fayrrll deductions for health ! aurance pnuus f a exFloyee r.queats it. Laployera with tever than 100 vorkanvha ontribute twerd hu1tL inauianea [or upl%ses 9anara:lY vauid purchzae ccvunlty-rated poliGlea. Gnder rur-ant :a e Ftleral RC n-Fer~een aet prrvtdes tnat Me 'buainese a[ L eLeuurancs' is cuaptafraa faGecal antitrust lava, provided chat such bualnesa ia ragulatad by Me Stau and C.^.at i tte c.`.a!lenged accia do consutet. a!%catc er coeccaen or !vtimdaticn. UnderF~ Cooittee bill, -aumty Cma anv_tmst.sults under Me 4cCarran-Fer,uncn Act vLtd respe•o hultn i ansance voc1E be r pealed. -1=s would not alter :vYnlty vith rafpacC co other brns of _nsu-anca. 9. mV?uce The ccra¢ttee Eil_ :s deaigned to aehvrae G~iveraal heaLtt c - veraga. An. :ndependenn yaCeval Healn.: Care Co~uslo.: vould _ eatanlienad t aanl:er c[ends _n Eeal ab inev[anu coveraqe. If it a ieaara/nee aYat95 percent of all Arr!oana v_11 net be c reG by 2ce2, C4 .'- l:d fubelt SorLl and apacv'ic : endatiCns te Cangrue jyvs nuary 1, 2002 en hw to reach Me wvar.g•icals ! aaakat a s Stathaved fa1Ltl to east Me CargeE. CCnqraas would n consider 61esa r uendatiana undar ekpedited procaduraa v¢th aaandaenta .n order. /t'N (,qM- •gIN- teS 4 F TLa eeaittae bill provldee a full subsidy far Me purc.`.eee of health uuucanea pr..aula by !ndiyldulle and fu111Y vitS i belw 100 percent of Me Federal pwarty threshcld. tbe eLlgibllity Lavel will bo phased up so tlut by Me year ]OCa, all GYcaa vitn Lecormam up tc 200 parcant of pwarty will ba aligiEla for aitner a full or a pariai suMady. Me laxlLa preaiua assistance asount will egYal Me cost of .1e pvealv ior a :'cSfi.d atandard health plan (ainua the . unt cf any [ntribuCian vde or cffered to to de by the Lndlvidual'a amp~%er to the preana of tha ceraified haalCh plan in which Me icdiv!dual Is o/led) . but nct : eed ebe velqnttl aveiape pvuiu. t the •nGividuai•. [ a mllaent for all couuniey-ceted ce_-tlfiad standard healtb plans Cffarad in Se coaunity rating a n which Me iadividual reaidee. For p'arpasaa af detaraining pruiua ist.nce aaouncs, a cartiflad atardard le.lth plan Ss daLned to aaan a cercaf!ed standard health plan eAet affare Me etandarY benefits packaqa. In additian, bpinning in 1lfF, uninsuved pr.gnant v and children up to aga 16 will be eligible for a full subsidy 9e aaily incoma is belov 195 percent of pwarty. Tba aaount of Me subsidy i b. pba..d wt far afwaa with faaily incoae banvean 195 percent and 240 pezcant of povevty. 'rhs praulua assistance progY vill Ue adiiniatered by the States. The Federal gaver:uenc will contribute 75 percent of all adainianraevye [ Me Secretary of Hulah and Huaan San'Lcee i diractad to davelcpaftandarda co a sure cocalatancy a ong Staus vitb .ape[t to data procYsinQ syateas, application Stru, asd other edalniftZative prnCedYZU. Indlvlduala and t _iea vir:f :- e belcv tne p rcy c- shold Via be a-=431e far re3ucad [[.t-ahaZ:ag for cut-o_-pecket ^_asts, as deterxined by Sa 6ational F:es1tS eanefite 9carC. If States c tae.e proviie aaaietance for c t-aharicg f r _r.GiviEUals and fas111es between l0o percant and 200 percert ofpoverty e',ay 'r.!1 be eligible reoe>va 50 Fercent ? eral =stcE_ng •unds : r chnw gu.^voee, vitn a ilait on iederal s enGCng cf 52 billion p¢ yair. Copies of this report are available at $25.00 (plus applicable state sales tax and shipping fees) from BNA PLUS, 1231 25th St.. N.W., Washington, D.C. 20037; (800) 452-7773; (202) 452-4323 in Washington, D.C., with the following quantity discounts: 6-10 copies, 10°c; 11-25 copies. 15%; 26-50 copies, 20%; 51-500 copies, 25%; 501-1000 copies, 30%; 1001 or more copies. negotiable. Published by THE BUREAU OF NATIONAL AFFAIRS, INC.,'NaSnicgton. D.C. 20437
Page 3: jni48d00
SPECIAL SUPPLEMENT ewai^ the a val va:ue of the bene!its Fecr.ag< vcu:a be the a a aa the slue c_casI9lue sn!eLG Stanterd optaan Plan under L eed. a¢ "lcveez Haa'it"_ seneftts Progr3r ed}u6ted for an evarage pcpulat!0:.. Hevever, the a tic ccnterv of the package vculd aif:er, and v uld be dec_ded by Jelboard. The F - e Ocsaitcee bill u':L eztaoicat e etandard bnefi[a package dafinad in gceral ! rme Sn,1 vau details vcrked out by a new Natival P.ealtn 6eneLts ? er]. the 3card vculd dete[vi e tne costs that will be shared by nLOlleaa through [a- payanta, ]edc[tibLea and c rence. ibara vouiG be two standard tnefitz packages. An e natlve standard Fackage rcuid neve a hlgh servlcea. atL~:ctihle emcu... and prsaib!v fewer iaa hi11 vould c eate . cateqorize of covazed it.. and salvlcae inelud!-.q: !!npatinc and cutpatient cara (inclcdir.g F.oepi[al and Realti pro!en_onai aervt[u(: ]. aaeryancy, and ubulatar/ seaiul and surgicaL s lvding azbulnca transpcrtat_cne J. cliniul preventi'+ as ~ t 4. mantal -11neae and sua(CanCe abuae aa iai; y Flanning and sasiids for pregnant ..... :5.c Ontpat:ant prescription dr.igs and blclogLulsi 1. Sosplcecart fervicee: 3. heaa health c - 1 9. anepatlent :abcratorV, radlology, and Giagnostic services and esdical aquisant: in. autpatiant r hab!Litation aerv lcaa) 11. vision care, bnring aida and dn:al c i.•WiviGuala under 12 years of age~ and 13. icvutig¢ticnel --renuatlis including rnutlw care provided In research tr!ala. The Couittee bil_' directs the r, v National :tealtq 3enef!ts 9aard to design the benefits package in a vaY °tict treata a !1lness and suGStanca eCUSe aervicea in the s vey etber aedical co:.ettiens art cbvered. Parity for Mnta! bealth5 end aubatan[e abuz. ze cea baene thM1[ Ybatever eeeu are paid by patiants in the fora of c- payretts or dadu[tlblaa cr ca-msurance vauiG be tne aar.a es for ALL medically nacaeea=y or apprcpriate tveatmnta. Sarvicv for ntal Lllness and subatance aruae would use cutpatiant settanqs to ~he greateat extent pcsalbi, other : ronalbiiitiee of t_ a 9oard would in[lude 3atining - ter:a LO:efaelGl plans for detaraininc) whether an It. Or aer/ice r, cassa a apprepritct for an rall<a,v!ti spac_al aCically ry ccnaidaree!on for tlvose under 22 yaaea of eqe~~clarlfya-5 and refining tteea and services (!ncludi~S perlodicity achedulas for prtventiva servicea)t determining =ntert] coverage dac!s!ena and refining ; -__es re9ard:nS :nvm:l9aticcal creatoents. the Board would al¢o be authcr:red to !aaue reculet:ona t a 9oal:y the cateqorves of covered servicu and ccst-f2artnS tnat voCidgo Into affe t ur.less CanSrese cvert'~rns u:e regvla<tona by jovnt reeoluuen conecd<rtd unde: expeacted Fta[etla[ea. The bill a s that conatL-utYCna11't va11a state La a relaaed to aborticc s -e would continue. In addit:an, the billvprovpdee that no ud'v¢daala mclcyeC vou1G N or en ted from puLOhastne or - - maqe axcluding abortian, and any .`. lth praf....... i, tealth [ :al 1 -- orpa:p v'd not r r<guCreG effer a~pacKager i~clva_CC aborc¢cnr•ec cCEer a - It :b'ect:onable an the o at e vel!glcus beliefaoavmecall[ the EiLl also prcvvdes aEat in a:ae vhace abcct_on aervvua are net -- n1y avaalablz, haeltE planavculd not have co olfer sncn The b311 v uld allor eaplcyere With fewer than 100 esplayees, as well as indiv3dmis, to purchase lnsuranca tCrougt ftaa:th Insurancs eurchasina Cooperacives. Participatien ! e cooparaeava veuld be voluntary for a]¢g=ble purchasarn. iLeaeataa aaployer groups and 1nd!viduals cocld also chooze to puzeGasa c •cty rated henlth vveu>cce from -rokers or directly frca ineurers. Cooperatlves would be private, not-:or-profit ccepcraLCas r-n by n haard elected by the menterz of the ccoperative. Yulb:ple cooperatives could serve a single emunity-rated regior.. : a vate ccaperativa is not eacaE!iahad in every coYVnity rat:nq a a cna State would be [equlzea to zpeneor or utabllah cna beganning in January 1996. cooparativas would be reNirad v rall nl] eligiSL in1 viGmis vi:hin t a a unity-9tinq arees in which they cper6a, ofter a f at Laaat thrsa healtA plana (including one With a poinc-of- opcior.(, callect preaiuv paysents from oplayecs and vndividuels, and forward pps11'.a pryfnts to baa12A ptans. [coperaCwa could exciude health plana, but 11 a oeperative ceqoteeeed a laven praaLVa with a haalth plen, net purl'.vn vauld bacaae the T1anY new covunity rata. Ceoperatives would be exareasly rohibited from satting provider or pceaiua pnyent ratea, or baarenq vnsu-anca risk. All plane pa:ticipating in the Federal Ezployeas Heelcl: Eenetits Pzoqra¢ (FEH9) . except neticn-vide pia vauld be requvred to cCfer [age m tta ccnaunlty-reted market. NOn-Federa! es-!oyea Fccchaaers of tbesa rtana vould pay a loeel eeasun_ty zew, and eculd :.Ot be pert or the P419 insurnca pc01. Fe1 CCNTA R52lR 5 a. BYSUA]YO FM1:1 Cap= lINANCIV4 .e bill as drafted, according to pre'4iotnary Cs: e'_aatu, euld [educe tna deSacit O eC n ^exc f s Years and over ten }a ~ecvever, as e eateguard agastu aaCCC¢tee badgatary affacts,the ' alttee S!11 includes e fal~safe a n Gmvgned a p ent etianC'_c pated ]peedicq increCSes or nvenua .oseea d_s tctSiz S-3 ecialat:c:. Cr atler Iedara': naalth prograaa, from cauaLng incraaees Sn~:he Federal defictt. anaar the oe=Eacsa, ! the PrseiGectz Suaqet ! any fiaca'. tn]attsthat on. pretlua and cast-staricg a istance, ta ded ctcoa, and other nw endvng vaul< not be 4~61y paid ! rby the an tebecea and hi5h ac t haalth plans, 8adi^ece _ end Hadice!d aaga (offset bY'lne.v-SUpa:aG iccreaao in L1eee Fro9-amq, end other tinancicg, chen the Preevdenc vould ba raGuirsa to fully cttaet :he dit}rnca tlrough a ccaba-.ation of (al reducing the Pnaaabut uhreahcl< for preslue assistance and raducii4 V.e c--shar¢ng gbnt Prograa (vieh apecia: protections for children and pregnant voaen): (b) lleitlrq the new tax deduction:and (c) increasiaq the out-cf- ;ccket lialta In the standard benefit µckages (to the axcant aan.reble autley eavlr.gacen be echievad). 2. XALiRAC:IG° iEFOPMS Under t..e Caaittee b1_1, nult!v pLns aculd as ra4aired to establish C1CerTatlve dispCte r eeelu[icn (-lpll Procaduraa and ulFract:ca claaas could not betrcught in court antal the claus had gona thrauqb and reached a final c aOluticn under the p1n'a procaduru, AfCer V•a ADA precedure was ospletad, esaG[ Farty aissaciaeiea with the : clt muld ara(q a laveuit to uek daaaqea or ctner cetlieaa t extent persitted under State lav. If a c a ?er ves a worse result or duagu e o•t`.ard below v-at bad ]aae avarded In t^.e AGR pr'+ceeding, that Ferty vmRd be reGUlaed to pay the ccata and attornay teaa of the atbar pa rty. The :otal a t at dalagaz :o ten-aca ncelc laaaee fral an '_njury would te capped at O2eo,og0.rintlanedannually by v1e CpI. ^.aad!taenal r of ,cint uW feveral liat111t't uLd be modified to :1nlt the liabillcy or each defendant to a praportlon equa-, to net ^arwn'a level at raapenaibllicy. Sevncy-fiva pur_mc of punitive Cauaqe awards would be paid- to the State for !l ura, certvLcatvon, and other actSvvCes to !>prova the ufeay anlqoallty of cars. Con.t!-.gency fees paid to a-tarneya vould be liaited to a eliding- cale schedule, with the proporticn to the attorney ceciictnq as tts - award i- eae. T. secretary of HAS vculd be authcclzad tcccr.duc[ de¢onac atict pro]ects an no-fault appraacSea to ¢edical l:abil!cy. ?ederal zalpracnnce r would pruapt inconsistent staca :ave eswpc to the erent such lav~apcsed grea-ar rucr![ticne on a- --.ey ! e at o11!ty, at peGiCCed adQlta.al defenses :ov clce cactiavs. The Fedecat aalprecti^_s proviaiene cLd govern a ona v a-cate courts and would r eatabllah a baaie for ]rcnaing valpracticaactitna in Fadszal ccurt~ FFAUD the ScCaa1 seclr:ty Act eu ntly provides Panaltlas for tealt`. ca[e t zad and ebuae vrtclun the Med!care and Madicald p[c,race. net. penaltlL•a _nc!tde ¢-lYaton from partiC:patio:l in fe programs and the ir1151GC] of a ccataLY Fenaleiaa and c iAlnal panalclu. :'noer the Cempitcee bali~ au511ar prerectione veuld apply' c a aqainat nea![n aaltt vtanz that involves Federal outlavs. In edGiticn,e new -am. - aud tvt fund vould be c-ea[ad with a portion o}~tne O!1ec:ed (-a ads[nastrat!vw Panalt!ea and asaeusaanta, civil honatary pna!nes,and otLer payance for related vi0laeions and -l ArcunCa n]he truet f.lnd vauldbe Used by the S.Cretarv of :9iSa^d the Att¢¢ev .-vaneral to oever the wata of coeGatt .-.q eud. 4. NIGX-cJ5^ PvVY A55CSSYE}T Sea it.. ._n zuamry of reven a prcv!aiona. _. ADY_vI5'IMT:%T 5=3LIF1G^.ION A!ID PAPLAMOP]( pLEUCTICN The crabitcaa bill rauid iapluent a national health infavaat!en network to redu[e the burden at adlinlatrativa coaplexlty, paperYCrK, and cost an the Eaal[h care ivstea: to provide the lAtarlltlon on Cat and gu!lty n c rv fercospetltien in the ho!tb cara vaekeeplaee: and to o ovlda~nfaraation tools that allw !aprovad fraud detection, oucccaes rezaarnh, and iapcovad yvaLity Of cars. 'A.a hi'cl would requi[s tha secreta.y of lIIL9 to adopt standards r the content and f0-vaa of the !nloraation used in cpvan aGainnacrative tranaactiona of heeltb care, for both paper and wcconic 'c-ze.^..e sacrztary vould also esGbl!an acanaarLS for c tra.vactiona and for certification Of network e ' oxqen zauons ehicn veuld anable -rivata zeeeer Laplesaneatian ef the network. tealtL care providers nd plans vould at required to pacti<iyatt in the n ork. ac :uat : c1a1Y pre<eaaln9. IaplYant¢L-On auid nable [otally paperlesa clalas procesalnq end payaer.t. ^e p[opcaa! +cu1d p=eeeFt 9tata law that requ!ra health reccrds to be vrittan. T`.e 3acrtary would utaLliah seandacds for e Naa1tX 5¢ue!ty card to ttata Card iasued anYvhere in the ceuniry would funeCen in a:1 otner Socatlona. FlcS card wuld cerry a unigYe iientifiar baaed a n : secvraty Nulber and vould te pra[ected by 1aY from being zedcv [ecuired for any Pu--peee oeRav _hn abcaining or .ing for CealiR care. °- ^ - ' FPvf G~Nt Lncrease ln Excase Daxas on Tobacco Products Isaca. 2.1-)OI) the exClfe tax ra^e or. ciga[ettaa rould be ir c nased by $i.oe par pack v_ h a cccparacleincrease, generally baeei antoteccc co.^.te:.t, Publ',hetl by THE 6UREAU OF NATIONAL AFFAIRS. INC_ Vdasnirgton. D.C. 20037
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5-4 ixpesec on pipe tobacca and oigars. A sl.oe ac[aa,e vould also be LeposeG on IDuC (tor aacn I.1 az, tin) ar.d Ueving tebacc] ;for eaen . pccc.l. YT.e btll aleb lepcsas tle exclfe tax •rc-ses on erbacco products maud ured and sold In Puarce aicc. T u.`.eaa inCreasea would teet fecttve ]a]ICary 1, 1995. To provide fc11 eubaiELes to cpildren end pre5manc vc ur.der p¢rt B of title XIX of the 9ocial Secur_ty Act, tlte e.cise ~ r cn ull oagarectu aeo [ pY ebova . uld ba anporaraly inccaasedao additional ]0 cents perpaek ef 20 cagareteee (osp.rable ccRer tobacco prWUCSI. iTase addltional 1 ieuld aGe s eCactiva for Cba period after Sune ]0, 1996, and Se_are lanuely 1, 2002. 2. As¢esebents on lcsurad and Self>InsureC 8ea1too plens :.fec. vos) .^..e bill v uld i 1.75 percent e ent a ealth ure preiluas : rad aa q~L-1RSU[ed plans L.curre2 after 1995. RavanUa free t:.la a f,aent would be uael to fund the Acadealc Health centers tru.t 9und,ac.e ^.raduate eedlol and Hur,ing education Trust ?und. ard :he 9loaedical and 6atavlcral nasearch Tru.c Fund, which a u,ed to fund aedleal re.earch as deaeriaeC In seecien 66S of -.he bill. l. _ax _n High Ccs_ Health Plana (fao. ]06) 9eginni]g In 1996, a 25 petcent aaclo Lx would be iaFosed cn ^planaihat ars ason9 tEe higbut-ceat ae p.r_ene af health plns i e b region. Tbe pau vould apply to the aacunt by vhich the - :ayuted preaLna In tbe u Cf a salf-inaureG plan) char;ed by a higb coat plan e¢csed the a raga proius in the r.glen• :Ca a would be ce~ucW eparately fo[ planf in tbe coravlay-rated and axperienee-ratad sarluts. plans YRien are aaoeq L•fe lovaso-OOSt 2f percent af plans in tba natton. ad]uscad for regional coec-et- /iving vaaation.. .culd beaxupt froe U1a tax . / they fall ritGCC t`.e highest a0 pavicent of health ptana in theirregien. To prwi?e full suGaidlas to children and pregnant v een ander pert B of title XIX of t.`.e SOCial 9aexity Act, tAe e rate set fertrh abcve would Ee tearycrarily lncrosed to 29 perenta]ot cai.nGar years 1999 thrvugh 2001. 4. Recapture of CaC-Ain Health eare Subsidies Received by Hig.^. _ncome Indiriduals (aec. 711) a ]he ____ v¢ld raqr:__e hiSh-_nccee tan ers ~;urharneG taxpap¢rs with ..... Ln excess of $9C,000 and vnrrc.Qataxpayers filing jcint recurnecv~c.h mcove in expfs of 5115,000) to pay additicnal MM'_caze Ja:t 9 pram¢'.:ms aufficient to cover up to 75 percent cf <ne estiaateC Jart B prcSrae ccats. The additional Hedicare parc B prexluv alao vcu1L w coae<ta? frca M¢d:care rartlCipanta that are -¢aidente o[ a usu pessessicc.' The Frcvi.eien v6.vld be e!fecive for tesable yaars baginning after ieceehec ]1, 1995. 5. :ncreaa¢ _1 EYclse :ax rn Cai:atn 3ollov pcinC and Idrge Caiibe: Ra.av',.n AaaUnitW.-• (fec. .15) -`e Cill veuld icpoee a le•OCC p ceat aanufacturrs excisa tax In particclarly Gu<rvctrve types cf Eancgun amunacion: notlc'+ point tull.ta that heve a:-ackat v_cII expar.d, upon i.pact mo ftarp barb- VCUldprojacticr.a• and b'llleta t.ha .are .50 caliberCr lirger. The :dx apply to amunitlon acld a_ r CecaeEer 31, .991. 6. Hodification to Se1f-Employsent ' x Sreataent of Certa_n 5 CCrpC[atlon anareRClda:a and PGrtne[s (,ec. `--6) Effect:ve for taxable years beq:'vlingo after :999, a ahareholder owning aove =.en t.o percent of an 5 ce ration'a eteck ecd provcding sigaillcanv services t eorporaHen ~ould pay payroll taxea en ai9ht; percant of his or .` rshera of the aarnl-.gs tro. sarvlce busin.ssea zf the S corporatien. Liaited pa[tne:s In a partnarship Yculd ee fub1act to f1iLl¢r ml... rina:ly• forty partent at tRe e trea a nvenbry earnad by s01e prepriaor,, pawrs ane 5 Corporacion sbareholdera would be exupted from e.plcyaent taxes. ' Crcanding Medicare coverage o, and Application of Hospital Insura..ce Tax to, All SGte and LCCal GavernaenY Esployeef (sec. 717) A11 State and local gweztuent eaployees would ba nguirad to be ccvawd undec 9aGicora without raqare to C1aly datee e2 hare. (Curre¢tly, participaticn i voluntaiJ ! State and local varnaent eaploy¢au hiied bafcre Apr11 jr 1950a 6.) 'fhesa eaplcyaes, and J:air eaployen, alsa would Ce r.quir.d to Fay the Medicare Hospital InsYrence (IfI) taa. This paoviaien would apply : farvlces peclor¢ed by Stata and loul govarniment vployeas aftar SaCte¢u.z ]0, 1995. _. Tax Sreataeflt of valuntarf flplcyar Health care cantrlbuticns 6eqinning in 1'396, upieyer contributions t a hultb plan would raeeive faverabla tax tr.atnent only fer •p.rutted eovaragae. Pe[eittad cev¢age would Lnclude e raqe under certified standard healtR pLans, cerLifled supplarntal health plane, and cartifiad long- -nsurenca pelines, as ve11 as certain other types of covarage. 9 11 addic.on, any emplcyer tnat ontriSues tc.'ar?s t.^.e c cf " ctv.raqa Lor any aaVleyse under a carttfiad seanaerd or supFleeental healtt plan '+cu:d ba raqulzed to vke an equel cont:iGUtlec on behalf c:.e risk of raees of utiazateen as aasxad Jy Ce provGar of uch _ all emeleyees uho elect ceveraqa. ^s rIIe would ca applied ara,(l) pursuant to a referral if ttis o^.e[ anan o_aa.ry care, and seFaraceiy cG ful:-niea and part-tlie aaployees. Cd~ oLLislde <hs vuteZ's irea of rasrdence :- 1t Ls eaergency Cace. Published by THE BIJREAIJ OF NATIONAL AFFAIRS, INC., Washington, D.C. 20037 SPECIAL SUPPLEMENT xnclcyers thac vio!ate the vohmtsry ca rIDuecn rules voul] be acbVCd tc a no:.detluc<ml. I5-par-ent axois pax designed to apprexinaae t aCact r1 acyin9 the uF-cyer ded__:ian fcr h.alch expenaes durin9 ~e period of t:e vielacmn. E1i.inatwn ef e-xclasi0n o! Haal:h 9enefits prcvided TTreuch a ?1¢Y_cie SpenG_n9 Arrangeaent '22/ Ihe bill vocld el:ainete the preeenc-lav excius¢on Lzom taxab[e _ce fcr acCldent or heal_h benefits p- vided :C aelcyeee -oy ryeir ampe'!.:a thrcug:. a f!exi]1e fpanding a cangeaanc. eTr, pravision - neeally v uld apply bpirvlinq ln 1996r but viG`h a eaay.d .Lf.eaive Gace for cr-lec_.veiy bargaaned pinns. ]. ye-year £xtansian of tne CeQUGton for Health Insuracca Caate eL Satf-Emplcyed I:.dividuaL (sec. 723) a o11'i vould extend the 25-paccant deductien ]or health n99a expenses and ~99Ed uplayed lndlvlduYla for taaable yeare begrnung i. _la_3-ion On Prepaycent of Me$ical IfJUrance Coats (fec. 724) ITe blll vould Crevide tEat aloun[s p.id after 199I '[ reeical r be previdad ec-a than 12 son'hs after tne v o_payeant vcu~d Ce treated, for parpoa s of tha ltulzad deduanR tion tcr eedial and the 100-percent ded•aCtion for quillfied health cara ccsts oLec~aivieuala, as paid ratably Trer the period dYring ehicS tha care .s provided. i. Deduction for Health Snauratfce coets cf LMividuals /aec. 701) 6eqim•ing January 1, 1996, individuals (inC1.dL g f -esFlcyed individuais) vbc a not eligible r uployer-subsidized Sealta coveraqe would be pavittad to deduct 100 percent of the cost of a car[:!_ad itandard health plan. orba~ 1. Tx'lYaatoen[ of 0_yanizaticee ptovidinq 4eattlh care servicu and 4elated Organrzat]ons (secs. >e1-lu) STe bill sould iapcaa four s2stLCnry requirernca cn _........ [ IC -e pmviLetc, fUC.: aa Eaapitals. c _ -_-q no.aes old age a ras, and FA0e. In order to reta:c c1aLr t empc itacus, _tese crqanizaticCs SeLerIllly veuld he re?ulred to a s(y :he Lc11cv:-q foun raquirements; (1) Grcv:de (dlrectly o- indirectly) signif:canC •Tyalltied cutreach a rylctl,^ YElcb ara c fined Ls _ re s.'i Maltll = related p[mencw. cara, e?ucacicnale or secial ce~~ aaa, erovidad In (1, In aII,.a tCac 19 oetlical:y fn[.esarv.d, It) be ov cosc to indiv¢duals Ocher+i.e c eae to afford uch s r+:ces, r(c) at ,pecialty ea.rr.ccy c e;aa111evef; (21 Annually assess eYe health ta¢ and gusla[!ed cutreech a eheeds of :he coc2cnicy and c lopaurttten plan to e :hesery..ds: ;]) \et d13eLEinate V n prcvldir.4 health C ]v'ices c1 the tasis of vnetler the ltdividual : fured by a govenren0-aponaored health plan: and ~<) Yct disccaina<a vhan pcovlding ......... Eealth ca'e e In the basis of rAe ind!vc]'_e1'e abilicy vc pay. Theaa povia~o+s vould taka aflect In january 1, 1995. ::.a 0111 prev_des that, as of the data af enaccment. e: @!G say be tax axampt under s • n 501(c;(]) :f i furr_ shef fubetnntielly all of l:a p:laa iv carahealth , rvi ea et~yta own f3c111c_ee thre'U.h healtlh rae profeas¢onals who do notcprcvide fubstancia: health car see+icaaether tpsn on behalf o( ,uctl orqanlfation, e.S. se-called ^sCaff aodet^ or •dad:cataQ-group acdaL^ :OIOS. :Te bill would Ispefe penalty excise taxas a sarnction vhere tax-exaapt ` a12R c erganivations engage :n transaction resulting :spropat •pravate ~ ne^ (e.g., peyingun aonaLly high -cepenaat:on to OLflcarereedeCto.¢ or other lnfiC•ersa . . and ot:.er eranfaetlves where a individual raeaives axea,sfve benaliai in relaticn to t. s provided to c1u ott3anixaticn) . These provlsions app•y to .nuruen_ occ_rrin9 after :we ]0. 1994, E!Lectava Januery 1, 1995, tax-exupt health c zations would be aubjeet to addiL'onal disclosure and repect cg r.qu ~iresanta, such as saYlnq t.^.a Kitten cbLLU.•I1[y healtn -A and a -aeds plan ava:latle to tbe general public. Such Ovqan iationa veuld also t ceq_ired to coaply vith sequests for c<pies c the arganaxatven•a vrittan c vunity health care and outreach saivira a plan And Cne ra•_'f 990. 1•he Secreta:( o[ t1P TriLSuCy cculd e tRia reGUrre.ant if C.a arganiratlon is eub]ecx to a..arassaent caepa¢qn. 2. Treataent of Nolth Miinunance orgenizaticn, p ent ocganizacions, and Health Insurance PJrchasln9 Cooperatives (fec. 7431 The till vould clarif,v the definition of • lal-type c under CWe f !O1(a). Previiing n~dCCal C a prepaldSu would no beitruted as prbvidinq co - aalatypen =asu~ ~oca 1ca1 cara 1a pcovided (1) by the oxqentxacion m useaGers at its own facilities vith health care profualonaia who dcsnot p[ovide aulatantial health c e fer•ices cther aann o halL L all aL of the Oft]anazation, p) cn a basis undev vh:ch euGstanttally be ha l
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SPECIAL SUPPLEMENT :Re bil: clnriEiaa Nat CrganlEac:cns a vv:ng a. parent pclding ceFaniea t]c hospi:als or asdical reaearcn cyanl2aCtcna ]ay guallfy a C'Sl:c charltiaa rather than ptl'/atl fc~ndat:ry. Gnal!fied heal^_ i.^.suranae p- eing ccoparatlvas a tablishad cnder the ball a aligibia , r]edaral !- cviGed t.'1at t- 'e :- svtlnt. lcbbying, and pc1LCc'a1 acc_vity :strio[ions fsial.ar ic pr¢a+nt :nv) are aa..a_iad. Vnese pravuion.z rould Sa a_-ec_ va as of ~a deta c, enactcent, ]. Sax 'reatxant of TaxebL Crgan:xntions ?rovid_-.g ?ee_L. .ns-renca and other prapeid Health CSce Ssrvice+ (seo. '4a) T.he blll r cld treat as taxabl¢ property and cauaLty insuranca a and`ae1C: v C eartain crg.r retiers _++u!nq C .H(o, canCacCa. [a_vcring n<cidant and health [i+b, cperaCng a r or enterar.g into certain arreng+aant+ .mder vnich flxad payhenv ars recaivsd by the organlxation for Fccvidlrq health care e+^+ices. 19is ttcvlslan vcu!d be nffeC-ive 1pr .axable years TeglMing a!:er ]ecaabar 31. 1994. 4. oryanGLation+ sublact to sacion B]J ./ec. 745) Tne bill vculd eztand [te apecial t rulez c anily apC!icmle to CeCtain Blua Grc9a anG 811a Shiald organ:Lariars Ca cer'2in nonprofit hefl!Ii-ra1S:aG oiqar.ixeccna, e_facive 4ar taxlo_ , r] baqanning after 1966. 5. Tax Exeeption for Eigk-Aisk Iruur\nca Peals (sac. 7461 5ha bill axpanGS tbs List of eax-axuce irpanizaicna to include qaalified Eigh rLak insurance pools. Tha+e e.ntitias + eacahlLahed hv a State or local governfant to prcvids `e+lth : arce. <n a onFC2c bs!a, to peraons cnahle : abuin health ucsuratce Lvcause 1 health condStions. Ite bill ragulres the State or _ocel gcvernsant to partlcipate in ths ongeing governance of the entlty and suhsid[ee cha c ation oi ths entity; In addition, n of !he n t earnlags of the entity can inure co the Hnelic oE any~rAivadual, • clud:ag any Pr:vata sharzholdab a 'CCls provis!cn applies to uxabla r rn beginning +fter Dacaabeb 11, 1969, and befora January 1, 1991. saa Tax T _cent of 501(c)(]) Bonds Sinilar to 4eva_-van:al 9anda ,faC. f4B~an llnGer current lav, 'Anprafit ]rganixations t a liaited t a total of 515o a1111an of t-exeapt hands < anaing. 1T.1s aiit applie+ to bonds for all nonprofit health care Lac_licles exaept haa?ital [a:ues, Caf:naL to !nrlcia Only ac' a tara, pese-.'ay :cpat:an:, !it:ea. ?he 'c111 '+oultl :.p.al the 1150 xillmn aaat l all !it .`,ea1Lo care c~aniaat:cl:a and other r-J:J~ L C,]an:Lations. -..1 - v:a_cn aFp!iea to tonds iaeued after Cacercas :_, :954. -ea.]en. Cf 'Cr4'Se.-ao care 1..T._ance an_ c..+lcea .aaca. 751 and 7521 aalini-.q 1_996, acensea ]ar -uallflad long-ten c_ servlces and _c..... rID c rancePraaiuma ~ V e ded'~ _a on the aame bass a[editairexpe~.es. - edditirn~~up eo 515_ - tay (inde¢ed) lang-tan r -cntract g.• -ly would not ved unas a e be suc.ecc - a Hovavar,e ioyerapayeenca for :-- - oulda t ba a ludahle f- aaploy+e h'~e in<aaa, ' and 1cn9ecerv care -..+u_ance -actd not he xa h ~ eoffared cnro 9h a.afeteraa tlan. 2. _ ^ Treataanz of Accalerated paa:n Senefits Under Glfafnaurance _Ontract+ (aam. T51-)54) The bill would Previae tax-frae t-aatoar.e : a aaeu.nea : Le ivrl fros a a ocl:ry If the insured : tatvinally _11.A.n nndivlduali t aider.d tera:]aily f a this pvrFOU 1f e phy+icien car'C_fies thattha individual has an that :s rsaaonahly axpected to L L:t 1n death within 12 ] ntna of Gha n ficatlon. A -cxFany gen ally rruld ta aLC+ed to treat a quelSf_ed - -ea dsach bane_it rldar a+l:fe 1 rance for tax pu--paaea. TEis pcoviaion generally applies CO a -e rscaavea after i`.a da!e o anact]ent, except ahet the provision t[ r. aating a death banafit ridar as --_a auranca /a e1.'ectiVe on .Ianllary 1, 1995, 5•. V la F__FI -1-h .nda _. Eatabllzhment af Nealth Cara T_vst Funds (zac. 761) :^iara would be established a Health Sacirity Sruzt TirA - ieCng of tba lcllaving aaauMe: net : vanuee lroa tha incru+e accz naxb: LaYb en high cost haalih plan+: Madica:d savinga: Fede~el nuvings due to the autC+ebila 1 ~ordinetion - ..eunes aguivalant to v ous caviland criainal fines W , a1cu.~+ ents collecteGaand R:terast. Thasa axunt5 ould be allecateG to che following fi'+e a v:tnin t.b T'ivst tund: a Health Inanranca AccounL an ]evalcpoent Accoun:: :ha State Hulih .Nal-ky aRG Ganaumc PrcGCaion Accauat: CAa Ir.g-¢er® Care Accounti anE the redaral Cu:la,v Prograa Fraud and ACUu ACccunt. The various payrencs and prCgraes under thi+ Act rould ba ropnarad fro+ 2F.eee accounts. 1: ' ---,t_tle G--Otha- Reve'tY 1. ~piopent Sta:as pccpoeal 3aguired tres Jepar en. of ihe Y:aasura (aec. ?'1) S-5 bill would direct the secracary ot Treasury ta supsit a The lagvalat:ve prapcsal provid:ng atatc:cry standards r lating :!hc fi<eec]r, of verxara ae empleyaaa c tndepandent coneaactors by _anuery 1, 1996. I. Ircreaze in ser.:raz aeport:rq Panalt!es (sec. ]']; 1Te ti'a'- vould acoify tha penaltv for failure by a trade Or Yai:,eas to file c t 1nfePaatlcn returns vith re+pect to feCV:Ce pravlCera. .-las p?ovteinn would aGp-y to lnfar26Cian retcrne 11a mora tlNan 50 days after t.`.s data a_ .naccaant af the btll. Ycnrefvtd+ble Credit for Gartain Prlaary 9aalth SaC+acaa providers (tac. T]5) ]Gr caxeble vearf beginning after 1111, Chysicians GraviEinq v13-ivv prlsar± hsdtli car. rv:eas in ¢ area 'eich a aECrcaqe of healtG pre.eu:onal. gener+lly vould be eligible cor v se tax credit cf 51,c00 par ecntlN far up to ]6 sontts (5500 Prlacnth if a!ready loeacsd in Cis ecea). +dditicn, physician e+sintents. nurz.-Prnct>tionere, and c= itied nuase-aldvlves s¢ving Ln health profa+ziar.al +hcctage araa+ would oota:e a$500 per acnth cradic. 4. Expening of kedirsl Sguipsenn (sac. 776) Physicians providing full-tiae pr:vr! Cu1tG caLe ur+icas ln an area vith a shortage of haa1LL: prcfee+:on.ls generally would ba ~:ttad : daduct + additional $15,OG0 aNUelly for sadical .gu:psant ccsta in Ne first year of eguiprnt u Thia proposal u:d apply ta pcapar:y placad tn sarvica ln taxanla yeass bagtnning a_.ar Jecaal:ar 31, 1994. 5. 2ost-R.tirssant Yedical and pifa Lvucante Reserves (Sec. 791) Baqinning 1n 1995, tb. alnisua period dur_ng which :f.e c cf pest-reCre.ent seLiul and life in ce coverage cou1C ta funded under a¢alfare benefit tund ¢ouldbe layurs. .. CoaYination with Haa1tG Care ccntincatian provisivna (aec. '62) ".Ta bill would p[avtie Cu: '~e xaxima perlad at wntcnvatmn - [aqa tl:at c r, b. elactad by an inCividual Clt lcses c erage undar an a+p;eyar group bsaiUf plan after 1996 1s t0.e longer of 6 ocncr.s or unci_ the end af the calendar yem . ' ciadit for ccat ]f >etaanal Assistance Services Reguirad by Empleyed ]!tlividenla (see. 96]: ?nps ca]1y inzqirad !axpayers a Y1d be e etlnd t ax e?K acval to \a11 of rl:a [irat 515,eC0 0 n :staccee expenses, r.ot o exceed !: f the !axpayer• . nad a Yhis rectt would pnase out cver the t rme range cf S:L,0'J0 to 5]0,C00. Cbis vravislon wuld eFply to taxaCle yeare bag:nn ing afts: pau¢ber 1995. 8. D:acLosure of Return ]]fer9atiOL for Adh:niatraROn of ceYain emg:ams Cnder tna Hea!C1 Sacur_ty ACL laec. i641 per.alt - e an the date o1 • ctrent, the bill would d19ClCeure a ceCti:n taxpayer raturn SnfoCOaCcn ro a aCd eaFlc any Fadcal, State, or locai ag.ncy adrin:aur:nq hea_t- ]uCs:aYa2rcq:aos unde: t`.a bill. 9. specia! Rule for 'Jefarred Cc+p+eaatinn Plana of Grcup Cedical Practic+a !aac. ]B5) 3aginning in 1995, the limit on a ual deferrals under a.ection a5T F'-an vw.Ili nec apply 1- t.1a Case of a:adi+l c retl under a excav 0 ranqesanta ined hy a greup vad:cal Fractica Chat •s +x aot [rom -an under aactian e01(c)(s). B__1ZZLQi^ha ccxmit!ae b!11 venld !ntegmate AlE< and nan-cesh kedicaid aplentn int[ tve private hulth care s.stu. ^.Say r uld purctaae pr1'+ace inauraCCe and receiv. /Federal au- pdtef on '-he a]ca baels al av.ac _rv-lcco . p.aPle. The Nadicald proqraa would be recalned to pcovide any services enat would not _ erad 1n !ne basie tanefit paekage (suPPlaaental zar+ices) foc ali gLOups currently ai!gib:. :ar 9ad!ceia. Tha <omttee bill alao would sake tsprovasantz in Nedicard hose and c -.Yty tasad long ! ra Care seNicu, including a anhercad Fade[a:~eatcR:ng rate fcr thesa serv-cas and ixprov..ents in e!igiEil!ty. 1. Hc`¢ AH9 `WdUNST'! GSeo ~ The Cosa.Ittee bill reu!d erute a new hose and c ueity based long terJ c e Freqru for people V11a nead aaaiataneaav~tht.tree cr af daily 1!v1nq. or who teae uNac save vantal - zrL c ce cr sctgnitivs !aparrsent, a who +ra children andar aga s x .eth a veredisability o a cuanic aedlcalcenditacnI States aay Of1eC a pfnge c a GYn sust offer parscnal cara ataandenc and, vhere appropriate, usa nanagczent. a.ner.uariu would IAve to r.t Eaduotible and cocnaurenca ebliaac:ena. e_n.ting for c e prograS vould he phafad in over sa~er. years. Publlshe0 oy THE BUREAU OF NATIONAL AFFAIRS, INC., Wasrnngton. 0 0. . 20037
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S-6 Uspr.g t:a a-ent bland patcanteges, C:a payeant !craula would be cnanged to deterains ihe blended iaysent liait prior tetne afP'-1ca::an of c aary coa-snar_ q p[bvu;en.. Xadlcare's payment sa cnt would to dacacvined based on tbs luser ef (,) tha tev¢ of the hospltal's reassnahle eosts or e sery charges, or (2) the blended payient lisi MeelCara would t'~.n-rpay ens lesaec pf (lt a0 pertsnt of •lu lwest as urtt, o. (1{ Ne lavmC aa0unc 1us Cha ben.C3cia2~,• e.[-aGCang mau^.ts. g. Paysenp to Eye and to Lya and !ar Specialty Nespital5 Tbe us pt tna %5/25 bland far eye hospitals, and a and .a hcspiCala vocld be extended to tar/icas pCOVided ont:1 S.ptesberRl, 1999. 2. i:.NG TERM Ca3L INSVFWiCE Tna cocxattea b:ll vou1G C eate Fed l Oevelcpcent and IeGleaentation of Raaourca-Based Mattadology !e- Practice Espeneee r era si:atus atanEards uGat ang t[n care leacranCe pcllcies aust ]eeC L order to ba carRfied. 91e Secretary would be reGUired to davelc a asthcialogy fot '+ Aier.g t•'ta n Standarda, 1 rers vculd be te4vlredtC yvaran.tee e a e iapleaehting io 199)a respuCCe-Galed syetm r r datenanmg Praalce _ aa _ t r:re-excac:ng c__- :cnq terz - oulc ` to inctud. n--`~ a expe.ve vtaav. value uvvta for eacn Phys:cian aarvice. ure a a coapanio a et[ar inflation and :- - coc c -t + El f F -i :N p ac icn. Po11cb +ou1C C. ceqllred to prcvvde eq_al traatSent c- ell conditlons _=:,Lt:cn o OLtpitCent Sarv:cat .rSt_a i:ven el7ayaent fCr Ce^aln ::plp:tal requar-ng =cng tam car.. 3. STANOARCS FOR SCPPLCYLF:AL IFSGFAYCE ScFp:soantal health bene_i;s would be defined to include two types at polm:es: supplenental sarvice. pollciaa and ccst-sharing policiu. Suppleasncal sarv_ces policias vculd include eoveraga Em and i as vot affered in Ine certified acanLari health plan, services and c rage r r itaai : _he certltled standard health lan, p hut .irt covered 'r of liai•ations : aanunt, duratian c cope. Cost- sharing Follbyef vould include t.toae that prcvida c vetage for aut-et- pocket papmancs, including co-insurance, deductibles and copayaants. ?ederal standard.. vculd be established for sepplevantal haalth beaef!ta pal_caes. States, ar in eEa u of multistate self-insvved plans cne Sacratart of laeor, would be vguired t' Kify :-"sr Lne supplaaenta: heal 11 banstit. policies wet Iadecel standards. A health plan ar : e of_•ariag a suppluencal Coticy in vlotailan of tae standards vould be euDject to civil .oney panaltles. C.Kain pelioies would be excll'Ead fros tbe definition of eupPlesental health benefita pluv. Ln 9ene[al, supplesental po1tclet auld be caq ited t oiply virt 1~e insurance reforms applied to cartifieG standard plans. ^.ast-sharrng plana vculd be aub)ect to different standards. S. t¢b-cAne -. PRCVISICxs RLGTEp Tc pART A e Couittw bill vould reduca payients to providars. C:fange 6aynant aatnodologies, and enlunce pay.utts to rlral noapitals. Tne prry.nt reductions includa e 1 percant deCreaaa !n ufe update factor for t-:patient heepl[al s rJiees, a rriccclon in payments for capLtai-raiat ] coaL to[ Inpatlent naspital f s, a 25 percent reduptnon i payaenu for dispropertionata .:arehcspi[als, rsductlons ii fayaants Lor ekilled nuitinq faeihties, arG a voiacor_.m an _ong-tern hoepuala. :e e Fayaen: eethCdoioqy enangas :nclude nav baee aoat years f rehebilitatlen and !cng-urn hospitala, and separate payment retaa for wie comunity hospitals C.at atrge, vhard c..e a: cv nospitnla la a teeching nospi:a'., Rural hoep:tal raysm ennantarenca include: extension of the Medlcare Dependene Heap:tai prevlalons; continuac:~on o•. :ural nea_th : - n grants: and a nev limited secvi tal progras '/hic.: Vouldaake C a Nadiril Assistance e ility daaerstCLCC.-. penanant, aaend a ntial Accass casvun:ty Xcspwal (IAC91/2•1ra1 Prisas± Cara Hosoital (RPCN) progras, snd establast a new raral evarqeney oee.cel aerviCea prograa. 2. iROVISiONS R--_L17EO PJ PART 8 a. Updates far Phys:cia.-.a' Serices The Comit]ee bill would reduce rhe 1995 dataula update ty 4.0 -_ -entaqe points for acrgical s rvlus, 1.0 [»aCantuSe teinis Cor lcal secvnces, and 1.0 parce[uga peant for peaaary eare aarvics b. Substiiction of Real 6rote paa.ttic PtMUct (OGPI for 'Ja1Cae and Inter:sity ln tne Volume Performance Standard The b111 v cla specify t:•.at tLa bistoriul [ata of inc:eave in the volume and intensity of s rvicu delivered would be deleted [-v the MVpS. 3ubacltuted an 1[a place vould ba tha e raga per aapita groveh in real ;inflation-adjustad) GOP for tne 5 vesr-paricd beqinninq with t.he previous fiscal year (199a) . :Ti pe[tcrvance standard factor v uld be [epealad. cc additian, tAa lower limit on tne default updats vactd be qpealad. C. payaents far Flfyatciirt SaNicei Relating to Inpatlent 3tavs in Certain Y.ospita'as ' . Secretary of Health and HumaPn servzcas would be directed CL develop for a11 haspitals paid undar Lr.a prospactive payaent system, annuSi. ^.ofpl:al-speclflc Caee-aY adjnated ralatlve value LLnits pa[ adsission and detaraina rhether a hospital excaeLS tte ailcwble rage per aditeion relative value :mits epplicaGle to tM aedica'. ]ta(f for tne year. If tEa'SecLatary dateralr.ea that the rate for C'.e hospital e ceeGS the allwable average par etlaisaion, tne Secretary would r.6uce pay.aeta for physician sariicaa to lospatal iopatients. d. Inon.tives for Physiciant to Provide Priaary Care e bill would rr te tbe tanus paysent for prleary care as Ge:ined in5ac. 1fia2(1)(a) pf ye Social Security Act, t 20 pereentfor sach physician . rvica. Tne bonus payae-.t fcr ctcur phyaiciae e cluainq prl.ary care) would be set at l0 percent tar aerva .a dalrtvaredin hmltA pt<Caasional anactage areas -ccated 17 •: r-ral a aa ~e 10 Perunt Conus paS~ent tar ; n-pr:va[y can sarvicas dellvered tn health fre(aaa:onal anoY_e5. areu Cccated in uroan are6s wCld he e.P]1nLted. rt. Iryauccn C. -o -nsuranca [ar Laboratcry Services The rill would re¢;ire MedirJre benaflCiarles to pay Ca-..'uurancs equal to i0 peccenc of the apprevad Madicare payaant uount tor clinical la'xratary s.rvirss. Applieation et Ceapatitiva Aeguisitien Preema for Part 3 Itus and Senlcet T1e bill vtuld dlr. Ne 9acratary to establisn coepaltive acquiaatian araas for procvrment of :CS) eesputa[-asial teioqraphy scans. (MRZ) .agnet3c retorance :aag.-q tetu a.id oxypen and oxyqen eT1lFienc. Application of Co.petitive Acguisition Prouss for C_inioal :~baratcry sarvieas TT.e ball vaald direct the Sacretary to astab115b cospetitive acguis:tiCn azea. :or procuraaent of clin;cul labo[aro.y serv-co. k. lart 3 Preaita .-e biLl would parunencly ut Part 3 prauiu.a at 25 partent of is JeK 9 epenAing for aged benefic:aries. t. PROVISIONS .3EIA^.CO TO MSCICaRE PARTS A ANO B a. Medicare Sacondary Payer Tne authority co transfer data ragarLing 2edicare secondary payars ien ted in o3P.\ a9 and exisnded in oePA 93) vcuCd be cede pernanecc.atine Medicare secondary payer reGuireaens for disabted beneficiaries v0uld os bade peaanent. ^.!e M.dicare seearGary payer cuirevents for benefiCiariea vith and stage renal disaasa Fould be caLe pe:vanen[ b. Expan] centara tf 8XCal:ence The bill uould d:rect [he Secrstary t expand the demonstration prc)ecta fcr coronary aresry bypasa and -ataract au[qary in urban Pawent would be eada o1 C:a basis of a negotiated cr a11- inclLa:'!e rate, beglnn:r.q vit.^. Ilacel yaar 1995. c. Mellcare Select The i-11 would perait xadLeace Seleet Polleies to ba offarad iet all Sbates. The Lnree year lialution would ba elivanated. d. Medicare Supplssental :nurance Po11cm (M.digap) The Si11 would requiaa M.dielre euppt.aaneal polieiea !Mediqapl -c have an annual Opan enrollaant period of 30 days. a. Redcptian an RaVLlne Cest Lliib for Haa 9m1tn C¢s SaR'iees The upper tisit on pay.ent for allorabla visit-salated cotts ! Roaa health secvaas would be Liaitsd to 100 percent. The ccst 1J cs ara ctanged from a perGsataqe of ahe a.an cost to a parcentaga of tl'.e median ccat. .. Iaprcvuenta in Rlsk Contracts Tna bill would aaka a nufbar of isprova.ents in Medicare r entracts designad to encourage to baneficiariet : enroll ln ritit contracta and to erqsnisaticns to enter into risk contracts. q. Reiaburseasnt fos eurta p actitioners and ptfyaieian's assiatants The bill Pravides for direct retaturesient for nurae practiticners and physician assistants in a11 Cutpatient settings. Reim~burasvent vould be set at 85 percent of tbe aaount paid to physacians for tna a erJiue under tne paysician fee echetule. Nursa ert-:tloners aai.ting at surgery v uld be reiaCuraed at 65 ps[cantc( t.he aaCuntpaid to physiciana ;n urCen fettings Lar SPECIAL SUPPLEMENT 19 situatlans in +hlch the ~ urge oract:tiener v c practicas 1 - ral .tting refars a patiant into an urlan aattnr.g and aubaeq.:eCtly ppvldea fervlCet :o -hat pat-ent ln the nL[an Sett:.-,g. Fublished by THE BUREAU OF NATIONAL AFFAIRS, INC., Washington, U.C, 20037
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SPECIAL SUPPLEMENT a. HEG:CARL ANC )6GICAIJ COVEPAGE aAHE DATA iha cropcsal V cld delay :hs ipp:ementation of M.dicare and Madtc¢td coverege Data Eank ur.til 1996• vner. 1: vpc:d be repaa:ad. vn r-.~p^yA~'-6]eCAT '. q ' V- r e0 -4e COb2l:tee bill estatiiates two new trust funds to a6515t acadap:chealth caLtars and teach:ng haspitall V L.he add!tlonal ekpennea associatad vit.h r nning pregroe for graduata madlcal aduca:non• taking ca.re of xore seriouzly i11 pe[ie.as, and providing highly apeoielitad oare. Payments v also go for dental education, advancet nursina eEUCation. and h:qh-inensicy r rai hcsp:xa'.a. 'Cae trust ]tnds vl!'_ ba [inancad by a new aesessnant o( 1.5 percent on pr:vate haa't."h insuranc. praeiu.s tLat will provida 511 o!llian duiing 1996-99 and SU.2 billian i'• i00o-Ga, plue payments from Madicara at cha vacen_ rate. These trust Lunds viii, for tha Ilrsn t'-s, establish a pmrmanent stream of funds to sustain acaCOic hulth centers and teacting hosp:tals. Academic health centers curiently r a granta for >icx.dical and bMavlara! rasenrch from Ne Naclcna'NInstitutea cf Y.aa1t.S IHI91 that are f'sidad by aFPropriaelena eutberibed under TSt'ss I:I a.•fd IV ot the Fubl:c :ie.ltl: seavice Act Under the bill, a third trust fund will be created to uaks additional payrnts r r biosedical and behavloral research. The : eearCh trust fIL d v:ll reCeive t:A proceeds of an aaa msma t of 0.25 percent on preaLAS, amounting to apprcxamta:y50•0 billion during 1996-99 and 58.o billion in 2000-04. one-fitch c[ Lhue Jv.•Ws vi11 be ut asida fcr aGpl:ad reeurct on c`.a delivery of health asrvicu and the quality of medical ca-s. The CeaittN bill inctudes e ral prpvisians chet Vou1G ieprave acceas in undeCeaNad raral and urban aream. The ieg:alaCicn would create a $1.3 billion ae eunt within the Y.ulth Caam T-cat Fund t support the develcpaent cf couunity health netvorkm and health plans that nlll lzprova de delivery of health u e - urde[varvaC areas. ?Vnding c uld ba •ased to provida capital assistance and operating as r address tlnancial, gsoqrepnlc and occer - e tohealtLaeNlCeL The Secretary of Hu1tlA and Huaan a'ervices vauld designata underserved a tatas msv alao idantify andermeived a eeaject Ce thm approva~sot - cha Secrecary cf Heelth and HumLn Servloea. 20 :TATU .Pn._ Statee VpuLd be permitted to oFt out of the F.dera'- ayatem and enacc thaic ovn aingle-payar ss- if certam -Clc:ons a satafied. Yultieaplryer un nplans and outtiraae eaplcyars with at least i,OGC eapltyao vpuld nct have to partaoipate in the syscae. 1. 3CLE CF NOYCISCLOSCRL FOR PROTT_CCE MSALTH INi0P11.aC'ON All heal" information that could reasor.ably t-e'.ated to a specific inLiviE'aa1 veuld be procec:ad fcca diaclaac:.. Cobpre :ensiva protectiona of this protected health lnfoimation would app_v regaidlass of f madius, vhatnar kept 'r. paper tiles c-izi ectronic daeabases whether retained in doctors' offices o rance company files, or avai:able fraa an -n.ocvucr ,atem or cvar a computar network. 2. PENALTICS Jnautlforizad disclosuras of protected health infcrmat:ca would ba subject to criminal sanctionf, civil acticns, and sdulccstrativa peneltiss. ienaltles would range : flnes of up to 550,000 and prison tsraa of up to ane year for wrongful disclosure cr obtaining of protected health infar.ation, to finea c up to 5:00,0o0and prison certs of up to five yea s[or viola[ions co]mitteL under talsa pretmneas, to fine. of up to $150,000 and prison tarxa c up to can years for offensas committed with intent e 1 protected heaah i-fermatien far coezeze:al advanuge or penonal ga1n. _. INCIVIWAL AITHORIZATZCN of OISCL]9uEES An individual vculd be abla to authorize disCloeuta of prptected health information abput hiaaelf or herself under c ra.astances t:.ac ensure cheauchoriratlon is a Imoving and meaningfulctoice, that clrama:ribe the usu of ttu disoloaurm, and that allov for tims limltation and revCfAtion of permiaslcn. Requeftm ! al:tnrrltatic.-• for disclosure vculd bm s-ructured ca serve tnasa purposaa• 4. LINIT ON AIbOl1T OF Ipi0R2GTION OISCLOSEO: PATIf1i1' RZGHTS FTen protected health inforeation _s discla.ed, It would be Lmiced to tbe alniw n .ary to h oeplish Se purposes for vhich the lnfcreataen v s disclosed. .VI !nEiVidval would h e the right to inspact and annotate records of healt` r rsat!pn about hissel] o harselt through his or her holth u cpvldecs. He or she would also have the right to prohibit CSe disclosura of a sitive and personal infarution so that it would not be included i Lha health i-fpraetion that providers are otherwise permitted to shara. 5. E%CEPSIGN6 TO S96 FOLE OF NONOISC55CRE ~ An exLYpt:on to •`.LUle sL hCnLleclcaure Voultl be c a d for Se folloving: haai[haare providers vould he Fersltaad 1 share :slwant prctaaad hea1:R info,aacn :-, c`.a prccess of d!aqr.e.v and treatxe.-.t: naaltn care iIDVidara and plans would ba Farmtttet to S-7 snare pcetectaa haaltn itietsaclon r r ine ourposas o! payaanc and for such otf.er ilnanclil and atlmin:atid tVa funCaona a arj ta the eLfact.va operat!ene cf the health s r ovaraight agenmes vould have accasa co lnftrxation to uncoveraLrCud and o[h¢ abYSaa: diacloaure o infortatlrr. v uld ba parnittad to peec p'.ID:1c valt] requirevants a d tne need for eiaeasa and :nlury raporc:ng. to protect ae nealth of an indavidual from :sminent haca, to provide health Sntormatian to nealth refearch projects, for which an Snstltutlcnal v board has dexeralned Vfat Gisclasures are necessa.y. ar.d Lor mrt ardaret e natlans and discltscia c1 protected 1ealth information vhen~iparty hae placed has or Nr nedical csnditaon a :n edditign, taclc.ur. cf procecte] health nnfprmaClan would be paml tad to 1 ent authoritres to invastigate a prc cute a healtnvcare ciovidar or plan or to ident:fy a'+ictia c- vl-nesz i enforoeaent :ngulr,+r and Gslcsvte cL procm[ed salth mforvatYonn would ba permattad vEan arCered by a 1uUpcena o- c v c- The cemittee bill directs C.e Saccstary of YHS, in consultation with the HaaLbh Flan Star.darde ard Quality Advisory Coaulttee, ts develop i standards and a cation crlteria to b sad 1~. t /ta cert:[i<acisn of a11 naatch plans~ Tna haeleb plans v uld have to anbaCd. in the catagorias af altars•.ative disputa r.mution, 2eCieipation :n the health :nfprvtion netvork, reportang o acandardirad data to produce coaparative value SnLormao:cn. tapltal and solvency, guality, patient protactlcn, and accass. Statee are requieed to Cwelop Ace[eLitatien, Carcificac¢on, Enforcement, and Information (ACLI) preqress mamting Federal quidetines c rify a11 health planz azcapt sulttst.te aQ6insurad plans which a cert:fiad by tne Sm¢etary of Lahar. eatablishaent of an ACLI progru is a condition of recuving Medicaid Cunda• and no Federal health care subeidiez could te paid to any nealth plan act certif!ed aa ecinq Federal star.darde. The Ctates would rece-ve Zutlinq for their ACEi progr'ama. P nUlIS3^• AN[) eoNSI'1f'eR P.'9OEMASIOq The Ccaittae bill inCludsa nealtb services and glel :y ixprovetana reuarch an the effeccs of health u e refoe on haalth deliverv un, meCical effeecivaneas, ae ing pepu'.ae:oc health scatus•~and naCionel qJelity p.rtcraance aaasures. Tha Secretary of 935 would be raquireL t otablish t orutvacion pro;.ccs and grente tc test and e echa-ia.e c ~nide tachn:cal assiatance to health plansufar tne pu: se of~iaplementirq 22 q'va1[ty laprrver.a-.a - n cal trace:ce. Thaae damonstratlonz vo¢ld b.a'ucdadt-trcugh Health Research Trust Fund mon_a. acd aFPrcpr:at:ona. 'rne c rxation ccapcn.nc of quality : included i che State A<c edleacon~ cartificatmn. Enfarceaena, and Inltrpetloe prcgrass. ^e ACEI proS=amz veuld prodcce annuaL scanderdired -cmparenvevalne intcrnatien on the Nrfo:oance of all health plana ea h c nlty racing ana, devalop olstnbucicn rechanSeas r r the value 'inlcrmaclcn, aducace and Frovide outreach 1 r caparacive value inlpIDa n and r and v aolvac oplain:a. IT.a secretary of :.HEv utd develop c Lcae~a for cer3uIDer :n:paatien, a VhaCher each stac! ateca the cricerla, and provide tachnical aasis.ance to the ACtI prograv. CnCr the Ccnmittae btll, !ndividuals would have the e -uadies !ir a denial, reductnon or tetminatian of beneCtea~eqardless of ahechextheir plan :. nn amplcvee benefit plan or an tndiv:aval insurance roilCy. Each plan would be required to utablish an appeals praceae that cludaa procedures for the an initialdecision, and fcr raCOtmideCSaon of a adverse decision. After -Jle Plan'a appeals process renders a['na1 Gactsion, inCividuals vculd he free to pursua other r aedva• :ncluding a State-nm coapiaint review procua. a non- binding dispute rusolucon program estebllahed by the Stata, or f-_ing suit i. Stat. Or Federal court. court ruled tbat . plan had acted unraananably, it could avacd allappropriace rel'vL. 11 II. lr]LA011T:Oa C9 PFCVItIOMe 0ec. 1. Purpaea It :5 the tu:pase of tle ccmaittee till to achieve lnlversal hea:tn :ose:ance ccva ;Chrougn: (1) su_s:diee [cr che purchase oL Geelth insuran<e: (E) afbrdabla etandard!xed health insurance: insuran<e "• -alnac.cn cf exclusbcary practicaa ty haaLCh companies. '/I a perxanant Natianai Health care caMolsaic: :vhich, bpinn:nq : 1396, v:11 make c endacionz avery t pyaatslsaic:: t tha Ccnqre.c cn how to lncavaaa che numbeq of paopla ccvered by health iLSuranca; ;6•, reducccn of hea1U costs hLmuSh m open ccapetltive markets and contln•led advancae in mad:cal educaCCnn and casearc..; and !61 health care prcviG.d under tne Xadlcara and Hed:ca:d prpqraxs and health proqraes of the Capat-..ment of Eelenaa, Oapartaant of Veterans AfSalrs, and :ndien Yaalth Service. aa Publisheo hy THE BUREAU OF NATICNAL AFFAIR9, INC., Wash''.ngton. D.C. 20037
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1 5 S-8 SIT:E _- 3aALTII :IlQPAp'cI Ayb DELI4EIY 6Y9TJl Iff091f Etiltitla A--PCOr1UL lSAYpARpa ppl aTAT[ sl0r'-ATO`.Y pRaoAAka sec. state P-an far c r_iflcatiea aad requlation cf beattn -asu-aace and dellvaN, s-e.oa PART_cIPAIIYO iSATr PaOGqA% pLIEPAL ]aaibYpI9ILITII/ P[. eat r eeda[ai lav gacerally does not 9wern tna aale c retl rp-aLs :c aG:vaudLS or 4roupe. T•a tYO ercaptions ara ^ a XvI-- rf :he Soc:a! Sec_eity Act V.at reyylacaa ~eula of suFpievectal v'- - pol:cias ;6edigap policiasl up Title XIII of cna Twlac Hea!t1 5e1r:ce AcC vhich sats oct standards (lncluding banaflt yckage cat:rq, for health aein[enanc. o[qanixatmnf enat .tcae to be 'aderal':y aealifiei. States set standards for c policiu aod rany States cave enactsd inauranc. ;.foCfa intha pss't ''ree vean. Gansral DaflnitLOna Ctelttaa Pre.i.ica APProPriata <artifyin9 Autlerlty -- For all multistate aelC-usurad health p!ana t:.e Secretary Cf lator. fOr cthar aCa.n<art 1aY.:.'f plana. --andactl ::ea1t.`. Flans, suppiesentai health ea-efita plans, and or.c5-ta^ c-a policies the State c®iseloner or aupe[in:endenc o in5l:ranCe or other State authority tf.reuqh tha paltieipaCinq .-+tate A'-^-'I program, Cereified ieng lase Cara Paller -- A!enq-taa can policy vbieE is - rt:fiad by c appropriate <amify=r5 authar:cy as .eetanq rLa itandards appacaCis to lanq-cen care pollcvs. Cartified Iovtaada[d taalt] Plu -- A health plan vGicn ia cer[c11ad Sy cna appropriate certlfy!ng autEori<y as seating tna apClicavla raG'a:renanta of tma 9ea1tS Swvalty AG !incl'adinq a:a :nsuranca and lelive:y syatu nforsi atandatds), aacepc tluc ts plan ioea noc c- viLe V:e standard tanaflta paGkega Or aLternat:ve a annar] benefita acka5e. Cartifiad n .andard health plane do nbt inciude ceRCied scFP-emsntal health ba:vfita plans. <arcified atandafd Iaa1oS nu -- A haaltS plan vhict prav¢GU tha andar] benefits package or :be alternativa stanCard eenef:ts packege and is Certified by the appropriate c ifying actncrity a eetinq cba e:her app!i<able reguirsnts of the Healtn Samrity Act (!nclGding tne :nsuran<a and delivery systea tefon fta0dares). 25 CartifieC LLuppleaantal Cealth Eeaafits Plan -- d health plan which ia Cart:S!ed by the aPp:po::ata <aCCifying authEr::y a3 -aet:np tha sianiarLS iFPiiwC'-e to auFPlemencal health henetits ciana. csuunitp-Pat.d ]adisidual -- Ar Sndivtaual he ia noo a exFer anca- rated iLdividuCl o- he i a par]-nne, a nat. o empararf anployea c erparvnc.~:ated .aplcyar rnc c oosaa cct to encol• one o_ the Cea1cC plans offered by sccl aapleYar. --palivary syete. -- Y.ea1tS plan dallverv systevs Include fae-far- ' " e of pceferved prrvldscs, staff or Sroup eodel :ealtn i.-Itenanceergar.aetione, and euclf oenac arr g ents as -.e secretaav uy reccgnite. Iquivalaat aaalth Cca P[cqra. -- other :iaaitd [at rcqraa6 def:nsd as fcllovs: - (A) aaC A Or Pevt 3 of the Medicare praqraa undeu title XV]]I O1 tl:e SociaL Security Act (8) She H bn_aid prbgaaa ute¢ tl::a XIX of he ScciaL Secarity (C) (o) (E) ACt. Tha haa!th cara proS=aa for active plitary personnel undar title Sa, ut:tad $cataa code. The vatarasa tealth <a[a p[oqree uhder chapter 17 of title 19. u.'Ctud statea code. The C1v:1:ar. Health and Med!ca1 Prcgrav O the Unifcrnad sarvicaa rCPMPOS) aa definad in mectlon i0"r](a) of title lo. enltad $tatea ccde. (F) The Indian haath a a progran under the Indian Naa:<`. ae Iaprovuent Act (05 u.s.C 1601 at uq./. (G) ASta[e s'..-.qla-payer avatea apprcved by the Saccetary. (H) Any govarn.entai hu1tL cara prm9raa fcr iratitutionali:ed indlviduals• Sxp.ri.aee-utad Laplayea -- AO indivldual Nle ia che esployee of an enpscvr<e-nt.d aay!oyac, eacept clut a experienca-cated ind¢v.dua- vho ia C.a spousa lOr dapa•Ident) of a ccvunity-ratad :nd:+idual v chocse to ba teeatad as a couunity-rateG individuai r purpoeu e enrtllinq in the covunlty-ratad health plen of rha casmunity-rac.d- spouse. Lrperiaa<a-Yttl Lplepa[ -- Any eablcyer vhb enplayed 100 or ao.a ,:1-trtma a.pleyeas the p[aceding calaadar Year. Pu11-taa Oplepee -- An sag,leyae (otMr i`.an a teapcrary or eeaaonal eaplcyaal vho noiaally perfbru et ieast 24 hours of Perv:ce per veek for an eaployar. 9eeleE 71. -- Any plan or s[[anquent vr.ich proviGes, or pavs the af, naalth benaflta. Tha t-e health plan does ne4 ':alcde che cost C<1loving, o[ any :.<so:aativn tEereof: (A1 Cav.raqa only fbr acc_dantal death or dianeaeetaent. 26 tsl covara9e t ev:dinS vageh cr parmcs i., lisu of ragas :cr a-,Y p.[iod during vhichihe enPioyee ia absae oa vorkOn account of sicknua cr in:ua.,'. CI nl /II SPECIAL SUPPLEMENT A Y.edicare auPP!svencel -ro:u}' ~as cefiveL in sact:in ld9i'- Ccvarage aiwC as a euppleaent :c !iabal:v :nsaenu. vorsars corFamatlon c a:a:iar i -anc.. Aueeaer::e aeG:eal-ra'pene : d:cn5-tsn c e pcLCJ. L•G:Sgca tuain9 :foea :xed :ceemniey palicy ;c-.teaa .te seceta' of aealc:l and Rumer. Sa,cas deten:ces Cf.at sucE a pali ~ prnvidas sufficcenay crp=enensive c cage c e t.nafi: 5o that :- anccltl be aated ae a naalth plan/. '.vl NI aSa:velen: health r-a prtqrem. .-, Mv cr r plan r - enge»n[ Llaa :h. Secretary aeLrainu -s nocacealor plan. 3aalta Plae apecea[ -- vitt respect :0 an 1 ured heali~ plan, t1e t to v .^. lito eaithself-tuuied eaith plan, tha eYpe[:c.ce- a.cee.Ployer ipcrsor. •aaltb Pecfassiotal -- Aa !ndividnal vhc L legelly au:LOC:xsd :o p:ovide aer.aas ... _'.e State in vhich 5-cn se- icee are prcvidad. ' mrad aaalct Plaa -- Any health plan vY.iCn i a hospital o- vedical . pcl:cy a carti::cate• ,^•osplta': or aedlcal a e plan _ulttl aatntecance crga.-LLxacion gcoup contract offered ty an ivuret Ibs<[er -- A: sed i c.pany, pnpaid Cospital or vad:cai aarvl<e plan, health Sanntenan.ee prganitation, or any ethar finliac enciiy vniJ: is engaged in the bu.ieasa bf prcviGing a plan of naalcl -na-rance oc haelc.h benefits or saivicaa. issldevt Pepulatlan - ncluiea any individusl who is .e.i]ing in ihe ..nitad Statas and v1o ia: ;A) a cit:xen or national of C.s United Statea o- ;01 alien permanantly residing in the Onited Stataa under calar of law. Seif-Insurad Isalti P1u -- An aapicyee valfare bene5i: plan, church y1an, gev.-ruent plan, or ot.ha: arranquent vnleh prcvides taal:h 'ce-.ef-.s 5undad !n a aannr otheriLn thrcu9h the pucchase af c- or urad haalt.l plans, but doaa nct : lude any [ cage e ms-rance dascr3D.d in (A) through (I) ot the healrII plan deflnaLon. atata AecCealtatioa, Grtltieetiaa, Iatatteaeat, Ia[erfaCaa (ACfII Proqrua -- Part:Cipating State prtgraaa vnich p:avide for Jle reditaticr. and cartifiution of health p/ana is nitlfieG standard nealth plana, C.rtafiad oonatandard health >Laa• certified ecppleasnta: heaitn banaflts plans, and Long-ten ca a policaas, and _a-f ovt otG¢ Pavtic:patirc, State resporsioil!tiee~ ]' ataxe -- Eaeh Of the 5ifty statea. e Ola rc o Cau,tila. L ctocnvaaltm of puarea i1co. Lhe Vn:taG States virqen Ielands, Ouea. Aeariean Seaea, and tna coOSOnwaltt of 0..a YOrcllern Car-ana ialenea, STATS ACCRLCITATIOM, 'PRTIYICAT*_o1, EY)ORCd%EM, 16t) ik-IORM1S1aH F[(AaAkS EaaltE Plan anC Lotq ]acf Care P01SeT Aeereditation ud eartifieatioa 'o de a parc:epacinc Stare. States veuLd be ratcired to Levslep Accrecl:atian. Cert:fication, ? cem6L:. and =.-.fcrxaticn (ACE=l . Freqraee by lar ' 1, 1996 c c fY all health F'-e a and -ong-cen earn Oeiicies e ot aulcistates-.if-i.^.aured plans. States would be - ced :r estanlash an ACEI prograe for atanGard healtFh clars ty -.' 1•1996, fcr s':pplevencal haa1C1 plane by .lanuary :, 1351, a.- onq-taca - n bv Aprf! 1. 1999. Eetabtiahnen: c an AcTI~prcSrav vculd ba a condition far ruaivmq Mada<a:d finda- A State ACEI program could u e private atcredi:at:on agencies for _w ac-:editaticn element of their prAraae. The Secretary oC :tea!tn and iuan Services would be reyvired to davelap cuidelmaa for ACEI prograaa, and approva ACEZ pcoqcass as auta:.S Federal 4acdelinee. 'I:L Secretary v uiL be requlrsd to distribute funds Lo 3tatea ftca the Health Savu[[ty Trust 6Vad in the aa of 5100,o00,cOG in 1395, and S1o0,0gC,^bb in aac .h of '-996-I004,.- Stata ACEI prEgrans. iT.e Sacetary •.ould be raquirad to davelop a bonus payaent achede.e fcc Statu [hat institute Itdapandant Review Ccu'c:eea to pcav:de [ endatp-.a canucnraq health plane ahac fail Ce32111cation. Eaa1tG Plan aSd 'Aaq Tara Cata Peliep Raadarda Infmrca.at State AOL'I progrev, ln c aiunction vith private accreditation agenc:u where appropriate, would ba requi[ad to datenina a process for :apoaiv? sant:Ons on ali hulth plans and lCr.g-can care policies. Sancions ccul< lncluda Prohibiting nsv auber anrc!laenc, allowing ating enrOLwe to axit iha plan vltteuc aanalty, aperatiry a healt- plan to prwitla taanslticnal a s• davalopinq a raction pcograa for the plan, or d¢ercificationof t.he health plana ter che Flan nas baen 91ven a naeenatla epportu:: _y to aak. cocrna-en.. Supplaasnta'. health pLans and lcng-tsn care oolic:ee not r.ified a eetxng Federal standards would ba subiect tc a ralty nat to ax aad 5c parcant of g=cas presins (or 50 percent <f waah expensea for aa:f-!nsurei planq. enforceable by t.`s Staca. caheusei Inforiatl0n .a Tha State A]£I o oera2s v u!G estar!an a - ooerata e conauaer cfornatxon progras to provld c nauaara ln :heSCava vx[A Cpaparativa val's infonation on che par:c.-oa -• of all heaL-4 plans in each c-rxuniry :amnc a-ea of the Scare Published by THE BUREAU OF NATtONAL AFFAIFiS, INC_ Washington, D.,^,. 20027
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SPECIAL SUPPLEMENT caparaeva valua informaticn. vauld pcasen.c. -n a a-acdard .arra., _.. following ic_arzntson: a Cav^:iPtive data atact cRa health Flav, incl•idln9 cert:f!Cat_on status, benefit], ,^, aiu5s, riak and :eferral LrranS~antJ, FroviCaZ l. -mat:on• COtplaint anG aPpeaLa prccass, and cchar npy:cprcaca i. :ormaticn. a Data frae ute naaional raaaunu of guality prbvance. 0 Data Lroa a nua! surveya of health c cbneubare ccnducted by ttIla inforiaticn proqraa concarning e ass to care, u of hYlth sarilcas' haalCt autoses, and Nrsllea wcistactlcn. c A fYbsat cf a.+ of gu111ty q:LOCaanca fot health care p:cCasssanala a~.L iec`11c1... ¢Te 6wnittea intends that standarCiaad caaParative value information anouLd saphasiaa aeeuarially ad~ustsd eost and naa1L`. - s data. Maaaures should transleian aaay -'=ae exiscing Piouss eods paetent and Fepu'_attan-<en<.r.d health autceaes, vith part~:clar amptasia cn functicn and vellbaing, preventicn focused on -cak managaaant reduction, and cansuAC faLSCaCtl]n. To CacillcaCe - eid appLlcatien of t`.oa ae ures, sundardczad and .... ntiEiully validatad 1aeCr4fentn should be uW vtere cVrrently availaJle. A Scate eansuee inforntion pregae. vy Join vitL o1e er voca ctier State ACCC proq>a.s co prepare comparative valca information fcr a qeographie eeea that inpludas ad]oieing partions ai eentiguaus Staces. A Stata consuaa: inforsaticn prograa would as responsibla f p:amotinS a ective conanar participatl0n _ Caare!ng heal_'h plana and obtaining care. 3]al• vould perfcrl ;iie 'o1lrYing tunc.icns :0 eSUVnca conalWr par.iaipation: o GiatrlDGte eoaqratlva value informaeion and adueata cmuu.ais abeut ccsparability of ¢aaltn plan charettsriatic. uW quality. a Provide information and rafaCal to assist in health plan enrallaent arA raCeipt cf aub.ldies. o Canduct Cu[ieacR to uaGCS.Ned and at-risk populatians o r uaer raapcnaibllitLas and :ighe. to ensura V.ai: :u1'l participatlan in tna health car. system. 29 o ROCaiva and a - e CCapltintn, to and '.ou-- ..ava appropriate ac-autoerelevanc L.fcrtatien. e Stata ACE: progra] n rnta -tm Consumar ~fcrbac!Cn program tdn:ouqn a coneract vtt] a nonprofit crganiraticn selected by tla State in a c FetitCVe prGCasf. A Stata ACEI progre® v u1L Ea parai ted to ~pasa apprepriace certlflcat_on fees on heelth plans and lcnq-tam car - it-aa seeking nclflcaticn. Effective Date Upon enactmant. oTmn eSA:. Ru990YlIEI+iSIIa etablisnent ef Cpssuaity nting areo .`h participating State shall, by : uary 1, 1996, c eate c or Ci ity r ing areas rlthin tLe Stete. :2a boundaries m.y be .vs fw.rae ts" to time. In cveat!eg t`.asa bcundaCaa r setropolitan staciatical r priaary mecropaLitan statistical area vy be divided into separate o nity ratir.g a Each conunity Latinq area 1Ust :`a poputaeicn of at least 250,000. A11 p.rts of a 9tate auatba a conbaanad irn on. and only ona conuni y ratitq azaa. n eatatliahing c unity cating areas, a partiGipating State say Lat CiacrilinaCe an tbe basis a2, cr atherviae taka into account, Giaabil:ty, laaltll eeatue, or perceived nme] for hesittl aeN:cee C a parrttv!ar population. Chis restriction ahallnot preniGat a 9tnta --cl esublsbing ccnwity ratinq areas that ensure tnac undersarved and vulnarabla pop'alatiens are better farvtl. Tvo ]- more contiguous 9t.ds uy provide for an intevcaea nity raci:.g arroa so :cnq as that araa is in ccaplianoa vitn che Lbova provisioDS. ataCe-DeL3aed tealth )Sn /atlba 1lreas Tha Stata f.C3I prcqrn wuld be :eguired to daeignata, 'aased ] quidalino froa tAa Sacretary, st.ndard health plan a i s for the health plan . andazda ralacM t sntial coaaunityproviGara and capacity to dalivar'sarvices. The haalttA plan sa uld pvevant che iaolaeion of Lov-ineesa and vulnerable populations by preventing tRa divtnion of qovariwn[al *eunCarlu cf cauntiu, tl s and lncludinq adjacmt GssiqnataL urb.n ar roral unLarserve la zeyvuranca 9oc1a, aisr adjustaact, and cost-obaritg sufsidl Adjuetaents TRe Sace ACEI pregrae would be req~irad to devQop a-einau:anca pw- tcr, c auunity-rated standard health plans, and a raimuzenca poel S-9 for self-insured standard heeltn plans (other thac auitutate aalt- inau:ed haaPJi plana; by JanU 1. 1996; a r1IK adJ'.lstnant pcogra'a for c ity-rataG scandarL~ -v ealth Fln.v by + 1, 1991; and a co¢-aharinq adJcscaanc progcns [cr ell standartl -v iaelth plana ;exeept . vu!tlstate se16-insuratl baelth plans) by Sanvary 1, 1997 6pecificatiea of .V.Gual Oaveral atret:nat Perlod Each participating State shal'i spaclfy for ine Staba (or aacb area) ar annual perioi c ac laant 10 Lays during 'Ihic eie :IIe:V1au.1. :n the5tare (or S:ea) Yy enrC!1 i:.. C: avitch, hsalt.`. Flans. Fraiua appr].al Pmcess !on :.naq ten cara bliciaa Each State sha!1 Peovide fer a proeeas Lor approving ] disapproving proposed preaiua in.caaaaa at dscraaaes vith rasp.ct to .eng-can cate policlu. tTis prxess ahall not apply to a group :onq-tea oare paliGy _asUad to a grcup deacribad in sactian a(E)(1) af Cne MFIC Iong Tarn Cara L^surenca Mode1 A" (aSfecelva ]anuarv 19a1), capt C`.at such group policy allail, pursuant to qu!dsllnes, pravidaenetica to pollryholtlaea and eartifie.ee GolGars af any peni'.u ehanqa undec aucR group policy. Ibe approval procasa shall apply to group c rsa n policies, the group continuaticn faat•_re ]t a group policp a[ t`.a sapa:ataly :ataa arylavaa and continuation cav¢age, and group policias where the function of CRa eaployar :a li.ated solely to colt.ce_e4 prniuas and ruitting auan prmuaa to tis caruer. Thia provision aha11 nae te oanstrued u prevancin9 L-ha MAIC f:es promulgating standaHb or a Stata from enacti.x, and enforcing laes, with caspact to proiua raCas or 1]as ratioa for a11, .nc-ud!nq 9roup, :ong-tarn cara pcllCies. TT.a State aball prwida foa cansumec aceess to actuarial randa, includin9 financial ln.er-ation, piovided ander tnis prav!sion. Effe<tiv Oate lua approval procus for loog _ cara pol_-1es. C nunry 1, 199]~ ~ oErbept as ncted, tde ravining prov sions ara af-activean ]aNlary 1, 1996. atg0I11a1QYS6 fol a}aS. aI1qIJ-.>tll aratW l= atate liagla-payar ystasa A State aey apply to tne sacretary Lcr authority t aparata a ingte-pnl'e: system in tbe stata or in ona cr oora tava~m:y-rntin9 area9 1r. i'1e $tAte. ^.Le 5 retary a'ould be requirad c approve a S<ate'f app_icatien to atlxmiscer a ingla-payar system if the Staca syatas: :'1, i established u- c Stace lav an< ¢ op.ratad by a Seace agency;(2) praviGU f r tna a rcllaent of atsl ast L' a perscns vho a lcgibla to panieipate in the aassunity-raad rarke, including a ~adicara eligaGlt 'ndividuals if tRa State has : eaivad approval : r Medicare integ=a ticn; (1) t.`.e stata enkes payman a to providers dectly, or th:ough fiscal !ntavadierlee., and e all financ.al rnab (a) t:a State r- v the standard banaf_t package to all persons and iataina<aec-anarinq requinweta no greater on any suCqceup of intlividualsthan clmae penitted under the bill: (5) Federal health care outlays to tha 9tate are not increased; and (6) ehe svstn 1s expactatl by LSa State to inpreasa e rage or ce..tral Rtllth care ccsta -a tRa ECLte or conunity-tattVq area. A State generally vy reguire axperianca-rated ind!viduala t par-icip6ta in an appravad sinQla-paysr sy.ta9. Horevar, tne State say not require participation by individuals who ara a rolled ! nultiscata a - ured aultiasployar pl.n or a suleistata selfn a red plar inaannad by a afpleyar vitL at least 5,000 amployaaa. Employarn cf . aapt indlvidu.ls a are axopt froa per-icipaticn m tha f_ el v1tL respect to Clue lndividuals. A Stace oparetinq a singla-payer svseas gsnerally is reqcirad to sacisfy Lha raqairawnca for paracipating States under Lts bill. However, CYa St.ea is not requlred to satisfy reGUireaants in the b-- thar a Ia usCent vian otRerviN not apCropriate tc apply [o a ain9laPSV¢a, am. affaative pate upan anac`aant. RYSfRmf or calc>I/ r11t r.a.a Praptioa of atata Lae sastriction on /etvorC Plabs Staea lavs vauld be prenptad to ohe axcenv Jut ttey c [raic GLa Lavelopaent of au:agad ]aCe plans. In parcicvlar, sucR ~v x would be ]r pptad if they have tha effect af ukie4' it un:evfut t r pla^a thata- no[ fee-LOL-smNIG plans (er fea-for-aa[vice ccapananra of pianal to do Ufe following: (1) c reate incencivas far the naa of participating provldere` (2) aquira enr911aas to obtain ura frcm parcicipating ]2 prcvc(l) frequire enrol'iaas to obcain ra-arra-a for specia'ty treatment; (y ntabllsR different payaene ratas fcr network and non- :.e.vark pravnd¢s; Publish9tl by THE BUftEAU OF NATIONAL AFFAIRS, INC„ `NaShingtcn, D.C. 20037
