Ill STAT. 334 PUBLIC LAW 105-33 —AUG. 5, 1997 26 USC 138 note. (3) The table of sections for part III of subchapter B of chapter 1 of such Code is amended by striking the last item and inserting the following: "Sec. 138. Medicare+Choice MSA. "Sec. 139. Cross references to other Acts.". (c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 1998. CHAPTER 2—DEMONSTRATIONS 42 USC 1395W-23 note. Urban and rural areas. Subchapter A—Medicare+Choice Competitive Pricing Demonstration Project SEC. 4011. MEDICARE PREPAID COMPETITIVE PRICING DEMONSTRA- TION PROJECT. (a) ESTABLISHMENT OF PROJECT. — The Secretary of Health and Human Services (in this subchapter referred to as the "Secretary") shall establish a demonstration project (in this subchapter referred to as the "project") under which payments to Medicare+Choice organizations in medicare payment areas in which the project is being conducted are determined in accordance with a competitive pricing methodology established under this subchapter. (b) DESIGNATION OF 7 MEDICARE PAYMENT AREAS COVERED BY PROJECT.— (1) IN GENERAL.— The Secretary shall designate, in accordance with the recommendations of the Competitive Pricing Advisory Committee under paragraphs (2) and (3), medicare payment areas as areas in which the project under this subchapter will be conducted. In this section, the term "Competitive Pricing Advisory Committee" means the Competitive Pricing Advisory Committee established under section 4012(a). (2) INITIAL DESIGNATION OF 4 AREAS. — (A) IN GENERAL.— The Competitive Pricing Advisory Committee shall recommend to the Secretary, consistent with subparagraph (B), the designation of 4 specific areas as medicare payment areas to be included in the project. Such recommendations shall be made in a manner so as to ensure that payments under the project in 2 such areas will begin on January 1, 1999, and in 2 such areas will begin on January 1, 2000. (B) LOCATION OF DESIGNATION. — Of the 4 areas recommended under subparagraph (A), 3 shall be in urban areas and 1 shall be in a rural area. (3) DESIGNATION OF ADDITIONAL 3 AREAS.— Not later than December 31, 2001, the Competitive Pricing Advisory Committee may recommend to the Secretary the designation of up to 3 additional, specific medicare payment areas to be included in the project. (c) PROJECT IMPLEMENTATION.— (1) IN GENERAL.— Subject to paragraph (2), the Secretary shall for each medicare payment area designated under subsection (b)— (A) in accordance with the recommendations of the Competitive Pricing Advisory Committee— (i) establish the benefit design among plans offered in such area, and
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