PUBLIC LAW 106-554—APPENDIX F 114 STAT. 2763A-475 (1) ELIGIBILITY.—Medicare beneficiaries are eligible to participate in the project only if— (A) they meet specific medical criteria demonstrating the appropriate diagnosis and the advanced nature of their disease; (B) their physicians approve of participation in the project; and (C) they are not enrolled in a Medicare+Choice plan. (2) BENEFITS.— ^A beneficiary who is enrolled in the project shall be eligible— (A) for disease management services related to their chronic health condition; and (B) for payment for all costs for prescription drugs without regard to whether or not they relate to the chronic health condition, except that the project may provide for modest cost-sharing with respect to prescription drug coverage. (c) CONTRACTS WITH DISEASE MANAGEMENT ORGANIZATIONS. — (1) IN GENERAL.— The Secretary of Health and Human Services shall carry out the project through contracts with up to three disease management organizations. The Secretary shall not enter into such a contract with an organization unless the organization demonstrates that it can produce improved health outcomes and reduce aggregate medicare expenditures consistent with paragraph (2). (2) CONTRACT PROVISIONS. —Under such contracts— (A) such an organization shall be required to provide for prescription drug coverage described in subsection (b)(2)(B); (B) such an organization shall be paid a fee negotiated and established by the Secretary in a manner so that (taking into account savings in expenditures under parts A and B of the medicare program under title XVIII of the Social Security Act) there will be a net reduction in expenditures under the medicare program as a result of the project; and (C) such an organization shall guarantee, through an appropriate arrangement with a reinsurance company or otherwise, the net reduction in expenditures described in subparagraph (B). (3) PAYMENTS.— Payments to such organizations shall be made in appropriate proportion from the Trust Funds established under title XVIII of the Social Security Act. (d) APPLICATION OF MEDIGAP PROTECTIONS TO DEMONSTRATION PROJECT ENROLLEES.— (1) Subject to paragraph (2), the provisions of section 1882(s)(3) (other than clauses (i) through (iv) of subparagraph (B)) and 1882(s)(4) of the Social Security Act shall apply to enrollment (and termination of enrollment) in the demonstration project under this section, in the same manner as they apply to enrollment (and termination of enrollment) with a Medicare+Choice organization in a Medicare+Choice plan. (2) In applying paragraph (1)— (A) any reference in clause (v) or (vi) of section 1882(s)(3)(B) of such Act to 12 months is deemed a reference to the period of the demonstration project; and
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