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S-10 SPECIAL SUPPLEMENT (5~ 11. V1 a12 a luiber and ]ypas r - rticipatlnq p vidara: a The Secretarv, c<naultacion v14^, tha Natlonal Aascc;atlon Of !6~ uae iingla source rappliare : Fhertacy a -cae, r Inturance C-=r_ss.cna-e, .oule ]ave_ , Lanears [ar !c]g-ter-i ca-e tadtcaL (i) aq¢ipaent. and oCler suppl:e] and a a prcTltii or llslt Lb e c0 yorata prac caof medicine. poll=tes. :be SeCreca.ry, !n coc6u!tCtirn v1L` the NeuOnel Aafecueon a atate IAV Reatr_ct!cba ca IIaalth Pre:afaicaal Lic.tsura $tate : Va [atLrlCting 'JlrtYgh Llcanaure ar ar!:e[vife the practice of any clau of .h.ealt.h FrofuuonaL beyond r F va )uatlf!se by :..e aki'la and tralning of such Frateaa:ona!a Vo1:ldbee praaapted. A Stabe vbuli be Orahib;taG [ a rucaLCCitg tta Yrtiaipatian, u¢auzaenenc, <t :neai•.ilacacvon e[a nealtn ara[uavenat solely on tte baa;a Of the arzeaeic degrea of L•e professional if rAe -ess-onal rs aeta-.S vieIin tha acbpe of t2. prefa..ienLL'. llunae. Preoptiaa Irca .tar:a .eaeflt RaLdace. xb Srata could [eguirs any health p!an to c ~ ua a.~d aervvicea tnac are dl.ffezer.c frca the itama and . r•icas specittad in the 3ealth Sec.irity Act. Pt.aytiea ot stata iA. lagulatiag otilinciaa Ynageaeat and lviv A 9LaCe could nct ragulete utGllratran sana9eaent and uviav prograIDa of n he.ltl: plan eacept . p vrded in tha Haaltb Security A<L. •ffectiea IAte Januar) 1, 199G. Pfha1AL lu/POI1IlILIS1/t )ad.ral iale \it1 /Oepaet to Iniltietata Iuith VSana aulCStace aeif-icau:e! ,YUltistata salf-insured health plana, and supple]ental health banafita plans, shail be ceRi1!ed by the Sacracary of labc[. for tSaaa plans che Saccata:y of ~or .hall Fexfon a11 O[ tha ducies of a Farti.cipatuq State. A a insuied health plan, ar a f-insured wppl... ntel haalch tene[itn Flan, shall be c sideredaaultlataca healtF. plan it it v eaceGliahed or eaintalnad by an ekparlanca-uted eeployer vhich Nt a uoecant!a1 nuaber of uployaea d led i such plan nn each Of two ar mo.a Stato (as deteninaE by the Sacratary of Iabar). ll Trte t a acitcr.s :03 ,relac:ng :c cevil • - aancl. 504 ;ralaLlng to L aatigatlve acthort]yl' and 506 IralaC_9q~ crlminal enforceaentj a;he Saoloyea Retirement IncOae SaClLity Act o! 1971 shall aPp1Y to anfcrcea.nc by the 3ectetary of Lebor af Se --nlre•Jant9 1L.daC the t1i: Car 9Y.L;1Cd:a pOplaya:e and aLLLtiltata aalf-_nsured healtY Flena. sltaLlieheeet 0f ReaideacY nu:ea . Secretary nhall aatabllae nLea ::dentify the State acd - uty r+nQ a rh+ch an 4nu e r e_eea. e ru-es shsLl be based on tl;a intliviauelb prchcipel raa--enca. IOrkplace asllaeas 9[oqraa ^ a Secretary nnaL develop crltaraa [oz rartpl.c. ve3lh.as progtams. Health plans may offer a u u d!accun[, -ac to exceed 1- percent. to .apioYar.a r ;r5 cart;tied voxxpiac. wL'nes prcgraas. Scc` diacauncanshall ha nppiied unifariy to qual_fiae oF!Oyers. IIp10]ee CAatiag tu.lea Che secretary of IwYCr ahall prcaulqata rpulat!cna tc prevent the avoldanca o[ 'lm regulceNnta Of tnla title through cha use of eapioyae luang buameases. appreval e[ PriOte lccre0ltatiou Prcgrue 'flva Secreury shall cartify pravaCe accreditation entitLes used by Stanaa to cartlfy health plana. ilfe0'tiva oate rpen anecnant. emlW. a'1'11hA1Ge Rlt a2P0.11 slS.s1I(LQTf aar0 1P}LICatlOal OP {SLIOIIte 9Te Secrataap' vould estaLllah a Yetianal eu13 Pian Standards and Cuality PdVlsprl' Ctaittee te advise the 9ecretary an g1!delitea r the state A6I pro9rasa, and atandarda and e uation cc:terv to be used iv CEe oertifiutien a[ standard healtL Plana, and taissiooavaO v u1d ]aveicp a;ak-ease] caf+ea: a andarea !O[au!aCe :Te CcOaitiee : enes L t tca Secretary ucultl c n•ider vhechnr : need [ axvd~'acy in ocao!isbin9 tnalinaac;al cap¢icy c ea1t1 pla.e ]y addrasa;n5 = a eifieran; charaetar;secas of Lypas of cal:ver) ayateaa and V.e apprncr;atanaes ct and naed to e capi:a'. to ouil] and aa;.-,uvn cha =apaoaty to daliver a.lvicasas coapared t; c raca-c!ny Liqbld aase-s. ei:nr.nt :ypa. - a secretary vouiG adapc the re]a standards to of ]aav.r! avfceaa.ane i red varausraell-inaured Ge1L~ plans. TEa s racary a v edept - atandaHS f0r health plana Oparat~ng ln undiraarvea aas. !ne Secratary veul] develop standarda :or Stare reinsuranca Foo!a, risk ad)usctant prograaa, and auhaidy adJ'vataanc Fro9raa.. She SecrecaCy of f.aGar v0ule davelcp et.neer]s Ccr ¢ rauuia_u prograa for auLt+stata aeiC-inaurad health plaeu. 6ffectdve Gate Cut']el:nu Cor A"..LI prOgrass, s"larda m atandard health plav, wcluL;nq and de0 auv< ~ <avaapae by :uly 1, 11995. Standard fosvppluental health Pla . u!d b developed by :anuazy 1, 1996. StarAard. f0a lrnq-taca cara pelvcus vculd be developed bY Saptamb.[ L 1996. 6R).91Ga1bM aPPLIC1aLt t0 aflHOalL mA1Sn PLUI a.gelacl s}aacAaLs Oaaceeceea Sssua ena fua.al 'n Seneral, a atarxlaad health plan sponsor a![ez;n9 a wuunir)- - ted haaltb plan votild Ge reGUCrad t offer ecch a P1an co any caamunvty-rated lndividual acplyinq [or cov ragb Any heal:h plar. sfonser o5[¢ing an aspen.nca-rat.d haalt.h plan reule be r quirad ao Ot:ar sucn a Flan to anY axf.rc.^c.-raied lmivtduai a!iQlble fo. caveraqaundav taa pl¢ tnzougn the SndiviGual'e e.ployer. A«m'nay-rated etandard plan aha':1 ba Yde a eila]le tprougnauc •JU entire casaun-cv nting arae (ar ar aal - vhich it is offered. A coucnlty-ratedst.ndard F1an say deny cvvarage to , taL _n]lvi'uala o a the ccce-niC, r.nq a~.L n vlacht`sy --aperace ae lcnq aa mcn]enial iavas.enay epp1.~ A sna=dard health plan may iapcee capacity _!s: a if ; ls pe[eictad to Lo co by t apPmpnav c-LSfyinS aucharitY. 9^.u pla.^n must demonscceca b •arifying authcrity that i 111 caase Lo 11 al: 1. appLCanta, c at ita tln[cinl o- - pacaty vilml be - ed + rOllmevt i ncC c anL'CnaC ~,div+duals ara enrouee on a --av-coce-!i:.cv.^..a be.:. ~ A s-antlard health plan sponsor aust renew ali plans. :c can reluae a aev, c- ra;nace, only fcr rcepsyment ol prezluas, fraud of the eL~g+b1a individual, or a reprasentation of eater~al a`acts c the Farc of au eligibla !nevv:eua! re_acwg to an applicacibn fer caverage or clais faz baneflta. A-.y Coaprebana'l+e Xedical Plan (aa deacr!bed in 5 USC 8903(a)) part!cipatin; in tYa FaGara! }ployeea eeaLth 9env':ta prcgraa shall offer a comi,nity-:ateL standard haaltS Flan in the CcaGul'.::y rating araa(s) in smacn it operates. • of daligLCua Iratarnel Ganeli[a aociattea ! exiatanca s SeFteaaar 19W, vhtc] bear Jla ri.k pt providin9 Snsutanceto seebera, a.xl vhich a an orqanitat:cr, deeccihad in section So1fc)(e) a[ tlta In:. iev te Cctla of 1986 and vhiCh ara axope Ca taxat!an uneav Se1(a)0[ such code shaLt not ba sub)ec- tetce guaranceed Saane ~eGUireaenca Ot this previaian. 3eae aecietias she11 aaly oa [egulred to 4+arancaa raneval to s.a>era. c.pc as vi]ae abave, upOn ana<taent wtil ha iapteaantatlan cf c velnQ (Sancary 1, 1996), an lnauted health p.an shall ~ rage to a11 !rAivldnal pelleyaolLars arA f!ras vich leaa tlAenv!OC aalov e uniesa tha huLtm plan apovor elects n c ta r me coverage (or all individual policyholdar. and all f1ras vitL fwer than 105 aopicyeas in insured health plans vbiCV uti!'v.e the une dslivery sys[u a cL plan oatry canceled. fYtrileraore, the sponor ahall pravvde r to iba appropriate cartifyinq autitority and to all ind!v:dusls covered unda[ tr.a pl.r. at least 180 daya batora ehe ecaa a da[a of a racacn. An i red haalth Clan spo naor tl.at c v alan or p'ana under this proviston aCall not aall pOlicias ton indiviauals nor to firfa vitE farar elun 100 uployaes !n `da State '.uin9 the sar delivery aYStea [or s par!od of five Yeara. auppleaarttal h.alth plana. IDe Yational Health Plan StandarES aad 'ryal-'ty Advisory CO®lctee auld interact ri.-1L the aOard Ot the Health SKVrity TrVat ?und _anearning fueWlnq a:M pregraa aeeoun<ability. {[fective nata Inrared hea13 plav auat varantea ua s f Jv,uary 1 996; Tna Secretary, in consuitatian vith tna HeaiC.S Plan Standarda and aalf-vnsura health plane avaC guatantee lasue aa of January 1. L996. Oualtty adviaory Ccaalttea, vould develop stardarda and eva-uation A11 t.ealin plina aeat gua[antu raneval aa of June 96, 1991. criteria Lc C» uaed in the cartification of standard health planiavd ]a enral'aenc supF~emencal nea!th p-ans. :he sa<retar+, n sul:aticr. vith the secretarv of Inbbr, vauld davelcp s'anlande for ault:acaca aQt-lnau:ed atanGarL health Flana and zvppleoental :et1th plans. etandard heaLth plana ahal': ba required to tava ac laaet cne ! 10 day apan a cel!aent p¢iee, aa a.carlishetl bv the Staca. In eaG~elcn. atandard health plana v 1 beuc,^=iznd to tava a opeG en[rlicent period [_oa JaauarY 1, 1996 to March ]1, 1996 to -aincida Pucli;F.et bv THE BUREAU OF NATIONAL AFF.4IRS. INC., Washington. D.C. 20037
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SPECIAL SUPPLEMENT 'h C.e :nPlemetcatlon of ccraunity rating. A secn.d d ced =Fen - rch 11. en[allcent r shaLl neg:n o a 1, 199]and e o 1999 '.ar no eneo:l-enc of praer,tts -v aidy e-:glbles aadaf:ned in Sac. 1950. Standartl healco clana anell be requi=ed c -ept [oll¢enc of lndivisua!e autaida at :ha annual ap.n • c perlcd vhan t:e :ndiv:due!'a anro:Iivecc status changez due ta~r ananga :n fasily status such as rarnage. divorce cr asperation. daatn, or]:rS or adepCen of a c[lld: chanc. Ln aep!cynenc atacus; chanqas :n raadance: disecral:caet for Cauu frca ar.oC.sr :- alth plan: dlaenrollment Lrco anctter healtC plaz dua to fai-re of that haalc: aan. Cove:ag. cnde[ a z-anda=d h s1eR plan sha!1 begin no aore thar. 15 daya after er.rcllsant' x.vbcrn and adopted aaldran stal': b - a--allyacverad fc: -er1oC cf 45 daya :sgard:asa cf c-aaa c- mrcl'aane. utiap :.Saitation soc Coommu]ity-4ted Yartet Each C saunlty-ra[aL aCandarC haalth plan aRall eatablvan, viNi=. eacR ccalunlCy rn[_:g area in which the plan i oLfereC, a-a.-.dard pce.:un for ehe a tda•- banaLits packige and/or no alternat:+a atarHard banafita p ckage. Faa!ly adJuatrent ractors eha!_ rarl.c] no actcaiial costs of tne benef!:z Package tor dittecant cluses o nrallaant. ^ha=e a aix claaaaz r nrollbana: 1) Individua!. 2) m!1d nn lndivadual Leas IDaa 15 Yeaea•ot agel. 11 Multiple childran Iunder age 161, el Maer:ed eouela viC'.eut children, 5) Ittlividual riS e. ar sb_. oXilaran, and 6) Renriad coupla vnGv. Gn. or aora ebildran. . 1:a e prealif charged to anrolleu sEal! be equal to no pzcduct c: the ztandard prasi'.u, no faaily ad~uztaant factor (LOr clazsas c enrollment atilar vhen lndiviGUa1 anrcllaant), and the age ad;usrae 9aoacr. TT:a stanLnrd pruiu, ahal: not lnclude cbaryas ttac '+ary vit.: .thod ef enrol:aant (thrcugh a DYrUaeing eoepaLatlva, tlireeGy :h[ougn a health plan, or through anether purehas:n5 agent) . 1ar!ab!e charqas !nclude aarkating, anrcllvnt, anC pruau procezaing expensee. Fcr pu^csee aL co®unicy caarq. 'Se Secretary, in canzultar=on •itL the Hatlonal Laaoeietibn af Ieuuranee C]Otsuonera, shal'l specify a9a adluRment factors. For zndividcals vho Sava attaarad 19 .ara o aqa but not aqa 69, no higbeae aqa ad;ustrant eaeear aay not azceab cvice the levas[ age ad)uata.nt factor. J9 andard haa-ih p rz mav add a aapa= - =harr-a, .`.LCG -ahal: ba Publiened Thia charge aheal ca erkacing, enrnlimant, and pcanlua pct ing rasts vhat vary h cachcd o enrallrent in Ula iaalt:. plan.s ^.1!sadalnistracnve~=harge a c be applred unzfcrsly vittz zvspecc • the $:Ce c p aoll!rg. 'ha Secretary shali prosulgece a-earda ragard_nqrnee c Gy vhich :he hlghest adetn]acrativa cna=gacan axcaad :he !oruc adr:o:atraciva cherSe '-f a neal:h p:an. 19 Aei]a:lraLce, llak Ad)'aataert and Caat-ahaL!]g ld'1'aatae]c Ccmmun.ty-rated, si•.gle State sel'-¢nsuz.d, ar.c rulclztate self- ad standard health plans '+ovld ce :acu!red to panlc:paca :rn the reteva-t retnsurance pool. Cb¢runlty^atetl standard health plans vould no requtrad c. participate Ln State rLak-adlustaent prctlraa5. Standar3 tealth plans shall be pmnlbi6ad '= c]argtng a s - adalntstracive =hn=ga for :Ldtviduals a rc11!ng :hrcuSh a par :y-raced. axper r-eatad, and single State self-lns¢=ed pu asing roperateve. Sne Geta: ther3a : - - standard heS1U: plane vaYld be•egulred to partlc_pate :n G'.e itace .ndivlcual encalliig :RCCUSR n <]apacaciv. shaL ^- standard n - ata:-maang aCjue<rana prngraa.. d aqe~ and cne premu:a fapp:opriately adjustad tar Laaily cla.a a cocperaciw admSDCZCraci'Ie caargs. Camun!tv raCng stlaa ba tainta:nad. Yotvlthstanding a rthr praviatan of tnia a the atandard p- hargaG to a vndual s all be ldant¢cal regardless of anet r Cnat Lndividual p_rcnasea c va[agz directly fcov t.ha a andard health plan sponsor, ctseugb a pu:eheaing eeope:at!v.. or tnrough any oeRar pcrcr.aainq aSmt. Yatiog Pract!cas and PaFSeat ef bulv. Standard health pian aponsors shall fully dlsclosee to the appropriate cartcfying authority, raCing praoticea for plans oesered. SuCR apCnaora at.a:.l aiao F[evide notiee, at Leaat 60 days bafora no date of axpsaticn of ehe plan, as to taru Lor : val c iha plan. Each standard health plar eponacrshall fils ennua~ly with tze appropciate certif.'li a autllori:y a rrltten statasanC by a mesber o tRa Anarican Aeadney f Ae<uariea r otRar Individual aeeeetaDle en such authority) cnre!fying nat no aetuarlal a uaptiens ar.d aet`voda aad by the zpbna r aa Sn ccaplianae vith tCe ragulaROns :agarCing standard pre.iuaa and ara actuaciai!y sound. Far n, ccl!ees, acandavd bealth plan apcason uy r - advanca paveenc of c sbntf.'1 preaiu. at the t ]f . alllen.c. -f a standard health plan sponsor Laila to receiva prealuanpaysant, no sponaor shall provide'natlce of sucn failure virl.m 20 days after cL date on which paynsnt raa due. )onaiacr'aaipatiea eaaed es lealtn atatua in general, standard health plans s.y not 1) deny, timit, a andiaion cavarage, 2) engage 1 any oCUr ac[avcty. :ncludt=.g the cf farvice area, or ]) in ene c af a aelf-:nsured standard haa:trh plan vary tlze pruaua, eaasd upon health aratus, eedacal conditrcn, c-ai15 experiance, r e:pt of healtn u sedical histc:l'y anttc.pacad naed for haaltf. c expensu, L!sm:cit'i, cr lack e! avidanca af lnaurabllay, aL an 'nd!visuai. :s s-11 and 4) the 1_ntat:on e- :on dosa noc aPp1y to preSnarcy. For ach ccnch a -r c coverage a - of .- - , any paziod a !Cs:onerliaitatioh o/ erageav~Ce raepact c a pre- nxlaa rg cand':!an sha11 Ez raducedEV•a l Gancn. A pertad c :nvous c raqe taq:nzan c]e dare an indi'+:dual : natled cider e!aE plan ~ ealth c epragrem vG:ch prcvades, vathrafact - t.`.eP-e-existing -cnditioar benefits equl'+aler.t to tLese of -.ca plar. in vhlch the lndlvldual 1 seeking : enroll. The per:cd ends on v.e date c- which cbe .ndcv:d~a1 la disecroiled tor ma•e tnan =..rae ncncha. During the January chrcuqh Varrh <pan anoiLCUt p' af 1996 and 199] v:C] reapect ` md!viduala ellglblator -rrlumtfu]sadies) tGere fhall he a - eaty during vLic` s anLardhealrc Flan apansaa ahall `_e prchib:Cad bca Lapoe:nq any 1!alraticn an ezc-us!or1 due to pre-ex:zt:nq hea!t=e canditicna. Lffactive June l1. 1094 thrbugh guary 1, 1996 a - ucad hult.•h plan aay r-=sduca or Limit c cage of any ard•tionor af tre5taent J1et :a expacted to coat SS.oO'l or`Jare hyring a tvelva-mcnth pricd. lfLeotivs Data a- r.zund haaltIl plana. danuary 1. 1996. Fcr aelLinauoa haalthPlaha, +anuarY 1, 1995. Seaefita ofCerad co all en-•cllaaz .n the plan A a:acd+[E Gu1cS plan anall offer the standard benefits pack+ge ar the nternatlva atanda=d beneL:ts package established under Subtltla C of Title cf]. tffaeti.a Data xnsu=ed haalto plans auat guarantee Lsaca a of J uary 1. 1996: aLLf-imavrad haalth Plana eYaC guara6tM 1 oL.Sanuart 1, 1995. A1': health plana nuat quarantaa callu'al aasoL Junell. 1991. Por al: at.`.ar prov.aions lanuery 1, 1994. CLl~VCRY SYS^d 5^AN=APSS capital Raqaicsaeets Sta:.dard ',ealch plana oult ]a ratFJ1[ed to Nat tSa r_aa•base? capltal Loru_a. TTe CCaH!t:ee :ntends that tr.e SecrecarV, !n Canatltation with the Setretary at labor, muld !nclude app-o,or:ata solvency standa=de Lcr all aell-inaurad Cea1iS plana, inclctling churc"t planar aul:femplcyer, and c_allfiad e ianlen plans and that no caCitsl ,s-aaLa[La , vary sCy different type of Raalth plan and sc Vency na sFOnaar Collectloa and P[crlaion ot etaadardifad laforlatioc Standard Aealth plans would be vaguirad to sukaic co cna Canacna. InforsatLan renter, :rn a atandardited Loreac, no data [aquued co preduee obsparative v ynfbruilon. Nealtfn ears prb:.mleenteand . eac:1 :ies would be ceqc,red to raport a standard sc of data to the Cansu]ar Infccaattcn Centar. pualitp iiprav.aett and uauranoe Cuality _mprove.ant and )usurance -- Standard teaitE plana v uld be raqw:rad to develop end lapleaant an intsrnal qualtty .aprcvavent Prog[aa dealgnad to a ata.ss and iaprova e zoLSe heaLV. tatun, a ollee ouc_caesr aenrcllae procaasas of u-e, and an[cllea sattsLaetcon. Standard healtA plans vou1L ba raguired to develop and lrplezanc qieLCy inprav..ent goals based on _hs ras,a!cs oL popu_acoh aaalth status aaaaur..ants. Standard hea!t!, plans vould he requirad to aaincain e oragram to sure che quaaty of holth care asrvuea eurnishad to enrcllees maeta ®_nasua standards of safety and clinical praccice. Utiliratico xanaqeaant -- standard health ylana uoutd be requlred 't14 ]a usa i1 tl o- urcifled health p-oteauevla virA appraprtace se ning na vksvg ravisv deteralnat_cea. Gtniulera_ 60 O ~~sa 1f ~ A standard nealch p:an aay lrpcee n- - :ng cc --- Ltatlcn : 11 tRe condlt:S1 was S:aenosaC o tadrltG:']hrea mon[1s (.ix mcntl:a durir.g 1996 c.`.1v1 of ._ lrent undar c.e plac, v; the limitation or axeLUa:crh axtands ce ror. -chan 6 aarcns aeter exclce:ce t ea net apply rollrenc in the plan, L Ghe 1lmcatvna c [o aB Lntlivacni vRO, aa of data ef b1rU, '•'aa trv+ered u.'~.dec iv plan. standard health plac.a would ba -eoc zad to beae utilsation xanngcent on current sclenti[ic knoeladga. atreas tnc'ant .~ dalive^+ of health care and cuccoau, rey pr:mart!yan avaluec:nq ans caapaeng FrecCLCe _attarna,rathsr iha-rcuLlr.a case-oy'-came rava , ~ Pob!istec by'T'NE BUREAU OF NATIONAL AFFAIRS, INC., Washington, D.C. 20037
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S-12 OCLraelcn r nagaveCt could not create direct CInincia- - encivu for [ .s tc reduce or llalt beditally necessary pr Ve aPPLCPrlaie a•N• Cpon aaquu acn ineagrecaL health plan would te r rad to provide a descnption t a par--lmprmg Or proapective pra+lder, enCOl_`se ar FroapeC-3Ve enmilee, of ut:lizataErl rev:lv )riccco'.f. SRa standarda veuld address cne nead to protact proprietary c-s-..ase _ntoraaticn. credanti>ling -- Sta:.dard hea!Lh plenf would be [eguirad to crfdennal pnrciciFeeacc >Ryuclans anG pracGltaenCS. Standard h•ult: plans vculd be cequired to • -a Lh¢ participaccng providars and faciLLGi•f ar• appropr:at•1y accr•dited. Certifi•d and licensed. Cantincity of Care -- Standard healtlh plars v uld be cequtaad to dsvelop and laplemanc a•rhaniau for cocvdinaLinq t2a delivery ct cara acroae pravldar a6cinga. Medical Reccrdk•epicq -- Standard health plena would be r•qiret to asalre that p•rt:nenL :nfcraation la readily available te apprcpr:ac• pcofeas:cnala. patieat Ptotactioaa abd PLC.ides bl•ctiaa PaCienL C-.Cpraat:on -- StaMa1V health planf vculd be raccl[ad to provide c nzoLl••a alear descviptive infcrutlon aad infonacvon about t.h•im rignca a1Y1 Lesponaabll:tiaf. The Coaaittaa encouragaa healtt plana, phvsicians, and aL1ar hulth c e praviders no use in.trcrtianal anG infcrutionel aatenals to ezplain reevofndad wdical procedures and treeta•nts to panlenta, aregivers, alld t$lard-Wrty' Wyers to adlcat• thY c ncerr.ing potential benefits utl sifks, tne naed to follow pre and pcst- ,.-eatxnt instnictions, and descriptions of aediul warning signs. Information RegerCing a Patiant'. Right to 9eif-Ceietsiraticn in Health Csre Ser+icu -- EaeR inteqratad hea'tR plan vould be raguxraL to nocify enrollees of Nelr rights to aelt-detaraination in healt.^. care dac:aien-L'sinq, notity enrollaes of L1a plan'a policy reqarL_nq advanc• aireetlva, viu Previa. mr adueationa eelvieiu for Wtients arG Pcovidera. PaCienns' prisary mre pEyalciavsad be requlr•d to include in Lne patients' charu their wishes concerning advaace dLrectives. 41 ConLdentiality o[ Patient Records -- Standard healtl'• plans would reqClr]d to have axpliCt pro9dures to protect the canfidentiatity tf individual patient inforsation. Marketing (Coes nac apply to self-insured plansl -- Standard health plann c uld o engage in sa/eenive markecenq tnat would have the effect of e aidlcg high-rtsk aubscribers viL.u a kaalth plan sarvice a[ea. Marketing satarials could not conCaon false or S•ateLtally nle.•adanq info--xation. No patient Liability for unpaid Plan Obligation -- Standard health plans would te raquirsd to hold •nralle•f r.arzl•ss v:LS reep•ct to any plan obligations for pap•nt to prLviderf. Remediea and rnfac•meni -- Standa[d pealtl plans vould be :equiratl to caply ViJ: L11e naWlu and aOfo[cesent requireOents of the Henithsecarity Act, mcludinq tt:a lnternal appeals process for benefit denlal, redArIipn, or t•raination. Standard "ealLh pla.^s would be t+quirtl to eatablish a grievance procefs for patienca dissatisfied vitt saceera other than dan¢a_ of Wynant or Prcv:•icn cf lwlefita by cLe pLan. Provider Selection -- In selecbLlg aaong providers of health •arviCes f aaabership in a provider network, or in ncabliehir•q tna torso and candiLicns of such sesCership, a standard health plan tay ot al.qage L] any fractica [hat di.cilainaG. against a pLCV1deL based on the health status of a Wtiant ef tha provider. A a andard haalth plan could not restrict Lhe Wrticipacicn, reimbunaaane, oa ad.anification of a health pxefeasienal solely on the basis of the acaduic deqaee of tbe proteasional !t tha p[ofasslonal if aCing within tba acope of Lhe prpteaflonal'a LiC.nae. votning xe cRe Health Security A[t vould prevent a standard health plan fro. oaCChing the nusber ana fyW of tealtth oa a pravid•r. to Llts needs of tba plan seaDerv reguiae any staiwlard health p-an to crncrmc: with any type of provider legally autROrlvaL to provide as:viua in the State: or establiah aRY ottler seaauce designed to salntain quality or cantrol'l ccata, eYCept as piovidaG ln Lhe Nealth SecLLrity AG. Physician lneanti.ve Plans -- PRyician incentive plans operated by standard health plans would have to wat the repulresent• c ctton at61'-)(9)(A) of Se Social S•curity ACL, :ncluding Se provision that no speclflc payf•nt is de directly or indirectly 'a.':det the plan c a physician or physician group a an inducecent to reduce or --ait x•dically necessary aervicaa to •nrclua. Physiclan partici.WCion -- 9tantlat.f health plans would be /i :equ_raE to estanliah a oecnanim [l:muqh vnc-n phyveacz have :r.put inCo tactars a: •ctecg patien[ care, and that pectens would be a'm1e .c choose their prmary car. physician from available practiticnarad standard health plane would be raqired co provide r nabL (at aat ]Oday5) ncC_f!Cation ro phya:clana of ']er'-sion5 to <ancel c denv reneva! cf concrecte and eatablish an -rfoi-ra1, r.on-binding and advacry tavlev procees br aFWals. SPECIAL SUPPLEMENT ethical 9csinesa Condat -- A standard health plan vovld ` r•quired to d•valop and lapleaeni a cede ca ethical b 'c~duct - ncteding Lhoae of i[acamPon•ntaL•andaaaaur• Pnticlent onna9 oec] and planning funccLCts. /nroilmenb -- a standard health plan uy noc knowingly erro11 an :ndivndual no va c_rrantly •nrolled in anptRer health plen. alt•rnativa GiapVCe bsolutiop Trocedures Yiating to kalpractice claLas Standard heaLt[ plans would be regu:cad to establish and adintain an a1teRlaCiva dlfputa )asCLUtion proudures pLOgras. aa.amtial c®upity irovide[ All standard healtL plans, including aelt-lnaured tlana, would be regviead c affer a eentract vitL at least c of each ca[egory of EsaatLiai Covunl_-y PrCviden in Sta4-deLlnfd alrVice araas during the 1• Yea- W_-od Gey_inYq .. SanuarY -. _1916. The Secretary would ba raqui[ed to develcy gua•lines f rtLa d•finaticn cc stata- dafined haslth pla. service areu. ".he SCataMefLned s rvnce area could be ssaLLer tlan a .ity-iattl aru, but could nGt div:de cicias ar tevnf and veu16, at a ainlsa, ir<LUda any ad)acant designated urban and rural und.ne.rved aruf. no Secretary aay aaM• ceptiona and reqtfira cont-aclf to be offere! to amra than r• EsaentLaL CcaunotY ProVideC IS CJS betretary dataain•a a[Cri capaCiCy ia rpuit•d to serve :b• Geeds of .nrolleef. :he Coaittee inteRdad tllis prbvialon Lo balanca LYe right o managed care or9Y11latiaN to Chooee t9eir oVh partneza and toe va1Le of traditianal providea to underurved raas, while beqinninq ine aat:on to a Wra ccoetitive aaLkAtplace. no Co•alttee a Vaiana :h•rSeCLeLlrf sakin.g ekGaptions in large NN:ce ataas al'CR asrLs Angelef or Hev York City vhere entire coaauniLea ars '+nGeraer+ed, L1ua, req,llring contracting with only one ptovider aay not be adequata to enfure accefs. A participat\on agre•sent batvHn a standard health pla'n sponsor and an •aaancla' cov ity Frcvidar vouLd provtda that tha plan agieea :a traatll• provider in accordance v1t11 terL and conditlpns at :•a•[ 43 as cavorecla as v.oee that are appliearL• to otner Provcaers vieh a zart:clWtlon agraaa•nL with no plan with respect to tne scope c; ServLcas and Lhe basis for vh:ch Wy'aenc Ls vada by tne plan cc the pnv:der . Lhe Secretary would be requir•d : =tfy as an Easental comunity P vider (i) a/grant ]ula cantars: (LL) co®unaty Cu1tE •ntRS: Gil) hasalafs proQII]s previde2s: (iv) Public I1aCsitg prov:derar (v) faa_ly planning clmlcs: (v;) IiGien Health prograu: !vicl HIV providers under the Ryan vhita Act; (v111) Mauraai and Vflld Health Prcvidebs; (Lr) federally qual:fied ccebunlcy nealth - - (k) rural health C11niCa: ~kil praVldera of aG.ool health s•ivicea: xii) c unity networks receiving QevalapsenL fu:dang a dealgnatad urben and rural undersezved a a (xiL) n r: profit and public Ecapitals aeeving the criteria f rpubllr hospi ala which a aliqibie entities under section 3408 eL no Plblie Health Service ACt (Medicare tiapropoctionate sh¢e adJuata.nt azc•eding :1.)5 parcent) : (rivl cnildren Y Rospitals veting ccaparable erieasia datacsinad appropriate by tne Saczetary. Curing tLe five ye.r transition, the Secratary could set etanderds tor tt. doignrticn of addittonal health profassicnels aM nftitut:ona as Essential Coaunity Pravid¢s if tne Secratary aeterainea tLai health plens eperating in araaf d rved by the applicant would nec be able to auuie >da5vate a- s to tna cc.PreRersav benefit FaeYSga viL`.out ocntract:n9 vitlN tAa aPpl!canc. .The offiee of Jeehnoloqy Aaeanent would be raquirad to conduct a study on vprcving acc•a• in underaerved areas. Cealtb Plev setvioe area ClWOit) , After health ~i tf cantlcMC~ h•ve Y ~aWCi cy vi:Rin stanaa planf would be q Lna pler.•a r.etvuck, p[ t1-vugh eentzerea with a fufllcient nuaoer, distribution, aM variety of Previdea to deliver tha standacd banefics package to Ql Wru ot any Seat.-deflned health ptar, araa in vhvc: tbe Esa1N plan is offered, vLLh L.aspnWls ProsFLn•u and in a aa.n.z mlcx .sur•f emntinuiby. Standard hu1tIl platu would be rpuirad to slke available and a<C•ffLEla, tzanslatian, caae YnageMnt, and CSansporttilon aeL'/icef. 1 necessary to deliver tbe stmdaPlSLed benefit package, and any aupplemantal benefits. c Scandar[ .*.ealth Plana would !e r•quired to an that for the selection of WrtiCiWting providers taka lnte aceeunt L e• naeds of diverse populatlana. TT:a standards in this wction would apply to aeif-insured plans only to CSNe extanc necafsary to deliver s. icu Lo esplcyees. 44 specialia•d servicee Standard tee1L`. ilans would be nqutred to heve vLthLn thair atvcrk. a cantratt r_cn, a auttic:mc nuvtar, diatcibuC:on, and iety oC pnvlGer6 of apec:allrad servlces Lo afaur• cnat fuch would be ava11aG1L anG elaible to adults, cnildce^, disabiliaa. in]enta~ and peracns with Standard `ealth plans would be regulred to demonatrat• Lha4 aduits, chaldren, and p•raor.t with disahilitief tave access to Publishec by THE EUREAU OF NATIONAL AFFAIRS, INC• Washington, D.C, 2C037
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8PECIAL SUPPLEMENT specvalirad treatbant axpartlse by reet¢ng eva.eacaoc cr_te_-a utab:iahed by the Secretary. SCandard health plans nay ea;isfy the standard ccntracting vitt and denonetrating suffSC:enr referrals ps detarained by a tidares set ty L e Seccatar+) cf adclts, children, infants, and p.rscr.a vith of ias requ_rtnq epeclalired a a designated Centers cellence. For chl'_dren, such spklaiizeG exp.r[ise would ba In padiatacs. The Secretary would designats :enters et Excallence n the field catieuclonal c e ttat aaet evaiuaion crvv.na uteblishad by the Secretary for the dellvary of Ca:e fcp acspian ca rsguir:ng speClalired t:eataen- and alsa Net two or lnra ot the follcring [aquiCasanus: A. Piov:drt epecialisad ed'vcatien and t ning .4rauqn approvri gradueta aadlCal sducacton pcegraas with eu1Gi- spaclaLy, vulti-diaeipltnary tuening and sarvicss :n both inpatient and outpatient settings, vlth aadical staft viLh -aculty ap'aointsants at an affiliated sedlul sanbol; a. AttraCC patienta from outside the aentar's local geagrapnic regian, frov actess tna State ar natian; C. EiLher sponsor or participate 1 or '.tave aadical staff vllo parbicipita in, paar-reviavad rssaarGn. S4aluation critqia would be deter+ir.ed by the secreta-ry for standard heeltb plana vao choasa to prCvide speclaiirH f rvices and treatmants vitLin a netYCrk fetting, including :ef)uirseents 1 staff credentiaLS and expeeiencs,av.! requireYna far N ured outCCaes in the diaqncsie and tree-_rna of patianta, For ohildben, such sFacva!lztl traataant erpertisa vculd be in peLlatrlcs. e 5eerstary vauld develop evaluation critaria for outcenas of apscialired trutaent n reaearc] fi-,dangs de availatle. TTa cavattea : ends tnat theaa evaluaticn c[itCia a avey Sraa the claips dav^nnd procedure driven ausurments to di..ase m naqeaanc neaau[aa, lnat Sa, indicatGrs of sYacass in treating tlre entirety of e dlseue a ass Ue cantz:'aua e cavb In addiccn to Gas3c cldnvicel lndicatcrs such as ncrfaL'ty rvas and ceaplioation [atea, outccaes a5 eabents will add-eas eucn i as - ea-ent c __znae with dagnostie and ffiarareume yeidelin., Participabing Physicim Pvoqras Standard health plar,e v uld be requl:ad to establish a poagres under vtict pnyslcians would agree to arepc tneplan'a payver- scSeduls a payment in f.YiL and not to charge patvents a e ther, the ceguired by c.*.at plan. Each c a h p1aE would be caPlired to m aavailabla the Rat of partlclpat_cqphysicians t ollees. Enc.•aplan would te reqcirad to have a apprapriete ncxber a, physicians In each speciaLty as part cipating physicians. oLLt-of-Area Caverage Standard haalch plans would be vquLrad to provida !or uraent ar.d aa¢gency cu_ ot-ares cevaraSe fcr anrollua of tne haaan plan. Eftectiva Oato Sanuary 1, L996. aSWCF,kLa kPPL:CAELE TO a01Pf.a11IM1kL ELU.SG apEPIH PLIYE Iapositioa ct pequi.ruects oa aupplqantal ENlth Benefits Plaes Supplenanul heatt> beneflts policies would be dellned cc Lnclude tvo typas of policaas: (a) aupplesental servmu Pol_cies, and (]) cast-sharirq policias. SuFFlenantal servico pohcie. would include: (a) c araq. tr -viow and i nct offacad iC cbe cenified standard ]ealthplan, and (b) covs:age for ite]s in Lhe cartified standard healih plan, but nct covarad bacause of laitation ln asccnq duration a eepa. Cose-aharinq policiee would include thosa chat vida co'Ieraqe for ect-<t-pocket paynents, including Cc-insuiancY. dedcctibles and copayaents. 6taadaras far sVpplseeptal IerviCea Plavs Han1tlA plans or inaurav's affering polieiu that scpplessnt s in tha ca^tifiW standard ':aalnn plan u¢uld b reguired t meet U:e following Pederal standards: (a) guarancaed 1 vi1: cna val opan anioll.ent pe[icd of at laast 30 days, c.p~a~ i caaes +hare suppluental farvioa pnliaias are offered to aaployses by tteir eaplayar or Co Sndividuala ]aaad an their aasbership nn a freternal, religioua, prc]assional, edueational er other similar organiaation: (bl guarentsad reneval, except 9o nonpaysent af pruiuss, fraud, or isiepreaantat]on of a natarial faev a•4 (e) ceu vty rating, vitn rates aodified by coauniCv-rating araa, fasilyslra and age, as 11 csaifiad standard health plans. Xnltn plans ar :.a rers would n be penltt.d to deny c vraga or vary pruvuu for aiig:ble paasons~ [eceapt based an healtn scatus,cadical cendition, r_avv experience, a6 of health cara, r- zedical neceasity. By Sanuary 1 1996, tna Secratarp would ba reguited to develop (in ultation V~tY ~}a itates) nin19'aa ,standarda that ro ahlbit Bnrket~ng p[ac.lcas by entities offering suppleaental farlices pelieiu C`.ea !nvolve: (1) providing conatary incantivas :or, o- tying; or otherwise conditicning tne sale of tna plan to enrollees In aceztlfied s andard plan of :he antity: (31 c ing or disalosing co any paity infcrmatlon about cte health s:acus or claims e_ .ence o[ S-13 partmipanta : cartifieE s andard heal~: plan for tLa pu^aee c. arketing a suppaemental ser+icu plan: and !]) pbcv:ding a supplemental sarvicu plan by a anagee cars plan to a., individual no- enrciled in such nacagad cara plan. Etandaids for ooat-aharlaq Plaaa Persons a only pa rectted to obtain e Coet-eharing policv ^roa Se saaa c~ ied standard health plan in vhic] C.ev a enrolled. Cealth plans vculd only be peravtted to affer coat-sharir.g -rolicias to parsons d relled in tneir c-titied standard ]ealtn plan. Naching euld rsquira a person ] abuin a ast-aharing poltcy and nothing vou11 reyuira a health plen to provide oos. Certified standard health plans offering cost-sbnring palicies IOUld be caguired to affar tbee : a11 individuals anrollad in tteir certlfisG standard health plan. Ust-sharing poLlCl/s vecld b. offered duan9 =ne aase aFan enrolLaT period es-_+n an.d for cartified a:endard heal•-n plana and supplaaantal s.R'lces Cal-cias. cert:fied a andapd .^.ealth plena v uid be requiiad to provide coverage 1Cr itena and a rvicu in the oait-shering health plan to V:e saOe e¢tanc as P=cviGed in tha certi!led standard hultd plan. carttfied standard hea1V. plans would be raguired to offer a cost- sharnng policy at eha aasa crice ns all indivlduals fecmmty rating). ine price at vtuS C`.a caet-sh.ring poliry la atSeiad vauld De csgusad : take 1nacdount any increase ir, ut!liastian for itus and serv-cas in tnecenified standard he11tL plan. Prcbibitien as offering ltlltiple /apkagas to 1ndiHdual A auppleaantal health benefits plan could not be offered to an individual vho is cm'erad under anotl:er surA plan c-.1ess che individual's ccvar.ge under 4he new plen baglns only after :ne tndividuaLa covarsge under '.ha origMal plan va taralnated. Pffacti~a pate aanuary L. L9sl for eli suppiaaactel healtn plans. s]91(GkpDa YPLSCalf3 -V IFSg TLlY c111 FL:C:za Jatioitiae of Laag Saa Cara PelibLes l'1 palu_ea cevared uo.der t]ia Fart :netcda any - c pclicp rzder c- certifica4a that is edvavrbed, xarAated,c• or dasigned to e ovtde covarag< for not less than 12 coruac'-.ivet chs(er eaC! covared person a erpense incurred, indam.^.aty r- e~ed c o:he CasiS ! r One or e Giagnc , preventive, L^.eLLFeutic, Cehab:la:ai'_'ae,a a oriPe[eo]al care - viced i- 9ltting t c^.ar :-.enian aCuta Cara .:aspital.Pol C:lrsnct c ra _nder :his Part~.'iClude rciicias deaig.^,ed tc prpvide baa:c Ned:care suppleoental coverage, taaic!:oapltal erpetse c rac. _c asdical- urgical expenee c raqe,disability i ome a r.la[ed a set Srctac:un c rage,~eaccident-only c rtqe, apecifiet diseaae rage cr oimitad Rea1iC, benefit c verage. Folmias tRLt a cel4rate death Eeneflts and ttat provida the option cf lump sum pa)9enta are r.ot CCVeCCd in t.'aa iart. Aegulatcry ovaraight Of leaq Sera care aaliaive 2articipat'ug States would hs nguired : certify oolic:ea as aeting n Pederal atanCards, An insurer aeel:ng a poliCy not cartLlied ay tne State would Ee subjact to a vil monetary panalty nat t exceed 50 percentof 5roaa p esi~s : ved [xom s ef tne pollcy, States would be Feraitted to davelopcscrccer standards as long as no State provision is inccneiatent vith Federal scaCdarCS. The Secretary of IC4$, •n canaultation vit11 the Yltionil AasoCLatLop of :a Comassionera (NA30), would be Saquirad to develop madel standards i ccrporaoing Lha caguicnanGS of thie ?ert v1C.in cn : of enec-sant. PartiaFac_nq Staces vauld be reguirad to davalcp a lcrg tern Insurance atandapd raquletory and anlorceaana prograa as part of their Acf]aprcgraa, vhich includes adoption of the NAIC aoCal act standards, a procass tor individuals to fila coaplaints about lalatiov.s of L`.a standards, t nsuser ardess to tnosa coaplaints, and a prescux reviav and eppravai procaas. cenq Sazf Cara Fa1icy Rasketisg lpuirrents Insursrs or agents would ba prohibited m a knovinglY mak_oc any mislaadLng caprasantaticn, on incoap:ats o: fraudulent ccxparison, of eypoliry . ey would ]e Vrohibited fxas any long tev u rensuvsnce th using y foru,frigat, tnreat, urGUe - esav c netbec t¢pLCit or explicit. Thay also would ba pronibiteEr tocemploying any marketing rtEed that fa11s to be explnvLt tnat the purpcse of C.e markating ls solicit.tion of insurance. The Sacratary of HE9 ln canaultaricn vitb the NAIC would be nguireG to develop sinifua 3nancial standards fer CAe pvrpoee af advising potantcal purchassrs as to the ccats and anounts of c_verage naaded. Inaunra and agencs vauld ba prcnibited fms knwicgly selLng a lc-.g terc care :nsuzenca potiCy n an individual uho la elig=bla fcc ttediCaid. -naurers and agents could not knovlnS-Y 5411 pal.ciea that duplicate coverage alieedy teld by L".e po_anri1 purchaser unless the pcrcceser Prov4dss vr.t:ar, dcc:manca[tont"ab!]a new coverage did noc dapllcata :he OveLnge already held or that the nae pCl:cy cculd replaca e%ce<cng cca¢age. pubiished by THE BUREAU OF NATIONAL AFFAIRS, INC.,'Nashington, D.C. 20037
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S-t4 Pny agent v sa1Ca, s .ra f - poixy i lation a( the rarkening and a standarda veuld teaubJect to a ctv11 nor.stery ¢1tv not to a aed $15,00'J for eGch '. oLaC:an. Ar lnic[ar Or carrier that effere Sor aale a polic. i ccce at Juse - - vLd be a'ibiect c civi_ aar.a. ry penalty not co exceed 515 000 Ccr eaab v-aleC-on~ no Secretary - consultation with S. NALC v ild be reGCared to eatabliaR atandLdsfor the training af agenta vho s " •ong t ara po-l--es aOd ipemfy prbeelvres fer no eeritlcat:anaLaganta ype have coapleted sutn traSLi.'ig. a.gciruea<s selatlag to :neg teri Care Ceverage Oader a Tolicy ]f an application for a rags 1s denied by a , rLe !nsurer would be regCired bLeturn dLreCtly to the appliaaCt any preaius paid vtthan 30 <ay. of t.he data of denmal. Lf an appl'=atLct f w rage 1 accePtad, tne 1hucrer sha11 provide the ensurence pclicyand an cutline af ccverage v:thlr lo days of covarage apPrave - - rage undaL a poticy is denleG, the insuLer would b.qaaed r to notify no pOlicySbidar in vciting vitnin 1`5 daya e-- at<e of the rYtonlsl :Or tf.e dania: of N carage. '.~je LnsC[er r aVaaLabla all records related to the denial and infOrl no po`_irholt.¢ how to app.al 2a denial. Repertiag leguieuaeta Ina_rars would Da raquivaG to repart a ually to eha st.ts insurance coaiulener, Sntoraacion including cre nuaCac and type of long ters cara peliaee in etfaee and no a s fated priuna. the rate o[ praal~u ineruee or eAeaa palicaas•~e laPearates and replacement rfto for t'Raw peLeies• and no nueCer of claima daciad. llgsat coez, easatica . Agent c n e fraa no wta a a lcrq ca[a c a iey, to a f_'rs--ti.e holder eft a pallcy would oe 13ited to tLSg eater of no 9 re than 210 percant of no acaansslon paid f ving the policy ,In taavCr.d Year Or no a9re e "1'an 50 peroent o.' rhe first vea }raatu..Agct co®:unon. or coapensarian would ta reqaired to ba 10 .eve. _or pollry re..eva_s over -J:a ^,er 5 yaars. 3ulas Sar /asue, Reassula aad CaacelLtiera 3:ong neom care poliay cculd only ba <anceled due to nonpayment af a or ea.er4a1 rlaeepreaantat:en or fraud on the part of no poi:dYhc:der. _ac.h. Srotp long t - n e e peL :Cd be red to pCOVLGe c vC[ed 1nd:vid~A13 vc`J: Cla e i antinuatrcn or oonvers:or, troa a grc_p to a individua pbl!cv aat aeets cercaln oriterla. conversie.is L a grc'ap pol:ey vauld be reguired meet cermoa.:. pcemiua Frie:ng regulremecta. Vn]-e and agents aculd be rsqulrad to qiarantee ahe issue of a po-1_ -`le Lndiv:dtu'_ aaa-a mae ai:fisY`s ladicai 'YhGe-^.':irin4 guldel_~es. ihe Secretary i sultation vith no NAI< would G rsgviled to devalop standards concv-ncnS po11ry rating and pricing of poliry benefit upgceae.. The Secretary in c sultaticn with the NAIC veuld be ceguirad to develop standards concnrr::ng paliry rata ecabilirKion. A long tara ca a policy sust allow for ninstaoesent of a potlcy celed dce i nn payaaac of proiin L' tde pollcyholdar La datarained t cagn:tl':ely 1nupCRatad arII tr.e pallryhold.r a -a ra-..sute , irb full Peyaent of back pruiuaal within f-ve aon:Ra. Cse of Btan<araifed Lecg Tera Caie Defialtiens end !Yruaolagy t1. ?f.lc, would be . Secetary of IIX.s, in c nsultation viC`n rewir d bc develop standard dellnitiens ud terainaLagy, and atandard Fohcy deacription foraats for •ua ln all long t.ra are poliuies. lenefita .tandards Bana-•its vould n t be paraitted to be Condltionad Crr the r.ead mr, r uFt af, any athac s her an che aadical n aa_ty tcr tne banefltn n servicas turLlshed by ,arcviaara e facllltiu meeting cenditions beyond these raguired by state Licensun or. cartlficatipn. [f .`.o.e Ceal•Ji benetits ars c vered 'cnder a palicy, the poliry vould not be paraitted to rastrict these a ea to those provided by aervicu re9-sterad n r licensed preciLCa1 r. r ner to provided by'!eEmare carrifiM agmciea. u3arvicas would ts reguired tc :nclude [.'.eae e[ a hoae Eaal-' aide or athsr hdaa cara enplayaa undsr certain condi[ions, and would ba regu!red to prov:de panonel care' reep:te, and carCain otnec basic cam•unlty-baead SeA'i-se. 50 $f - L31nqo banefit5 a e cGvered 'lndar a pO1:Cy' the polvcy would n c be-p -xittad to csstrnct cha t'rye o[ nursing facility crverad. ' A par --ee policy could - endLtion baneftt payments on the eiP= Of s c i sardcea r.or on the cacaapt a_ seivices frca spec:Lic :Ypese'Frovi]cs. SPECIAL SUPPLEMENT A Long : cara pClacy v c1d not ba penrtted c - benef]te [ mdcaGUela vith A1rRCCer•e d:aaeae, cih er .... resscve dagenera::ve d encia, a tal !llness. o tzl r - dyf`erent.y from SeneLttenScr lndividual. +inh a.unccton,ln -xpa_raanc. An t -ld be pe:ml ted : eYelnde cr condlt:an benefits basad on a cadica~ o -_ for which the pallcylclder reaa4ve! --eatrent o a otner+lf~ dleqnraad vithin s s ntha tafere che xclude iaa~iance t epolicy. no pv1_ry would ba p.mittad to eover¢ge ef cnat p -t: ng eend![]on for up to 6 acnthsafre. ens start cf caverage cndert.e pc11cY. An 1na re could n t deny c rage due t a pre-exazbing -onLiticn heaPPl:cat:on 1 ra9e did ne- eegueat sucn _c-eraac.rn v:th rasepct -c scch coAltlon. Tuctiaaat A..esssaat! ard appeals tfpcees :unctional a aen<s would bs eoMUCred by L-.dividuala e organ!rat_ons not under the concroL of the : fach i - u_d prcvide fer an !-eepanGent process, ..et:ng e standards, for appeal of funee:cna! aueufanea and cliiaa danials~ Iaflatiaa Preteeelen lcng t.ra cars pali^_aas vculd be raguiret to include inflaticn prreect_en a ting eininsrederal standards unlees the :, obtain.a from Cha policynoldsr a vC---en [a]ecEren ef t1_acovr.egea aba-rar[eiaure Icng tar, ra pellc!ea would !e requ!reG : ncluda cendatory - n-farfaiture benef:ts L'1 a forf to Ge es-ablithed by the Secretary, -n conaultatl.en vith no NAIC. sffectise Caba 5tntes would be re@ilced to lmplesent enfarcaaent progracs fer lang ten cica pclicles by April 1. L357. states vithcut vuch a pregraa 'muLdbe aubjeot to a lose af lsdaral hadicnid matcEi:q pavv.n-s for lcng tare care eaavino. lfaalIts aTJ cCSt-s.AIIIM6 Si 9S11NARG aENCri:9 PACnAGr uececal bescriptiob of Standard Easafits Packages aad Ccsa-9Lariag -hauarul 'mlce ef ona atandard beref-'ts packaee vould be req:_red ac te equivalenc to the a tuar4al value cf c`e Slue bess/9'We ?h1e1C Sta.-,dard Opt:on (3CiB9-SOl under 9]e5ederal ]rFloyees Hea1L'. 3eneGts ;FEflB; pregran, adjusted for an average ?Opua::on, and adjusted for tbs particuier e :ngeehedu'_e provided f , :he p kaga, ae determinad by thea~iational Neal- : 3er.efia boarGestabltahed under Settion 212:1. COSt-snaring i sngeeenta c uld L':ude cc-payaents, c - a ana dedcctlble ameunta frr eerv.caa riner than cii^ical preventt•ie 3e:vlcee. :cec-sha[icg asangsaents vcilE be spacifiad by the Nat:onal Y.ea1C1 ?enefcts 3eardt 2. v u1d be at least two opt'cns for standard benefits packagea, ea h^ v uld hava qe s of c red h s aicee, evaver one culd contain higheracost-ataring ceqerias and/ar [ - sreW seivlcea.TTe latter u rafar:ed to as an altarnat!ve acandacL baneLlta paakage. sa ccec-sharecq scnedule established ty the aeard xay lnciuda _' a-tara 1Laits, 44u .'.eductibles and cut-ct-pccket laai eat- snar:nq fci a year would bs baaed apan aspensas i rredfor n and - i.Rad in aRe Yaar. Hovever. a paar. m ecpea..s :!d 1~'l t::e laat tnree aGn~1'a Cf the pravioCs year towards the i ccstCahering raguireaents Cf 61a cJru82 yaar. Bescripcioc of ca[pariu oL It. and aar.lca. Standard health plans would be riguired to offer a atandardired set of c red s rvlces + spacifLad 1 etatute. iteat and s r'vices urGar these categories would be furniahed to standard health plan e-rcllaes rnLy vhen aadically naceasary c apprepr:ace. The daLlritivn at v:at 15 aadically n earV a eppcepeaate for an enmllee rvuld be tbat the !tus and sarvLCU n (1) Lor CEo treatssnt or diagncais o a health candLtionl (2/ generally r.qardsd as being safe and eflective: r,o) Sndicated foa no enrollee~ c ;a) lnterded to Yintaln or iaprcva tha hio:ogl<6L a psyc'.alogical or fINC.lona llonal condition ef ~e en.ollse or [a prevent or e425eate an adverse health outcome cr ilaltavlon Ln functional capacary for the enrollse. far :nLividuala under 22 yeara of aga, the 9caco v uLd re direc2ed to give c alderaticn to age and Esaltn status co prevent c saeliezaw da affacta of a condiaon, illneas, injury '+ acrder, t aid In the individual's o rall phyaical and aental }~' grcvV: an] davQepsenC, or nssast Lte individual :.. achleving cr ~ ~'O ' 52 -~~ ~ ..aintainl^c 3ax-r':L :NC-ic..a_ - pcay. ~. Categsrio of ceve-e- serv-us and equiPment would inelcda: ~~s..inpat:ent and cutpatlevt care, inclsding hospital and hsalth vy ssianal sarvleaa. Nealth prafua:enal varvieas veu1G De ehase , Lav:u11Y F_ vided by a pGYs_c_an or anrt_ar laalth prcfass.e..a_ vhe 1e u Published by THE BUREAU OF NATIONAL AFFAIRS, INC., Washington. 7.C. 20037 at
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SPECIALSUPPLEMENT ce11y authcr:ved to p v:da acc:f a.:v_ca -:. c'IS suu :a -+n:<n tn. saNlCaa ata Crov:Ced. +. Fiarqenry aa[vvicez. -.x:'ading aFprepriata c acaForr aerv:cas. v. Clinical F-'eva^c:va serv:cen, inciuding sarvlces 1 :a:. a pdpuleticns. and aq -aFprcprlac. iamunuatlcte, aea_s, or ~~inic:22 vvl.l. •. %ental 1ilneu and nubatance abuse eeNicM. 5. lamely plar.ning sevvlcea and aervics.a for prsgnana voeen. 5. Piucapcen <rugs and =ialogicals. t. Y.ospice cara aNrviCU. 8. Hora health G:'a uN!ces. 9. Cutcatlant laboratorv radlclogy and d!agnoscic asrvicea; and duSab:a aedicaL equvpsan:. Nothing in tGla aeCLlon ahdYld be ccnstruad to pnvsnt an ir.div:dual frem purc:asing equ:Fme^. cr rvlda trai a e fYFensive t11er. e guipHnt o aalviCa6 Clac ate datermnad to beasdiraLly .~s4sery ar appreprleta [er tCat individuai. The C ' ctends tnat an Indivilual v uld be alloved :o pubcEUe or rant t.ba scre expenaive pucprnt o saivicaa by paying cha diffarv.ca between the<osc at sucb souipeant or sarvlcas and C.e ccsn o2 aquipment cr aarvvus denarainsd :o Ee madlcaily necli h~1<r appiepriab !YL Cn+t :RI!v1tluQ. :'Sa aupplier, in turn. v and : caiva paynant directly from tbe Eu1t] plan for cRe coat a[ t.`.a aed!cally nacessary or aPDnpxlau equlprnt or services. 1L. Cutpatiant rURan!1ltation services. 11. Vision earb hsaring aids and Cantal cara 9ar indivlduats under 22 yatrs of aqa. ' 1d. IRVeetiqatidnal tr3atalenta, includinq roucine cara, (EUt excluding the direct eosts af an in esLlgational drug trsatmene c- rssearch t.rialavapprcved by Se Saeratery cf :M.S, davvice) provided in the oirectors cf tqe National Institucas bf Health, tbe C oa1s-oca r vaCens of the Pced ee.d JN4 .Sds=niaraeibn, :he Beeraury of A1fa:ra. Lhe S.cretary of Mbn+a or a qOalified nanqove.. a tal rch entity as defined in quldalines f the National ln..iiutea c Haalttt, lncluding g'iidelines for National Cancer Inatltuca-deaignatec 6] ancer esnter aupFcrt .... - a pee ptogran aa Lefined ! C.eSecretary af ad and apiTa'+ed resaarC] Effeetive aete +nvcacy I, 1996. IN^IOM.L EeaLCE BEIRlItS EotiL A Yatlanal Health 9anef.ta Board vduld be establiaEd vltCin the Cepart9e.'it of Hea1G: and Y'iLan Sarv:Ces. 1:'.e 9card vculd Conmunitate ^. tLle Nat_cnal Heal:h -a lsalon about isC'.1e6 : a:ed t bene-f1ra. The Peard vouldc nLiat c- denbars ncm:nxtetby :Se - uld aerve for s x-yeaC, President and ccnfi9ad Cy tIIa Senate v o stag5ered t No za Nac 4 zenhers ay Le affilleced vith the sama v i;ical pa^y, NetSers of the 6card aoald be epFC!nced no later than 9Y days after e actment and Vouid ba felected Cr. '.na baais sub'.eCta. of their axperience and expart:la in relevant t'na 9aard, i sulcaticn axpart groups, aauLd be authecitad to promulgate requlaiians t clarlLy c ared ae and e.t-sharinq (Lb paralt t.a axistenCe o1 a variety of dalie~cas systeasl, daeloF apPropriate sGSdulm farcevered eervicee, and refine p lieias regarding cov¢aga af lllveatig9ticna: Craatsents. :AS 9eaed 'eouli ba diraeead to reftv cov.-.C a a by rsnce to standards of inedical n <nty or eppr=F~ ataneas 3r it, rollae. ea¢ifiad standard heaitEplans vould pcev!de e rage ef tta categeria <f services deacribad in ehis saornicn for trantsent ned d!ngnostic croced¢res tbec ara smdlully naeassary or appropriate fcr Lha enrolla.. Tlhe Mard vculd: f11 GevelcP ir.terla coverage dacisions in liaiteL = vcusstancaar (2) Ms:gn rlla beneLlta psckags to Pravant adVeree risk aeLsction: (]; Hot spacify typea of providers Phen clarifying covered aaNices; ;a) Not spee!!'y parcieular prx.duru er :r.ewnta ar <l+aaes of prbcaduns or traawnt.: (f) Giva priority to tus Lollrnrmg viV.in the conntxbints o[ Na artuarial lia!is un in this art; ith othar(ssaiauiti.rvtaeneeli!9lnbasen~a~ac=n~abnse,:arv:can or apprapriatensss f r Ne enrollee, a as to snsure ttat arbiczalvy day s v:fit limits or <bst-sbarinq reGUirementa vauld not be applied to mantal illness and substenca abusa sarvicss thac era noc appliad to vadical s rvicas. SuCh servSCes sEOUld ancaura9e use of oucpacient treacaen.a to the greatest extent possibls: (b) 1Se Ceeds of c.h!1dcln and vu-nerabla populatibm 5a ,. _1'.1La:.c ~:ra1 and underaeT:eG crcivlduL's(; (<) Impi'cving t.`.e taalth of tnaividcaLs tbough o entian. For qa!danca in eaab_!ahinq these serv:ces, the 9oard caUld ons:der A,c~ ~ ultatvdn vitl:appropriata govern=antal aganc:ea, task forces and p NSeional qrauFS (for eraaple, c ing rsnnmendatncna c • A<visC:v CoaaiRea on :]mWCratlen PractiCee, the US Pravent:e S-15 Se:v_res taak ?crce. and fcr children, tne asarican aaaGamy c. PediaCricS.l :teve a u'd pe ata~crizad to ba apP=bprtat.d bc Lha Poard suC.. .u3a as aay ae naceaiaCy to ca _ clt t..a purposes of tn:a pa:-- The Board vould alao b authcriied to issue cagcGationa to aodify t:1e cataqocles of covered a eand < a-aharing :hat would go into affaet unlaas eczqrsaa e - acea regitatiens by ]aint rasolution cGnsidered under e ed:tad ebcedCres- lffectlte Cate 3oard aaaben uculd be neeed by :ba prasideGt r!thin 9o daysatter enactment. PapVralOYa aE1.1.SING LV aa0lSICY EID asLIGiOW )1LIaEs Netting in tlas title shall be Canatned to confliet vit]I any conatit_tionally pa"aiu:bia regu'.atpon of abor2icn by a Siace. Noching :n tl.le title shal! ba con.trued tof 1. req,lire the Craatian C eeintelYnce of abortion Clinica or oG:er abCY.lan prcviders Vithin a State or any re9lcn of a Stata: or l. authcrizs any laeral aqancy or stacs `s raquire clfe craation r Caintanance of aCdrtiCn clinics or ot.Yar abartibn prcvi0ars, deny certifimtidn, or any other benefit geantad by tivs title, to e standard health plan basad on ths numCer of, or Tha presence b- raenca =fI aEartioT clini0 Or oU1er aDOrtian pr<v:ders in or at:!:Sa<sd vith 3s plan. Notlinq in tbis title ahall be conacrued to: -ravent any individuad :3bm purchaning a standarC benefita md!vqidu.13op1eCeuCosaCortimaae tha tvais N a-sligicus belief or soral renv!<aion: 2. prevent any taplayer ]rca contributinq to tba purchasa of a standard banefits package vhich errlJdes aevarl9s <L abGrtlen Cr Cther rvi<te, :f t11s aaploYer cb]ac9s [ sucd servco.a an Cfa basiac_ s xa igaous ra1!ef ar naral cenvieticnv 55 3. reguvze any nea!cb professicnal or health LacilLty to psrlerx asa:st ln tLa psrforbance of any health can sarvlca, If ths health Fic[aaaional cr !aci!ity' rb;acta Lc psrfcrr::.q to assistinq in tbs per!araenCa of sucC a sarvlCl on tae Daais of a rellgiaua belief or aoral ccnv:ction; and 4. :eguire any co®ercial 1 ance c<mFary, 9!LLe CrasS plan, inteqrnced health p1an, =r any othar c:qaniraavc:. that aesules health 'eurbnce ri5k r effer ccvaraCa of Yhort:a' or at'lar servl=es. cha tlan eb;ects ' venng acch sec+:cas an tte basis o. a iellg!eua belieL or moral convlctien. Effectivs Pata Sanusry 1, L996. 1ZFlY0bO aC<59Y SC maLSE pLl"s 1cCEJe TIRGOGE EYPWYEaE dev.0.1 Eaplo}er 0.upoa.lbl_`Stiu All uplcyera would he ieq'.t!red to sake standard health ccveraqe available to ea '- cL ahe employaz'a eapia=eas. Efplcyars gsnsr.lly would be required to affer e.rollsect in na af at laest ] standard plans prcvidicg Us atanderdrbenefits package• In rural Yr.s ie vnich tne Gavemer haa deterpiCed chit theCa ia insuffi<ient popu!ation density to support I ccaauninY-raasd heaLtR plans, evplcysrs need only aake availabls tlte plana offered in CLe araa. 3ac.: as'plcyec could to [aquirad to uka availabla to aacb saployee @.e < infbraatacr. publlabed by tba State pursuant to 31013 an ._a esployar auat Lorsrard tha oasa, addiess. and btner !dant~fyin9 informat!on as tlfe Secretary say specifY to cb atandard plen or purcnasinq coopsratlve in vhich tha esPlbyN is enrollinq. At tba regaast of the plan, ccoperae~is, ci up-oyss, tbe uplayer aust v1th.•.eld tlle aaployea's share of preaitiss from tha eKloyu's cagas y~ and forvard tGe ascunta vitMald to t]s plan or ccoperative. 1? {Ve eaplryer say tearge . naainal processing Lae (to be speeifiad by tbs w~a Secretary) for CLis urvica !or uployaa snrcllad in a:lan o ~/r ebpeLLfiVa Kut is not CLe of Cse 3 or sore plans uda available ty fib uplay.r. , -= the se raqui>s.anu vould not apply vith napact tn saaaonal and ~ • ~ canporery eaployaes v^d vork for the saployer los than 6 soncES in caiendar year, or io part-<ise dcaasti< as9loyeO. xaintenanae of affort faf Cavrage ef CLlldrea A Any upleyer that as of -uly 1 199s ssde <ontributicns covar YVd tna h.a1th coverage of rha children af eaployees (lncluding any I-L 00 56 coveraSe Cbeuq,^. a faolly palict) :a :equ'sed to continue au eaplbyer centr:ECtions fcqfS!ldrenef employees enrolled iv any ce1-iP ed standard hs.l_S pLan offer:ng t'.e standard benefits package. Gevelop.snt aL Lar9e bpLayer Pusobu!ag Graupa :he c raittee pnvisien would psrclt 2 cr aere experience-ratad emplcyers e,cin togather 6c purc.^.ase Lnsuranca (but not self- VI . Published by THE BUREAU OF NATIONAL AFFAIRS, INC., Washinyton, D.C. 20037
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S-16 re), ach e :oyar : ucb an rrRnqepent v u:d be LYapcnaible teettr,g E]e eop:.oyer's regui[aaants JfAar the bp11 with respect to t.e ebp:eyar'z employaas. Coutmity-raced erployace could noo ~a^1cFve -a a large avptcyer group. lafarcaaemt Pasticipacing States vould a0nitor end an!orce w raguiresants tna ti11 tmat apply to aeplayers that aperata in Lhe stata cluding multistate employers to oa ar•enc me tCavr in-State cperaci0nsl. An eaploye: chat !ails t roaply vitn any .wnt c_ a oill i uo)etu to a civil panalty equal :o not sp than 33 per_ent ef tte vagaa ef any aiplayee adveavlY a_-ecceo ey aueh durvnq che pericd of tSe !aiY1•e• effectiva Data ]anuary 1, 1994. ACrIPe :'EfDCUE ILLrI ILgea1C1 )pPQlalla NpraaAf/O[e POK:ICts oP JQtm)r1l 4bPlLfins iareltaeat of caaupit} Lted Iadividuala Sa Cartifled staadaza lealta slaas :he c ittee Grovision vould pevit purdusing caoperatives to offer earti9v atardard Eaa1tC plau vitb vna they nave entered in agreeasnts anly t covunltY-vattl IMividuats ruading in or aeployed in [ne covunicy raciny aru suved by LEe purcvs.,q ceep.racive• carrying out its rupanaiDi}itia, pus tiadng cooparatives veuld be - requirad to perfors nacusary attivitLes, including cutreacn. t actively saek tha enrallaent af ceommunity-reted indivcdua'is, p[egr.ent ig~le fer subsidles, ani Sndividuals who :eaida :n aedically v LLig~lendar¢eavad arata. pusiea ef Cooparatiees purc:aaang coaparativu would be r.quirad t (1) enroll vty-raced ind!viduaL in eartitled stantlard health plans; (I) collect and f rvaed preuuaa to eartified health plans; (I) eneee into agreuents vith cevtified baaltn plw: UI e e ctat the satvtcet of tne purchasing ccGperative are accessible me the Sl Ocap:lni<y rating area' (5) enaure auch ava:labivuy by prcv:diap :aquired inicrzatvent (61 establish a prOCe.a fer the r eipt and dispoeition of rovpiaints cegardt:.g c:a parlovza ce of •ts dec:eaf (7) coerd:nate acti'+:taes with cenar Furchasln5 ceepera[ivas: (8) report 'a L:e Ptara inlcrxaaon rega:dirq sariceting, e ollaent. and adsin_atracive expanses, as requared by cLe Seer¢arv; ;9) cOrpty vlcR such ftduciary responsibill:iae aa the Secretary requ~ras: ;nd ~1n) carry out other Iunctcons. -coparatives vmild te eYpresaly prohibited froa: (1) app=oving or enforcing provider Fayamt ra r f3) ragilaticg Freo:ua tr Cealtn plans; (3) certityinqp enfscing paybene ratea f rprea denr ;/) a :-.g f nncial riak: (t) parfcrsi.iq any other activities identified by aparzcaipac_n4 StaOe as inconsistent viGl the perforsar.ce of c_ ratlve duties. e partic:~ncang State finds that apurcbuing cooperative is not carrving cut i_a duttaa, t•'le State would ba reguired to notify C.e 9card of Directors and to peraic the Board an opportuhity to taka ac-_on to correct Lho de!ic3encies. Il, after the 9ear1 has a opport::nicy to c a defleiency. • particiFating 6tace vculd ba authprized to: ;3) aLd¢ the ccepexael•+e to nold a etion for asahara of the loard; (1) yka appropriate actions to assure thn performance of dutiesr or (3) both, A per<icipating State would be reguireL to develap criteria cancerffcr.g tlia per:c:vnce or duties by caGperativaa. Agsaueats with Certifled staadard Iaa1tL slaae purchasing coopcratlves would be prsittad to anter into agreewnm viJi eny nertified atandaia healtli p!av Purohaaing ecpaz¢tivaa v uld ba required to antar inta an agraa.ant vitR at laaat 3 c uncoy-raced care!CSW standard health plans which proviLe tha standard benefit paelu9e, ineludi;q, if availatle, a fae-br- sarvica ?Ln and a noalen plan with a point of service option. Ccop.ravivas vould also Ee parlittad to enter into an agreement vith rated eertl.fled standard health plans ehat provided the alternative atantlard banefit package and with <avunLCy-ratad cartified aupple essuctsl Eaaltn banefit plana. The Gavernor of a paY-icipating State would be peaitted to valve CEe xequireaant [Cat at la.st 3 pl.ru be offered fcr rural areas i there is insufficient population density to support 3 ocasu.-ity-ratsd certif[ed standard health plane. Agxeasants eade with taalth plana would raaain ln elfect for a 13-acnin period, erupt :nat cocp.rativ.a would be p.rs:tt.d ca ternlnata en agnwnt if tta ca[tified a-andasd health plan's r.riflcaeier is cevinecad'ef fer other geod uuse. se veehvnq in tl:a secttta veuld prchltit a cezc:lted scar.dart nealt^h av¢tn ano. a Furenaaitg eeeperaeive has dactlned to encer into an greeeant fros offering a carti_ied atandard health plan to ceaeutity- rated ind!v:dtala _[f a=crauE:ty rating araa. payn:avt of pra®iuss which an uployer ia required to aake vould ' peqc'=ed to be mde directly Y the purcaasv-.g ccoparacive. Othervi Lndivlduals veuld baka payaents direct!y to a purchasi::g cocpere>+e. SPECIAL SUPPLEMENT 7c:cnesin5 cocPerative. would be Peraitted to Orov_!e fOr penalCaa and grace periods fcr leca payaent reasonable iething m tRta a veuld be construed as Flacing vper, e purchasing co0peracive a risk asacc:ated viCh . tL f of lndividuals and aaployer t e prespt payment of premruma (otler °.ac tl:e part:cn c e provua rapru.otieq the purchaemg ceoterativ. aGinist.aCVe fee). Purehaa;n5 c0operae_v.e would be requ:red to Lervard the pre.iu.e it ccllecta on bena!- of heelth plane within a period of t speciLed by tte Sacretaey, but ect to ayceed ]?ay. after racupt of _.a prasius. Pretitica of Infareatloa z~rc.:acng caeperatives would ee :«ry:zed to ra ailab'a 1. ach eeployer viUan 'JU < cnity ratlar, a and e.ce indiviGuat cesidi::g in the covunity ~atinq it servea C.e fclloving: li; specified m rctlsant infcrvtion: and (l) the cppcrtcnity to r into an ag:eaaent with the cacp.rative for LiL pucn_se of a cartifiad atacdard healtn plan. Inforvtion say ala0 be provided as designated pubtac access sicaa, including publle 1lbrerles and leaal qwerraanc offcces. wiaistraciee laes Purchuing coc{»ntives vculd be peraitted to lapcse an adsiniatrative fee with respect to a cooun¢ty-raced a divvdual enro11M in a cartitie/ standard healt'h plan offerei through a purchasinqcoeperative. Tlu 9eereury vpu:d be required to establieh ¢:t¢ia for ad.inlaLaciva fees charged by cooFe[aC'_vs. rffaatiH pate upon enactaant. oadlYIiAYIO. a6 ofllASloll O/ PP[CSVIlO CD]P1aATIVaa lstablisaaeet Any person aeatin9 tne Ceg6resenta for purchasing groups e. !9 tatliah_a purctasing < e.a_ [! a nct-1c[-FrofL' p participat!ng State, t,L State valld o recvuad*cr eat apcr.aer, by leglalatirn or other.wrse, at aaat one net-foc cceperetvve in e]a cOnmunlty raeing area. Nothing i-. this a ct10n aculd .~.e ] Sed a recuiP ng that there me en.ly one purchuc^g c ratr+e a ing a cecruaLty rat'.G or preveaclrq a sarale ^ot~[or-pccfic corFecatic^ Lron 'o ing a pu~chaa:ng ccoperativefirn oere than o - aaunit'y rating area. If a pucchasirg ccoperative se- tore than a mnuc~y racaag a e Stata, t.epu chas:ng eccperatlva vculd be veep:lrnd t separatelycreeerc ;c eaoh State with respect to Che rasidents c- cLat State. Insurers vould ha rrot ~ited frce , iag or under+ritang a purchasing cooperat:va,~but would be perat]ted to ad9:nister a cooparaeive. tlnits c! Stace me local gcve_-nzen-s would be parnleted to fora a purchSsing naperetiv.. sCard of Dlrectora A puxahaeLng cooperaalve would ba gaverned by a Board af ' Dir.ctora. which would be v ud with all pcvars granted to purchasing mmFeraCVS. Xubers of the 9earC would Oonaiat of indlviduals rapra.entin9 other ind_vidaala vne p rehasa insuranea throcgh tne eeFarattve, '_ tading aaployaes, and individuals vho vapraaent eaplcyers rho pcrchasa c varaga t4~sougt a aoperaCw. Board aanCers vculd te equally diviN2 between uhosa rapreaenting indivtdus_ conauaers and tl:uea reprasenaing uployera. :^ie follovirg lydividunls would be p[ehlbtted frea a ing on Lhe 9oard, Eacause ef ceefl3ets c terest: (1) health care providers; (I1 esplcyees o aeater of c^.a- beard <1 directara tnat Saa a auhaLantlil omennip IIteroC in, o dcavu substtntial i frea e Sea'_eh u e Pravider, heelth Flen, pharfaceutical co.panv Oc- supplier of sadlcal equlpqn4, G e ferVicu: ;]) an indiv]dual Vho derives substanGCal 3 ose froaLSa pvovision of health csra: or Iq ...... r uployae of a aasociatlonr law firl, or GC.er inatitution rapreaenti.'Ig cl:e in:ereste of health care providera, health p'ane, or Othars inv0lved in heal'n an ardividual who practices as . prt[uaicnal in an acea ¢nvc_ving health un. COapensacion to M.bers of che 9oarc would be Siaited to reiataraesenc 1or reasonable and necessary e.penses lncumzed in tpe perlcraance of duties. , Tbe P ard voutd w reguired t stabllah a provider adviao-f bmard c ¢sting of repreaanu2 of health u e pmvldeLn anG rofessvonals vhc provide Ifaa1CE care itaaa and aeiviees Llrougn cartifiad standard health plans. PrebiLittoa Agaiast salf-pealing aad coafllats of IDtarest ac ~ 4= Paracvpaccng States 'ould be eeq~ireL et prcsuigate standards of conduct for any adainpaCracor, cfllcer, 4raatee,fiduciary,vucOdlan, ~ uael, agent cr eaployea o1 any -urcnasing cc0o¢acive. T1ue standardn u1d 're reGuired to 1nC1ude: !~1 the cypea of inves:aent _ iLte:es[, ovne[sntF af[1!lat:ana, or ocher eaPio_}ent considere /i1.d :mproFOr dur-ng the Cenuce of n:adiv:dual's arvice or employment _~ with a Purc!.aeing cecperative: a /]I the clrcuastances enac 'OUl (~d constituoe lspe rissible conGitts of '-nterest or a:1-dealinq bv aua ~A eCplcyeu. sucn indiv:dcala vou'.d Ce apeciLicallp prohibiced ..Ya' directly or 'eodtrectly: (:) Operacing, representing, or teing aaplayed to& Published by THE BUREAU OF NATIONAL AFFAIRS, INC.,'Nashington. D.C. 2003% W -3
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SPECIAL SUPPLEMENT by, Cr affillated vicG a tealcE plar. psrticipnu:S in tna a ni[y raa,^.c a 2) u ing any rf the :nforxac.cn acgusred through a ccnsn:p vian a--caasin9 ceoFara[:va f r Purpcnea ~rselaeed [..a Farson or entaty's duties vith c1a p-cnaatng cbbpe[attvec • . Caee6laaciaa Aaong puraauibq ceeparativas' S-17 :xPLtxs.Ta:xox or CVYSOMLx xnoZXA-rox FpeCR.Vfa RIN QOAI.ISy PhaLAACS _eaa:aer Ittaaatien Pcogrea ccc v.a c .nfcrnacicn prbgras aatabltsl:ad !y • parce~ pao..ngscppcccpao.ppccc .ng Saa[a, [ne~Saoreeary, in consultation VitIl the N.tiena'i Health Plan Standards and (,va! _, Adv:fcry Cbb./atae would do the ]he Sta[a vculd b required t utab!ish rulaa Lcr coo[dinancn ong purchaaing e - a aaplcyc cacel in ==y retn'gra - elplo•aas ehb • Coa]Ynoiti'=ataand d ~ndivvtlualn reaiGant :n int .ranticcvun'_y cating araas. .oaov_n9: ;A) Mfactiva pata Er.actment, 1CCSap TCROOGR a.seC:1S101! )Lllla 4CAI.Tl11p lasocl]SIOY lLaRs Multiple Caployer Gelfare Ar[ange.anta (IRMAS), rura'1 alactrlc eeparativa plans, and rural telephone erepeeatlve a taevon pians that a ,^.ot °qaali.",iad avoclation p1uu,• vould n longer be a d tc prcvidn health covavags- a quallfiad assoclrt:cn plan 1 aplu u chat (1) c vured at least 500 pat9ioipanta i- 'Sa -n:tad States n auna 1. 1994, (S) J a b.en : apaiiticn at a11 elaea as a tRVA, a [ural electrac cceparaClve plan, or a rurai telephone CooCeraCVa aasociattc:: plan du[ing tha o-year pariod bat0ea er,aeaan of ena Sill, and (I) is sponsorad by a Dbna tide organizltlen eAa[ is trgantzed arA vintained ror suCstantial puzposas cc.er t^an te prcvtda a hnattb plan. Eristinq 1f6YAa tlet uera asCablishM tafgrs December ' 1992 also ould ta t'aatsL as Nallfiad avcciaCacn Plans 11, as Of S ` 1994, G`,a lCVA (_) eaverad at leaa[ 500 parCYC_par.ea in U•1teG States and ;21 `ad, or tad app!ied t' certifieate of eper lo as a health plan f s th. 5eaca insurance ttvLSiener (~11es+ t_eSCate :e]aGca or revbkea :he ce._iflcation :rr Ciuse). By thR eLHCtrtve data bf the bill, ucn speneor of a qjali!:ed asaacvatton plan anelud-',g a K,R'A trea[ad as a gualifled aeac_:aC:en al 11, u a ea pracnding paragraph) that nas r - cab_e l- ntbha treated as a plrcl:as:r,Q cooperat[ve arust an aa[•afy [r.a ants of Che !iL'tAat app:y to ce[ctf!ed avandard nealt.+, p!ans of(err~g the a[andard benefita packeqe. In addl[icn, a Sualitied Laoc:aticn F1an tt ]at[sfy eolvancy s[acdat]s e velspad by tGa Secretary c[ Iaborand a csplv uztp rapcr::ng a - mlaa developed by the Secretary to anabla Gya Sacretci [ and enfcrca such 5 ar.dards. A susiitiad a r. plan ray Frevide aalth c- rage onLy : vmbera of the a , their eaFloyaa, and sFOOaes and Gepar.Ga-d, and t:.a n i:<ea : che p!an - nct 1- a Ey acre than 10 pement each year. a prcvtsiccs of parts z anL 5 subtitla 9 cf title : ot rds Tplayee Retieesent Income Eecur'.y Act of 1974 ;pYCSA/, aa Val: the enfcrcaeent prcvisions Genereily eval:abla u.Yer ~s D111LSana1, aFply : Gatlon planf to t]a axtec[ daeaed nao..sary by CAa Eec atary to a3ferce <hese raguiraaenee, A gualiled as c!acion pian that has 'raen certlfied by Cbs Sac[etarv ot IdbcrassaCiaCVing =.se atardarcs snall be treated Ss a . an ra:nteined by m ~__.nu-racad eaployer. affectiva rAta 9anuary 1, 1996. apaCSlr. 1V[d LcR C1p1Ci LYp YOLS15[PlGrla 9)a A church plan or a aultivployer plan dasc[iDet in this eactlo^. and vhich is <er[ifiad by tha Sacratary of [mbor voutd ba treated undar the blll a certified standard health plan ealntalned by a singl. .ap.ri.nca--acad eaployar. A bhurch plan is described in this section if it Ss a cr.urch plan described in secticn 414(a) af tAe Enprnal Ravenua Coda iha:has at ~aast 100 partic:Pancs in hba On1taQ States. A multiuplbyel plan ls Qascribad !1 bsle saClon i as o: Sur.e :994, it (1) COvered at least 500 partieipants in illa Unieed States or (3) vaa vintaxnad by o sare afffliatas of t. labar eiganizaei0n, or o r or .o e affillatea of labar acqanizecwns repreaantinq a.ployees Sn tne sasa industry, covarln9 at least 5Eo aoplcyeee in clta Onitad States. A chutch plan or .ulti.apleyax plan described ln this a would be c rtifiad av taa Seeretary ef abor if it aa _ef[ed Cne n requiramenta under the bill [hat apply = standard healtn clana offering tea sLdndartl aar.atit package and any addit:onal s ancy oS etner atandards six1lar to tAese tLat app!y to qualitiad a lation plans to the e%tann tne SaC_etarf Geeas nacesairt to ansura Cb>c banatits vill ta provtded in full vhen due. 61 An employer hm:nd by a o i11ng agreeaenc ' _ an eaployas paztictpatacn inn aeulcleop cyarclen described in N1s sec[!br. aeuld b. auexet 'bcs the :eNlrevant c:.at t5e eaFlcyer aasa avai!aS!a to such omplcyaa ec leaet ] scandard health plats, ~ Effective DatV January '-, 199E. Cevalcp a eat of na[to-.a1 ascru of qvaltey p.r!oraanca .n the cateqcrias ct c.. NGCesa to sarvieaa, appetprlateness gf health cara urv=caa provided to - unars, cuccoias eS baa1Cs cara iarvicu and p[ocadures, healtth proseticn, prevant:bn o( diseasaa, disorders, and ether health ccnditicrs, coneufa: aaclsfett:on with carn, _lak saseaavent fae[cra, and pepulation hu1C1 atatus. (9) Date[nlne a naCio[a1 standa[d survay design and svpling strategy. Iataraiee a standard fonab Lor cosFarae!ve value satcrsacion. (D) D.cavina appropriate Caaa-aik ad'fususnes _er data coaparisons, (3) AFpi'ove =ntarststa 9aographic areas oaparaava velua inforlac:cn vheza cevunity ratnaqarfor aaa _ ctcaa Stata Slnas. (r) 5stabliaL etandards for the distriLucion of ecaparativa valpe infcrfetion. (0) PrClYida taCJlicillaslstance and tra.ning. :Ta sacsatary. in ccnaultation Vit1 public health arparts and tna Health Plan Standarda aM Quality Adv:mry Panal, Vculd develop and define vathCds to aa.auta papulaticv hea_th status,i.ncluding rvk actor aees.avnt. Pesulta of pcpulation health se.<ua seuuru would tacosa thabasia for as_owr tocusad qualitv inprcvoent goals and Eaalth plan standards. aealta unicu aaa g\ulitT Ilp[ovaaant aaaaaicb 63 :he 5ecrecary rculd d'-ect iha Agenc;: for Nea1 ^, care policy a- Research (AQIPRi and the Health Came Plnancing Administration (HC?AI e conduct and eupporc rafaarch on LAa effacts cL haalt] care nfc:n on aealth cera deY_ie.y eysteas and aatnoda [mc r_ac ad;cs;ment. S]< Sacxatar'e would diratt and Rasaarch (AC!PA; ib cenduct and suppcG research n nedLcal af_•actlvanesa includ:ng C b ees resaarch, -!inlca- pracclce Qutdellnas, technology assessment, and disseainaColt and :pp!evanca[:m cactniguea. I^ addition to any ctha ancuntn apFropriated from sa 3teedical and Behavloral Rasearc: S[ust Nnd, tGera v cld be au[ncrtr.deb be appropriated 5150.000,o0J f r f:Jea: year 1955, 540o,00G,0co t fisCa'i year 1396, 5500,01.,000 fer fiacal '! 1999, and Sa00,0o0,COe for eacn of the fiscal yeara 1999 dorcuqt 2004. Lplaaanting qualitT Isprovsaaat vsaarch The Sacratad' vculd award grants to States c nmur.ity-Easad, inGependent, not-LCr-proLit crganizaeiona to establish d ratiar. prc; s tAaa provide c.rcifiad standatL hesltn plar vit~oc]a tacenecal a stacance S tspleaent tha reauls et guiity uprnvament research into ne'.ical prectica. '['teere vculd ba nvai!ebl. $SO,OO0,000 tros the Heei[.: Savri<y TrLt k4nd for f 1 c'. yaars 1996-2004 Lcr gua11[y i.pmveuent demenstratisn prea ea. lsplveatiaq 9uallt) Isprcveaaat laNaxoh 'Ina Secretary vculd provide an • ua1 repart to CCngzeas vhic.: evlevs cha z aulta of the quality iaprevasent dameeatratton p[olacts, valuata c r info[vtaon preq[saa eatablished by pertacipa:ing $tates, eracka Che evolutign of natienal perfbraance a eures and oG`.ar r ¢ctb and evaluatas State, ieqional, and naor.a'1 trands on the qcai~ty of hultb cars. effactive naca upon mlCt)ant. 1.tl0lYa TO lbtca RCCLa [o pYD.aafaei0 Lls.l9 aLl'fa "1 .L n1rlLG/16lf aln) GfIR/.STCY OT CCaIOI!ISf 11RIR1 00pTa aN /O1 ^_fiLtAL AaaIttANCL creation of 3rust f¢ad Lccgmt An :nlrvtnctu[e davslopvnt account is <reaud within the Health Security Trust rund to NppaY tAe developaent of ryuun•: y hae!Cn netvorks acd cartifled c uncty healtS Flana, and to pravtde oper3tin9 and capital asa..atanca CC s4ch netYork3 and plans. :^.le 64 - nary o• "eeltt and Hunao Seneces '.ou1d Rave availan!e 51,1 bll ion ennuelly tc adaimstae all programs funded chrcngh the accccnt. .. ]uigtatica of Aural and Orhaa CaderNrved ALesa the i xxtary of cealth anG Huaan Sarvacee v uid be reqslred to develop sear<eccs for ider.tay_.~g cafynated uctan anG r:al undarserved areaa takinq :n:c account financ:al and gaog[aphic acceas Publishetl by THE BUREAU OF NATIONAL gFFAIRS, INC„'Nashinq:on, D.C. 20037
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S-18 to certi`--ed taalth clana; tn. avallaeili:y, adequeay, and q aliey cf prevcds:a and haaltGetre (aciLtrese ana tAe Aeeleh staeus aC an raa's [esidectf. States v0uld have the aut:.ority t:dentl!y -_ siSnate? '- and ¢ral unGenerved arsu. +ua)ecc to elAe a?prova'. af L a Secretary. The Secretary eould aao deaignete such urEan aad rural araaa oSatl cn the Loove ara:araC. coaunlcy Laa1tG droupi cerci!iae cameagbitT sealtL riu: Cpanunitp esaltb Yetecrk: sligible eneities: Isolated aupal lacilitiss Coamii ity health nexvorks would ba defined a ofqaniEations that provide at taaet .... aetvcces included in Oa atandmdlaed benafi=s package <ar diaely [hreuqh :Selr aeabats or eLtough affillations J_t-^l athet _n entlCia6. A network lu.t ansure tA1t N ara _able acn actaafibte t each enrollu viS rqsen.ble preepcnus. T!:einecvark vauld tave t ~ude 1. Or lo of tlle Lellwing: I) rstcnuticns, phy.aciana, and atLer pravidars . r+ing a Hu3tA ]rofaesianal Shortnge Area (NFSAI Or a rving larye ruabeLa of eedically u derserved Individuals; ]1 gualltled aigren< and coal health centera; II gua'ii[lad hoMless Ftograur a) [ailY Glaen_~q providers: a) HCV nrovilara: 6) vtafnal uad chlld health block qrat[ recipianta: ') rurnl health miniu ani rsderally Plalified saaltlt cecCert; 91 pievidnra of a rvices !, u2ban . a undR Hcle V of the :ndben aaa1C^. cara Iapmveaent Act, ar providers of a [ea under tee _nd_an Self-eiaceraination A[t; a) Stare cr local puplic health a5ancias; and 9) isolated raral faeLllties. A CeraLied eovunity ]ealth plan vculd ba defined a publiC az nccFr[ivt pr:vate health plan that previdu a slgnafLtant veluw of medically derqrvad populationa or to iMlvidusla refidi~g in HPSAS: includes ac lust one of tbe providers listed amve inder t a definition of a ooounity health Mtvork: and seats ail of toe cther aritaria cf a certified health plan. Grmta and CCatracta for Nvalepeent of rlau and Nt.arts II:e Secretary would ba di[eeeed Ce arar.l granu ! e tne :ntra.cruCtura devalcpaent a unt to puelLc and privme n n. prott health care orgavtaticna t iet thaa in teeoaing coLunity beal'~ ne-vorks and certi_ied ccvun•ty Eeaith plans. ¢nt :u'da cculd h ued to aeslat i reeNitlent and rateneian of health care prnfusienals; develop entovvtion, billing, a:M 65 repcrc:ng s yceGS: _i.tic prav idera tooeCher /:,'.cludan4 thra'_ch fays:aoai: reet r serve requnewntar and suppart other actra9t-esn related to 3rvelcring [erpaed cepunity health p-`ans and ocsmun y haa:tn natvcrxa. , lard-n5 grants, tf.e Sacretary would be dLacted to give ca oetvcrks and Flans that includa tLe largast -:aerer a[ _ti:ed cnce ~~e daLiniCion of a ccanunaty healtr. netvark. hat are serv_rq paealatcom with tLe highuc degree of :uwec neel. YSe co¢vittae :-bands that ene autcose et t:e g:anta to aetvcrs and tlans '. ased e>'peri:ae ar. the duelcpsent of raiaovrserents -ea..cGolcgies tar:urei based aanaped ure. As a c[ndition of 'ending !rOa the Secretary, grenteef vauld he :Cguired to serve a de3_gnLted urban or eyral UhderseCVed area, and to ss:vs all iadlVlduG'u regar]leae of tttair flnancial or ineu]ance scac~s. grmta and Contracta for bperation of rlans apd btaerka ~`e Secrecary would be raqulced to uu funds ir<a tne _niraatrueeura d velopsanc aeeaunt to Drovide operating a istanea to carrlfied c iv caa:Ch plane and e unity health netvprka ~n order to adLevgeoqraphic, Cinmcial~v and otbsr barriers to healtN fervices u in designated urUan and r,' rel araaa. Grant funda cculd be sed no previde c .c+ationand related tacvicea that vill inc:.nae a- crend funds ceuld aiso be used r transporCLC_On` includ•cg r ral and frontier e.ergelfey tr6nspar-Ltian vstams, patient aucreac-, patient tluuticn, translation servicea, aarv:ces. a:c other ser+icas related to ihe provLSion of health cr As a-cndi=ion of CunEin4. granteu wuld be required to. deignaeed urEm o rural lnderaaSVtl arY ana to prwlde el:e to Y. ind-viduais reqardless at ebeir CAUOCial or insurance atatas. Ioans, Loep aYmmcoss, aLd Grmts for capital faeeetaent e sacratery would be diveettl to use funds [iei se infrmtmceare develrprnt account to provide capital aaastance t covmuni:y hwith plana, eeounaty haaltR nat9arka, end isolated r--a1 fa[tlit!ee ln dasignated urLan and vral underaervad atus. Tha stance vould ba provided in Ofa ten of lo.na, loan guarnneeea, andidirect grant.. Funds could be uaed f r the acquisition, Yodlrn]ration, vereicn, and ezpecsien of facilitias, and !ar the purchase o r equipmnt, i cluding hacErara for Infarvtion systa.s. The Sacratery would be requiaed :o davQOp criteria for rastrlctilq the use of drrec~Y grants to 'urgent cap:tal ceaas. A: least ten percent of t_^a funds aval3able for capital 66 _stance veuld be : aerveG !er apµicanas seekirq e sarve dealgnaced r l aceea, prrvidad that a suf:LCiant nuabar of surh Gual-`_Lad applicaticns va.a apprtved. TCe Secretary v c:d t requirsd to give preference co epplimnts who need capital asslatan0a :o: prevmt or eliminate a fetV hatards ancal ! vOia ncn<rvpLenee with 1LCanfUre or cadt:atzcn s:antlards: and inprcve the provision of easentral sarylCes. SPECIAL SUPPLEMENT As a condition tf Lcnding [cr capital a -, grantaes would be raou-red t e a aeslgnated urban and rura!anrae. Taav vo'.:ld ace reouiraG taaer~a all individuals ragarLleas [t tluir C~acmal and insurance status. Any : rade und¢ tt:a psrt would be raqccrad, a)eC : che Fedaral Cvdna Re[[rs Are of 1990, to s ueh terms and canditions aa tGa 5e[veta[y detarainedto ba :MCavea.y to proCecc v.e .-na..cia1 antereata [. Yhe United statea. sffaeeive rate Upon ...ac,.a..._. O.k6TRATIGY ]oraratSR 1+ 1tCrCSa TILL'(rpICI1i ARp OTSR Oaa6 or T1f Tif.aCOphorIIGTIGR. YlTeoar Ik aG1A:: AkI}a DYObetratioc prolects te pro.gte }a1emeCiciee md otbef osea of the Yet.ork 1'he Secretary of pJls veuld be au'lierized to . $20 a_llion per year Cr[r the _nfrastractura deve:cpsent a ount to estcbllsh a three - ulaaedlcine da.enaaratl0n prpgcu. l- prc)eeta ! rdaG u.-.der thia fectinn vould be uaed to develop a Mtlaure raietur.avent aeehodotog,v fev eeluedie!ne serviess. Healcn care p ovlders located in rural aneaa vculd he e1Lgille to receive tunaing under CAia uction if they estabtished par:-.ecanips vithether c aonity instltutions to identify and iaplarnt calatedieiea pre)eeta. 3Ley would be required to sateh raderal grants at a rata of at leaat twenty percmt. Granoa couM be used to mppott= the utabli.ats¢t and eperetton af a eleaedicine systu that provides .pecialty a ault.Cion to rurel mties: the da.Onatratien of che applicatior. of telu.bicine for preceptorship of aedical and other health professions stcLente; rne 2ayaen: of CranalLaattn eeetar ialaLiea, aalnteninca of eepllp.enC, and [eFenaaYian ot spacialiata and [afsrrtnq praatltianers: end [acli-ation of collabovntion awnq physicians and othr health caa provitara. The Coafictae would like to enccunage particularly casc affectlve 67 ne of talaretllci:n vhrch anct be the a -ach^.oLOqica_lv advanced. The ful: bandwidth !nteractive talavidee denonatrattons to data have l:IO1R1 the potentia' CL celepealC:.ne, but have not deat v1t: o inmortanc prcblexs; the high co¢ par cnute of use and the '-e --s ent cocenuel f and the rsqCrranent that a11 parties Geavailebla at the a eatlee although tn alfCerent utcna) . The Ccmitaee v eld ake to * acluGees to these problees s that :aleeetecine can baroae integrated into che practice of ced_cine. Other, laver Cost teahnolCgaea that cro solve theae p oblene neeG to be tezted. For e aapte, CCe t of electronic aai: v 'redete[ctned lnfor]ation fOrra f r speciaity c clta:]ona Y_L`. 6ti11 1igiCal photo aCtaC.'mta cautd heiapleaenped at LWast cost, parcicularly if the specialty cnsultants vate paid for their onsultacicn, and daee aoc req+are the consultant to be available at che aame time as the patient and referring physician. rederal Iat¢agency Task rcrae Tha 5ecracary r uld utabilah an Interagency Task r- on Rural TaleseEicar.e. ^Le ^.ask Torce would be rpuirad to ldent~[y efLectiva uaes of biet.dLCine, revisv and Cocrdinate e luetions a all federallv fundeG telamedicL e deaanacration projects, help rural entities to conduct local needs asaeaa nts and develop consortis, and review the Hea.tt. Care rir.anc-nQ AdliniatratLan'a pollcf for cairaurseient of ;eleoad~cine YClicea. Irsnffioieot uounts Ln the Ttu.t ruva >eeount .^-ulding [or ptOgrus in -his aubt!t/s is li{ited to the amounts available in the Infraaeractuza Account. afseati.e wta Opan anactvent. IAtGYOlSLr /]e01aRCa CGO1D$pYIOR Fevans enrollad in public or private health plau would r treatrent for in±uriu or illnesses suffared In an autasabile a cin Gec ur.der tne usual teru and arrangaasnta generally applicaLle to tha prcvision of sueA nivlws under their health plan. AutosObi_e icsuren +muld be rsaponsible for reiabusireq tAosa plans for ash exp.nau. 1'he mtcepbile Snsutera would saka payoenta, to the exta-. :.hev are obligated to do so Wder [he polioy, on tba baaie of fee schadule. applied 'cy t.`s ln7ursd qracn-s besltA plen. Statu vauld be raquired to anfcrme coapliance by autoaoClle insurers with tneae prsvisaonsl iftactio bata upan a..aeevann. 69 SLOCIpa AYp brORC1rLNT 42egat lu Under ct:r:enc lav, an insured's c aediaa fcr denlal of a be-.alit depend en vhecher the person 1s coverad through an evploybent-easeG ?ublished by THE BUREAU OF NATIONAL AFFAIRS, INC.. N1ashngton, D.C. 20037
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SPECIAL SUPPLEMENT plan ci iEmugr. a plan purchaaed dG[ectLy by Se peosan. tha Flan s an ertptoyee cenafic plan, vnett•.ar se!f-mauud c- red, t reaediaa ara l:mited to those p=ov:ded c`.der -=e Erp1o Retirement e security Act of 19Sa (@R33A1. If tne plan [a purehaaed ty t1e +ndevidua'i aad i not a e¢pLayee renee!t plan, remedies are decernlnad u:.dec SCaCe law. Under ~tI9A• p!ans aust prcvide a pmcaas fcr re ing c1a!a dan¢ala within spacific ti.v periods. It the appealfalls again vitSan 'Jiet review process, -..he i1'Gividual 1ay eile fuit :n SLte o Federal cocR.T`.e caurC aay award the person the tanafica denied, es vall a attorney f acd coats, vy ivpcse statutory penalties, and uy grant declaratory or injunctiva tellef. onder EAISA, however, rAe ccurt say not :nposa ro/pensatory, or punitlve daaeges. 11 the olan as r n emplovN benefit plan and i aan rLe ind!vidca'i purcbaaed cir¢tly, tbe indivldual say be awarded whatever damqes are availab!a under prevailing srate Lav. C2Mittee )reeisioe :r.divttllSla V<utd have doa aefe reladAS for a daniel, reduction or tenanstion of banaCits iqardlau of r?.etrr r tdair plan ia an eaployee benafit plen cr an individual One. Each health plan vculd be reguiaed to pzwiie : aely nctlca of benefit deniai, redurion cr tsrainatlon to anrollees. S'a plar. v uld reqairad to establish sn appeals process thet includee pracadu-u r'1v da n evier of an lnitial declsion and : saderation rt rS.a !nitial decision. speclal precedures and tiaa Lsssations veuld aFpLy to asargency and urqant situatiena. After [Le plan'e appsls process nas renderad a final decisicn, indiviiuela vwld be free te cdoese ueep otbc rwdies• 'fhess 'eould lude pertiripetilq in a 9tata-ran cOogLaint review procafa (v+<h the consent Of t0e plen), takinq pettt in a n-bindln4 diaPUte resolution prtqru estoblishad by tna Stare~aor f!:_nq suit :n state cr l.Larel ccu-. Each Staea would be reguieed to establish a coap!aint rav+ev prcceas vitE cccplaint raviev offices to hear coaplaints and rander decisicca vith raspeot to benafit or paysent dencal cr delay- 'ne vo191Lt review office v u!a Operata under proa.dvraa Chat : u the use of independent, aedicel exper:a, special proceseua in Uvcasa 69 of e r"-ency and erqent a+ttat:ens. ana ; - v_dence. ]f _na Ce • --is c:.at a plan had acc.E u.^ .eaonabiy +n denying tenefiVseVth, otficer c uld orovide eqtctable relief,regu:ra -- of benefits anc payment of pra;uega.n: i-cerso antl at crney~a faes, and o v+Ge ocher appreprceP alie[. Cecaaicna of the hearing offlcars cculd be apeealed to a.`.ee1Ch rlan rev:rv hcard C.ar eacn State would aatahlis:. ~ States vocld a o re [aquired to otablish early m r aolation graas vith preced•lres ;c provide an cppgrttaL`y for haala.. clan enrollees to aeek rese!ut:crn of .haarclaiaa thrcugh a a n or other fcrOs o alternartve dlseace r aolut+nn astabiishad_.i acccrLance vlth rayvlac:ens of tee secratary. iVnda from the Health security Trust Nnd v cld be = vzdae ro ssiec States vifh the c of astabl!shing cempla+nt review syftese and early resctution pragraas. .. f tne individual ]ces not alecC to puraue the ccsplaint review or if the individual pursues aadiation but that pccce.sdoea not lead to a ttlerent, cba individual a1y file suit :n aay ccurt e. Ccapetenc jurisdicticn. If the court ru_es fdat a plan had acted unreaaonably in denying benefits, the court could tapOse reaadies ava-Cable In sacG ccurt. Additional prcvisu0na would provide the Casis eer r aedias and -eent wder tne Haa1tA Security Ace. c!viL en c ent Of orders by the -ecretary, or tLa secatery of Iabor vouldbe through a.:a district ce- the United States, Paeial Constitutional chal!anguto tha~Haalth saeurity Act would Se heard on a spectfied tlae schedule by a tnree-judge court of the United States Oistrict COurt :or te Oiatrict of ceL.+ahie, vrth direct appeal to the C.S. Supreae Court. tffective oate . Upon enactaent. SubCitla D--WOt0I1ASIO/ RlSE oTltl e•PYIeIclle O/ LAW /ae. 333. lepairap~}aiQpaev iefcrl preeene cev The MCUrren-Eergueen Act (15 U.S.C. /}1011-151 providea t]ec the "tua+nese of insurance" Ss exaapt froD lederal antitrust lave, provided that auch Gusinus i ragulatad by the Statea and that the challenged actions do not ccnstitute a boycott or coercion or intimidat+On. cmittee v etisien io ' 'n+ty f 3 antitruat ati[s under : e 4cCar:an-Fe[ Vicr Act with respect to ~ea1tA insurance would ce repeala<. T.ae would not alalr :munlty vlth respect to ottar ta[xs of Insurance. ~Btfeetive Cata ^ Ser.uay ! 1996. 6ee. ai. cfflee of LLuial aaeica Palicy S-19 F1a Cffice tf 3uta1 Health v estab'iishad under Ufe Scc:al 9acurCty AC and residaa vpttca the puLlnc Seatth 9erv+ce'a Health inso'e:ee and Seiviess ddsan+er_artot. cauittse praviaioa .ne Fos+¢ca of the Clrector of Sa Cffica of Rural Haaltn would he elevated to the pcsition of che Ass+scant secretary fcc iural iealth. stfeative Oate Janua_ry 1, 1994. eac. 119. aaengaegts to Ztyle)ae aet!ra/aat Incesa aecurit) Act The cc®_ttae prcviaicn would pereit the Secretary of acor ta issua specal reparcing and disclOSVre rulaa for a/plcyer grcup hu1tTs plans and naka other conforssnq arndaencs to ®¢sA. Effecti.a Date UGOt snecc/ent. tt .t. _[diviLUal has nealt] insurance "ecve:age" 4covered ty a Certifiad stard YeaRh plan,by ClfaMedlcare or Mad+cald p:egraes, by a henlttc progra® of tAe Cepartaenr ef Jefense, Department cf Veterans Affaira c Indiat Health 9ervice, ty a State a_nSle-payar eystm (apprcvad 'c ine 9acratary undar oct:cn 11)I1 of the coeaittee bill), or Dy any goverrsetcal health ca. progrm for inacltuticnal!red lndividce!s. ratieaal Eaalt! care cevissioe Ar. indrendant National Health care Ccuission vculd be eRanashad to menatcr and respond to: (1) trends In .".ealth :nauranca coverage; and 11) changes In par-eapita praaeaaa ard cthar +ndieaeera of Yaalt care inflation. 1Te Carniaslon vould t•e coaposed of " aavbara nca iaced by tha preaident and mnfirled by tna Sanata. a ceHalssian cambera vocld e 6-year, staggered [atv. Nc ao e than • a ea•b ers o the cceirvisaien may be f a cne s e political partvur -ae seabers v ou'_d be oeper.aaaed at a rate provided for level Iv of tLe ExaRmiva sc.hedule. one vasber of the CcvisalOn sbail Ue designated as chairenn by tEe .-u+denc. The teebarship of GNe Couisaion vould inclutla intlividuals vnc have gained national recognition for tpair expert+se +n heeltn r.cksb and have baekgruunds in such d:empilnee a. aetuaeial aeunea, demograFhY. eeancuc4 f!nsnca and healtl. aanvccae research. Tha Cavlasian would appoint an ttecutiva cireror and nucn addit_onal EffiCera eM elployees as It deaY tareaaaCJ to carrV GYt ita respanaibilltiea urAec this aot. e eztiee Sbe couiuiOn would be advised by ind:viduala with concerning t.^.e econoe+c, de mographic aV 1 =ante aa~Fetax:actore tnat affect the cost and availabiliay of huutn lnsurence. Congre s is sutnarared to appnpriate auch svss o ana necnsary ceuissioh. for the operation Of the 72 Aseuranca af paiversal Covara9a The Ccmiasicn daat report to Cacqrafa his-.n:elly on the statcn f nea_th in/ufanca Covarage +n tnf na[SC. Tha report -ust include tte s_ec.ra and partoraanee aeesu.ea ae every coerumty rating area, lnclcdin9 se fcllovinge 1. oerograp.^.!cs of the u Vred, and `lndings on vny chose !nd:v:dlale ara 'in:oscred x. strcetvre of delivery s. ea. l. Numer and erganizacional fera of cartifiad standard heaL-h plans: t. Lva'i of anrc113ant in certified ntandard health plans; .. stace iapiaamtation of raaponsibliliea, including eetsollfhaan0 of o.nity rating a-aes, 6. status of insurance refona: ?. C.evelopaent of purchasing graupe ar•d cthar buyar rafbruo 0. Succesa af aerket and etbac sechan+su f cantrolang lealth expendituras and prwlua costs ln nna cOVuniay rsing areas and nacicnally: Published by THE BUREAU OF NATIONAL AFFAIRS• INC.. PJashirgton, D.C. 20037
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S-20 s. s[atus of M.Sirald eligible individuala under tna Medicaid praqru, tde integration of auch i:WividueL lnto ctvecaqa by certified s andard Ee.1Ch plans prcviding standerd bena!its paekagea, and t7s transition a_ _,e H.dicard prmqzaa twar'd a.naged ure: 10. 1~. •Gequaty of subeidiaa for ir<ivldualsl Statue of Medicare b.nefiolariaa under •Sa Madicare Frograa, s integration of mcd individuals into cwerage by c.rtiflad at.vEard health plans Prwading standard banafl;a paetago, anl tba tran/itlon of Mdiuce tward Medicara riaa cCntrads: C•rerage prtqraae awa tboae vlfa are uPlayad, includ:ng statua and level of v untary atPloyar contributions and pe6tieipatian raLea in~pu[ehasi0lq cooperativaa alld aacng large eaplayaes; 1]. Percentdqa of individuals rno a ehrall 1! ceR:fied ecandard haaith plan/, separated lnto categories of Medicara, Medicaid, asplayed sdividuats and individuels e115iA:e for; ]l ta. Re<cs..nGaclans, sFecltic to each ca •-:ng s:ea, a- hov tlie area alght lnCraafe Povatege aacng/-ne .e{identf and CuiV:er noderata grcvcL in presruas. The CcCliss-on ia '- Ytnorired L] addreaa isaaee ralaced to daLning a etlovee" tax pucPa/a., incl'_din.g. nac 1.sited to. di3c; atng : s i33.e3 Vl.,• ~he Intetnal Revanue SeN1ce ar .ha ~eFaxctanc of ;ae Treasury. CotevaSe =riggar If 35 parcen[ bf the residant pepulatlmn is nat c red cy 1003 tbe Coalaslcn s a acb:ct[t •.Ce ConqLH/. bvJanuary v, 2002, e aplenenCing biavhtet wnta_na suCll sututGry previaions as the r ce®vatan s.terzx`.es a asarv or appropriate to :aplement the entataota dava:oped under this subsaeticn. The recomnendaLiona aha1~' lude eat.`.t•ds to raeclf 95 'vrcant cw rege i c 19y : 1ng - sthat nave failed to aeat tLat target. Tay ryaatltlraae all- ralaant percaes, inc:l:ding Staca/. elploysrs, upleyeaa, unamployed and 1. inocb. :n.ir.daal., and publlc prt9raa benvL-ieua.. addition v nny othsr r vn4tians it su2eits. vha _aviaa_an muat nake faparata eaeooen'eabiana pn :Le fmllceicq: _. A scnedUCe of aase/nenta or cOntributions to encauriga esployexs vho are noc deing so W purcaasa coverage for -.ear employtes: A aatnad of en regi:q full cevarage rT•ich does not require any aeeeaaean_a an oc cpncibutions Irps uplmyere: Pos/'_ble adjustaants ta ttu acCUarial valua of tha Standard and alternaciva srandasd bwfits packageii (:^.fa comissicn anall tnCOra the N.tional Haalth aeneflra 6oard of a .ndat ralatinq to ;ne aetuaria1 vatce of tnsa _enef~U packl4es•) Po/sfDle adjvataenta to pral,u and coac-sharing s'.:bsidias: and, possible adjuataanu to car treataant of benefita. 3'ne eutYte eauCliahaa prpctluraa Cpr, cmngreseionel censlderation of tba xmional Healch Car. Coai/sian ra, --. •. Rules for tte Sanata Tne MajoritY rader Wt intrpduca C••e Report a a bill n tle firat day of •NSSion follwirq tha s of tne Report arA lqialativ. luquage. ! CAa Yajcucy l,aade[ hu nmt intrWUUd tpe bill vithir five Gsya of aanon, any sanacor aay do sp. ta t. Tne 0111 ui-- be referred [a tSe apprc_t_ece Sanate colLittee. - the Cemaaee faila to raporc :1. _agialacian bY July 1, F003 (or If the sanate i t in s on this date, by tha first day of a n a!tarab s tece;. it ana11 be autcsatically diachsrged frco urtner t aideration of tbe bill; and t0e bilt snall [a p:aced cr• U.e apFropriace Senata cn•enCer. Within 5 a a:on days after L1a bill is placed cn the calendar, ~hs M.a)crity Lader, at a ciae to be cetsrsined by G4 Majority leeder v su1ta41en vith tna Minority .aader, sha11 proceed to tte coceldcacion of the bi11• lt on the aix'.h cay of aesaion, iha Senate hae not praeaadad : eidsration of the bill, eAen ete siding officer /ust • aatioally put the ei1`- .~Yetore Ghe Sanata tbr _b6eideration. cOn/lderaClCn a. 30 Houra of -. 1Vo hours for first degree relevant anevdfanta a. one hour for ea R[e_evant secand decree anendmen[ SPECIAL SUPPLEMENT ]o eiru[aa a eaCl: debatabte aotion, appaal, or polnc af orda subaitted by [Le presading officer to the caruta and no wtion to i.cass_- sha11 ba in o[der. .-]ete ahal1 be five baVrl of cOnaideiatlon of .ttlone and w:a:..ncs apprap--ata ; asolva the dl!ferences bawaen the Hauaes, at any panteulae stage .,f the pceceedings. 9r•ere sEa11 be 1a bours of debate an the conLewnu report. .L•lu :ac tG. Mausi of RepreeantatLvea a. ^s ]Y)ority toadar aust introduu cEe Repc[[ e a b:11 n che first day a6 a ssibn fo:lwicg the a.,bmieaion r- a 0.epo:c and legiela[ive languaga. [f the Ma)ority [wadar has not iatxcduced 0.he bill vithin fiva days of Su.mn, any Mssbar say do so. t. 1T.e bill v1..1 be eefarred to t.he aCP=opciat. Hocse 9! cabai^aa ar c0aai]teaa. the c - itceaa faile to rapcr[ tr.e l.gmlaacc~.r by ]uly 1. ®Ioc] r, I tha F:cuaa is iat in - th_a ia0e, by the flret day ct a n aftar this Catal, chry shall be a aacicet:y dischayed Irom turi[eC cmniideracion of th. Sill. d. cn the sxtL leqialative day ;U•e day v vhich the iouse : has ba n ~epl r tne d a a[e cm ' the cilt e plac ed-a n tUa pprapriaaalandav, :c anall ~/ilsqed farany Yed`.er to C e[.hat _he House resolve _cself lnto t!e Coas'-ctae of _ha Vnale Hause On -^e State of tha Ucton, for the conanderatton oC cne hi:1. and the firsc reading of J:.bi11 s..all be dispensed v .n. e. After general Gabate, vnicl sha11 te c neG t Ghe ri1 and vnicb Sra1_ not a'eed Cour : a be equally divided ind controitad by tla P.ui. [can and nsnking Minorlty Mesrer of dbe <ovlctea tr caa_t[aem to vnah b]a Sii1 had been cenrreC, the bv:l shall be aiderad a ead far aaendaeni ~.mdar the Ilva-ainuve cuia. 5'ne •stel tiaa fcr Oanstdering all amentlaents sna11 ra lisnted to 26 houra oC vbich tna eb[a1 tima r datatitg eacn maensanc under the tiva sinu[a rule shall na. arceed cna bou[• At the lualo of the anudaratimn mS •S.a hill for ardm n•o'.-~c[.ha utttaa ata'.1 cise and reporc Lha bill to the Hbuse vith suro alendsencs a say have 'r adopted, and cha previous quutian ahall be conaadaed ordered on tne bill and cta aaendaanos C.rato t Cinal Nasage v[theut _ntavvaning aot-cn aacap[ cna mcticn to recr4it. rffectiva mats cpen enaetun_. •I Lt 1:1 - P1iNILlt As0 Coa--eGF1Ma Aa6xaxAXCe 9ee. 211. Pref1•a>1 aad Cpat-obatimg Aaaiatanee PSaaent Lae No cr vi5ion, 4pu1•c.. previ.~cv Prasiua AaaSatacce far Iadieiduals aud /aallias sliqibiY t. Tna cmmitbee bill t daa preaiuv asslseance Cr r the pcrcu. of heals !naurance e¢ecdiving [m ha follmaing crttee: (al Individuals and faeilias vitA inceaa ehtt does not excaed 10a verty v111 re eLigible for proi ua aaanatenu[o pay for cner[u l tem.t of tAaCr health in/uranaa pvuluaa lsubjact to tba :allficaccns docrlbad telov). T'ua praeium aacstan.ce eliqibillty vel will he phaaed up so Ghat by the year 2000, all thcae irA :neemea ap to ~00 percant ef pove__y vill be aligtble for eather e tu11 a' a partial subsldy for tbe purchase of ha>lit inaurance• Eegir.ninq in 1997, t..`e uaLLnt of praaiuf asslstae ce for rhicS e intlividual a mLLy i ellgibla ia phased cut Cor those vitL lnmmme batveen 100 percent anG the following percentages ot t varty: Calandar Yaar PerUntaga ot Povarty 1997 1l5 199a 150 1999 115 2000 200 ;SI Ne•pre eieear 1a payable ea aeee d titled to auCaidy of 5150 or lele in 1996(SaWexed to Clangaa in tbe maG cal ccnaurer price inder for years tberuLtarl. ?ublished by THE BUREAU OF NATIONAL AFFAIRS, INC.,'Nashington. D.C. 20037
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SPECIAL SUPPLEMENT ic) ILere is no pPVerty ad]ul..fant !ar faa11'f siaa abcve a!aaily f_aa of a. $taces have the oyticn of isplezent!ng -b.e preeius a '- a program reginninq '-n Jarmary 1996. A1! Staca. aust :spleae-• c e prcgrar m January 1997. aasident c._tane vM alians persanentlY rYi3ing in the U. S. undar aclor of vav are nllgibla for prYius as.:atancs !ar the purcha]a c! a csrclfiad standard haalth plan. UrGccavanced aliena ata not al:gille. The Fova^y ave: that Oe used : teterrvnin9 :s tLe official poverty !ina as dafined by chs offtce of Managerant and Eudqe0. mv r sed a ually i ccrdar.ce aich se¢ion 6)IIZ) of L!e omnlbus atdqat Reconcillatlcn Actccf 1531. PrYill .Uaietaace Aanunt Vbe ]axiGYi pramlu] a ' :nt will equal t.he cost CL t C a ca^ifiCd a',~.earn+.ai9n plan i6inu3 tY.e aeunt of aLy antribuc~an rada or cffeced to t aada by no indivvdual's eaployei to the c of the cercifSeG health plan in vhich the lndividual is io:led)c]tut not to axceed t`A veighced average preavum !or the vL:viaual's class of enrolleant • r all ccTJUn[tV-;ated aert:fied atandard 2 alth plans offered an Sa coma'1wL'y ratinq a vhich t1.e :ndivicual resldes. Far purpmes of dateraining F eevua ~ i.tance aa unts, a certi!ied standard healtn plan is defined to n if~ed standard nealt~; plan C.at offers Ghe standard naefits ~ packega. DefLaitioa o9 fncesa Incooe ia df!aed as adjcatad geoss :nccss (as determined for purpcsee of payi-.g Fedaral i^cene taras), aodified to include axable ittarast lncoae, the perCicn of social a cr3ty benef3ts :net a not aubject to taxation, and paysents unde- tAe a1d to Laci:iea vith dependant children (APpC) prcq:aa. Fnaily i viUl ta datarained on Ghe tesis cf t[e inccse Of an individual, ar, inQlvidcal's spause, arA the i.i.ccae of eny dependent cbaldran or grardcbllGrac. Presiua laaistaacs for arCC Ycipieats Recipients of AFOC who are integmatad !nto tAe refomed healtC care systu a eligible fcr prasius assistance on tbe sase basis as eppl!acon all or.b¢ ellqlble SnaivitluaL. :ndivls aay file an -ar proius a..vcame at no Yse -vea rtan thay aPp1Y!ar AF>c. 1ligibilitT neteraiYtion no Saerstary of 9ealth arA Huvsr. set+iras is directed co prcautqate rsqulatiov spacifying p;ocadural aegu:rasanta that States : lolltv in Yteraning eligibil'-ty for pruiun a sGatance, v.vc.. ahall include regulations rLLarinq to procedcras fon LIIing of appLCations, vsrifiuc:cn cf iv'oreation, clas!ineaa af decision- naking, appeals of adveve daeisions, and sud ott.er Yccers as e•.e Sacretary determines to be necessGry. Appiicationz !- assistanca vill be available tl¢ough uplcyer] and puLlic agencies. The Secretary i. required to develop an applloatlon fcra thst •ill Ca slmple in _ora and cnderstandaCle to the average irdiv _ual. Eliq:bi!ity will be calcclated o an a:mual b An individuel : favily that has a aFprovad appiication : r presc'i] assistanca aust 1t1e a end-ol-year lnctbe recerciliatvo:l ltatement at sucrt tile S{ Is spec: ied in ;equ!et!cns. If an lndivcdel Lai1a to f11a Ua tate=ent tha amo - ef no premiun a isnance provcied in tha e v ill be considereL a verpay¢ant • cepand by Ce indiVidual,and ' lndivlduLi I:11 ^GC te e!ijible ler pruii3 a]slstaOOC in Se f]1_ovlnc vaxr unti: the etatemaai is filed. :his provision vill nat apE+y tn cazes vhere the State lindsthat tnere is qood cacse Ler failure to file a toaely .cae.mevt. Staeaa may '_ e Federal e e tax return infocaatirn : -!!yir.q eliqinility for assistance, s~1.ct to privaoy aafegue:aa specaied in C.ha bi11. ~ The agency adainistaring tna praniua a..istanu prcqraa e:fail pay the pruaum aseiftanca t which an individual a aaly i antlt:ed directly ro no plan i vhiah tha vndividual c ,a.aiy is a rollad. An seFloyec of e mpioyY vhoae aPp! -i-etion f rPreaus a ista.•.ce haa baan apprcved auat, upon request of tlu uployaa, adjust any premiuz aacunt beivg v:thM.ald a- beJialf of tha uployse to reflect the pruiue aasvacaece fcr which [Ye eaploysa Ls aligibla. An individual no knowingly tu~deratatY iaooY or oGhervv dsrepnesenb satar.al !nfonation inn an application for prmr,s assrscence shall be liable to CEa ?ederai governaent far any axsa paymnez aaae be]ed cn no uaderstacesent er siarapru.n;aG_eaand for " n tna ex s paymantf, and. -n eddiGien, aaall ba liable Lc tneafatleral gOva-•n]ent ! r 5],000 o if greaur, thrY tizea Na eaf paynernc] tada taxed on t^a Ynderstatuent ar aisrepresentat:on. AespabaibiliGT for h4i6istratioa - The Stata shall Ee rasponaL`le for 9dlinistratiOn, and ]ay deel'qnate the State agenry thaG it deeY appropriate to carry cut -.ab7salry functions. Tbe Secretary of Health and xuun Servtcee suat davdcp standards : suure consistsncy a.ong States vith respect to daca .yo.... inq zyeuus, appllcation forY. and su0n ovhar aa3inaserative artivStLes as tte Secretary detarzinas neeausary to ! S-21 prOSOta no etf!cien0 aaalnistracian of the praaius aasistance progras. A 1Late shall be liable to ene Faaeral gcvevivanl !oa payeen.ts Yds s ecrar. Funda r.quirad to pay Us praeiua su scance vill ta transferred to the Stata a aUCh LSY and in aUCti foi116] praviLed ir. regY~atiane. ].`.a 9ecretary of HYlth and Husan 9arvicY shall }rcvide for regular au]its. A Stace shall be li.hle fcr pay+enta Yda 1. erroo. no Fadarll governYnc vY1L YtCn 9tate Shcinistrativa cest{ at a rate of 75 percent Federal, 35 per:ent 9tate. staces nava c.a option of o avlding P sius a vecance co tGaae who ara aLiglb!e begLMing vitl: no aoerA of :anuer/1996, and vu.t prCvlr.a presiur asslstance for m0nt-•a after Sece'9Ger 1996, presiu. Aulstuce for Childran and Pregnant seaee ch:ldre-n under age !8 ana pregnan; vosen in Lanalies vith incze that does '.ct axcead ia0 Percent cf paVer.y V_il be eligible for pramiue assiztanu Sar Jva puachaae of health insurerce pramiaf, bag:nning in Januar) 1396. Children and pregnant voman vill ba elLqibLe for presaua auistanca m Lollovs: Family :ncaY Preaiu Assistancs 135t of -averty ar SYa !oat of prasiua 135t :a 2.0% af poverty 3oe of pre._.m abOVe i051 to l'Sa of Paverty 6oa of pruiont ebove 215% to 2304 cf pwartY 40% of GrYlus above 2]0a Ga 2104 of Poverty 20% of preiiua above 240% of poverty no assisunce Proviaic^s doccibad aCwe relating to pruausi aeevstanca for other individuais and fasiliee also apply to tne Freavut ass/saance prcvcdad for cnese chlldran and Pregnant v In c sas vn¢e fazulea could quat3fy t r both regular presius aub9rtdias and special ]ubaitias 1Cr c:!dren and pregnent VaYn, the !alilias cculd chocY to receive the Laryer ]ubsidy. As 1n che Medicaid prcgraa, pregn.ant vczen will be daterxir.ad praaurptivaly eligible Mr assistance. Stata. susC provide pruiu. uaistanca [c cb!Sden and pragnant +ocan begi9ting in January 1996. cost-sDariag assistmOa . cost-abarieg foc i'YY Cp ta toverty Individuals and faziliis vith L coY that does not a ceed 100 p¢eent of pevarty arM e1lgiDle 1er r duced caae-enwing ae polnt of aarvice, as daterained by t•.e Yatianal Xaaltb 3eneflts Saard. Y.e.1iR insurance plans vill abeart tlla cost of ceducad co.c-zN:ir.g. sracu cust begin dacersininq eLiqibility for cost-sharvn5 ance far children and pregnam vown beginning Ln : uary 1596, inay vay begin datanicirg eiigibvlity far c -etarirq asvrtarce f r other !ndi'/:duala .nd fui:ies beqinnYng ln „anuary a956,a d avec do ac b.qirnang :n January 199v. 3o Ccst-shaztag far tbeaa aLeva pevertp ` Statas v'_!1 have the option of prcviding rost-]rtarinq a istanca for indivvdsa.a and 9asi1!as vith acase betvaen 10C'p¢can'and 200 percenl of poverty. The State aust pay S0 percent of Cte cest, and - -1 re raepcn6lble fCr e]Ldbllar.~tS eligibllity regu:ranenta ard for nist:atlcn. CapFad e-titleaent binde vi11 be allocated to the staces cn no tas:e of Stata pcpulacvon, EeglnninS =n f cal v 1997. .+c tillicn aellars a, r vcll be availaele far ela] puepose. SL•aotive oate As n0:ed. a1 ^ITL3 IV - lIY1I1ISLL1fIVZ 6IMPLIfICAfION Aao7 9RivilCr ase. aol. Acainistrative eLplifiutiop ptueet 4. T1e Cxnibus 3udget Raconclaation Act of 199] eacaDlifhed a Y.dicare and eedLcaiG <overage [ata Pank vott.cn tha Cepartnent of Health and ?tqan See+icas. Tha Seccltary was raquired to a.tablien - no data Cank for no purposae of idantif'+inq and cetlacting z o ah:rd parties respansib!a Lor paymenc oL haa!th care i and aaivlCes !i hed to Madicara benaL!ciariea, and a retinq i CYa cell'-cno is callacting u s due !COe thirdaParties l~able t reiabLLrsa ccstaar rred by any SCate pl- under the Nadicaid prograa. kSployers a a vquired t weport cereaic lnformGlon r.o t:s ]aoa ears canceceinq eaFayae health crveraqe cn r. amfcal basis for years Ceg:nning vith calendar year199a and and!nq vatb calendar year 199". 'Iha f:rsc f_litg is to occcr on Febcvary it, 1995. 9 efaian Ydicare and Madladd Ceeersga Csta tanY amd Ilelatad Idenilfleatiod Yraaeaaaa Pubiishetl oy THE SUREAU OF NATIONAL AFFAIRS. INC., Washing;on, D.C. 20037
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S-22 Jbis section delaya the SqleaantaCCn of tna Medicare aLd Medicaid Ccveraga Jata 2ank, effacctva upon e ectmant. no :ac.e 3ank ri11 N repeeiad. affect:vs ruar/ 1 1996, v n no r w1'.h infoxfatlonn network provided uzfder this eacT:cv :a Lrpluer.L. Iaaltb infersatiea aataert Thia HCticn tYerGS Title kG of no Cacial Secua¢ty Lco ty ldding at CRS etM u rav auhClCle 21<:ad: subtitle s-amlaistetive si.plifiaaciam. Arpcae no Cov tts. balisvas chat Cta haaltrh cara systu is dependent no nprd delivefy of Sn!brution and t.:at one lack o eLtattive health illfor.ation ih!rastrlcGmre ls nepansi]le r such of no adt:aistracive <cet and burden cn haalth care providar5, heeltA plans, and c uae[t. no key to efficient tealtn Gre :e no rapid e[d afficient errSanqe of tanderdlzad !.:fbrz¢tion. Kany or tna reforms prcposeC in this Acx, such as guality sonltoring and r a ad?ustaenc pf inscranca prea!ata, unnoC M lmple.ented affectnvaly'.achouC suct an intraatructura. '[.:e evolutioIl of no pracGice of mMicna m effec2ively a aluate and ince[ya[ata Vla lateat re ults of oadtGl [ch depends on suCh ah i'lfraatracpn to ccllect rtanGerd`Sed aedaal record dat6 fr autcomes reNarcr. and to d!aseainate Cha [esults into practl.ce. A11 a: t".W outncMs r ult, ::ct frot colleccing mere or dupllcat:va infertacron, but f.ea cRe use of tta ai :nfrastracruce to zake t ter ese ! ~;a :,forbac_en ve elreaty oe1:.cL : incraasa ine a C:crency and elsroat .CNa ?ecsa cf health care. TRis will iring auc: needed cor.t;c` tc U;. iccr.minq zpanditurea 1n no Kadicenn acd Redicaad prcgraaa. T..... be affeccrve for Yed!CS!a d': MuGlinld JrOgvLL, ROyeve., c`e Saaa ae allst ba avsllaDle for .n t1U tcmeet or - .-cer aa health plana. °15 auEt!tle anaLlaa V.e !mElafantatlon c a healt.l L network to reduca no burden c1 adaznvCatzva conp!ex Ey, ppE~p ay aP.d :c9t an Che health r [ 3vstam: to pccvvd. L - co.[ and qua!Ity necassary ]ccrpec'~ion lc RealaR c- r and tc cr- ._a :ntcnatabn Ccols tac a:lov iapwad 4aud ^_e.ec :on, au.ccaas _esearcE, and val:ty of cara. To iaplevent sueh an i aatcvetura raeponart>ly, the eoamitces need for eac~cnel acacGrds for 1v protected il.cloacra no f pountially a itive. iMivtdually idantifiable nea1:R tnfenacGOnc ID!s i u o~ no prlvary of personal health mfcrtauon is covered In subt!t1eC. Tha ro:e oA the ?edaral governsent in Cfls andeevcr is ta iainate the barriers CRat prevant aucG an 1-astruc- from faraing by establiatirq a..inda[da and [eguiratahts !- elactrenie eacnanga o! hae1CR infcrsation aM by .n rnginq their incaqraticn into cperatienel systen. 'fhie subctt:ecdoea Lqy c eata a govarnaent ontrclleE Cata ba.x, but a publie/pdvata part a[ahip v6 =h generates only a teehnolCgy-raucral blueprint to[ tha natw[k, to be tap:ea<nted by no prnvara a ater :hrouqn avltiple. i.^Mependent crganlratCbna eepandlnq t eut Lereea. Ttu. erqanitacsons v111 ichisve a cmt- eC:ecilvh healCh 1.^.LOnaCCr. naCVprk Ghroug.h. a dlstributad data environment oalnq modern !nfo[fation technology for starir, and fnaring ta[a m intatned n[ no point ot col!aRlon. no c Jittea ekpeCtt tbat privata entelprisa vill impl.aent no health inforaatacn nacvc[k quickly once Sese standarCa lsvs baan adopted and vill continue to evolve it urMer coapetitiva pressuraa ln a un.ner tdet ]eat aervaf socaety. petivitioss no 'Healtb Infartatlca Hatwrk' ia no daairad resu!t of applying cbo stafqards and r.quir.aants at tAaa aubtitLe. no ten alth inforaatlon' .euu any -hfareatipa, whether oral c- -.ccrba any fev or rdliu, Sac ie c[aaCed o rved by a Caalthc provider, healtG plan. health o night agancy, G.elth rasaeraherra public health authority, uplcysr. life lnsurar, aahccl or un sity, or certifiad health lhfsraaa!cn rrtvork sefvica: and aelatsatoethe physacal ac aantal health or cenditibn of an indlvidual, no ppovlsicn of `ealth caa to a indivtdual, or tta piysenc tor no provisicn c Ilee1Ch Gaato an indlvidual. ^hia heaitL 'afo[.aticn i rotectee' if it identlf!eaar, indivldual or if tbare : raasonabla ` believe tha[ the infcrsation can be uaed to Id.nt:fy an indiv~a, ~ a. If it a nct prctected under itis da_nition, cten St is 'ncn- idant:liaoie haalth lntcndt:rn.' 83 M.dicare defini[Sona ara used [cr 'health c• vidar.' -pe definiticnn of 'HUltR Infocsation Natvcrk sar+ncu ~6 :apcrtarc to eve understanding ef th_s nbtina. thase private sector entities provLd. infc:vation prxeasing sarvicls to plans and pravIders under contract and are cercitied by the Sacrecarp. Ihese anczaees partoz-W fihctCOna ncv ]erloried Gy cLar:nghoua.a, SucR a3 nvarO:Lq -aper lCrSS into electZOnic foraat, itaring ten aa<ar<nic lorxe, anG intaracting v:th [l:e health information natvork cn banal] of the provldars or plana. AnbUlar fu.utiOn of ebeae ellc:nia9 u c Lransbi: clnim toc health ra seics te no appwpriue payar vi[hcuc~tu:der.i:g 'he r cv:der v:U the J<D of f-'guring out t vboo to send tte bL:l. A ftnnLird dacisien aekin4 Prograa called ' ordL^.atizn of bar.afita' is run on eact clalt to daCermine where to send it for prcoaa. mq. It ta worth noting that the definition cf tealtA plans used by this aubtitle ine!ude ALI seure s of I:aai6p Grs and payaent far healtR ca[e, Snclud!nq verkers cotpensacion, auto lnsucance. Madicaid, anG Medicare. Vitlmut such cpapleta participation, tt:e savings to Medicare and M.dicald proQ-aas will not be raalizad. For thcsa prcvidara pc plans vithout no caGb111:y af a the [equ!raaenta of Sla aubt:tle, haal'1' lnfonat4cn netvork urvius vi11 mntracc to provide no necessary support. 1Te cost of aubh auyporc will be laas than tEe prasant cest c! preparing, proGSaing, SPECIAL SUPPLEMENT and ruuttinq clalaa and ocE¢ aGalrbtr¢ive tra:uacttons a ally. Even graGter aavings v111 acoPie ta thoea providar! and FlansaYho itplemant taese <apabilltias vithin their om 0[glaiiiticu. Cri::cal e fYhction::q af the health lnfortation network ia no - ent thap \11 such sarvicas cooperate and vcrk togecnar tc splecant the natrork. A a cf tRssa aarvicaa, ca1111 '?ea1tS Infc[fattct ProtactSCn or'.Bar.a:a~[~yona,' perform a MY and l[fqrtlnt t.ufctton, V.i: o x_-y tealth information te e-eate anonvaous a alytic filas vhich can be uaed in health c.aaara, gual!ay Lprbvuur pregcaaa, and govar.,nenc acnlcorlnq prograss vxthouc dnsclc.znq no Sdenttty sf ene .n1iv:GUa15 :avelve6. A'healtR researcher' 1s a pancn who corAuccs a bicnedical, pu'Slic .`.ea1tL, epldaa!ologlGl, health aarv:ces, o health stLtistlcf acC pro]aR O arct prr'iect o Ial andbahivmral factors relating to Eaa1V •i, 91vb has aeen epp[eved by ae -n¢rtutional rev.ev bcard. The term 'standard' Is applied to data eltaents af health rmation, inforLt:on tnnsactions, NLOds af aCCeasing mdat:on an :he network, heslch a ritv cards, and a other CYtion SCY ar p[CCess CIIat falloa's atriC def::ieiCns adcpted by the Secr¢ary under thia auDCltla. neecal Raqulraents oa secretary Re ccr:._ttee bel!aved ctat " aosc e•act:ve vay co :reLeoant :nca heaic:- in:ctmat:cr, nacvock is vc set national standards [cr the ' a elesen:a, tranaact!en.a, and poociduras which tora no Elueprnnt for]n:.2r.. and cOmiatent i foraa4on ekcGanga i bhe Real[: ~ svscar. and accourage ppivate~en:erprtae to develcp and emcleaerrra tte ..e-+ork ac :clingL!. ' -:ary:d adoption by aurn :ziveu eccerprcau, tN _ o :ary,n _ st cted to adopt stancerGa CGat are :n e a d -ected or developed or by tEe standards a - ~^^reditad by no anencan National StandarC. ' ctaut. cANSI'ya - eaANS: tandarda davaloFaec] Fracaas includea para:cipation v qoverntent repnesencaciv<s troo all naDpr health aaencies aa ve11 as vo-unceers .roo ba]or indua:rlu In no health field. ate comitcaa cecagnize. cnet aqancies vithin tha Cepartaenc o. Health and n servi a tave been Ferticipetang actlvely in Standards9atta'Ig _icugh AM1SI and nctas tlat it is CCSC_cal for no davelopaent of tne healeA infcreatien r.¢vork L:at thay ronClnue to cOOEara:e Vlih aad paLticipa.e in tRls pYGl!t/p[:vaG ,-.a1tr Gip. The cartoi:[ee e ects cAe secreciry to contlnua i e'saitaa c ANS: andarda i.valoPent grcups to davelop all stantards, and future ecdcfecattcns [a s-ande[da requizad under tns acbtitle. b petent a'reG no pclicy of no Office of Management and 9udgec as ar-Ictlated ln C!rCUlar A-!19. If, however, a ter due c , this prccaaa fails to prodcce acar.derds vhich [eet ~. requ!rea.nts cf S1s surcttle, tCe ssaecarv a q!ven authority t escabiian no n aacy aa-.dara. rutside the aNSr preceas. This author^ty ia granted a a fallback pos -on and it is ` anticipated tbat m will be u.ed. no mlttea axpecuCleSecretary : vork in paRCerahip vith no v ' if this authority shcu:d oe r csary. and that ignif~cant changes would be put through a daCnedprocess cf t ring re(tre r ir.g adopted. 9hould ehis !:!Seck sechanraa bs ceqr.:rad, no is directed to report a.b specituc c cuatanco cf tta -n.-ur. a[t..e s:antlarda setting Procesa co Congress. e Sacretary is permitted Co develop a axpedated pcccedure : adopt health :nfonaticn atanda[dt that already a ist. no C<mittae aha: atendarca .hic.'z have pxeeded tlzrcugh Cha aASi standards setting prpGas have already had anie oppcrcun:ty for euhl.c cy and adeg'oate par:icipation by other public and private crqan:zac:CZe:a, and t~evefore do not neu to be put through a angchy atltin:atrati'+e s by --'le Seeretary b.fore being adopted. If, G. e t , e ssor'!aivent pf no e[pediced prcceaa itself would takeve ong, me ~n¢ial sCandards should bs adopted as qulckiy as possible va:.out the ekpedv-ed Proeeas. hstacGerds fov no basie for no 'vplu.nca:ion pf no healu ~ tonation network. Although the intent is to ao che prcceesang and transalislen of sedical infonatipn into a cmpiacely paperless eede, no Secretasy uy develop paper fonacs I tlvae nattcnal standards to allow thair uas tn special acb.utinns and ]uring ss the :ra..zacun. BtavGards for nati L1aaeSta ot aaanb Intonatlrn T]e Secretary la dlracted to u e C.e aGOVe genera' pScesas to adopt s andarda tor aleatrenically ~epresenc:ng the cantent and - 'i!tov and coepatible r ot c:e daca e amencs used -'Ce !- Val and adtaniatrative t cClons of haalt: cara, tha i-.mt[an nec.asary co iuppor avaluaLionS of clan ird prCvlder cualLt'y, and thehaalt9 !]_ariaticn !n a patienC redical record. Gnique xdenttfiers Sor ind>viduala, a lcy¢s; providava, and t alac hm atanLardized. ;The tenr~rdenti.ier' cas aQaaed ^ar '~dssen.tl!lcacien nuaber' to allov the use of alphan.erc ~ '4e '_nenue ldentifiar for an :aLiv:dual. caled che <ptrsonal lealtl iden¢fiar' or PN2. is afon af tte indcvidua!'a SsN, a rarbiad by ar. encryption aet`.odaelectad by no sece:ary t ;ns:lrertr-Vacy, accuracy, ar.d V.r1!iabaLlty. The incent 1 - O 9ecratar+ s :lek!ti_ity V!t.'. Lhia paracnal heal:h Identit!e•. Clere are .... vrivacy acnsideratipna .vct aupport a sachen!et co - race thevaonal Realth Sdentifiar vhicn v u:d allow no f no SSN : e no AiI, hut ncc rdo r alrnccgh tLe oppauc. a way calouiation has Gan vaad in e aal[ueticns. The PXI ahculdnlncluda a aechaniaf to take a e Jfat c can sattemecically date[axr.e that a string of tlaracten 'va valid PNI Published by THE BUREAU OF NATIONAL AFFAiR5, INC.. Washington, D,C. 20037
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SPECIAL SUPPLEMENT and not e rsndo. scring of cbaracten. _nceaal c..eka L cteracter c:enarosLtlcr, and atGr aanu.l data .ncry .r:cr. .bould a1o e. oipa[ated. Vatnq tia standard, plana s.y i urdsta al'i indvviduala vitl soc:al secan:cv mmen. fne SSN vilL appear o-n the •ace of ihe card fcr tde'.titicac:on purpesear as nov appeare an t dr:ver's -- , but will nct be used t a-• salth ecacn. Pluu fay elect to upGate cpnioh~ , enceleG i! rmt!on. ov ra thar s rollaea' urds as lcog as tnay follow no standards ! ssuad by = retary. no intu:t is that aa carGS oe ua to help :dent~fy Mae iedlvidual for 2e purpese of obtatmng ac paynng for M1eaah caia. xtCg v sually and eler-nnv<ally, s vttsr what the locac!en o: Cte plmor prw:dev being countacted. '.'.lars are s veral viable sources c idenulflers :Gr prGvid•ra, tla-.•, e.ployars, atc. Altbecqh no Secratary 1. given t1ec2Yiity vct] G`.e aalwt!on at apprapriat• idancfient the 99N c lndiv.dual provider and tEe.tax identl'icataan cuaher for a co[ponava ent:Cy ara eoNldared to re reasonaGla startang Feinu tn N• prxe••. one reqUired stlnQard Vllien does hat fit into tSe abaVs procedures is ahat of a ceds set ;aLSC called a lesicen ar vacatularyl nch te a taele of peosibia va_ s tor s data _Wt each enc-ry i tne tabLe having a ae1_ dsLlnec seaningccEe a are cypically used to claasity aadacat concepts I crdinq and i~dex!ng purpoaea. See anGartla ' the forvic enC tva.vmia•Lan of caded hu:bb inforsatian n Ga aet by no pracaas outl:ned e v , but tbe 9evlopvenc anC nalntenaLCa af CEe eet aE cttles, vhi-hCan N eCCered in:c no foraa. aa and e-anea tt•d, _s a nenstant Frecass, a-a. -a _• care eo cepes nicn need to be eMedare Eanstant_y ererg:ng.For this: code aete ¢uat G uintaicea by Letined arganizar:ons e Y~reccl~tle letectlttent procase aS a andards setting. e co¢p:ttae telir+ae vnat ' lcpvanc and r tenance r - -- ccLa s e - -a r 1o fut'aL• d :oF°enc c oaputernbasednpa t ---- aystara acd G.at the Se-Ceta[y snocld epeL"y tnea and^indtheia aCcard:nqiy. CCQe aet] for `.'ar_cua aieaa are :.oL ealr ned ay diflere.'1: etgan:Za.3C1:9r 9ebe p'ab1iC anC Sobe privata. n general, C- s:ngia entity that has covered e ouSh of the CiaveGicnl field with a `.:gt S"+ality vocabu:ary -or c ~cat no : rch tsrs. buc thece a:a a!arge nusoer of exullent efforts e~ac eactacovar a aa11e: paet of the biaaedica' deeain. a beat alobal affe- to Cat. .^. s been to reace an 'clErel:a^ ]eclartisn that c arC:aacu and eross-anka : b•at of t.`.e apecialireE efforts. Cnde: congreestenel ]und!ng, the Natiocal Oibia of YsCicne (NIH) , part af 1. 9atianal Snatitutee af -uLL` (NIHI, t ted auch a ompandiua or thesa'.:n:s called the Vnif!ed Medieal tanguaga rystea !fMIS) Metathassws 1Ta Matachesaurva not a rosa{!nks different cllniral ccEa sets, but a:ao relates C.•v to cne language ',sad in practlca gcidelinen and no latest scientif!e Lituattra. C.us snpporing i rsa betvaen pabient - cord syetaaa and atter :nforeation that c iap[cve h•al[.h J - d•eisiens. PLLr-her, since re Federal er Frevate s0enry c - -ent health ea :ay e[]arts, it Ls c^ .ical thec one agenry te designsted taserve this function tnd to en•u:e that ttars a effLcient aechanieaa for updeting and ]istz_bctinq ceda aets naCed by ac.pucer-based patient recore syst.... In particular, no Nill ehouid G desiGnated by the Sacretary aa no agenry :a nsible fcr • ar.g no ezsc•bce, _.gu-a- 'laintenance,andeflicient distribution Cf co'ds sets su:table for all .nta of coaputer-tased patient rscocds. 9]is vill staCilive this critical Coaponen[ of Caapucet-tased patient r ccrd aystees and r.tcourage their devalolment by p==vate entarpris•. In urrying oshts responsibility, the NI% should uta.Slien end be advised b,v a .nti]ic clinical Languape AdvLsary Group, caspo•ed c experes ! Cte private sector anQ relevant !ederal ]gencies V:t.`.i: fHNe, CcO,ra'd c.e VA. no Mi)1 iay also mcar into agnuents with pravate aeccor groups, atLer Federal aqenciu, internatiocal azqanira[ion., or _aceigrt gwaxw.l2s as appropiiata to schiavL-; thesa abjettlvee. Iatarutiaa Srusactlau atahaaraa .^..a Sarntar) !s dir•ct•d to u e no gensnl pracass GefcrnNd above to adopt standards for andueting Qeetrar.icaLLV e r no 'neeith network L1n usual :.'uncialaM adalnlsCCaiiva transasiana of SP.ci.l ateantinn is paid tc devalop¢ng atandards for al.ctrcnic coordination of banefits, because ¢t i volves s ral pa^s ehie6 aust be caordinated : rete c- tLy. Standards fcr tna Cr\Oeliasion aLd lut.'lencicattopcf eleGro]ic sagTatu]ea a alfe r.quired to cover legal reguinesenta on -ransactions reGuired by tCLs 87 2ct aa va'L1 aa fcc P:•s-rlptU-ns and <.e_-__..__ ced:ca1 recorda. 'laetablu for Adaptloa of Etacdards The Secretary 't ted t adopt existang standards r v data .:t1in 9 man6ns of a actne^t. -• Seceetary _ expected t adop radditional standards that are currently under developtent within standards for cte electror.:c aadica! : oce are coeFlax and di:flcult to a, , but a extraaely aaFCr•ant atap toward - cag:ng tLedevalapaen ro[ t:eee systeos. TTe 9ecretary i --.:cted to adopt an .c-aa- set o- aucr. ata..-arde after I years tut within 7 yeare. :ne Coavittae expec s ttat the avsum c standards '+L1: evolve '• to keep paca vich t e.^.nology and the aepR:s :eaeven of the over heal-hi~aLorcatior cetvor:a. Jr. tne ac".en tand, if standards are chac.qed too a'nit b.mws inafficient fcr neeverk e~icipante vbe ustcoapty vith e v atandarG. Tzersfoce, C.a sacrscary [ [ andaake C:alqes to rlfe aCandards (cth•r t`an nattuced to • cable seta) no oaraIL•QJenCly than every 6 eonchs, d r the [ir•t yeet~ Ideally,coanges should not be raGUared any v oftan u.ar. !rnually, but C.s Coallttee felt UGt no Sa<retary needed s SesibiliCY in c`.!s erea. no anL•nt !a to lLait cCan9es vn!st veuld typicalCy, teguire prograa or rvat ctangas '•t not to llait additicna to code seta, which bypically only faqulre updates totables to S-23 descc_ba n ar a e pr•caae rncepts. caEa . addiCane aculd be allowed anytia• oay ar• c.ssedhelplul. Ya7cr structural changes in coda aeta sculd .: to follow the abava ciaacable : otter standerds. Medillc. :ons to ccde wts auat i lude iestvc- r.• how to presarva S e a Was :ag a! praviausly enaoGed i . Secretary =s pera-tt.d t candr- tt ieacnscracicn prej. .aanG .T. caer analysis in evaluating tbe ccrsistency a- adopted standards. AegOiraYents .Stb \aspeat ta Certa.ia Trebeactiaaa aad :afernatlaa All health plana, SncLUd!nq fadarel and state plans, and ni1 haalJi care prcviders are raNlrsd to per[:aipate : no :aalth infcrmtien network either dl.eetly c- -tugh a c ra¢ vltfn a certafiad health intorsation network aerv:ce. privad•rs aay a eo qet alaes : utisfy cae requueuancs a neir betult. P ans and previders are nsponsibL for ccndca nq clay transactions ;:nC'tidlly mardinatLan af benefit• and a _ua11y Clai4 attecil ar Lar providing • Lor'laC:on an 11. a .d providers who do not aubsit claic.~LL.nCrfcr raspand!ng to autnor z inguiries fCr lnfor/atian etandardired 'aM]ar t`.is subC:tla. [n addition, plan. are required to conduct tr sactions electraGiaally o r no health aaLOraat=arf n•4vorx tor e.-R-allaar. t: a:qv^ilicy d•teVaanation: c.a:mt stans: Gayvent and ruittance refezza.e, advvice: p:uice payaentt; f[rat [spert of mj_ry; no and au4:criaattan. Subaaaions of quality lnfar.aticn in standard fcrsats are also reGUi:ed. co-Cpa ara requivd to accept 8! elec-r-nu en:oLlmenca and preniur payaents. ^.ha intent here is .not to torce ecalayen or co-cCS to subait :cl:xenea ar payaerts .l.etecical:y.c - ca mae s_e ac a11 plar.e and c-aFs va'-1 arcapC electvenic e rol:nenca a.vdpr thacerrun paySencs Loa those V ovant to take aGve CaGe of :.e ttratil-ty. Likevvee. F:eviders would have the opt:cc ca electrenlc 21i^y_\:lity deter8:n9t:o.Is, clalRa atLtus l.^CUireea, electrot -c aaymenta, a electzcvc referral authertzxtions vrth a y p:an. It is expected chac '+hern o sr•d hy all olans, se s ings a nce vi11 c,u:ckly convince all pravidsra v< Farciopate vc.-n-a. , CCOrainaCion af 'r ::ta presents a special a cat_c-. Vhict, to ta eLLectlve, raqurea four •luent.s. lterrcnLC a1_gnb_i__y cwarxination sust be a ailvls fer all eca1lees i all plans, L rst ecorta of _nj',:rv must be suraitteL by all esployera when v a_e iured on the Iob(theee .•rv a ospective enrol:aer.c. for a arker'a c •etion a ssl, a standar] alg0 ^s ' L C•tlr91.'Iln4 the hiararchv of cbLlgore :or CIa1.a aust Ge • rebl_ahed hy no 5•c:e_nry and, and all claiaa auac ba sub.ittN slecbon:cally f- - aeang against this alSOrichs and thus routed vic epp:cpr:at• cayea~• It ls the intent of tbe ce®:ttee to requlre all four el•cen-s. no Medicare and Medicaid caveraga ]ata Lanx enacted iy oapA 9] is delayed and than repealed at no beg:.'In.ng at tnis aoEt!aa. Its -ct'_c i rep'acad througb CAe atGVe raqui: ' al1 alth plana to • etAe e cesenie avallability en the health lnfor>acion network o standardized en.ollMnt and ellQ/bi:ity infa:9aC-c^. on every tared tndlvidual. In addlc:an, csY.ified healtE infaraacicn tvorkaccess se:viCes "+culd ba capable of p•rfo[fing autoaatsd alectronic c ordlnation af benefiba and responding to srv'eriee frca health c• pccviders and health Flana, 1n scandard!z•d t- f detined ty '.he Sacretary, req.rd!ng the enrcll.ent and c cage~far any mdividual vmder any health plan. Tha reguirad ccordinatlon of benefits deacri`Jed above iaplsxlCs, in an aatcaated way, the intention of no original language. 'i.etablas for Cme,llabce mitb sayuire.eots All health c+re providers and plans are r.guir•d to part!cipate ~ the h•a1tE inferutian network vithin 1] wnths e no Sacatarv aiopts staMards for daing so. no Sacretary vall d. .raire cYe grace periad far tOiifioations to etaMard•'in no range oL 90 daye to 1a or.tb, deparASrq an the Mture and •xt•nt of no foCificaelcna and ~he aeount of cias needed to cn.ply. Accessing lealtb Ibfarutiee fet lntborised Pcrpcae: Pians and previier• a reql:!rad to fake certain a- ndard data e:1ab1. .l.eteenieally on the hu1eI, !nfemr'_cr, naeverk to au¢norirsd inquiries, tUC1 as Ghase [or refearih, guality evlluation, and Fublic E•els. Y9a Sacretary is directed to adopt cechntcel standards Car reyvests r andard haaLt: :nm^atien vh:c."t as - -hac the raY+est i autnoriz•d under Cne privacy lav (aubticleCy ar odac :t i cuest for health infornation t_ - orocecca< under _n orivewy law ~sub¢Ite d because :nLa+iduals c3n:.oc be Idenci:vwG. 'aa1=9 tn:brmaticn pcocetcion orqaaicaC!ena are extecitl to provide n-LdecclLtable health Lnforsatton to qaverrs<n:acenciea under standud gcverssene prncurevent rules. ° alth olans antl provide[s a oeqc:rad to prcvide to such a health intcnat:on rotecctc.^. organization ct• infaCtaG:on necessary - r and co a 1vzCnc :CVirf at e --Ft c eeC tha ccs-Cof acCesSaLg and OransRlLGing the LnLOnaC.en. TT:1s r•gucrsG•hc u ree:-.rccaCeC ao that a haa!c". :afarxa¢on pmtacc:on c:gan:zation that gets a <overraant contract does not have unfair advannege aver -s empecvtan-n iavrg [he :nfocaecoan fer ecn•r purpa•ee. Rupanding to Aeeeas Yaqcesta 'me Se[retary, through no g•naral standards seving pracesa, vi11 adopt a aaananlas far respondinq to reqlesta aade of no diatribuud database of health !r.Loraat!en sade avatlabl• by haalth - a providers and ha.lch pLans. toa aurdardsar.ly apply to the a x data eieaants far no R e sactetary !ia adopted arandards under thia suefitle. prev:ders and plena ere requnreE co respond in a Fubiistee by THE ECREAU OF NATIONAL AFFAIRS, INC.. Washingten. D.C. 20037
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S-24 e:y vanner. tnu providex or plan has predete-~inad tlut cvy 11 r nnaver r.GU•ata e r inferation of the type b.ing requested, tuaf aus •sp<na tiaely aanner v1tD an azylenatacn, in a .ae[d ' .pa<:Cic reeaon for Cei:q unable to respond with rce reqL'as~ed of c• data. :ne intent here is Co praerve rlle lenoainacor in - and echer ayuicies by d5at~•quisbi:y batvan intotvcicn C.'J•eta -i5at `.aVS not baen r ad, rYepansa C~Iat :LVe nat bean - - v.Gana : c..... c prwiC• hultb Lnforuticn bec.use o- soa• cc-.idersd veaaan. [anqtD of 21.e fnferwtiaa atould s. \naessfDla ^hare :a no pnc,:ical liait an the a.ount ot t•rtuat znfonation mac cae'. -e kept on-lma. A Privaoa praetitiane[ un Frefatve tna capiene elaccconic eadic•1 r cCr] in Ceztval Lbrf for avery pam•nt tse practice an a uingle disk dcive. la[qar, >tutailat:ons vould be expected to uw a5ierarrAical stnrage arcbitaetur• vnicn aliws -- :ag older tatexial• cn-lLne but c alcver, lus expenuv. aevz<u. visual inforsaticn, tor azanable, -akas acn aare digiul storage space co .raarv•, ec the Secvtary Sa diraocad to adopt stanhards r. r' pec= to me 1•ngtn of tlr uca r,.ce of n•.Ltb :nforeac:<n sbeuld be k•pt acc.uible (on-iinal tGrougn C.• bealtb ,neamaclon n.tuork. t!aetebles for Adoptlon of PtanLards sed C..,liaaae -ne Secretary u required to adopt inicial stund.rds tat h•alth 90 Lenan:on acceas vic.in 3 rocchs o• .nacttene. Madif:catZans are_ed c once avery 6 nan:hs, after Ce first yar, and vill be feC-_!e cn LdCpticn. statdsds ard CertiticatGan for eaaitD inferut!an n•tsort e•rvic•e Tne secretarv is 1ns0.1eted to at4aalisa standards and procedures -- '- tate oparatad ar privata entitu cailed tealth lnfarZatic.nc ork a a to pectora tDe in[•riad!ary : vl'.:cn L.apteoencvahe r crk. Haa1C. intaraacion t-uscaes asvcnaoans C:9c':oae protected health intcraattan t aucb entities LS c:ey aLa ]0. eerciSted. cerc:t:ea a^ci[Lae a requ~rad to fellov all t standar^_s and reqr.reua^:a aaopted by tE• 5•er•tery, tc a eHanat• Lhu: saw:ces and :acilltaca Ctie health intoraatian n crk, ta uA• nul-ic d- afo a tleir Per[or¢ance, to aintain the .`.iShest pracc~cable a r:ty pracedures for handling healch -rnation, and ta ]ava polncies and proc•du-- s ln pla vhich - - vitlea and fafar..cion proaesai.~g to prevent accees Cp any larger c[gant[nitcr. at vGic1 tLey ay be parr. phila tF•• cazm aluctamt to ia;oee a r.guletary burden -_hase ent_ties, aliaved to ba n. e•ry Priaaraly to .naucs that any antLty that processes tensitiva, individuslly idatifiaCla a'itn inCotaaticn naat necessary [.quireaenu to enture chsa pacient pr vacy is protected. Tha certifluticn serves clree ad3tLonal purpaa... Pint, carcificecion allcva a plan or provider to contract vith uch aa:'+lca. v:cb tne undarstandirq tDac they Eave baen )udged ta pa.seas tne coppacn:+ce to do vtat tltay claza taay un do, a ;cdgcant noat p[ viters ar• in no puicion to sake. second, aucn a p1er. or prcvider v uld ooc cs held L'abl• urAer tba privacy lax ~tubC:t~e C( if a Cettiified aerviCe Violetd ttc•e provitiona. And ttlyd, revC<¢t:on of certi !;dticn or coM1litioPal C•rtifiCaCion would -e Canpltanca, {1.^.ca entities vGlc] ere not c•rCifl•d canr.ot bev aCCata ca t11e helltn inforG•tion network. • a:pec•d Gut Daal= intoffatlon natvork.aervica v111 not typically Ferfcrn atl af tda functlons listed and C.Lt scae appropriace neY [unctlons aiy ariw evar t11.. Csrtif:cat'en is intended t spee!ty exactty vhicE furctimu a taltl lntorae^cn crk a cviu !s Certifl.d :o parfora aza such certcfied Cvncticns mayvta added ard drepped or•i t1a•. vitbin 1: senibs of aneceaanc, [1i Seeraury vill ucabliah this c•r::ficat!on prccedure, but iC Is axpected tGat ... a pr vate c r qraup vill awrg• to partoa Chls fvnctiofor r aa[a lnpcad applicants and that the Secretary vill designate then to cccduct tna c•ra.fGcauon• Cart!f_`utian vwld nat be lost u,•Iless villful nag'iact or refusal to c a prcblemm v er:a•n0. Althocgh tt• antiuaa are req.aired to get r•cercified evavy i yeera, c`.e ccasitcee fully eznects cbe S.cretary to devia a ce[LiflcaClon process that iapos•a as little burden as praccical. 14e process is expacted to be one of providing a standard set of inforl/tion on qualifications and 91 -aft re-COnGnae and noC of - Cr :-.apectcorts ur a an acdSt a juatified ry oePtainta, evidence of poor pcta[aantb arconer rLUCma invutagaGOns. tnsuriag Availabil!ty of latarutiop u0mn a,^.ealtG C1an or health c e pravnder does not c _he abilaty o c<ar.sn'_ standard aata eteeents dicectly or dc.s n t have a a rdcse, a s•Crscary 1 -•ae - - o healcn :° at:on r,etvark en ec_ c to -elp~ake their ]•altn infecaatien available te.• tliwl sure al<ctctnical:Y- sL c•.ac-eas to a health inIImnaeiars network aern^_e u not ceetrict•d by geography, the intent hea ia no- to have the Secretary perfcre ehese functions but ;a estaolish cedures fcr Crcvidinq assistanae te t.he plan er provider Sn xeating eneiz obliqaucns'inder this auCCitl•. 'L1fL mav include technical iatancea heiping the plan or prov:drs ke ccatact vith a villiag a.rvic. organuauon,or .upcrary finenclal assistance. G•aaral Panalty for Yailure to Czrply With 3aQiiraente and ecadards A11 tert:c-pants ane exiectad to caaply vitb atandards and auSaiuiaa. a reGUirad CrahaaC.iohs vlthin a uascTaEle tils unle•a spe<ificatly vaaved or excludad. Tte Secretary sha11 iepesa a penalty of nar r• than $1,000 for aacb vaolat5an af aulth infarnatlon natvorkaseaedards and r•quareaenea. There is suffSel•nt flexibility thac penaltiu are not espected to be iaposed unlese vi11f•.i1 neglect SPECIAL SUPPLEMENT is evidant. The secceca.ry ¢ay pravide cechnica'. assiscance a naCessary c choee unable to cosplY• Addlticnal penalt:es ara isposed for vioiac ens of the privacy lev uMer avbt:tla C. Iapaat!o¢ of Addltio¢al lagcira•nta tlealth plana erd Providers aay -et ir,pase add!t!onal data _ransaission [•qUitefents e su.•Wards b•Yand scose adopted SY CSe Secr•taav unlea• they e e NCUaLly aQreeebla by e11 part_es or a s granta6• T9a intsnt is to prevent nepbszard requira•nts vh:chradd a1g•,itlunil...... to tba adainist[6ive catt of do:r.q business vitncut a lustifiable xalvar praC•eQU•[e ':ntended ta e11w vnluanie edditiatu tbat are J'.utif!able. An ananycous a -[ing aachan:a +11azn a party azpenacing a iolation of t,`.:• proceu t- J a r•pavt vltlevt being s isot to retaliatmn. •ffect aa s4te La. R.GUireaents of tbia Act vould preeet contvary Cr ¢ora atc:n4ent Suee . ,Lud!eq Fravi ns that reauae healtn Yeaorde Le bs Ca:ncained anvrlCta. etlfer Cnan ela cronic, f ra Tne Sacretary ssy •x•.pt pravlsiona, includl:xt tbaeatnecu•ary ta prevent fraud and abus. related to contralled subetances. saaltS fnfonaniaa cantiauitT 92 States are reCa:red 'o abca:n and Secure any s and+l:d ZaCa C tay ae Gvandaned by a•^•ea1C1 care pStV:der a n JEen such ar. aeCty ceasee to ex!at or _s unebta t aak• data a'+a:_able aa raquired. - - where L !nfor•Sation in salntained under contract by a alt6 raat:on network aaraice. and that a rv_Ca _a decer[1f:ed, [ s - :st, or : u'.abl• to eak• aueh data a ailable, t inforaation vil6Ybe r[anaferrad to another [erttfied health intoraation netvnrk ser~it• aa desi5nac•d by the Secretary. P[ccection af CeLei ial Irfornstlon The Ccma:ttea understanda that raquirenents vhich cecue dasclaeure of trade eecrets veuld be an.a ecmpetit_va, vhich Ls noo th• :.itent af tDas subritl•. Panant far 3•a1tD Care services or teaitll Plan praaiuas 'Chis statament es. c•e rlfat tl:a fubtatle does not r: +•nt indiv:duas fro® payinq lfetr aedLCal bills or pt•a!uns Sy ciedit car] it they choose ;r do a It i- L lntsnded :c apply tn rther sitcacionF •uCl as payments co provideSS by plane, a p eau paya•r.ta to Piana or ca-cGe troa a9loyars. Eea1tR 6ecurit) Carde i iCrougG tCa gan¢al ¢a:.dard¢ sattiag process, the Secretary directad m adopc a at.nderd e ra.c far a hult.h s aty card and far i]farnahicr. vh:c] eav ta e•-.caled en a eleccraniuily. Ths c wt be duraula vitn i tUefLL1 11fe at at lea•t 5 yeacs, ruiatan-co unc.cf. :Lnq, able to • !nto.-eatian el.ccaamcally, and cosc-•ffacrtva to produce and usa ln any healtA care Lccat:cc• The alactrnnically •ecaded infornatlon to Ce required by tlu SecreCaty vi11 ra one ainiaa ta help ldentify tos lndivldual. but tn• Secretaty xa at standards far atd.r typ•e of icformatlon V.at could help viCh tn: v n purpa•a af 'd. card, osin9 a ca heel[h cas and payin9 = r lt. Alehougb oa usd d•acr~ed ca e t:.is prwtsioni technoloqy neutral, Cha Catllata has in a!nd a vthtng .ike a credit card or drlvar'a lScanse• It is rnt in any vay intended to isply tLe uv of an •xrwive deVice with tna capaGity to atort significant u of !nloruclon. Sir•cs this subtlCle reqairas ev ry paavid¢ anduazY plan to be e nneetsd t an eleRian:e naevark, ene nenvark should be tEe anly sw[ca of per•anal ar health inforvcion Nat may c`ar•ge over tiv fer an individual. The ind!vidual'a nor.al 5511 :s reguired to appear on the f af ene card a¢ part ot tse identification information, but Lhair .`. a~th nfcraation vouid Ea stcred under an anctypt•d fon oC the ssr callad Cbe 'peraonal 1u1tL idancftl•x' ar m[I. YAe PM1 1r•5vrr•d to te ncluded :n tbe inforaatlon encoded elactronicai.yono.^.e card buC o11ld not appear in :nllan [udable Lon on aba card. Csinq this standard, plans vill ba ruponaible for issuing urds• Plans m, 93 'ect to add eneir ovr, enc[det 'nforta n cn nbetr e.^.rcaeeo-' Cactls as lonSS• they fotlcv tho sCavAards : suedby ene 5•cacaey. Cn reqc•.s , plans are reguire to yrlcc c t ene encrd•d in:orxecion or. an !ndavidcal's card and give tnam a copy. Misuse af lasltE security caxd or Parsenal n•altl Identi[ier A parson who recryira tne dispLay c u e of the nealt.h .tr1ty card ' r purpeses other than eCtaining ec payn^q Scr health care er who c--unterfeics a health security card faces a fina of up eo5va,3oo ind aFrlson tarn cf up cc 2 years. The aame is tr:e of a person vr•o requir•s dLacLCmre of or use ef a-•raonal haeitc- ident>L'e[ far a purpcee ne- autllonEed by the Secretary. plreet lillinq len Cllnical 4beratory seraices Clalas far clinical _.berecary aecvlcas must b• r:dmitt•d directly to a plan. AutDa[iutfcn of Apprcpriatio¢s The .tandards setting prctets, vfiich forms Ufe critlcal parc of F•deral penicipation ¢n C••• DaaltL infcrvtian natvbrk reguizes bntitucus supFert• lapr ivq t•4 SSA muaaratian systu to handle tAe lncreas•d daand for accv[acy and apeed c. -ssue af healch Publishetl by THE BUREAU OF NATIONAL AFFAIRS, INC... Washington, D C. 20037
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SPEC)AL SUPPLEMENT idantifiers euf be funded. the addlGCnal ettcrt by NL/ to %rdinate ccde aat davaloFaent a,'Id integraLlon V111 requlta abc'1C $20 i111ict par year. Thue s and any other • a vhich vy be - o aary : carry aut the purposas of this suCtitle are auehcriaed ta beapprcpr aiad. Oeaer+l leQalraalenl: On Aacretarf Tha sacratary ts raguisel to rely an the Vcrk of tGa Haalth :nfcraation xdvlfe:rycevittae in coag,lyinq with cLia subtitle. Cenaulaticn vith ot-har e.dera: aganciaa i volva it starAards setting 1n t]e Eaalih tield, auch aa tta VA, 1. also raquirad. eealt4 fntorution adtieor7 fammittea In Carryin9 out her duties under this part, the Secretary will [ with an AGVisory Coulttee c aiacing ct 15 aubers f-ca Ju privete saetor Sneludinq providars, eensusara, and experca with practical arprisna in Cavalopinq and appl'fin4 hultn intovaticn and natvorking staMarfa. The aaab.ra and the chair vculd be appoitted by t.he P[esadent ard a ataggered, 5 year t taa vit9 acaa initial appo:ntxenta ude to[ laas then 5 years. P-`ecadLLra- and requareaenta ara included f -es, conGiata of incanst, seetinge, and guoruv deteraination~~ The covittu axpwta esabars to represent diffa:ant professions end geographic a-a.aa, -nclud!sg urban arA raral erus, atW have che 9/ _ axpe^`] and ability ==eprasant aLl elaments of t:a aaithcara ibdustryto approprcately aaavt the sacacary to aaat the :eCCirnmr,ts of this subtitle. natbars c1 the conL:ttla are eYpaetad to be nocinated from the ]olleving groups: nacionsi organirationa - presenting health care pcovidara, aenuLacturers of healthcara pcaduccs, healthcare financial ]!.^.agerf, eedical record Sanaqers, health infcrvatica t essaonala, State health deFarteaas and public healtt e .als, health inforsation ay'atm v gevarenenc healltca]a prrqLm]. heClthcare Slscal intarJ.GlaCl<], haa1V. - insurance industry, ehe business eomunity, haaltAcare eoa-i.nens, censuer grcups, leber, ar.d clfa elderly. 9Re Centlttea i euFOVerad to hold henringa, - e te.tizcny, and ev_tlence t e11ev It to funotion e raquarede It v 11 fuCetl]n'. a eanner fi9ilar to the proapective iaynent Assessment Theocenmittaa will subvit an a uel rapon to Cong:ess and tAe Secrecary datailing tha status of ae health infe:nac:cn n crk, Che aavinga and tests of .1fe natvork, the aCivitiea ef aloae •a~ng tLe netcork and `JV extent to which tnay ara ue:nq atandards to work tagether t= t their naeda, Lha aktant to vhich privaoy and aacurlty -rntectionf e e buinq nat, the mvEer and types vf peeaitits asaassad, o:e ryality of itforntlon being received by gcvarvetta, problev vlah !mplemeneation or tising of aGndarda ndoptons, and anv l.gislat'_te racosnendatirns related to the health inforsat:orn natvcrk. The Ceannctae viL' ba funded and aet until otNerwise provided by law. draots for DYOOe1:osClon Pio'leots Tce Secretary uy aaka qzante foi duonet:ations pr=j¢t. to prooote the developaeni d use of electronically :nteqrated, ty-basad clanical inforaation syateas and casputarited patient ord nl systems. /1n institute of Madicine study uuticned that •]rQy aating the t content, and procedures of current pat:,ant records vill perpetuate CDaL datlcianciu ard Vill be insuLlcient to meet emarging uaar neads.• It Ss nCt enCUgE ibat the Secretary aet standards for health Jlforlation and Jlat the private sector aJtoaate tne health iafonnticn 'uainq tLesa standarda. Tha goal of beinq aLla to build linkagea af lenqitvdlnal, lifetise pata.nt data scroas the ccntinuua of care In an opvrat-onal avatu frca vGich, alaultanacoaiy, providers can prer.eica, adliniatrator; un adalnisce[, and c aeeiche:] end'ict rasrd, cannot Ce ~acheG vithcut c eatinq and taatinq n c ceptual lOlals. Ooanatxation projacCS vill provlda :ha laboratory satting in vtieh proeua aodels and g1oLa1 data ocCala for t1.a coapucer-Oesed patient record can be intag[ated Vith cperational I.acal decision support and ner sathrda t expreaainq lr,d encoeing aadical c cepts. f these things can be incegtatM and used to .xpr.aa aaicai concepts end pricasaaa ve11 anouqt to suppcrc tt.a pzparlee] practica of aadiciae, than the adainiatratlv. and ao..i-orinq requicenant] vill be autosaned with atLla addLtionll cose. 95 deten:ne '.n. :ha 5ecre:a^! is civen b:cad a ceoriry to app:oFriete daoen]traUOns to fGnd,ucancantcating n t n tnec` d.va'ccpunc of rav tacncolo?iea, bct on the prectical in.tagrst_cn, 'rn5, and u of ees ting [achno:oqias in the vaal-VCxld practice of haalt]care •n tle covm_n:ty. Etfactiee Cata Upon Cna¢¢ent. pae. 402. Pzlvacy of 6ulth Ibfoomaeiee P~eeaa~L~ v Pbaaent Federal law prevtbea pretection for t.he medical held by ]eda:ally fundad dCUq and alcohol abCea traatcant progCans a aittea Provieiaa 'rindiags and Purpeaaa pra parTh. prapar diaelosare ef paraonally identlflable health ia "~inECrvatrnn can cAuae hara to tha i:Cividual and the pcsslbilltiu for ivp[opei diaclesure are aggravata< ry increasing broad ..... a to healt Ynfcraation fro. auccuted data banka, perticalarly tna S-25 Ladera:ly funded `eelth ta syetu), Yallcare, and IleCiceM. TLe lntent of this auLtitLa _ a protect the prlvl.ay of persons with reaptct to ind[vidually identiflabla health in[oraation, whether cral or recorded 1e any fora or aedium. pafiviticef 'prctucad heal h 1nfc:aaticn' is any infcraattcn viet relarae to the physical nr a.rul ]u1a of an indiv:deal, the )roviaicr, of haelth t to seirGividual, or the paysent for tuch haaltE c a. SeYCna vhe Sclda such protected ineersaticn 15 called a'haaltn ir.tCtrat:on tiGatas.' Hea1t-0 t'AfoavtSnn trustees mcluda Fealt] c]ce yrovadec], health plans, life insurers, sebools an1 '.:nivera:tias. .alth oversight a9encleb and eployere. A Saal`S lnfo¢mt¢on network s e aat !s wccitied Gy c.:a S scy is also a tvatse, elNecgb it cannot disclcae anY protectl health :nfetsatcen a.c.pt when aebinq as an agent cf anctf.er 'raatea. 1a a Ceard establi.hed in acccrdance An 'inst!LlltiONl ravi]V bwrd' with regulaticns et the secraCary i a privaCe :. rch in{titutlon or a gtvarfuent agenry to raviev propasa6 rasearev pro7ecta for the proceaocn of huaan sub)aca. Oevetal L'Jitatlone oa ~SSeleaULa O1a genaral r a that a tivstea, tncludlnq officers, enployua and agents of the c,-:atee, 4nnet disclose prcceccad health Snfot^vatlcn 'inlafs specifita!!y a- ved y t,has st:Etitle. All lealnh zrtor¢ac:cn chac could : nab:Ybe r cad t spaci[ic :netvidcat would be pro:ected from c hisclceure. T:eea protectlcna vCUld apply, regLrGle]a of fora or aadiCE, Vhar4er kecL n Paper t]laa or 1 elGCirc^lc database], whether retained in CoccOrs' officea O :L]uraL<G copPany ftle], Gr avL11aJ12 fSCa an Lnfor_ativn fyetev c. cver a computer netvcuk. Svery iiaclosure of prct.cted hen_tn intoroaticn allowed by this suft'-tle is 1leited te the c neae.sery t accomplish Ue purpos x e 'vhich tne discloaure : xade~ '"he Sseetzryaay :]sue ragclacicn] to:mplecant ata :est:-C'~on. A1' oaed Frotected haalth 'nforaatten ruat be idantitled e proracted a d~ va;act to chia subtitle, PsotecteL hea_th :nfc:oeticv about a ind:vidual c oaduclosad or caad fc[ e other purpeee and cannot b caea agan,at tne indlvidual uniesa speci_ cally permitted by th[s s!itla. The Secrecapq aay issue requlati=ns to protect i rxatvn~n vh:c.: the haalth c e prwider is identified to proacte tha evallaCillty of health care serv-ces, allovi:y rr_steea t har9e a raeaonaCla fee for the diaclcsura enc rapr=ducuce o[ health infc:ut , ta Cvaarttee intanGa chls to a n that the costa cf laMr„v :ala, and dupllcatlcn should be paid for by [he reqaester, huc chat the trustee should aake r.e profit froa this actlvity. authprisaticea for Disclosure of Protectad faalth Iaferaatieo The sub}amt of preteccad ncalth ln[oraation say euthorire disclosure of the infornatlen under c cuet+ncea C`at ensure Cta knovinq aaanirqfal ¢oice, that oi[eav ] autherization is e Ind tha usea of thadiaclosure, and tlhat allow for tiaa aaatat:cv and ravocation of per.iaaion. 19ia vana rhat tGa indlviduai suai sign ar a4thoriaatlcn form which saya tLac Chay have rac4 a aapanta form on '+h'-ch t,he paracn who Vi11 racaiva the prota<ed health :nforaatlcn hea describad the diacloauru thay ihtand to .aka, naaing or 1 acribing Ca Fateon vho vcil di¢loaa the infora.ticn, the Information to ba disclosed, anG the perWn who will : • t.9a i.nfcrlation. The autECriratren zlat specify an a Yarationvdata Cf 2 yedf :aas. The uchcrizaticn aay ba cavnkad or ended ac any tise.Cha lcaitation autherizatlons raNaaeeG ine nneeelGn with tha prOVis:on of ]aaLGS. on a to prevent y[ eion on tha parC o tha pr=vider. Nota that vithtbis lav, 'SSra lsno :ongar a need for :cutine authorizations f r health ea• beeause eLa netul busmafs of health care and vyNnt ter Realtdlcare is permitted vitlout authorizatlon. C^.u secratary La requcred to develop aodel nquesm f autRoriaation for duclosura arld aoGe1 stataaanv of intenG.d tl1]Cluuxu vhich a a structured t= farVe i.haae purpOSes. A copy of the auNeCiEaRan must ba aaintalned is part ef the in.ortutAn diacios.d. 97 The sacreca[y L:agu_rad ` cablra.'+ a prccedire : r _ - protectad real~ intone[icn en a 4reesad :::d:v:lual vtar,in.rn :a na andividua'' rapreaentati',a ]u=h as a ne%t Cf k:l:I certified aealtC Iuforuticn satvork aarrico A health inforvaCen "staa vay diaclcae FFotected healit rnation : carLified haalth LnfoPlatien netvcrK sarVlcs aetlcg as an agent ot t.he trastee for any pu/yesa pe,mit:ed by ch:s provision. T11n health inLCrnat:On netverk tarv:ce, aRing as In agent of a tr,lftee, nay rediaClcaa G,e info.~LGticn to arL[her pe:]on, a] eern:t:ad 'ander this pr=v:]1On tc :at:lieate the completion of _1',a ?c[qGSe fcr Vh:ct the infor]ation vaa disclosed to the serv:cl. healt`. A health icferaatlca Crnataa eay LLcloee protected infornaeon to a certified health infer.ation protection crganizaticn for the pu.-joaaoa c.eat~i'.g non-identlaable health tnforaet-en. ~Ia Giselcauraa tor Tr.auedt and rloaecial and ndsinlstratire Traaaactiona •011 ,lsclcauru of protected heaLth infor]ation to a p=wiCar for t,he 7 pVLpcu ot :anderinq eaca to rda indivldval are net llaited ml 'eee th 1[~ individun' hes ptava eua:y ebjeeced 11 Vr=ting. i91s 15 ...... Lry to /T parait health ca-a provldarn to aLara relevant cn-oraaticn -n Va. Publish2d by THE BUREAU OF NATIONAL AFFAIRS, INC., Wxsnington, D,C. 20037 0-
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S-26 prCcess o[ Clagncsis and tCeatlenO A provlder or eapiovaS a.y d'JClose pretectad haa:th Ln[crutcon t a plan [or c]e purpesa of paYing f v ' v q t.he payaent for, healt.`h care. A Plan say likev_se dlsciosevuc.. m infc[natlon to ptav:ders or at.her pLana ecr 1aY PVrpoee. leat of fin and DSrectorl Iafa.LtlCn A provider aaY disclosa prataeted healtA infoivtlee to the nex of kan, cba lnelvid•ta1's reprewntatlve, cc an nndivadual with vno. _he individual has a cloee p.rsanal relttionanip if CGe 1nLiv:d.iai has not objected and CILe i-.foruclon is about hultn oare cuz ancly belrq provided to that individual. A prwidv vy dlscloae She 1aion azd g.nazal health rtatu. of a naael individual 1f the person hasn objectet. iqlth •acateea aay iiaclese pxctecced health inferaacicn .c azeist in the iduri_Sution of . decusad inalvidwl. Wr.Ieae} Ci.teuus ' A trnustae Yy dlac:o.e protected health fnforaation in an .erqenry to protect CDe health or y fety of an tndividcal [roa ent hane but the dlsclosure r oniy be asxa to peeple vhc need a ic --ake action to protect the ir.divLGual at r1ak. oveasiqit A tva_ee aay diaclCae prOtected .teeith infcrLt.on =o a]ealth 'GrSlgLt d9eccy to dCeq 'lhccveL ir.C -nedy nea-oh, ca[e f-aud enf o[ler abuees of the hea_cn care a te>. ~-eca '- accron e avesuc,cicn a ieic4 cut af : uac o: t eLh cara ~r payaent (ee tealthh nocin[oraa: ahcut tndlv:dcal dtsclozed [ cverzighC purFOaea can be used .., aen aC^.lon a;nat the 1.:dlvidual. ruLlic ]aalth A rresca< ray disclose protected health i rnatien t = tte [e4ulratenLS of hea'_t:, dLLVlGrltlaa a:.d the reed !o odlaeaae and capcrccnq~ v pct1!c health nrvallenw, and pcbLC heaib~ inesaagac:ans cc ...ta_.en_-ce.s. 3aelth Feaearct A ccuatee nay disclose n-oteRed health infcrmatlCn : 4eaL_hh raaearher :1 t]a research projec: i udgeG bv an apprcpriace inaucunieval : ~ r reguire c e t+[arza<ion and to be of ncffic:ent'iaportancaasto cutveqh tpa '_nt[ezion into the Fr-vacY a the inaivlaUal. If the realacct cro;.ect [aqLLir s direct Contact nC'. the andivicuala identifiea In Ch: i foraaCicn, 'e..ne in.atitutLCraL review board v - also ludge '-tet the cOntact ia nacessa_y and JLLt it '/311 involve theainl6ua of a!ak :o the individual. If the :nforxat!on ia to bn dlsclosed uaaag Cha health iafbrnaticn netvork, the apprcvtn5 rard ausc be o certified by t.e SaCretary [0 do a The Sacretery -vtll issue rpulations for certifying such mtitationai : v bcard. vhl<h hive the qua!if!catione to protect ade:R_ality af z search ubjecta ^he c arc.her Ss cbli9ed to dentrov t.he :ndividualidentification infcranue-. a soon a poaaible and to take appropriata precauticrs to kaep it conC:dential until thv. Judicial ane Ad.1o1FlKHYVa Parpc.es a intl_aidual places their >byslcal or sl tal condition : a in a :cdicial e CC.inistratCva prtceading or uLder[qce a courc- ¢C¢ed p0yt]cal o aantal - uinaCCon. a trustee is pec'.i_CeG to diseloaa auch healen i[lforfatien ta the eeurt. ..e fatorca.aet A trustee aay disclose protected health Inforaation t a law ent agency with rrattan rerti[lcation as to Lhe need : r such enlCrtO n for uN astlgatlbn of a tr9etee, in the identil'cation of a victim c vitness, or in aR L es[iaaticn o c[i=inal activity a4eiriC tLe t aatae oronprealsas contro!lad by Vle vacee. ?e dlwlosed 6n[evatien nnot te used againat cle .ntified individual unius the aetmn ls directly'related to the pc r,oae for which the informti0n vas cbtalned. mveruent eunpoenas ana aarran[s 99 '- diacltse p trte] neatcn in esPense a 4ovsrueno sunceene e varranc. I^na c sctoseaa: raacion cennoc be useC agEinst GheidanC[ied :ndYliduai 'alava the aCCion i5 di;ectiy rela:ed :o t:~e p rpose fcr vtlc: tha 3RLCrnd::on vae obtalned Lcceaa Prccedurea !cr 4e dG[Orceaeat Bunpoeaaa tnd serrante A yevn['=ent auctccitv cannot Obtain pretected hea:th t.:[omacian cnleaa c^ere _-rnGable c to tetiave Chat Cna 1nfo~atrCn t -a!evanc : $egit!tate ln,'1ry. 41t.hin ]0 days c eGen a vdr;ant !a servedd ind:vedva! must te notif_'ed e any proteccad hea!cL lnfo rtanrn s ainec. A copy of n unpaeca a d served n cte lnd:v_Lual, exether v1t1: a notice ot the :ndiv_duel's r'ght c cCaile-.Se. '_5 daya aefcra Cha Sove_-nmer c cbCain pretected realth infcrvatton. The g aer ent may applytotl:e court [or delay o [ notlf!caciT in fpeceal aaso. Cballeege Ptoceduru foe Las inforcuant suLpoevas ~ A protocol is epecified '.mder vGich an irdividual may challen4e a gevetnment acbpoena o' e rant 2Cr p:Ctectad aaalL.1 IP.fc[neclon Vitllin [ days of notice, tr.cludmg the rsgulretv.c that the need for Ghe ' in[croatlon octveigha the intrusion intc vhe lndlvidual's pr:vacy. SPECIAL SUPPLEMENT Peivata PartY stibpceoes A t- ee zay tLZclose protected health inforutlon _.n response to -- vaceparcy ecopo.na. aCCees Procedures for )rltate /artT atapoenes A copy of a subpoena .ust be sarved cn the Individual, tigether vith a nCC_ce of VNe LndiV:dual'a ri9ht t Glallatlpa, 15 days before cna ;r>vate pacY a.. obta4n procected buitb :e[oraatien. CDZ1lenge Procedures for )rivate )aXS sYEpoanaa A prCCoco', i spacifltl under khich a Individual aay challenqe a pr:vace tart'+ subpoena for protected heaLtt :nformacion rcth:n 15 days of notice, :ncuaing tra reguircnant that chanetl for the :n.cration cutveighs t2e in[masion into privaci'. 2atabcieaaant of HfepGaeda^ha Ccvittee arpects health Sn[crnaoion truaass t bake a:1 reasonaola preuutiane ta v u-e LHe Integrity end c adantia'iity of procacced naa'tn in[oraaticn. TTe Searenazy i reetad co pmvuiqate oaqulac:ene reqardtnq ehe type and lavel af aaearSy vaaures -r.s.eas are expected to adopt. lccocating fon Dlselosures lot idealiv, cne CoosIttee von1G p:efa- - ,]iec!osure of protecteo nealtn _M1_onaCaon ta doCUnencada euC ~lned in chis pnvision, b t 1Laadditlonal burden of ; orarnq and atcrinq sucn docuientaRan 19 cOLaldereC to be prottiva. :^.ICeforb the ^otnicee .".as caken tte tack o' requircng all truatees to record discloauraa by axc¢t6cn, c.^.at:srhose dLacloscraa vhich Sre te[ routinely part of Vfat trtacee'sbuazness. Underacanding thac each type o -'lstee naa a different d!in:tion ef Yhat i cutinely Part , of dotng~bus:.^.ess, the Ccmnittee has '.natr.LCtad t:.e secretarf c0 1 glcdelinen cc help triscees determ:ne the l capt:or.al carc'.,nscances In chey a_e regu:red ;.. _eccrd diacloaores. ZasCection of Protected Cealta :nfenaCan Yinh.in 30 daya of a vrictan re?ueac, a lth care prcvider oc healtn [ uat Fatni: t`e scblect of protecaad teelch :nfa-aa cn .- tnelr representative to :.^.epect and pet a copy of : ords of such :orrac:on Crcugh their health c e providers. Yhe plan or provider say offer te explain o:nte rpret these r cards. ST.e plan or provider azt dece[oina the identity of preveeue providers o orevieus orda on bena'_[ of Na i:~Giviavai i r.quaxa v ~mg.- SE.r. .paciflc ezoapcions and procedures to telloa n of aenta'- n~alth traataenc -ocaz, information nlout at.hers, .kpece.3 andangernent to life o safety, confidanoial s - celatad ndainuLStn. infersacion. Plans and provitl rarsa_ require e ceac reaaGurnamant for yrovtding such sarvlcas. Irdivuduals alac have the rnght to proG!bit tha disClosure of nemitive v.L perzcnai lntoraaticn a thac it v uld nat be L cLUded i tna healc.h inlovve.von tnat provcdars ar- ot^wcviae permitted to snere laead.ect of Protacted fealtb Inforfacion iitbin a5 <avs 'Jf a vrittan regYea , a healtt care previdar o huitte plan must raspond to a requeet by individual to correct or end a racord o[ ta lth information ty either ukinq Sae c-ractlon as.ndnent or fo1_cvang a prescribeL process Icr detlinq with diaa5r.eaenta. Matice of InferfatioG )feeticee A health care Crovidar er nea!hh plan euet prepete and 3iaaaminate a natice [pardin4 the peraonal righcs ef an individual, as descriLed abova, and tha provnder or pian'e procedures Lce t.he exerclea of CGCSa riqbts. t9e sacretary is ragLUrad to devalep a model for such e nctica. stanaarda for llectronic fombbmeota and corunicatione Mosc ot t.hiz legislation about pr:vacy of health inforvcioc was vritten a ux:bg thet the prececved haalthh inforution and the documents lnvolvad tn liac!eetnq it vere a!1 dona in on paper. 101 - mtenr of qe CoL [tee, nc+evep La that as r¢ `. as LossLtle a t.`.e storage and Llaelosure of protected heal:h info[vac:on v•:_ ea ~ Gone electrenicllly, so U:e EecreCdry :a nnsiructed to adopt and promulgate atendarda ty v-ec` a11 ihe aitcaclone described n.n this aay _e execured cdcalD! e_ectronlcalLy, ko LSaGi:1y fer Perfissiile Discicsures A dacloscre peaicted by _ds subtitle v111 noc be cause for 1iaDality under conacn 1ev. Mo L1ab11itY Ear Iastitutionel Faeie. xeard Detera:cationa Revlav board aeahers and thair Lns[ituticns v_11 not te :iaEle v.aa for tha gcod fert.`h daclaicns of the btard l~. Geed raita Haitvee oa -ar.LtiCabica O..IA~ If a health v formtlon trustee legally dlsclasen protected T health infev en to a ca¢:[SeG health information nr ork a - -1L vtceG zuLSequantly vlelates thLs subtitle, CDe ariq:nating t_es_ea ~.'~ vsu not ne held 11aDle. .aya Publishetl by THE BUREAU OF NATIONAL AFFAIRS, INC., Wasnington, O C. 20037
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i SPECIAL SUPPLEMENT civil panaity A aru/tae vba suGstantially fail/ a co.ply with chis subtitle vill ba suGject tc a civ;l penalty of up t0 510.OO0 p.r vvo!accc. ciYil Ab<iem An individual a9grlevtl by conducc in violation of this ¢cbtlcle aay bring civ:1 actian CcaceECi:y no aors pDsn 3 yaars after the ,ima:ien v, ar should Eave been. di/cov.red. aroaqful DS/eLOSUre e! Protee:ed [sa1tL Satoei+tipc panaltias for knwinqly vpclattr.S t=i/ s'.Lbtitla range fros ftnes cf up to $50,000 and prison Lens of up to oem year for vrenSful disclcsYre oZ oCtaa]ing of prctsCCad healtb InfctLaon, to flnes o1 up to $100,000 uvl prAon tetfa of up to Gva Ye/rs :or violationa - xxittad urdrs false pretense/, to finea of up to $250,00. and priaon up ta tan Y/aza fo[ oLeevs c vattad vl[h : c to as_ p[otaetad h.altb inLOtfat:en fer eauereial advantage or p.zaonal + qain. lalatibaabip to OtLer Laa ^bi/ aYbt!tl/ pZeYpt/ scata 1aV, etcspt fc[ 1av/ [elatinq to v•:d'. ataClscica, pubLic hu1G Or sental health cr the reporting of abuse or neglect• e., infacl:CU/ dlaaaaea. liqat. e1 IapwpeGevt/ 1a1 The rtgCta c tndividuala declarec :nct_ nc bv a' - _ 1-1 <xaresed by their r fapresectacava. n naal_n careprcv _evoaay also 6aRa IDch a dataZ9ication. nigbas ef Nioar/ A11 the rights of !ndividuale under the age of 13 years of age _ lsed by their parant or legal g_ardian. T.`.e rvq"ts af inC_vidcal[ a s 14 through LI years of age r - eed by either CheoaeLVa. or eheic Fazar.t or legal guardLanOe Parsoas 19 yaar^ : age and older, aud [3faee vhe heva :1e Lega'_ nqtc cnder State -av cs apply ].r and obtain medical cava, ehall exercise their am rigits. Effec'_ive Daze 'lpon a..actnent. 103 41t1a v- MaCpraetiu aaG lraua 9uLtitle A--fEDERAL T04T SAf1oW1 Bec. 5a1. PeCe=a1 Tozt aefaR pro.nC L under current law, eelpractice cleims ara ganeraily resolvaL unde- State _av. Cenictee provision Federal 5alprnctice rs]orm/ would preampc inacnsletent State laws exsept to tte axtent such lave peralccad additienal dtfenses o0 alprecCc. act:onn, anpeaed greater _1/i4tiena on attee,ey fees, or 9.FCsed greater r - n caic or pur: teve daeages. The Federal aatP a_iw prcvinibnsv c~d govern act' na in 5tate e . Federal c- a but would n- aceblish any new basis for bringing aalpractice actions in Faderal caurt. Psrticipating Stacas would ba raGUlred to establish alterr<tive dispute r aetction (AJA1 preeeLUne/ and alpraatiee elaiea could net be brocght 1 court u.til LYe claies bd qotv through en] [ ached a final r undar C.Ra plan's Proceduaas. After caa ADR prccedare oapletadyoeitnar par:y diasatisfied with t'Sa r sult could contest tha ACA decision in court to [ha axtant patsitted unAer Stata _ That pacty could bring a Lavsuit to swk duagea e- ct5er cadreas paraiCted under State 1aV. If such a parsOn r calve/ a VOrse resYlt or Saazges c e-tnird below vhat had eeen avazd.d in tie ADR proceetlinq, that party e cld be requiced to pay tY.a costs and atcasnq fees of tha other party 'on rLe aaurc .ccion. COnt:ngency Lses paid to attorneys would be lia!ted to a/liding- cal/ achadu':e• vit15 chm prapcrtion to tha attorney dacllning frca n 1/J par tt c] tha f!rat 5150,cOC to 35 parcenc of Gvards beyond 515n,c00. 1Te total ascunt of davagea :ar nonaconcaiC lassas fras a injury vould be cappad at $]50,000• indared annually bv tpa CPI. ]raditionam nvlas a1 joint acd savefal Liability would ba sodifled to 't ait the L!abili:y of eacE deler,dant f r punitive or tonecOnoeir damaqes to a prcpcrt:en .gual to that peraon'a level of respeniCility, to De dateraina6 by the teiat at Caat. Saventy-fiva p.zcant cf n - davaga avards would be paid to the Scata for 1lcansuce, rer:iLicatlon, and ether acbiviaae to 1.prava t..e aafaty and qiuiity ct care. ITa Secretary of HA5 would be aueherited to conduct demonstration proleoc/ on ne .ault approacnas to sedical 1!abi':ity. Sffective Oata 104 S-27 cautea of actac¢ ap-alCq after Ianuary 1, 1315. Dubtitla !- a1PA1^a0 /rp1T/ Tp CoSfaAT ElALTE clll FtADD AYD AlOa/ APP1<TIMa FiDESUL o0:'LAY PrmeAkG fee/eot I+r 8aalth Cace ant_ fraud Tzvst fuad povialce. No sanctlcts !cr rraud that Af[acts Federal outlqa .%[ of the o ia1 See•urity Arr provides penal[:as for health care fraud and ai•tae '.itYin the Medicara and Medicaid prbgre9s. These penalties Ln0lude exclusion •_ . parcicipatlan in s/ prograas and the inposaticn o aivll a nebary Panaltie/ and cr!anat pens:ties. ^Te office c-_Sa :napector Uneral of iP5 and one Attorney 4aneret a uponaible for : tigating and preucua!ng suen vialatbana. Sta[e agancis alac F=avlde health cara fraud concrei programa to raatrict fraud and abuse vitEi.'1 t11/ Medicald prOgraa. coyittea Prc.iaiea )art 1 Iseoa. 51..514) - Iapeovid lnfcrereaC and creation of {asit6 cara ALti-fraua Trust hiad A!ederal butlay Tncgraa Fraud and Abuse Cont[ol Account v uid W xeated i- tna 9ea1G4 Sacurity Trust 11,nd t contain a portlon of administrativa panalt:ea and a .ents npesed undae t>e Soc ¢ seeur tv Aot. e vil . eeary paeu~eles iapeaad ueMer e.his Act, and other panaltio-paid 'or r iated vialatiens cM ae<Soeu. In anv year, C.e account ... ld racaiva cha first $75,000,000 Ln calleCtlcn/ plus 50 percent of any addltianal aY,unt/. Aaeula/ ln the a tault would be available vlthcut apprcpzistien and could N usad by roa Secretary and UIa Attcrney Genaral to caver the cosns of praaecVtLans, e/CiqaCOV, audits, inspections, pv,id¢ and c wer educ.tian and advvery cpiniona, and Other aeeivitlLS to control fraud affecting Faderal outlays. Sucb L•.mds ar intended to be auppie.antary to appropri.t.d operating budgetsos rIle ageneiu. '14e seccecary and Attorney wneral would sub/St an iMual espert to eongr.a/ on the . ganerC.d aad disbursed by ehe ac unt. 'e/ Inapactor caneral u~dube autbeciaed to rataln and ua any funds paid to reiaburae ftr tha t ef ocnducting inveattgition/- an '8315 of:ica cf Inspectar Oen. al A/sat fo[faitura proceads Tu.d,^ to be ad.ini/tarad by and contanually availahla ta cba In/pect[r Caneal far invasa3etlOns, f_ che would ee established in -ne Sreasur/. Funds transferred ]epartaanc of :ustice frc/ torfaaturas would M deposited :n ache fund. A prograa of r vaads for lnforaation ieading to prts cuconand - nvSCtien cf a /an or e Fadaral health bare o! f.nN could be utablishee. 105 part II lBec. 531-flEl -..avil ]enalties and kiilts c: Action The Ssret.ary of HeuLt'h and F.une, Sarvicas and C`.s Attorney GaOerL1 v 11d be YQulrad to eetaGll¢E a jGlnt prbg2aa c coordinate ef:arte a G cake acllon9 !n control fraud and a.".lae affecting Federal eutlay piograms. The Secretary CL PYS =0uld be authecired to Lnpeaa c v.1 b natarv p¢nal:vea : r Lcticna affecting Federal outlays, t v luding ones rhat are a:aile a!C Cl5o5e that v uld subjact a parsen [oa penalty under npec4fic Osioc¢ of 3ec;ion 1125A of th. Sacaal Securlt.y Act. 1Te secretary~roul< ganernliy follow precadu[es and Fcvide for nppeals as u!d be req_:red far, 419/3er proceadinga under aectlan 1113A of the SocYai Se<urity Act. or cna stat/ in vhich tfie plan is lecaeed could initiate suc.n a proceeding. The Secretary of FOLS would Oe retptired te exclude .' p¢rt:cipation in a haals plan tor eot laus then five y acs a indivtdcal c -ity a viCted of vzOLatlons describad i sectlon 11f9(a) of the Scc:/l SeCurity Act, a/ aMnded to include actien/ af:ect_nq Federal outlays undar tbi/ Act. Sha Secratary vculd be eutberazad to exclude lros paztieipabian Sn a health plan far p/rLCd; of different duration an indlvlduel or entity ccnvicted cf violatians desccibeL a apactf!ed subsectian/ of sar!cn l13!(b) c[ t. e Sgc1a1 Seeurity Lct, aa aaended. Cna eaeretary would be raquiiec to provide notice of e uflorm to Saa12h plan/, state health care adn¢nistraCive andLState licansing agenci.e. Prwiaioa would ba aada for provtdinq nct.ca• hear:'(gs, an1 judioial revi.v ef .xclusiq s. ]art III (ascs. $s1-Ea11 - Additienal Yaad.ebt/ A n ` of related aaetdaanCa to eonl0sf and stranqcRen the anti-freudand ab¢a- provisiona under tbe 9ae5a1 Secunity Act .cuLd al.e t aeas. A^heaith c offen/a• veuld be defined a iolation of sF ~ilLed secclOna of title St of 61. Unitad stacu coda~ of CISa Stcial securltv Act, of °JIISA, azW of tba Food Dtug end cos./tic Ac1, ncluding car;ain eactian/ as aaanded Sn the Haaltt S.curity AO. Title 15 af :he Unitad States Code v u.d be uentlad to defln. Esalth e lraud and ct.Yar affanaas related to Gsaltll aar SeClen 1v39 of LLile ]: of ebe Cnitad 9tatsa Ccde would bn a.ended to provide thet falae c ai.a for peywtts by hsaltn plane shall ba c sidered false Olt _s subjeC to the prcvisions of t6e Fal/a c-aip/ Act. alf.ctlq Dats danuary 1, 1996, e 106 Published by THE BUREAU CF NATIONAL AFFAIRS, INC., Wash:ngton, D.C. 20037
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a 5-28 :xS11 VI - IpbxcAAa, llaolCU [pOCa-1oY. A1a IllaxClln subtiele A - paxciN PAiT : - klaa: CCyyiiCiIla aa: _aa te0. aal. IaPrcvameata in lask Caatrerta Preaent r AFprexl0ately 5 percent of benefici¢ies ara er.relled m health aalntenance argan:Eactcna j:i![0a) 'L`.dar rifa contracta VSth Medicare. -', Order to enter inte M1G:cara -isk contraets, eealtn plani a :'egVlred to feet e[aadaida eateblCahed Sn aee2lon 1976 of iSa Social Securit] Act. Included asong [teee atanCaSds 1s a recwiresent c?ao a health plan ba a federally qualified bultb sain:enance acgauzatian or Previde aaabers vi[!1 rvi attaenttllCYea1 11boracOryry X-ray, inPa eF ya-ciaa' s _es, EO•pi tal saN aeryanCV . and prevanc ve pN6ceb and out-ofyrea c rage. OnCe[ riek can<racta. Medicare paYa ga]s 95 perc..nt of tba esilutad aaount vculd nev. toa to pmvtda Htlicane benefits to daaegcaF~lully ccaparab!e Dena!iCtarlas :n t.he v.a county s'p0 had not . rollad in an YMG. Me Payynt alOLLnc ia L`a avert9* ad:Wtatl pei aaplca vaC (AAP<C) . ttaadaSas for Caetracta Lommittea sre.imi certlf_ed standard health plans. as defiaad in Sec. I10oa of the SoCial Security Aa, vould be par4t-.ad ta aatar into Medlure riak and cost ccntracts if they seet ravased staadarda utablishad :n Sec. 18]6 a1 t,. Social Saearity ACE. xta x.guisuent dac plans be federally qu.it[iad healta ssintevnc. ryenlutlon. wultl be repealed• Me exlsting Cagu!esent that a plu have at least f,o00 allaes v uld be ntainee, as a'¢uld t5a S.ezeury's authority to enter into cantracts with a plan sarvivq fewer en:cilees if CMe plan prloa!ly servaa uesCen eesiding out.rtde cf urPanized arsas (fcund in cuvraac Seetien in]6(g) (1)). :1e existing atandards for enterlnQ into a t9st-based contract (:cund in currant Section 1C]6(h)) wula be retained. xadi.iduala lliglbla to 6rei1 All M.dicara benaflciaries ent[tlmd to benafita uca¢ Part A and at rcllad in ?art 11 v uld be e1191bla te p+rtlcipate !n isk c contract viCh a eCrtitiatl health plaan that a s:bearea t vhiel individ<al : nides. faployer-baWplana uaad be pevl~Cad : the astrict a r013aent to certain classes of individuals des:gnated by _,e Secretary in regulaticns. Medicare bnef!ciarc.s with end stage 107 renal di5easj vculd be pota:t:ed : earcll tn a ca-.-.ted etnndard health p=an ~ itn ruk cte contracc. Earolleaat Elig:bin individcals vonld te pervitted t m11 •.'ith a carCi4lC s andard health Flan obat h/s a contracn unGer secaon lai5 aa yrovtdad fcr i reguiatLons (inClud!]q J: rcuqhenrall¢anC rcuqh a rhi:d s viduals would be penitted to terainate a lleenc during party) . ar a cat ent p.riM ip.evel.d by e:. s.c:.ea-,v'se_f che 1.^.dividuLl r va the plan's a e area, c- ONer speciGl eircastanc sexvt, as preacrabad by the Secritavy- ' Reguirueata Regarding Markecing and sbrollsaat The ex -icg pravislons regandieg sasket!ng and er.rClleant (focnd iu cu t5action 18]6(c)(1)(C)) v4uld Ge reta[nad. Me Secretaty would also be required e develop ud distrit'ute ecaparat.vr v [:als ragard:ng all aertif!ed standerd health plans to cnd:viduala eligible to etlrCll in a crntCact undsr SeCtion 1576. sources of Papaat !roa kedlcars 'ltaat hIDds Che exiseing provisions regariinq sourcea ef payeente to health plans Vithcor.trac:a under tbia serticn (found in Cllrrent SeCt_an 1eta(a)(s)i vould Ge raralbed. Pa]seoc Rulef ondsr ilsk Caatraeta :ertif:ed a andard health pluv entering into Meaicare r!ak contracts YoYld C- Yve a paYaeSt far each enrolled Medicare beeeficiary for each ientA ef enrelbenc agual to rlu ev.:age Madiean par capita :ate for tne Plan's service ers, adjcated by nha rate factor dete:-nined r ucb class Of indivldual. Me Secretary would ba r...... d ac detina epyropriata clusq of indivlduals, based an a9.• disabil'-ty status, and other fagtors tha Sacncary daterainaa co be appropr!aca. Me Secretary would also be required to detaraine rate fac:ors for ach clao of !ndividuals to reflec[ dif!erenco :n rLa AVeraga per capita ipandieq for banefita under Madicare Parts A and 9. Yhe Saccettry would M re9ulred to anncunca the rata factort :o intereated parties (in' a sannar designed to provide notice to interesced partiesl not later than July 1 before eba ca_enaar year c_ncerned. Eudget sNtralltT Sbe Sacratary v uid Lv raguiTed te prapottienatalY reduce the i es ynt of payaents for ri.k contracts by an tea Sacratary deceaan Sary to asaur4 that payYnts do not ekceed those that would OUarvase hava baelt pa!d if Section 401 oL the 9ealtll 5acurity Act had not been e aeted. In asking such adjusuenn. the aoaaicto intends that t.:a secrecary take into accaunt for ccsta in a serv:ca area aa loe c parec .- nac-onal c_s-s. . SPECIAL SUPPLEMENT CeCerfat[tLOa O[ arsra4e Redlcara Par capita Late -he Secretary vou1G he raGu1L« to a ay deterai.~e :ne a rase Medicara par Capt:a rate and a _ by oCto`-er 1 efare one c ecdar Yeac . votved~ 'Theer niy a raq.a Muicare p ' capira raca ! r a aervv e arae vculd be aq:al to e siof the Plancc9roner.t and the IN-LOC-SeN1Ca c atcnen:. -~~ a The r o ;i deftced aa tSa sy¢ of :he (ol:ov! ng ..... ta ar aed a andard iealtk alen: tte aacur.t cf : , -ihlY prev cn sudaitted by the Plae :c the Seareca-rv, ad)uredby a factor tYe Secretarv ]ete['^laea n- ssaC( t ncrsalire the 1:.erence :z the iistr:bct:ono indivtd.:als pro]ected to be . rolled n that cetafi.e standard teu'.t.`. plan aa q t1e v cla.aes a mdlvlauala ta¢PareL v_C`. the nat~uul ±!act rzc<• of att-cCaves e_ Medica[e b ciartea mult_p1Led by a-acr. lezpreased aa Faec.c:age~~aL1e nune[ator of he fraction is the nuaGer ofal: andlviduals encnlled in se F1an (prc]ected by the p1an, ys:nq aither hvtorical expa-.ence or scn cther aethcdelogy davelaped Gy the 5eeretery) . Me dencaanatOr 1a the nuaber of all Maeicare Qlgibls indlviduals in t:e ieivvca area. -e fee-Cor-sarri ca cespanenc is Ceflnad as qv prolected a raqe aontAlY Fer capaca '- -servive casts for fAe a r~ice e for Medicare be-.efielar:as - t ennalled !n certlfled atandard M1s'.c.^. plans e:th e -acta under Seccicn la]e, eGjusted by a factor tbe secreca.y deter5iru n n raauu e difference i'a.OChe distribution of iadividua~s rv w '~ e prcl.cted co ne tiolled in that certified standard health plan among the varroua classas a1 1Mividuals ccepared e1Cn the acionai disit:GUCion ef al! classes of M.Gicare beneficiar.ea. aultipl_ed by a fract>an (expreaaed as a percentage/. 4ne nCrator of 1w fraetien t equal to ehe nu.bar of all Medicare e!1pi:. Indivydyala in tha a rviCe i ainUa tYa nuaber a lndividyd'~i Vko rol:ed in certified atandard bealtn plans with M.dlcare risk ontracts. Me denolinater 1. e'a11a1 to Ule nuarer of all Medicare Qigable indavtdcel5 in the servica area. arajectad average aonthly per upita fae-for-serviu casta a def_`ned as tbe aaaunt (Groratad to be expreeaed e a .`.ly a 0unc) that ahe Sacretary piaapectlvaly atiaatea vauld lapayable fcr ' wexN under Plrt.a A and B ar.d other expar.aea !lnctudirq adai.iutrative expenses) :f V1e s.rv!ces were prcvided by other than a reraLed standard b.a1LS plan with a Medicare risk ccntract. The Saeretary would be required to base heee est!sacaa crn acical exper: Of Ghe a Nrn,v f the Secretary detet`at the tlata in the se- ice a e zaa rainatl.quate t aake an a u.ats . uaace, th Sa c raaarye craaary vouldbeacthcrlred to use CEe aetuelr .xp.ri.nn o[ a similCr area, Yitll approprlate adjuGaents to a ec_uarial ewive-e^ e, including atljuauencs !or dasographlcs, eeaiS l09 status, and the prsence of specific tecica- ood_cianf. Oblloii YGatb3S lrelSbpa and Pre/luas for AdditiEnal fatdiaea Each certi]led standard P=an vilh a Medicare n.sk contract v uld be c red ce subat:t a bid to tha Secretary fcr t`.e cexc calandar yeax :Or each serVtce a a for vhich the plan has a 1sk contract. The Gid vould be raired to inclode tha :ollovlr.g: (1) the xov0.tly prexiur am unt t.plcuan i tends : charge for M.dicare beneficaaries led in ttua rlan and a Projacticn of the ptan`a a rollrenc by Ctaaa of lndividual: (I) iSe p[aaa'um e unt tie plan intends to charge f]r eae'. claas of individ'.Ials far Lna aandatorf add!tienal fervicea (ducrlbed balov) ; and (+) the F=es_is asount the plan intends to charge Lor each package af additional tealth care aacvacea offered by J e p1an. AC least a5 days before the da<e !ar suhaitting bida, ae Seerata.v would be taguirad to provide for notice to cert_fled standardhealtn e'lana vith risk eonCraets of propesed ohengea in the sec~cdalogy or benefits c rage assuptions. The Secretary wuld also be raguired to proviL.aplans vic: an opPortunity to consent on the proposed changes. Pa}aeat aaltl SOr aiak Contracts Eacn cerCified standard health o:an with a Medicare risk contract vculd be requimed to c?arqe indivldaa:e enrolied in tbe p1an, r r c.m duration of t]e indlvidnal's e ol3aant. a fikad ncnt]ly pruxue egua'. _he '.uit!cra menNly praatla u and the Prulus aaount : r tMe additional mandaeory s eas. An enrclltl individual would t. -aible for paying the plar Me d!ffarence between the fixed monthly prulus ame\nt and the average Medicare Par capita payaent vade to tha plan. T•he Seeretary would be cmguired to a.ke sant-hiy payaenci !n advance equal te eba average eadlcare per eap!ia paysent cn trhelf of soh enrollee. Tbla paysant aae v be [etroaetively adjusted to. take into account :he dlfferanea tetc..n the .etuai numbar c indLviduals anrotled in the plan and ine nuaber af indlviduals ast!maced to b. uuolled at tbe tiaa Sa uounc of tbe advance payaant was orisatea. Me seeratary .ould also bo euthoriaed to uke retroactiva adjuStaufts to teke lnto eCCOUnt individuala enrJ.led in a health Plan aperaced, sponsorM o oncribuced to by an tMiv:dval's uPloyer. tte frater aaployer ~or tLo empiayer or !aner aptoyar of ind vidual's spoufe. If the a rage Medicare p.r caplta rate paid to a heit: Plan exceads tAe fSxed senthly presiua [har4ad by tte Plan. Cle Plaa would 110 Publishetl bv THE BUREAU OF NATIONAL AFFAIRB. WC.. WaShington, D.C. 20037
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SPECIALSUPPLEMENT Ea r<qoi:ed no ._ r nay tr.e e ces _ ,c_ th.. _ndr.idual _n eha fov C a caatk o oabcte chaerc<aatc ~te pceovto c.~ nrged for addltvanel ith c alectedby tne plan. The L.G13inatiCh.. ^. uof LGatlPC iato r v a rabat.e e a •6ributian to a supPleoetai Eea'1LG pra ouldbecade by the plan. ^:a canlcee :ni1'.da t`.at ir.fcrpataonacout Ybatu or -onCribut:ons : suppleoencal health plana be supplied to Medicare be^e!_ciaiiu in 'ten rarketing aecarcala m chec tne Secretary vculd have e Orpo-un.cy to r the oaterlals. Toa cosslttee Clrther v ends t.`.at repaces qivan to !naiviCuala be treaCed as ncn-taxalla incone, PaneOt Rules far Cost COCtreats '1T.e exifting payaant -ilee for cosc cont:acta (found in _urrent section 18'/6(E)) vould radain ananangb. Coveraga of Betefits tpder aiee coatrecas . .'e[tified standarC health plans vith Madiaare risk czntcacs uld be reguvred to provide enrclled Medicere c na_cre:vaa vit4 - za 'stl.: M.dlca[. Pares A aztl ! f c tta u.- aanNly pcuiua aa nL Tbay v uid alae be raquirad tc Frovide Medicare banaCiCitr~eacea vit] G4ea additlonai sandatcty eervlces; (1) Creventive health eez-v=ea as defined by the sacrau.y: ;I) unlisited inpatlent hospi-.alizatlon: and ;I) v ot the c at Medlcare r,le vhich at:pulates that Medicare banaf ciartes Lvan inpatient '.ioepital stay ef 1 days bebre decrsing ellgibla for peet-bcspvtal attacded oare aarvvcaa under sectien 1a61111. Plans veutL be reqiired m cnarge a separate paoiua for thasa uivicas. 21. vculd be pernitted to offer Medicave baeetieiaries additional wzvieas for another separate, edditlonal praaiua. The exiKing mlea regaeding J1a pravision af aedleal!y necesaey Care (found In curYenC Section 1aa6(c)(1)(al(A) and (B)) resal ur.changed. maoeyciw top Yatinaal Cnvarag. Owleioas a natiomi mne existinq prwision exeludinq t eftecce of coverage deciaien on rates for /Ge ysar•in vEich the c verage dacsion _s ude (fwnd in fmctant Saction 1616(0)(])(B)) :vaina unchangad. Cost-sbariag sagbixem.ats Pach Certlflatl atandarG hea1tA plan with MeLioare e rclled individuals vauld be raguvrea to establis,^h coac-aha:inq regu:renents for I(edicace beneficiaritl LYat are not greater C'.an the cca:-]haring reguiresents established !ar nan-MeLitara indlvcd'aals enrclled :n the plan. anrollaebt Pariade S-29 Srbt_t1e H O '.'it1e 1 eal.n Sac'.Iri:y Act vCUlf a, e 9va11ab1e LG Medicara Sene__c_ar_as enrolled ln Medicararilk or .'aat contracts. Agrauut eitb Otili.etioa and gnalitp CCntrol Paeb Raav oeqaeiaations The exlsting [ Cuir6enC Clvt 'nealtn plans v:tn ctntracts u . Sectian 18'6 ancet ~nce t tracta ntt e ucilizataon and qjality~c coatrnl paar review o:ganizaavon (feana in cairsnc Section 1®;6(i)l')I vould be recatned. Orievence r[ouEUCes aad Appeala The excstcaq p[cvisicns ragardl-.g bceflCiarv gnevancee and appeals (faund ic cur:enc Sact:on vev6(c;;5) ) would be racainad. AEVecae oireetivee STe axlstan4 =equirasent that plans provide Medivre benef:ciar'-es Vitn :nforaatlan regarding advance d]rectlves (faund in curaent Saccion 1696(cl(9)) vould be retained. Special seNirueat [agardibg Certaia lospitale Th. exastl:q [eguiresent ceQardtn4 payeente by a Eealth Pian v1th -- act under section 1071 cn behalf of an enralled indlviLuwl eving serVicas !na hospital deflneQ in 9ectlen 1a66(d)(1)(3) nf theSCcGa1 Security Art Ifcu_nd in civrsnt SeGt:Cn 16]6(c) (t)) vocld be rataineL. Lisit aa Cittqea for •C.rtaia /erlloaa ]ha existing prcvlsion li.iting carteln cltarqes L rendered to Med:care baneficaariss enrolled in tontracts underc5ect_on .976 (found in Nrrant se<tion lt'60)I wuld be ratalnad. 1 atud} ca Certifiad standard lealtG llaas vitb rier raatracts The PrOSpective FeyMnt Aseeleaant CCYiasion and the Fhysician Paysant Raviev Coviwion vould each Ge requitad to study and seke .ntlatiens to Ceugreas on tLa fe11ov1ng: (i) vays in vhich mlloant L a.rtifLed standard hea:N plans vitS MaCica - actt cauld be increued: (2) alternatives to he c- mt paypan.t aetLcdclegy Cbat eight e rage fo organiratlona and benaCciariaa to a rcll i carti•SaE standard health plans v1tS. %edicare rLek contcscts; (]) vhatlar '_he aaaographic cturaeteriatics and Reelth acatus af bena!iciario enrollW in cectitieC atandai'd health pla.v Mith M.aEicare ciak ccntracts dlffers tres orJUr i'fdlviduals entitled -a bc,efita under Medicare ?art A and e zollad in Part e: and (61 vh6tvr tne veluae and Quallty of c- -aedared to Madlcare benefioiarias enrolled in risk contcacts vitA cartifiad standard 1:1 :he rsxisn:'.g ,secvu_ - reCarding enccilaene e ~etls !cund in cc2ralc Bectton :8]6(b) ) vou1 C LL.cnao5etl. crd:r,aced cpan nrC11]e.^.t yeriod would Ga authC~z 1 ad ur,ber Sec[con 6:5 of tne Health security Act, MedL`icatioa of tGa 50/50 kule 'ach certifved standard F1an viS a- under n 1676 auld t required to h enrclled rarLe_antp, :0 per=e~c af cevcn Coes n - lst of Naeicara or M.dicac] an-cllees. The secetary would be pers:2teL ao ecd:fy c- a a tni.:aq~'seaect 'f the plan duonatracee :hat 't provides fora adeGua:e GuGl:ty c -a Lo: benefialarnas Sy LI neetang :be guaLity standard for cerafied standaxd health plana ieposed by the eealrl Securlcy Acv i2) nsecing tAe ! scal r.dnesf :equvicemants under TSt1e %_I_ of cne Fubl•- Heaith Ser+ica Act and aV ` requreaents r cartified standard 1ealNplentor at laast tteclsyeers c -iy precedir.g an applicatien r ver under this a ~il a deocnstrating succeaeful cperatianal exparianCa aa a cert!Liad standard '.uaithplanvitn a MWicace contract ullder5ection 1316 for at :east tl'.a ] years i9ediately Lreced'1ng an applicat:cn for a waiver under Sectlcn 1876: (<) demonstrating ttat cL nu.ber of indSviduals ra11.d in er,e plac is at :aast 50,000 at the t:ae of appacation for a vaiver. The Secretary v u1d be psroitted to accept guality perforaanca standards aassured by private organlzations acceptable tr the Secretary or acganizeuona dasignacad by tbe saeratary, vncludlnq paar crqanixaoan.. review e iating authecity to susperci erSOllaent c' The Sacxetary'a x Medicare CaOat!ciariesin a plan (found i rent Sectioc 1896(q (])) vculd be retained. ^.he Sacratary vould be peraittad to z- nata cre 50/50 reguiroent vhan tde saereury Gas detarainad that certilied standard health plans have estaElished altarnanive quaLCy assucance a¢hanisoa that aflstivaly provide auff!cient yvlity safaguerds. Proapt Pa}aent Req icMnt The existing raquiaesent that health plans provide for proapt paysanc aCclals. (found in c ent SeccLa,. 16]6(g)(6)(A) ) would de retained, aa would the existing provtsion par+iating the seerecary to provide for dira paysant ef clala in eucc uaas (.CUnd ln wr:ent Section iDO6(911a1(al. Ccratieo and Taral.aabiae Of contnactu iffectiva pates aod Tarsa of Centractei Poqrs sad IHtiae ef the tecratar}p aad aeadies Tne existinq pravisians regarding duration anL terninaticn cf ccncraccs: effective eataa and taraa of contractat pavers and autiee of the Sacretary: ana reNdlee (found in cu ant Sectacn 18'/6(i)(1) tllrough (6) voald l» reecned. Additional ruediee ava.Lable under health e1a[t d'_ffeVa f ehat randerec : cthec :.-.di'/auaLe en___]ed to btlletl[f undar M.adicare Part A and enrolled in Part 3. L12ect!v. date .a.nua[y 1, 1996. ]AHT II--P9ovIe:OkB REr.aSSP ':0 PART A sec. 611. Iapatieat Caspital Marvicu Opdats for FPS Laspitals praesat lav Under the FresPectiva Peyaant eystes, v:ere ara different atandardized .... nts for hoapitals located in :arqa urban (aetroFolitan setiatical a- s 9GtIN a population over 1 ailllcn or 170,000 in Nav 2ngland), "cihar u[tan" areas, and rural a rlffarent cpdace factors apply to the urban and rvral standardizad - Meaicare dependent and sole comumcy Empitals are peid based on cte t:gher of the applicable standardited as ' hospi;ai-sFe<:Lic rate updated annually. TYe 'apdete faotora are baqd on the prolecOed :ncreaae in the hospital larkK basket, a indax CPlt aeasuree chan.ges in the pricea of goods and services pcrcSanet by hospitYU. The update Cacbars are as fol:ovt: e €!soal year 1995: foc urben hospitals, tha estiaated percentage inCeale vn V.e hcapital earket basket 9inus 1.5 peccanCage povnta: for rural hospitalb the u unt necessary to eqcelize tGe rural and btLer urban' stan<erdlzed aneunta. Tns update factors for t:.e hospatal-apecific rataa apFlicabla to a scla ca naty eapital o a M.LGCa:.-d.p.nd.nt, eaall rural hospitala[e fet egcal co cne p.rwntaga lzsiusa in tEe hospital sa[kec basket sinYa 1.3 Je:cNCage polntl. c Fiscal yor 1996: Cor aLi hcepitals, Cns paroentaga i_ease m tCe noaplcal aarket baeka aillua L 0 p.rCantage ]Cintsnt o Fiscal year 199T Inn a11 hoapitata, tne peirentaga increase irn tLe hcspatal aar<et beskat sinue .5 percantage poivts. o For fiscal yeara L998 and .Geleafter, the update fGCar for a11 hasPatals is ut equal to rba parcenta9a mc_e.sa ln t.`.e 'a spiaal aa[ket baskat. CO•lttae PreMiafee For flscal years 1997 3reugh 2000, the updata factor for all ~ w hcspitals ;acben, rural, jate covunity, u+d MeLCCare-Gependanq voul lVd •O ]a aet egual to '1n percentlge tncreau in Ule ECapltal aarket basket s_.,us /.0 pe[centage points. 112 Publsneo by THE BUREAU OF NATIONAL AFFAIRS, INC., NJ25h~n9ton. D.C. 20037
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S-30 gae. 112. 4duotina in Vayescta far Capital-Pelataa Costs fev :cpatf.at Lbapital aet'vices. 9reaent t.r • dieare pdya hospitals for inpatian: capntal ef under a ' prcapeccr+e pay:anC systan. During a tar-yaar t- r n sat bagar. fiscal year 1992, hoap-tals are paid based on ablend of Federal rates and hoatlta-_fpecl!iC Capital tataa. no initial Federal rate vaf computed haaed on un>Ldlted 1989 Ccat-neport data, trende2 forward - 199i. 1'ne hcepital-apecif:C rates vere baaec on data fraa the hoapltal'e 1990 ccat repcrc, :1Yndad forYard to :99]. The Faderal and .`.bep•;ai-]pacific ratee are updated annuaily for -cflntuon. The Jaealua 51 x.eonealatLC.^. Act of 199] reduced Lhe ]edara'i capital rate by 7.4 iercant to corract arcars 1n tCe lnflation foLeCdsiS used to Uatablaah t.he Federal Latea. Hospitals exeluded Crot tte prospeetLve paysent a (psych-a-i_c, :e6abcli;aton, oDi1dL41'a, u asd :ang-hen ospatala and p4'cSlatic and rehabilitatice diatinat part 'uptsl are paid a onabls cost basis for tha capical-related caeta of aev-eas. CaSeolttee arael 1 AG;cstaenta would ba aade to L.L Tederal and hospital-apecvfic capital payaent rates, for discharges oeeurring after Septeet¢ 30, 1995 the Secretary would raduce by '/,31 perear.t no unadjusted atandard Pedersi c.pido1 rate _n ef:act aa of LEa date af • ent, and would reduce 'oy 10.4 percent tta unad7usted hCspital apeciCic rate -n a-fact on t^At data. iaysent for oapital-selatad cpats sEall N reduced by 15 percent - ast [eFOrtifg petiods bccurrlry dur_-q ucz a! Lacal yaars 1996 through 2003. E[eect~va 9eta EL[eotiva fdr discbacgas xcuTzinq an or afaer xaba[ 1, 1995. 8ec. all. YdnGt1<as is GSaproportianate aMae Peyaenta Pteaut G under coa prospectlve pays.nt systa., Madicae provides additional pay.enta to hospitals serving a disproporticnata ahare r- lov-:nccse patients. no adJustsent aaaunt is dater.inad uafng Coraulaa based an the dlspropertiGnata anare patient percantaSe. no dlaproportionace ahara patiant peccentage is detined as te sta of the 115 - taqe of tocal pateer.c Lava .^l r a e attirced to ron-Yadimrs- 'igibLt Sed!caid ce no cha pe[centaqe of Ned:care oatianc days chat are attributed LO M.edlra[e haneL'~idaaa L,at are alao eiigible for Suppleoenta! i rety Income her.efitf. Saparate fernulaa ate Fd v'=ed for varioua ca~eSOr_es Cf urban and rvral hcap.tals, tlittee 9roviaLan The Secretary v uid be : red to reduce payments that v uLd otherltse be Gada uncer C.e de]propoRionata ahere ad]ustnant by 25 percent. The SeCretaT a-c `11e Jrospecti/e PayaenC AealSSnent c0iiisa_cn ou11 submit to GYa congreas ry july 1, 1996 a- er,datiorn for a aaGhodologv to ]sa5ure and a r e funds for :aspi?als that racelve a Yedicare disproportlCCate f.d[epayaante a ]a-a Zffectlca foc cischargas occurring on or after Ccicber 1, 1997. aac. 414. taalaad VsYaenC Metbodolagy for Gehab111tation aad lnng- tara care HGapltala Pseeant 6at Hoapitals exctudad Iraa tAa prospectiw payeent ayatea fpeYchiatrcc, rehaDilitatiin, ctlldLen'a, cancer, and 1CIg-[etr ::ospltats and payC.iatr'-, and raEsb!11--ation distinct pat unltsl are aid o - cnablu o t basis auC]ace to a rate of incraaae anit on cparatinS Costa par d'acharge. T1u par Qlaoharga La1, or target anovnt, ts updated nnnua'i1Y. Ce•ilGaa Pr0.fe10n AehabL'itation hospitals and distinot part uhita would be assigned ttlr 199o alld 1991 MadlCace cost repet[irg paricVS a nav baae v Llaits for fubaequent pericLs would be Ceteralned based on per-discharge xedtcnre opareting ccat averaged over no two year percad. The rebaeiMJ vculd: o Mold bara:'.ess tnaw hcapitals and units under thair 1GSits by paying thu t..hir costa plus inCantive payaanta. c Ptwide a floor of 10% of tile tatianal . ra9e for eacb cypa of facility for theu faellitias vitl very Lov 11a'se. o peevide a Caaltnq of 110% of no national avarage for eact typo of facility for new facllitias. - a Secratary would be raquired to cospltte develapsenc of a proapectiva payaant aysta. for rehabiatation hospitals and distinct 116 SPECIALSUPPLEMENT - -_ca, -'.e1'_ding a pa=_enr :1ass_[:catisn s)fGU, e.d present reCC2andatio,:e ta Ccngrea5 'ry octabar /, 1996. Conti Cons for a[C1CalOn of reLabillbacicn hospitala and distinct par: =Ltr ::a\ the pp5 would t %canCed to accaunt :or :he iapac of .crr,d oglas and furv:val :- and : chacqaa in _Sa pracCes of [...a_--.:d;1an ved:Gne cver n peat deoade. Any Lonq :ern Hosp:tal meeting e two year !inanciat losa test and ov ---ve pac¢eci lcad test, would na aangced n average of t'.eir [99C and 1991 M¢LCare < reporting p a v hase Year. .n any subaeguent t'+o-year par1M - ehich botr.t were rat, the SacreGary ':ould b peytpred [ sagn the hospital a v sa year averaging t.he ccsts of tJe two yaa[s. A tospital oaatsJiefinancial lcss test i[ it hes nad t - of Lcseea vhara ! 'a excaed v f - A hcspt a1 aat:a[:.a Se 1- a patient lcadtest _ it haa MeCtcere dispropo-^-ionate share pac.ar.t , cantage of ?teeter t..an 23 p.rcent. e•fecc'+e Cata oc:cber 1, 1994 lee. ai5. Aaratarita oa ]eevgaatioc of 4. lqng-Para eaapitals Preaeae u. (cnq-ten hospitaLa excluded froa the prospective payaent fystu a paid on a raasanacte ccst baaas subjact to a rate of increaaa o, opeaating ccacs per dis<Aarge. Cr~itt.e pta.'eloa Hospitals with en av rage inpatienc length of stay of greater than 35 Cays would n t ba treatsd a long tare hospital unlasa tha haspital held this statue as of the ]ate of tAa er.accaent of no 9aaurity Act. Health _ fer_'va oane cctaber L, 1994 aae. ala. SmaYesliea of PSNSa ta OQdatea to bCtlaa aareica Coats fOr saillad lutsitg Pacilitiea - Pzaeant ca. M.Licare payment for akilled nursing [aciaty ser+!ces :s sade on - nabla cut basis aub]ect Lo a llrit o routine cos;a per dial. :ha 1_sit is Cased an 112 parcant of LAa aun par dies ; utine setvice i 'cats foL freestandi.g facilitlo, n¢e i add-on to t.e llait [cr haspita'-based LaciLitiea .qua1 tc 50 percent of the da[faranca 11] hecveen 111 r of the a-]Q d!ax oft6 for Ireestandanv 'a ^ anb 1a3 t Cent af tne-a r daea rnutlne coats r r hospital-based facilit'-s. CBPA 199i orohibited the - cretaty Croa applying an uptlata factor t the cu: ' sits for akrlled nunsing facility cost reporting p.riob begln-.cng cn fiscal years 1994 and 1995. Coylttae ][oyiaion The Seczecary would 1iz¢t to le0 percent (er no amount naeesary to :he e[[ects ef[ha cBW. '93 fbeeae o updat2s( eupper laiteon payeet: for : annhla routine servlce ~oeta for sa tttvaoes _n staled nuraing !aciiites. . --i~yv rd_25 ^hif provieicn is ef:ecCve on CCLCbar 1, 1995 aac. ai>. Peyaebts for sole CauunitJ loapitals •ith Saaohing Yragr.aa and kulti-aospitel Caapusea. preeeut L no sacratlry is required to deCerslne cR0 epecif3c rates .' hospitala in dlf[erent areas. AaguL-eaanes eiahurse mul_-i-aaepus faci'__ nes based an tta location of the discEarqe appliu only to hospitals not exupt [ c eP5 and to hospitals raisbuned on the basis of OAGS and oct to hospctals caiahuraad on a cost baais. aenullAL-I=vkaiaa no Saeretary would utahlteh separeta rates of paysent for aaet facbiity of a caou:Jty hospital with eutti-hcapical caapuaas when at teaac one of tna hospitals of no sulti-hospital eaaFus is e1:qiC1. to raCelve ineGrect raicul education paysans. ~![eC:1Ve data is CCteba[ 1, '993 for bospltals t.hat a rged after oeteber 1, 1947. 6ee. als. Yediaare tepead.ne, W11 sural laspltala naeant ur To quality for Medicara Crvpen hCapital rust :A located in !ra and gave had at least 60 percant b attributed to N.dlraca patlents du beginning ducing fiscal year 1947. under the ea.e vlea as sola c perloLa bagtrvting on or after Apri Publisned by THE BUREAU OF NATIONAL AFFAIRS, INC., washington, D.C. 20037 d.nt Moapital (MOM) status, a l aree, have no aora than 1+0 tedf, le ~ its inpatLent days or dischargu ring []a cosa repariirp parisd ~ 4141 a eligible for payfenc nicy hospitals for cost reporting l 1, 199U and ending befora April 1, 119 eeV^ ~ I ^ s'^.l`
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SPECIAL SUPPLEUiENT 1991. For dlacnargae e -ring d-n9 ary c rapor:r.c pecaoG oaSir.ni-.g an o aftar April1, 1991, tnccuSh ~a-tamker 10, :95a, and Vpfi would c ve 50 percent c the difterenceSwveen their payment untler tte e iating n'L r+lo and the payment _egularly prov!iaG under iha praspactive pa;nant aystw. _¢wan S-31 ]le :2e Cmona4atccn pCCgCen vculd 'a made a Feroacenc t o.t af the lialted 'a tea Hospital Program, and all Stataa vocld b~e<n permatted tc Partacipate. C:¢ca for desigr.acicn as a MAY would para:iel c.^.caa for an RPCY. except for v:t follov¢r.g: Coui<tae Proviaiaa IA; . The : cat_an criterla v u:d be thet a MAt is located i nty 'vnth f t6ar. 5 r avdants par aGLa[e a - t a in A LaChn:cal co:rCCtiOn :- detersinad Ey teinq e/6 mcnth c aeeunt Ceftn.tlons needed to make extarced to Septemuer 30, 199a. ify :he[ peyment a u-.<a repcrcanS : ricd.noP.:e tRe calculaticns :or MiHe a target vculd e 'al (c) :ural area that ia located more than a]5 a-lecri5 nu.uti .rive :raa a hospttal, :IAP c[ •SPCH. A:AF would not _ava to be an existing 'otp~tal. A:AP v 1G r ' l M^ES would receive 5o percent of <he difference barveen Thcr peymnt under :hs .:u -ent MG'. rv xnd C:e payne regularly pravided c f01 ou no_ ..ave re part <f a rura < health nat~ork. A:.V voc'_d nct hava a bad alaa liaita:lon. enber :0, 1998. under the preapacr.ivs payment systes thraugh Sep (£; :Se Cal c- of a tural Ce 1t1 c11nlc that a MA: ld beqinnin4 vSCS diec2arget aactv_ng rn or after Cctbher I, 199a eG •ac. s19. provisions lelated tc the lural Sulth Transition psant Progiv Tr would be authorized to be apprcpriatad from the P.Lera'. 5cspptallnauraace Jrtst Tund for the puipese of vk'_og grants to States under UN L.a4ted Sarvica Hcapital Prograa: ;A/ 915,0o0,o0a for Statat rlfat have establisbad a PPClt program fcr eact of fiscal yawa 1991 through 1595. (9) s29,00o,O0C far all States who gullfy for grants _nder G`.a limited Se[vlce :tosp=tal Prognaa fer eact of fiscal yeara 1996 through 1999. e Covittee i teMa [lfat the rural osrgtncy sedical s a pregres .... d alsa inluda CrauY eara a cdsyanent r vevgency cars. The COnittaaalso intends that StaCes aay 'vs grants m(und n-Fraflt State duigcatad agenciat ic nelp fovulwe plans, eol.n.nc raral bealtL netvorka, and recaasend iasignatvn of taclliti.a aa aDCis or IIAts. A[vra: atargen<y aedlcal senices Lrtgraa would be estaDllaneG to iaprava . ergency madical serviw (p5S) ope[ating in rural and __cncaa_ ccan.nitiat. Prwwt La. OBPA 8T Gaatitucad a progra. ol granta to assist rural hoap:tals vith f r that 100 beds in developing and iaple.enting prcjects to sedi=y t.e type and eztent al servieea tbey provide. aanta uy be ufed to develop huith aystua with other prcvitlers, diversify ' recruit physicians, daprov e vnageaent eysteet , and prevlde natrs[ien and e vltaien v a telwczaunica[ions to physiesant i panpcaer shortage areas. The prograa i u...ctira6 at $15 si:lion par a year for fiscal years 199o through 1992. Caaictee ntcvfaloe AFp=eprlatians for the rural health transition grant prcgrez ald ta autharired R$]0 allllan per year for fiscai years 1991 through 1997. 3@al priYry care hasptals would he eLgib'u for grants. 2ffactive C.ta Effective vpan the data of enactaena. 9ac. 420. Cdlited /anica Eatpital Pmgtau /tsseet "Cndw cha Ssasntial Access ceuu:.ity :SOepicels/AUra': Prisary Care 119 Hcspical 1?-1CM/RCHI pregram, u sta[es Mv he desi5na:ed bl' rne Secretary : rceive grants to davelop rural .a .`alth ne_aorsa cenals;ing afLACHa and RPple. The M.eCical Aasistance FacilLty (MAF~ psogram currently operates a daacnstatlon projaat in Man:ar.a th.at a emGts small mra'i hospitals Ircn c - 1:censcre lavs, expends ina iole of eid-lr+el _ < t'oners nd am_r-vea Madicare p, ent. ^.are is no provlsicn for Llni-ed e e haspiaal programs or frr rural eaer3er.cy aedlcal ser+icas prOg ams. COViteaa Peavislea She sec[etary would ba required : estabiiaG a talted ae hospical pregras to tcordinats runal hospital payaentaeqodoagas and deldvery svat.a, including MAP, PI.CH/PPC:.. and r emergency erv_us. T'he goals of he Liciced sarrwa HOapita'i Praqras are to: a Maka eveilable alternative hospital aetels to ssall rurai c[ solatad rurel c nitin i which factlities ara ral_'evad of Cfe burden of aalec[ad regulatory rePairanenta 'oy llaiting tha accpe of -npeasnc acute feNicw alfexed. Alter Madicare reinCCrsernt policy cc support tps finsncial viability of altarnattve fac¢1Ltiw by SiaitLng 'lle financial r1sK lacad by such asall hospitals through the usa of r.aacca2la cas[ niaCUSaevnt. c Pro.ate linkages between f cilitias dasignated by tAa State and broader progrus auppcrting uhe daelopant of and transition to integtated provider netvorka in rural areaa. ^.:u .Nral Pe:aary care Nospit.l (RPOI) cosponsnt of the Lvited servace Moapital praqro vould he axtended to all States. 1Ta existing criteria for designation ot a APCR : i cspc t5sa requirsaent that 5P'v'ls nct Inve e Lanqtrh o ataya eedtnq '1 hours would be changed to allow an average bength a auycnot a<eedin9 96 hcura, and tte , ftiraent that RPCis nOt hevs . aa than 6inFatient Lads would be cEUq.L ta allor 15 inpatient Geds Lc[ prcviding acuca inpatient care (imludlnq sving beds) . ;^.fe requlrssYlt that hospital. be dwignnted as LaCY.s would be _ antlnued. MPt3a, hdvever. vould ts re4`irad an as[anlish LinkaSec vith other providers tbraugh rural oealtR networks. te requiresr..t that the Secretary develop a prospective pay.ent syatu far CPt:.s would be eepeeled. Inataad. MC6a would be raiabuHad using vhe !GI eist:ursesnt aeLhodolCgy, incl'idlny roats of <or.tracCs far s with other :rovidnrs 1• Nrel health network. Hcspitale av ent1~ cer[ifitd as y.aIXU would Ea peraitted to retain Sole coYunlcy NOspital aa.tus. 1:0 ELLtZ11MIEffectl~a bate Effctive for discharges On Or after Octcber 1, 1994. eae. 41. Tarainatioe of Indirwt SSSdieal aduoacion Papeat. P2went ]/ -ndireCt medical educatiCn payMnCe are aade to hospitals under 121 the M.d:care Proscectlv[ ?, er.a Sya=ea. Copittee Pm v10e Y.dicare indirect tadical education payzents tv e directly to ]ee?itale v c1G L nated. The a unt of payas s that v uld have been maCe ~r lndl.~t] a.dica'i educaCn veul] r nefarC to he Graduate M.eGSCa1 £Gucation and Acedeelc MeaLtA can-s[s .1a- Fund. plfect•::e Oate Sn-.cary 1, 1956. 6ac. 122. subaeutt cars etudT ptaun• ' Na provision. cOSaittsa Provision Tha Secveury vculd canduct a study by OCtcber 1. 1996 to: (A) Define the lavel and cyp. <f ure that should c[nstitute subaasta cara. (B) Caterfine the apGropriatenass of furnishing subacYte c in different sattinqa by evaluating the q.:ality a1 ure and paeitnt outcoles. (C~ Cateraine the cost end af5activaneat o[ providing n.:uic_te care to individuala elig:bla for the MiGicars pro9raa. (0) oetttaine cRe axtenc to vhich hospital 6to prospective (i) wou y a - have to a.at1 apprcprra<e prooeduns for review of ut11c[aai<n of c.inic .atvicas. pay.ent [ataa are appropriate : r the lass restrictive Lnstltunional ut[ings that provide auLacute care. Study t.Re rLLetienshipt betveen institutiona and t[ecr eaysent aetIIodologiss in orGer :o devslcp vays =r• Vhnch to iariaive LSe eontlnuaty al ceve fer u ch pat:entePIaoee in vbicb subaNta cire 1s furnithW. iliwClve ut. ' Lryan wcta.nt. PalS Ill pNPItIOMa liLa'Rn TO P1!'f 1 sea. Ot. Updatee ler mysiciws' eaa+ices Present Lae lV L V .asa 122 8W ?ublisheG by THE 6UREAU OF NATIONAL AFFAIRS• INC., Washington, D.C. 20037 t1Z
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S-32 Favm 'e uacer ] . V , 'ic 8 aLeUpdateL each yaaC 0v aniC3[ ae on indar9rioSVeo1964. pbysimu: '-e.s v uPdaced annually by Me neEicare Ecenelic :edex (MLI). Ttel¢_aeaeu[as in[letlon in Me c- cf pmvlcinq pnyucien NLaea. a 1924 rtlrnugh 1991, Me !C] cpdata vaa cf]er, set :, econclliatiav laqlulatlon. The !CI :a Nrrently eatinaced t0 be1,3 pcmt 'av 1945. 9eginnin(J in L993, }Gedicare phvaicl6n f ea are updated a Ua11y by a default farauln, cnlua Congr.as acti. Tis updata is baned on - e Lhinga: (1) Me MZ:; and ;31 a cospa° sen o( actual Pnyavcvan spanding in a e feriod comCaradto an erpatdctcra goal 'rsavn as ta 9edece[e Vclcce Per:orIDanGa a' acdard :MVPS). SaFacau 5cals ara satiGr surgical, pr31a1^f ta-e, ar.d ee^/lcea (excll:ding primry cara). If the MVP9 vaa erceeded '-n Me baas pariod. Me updete ar rvicas v12ni n e`.e categery 1. egual to Me :¢3 reduced by Me Percantage Ey vE1cL Me carg¢ was eYCeeded, If expenditura. .... leas LEan the MVPS, ehe updete Ls Me IQ1 Snereased by Ue ;arcaye DY vhi ch expend !crea in Me cateqary vers belcr :Ga tar9ec TEe CanlEus Budget Rsconcilia.tlan ~, of 1990 (0lpA 93) reduced s default vpGatea for 199t by 2.6 Parcancage Polnts for sur;iul arvlcea, and 2.6 prcentage points f all :char services (includinp ansschasLa farvlcea) , except far priaaay u . vbich e ved C.1e fu11 default apdate. 3a 1994 updates ate 10.o pe .Mtage Po]nta f sLLrgi41 a:Vlcea, 5.3 percYltage palnta fOr nan-1uLgical aerv?ce (ineiudin4 anaaU.Ka aarvieu), ezeapt fer prlaary, ure services, vhicE ceuived a 9,9 percent update. eOPA 9] alsa ceduced G.e defaYlt updstee : -995. The defaul: updats ls reduced by l.l percentage poinu tor surgical 3- eve a11 other aervicu (includirg anest^aala nrvioes)~ axcapt primry ure aerr_ces, vhLa: recaive Me full cpEata. 9nder Me default fariHla, Me eeeaetary of FIIS Eaa estiaated tf.ac Me 1995 updatsa rill ba as foiLas: 11.] percentage pocnts fer surgieal sarvlcan 6.7 pereenuge pointa for non-sueqieal a (axc:vding prla.ry cue services)p aM 9.4 pefcentage points for priar± Care servicea. Cweitba areNSioa Tha covittee prwialan vnuld reduce Me 1995 default cpCa:e by 4.0 paCCaR.age Painta for s]rgical aarvices. 4.o perCentaqa ptin!a for nan-su[gical wovicas, nnd 1.o parcentaqs paint Ccr pnaary care fervlcea. Iffectiv Date Opon enstanb. 123 9ee. 632. aVLStitutioa af Real GCOaa Ca.eatle prbduct ;GJ]I :ar :etma abd IDCabaity Sa the Volusa Yarfcraerce etapdard P2eaaat ia The OeniEm 9cdget Aseene_liatian Aet af 199g (C6p.A 99, ' estabiiited a sysm z of Medicare velue perGartence s andarts (!9:ps) vhitE t a sad t calo'vlaee tne annual upda!a L nvareicr, faccor;for physiclan and cenain ot'.Lr Pe^ s oaCar + uary 1, 1993. :nder this svatee, ecngrtla veuld enac] a i eFaciflc i vel of inerease L.^n e xpena :cr.s for a aubsequent -alendar ... :n c. ~e absence of Congresa:anal ac nCte rats of ineraasev axpenditu[es is dKersined by t f -vuleiati law. The MVPS :a baaed c atipate a : ('-) a percenGqe lncraiaa ia Medlcacc f ;(Sn Me incraaaa in Me nurberthaer of Part 9 enrolleea, a cludir.c ; elleei i'. FAe isk-eont'aeta; ;?) an eatnm!e of t.`.a histerieal e of r- _n Lhe voluia and tacanstty of a s dellveced: anLa(4) any~U+arge !n payamc due r Leglslation or regulation. This reduce! Ey a pCfervan dard faet vhlell e qu ala ].5 percentaaa pav]ts in 1994 and4.0s aapercentage points in each suGsaquen.t year. Under current law, Coav is a lover 1Lit on Me default updates ce tha physician fee schedule. tpe e ual update to V : schedule can be no lover Man Me MLL ainus 3.0 percentage poi:us a calendar 193a and ainua 5.0 potcentage pointa in 1995 and succeeding yeare. Cosit•ee fineisiee .y 'P..e comittu provlslaa vould speciC. @at the historical rate of in L.^.a vclrs. a+td incenslty ef s rvicaa delLvered v cLd be „ deleted 1-1:a [.!e MVPS. BubattEUted 11 itt p3aee '+ u:d be er< a reqe ~ per caP==s grovt.^, ln csal (lnflation-ad7usted) cDP f r Me 5 year- , peGCM begi:ming with rLe prsvioua fiacal year (19941. The perfornenca atandard factor veuld be repulad. In additcan, Me lower liait cn [na default update vauld be repealed. Iffeeeiv Data The pceviiian substituting real ODp for voluae and intensity end the provision repealing Me perforaancs atandard factor caka e1_'.cc vith Caapect co volune parfarsanca sGndir~i{ eat+bLVahed beginning -M Py 95. Me provialan regarding Lhe rePi!al cf tEa ss reduction to Me apdnte takia effeet for v ices furniatad an c- a_.ar Sanwry 1, 1999• lea. '33. Pajnseats for PEyelCiea services ralatiag to lapetiaet atays is csrtaia laspltais Pfeeaat Sa '1h6e generally a adjustaenca to aw `s payable a phyaicians when covered sarvicss ere provlded toinpaELncs c. 124 126 PubliShetl by THE BUREAU OF NATIONAL AFFAIRS, INC.. Wash:ngton, C.C. 20037 SPECIAL SUPPLEMENT besp..ala. Eacn physica.-. 3_CxLte c'abs Gar vera -e- ;end.ec, and t:.e amaunta patd are de4plned Lt actcrEance vtlh [ye Heetcare Pn,ve:ccan 1n sGadule. SG onlyext.pticna to L as 9enerai rule are vhac opyaictsna prnvlde aeraces as panof a a rgical t. or vnen ^.ay SUNrvLSa eervitea Prrvided by cert-fiad -.g~stered eurse ane9:".ec~ati. Comittse 9aavisien Che secretary vculd be derecteL ce develop fa a11 hcipatals pa_d under !t.e payaena systaa, annual, ^.oapital-apeti(tc c 51% ad;uatid r lat:ve rLlua un: :a ur adaaeslon and Ce4niae vhCL~er espital a- a Me allcvarie averaqe par aLacas:en [LLactve valua units applLCaole to Me !edical staff far Me year. C Me 5ecretar,• deteOlCes that Me raCa for [Ae hcapatLl eYCaeds pye el:avatia eraga par a ven, Me secretary would reduce paynar.!a for phys]clan a s to noapital Lnpatients. 3v October 1 of eh year. Me Secretary vo_-_ natpfy each tospvtel of its speciLc ratat~ve values. 'n the case of urban hoaplulb Me allevab:e averaga par atlaisaver. ralat5ve value v. ,vould N equal to 125 percanc :o atlalastans in 1996 arG ;399 and 120 percant -yarea[te[ of Vuvedisn 1996 hespital-apeeLfie relat:ve value unlts par eLVlss¢en for a11 hospiul tedltal etafZS. In Me case e rural htspitala far e.eh year begietrt_ng vitE 1992, the ailcven:a per ndalasicn z.l.c_v. valu. unvta would `-a eqaa'. t U4 percent ef o1e sedian 1996 ILOapital-ap.c:Gie relatlve value unats per edaisccn far all :fospltai sedical scaffa. Re hospital specifie prajectad relative value unlta far a hoapitaL vould be aqnel to Me aWraqe relative valua unita per ada/asion 'nr physician se[vicaa furelahed to inpatvents during 1996 by Me Ecapi:al's atliul aaff and billad to Medicare, adju.ted for :eeiana in elsa aix, the disprope[tioCaea sbare tdlua-sant, !Ld indirecc beaching adjuataant, if appliuble. The p[o'ectad exusa reiative value units far a year would ma Me nva2er oL peresntags pointa (u dsterecneE ty the Secretary) by vEich a meEical staff's hoapital apemfie Par edaiaaion relacive value uvuts ercead ths allwnbla averaga per adavaa_cn belative vaYae uniti. The m vnt of paymnta atherviaa due would Ue reduced by 15 percenc f uch wcrics furvaEad r r hospltals vhcse relacive value u,-,-cs pe aGaiaaven exued Me alvovable avsrage per adavasven. NOt lc C`.an ec4eber 1 each year, :ngi:ulir.g in 1399, the Bacreta t v u:d ba required to deterav each tospical'n actual rage yer adai.aion Celative v unib c ing claina ' subaitted not later tban 90 days af]er Me lasc day of tb previcus 115 Year adj'.Lated fer caae m anc tne ^-tsprcpc-:enate anare and :nd rect cmcning etllua-s.ncs. - a in vhich a Scap_taLa actual a raqe par admisavcn relai ve value units reduced a also below the a!lcvable rage :ate, ~,s sscVerary vou1G [elabcrse Ue .^.eapLtal medical taff's fiduclary agent Me amouct ccat uaa vlth.vvd Flus a veE intereat. -n Cases t:'LerC the aCtlal e eraqe t_at:Ve v naa Yere tlan 15 perc<ntaSe pcinta above che a:lcvable a rage~ ~-ye Becretary vaold [aveburse the hoapical aectcal scaf-^3 fiduc:ar,+ agent an aaaurt eqaal to che dif_•erecce becvee[ 15 percentage p ncs and ote aetcal'r of percentage points by uhiah the a aff e eeC.d the ' vableeverege Fer adm=ssion relacive value units p1c3 accrued lnterest. Fcapital medical axacutive com_ttees would be given a -year advance nctace of prejecceG excessnve nlatLve values and would duignate a fiducaary agent to receive and disburse aaeunte vithneld by tne Secratary tAat are aubwT=ently reauznad. ALternatively, Me ' vetarf could diacribute aucn m xnts directly to physicians vho treated patients in the hospital o a prc-rata Gasia based cn 4u propoctlcn of aervicas provvded by eech physician during the year. iffectiv D\be C1feCLVe Cor sarvlces Iu^nahed cn er after SantLLep 1, 1998. eac. 434. Caaa4ea ia Uaderservad saaua Pqauts preseat Lv Physiciana prwiding asrvlces tn health profesatcnnl ahcr.age areaa. as definAd _n Sec. 331 of Me publlc :']aalth 9erV~cea Act, currentl? : cevva a bonua a5ua1 to 10 percant of Me Madloa[e pq'aant aaou.-t 1 r eacE physicLan aervice dallvertl• `.mit•ea Provialoa TDS c uittee provision would i e Me bcr.ua paya.nt for pri.ar! ca e servicaa, as defined in~5ec.s1®a1(L) (a) of Me secial Security Act, to 20 parcent far each physiclan a rvlca. 1TS bonus payasnt fc[ oohea phyeician.aerviru (ercluding privry cara) v uld be sat at 10 percent tur urvlco de1'vared in health pro_esaional shorage acus locatsd In rural areas. the 10 peresnt bonus paywnt p[ofasalooal n-privry cara aervices del:vered in health eEe~.ge areas locatad in urban areaa would Ea elvalmted. iDfeccive Date Upon ehaataer.t. /ea. 935. Pa.eloPSent end :apleeeLtatloa of Raaearee-aaaad
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SPECIAL SUPPLEMENT MetlCdOlogy for Practice EIpeetee Prna[t Laa . iroa 1992 to 1996. Yedicare la phasin4 - a fea acn.GC:e v1C.`. :ate ctaFenents for phya:cian Vor k, prectlce expense and aaipractlce expen . Pract:ce erpey r ::cludee of!nee rants, enplcyees va5es, pcysvcian coapanaac!bn, and phya[ctat frane. bena'Lts. ?aynant for the phyalaian work caapcnent of the !ea ~edule a oasetl e - rcbbuad relativa v aCa:e fd6R'v51, buc Farnent inr ara<tac. xpenae and ralCraccice ., .ae are aasat eo bistar:ca! _nargu. roaeiov . secrarary vou1G ba reguireE to Gevalep a aecYodclogy for lnple .ntang :n 1557 a ruourca-based ayeeu for deveracbinq practice axpanse r Latlva Valn LTita for each physlcian sarv:ce. C] develop=nt tne vatnoCo!oq/, tte sacretaty Yould cor.s:der iha ataff, ecryipnant anG suppliea '-aed in c.a praviaion bf v ious aedmal and aurglCa' a.rvlcaa in vGrloue NCtinga. Yhe SeOre[ary vould t reCaareG r repcrt to Crngreaa on tbe aathcdclcgy ty ~ -v 1. 199e. no existing payaen[ eetnodcloqy vould be cepeale3 when tte~nw Fayreac aat]odology takas effec< in 199T. [f!ective Cata Jpcn V.actaent. .ae. {]s. Oesevetratiav ProJeeta fee sediwra state-aaaed perieraaace a[uaard latss of Iaerease Prasaa! La Med:rare C.ILrenCly Nta Veluae partoraanGJ aCandard for Chree caeegnrva of physie:Fn s SviCas: (1) sur`i urncu: Ill ' scrgvcal a c!lding priary ure urvicaslf ac.d 'ol p.'aary uea perfO raa nce aCandarda a- ralculaced on a netionalrbaaL.Cet2ere ars nb Suca-based voiua. per[casanCe scandards. C90RLttae D _aien no sncretary would beraquiral to utablisE Guonstratlon psolecta i not sb e lhan three 9Cates unLer uhicl. a cace alacts stata-based volmt peatoLaand standard rato cf i e to Ynst t4te for nationol perforsance atandaLG ratesnofeLncreava. Sacretaq' would be required to utablish Eudget-veuoralaty reguareaenta for [h. descnscration pro)acts. aaC. {3T. E1laiaat1011 a1 10[fUltrprl.ea OPaepapevt fOr Cartala [ospital Outpe[ieat Oa[siass 32'I no aggregaca aLOCnt o v e payctnts sade r tospital autGatiant a (oe ruralprrvery c e cspvtal s rvicesl :urnlshed : annactian vLth eabu!atnryaurgary, redialoqy and ciagnostic tests aCUa1s tna L sar o[e (11 ena : af a Eosp:tal' -.able covts or :ts Na r arSes. net of deductible Or c- Zance a u-.ts,and (2labl~dad a - expr:sed of a cost and a ctarce portlon. cost F on of the blendia based :he :ever of a hGapltal'a costs or chargefhet Cf benef!Ciary c - aharing. TLe eost portion cf nhe 'rland es e2 pereent for avbuletory surgery and radaology s_ iaas and 50 parcant fo[ tllagtasCc te - . 3a cnet6v pcrt:bn of e bland Ls 58 percent o CYa aabulsto_y sCrgary center (ASC)payvant rates nec cf Eenefi-iary ca-ineurance, -G 58 partent of L1e pnYSiclan fee schedule an unt !- rediolegy nor af w-tnaurence, and So percent of the ptLysic:an fee sehedule for diagnestic tests net of to-inaurance. u ra a A hospital say bill a benaCCiary ! -suraace equal to c e sarv:ce. Movaver, tbe twenty pacoer.t cf its ctarSe for an oucpatient-•sc s b1erA.d am ur ts are calcalatad after applScat!on af benaficiary cost- shar!ng (e.g.lcver cf tospital ccat or charges net of cost-sharing and 80 percent of tba ASC rate). This Snconsiatency : apFlthration a ost-.:,aring = sults : n anosaiy vhereby - cnt a beneficiary pays i o-insurance does not result in a dcllar for dollar dacreasa in M.dicare prt9=as 6ayaent. `C Proas'an _ uting ttu current blend p.rcentages, the payrnt foraula would be obanged tc Setaraine the blended payvnt limit Grior to C1e application of beceficcnry tcat-shar!..q P[cvisiens. M.dicare's pa .ent aaGunt would be detera:leL based on -_Le lesser bf !1) .be : of GYe tosp!tal's reasonabla ccsta ar c¢rtoaary cdarqes, or (2) <b b3ectleG payvmt 1ia16. Yetlica[a would thm pay the lesler of f~l s0 p.rcent ct cYa lrvest aaount, or (2) the lwe.t asount l.ss the t.nvteiasy ca.e-ah.[ing a.ounts. sffectiva wte 6Lfeciva for sarvices furnished~duvinq portions of aost- reioRin9 perlods Occuriing on or a_'ter :anuary l, 1995. Eec. Os. }ayee9te to [ye avd to lpe apd [ar apecie3GT [capltale rzeseet u. MOSpitals deaigeated as aye, or as eye anL ear ]oapitals [ecetve a blended payaant rate for aabulatory surqery for which 75 percent is esed on tl:e hosp-tal's costs and 35 percent is based on the rata paid to f-eestanding ASCS. :n general, tlLe b:enda3 paysent rate t hoapitala for autpatiant su ode[f is based al peeCant on cosca and 58 12a S-33 _ .- n cYa A5; r t . ePFI a . :.Fe~:nS - beg:nningan r a-[arC ..nan<tcoernan i, .'1998, a o befare January :, 1995_ •Qs Cealttee Provisiet T.ba cfe of '!/15 oland !o[ eye hatela, and eye e ar hospi[a1s uocld be .xtsndetl to q-aiCas piovltled unt11 September 30, 159'. txf.rtir. oata ja_cery 1, :995. Sae {D. i.positiov of Ca-IVaLrance for Labaratarl asAvicu P!e..ar_'a Medicare han.!icia[iu ara teyylZed Co aaks co-lnsuraOCe payments egual to v0 paraent of Medccare'e approved G+yaent eaount • certaln since 1sea, pa~~nc Of ao ansurance has not be.noreguarad for cllnical laboratory . -cas. <a~iCtu Dre.lMee no c vittee pLw:aitn va41d requira X.kl baneficiariee to pay c- eGUal C 20 percent of [be appraved Madimre paysent aac.lnt !b_ucLniul :aDcrnccry aerv-us. [f[ective Oate ]anuary 1, 199Z see. {a0. lpplleaiiaa of Coqacltlve leguiaitioa )reoess far )art a lt. evd lervices xeaeec W. Medicara paya for ooaputae akial tawgraphy (CS; soar; and vagnetia r vaa4lnq (M0.I) testI on t]e :~ f ths M.dlcare cnysic!an fw schaduls. 39a fee sohadule ias tw-parta: a technical oaPCnent for per!oving the test and a Prcfessicnal coaponent for intarpretirq eLa t.at. Eitter part of Sa tart ur. Y billed aeparately. ?ayaants for oxyyen and oxy4en equ!Faent ars uda an tYe basia 0- a!ae schedule !or duaGla sad!cal aqulpsent. CoSXittee sxo.ieios no c :ttee prbvisicn would direct the Secretary to establisli ccapeclcive acqdiaiG'on areas for proctl[Oent of -= aGans, MR3 testa 1]P and crf9en and oxygec .GUiP~enc. the Secretary vould be penvtted to utabllsh different competitive acquls!Eicn a s!ar dlfCennt :s and a tc no -cmpetitive ac,lrs!ticn a ,o d be r red ]c be~ or be Vithin, m¢[Dpcll:an sCatlstlGal e (ctMSASI. Ray v u'Ld be cEOSen by G`.e Sacretary based on V.e a L lrty and acc.asvov!ity of scppliers and the urtbaGle favinga to bereu-seC fron the uaa of cevp.t'ave biddinq. Tba Secretary would be requrred to condect a corpet:tion vac^q Ladivttluala and entitias acpply:cg it.mantl aecv:c.a r c-' acquisv[!ca a e a Secretary would onlyabeep.raxcted ard-e -i f CAaindt al or er.tity seats 4=ality atandards speca ed by the Secretary. A coapet:tive acqu!siLor contract would specify: (ll the cJlar.vity of ae.a and services to be pravvded: and (2) othar [eras and bndialc.-s apacified by -yYe 5a¢etary. 1f cevpe[1t!va acNisltion !ailad to c sult ! t lust a[a percent reductlon in tha paysant ea unt fo ~thesa seivices, ora Sacratary vocld be tagu:red to sake reducticns in paysent levels for _.ase services to aehiwe e 10 percent reductibc. Effeetive oate Santary 1, 1995. see. 64, 1>p110atiav of Caepetltiea lcgpisition lpoaass for Ciiaicai ~ Laaoratory ser>ices Q }reaeat L. ~n M.dicare paysants for cliniul diagnostic labavtbry tears a ~; aade on tYe baels of tocal fees Ln payMnt areas dearmated by t}.e 1[ Secretary. Each fae echsdvle payasct is aavtad by a naticnal cap. pt~ The cap is aat at 84 pe[cant of Gs aadim o a:1 fee tchedul ~s're payfants for a partiCular rest in 1994, 80 percent in 1995. and 76 I~ percent in 1996 ani -derufter ~eV. [~ Cdsalttu YrbHaibv 3e cmittes provlsion vould direct t!e Secretary to ~~ establish Coaqtltive aeqaisition a[eas for procurasanc of c1in1Ca1 O daagncst.lC laboratory teacs. no Seeratary rould be peraittad to eat.bl.ah different ~ ccapatacive acguisition area' for different :teaa and' servnces. no oapev:tive acqaialtien aros would be raPlired to be, or be v:th:n, ~ ae<ropoiitan statistlcal areaa (MSAaI. thay would be CSOSer. by the Secretary buad cn tlLs availabi!1[y and accessibllity of suppliers and 3]a Publisheb by THE BUREAU OF NATIONAL AFFAIRS, INC., Wasnington, D.C. 20037
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S-34 tLe : eao ! aa.+nqs to -a ree.+reG fr-n ete ~se oe cap.c_._e b _ ^,he Sacret¢ n Ycu_d !a reymlrad to ccnduct a cnFet_:ion aacn4 inG_`ir]uals a.M titlo aVGplyir.g ' and a c ach -ampataeiva aequsition araa. no sec_.tary vouldenly te peesittad to award a-cnt:ecc 1] cne lndividtal o, en icy ..... 4u ality star.dar]s speClLia? by the Sacratary. A toaGati]1ve acgu+sitlon concract veuld e c_:(1) :ne guancro-l of it ms and a ca to be Frov ~ec: end (., echer :ers an.d cantliaons spc:nad by rr.e9acrecary. " cmpenit'_ve acGUtelcnon failed to r auln in at least a 10 pe^enc r.duct:On in the paynent aacunt ; c 1a2orarcry a - cne Secretary v c11 `_ regutcsd to aaka ndac-.cna v , aat-:avela for 0.1aaa aar•LCaa to achteva a 10 partant raduct:an, p .ffactiv. Cata .anuatv 1. 1995. , aac. HG. @pud.d Ca.erage far 9Glsiciau k..iatacts and qupae Praetitiovars Qj1faLC Lv Pirect Pay.ent aay be Yda for cartaln a Svices : ianetl by . pract¢tianars. clinica: nura. speciallsta, and phyaicians• aaai/tanta. '9here peyNnt /a Yde, it auat te lada On ar slqfuent- elatad bania, aubjact to Paa: !<Oanauran<e aM daductlDle :agu:reaan-a. Paysent sny not ba uda dinctyy to Physlclans' asslstants: it t be saCa to tLeir uylcy.rs. Wrs. prarcitloneLS aOd clinlcal tu:ae spaclaltab aay bill E.diGra Part 9 directly for .arvicu p-oraed tn a rUral ar.a, lncl•.ainq hcspica'a. 3atabursaaent Y vitn taa satting in vDicII s t pee[oraatl. Pcr aervSCas prcvidtl by physician vaiatanta ng a ietants at sLLigary, ni.bLLravant is llsitad to the leaaee of G1~ actual carga or 6s perCent of tha ascunt that would ba Pald to physlcian varving a ssisaant at aurqary. [or sarricas randared by physician aasietants ln a beepital, cth¢ LY a istanta at aurgery, and fJL N[Viua randered by na Praa iOnera and clinical s ap.cealt.ets tn Eospitals i , payaeav Le liaited to the Laser of no actual c.4arga a V9 pa rcen• af the ascunt pard to pnysicians for parfcninq that a. all ather c [.d yCingL pay.ant ]or e rvlcea .ryndereG by physiclana' a scanta, a practltianars and clinical nuria apaci4-sCS ia 13a1ted tc :Sa laaaer of ths attual cMrga o[ /9 paccent of t;a uount rLt would t. pail to pnysSC:aOS fnr perferaing LGat arvica, 1]: <aYi:Cae Pravlaica RaincuSaasar.t fer saivi s provided by Phyaleians' auiscacts and nurse practatienars in outpatient aeccicgs Ycv1L b ac tha laaaar f t?a aetunl cha ye cr a5 parCent cl L]. asoVl¢ paid taphy/iciana r parfOral]g that saR'ice. Railburseaent for n rsa prectlticCera who practice i cal aattin9a, but vhO raf¢ an tha pacients c r a c aurqery and scnuGVentlya ' a ant at urgaryln thatr would be raiaaurfe' at an. 1 - of t•e 'a cal charge Or 95 percent Of tha aeaun[t pald :o physiciansfor aasle:ng at . surgary. . Sffactivs cata January 1, 199T. 6et. /a1. Part 6 9tal'1R Praue[ uv Prca :901 tf.[cugh 1990, 'lle Part 3 proiul a'as aet : r$6 pareant of p.rt e spending for agsd b.nafiClariea. no e.ralnirq f! Paraent vas funded frca Yeneral revanuea. no ttnitu. Bud9at 3acancilvaticn Act Of 1990 sstabilab 1 CIa wnthly Part 9 preaitu in statute Ulreu9h 1995 to eo r 25 peSCent of Part 9 spendL g ea ]O11bva: 519.90 ]n 1991, 531.ao in 1992, 5I6.6o Ln i9A), Sa1.30 1 1991 and Sa6.1o in 1995. no OsniDUS 3ueg.t Recanc:llaC:on Aee af 1999 ek[andad G`.e $5 Feresn[ SatG a Pr.aiuW pOliay tf_ou41 1999, be t did not apeci[y actual pnCUY in laV. ry.i[tee Pteaaies no ccrnittea provision vculd pervnently aet Pa.[ ! pruluaa ac S5 parcant of PerC 9 spendlnq for aged bahaficlarias. lffebtira Pate Opcb enactaanC. !1!} I. - ffp~Ilfaq alLiSlD 'ID IOpic]L[ !l!H a 1Rp a elr. WCicara aeeandaiP Pa1er Kaunt u (a) Ektnnaian of _'ranefer of Cata - CIDq 99 autLerived the aa[aCliabaant at a daGba. co identify erk+.'~g beneCit a an] tnai epau. e layreve ldantificeticn c a Ll vRluh 9adioara Sa .acoMary tb third-party payen, no data aatch lialu In•}rnai Revanua5arvica (IA51 t.a records vith data froa 1]] SPECIAL SUPPLEMENT eRaal=h cEra F :_ng s Ats:ntrac:cn 'XCiAI. 'ha Onnlbv5 9+ iacancil-a::c-. ACtn=nr_99- a1 o EeG in ea:anctcr. af c.le t[a.-,atar c data th[a'igh Sspteder ]0, 1998. ~ (C/ EktensOn ef Yadicara Sacbnd" payr. Lor ]iaabled 9me!ic:anm Msdicare ls tha s ondary p r to cartain p Ceel-h pians o.bted cffexad by eeotcvaaa e(c100 r r a aea fo.rE+ea taneficlariaa. Tta au-.cncyforthla p~cv+altn exp+ree Septeeber 1. 1998. (c) ixtens:cn a- .5_Manch Rule fcr ESRD baneftc:arias M.Eirare u ine a ar/ payex ] certain nployer g-eup hee_th plars c ver:n9 ber.a:ic'arias viV, end stage te~_ disease ISSRpI during aha first 1a mntha c a benaflclary'aenittlaaecc to Wdicare the basa af PSdJ. '.aha authority for t`la peov:alan .1.... SaFtaarar ]O, 1990. SSYittN /revlaleL (e~ Sxtanaim of Tranafar ef oata no authority for the t.ansfir Of data would be baca pervnent. ;]) El:ensien af Medicaea Secondary payar Ler OLaebtad 3anaficlerias no XeLlcara .<anLary payar [equirssenta fo[ dasabtad bane[la:ar-sa vcu1C be vde parsanant. (m Lrtanelan of 1!-MOn911 Fula for SRD Nxaficlar_ee 2lle Rad!care Hccndar/ payer Saglauanta for banaflOlLies vatL snd acags renLL Lisase ..ould be uda peraanmt. Kfsetiw pata Opan enactaent. sec. 111. lodlLlwtlaa to ]lralbiap lefaLCal Isceytion Ptaau[ f" Pnyficiav (or ivediata faally reCera of auch physiciena~ viCh a Linanccal rstat:cnship vitn clinical lamratcces. pnya+cet c~erapy se rviceu occupatLena tberapv n Glology sarvlcu: Glology o other diag noa Ca vadiation t~atapy serviwsr duranle rdical agu:peenc: pazante[al and mteral nutrlenta, eqniGSenc and eupPltes; urosU:acics, Rnotid, .nL prasChebic Levicul Lcx ]aalth a - cpat _ pLasc ytibn drugs: and Snpictsnt and outpatient hospital eetvl[u ara prc.:lited frbr. [efarring Medlcare pat s b[hOa ,s Jhara e ef gaceral and apac:LC a cepttona CucF.e proGlbLlen.i eAls~acitic eacept:en ra provideG to t4 ban a- er lrvn-aent Lcrva rvlcaa'+ished 1 ra1 a eubccar ar~y all Of L9e sarvicaa prOVldeCarnre furl'vned to mCaviduala res--+cg _ the racal area, Ceuitcu Pegvlalan no proposal ueu1L szpanc the ovn¢.hlp and _ akcepc.an nclude s rvlcea pro'nded i aurEan area if (11vtYaae Frcvlcing the sarvice i cca udx e Ilen 100 nltes f- ct5e[ :lh ct1aS (I) n • Cr.an50 PercanC of da patlenc-us.ra i, the entvty'] servL a a- tilive Ua enC+ty: and (1) bacausa ofthe a local tapeg-aphy oc perfcds of prbtcnqed s acher andiClons, other a atiaa Previdia9 Ss a no- _eadaly accessible for at luat 90 days m i but of llyaar.'e iffectiva Oate upon ececcoent. 4m 111. CPand Canteta of ltcallenca }SVaan< 'v Madicere c antty haa two dalanatr¢tien projec e tlet i nvOlva enpeeie+ve ecntvac-ea vttn ^ anters of ekeellenea• te parfors c rc arcery bypaaa q[a[t a.Cgevy, are canct surgary for ae Payeencnac' nclcdea al. a cs p[oviLed in cevu2loo vID] cb o e pmceduru. Jha bypass aczgarydsscnstracmn 15 ¢vrantly Ca1.'q cenduotad in saven cltiu and cha mcanrt aur9ery daunaeratlOn +s biny conoue-ae _n thxae Calt•w havleiaa rne a®ittee Grevlaion vauld Livaet the Secretary to empacC the da.enstrat~On pro)era for c nary artery bJpau end ct urqery urban ...... Paywnt would ba u!e an tae buis o[ ar.agoctated or ali-incl:alvenca, heqinnmc with f-'acal year 1996. no aCnmt of payrnt vauld ba uqv ed to be laea than rhe aqqreqate aa',unu of paysenta the Sacretary v u'_d hava satla _f c'.a dueestsatfav vaxe rt anduetsd. Payrna for eorenary areary byp.ae aurqary would Mclude the Eypau pC%edure ani u16ad sarv_caa. no Saeretary would Ee ragulred to uka a psyNnt to each Eanaf+biary to vhea aetvSCes a a provided urd¢ LEia GocnacSac:cn equal to lo parcent of tbe difference betveen what tCa 54[etary would a GaiL for theq urvieea in tna abaanee af tbla proruitn and vhat CY.e Secretary attua:':y paid for t•.e aarvicM under tbia prcvistcn. PubliSheC by THE BUREAU OF NATIONAL AFFAIPS, INC.. YJZShin3tCn, D.C. 20037
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SPECIAL SUPPLEMENT efeeative oaca ]pcn ecacaent. Mad!cara Select as. 151. reeao ^.ha ot_i:ua 9udSec Reccnciliacion Act o 1990 ;o?RA 9c/ -equ!s :.Rat all Madipap pclicces conform to ons of : -andard t cefit oackagas, L^,cluding a oce benefit package tnat c a ta maaa a lable ty all Nadigap : - and OL e other Fackagaa ttat a l _.... •taa iha Cptmr. of eCfclc4. -n 9ene[al, Yed!9np pclicies myc c be canceled and [:ut ta ¢atanteed r evaDLe es lcng as ptealaas ace peii. 09P.a 3aalso pavi aeL the o !ng of e Met!ura acppleme ec policy, knovn aa xaaiura Salae_,i 15 See- TSe only tllLferenae beCVeer, standard Medigap and M.dicace SeleC••Is that Select p[1!cles ri11 only pay fu!1 Cenefit. !f covend aari-ces ara abtaanetl C4rougC selactad healch p[ofasaionala. afi•tea 9ccaeian The covlctae pvov!sian vauld perait Madlura Select pallclas ec ffsrac in all Staces. The tsa year lisitat:on would ba elLlnatad. A haalth v aaaa otganizat!on cocld offer a Mad!caza acpplea.ncal pe1!cy that dcas nrc cantara te ac Least c r the tan atandari b.nafL- Fackagu :: (1) the banefits !ncluda at least tna core benefits package. a-thaugh the plaa could rl.arge n nal ccpaysan and (?) tns t nafit package irc<luding a aFeyaer vEen coaC!netl vlth Medicare ba'Aa-'Ita, Is subaeanb!a11y si.i:at to bane£ts prcvldab : n-MWicara . zellsesaf t!a healch vlnten.c<. urganlaaCO,o A Medlcare Salect pelicy aay be ca caled cr hot 'aevad n t!a c c4 n iaiv!dual vRC ! s tha a rvice area of tne pol!cy, except •Wt if Ra individua aw [ which the of t.ha Nedicars Salaat policy (oc an atflliab) c{fers a Issuer Med!gap palic), C`.a altarnatlva auat hs aada availaCle to the ind!vidual. ltbetiw Dae T.'Ie Yational Assceiatian of Irvueence bu!ssbnu'a (YAlp vaul< hava cina ntL. aftar [Ea data of edaC'taent to i coe cl _ant aoLal regulations tc reflect tnla previaian and t atlar changes of a rec'hnieal vture. If the NA2C deaa noC revisa Sts aMal regu!ataons vitLin CEa stated t!es traw, Se 9 cretar! vould be recvlTed to aavelcp a[.gulation and veu!d hava 9 aan 11s to Ga ao. Te r sed .eael ragulat!ana or tadarai requlatlona vocld apply each 3te an the date tha state aeepta aucb regYlationa c e +ur after the reg'alations are davalap.d, vhlcnevar ia eertiar. a~ Speciel pravcsi- aca !ncluaea for stacs. stoaa le9ialetu[as vb':1 nec a t du[ing t_•No ayUr period fal!evnng Cta develepaenc af LL 135 Pubhshed by THE BUREAU OF NATIONAL AFFAIRS, !NC_ WasYington. O.C. 20037 ! n Saa. s55. Itellcare auppleaeccal Itauranca 9olico (%.a1GaC) aresenc ca. Hedical ande,Cting and certalr, ocher ocacclces ate pertnb_ced with [-ect to YlG:caLe f'applenenCal poi:clee for '/ an 1na_v:aua: age 65ao clde[ appLea aurtng the a- onCh parara aaq!ecrng vAtn tta first xonth vcicn an ¢ntlivldual :n fiLst anrel3ea fer taCC!te under Medlcare pa[t 6. TTe cc2Yictea praviaion '+ uld reg':La Medicare aun=leaercal a(Ca__gap( to hava a caerCa.~ataa atnuel open e cllrar.n per¢ae io aavs. affective pate January 1, :996. )reeeet v. Noaa taalth < c isDUSted on a r aabla r basla, scb)aat to aggregatac iiits which a- updated a ually, The CutiGua 3uLget Reocci!iaC en- raisD U S tedArt of 19s'7 lilited payaent for hove leeleh e nry Ccsts to 112 percent of `~e a an labar-ralat adad and n- labor p.v '+ ait eoata for lr.eataeC!eq ECU health agencies /MNASIOS o®RA 1990 prchibitad tAe Ssctatary froa applying an updata factcr to the cost 1 aits f r to.e health wrvlcss : ost reporting pe[icda Eeg!nn!ng v fiacal yurs 199, aM 1995. o6Al 1993 slao el!smatad edd!tvanv Gayaerta for adain!etrat_va and g.naral ccsis of hospltal- taaaG a]IAa. Cra•ittee rrcviafon Te uppar 1!alt m.vyaent foc silovable vlait-related caata for taea healtl aarr!cus would Ca 1!a1:ad to loa percenC. Sae c t Lia:ts charqad : • percentaqe of the .aac cost to a perceatage af tGe a.aian ccst. ~ affective Gate cctcNL 1, 1995. aa<. e5) T.rfiCatian of greduata Yeaical adaaation 9elaeata fraaaet 4. . vs 5-35 -xaauate oeaieal educaaJCn payrenta ce nade to toapacaia unGee MadiCare. Ccaaittee ? avie!en Medicare greduate neL!ca1 educat_on payaantz aaGe eirectlv _ oapltala vauld pe t pa, Th. a cf paynants GhaC '+culd peva cash aaea : r prmuacN c muca¢ccv v ule t-- nafered cc cha craduate Yndtcal Eduoatton'and AcadenlC Mealth CecCevs Srca: pVnd. :ate Safltary '_, _995. Sae, a5a tYens!on of lacial laaltn Ma!ateaaaca OrganSSat:aaa a.~`.+.~ -1zs IThe CVfi=-"_ ]aeuctian Act of 19®I regulrea G`.e sacreaaP• ta grant tt.raa-yaar vl a for aemonstracLCts cf a ci tealth az crganlaatioa(s}a(da). TLefe denocatrattcnintagrataa :ea1LE and 'aag-aars ure serv!cse c a prapald capltated baals. t'nese duoesaatlona have bean artandet l r1 tiaea, aoa ecencly !n oll:U 91, which eZCended :La 9alvera Chrou.n]acauar 11,1997. <cuittee arevfafoa T6s vaivers would Ye extended fer an additiar.al tva yaara to Iaca.n.r i1, 1999. se:.cci.. oate vpan ecacta.nt. lac. 151 atod} ea Yedicare Sp.nding treaant 4. Fo p[evision. C2ILdttee lravia'm Tha hospacSiv Paypant Nsesawnt Coaiaaian and 1a P]ysicier. Payment RaviN Caoiesicn would each Ia direc:ed : cnduCt a stady a [ata of ! w in Yid!care spudlrg and = s.ke r endacicn. r a Cangrasa a~tratagias t s ov the rata af grcvCh. T".usatuLies acld b rpu~red to mcludae(!) a ways LLev tat.h the national rata antl tLa rate of groKn : unity ratir.g a and (I) a of vEacbar aat.ting laeaive.penaiture tarq.c.~ a lccal vcluMSpe1°aLiNa-nca standards would be auccasaful aa part af t]ls eftart. atfact!va Oata enactzen:. 3ea. aso etaullaaC 9voteasioq s.atus 9x Vc pravlzicn. Cou!tbe vmeisiaa The 5 r of 4ealth and MuCan Serv:Cas vcu1G a iaad: lLl to develop~aatreaslined, a e.idaralzad and raperieaa pre s for Eancling all c - a banaflta, asludlcg bacef:_ ay:ea eaed ic Madncats [ISk c n acts; and (21a :rccas : ensure chat for Xedlcan s riraaa e filad v!tL Medicara, M.dicare auPplerencal pal!cias. and cteer suppluantal pcacaea before providers would te pernltted ca bill MeGlc.r. b.n._luari.a. lffactiva Oaca Upcn ¢actaaxt. sad stage AeCal Ji..us ss ianess Tha coaaAtaa utqu Na 9eccstary to e ae taa appropriaeane at [ta cu at 12 .ent1. . canGar/ payar perlodtar 'rndlvlduala entitled to Medicace because tLey have d auga c nal diaaase and to aataraina vc. ~ar a longar secanaary payer period vghc be apprcprlaCa. IYbtltla a+-1®SC3l. dVOSIGM aac. ae5. YaQical 1QOCet1Ea gl]llRlSa OUICIL 6CC\SIJ/ 1\psi fClm KaeaaC C.aa graduata iadlcal and fataia4 aaacatioo Stvat luad Na provasian. , 9aneata rar Radcate [sdleal sauaatian vndar Mtliur.'a payaantv to hespicals, the direct -osts of graduate neatul eduuclan Yra paid aepara[aly fro. 'da pR4-baaed coapital'. 2aysenca. Payxnta ac vde an a ra la baseL o each hLt cal c ta per aidant. faci Eospaal•a c s par ar.t ave calculated tottne bosplLl's c rapart. ' r fiacal yaarr'99a, ganerally updatad to the prew•-.c~t Ru mwa4e[ of c uGents 's t1.a '+a15ECad ave[age malvr of residents who an vithan tna a1o-ou. ouebar 155
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S-36 ce ~ -' raq•::ree for bear: eli;tb:_:v~ p:ua 1'oc to a eeeC 5 vacrs ar.esn.RaL' Lne nutbCa of aeside•.t3 :n additiona'. yearaxef tralLlnQ.~ payxents i.ic'_da ;esiCent antl faculty ealsrlas acd cttar [elateG direct . Costa. araduat. sursiog Edccatica Paysaata Mc pra'/:a-cn (the L1reCt crsts 'Jf train.ing !Or nur ark:.ng n ard the RV degree n providar-operarad p[rgrams atepa~d,c K.dxnre o e rle cost taais, out noc tnase in graduat. edcca¢on progrmelna Xed'. ..- ettooi Acccnnt ..o prcviaLen. c ittea Groviaioa Oraduate xedLcal aa.d ]ureiag sCucatlca Trust fund A tiva fund SGr payaenta for araduare Me<iu1 and Mursing rdueation end Nadical School payaenta is utac.iaEed (see See. 761, creactng a ner 6ec. 9552 of the :nteenel Ravecca CMe ae 19a6). :ayaecta L-to C.e trust fund ceneist ef pay.ents Lhat veuld Save baen rade [ r Medicare direct madical educatlon u..der cu ent lav, plca a patnon of [eveCuea ! t.`.e 1.]5t ...... Mnt on proiuaa for :nstreG ar.d self-:nauzed health plans atd pollcvas. Peyenta far Graduate YadiCQ /QCCatlon me Secretary of !919 vould sake wyrr.ts fv0a t11e Txust ]und fo- Ju eperntton of Fp[ovad gradueta phystcvan M dental Laning pr[grap, caqL:vang vn calandar year 1996. payeenb vouldteta'. $],200,000,C00 ln 1996I $3,550,000,000 in 199>; $5,800,000.000 i': 1996; and in sVDsequanC years. 95,BOQOC0,o00 1 eaad bLhe chenge -n tlte aedicll Cire COnpanent of the Canataer prite :nd...... 9 year. Paynanta to eamio eligible appllCant would .q•:al atta fu11-Cma- aq.cvetent nusbar of rnaidenca in 3e progaaa (geoaally a calculated 'ader c_ttent Medlcaralav) aultiplled by th. Snititutlon'a ccsta of caining ruidenta ae dete[avvad under current law : r the nosc r int n period for which data a avellable. Payee~ta ln any year sou1L be prv-[ated if neoaasary on tbe Easis of available funds. ar.auat. nreisq tduaa(;ioe 9aneaca A prcgram tc pay for :be acsta of graduate nurse educaticn would be eatabllsned. Eligible applicec.ta would W defined aa pregraas for advanced nurse educaticn and for ttaininq n a praccitionera• n ae aidvivee, n e anesthet_ata, and oVlar tral~ng ., t cllnlcal nurse specialties determined by the Secretary to reguireadvanced educatien. me ascunt avallaCle for graduate curse treining prograxa eme the 139 - c Paac '+eu12 `e S3C0,]OO,OCO ta 1996, :ncreaseG a- cal:y eaftar ry _te chanqa in tbe eedical care aompOnent of tlv Conn:nar Prcce ]ndax. Meaieal school Payeatl Payeents veu-d`e vade to medical a cola : tnt in aeeting additicrzl C achvng and rasea[a.`, c iated veeh tha trana:tion to managed t etat:en and axpacded ambutatcry teaching. Pavnenta would C 1 5<rGO ni111cn In 1996, 53oc aillicn iC L59], $400 million 19960`5500 tillion in 1999, and S6eo eillion in IOOo, increased snnuaily ttlereafter ny changea in tlfe redical care oaponant of the Consuxer Prtce Indez. Cffective Dare upon anac.ne..t. ' aCAUL1I:C SLau'S C2YLCR8 1'!o!'f ft'Mp aat fAe me Indiract MeLical E<ucaticn (Ils) ad3ustaent factor unaar Medlcare1s prespectvva payseat rysto for inpatient hospital aa[viees ncraases paynants to t cGing hoepltals ccspared with non-teaCtlny haapitals. me I!Q paSTMnts are intended to reflect differecces in paC ant care costl due to tne inCirecG c associated with graGuate meLSCal education, the aavacity of illn ss trutad, and tte coaplexity r higlly aoec:alited aan. PayeenGS to saior teeching hoapitala baeed on diaqnosla-related grouFe (DR65) are iC aed Cn a rage by aGCut c e-third, under a statctcry formula tbatincreeeas paylenta !o- each diacbaage bv aMUt 7.63 percmt f r alcb 0.1 i e n Ue rat_a o attlants to tada (eaetion 1666(d)(5)(@)(i1) a tbe Soeiel SecuC :v Actl. TT1e = reul. Is rultVlated on eirv111naar Daaia, to tnae en. i- • in eta payrnt capers e[fsorvhat Ln hoapitala vitD very hngn resadent-ta-bad Tatioe. CCrittM sleel.iee 1e0 A L.^_ei 'vcc to aa):e paymenta to CeeG,l]q noaPVtnls and t cadenlc -_:nentara c1at aFa[nte CaaCnin9 :cePirala, zc achoola of denttst_ry,aanC to qn inuns:ty nanteechi-g ci_tal `oapttala vculd be taGaShed (vae$e .`.rtc. )51, c eat_.nS a v Sao.9552 of :he :nternel Revenue Cade of 19661. Peyaents Into the trLst fund would bnalet a1 payrecta that veuld have been rade fnr Hedieare indirect oedical eGucaamn under cutre-t law, plua a portien of r r ce one 1.)52 con prer-_ims fcr insured aad salf-insuredCealL`.plans and pallcses~ The paynents to the teacCinS hmpitala and acaderic health centers a_ :c asaist vith aGeclaiired coats they incur Lhac are not --t ncnrCed by ct}er ent]ti.a i proviLtag health servlae5 and thata- unl:'[aly t eced by payaenta for hospital aer.-cee under ~n-.a3ec'c . ~iclonw SPECIAL SUPPLEMENT An " r' nic health cecter' ls a teaChing GcePital o a stnoCl of tadicine c.osteopathy •JUt operates a teaching hoapntal. A CaacCGng hc{pCta': is ahoapcta- Vlat operates a rasidencv crClhinQ pCOg[as Jtat -s acced/ted by a apeci3:ty or auespactalty. OlstriDuticn of funds uang teaching lospitala end academic healtG c outd Da aecerding te a for+ula aodal.d after the PL^ett Yedlcara IMI ad3uataent factor. 4be cyrrent IXE Payvent roaula, vheeh _a based on CROS, would be sedlfied to ref.ct tte varying methods of hospiGt payment In the Prlvate uctor. ft would also Ce ad;usted to ospensace for toa higher ceau of reseamh- incanaive acadee:c aancere. :De seeratary of ®5 would be required to repett to LSa Covvvttee Fieenca and ;he Cov>tte. on vaye sM Means by Su'y 1, 1394, with an ny r.ecaaendatiana for furtAer aadlriueiena of Ltl. [onula. Paymenta tc achools of dentistry ara tc aaalst with au costa of traivvr.S dentists and with un[eiaDUVeed enl health me costs. SeveOty-five rarcent af tb. pay.enta would to aade rn ote Eaac. of the T:[5e[ cf full-tive training eauivaleOCS at the sCllc01, and t"/enty- fiva perunt on aLe baais o1 the awunt of unreiebursed a health - oats. Total payaente aould egual $50,000.000 in 1996, 1C- aaa ually thereafter Cy changes in ine aed=cal care coaponent eftne ccnfuer Yrice IOdex. P.igD intensity nentumirq raral hospltals veut< be nOnteaching eapi:et. In rural ar a thax r.ave a]igh nuaGer of . uely ill patients, ba.ed on ause-eix indax of greater :han '_xcipercent of the -.atvcr.al a rega for suc. hoapitals. vayeanta to such hospatala v uld be ague= Cae5 perent of tbe inpatiant coats of a11 patients of clt. hosPita~ Annual pay.ents !or academic bealtL enters, schools of dentisc.y and high ivtenaity eentaaeh:ng tucLL hospitals would total $6,280,000,000 in 1996; S:,i30,000,OC0 tn 1997; $6,]10,000.000 in 141 :996: 59,6C0.000,JC0 1 1999: Si0.64e,00C,oe0 In ]90e: anC cn each sube.qa.^.t year, 51o,64C.oCO,000 tncreeeed acnually ttereafter by changaa in me sedical care component a1 tAe Conatcer ]race Index. Effoctive Oata Upcr. enac-rent. ORA'.:OATE MLO:CA1. ECOCATIOY Ax0 ACaOfMIC wcaLT] CfMT1Ra AND 9IOMED:CAL p26EARCa rma6T eoMD AOPIOORr MKKITT18 A CraGuace Medical PducatioL and Academic 'ealtn Centera and 3teeedical Research Cr_at Tmd Adviso.y Cavnlttae v uld be establtshed. :h< comvtt.e would conduct a study of tlfe e- raticn af tte irust [unda a anl-ahed above and o vhe1ur the fundt~g : e approprlata a- ould report to tne ecaaitteee on Finance ands Fays and Heana and Ue s.cratary bySanuarY 1, 1999. The ccaxittee would be made up of 7 persons with relevant expertise, and would erve for Cte leseer of 5 yaora or tAa ltfeef t]e ccesittea, which as scheduled to exp:ce 90 dava after filing 1ta repo[t. 1_Yective Data Cpon enactnent. xlblQD:CAI AMD alLA9e0tan la/WC9 1120.1 POIe •e provisiens related to the Siosadlcal and 9ebavioral Neseerch Tiysc?und. a section '61. creating a r.ev sectlon 955] of the Interee: Ravenue Code of 1966. iffectlve Data opan eaament. 6ubtitle C•• IOp y/p c01D(VRITf all1D eIAYICi alJ. state Praqraas for Iaea aad Ct~ubi!} Imea Care for Mlviduala .Sth DSsebllities 92asant tae e M.diuid prograx currently covers hese end ceaunity based lcng terx morm servicea for loY lnccae pecple vDc are physically dLsabled, aentally ill, and davelepsantally diabled or aentally retarded. Hoae and Ccomity b+seC lanq term care aervic n be erovideL through v var authorlty under SaC. 1915. Tteu v tera : Stataa t0 pnvvde a broad nnqa cf wrvlcas, including ho3e'aakerlhoaa health aide vivicu, peLaonal care, adult day cade, and other o anstitutional a t needed !y 3iaebled persons to n tne ccuunlty. xaaverprograu also p.nID Statea tc apply instltucona:, care eligibility rule. (which aie typioally me 142 generouq to tn. non•:nstttutmnel loc5 te., rare pepulation, ether -11an -a1vR progra:Y, States c n pLoVide dtacre-.e covunlty baaed long - cate servncae, .u h ae par al care, clardc a rvncaa fcr, aental l:.alt: care, a d hoee heactE. ~o[ these sarnicea,•cvever, States cann.ot use the more generaun aligibil_ty atandards thac appl to perscns needLng in tltutlonal cara. Pcv tfia r the MeG'_caid progran ts generally canetdered to have an :natatuteenal biaa :na0far aa lacA cere tare serv _ea are aencerr.ed. Ceulttee Previsian In Osberal: States would have the optton cf astablis.:inq a nev progrem for hooe and cc55uC4ty based lc-.g ta[n c e for :.ldivcduali v:ttl dvaabvllties '-nde[ ]art c of the tladtcaiC paogrm. Che vcretary would be requica< to designate an agency nsponaible Lcr nrograa aCainietraticn ulthin six monthac nactaenA Statee cculd impteavvt prograu an or after Sarntary 1, 1996, Publishetl by THE BUREAU OF NATIONAI AFFAIRS, INC„ WasnirOtcn, D.C. 20037
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SPECIAL SUPPLEMENT ataee Plaa l.guiru.ae.: sLatea vculd be required rv obtain C`.e Seeree.ry'. spp:cva'. o[ Stee ptan pxior to 1 pleeentvrq t,. prograi. Tte Seeretary cout] ncC approve a$tate plan u. sLt was daveloFed after a public Coment penod of ac least ]0 daysand asc ths falloving rtguvrteencs: 1lgibilitl: :'ne State plan sust specify a avatu for onduoting an initial screening to i5 an ifAividual .` atifying i n gler a ces vp of dlaabLlity. A State could not i1a1t al!qibhlLy~ vati fy boad o e inee... aga, g.ograpny, nature e eateqery of disabvlity, aidentlal a ing (other taan an inatitutional sacting), cr on srAer grcunds apecit!ed by tbe Secracary erupt thac a State would oe permitted to llait eLqibility tor . e base3 < Cu level of diaability. Tne $tate plan YOYld bave to asaure LAt a individual ulving eedleavd hoae and covunlty based sarrv_cu vould continue to receive an appropriate level of serviu. evtLer under Parts A or C of H.dicail. Nr.fos: 1Te SGCt plan rvat ayeclfy the w to be c red ~ander the prcqru, the rihod of eguitably allocatinq c O and seNicas LOI%j individuals ::1t[1 a variety Of dlaabalities,t~:easaMer vhicb tbe plan a.rvia.. ,r. cc b. toarain,ca vahin :h. progra. and vit, health and long ctra ca cas aval:able a aide ahs the progras. The 9tate plan vould W reqairad tc w re taat lov-lnacae individuals are repr.sented in the praqrsa in thesaae propcrt'-pn as thay are apr.aenttl in t]e state pepulacven. The State plan cvuld :aks into icOounc Tbs availability of infc[.al ca e vhen determining the aa unt arG array of Nrvicel to be provided t a disaoled Sndlvi]ual. The State plan vould >e reyu:rad to provide ecnaurer emoace i nel¢t:nq prograe s d progru providers. within :v _vears a[ iapleaen[ing tha progruCea andstate wac conduct a statewide anenn of the nseda of irAividuala with dis+bilities using a .craac sptcified by L.e iecratary. 1a] coat-sRariag: ' -tate pfan vouli '.cegc:red c - htne'miary aca:-atareng in eccordence vi>l r4e ap.e''meciona be10v. previdar Taiticipatiob: The State plan would te [aquvrad : - cefy ehe typee of providere al:qibla co prcvsle aaiv_cea Noe[ ihe plan, g lud'-ng conauxcr-direoed set'+tces, and O-i not liait providers to rag:aterad nura licensed practicalnlrs s or Xedicare-certiLed agencies<r provicers. R.e Scacep-an vould be requlred : s acit'! cRe prov-der paymene ratodology. °t State p'can vculd b. ragcered to livit rartacipating providers to ihoea that accect pcpgrae payxenc as pa;ment in fu11. 9ua1!ty Aaaurabct: The Svete ptarh would be r¢q'alred to prcvnde .<r qualict assurance according tv the speoif:cationa listed belpv, Advi.or} group: The Scate plan ahall a uama c-usicn and painteOance of an advl3pry group in accordanceViCe ap.clClcaticoe listed betar. Adaiaiatraeian: Tte sta[e plan ahall deaignaea a agency or agencies with responsibility for prograts adainvatratisn. JYe Stata plan will e e that adalnlatrative coscs do n erCe.d 10 p.[cent of prograa expendituree beginn.ing in 2003. IT.t $tate plan shall colply vitlh re(rylrafents ' r aLdressingany aGve:fe e fecC. an health cart workers redeployaentraaulting 'res !apleaenratvon of a progra. under this Pa:Y. atate C~liaeee vit! psquir eatar ^e sbate aha11 provlde to eha Steretary auch reports as Seeretary aay apaeify and ceep.race vit.^, aCdits. tbe Secretary shall v rtit7r State pr>graas s en annual basis. States tnat fail to eaaply vii`e one raquiruenta af this Part aubSea2 to the withholding of Fadaral funda for lervic.s Or adainiitratlon. aligibllity: Indivldua/5 vit.h disaGllitisa allgible for aerv¢cea under thia proqrae includs: an individual of any age who raquiras handa-en aasiseance, nerviaicn, or cueinq to p.rfcn tniee or aare aeeivttiee of Gaily luving and vho is arpe2ed t requlrt suen aaslsunee, supervislen, or c.eing o war a p.riM of at lsaat 90 daya: an individual of any age whose s standard sental status :eeocal SndlOatu savtre epqnlt:ve iapavSSenC or s vert iencal ~zpa_rnent or bot11, vho reqlirea hands-an v atandby assistance, auparaision, ar cueing with a crs activities of daily llving, req3i alistance vlth ane a e inaCrlWntai lctivities of Ga]ly living eelated to erggnitive o santal lapair.ene as tbe seeretary shall specify, who displays syapto.s of ene or .ore serioua bttav¢orel p[oblevs (aa spectfiad by tae Secrat.vy) vGich creates a need ftr nupervision to prevent her+ to aelf or etbers, and whose ccnditian 1 exp.cted to last at least 90 daya: an in.dividaal of any age vno has savae or piefound aental :aaitlatiort (as L.cara:ned acco:ding to a protocol specified by ehe 114 Sacretary): and an individual under aqe s_ vho hea a ssvers disability o cbrcn8c medical condition CSetti®its fCr.etitning 1 comparable to s:anGards estabLSned !er othar Cateqcraeaae 10d1vYdCaLS eliqvble fCr seNices under V.is pLOgraa, anG v.,o]e dlsaCil'_y 1a ekcec:ed to last at least 90 days. Actcvitles ef daiLy 1:ng include: seting, nilec:cs, G-ess:~q, bethcng, and transfer:..g iv T]e Secretary shal'. eatablvah c-_ a far Leeemanc-q cGe - . lsvel of disab:licy among a eategar:ea c ina_aduals that a- raGle in savrity, regirdlefa of aqe o nat'are cf tha tliaabLng aec::G vion. e seceeaiv ahallspeeity a uvvfoa prCCGcol ! n the mvtlel fcraeniCg and deterpinaCeL ef diaatil :y~r a~acas may nct asseea a fee for determina.ip.a o. Lisahil :v. S-37 Ellgilillty detereinat:ona ehall be conducted by put'ac or n profit e apecifiad in ]ha State plan. Pedeterelnet:c:.a a'a~l Ea conducted at-• aat every s:X sontha or aOre freyt'eat:y i: there J a aignaflCar.t changa in ec ;nClv:dcal'aesndition. proqral aeTmu. Care Menna e Staea progru .uat aake a .abla ca naqes sarv LCas t vnlCn 'nelneluda a eosprar.tnstve a e s e of eta indivv'ua1's nead for h<pe and c ..mey Gsa/ s:vieeb2)a indivitlualvred ptan of case based on ih. ass.sevent, .) arrangements z tAe pec af a r+ices apecifitl ln ths plan of care, and a) aonitorinS t!adeliva=! of se:vicea. care v nagevent a rvices cau•ct be prcvidad by an individual or ageneV tha elorovidea e arli CoRWiCy bas.d a - repC : <CCCuastancasv a State deceralLes tdat progral a rtllsent -ann ct suppcrt s dlvevaity of providers and mrs vnagars and 5he Stats sveciCies procadures to avoid canflic- of startac of an enc-ty ;nats bath c.e sanager and a prwider of te.a and covunity based The ccaprehsnsive aasevaent sball 4.c1ude an assaasment of tEe -ead !or prvlus vbeaher a nct t.Ya s are provided under U:va prograa. TR. a ent shall be canduoced usinq an aeasaaae.: soal develeped by the see~etary. The individuallfed plan of uae aRa11 specify the ss tc ta ;rovlded under this progras and identlfy a-rangennts : asary ervicea not t vi]ed under CAia prog[aa. tna plan v- ll le speeify how aervisea vill bs ee0rdlnatad vi~ atLer nalebr~ar wl suct plan of c will be reviaved and updated . ery av anl:a.s ^he c e Flan ehall be developed vitL tne lnvolv... nt c Yba SndGVid4a1 or the indiv(daal'a repraaan:atlve and stall be aFproved ry 115 the ind:vitua'' cr vntlvvvLUal's rapraaer.cac:ve. parsonaL CarG -- The Lrograc shall :nolu!e o r - lh tbe array of saT+loes covared Sy ihe Stats. Availab?eFer.cnalrc c sha:l Include both aqenry-edattbtered and c -^.iecud. Stat.ses all act a:he employer of F vvdingr c direcced~~r nat c and a.aum. r eaaa-.a: :.iwso ?rovidin9 c~a:ng, p-cv~tler v payvect, taX vlaMOldinq, 't empivycent 1neurar.ce atd vrorkers' -capensa<ion < erage. 3enzflciaees shal' tain the r select, tGre, tenlnace, and direet t.e sa.cee ef a onsser-Girs<eed previder. AGdi' nal Se:v - 5tatea v prnvide a raEge cf ser+:ces . additY aiages - and pec -_udir.g: noe aaker an2 cherea istnnce,ncee retlificataon.s,nceapite a - - .'e devlces'saduit day s - .`.ab!litation Ond rahabliisasIDn.'t supported eap:oyvent' 1lomesnealth services, CranaportaCCa. an.e a ether care or assistive ne:v¢cas apacified Ey the State aad apprcved by the secretery. -mtceions are ciaicaticna -- The prograa say not prcv:da werage for rooa and board, Gr sarvices f iahed ln a hcap:ti:, nursing :acility, enteraedlate cae facality tcr the c tally retarded,e etter inatitutienalae[eing spaei5led by tl:e Secretar). Sarvices aay not 'oe provided to Cne extent tnat an indlvidcal n eL'gible fpr _ie a rad by n health plan, the Med mare proqras, or the Medicaid prograaVa States operating a prograr under tSis part v uld b. requLed to <antinue to aake ..... able un]ar paTi A of M.dicaid ctrtain speallied haae and cavun•= y based long c rm care r uc:: -~ ca to caesgoriu of individuals e11q1D1e tv ve a s during the Year 1>sediatsly ireceding eCe Yearvhmh the Stateeubaitted a State plan for approval under this parc.~ Cest-ebariaq: tTe levels cf beneficiary ceineurance under the prograa ahall be as tcllovs: einau[anu tcr ardividuals v:th fasily : s btlav 125 percent of tLe fedaral pcvarty level; 1C percent c-surance fp: Sndividuals with fa.ily :ncana ef at : 125 percent of poverty but below 115 percent of pevereyp 15 parcent e rcr individuala with ]eaily i cf at : t L95 parun[apf pwetty but belov 225 percent of pcverty: 25 percanc for lndividuals vith faslly incaaa of at leaet 225 percent >f poveriy out Esicv 275 paxent of pavsrty; 20 percent for irAlv:Luala vltr• lenily incomes ot at luet 275 percent of poverty but belov ]25 percect ef poverty: and 35 percent coin.urancs for individuals with fax__y incomes ot at least 325 percent of poverty. A schedule of a ual detluctibles .haa be aa lollovs: r Geduet[ble fer mdividuals vith faaily inCOaes below 125 pereene o the Federal poverty levQ: $100 for lndividuais vltl fascly - s of at least i¢b percent of peverty but below 1]5 p.rcent of peverty9e5voc for lnd:viduala vich faaly inccaes af at least 175 percent <f povertv but bel<v 325 percent of pwertyr 5]00 for irAividuals v:tY fas_i. 146 ees of at Least 223 pa[cact c eue Ee1ov : 5 pee-a povecy; Sa00 '- vndlvlCuals vitn 'as11 rty~ incomes a ta75c- percent of Pr"ertY but bvlov 325 Os a ef poverty; and S5oc !or SaG_vid•_a2a vith family incoves c.atteaa ]25 percent of p v.r[y. T1a Secretary o'ald be raqcired to develop a setncdalx,,: to ' e`S.e rast-sna:l:cg burden :r :cGtvtduais v:[e y cep[tanelly Ri^y JUt-of-pcckat costs fCr ahvn auchcosts coald ;eppardtre t.^.a_r ab:lir to take atlvaseage of seTJlees c.erso uGer .Rra pro9=am . O Quality Aaauraeee: '1Te State plan voulc be required : speciy the State v_11 eneu:e and monitor the yvnlity c -- -e5 _oclutlr.g: setec.:e[ding Oe Realtt, vafaty and cen antaalv at ~ Of intllvyduels v:th disatillt:ea [tCtivinq f Cvi<e a/ s i1q and enforcing vinmua stanGrda for agency providers; saacvnq cinnmva ~ cCV(e[.n<y cequir.'Jenta 1Gr consuserv6Lected provldtra of p¢SOnLt cete sarvv s ar1 ncv such aeapatency will be dtaonstreaed: ohtacnvnq ~ aeaningfC.cconsuue: input incl':Gi.^g measuring utisfactmn and racezpt ~^ W Pubiished by THE BUREAU OF NATIONAL AFFAIRS, bYC., Wzshmgtan, D.C. 20037 ~ ~ ~
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S-36 sabiv.ning a procsaa to _nvestagate and aolvalagations of naqlect a-dioraYU•eivesta6ltaLin4 opt:onii craining Picgiaaa for Prrgraa Gnetic:acva i a and d1reC:cc cf - ~ir-Cirected prLviGers 1 peraanal asslsta ce env: aca.: .ateshinq e appaala pra^edure for e1:q:piLty dsnla:a b-.d a grievan<e Frec.duce for Lzagra.a.nez < nc.ninq a Pian of cars: providing eer auaei ca^iuytlon in quality • t e acviv :ise: ipcLyln4 t.:ec -crl• c CU lonq ] care aatudesa:: n saaL.:ng a.r+m. ;.i.:1ty and b.neflciary riQbts. T¢e Sute plao would be re4uirad to aca,ly vCth [ed•ral star.Gards in t1e tallwtnq es : sanFle review of eliant aaneatcry reFarcirR of abc••,eegleee, and •xpioit•tven; developaent c prcvider rqistry to b• vC• evaiiable to t0e publlc: and op0ional eca:nvnq prog:aas far itfareal care giveca. Lt. !atlcvinq Proqtaa beneflciaiiu would be re4--rtl to have rlghta: to aa tu11y into[fed in advance cral:y atW in vrlting, of Ne care [o be prcvided (o vhanges i., tLat c r•): to pastlc:pete ln caa• ]lanni.^.g: ta vl • giievancae vitA rYpect t urvlcee v:t-`.out :apriaal: :0 Cetnlorfetl ..... Ear cc lodge a eeaplaint vith cha state: to proapt iasOlution of any coaplaa:t or grievncuto precy well as ean-LdentiaLity efperzonal aM eLinieal [seorda: ceaccas personal and clialul :xvrLS: t csfuae eare: to training on tae _ manaqaaant of cers: to be Crse ftea pEyaiul cr vnt•1 abuse. catpora pubrtshaanul ard physical or cheaLcal reztraln; to .:e• c:]ice ]f _ircviders: aib to direct care. Ad.laorl areupa1 •N:e secretary veuld be reqG.[ed cc ocabliah ar. adviaary group mapoaed of a or[ty af iMlvidcal5 viCS d:aahilitie., C.•it cspcesenucive., aa ve11 a• Tederal and Stace off-cnals, previ<srs, and 1.1 agmea•s. IDe grcup ahaCl advise the secrecary and Obe Stata. on a11 eapacts ot tne progr•a. 3/7 aoG State . as4i:rad to eatabLm a - qrc'_p to aL'nse it on il asrects ee Lna -rxlraa. - 1ao7 appointed by the Lova[::or. A aa'oriey cf rl:e qpoup ata-1 c aaat cf indivlduaka with 3vsabLitiee and Vavr repreaentacvvea, 1addir:cn, the qroup sRaL1 incluCa Stata af,icia!s and local egsnerrepresen;ntivea, and prov-Gers. The gtcup s.lall edviae the State prnar : velopsent of the a.a_ plan and FroviGe aegOlrq input concanac4 ]e proqraa. Payaeara to etateu: .a~ar,y-Cgy: Federal matching rate aha11 be the Federal Medical Assistance Xa.c,^.arq ]v- tage plua 15 parcentaga pcinta, ..... t that the Federel peicer.tage:nder :his part ahall cet excaed 90 percent. SPECIAL SUPPLEMENT TedereL 1•v aetatllahu a baaie a•t of aanLtory •arvaeea -rat States must provide ineluding: inFatiane anq eutpatient haspital servic•s: labaratory aud r-ray sei+iust tvrat teaiW elinit end fedarally Gualafied ]e•1t1 center ur/ic•a; nur.lnq facilLty sarvice.: faaily Flannin9 servico: early and periodic •cr•eninq, diagI and treataent :fPSP/I) asrv]ces for children :uxler 21 years oldn cra• -th a - I and pnyelcian, OUree aldVlfe an.d ^.erta:n cer[ifLed -vrse vraounoner . e ar• eany acn•r a. a seace aay c e to c lncludln4: DreacripCan dcaqs, ~ na9wnq pers n satt•ndantr ure• phyalcal t:.erapy, rsaab:litaticn~ and aental naal-h aerv:cea. __ee 1eeelalez Patt I-T3S/gYtI0/ OI CIR1I21 f]SOItL)/ aac. e9r. LiaitiaQ covrage aader Yedeaia of itaaa. •nd aer+ic•s coRred Yader Itaadana Naeflt sac[aqe AIbC and IOa-<asGi Iaiv!dual. rec•SVing Aid to ?aaL-lee with peperG•nt raildnn (F)pC) paylanu and individwla ellgibl• fcr Hedvcaid acuts car. serviw nc do not recevva any Fsderal incc. nuppert ftefsrrad te as 'nan-caab') vould balntegrated into tsa general health cars refeaa prcgraa. 1Lese LMivldu•la would aa tha c un:ty-retedi private saCtor :ea1tA ure .yto as tbry t.ccvc eLigiela ! Fe<sral ptuliae aub•idlea. !at purpe•.s ot Prseauna and o.t-sharing, Lhe.e i•Idividuala would be treated llka ctnar lw-inca•a people eligvLe fee M1derai subsidlee •rd .nrollwnc in rert:Cied health plane. . 149 rent Madica-d a s gavercing ' red s -1and e114:tit1'v ould ta [etain•d m c r aasvicas neC ] Nlae]COVidsd Vccgh ceniL•d hea th l planaweBacause Hedicaid ia a aconaary Payer when a reclFie^.a has prvvate ceverage, the F-]4ra vouldprovlde auFP'uaental sec.'_ces for 1av-incom• grocps currently entltled cc Medicavd. The __ - t ' 'exvbilacy provlded to States to deterv i e the aptional s[.Iicesa.^.d i e it YL13 cCver vould b• re.a_neC. 89I Recvpieeta: M.edicaid beneflCLari•s vEC re • Suopleaentary Securlty : -avventa would revain :n the fullxedicac] program and would not te in- cEed tn the ceozcclt'f rated ]arket. Du•L [11Sibtes: M.dicaid tenettcierua vha ate eligcile .' Yedicare ~cu1d ala0 n t be : clCtled in the comunn[y catee mcket. This gracp sould reaain under MeClcaid. •airteneme Of Sffort: Statea would be vquirad t aake a general ]aintenanc• c•ffcrt (MOE) Payaent for aervac•a covered under tte standard ben.efica package for that portion of the Med:cald pop•ciation ehat moves froa Medicaid onto the !sdsral preav':a actsidy progtaa. tte State HCC would be indexed to tbe per upita gravah tn national health expenditsaa ar.3 growth in the 9tate's populatian. puarterly Federal Medical Ass:sunu grants to tbe states would be reduced by t]a zaint•nance of ef!crC asount. 'yi.} _Ap•ran,a: 1•he Federal share shell te 90 percent of aSoCntsae _ended for C,lailty aa•urance actlviti•s. zhare of amcunis expended for aivg perc•nt. bilicy and aasas v` a ; Federal n. ha11 be 90 Until lool, the Faderal shere sl:all be 9, - - ] - expsnded for doign, tlrvelaPae-< and inatallaticn claiaapraCev!~g and 1 foraatlan ayat•L. Beqinn-'q in 30a0, the Federal share !Cr a::c1 Cctivity ahail tV 75 percent ]f alountE •apended. ral aanir`etretion: The /ederal share ar•all be 50 percent for amotncs expended eer general adainistration of the State plan. fsdexal audqet •taauat avd lilctaaat te etato) Stace a al_oraa - ear aftar 199J ahall be based On ttle aaoVRt of funde avai:able t.Re~ vyear 1n Ne Dong : re Accouln of the 3sa1tA 5•ccrlty ' t Fund plua a funda 11. t!e Account that vere not exper.dad :n a precedia9 fiscal y r. e Secretary ah•11 •lloe funds to •ach Stat• laasd on: the State's share cf i.ndivlauala with disaEflities in Se N•ticn: State vnges for service yersannel relative to ata national reger a Stat•~a Federal aatcbing raca percentage under tES progbea: and the pnport:on of 9taca's populatlon that ia lov-incosa relative te th• nat:enal prLportion. E.aluatlose: a•qLMing ln 1003 and annually ther•after, the Secretary veuld be requc;Mred to c poz: to cenqiess cencarnin9: the erenc to vh10.1' : intllvlau.le vitn dtaabilities ar e4uitably ed ty the ^reg[aa: tne adequacy and eguity of a•rvicaaprcv _ed to lervdividuala vcth ccaparable dlsaliiities in different States: ate oapa[ab:lity of state particlp•tlcn in che paogvea: arA ch• ab111ty of provlders to sea- ser+iu deaand. affsGCive Oat• U]c ana<-ment. 148 auLtitle D -- IDDICAfO iROaR9M Preseac esa title XIX o;he seedal Security Act (M•dlcaiGl pr]vnt•a f enaa:oiv -- raqe by all oarSLCipaCng States o[ acuta c aarvicea - indtv'1duLls and : miliee receiv'ir.g eit.ter A'.] to FLm:'iCea with Deeendent Children lAFDC) or SupplevenCal Securi]y Inccie iss2; _..ceee upperc Falaencs. ^.hesa groups e refarved b as the "cazh Fcpulatica" vitn::f Medicaid. In additicn, p-lcipatinq States must exlend c to preqn0.lt Vomen eLd childten up t age alx vltn maly 1 coeesaap to L]l percent a] tne Federal paverty = e and chrldrev bcrl aftaxSapteaber 1992 up to 1J0 percent c th•Aadaial poveccy t•vei. 4Te MedicaiG prcqraa prcv:des states C.a cpt:on t excand c raqe of pregnent va and children up to aga o up to 1d5 p¢<eet of n verty. Thare ar•nany other optional and aandaccry age Srocpv C ccte c aa Xediuld a rvicea, of which i ]edccally NeeL'y eLi4iblltty'vld•r vhich faaillb viCh alqnificanc oe^_cal ca.e expena•s can 'apend dow' lnto M•dlcaid eliglbility. ltfective Date Sanuai: 1, 199s for Stataa that i.plsaant the prea:ua auh•ady prograa In tLet year. Senuefy 1, 199) for 9tatea that do net aplenent the pceavuv acCaidy proyr•. early. Par: II--cQORGiYISaD cY1 aaRVICSt ol ]I11aLtD YlDICAID eII4IELaa aee. 972. Cardiaatad aat• isie,ieae fgr Dis•Lled ifedlc.ia lligiblu Cvrr•nt _av vsgarding M.diuid un•ged cace vauld 1.1 i-tact exceFC that States could anly contract with csrtvf_•d standard health lLrth•c, no c.rtGfted health plan vlth a Medicaid cn ac- ruld have a0ra t3an 50 palYent of ita enrollsent c0apaeed of s5F/M.diCaid raCipient•. lffectl9e Dat. Sancary 1, 399a• PerC III--1arYtlSa •M IOtPITaLt talvl9q 9OLYa.AlIJ POPVL4TIOMa aec. a]l. bplaesa.ae of oR 9ay.eata itE lafaevb to IoapLtale a.reivq aula.rable )OPUlatiava '.^.u current e•G-cata DSspropor.ionate share Hospical (G9M) L50 payaenc pregrar would Ca pGaced-devn during the period of tiaa in vn1c. C:. ?aGeral ntaa _s subaidy proqraa cz imFi•e.-ced. g•CVnnin [99-, tne Stat. OSH al3atmenca would be recalculated to a unt gfa aLuced Stats aed_cal aaeiatar.ce payments cesulcing f a C.. conversion of aome ot tha program co a maintenance of effort paysect. :Tan tta the pieslu3 zutaidy eLqibility level (for :ndividuala cther than cht!drerl and pregnant vomen) r achea 1251 of the Federal poverty ve1, the Federal and State JSM spending capa vould be reduced to 10% af medical a ..... anc< evpentlitutee. The F.daral and Stat• spending li¢its vaulabereCuced anotSer 3 psz utage po:ncs for each io.- af 25% ln the :evel af preaiub subaidy ellgib:':ity. 1?e c]ncepvo`sa "hiy-h CS'f. State9" end ^lov DSh' Stat•a" would be eli9iaated. The year after the stbs:dy eligvbillt'! Level reach•a i.ot of pcvey, the DSx program vou1G be Q'_minated ar.d replaced viCf a Vutnerabte 9opulations Ldplstben'. pregram. Noaccta)e elgible f r paye•r.ta under tbia pvogran would tave had a 1 ctillaation rate (aa ddl.:ed under 5¢. 19bfb) (2)) af as least 25aain 1991. Payn•nta cC hcaptiate vill be allocated 'raaaL o the a unt CI .:OapiCal-ap•cfflC L n • daya r:•tive to lw-inccie day. lnpat:ant days a[conally. ]ocalfunding ava:Labis :mdar tbi: prograa :• i1.5 billion per year. sffecties Data October 1. 199T. Publlsnetl by THE BUREAU OF NA i IONAL AFFAIRS. INC.,'h'asningecn, D.C. 20037
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SPECIAL SUPPLEMENT Pert fo -. IQLICIIO IGYO TiLI C1{/ PRGYISICIIe tae. a]a. PaTeeta far Imsa or Cma•udiCS-tse6 Caie, Nasanal Casa Nrvicear aad I[ail 1lderll piviaea Tha ?adaval Medical Assistanca Percentage would ba Sncraaaed by l0 parcaniaqa peinta for: paraaul oara attendant s . sec. 1915 hasa and c ity basad long carf care vaiv.z sa=.z-a.,caand no frail aldarly hos~vnear. option undar Sea. 1929. aae. a45. Iaetusad Maeozw Giarsgabd for Ibdividnals asceiviaq Certa6a sarvieam statas vould bave no option te expand eligibility for ainqle individuals by inczusinq [-0 asset 1Lit -ras Sa,000 tc $a,CCC for aeSVicee Sncluding pe[fanai Ce[a atteniant seNicu, CFA 9ae. 1915 var Programe, and tas frail aidarly heas cars opcian onder sc. isz9. see. e'!s. /raSl t1dUr1) .Jensoa.tratias 1rCjeot raivers ^Ra nuaber of aut6orized Prcqru a! All-Incluaiva care for no Elderly (PACL) de.onntratlarl altem vaUld be indreaaaL SSas 15 to aa. The Secretary Of KKS would ba ra9u=red to daelcp ainimun standard requir.:enta :hv an arqanls.eirn au.t sat to receive a danenetratacr. 151 •aiver. Tha Secreta.ry "+ouid also ba rac.u:red te aeveiep and nake !lable to a'tatee acde_ Gutaiinas for enilled liuvun or cartif-'caticn of pACS prcvldera fcr u a by Statas chocs_ng to devetcp taSrated !ed licmara o certif6cation requirmdmnts tcr thesa 'd previtlar/aerv'sa delivery cadaia. The Sacecary vculd be raquireL to 2evicP evalcaiicn Precccole for PACE oro]ecta i cperatGo-n an the dlte af enaC:bent and repoCt to CCnqreea by + uary 1• 1993 enn the deslrabilaty of qran[ir.q partanent pravider scatua : sitaa. 4'ha sacratary veult also ba rapu.red to dave!op avaluet'cn pretecaia 'ar demonstration pra]ectaascaoLishsd af2er the date of enactment and cepcrt to ceng.eee hy darnury 1, 2CC1 on the ]u:raEilicy c[ grancing pertanent preVitler stiCS co ihafe Ent!bies. eec. a]t. 63iainatine ef Peior Laatituci0valisatlan iequirueot T:e raguirema:lt -_•at indiv.duals need to hava tearn natitutionalitad a ond_tian o ali9abillty • Cabllitaticn Cervices LLnder a icaa a nd co®uS1ty baaaa ca[a val ar •aOYld Sa a'lieinatsd. Iae. ivs. I1laiaaeiob of Ruie Yeqardiay Availabilit2 at Lada in Certain inatitutiona As a ccrdition of approval tor a Sae. 1315 eaiver, CCFA currantly raquibas Statu to desonetrate tha avaiiebillty a an IDetitutional bed in order to hava a aq+cvalent slot in a hesa and cem•ina'y baaee vav.r progra.. This requir.manc vculd ba diaiaabed. tfNOtivm bate Sanuary 1, 1995, except L`.at Sac. $76 ebell bacose Y_fettive upon enacteant. ParL v--ll{C/LLVE00/ aao. ate. <ae[aqe uf I11 Cartiriad luru 9r+ciitioe.r aaa Cliaieal Wiae apeeialiR servica. SGta MMicaid progtaaa would be reguired to Cei]Curse diractly for the aarvicu provided by all certifiaL nurs. practitieners ar -ainical nurse spaeialiats vbien they ara legally authcriasd undar state lev or rsqulaticn to +parfor.• ebattae or not tLey operate under the suparvisi0n f n pbysician or ccner Caalth cara provider. 152 TITLS 711. RIVEY06 PPGViaicxs uuCtitla A--Piaabcicg 9aoviaiobs -. Itereaaa in rteiee Taaea aa Tebaeco Yrodvcta luca. ta1Y90a a[ tba bill and aec. 5701 ef tSa cade~ Praaaat L Tas ratea E%cise :%e5 are impofed on :ba aanuCaciVCa ai taFartat:cn of r- cigarette papers and tuCU, snuff, enaving teCacco, and pipeicbaco. Tha pte9ent-lev tax ratu are aa follcva: Snall cgarnttae ( eigh'_ng no more than o pounda Per Sia psr thousand Sa Nocsantl).................. eenta per paek of 20 eigasetbs) . a .e cigarnttes (raiqhinq na than J pounds per C.ousandl'.....-...••515.20 per thauaand. iI3L21 a -eell ciqarx (vaig.^•ing n more then 2 pecna. per cnwaana) .........••--•••• $1.115 p.z tbavaanl. larga ciqara ;valghing arra chan a pounda per tnocaand) ................. S-39 12.75 parcant of Yrlutacturer' a prica (but not e then 510 peo tLausuM). esb raxable cigarattas are claasifiad as uall ci4araCtu. ':arge ciqarectaa .aasurinq sc e tEan 6-1/2 inches in length are taxed at no rate prescL]bad for sv11 ccgarectes, counting uc.. 1-I/l incnes (ar fracticn tharacq as ane clg+recu. 151 ""'-- a ^'a^^ "L cigarenta papers'........,. + t5 cenc psr So ci9arette t::bas•........... papers. 1.5 cenra per 50 tubee. - . cteVtfc trhar _ e tabacro Snuff ...................... 26 canta per Pcund. chev_ig mtaaco............ 12 canta par pour.d. Pipe tobacco ............... 00.5 canta par pound. No te% 1s 1Apcsad an tCOacco products exporCed frCS the United StAfAa. E%e2p910na also 3 alleved for (1) tobacco producra furnished by manufacturers for asqloyee c or axpaa¢aenul purposes; and (2) tobacco prcdccvf to be vaad bv no United 9tatas. C] addltlan, no t.ax ls _ a- cn. tebacco to be uaed in 'SOII-ycur-oVp' cagarattea. Revenues from the tobacco producta axciee taxes are reiained ln tne general fund of the Traa.tuo(. Rmv¢uea fraa taxas on taCacao producb brought into Lha United Statea fcmm Puerto Rico are tranafmrred ("cc rad c r") to Paaro Rico if no products satisfy a demutic contant - mntl To Federal a%ciaa tax is iapcaad cn tobacco pio]uc:a aeld['n Puar.o Rice. kau t• Ctuce Medical rueart.^h has ilJaad no use of tobacco products a a ntvtxr ' ciqaretta pepera Meauritq aere than 6-1/1 inchea in length axed at no rara preacriwd, countinq aac0 2-]/a :nch.a (cr n CLereef) aa anm cigarette Wpar. Mo ta% ia ilpofed en a book or set ot cSqaretta papers Centaining 25 or fewer papers. • Cigarette tubem MeaVrir.g a e then 6-:/3 LncXaa in are tased at no rau pna¢ib.a, e inq aeb v-In mcnas ; fra<tion LhareofJ u no cigarmtte `YDe. Ccde a ction '/652(d) provides LAat an articlb other than an articla ccntaining distilled apirits, aball not bs treated aa produced iv puarce Rice unlesa the aua 1(el no eeat or alua of the xatariala producad in Piarto Rico P1W (b) Cne diract caata of pre .n• rat:ana perfaraed in Pv1rte Rico equaia or %ca.d. 50 - e cOe no valua of no article as of no tir Lt ubrouqnc !ate :.`.a L'nitad States. 15a of dlaeases--lncludLng cancer o the lu-S%, e'uth and throat, emphyae-.a• chronic Eronc.`.it-e, dr.d :eart diaea5a. Saeking alao ia Geliez'aG to no a cont^lbutinq factor to low bi1Vt '+aight baliu. In add tion, eedical research has suggested that "second-hand faoka,^ that i stoke 1.1`.alea by nenaeekes, Sncr ..... nealth riska and coata nsaokara. Thce, a!1 Afericans, bochsmokera a0d OCnamokara bear one datriren:al .^.ealth affecta frca aaoktng. Research has concluded that smokers c all ages ceq~-re a- nadical c e than Lhcfe who have r. r Smokad. Aa e t Fravv'er of health cara, t]e Federal c encvnas e cerest i rolling health ccsts. Tharafore, C.^.. c~ov:ttee conc aceres tluaad that iCn_ apprepriata te mccema tolacco taxes to pcoviaa a market incentive to indivldua:a : reduce t.helr conenapticn, c never ecmmance the umptinn, of products rhat can bers ena'shsal6R and incraese ths health care expandiViraa cf no Fedaral0ovarwenr. f 4 iaien c aca • of The bill : saa the axcisa e nta on seell cigantt.a by SsO.ac e.r tne .avd (one dollar vr pack of ]0 ciqeratras) and on large cigarettas by 5105.oe par Vlaasand. '0fe tax on atnar currently ta%abLa ceb6cco areducts '%cept snuff and Gevln; [obacco) ia __ incnued praporCim.ataly 1nd a 517.35 par paund ta% 1a :aFaead c ~'n ro11-your-avr.' tohacco. The tax on u.f Sa 1,C raased by 51.c0 par Q 1.2 0l -d °..ns tax on cr.ering 'cbmcce is incraasad by $1.:0 Fac ]avnca pcuch. ~ Tha nar tax rataa on a11 tobacco Frod'iots vill be-- ~ Published oy THE BUREAU OF NATIONAL AFFAIRS, INC..'Nashington, C.C. 20037
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S-40 5.11 o+garectes (vaigEinq -o ]ore chan 1 Pounds peS tr.avaand) ................. :grqe cigaractu (veigtlnq e than 3 pnuMS par aar Svusafxl ........... :...... ^i a^ Saa11 cigars tvalghLq no aose tCen 3 povnds Par c.hauaana .................. e bi11 ispeses u: assessvent a ccident cr Eaalth c evage providee Ivhethes t.:rouqh inausanee pollc:u or ocheevlse( vV1h '1^.N purpaea of the asasaaanc on accident or healt.h c erage ie nd to rsise r fund the Cradua4e Cadiul Mutation a . l $ae.0a par tnacsace Acadetie x f tn cent¢s Trust Na end the alcfadica: and 9ehavCnral . [i 91' 2a Roearch lrust ILnd, estatlisted under suLC:tCe } of title _ 'J o . ., . paa paor of 20 ciganr..q. ena bill. 3iDlanatlen ef sravlaioa s1:0.]a par G'.cuaand. $y ameral sl1.G par thcuund. ta~a cc9ara IvelghLng vore _han ¢ paunCS per _hcusan- .................. 155 66 percanc Of aanu.accure['s pe te !Eut not aara U.¢r. 5155.]0 per cCausand(. ciga:e::e papara.......... ii~ cigarec:e r,bes........... $nuf.' clnv 'cbacto mmbOlp Sautf ..................... Chavmg =ccacco........... plFe LDhaccc .............. ^Raa-you:-CVn^ tabaccC... 3.88 cente par 5C papers. 7.'b cenis per ?e t'_bu. 513.69 par pau-a. S5.aC per po'nn.d. 61].15 par pounc. $17.35 per pound. Revenuea f: a the increaea ln v<lea tax rataa an tobacco ppeLUas vi11 ra pid into the Hea1Cb BaNrity Trust hnG. TDa bill also :oposes tbe in<rease in excise tax racas c tobacco pcrAucta sanu.actured and sold in puerco Ricr. Revenues .:aa these taxes vill be pald into tbe Rsalth Sa<urity Trust 34nd. To provide l subsidies to children and pragnant v n under yart 9 of catle kIk of tta Secial Sacurity Act, t]a exclaest rate s¢/1 dgara!!se a c forth aDave sDa1L he incrYasaL by S0axantx perpaek eC ]0 eigarettee in LSa eaae of axeiclas Ceaoved after Sune 30. 1996, and before Sanuerf 1, 2002. .^Je arciae tAx an ather [axaDle vicedur!s vill De inerealad by rcRaraDia aaouncs durmg that pe--od. ITe bill rapaala tbe present-lav axoptlana Sr tebacco producta provided to aapioyses of the 6anuf.cturer or asad by tha United Statas, artl includ.s the toilwing adainiscrative and .... liance Prbvislcna+ (1) STa eisaptinn for exporta is lisited to prodtcts that are aarked ]c lacalled under Treasury Oepartaent rules designed to prevent the diversion of such products into tDa doaestic oarket. (2) Re-iapartaticn of tobacco Products previously export.d without payvent of tax (etDer tEan for retuvnn to the manufactirer) is prohibiced and a eav penalty, equal to tDs grea!er of $+,o00 ex la6 file -. the a]cent cf tax, is :mpased on all ca:t-es -'+olved 1 any prca~blted re-uporcacla-. (All tetacea producs and,cigaratta papers and tubea. a vall a eL' vassels, vahicies, and aircvefG aad :n al<:1 Ca-_OPaitatie.la, are subject to aei¢Yre by t:.a Llni'_ed States.) (3) The c- Cnt ] ufacturer 1 entar) aaintena~.ce ar.d -'g requiresenesanc nal 6ena'i=aa. and fer.eiture rules are extended to inprters of tobac-a prxlucts. (a~ :ne n Crc-laV exemptlen far books or eeta of c_garet[a papers ctnta:-i]g 25 ar fevar paFeaaia repeal[d. ~SI .a !cbacco praduct r venuee to p4er!c R1cJ and Lhe Vlrgtr.lianda r is - livcted to presanc-lav tax 1evela. Rffaet•ve pau The provision ge^ ally is effective fat tobacco iraducts reaoved after 'JaceeEer ]1, A99e. A floor atocke : la 1 aad on xable tobacco products neld on January 1, 1995, and on aeo.n aubee4,enc r¢ca ln<rease C.ate. 2. as.asasanta on Insuxea avd 6a1[-iaeured aeaatb alaos (sec. fos af the bill aaa tae 9400. as01-afo) of the cade) ptasevc fa. '1'here a ne exciae tax or other apecial rederal tex c dceastio health ine rarca policy presaus.. A one-peraent excise c x poeedonap8 alus+fu.ca Foll<iarel9n-ial]~ sickness and accidena in a SPECIAL SUPPLEMENT 157 -asfect •c s+d.ny ct S. vnit.d States'. - n Celatad adainistrat:ve sarrtcea. Ne assasaaaact mposed on a Ye accddenc or Eealtb covevage :f suDatancially all of c a cavaraqe -'-_ a[o llabilaas +ncurred u:.der varkarM1• caape.vation :avs, to:t I¢abilitnu, L1aDilitiu r.lac:ng to avnevhip ar u of ptoparty, er !i_ 1nsurance. o- sueh eaSer a+C+la] liabllitlea as vay te s ]aad by CbeSecr¢ar./ 01 ireasu_) ir. caqu_aGmrmAcc:dent or h.al:h c]verage includas. but is ra[ be lioited t overage f slck ess, acciden.t, c'. prav.nclve c , paysancs as ¢- ault c- ted¢cat candl!iar, a pay2ut of a f:xeG a acnt fcr apecllpc disenses or r•oape!alitacion or eeher spaeiflc tyFes of care. n ger.eral. vath reepect ec h.ealth inaarence. 6ne a s.s.-ent La Sapcsed on preniuv. wiN raspaet to prepaid health c arrangaaents, the asaesamnt ts ixposed an Cv fixed payaenta a- preaiutu paid by v Vit1 respect to sell-+nsured plana, the ment is iapedeor0.the a cident and healtL < verage expendituru and •JU edamistrativa expenses of the plan. She bill izpasas a 1.75-per:.enc ........ nt an Gha prealua for any i e pclicy praviGinS accident or health insurance. 1'Da ia.u.csa[ ma pollev 1s LiaDle for tAe assassaenc.' tEe aaeeu6ent _s IiposeC ragarileas af who pays bbs prolu. f a Poli<y subject to the a er.t pxovides tctlf accident or haalth G varage and n - ccltlent Or E.alth coverage, ea aeeesixant mpc.ad an t1Ne wr!ion o[ Se pzalua at!rleulaDle ta tr.e n- cidant or health c rage if tDe tlarge for such arLer c rage ia feGarataly stated or furnished !o ehe pelleyEelder in e separate acateae.-.t, and is reasanaEla in relation to Cha total c..arges under c.e Fclicy. Arranguentu •andac VLicb (11 . person re<ei•/es fixed paymens or prea+uma ln exchenpe for an agraa.apt to provide cr ra.!qe f tna provl..on of acoident cr health <ovevage, and (]) aubrtanc+all~ a11 t tne risk of utliration of health Gre ervicea is a d ty such person or the pr>vider of suci sa s prapalds~ulaealtA ce-e arrmqesentq are treated u lnsurantapoliafes subject -o txa 'ma D111 generally deflnas the •:nitad ptaces^ • include passosiona af tD. United States. Aaaur.[a collectad pureuant to this .nt a accident anG health crveraqe will not ee transferred (-eave~ed over^) to any possession. ' Far purposes ef ena a easene. a cest-plus contract is treated se an insurance cen.[ae_. 15e or Fres- uIlar nc , a T. se, the a s ,apeset o uc- GS - n pa a y]entreated as ibe lsauer of p the r' r aceestvsoars ~a paym.nca c< .... Fraan+oa esoen-. Follc)and is liabL fan :.. Che bii'. alae taposaa a i.v5-Fare.-v auaeue-t c aooucca paid `ar c n nea-ah-re:atCC a?alnla:[dc_va s rv:cea : -.udld in the prevlce fcr a vol:cy. She a seesvent u AmpcaeC on~t'e r cviGer of the aen'lces. -f the health-relacad ada-n+scranve ar-i -ea are parfcr-a e< p'ursuent ta a act prav.ding far adatn:stra services Sar Ecch accideee ar Cea1C= c raSe ace r- or peaith c rage, ]<a a]ent :a xPCSad o:, aarm!e pavdil adviniatratnva servlcesatbributable co GLe ron-accider.t cr health rage if the charge far such other s rv:cea _ separately stated c furn aead to the palicv;.older v .epacate s-e ent, and is rema..en_s in ra-a-tan to uhe cotal ahargea unde['4'e coctra¢. Sar+ices aubjecc et the aneasmant incl'=da cle:aa Fraceaaing c acher adainistrac.ve ar./SCes perfovved in connection with accldent o[ health <average (i: che cnerge far sucD . rvtces u n.oc included n che prevlua ! ^n pcliry/, ar.d clalas peecesung, a¢nqiny prcvisann a c_aent or health c varaga, a Cer 1e adainise:aeiv. a a perfaraea 1n cmm.etlon w•: n t,.if-inaur.d plan estaCllsMd or aa+ntalned by another pecscn. eeL t of self-lneur.G alae s.:f-inaured oians e subject t onthly assesaaan! e ^u al cr 1.,5 percent of the auC or tda plan~epexpar.ditsres for a ec]ent and hea~ c raqe (ae defined above) and direct ada+ nisctatava expansen fcr cv stn-. The assesacent 1s pald Dy the plan s. nsa.. plana subject to Ghe aaeeaseent are G=a.!e thaC p vvide a cd.nt ar health coverage other than chraugn an a pclncy" and :hac are eatablisGed o: aaintalned Ev (1) one a_ aare aap:ayers Published by THE BUREAU OF NATIONAL AFFAIRS• INC., V/ashington• O.C. 20037
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SPECIAL SUPPLEMENT for the benefit of tbeir aLrrene e r aapleyeese (I) c on upleyw OrgeniratLcna for the benefit of taeir Curran[e or [aiaer auGta) (]) one or w e eap'coyan and eap:aYU crSaniraCoca ;oLr.cly for the wafit of currenc or 'craer oplcyus; (a) a voluntary apl0yaen' TeneEic;ary eesociatien ducrLbed in Oeda ' a p[ovtsion is ^ t :ntended tc Liait the _ypea of arrxn9ementsthat are treated as :vucante pol'_uu a'ablact to the aasesaaen.c. For exasple, aaacgaaav.ca under ttc'1 sukatana:el:y e:1 of cae r'ek of u-xiLraticn of health care servioea : net e aueLty: Ghe person an9ing for the Prevsien of such .."Co. cr vlder c!a mCn se[vicaa e.g., . '=u-lcr-sarIica" hea!tt Cara aCrangenenes) are insuZince pel:cie] suGject to the aefess_en[. :59 - c 5]1 tc1;91: and (51 guaitf:ed a ' 11U1 ofpfa tal: cul[.p+e~. --- xel:ave arnanqevents, plans baintained by r ral electric coc?erapivea an ty ru[a: telephone cacperatlw asseciaetov• and cercatn plans maintained by trade, ind¢str!, o crb[alsLCnaL aasoC:aConl. `-s of ocSerce, Ce1LgloCl O, -aatiani, to p'1L-ic e..- -. assce3eXTla~ . .he acoLdent and health c rage expenditcres of a plan f any month do : incl'_da expendt['res aum)ece to one eesessrent evr Oltent antl health _n ranea celicy prmiuva or expecditures eutlect to C.e a- ecax on Naleh-velacad adminiscraccve s daacriDed a addLtion, a etaburaemen_a r ved bvl plan sponsor (through t - cclaivieal are r.IDtracted [rca aceldent and health ccv rage expenditures. Depreciation erpsnsas aLlevable for prapercy co be used i e- -h the Frevisnon of a cidene er health c r¢ge under cadaa n L6] a - ted as cideot and haaltt. O rage expendltuve. AOCLdent eand healtll c vrage expendi:uces do not nclule any ot.`.er expendit'are [ r CYaaCqUlsition Or :aprcveaent of land cr Ler the acguielt:en or iapreveaent of any praper:Y to be used 1 connec:lOn with the prov:sLqn of 0.idellt cr health coverage which is subject Or depreoiation a--ovance. The felLoving uaaplu !lluatrate the eperacicn of the aseeaaaenc with ropect co self-in.u'red plane: e --LaplOyer A uintaina a self-Snsured plen and has a ractvL4; ICmrance caapCny X to previGe ada:ntatra[_ve fe:vicea only with respect to The plan. PaPioyer AIs .ab1e cnvaraga for tEe avee.uant with respact to accLdent and health expendiccruunder t.e plan. naura^w Coapaq % as liable for the a ssaent with rnapect to uounts recelved Laa C1p1oy6 A for adSinlSOrative urvlcls. -x e 2--dplcyer 3 aaintains a Plen that is ae1[-inaurea, andc rchatu stoF-lOSa Ccwera9e : a Insurance Ccapany °. Employer B in 11ab1e for the auassaant viS respect : accldent and hultb cov.nge expendltcrea urder the plan. In applyin3 the aseessaant, the arcunt of any reiaburaezents raceived :ron Inaurants Coapany T under the atap-lcea policy are subtraCad frcave<al acciaatt and health c erage the coapan: for r1eble oPfor 'IGU pollcp shYnt nLespect to Insurance YLLL pruivu paid a s Cployer 9. to entu oroorau Oertaih direct gevernaental i:uurance pragrau a t fru gOVeCIIMrital ..... aPa rtf A t!A asseasaent. eapt prc9rLe or. .eedica ;oenar and 0, Yedieaid, any progxaa net prevides healeh coverage 160 m9h an in.suroce paLLcy) to aectera of one A_ec r ' aa or vetaram or tc¢ha:repcuvu ar Lepandents,and a pcograa estatlianetl by Fadera: lav for providing medical c Iother dlan thrcugh a nsurancs pcliry) of ]ndian Erebes. on., governbenn programs are subjaat to chesasnenseen_. led aed a ^ =he net :eVenueE ccllaCad from the as9e65bent v1-1 S sea :e tund the G!acuace !!edical ydlLcatlon and ACademic ~ alen Centera -axt Fund and tne 3iomed!ca: and 3ahav:eral .=.esea-c, -.ust Sund. establlated under the bill. 61[ective bate The aaseaavent as e[fective ! r payaents and puciums received and expene6 ir.curreGVitL reapec OtG Coverage for p-.,-s a-.e- OaGenber 11, 1995. ]. IIciae Sn at Sigh CoeG ]eeltb Plaae (tec. 70e Of taa bill and uqs. 4511-45i2 of the ^.oda) maaent [ae Ye exe•ae tax or other speeial Tederal uusaner.t is iaposed On daaestlc healtt insurance policy preeiuas. asaaoae ! z caanga S^.vi cseaietne tetiea that an exciae tax on aq:. cose tealeh p`ane cillhelp ccnCain naticnvida healGhlnsuranae Cceca. latetloa af 9roelsiop Sn ae ral The till lapasu a nendaductibla axcise tax on the ia r of any apF-icable health plan"6bet is detarained to be a higncaac hea12L 5-41 ' With respect to a ulhinaureC plan, the tax will be :aposad on the plan sponsor. An applicable halth plan I. any 'cartlfied standar'_ .^.aaltl: p:an- and any •cer[1[1eE r andarG healCh plan.' A certified andard haav plan 1s generally defined in seoamn 21]11(a) (2) Of dha social security Act, but. 5 tn:s purpcee, deea not include n plan p[ovlditS the elterative scindard benef:t package ducrlDed In suDCitle C of such the Are. A certlflad non{tandard health p-an as defined in aaec-en 21011(a)(1) of the SoC:al Saeuuity Act. t61 plan for any c xabte ?a_- _.- The tax :aFCaed eguals If -e-_ - of CG taxable mcuc wiCh vaap¢ o:ne n1gE cosc health ptan _ r the caxable pericc For purpmu of in. p-ovlaton, the r e per?cd 1 gererall'j vhe Ferlod iSSedLatalY fc:1N1.'1g the clteexe[ the plan's - ual cren errolaerS per1M for vnacC coverage 1s provtded to p rsens 'Lnaured .ncer the ^..^.e 3 ary of the Creasurl will utablilh reporting and ce[ikeep 0.9 cecul- - and the b ao for raking any ~rys - one cax~~xpcv~C v.-.Ger :hts prcvisiOn. rceas - a gtanted a orrty to ssue cthar regulavlars neceaaary to carcyaut This prrvvs~:cn. !. ltn mlu aan _ ^1le An applican:e health plan is a high ccat plan : r any eaaab:e pe :cd : which the premiuas r a ved under u:e plen° exceed the sux of The targat aCCunta :Cr each Claes of e1lrOilaent. the premluas receLved undar the plan will be ad;usted in And only to one axtenc prescribe2 by the Secretary of the Pceesury to diere9arG c . ^ . a l n a O lal [actora taken into a unt in utablisbing the preL1':]a c:largeLta 1:Isureda. ilit)1 respecC to coWYn:tv-rated p1anL the eremauma recuved will be the pruluu that would have been recaived by the Is, had any age adjuataant factor bun dievgaraai. For e aople, -- a ccuur.L<y-rateG plan charged an tndivLGual an An app!lGable health plen that cweCa irELv3aua15 resvding :.i Than a aty-rated area will ra treated as a aaparata Pla.n vlah uspect~ to each araa. i Amounis cCllected p`1ratLant to this eYCise tax on htgh most health p:ans will not d t-u:aCerred (i.e., cweret avac"I to any pouesaon. evary plan In a covunity-ucad area will have the s cpen enrollaant period, except for aaif-insurr5 plars nnrta¢naG by eul_isaaee aplcyers. The Gzole priod for a svlt¢atata ael!- red Plan with reapect to a W[LicVlar e u would w the plan's first [ull Cavsra9e perLOd that beglna e after the and the applicable camLniey-rated arsa'e aaveraqs period. For aapLa, e that a aultiseaee seLf-insured plan's COVeiage pe;t0d ^ :rca May~1 cc April or of each year. If the Glan opsvus :. a ce nlt'(- rated a- a that has a eovera9e per:ed that begL.na on 1,mu:995, CAe plabb ' xable period for that year would Degin an May l, :995 an.- end on April 20, 1996. ~ at o eaiuae recaived by a commarrity-fates plan do net inctu_e any [vak ed}uaanent payaent racuveC by the plan. 162 add:tlonal 51OC a a its andard presl•.Lr as ec_c ^ ivldual~a a9a,t2:eaLdlt'_ nal 51c0 as not treaced as a preelu calved for purposea Of deterxrning '+hether the ?lan ia aaigh c_st plan. with rupect to expececu-reeeL plane, the pvaluaa r calved vill be the t iuma that would .^. a cean reeeivea ty G e plan •.aG e risk ¢djestrent :actar been disregarded. The ccmatvee mcenda that the_tek edjua[tent factors to be daacegardei vt1: be aimilar to t'o actov used by the JecarbaentoE Haaich and Human servtces :Y!S ~ dete:SV e the r:ak a]iuatme-.] for c -'y-rated p1Cn3. For e n f gander 1s a 'actec that is cakenmunm aecount :n deterx:na-ge. ~ L- ad'cs:a<ncSor -camun':y-rated plans,then any ounts raceiveL by an axparlence-ratet plan actzibutatle to gander will be as[eqaried tn The xan.-.er prescrtted by the secretary Of the Tceaaury. The pruil:ps reedved under the plan include any preaiua reteived by tna insurer with respeot be a ce-.i[-ed supclumtel healtbplan^ .^.eaLth that c vera an insCnG ateo cGVCed by tne Cer[iLed standard plan. o 5ivan Ciaaa of mrolla.nt for any uiable peri<G, al:a targ. eucunr will be the target preaiua (utabLished by on. Steasu:[, as d_sCnsead balcYl for that Class Of e ollsent anitlp'-:ed by on. nuaber of praaary insuced peeple eovesed by the plan in That clau c- ar_c113er.t." Establish An applicable health plan will not be treated as a t:gn cost plan If in. 9raasu.ry Geterilnel net she adj'1{ted avata4e presl'as for the ptan falls belcr she adjusted average preaiu or tnru fourt`.a of ec- plans in the ]rl=ed Statea for the Calendar year. The adjuaed vare9e pru-ua is The rei9hted wernge G[auu for all ol ue c5 enrallaent under the 7}en adJueteG to acccVnt for :L) the aaae actlAriai faCCo[a discussed abmVe an the Case Of C]Lu:.L:Y u'Parlanee-[ltatl ratad plans, age adjuetaents. and =n the :asa of plans, risk djuataents), and (1) Cet-of-llving" and rtlar dilfecancee aaonq coaw ley-racad a eas vbich effect prean.u c sta. the auaeed evaxage -rulua taku into a¢ount any prutu .eceivad A artifiad s ppleaental tulch plan La de[ined in aectlon 21011(a)(4) of the social 9envrlty Act. Publiened by TNNE 3UREAU OF NATIONAL AFFAIRS, INC.. Wasnington, D.C. 20037 II ,:~
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S-42 I In L a Pr.ara tr.aueed persorm is red cn1Y for a poralan a re taxabla geriod, the carqec praaiu.vatb rup.ct to auc. pesson suatce piopoitxcn.tely reduced. ' - --cf-llve.ng data i not available by area, tha J au o.partaenc is auchorired : uw auchh otaer cnfcrvttoc vlating to cea -ar-Siving as it doeu relavant. 16l - cta [eeFect - ce ted s nta; ~ e/tn plar. cvers a.n insured alao covered ey the ca_t- ~.G standard neaith 164 under h.e bill, U:e :axable am0'.ln: aunt by vhic! _}e - cre]luma recelVed Un]er :Ra eatl G5e -eferecca preei',L~ saeunta- tcr eacn c aft. -T-lvntW [ tnia pcCpcsa, tRe tocai p]evtuaa rlcetved la a.er]i..-0 1=be s mr detenininS vn.c+.er a F-an i a n ~a ~ high coac tlan.- ereference prul's e Ccr e givn c of .-volL-anc. vi11 te the reference presic¢ tc~tthec clasa of e mllment !er oa atle oaricQ nultlpl_ed by ehe r r of praaary inaured Fnple ccvered my the plan in that claas cf e-.roacant. ~ a Secratary o5 the : ury : rpuired annually tc es:at1esh target premluzs and : - e e r nity-rated a- s scan as practicableafter_ec oftnf a uapen a ellxant perlcd. A^a-vet prasium and a refer nce pcaa:ua would be saparately stabllshaC or cavunucy-raceC and aapr:enre-rated plana vie`. e.p.¢ to een clas et en ollaenc. SEe Sacaecary is ceGulred ca aaClaahcargec preai'.a; at 1 vels it e will u e the tax to apply to (1) c u.':ity-rat.d sta:#erd health placs ctv¢ing 40 parcnt of the total primary Icred peapl. covered by c amunity-reted scaedard haaldb olar.s Ltba a aM ~]) experlance-rated stmndard health plans c in.g 40 ?err.nt aC the total prisary : ured pacple covered by expari -ratad atardard !ealth. pla n tha e e v vill eguat the a rage preeiu for t Thebe at . e11 .nt o!on a11 aertitied standard neel-~ plena af.rea In ttteaaraae aataen[ ef aelf-lvured ¢la¢s For pu--poasa aC deteraining a ael_•-insured plan'a svatus aa a bi9h coat plan a¢d i.n taxabla asaunt, tbe puiuu raasivad by oSe nel_'-insured plan ri11 i. lude (1) a acnabla esciute of tLa plan-s e%pendit'.:rel ccida3t ar health caveraqe aad far direct atlsiniace:ive expanses L LAa coaunity-recaC area during 4e taxable pariod, and (1) any pr.auv pa=d by tRe plan spansor fcr acrident ar health coverage under an lnsurance pa11ry. Sbe eiCiN tal rata 'lndar Gas praviaion 1. lncrsased to ]9 percect tor tazaGle parioda CeqinniGg after Oeceeber 11, 1996 and Gefore Sanuary 1, 1001, co provide ful: aubsidiem for cSl:dren and pregnant viceen under part 9 of tit`a XIX of tRa Socval security Aot. lffaeele nate Tha prwiaian is af!erive a!ter M<eWr 31. 1995. 165 6. Aacap:u:a of Carcaia lealab Care au2sidiea Raceived by 81gb- Icccse ladi016uals (aoc. 711 of tIIa bill a¢d eac. 665 ot the Cade) Pr.ae¢' t.e. YC21carl, at::orl:ed under '^itle %vII: of t.`s Scclsi Sectr'~y dct, t5 aIacacnvlde neelch :nsurance preSrer fer the aged and c¢rta.n d_sacled parsons. :: cohs_ata of two Perta: -:e haaFltal insurance ;m L) program and cta suFpleventary medical insura:.ce ;Pact 3) pngraa. Y.ast Arle[:can5 aae 65 ar c1LGr ara ac' a'- t_t:ed ta coverage undsr 'an A ot %edlcara. Part 9OtMedicar3 nt_ t:ed:s vol'atar;. Far199<, eacll :ndtvldua~ VRa eSrolla in 4edicare ?aCt 9 pavs :. "- a prealun ot S/1.1J par month regacdlesa of his or her -rdoxe This pcemica rate ia egual re SS percent a estimated ?ragres costs for tne coming }a r 2enef :e r veG ander Part A a:d Parr 9 of Cadicere a[a excludabla f-^Ga tl:a gross L c-ae a[ ¢Re recipiant. leuoas fae Cba¢ae .. . Under Present 14. Tadaral GOvernfen4 eubaiLiNe 15 percant : ena c of c rage under FaCC ® of Madicara. :'ha subaidy applies t tall Medicc-e PaVo 3 enraPees re,I of rlAelr iname lavels. The Cozaittee bel:aves Chec prui3a subsidiea should be baaed c ach taxpayer's ability to pay anL, tRus, bpat highar- ince¢e taxpayere should pay a grsatar Nara of [Le ptuiuaa fo- .av¢aqw under Nadica[e Part 3. Sipla¢aclo¢ af pr[viafe¢ Under the bill, caxpayers vitR vodifiad adjusted g[aaa 1,tome (AG.) above a chreshold aiount are reguired to pay adGiticnC prl61'.us for each acnU o coverage undar Part 9 af Medicara. ^Ra ua Medicare PaK a pcuiua for M1iqt-L1CCae %atlica¢e Part 3 rolleae v uld cover approxiaately 76 percaac of atitated proqraa cosca, up !rce the currenc level of 15 percant. SPECIAL SUPPLEMENT Far purpOaas of cevputlng c5e addibianal prealu aodltiad Ac] _a aG2 plus tax-eXefpt interest, certain tareign aaurce :ncoae, and _--c.e •rc. tix-exupt higber aducation C.S. aavl.'qs bcr,ds. E'u uEOid oouat 1s $90,000 fcr .rried taxF.yen, $115400 :- xyayer aurzi.d xyayera ed tarpayen filinq jolnc [ecu¢ne, and $0 for -a tr!ing separses r.bu:v. The ocunt of additional praaeuas is phased vn : r uxpryera vitL acdlfiad AGl vnaC eiCeeds the thrtlhold alcunc ty lass : n $15,000 ($10,000 far saLried taxpay¢n filing - .a if aach apouse is reguireQ to Fay add•. Sonal praal'u.I. Any adtl :ia.al Medicare Part'5 p[u~.ua ivpcaad under Jv bill are traated as 1n-_r taxas for purposea of vubtltle t af the C[<e :66 -ns ' ced=r and adm_-_ - bua a treated as - ncoS. • tax !Cr a e _ _x pCrpcseee o Jtjc6a see. 55),a !Or t.te p5naea CtdateC61r1ng cL amount ef other tax oretl ~a cnder t.4 CaCa. Addttinnal pres_uaa mpoeed tnder the Cal'l are Geduc'^iGle to Q' e%Cent IDe ¢r _ua when SdLed to otEe[ oedicai expersss ^c[ oclacvua deGCC¢:hl. xcsad '.6 Farcant of AG:. Unda[ toe bi1C, panaitlaa fcr !a_1'ir to pay ea-imated i,rme tax vlil not be caposed a a taxpayer fce any : r=:dpricr toAp=i1 16, 1997, to tbe extar.t that the undercayeent r u;rs tt'nm the :ai'uro to pay ad]mconal Madicare iat 9[ a_ues. Prraeacs 1 e ae collectian of add:tlonal Medicare Pact S presiuma a o be credited au leaab v-carly to e^.e Suppte¢entary Maeical Sna-rarce ]:uac Fund. Undnr preeenr lav, the hedicara avat s applicable ln U.S. paa. sicns. In order to en.'cre rAat the addttional Part B praa_ua a'3lected 1^h respect to Madicare partlclpants who are residente a1 a U.S. possession, Lne bx11 proviLes [hat a U.S. pcussaiCn 1a noc a partic.patiaq5tate for Furpoaae af the bill u, vndera agreeac.t I1^-h ClA United States, o.e lava of the poafession i.paae aLd!tuocal Xed3care Pa^ B praaiu tbat Sa coa aa.s as Sac :apoeed '_ the United Statss ar.d c-,a Feaasaaion Faya aver ada proceads t-te the premium to tne Supplu.niary Medlcal Insurance arust 1tnd. •t4e[i.e TT:e provision :a effective for taxable years beglrming after CeceaEer 11, 1995. s. incrasae is noise ta[ aa certai¢ iailoe poi¢t e¢d Lrge caiiber 4adgub Aou¢Stica faec. 116 of the bill sad seo. 4101 of the Coas) Trete¢e tae A iC-p.[cent axelse tax is ivpoaed In the sale of V-acals and rwalvais by a vnufaetuear, produOar o[ lspcrter Uereof. other tireares astl abella anL urtriiqea are sub]ecc to an 11-p.r_ent Asaunts e(Idivalent to [ ^ a froa theaa excise taxes (Jr.d i`.e Faderai Aid to 411C~ife Prcyraatcr use in saking grants to support Stara vtldltfe pregrsaa. lauona f r CD.¢as 167 - mt^tee telie'aes ] Et1cn has b desegned, i- 1.'+q pcrpoces~ buc ratt.e[ vitn the s ent to avlLc[ savere,sa , FRyslcal m)cry to the humn body. ?ar mcle, a e arnunaiav [as been designed to pCeduu, upon yapact, sha:~ bar]tiik6 pro]ections :hat e end beyond the diameter of the anf:red carbr:dga, prcduccny GX[[ac[din¢rf tisaue damaae in a Vic.-IR. in the Un:ted Statee. 9nch amSUnttlOn c r. ta purchased eadily cver the c untar. TSa availabiltty of such ammuniticn pruc.cs a g e danger c d.nary cltitecs, to law enfcrcarent efficers, ar.C even ] .rGency room pnyeiciana who ¢usr re¢oce -ar'.ed p_ _ectale9 by hand from the wounds o! gV.-shcc '/ictl2s. 'rRe Com¢tttee believes that such a®aunition should be removed frm the sarket place. Acoctdingly, Lne -.omaittae balievee it if apprepriace to impose s reta of tax a! suffictenr ¢agn :ude on aech aSSunlucn to eli5i`ata iti manufaCture. ti'alanatiae af pmHafo¢ e pravialcn i the ad vilccu axciae tax r^ ceCCa~ handgun a nSion' A 10,000-peCCenC ^a aFPites tC (1) jacke'ad, hallav poinC Froi.etllaa which uy tauaed ia a handgun and are designed to produce, upon :apact, anerp-cipp.d, bacb-11ka pro+eetiom clab excend beyond th.e mavetar of tha unfIred pro'leotile: ar.d (3) -artrldgea with a prejectila v aa'ar:-.q 0.500 inch or Sraeter in diameter vhLC: aay be 'aaed In a landgun. Racketed• aeana the projectile or bullat is aited 1 a thin metal Caver o ~ncket. "RO11¢v polnt^ se a!lferea cavity 1e the n at theprejaclle. A hollav paine prO;eccile expands pce:areils evhai an i¢pact. Sxanplas ef •aeketed, hollov point that Prod'aca, upon Sapact, aherp-lSppsd. barb-11ke proje<iona, a e nitlen c' ncly Xnovn aa •Siar!ic.,• "Hydrt Shok,• "Golden Sabar," and •Lawn.• A.otints aq4ivalent io r vaTU a CrOf t-`1a 1ncr aaad axcife : will be added to tAa Ganeralatvnd and vill nat heu.ed to fand t.ha Fedatal Aid ta wildlife Proqra. Published bv THE BUREAU OF NATIONAL AFFAIRS, INC.,'Nashingtcn, J.C. 20037
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SPEC(AL SUPPLEMENT llfea ive baCe The pcovisicn 1. effective fcr a_ a sade after Leceebtr 31. 199a. A Iloet stocks tax genecally : apoead on tved aaunie:on preCnC-..a held On SanYary 1, 1995. {p•lever. no floer atOCks tax la iap0aad taxed auunition that u destaoyed (in a sarser =rascribed by r1e Secretary a1 Treascr/7 tefora (.prL1 1, 1995. 16B 6. kedi!!cation to ael!-dp10}.+OC fae freataaat O1 Certaia a COrpor+tiOp ener.bele.r. aad JartCere ISe=. 716 Gftbe bill apd ear. 1.12 ef the CeQel Ev 1 1 Pe.... t J. As Fan o t.he Federal rDeuratce Cce[ribctiona Act (PICA) . a tax -3 inFOSed oa t=plsye.s and aaployera, cne-hatt Of `be tax i:sFCSCd the emplcyer a d onm-calf :s :apofed o- e enplcyee The tax :s eCmCOfed c! N[ oarca: c1d-eqa, sYT~lv and d]sabi!icyV. auiaec. (OASD') and Nedicare ,^.nsp:tal i-uucancs ~- 9I1. For vages -reed-ic 15sa to covtred tepteyeaa, tha cotal CASDI potC:cn e the tax is Lx.l percent af Cte first 560.600 of Vage3. L2e total XI portacn Gf the 3 1.9 percent Of C -a1 wages. ..le cap en La9ea SnbJeCt to tlle oASDI pcrtiCr. of FICA t.a :^deitd to otal:gae :n t`.e a erage Vagaa ;he e onoev. 9ne cep e vagaa subject to tt.a 91 pertlon of the eax l the f HI v+ge a cap d aa c$l]So0olVed after Ceceaber 31, 1913, FOr 1993, S:Lilerly, under ine Sel}Elplcyaent ^onCribcticv Act (SECA), a :c e.f-eapley.e=t tax :-aposed on an ln.dividual's nat +a[Tanga ( ;SE~. "JIC SEa tax rate ia tna . s@ae : +PICA r e for e®pioyar3 and aapLcyama (l.a.. 12.4 pa[canc for cA50t2 ar- 2.3 p.rcent for NI) and toa SEJ. T.se ia eappat anL 1hGaaed L ttt sase aanr.ar es is the 'ICd `-ast. -: gan+ral, the SECA tax is reduceG tn cet extent the lndividu+l had vayaa for which tEC\ [ames a•ert vatL:eld cuc¢ng the 'he NESE of a partr.er In a parene[ahip generally la the pae[.1r'+ d:atnDUtva fna[a Iroe any rrade ar bualntas of the par=nerahip, ad]uaCed for cer"Jin itela of LneoM that a e pasalve 1n natupe ([Or ampia, rent+ta of real estate, dividends, and Interest ar excluded •YC9 5'?SE uraea3 sucD +aOUnta art r e:ved in the c of a trade o busineaa dealer - tbe ralated propertyLse xovever, tnt distributive share of aliaitad partcar gentrelly is axclcded frce VESE axeept to the extant the d!atributiva s4are is a guarentted payment for wrvicas aetually rendered te er oe behalf of Cu Farcnersn6p. SSeilar rulu .^.et provided !or aharehcldtr3 i 5 pOrporatioN." 'fEUO,e enareholdera ara 'At reqYirad ]c lnclude aa Pbr smse puryows, a ahareColdar tLat cvns ac e tDan 2 percent t1u stock [t an 5 corpcrntion s creaeed as r+rtne[ lnn paztn.ranip (sec. 11%2 p/1Flovever,tble rule dee3 not apply for emplcywnc cax F~-poeea. !69 NESE tnelr pro reta share of Ia nceca o: an 5-er;o at:cn Aachar, shaceholder» xha parforrm servicas for the S accpo at:on art SuD)ect to FIC\ taxea On the Vaga3 pald to cnaa." Re at ( - 3he SECA wage base is l2cc'.ded to taalle: the 9ICA vage t r3Aac beth SECA and ?ICA are Intended to aYbject ; tax r - ttna ons cixcayer later. The coSlxee _elieves-rltac the ea[re02 SECA hCse ! lnder-1LCU+1ve in aeLa c ses (because ctrealn labor scb)ect to taxl and o -uclual•n ceners (bteanse c- n capital 1nCase : 9L`)ect CavLax). ]er- and - ncleslone elttn r suLe mtvely became of rbe [erf e n] e r-( e ley t^~'cuGh rhieh ane vdua: taxpayer condecta nis Or hei trade o business. 1Te bill 3id!Ilee Lte SECA base t aorC accUra:ely a Sure the "vags" eleaenc ot sat-esplcysant incesa and to provide simllar trutment for sl®ilar vneeaa aarned tnrcugn different e,+pea of tn.tielts. ei Sm ia dteaeal S4a previaion asands tne definition a: RE9E to; (1) inclcde 90 percent of tna pro rata snatt of S corpGration e a darived f- a.rvic.-raatad ]ueines.ea for at.reholdera who wn acre t`.an two percent of the stock and provide signiEicant sarvicea to nne corpcraclcn (2) provide aLilar rulef Icr liaited partners rho provids signiticant aervices to paraerships; and !]j prsvide a apecial .xcluaion Cor certa!o Lnceet derived fnos invanccry fcr a-_ texp.yera. ! =a ratioa sbereboldera Under tlfe previaien, in the usa of a s2-percane sharehclder" et an 5 earperation for any taxaGle yur who prevvdes significant servic.a to or an eahall sf the corperacien during t2a yur, the 9E52 of the eharehmldea' inclndta ao percent of the ahe[enOltlar'a pro rata ~r S.n, Rav. Aul. 59-021, !9E9-1 0.9. 225. }urtberface, a ah+tehalder of an S corpocatien aCy be sutjeet e?ICA is aven if tLa sharebold+e is not paid aacu.-ts dtneainated aa vages" by t9a carporaticn. In Rev. R.(1. la-a+, 19'!a-1 C.]. 287, the 5-43 IPS held Cbat tw sDaranoldara who parfcned sarvicaa an 5 corporati0n but did nct drav talariu v aubiect to rIU cax a dividend disiributicna froa tte coryccation becsvse tb div+denda rapreaenead r.... nable cc~enaatlon 'er Ghe atNSCea perfcrned. Saa. a1ac, Snic 91e 12d 90 (9N <ir. 19901 an] 0.nn a clark. P.A. v. n.SS, Ne. C'V 9]-O10e-E-tiL, IDC' Idano, 3/25/3V [cc sialler rtsult+. 190 a C[ xebie ° lc.a !- a yerric.-caleted buar.ess.n^ carr:ed on Ov - 1.e 5 Corpc_aC:On. A•]-percen: eNrthcidar^ a any sher+hclder ~C1at cvns Or+ than 1 percent ef [ba sceck ot an 5 corporacicn at anv r:ne dcring the year 1]l](b)). Th+ anar=nc-der'a e ata Sna:e of the 1ncoN ar lcaa Of an 5 cOrpcratlOn _s decerbin<d Fucsua:.c - na - ral vles o suGchapLer S 1166). A"yN:ca-[elatad any ade or invol'an9 the peCarvance c - a fieLds of baaltnc•o6n.r than ich cact ' ln-pa4enwc psrson+l car.r faci!icieel, !aa, ^.clnaeclnS, arc-.atec-ure, accaunting, a -al aarvL^ea, perta_-rin$ ares, crnsult:ng, acnltLios, fir.anc:al . cts (ctnar than :entnnq~ or brakerage servuea„ c_ any trade or bu.rn. a vi> atspecc to vnlch the Secretary of 8(a Treiaury ea[era:nea v'at capital _a an lnslgnlflcant 1_c0ae-producan9 fac_or. The ptuent-!av avclua:ona lroe xE5[ cIlat apply to carcain ;ypas of lncane slsc apply to S corparetiona, it any poYion cf a shanno!tlc's a o raca share of the inaose or 1ou of an S corpcrac:on fres a trade or buslnaaa carrled an by the corpontien 1s c eaun:ty preperiy : or 1 uvder c1e coaunlty praperoy !avs applicabla co acch ehare¢ a!1 e eucn ince.a Cr : a is lncluded i capueing the NESE of the snere!fo'tl.r and ne part CL sueh leease Or loaa is eaken into aacount ry ;nt +:eCenol3er'a apeue.. AvnnCa that an 5 corporatian shareholder eYat treat as 1RSE 'andat :his Frev¢a:cn ... treated a cc+qansaLlon reoetved by he tae avar as an esployae of the coryeration for purpcaea of scbchapter . D of ehe tnurnal Rav.nea Cede (relating to daferreE eospenaaclah) ei ae a - eY.e c o1 a 1lnitad parin.r of a yKaenbip Vno p vidu sig:~ificar.t s ~ bal:aLf of the parcnarmtp fur~ng tfe , tht PESE of Ce parinar for tne Year i c1'.(Ca ao percent of eh.e partner's laseributave share ;other tnan guarantsed payaecns for SeNlc+al of taxabla !ncole or Ioaa Lrd• N[viCe-raat/d buslntsata (aa deEined abova) casled an by tns p+T_-,.eanip.'° IEe prcvialon - ter Lbia p;rpoee, lendinq uralcea ganavlly su,. tne LnGing fervices cf a tyye iilLnr to ihose nctfally previdedby a bank o. sieilar inetitut!an. - In so.a nstances, a li.ited parcner .ay provide significant a.Nitu LG or on bNalf of e partnersbip i.R a taYaDla v thac -•111 generate :axable inceae to the partn+ahip (.bd b reported in e dlaeribYt/vt ahare of the 1!ii:ed parClar) In another tanable year during vhich the liaited partner nay vot ptovida eignit!oant a r.•SCea. Ta t ex:ent prbvatad 1 rtgu!a4ons prOSUlgat.d :y the Secrecel:' of t`.e'ressury, a 1laited partner vlll inelude !n NTSE + portion ef t.•.e pariner'a diatr!DUtive share Of t+xalt'~e i CoN c- lma froa s.rvyct-raareG butinassa f_-oa a caxable year if such share - iaa tha Freaant-:a+• q~arantead oa`.-Lent - e rcr 1 ted partners ahoaprovid+ aerv:caa to cr on tanalf ~=f :n. partne[a.^.IDPIbus. for txappib a li`litad parrPer who prcvidO fign:flcanf sarvicts co or cr behalf ef tte partners¢ip '-ur:nc the yaar .culd inetude In NESE:;ll lOJ percent Cf Lnv guarantted payaents receivad for Servicea. plua (2) EC percent of asy rtsa!ninq dtsiributtve snsra ef azable lnccae mr loss from s ict-ulated bus:nesses c eetd an by tne partnersnip. ^he presenn• ev exclua:en+ (roe NESE tlac apply ;e certain chas o( c.coae also apply to !1®aeed partners. Ibvaacerv ineese n general, ene prcvrnion ai1eV3 2 taxpay¢ Vitn FESE :r x of i1]S,COO and !ncoae (rom i entorf to exclude aC pertencofsoc-I ' ececry i e frnv NES]. Yo exelusion ia a1laVetl Vltn qap+ct • i~e first $1]5.000 of NEEE. elan t a11 of such LCCasa is (- inv.nLOty. Spec!ticaLly, the provaaion aLlcvs a taxpayar to cadxe Cis c- her NESE for the taxable year by 40 percent e! the aeaer o((1) t-be e +eunt c• the taxpayar'+ a_locaGlt fhart of net invantory inees. <rlEi tne amount by V:!eh :ha taxyeyar's NESE (det+ralneL vithoYt raepact -c t'tia inventcry excLUaion) fCr C]t }cear ....... $1]5r000. T.he $1]5,000 aaOLLne _3 redcctd by CLe a nt of the taxpayer's Vages that ara a{:D]ect t0 /ICA and is indexed to CllanQes in the avacege vages :- de ecancay. r tAis purpcat. "na; !ncasa" Sena[.11Y da n.t - p frca l.he sale of property descc:bed in aection 1221(11 (i.e., tockn trada ef tbe taxpayer cr etqr property Of a kind which vauld preperLy be included in tne -nvu:tcry of the taxpay+= it on band at lc!ca the uxaSle vesr, or pnop+rty held hY the taxpayar pr' y(o an1. to cuatomtrs in tF.. ordlnary c of bis caade or bus.cesslr ?ov this purpose• net i coaa is the gicss Profit Iras inventory a raduced by tba !taaa of deduction or losa properly allacable to av b In the caee of a dealer in securitiee `as defaned i sec. r~ a%Sle)(11). nee inventocy !ncor genaral:y !ncludes a11 net anc[a lHe Q ~ 11 ~ ars ia attriDUMbie to uNicas per'-o-~ in unV.er CaxaCle va ch .y a [aqulaticns sbal'~ not apply to inctae +tir3uiab!e to urv suchices ~^ rendered in taxablt year Np[SCr ;o the eflK.iva date c • thlerp~rati N. Siallar _ iea vall apply co 2-percant sta:eGe:ders of '^ Puc!ishetl by THE SIJREA.U OF NA-IONAL AFFAIRS. INC., Washtnytcn, D.C. 20037
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S-44 rer a raea ee huatnaea 11 eeta aetlva<y af vE:e: 's CYe • af i entcry, aat inventory :ncafe ie the net 1 1 Cte tradeao b'v1MSi. !Oi a trade er bueinese that !nvo s tlfe aale a r.ventor! enL ochar . aoY incar i1s th? groea pro[:t 1 t]e :nventOry v salea s(i.a , gre.a les lasa s ca t! goods aeldl : a t!e :teaa of 'voss atd daducaicn praperly allecable to suc.. salaa. 1]] . ^- ..•. . vESZ aaee - _ _ in .... <`-lea 1). out . cicding-a - _35s~c --acva i~~e.iG a `a aaxpey.r'a caFactty aa a deale['nei..cvn :u~e Rus, _ inventory mcobe ae a dealar in seeaitcu c:vdn n-eaut dividends, and cv.a: :necme or gain vitb rs;.ct m ri.cJ.^_c.a neli a. -n+entary. other Act. -.. __ visi.,n _axes conforz:cg asendsecta to _ia social Security -`e pnvislan ns net ic_eqed e changa te pnaenc-:av althcr:tv the =- 1 ievetua Servica to ae ~ eCaper aaour.t to be treeted r , darcved ny a ....... lder-uPLoYea of an 5 ccrporaairn. If!eetl.. pae. The p[ovis:on apptiee :o cdxable years c: ir.d_riGUala beginning ¢ftar CeCenbe: i1. 1995, and to tAraale yure of S ccrparetians and partneaahtps e,ding viN cr vit`.in auch raraGle yaare c_ individuals. '/. Zxtevding Yedioara coeeraqa ef. aad apPllcatlav ef Ceepitel Iaaca'anca Ta[ co, A1 /tate acd Iccal Gavardaeat Lpleyees.(a1o(p)iamd 12s(gGilf tas bcial(sewrit} Aat)a~ 1°d pSlaaat Ilf under present :av, State and lwl geve_wnt nployaas h:red before April '. 19ea, a nac c artl under Medivra u.nleu a voluntary agrseaent is -n affec0. A12LOUgh the Goapitel lnsuranca A ealf-aaploysd individual i cludas as NG9C gross :ncome frsa any trade or butinesa carried cn by tEa individual 1 ee csa deduclocs allocabla - sucC incou. Presanc-lar sea. 1eof(q (ll providas cLat NEAi duss . t lacluda lnterest and dividend i c unlaas the interest ard dividentls are tnceived in the coursanafaa trade or businaae a9 a dealer :n stocka or sacUritiaf. 9lsllarly, t{0](q(]) provides that gains froa the salea ot property a zcladeC frct Y69E if such preparty : upital a or es of a ki^d vhich ie net Includible in lnvantory or held priaar~ly ! 1Na aale af US, mWer presant lav, a dNlar in ucuvittes daecrlbed by sec. raTS(e) :!RUS, (1) qonarally ixludas in MESE U:e dividends, incarasc, gains, or other i:coae darlvad frot securities duc:v4d by sl s'5(c)(3) held by tbe dsaiae. A duler in a a qanaraly xctud.m froa NL9L any i osa darivad fro. a security tald a an inves.nent (e.g., theee aeearitiaa eeaeribad by aaeure"5(b) GI(All payroll tax does no apply to fucrh eaelcyees, they eay : YeLiea:a tanafica,! ampla, 'lmeugn their a . Yedlcara rage and che tospital i.^.suraece payraLl -a .ndatory for State and local qavernaer.t eapiovaes hired ccar after April i, 1`2E. and PeCerai eSployees. - wages paid in 1494 ta Yedlcare-ceve[ad employees, the trttl hospvtal : - e tax cate in I.s parcent of total wages. e-half of bta hospstalnC- n - tax (1.percentl ta :Eposed on tha zchvee ar.d one-..a_f ontce eaplcyer. zeaeoee for aeanae The Co2t--oee believes C c 1t i appreprta[l, aa parC of fvvdanental Realth ca[e refora± to requira chac all State and : cal govecfine.^.t eap_cyaes bs en:itled to covarage undar Madiure. Tha Coa.amtee belleves Jlit such covetaga v:ll ensure t.*.aG no elderly tndiv¢duals vi11 be eenvae adaquace Gaa'.v. cnr.. Taddieion, rany State and local gevernsent emp'oyees already q aLty :er MedicarI cwe:aq. by viitua o atner asoloyaeo0. Tbe Comictee beaavea chat i1 1s unfair Co reliave euch eaployaea of a cbligat~on ta contribute to tha aalvency of tae Y.adicare avsto when all other employaea are requlasd to contribute to Med'=ar. . after ttay have e f!icienC guarcers at cweraQe to qia-ify far Medicare beneflcnu abadlaaatiaa or ~elefea The provision eYtends Madleare coverage on a vandatory basis to all aamlu ot svate and loul gavernaects nct oahervnse covereL undee preeent law, without ryari to tReir daeee of hire. Thesa aaplayaea en d ttuir aspleyers vould ba liabla far the nospltal ineuranca tax, and tlv aaplcyau ViL1 ear.: credit tward Medica0 al!qibility. . In addition. fatvi e prior 1a Octobar 1, 1995, of Stata and local governyent uplayasa rbcsa vaSas a r eublect to che naspical inscrace tnx sclely baG9usa cf the biliVill ba c aidered cov retl aaplcyaent for purpoaee of datanaaing eligiDillty for M.dicaxe veraqa. Tbe wper-rnt ef the Treasur+ (ill ba requi:ed to eieburse tLa Federal Hceplta3 Insurance Ttusc Fund for additional payments vde, abinietz.eave axpensaa i curred, and any lntereet lasses vhicts occv u a cssult of the va<ognition of the prior et State aod local governrnt uployas for Ifedicara eligibiLlty purposas. SPECIAL SUPPLEMENT ln.u`acicnvvyvn sau r- Wc tha sacretary of V.a Traaeury, i~ G a 9vrareaent6 pravi=e prceed~_rea u.gr.ed to ' that Ltl~d tviduaia vhc p.rfare ;adlcare-qualitted governxnt oplovse t are inforfed of (l) thair llgibvlity or potantaal ally-Sbillty for baneflts under Medicare Pac A, (1) tl:e req,u::ecenta fcr anc crnG =:ons of, <1LSis:::c, •-r beneLts cneec Madtcdre Fart A, and (]I tr.e necesatty of talang a tioely aFP1:caCCn aa ¢ condi]ion Cf banalrg eLtltled m benefita. These precedures are renVlred te g:va paCtlfUlar at;eition to indlviduell '+hc app!y !tr arn annuicy ar retsenenc benefir tased cn a CsabLLty. The provision aF?liea co serv:cu perfccaed !y Sta:e and local aovernrent uplryees after Septeme: ]o, 1995. 1l5 euCai[la a--Tar Trestaect af f1GlaYer-9ccvided aealte Care -. 4ar Treataeve of valuvtary nptayer Eealta Oare eobteibueisns (eec. ]ri of the II111 aad aee eeu. aall-e5gi of the eada) Presene /ae Em-.loyers generally can deduct the full cost c1 emp:ryer- prcvided hea_ch care ae anotdinary and necessary eua:ness emena In addacion, m leyer-pccvvded healtn Ceverage generalLy is fully xcY:dable free the grese : e o: evplcyaes. :tovever, : emplayer pravicas i employees v:t!h heal-!. hanefits under s eelf- icaured aedical : ent plan, r nce under s rlen ara eYccidable v1t:. respect to a hiq.`.lymcoCpfnCaOad :n.L_vidGalc y to the extenc that the plac dcaa nct dsc[intnaca in favcr of Gighy co¢penaacad !ndivtdcals ucher e vqibll:ty to par_vcipece or bl l:t a baneflts Isec. 1a5(h)). Urdar LL vqi yt2e ragudreaancs fcr ontliscrimvcanar. in benefits, a ult-!n.ur.d plan aay etteDlish a lioit f ent e reireurnaaent vhiet aey 're pavd for any sinqle o it caarination of bsnatits cnder tta plen. :{ovaver, any u ua liavt t the amount of zaiaburseaent fcr health expensas attrrbutabla t employer o tributians under a aeil-inn:raG sedlcal .xp.ns. p ust be uaibrator a13 p.-ic!pancs and fo: a11 dependentaac eaplayeu who a a paraciwOCe and uy not na ecdlfied by reasan of a pariacvPart'a a9. or Years et qrvica (]:ae.. 9eg. f :.105-11(c)(91(i)). laaaene ! r L'hanaa The Camittee ballevas thao upleyer-pravidad beehh a rage that dcaa -.et eut the :agulLaaants at t.la bill, that dieciovnaces agaivt individeale Gaatl en haaltb atatca, a[ CEat i net mada availaEie on Uu uw tarss to all vployeas should noc : ava favoraEle tax crutaent. Norecvar, r.quirSnq any eeploye Ce cr.arrbut:cns to ba vda aveilable cn the .. r.. ec all employaes preventa aspioyare fia prwidia veraga for higher- oployees vhila shifting :Ae ccae f crverege o1 tovac-tncoaa mplaveen tr tha redaral Gavar:aen0. . The ceanittu balievas i apprapriata to deny ehe daduct_on [- osplylnq apleyar contributicna. 9wwer, bacausa a deduction denval hes n effaen a Y aaPlaYere (e.9., tex-axempc and ceaveeu h.~a Gaelaedaaea l atfatted by a deduction Lenial/, CEe epoee en exclse tax es z proxy far denial of tha uploy.r dsGUetion. In a tal ~lanatlav of )roeSalee Cndar the bill. euployer-providad health eare cencinuea ta be azeludaCle fres av g[oss in<eae of eaployees. xovever, enpleyau 176 cen:^ butiena for a c:dent r. neelch c- nat do not meet certavr. Culrerenta are fub]eCt to a nondedu--elble exC:ae tax designed to approktrate t:e effact cf denying tAa euplcyi iedcction fo[ cartun healt.'L e genaral, the . - app'.iee to aaploy.r C'Jnirlbc--~'•.cr .a-'•.cr.a far : coveraSe other than permat:ed c arage and to emFloyer cott[ibuaiana for ]LSClz:netary c - Pevx~tad veage cenera_1y includes c rage -hec s~a11ee t_ .evee.a !T':le i of tha bill and cartairn ctr.ar apecified typesro[i cavaraga. Covaaaga s dlscriminatory f a provided c tesrts that discrnxenates again.st indivtduala based an healt] atatuaor St che employer ctncrbuttons are nee avavlable cn an aqva! Eaevn :c eaplcyees. ']nder _}e b111, eaoloyar-provided e cident or realth coverage sub)eot c it 1 nec paracctad c rage - ivtna c varaqe excise v(1) `c zage under a cartified standard haaltt plan°', 1~) cevaraqe under a csrtifiad suppleemeal health plarc' unleas such coverage supplevants the c verage or banefics provided under a c•'Lifded s andard hult.: plan Nat provide. a.1e al:ernative standard netits packaga+'. (]/ tcvaraqe under a qualifiad e long- palicy~, !{) c 2rovidlnq ve5ea o Lnsaranca cage payeancsin 1 of vaqea ! any period dvbilg vnie: the aapicyaa tf aa t fne•eork on a unt of alcknus or la?ury, (5) e cdental death o rage, (al c varage undar a aedicare fupyLamencal pollcy'•nantl (') cov.rage under an equlvalant health care pregvam . - iTe Froviavon daas noc a!fect Llfa presane-lau ivlae regarding PubliShed by THE 6UREAU OF NAT!ONAL AFFAIRS, INC.. W2sn'.ngton, D.C. 20037
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SPECIAL SUPPLEMENT S-45 rsema. •• 4ne tara ^rertifleG atardard health plan^ is de!inad In sec. e . l -- 9 ' l 21011(q (2) of the Soc:e1 Secirlty AvC. e x .c ASfume ut an asployar a :uli-tims emp oyees work In several comm'miby ratcng arus and bhat tha weighted ° • varage pru:uas :rr ingle cw d ccve[aqe : a ar i :4a tars certiflad wppleunui bealtb benefit plan^ -s er qe , eas as net !crr•: waple with cIllldcen vary azan th ned def in saC. 31t11(a)(al a[ tia Soc:a: seNrity Act. q ose ar Ge1cV: '~.a altaivtive s'-andard beneL't. yckaga is dascribed in fac. 21201(b) vt the Socifi Sacurity Act. ibe Cera •q.ulif:ed '_onq-ten c re .nau2ance pvl:cy- ia defintl in ya' sec. Y/02G(b) 0f tbe coaa. a " The term 'aedicare suppl.aantal policf' ia def:ned in nac. 1992(g)(1) of tte Social Secut!ty ac0. P.fe term •equivalenC hu'.th Care pro4raa' Sa def-'nad !rv eaC. 2:100(6) of Ua SaC_a1 SeCUri<y Ac. Cqu¢valenC health care proqraxa Clude cartaun govprnynC proqreas .uCn Medfure, XadlCa:dr progiasa !or Cne military, and aailar progrua. 177 • of a - e:aga or tC anyapayoanta r ~ a G by an uplo?ee~ r w'nstIIer or ~ accidencnor heals covaragecif parmltted ccvaca9a for purposas of -he ezc¢fecat is tnd{pendentt of tncma or uplcyaeni caz LieaCaent. iferib'natore o n heaich etat - - Any eapLoyer chat contributea towards the Cr of ccvaraSe Cor evployeb cnGer a ceitiaed a•andard health planar 3 ce^t!ied leCe-.tal hetLLh plan [hetconntrtutaf panitced coverage cannoo spase a v •ivg perioC, deny coverage, c vary se aa of tne :buticn solaly by r any uployte'e hea.te steccs, a a expertenU, tediCwl o.CSI, LecaiPt vf neaan eara, cr lack otevldanoe of insurability. ~I Single RAi Coupla vitt. pildren VAp c.-va.. 'Jlity Rating 52,000 5a,000 Araa / 1 coasunlty Rating 5],000 I 5a,200 Aree / 2 ChLllnlCy I Rating $a•c00 :a,0oo Araa / ] Affu.. •u _her ihat the e.pl0yer aleccs to satisfy tAa eq,a1 contritution ru-e by c tributing cbe aaas percentage (>5 percent) of Le veighted avarage Prealum for eaCh ...... e enrolIsent in asoh CCLnnity rating area to all of its fti11- . uployeef• Sn tlis exaaple, eeployer eontrlhuticns for esplvyaas ln cEe e1-A1a and coup+a SC" alldren classes of evrellsent conld vary as tollars: " --A.:y elploy.r ebae eOnt]bCUS tvvartlr tEa aeat of r rage for nv eaPloyea under a Certi]_ad standard health plan rcifieG auCplefastal health plan t:.ac ccnstabutes Paraittad raga i rai to canir:GUta ona of Cpe frllwing as uatf covards the Cost of Che C s'age selected by acy other saF oyaa< (1) e doLlar aacnnL (2) U1a ... perc'mcaqa of tne Cost of Ile the ceqe (vith vr vitTOUt a Co1lac~eap'°), or (J) v1e naca percantage of the vapyhted a cage preliua for the cless af ^.:cLlcecb" for the comcuni varating acea ir- which the eapioyse uorks (uitt or vichoct a Gollaz cap) . An eaployer can alac bo apply tJL agual ooncributlan rale aapaiately vit.h rupaC- t fu11-CVe oployus antl par:-Cisa employees. Emplcyers that CanbriEUta to the ?urcLese o any Part- tiCa ampioyse'f cC'verage C n elect to sake a'Jntabutlon to all part-tsa espl0ytes proportionane to tte nu.ber of hvura worked Ey cha yart-tiaa aapioyu. '° 4aa dollaz ldait un be exprnsed eitAC as a iLaC dol.ar t or as a par'ce114ge of tha wlghted avera9e pre9iua tor t:.e cLass of anxollaent. Tas following a+.p1u illuftrate this ^ale. Cxnmpie 1: •Ab aplvyar mntsibuticn for uc: eapioyee of 80 pervenc of i3a Cost of tba Cbveraga up to a aaxivv anII•vl ^-entrlbution of $3,000 could satisfy the aqual centribut:cn rula- Ezaaple 2: An amplCyer cantriDUtzon for each employee of 90 parunt cf tl:a cost of 3:c c-veinge tndar the plan, but no alu than 1c0 pereent of 'Ja u9hted a ercga Prefi. for ibe claae a ansgll.anc of the uFlvyaa .ould satisfy tha aqual coneeibution rule. ' tTa ten ' ei5hted averege preaiufe is dellnad in nae. 19e2 of VJ Soclal security Act. 1'/6 A C,:11-<ive esp;ovee is an eeplcyse vno is rralLy evpleyed at 1et5t ]1 `. 'aek. A part-tva emplcyee ia an aaployaa vhg is nerfallp eap.oyec at ltasc L0 hcurs per veek a-.d lasf than 21 _ours par vea:e The Eoiloving eaplovus (vEeteer full-eias or pare- -) era exciujed f r purpcasa ct tha aqual vontr:bution (ll employees chc have not ccmpletad 6 xontl•s of aerv!d: (2) aaploysea vno n-eallp vark nn[ molle -t.an a aonCES dVring an :(J) upiby.u- ve[ed G3 a saployeee vhc are _nclcded in a unit of lactive bargaining agreement `uahealG: coverage w'Gs the ub1CCt of goad C ith beryaining; (al eavlcyua v o lave nct attai[ed age ldt (`-) Ler..er saplcyeu; and (6)uploysea vhc are ncn-rasndevt aliens and vho nceive no U.5. sou-ca earnad icccae. ' --FCr purpaaea of the eq_ai contr-hucian ' csrtaan aqqreqacion :ules apyly. All uployeea at orporations that a a eanoers of a centrvlleC group cf Corporacicnn, or a11 eap:oYata of tzadu and baeinenq (whether or not co[pcravedl that a[e under covcn comrol, are aqgragatad and treated nf If evFioyed by a:^q=e esP=oyer (uc. a1a(b) anG (c)l. Siv:]arly, all esplay.aa v[ eap.oyers that are .ubara of an affiliatad sarvica grcup ate treeted as uployad by e ungle aPlo9ar (aec. 114(.1). The uplayee iaisin9 Nlas (sec. a1a(n)) alav apply. 'e an eap:cyet cvuld ba -rwtad ef operatvag seperate linef cf husineas for a ynr for pansion plu; purpcass. the aaplcyer may apply the equel ccnt[ibution niiea separately to each separate lina of buslnasa for that year. coaunlty a,o00 rtaClnq SJ A00 $ Aru ( J Purher assusa that 'de up1v1'er liaita its contr.bucions to the lesur cf the v lgbceE averaga prul'a br the classu vf anrollaent er a fixad dollar aaeunt ($3,000). In cnis eaae, lU0 vvlover C -ributucn5 f- :~Sla c and Cvveze5e ]ot a cc'~ple vith•cY:ldren cauld vary aa fcllocs: Ccxnur.icy I aa:ing AreL / 1 II camSUnity Rat:ng Area I 2 Single vAp CoupLa vl:b I Qildren YAP Ccunity Patirq 51,500 $J.coG Ar.. 0 1 C~unlty' Aating 51,250 $4,500 Area J z Singla AAP I ceuFle vith Oh¢ldren LAp 1,500 I 51,000 52,1E0 "1 $3,000 ¢n_5-citI SJ,:0o .I SJ,000 Area I J rxanble --ASauaa that a employer offers to pay so percent of a f4 0c0 previua (L e.~ SJ,2001 for covaraga u[dar a Iiad standard hulth PLan fo[ one cf ita t 11-tise single aaplayeea The amplayer offers to contrlbuta the toiloving aarn'st for reverege for any e.ployaa: 80 perunt tha COSt of coveraga undec the pLan salacted by the evplol'ae, >ut no a e Uvn $3,200. 1Tb satsCie. ]be equal ca]irlbutivn }equaCe.ent. v ma --Aasuae the aue facts aa in eRaaple 2, but in a-dit_cn~ the e.picyer offara to pey 50 percent of 'fa $4,000 praav:a (i.e., Y2,COO) ! osingla coveraga u^.du a cartiLied stzndard heelah plan forone of 1ts Gart-<Sa. ploVeaa Who ica 20 hours par veek. undaz --+s blll, tEa uploqar is xu,cirad to saks concributibns to a11 pert-tiw uployeaa that vork at least 10 but lesa than 2a houn par veak buC ray elect to Jrorata such =CntrlbutlCns basad on Ula nuaDer of hours rorked by such part-tise eap=oyeas. Thus- !or sxample, tna eguaL contvibuticn rule vauld be satisfieG 'f rAs explvyar aai[u tAa folLwing contribution for asp;o~eaf U.at grk 10 hcurs pai veek: 10/20 e¢1tSV1L.d by 'J'e dolter aaount centeibuted on behalf 1 . OOa) oyu who verks 20 houn per vaeR (19f10 z $2•0o0 e $ e. ••c a[ i T`e aacunt of C1e excife tax for coverage that does -.ec satisfy the raquireaents of ehis prwision is equal to the product of: ':1 the sua of (a) uPloyar rantributicne andar an aooident or heallh .lan for coverage otEer tlun Peraitted coverage, and (ul the tata4 aployer =enCr:buttcns iGr co rage mldar rarCifled atan.dard health ptana and uztifiad fu9Plaf.ncai health Glans Sat ccnsnltute p.ni<ead ccvrtaqa du[ury any portcon of Cna year in vC:Ch Uere s 191 Published by THE 2URc'AU OF NATIONA.L AFFAIRS, INC., Washington, D.C. 20037
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S-46 dlsccla:ne_cry ocverage; anC.;2; CAe hignsst ocvporace tax rate (cuc>encly IS pevcanc; .:: -y.a se!fe tax appl'-es to all esployera aat v:alete the voluntary ctnivlbut--on tvles.including t-aYasPc and gcvernaental emplcYerf. 'na excisl tax _z not deduct:bla 5'o e e:Se r 1 re :epoae< vith reapet to any peclad : ecn i s-abl.ebed to m. zaev{ee-ion ef sa 5 tary ef r nha vn ec -_ aury 'lhatt employer did not knav r torcuqh e Lng usonable dL:gence, vcutd ifot Lave knCVn, tlllt viel.ctona of Lhe voicnCaavi ceninbutie~. n :sted. In addtCOn. n _ v LaCbn. cf the voluccary ccncrinutconaY :Llef•f apFOSed " ar.y fuch v'rlatian la due tr reaaanaGle cl'lae and n to - villfal nagLCt, and i :w:ad ducan9 ~a to-day Fermd r beginning c date CSe uep?over Itnev. or xarcvaq a aanable d11:5ancaYOU1.'d nave '[noa-n tlfat zuch failure eY:ited.PUa.'.er. -1 Cte case o violation vhich la dua to Laasonabla c . and hGt to vil'CV1 naqlaCR. C.e Secretary a{ 9la TTelauN, Can v e ail or part any a .ax. to ra extant tlut tha psyeent af such tax vauad ba axca.aive ralatcva to the failura involved. 1laaaoua eulaa For purpesas of No prwisien. a parCnanhlp is tna:ad as the anplryer o1 each partner and an 5 carpgrataon :f ra ted as eha aaplayer o each .h.Latcldar who is an employxv!thin cheaaaning of saatien za1(cl 01 the Coda. The tan 'e.ployar ccnt=IDucion" F rl aeana. v:Lh tespact to c varaqa under a hul9ti p1an, the ~ cha cost of Ibe raga tlvt is previdsd to or a behelf a{ a eaP=oysa by an teploYer. ~aa tavs •vplcyar cencrL`ucicn• al.a <ludea salary reduction amounts uadar a cafetsria plan. In Ibe usa of + cafeteria plan, employer concributiona avallabla :utler thm plan 'ratter than ac a- evployar concr:butmnal an taxen into accau:t untler cha aqual, mntribut!on rvla. it i in2andad tt•at the volcntaiy cont'ibufion :ulee do cat apply to e.ployer ccntributibns for Cireet aarvicas that - datarsinad by -~f'a S.eratary of tba Yreasurf to te priaarily alaad at vorkpleca huLit eara and health presetien or relatad pcpuletien- baaad p[aventiva haalth aetivitiea, to e.'za axeant toe 5acecnry deterainas Lupesition ef tAa aseisa tas vauld Ge i..cansistavt vith c.^.e purposea of tha b111. • Secretary of t9a 2aassu.y is autboriced to p[ascribe s.:ch cpula iev a a naceaaary to carry c tba purpoaas cf tt ~ pravision, including rtgulatioCa prOv:ding for tna detenlnatibn af :^.fa eill providas that any acunta collacted vith reapect to this tax are n.ot transYerred (caverad evar•) to any pesseasion. 112 the aaa'_nC a! any aaFlbye[ co'Itr1h'1[:cns end tre preve. t:en a voldaoce att.Ra exciae tas t.htougn the uae e, certain xrraegnmts (described in Ceda s.b. a1t(a)) . ='factiv. Dava T.Ea veluntary vncricucion rules apply cn ar after laeua.y 1, 1996. 2. Lllsioatieo e! Sinlusion of le.ltl Seoeflu Provided itrongb a flssibla SpeoC!eg Arraagaswt fsee. 722 of the bill and sec. :oa of ea cbdn Preaeat :.a cafatar'a alaas - _. .nder presant lco.pensation qenarelly is includlbla in gross :ncole when actLally cr coNCr4ct1valy received, i.e., Yhen it udeavailabla to :ha !ndlvidual or the lndividual has an elactien L 1t a.eunt. Cndar b exception to :La ganeral principle Gf Canstrlctive r.Ceipt, no aaount!a included in =a graaa lnceaa of a Farticipan[ in a cefateria plan v nfai^.ad by an and employer soleiy bseause tha participant .ay aaace asen5 cash c.rta!n esployar-provldad qualiCied GUefits. In gceral, a guallfied banef,ruson ~~efipwiflels prwsicnaxelsiuda bl ecn of Ca that dable LLOS ac eaplayae'• ]n2amal ievanu,COda. y3plbyaa-providad accident or haaiCh coverage ia a qualif!ed `-enafit. 14e eafetaria plan sxvGtiee f- tAa prineipla of eoestruetive -aceipt also applies for 11oy.ant tas purposes. } 1 edinm .rra;g>~y4t A fleaela spanding arranyeaent (•f5A') is a nisburauat•.t acmunt or sisilar rrangasenc (vhathar provided through caasarcial inaurance cr othsrrisa) under vhich an ..plbyaa is rai.buraad for aadicQ expansas or other mmplayaa-pnovidad qualiflad bansflts, such . dapandent care. Me ehat aan part of a ufeteria plan genarelly aLe fundad rJ`rouqL salary, reduction. 15AS Yy alw !a prcvitlad by an employer outslds a ufat.ria plan. ISAs are cooonly used, fer example, to niamursa sQloyees for aedlCal axpenses nct c varad by insuranea. It dernim mnditions ara satisfiad, a.aunca amuzead under an DSA for sadlcal sipensas (a[!qr thae preslu.) ara axcludabla froa gross incor and wages for apioyfent GaF 'POses. propcsed 'I'rtasury =egulationa dellna a health f9A as n ber.efitt pn~raadc,xpenus-das b~e 1cYs.Euraed (suDJacc t~ar.buna..~ic:.:ed. may 3a2 SPECIAL SUPPLEMENT a ar.d tn ather c nab:e <and:t_cvi and enG¢ vhict t max:AUS a uneef railhu,aelent V1at :s reaaonably a allab:a t rsrriccpant ; r a paricd o coverage ia noa subr.antVally : excess che tova: pravv.u (:noludmg both enploYae-pw_d art asplayer-pazd pcrcions of the praslvm/ !er such Farttcipant~s c raGe. A aax:aue acaur.c cf x aavenc i substantlally in cf the rctal excess premiun :f theaax.aux aaount is lasa than 5oap .cent cf eEe preeau:.. ]eafoas fe2 Gbaeee +lex:ble s endtng arrangements provide tax tanaf:ta f-' - dotlar r a:th c coverage (e.F.. capayaenta antl deducLlbLas` a +.11 a uninzurad expens.a. '"huLindividuala - ng the c e do not pay t !v1t c the covarage, a :cc• v:aLL.`.a:dixed by a feder - - ac0..I This r_baidy can 1.d : [i1L- of health c a and r -ontribute to lncreesea in nealth cere costs. aca:vi ,+ '.mderatlr hi1L bauuae al: individuels have - ' standard bwaflt package, tban is no need to pravida n scbaydv S uch expanaaa. 2nus, the cavittaa believea that it is a e a exc-ua-en foc hacelta prv.ded undar a apprnFra eLa rat tlf flax:eleapend!ng arrangaaantt iSlavatiev of M'avlsiev under [l.a bi11, accident or hultb banefita prnvidad undar a e5A a ncludicla in i and vagas for lneaaa and aaplcymeat taa put'osef An /SA -s j-aflneL ganerally as under the proposed aury requlat!ons. Under tbe bill, a.'f fSA : a benefit pre9Laa vhioh prevaes aaployue vith c r.ga (vtett.ar cArouyh ar acc:al oUleIViNI under vhich (il spacif!ad i credvxrwnsaa vuC.nrelabursed r,suE•ert to niaWra.aan[ aaxiauvs and other csacnahle ccnditmna~, snd (]) tea saxlaua aaounv of rumruraasent vhlch :s reaacnably evallaEla to a partle:pnt for suct cev rage : leea aa.n foo percent at tha cwt of auch wa9e. In the uae of rad plan, the sa vnt r onaDLY a allanle is toba tlaLIDGPAd on the baaia of Lhe tlnderlYin9 cwaZaga• lffwtiva Data :pa prwiaicn is genaraLly effective on and after aanuary 1. 1996. A delq'ad effacclve tlata ls provided with raapect to cpLlecc:valy barqalnad plans. lei 3. T'o-ISar [itaasion ot the Gaduction for lealta Iasuranca costs of 9elf4aploled indlviduala (sae. 723 of the bill aed sec. 1sp(11 af the Ceda) PraaaLe Lee under present Lav, ind:viduals who !tentre dedections a deduct atounis paid Cur::.S the taxable vaar a: not rel]LUrfed by -suranc< ee othervise) for a.dical car< o: the taxpayer, ar the :axpay, r's apousa and dependenea, to aha axtenc that cbe total of aCC.`. expenfef axeeedn 7.5 percent c: Cb taxpuy e ed)uaaaL qross .ncoae (AGI;. In addition, under pr.sent lav, sal!-asployad individuals cannot . Lude c valua af health insuranca ftos gross mecae. Fan tS:a purpose, self-employed indlviduals include sale propcietcra, p,ars in partnerahipa. and vc t•han 2-parcant sharaholdara of 5 ccrpcrations. Ptior to lanuary1~ 1991, a salt-eaployetl !ndividual could deduct from gross inaoaa 25 percent a[ tha health insurance costs of Cne individual andhia or her spauaa or dap.ndenrs. Tbe 25-pamant deductian vaa not available for any sonth if the aelf- aa,lcyad individual uas eligible far afyloyer-pYld (S.a., esployar euGaid!red) health banalita under a Glan of a employer cf the individual oL the individual's spouse. In additlon, no dedu<tien vea available to t.M1a excant tbat tbe deductioo exceeded Cha taxpayar'a aarnaG ineose. a faL Cb~aa The Sill providas a deduction for all indlvlduala vhe ara nat e11g:bLa r r aaployaa-aubeidlaed health insuranea. ^he Ceulttea Lal!avea it .a app=cPrLaG to axtaD] ".e ]5-percarA deductlan fcr n.alth iosuranca aipenaas o[ aalf-uplo,vad icdividuals unta [lv nev deductisn is eflective. n i of srovisiea 1Ta bill autands the 25-perunt daduC.lon for health !nsuran.ce axpartsas af aelf~lcyed 1+WiviLUals, affact:ve for taY.bia years 'eeginninq aftaL Gwasbaa 31, 1991, and befora January 1, 1996. ffaet"a Data The 25-parcant dedubtian for self-employed indivituels is extended aOfective for tax+Ela Yeua beginning after oecaaber 31, 1991, and befcra +anuary 1, 1996. 1a5 a. Liattatiot on Prapapant af Madlcal Iasuravq 9iuiuu ;s.c. tia of the bill and sec. 213(d) of iha codtl Praaaat :.a Un.dar t aent lavw a taxpayer who ttemiaas deductions may dadut councsFa:d dur:ng tEa taxabLa year (if not reimbursed by or othe:sr-fe', for aedical care of ehe texpeyer, eno the taxpaver~a aFOUae and dependente to the extent that the :cta1 cf uch expenaea exceeds ".5 percent of the :ar2ayer'e ad;',:aeE qresf lnCOba IAGI). Pubished by THE 9UREAU OF NATIONAL AFFAIRS• INC.. W2shingten, D.C. 20037
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SPECIAL SUPPLEMENT Jntler d apw!a1 rulai prui':ma paic during _ aala v c ay i chat [axpayer t.foCe he a ahe attain aSa 65 for covers sadical eav( fer •1e taxpay(c aftsr tha teq.vereattav-c aqe 65, or t:•a CaxpayeC'a apoul( Cr f dapendent, . a trwtad a expe.-,aea pSid durang tne taxable year far inauranca L.IC CCnatltutea reGical cana i] preaiurs Cor the :nautance . a payable (or. a level pava(nt beaia) cnder LLa c ntract f e par:ad o: 1o veara ar sore ar until the year i which .b( taapayer attains age 65 (but :.n nC caN :ar a period of ~us ehan fiva Yaars) . A• af reven•,:e ralings bas held t^_ac, under certain CSLCUIatLr , the portien of a fee paid for 1lfetile r e CG1t is prop.r:y alioubi( ts vedleal aapns(a is daduetible in cne y(er paid, n en though the aadica'• aarvicn vill n t Ge perfoned until • Ntur( tl.a(, if at al:." Lb( Internal Revenu. serice has .ncly issaed a revenue rulinq sucing Yt th( Prior rul6ngs ]hould 1oC be int(rpret(d as alleving a lrrwt dsduction a payaenta fcr future aedical Gire (aC1uGing aedical illavrnncel eatanding s'mstannlally beyond tbe clos( at rte 9zab1( year in es6uations vhere the f'aur( ur( la not pur^-tased Lx cannecaion with [beaini.vj lifeelaa ur( of the type duer:b.d in tLe prior vlings.' 8ta r(cant revenua raliiq atates that it will net be applled •_ a.aunts Paid before tctcber la, 1993, or to aaoun[s paid after pttobar 'd, 1993, pur.uant to the terfs of a inding cqn ract entered into befara that date if auc.n ta-^aa vare in effect cn tnat date. 1eaaa a eee ct.age 1t( Ceeeitt(a believaa CGat p(rfitt:ng taxpayars to Gaduce the eat ef health ivuranu prnicu i advance of toe period luring vhich tba lvurance cnverags Ss to ba prcv:dad al3ors uxpeYeva tc sinipulata The tzaing of d(duoticm based an casb expenditures and ° See R.v. Rul. 75-302, 1915-2 <.B• ®6: Rev. IIv'_, 75-1e4, 1975-2 C.B. 87 ; R(v. Nul. t6-e91, 1976-2 C,B. 52. °' Rev. Ra1. 93-72, 1993-9a IRB '(YOV. l, 1993). 166 trary to general proncip:es fer the recoSnucan c_ _.iccae aX d(duct:cr•s. fi4laaatian af 9rCViaiob n zed The bill prcvidea that, for :crpcaes of c enized G.Luct'_cn i far qualified asdLral expwsea avG c-~e :o0-Ferc(nt deducmen _ e health care ctsts of : viG',:ala, arnct paid '.urmg e xahie year chat a allocanla to inaurance covea5e or tedicel care -c he provi'_ed nete than 12 sonc5a a ter the aonth : vhic: t:!e paytent :S zoom vi11 ba treated as paid ratably aVer tne per! M ]-in9 vhich uhe ceverage a- rare is to te prbvaded'he p=evialan ccae ncC aaend the special S1< under praaene 1av ]or _est-age 65 otdical insuC3nre. ee_he-+y. bat( The provisien applies ta amouats paid afbeY c.aeaper 11, 199e. 1a- aubritla c--beductioa far Cadiviauale Purchuieg Cen Healta lasuruca _. peducaion for 9ueltb Insurance costs af Iaeividual. (aee, 731 et tn( bSll and eec. 213 of the ^_ade) , Pxee(a• Iw under a a t).ar, individuals who itevize deductions may deduct a unrabaid during :he taaab!e vear lif nat -elaCUraed by e or otEeruisp for nadical car: o: the taxpayer, or tba taxpayer's spcusa and depandenta, to tha .- t that : e total of such expenees exceeda ].: cereant ef the axpayer's adiusted gross lnccve (AOI, . In additlon, .ad(r present lav, • f-aployad individuala cMnot exc/ude the value of health lvuranca f a grosa : rac tnia purpase, uit-a.pley.d iMividuals include acle proprieccrs, partners in pa[tmrships, and aare than J-pezcent sharehallara et 9 GGrporaticns. Prior to Sanuary 1, L99b a Qf-eaplcyed _ndivcduai auld deGua frea gSees !nCOSe 25 percwt af the Cae1Jt insu nce - of tM indlvidual and hia or har spoute or d(pendenta.Leim 25~parcenc deducbion vas n.et available for any aonV: if the eel_•- e.piayad :r.dividual vas eligibla 'ab (sployer-paid (L e., esplayar aubaidiz(d) health banafits mtler a plan of an uplcyar of t. individual or the [ndividual's spouse- In additcan, na deduction .ilable to tbe axC(nt that che deductiqn exceeded the CaxpaYac'a aaraad i,.ca.e- r enyce Prasene and prior law provide ineguiteble tax traetsene for the purchaee ot health imu-ence Gpendibq [n hev tbe asu c a purchased. The value o2 aRlOyar-prridad teal[1: car( a xcl':Ga]1• f_-os i vithaut. a.i0. 4n6ar prior la, aalf-(aployed individcala vno r not (li91L1( fer ..ployar-subaidized health uld deduc< 2e-parcent of tb(ir health insurance cmaa. L'nder present and prior 1av, 1nGlvidual5 vbo do not rwai•ae oplayer- rOa-a exeeed 75 pecentnOf on V t'feVledx(-~nhea-hat tqYil .adlealaxp(nNaa 1 r ibe bill addbesses th( inequity af praaant and prior law y allowing all i.•tllviduals a deduction fer 300 pereent o[ the eest ef tn( starvlard Ceneflt pacrage. ~lanae!aa af leveiaien Ym ti11 provides a 10o-percent d.duction° fEt healt.: S-47 ( asaunt cf •~'e deduction uy be reduced to a ub dafic'ta P.: ( _n Federal hu1tA carv apenditq pursuant to a¢_-on l91 af e6e bil-. :ea :nsuracce coaca ct sndbvpduela ;.nc:uL:nq saf-eapWy.d :-.d.v:duala) vnc do not .`.av( esplcyer-subsadiaed h(a1C'1 coverage. ^ne 1]o-Percent Lsductlon appLes ccly ta the toat of insurance •h eapeet a a Certi]1ad atanaard nee1:L p:ac. IIlus, cninsured andout-cf-Poeset pedical expenaea ;e,9 „ coFayv.nis, LsGCCtib:.a, and u ccvere? . aee), and pre¢tuas pa_d far supp:eae r.ca'- or orher endard : e are nct eitglb r Q;e NECCt:o.^., tutare ~edVC.:`a:e -e-Chea Jl ateY:efa at :orai aed:cdl e%pensea exc(ed ],• percent Of AGI. 1'xpe'.sez t.4at ar( al:g:23a :or t- e Ladl:ctl0n are ]axO :neo acc0ua< fbr pCrroyea of /etar3:nir.g x•-.eC.tr V'tal rtedtcal axpenses exceed -J:e 7.5 percent floor. The Lo0-Fercent deduction is not avai!abl( : r any banCn vich raspecc '- vera9e of an indiviiual if t- . indivitl~al ia eligzCle co pactici?e~a nn a suLaidlzed csrtified atandaY ]u1tR plan Caintalned Ey ar. eap:cyer. For exaspla, :f an Sn'1lvidual ia eliq:ble to parclcipzte in a suba131zed caztifi.d etandari health rlen of a uployer, but such pl(n doea nct a subaidSZed - rage of dependent, of tta tt enSnGivilWl, en tLe daGUC:on s anlable with raapaot to tbe purchaae at ± oandenc health tnsucnrce qverage, In sucn a uu, ths deduction applies only vith cespect to the additienal cest of tba dependent cwqage. /frwt~.a p(•e 1Ta :60-percwt 6educt!on for lnaurar.ce axpenees : _fec::va for taxab':e y ra bag:rn:ng on or after January 1, 1996~ e Sd9 9ubcitle 0--emupc Or;.oiaatiers 1, Sar Tr(ataebt ot asqatiz¢SOOS Pravidieq SeaLCE Care aer.!ces aad ielatad Ciqabitaticrs /leea• ]a: and ]a2 at the bi11 aad e sal, $01, a033, 1104, abe 1710 abd be• . Os. ena u59 af Ce. ccdn Paau-t Lav .ode ]ection 5e1(c)(]) Lists certal] aypeC of crganlzat'cns teat are exeopt 'rv Federal inccoe : xincluding tnoae cceed anG c a:ed exolvaely f- rellgioua cha[:table, scientlnc l n _ testing fcr punlcr eafety,clmernry, or ad¢caticnal F'arFases a t the vt ings of vh!cn inVres ta^.M benefit of any pr:vate anarencldcacrnlndlv:dual. rituCOV G OF,aniratlona generally a e deductltle for Federal 1 acate, anG gift t pcrpqs(s• In adLit:an, s ocqan:zatiam a:eeligible : a- .mpt [Snaccing that is net cu]ect to tne State valuse cnp otYtvlae appl!em'_a cq privaee use[s e'ax-exeapt - -!ng and, in the c aapitala, eYe a espt 2ra. tne 51]a nl'n1Cn lirit otmrviee applicaCle to CF.e aaaun[ Of tax-exaapt fi-wcin9 :cca vhict a e(ccion Solic)/3) organlratian can benvSL• Aletcagb Code aacticn 5CI(cl(3) doee not apealflcally reter te furnisning eedlcal ca or operating a not}fcc-profit hc.p:tal. sucb netivities hava lcngbean c adered to Lur•_her cn¢SLable purpoa Nwever, tna a oSavis:an c noe-!ee-peofl2 v.dioal not, by nualf, auti•aiene to allor a azyaMzatccn to qualify ar exempt_cr. urAer sacticn 50CIC)(])^ pltner, an erganleaelon nuat deaenstrsta that its ae_iv161es era tarqeted to a char!tabie cleez. 9b( pr(ciaa nature o] Cbat cher_table claea nae been definad cnLy througL adainastratsve guldance, and nat by statute. In 19.6' the Int(rml Revenue 9eiv!ce (IRS) nsuad Revenue Ruling 56-185, 1956-1 c.e. xa2, aattinq forth tne candit:ena that a nar-fcr-prnfit, hospital au.t aatief,v to Pialiry =or recagmuon as a :ax-.xupc cteritable argan!zabion under aectian 501(c)(]). The 1R5 r1ad thac a ha.Vita1 would be axaap[ if it rat [.ha fqllCrtnq four ronditCCne: 6) it rvet ba erganizad a a nat-farFrofit ganizatien for the pur-pese of epeeeting a hoepital for the Care ef the sick: (]) it lust he operated, to the extant ]f :ta financial ab:lity, for tAeY ]at able to pay fCr the aeNlCea rendered and net " Altheu9h noc-tor-prc!!: •ospitala gsnerally era wceqnived aa tax-(xempt by virtas a5 being "cTaritatle• organl2atione, some also aay qualify for exe.ptian a•admeeacnal' a[Ganiutians i•ecauae they are orqenlzed and operated prlaar:'y fcr aaLical .ducation pu c7cses. 190 valy f r anese atte a-" expec0ed ac pay='; ( , - _ ca_::as t a paa=_raar q cup ot p:yaslans: ~• _.._ .., ___ ___.._.."_ ____ ___ -- _______: .._ --------- ., -- -. O eenefit of any Pr:vate sna[ahc:der or :ntllviLual. -. 1963' [de ::.5 iac'.ied n....... _ine 69-5/5, 1969-2 C.3. 117. ~ vhlc^. eztat::aheL t:e aa-'oa':1edc0 nity bwe._•^ ata'.dard. _ 1L_ .iCiy-nS u r•9L_aClana 1ed tan~ a 1er", a IRS noceG that tne Fceeot:on of hea15~'.iis "ana sf Cmapurpoeaa --b ain ane Senera! ~tti• _ v cf ahar:ty Cnat a deeaed bene[iC:al :e the c amunlt± a a ySol e even though the class of taeeficiaries eltgibla to -eca_ e a direct iA PubllslleC by THE BUREAU OF NATIONAL AFFAIRS, INC., Weshington, D.C. 20037
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g-48 c :CS a valaa tl vet i.^.c1uEe all aeeGers of !te yc~,a aa :ndigecc oenberf of the rrmun:cy, p v:ded thac _ Ccc s Lhat : reLlet is noc of benefia to rhe lyty.•f -p5salsc acMified Arvence k.12oq 56-195 a ¢lyinate .ne fceci!:c teqiireveni _tet t. asPica/ vus2 be Cperated,r_- -'+e excenc of :cs flnancaal aDi~ity, for Scae nat able c pay V:e f r~iCea rendered and noC emc-.IS_vaY !cr cn<se m_. and ¢xpaced to pay. Tne "to unliy benefit• standard, vhicb rosinl te priac:pal aneare npplied by t1e IRS toaay, focuws e eu-Vr af factors vbicn ind:Cate tnat the eDeratlon of a hCaplCal beneflta t aty rat.^.er than P r avetee r+t.~q ravete tnt¢eeCS. n Revenue Ruli:q 59~.6. the cRS L.eamnee that the couunaty oene0it ¢sadsa vas tafied cy a noepiui aet tparated an eefqency : ap.u to •a o~~fvns enE prnvidld hcepital Care in nen-oerqenry a:tuaticr.afor everyona aete to pCy the cest tnereof, eitber tauaelves, ar through I Gith veePatt to ahe "financial aDility reGYice.end• th. IAS noted that: . fact eLac !a rity reaor! / relarivelY = nclu.ave clab a~haepitat 1e :uL operated :or caarctwble purpoeas to ibe full extent of :ta fivunczalability. xt eay F~rni+h f rvics. a reduced retls vElch ara belw ccft, 3nE therlby :ander rlarlty in that sazlneLi it fay also lec side earnanqa vbicFh it uws for try[ovaaanu aM addi:lcna to bcapitai facillcles. 1t wL net, hc.wer, refuae to Cepc patienta 1 vaed of hoapiul ure vho cannoc pay !or fucb wrvicea. 't]:ree years after pWlioaeien of Revenu. Ru15ng 56-1a5, the Treafury DepaCaenc slgnificantly reviatl its rsgul¢LCna lnterprating section So1(C) (3). Treaf. Req. sact:an 1.3o1(C)(];-1(dllll provides cf.ac 'c.e cera 'cSnr!taEla' ta uasd in section 5o1(c)(3) in ats qene:ally accepted 1ega1 alnsaend :a, tEerefore, nct to be con.tve! f liuted by Ne separan enusezatien in lactian 501;c)(3) of othar caa-axe®pc purposaa rhic:: Yy fall within the broad outl4nea of 'char:ty' /a develcpaG by :ud=cial decilicna.• L91 -d-pCitY =al:ablrfed.ent.'r Tae :aap:tat at : a n Yev" fu1. 53-5b alao LLd a board of Lireeta[s dravn froe[m acafauntty atG e- opan cedlcai staff policy, ceat.d perscna pay:ng~cheir tills viW cne evd of public prognava (suvl as Y.eGicace and M.Gicaid), and applied any furplus receipts ao improvznq !ecillt:es. eqc:pverc, naS ent C mtynenetl4aalftandardgappl:~eaticnLeten•nlan{rvhet eV aC yy0eq _ ta%-e%aapt atacv. unGe[ fe 50: q I (1). n1L:oaSh flighcev different ceracceraftiaaEre exas_ned.•` ef f . _ _nNara Ccde Secoicn 501(cl(V provides an ekempcien lrcv :nc ve tax for n-profit orgar:La[ienl o rated primar¢ly to prcae:e the 'r gocd and general ve1lareecf tne peep'ie In Ct. ccmunity. cWGlbutioM te fucd crgaaizatlonl gererally are 1ot dedYCtible for ?etleral tncov e6taCe, and gift rA< Curpbtea, and nuch organaieticm ar noc eliqitle to berefit froa tax-axampt finecC_ng beyone 5ina~.cv-.S availatla eo oLher p_vare ueera. An lLYO a..x_ng nxemption al a aocial welfare Organ:2nLlen under n sal(c) la) is not raquired to pos. a. nll of :he sme chereetermCiea asan Mf0 thae qusliflas ecr e emption under aeetion Sm(c) (3)% nowver, ite activlties qenerally must aacLafy a c niny banefit e:xndarG liailar to, but lela exact:ng then, LLt IDposed on a c..6itavle ID[O.° pt Chari`iaah p--Sect.ion 5o1(C)(]) apetiflcally eenGitions ix- empt a s[or all organlratiGns deacriDed in that f t:onon the r.esent that no part af the net earninqs of ebe orqan:aatltn :nuvea no the benefit cf any private sbarehalder or lndivadual (the '-n Rav. Rul. 83-157, 19a]-1 C.B. 94, L1e Ip5 Clarified that the operation ef an ertgeney =oem vaa not • Frereqtzaice for a hospvral to tlave rix-useapt atacus under seccion 591(c)(/), if a state heatth planninq agatlcy ude en :Mependent teterainatlcn tr.at the ap.racion of an oer9mcy rma would te unneceaeary and duDllcaCve. ihe -]t•` concluded tbat, i eu h a uaa, '.he p[uence of the aCher _ a sat fereb in R.vRu1. 69-5a5 indlcatad chat the hoap::a1 _- 2ted CM hsaltb of a clns bf pe[sons braad encu9h to benefit the caabuniiy. .1 Sea, e.9• r.l.iewer u.elt v- rv • i n , 9a5 L2- 1110 Srd CLr. 199])(holding C1at ^etvark aMal Slo d:d -.ac qaalify n 501(r)(]) .tatus bacauae 1ta a<tlvitlea did not p varily Senefactttu coaluniLy). See generally. OOf 39929 (Auguat 30, 1990) (eviavin9 IRS paLLtian reqardln9 LWoa). l9] ac-_a-led ^pt:vate lnuresent tmri.•r _. • -e - . --A tax-exeapc aoCal r v •• re iatacn described tn aacav n 5oL(t)(a) vuac G organised an a rofit taslsan? suac be aterated e<cluacvely for 1a preset:cn o4 a c:ai vei(arn. In ccncrast ca aertitn 5e1(c)(]), hovever. [lere o apeC:[vc s[acutcr]' it secticn 5o1(c)(ai prohibia:ng :he na1 earninga cf a fCcial '.ai'are organization described irn sec-_ °01(c)(J) inuring tc thabeneCii of _c-vace faarenclter or m6 vvdual rc SPECIAL SUPPLEMENT e . v- a-ane.rea • otgan¢zatlona deecribed in aecticn 501(C)(1) are clayafa u e-^ rpubee: charitiee or p=ivaca foufdationa. penalcy earva caxec t a ;apcsed under 1e Cotle vnen.a pcb~ic characy aa#as inproper pelitical e>pecCitures peo. aS55i or emeaas c GCSGUaLifYin9 !cbtY:;,g expendituru (aeca. /911 and a91¢). the Code generally doea noc pvovLGe lor the :apoa:tion ef pa:y~Q' - vhere i 501(cl(1) publlc charity or seccim 501(<) (a) aocialcv.lfare arqanlzeticn engaqea tn a transice_on rtsult. :- p:lvata anu[eeenL. :n rvcb ua.a, eLe onl 'Lt Y a.:~:en thst apcifiaatly : author.red under C.e Cods x !l :rvatian f fhe crqanizatian'fiG%-lxupt awtua. ^ ensactirns enqeqed in by p=-vaxa foundationa (but not puLlic cha[ ties) a- subleec to tp.eial pevity e a unCer te code :f tt.e : a prohibited ' e'f-Leallnq• cransect•on (fec. 1941) aGoel not a cosplish a charitable purpcae !sec. {9a5i. Nonprofit `ospitala, and ether nonprofit anaties t.^.s principel purpoae or ,nee:ona of which are provtdteq eedioal eaie, a e clafaiaad a. public c]lara'At a A, th4e, re ..ot aublact r the npec:al penaicy exciw ux provia:vns gwerniag private foundaticva. prvuixatfaae iax-exeapt crq..•uzaciona geneslly are requlreE to file an 'i Compars :C]f 39962 (Nwuber 22, 1991) (trenlacaons !n tleich part bf lospltals' net nvenue sceu told to phyaimerl fourd to 1natitute private LCaeaeatl yi5p P1A 9111oC6 (CacesCer 10,99e)(IIICM4va cbapenutien plan Rf vhith ell amplcyeef partiaipace _cu.-.d to nct Jeepardize tam-exatpt atams ef haapitel). •° lven where no prohiLitld pcwatl inuruenr e¢iats, hcveve:, •~sn 1ncldental pLlVate beneflts can!erred on -nd!viduall nay ca _ e organization not belnq operated 'exctuaively" for a uFe pu rc.a. see, . 91 T.C. 1053 (1909) 19] annual 1h!:Clat =n ret'Irn ',FOra 990) vttp, C^.e 1p5. CcGe 9 e 61ca olGUiru t:ac a ea%-exaape crganlzauan (ott.r :han apravat• !aund ecion) s a x e avellable for puGllc :napect:on et Ue c[qanueticn'aprincapal office a cop,v of the organisataon'f Fo 990 iexcep< for che nar.as of contributata to te organi2ablon)for the chree mosencent .... ble yaa[aI".::a pubLC inapactlCn reguersbenc slse eatenea to the arganirat:en'a ap?licataen be the CAS fer cgnivon vf tax-exempt atatuv. tha ]is decerxanac:en -atter. e-n certain ot`.er related documenta. aea e e cbea t eelth care orqnnazncians s u_d not quaii!y. fa[ tax- exevpt atanua '_nleas th¢y F:CViLe a rv:ul~C.:at ae b.,;<fic'?1 - a rncle. Terefo ., the bill i ludes ftaCuto[a e c a unicy a •S.e_" fic e CLaaL n0 '.rrat .^.e41th ca crqan,Latlona a - reaponsaven~e aLe nudan0. [.Seir ccpaUlaivl. ' adQ tionCetc enlu:a that the advac[aqu of tax-exsapt autus ulLiaply beneflt the ccma rcty. the th et11'a extenda e presana-!av a cion 501(c) U1 privac< unent prCnabetion to nenprefit healeb eWre crganlE¢Srn. ducribet i ection •.01(c)(f) aaW pravldea for intermediate unaiccf tnat aay be Jposed vhen nonprofit healtq c are ocgantza[lona Go¢abeC in sectlon 5c1Lc)(3) or 501(c)(a'i enga9e i - r 'aans viC• c a insndera that : eult in private lnuresenc. Sbebil'a also elNanc>•overttgtit and pYbl,c a oouncabillty of nonprtSln heal[: c erganizations tltough additional repertinq o Infomation by nonprofit healtli ra organiratlana to the Incer..a'. Revenua Sernca (IPS) and incteased public access to Lmveaca filed by avt_ o:qanczation. vlth the IFS. [Sblmatica of KeHfiml She bi11 ivposes nev requlr..entt On taa-exupe er¢nliaLion. described in aecticn 501(c)(3) or 901(c)(a) that beva as thelr predooinant aetivivy the provislen a'hulth care a rvieee.•" (^.he bil: rafera t luoh organir.tlona a•appllcable tax-exempt health care otqanlratcona.") 68e n vuryiresents, tLereCOre, apply to tax-exeapt holpitals, cLinlef, n rilnq ho.ea, nld age hmes, a d @10c. Tha new [equiroenta do not apply to erganizaciaEs vhole pzedbavnent sttivitisa are nen-haala ure service ec:ivicie. fb9., " 1Le tezn •healtl eare ws• qansn (1) any actlvity of praViLing vedicai ca[e (aada(ined ln eection 31](d)(1)(A)1 individuals: (2) any aetivity (such a aing o old aga ho.a c re) vhlch ls treated a. accaplishlnq an exempt purpeal of a 5c1(c)(]) arganiza[ion solely heuule SL is carried on as part o actavity aast[rbed In (1) abwe: and (3) a,e(tnat :l not ' 1-typ. ance undet aectacn 501(a)) .or artivt!u lascrlbad in (1) or (1) aCave. /9a educatlcr.al acganlzacion. _ e`.e rredoovnanc act:vvt:es of ebe ceqaniincee Gb net Lnvolve tne del:very of !anltt eare teeviees to Fat:enca). : aCdition, the bi11 apeczfically provides that tha n reqa:reaenta do net apply to an ocganiza:ior. that iexomeratsa in a manner not ineonalsterL Vithh raglliaticna as the secretary of Treafury may prascrabel tfat one of :ts princlpal puapeses ia cadezvc a: nang er ^-edical researcto nor do cbe - reguirameou app'.y :o an orqanization ne< provldes haalth care a rvicea an an u:mospenaated lefu [aqardlese vf Che patient'• abvlicy+ccypay. TT:e new r.q.vunme: :a Ge r.ot apply to Stace and local gcvernmental enciciea. Publisnetl by THE BUREAU OF NATIONAL AFFAIRS, INC.,'.Vasfiington. D.C. 20037
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. SPECIAL SUPPLEMENT under the bill, addition co .aeiscyrng a nicy O c Gc standard, appl4cable 4ax-exeept health care ccian.oet rce a e equiCad to aatiat,v che [oLwiig [ctL reqlarementa in er]ercc be eligil6e for tax e npt atat',va. (1) The organizatrten auat prcvide (diractly or indinctlyl signifiranc "yyal:.[!atl eucreacn f- Ces.• Me : •4=e11'!ed Outcsace a erv e+ a<eflned as nea:C u related prevenciveeducat=onal, c :+1 + l e proqrass, irov!ded (i) in an aaea that Ls aed!ca11y unLersarvWvvVN rsspec[ to such healtll ]!re farv!Cas Ii.e., a haalth prodesalGnA1 shortage area populat!cn "HPSA" defigna.ed by the iecre[aiy of rd'S or an area or grcup r onaLly daten:ned by c1e arganii+tion, In a a ,ot ine<euiaCmt vtib T- +ury regulations, to n+ve a shertageot hP!t`h profesaionals relsc ve to Me nuabar of i.xiividusls eeeding s.M n Me a cr populatlon gsoupl. (b) balov coat v u eixGivldYale Ethe[viae unaLle to afford such a r(p at - alty eeesqenq care ]ac!lities tbac nors.lly cp.rate at a vaaa (i. .vergency treu.., .aer{enry psycniatry. o ent.rs). An crqenlzation vi11 duonstrate c.hat it provcdes siqnuc!tanl qualifled - act serviCaa on a faCri-eM-eir-taneea baals. An crqanlzatior. has C.e opcion of diracL:y flrnlshinq sucR services 0 :]d!SebL!y proV!di.ng sYC1 servipea by \aking a grant Or COntrlbutl0n ;c a dEnee arganuation C`ut Ca-nlahw Gaalifisd outraaCn aarvices. Tha prcvisicn of lmuranoe cnatitutes a qualif!ed outreach aazvica only if provided cn a suas!diraQ basis. (G) Yitb Me partlcipaticn of cau nity reP:esentativas, cL organivation suet a.u.usily . e hulth c and quallfiad uch aszviu natls of the c ity and d lop a ritten plan c46t aats fortL hnv aha cwanizaG'anaaunan pl.r~ to edet UOSe needs. (l) Me czr/anizat!On suat not diacrvinaie against indivLiuaLS in Me pravis!an of health u services :he b oc whether the individual is insured by a gw.rnamtsponsor.d health :95 p:an ;a.g., nedLare r: Med!ca_tll" (a) The organizaticn z et dlecr:al.^.¢ce aga:~at indlviduala in Me provision cl t +vargeney nealr.t ea.e aenneea en u,a basla ef the intlividual'n atiLCy ce pay." crgatisatvanrs that fa!1 tc aac:afy < ar a e-a o[ the aceve nev Stacut.,ra regc:r enta are eublect t catnof tne:: tax-axeapt status and, vn event, will be :~e1~c~ble t c contSibu]rrnschiL ~ e e deductiCle by t..e doner 'or eder]1 Income, estate, or gift tax purpases. _tfecc-ve dete.--rhe n.V statutr-i o : - i- applicable cax-exnbpt neelcRcare 2-g lzaaccnscake effeccn danYary t, 1995. glb avalifleaelat unLer +attion soi/el (3l undeS the til!, an tu0 feexGng t- ot ftaeuC under se<Licn 501(c) (0) is reviirad to furnish aub.tacclallyesy all cf its prizary care healthh rvices at its Ov( [acilitiu thrcuqh health c protesaiccala vho do a t prevtde substantltl Gea1tA c- - acher thar. on beSalf c such organization. 'L.:ue, -+ aep0~ataCus vnder section 501(c)(0) i vailable : n!do on!yY It 1s organized aEcorling Lo called YtaCC aadal• e'dediu:.d-gmup EWe':.^ Inccnt:ast.an :]fo saekicg t-aYeapt status under fectiOn 501(c) (+) 1 nct required directly to [urr.Lsh haalt.h cC.m e at ita own eac!lity ;b` _ i rew!red to peec the cegu!n9a c[ a secLion 501(a), discussed belov). Y[.aav. dnte.--'CO. pravi+icn is effective an Me data of enar nt. ' 1Y(e C<Yittee lntendl C`.at an a a zatian would nat violate Ufa nondiacria!nltipn requireNnt if the <rqanl2atian cannot accept Fartic!panta in a gwarnaent-fponsered health pl+n a e ciqanizatien i aaGJeet to Me requ!revanta ot aeetion 19]6 f)a! -n e9be Socaal Seeurlty AcG (regviring qf+t at leasc 50 percent of enroiled eesbersLip in a Sea1tIl plan ccnsist+ 2- non-Medicare or M+dacavG a1/giOle individuals). ' If a o.yani[aclcn doae nOt provide erzyency sec+ices does not operate esarganry roe.). than ie could ~ot aceininate^ n che paovision e uuv a and, _herecove, not euh+ecr to CCs rule. eequently ~ requireaenta (3) and ;al (ebove)~affectively will nat apply to an f9W V t dcea r t ESractly provide aedical surv¢ces (e.g., a ne[vcr%-pedal ®W exeapc under cade section 5o1(c)(a)). 196 a a The bill a ends secc:en 501(cl(<I t expliclid.l prOV;ta t a sccLCt v'are Organ[zaa^.n or oCCer crrganCracicn EeacrlDed Ln- -- that section haa a a predominant aQiV'.v i, rr<vt¢icn of Sealth care sarvire3, suQl Organi[atlon 6a eligible Lcr ax-exanpt statue 0111y !f no raCt et lb cet earnitga :.lrea to the benefit of a rrriau sCarshclder er ind!vidual." ' E•fective - i The pmvision generally : a Sune 30, 199<. Y.cv... --The r, under a apecial : - cpe Pravi¢iOri does rt apply t - 1-rzng pricr to Sune :c. _99a, it iuch ir -e - • - ac Y binding O luneZ9~a199<,anda03i1 ' thnreafter <be :hfore s . ent cc-ureed, and Me carea of v..-ca have r.oc aaceria!lvr changed. S-49 t a c_ara. . ]1e 'ri11 +apeaaa eve-tiered penalty e af a roediete a n ln c + vhere n app°vs aGle cax-exeept healtth ca . sqanvzacicn ot]er thana private f undacunl engagea in a -rsnactaen result!nq in ^caraGle tneruent.• In such cases. tntermed!ace fanct:ena a av be iapoead d -Lain d!+g ~LLified paver.s i-.a:denlvh< laprop.rly benafle f axabla +nu[eaeet Grensact:or. and aay ba !apesaG r arganzat+on n,agecs who partlcipate in fuch a-ransacGiOn Ic.ormg rAat tt is :epLDper. ^^axable !Ilureaent^ aeans any inureler.c not peraitted cnCer - `.01(c)(]), a 'indeC 5ollcl(q (asanded). : cLtv-q fmm e tCanaant:rn i volr!ng a appLuble Lax-ex.ap[ Saalth v arQar.czLt1<n in Vn:cn IL; Me v;lce o[ an econoC< beneSlC t viCm to c fcr the u a d!squeli.ted person N v e[ the aexce.ds a u consideration (~ncludiag perforaance o6 servloas) receivadby Me orqanization f r prcvidinq such bene5!t, or f2) Lne a of e c benefit pvwvded t or Me ca a[ a di+qu+licvd paracr. detarxloed i vnole or io parcby 1fe gross oo vet r f of cr core activitiee of Me crgan+zatvon. ~•tax¢tlt e inVrevent• SrCneaClona +mject to exciae tale+ under Me bi'a•l include transactions naulting iO Froh1D!ted increaent becaufa a disqual-•fiad peasen .nqaqee in a n n-[alr nrk+t vatue t nffer of property or otte[ Mnefita with Me arqanlzat_en or : on+Lle coapensatlon, a va!1 -rahiLtaad financ¢at s artangoanea under nblcha diaqualiflaG parson : ~ayv- ect based oll Me orqLl1ratlon's gross cr cat r e d a_-pard. Me ccuLttee inacructs <`.a 5e<recary of Me :'- +eury t guidance regarding transactions and arrangeaenosa:.at gr e ruse to taxable inuresent. " So :n:erence i anE+d rpard+ng eFplication of :he c reme]L and private benefit te+ta to other OrganiaaclOna Gelcrtbed 5alfc)(a). section 197 Exuclr.c c e-lav standarda 'J111 apply :n dece:vining - efa ot e]ppaneaG:On and lelr aarkec v]lue. :he ca0ittee .nds tdat an orqanlzation vvll be entitled to r taaile presusfci.on c -ableneaa vtcn : eaFensacicn a- anSaaent viVl E diaqual_ci Oersenc= on a it S-as to '.he sai+factlcr. o: =1e Secreaa[v of tha Treasurv cnat suct arran qatentv spFreva^d by a intlePen=enc beard (er a t1Gepenaenc c taee autncrized by ih bcardl tiac (11 'J fe] - _ +rdiv:d'~ala ':nrLLatad to erA net aub)ett to G1+ e n[rel cf the ^_ en(s) 1 volved in Me a anqeeenL (21 cbtained and r c appropriate data aa tc raGtt+cy Le.S., compensation els paid b sieilarLy situated ergc~lzatvona, bcU: t rable a'.] eapt, fcr :cctlanalLy c aarabL positmns: the lecaccn of cr;aniEac!an.i 1aLing GN.e .ilaEVll:y of a ailar ep.claltle+ the 9eagrapnlc a , independent cmpecsatmn surveya hy nac!Ona11y recognizedindependenc 11raa: o actualvritten offers Iiroa 51311ar insplLutLona coapetLlg for the n rvicu of the d!squa!if:ed person): and (3) adequataly docwentad Lhe basis for :ta dec+raination le.q., rda record includes an evalaaticn of Me LnGlvtdua'. vhOse coapensatioT vas being established and Me basis for deeeninin4 that tair caspeneatien was rea+anable in t14he of thec avelcatvon and tlatal. a iailar cabuttaole prasu.Ptvon vill Y:C: reap+et ra L`e reatonlbleneaa of Me ValYaelan ef property u1G (or purahased)by an oiqanizaci<n to (ar frts) a disGUa1l1!sd paracn it tlie sale (or purahasel is approved by an independent board cbec asea appropriate cosparaEility data and adeguacely docv:nenta its deteraination. In ad]icion, the b111 specifically provides nhat the paysent of peraeral espenses crether, ec c beneL'is gaanted to• a diaquaLi'!.d pevOnvlll be treated as ttnaiderabion f e.^.dered by che aisguallfied person only if t.ha cig+nizacion ciearly indica:ed lcs intent to so treat the eeonoslc benettb. In tecer9lning vhether an orqa0laation claarly ind![atY1 its Intent t -ut e c Ganec!ts a compan+atien !- arviCas. t]e relevant factors Lnclude whether Cie appropriate decision-eakinq body aFprovad ihe CrarJfer of scanofic benefits as o.puuanon in accordance vith establlshed prcuEUtu and vhetLer the organizacion and the r cip!snt disquallfia2 perscn LeperveE Me irenafer aa ca.panuticn on Me relavent 5 ru (e.q., Me aaa + e prepecly repcrted <n Me a-3 or fOrs 1099, a approprvatea,,unta of ine dimCuaiified person, aYd on Me a-+nLEaG!en'a f<ra 990, or ctEer docuaanta dist[ibute3 to Me publ!c if no TOrf 990 !a raquiced)) vit.^• the eacapt!o of nontaneble frL ge benefits descriGad in prOant-lar aaCion 1]3, a crgantzaticn could not d.acnstrate thaG it clearly indlcatad 1C+ i t to treat ecOnosic benefits provided tr a dvaqua!!fied pencn as coapenaac!ot for serviue aerely by at t.he tile of an Ip5 audlt and .ithoutfubatanit+t:an tnet is anteapOraneous with :Sa transfer ef eccnoaic bene[lis at that such benefits Y,v be viewed as par. of Me d!.quallf!eE peracn's total cc.pensaclon yackage. ^cisgua_L[ied persons" mea- + peraon vho :s (1) an ^organLVtion uneqer• la.eantng e, cfflcer, dlrmaor. or trustee o' an orqanlzacion or any lnd!vidual4 ving Fovers or :uPonsib=l!4.a similar L LSOse of cifLreea, diraeccrs, or truaceaai Or (4) eny cndivtdcal (ochc Chan a crga:.lmt!an aanager) 'm s(a) + pcsitaen to exerabe az'.bstantaal lnftcenee over t:e aftaira of a.:e crgznl¢atlon.c (b) ? +n4 suEStancaa'. x Gica1 semces n+ a phyaiman pursuant • enplcyrent e ontraetual -ela<acns-.:p vith the organ zatlan c other o zatccn.'• iaddltven, ^disguallfiac pereona" ' carta_-n f ily zeaberaand 35-•]eroe'.t eVned er.citle5 ' of cers<n1eeacrlteb 'i11 O(I) rsendisqual:fvaE rsen at any aocva. aa vel': ae any pe - vGo vas a pe teee during the five-y.ar Fer¢od ; cr to Me cransaetzrn et saue. Published by THE BUREAU OF NATIONAL APFAIRS, INC., Washington, D.C. 20037
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S-50 A Gvq1a! itieC pernon no 1a U:e b netlcury rf a inura..-e cansectian : s,Ijeet to a first-tier penalty-a eeq_a: to 25 percenc of a ar.t o the taxaGle S Y[aaent :e.g.axt. cnc of aoape-saclen g eadcn9 = eaanabls re.pen.auon ar tta asouilc o( a rah!bi:ed t- action baaed an tLs organltac:on'a gross - es). An organizacien a.n+qer cta pa-ticipar[s in a axable~• ent tcan _ n imovCag ttat 1: ts an taprapea n Yaub;.act+to a urW-ft _Lr penalty t o a~ [c~ant t t of - •' ft s ` aacunta[:Se taxebla in nt (aub]eCC to a vx1 ' of a tax o: S:o,oool. Additmnal, ...... d-tter taxea say be lqwsad if 3e taxapte -emnet c eeted vithin a specified ti.e pa :eE.% Sn a disqaa'.itied paraan vno s tSe benetlciary af C.e caxablaa~ r. suEyct to a penalty ter equal to :oG p.rcanc s e aa cnt cf tte taxabte !nure\ent. An orgeniAt~on ianaqer xho ~ 1y eagree to corr Ct is sunleat ao a penalty tax e~a1 to 50 percent cf tAa a.0ut Ofi'n axLble 1nuLesent (alp]ect to a xisus a.ccnt of tax of 51o•OOO) . fcr thas purqae, the caca correcclon• ' STe ure tact :hat a physician Caa ataff privileqes to edait patients at a i:utltutian dbae nCt, by itaQt, N¢t tLe phyalcian partoras "aubecantiale rdiul savlcaa at t]e inaniwclcr.. •' 9cS purposu of the provision, faeily aeab+ra + e]ete[n!.ied under preaan6-.ae section a926(d). except that suen sesoers alae include aiblings (vtetLer by whole or balf blood) of 2e :^ALVid'cal and spousY of su= siD!ings. :'Me taR ']5-pecrJnt owned l•.[ .:es' xeans corporatlcna• partnershipa, and trusts o utatea vE!ch a d!sY=alltied qnon oaT e Can 15 percent af -da Ccabined vcninq power, profits intanst, or bec.fccial interest. k Under :ha bill, carxacicn abaG be nde on or prccr to tte of (1) tha data of vili:q by tha IFS of a notace ct deficiency undec a ccion 6212 with respect to tne tirst-taer penalty sxciss • Imposed on CAe disquelified perscn, or (,]1 the data On vhach auch tax ia aasasae-'. 199 -a :ndeing the excesa [ene!i: q C`.e ax[ent - -e astabliahlnq eataqaardsro prevent future aucn . sab.nefLt, anc vCere fully cvdcing t:a axCes. bene! 'a ]at p.itle• a.ito a-ci.isnal corrective actlon as p[ascnbed by '11'eaaury eeg_laticns. '_'he lnter9ediate san.caons tcr :LlaDla inurenent t:ansactiana v be izpcaeG bv tLe IFS 1 ec of (or in add3tCCn to) ; accatlon of an oca,aniZatlon'] :d%-e%eeptstatua. :f ]ore 41an o- dSSqualiLed caraon or manager 1 iable t a Fanalty e e tax, chen all a ^ rsoes shell *;cintly ar.i . ra11y 1_akieafer sucr. eax.~~ Undertt tar soese bCll• t.:e :r15 has suthcrlty to abate the .- tax penalty (ur.der -,resent-lav aectien 4962) : - -aclasheG that cne vlolaclcc cas Gue C- nerRe c eani not aue t :afal neglect and t ean~acion at iasue was cc-:ecced vithiv. -.Se :equired correction periaa. T - ent an arqanazacicn fma avoiGing the penalty emc:se athrcugh ternrnatLan of its tax-sx..pc atacua, the bt 1 • also pccvies [ r tne napesltbnaf a t.x on applicatle tax-exenpt healtG Ca crganizatvcns that t -nta their tax-axespt status. "ha unt af the tax i equal to eha lesaer at (1) the aggregate !a benefits tnat l n can aubscantiate ihat it iae received soon _ta exesP'ion fro. tax under Cede saetitn 5Glp), or 11) Ihe valua of the net a sate of sueh orymisatlen.• Tbe gectecary of tlfe Treasui'y :a petfltteC' to abate a11 or e poKlan af tr.e taa' if an appticable tax-exupt `eaLth u erganitation distributes all of its net a seta t a charitable or3enlaaciOns CeacciJad ln Coda secr'on 501(C)(Sl chat •ave been ln exlstence for a a .ccus 5-year period. In additlon• applicabie tax-e:upt healt.`.cara argal:]faciona QaC ara dasertbed in Coda seCClon 501(0)(4) era pernittad to distribute tliaic nat uqta to ana or aet organuations descr:bed !n code saction 501(c)(4) tha1 taen ln va.r.c. for a wtincccs :-yaar periad. An applicable hee!t'i cara satlcn !/ per.atted to ttrfinate its exupt atatus only '_t t hsaapaid the tax (or any parcion thereof tLat 1 nct abated) and tf.e zation has n ifled the 9ecrstary of its intenc to b nate upt atara (or •Jie Seoretary has sade a final deterainatacn that such atatua haa terflnatei). - 1!berts the bill'~ provisions ate parallQ to the pre+ent-lav :dtaadlau sanctien raqiw gwerninq private foundationa p.g., ]ecersininq vGetLar an aeqanisaclan aaauqar kaovingly participaa.a : ar. iaproper tran.ac-ion, t.b taxable p.riod for co ectlon, and joLnt ena s ral liability), the Cevlttee intenda tbat pana11e1 proviacona of J:eaintenediete (unction regira be inee.-pcet+e 1n a sia:ar In calculstinq tEese u unta, rclo siailar to tle rclsa applicahla to private foundations sK fort] in Ceda sec--on. so-(al, (.11 and (f) eppiy. 2Co ".c•-~e vace.--Tha t- v.sian applles ce _av-eoece nc.... - on ar[atter :un.a 30, 1994.-' ' eguir - •. cer the b111, applicable cax-a mot healt.^h care Ccganlaaticaa red to take n aalabte acthex~ - ra1 pur'ccand the 1F5 the •tterc c Sty ' alth r and outreaeE A e _ (reYSredabcve), n the s - tket thalr a ual1 2 rn caCton :eturn /FC^ 99C) is required to M1w ble Cnder present :av. Te b_11 alse Frev_des chac amY ovganu_aataens a;e oaquirad t fu^.csS, as part of V.e1r annual ForC 390, .nfoctatlon reqard,nq thel: ibalotentaaon ai oYe cctaunlty heal~ c e ar.d cut:eac` serv:ce needs plan for tha year (itcludang enracavered osts and SPECIAL SUPPLEMENT ra e foregone 1~ furtherance of suc.`h plani. In aadltien, scy crqanaiat:onf are requtred to diaclaae such 1 1nIiLCion a the Secretary of tna: aury za req~lre with o--- xan•a " 0 'ranaactlC:.a (daaCribed aGGve) lap•cpar!yengaged :: ' bly t.h.razganl2.Llon." ^`e ball a1m .reviaea ahat app.lcable tax-exeapc nealtTh ca- organlzacions e, r quiaed to ce.ply vrttS r¢qaeacs frre a vSLUale who sask a c[Fy[ organ.iatlOn•s xritten ccs]ullty nea!th rare and outreacn vee - eeas plan arC, If ae requested, a ecpy of epe FoCJ 990.'• _pct e recpiasa, the crqariza<:cn is required to snpply c Str.out c a ocher ti:an a eale t for reproduction a and aaclcngcaata. If the requeatn!c- ccpies is aade n pe[sen. Cen tAe erganlzation a vedia[elyprevlde such coples. f the requeat for cop=es ta vde athar than 1: perscn (e.g., ty sall cc telephona), Chan copiea rust he prtv¢aed vlihin lo Cays. Hm.'aver, a aryancnation vy b¢ celleved ct its caaga<mn to provide eapiea Lf tl.s Saeretary of the 'CCeasury detarelnea, upen application by LLe Organ_ia[1on, that the ar9aniEaaon is suD]ect to gn paign (e.g., repeated, e reqces<a for <ap aes) as4c3 w pai t:.et 'aa:var of te obligatlonetotprcvtde a cCPies s .he public :ncereet ElSective tate.--M1terovisione governing reporting and publ!c diac!Oaua. by applicatle •-esenpt hea:th ure nrganliac:Or.a cake effect an Sanuar)• 1, 1995. r ° The praaentTlav panaltiea apelicab-e to fallure t •" e aely, ccaqlete, and acaeate r u-n (sec- 6653(c)) v:'ll appiytn vhere a- applicable ta.-ea..pt]e+lth ur. organizauon faa:a cc coxpl',. v_h tGe bi!1'a repoK:nq reguaresenta. " If sa ceguasted, copies auat ne supplied of cte cc nicy ]ea1tS c and outreach s i needs plana or PeCy 390 forca , of the crG nlzaticn'a three aestreunt [ax+ble yeera. 201 1. :reatasat of Haaltt Cctteranca ax,uieatiova, perent Cxgat-satiCna aad 8ealtb Iaaurance ]uicbea~g Coaperatives leac. ]as of tbe bill abd +aee. Sbl(.), Sa1(c) a soa Of tbe code) pre Eealth a ntenabce satiane 6acticn nl(a', prov¢ces that a organlrat!an c described in - an 501(c) (]I o 5c](c) 141 of - Code 1 exeapt$Coa taxaaly r.csuestantaat pan of :ts activi~les s c -a of provlclcg cg rLercial.ype lnsurance.^ -- the c orQan6eation c.^.at is axerpt from tax after tAla rule 1 app~led, of !he actcvnty of -- vtdtns co¢iarctal-cwr. inau:ance 1a treated .. - xabLe red trade or ausineaa, a^- the tax in detacn.e by applying thearvles applicable to i --ospancea. cem.ruat _yp. anaurance qenerally :nclcdea any lnaurance of t[ype pcevlded by ccal tOSurance cospaGles. PVUent law provides ChCt ®erc:al-type iksurance daea tot include LnCidental haal•-h -.ce oirovlded by a health Eainceeance organizatlcn (!CSO) of a ind cuatoearily provided by an MMG (sec. 501(q ~])(a)):~~ The statute does not specify particular types of aatlvities t'.,lc satisf_V -.-a rula. Parent o uivioea chericaDlm oreanixeiioas dascriLed ln aeetlan 5o1(e)(1) are c1u.1!ut .vtd.r as pub11C charities ar pravate faundatlana. in g.n ral, a organazatian vall be classaL'ed as a public CLacitv if 1t •1) ^ a slgalticent mppeK ;generally .o[a rNn an¢ clfud; ~ the feniofcontributlona f;Ca tSe general publie or (2) is a chcrch. scGOOI or bospital. addiLOn, In Sa9(a)(J) prc'+ida. bhet pubLic charitaas 1ncludeceKain `auppaK• arqaninat:ars which ara c;9anlaed and apeceted ex-lusively to benefit or.e ar aara ted public ar publicly supported c.aritabl. or5anizationa, p~lECic charltles ars nOt sub]eCt to Che speclal ru• applicah!e : cri'+ace to'cndations, such as a prohibition againat se/f-deeLng and tax on net onvaac.ent inccae, and contributions to puElic charlties are .ab1ec to ao e liberai deduction raies than are concributiona coprlvate foundatlona. Present 1av providas no rule tLat applies apecifical_v t quallfied bealCh insurance purchaaing cooperetivu (aa eatabLiahed ur.d¢ the bill and described ln part III of suLtitie 0 of <_tle %SI of the Scc_al Sacvrity Actl. ~~ The :rtelTal Revenue iervice has interpceted t:,fae provlslcrs vifS Cupect to 010. in o.C.M. 09t2a IACeuat 20, 199C): G.C.M. ]9839 (Auguat 30 199o)i and G.c.M. 19800 ~Auguat 1., 19901. 202 Geeaens tor cLUVe 'ITe Coalittaa believes tnat• because lo1GS are an inp0[tant a:ncen of the F[c;islcn if '.velth c aervacaa under che b:1:, adClcioca! clarificatlon af the definition of con0erctal-typ+ :nSurance -s needaL 11" r pa_t to IH(oa. Yar.y n. ool cnla aca tart of rao[ganivtl ayatem tSet ace under tha ctncrolefa parent acganiiatlon triat servea a sential:y as a hclding carca n for the 6a ceuaesv+tee. ceuae cha stacusot such parer.t orqacizatlonsa tuhllc charrtau or private ! undationa ia u:clear under F-esent-1av, t_e Coaa_ttee believes ihat it : appKpriate to c-arity 21at aurn ergaalzatloaa are not priveta :ounda[pG.^.e. Publisned by THE BUREAU OF NATIONAI. AFPAIRS, INC., Wastingtcn. O.C. 20037
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w SPECfAL SUPPLEMENT Sn racegnr[ion aL the pu:tlic mteruts se[vad by qualified hea1L•1 insuranca PuLCnaa:".] coapacativea. the COmir•Gla haiievea Cuc auch organiza[ions sheuld Da affordvd the benefits of Fsdarel tax-axeapcion, sub]ect to cenaie _-litations. asblanacioa o[ }rotLsioa nealeE eaiaeyeaaea a . -aas Jnder the bilt, 11. lrcvisien of (Cr tb. arranging far rLa pxovis!crn af) aadical eare en . psepaid basis by an 3M0 !s nat v.'eatad av providLng e -eyp. insurance it and only if aceb (1) ca cvieeE Evatbe oiganiraticn tc lat ata cil!tiee Srcugh heal-.` profassicnale vho do not prov:de n2acant:e: health c- - u other eLn an babalf af tAe orqamzataan: (2) aava p[ovideC by a Lu1tL care professional to a mub.t af c`.e Orqdn;rltiOn C^ a baaie under rbich eubstan;lal!y a11 ot t -tsks v1tA respect torato af utilizatian by clv seacer :s asn:nvd by 'na prtvnder of such carr. (3) ure otbar rAan prlsary a providad t aalbar pursuant to a feferrll b~tba F)lo: or (a) acezqeccy c a vidtl to & wber at i location ttide tbe h ecber's araaat resiaencs. For , auple, an !Dtl•v provision of urs falls viCm tba f rst cataqbry abova, in tna u of a ata:f or dedicated group aode11954 tnat hires leird care providers (as a.ployvas or indepandent ccntractora) to provids sedical care exclusively to ®10 saareca at cRa iMO's faci11t1av. An ICU'v pravision of (or arr+nglrq for prvrialen ef) ears falla within the second cateqcry aMVe, if LIe '9fO pays health u- prb:eeeicnala o a fixvd C caDiu4ad basla. vhare sucn payaents ara basad on rha number of aalkers served by eba healra c professlonal, but not on tbe extant of earvicee provided to a eamEVr. :aguiraaent t:.at substantially a11 of Se risxs of rates of utilization of the care praviGer's sarvices by saaG+n 'oa bgrr.a by 20] tte prcvider ! intended tc limtt ttla use af pa;-ant arCGageeects tl:ae do not ssft scbstaneiaily all Cha risk t e pnev:de. For example, an -010 that te tax-exempt under section 501(c)(A) atd aakes itated payments to a network of healt.R Care arrfevstcnals : peniciiac aree ganera'-ly is not traatad . vidmg c -:e1a type i surance under ;he pr]'/ialen. 3y Cantrast, a ®ha- /QlO expends !ts oFeratlon to e nearby a and ic - 1saac do ao by a[renSioq c0 proviCe nedical cxre tbrcuga e ne crkef physicnans in [..-cor-servlu b e@•.o y treated e that a a ^ pxcvviing c ezcia!-e tnsurancv. a.vnder praaent ia dvpendirg on t".e subster.iiality of thv activi;y Of provldV-q ID -ae , the :iM: is eiL:ar subJaar • reletedtr c~S;sicasa i vi2 : apa< to ihe ac.vv:ty, o- bemces :neli5ibie [or tax-.xeapt ltatus. M iL9C's provision a1 (or arranging .'es of) care fslls vithL the third category, anova, if care eth¢ N.en prirary 's provided to aaater pureuae¢ to re[aza'. by CIle F]1C ~lncl tlic4. = r tnis purpose, ita healt~ care proNSSnor.aa), ob aypreval or ratification by eha HIfO. iar.at o -aaisatLppa Tnarbil! claci2!ee UfaC, undar present-Lav Mction So9(i!, organizations that sarve as parent Salding ocapanvu for tospltals or gedical r earon orqanizations xay qua!ty as public chantias rether r11an pLiVa[a fcundat:oTa. 4ualified health !:uurnnca purcAasing cooperatives established urAeL tAa bill at•v vllgibla fcr Fedaral taY-eiafpc status, provided _ et private inufasent, lobbying, and political activity nstrvctions are sativ'SW (eisllar to pns ent-lav v 5o1(c) (])). sucL hsalth iz•.su[anee pusduing ccapaeatlvee are n eligible to usa ^Snancing provided fres CSa proceeds af tax-exaapt bonds. lffsctivs nate Tbesa provlniozu are affectiva Cn the d•te o- anactm.n_. a. tQ Tteauaat of taaable dryamisatieas T[oviding Eulab Iasurasu and otbar hepald lealtL pars serHaes (v1o. '/aa of tb* bill and sw. aac ef tLa <oeq 1[eeeet ta9 204 Under present law, no rule provides that taxable haaltl: mainunnCe etQaniaatiots (MCS) , aiqanicatons sivilLr to ihu, are treated as pioparty and c sualt'y insurance coapanavs for F.deral tax t roaaas. :1ta tax treatment of a axable h8o (a.q., an !CA ocqamzed o a far-profit b isl depends :argaiy c;.A extent to vhccn it S alifiea e an insumance camFany. At present, tne r_ay of a a taxable Irathar than Cax-exeapq. Xany, but not a11, of Lheee crganazetions have deterv:ned their Federal tax on the a sttlon tut they qualilY as Prcpercy and caaual[y !nsuranca anlea. In dataraining taxable i , propezty and a ualty t- compaCiea 1ncLUdO Iaiacg oVerCi - and gaafs) undervr gtmcaaa ;ssc. 83](b)(1)). In calculating undervi!rinS ic , d property and caaualty lnni[anca coapany gme[aily may takea coar+a deduction for a portian IBC parcent) of t`.a increase for t.e year in s-5i .arnud praniuas m+d f the discouaead aaount of lcsaee 1ncVLrvG (!nalcdeng 1n rraE -but nat raported lbvvee) ;veCa. 812(l(/) and (5) aed9/6). tbaae dedcctibns v net reflect tne ^all - enta^ teet cr '1:e acanoac perf [eqcireaants tbat qenarally eFply to aeeraal-aerAOd taxpayersCe feasoee fer nuae 1'hv Camiasa believea it 1 advlsable to c rify ttv Mdaral tax teeatment af taxable oiq.nlz.eie(u eEOSa pr6.ary and pradosinant business activity Ia to lnsura or nsuia accident and bealth _aka. or - aperate :ike an E)(O(or enter lnto arrangelents that a.ebl."rea a av: a1n), cegaz.ileu of vhather aucn arganLVtLCn. are t- Cad as iLaurance coepanlee cnJer sute law or atAer appi cable 1. Thua, thv bill treaes such organ:zat!cnv aa prapvrty and cavualtp Vnsurance ccapan!es for Faderal tax purposas. ~laaation ef Yvelalen e bill axpanda tha etape of crqanlratian. treated aa taxable preperty and ea .valty insurance aoapanis.. OrCet' tbs provision, any orQanafat!on that is not tix-e3elpt, Is not a 111e insuraLCa ccapany, !s not an arganizaclan to vbich sec'caan B]i applies, eM vhosa priaury, ard predo.inant buszness arivity duri.•q rda taxable yeaL falle Sn an. af thbee Cateqor:ee. aa trea;eq aa a prop.rty and ualty 1a.arance rany for Federal tait purpOVes. In applyinq t.La pravialon, an organizaeicn'a •yri.ary and predcalnant• buamess acivity Ss int.nG.d to wan tte attivity vblch c n.titutaa .ore then half of tLa arqaniaatlon`s bufinesa adivitiab datar.ined on a onable basis (fgr axaapie, as a fraction of gross revenues froa al~sbuarnese ecmivit!ea). Tha three wtegcriae of actlvitlee ar.: (1) lesuinq accident and hvaltb nurenca contracts or ra!nauruq accident and health -islo: (2) cparatl.:q ss vn fB:G: or (3) entaaing into arnngafeno under vbicn :ixed payMnts or preaiuas are receiY.d Ey the ]05 orqanuatlcr. aa canlderation Lor [ov:dcog c- a¢ar;:n ar'the trovisivn aL health eace svrvvcse aod s'.vbseanc:ally allqt•ze risks of the mtae cf ut:lization at sucn sez'v'_ea is auumed by LL prov;der af sucr. 5 C Yo inferanc< i tntead se :pat taxable orqanliaclC.-.](1N..ether or not t eated a Ctpanies u[Ider ap_'Jiicabte $tate Lav or ragulatlC-.) v vlcces • Cons[]t of tradiclonal nnsurance ectivnc.ea aucha arranging L r t:e p evice:on of oediaal care, c-eimbuasing L nat3cal care, a a-fer- service 'ca.vs, are vt ine:.rance catpaniae far F.deraa tax Fu:pmes. cl:s ^Er=aara antl pretlcevnar. caqa_raaent is ood!ficd :n the O e of rrgavtaew-.e tlfeb have, ae a - .-vai thei suing or r - c:dentand healtha: aace acts. FCr eccth organizataons, :Le ads:a:ste[:nquef accldent tl healtt i a - ecte is andar tha ba: as part of such business avlty L r purpceea of deterain:n4 whether ihe - zatcn's mtivitiea fa11 viahir. t1 accpe of category (p l abcve tt i anticipated that, in tYe [ of a staff or dedicated group medel ICSo (vhara tha @10 hias health c e p[OLaaavanaLa evther as esployaas or indapendant contrac-on), no losa ra a ceEuctlcc f :ncurred but not reported (IBHR) c culdba atlavaote vvA1 ravpact • such haaar= cara profesec~als~ v iviua. In ganeral, 1n those c .:astances, util:zatcon of s- i a eof such hea'ith care prafaeeionala !e er can be L ovn by tta ano of JU Fp0'a taxable year. aa the cthr hend, to CSa - t the pariod of health ra4e cf aucera of the R!o estends bvycnd the antl of Cu Ii.C~a taxable yeev vhera prvnuv ar pespaysents fcr health c rrices ate nct due or paid aantnly, but rather a e due or Fald a ualLy or quarteb!y ov a period otler than t.'ve /p1oY i axabla }' ar), t:.in eCeGUCticnrith r swct to tne n rned preatuss _ r tAe year (reducadaa req ired by prasentlae) vould !a app¢vpriate. fffeetl.e oab Tha proviston is vf-evctCVa for taxabla years tpvnn!n9 after Cecamhar i-. 1994. A t wltion vule providas t.at, for a organization av.ar than one vhich (1) trea4 itwlf e. .ub/ect to taz a a property and alcy inaurance mpany o !u original Federal :a ratusn for taxabls years bp!nning tn 1993 tl¢ough 1994, a(zlis c........ t far Sts last tavable year beginning before 1995, ths ctanga aade by the provision Is treated as a changa : sethcd c acccunti.nq, and ad)::staente under teC•ion /al are taken into e :ea firat taxable year beglMing after CacamL.V: ]1. 199aeCC=Cti: ~ot 1 endeL thac an ocganizatfcn deacribaC under bhv provv!on tnat a eived app[eval : chanqa ita .etnoe o e untLnq Wfore Cecasoar JL 199/ c te t-ueetl ae a prop.rtyand casualry vc uranca coapsc,v for Federal tax purpOSaa te suEjecc ta tne rula ude-;lva provis:on 206 lating t0 taking :nto account in One year ]::a ad'ustaents .:nder seotion a81, , suUl anarginiration'a aactlct 31 ad;ultments vould -.et be a ratvd by the prov!sion. Under :his transvt:on vvla, in the case af a taxable organization tha: i netad as t to the reql:rvicenta of . n s/B (retaCing-to altalizatvan of policf acgu:sit~on aexpenses) Lcr :tanceb taxable year beqinoinq after Ceciye- 21, 1994, any adluc[aanC ic;rabutabla c treated a suaJect to a ction B/B in a prCer year :s treated a ,attributable ; char.ge aathod cf aeeountlnq, and talG<t lr.to a- aunr for ita first taxaDle yaar baglnning aLter Jeceaoer ll, 1994. , ^.he provisien also provides a taena:tion rvlv f o[qan:zaCCv e:Pt trca ' r ths laav taxabLa year baginning h e Tan~.(ar; 1, 1995. - ucn a crgan:zatian, axCepr ]s at':e:v1 e provided 1r. :equlattcv:?~(11 no ad;uataent is taken LntoacCaunt for the tZ Published by THE EUREAU OF NATIONAL AFFAIRS, IkC., Vdashmgcon, D.C. 20037
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S-52 s lrso : xaDGs year beginrzing after ]aceabar 31, 1994 -edr s c__ naBl (cr anY =L'..r pnviavee) er. aecoune of a cGanga in of accounting : cvinG bY :be prcvlaion, and I11 for Duz7osas of deng rmimng gain Or Ies+, =a ad7usted uaia of any asset hald by Ona Or5dni2aC:On [n tle first day Of its (Illt Cakable yaar neqinning after Mceab.r ]1, 1394 la •Swttl as equal ta -.a fair zarket valce a r J:a day. Ryulatleu aay prucriEe c_unananus c nvn!Cn t.he appllcat:cn of tals transitict rale Sa nappropviat+ end tLe excane to vhSeS atSat rolee apply (n avcb _ - ces. SuN circcestar.us vy pnclude. C asple, those _ vnunaa au of qain, loss, lnccr, daduct:co ar ccedl; vould -••xable to the organizatian before i s f:rat taxable vwr baCCre L995 (beuuae, : uaaple, L- vaa tceateQ aa fYna - to -nruatad Dc+in.+. lneose ear). 4. Ozyariaatlcaa lVbleot to /actlaa 433 INa. 115 ef tne bill aad ew. e33 of tL cede) >Keunt z" u( orqanizacian deacribed !n saeelens SCi/o)1]~ a(a) at rLe cade aa eapt f ta: only 'f no substantial part of 1ta _ - is[s o1 providinq mparovl-typ. i 5o sl)las9paclaL rdL6 apply to earuan elLqitle health CV - crg+nazaticn.. Eligible Cealtlf i(u u orqanasacicns are~ll alu Crnaa or Blue Shield organazationa exi+tirq on lugust :6. 1986. .hun have bot expecienced a sata[Sal cbanqe atructure o Op.rationa slnce that date, and (1) etbef anyanzaatlana c5at a.a ceCtacn coar:nlty-aacviCe-zeiated reqYirsaenta and substancially all af vnoae ar:vitiaa !m•elve the providlnq af aealcb i - n BJ] proviGes ^.at eligible crqanluticna a e qevera"y -reatad as a-cck property and casualty insurance cospanres. sectiu, 2]] pzpvides a apeclal deduction Ccr eligzble axqavzeit<na which ia equal to 16 percenc of tt.e clam and SPECIAL SUPPLEMENT (s+c. 115) . ie11iS insurance nsk poo1s have hean utabllshed ln some stata., and . 1e of bl:ee mepanding an 1•eir aMe O organixataon and aecrees of fandieg) b.ve •w n dete[alned by tbe Ir.ternal Reveaue Setvice to De exupt frea rax 'inder uctmn 901(c) (6), or [-a-a that SLccae is aYCludable u.-der pctton 115. L~o1 f r Calce Scae Staca rC+K pecl. w=ently have difficulty obtalrlcq car- axopt stacus ceuuae preunc lar :a r.pt apeccfically desiqned for Stace riak pocl.. Ybe Cavittee tellavu tha:, until tba taaitb cara refcLa pravn!ona OL •1fe bill becoaa effecClve. States eGould entive to provide ]ultt Sn.urance to peraons v o ' vt obtain 1 ce ucacae 0! tdeir health statcs. ID:s~tne bill z- lude. e teaporvry p[cvislor. under vt_ch arqanlzatlona cbat provide insurance : su= persons are tax exeapt _f they ae.c uruzn requl:evnL relatirq to State involve+enC in c0. organua¢on~. operaClpn and funding. ppleeaNea of f[mi+les Ths bill erpaMa the list of orqanlaattena t upt •- au ~ 'znder saClcn 5a1(C) u!nc!'ide a qaalifiad biqb risk beal h C. paa1. A goallfied hlqh rlsk health Inauranee pool generally .aana an aTtltg t]ut !s ubl!shed by e 9tata c pO11t!ul suadlv:aicn cfa Statatc prcvide haa1L~ ! . a 1 nonprcflt basis, to persons unab!e to cbtain health u b.cau.. of health Cenditlens. 9ucb a ent!ty gualtf!ee only i-• cartaazn addltlctJl redRlrtlenCe ira eat. f'arst, t_e State or ,xaC[al autd!vulan aut (/) particiPate !n the onqoinq 9overnance of tlv e ticy and (2) suDSidin tee operation af tL antity. Second, r.o p.rt of rde n.c .arninqa of tos entitY say incre to tEe benefit of any private sharehalder, sesuq O indLviduel. ITe pmvvion axpiras vlth ropect to -axabl+ y.¢s begzn.:ing after Mae.:Mr 11. 1996. ]09 30) Effaotive pate r<nsea i c rveC d irg the vee + the ad)uaLed a Eeglxm¢nq o[ tce yeav. TEis C.LUOtion 1s olcvlaped Ey [upucieq taxable c1 i i ' 1 ' 1'ba p vaion appl-a+ to tixmle yeaSS beqinning after 2ecCmber ua, a L ncY^ aLLr 2 ed, axpen+ea incurred, tax- c ll. 1959, and bafCre Sanuary1, 1917. a:pc cocos ,-ne cpaaat;cg loas urr.aven, and cther 1 nle to n. lt Y t Th at-r-bcta e . cainus. e dedYCC[on may noC e3Ceed taxable lnccae e- to health buaineas fer :M yeal r a, tar irea t.ett ed 501(c )(]) aanaa t!ii_ar to Oava['leCtal 3abde ,calcuiated vi lout raga o to his dedurianl. (te e. ]4e o f tbe blll ana aeea. 141- L"0, 265, and 56 ef tbe ceda) In addzti=n, s n a]] e ieinatas, r eligible Orqdn:rdCa[ns, tne 2a-Fa:cen[ :edu[tlon Ln unearned preai- r ervl5 t,:nt applies generally to all property and easu>lty :naurance c[apan/as. u r cbanae . iTe cemvittae betievea fairaeas dietatfa elat the apacial ivlea .f!ttinq 311. Cr[ and Blue Shlald w-. Gerccqanizmiona Ger sect:oa a]~ ahould apply tcc ,cLln orqanixatlona tlet became taxable by - e aeme prcvlsi0n Of the Sax Fa1br. Act Of 1986 [nat yde B•:uc^ tY e and 91cs Shzeld arganizatcona caxebit, if sach OCq1n1EdC1C:•.a a 'lot Blue Crc+e ar alue Shiel] o[gani]a[lON Dmc oAYer-+aae cut L`.e eiigibllity ceql:inewnts. ISe couittee ba1!eves ttaae special ivlu ahnuld apply to suCi arqanizatians for ihe sae yerlod C1at thay tava nppLad to Blue QOSa and Blue Shield a_ynnzza[aon+. t®laaat'an ef lee.iefoa e bill applies the speclal Nlea under aection ei] to 1(e ame .x:anc they n e provided to certain exiatinq Blue C or Blue ' _e1d arganl2ationsr ln tbe 4se of any aCQiniaati0n rlIIt (I) i not a Bhta CCOSa or Blue 9hleld otq+nizaticn existinq on 8agust L6, 1986, and (11 atberaiae aeata the neWixoenu ef eaetlen !L'(e)(S) ' tuLinq the raquireuent o1 ne aat¢ial Ca qe in operationa ac atr'uctvre a nca Auguat :5, L9l6). urder r1L hill,an ergauiatiea gualifies foz this treatxent only if (1) it is not a healtf. ir•tenance orqanLZation and (1) St is oryaanisad untler and gove~ed •uliy u liy_•liy and clueively applicable to by State lavs vhich ar +pe<lf_ _ t-far-prnf!t hult.insutanca or h.alth service type orqanitatlens• +lfwLive Oate TTe provision 15 attective for raxable yors begtnnin9 after Cacemter 11, 1901, - S. tai 6eeptioa for l1Nb-L1ak. IasYfaace T>ols Iaac• '/4s of the bill aad e. 561lo1(f]) of the Codel xaa Yo prcvision of present lav apeci:ically provides fa tax- zevpt status for organlaaticnx prtvidinq hsa!if. i rlLCe coveraga -o persons u.-.ab!e to ebtaln health tna::rance c rage i the prayate 1 e rarket because of haettb conditLm+.a~5ect!cn-sOL(c)(6) c- <ode prcvidee fcr tax-exazpt status for bueicess laey:ea and S otner o' zatlans n- o:ganlxetl Cor proflt and --~ af t neC . rninqx'Cfivhich inurva to the Cenefit o any prp.ate careheldar or :.-reividual. Section 501(c)(q prcvidea for : esp: status for certa:n civic leagues or otganizat!cns n orqanized for prcfi< but =perated .- vely for che p . c .elfar hov r uch n=rgan zation may be ...... onip .- +ukatar.tialpart cfita a ivltlae conaiata of provlding comrerciel-type msuranca. '•( LLe cafe of a state o any pelitical subdivision of a State, preaent lev provides an excluaion f cCe derzved from the exerci.e of urv esaanbill governaer.tai function pee+a=t x.a. terest c- state a ocet g[vernaart ]onda y- ally 1 xcluded f- e f the oonds ars isrxd to C e direct of -J'asescv.rra.nt. ;aec. 10]). :Ifte[tlt Cr. h onde u.Q cy tbess governtent+ to i ,ztie+ of ather Ferecca, esq., private activity bord+,:+taoble~=nlus e+pecif6c . cepticn troludeQ in the Code. Cne av=h ... aptlan is for Frivate eat:vi:y oarAS issued tc finance arlvitco af privace, char:uble OrqL".izacana described in cvNe u :cn 501(c)(]; ("aectam 501(c/(i) ocqanssatlena") ahen tha act!vlcies do r.or constitute an -nrelated t:ade or buaintle (aac. 1411e)(U (G)). •ctl.itl bonds Sarore e ent cC Jfe : x RafOr. Act of 1996, Statas and lccal qovarN and a ctlOn So1(c~/]) OZganiset:=ns a ra deaned exa.pt personsJ' •mder the Ccde bond pravifiona. Aa.... Ft peaons, +actaon 501;c1;1) or4enizations vaa not traaced as "private^ pec+ons, and [leir bends veee not "!ndustrlal development handa" Cr "private loan bonda" (tba predaceasor uteqonas CC cirrent F _vete actlvity banda). BrGac presant 1av, a bond 1s a private activity bond if u precee[a a used !n a vlclatinq aiNr_ (al a private buainess tast or (b) a prvvate loan test. The private business test uncave tco-prcnqed tast. fint, the test lizits pr:vace btain.+s~ufa of govervantal bcnda t e tnan .o per[ent O t.le proCaeds.s Second, no aore than 10 par<ent a the debt s Ne boMa vy bo sseursd by or de[ived lrea private busin.ss~.uera of tAe pectuseda. :LC privete laan test ]L!ta eo Ue lesar ef 5 p+rcent ot $5 silLicn the aaount oC qovernsencal land prcceeda tnat aly be usW to linance loabs to persons ofter :han gcv.-naental u•'ll•i. °' No aora than 5 percent of bond proceeL+ a.y ba u+ad i privat+ buaineas 'ae that is unralated to the govarraencal Furycse cL UU CVhd iatue• '1'11a 10-percent debt a e test, described bQOV, llkevvs 1s reducad to 5 Feccen< in the ease of such "discrcpcrt_onmte" private bu+lnea+ uaa. 310 - iva5oa baea. As atabd above, prefeot 1av t - a ectien 5o1(cl(1) - '- imt:ona aa pr:vaea p¢aons; :hus :ends for L]eir v may an!y tea ueG arevabe act!v¢y ^gual:fied 50:1[1(]1 Gonds,•e sual¢t the rest~t -cc_an Code s n 145. 1Te scst sign:5icant e raf:r:cn!or -nita tha a - of cutatandina ronda frea v tch act_cn 501(q (])crgan12a91on may benefit to $150 rnllion. _.n aFplyanq : "SiSC sallicn 1 sat,^ ell a n 5ol(c)(3) o:qanixatiena u managaasnt or contrnl are tveaced aa a :ng1e c:qan:[anan.cCTh. lieit does nat apply to bonds for heapicai facilities, d -.ed t nclcd+ only aects c primarily :nFatten4 organlzat:cnfe A s cnd re -:ctton 11ait. tc nt e than five - ant t.e aa0u•'ft of ^t t proceeds c LondiS that may be aad cc CsLnce any acrivitus ;inclld:ag aa ccaCS[ iasu]ng the bondsl other tloen the exempt purpo+es of tAe sacticn 501(ci p) . narat_on. Published by THE BUREAU OF NATIONAL AFFAIRS, INC., Washington, D.C. 20037
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SPECIAL SUPPLEMENT I~SValeCOn enacced in 1988 /apoasd !cv-inccse aetant xcupanry a n exlsting rnidantlai rental property that ia r/d by.ection S01(c) (3) organizat!an. in ..... c-tond-tinenc.a t raact!ons. Tbase r atr!ecLOr.s raq'iira aha-aeintxum n of Jfeheuaing un!ts cemp[taing Che propartY be ccntinucusly cupied !y cnants havlig fauly :ncoeee cf 50 re[cent (6c pe!ce.-t t..t in certa'~c1s41 Of arsa Ydian 1nCOSe fCr periods of up to 15 ysars. lav-inacme tarant ocwpancy requirasancs apply to ! r-pra These ]evelapers receiving tax-sxupc private acr_vity oocd 5_nancang. ctex rastr:ct•av . Several restricticns a iaposed on prlvata act!vity bonds generally that do not arplv Lc bends uaed ta flnanca State and local govec-.ment accivities. Many of enw rutrica!on /laa apply tc qvcifaad 5v1(c)(3) bonds. Mo aore tnan tva percent Of tEe praceeds of a band iisVe say be used cc finance the casts of :ssuing t]e Sonds, and sese aani.. e a hot rauntad in detmrmini.Sq Va/eher tba aoMa utae!Y ete reqYiCaaent tbfr at least 9E paee.nE at CSe net procaeds Of sacb band ve/ue be aaG !ar tbe exAx,,t acc!Vitias qual![y=ng the Donds for -ax-exupcion. TRa 5A!gEted aversge mat4rity of a baM 1YUe vy nat excaed 12G Perc.nt of the avarage ecatomic life af cM propercY finar.ced ..-- .. _`.e prxaeda. Apublic hearinq auat be held and an eiseted Fublle official - epf-ave the bonds 1Mfor/ they ara `usced (or ea eanda aue[ be approved by voter referend'.ul. 311 SI properea f!nanc/d v__ -race ao uty conds as cnve cad :o a use r t quelifytng fcr t -ex epc f-nancing, carnain loan ..,.e-esc peoa!tlea are !aFaeaGY 6oC'n qcverz•uantal and p[tvate acc:vity benls a e sub]ect to . n.er]us at]!r crGa Ceetrictiona. 1nUudpaq t]e fo_.cVicg: (1) The amcunt of arbicrage profits thet rav ts d tax-exesp: bonds i strictly , ted, and aost such pro[L's ausv -e reGaced s the Federa Governxent: (i) 6arXS tey not leduct interest they pay _c the ewtenc Gt their in+ascxents i- aot cax-exaep_ bonda: and 50: (1) Sntereat a - vaca actlv!ty honds, a than qia_ified (c) (]) bands, s a preferenca nc/a iz calculacing cte alternative :^.le CCmi[C/n h/1!evea a distIr.gVishing feature Of AaeriCar. -- a Lte sinqul3S seqrae Lo vh:cb t]e United StGtes r3inCains - vate, ncn-profit sector of privata health ear nlqt/e /aucation, and attur cner:tahle i ututions :' Cne pualie a rvic/. The ccmittae believee it is iap0-tant to asslst s.ae pcvscs inatitc2icns In their a0.'ancemant of tne publlc good. 'Re Cenatttaa finds perdsalarlY Snapprapriaea c`.a dsceictiozu of prasane Sav vh:ch placa CU.ae aectLan 501(c)(l) arganzzviena ac a fina:.r al disadvantage retat!ve to auCStanclalty iLez:Clca! gavarvental - cutima. tor example, a FuCllc Ea.pital generally has - aatad actus to tax-exupt bend tinanci:y, vbila a private, aon-profit hcsprtai is aubject ta a 5150 milllan !ia_tnc_rn cn ovtatanding bonds to the ext/nt tte bonda tirance health Gra fac lttaes t.hac du n t:ualify under th/ prasanc-lav deflnhion of o/pital rhe Co(Yittee is eo rnsd '2ac thls and other restrictions inh!bit tts ability of Taeriu's pzivate, n on-proflc nacicunions co maderclza Cielr healtn c a Lc!1!c!s. L.e vittaa believea Cle ux-axupt hend :u sa shCUid treat more egually State and lecal qoverna/nts and LSose privata arqanitaticns Ynict are angag•d in similar aGGivns advancing tbe FuLiic good. ambel.m.ri., of TGe bill afends CLa tax-exNpt hand provieiGns of tEe ccae to cnfo:f generally tha treataent Of bonds ear sad:on 501(c)(3) Crgannrations to that Crovidad ter bonds Sssuad to finence dirst staca cr locel gaver:lment aotiviti/a. cerJin :ciat!oc., dascrID/d re.ov, chat have been iaposed an qualified 5o1;c1(l) banee (but ~a- an gov/rnyntal bandsl fic<e 1996, ani amat ad]ress apee!allzed policy caacerns, ar. retamad. Aeaeal of ariv.r. 1 1 d 1 Sf1 _ x Dabda toi (}y'iq9 312 So' c l satiars _..__ Ra concapt af an "exeppt yecson^ that exiate' Or,der Uva coda bond ytavisions before 1996, ts reenacted. An ezaspc Fereon Is defvned as ial a state or local gav/rn.ental unit or (b) e sac<lan 501(c) p)crd,anizetaor., Mer. carryina cut ics ..... c a-ivlcies under ecte sec - 5e1(a). TCus, bonde fGr aeCLion 501(c)(]~ ct3.nitauccsa- - -. eralLy n anger classif!ed sa pr:vete ac--vity onds. - cinq tcr urrelaud tcstneas a - a of aucn sganizationseectciae cc be treated a a privateac.-vacy for vhicn tax-exempt N tanc!ng SA not suthcrired. Aa e lrSpni, se<tion 5o1(c) p) arginiratians are aubiecG nnits aa States and lcui qvve[m/nts on using :heir to the s e li tond r r./da to finance private busineaa act!v!tief0 ]c ¢ake pr:vateloans. Thus, generally n -e tnan 1e Fercant Of the bend Glan a ir0aseda'' cen te used !n a bualne a Yte of a Fa oiS/r xaspt parson if C code Frivatespaynent tese ~ aat:ali.d, andtrd xere tlfan 5 percent ($5 aillian St :em/) can _e used to aak/ 'ion..a to avcn nonexemFt" Farecna. S-53 ratiea Eobds Present bda a/rian 145. vCich escablisbu additvanal es4rlct:ons on ^uali!Sed 501(c)(]) Mnda, is repealed. elanq vi'd tde r//triction ]n bOnd-f!ILP.'Nd COsta o: isaY+I:c/ Car a a 501(c) (3) acganization bonds (sae. 147 (G)). SEis el!ainate.tna 5150 artllion !lalt an nar:lcapital botps for saction 5c1/0 (]) organrrations. " cnte 13:t vauld be reduced to 5 percent in :ne u d!aatcport!Onate PrivaCe use 46 under the prasent-laa 4ov/rnsQ.taband di{proporilonate pr:vata uae llait. 11] •af/at!oa Sanda Ae atat/d abave, the bil'. retaina cartaln spacaalized Otlona en bonds tor section 5o_(e)(1) arSNiEatlona. Firat. Vla^i11 retains the regulrement clat axi]ting -esident:al ren9al property a cru:ed by a ctien 501(c~(1) c:~./n rtlon in a tax-exeep hand-!inaccad traLsacticn satisfy the fase 1CV-LUcoOe tenant reqfiresenta as a•=aar houainq financyng for fcr-prc!tt developers. Second. cSs t!11 retain/ the present-lev oa_u_aty l3s:tatvns app!acarl/ to darAa for a Cicn 5C1(cl(S) orqanizac!c.-.a, and ;Ge eublic epproval raguvrerenca app!icable generally to prlvsce v bcnds. Tbasd, Lv bill continae/ to apply tne p.nalt:ea cn chanqeei s - espt-borA-financed a n 501(cl p( eryamzatimF:epercy to a u.a r.ot qtfallfled fa. such financing. Finally, the bill aakas no eaandaenta, ather tnan technical confb[3ing anendsenta, • th9 tax-exespt arbitrage restrictiona, tbe al:ernaclve n!n!xua :ax uc-exeapt Evnd Graf/c/nce' cr V/ prov:aana o ral!y d!sallwing interest paid ty tanke an sonies aed to , ce ar carrJ c!x-exeapt banda. •leaatia bate The praviaien apP=1u to bards !ssued after Jeceabar 11, 1994.. ^te CoOitte/ -nter.t'e for exampl/ G.at any ;tialICied 501(e)(]) band issued du_~ing cE/ period Sanualv 1. 11,85 - Oecenber 1C. 1994, ahall be treated as an exupt P/rsan bond after enactz/r.t of tbe bill. 314 subt---e F-res Praats/at Of Long'tea Care laauraoc/ avd iervice/ Tax Tieatlant of 1uo9-'era Ca / inauraac/ aad ae~iCea (//c/. ifa aad 9s2 af the bill ud aacs L ita, uf, 213 ana Y/p2l of the ccde) Preaeat 'wv Gduetion fer medisal e :a date ralining cazable incore ;or Federal a tax puipeses, :axpayer la alloved an itmexed deductv;n :aceise aGUrsed axpenses chaC are C9ad by tne CSxpayer durzngany rarable year fcr xed¢cal care of tte .expayer. Che [axpay/r'a apeuu, or a depecdent of tk/ taxpeyer, to one extent tSat h expenses xcaeL 7.6 perc/.-.t t tEe adjusted gtcsa ircce of the taxpayar tor sucn Y//r Uac. ~= i. r r tnia purpava,exoecses paid for medical ore generally are defined a cunta paid: ~1~ lor ama diagllosia, Ct[ea mltiqatlon, treatm/nc, orpr/vcr!orr of d!sesae (¢ncludinq preseriptlon sedlcines rr drugs and tnau!in), or for the Furpcaa Of affacting any acruccur/ o- function Of the oody ;ather than esaeeic surgery not relat/d tc tli//a/e, deformity, or acciL/nt); (2) fr Csnzpmtation priaaviiy far, ard eaaent ial to,aedical .1. ceterred co L~ (a)( ar (3) (including Part 9 M/dicarapreaivas) covering vedical cace _ve_red to tn (t) and R). Amaunts raee_ved by a taxpa?er under acCident or health tnsurence tor Fersonel in0uri/. or aickmaagen¢all: are acluCed Cres g=eaa !neoae to the sxrent Vlat tha aaEUnca Pae ived a not att.: utab.a to feGical expenses tpat v/re allowed sa a deducian .Cr a prior .as<G1e year (sec. 104). Contti9utions Of an emplcyQ to an . cident or hsaltl F'-an that vrwide] ccapenaacion (thLaugC i or oChervisa) to an amplcyee for Penon/1 in]uries ors rcknmse of c.s .aploYe,cYe amplcYee'a spvuse, or a dependent at nhe eep1cYad f[m the !nc af the ~:loyae tor incose andy yrv11 tax Puxpea. (aeca.lo6vme aod 1111(e)(2)). [n additton, unts r/ceived by an emp'-oyee under suc6 a plan general:y ar excl'.+dsd tvam gross :ncome to tbe eztant that tEe as<unts receive6 are paid, directly O indirectly, to reisburaa tne empleyae ! r expenus incurrtl by the empley/e for CLa seGieal•cere of tbe uployee. C1e asplayee's spaus/, c a dependent at 4u uployea 'sae. 1G5). far Nis :ry[poser expenau 1 rred for sadicai care ara defined in the sa.e s r as 'Jlder the rui// regardLng the daductian for aadical eapenaea. a5 7ublished by THE BUREAU OF NATIONAL AFFAIRS, INC., Washingtcn, D.C. 20037
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S-54 eba ecr ehaaca :na Coeeitcee t a co o eviGe e antiv/ for :nGY+!Guale taKa !inapcia! - ity for their lOnq-t.n badl'S, c- Tus, a bi11 c +cdeaca --ralty for creacaent of toog-yan - _- s aa a ieaua:'c'uretical axpersa, and c -luaion :- - ter-acn a:ncs raid under 1oOg-ctn cara :nsuranca r -- -a and !ong-te m a Cidere L insurance ccntraccs thac ceec 'Ceb:'L1's raQUtreaenn3. TC/ Cc®ittee also hellnel -hac 6 is :,t- a ce clar:!'/ c' -aatcent of long-ten c -- and rn9encara :bsurance.vhcch i nct coapLate!y Qaar u -aaer.c lav. Aovwer, the ecmai'ca. i aeE abouc C^./ affacta ef providing eoee f rable tax traataent tcr lat5-ean cai'e ranw than !- t product under prs/ar.t L us, C. Eel:av a tlfat cptcyer <ontr!bLLtlon !a[ lan9Yran ^us, can • Caurs-ce ...... z ncc b xcLudaPte lros lnccae. :S.a ccaecctaa be!Iava/ rAa'enq-eera e and . r+ices that G not aeet the r vic eaentS o- ch/ bill shou'iLnco- r/ce.va favo[arle ~ax t:eatnent, ffiAaratiea a! sreH/deas Ia v tai SeDnces C.hat .-Iafy the requireaenta af tEe bill an deduct:ble as madical expsnsas. lnsurance centracEs, and rideu to liLe inaurance centrac4s, that leet .-da requiresents o• 1he bill (•gualiLad :ong-tan c insurama polteee.•) au]jeet to tAe taa t eaent ut fort.~rm tha bi:l. Any aaaunt rscelved Ynder a lcn9-tera u policy teae does not aeat ida raguiresenu of rhe Gill ac. noc created as an daOlN: r ceiveE for psreOnll inJUC!es or a1c)Cle/a 9na a-e not excludabla Sro.qro/e incor. - aet of laaa-tev c r.lees ._ - nl Tae bill provides 'Lat certain /arYlces fJlat an prcVidea te an a incapacltatad in/1v!dua:.-(dafinad as lonq-t/n cm a.rvu..•1 a uted aa sedtcal care for ~-pc/a/ of the deduction for med!cai /xpenus. 19ua, under oa bi11. a tupayer s alioved an aaaimad dadudtion for unlaivburaad ezyanaas tlue aee Fald by -!e - xpayer during any uxable yaar r valiliad lonq-ten care Cut a iroviaW ce ha taxpayer, tEe taxpacc'a apauae, • aidapand/nt of che Laxpayer, to che uKant that h exFensea and or aiig:ble aed!cai ampen/ae of t.le taxyayer exca/a 1.s peccant of tba adjested qaoss ineae/ of the aaxpayer :or sueh year. In add!tier., :nfder C.e bill, /ligible aedical e'penlee for j.u=pcaes c the aed!cal a tanse deduction inel'ude pruiuas wiE for tn/uren-e 216 :aC ?:o'+idea qvyrage !- euaLfiad Lcnq-tera care races, but only if sucII insurasoe !e prrv:dad unzet a qua'r:fiedslong-tera ca-/ inauranc. pa1:ry (as dafinad balov). D 1 itien of vuaLif!ad lcnc-tera c _ s Ina pCa "q_ali!ied long-tera care e/rrtcea^ 15 defbed a¢ tY.e neceaaacy diagncacie, N-vng, aitigacvnn,treating, preventive, iharaFeutic, ahabilitaYiva, aain[.nan<., and permenaL care a rviua ivhether pcfcraed in a residential o oarssidentia! aettncql Cha: Are rsquicaG by a vndlviCual during any .^wrlod thac s _.di•c.dcal cepecitaced indavtdnal, but only i(1) c.he prizary Fcrpose et tE/-f s la to provlda neaded a iatanee with a aeriv:ty O daily living cor prcecaon froa t=raacs to health anC . due no vera cCgnLtiva iapair3Ant, and (2) the sarvicaa are provlEed pursuent to a continuing plan of care chat is presol:bad by a licenaed prsfessional. Cn additian, in arder : cituce qualifi/d long-tan , the a cannot be pvcv ~ed by /ny :elatlv. (diractly cr t.•.rcugG a paY:nenbip, corpc[ation. a otner antity) of tba i eapaeitatad indiviauel unlese the relaccve 1s a licennea pro-esvanal with respect ee tA. ..rvacu p:ovitad." ^afinit!c- of SncanacltaGed !ndiviGuat An incepacitated individual generally !s definad a indlvidun'- vne i certified by a licana/d prof/aaienal vith3n the pr.cedinq 1)-senth peric] aa (1) bei:al matla to parfcn, vitEcut suGstancial alslscanca Iroa another ir.dividual, at 1/e/t two act!vicies of <aily living, or (2) having lavara cegnit!va iapairment aa dafin.d by coe sacratary of tpe :Ye.sury vn .ultaaion vvtn Lha Secratary of Health and Huaan Ser+ices, for ?urpesee of detecaining MeNer an indivadual is n i-.mpecitaced individual, acCStantial aseiscu.p includes evaing ar aub/tantial aupervaion. ter purposes of tOe definition of an IIlcapacitatad Individual, che nct.viti/ of daily Iivlnq (AOL'e) ara (1) eatinq, (2) tei!etinq, (.) transfarri;q, (4) bathing, aM (5) drefalr.g. A licensed psofassianal is (1) a physlcian or ragisterad pncfea/Sona1 nursa, cr ) '• For this porpee, a relative of an inrapac!42.d indivieual ncludes: (1) a eon or dauqbtar, or a descand.nc cf aitlur; ;21 a .; stepson or st/pdaugbfar; (3) a brotler, s.star, acsphrether, or atapaistarr (a) the indlvidual's father or sotter, s an ancastcr a! ' elther: (51 a st/ptather or snepacNSr: (6) a r daughter of a brother o vtsr: (]) e brother ar aLaar of tson ne lndividua)ls father a scehart and (4) a son-ln-lav, iaughtar-!n-lav, pat/r-:n-lee. taC.er-Snrjav, Wther-i.n-lsr, b[cNer-in-La., or 217 SPECIAL SUPPLEMENT (31 any oc./ ScG1v1GUa1 vbc s va!;es s.+ch cequ:raauce as aey -~ preseribed ~by t.he See:eeary efarae Tnaeurf after COnlVltaacn 'e1t'i V.e $acracary of {eal_h arG Avsan SaN!ces. ~e b-:1 pro'+.dea c1ac, fer purpesee c the laternal pevenue Code: (1) axcept aa F:evided belov, a gua!ifl/d Leng-ce:a care nsurance pclvcy : r/etv as an accidenc or haa!t1 insurance -- act, 31 an ncs(et:er -S.an Folicybolder dlvldends or premaua ra!undal r v/d andc a'Sh a r' plan vtch u/epect - '_ified len9-erv ca sar+icue at.G n cnts : -v/d fcc peranal in)ur:a/o uck-.esa erG a-eieoursevena ' ac:ually in red r r purpcaas cf 1ve saaical /xp/n/a daduc[~~naes - rally.a -lan sf ac amplcy/r that previd// c eraSe under a quaLfied : nq-can c e.n uc ce Foliry is creatad as an eccadent ee1:h Flan vitn n/pa< 't0 muc'h covQe9e, axc/pc --hat r axclusion :s provided !er upleyer-prevideL coverage u-.d/r a!cng- un care icsuiance pcliry~ lal escunts paid fcr a qu/lifi/d -c.rv ure :-uurance policy are traated a aounts Paia for nrsuaanee !or purpvees or tb/ mad:cal expeve daduccioe. and ;5) e qualifl/d :onq-tera cac i turance pOlicy is treated as a gWrantNd - n.vabla ce tratt aubJecc on tlu rila/ of Ccde eacticn ats(a). ^hus, 'andar tne bil., asaun!s C ceived under a qualt!ied lenq-eaa ure lnsurenc/ xticy are exeluded froa the g:cs/ inccua f tna [aGipiant tc the extent tIlat cha eacurts aa not at]rlbctable ta axpenses t.`.ac v r a!loved aa a dsduct:cn for apriar taxable yeac (i.a., aedaeLLazpensu on expens/e faa qualif!ed lanq-ten rJre aarvices). 8Ga bill previdas ehea eaployer aentrlnuevena for lenq-tan icauzance l a ludible in gross incaset add!tion, because upeyar eontribetieas f r Lonq-tan e r e ineludibla La lneem., Lenq-car /ar/ c/ is not / guaLiflea banefl[ !cr purposaa af c•.a ceferACLa plan vlYand tberefoN caR.et be previdad Ctroucih a cafararia plan. An llauran<e pol!cy is a•quaL^ad lenq-ura ura insuran a palicye if: (1) one poliay !s a cartifitl lang-tetf care !ns'vahce palicy as dafinea ia eetlon ]1011(b)(2) of t]e 5o<eal SeNrityAC (ratatin4 [e redenl atantaras and requlzesenta for -r.vaca :ong-ten care inaurancq: :2) bena!!ta urd/[ aa pviicy an _iaited car!N by a lieanseL prelesainal ritSln individuals rhe are i! Sa preceding l2-fovf3 period as beinq unahle to p.rfen, without substancial e r stanca lros ancther indiv!dua: (!nclctllry auvacance 1nVOlVing c;einq or stib/tintial tYqNisicni two on scr/ aCiV!Lles of aaily Lving or rba heve a severe caqnltlve :apairaant: and ,]) 319 - -c1_<y savasf:es the requireeects apecit!ed Ee1ov rs!>cv.~g ~ ;a) the Payxenc of prs¢icaa, ib) caah '+alu/ and tSa bcrrcv!ng of aoney, ;- cefcnta of prm.vas and divfdands, ;d) the cevcaae cf expevea relxburaaiLe u cr H/dicare or ce'+ared under cobFnnens:v. neaith crvarege, and le)C./ aax-cua b/neGC. a gua:illea lav:q-cera c n e poltcy, che pclicy !s req,-red to previd/ that tbe e eaium payaen- uaaer the petmy nct G aade e raer than th. deu tAet eueh payaents vculd neve Ceec made 1f tSe coiicy provided fcr 1ave1 a ual Fre®mn Fa}astts Over - expeaCLncy Of t_e Insured O iL mhorteL 30 yearn. A polic: 'doss+noc !aat : c NIS reqaire®enc meely b c tha pOlier nLviaes phat p~m•ws ¢ rved if Sein vedbactaas b- sed c nala anable tOperfoR two act:vities of caily 1cv!aq or having aevare cognitive imFai[.senc (as ?eaCLabed amc al. An 1hauranc antract csnstitctn a quallfied long-ten can lnsuraocepcliry only If thepolicy does noc provide for a caaR value o other roney (other than ref'.uAs of praaims and d!vidands Sad atova)ttat o n be paid, aslgned, p:/Ggaa as co-lateral fc[ a 1oan, or borravad. i/b=s o a d'v'a ntl/ . r ba a NaLifiad leng-ua eara insurance peliey, ehe entraet baa to prev:da dac pelicylfclde[ Sivldands avet be epFii/a a reduction :n :uc:e prasluu or on a future benefd) (to Che extent consistant vifli the lilit on beneflta). tha paliC'j haa to provide that refurAs of pr/.Lw upon a par!al e /nder - cancfllacmn of Sa pelicy ar r.qulvea to be appl!ed a reduction in future preaiua. ^irther,ibe policy has to pravida caat any refund that «Nrs by raason of tne death ef th/ d ured or on --L complete surrender or cancellation of th/ pel!ry ca:mat exceed tha a'greqate pr/sau.s previously peid under che contract. 2f an anacn- nfunded uoder a quali!ied 1 ng-cen ea nsue. a Peliry by s rranGer a ef Ca duid at cha :naured or upan ccrylatan u ca~calae!on of ebe pel:ry, tE/ aseunt vaeeivad vculdba inclaG/a : the gbose inccw of the rscipiant to =e erant that a d/duction or eBCluaan raa ailorabl/ with reapect to the premiuv. L2SZa91 In additmn. :o constitute a Na1!Cisd '.e.p-cen care insurance peVthe pel!cy~ nno . extent t.ha ~ ofeaant xpens~u Pa ad nt ot p:an .el.bxu.-~aad eund/r X/diuve or undar a carilfted standard taa1G'. 319 Puolishetl by THE BUREAU OF NATIONAL AFFAIRS, INC.,'Nashing(on. D.C. 20037
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SPECIAL SUPPLEMENT described i.. -..e -.eelth Sacuray Act. K.Al."s c.old,t.d A ryual!fied lang-teC] c e insUrance r Ley caalct = vpde f ber.eC_ts i f siso t ~valenn a lsh n ev rs e er L a , ]ns c lnd r in rne ca: o ~ayc.nn on other - _ r <Lea a y 31! = ued viCh raspact to an ind:vt ua'a i baais~ ~ - eeCed a policy ] vRa purpcsa. For 139=, Gn5L5C , sac CnereaseC 'eytha per]er.taSa _n the s rprlce index ]ar •. calendar v 1996 plus 1-2;2peroent. 'or sw'ae9uenc v , the r dollar '_isub : ad]usaed annuplly !Or inflattan 1 - a S a 'cc a a _:iecen cost andax Lc be develrPed by t:.e Secrrart o1 Yeal 3elv:ces to 1ncJafee in ca ta of nursanq hcmee and - .ac-Lttisv~ eenef,ts under a qualifiad lcng-tss ae insuranca =alicy may w paatl • -alrSUrsenent baala c v_tEau:reqecd :o t`.a .xpensu urred n g tns paried te v-ich tife payawts ralate. In ai[har paypan[s a --eated . ca0ersaclon !or axpenaea paid Lar medica_ ccw fer Fi-Fesev of ina deduction for aedncal e.aaa. Excvpt as pravided in Treasury regulatianL in the ease o Lonq-texa c ccga pccvided by a rider : a Cfa insuranca c actv c1e reguir..ente for a pali^, ttuta a ; a!if:ed 1or.qr[er. cara insurance pa11r, apply n if eheportion of 1Yf contract t.1eC providas '~ang-tara u r seFarats ract. Far tY.is Furpoae, _he lan4-GV u 6nvurence partion of ttfe eont-ae[ a only Gb tarv and beneLl•s unCer a 1t!a ent ect G1at - addltion to tha t and banelta of t1. ocntract without regard to LanQ-ten care covera9e. Paysenas bade under a quelifiad lonq-tea ura rlder do net bacca :ncludlble in incew, r solely beuuw acch p+y.a¢LS ceduce Ufe death benefit or [ha u.E surrander va-ue of the life :nvurancs contract. u payaent. for leng-tarf care coverage prCvided by rider (11 anyp aM abargaa against tbs life i cantrace's cash sYrrender va1Va fbr eucb c La9e ... trSaCed aapreaillme r purpesa. of tbe Fra.iu. p.yrr.t rule deveribed Wove (r.lating to the sncrter of tha !nvured's lifa axpeccancy ar 20 v ral3Ta gcideliae prailv 11a1tation (see. ]].1(c;) fcr a life in ance -ract ia lncsa.ad, a of any datb by the s anycharga] to r`1a casb s ender value (but not preaiuas) to pay f r long-tar - nsurallce c verEga, lass any vu~ therpss t.`N !aFos121on o1 iGUCee tne praaiuv paid far tlle c[ntracr. furc.`.ar, na Sch u aedical erpense deduction is allorad for ~arge. agaavt tnalifs insurancs ntraet•a ueh vLLrSantlQ value used to reduce prea:OPi, unleas eucF, eSatqes are includ!b!e in incose enG the [ veraga provided ey ths r:.de[ is a quaL'fled lonq-tars cara bnwrance 320 palicy. A payeent o long-caa csre banelit '_ndec the r ust nac reduc6 the cash surrender vel'-e of the L1fe 1 s ance cont:act -- t_enatety ] than it redccee Cbe t ath0e::e:1: '_nder the Life : =ntcact. Thus, the oercantage radcc~:n by r ^ cf enerpayeene in the ca9h surrender value of ete !ie ins'urance ant[act ma net n-eee iha e raduottan byr .e vavzunt ltthe death benefit payarlacundee ene l_.e _nsurance co1lLrLCt. ea]uN e :at1 ~j . ._ The bill directs the Secretary of tlfs 'LreasCry to prescrlbe such reg'Aacocs n may r to ca but t~ erl.reaents of tls t islons of the pinec-.lating tolcng-cen c nclud:ng :equlati=na to prrvvenc the a oadanca o ucn pravielensaby o m'¢dtng c- Luntler a --act antlrt lc-;-tera a pzoviCS f thepropezca cet:en of e aa e-veen ...e .onq-tevy care anc _-_e -neuranu Fe--ions of a con<raci E'fsctiv. The provis!an c e bill relating co the ]edeettEll_ty of expansaa paid fa gual~f!ed lonq-t care wrvicas appiisa to taxabLe y.ars beginning a - aeaber :1, 1995. Pbs other provisions c! tne bi11 relating to long-cerm care app=y to po_icies issued after Wcanber 11, 1995. A pollcy iasua< befcra SxGUary 1, 1996, that sLCiffiu t raqu:raasnca of aquaLif!ed long-[are c icsurance pclicy o anC aftar : uary 1 1996, is treated aa being issued an Sanuary 1, 1996. It ie n.bt it4ended, "-oYSV¢. that t'.tv rule changs G.e iLe Gats of a life ineuranca policy vi:h e long- 9 rider, for purpesss of eK'tione )t02. ]]03A or 10-Ca of .ha cCeGa. Ter putpeeev of applyi•y veeeien 7702, '902Aa. 101(^ of tbe cede to any contratt, tbe sau.nca of a Gual:fied lOng-ta28 care insLLtGnce rider (cr cCnforaa=<e a t:ng rider to t•ha qualificatlon regYiraaenCSl r.ot t[eated av exardiLicat:on or mn.acial chanQ4 to ]a<h ccntiactls A apeeial traNitianal rlle is providad for iiy long-ter9 e poliry i su.d a or befare lanuary 1/996. Undar this r cf~a aftsr Llu date af snacvent of tha bill and befcre January 1, 1396, the contract is axchangeC for a qualifiad lonq -ten cara aurance policy, no gain or Saee Sa reccqtlired upon `J1e eZCtange. '!any ney cr otban pruperty is recsLVeC in tne ex an?e, then any gala racognized to the erent cf tne v ef tlt. Y nay and the fair aarkeC viiue of the ot^.er property viceived. For purpeaes of this <ranvit!or. rile, the c eellacion of a policy pravidlnq for leng-tern c r eeoveraga and estunt of tAe eellatianprecuad.ren a qusiL•Sad lag~nce u-e -vuuranee po:icy within 60 days iv nruted as an axchenga. 22: S-65 ai TreataePt ef >eeeleratad ]eatb Beaefits Cadc Glfe .tauraLae eostraeta peev, 753 aad ]si ef tbe 1,11 ana aeev. Se1(g; aad a1a(q) at t]e ocda) huea• 4s ar_o. If a cr,tract r a iha Cefi:.. aen of a lifa i urance Ca-,cract, ~ i- me,dces - _ Iude i e Pneceeda that a ?- cnacantraceaey : . death e Cne : sured Sec. sUO1(a,). a In addition, ` u.Q93tr:butec i - Income f"inslfe ceilLUp'^, rned s redhtaQ u r Lch. contrace is hot smlect • arrent taxation < tEa ca of tne ~ut c - - Tbe c- a r applies ragardlaes af vhether t.`.aGSath baefits a_epa.das a luap sua cr cthervlLe. Asounts rectived under aA s n r t(cU:er C,an a mtdifled eCdcVter.t conGractl ]r --o L ildaathCfa[lte insured ara includ:b:< :n Jla gross Lncoaeof tlu racap:enc to cEe excent Ihaa the ¢ Ynt recaived tYCMds t1a taxpaY'ar's : uta.c: in the contract rgan¢a11Y. Che aggragaca as=unt efnpreai'.me paad : aecunta F[sviaca:y raceived thac vereexcluded froa g[cse !ncoael- : a contract faLLS co Lsec tds dafinicion of a:ife i surance ancraca, inside buildup on the contract is genarally sub;ec : under.aeion nW(gl. i- on '~e : raet far tAa v in vhlch a entract •eils to a.art]e oaa de]Lnitun a •and tn2cee cn ts ccntracc for e 1 prior vursl qenarally i treateordinary _ncc.a recaived or sc riad !y t,'fs haldar during T.hat year. For this pu:pevs, _ on tna ccntracr is the ax of (1/ Sa ivcrease in tha - su[r.ndar value c• e contracc auciny tlfe - xabla ysar and raacost of Ca 11fs1 _~ e s prcteeeien pravided duair.g <`.e taxable v r(2) tha prear av v paid ufder tAe contract during th. tax.b!. year (aec. v]02(q)(1)(9)). ln addition, apccicn af L t paid by r of rAa death of the inaurad eey be : `adib ~a1.. un : ttat 1 only tr,e e cf tba aa ult paid by v 1 o of t1a deatt af t]e a red ov r thvanet r ender value of rSecontraR is areatad u life ineuranca prcceeds aliqib:e _ar Lne excluslon pravldad '.•.Mar aeaticn '.01 Ivec. '9e214)(2)Io qcalify a e life invurance ccntrac9 fo: F.deral i pcrpoaas, a contract iJ{t re a lifa insurance contract under tna a apFllcabta State or foreign law ani sust satdvfy either of two aiternative tasta: (.I) a eavh valu. ,cca.ulat:en t or (2)a tevt iec¢rq e a guidellna preaiua reguiraaent acd e cesb va-ae cct[ido[ req_iresanc (sec. ]i02;a)). 222 b r 6. • be . Tbe aactetary of the ireasury haa d ued proposed regulataona10 under vnich cerCain "4=alifisd accelerated death banafits" pa:d av a result of the terminal illneas ef t.he :nsured uould ie treated as paad by re of the death c the :nsured and C1,ereLCre, under t tbpoee _ 6aqL!eticna, would 3Vaiilv f r•11e ent-!ev ¢xc:'Asicn tfrom i In addition, the Frar=sad ragulac:cc.s '.au1C pe:rL- a csurance contract • q_aRfied a rated ]aacl Cenefit rider to yve:ily as a_a_e insrance ccn[racc under section ?902. ur.der the propoced rayulacions, a benefit would s+a!ify as a a gual_Lad acee!eraced death GaneLC only if lt n rae mfqulrentiles, First, UN qua!lfied acce'aerated deaCS ~. r er'fefic c'1 be Fayable bniv If the insured beocaes tsrium:ly i!1. s ccnd, the cnt ef tha accelaraced benefit eUst aryal x exceed the creseot value of the reduction in tha LeaNbens[1t other+:se payable. 1'hird, the cash surrender value anL Ua deuth benefit Ctder 0.Se pelicy r t he prepartiacatalv raducad as a nsu.c b the acUlerated Ce:.elit cayaent. For purpcsas of che prcpoaed regulations, a rad parsonvauld ba trsatad a rs:nlly S11 i he o she has a iLness that, dupite appropriate aaG:ca1 cer4 the insurer veuenably .xpacta to [avult in death within 11 onc`.a froa LLe data of payment ef as acealebatad death benefit. ,e aroposad requ!auons would not axplicitLy reyvire a doctor's cartaficatcor, as to the paaent's cendition. :nC.[ Na propceed ragulCiov, C1u s.xisua permissib!e difaount rate would be tns graeter of /1) t.b aCpl_cacle pederal rate (APi) that applies unEer the discounting rnlss for property and caua!ty insurance !a r es, or (2) Gta lacereet sace app'.icabie to pcllcy laanv undartne rv contractg miaeounting veuld be ealeiLatad a wing tLe deatA benefit voutd hava been paid 13 menths after ihe paya.nt of ane accelerated death benafitf iuaune fer CGUCa STe Capittee vishes to Grovide a 1Lited ..... tion, a rne a of carfain taralnally 111 !aaured S.~divlduaL, tc tne Frasenc- lavrvle peraitting an exalllsian tcoe ineoaa enly r r amcunts V.at are paid under a life ineurance contract by reason af J'.e death of the i ur.d. 1L Coaittee beliavee that ahe ax cs:en acoulE be perci~tad only in r5oee caves in which the aaccnt is racaivad v:thln -2 montsbefore the lnsureE lndivldvel'v r.eonably expectad ^_eath. A partod longer inen 12 ynths cou1G becoae syeculatlve and not real_stacally relatsd Ic tna ciaa of the lndividua:'a death (vben '° prcp. Tseas. Aag. 9ecv. 1,1a1-8, 1.l]02-0, and 1.]'102A-1 (`Jacober 1!, 1992). 222 ?ub!isned bv THE BUREAU OF NATIONAL AFFAIRS. INC.. Washington. D.C. 20037
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S-56 .. - .-c_. _ _on " ' a pa:a b - -• _ _ an.. appi:eag. ]L --_- e 11s] oelteau tnat pr]c64.cn o p=-lcync'_d.rs a lixltatlans an t•(e tecnad and aa csua race of ^ 'n rru-t penlnand also v rrants a requvreaenc ]haC Cfe casn --ender 1.11. net be diaprepaet:onaEeCy a ced 1, relaa:cn. to c..e eeac.- re•.e:c cy ihe aeeunt pa:d mfdar t.he p:ovlal . jirLaatien af Proeisicn '.he b_.- pr]v:des a xc n from gicss inccce for -ain r.ts ta :e]v _lfe u ranCe cOntract '_ne : red chec] - nily ~11. Poi this pu rr bse, a lndivlGUe': redr' nallv :lI 1: the t r detert:.-,es, af:er r elpt of acteP=ab:e ceRifvClti]n -by S licensed phyalc an. thatche individual haa a or physical condltlon chac a: eascnably expacted to result in death v1ih..n :2 rent.hs ef Jfe ce[t [at:an. -he e lcalc'n under t e bi11 Sa applicable only i two - e s are e .:nder a present value : a tne aaount vedx - egualto eed V:e present value of CLeceductlen in cSe death cene' : ttheevv e payabie '.md.r the l11e . ,- contract. ieeond, under a ratio tese, tbe paynent af 'S:eaaoune ust noc reduce bhe caah a endet value of t.Ye rontract propar.lenateiY x e Yaa che death lvn.fit payable under :ae - ot.'or vards, tbe percentage dervved by dlvvaln9 ons cash aurre]ter vG!ue of C11e Qntrert :aediately after t• distrvbubion b ~he cash a-render valua of the contract~[mediacely before the dis _TUt1en nust equal o exceed tlle percentaSe derlved by divad¢nq tne d-.`h benef6t paYable 'ae]iately after the -r_huci]n ty :S. deatn b.r.efit pay. le sedlately befere Se iiatr:'LUtion. '[he avb.ln- received is .ntended t] include a ser-ea ot panents. For Fu_-pCaea of the prssent value taat• ohe presan: v ef the reducT'J'n cn the death aenefit is ]aterained by afa[ence to a ua panve6ile diaeew.t rete, aM by a :ng that the death Cenetit would have been Paid on tae date t.9tW 12 a a fr]e ihe daca of rn:e pnysiclen'! C/tCi=lcltion• 411e Lrtaua GV tble dlaccunt rate ia tba highest cf tbe fallcving chree :+narest ates: f,1) the 90-day Treasury bill yiQd (o .ost re ently punlished), (2) 9cody'a corparece 3eM Yield Avera9e-IfieneSlY Avereqe e]rporacu (e[ any s sax rate) for ths enth endltq two nont.he befare the date the rate ia deteznana, cc (I ) tta raca uw] to detenine ] - ender valuu under te centtsnc durlnq the applicable period plua I perCant per unf It :s lntanded that -`.e rate c deteraaved as of C•.e date (or datss) Cut the payment :a aade. For a%aople• a uae tbat An lnaVred 1. certified as be1nQ terminally i11 On Janulry 1. 1995. Aae:ue aLo that the c parxv a:rle ? unt r_ is ic percena anA ihac tYe cash aurr.cder •a_.leaof Vle con-rac- .a 5100,000 and '1:e eeac`h t.n.fit payaCle s 224 95:O.00t. vnall'(, a uve ttnt ar acceleratad d .`. be~.eCt •r pavi Zu1y 1, i995 vh:ch red'aces tnedeaJl t`.aflt o ter V.e antract by 5200,"_00 (4e.• froC 5500,C.^0 to 5)00a,OCO;• Nndar Cnese faccs, ' applicable d:aoocnc paccd cocld be aix months (i.e., CSa - vcd ^-etwen July 1 1995 and ianuary 1, 19951" and thua, tl:e cnt cf the accelerated deatr• tenefit paid - eq'cal c exceed 5150,36c fi.e., the $200,000 reductvon in tLe teath r ne!]t paveala eascc'_nted at 10 c- ent for six mone^s). add'_tven. --e _atn surtanter - /a1Ue tf ]ha contTLct afCe[ discr Guc¢on c the acceleratec deatC Senefit must equal or exceed i6o,:00. the aculerated deetD benefit WIGer the contract i ai! er. with a ege lnat ihe deae:, bene^: - ter t '.:a1 eduetlon !rn t.`.e death benefit a v tad bas:s.lether. Lhe e t of u1e lian, and ir t cSerqesvetl r - any cnt un connect:cn v:th :nellen, aare taken Into account as 'cllcvs. a aa c e pariry hetVeen 'ne of tne L :. aethod md cf a discounveG payment. first, tpurpopa af appiy:ng che pseeenc value test and the ratio t t(deacrnbed above), che as unt se the : eaced a reduction in the death 't , and ~ CLe cash a .nNr vaiue~ a Any interaat c au,es, vit.hr e t : any wnt v- ectlbr. vith the lien, Cat cculd enc:uberV.e oec uah -endar value er the deeal: benef!t in the future a also treated aa a radLLCticn :: Ge cash aCTrenLer value end Clle death oeneflt a the time ]f the a iated benefit payment. secccd• a y interest rate epplieatie vvlnrUpeea to any u unt i- c- v1eSh t•`.e iie^. C nnot exceed JSe aaYisul peAisalble d~.acoultrate CSat applves under the preaant value test Idescrlbed abovq .^hua, auch invarest cannot e:reed the as uht of the diaocunt that would Eava been permitted bbdtha e rated benefi: bean patd r t discounted baava lnstead of by 'J of a lien• an] the lien may r, n_aabar the ceen s ender valw p[opoCtionehly >ore tbat it enclsbera aba death `enefit. TTe prbvtelon GCea n apply in VSe c of an mcunt paid to any caxpeyer ccher LEen tbe ::uured, If mC taxpayer hm a Cable v eat by remOn Of the 1 ,red being a dicectrr, ]ftlcer or ebuoyas of :be taxpayer, or by : escn cf tbe ansurad beinq !`vncin!ly inCnrea4e.i In any trade a_~buainem carrtad on by the taRpayer. Par life lnaurance coapany -am putpbsee, the prcvisicn treace a ruaLified acCalerated death beeefit rider t a life /asurnnce cntract aalife lnaucanee. A qualified a rated deatl:bene!it CldeC ta anY rider an a life ineUrance contract Lat pravidea r discr:butlcn to An itxfividual upan t`.e i aured becoain? a]ersi[aily :11 indivilual Rs defined abcve), but only L' such paypehcs undec _..e Cader are piysenta that are erCludaEle unCer this provision. .Sanuary 1, 199a ia 11. date 1] rontha after ohe date at tr.e physician's certifiraticn. 225 SPECIAL SUPPLEMENT cate 111,111- The provisi]-, r nerally applies to avounts recelved afier dats c macsent. 'ovever, tGe Pnaent value veat [te - thac : ved a i accelerated deach b e cusc or exc.edaohd esast valum o_ the redccttcn [] :h.nd.a[h b does n- apply : - unt racetveL b ]- ianYa:V :995^e f1 -t( e ssuat:Ce ] a '{1a:aCVed v... [lerated _entlEel:e:a rl.a•er : _e 1n5urance -tntr3ct ' treated a !acac:On o: sater:al cnacqe c the contract (entl enLad to atfact c1e : e iace of h ontrect under s- o lOllq I The Piovulrn cieacyng a qus:i<G a- ted d- oecaflc reder es 11ee lnaarance for l.,e i0aurance c,, ar pu:FCSea ta affeccive cn .anu rv 1, 1555. 226 Subtitle P. BasatG care tauat Tvnda 1. fetablishsent ct CealtG ure Ttust Nada (sec. '/a1 af the bill and bel/ mca. 5551-9551 of the cCde) No p vnsac... pr... nt L a f - n The colnlttee deaiPes : e thac ]here a- :dan::!:aole f:`As aval_ao.e _o anance prcG[eassteGliahed under c..e ].__. lonblanation of Prcviaiov 1Te bill eetabL!ahes Nre* nev heal:h-relatai trust fcnda m ine Intec-.e1 3evenue CoGa. - aeeor'-v r:et n,na :•nere is escaCliaheL a Health SecUtity Tt1st nv[,d c iat:ng of tne Ctllovmq v unta eguivalenc to taxes r vad ! Lhe - e tax.. i .ee on tobacco products (only toc'~a extent f Cha t -e e provided under tlle Eill)• and on c c]eal".l. p1an.: ;3)mOUn:a QeterSined by the Secrecary of Sraasu-i, ultac4on with tLe Secratary of FAS, equal to tne sum (a) reductlons tn PeCerel expenditures under • a SI% of Ne oria1 Seclrlty AC- ;"SSA'; resultinq !- s 6he provvsSrna of C.e till,a (DI any redcccvone ia payeenta to Statea under title xI% of the s5A by - of the 5'-ate aainteOCnce-ofleefOrt reoutrue,-.t undC fecrion :911(d) of Se 55A; (3) a.cunta deteravned by tne Secretary, in u:ut:or, with the Secretary of lD1S, equal the decrease in ?ederai exoenditurea at:ributable to Ns provialens of spbcttle C of title XX: of the ssA (relSting to auLosCbila insuranct coordi9acicm ; (4 mca.ta equivalent to :he lollaving ea unts recaivad by the ;a) criainal Cinea i.pbaed aad collected and - reen•< ng x e the fosfeiture O( Grope.-y ln c s involvvng a Federal healt.h c ]ffenae (sa detined : aa¢itv 1L20D af tle SSA); (b) peeelties .nd davges i¢oeeC and col3eCed under the Salse Cla'_ts Act a imolvinq elains related to the prrvcafon oe health care itebaand aar/iGSf and (c) ealln:atratrve penalties and asseaanenta !flpofed aM colleCeL wAer ... ticn 112aA o the 55A; (5) anbu.•:ts cransteuad by :be Secretary of 506 froa V:e Federel Heapvta': . Ztust Tu.•fd and che !ederal Supplesent.ry c-.auren . omat Fund ey11a1 to reductions in expendituree cut of such Truat P.Inds - sultvng ere. rie prwiuens suStitle (G) af title XXI o: t,he seA, a added by the bill ~rslatin9 to .ut]sobile insurance coordinatlanl: (6) aneunts iiani[.rrsd by iha 5ec:etary of 34ts rscovered under a - n 1110A cf :he SSA vlth rupect : certi[ied health plan or lcng-ten c a policy which a not repaid to the plan or policy, and , oney gilte or beguesta nade to the United Statee for >110catvan 23T ]he ]eleral cutav Prograa Fraud and Ab:lse Cc.trol Aecam:. a.SCr:rad o.tcv; and ('/) SIDaCeat creaLCed to It under code section 5602(b). re are Gve Acccunts established within the Trust Fund, as follcva^e 1. tbe Health Inat e Acoeunt Vill race:ve aLl adotinta in c Jle Ttist F_nd not a:lccatel~ r Acccur.ta. Axounts fres this Acctunt vll: -:et - carry eut the health a prea:us assnsc~anceoprogran and ct~aEarLng progras mtablishedunder par . B of :1tia x:X of the $$A. However, to the exten: that alou'.ta :.-, tt:a Account are :neUfficient to pay for cne a vtanu end gaanea, ehe e a atlatle vn e ing paycents a to be sada !roe bt.:er !unda 'Jl Therefc.c tEe mcunL aaalatance and qSanta ara Gl by tt. .ligtbCvi:y and grant fornuLas, and not by the aHount c- .'cnds avallab:e lr. L.R!a Account. 2. The Infrastructun MvQCpnent Account vi11 receive $1.] billion per scal year.' Aaccnts Sro. ihia Account viil te approprvated t_ c^+ cut the progreaa eatabllahed ander pate I and I1 c auoule F of t:tle %XI of tne SSA (velacing to (C; gsents for oa deve!aPnent acd ]pe:atven ef aeLUnity health groupa and for capiCa' -n and ;1) deacnatration Pro3ecta to proaote cQemedicinevand ocbe: usu ot the ealeeoucnicacl[na netvork in rural eeaal . 'S. State Health Duaiity and Ccnau»r F[otectiofl Account will rec.ive 92CO all:ion for fiscal year 1995; 5500 vEl:or, fcr fiacal veers 1996 :hrough 1598; and $a5C lilllon for fiscal yeare 1990 througp 20c.. A.ounte fxca tlis Account vili be approprvated to carry out the prcqra•v eatablialud by section 210o](c)215G3, ad 21516 of the SSA frelating t0 (1) aupport to Stato for elcab11ah1.^g a editat:Cn• cevTificerlan, enforcwnt• aM inforaatlon preqaa vath respect - la.lth can caverage+ (2; lapleaentvng iuaiity :zprcvaaent r.... r S t.hccugh dsaonstracian prc!ectar and f?) supporc to states vbactatablish ana aaintain caeplainc review aystus and early dlspute resolution prcqz...). Published by THE BUREAII OF NATIONAL AFFAIRS. INC., Washingtoa D.C. 2C037
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SPECIAL SUPPLEMENT 4. Tha Cenq-Gev Cars Acceuntt will receiva uounts aFP=cpo.atad to no Trust PUn.d CY reasan a! a daCaase :n ]ed¢al expecdit'ssas aatriSCtable to tha previslana ot aubtvtle : of title %%I c- Se SSA (ralatanq Ce aute.eC61a '_uueaxa coocdlnatlan). rall as any LL:ta iran.farrad ta no Healtn 9ecvrity Truat Tun.G f~aa the Federal HmFltal InauLanca last fYnd And the Federal Suppieaentary ,nsuca ce Traat T:nd (ralat_'q to auta.obile lnsuranc. r ard!oacian).Aaccnta S:s Acmunt eill no apprcpriated to carry cut no praqras uteb:!ahed under pYtt C of litle %-Y <f 'r:ae SSA. s. no Federal Out:ay proqru ?nud and Abusa A<count vi:l 'a Thn unt would Ge edi'vstad by c]arqes !n ...e Crnsuver prLce Index far fiscal years teglnnicq afGar 1999. 21a - va ch o$TS 311:;]n eLC: ;a<a'- '.a- Flua 5: - addntnonal ema v no ;olluv:nq amcunts transferred t' he ^ at Fund: (1) cr:}inal •2 a ivpcsed a collscted anG avecnta : a!tinq Lroe t.e fcrfalture of prqp.vy :-asea imoivvvg a F.deralsheeltE e(as da5!nad : ':128o c: the SSAI: (2) penal:ias and dapaqea i3paeed and calle^ed under no Pelsa Clanas Ae` ir. ra nvolving olaima related t the prova:cc af `ealt`n c a cevs and cs: arG ;2) adainAstratve penaltiea and a - impaeed a tllacted u.•der section 1128A of no 58A. - ald-9 en 9 the Acraunt vill - anY transferred - the zat Fu-d 0y tha ieccetar; of F26 r ed ucder aection 1339A b'he SSA with reapect to a certified healtheplan ] cert:f3ed lon5-tan care po'licy Which not are repaLd to the a r ooLicy, and any v ney gifb er begueats maGe to the °nitad 6taCe• for allocation to AC<cun.:. Abou.ls ' this Accocnc vill Ee appropriatatl t <avry o t no prograe d rSbeL an 1116c a the SSA. :iw<ver,r, ounta in the AecuTtvhich are made a allable to any Federal egency vill replaca a reduba t arnunt of appropriaticne for sucC agency' under apprcpriat:ons accs~a ALelnts not aXpended frca any of these AcccU.'Its Eurinq any :i cal year vill be aau.led over by tne raspect_va Account • suhaaw.nt ca1 years. Interest cradLtad to no Yust L.d under c ode seccfcr. 56W(b) ril: be a!locetad to each Account ratab:y on the basis ]f no balance -n aaG•. Account ae cf no beq10n1nQ of no flscal ye1r. The craduate Hedical Education and Acadevic Health Centers : Fia1d conelata of two Acccuna. Cacn of tbaae Accounts V:11 be funda^ auG of aa unc. r ivea tn the ^reanu:y fraa the a enta a insured and a rad plans lundar new Code aectioca SSO1sacG escd) (qChar tnan any portion o suth as unta tranafarred to no Biaaadiral and O.Laviaral Aesurch ^. t Iwnd, tlasa!bed Ylcrl. In additi]n, tha 3ecretarv af :{8$ will transfer no [ollwing aacunta to the Sraat Fund each fiscal year f o. no Fedeeal Naspital InmrancaT-ust Fcad ana no Federal suFPlaaentnr,v Insurance tTUt ]umG: (I) tl.e a u.it tnat v uld have been paid trca no Federal Bcspital :.nrancs trust Fund under section 1886(d)(5)(5) of 3a SSA [in sfYVOt befoce enactment o! - e b111): anC (2) ` amount ctatvould have t en pid out af no PeGeral Haapltal ituura•ca rrCSt Fund a[a tnaFedaral Supplaaentary Insurance irust Fund cnder a~-SOn 1806(h) of te s5A (aa : effect before enactaent af CAe til')• TIIe TL'sr "vv etll alsc raceiue Snterot cvedite3to it under Code sectlcn 96o2(b). ticn Accaune vi11 : :'< d'aca Nufa xw cr.eu.co l ed ical and (p e (1) a ta eqalvaler'.t ta no a6ow'It that racLtl t.ve Wen paid aUC a' no Federal 9cap!La1 Insurance ^.ruat Pcnd and CIe Federal Supplementary L'wuranee Truat Fund under aaeelon 1886(n) of --ta ssA (as in a!fect before enac•_aant of no SSl:i. plus ;1) no excess af (a) a.ocnts vade avavlable 'indar subparc ] cd part 0 o[ title K.':II of the SSA a]r(E) Ch. avount tha2 'vouid have been paid frca no F<dsral No.pv<sl .surenCe Ttuet Nnd UndeL sact-an :006(d)(5)(9) a[ the SSA l39 ;a9 an affe_t hefare < et, _ af the m'!11. Ameunb¢ in _s Ace-ent call be ava-Lals to carry c t qa proSreas escatlimed o iccer autpar . rt pa ] o ~tit:e .'CJ a. the SST. :']e Acadea;c Health Ce3ters Account V:11 rec e!1) aaounts egul•:alant tc a1x a cunt ttaa would ' e bear. paid f as the Federal liaaplta_ Insrance TLNSt SVnd under a !on 1896(d) (51 (B) of no SSA (ae 1 ef_'ect ceLOrs e ent of no bill), plua (3; Cte ..... of (a) a c mad< ava/1ab:e unear saaFaCI] of part 0]f t: xVI]I of the SSA a (b) tne a unt tnat would have eeen paid f m the Federai Hosp'a1 insurance 2'cst Fur1 ':nder s c n 1986(d) (5)(B) ]f no ssA (eflect before e of ]1N bill). AvoCn[a in t:3 Account vi51 1`_ vailable to t the paograns eatabllshed unGer suhpart I: a[ part 0<f t C_`e KJI]I of the SSA. A;ly an<urt r expendad frov tnaae ACOa'.mta du:ing any fiscal y.er v111 be carried over Ey no reapeet!ve Account to s seq.:ent fia<a: v aaIf the s cnt [ e ived 1n v'.le trust P.md 'J sit]¢ greater or laas Cnan the aa untrequtred tc be allocated to V.a ACcounts, tllan :1e a our.tt to 9e allocatad to each Account Vill be increased or radYead pcoFO^ ca1y, ae appropriate. Interest .edate2 tAe Tvst lun! Nder Crde se0tion 9602(bl vill be allocated Co eacn Account ratably on no buia of U:e balance vn aach . Account as a: 9u begl.n.^g of the Claul year. d !i G1 * b S ~ • Add Tha BSOmedicY- and 3ahaviaral Rasucc: Trust PurA vill r-amounts egulvatent '0 14.2 percant of asou.^a received _n the treasury :ro. t.he assesaeenvs a _nsuaatd and salf-inaureL plana. the Trust Ind vi11 a - intereet cradit.d to 1 under Cate feccion s602(ti. Aacuntue:v ~.Ae fund vill, suL)ect to appropriationf, t a!a ually t the Secretary af tYtS on behalf of no A<tion.l : at~tates of Hea1tA (•YIH`). no Secratery of ®5 will dlstributa such aounts a follows; I1) 3 peresnt to no office af ebe Jiree[or of no FIH enC .ar construction of intraaurLL and eYt^asural bual_.nqe and S-57 cillG:as; (2) 20 Parcent to no AgNCy far Maalth Car. ?olicy and Aatearah foL lealtl. Cire aervicea i e1rC:./ and (]) Ghe r i.:der to aaLVr tnatitutes of no H36 111ti proportion to no -aaf e nual apprcpriatiens for each ae.ber i. tituts. Hoeavac, ~a aaeunca st.he Tru. Pund vill rWlau cr raduu the aaount of approPriatiansfcr che MLH undar appropriatians a -a. 230 eube!tle o--otaer Favevue Provlsio3a -. aplenemt 9tatas erepaeal iaguired ira. Cepi,zea- of the !Deesuri Isec. 771 af the bi111 Pregv: '~ Ia c :a1 rAe darevainabian of vheCher an esploy<r-arplcyee indepe•dent ~c .ractor relationship a - r Federal t purponea v vade under a covon-tav vestxvUnder this tast, en eaplayer-empLOyee rsiatlonahlp g ra11y .xiats 1;he pe[ac- G r the services has ~he ri9ht: ot cn1Y t.^.e ultcef mtne sevi , Gut a s ihe ss by uRch ^.otChab [e:LLt :a tsEed (^.rsaeCeRa9. a ]1.]101(cl~lll(hll'ahettertte r.qu~1 te c rol exlsts 1 C.tenined basad cn the facts and duaatancas. The ]ntarnel Revenue Servlce CRS) va a 2c-factaa rear f thls pLCposa. Rav. Rul. al-al, 196]-1 C.0.196. addit:an to aha o a laV test, Lnera a iatutary pro'Jis ona claaa_LV_n4 0artalnVerkere aa e.Ieee or 13dapend<nt contra<t]rs far cartatr, p'lrpoeas. aatiea 5]a ef tb. ReeeaVe Aat of 1976 -n C.he laee 1960a, no 3P9 lneraaaa2 anfarcavant o[ no evployxent t x va, and mntraversvas drvatopad betveen the I3 and taxp6vers aCatq•cnether husiOasses had corractly classifled certatnn workers a mdatendant -cntraeters rather tLan as eaPloyeea, In 'esponse to thie prcblea, Cenqreas eiLeted NCtion 5]V of the R.Venue Ae: of 1174 ( ^IeR!an 520e), rh/ h genacelly permits a taxpayer to treat an irdividcal as nat being an ..playaa for emp_Oyvent tax Purpaaas LegarEleaa af no 1ngl!vidu.l'a actual status reGao'Idble W der no coYan-1sY teet, 'J11eaa a.ha tarPayer has no baas fcr aucn traa•.aant uM if c.rtain additiqnai ceguireaenv a- satlatled. Secticn 530 daaa not apPly in tbe u cf an :nd!vidUa: who, pursuant - arLanpasanc b.t'nan tEe LaxpaYer and a cchar pa:acn, ptcvtdes aerVioea far suC~j other pe[ean a enqi'aar, deaa9c.r, draft.v, coapuur proqrauar, sysSava analyst, or other svalarly sk111ad rartar angaqed in a aiailar line of vork. Section 530 daas nat apply fcr incow tax yurpcsee. Thus, Lha serv!te Iecipisnt's dateraination of rhether an intlivYdual : n evpLoyee :a[ incaY tax pJrposea ! aaCa r1C.aut reqart : 1Cn slc. In addibicn, sact5on 530 doas not apply to no vorke:sta employment or incoae tas purposea. e detarv¢natiqn of rhether a vndividual is a eaployaa for purposaa aC detervvning n:a cr Gac :ncoaa and esplayvnt •ax liabilities is vds rithcut :egart to aectlon 5]0. e!__._.e 0'•4. 2]- Jnde: Preaent :¢v. s19n;!:can[ t • -c• • '_ clasrificaticn of a vorse as an evP:cye. m <ina.per.d.n['• o]ntraqozc Some of :hase differences relata ea vitRnOld1:g and employment ; ttqulresente, a vaL' a;h. ahility b axc!ctl. certain CyFs o. <rpensavion [roa v m - rake <ax Gadueiana : r certalr. expenaes. Sey of lhe v : tna bal! p lace gre signiflcance a t.he orcFerclavaif~catvn of a v c_ttractcr o emptoyea, becauee veyv'irsvena ss with 1ntleFendent a respec healtn care r rage depend :n parc o statas. The present-iav ivles : r letenn: vng whether a ucrke[ u af. indetenaant <bntrattor Ontinue to rcault 1n 3lacaassi[M1Ca t ten c_ arRers and uncertainty avong taxpayera Mlsclasv[ica:acn o[ workers can be either inadvertent or del!bera:e. ' e1aa81fleatcr. of varkara i iMere.^.tly difficult 1 e Cases because it is a factual daterminatlon. 'Cne ecazlttee believea v.ae the prasent-1av standards far vcrker claastficataan coc:G be modified to provide a certainty far beth tAe LiS, em^toyers, and vorkers and, in ¢pprcpriate [ aulta. Hovaver, because ef thedifficulews of rdaternining appcoprlate ' -cation ct rclu, no Cciaittee believu furtSer saudy of aFa[.c legislative proposals ahould be eade hefora sva,tory ohangea Are adcpted. larol.all~ee`f 'll'a°Si~°a ~ w Tha bill diracu t.he Sacratary of no C'ruscry to auSa_a a ls O ieglslaCVe proposal providing atatutory scandaude relating to the ~ eleaa_fieat_en af voikar -aa splayees •-`-'depenuaJt 'ant.aet]rs to . ff i. bate C" The provision 1. effective an [ho data ae anac--.ent. ~~..a ]. Iaeraasa ia aareLOea Yparting Penelties (aec. Ylr o[ tha bill ~ 1 aad ew. eTil ef tbe code l~I) 2 t t - 1- ' u and soaD-tal .~ai Vndar Ne CCde, ~parsen anqagea in a trade or bua4naes who makea payaents duainq tbs t ndar year of 5600 cr acra to a peracn for Fublls'`letl by THE BUREAU OF NATIONAL AFFAIRS, INC., Washington, C.C. 20037
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S-58 v {alar-1H, VFges, prY ' annLLt:es, caapataaCana, cuueratlcns, a.OlusAnta, or other fixed or deceninabie gaina, profita, and incc.e, autt 111a en lnfcrsatlon r. vvth t:a Internal Rwnu. s.vic. (•IR£') rapose:n9 the aao'.int of au- payeenca. a+ell as 1u r.ase, addnss and taxpayec iaenci::cai_onnuaUer cf una per.m 212 _ vno] sucn eaySents vere Zade '-. S.e;a;, 11 A a - tasea !so as _lrncaned to tna Per{tn to whom a_ch p/yxan;o ae.. aada sec. 6041(d)). ]ae coda ccGtai:.a aCdit:ona: a - v irinG `.a< raciPie^ a - r vhems - • per!ara.d) service enqaqed in a Cratle c b':slneaavnc ]eKea pa';r-en[sie nnerac.on i tEa c of that crad. usir,ea. v parsCn for r+mu i~eG ]usC fila vitd V1. ps an infertaeta.~ retun raport'ng lCen er.ts (and tne .'vdm. addtesa, and caxpay.c v CaCOn n r of the rectp:nc) lfhe :eZuneration ,taid -c rAe person during the calndar veLr :s 56C0 or sore (sec. 6041A(a)). A{1.i11r ar.a[eeanL cusc also-be furnished to the pacsen to vnoa sucn paytecca vere nada (sac. 6o41A(e)) . Ift l An)' persCn [lat .' • Gc fila a carrect inferraclon [ turn" .:<. the ITS c- [ b.rare t e presacibad Gling dama . su2;eC -6a a 2naicy t*.at~+arin baaed bn Vhen, if at all, the c- t i:foraacior, cetvr., i filed. IL a parsOn Lilea a correct i fc[rae.en return after tne pr.scribaG filing data but cn or befce tL date tnat is 2o days aLter the Praseribed filing data. =e penalty 'is $15 per recua., vitl: a aaxls'.is panalty of $75,000 per calendar vean ff a paraon f!les a correct : rmac:an rntun after the date chat : after 10 davs after tna prsacribed filing daca but on or before Augus[ ' ot that vur,° the penelty 1s 530 per return, vi6h a ux:aua peneltY cf $150a00 per calnds yaar. cL !ntoraacion retvrn not ti1aE an o Getara Xcgu•t -[L. ~~ile:t cf LLa panalty _• 550 parpra-ur-., with n aax-O.s penalty of $250.000 par calandar year. 1TSra v a•pett.al rala : r d0 aniais fnilure/ to inclace the - retl, c ecL i rvtion IDis excepton apPlcea to i aCicn~ .turna teat are rn C.Q c or before Augcea LcVnder th.raexceptaan, 1 an ietorvcioe return ~s originally filed vicnout e A nuaber of a esptLOns to this requireaene ere provided in Treasury cegulations.xIn additlon. to the axtanc inegneral infonation repartinq raguir..encs cf tLi/ provision overlap specific i3feisetien eytCing ceguireaenta elawnere in the Cede, taxpayars are gueral3y eequired to repart only once, unar C`.a more specific i'JlorYtion capORin9 ProVi/irn. 11 '.hi/ tera is daf!ned in Nc. 6'/2ald)(1) , and raLers to a1 .alcrnatien ceper-.ing requlreaetta in the CPte, Including sac•.6041(a) and 6041A(al. ° SutaeGuen references ta August 1 aaan{ Augusc 1 of the year that Includes !.hu p-escrlbad f!ling dace. all the req4ired inforvaurn c vitn inccrrec_ :,--eatan. and tna return ie CeHected on ar EefCra August 1, t:.n LheoClginal return is creaced as having baen d led vid all of the corrac; ;eq~ireG !oCaatLon. Tne n of info[sat:on ratCrrl cnSC cay Cialily r this exceptien for ev ealendar _v.at is linicad c ahe greater of (1) 10 r [ns or (2) O-1a11 ef Jne parcC.: o`. ,'le total nuOLer of ;ocation returtv that a-e raqCaad to be filed by the person dur!rq the celecLer year. ' addttion, t2¢e are sp6ial, ldver ]a%1SUL lavels for this S'_ty for s ail t:tavnessea. For -_hts purpc6e, a s]ai1 euaineas I any person :1 ainq averaga a ,ual grCes rece:pcs f the a t racar.t ars3 :a%Cb1e ears endin5 befCre the calendar vaar thdt do a exceed 55 ye mi!Lin. Tha aaximua penalties for 525,0c0 (inscead of $'S.00G) if the failure. a - ~ed o or before 10 days after tlfa prescriEed f:1ng date; 55o~0a0e(in{tead ot 5150,0001 f Ne !aitures are c ovaC c or before Augiat 1t ani 51eU,C00 (LnseeaG of $250,000) a- -a failvre• a:a nct cor-aeted on or b.!ora Augusc 1. _ to file a cOr[ar- lnfenatiaa eatuaf v6th t!e Ip5 la due ntenc anal disre9ard of tee fil!nS ragulramen0. che panalty for eacn nUCh failure !s increaw6 to tne ;[uter of 5100 Ot la percenc^ at cne ae unt requirad to be reportad c ractly, with no Sinitation an C.e mr!aua yenaLtv par calendar y r(sec. 6)33(e)) • inc- In cha penalty applies regardlese of vhet.her a carrected v-aetion retunv is filed, th. failure ie de simave, or the Pecscrt ct to cL penalcy !s a saall business. Any p n that faila to furnish a Cor:act payee .cateaent° to the person t VGpa the aLSCOent is Lequired to Se furn:]hed on or before tna yre•cribed due date !a subleot c a penalty of $50 per enc, v m vi!aul panaity of 510o.onc par mdat vear. If most ne [arlure to furniah a eec payea •catenent is due to intentienai e disregard of Gne reguiresent, the Penalty increaaae to $100 per smatesent 0 if greater, 10 parpant of 1ve mcunt raqulrad to be shcvrn on tee .stat•aent, with no 1LSitacion Oa cheoax-v-a penafty par 1'1'bia percantaga v s dap.nding upan the .ype cf ,aation wturn. vit_^arupeot to LnlOraaiicn ceturna requirad under aaeeimna 6041(al ai+d e043L(a), tha apCilcanle percentage le le parcanp (see. 6oR1(•)(2)1. SPECIAL SUPPLEMENT ° C^.f!s tan is definad ln sec. 6724(d) (21. and r <ertain :nforaation reporting [eguiruncs in the code•-inclcdinq faca. 5041(d) and 6043A(e). ° Pive percent for several types of stateaencs. 214 aa.endar yea.. railure to .ice ceber ia[c:taciOn . -•1 - 6 2] Any ] n that faila to ccmpl'y vicG ather specilxed infcnatl0n reperung veqtourese]ts o e oefore Lha preecribed date : sub-ect - enalty of 550 fs- ea n failure, v1Uh a lty of 5100.00J - Tn calendar } ect - rtinga~g~~r~earenca ic - Led this tuzFCSSa:ncluda any rec,v:- amenc tee anetuda e c-ecc ee.vever ndot/1:caaon nurLer c - n, a aCatemenL. 0 anya'C-.er docum. ocher c.han an inLorva recun Pavee scatezantl and t reguireeanc • isn a Ce -- taxpayer tbentifvcacncn nID.;arac anocher (T .as. Regnec. i01-6).2-1(a1141). Any Of t.he infomaa'_m npcrting pe-.altiaa nay fe vaived : it ie shown that the failure Co cOSp1y is due to ; teGla cause and not c c1LU1 nagle<:. rar thia purpme, cnable c ieta !f I1) there ere sigvificane ctlgating factors Lor tbe ailurex such as t`.a fact thac a person has an astaYibhed history of ot.Flyinqtivith C.e inforbativn reporting reguis..ensa, r U:e failuse vaa used ey aota beyond the ynen's cOnttel, and (I) tbe pereenacted !n a responsLlla aanner both before and after av !ai:ura occuriaG (Treas. Rag. sec. 101.6124-1(a)f2)). Efa•o r Cbenaa The ccaaiaee ]eliwea that i crea•Lnc Uva pnalty to reflact Lhe that u repcrced lncor[ectly on intcrsabion ea[na vail 1aprOVe oapllanc• v:th the uporting [equi[eaanta. 3nPrcvinq cospliave. vit`, tS. r.peeGinq requ/rnanta vill help ensure cmt independent concraetere rspart all ef their lr:eeae, v..-ahn detaremaa el!q:bil: y!cr au]aid!ee uader the b~--. . Julenat!on af Tzca•ioa a. bi11 aadillu the panalty for fallure to file ect infcraacicn [etlLTs Yith respect to two types of information return• (1) inlo[sat!on raCUrna 'and¢ section 6041(a), but only u returns relate to pay.ents to eny person for . r+icu perfar.ed]y such psraan (ctter then s eepLCyee)." and (2) recurns regarding - raticn for sarvlCas uOder seat!en 6041A(al. In geneval, bcG`h o 3.a~esacoions of the fode relate to in.craation returns vioth resDecc t.4 provision doa• nct apply to inlorn'ut:cn rettrru filed under section 6041(a) ¢at do not caport paynens for servraea. 215 to Faypantn cada to nen-esployaes, suc: as :ndepenaen : cov.-a--c... In - _al, the bill i a V~a Fenalty for failcra t ' - 'ied infonat_on raturnn c r - v on cr before A:guat 1-- $5, fa- each racurn to the grutarcf $50 c t percent of cha amo'ac required to ta nportad correctly but not acreporced. 12e $250,000 ; a s'ai.'a ce^alty for failures to file csrrect mfornaceon ra[ans -any ca-endar yaar conivnues to apply 'inder the r---. The bill also provides for a eseeptien to chis increase :here subscan.cla'. coapliance has occurred. T.".e bpll pmvlde6 the: Chis <xcap:l0r, voul.^d apply rase¢t co a cavendar vear rf the a5gregace amcur.t ehec 1s timely and orctiy rapertad unLec sectieos 60a1.'ai and 604J.(a) vith resprc toearvius for enat catender '+ laaat 35 -- ent of the aggregate a - req:nred to 'a rapcrted u-- ' ect.an• of the Code vit: respect to s rvi<ea for that calendarv ear. If t1.is e%cepcaon applies, the pce•ev<-:av penalty of S5o for uch return would continue to apply. The till ' • not affect the following provifians of present :av: (1) t:• Seducti n i] th• $50 penalty where correction is made vidirn specified period: (2) cne exception for de a 1/i• failures; (1) t]e lover 1 tetians LOC person• Vith gros• : eLpts of r e t`.an. 55,0CO,0a0: (4) eha :- n the penalty ln Ciaea of intentional disre<ard Of tse filing requin.nC (5) tLe penalty fer fa_ ',ra to fanish correct pavaa staceaants under aectlan 6722; (61 tAe penalty for failure to colply vit1: other information raperting raguirCmenCs under sact/on 5@ll and (7) ihe ceasonaCle cauae and other specia: rclea Wlder sec..-cn 6914. ]ffeet4ee nata She provision applias to infcraaticn returns the due date ! Vhich (Vithout reqard to exLeneLens) s aora than 30 days after the dat• 01 anactaent. 3. IlOefeflladable Credit for Certala Kiaarr tealth aerVices lV O ~~5a PtOViders lsaa. 775 ef tba blll and net eec. 23 of the Coda) freaent 4. .meiwua tareeeea eas t a.ial0ms W In 9.1, th. cperatLOn o1 Internal Revenue coda vle- aces ~~ ~~a { ~a lV Publlshed by THE 6UREAU OF NATIONAL AFFAIRS, INC., Washington. D.C. 20037
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SPECIAL SUPPLEMENT ' Erylayers ara requireG to Frovida lnfonaticn clth rsspecv 11 nges paid to Lhalr upleyaes en Tev W-2 vnder a ti i051t /equently, ehesa :nforaatlcn re-urns would not be affected by _na Li~l. 236 - aed ... e lcc vcT_~ cn/ Ccaed S - e-Proeucicg actev:tvat Nonetne;eas, Present :a -ed/s everabla Ted/ral ILCeSe : x tpeataent 'or certal(lc.s.cerporaeicr.e c1aC cperate -., Puerto Ri[c, c e].s. virginIslands, or poasass:ans :ha unaPd SCatas to enccureqe :ha conauc: ot Lradu er buslneas ithin thase areas. In add_t_on, certein Coda sections pravide adG_tional benefits in taLreted geo9repnic areaa (e.q., 1 - housing c cit ar.d au :a r rqag. raca Fmviaicna :-.t~artairt econosica!ly dastresseGlareeslc 'ha crnibu5 3udeet 3econCl'aatirn Act of 1991 ('1991 Act') proV'_'_es for tr.e c a:gnat:cn o 'Irne empeve~en: z and 95 a entnrpre camuniaies : aconozicallY Giatreesed a- satisty:hy cartam criterla. e Ges:gaaclona are to oe rade duEing 199a and 1395, and e ally vlll e effect for 3C veara. Ouring t~~a period the~du:qnntlan :s in effact, spectai tax tnce.^.t•ao (t.e- aF asployer wage credit, add![acnai eact:on 1'9 expen ing, a axpaoA3d tax-exeopr 1lnancing) a ailabla ' - rtain *-usir.e3s conduCa/G a in / r t tcr.aa. 2xpandad :- empc tinancingbenefita a avaiaele for certait, facilitiaa located in enterprlaa ccrosutities.In aGtitipnn ae 199'_ Act p-oviGee 3FCeleCated ]aprec:a:lGn befNlits and an -nCrelentaleeplcyer vaQe reei[ for certein buainss activi['./ conducted on Indian ze3arva--pna. Cptla section 108ff) pLOVides an excluaien •SOS F/deiel tncexe tax r what p[nar+iae veuld b. Gi.cnarg.-e1-!ndentetlisa :rc1t a etudent ! CS discharged Pcrsuant ta a pravielpn :S tna agreement that re[(uir// cha student to work ! a perleL c- - n pcofeasions : r any e a broad cleu zf .ealcyec/. Secilon ~OB(f; eF?liea only to student :e aeGe Lca funda Frovcde< bY the Tederal Govern3ent, a State or 'eeal gwernaent, Or certacn pu5lic benefit cotyo:atcen. deacribeQ In aaction 5o1(c) (3). 9e-' a aaply tAa favorable ireetaant previded by aeCt:en 10a(f) applies vhan a gave_-em.- agency diachaeges a stcdent loen upan ths stcdena's rrovlaionef a/1iea1 HNieee to an under3ervatl area. Proent Lav does not prevlda fer a/pacial credl; tgainnt Federal lnoow taxes for lndividuals vhe provade sedlcal sarvicu .n aedically wtlers.rved geograph:c nraas. oGher, nen-tax provisions af FeGezal law provide Lhat certadi health c re prefessionais who agru to vcrkfull tnae far at 1 tvo vearaat e appmved governpnt or -.onprofit uployaan: s vitlin a'haaltn prcla/sianal ahartage a[ea' ;EPSA) are allgible far 237 schclarsilps ar repa;2ants e1 scudent laans,~ _ ;.p a- n rapew/ a prograsa a aeoin:acebed ay oha 9aticnalaXealyd - Service Corp (VNSC) , which ia per: 01 tna C.partmant of Health and H'+Cln SarvLCas.'° S-59 practice dentists, pr4aary-ure nuise practitionara, and certified aidviveal vere providinq sediui csre = HPSIa C.hroV9hcut t.ne Un:taa Statea Gurauent to rAe MHSC achalaranlV arA loan reFaysenn progra.s. - r purpo//s c _he credit, tne : 'physic¢an^ bes t 11 ing given such term by /ecvcn 16611r1 of tta social Seccraty Actn 2]a _ -• - case cf a --' -n asejsnanr -se-Fra---c:cne~ v- ~G :.a :.uiae-~ cva:.tgardlaaa of wean the :: -v.1ualbegan pLOviding nsdaGal ]erVlcu tn an StlderfarqG area) Tnez]/C:t 1s ava11ab1_e [c a taxpaver only :f he or she prcvidn FriSary hei_cr. SelVteea , on a ft11-trbe biala : `healtn F[F!/asva'lal ahrRage area" (99SA1 fesdefinatl cndar p:~. nt-lav seetteC ;13(alf'_IfA) of - [he ?3/3ia l?ealta farvira Art)) obe e114'=^le .`or -_ha credit, ^e taxFaye! ' regulrad 'C obtain c/rtificatitn froa the 3ureau of ?riFary F R care, Unit/G States p.~Diic HeaLt:. Sarvi tha ]epartsan ~of Health and Human Sarv:ces, that he or s a full- tina prev:dar o sery h/a1U. 3 da iPSA, and, tne casa ef a taxpayer v ing i a HPSA Lccats vl oetrnpoGtan 1:at ne o er.e Ferfczaaa - :as a o emFf-o~.ec ~r.depe rK rLenv contracaor; fer, a Sovemaentalsc nonpnfit ' credit is not available, herever. • C'fe taxpayer n[ity. e ynrticipatedin tM Naticnal Heal[h Secvice CeCps(MISC~ schelarsh[p [ Lran repayment ?rag[am. STe credit i. not allcved a an erbet against alterna[iva a~ntnaa aas (AMT) liabil'Sy (co]e sec.25). Under t e pmvis:on, a taxpayer is Quirad b work ful'a tile prcviding primary nealt!, s 11 a HPSnQ uir ad A for 21 c cutive aont.a (tcllevlnq cerilicatlcnla otle cax cr/dit. If a caxpayer <cu n t provide primary health a - on affll- time baa13 i a 4PSA fer, at least 24 cenlerytiVe xcn--b//felloYing carttfication), any creLit prev:ously tiaived will be ccmpletely eaptured and n creds will be allpred !or tne wrrenc or future taxable years. a taxpayer performs ful_'-tise prisary healt] fervicae 1 aSSA for at 1ast 24 c aacut-l!e /ontls (fa1_oVinq cartrtfication), then ttere will ba ro recapture a cradits previvi/Ly c aed. TLe Secretary of the Teea/ury, in < nsultatr.en ith cL 5/cratary cf F.ealth and Hulan Sarvtces, is granted u[hornty t - capcue at credita when a taxpayer !--a to ~ vide fe./1Ca3 _l a 3PSA Ict at :eaat 2. lpntr./ due to ' e tav 'priaalv healtn sarvices' hae the //ani^q given such tere by sectlcn 8I0(b)(1) of the Public Hea1tA Service Act. ° See Sitle 42, U.S. eeda. aeeiions 254. and 25af-1. For purpasas of eha proviaien, aadlcally und¢farved arus ss..clcda gecgraphle a , peputatlen geeups, and publle faeilAi.a tnat have hPSA a/signation. ' Ter purpoees c t.1e credit, a pracCitionen will ba : s.d as providiaq • a HPSA, n af the aree no :onqar n / in 1pTJ e a e[a la deelgnated ae a HPSA deaignaticn a ~lCh. i vnan the practaticnar i c/cti] ~haled byine Mpartnent of Vh9 as ptcvidir.S priaary health f a in ua .1o. (1./., he practitioner alreaGy s providing priaary health servacu le an area a a HPSA on Deumber 11, 1991, or subsequentlybegins prcvtding sccl, sarvicas in the area when it is de3iqnateG as a HPSA1. S]9 =x:r6erdineCY circualtancef. Effact've bats Au for cnaave ^.he pravision is affecive for taxable years begtnning after 1996. the c mletee belaevu C.at, -'nav ef tte Shartsga of Prieary healt:, s rilce pracat-enera i -ain '~nder5a_-'/ed a !C 1s appropriace to t-ovide a t encourage pr:aaryalealth 6. [rpenaing of Medical Sguipeeet (aac. ns of the bill an< asc. sar.'ice pract-tioners to eerie .n sech areas 6aSlanatiee ef Pmvi/ioa ava ef tbe codel P[e/eet 4. A physician vnc proviGes prisary health serv:cee in certain pee ution rules meaically ucaerv[v.2 eresa la eligible for e nanra!undanle c:/d_t against Fede[a1 n a taxe/ af 51,000 p/r m nth : up to le acntbs (55a0 par month it the pnYacaan .lr/ady ra providing pr_aarv health selvices : any undenerved area at the tave t..a credit becones affec::va cn Sar.cery 1, 1395)." 'Se Credit ta-a -a 5500 Far vontlf ':iPSAS e a designated g/cgraphic ¢ vell aa cartain designated population groups acd gpverna/nCa~.ci~it:esg arrantly, aore then 2,400 prisary care XPSAa lave baan d..:gr.aced, cw.ring a-1 0[ parts of 1,900 counCaa In CAe United States. Shara ar/ also r 1000 dantal HPSAa and evar 700 fantal haalth ilpSAa. IIDSAS are deaignat/a by ttu Bureau of PLia.ry Aaa1tA care, vhich is part of the Uniud statu Fubltc 9n1tL Seavice. IIPSAa ara ideetif!ed on the basis of itate and local gcvernaeht raguests for da/:gnation. Primary care HPSAS a e deeignated on the basis of rate of poverty, a to priaary health car/, lor birchveight G1.-t]s, infant 'sortality, and the physician/populaticn rattc. Sea 1.1. 59 [iC9CII1 $lgiy,tat na. 14 f nuery 21, 1994) at )a11-530"/. ?Le HHSC 3avitaiization A.andiants of 1990 (sac. 13JA of pCt. LV 101-697) eequic/ U:at tYe Secretary of dpS annual3y prapare a list of Y.PSAa in orier af greatest ahorta5e at .adicel prac[ tioners (by using certarn esc]usiva Cactorsl and chat pricr ty in C.e aa/i9raent af xation.l 5ea1tS servics Corp (vKSC) p.rsonnel be given to gcver.vnt nonprofit entlties aervizq ePSA/ with the greiteat ahertag//. Sea63 U.S.C. 15/f-1. ' Aa e! BepleaCer 30, 1993, a total ef L163 practitioner/ (i.e., pilaary-ora pey/iciana and physician assvanu, 9en/ral In general, L11e ec/t of preperty -S,at has a/aful life lcr.gar than c a year a t ba capieffiized and recovered over :ae pursuant rJlu. anqibte lepvebie tr depreciation o anarti[ation * patpar[v Flaced in a after 1986 isdaprea:ated unGer the modified ACCelerLCetl cost 3aceVarf Syatea (IIAT,n) • red aa perC of t:e Tax nefoa ACt ef 19B6. Under YACP3, hagh technology aadi-al equipaent en dapvaciatad e ragulae t.x purposes s e 5-year e/t:ed. reccvery perled usvy the 3oe-Ferceat LeeLinvn4 balance "9i5h technology medical eqaipaent' seans any elecconic, :eccremechanical, er ceapeter-based high t.chnoloqy eq::Faent useG :he sc[eenillg, voniooring, observaCicn, diagnoelb or treetaent at patienta Ln a lancratcry. aedicai, or Soapi=+1 e..virona.n<. In general, CLa baneflta of Che a celer+teG tlACPS deductions are raluceG for property 'a.'(der an altarnative Gepreciaticn system tnat apPliu to fo'eign use praper<y, ` espt use Prapertv, :ax- xeept bond financ.d proparty, certain Lapartad Fropecny, and prcperty which tLa rexFayer s ects. The alterrative depreciation system also is ssed t ceyute caWorate earninga and prefita. Pe netlta are reduced hy c.lw:atang depreciation using tda /traight- line eethcd over t]e property, elas/ life. A preperty's clnss lila gan/rallv carsaspenda to its Asaet CePraeiatieo pan9e (A0F) midpoint andtften ia longa[ than the reccvery period appllcable for regular tax purpeau. TG/ class llves of the alternacive depreciation oyatal also ara uaad for Furposee oC the to[yorGG and individual eltarnative ainiae. tax. I'he claa/ itvaa of scsa asseca are ut by statuae, rpardlasa af the asset's Aea siapo:nt i'a. - claa/ life of high technology aedical eguisent i/ s/t by stacuta at flva yaar.. Fubllshed by THE BUREAU OF NATIONAL AFFAIqS, INC., WashlnGto4 C-0. 20037
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S-60 ll In aec af daprwiacicn, a taxpayer xii"h a suffic:ent!y saall amount of annual Snvestaant say elect to deduct lmdlately up co S1'.5o0 ct che caat of vallfying property placed :a servlce far cLe 2{G . .: +naar 3 --'; :-9.-' -', -erers a ' :nq PrcOC[y ./ saleflnetl a depceclabl tnnqtbbe pecaanal arapercy cSat 1 urcnas.d fcr cea in uv a t . tonluc: a acrad. c n. ' S:c abcu]: la reaucea (buc r C belev ien~ rr [n~ avcur]aaY vnach Cne ccsi <L quaL:ly:ng Frop.ry pleced :n serv:ce L inq tne ox aear axceeGZ 5t00,0o0. In aadivion, Se amaun[ ei q:bleco reeFenSed !- a ! xab:e vea: aay n- exceed :ha caxable : cme of ayer - ahx vaar =hte ia lerivea f_c_-^a ace_u cceLuet a1 e:eE< c An u 'y a aunc that i -allc.'ed es a]eauct:c- Eecause o a aale :n a:tattan mfy ta carried forward to s'lcceed:ng t..xaole yearscaur; aecc to Aaaseos far c• .. The cec.a_Ctee believen that it : aprrcpr:ate to Frov:de tax Lncant:v'e3 to encCurage JrlaarY u e pl:yatclans to :cca-e and p:act:cs In health profeeaional shortage a-eee. L2blaaatlco Of 9roaiaiea O]e atll tcrenaes tne aacunt al:aved to be expensed under s i':9 : atazable year by Lbe : at: ;1) the cost of 179 property vnicn la health care m pperty placed in sarv!ca dur 1q ene v.ar av (1) $15,000. Par Lnia Punpose, "healtb eata proeerty^ e tion :79 psaper[y: GI vh1cG ia oedical agc!p.cu uaed the a nitor," obaeLV\CSOn, diaqncaia, or treatmenta• patianta i a labaretory, suiical, or htapltal anV:rcnaenc: (2i Vhiah :3 e1Te] (direc{ly or lndirectly) and USed by a phy3:clan (as da-•ined by section 1e61(rl ef Se Soeial Securley Act) : cive conduct ef auen phyaiecan's !ull-tlae trade a bua:nsz af prov:ding prieary health a e. ps defined i 13c(b((1) cr the Puliic Health 9ervice Avt)1~ a health prefeaaional shortage a- a l'O-PSl•1 r a defined in Nct!on3]3(a)(1)(A) of the Public Healch Servica Anir nnd (/~ autatentially all tA. us tt which : uch . a ehysie'ans providing priza_ ryzary heale't services +itnin mee~apalltanacacistical er a(es dafined by Secticn 1U(k) (2) of the Internal Ravwuecodq a eligable : r che additional eection 179 axp.naing only 1f :hay pafon such services far, c, an beEal! 01, a goverra.nui ar nanprof : entity. AS prbvided i+ (2) abave, a taxpey¢ sust satisfy tath a rsnip arG a test in ordec to be eligible for G.e addlt!o:al axceoaing provided by eba bill. First, ae panperty ru c ba avned (direccly oi indirectly) by a pby.ician. /cr tl:is purpoaa, indLact o'mesnip would lnclude ownership by an entity in which ° Secticn 1391A of Cha Cede increases the aaoune aaoved to be expen3ed der sactivn 179 by anenterpc4ae rene business cy ohe lesser a (11 520,000 or (2) rde cost of section 179 proGeRy :Ifat s qua1L•ted cana property placed ia sarv-ca duri.l t0e -axaCle 211 substantially all the cvter5h:p lnterests a e held by pnyualans. cnd, cAe Property v Is aei :n Lhe ac[eve cccduct af a phys'aan'a Lu!1-tine crade or busaeaa of prcvidinS Praaary health - in a HPSA. Far chis pirpose, •use" aeans a-s than a da xnrryms aaounG of cne and does nct .nelude leasing t.he eqaxpve-t aa I: addition, v ehe casa of mc1c:P'-e er tnd_cect ownership, sutw;ntialiy ra_l athe a~ ers auso cse ¢a Thue FroFerc'y. tc:ans a a egual a partnanhnp -ta[ haa cva phys Pnrt-.ers c el n c qaa__Ly far the add!tconal expene:'y unleaa SCI:h Ptrtnars u e c.`.e troperty :-. Lhe ac:lva -' - ![heir ful.l-C•:e :a or buainesses ct prov>dinc prnrarv healtS servtves In a HPSA fermo.e than a de ea.._-ts amouvt o- uae. Aa un r 2re ent-1av SectiOn 179, the 5ecretary Of tne Srea3'ary may prcvide, by regulations, f recapturing Se benefit prcvtded by the prcv_slon vitC respect ~ nyrprcp.rty ctuc c a to ee naaitn care property at an,v time. r c':13 purpoa , property vt!1 not be [reated aa having ceaaeG to Gehealth care PCOperty a iely becalsa an araa that vas designated aa a iPSA vhen Lne prbper!y v s placed in s rv¢ca aufaeq'_entty has :b HpSA dnlgnation vichGCam by c':e Oepacteeet of Hea1Ci and Huun nervicu. 6L•ec-ive wte The Provca!<n applies to property placed in service 1n taxable - rs beginning after ]acer.esr 31, 1991. 6, Past-ReGiLeaebc Yediaal aad LSfa ia3uiaaca laeevaa :Sac. 131 ot the Cill aad aea. a1sa of the Cada) Praaant i.a. Under present law, employae-Previdw peat-retaeasent sed!cal benefita ars general.ly excludabla fcee the qcess in a! e plan participant or benaflciary. In addition, an uployercaav deduct conCrlbutlona, Vltbin iialts, sade to a welfare banefit~•und far retiree Sea!tb ar,d life inwrance benefits of its taPloyws. A r. banefit fund i In generel, anq fund ibat 1s part of a plan of an.apleyar, aM tbrcugh vhich cne ..plcyer provides wL'ara benefits to aiplaywe or tAair Wceficaatiea. Centeibutiors by an uplcyer ;o a welfare banafl: fund a not daductible under the usual -ncoee tax rules, but [f nnay ether..aa SPECIAL SUPPLEMENT ° >roGercy that .s boe`f ued in tae ac've eanduat et a phy.icianb full-tiae Cada or usicua of prov:ding prlsary hea!ah car se^iices in a HPSA and lused erll gu\l-'ty far tae addlttonaleexpens:nq If t'teN 13 Sufficlent '1 of --he prcpe~y : the netcve conduct of CLa physiclan'a trade or bu3inees. n 2a2 .c' a v c.:e under _he u3 r_tee e.g., •-- - ordtnay and ..aary sL efa e eal. G`.e ;-.[C:ac[iens e <acucable ' itt.in liaita for c.e taxable vea vh:ah such rs ccntrcbucaan3 are fada to the fu:.d. '--" • 'co. smcunt of the de]uctaon ctharvse atlcvable to ar evplcyer n ribut:on to a'.e-a e benef:t !:Inc •c; any taxaale ytar 1ay not exceed the yveLfiedacest ef tne tvna for c '+eaa. The qcallf:ec cost r! veL•are St efit fund !or a i~3 tae Sua o• (:; t-e _ iea ':r.ct ceae oe in. N:.d SLr CA.ayear and (2) tpe adCi.:anry i n 11a1i3) ro Lha q;a1i11eG a - unt under t. fund fo_ the y_, reduced by (o) at:e after~tac L =cae af cte f:nd. A g.lal:flad asset account -nder e e.farC CeneL'it fund i -'• conslatln4 of auecs aet ... de -c provide - r tne payrent of disab~lrty payaea , sedical banefitf, acFplemental unemploymenc -oaPen - a Lts or a paY benetita, or !ife a r3nca r tanafl[s` Jndarpraaent. , account lisit rs pravidsd tor Ue alcunt in a gua1:!ied aasetSCCOUnc far any year. Tha a cnt liat for any taxable v say i ebude a e to Pravide cercain post-rstiruent aedlcai~and ILa i e banefSts. This : n:t allovs uounts C enably r esacy co a - servez under a welfare benefit plan saeAat U:e liabil!ties for po.t-ret:reaent ladical aad life :naurance be:felits vith :eepect to a grocp ot uFloyeea aan -e P-e6lnaed aver ahe varkin9 livea of such uFlayeea. t'nter present :av, it an eYploy¢ vintaine a welfare bwe! ; fund chat prcv:GO adisgualifl.d banetit during any taxaDle v_ the eaployer is aublect to a excise tax egual e loo p.rcent cC che disgualified be::afit. A dlaguallfied benefit includes (1) a oenafLt troviaed to a key uplayee otne, ttan froa a aeParate ec une raY+ired [o be estaLllahad !a ployea, ;1) anyce ast-retiruent sedleal or 1!fa ucan evp loyea, a eane_t el:st :a provided a dlscrtvlnatcry aanner, aM (a)anycpareion of a welfare banefit fund reve-:n9 to twe euplo,var. /seaena for eLaaaa 't]e C®ittaa bs!iwea that taxpayers hav. inappropriat4y interpreted the prasant-iav rules rQating tc t.L tunding af poat- cetcrennt rdical and li[e inaurance cavarage to para5t cne funding af sYLh banefite in a lulp e. iP. Certain ci cu..e. 3. ITe :o0ittee believes that Such interpracationarct thentvlee aay veCuce tix renefit seeaity ef eapleyeea who are encitled -o such past- retireaan[ bene!ita wd aay a11cv a esployer to aanipulate the t:alnq cf dedact_ans !n order t sexl3i[e ,he : x benefit. Novever. the CS®lttse c ncludea chac a tula peraict:.^q eundlnq n - vap!dly cnan over the sror2ing 1!vu ct uplcyse May undoly lengthen the pe[io] over which an uplayar ceuld f-nd aueh b.nefits. TTe 213 Colrlrtee C!iCVe] rhat a 1 :nq . the fund :~.5 .:f s~ch benefl:a ver tSe varking lives afeaplcyaesr buc ncta a Far:cG af 1 C`.av 10 years strGku an approFrta[e balance among the .ctareatssof seployere, eaplcyees, and tax policy. - 'fertha coaictae ba!Saves that avruncs acrtributed to a '• e Genefet tian by an emptoyer fc: Po. retaeoent aedical and ~.cfea :.SUranca btne! :a ahocid S sed ovly Go prov:de s.mh benefite and should aot be uaed to provtde ctber benefits u r the plan. - tcee concludes cnet nquirang a c - r posc- :ett:axenc taneflts ca te treated a fepara eaccouna uc'ur [he a'e-,ere benaf -- ?1an a[c aclilhu thts qeal. 6mPlaaetien of Pravialoe Under the pravislan, the alnisan Feried during vhlch cbe cast e( Fosc-retireeent aedical and l:fs : - rage could ba funded under a velfara c t fund : calust 10 yee- . Sbus, an esp!oyer ts peraatted to deduct the ce. of !umJing such coverege r. a:eve1 b r ena wrking livu m cov.;.d wpla,vaes, but hct over a Feriod oflesa than 10 years. • Tha C[ovisian cta;:!i.a thr e to prcv:da pcac-retireaent aedical and llfe insurance benetita under a welfare benefit plan au tained a separate a cun0. :n addltion, any paylent t- a Ce a~pamrete a r required tahe aacntained for pcstTretirement aed!ca1 and life l u ne benefits Ghat : not aaad c pmvide a poat-reciraaenc aedical c Llfa i r a eenefic : c1'uG.d in [na list af dlsquallfiad Wneflts forvhnc:f tl:e emp!tyer msubject to a loo-percen: exciaa tix. Ya inference i intanded as to the proper lntarpreiaticn 'inder present law af the flmding rulas vith rsspect to past-retiresenc me2lca! and afe lnsuranca benef!ca o ta vnwher p eent 1av painncs as - contributed to provide such eenetits tc oa vsad toprovlde far other benatita. /lfwtlw naGee Tlte piOVieion telatinq ta Zeeerves f r poat-cecirevent aadi['al and lifs tnsurance bwaf-'ts under vallSre tenet!t plana i/ effwtlve !Or CGntributions pald or accr'.led after becesLer 31, 1994, 1n taxable years and3ng after eLat datea ihe provi3ion r.qulrtnq that tne r for pcst-ret!ras.nt sadlcal and life i e Eacefita be na•n<ained ea a separate account la effw+lve tav ccntrlbutlons PubP,sned by THE BUREAU OF NATIONAL AFFAIRS, INC.. YJashington, D.C. 20037
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SPEC1Al. SUPPLEMENT S-61 caad ar .drued after tne data ot anac•sent, in taxable yearf aOdtng a.-er chacdau. tlon:esiLenm attans are net e11S'=1e ce c.ate tte cretl: . Peracral asaiatance erFensee are baClned as expaneea far: (1) ]u - nel assiscarce sevvices apptcprlate ta carr + cut the aCtpvltiss a: , da-ly -iv!n'g in or octaids che naml, ii) f.aeemeser;cha:e aacvic.s ' 4. Cocfdinatiom \itb lealtb cata Coetiauatiob 9foalaloss aec. ?s2 incifenta v t the F-'OVisear, od such personal asais[ance seP+pcea, E 3 of the bill amd sac. qaoD of the codel I assl5tance V1C ; 11!a skills (in tlfe case c an ind:vid]al V19n a cbgntLive irpai[ven.)• IU c mnuvsac:Cn a :5) v -ela:ed alppo[t a (6) ccordinac[an c .... :1red in ihla t ' y ¢ (2 a +e paragcaph a asbv ec .naloqy and oevnceelcluG_nq 1 asaeasoer: Of need and :ranning Cer a~cc a es) and ~d) i :n cenerat• an emp1C utn 3G ar aore ebployees cusprovade ~ , sodif:catdona ct the princlpal Place of dbeGe af :ns :ndDndcal to neelch pian par.icLpancs v _c t•a 0pportunnv co CCCta-.uetneir ene e dl!:catiats Ve t t [t t ld Ll ll a b: cage : e enpioyer'a heelcn plan for a specifiad Fer:od :. x en e o Y C ery~se G a o a e d time afte- cheoccurre^ce cf eeeain qualily:ng evetta ::ac aYp..... for oedical caCe undr. OcCien ]11. Acavitief af dailv cen.:Yise vauid hav! cerbi:.ateG e.en caverage. le mca5. Ca11K1nS. t-ans!era:.S, baL^.tn9' and dres:u.4. ?F.a waliCYiFg ev<nas cnec r :aggsi rignca : ccnc:ncac-tan cage are ;1l Lne death o L?a enployv (2) te voiuntary C involuntary c inacien Of t e ufloyee•s eapioyaent (ather than oy - sOn of grma a --- ~15) a rlduev_on of [efe eaplcyea'e r.wra• ;a) Vu diverce•cClega: .... reL]on bf che eaFloyee. (5) C.e lmPloYee becoming entitled to b.nefi4 under Xedtca:e, ;5) a deper.Cen1 cni'_d Of tns aeplcyee c sznQ to be a iependent under rde eLp1Cy!['s plan, ant ('/) n Ga(!s tt! cowncement C bankrCptcy prec.ndcngs with reepact bo uFicYen The x per_cd Of heaLt] c -cntinuat:on cev age cLat vY >e elacted is 16 vonthb except in the aaee Of t vtlan of e~layaent o aducticn rf hcura faL vhich the pYiau. period ta 18 aonc.:ar Tne 18-nollih period is eZtended to 29 aontES in clrtaiO caaas lOVOLvinq the 113abiLity ofcne plan particiPant. caa[san events, scch a CSe failuLe by tAe plan paracipanc to pay LGe reNitei pcev, ray trigger an .arvnc cesaatinn of the hlaltn wre cantlnuaclorn aa.erage. Mibhin L'bita, amployers my rquice health pLan participants rlfat eleGt healta Care CoLlt:nuatian <aYlaga ta 2ay !ar auc.O covarage. _ P_nw °.e ]aalth care wnanuation provniona vere designed to procsc eep_oyesn and thely depl.^.dentf froa LaaporerY .Caof health eevlrage oat c uld oewr aa a r oult of various e ent.s.sucn a tersanataan of enplayaent. 1Te health Gara contlnuanion rules were lntanded to bridge tAa gap u.ntll nev coverage co•.Bd be opta:nld. 'Pha paovisibna of rda bi11 pravidinq access te health care c_verage leaaan, but do not elislnata, the naed for ea- ' uation rules. OzWr tbe bill, dlar•apti0ns of healtS car rage~aould stiLl oceur. For sxaapla, in tbe ab/er.c! of tnehsaitE cete ccnuncatian ralea, an [ndividual who c•Ianges 7ons eight have to changa haalt'h car! plana a veral tials before ooaiu:q a rev )ab and a v erage, •he period a mplcvr s br:ef. Tne health carecontinueven a :oe prwuiona veuld telp >, char.qas 1 health care plane. Thub the Covittas baLisvas tns contu.'.:ataoc hu1C1 u e tulea should be :lLained, but :Lat the period C- GanLinuaclan coverege should !v /hortetad. 2a5 Erolanetia. a! Pea'+lalam . :Te 'biil re^aina the prasanc-lav bea'xh care Ccr.:i^uecsn -iLea, e eept chae • maxvmua peraCd e Ganecnuacun c rag! CAat - n ba e e d by a mel:fied banefiCar _v! r aay qualw•ng •ve _ reducedc`lJnder cna c/11, a:ualifietl beceflCtary a elect '_:S tare cananuac:Cr, c veraSe : the lonqer of 6 ncnena o mtil the and a• tha ce.endar yaar ~n vh:ct ine gda:ifying event Ef[eetive yate o'+ieiap iS et e_ve with reaplct to q1Ia1'1!y:nS evence that ccclr On or after .ianYar) 1, 1991. 7. Credit for Ooat Of Plreomal Aseistabce Sezh'icas Sequiad ny bployed :LdivlSUals leec. '/1 Of tne bil: sad !es eec. 24 of taa cabe) Pa.ea• Laa M:ere i ne max creG:t far tns aosts of paraonal aa.iatancs reqviced by individcala. Cartain aWical expensas, Eovever, are deductible under sea ion 311. A1aa, the ca ta of cartaln inpmavseer.b to preparey tay ba ineluded in Lna baals a taxpayer's Fmplry unLeae it is otharviae deductibls unGer secticn 211. a.. r cnama. !^.u coasittee believea that the cast a[ vo[k-ralated support qrvices repreasnts a aageifiunt ar2enae fer Fhysieally }palrad taxpayers. ~- such •dxpayeta YitL aadeat 1 GCNe, :Saee e> eneee asy ae an Sap.dlaant t kirq l~loyaent. nPrcv:dLnq a • taxpayers UfrcugG a credit liaiced by tte awvmt ofs ned a vrcoae vay encaurag! physically ispaired tarpayacs ac dco/a saployedi aboal-ott'. of Weli.i., 'Otu bSL' prCVidu a'nonrafundable tax credit fcr up to 50 - perone of an ildSvidual's persenal aseistance axpemes ip ic $15,000. Individuala e eligiSls to ciaia C1e credit i by : mean o[ any aedica:ly deur+inab_a physiul iapairwnc, Ltey a- unable to a-gas In an^ substantial gainful activity without peraana'1 v tance 1 carryi: out activitles of daily 11v1ng• Sccb physical _ _apavaenc at N expecbed to asult in ]eetn cr aust he expected ta last !ar a erntinuaua period of not leea than 1. aanths. 246 aaxirun a -nt Of credit is tna lesser of $?,SCO cr one-half 0! t`! InG:v6CValOa !aTld inaaq. :[le daOLLnt C! the cnadit is pnased out by providing a iover cradit rava for taxptyacs val eedttted aG/uaved Sroaa means ~Abi1 cf 550•000 ar oae. 'L'ne credit rate :a r duced by t n percentaqa pa:nCs for aacn 55,0c0 0 sor:LeL AGf,Ractia9 at 55C,000 of aWlLled AO:. '.^..ua the credit Ls not available fcr indivi2Vala vith sodi!!e1 AGI Of 570,000 or :Le mate of tlfe Credit la deteraned as fGllove: Ior a vich a .ed'. - 3odiftetl AGI Laas eken $50,000 50 psrcent At least $50,000, but 1 e than 555,C00 40 peLcent At leasL 555.OOU, but 1 a than $60,000 15 parcent At least 560,O0U, but _ a than $55,COG 10 pe[cacc At least S65,C00, but lefa C`.aef $]0,000 1: percent At Laac 5l0•:00 ; pertent ITe 515•000 (uxlaVl asounc Of paraonal a iscancs e endicnrea eligible for t.`.e creditl and 550,000 (beginnang o credit's pheasout range) a.eunts ars iraexed t inflac ov1~ r ..aaatle ya.a beglM::y after 1996. :Te aanunt of awLfltl AGf a vhicn tle redit :s lntiraly pba/ed out : net indexed for inflaeicn, tut v I always be 020,cc0 greater tban tns beg_nnv:g Of t]a pbaaeaut ra-.qe. Modifted AG1 is adjusted grosa in e (1) deceained vic•sut raqard b- -lusion.a pravided ! r(a)intereat an educRCior. ings handa ( a5)• (b) certain foreign e IDed a'r Of Unlted Srava ci[iz.na ar residents livlig abraaC !uc.911), (r; Certain 1 scu:ces within GVas, ANr:can SaaCa, C the NoZCAaCn )Larlana Cllands ( . 9]1), and (d) i]Caw trLa a e vith:n Fuexo aicc (see. sO11r and (1) :..ereaaad by LLe aaauncaf 24, tax-exaEpt inta:eet received Cr accria] h,v -.he raxpayar dir:,.g :ne taYable v r. My anount taken into a t in deUrsimnq the credit cannCc be takeu :nta accocnt in deterbining daduet•r'1e cedical expenses (under sac. 3:1). Svi_er1y, _! a credit 6e allbvad !o- exLen aa chat would otf.erviae t]ceae the beais Cf property, tne baais e ia reduced by rllaa _n[ of the C]edLt. i13 alao -- atha credit for paytents a v peracn ralated to ine campayer v:cnce the reanicg of actions asP or 707(b). Tbe Fravinian :e e[:eccivs for _arable yeacs beqinnieg a-_ec Dacemb¢ ]1, L995. a. p1se10euLe o[ Return 1oCOaaiioa for Adaimietratioa Of Certain Progress OLder tbe Sealth aecurity let (lac. ?aa Of the bill aed eeb. 11.3 af rbe Coda) PLeaeat tas Ae Internal Revenue ccde prohibits di/eio/ure o! tax ceterns ar.C retun infor.e[ve.1, e L to c'.e axtent epacl.ically auttorired by Ine Cpfe (sec. 5i0]) . YnaYthcriied dl/<'~a/VLe is a felCny punishable by a fine n ceadinq S5,000 or Saprieo~u.nt of nac e•Jmn : e Yeare, at bOttf (sec. ]210). An acticn fmc civil dasages a vay, ie brought fot unmtGorired Gbcloeuse (aec. 'U1). No tax infeeeaiian may be furnished by tbs LnterrmL Revenue Serv:ca (L(9) to anethar egency unless trhs athar agency baa establiahed p[ocaduLea mviafactcry to tbe IRS for .afyuan!!ng the tax :nformeticn 1L recelvN (aec. 610i(p)). ~ a a Cmr Cbanae The Ccoibtae believaa accass tC cartaln lteas af taI aion should be pravadedta govecnsent agenoias atlalncscering `ealthsulsidy progrua to a isn tnaa in datanining aligib111ry far, and eatablisning cavact bevefit levels unLer, rLe health auCaiiy Fra9ra.a. t@luatian e! lroviaica Cns bill paraits disolaaurs of certatn taxyayer ratur• inforfaclon tm officers and e.plbyeea cf any Isdeaal, Stace• or loul agency ad.inia.rirai nesltII .ub.idy prograv !or uae in verifying allylbility tor, and eetanlishang corzao benel': levels ander• secn a•.:Caidiaa. oiaalaaable raCarn infaraation 1e laaited to adjoaced groaa incoee, v`e unured particn e2 social aecvricy be:.efits, tax-erelpt Sntere/t inccee, sarltal statua and '.be nY1Ger ¢ee Pub:ishetl by THE BUREAU OF NATIONAL AFFAIRS. INC., Weshington, 7,C. 20037
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5-62 -. depenaents.^ Urdar Cte bi1:, tazpayer recvrn Lnforret:cn say only ba vcltaad 1.1 rasPenae :a a taxpaver'z aPp!icac:cn Lar a taa'_-.: snly to ef!iC.ra and exDLoveea a aq¢cy tefpc.-.e]Sle for aaSi^ scerl0g rta subsidy ancludlne - - eee et e.. agencv :e3ponetbla !r :av Ylrg a c atc::• g health ta1:L31dV QeCePJt'.aC:ar31, a1:E a'.iy ane ',aces5dal : aaKa noaC d¢ancnata. 1Ta .absic ae a _.at '" - : te - detl bv resas cP 1- casc wxPUter axcnanqes o!'.:_c._attcr. ...G . tepe-te-taPe exc..anSesi. 'he b:il requa'as ar.y FeEeraL, State. cr aq[ncy recel'ving :axFaYa: retor-. 1^fomacton c Ca.ply nth tne a!e"arLS present.y -.ed :n :ne Code gavercing Y. „ af G c!cuE t3x raaC:en.~ Alac, -J+e r111 appl3esst.'u t fent-lav Nnalaei autr.ar:ted disclosure af 1.'lforaaCton _o :ec:p:ent Agarc:ea and v.air~esp-ayeear lEeecttee o t TSe praviccn is e[fattive on the date a- enacisant. a. Special tnle for Oeterrsd CaopeasatLCe Plars ai arcup Mea!cal Practicea (fse. faS af Lae bill aad fec. a3'/ af the Cada) Frafent L Under a eligible unfunded dafewared ccaaensatxn plan of a State cr 1xa1 gcvernaent or [ax exespt enta[v ( sec. 457 plan), carLent ccepensatian that a e detereb !y Or o.. behalf cf s~p'an s pareccipant ate 1 cl.lded in gcafs a vCen they are Fa = vde a ailebls. 1Da uxLos, p.ressted annual deferra: 'under a:1 c- pierf c r/.'q LES .aa :ndivio•al -s ite lasaer e. ;11 5),5oC a_ ;2) I]-1/J percenC of capaNaaian. y}ya°ns ! ciaae. SR. Caaittee baliavu it eFDropriate to eli.inace certain ' Ln adGiticn, tRa bill treats valfara Eenetita a e Ler pcrposef ct capntitq eli9ibil:ty fot a health euYeiay V.Lare nefita a a not incoas for 4x purposes and are not presently raporteC t In. IFS. :6ay are cherefora nat :eturn :nle[aa[+on ar purposes at a•.e tax disclosure r+les. Also, prior to recrvinq any [axpaVer nnforaation, a agency a beguirtl tootabl3aS pracedurfs faeietactorf to the _95 far satag~artl!nS t1v -ax !nforatLOn it reoalve. (sec. a1C](pl). 249 •--cceone Cn ate cc f de.erred crapenaatccn ct peraana prov+diq ser+laasc.cecgn a group aedicai cract:ce. Cablara-icC L pi v ELder the ball, tne !._i_ annual C ferra-s cade: ion c5: ttan ccea n appLy in c e at an 'nd'.nwa1 C 1nCe: excess b netlt a-angetenc ] intalneG b a grrcF oedV'al-prac:_ce vhic.'. ia < ebPC ' u.:Ger a ction 'ol(c) (]). ed0it+rn, 'e deferrec u-Ce acn an a angeru are nct taken mt: °ant : apcLying ea.vrnuai - t caccher section a5? ; an " - r109 = a v:E':al. An excaas b n~'1e11t e- an9e]e --zav9ecentv ich - oaincalaad solely I rone p'arFese of p- v5iing s : - et :he ':cnataeiona on n c rieuccr.a a- tePits a r.aFosed bP section e:5 cf cte coae o: cax-qualitied pensmnplans. 1Lfect'w nata Tha oroviatan :S e..CCtive !ar Caxah-e years after DeCemler ]I. 199e. &ee. 9e1. lrauring Sea1tE Caee /lnancing e_ ._:3-3ii rngress e ictad Cfa Graaa-A.:d]an-3o:linSS Act (puk. L. Nc. 99- 17'1 in 1985, to provlde an :reanteve !ar r.`.e pruibene and eanS:eas to raduce tn. Geficat eacGyear t]reugh tta regu:a: l.gul¢i:ve v-- ]Le Graaf-iuGCen-Aelllnqs Act esCaDliaheG a daaliying - aof deficit targets (retecced L 'faxi.ua Ge[ic:c asocnta") ea]Sng to a balanced rudqet =n fiscal year 1991. 19v Act e cad [l1e de[ic.'t tLrgata Dy' :S:a "saSaeatratL]n prccea3," cndec vnnCh autnaat¢c seandAng rMuoians VaI!d oacc: it the prC]act.d deficit excaedad the de::cit ':acgaa. , -: 19B], after Che SuPrele Ceurt ruled <!a fe~uatra[tDn -riggecinq rec`.ayduevu in the :zap-gudsan-HaLinqe Act ]nCanal ca lpiaiacive branch inva:vezent. con4ress .~n.a CEe AG, eatukinQ the gcal of a balanced budqeC t year 199] Lod placir9 reeponsibiliay r r the autoaatAC tcigger`~ nqc_ sequastratien ln `Se hands af the 31rac-ar ef cne Oftice a_ Manzgemant anC ludget IO/B1. Congaas ravisad tr.e a.gueaCat!cn process in the Bcbgat Enforceaent Act (EfA) af 1990. First, the Act . anGed tne process : fisctl + 1995 (QC.imugh the cudget v s t reR:red to ce bal<mea bv [11at tile). Secend, the Act ah!Itedtf.afocy cf daLica ocnt:ol a - veL" l deficit reCucaon ca_ryets, t pal:cy raquicin4 that r ?edera' leqialation rot 'ederal befictta. Thie Fay-ee-ycu-go raquireaent v ccspllsneC bv uLaCLiah:ng: (11 disaaicnary apandinp onpa vh+an e_ ecuvely that nev e. ineteased diser.nlana.y •pandirq ee o_.ser by 250 SPECIAL SUPPLEMENT ' ' r Gtu:ecanary ::oqrae AY•aG.a.eSreq_lienenc to anfure that le : c c : y Y g aLa:v. nanq A enc ::eaent3can3aPAY-we s ata !il!v pai] ! Cpe flA ..da . _end_:.q pa ad q r auireie,c - ar ..eaa.e ay a.a . ao .f t n . s+Cered oy the Senete. ~pf - :nq • h. g. C ex . _..a apenc::S caps era the Gaz-q ' CAxCgn t a: -:999 :: y C_ , e +Lbua 9uGqet ,ett:cn ACt c. 159],T+b. 1. No 5a. -qo a acy v a bcceGecec : - .-. ,... _..... -~_ ..~,.. .... .... _.~yc,,, emc.: :aposM a UJ)e r• a a Pain: c _ae:, V..icn 3av a'f.y ra viivad sVpeba]or':V of 6'J voCes. _sti:.g SL _ttry PAY-GO cenetra+na V:rcugh t"' :999 ar.C a 1c-yea.~pay-ea-YOq-go pa:nt cf a - ePerata a the 9enate ' enactben c[ Leg:eLa¢6en vhacY. +s If ",tto,na to cacse lnc:eeae] :n :ha faflcit !o[ any Year ypyn .. a. .at 2001. cam.ictea areeteteb The C !itee P--FCea: :ncludae a fa]lsate • a dealgned to :ap:.een©autosttlc a- ourse c rtLons _t aa3nlaqialntian : ro3ecCad, fcllw¢ng enac-m. -c WunderfuaGed. IDe cccrec.nan cc,a[.iat 'su1L a o be trLggared Ln tAe event et u anttctpated eneceanes :n MeC:care or Mebicald spendinq or 'ananticipacad revenca lossee iae to fPaciSied health :ax axpendlturea. - eal, if the President's 'euGqet !ar any tifcal ... - c]at Lf.a n euaaid!ef, r r ta3 G.ductler a-d ctAiro ene ~urea would nette fully pald for by c!e n v revuuea acG Cta Y.adiCare and MediC9ld f vinga (reduced by Wantccipated 1 e!n aa prcSraasi, 3en the :ncraafetl spending vauld Ee tull1' oflfet bya at (1) a rtluecion in sperACng [er pnsl'a and rta: fr¢::ng ..... tanes: (1) a Sueed aeduc.:Cn ! :nC1V:dUais purchasing -yetr ox^1 health insurance: and (]1 i!'.creases tn r:.e c- af-packet !iaits aet for toe etandsrd and b.f+c cenef!t packaqef by the tlat_ona: Hult1 loard. 4ne rchaniss vould cperate as Getaa_e! Seiar. ratitloseat te NCeidiee aad tai aeductiaas eade ccatingent oa autonatic deficit redaetlea The legal ent!ttasent to preaAu and cosc-eLring a isoance, and the tax deduction Lor tndividuals purchasing rhai¢ Cvnhealch 1neCraneevaula be subJaR to the eperation of tLe deficit ta__aafe aeI..an_av explainad below. Curreot ¢ealti epeaaiaq lstiaate 251 The aoeaiteae prov_ requites tte P:esiden: t iaace, no later ]- n 6G aaye atte[ enabtGent, a c.:r[ent baltlofwnd:ng i(eNSE). The CHSE is to IDelude proycb:on3 cf che e' far CaCal v r S6 Usnugn 2001: tc: octtays far Met:CLre e enGitures aa1 H eCtceidcS6eCtceid expanGituaes(1nc1uG1 g ad]ln:sc[a.xlva costai: and revenue Laa3es a laced vtth cne eaployee exclusco- o ocloyer-?:cv:detl a c+tlenc a G healtl c e and t ce<ucc:b_!_ry of div:dual bedtca1 expez Ln exceas o. 7.5 pe~Ce:.t e, ia]u-Leagr indiv :dual ass incon.. Since tro~ac_icn !o: tnaae ita are nat available eevonG r 29CC.•C1eaCN5] !et !ata_p6 5 1s Ge[es:ned hyapplving annua'c aaaju3irenc factcr (to be da-atvlned ny ctla) _a each c_ ..,a aFPilca'J1e ea-l-ietes a5 9et lcr.h tar :Y Scoa. TEe statvicerv ianvage makes clear rttat tha eaL-ulaticn of "- ta1 cu'._a'/s" ' r Med:ca[e ts to he o::set by Medicare Part B preatu4e, vhtc^. aee scered aa oCfs<Cticg [eCeipb. Eot Furoess of the C45L, it is aasuaad t".at any e af aiacrettona-i syndLng vill be malcula:etl a ording ic tne 6 s s¢ tartt: 1 257 et tne 9alanced Aldget and E4ergencY Gf'qt Ionttct^AcC o_0~985, as anen]ed. Aaaual 9ea"_th laters lstisaCe TLe President vaula be reyuirad tc include i^ ach Budgat, beqinninS vit] the Budget f r tiscal year 1996, a"Nealth Refaa Cat_nete^ (FLaE) t r in. uPCO.in4 !!acal Year, tha c- enc Siacal year, and (baq:rn~rq vith LL fY 9] bLgeq Ne pr'_cr fascal year. 'Che :RE far each c! Goe three applieabta fiaeal yeara ia a calculatlon a updetaG p pCiane of tha itev lncludedi the +ySE 1ncluGi.•q ananciciGatad changas :n Medicara and MedicaiGl yea nev health reton ouclays ljyyl nec health nfo[. -evenuu. This calculat!on vi1 fhov to what extant health r.fbra ~uaya, µva any un +cipacat lncreeees in MaGicare and Redicaid .xp.n]+rire., are offset by nav Eea1tE ratora reven-es ana aavan9s. Nav nea!tb a dtlays i lude: tatal outlays tar paemi'_a vt-searing a utar.ce (1^.cludir.g a raGVe Cofts) ; and F.arqas in outlays : sult!nq fboa talsiAct, :nclctling diacratarnsry apDroDrtairna, Na2 health refore e e is eqCa1 t total r enuofcr Cha applncaoLe fiscal year auetotAe:ncrsase i-. 9he tcbaccc excisa ta and the a n nlgh oost health plans provided !n <hia AK: minus total r a losses pra)actaa for tbe deduccton = e- rchase by Sndivrdualauand tiv a -eapioy.a of health ln.urancepatm.u: plus - changes l +n aultinq [rom this AC ,.ncuLlnqta , arryGVarot excess tinaneing frea eha prior Year;. 252 -: pu ~csas cf t:.e hTI, It + aaau9sG t!.aC any est'aates c discraticner+ spanding vill be c culated accardingeeeEa n+les sec - in 3- on 257 o tne 9a!anced ?LLdget and E]e[9encY Jef:c2 CCnt:ol Ac-Co:1935, af asanded. PuZllBhed by THE EUREAU OF NATIONAL AFFAIRS. INC.. Washington, D.C. 20037
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SPECIAL SUPPLEMENT Datarai¢atlea af Dafitatced Sealth apevdiag and Lzceta 6ealth H¢aeaing. Each v ,'Sa Ptu:dent'a tu]get ia t LiN a .eb., a[ c the CHSE 'r [t rhn FPS [er: Jla upcoa4n9 =tacaL tal 'mar. end riclh tna ?Y 97 budg.vl the app'.icau!a ;t(f exe..e. :21e app!:carle C; cal ]residenc vou'id be rNGuired :o repan the arount of the ~ cess a "'_nllcancetl Cea!:h a ndlnq' far ;he apPiicaale f If the apPlitatle P.pE i_ e cCen tne eppliaanle eHSe, u a Pra aLd be reCuired :o Papart euCh daflerence es "ezcaaa healtn[vnancenq" .c_ tha applicacl. fiscal Yearr f the ]raeident'a budget Includes a dececainatic^. of axcua health f .nanq for a[iauK year, auch aaount Yould be lncluded In c+lvlaung t•e Y¢£ [ r the eubepuen: ISS0a1 yur, by inclcding t:e unv in th. cal.calaCOn of nw civ: + a hae. ~otn.a vey. ...... financirq [ eryearurill eaah:cn~ 1.~ fetluer.: 'fear froa potential relYRlans, vhich need not y1Cu: in +1av of it.. cvaulat:ve ef[acr of tha tve ysava. offaetticg t¢fiasaaaE ]aalth spending If rLe Prasideat's Budget includes a detaralraticn o ucfinanced Gaal~l spending for the upcofinq fiata'. year. CS.e currenc lacal year, an t:.e fiscal year rhich sOdad C!e priot October. such ie:erci- ould ba requirtl to G aceosp.naed ay an exec+t:ve crdar aflactnve an Orcb.L 1 01 that uL.Mer year vGioh [ully c[:aaa, u: cYa vpcounq fiscal Yea_-, the tocal a.ount c_ un--nanccd health spendi:.g. She c aeca a to ba accapliahtl CtLCu9R a coabination cf: (11 retl'oclnq praalua a e e+N caat-et ra:af assis:anca previded - !hg by thia ACt: I2) rMeclllq TLa heV tax de]uCtian: and (l) ca_ oApccket lvuta in tba attndaC aaG baaic Wnafit pacxagas~ ^eaa offseCS ara to'ba applied "preperTlonelly." to t" excant praccieabls, hut In no usa b preporcionalit,v to prevan: fcly S-63 B. In cospliance v:C. pavegraph )(b) of Rule %XJI of t::a Standing Rules of :he 5 nate, 1o11eving i• taDulation ct eacS rallcell vaca taYan dur..v aaak-up of C`.Le legialatian s vetee an~ an. _ vota r: 6aVCUa aleadaent to Qe.pt uill basiaesaae Lram the a.pla)ar undate, dereat.ed e-16 "FaS: 3aLLC_a, Mitchall, Pryor, RaCk.fellaT, Jaacae, conrad 4AY5: McynNan, Boren, lradley, Rlegla, SraauY, PeCkVOW. Ccle, Roth, ]anlcr_h, Cv'u, LYS.nhergac, cia..lay, 9accE, vallap eote 12! )aabeed auead.eet ee strike tL emploSet uadate, passed 11-6. Y:AS: Baucaa, Boran, Bradley, Breeux, Con[ad, paUVCCC Do!c RctG, Ca+:farrR, C.afee, ILrenherger, araealey, EatCh. Yal!op NAYS: Moynihan, M!tchall. Pryar, RSegle, RacYafeller. Oaschle vote p: <hafaa, lreaus aaeadaeat to estahlis), a new oaqraqe ^trigqer," pused /a-s. 255 'dCAS: Yoynihar., eaucua, Boren, Bradlay, si:Call, pryor, caac..-a, a.eeux, Ccr.rCd, _an-erth, C:a[ee, Ducennerger e['aatin9 the unfinarn'ad health apending. A pricriry tvle ! eatabliahed far reducing Fru:ua a aat- ahating a ra[anee. Aaaiatanee is dlvided ihte two c e aae]ata[:caeto prJglfaRt vYG ahd children, anG a l ato otl,ers. An}' reqaarad reduGCicna a e to c lnitially froaihe-latter ategcry; eeiatenca to pregnant v n and ctilGran 1. tto ba reducea unless and wtil the axiaua aaount af redccc na nava bean YEAS: BoLen. Brad!ey. Mitchel], pry'or, Rockafstlar. caschle, ereaux, ec¢cad, panirrxh, Dhafee, TorarSacger taken [cca a!1 ac:acs. ]Sl yetae a Sul. 1. yel ReductIeC a tax ieduct_cns i to te actiaved t1' =edactnq cha Lereantage oL allglb!e preml"S e:ch are deduct:b!e :n G:e doors apFllca]le year. Any a : reductleCea ' acCC¢panled by i:easury [ey lationa inplenenc_ng such nLUCion. vata )5: GreaaLay aaendaaat on pap.ent for nurae practitioners a phfaleian enista¢ta, paaaed bT valea vate. In¢aases ¢n e f-pccket limits _ t•Re standard and n m vote /a: path aetien to strike pee-fuadibg of peatal estirea health alternacive anefit r xa9es are to be de ::.^.e extent the Daaefita, paaead by vaies vota. PresiGea deterai a U:at such a i vill arocuce reascraal¢ ?eteral eutlay s ings. Lny er]ar_ -aasing o t-obpockev :isi:s Ycd be : ret to be accoaeenud by NntaonaL Health 9ace!s Vote /v: LLitchell aaehdaect an keaicare valus p.rraxuaca standard, 3oartl r culaacm 3¢Flenenitng fucE lncaafea. Re¢caaeadaticn far Altar¢atisv Reductions the P sident'e Budget for a eca1 year v a eepanied by e 9pecil.aC aGCVa,Ch. Va:rona!Health Care ct¢rlaelae vcul]tn pequir.d to van..ic -a tha speaker c L1e House of Representatives a c the President of the senaae, vlthie a t rapcrt including elaernacrve prapcea:e to o[faat .nable a th prolectedax_asa outlays. gk0 Audit of Red4ctioGs ]f G e Prea.den: has aseved an cc t!ve order m,der '.`ase pxcvLaicna, tl:e Oenerai AccountinqC1f1te Ss reguired to raPort : canqreas, a n tSeCea[ter as paauble, an analysia of whether J:e cucve erdev has fully oeaplied with cha Legulrements of these pravlaior.a. [Ceetive Data Jpan enactsent. 254 . vOTE® 0? Tdi C9XliIClfi. A. in Oompliance vLG'h paragrath ](c; of Rula XXVI cf :Ea Staad:nq 3u'.es of the senace, eelloving i a tabv'.a:ion s -est by anan ce¢Eer of the c nnittea In favor a and in cppeaitc'sCo CD.a Riegle ootiontc report ttis a g al bi11 to tl:o Senace: :'CAS - 12 VAVS - a Mr. P nihan Mr. 3aucua ML. Bcren Mr. Rockafellc -. 9radley Mr. ?acxVCrH Mr. Mitc.^.ell Mr. Lale Mr. PrYor Mr. Rath Mr. R1e91e Mr. dteaalay Y=. Casahle Mr. Xatch , Mr. 3reaux Mr. Wallap Mc. cc-.rad Mr. car.ecrth It. cna[ee Mr. LLrente-ga- passed by voice vets. eete /a: siegle ueadae¢t an apecial eevarage far piegnant vo.ab and childrea, passed 1a-a. t'FAS: Noynihan, eauNe, anrsn, 0radlay, Mitchell, Pryor, Rtegla, Rockefai!eL, Caecdle, Breaux, cotLed, Gafae SAYS: Packvoad, Dola, Roth, Dan[c2tC, CaretYar9er, Graaaiey. Hatch, aallap vote N: la¢¢as uendaent to atrika aadunitien tLa (ather t]aa 10,009% caa on aiyanding hafbad aaa .]6-caliber aavaitioal, passed 15-5. '!EAS: Baucua, Barah, Mitchall, Frya[, Rockefeller, Daschla. Breaux, Conrad, Peclcvocl, Cela, Rcth, V.:renbergar, oraaaley, Heteh, Wallop NAYS: Moynitan, Bradley, Riagla, Denfarch, Cllafee 256 veta <1C: Batch aaepdaent to etrlte asaaeaaeat an large li_-af, paaeed Sl-G. '[CAS: ?Oren, Riegle, Breaue, Conred, Peckuecd, ~c1e, RetR, Canfartn, Cha[ee. ourxn¢avgec, crassley, Catch, Wa11ap NA'[5: 4c}'n'ihan, BaucLa, 9red'ey, vlechel_, P:+or, Rocke[elter. Laschla vote /Li: caaiZaa'a anendaeDt to che aark, \dapcad Lp uaanisaJs cenee¢t. vota /12: Prycc, Rockefeller, Conrad, 11eq1s f Chafaa Yendaeat oa ]ase aed t ity based caa fioanced by auaeeaaile insurance c_ardi¢aiop'apaeeed 1hA '[EAS: aauc 9aren, avdley, M!tcha'a1. Pryor, 31ag1. Re<ke[alri`vaacble, Breaux, Cenrad, Cele, Roth, Cha[aa, OraaslaY, Hetc`. sAYS: Packctod. Canfotth, Curenberger, Wallop vota a12: Daaforth eueoCSeat to strike vZECI aa vlpxectice rafci-as and !alar: bev GroViaioas oL aalpractiae, passed Published by THE BUREAU OF NATIONAL AFFAIRS, INC., Washin¢on, D.C. 20037
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I S-fi4 3reaux, rad, Dal., Danto:J`, Chatw, T:ter~'ergecua reea'.ay. Hatch, Mallop HA:S: Mcycn:an. Baadlty, MStchell, Pryor, RSp1a, Reckaftl3ei, yacnt.. Pack.ood .a /: wallop sCtien tG strlke prs10 aaaeapant aa ILad aaadYi a p ca cavcara, dateatad t-11. YP]v5: 6sucvb Packvoad, 3o1<, Roth, Gtaa.ley, BatcC. MallaP HAYS: MaycLla:., Wr.n, Bradlay, yltcCell, Ptyor, Riaqle, GcckafQlar, aac.._t, 9raaus, :cnraG. DacfortA. C.hataa, DuraMarger veta /t3: loctaf<ller aaeodaant aa ~ypit) ratiaq. defaated a-1a. ':y15: eaucur, MStchQ1, Pryor, Riple, Rockefaller, DascSla YAYS: no,va:han. Bcrec, Bradley, 9r<lur, Canrad, Packveod, Dolb Racn, .ayort.~. Chafes, Curen.:`arqar, Gresaley, HatCd, vallcp 257 vota /1{: Ratca ta<rdYent to asclYda aDOrtlena lraa tEe ceapraCaca:v< Denefit Pacb.qa except in csrtain cirnnsaanvea, defeated P-11. BrenC%, Conrad, ]G!!, Rotlf, Danfcrth, L1LeIlb<rgar, gLiasl<y, :atch, 'dal-ap YAY3: Mcynihan. 3auau n. Bcten, Bradley, Mitchall, P[yol, Rieqle, Rocxefellcv. 3aacnla,PackvooL. Clatse vota 11]: arvi:ay aaandaent to prsaa--va constitutional State wchcrvtY reqarairg aDa[ticna, paaaad 11-s. YJS: 9aVCla. Eoren, Bzeauz, Conrad, Cole, RatC, Danfcrth, }ranherq<LS GCare:ay, Hatch, Wa::ep HAYS: Xcvnif.an, Bradlny, y nohell, Bryar, Riagla, Rockveller, CaxnL, Packvacd, Cn6fee vata /1li Danfo[ta uocdaent Ca ao ragClrsiseat for aaantion aerviCas, pused 13-e. ?t?S: Moynihan. 3cran, ? lar, Bfeaux, Crnrad, Dole, Rctb, ]anforti, aarerb<rg<r. G[axa_ey. 9atah, Va1Lap HAYB: Bauaua, 3radley, Mitohall, Rleqls, IaekafeLlar, Daachle, Packvoa], C1af<. vota /1f: Gaaforta ..... lsoee aiaoae Soi pivvlGars, aealta planx, Maplalana and ptrcaaaera of hsaltL car., paa.ed 1r-a. YEAS: Mcynihan, Boren, Ca ardls, Braaux, Cenrad, Dole, Roth, DanforCh, 0.ranoe[g<r, 6raulay, 9atct, callcp HAYS: Bauc.:a, Bradley, MitCUll, Prycr, y'plea Rockefall<v, Pack':acd, Chafe. vots Iio: Caefavce wadxaot to pr.vent svlalditatioo of aDortioa, aafaatad a-1r. ' YCAS: Dreaus, Canr.d, Dole, Rot.L hanfortt, GrYaLy, Hatch, Ya11op YAYS: Moynihan, Saueu., 9arV:, Bradley, Hitenall, pryor, Riaqla, Rockafaller, Jaechla, Packvooi, Ctateb CuranLeiqer yiceea en anlv 1 11,94 Vata /r1: Pact.ccG aaends<ot to oEavq< epa9 anroilaevt fra. 30 to >G xsa dVa, p•sa.d ay rn-ca veta. veta 112: Pactreod axeodaent t apecifT n restffictiao on aplo)¢s of _args fL i to auy inxu:ance at cauuvity ratea, dehated a-11. 'YCHS: :ac.rvceL, Co-t, Rot.:, Gra3s'_ey, Hatch. 4allop HAYS: ?tymhan, 3aucuE, Bcren, Btadley, M1CCha1, pryGL Riey:e, Rcckafeller, Jaschle, Brsaux, conrad, Danforh, etaae, ]arem<rger vct. fvl: llraauz, C urad uandaset raqardinq tax exupCicn far atate hrqh risk pcal.. paai<d C4 ve1ce vcte. vata /f.: kac] axeeda.nt to provida fur a eatasteophie plan/sedieal aav.nqa lcctut, lafaatfd ]-i3. '!]15: 6c[an, Peckvoc], Dole, Roth, Orasalay, Hatch, Xa11cP HAYS: n1Eac, Baucva, sradl, Mitrbell, ?ryas, RSaqla, RcckefsYCC, Casctle, areacx, Cenrad, Ganfor--h, Chafes, Gurana<[9er Vote else .allcp satiea to atrika qenaral sevaaue papeat ta trust fund, Paaaed U-1. SPECIAL SUPPLEMENT '!EAS: Baucua. Brucx, PackveN. Dal<, ReC.:, ]anfcriv, C:.af.e, -,yeruer9<r, ^+rata.eY. Batu', Nallrp NA'f5: 9oymhen, Baren, Bradley, Mitcball, Prycr. RSeqla, Racka•alCet cnicGle, Conrad vot< /]e: Canrad uacdatent an prt.lfi• craalt fur aenaafav} ptWyia to t]a Cait<d 1tin. .ortera Coeaire< iLad, debatad f-11. '!F].S: 9or<n, COarad, PackvccH, Da1a, Danfart9, Chafes, :[ueley, .a:1cp, Rot, HAYS: Moynitan, 6autva, aradleY. NStdaa. Prycr, R1eq1a, RocK<f<lle[. DaaChle, LtuuY, DuLenaargar, Hatch vata 1¢v: aallop axevdmeat av Yadlca[a pEpsician aelf-refara/i, paaaad a} eaica eata. vota F¢et Dureaaerqar uandaent ea dafartvd coapenaacion paid to voica vote. esuio 9revp .eGlul Dractlcaa, pasaed by 259 vata /fe: Cala asevdaeat to provlde that the Yationll Eea1tE Car< Cavtiitel 1 nat lutGarlsed to address issues rs"_ated to dafinioq av e.pla :ei tas putpoasa, paaaed Ey voice va[a. vots 030: Ti:atLarqer axeodteot av state f_exitllity, Ceresd 11-f. -:CAS: _ [adley, Yltchall, Bcaeus, CJnrad, Pack~cod. Rcth, -anfor:n. CaI¢e, ouracnerS<r. Graaalay vote t31: Bovan xetion to atvlke a11 slcqla-GaYer retaeocu, dafeated ro-1C. YEAS; 3aren, Bzelux. Packvood, ble, Rcth, Danfort'., Chatea, Jurantargar, :'.atch, Na11cp SAYS: McynL^.an, Baacua, B[adley, Mitchell, Pryar, Rleqle, Hockefel'ec, Daac:la, Conrd, Greaalay vots H1: BaeaR aaeaGS<vt providiaq for a atudp on suL-acuta cars, pastad DT voiee .eta. vat< /Sl: 6atch as<adaant oa itata aauoutratlon pYojecta on no-famt liani112q lai xodlfiad to ioclude ^aap^), pond Li maca vate. vote /3a: katoG u<ndxect on xedlaara Part s aaraiaq. pevalty, dafeaLeE a-1a. YEAS: Roth, G[asalsy, Hatc1, xallop YAYS: Maynihan, Biueu's, Baeen, Bradley, MStcne2l, Fryer, Rieq_e, ,iecYef<_ler, 'Jaschl<, Bruul, Cantad, Jeeltroed, Jole, Canfortt, caa:.a, DurenDergar, vote NSt p.ravDarqez waNeot ragardiaq classification of church health plana, puaad by vniee vots. vete bat xateh aaead.ent ev xafriaqe pavaltT So s<ditare Part a iuaald) recapture, paxaad af voiw mta. vote Ii]t araasla), !C}vikan ewad.ent ov dlaeClxinatiee aqa'_asc providers aaaed an acad<aio d<qvee, pa.aad n1 unanaxeui Coasea0. 260 vata pa: Rallcp Qnd se9reel aaendaent tte :all-sat. .ecEaalaa to strlta paysant af auEaidlu [rom q<neral b.:nd, dafeated a-ld, YBAS: ?LCkvocd, Co1L Roth, r.raealey, Haoch, Vellcp iAYS: Y.eynlhan, 3accus, Bo:en. Bradley, NStchall, Prycr. Riegta, RocKafetler, :aac.,_a, Breaux, CcnCad, Danforth, Chafee, 'hliarberqCr vote bf: CLafae Yatdaan[ an tail-aafa Yctaviu, paaaed 1/-/. Y?25: Moyn:han, 3CEec, Btadley, MixhailPrycr, Riacle, Rc<k<faLer. Casrhls, 3vaacx, CCnrad, ?ackvccd, DanforN, cGafa<, Curcberg<r NAYS: 31 .'.e.a. Reth, ^uiaailay, Hatch, Va11ep veta /.C: DavfortG ueGdtavt e adviaaT ccxaittee en aav trust funds estaallahad for ataauic health Csatav, qraauate sedlcal and nu-aiag edutaeian, xedieal raseaieh aad udieal eehoois, paasad aT vaiee veta. vete aal: Lbla au<veaaat ao Slilt itanda[e henafit to avaaiditea populatica, dafaatad a-i.. '{~~. YEAS: Paclnood, Jola, Roth, Gtusley, tlatch, Fallop ~ ` M1AYB: Mcynihan, laucai, Bcran, Bradley, %itoh<11, Pryer, Riagle, Rcek.fall<r, Daechle, Braas, Cersad, Uan[o[LL CSafse, DararSerger ' A ~W,.~. 261 {V w zti Published by THE BUREAU OF NATIONAL AFFAIRS, INC.. Washington.-D.C. 20037
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SPECIAL SUPPLEMENT 29. )CDGLSlAY :Y]ACp oE Tal ]ILL S-65 ,T.e g:asa ct O[ aiS.iLies vou1G [aacn 511:.0 _il:icn by r` v.ar 2000, tua. :- - Would 'oi affiet bv SaC billiOn of a - ahe vedicaL] prrgcayUCGer the Covl_•caa' acaa'a bill. HrllaaiG r ct netreared" 1 c pr:vate bpiC` i a sc Sac a• iu-ai_vu a-a p[eim :n HIdICa1G caata ar. re2ucel~a^ The legislation also pranectL Lpa bsdgeti Of state and Local SOVe[nee.^.es. Fcr '-fa La year pe[iM fieaai 1995-300a. ]La cuaucat:va redUC::on ::1 State and LeUl CltllyE le $5.] billlOn. C30 a rePerci cRat "Ln CL prasent aetLesee.' a a11-safe eeGan:se,-~neluLaL ln t`,4 legielat¢en •voulG noe be called :, piay.• xw.v.r, 1 necasa.ry, 3a !ail-ta5a aecban:sa, vncav c_G aucaaCu:1Y =occain benefit. PrevideL Cy tb. covutea's +ould "prevent ti•e Propcaal fren adding cc Lbe ]e!lcit .... r'Ceiuant to p+ragraph X%V] (11) (a) UI Of t,e sund:a4 Aules o, the 9enatL the C®ittae atatee Cbat n Fede[LL aqeevy tta provided bcLget eatieetaa !Or tlis legialation ritlN vEiCb coapar:.faas raSEt 'te mae.. .n a rtaece v,tt pa[agrapn 1- (s) of Rule XSlI t the Stattcag 2ules c- - nate, ;Jie C]m'.tea ::LC:utllnq the ! in9 V • c, _ n r.sFect to ine Su]gecary :apacc e! e a. ipls ~ ~ d Al! 'l _ "A iraL:aiaar~naysis cte•ea_'b L -eerived [m °l 3cnLs paport.d Ey G~e Senate ^J'miltLee or.nanca." da.eC 59d, enC preparad by t ong[eeaional 3uGget Jf!'ice •c30~. e Lece Of fiiin4 rn:s repert, t`•J c90 nas noG Prepared a-_ne- cozt nit.xaca c, the Comi:cte.'a bal. -crtling t the :-.lcr9[:en ?rov:deL by tAe C9J, 'inCe[ cne ittns's leq.:Lat:en [he ].!:a[ veULd be ietlucetl by $LLC ba:ian - 1995, by a cCiulat'l!e 511.6 bi111en fOr tna !,e yeaP ;rioG FY 1995-1999, anL by A C'aulatlve SL] bi:,lion IOr LAef_va !aar perLod F- 1000-3001. Tne Cso :epcc aleo indiutu cSat uader tha C - 511 LSe Ferpenc of the FOPUla[Son e eree ty eeYitl in.urenc.wau~d ~ 999anL CraG 35 to 9- pO eRC •_n GalenLaL _99Y. L•Id to 93 perte, ' r~c a '?•eSeaRar. Cntler Previtiona of tbe C<Si[LNY blll, 16 alllicn peracns ~OUld t a ZaureYl a 1997 and tbiE n119ber, v uld L- e to 3] Cil_len pericnebY 300{ -- . rJall balf Cf tL '_'n perc,end cose- , cSe i enie :n covwragwi aeblaved Clrcuth premium e a„a_:ng su.siG:ca to 30 sillion fuallea eM ei.qle iFd viGUala. 93blas appaaring ba=OV are fLCz t]e prellanary :80 reFc-. 363 i1lLE1. Mp~aYEYEfraeilEtCftNEFFElMLMFOEriw1'EEKCifCrMKitiXiECUOiraR u.Erc.wannrxcca~rteeaaawe.cE ear~.eare.w logg '. iwr ta 1. ap a+ am m ]aa tuAO,ararrdmAYf , o.r....~..~.a...~. 3boooogaggI atr..r~s~a~.rare~+. . te. re.CS.r~.~a~..rr. .~.. a. rr. tw,u e=ma.rs. r.e ir. c.r neer.. IIM1E~/Eq...a^Jrr ]a..,'r..rerea.u.a rd. o~.+.'i ~r ~l~GtgggdSb i E~YASC~.a /1AY. Wer. MrEtirlaYrii~,AO111W ..-e..O. IwVSY Ww.e.Y/ar/ ly.uiw Er/e•~YOr~PT~~ EraETeeaF.erreSYY IJ.~raCJr.u tal.eYrM1/e ur.eYYGawua..r .E-e2iMaPwe.. r..a..e..s. E~aC.enOFdev ........ . ................. .......... .. ........... .. .... ............. ...... ... . .........~..... C.~r 361 i tatEi. Ceri ».~+w~..+[....r nwr.rr~rw.wr.. n araara..~.E.¢..~ ra. re~. IYbe n.W.OrW /y`e Ee~. 1~aYi.~ .r.~x..wn... re+.urln~.nagge u..r a~~omeww..a u r..ww'~.wm.exa.E..y u r.~e.rr.ema...wa r r....r A IY..Yrar~r.a~~ • 1. 1. ln n. 1. ao nm zn am ~ 0 c 0 e 03 a. e. 04 a. e. oa a. at a. ct e e n. w] wE 9] r]V rya V1] .......... n....eu. n.......... 0 a a 0 zo le lo wn aa av ]G ma 11 nu Y~aE 1i_-Ii pr a] a] al Zper..y-lewa•apwwY, at e] a. 01 Ca at CKIIESIOMMYCVwAYt a, MM1e/i. e. .r.go la~L.e~Bfl~~a oi 9] ce ]s ls a tn] ................. .......... ....... _......,-------- ...»•.. ......... ......... ....... ,:. ------ ------- __:..,.:......,.,.... ~rv Published by THE BUREAU OF NAT IONAL AFFAIRS, INC.,'Nashington, D.C. 20037
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2047599237 ~ Y a r. L^ ^ 9• • ;• 99 9' T^ m v _ a 9. 7 . d f,lf t~s i3lq~~F i I:AA R.: P P xp R-R R^.~ :c J , t p- 9j4 • ; 9 p 9 R P . '~ ty~ a
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SPECIAL SUPPLEMENT r.w. a ueum ulwlanc. _a.enp. M sueavar saec In nvam. a p.aawl '.an 1M taaa 'A'N 'Atl1 3p5 H,<t mpi m.aw u. ia NY~uNY..mn'tepad'CY aa 'dt 1. aa ~a 1{ s.aallne a ~ s ta m A Is m •3 'Df fa aa 11 na I. a u na 'a r. .. ri. Ia Xeafa NtuT/ lq u MpMaa af Ine fa.wmaae en fMase aome.t Um4p ia1 iY 'Me .Ve n n 261 ~ ~ 'df n 'Sa 3/ rer aa a4W a/el.a.a 14 uwnsra«t..g.dtu. s sa v I a n s e e n T a 'z 'z v a a z a 9 a rn a a ~ n a aIXlllf2'. Caryteeva auap.(.~M1~. ]68 'ape a/bKibns d Xatmn Mael.l• E.oen]nune ler cwnear seec In bnone d au:em ner lar ler soa mol :ocx xw mbu erwn. I 31 1 Slz 1.w I aD 114 y I ay, 1m] zLV /I.aV, aaruna'M aaaaacnaa a/MCimmpxanfnarce 191 Laaf I.ala liy '..]al Iq) 2aa5 z21a Clunp.rvem aer.na a. af ' f/ rl I1 a 1 .f souMSo wy- eaap.l aace V. REGULATORY IMPACT OP THE BILL In acraYanca cith paragraph li(b~ of RJla %%at cf the SCenGLng Rulex of the Sr.,ete. •ollovmg i a funasry of e tte regulacory effects of t.115 legislaticn. Sas been deters~aed c:hat i ixpaacticablevctle[ tu[rea t re cocstrainta. to lnclude a xo[e cerprehensiva r<gula[ory iepact s:atamant. A. Estiaated auiber of iadividuala amd businesees rto rould be regulated aad tta ecavaaic effects om those iadiaiduals aad busiv.aa.s. 1. In genaral, the li11 vould affec approksa:ely L50o insurance -expaniea that vculd have to v1:h aw, federal e[andards for health plans and long :-m care policies. The bill u u_d also iapact the approkiaateiy 5 v111con i•uaineaeen ttat rould be xeQacred to oCer varkera a chonce et three .`.ealth plans. 2. Healih plans would te raquicsd to offer a standard benefits package and a alternative atanderd Senef.'ta package, as a persit tha sale a natandar2 and supplesental `ealth plana. This would impact bealtA~<are delivery sysieas, which would be o:ganized to provide standard se[viws, and insursv, who would price the health plans in scccrdanca vitn rhe certifiuticn cegciresents. 0. SRe administrative a:aplifiotioe provieianf reeulata all health plans lncluding: .edicare, eedlulC, auto lnsura.a. and workers ccPpansLtion, a11 health mte pravldera who aubeit claixs ta health plans, ekiatirq health intarviian clearingbousaa and new businessea vhich p[acess D.ultn lnforution. 4. tT1e privacy of heLLth provisirns regulate all Tea1tA plans, baa1C ea e providera, eert!lied health SnforaaClon netvork a af. enploy¢ health o r.igEt agencies, 11!e lneurers, acncols and~c 1lniversitief, health raaearchert, public health authorities, and lav enfarcaasnt agenciu. S. Caat-abarLq aaaanquenta, includinq cut•of-pcckat ea ua wta for iltlivlduals and fafilies, would be detennneL by a National N.a1tL lanafita eoard. ITe Bcard would issue rq.v'-a[_ons to clarify iteY and aerviCY Vilder the categaries a ve[ed f icea. Regulations prolulgatad by the eaetd would have an ispact an nauaer., insucsra and tGCae provillrq sarvices ln varlousLeal:h care delivery settings. 6. arovisiona in tne bal to repeal iaunity fns antitvst, would eflect all entities en5a4ed In tne businees af S.LLtS 1 e, to tna extent that they ere .^.ot now sublect to ar.titr.st acrucl.•uiy.nc 270 269 S-67 .~'e r.medy prcvialons would astablash praceduraf for all -' regardlcg cna denial, raducticn or tervinaiaon of 'ceneflts. Aa sucn~a:hese proviairns vcad affect all healt plans suYjwt to 5tate ce.____ca-_on aldar tlfia ACt. e. T alpractice Frovisians vovld affact a -a based c a:legaRCna ot aedil vipracttoe. fha ecter.:ial.~- e of ~~ efendants 1 -ea all health profaesienals agatnstnvhcxsaucb a cLalv a:ght ce rased e. Iapaet af the bill oa peaaeal priv.ep of the iadividuels allactea. Consum.rs a e assured under tbe privacy provLalens of the bill that :huc :nd:vdually identiflable health infoaatLcn _s prote¢ed bv Federal Lav vnicE liaits sutGorLl.d d!sc:cmrea, prevents aappvopriate ilscloeurea, and pu.-ishes unlauful diac.esures. Proteatlena : r tha heeltn s ur:ty card end the personal health identifier ansure thet C.ese cannct to used for purpos4a other tlan _eceaving or paying far tLcare. Cocsuaera alse have lmifarm Leg.l rights to inspect, get cepies a sake corre<ic:u a en'uenu to, a.~d [aftrict diaclcevrea a1 ther health : ccrds. ~~addition, guaranteed a fe provislana under lnsurance refor.l : ove the need for collal:aers tCdisclrse hea'.t: inforxaticnt eap•eyers 1n order to receive oployer-based health msurance crverage. c. Additional papervort, tise, and uasta ragvized of the affected partias. on the vhala, this legialatian is ezpeeed to reduce :he papeavark, time and acata erpended in operati:p tbe naCio:la- health care syfte9. teaith plsns and bu1C1 csre providers vi11 have drastically redl:cad paperrark, tifa, and ciscs related to billing, accounting, and titcring af health ure uadec Hu ada:alseraeive slaCli[ieatien provisrens of ehia lpislaticn vhach prcvide far ueifbrm elactronio pr _eEUru and acandardixeG foras. Ccoperatives and .apioyers will .lsa experience less adzinastrative pap.rvork baeaun of standardised end a ctrenie ssan. fer enrollxent ant preaiun Geyaenps. conauaera vi11 have fever inconveniencas vitn billing :cr health care be<ause 1v ur.ifors aetbcds for billing elacaronically and o paper vall be consisteot far all plans. A health a rity card vil: provide ldentilleatLon of consuse[s thereby facilitae.ng e.ec.ronic 271 Published by THE BUREAU OF NATIONAL AFFAIRS. INC.. WaShmgron, D.C. 2C037
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S-68 accass to C^..ir Ln3Orance v CGSe and el[v.na<ug S ]ccucentation acG dQ3ys in a3er-ea<y r . additiccally, prnvlders nl'. be vor. lik.ly to Suvvit m.urence c:e.m : r c<necv.rs becau3e 'ae *_cch lese axpemive and aa31a to anide py ale<trcnxa}ly S:End~ardlif= eTrC!LSer.t prcCed'.:rea. 'allarant..d 133'3. reL<r33 v ' ave -na a![ecr ]C r.duclnfj tY. papeNOrA -n'c1V.d in Slqning up:JC nealt.^. _ns_rence. TRG adOlnaatC[tiv. sizeLLicaticn i vLsicn ln tEe bill are ax:flcted to 3 ae CveZ $4 11111.1 Fer y.aC tn r.GtltnCl healrh tures,cErouqh cne alivlnatien a: aGVlna:rative c.e.caed and Published by THE 6UREAU OF NATIONAL AFFAIRS, INC.,'NaShington, D.C. 2C037 SPECIAL SUPPLEMENT CI. mlOte I1 1ZItSIYO Idl h a<cordan<e vitli paraqreyE 12 0: Rula ygyl of rde SnandiRq iu!e{ ot tlu SanCC.. in L:. epiniCn of Uv cClClCt.., 1' u r.ece33ary to dcspev. vlth tlu .qulr.v.r.c. at :hls auGeeccito cc e~eLnce rne Gcaneu e( t.e S.nare. 27]

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