Title IV, SEC. 4014. POINT OF SERVICE OPTION. (a) Point of Service Contracts. Part C of title XVIII is amended by inserting after section 1889 the following: ``point of service option ``Sec. 1890. (a) Establishment of Program. Not later than July 1, 1995, the Secretary shall promulgate regulations establishing a point-of-service program under which individuals entitled to benefits under this title may enroll in a point-of-service network that meets such criteria as the Secretary may establish and may obtain such benefits through providers and suppliers who are members of the network. ``(b) Criteria for Networks. In establishing criteria for point-of-service networks under the program under this section, the Secretary shall ``(1) designate appropriate geographic service areas for such networks to ensure that each network has a sufficient number of participating members to provide items and services under this title to beneficiaries; ``(2) establish qualifications relating to the business structure and ownership of networks; ``(3) establish requirements for participating members; ``(4) establish a schedule of payments for services furnished by networks, including a schedule of bundled payment arrangements for selected medical and surgical procedures; ``(5) delineate permissible incentive arrangements to encourage physicians and other suppliers to join the network; ``(6) specify the rules under which carriers under section 1842 may administer the program; ``(7) identify certain illnesses and conditions for which the use of case management by the network will result in savings; ``(8) standards for the processing and payment of claims for payment for services furnished by the network, including standards for the apportionment of payments among the Trust Funds established under this title; and ``(9) such other criteria as the Secretary considers appropriate.''. (b) Conforming Amendments. (1) Section 1812(a) (42 U.S.C. 1395d(a)) is amended (A) by striking ``and'' at the end of paragraph (3), (B) by substituting ``; and'' for the period at the end of paragraph (4), and (C) by adding at the end the following: ``(5) such additional items and services furnished by a provider of services to an individual subject to case management as may be specified under a point-of-service network arrangement under section 1890.''. (2)(A) Section 1814(b) (42 U.S.C. 1395f(b)) is amended (i) in paragraph (1), by inserting ``or (4)'' after ``paragraph (3)'', (ii) by striking ``or'' at the end of paragraph (2), (iii) by substituting ``; and'' for the period at the end of paragraph (3), and (iv) by inserting after paragraph (3) the following: ``(4) in the case of items and services furnished through a point of service network (as described in section 1890), the payment basis specified under the arrangement established for such network, plus any bonus payments as determined under subsection (i) of that section.''. (B) The matter in section 1886(d)(1)(A) (42 U.S.C. 1395ww(d)(1)(A)) preceding clause (i) is amended by inserting ``(other than paragraph (4))'' after ``1814(b)''. (3) Section 1832(a)(2) (42 U.S.C. 1395k(a)(2)) is amended (A) by striking ``and'' at the end of subparagraph (I), (B) by substituting ``; and'' for the period at the end of subparagraph (J), and (C) by adding at the end the following: ``(K) such additional items and services (other than inpatient services furnished by providers of services) as may be specified in an arrangement for a point-of-service network under section 1890.''. (4) Section 1833 (42 U.S.C. 1395l), as amended by section 4032, is amended by adding at the end the following new subsection: ``(u) In the case of items and services furnished through a point of service network (as described in section 1890), there shall be paid (subject to subsection (b)) amounts equal to 80 percent of the payment basis specified in an agreement entered into pursuant to that section, plus any bonus payments as determined under subsection (i) of that section.''. (5) Section 1862(a)(1)(B) (42 U.S.C. 1395y(a)(1)(B)) is amended by inserting ``or section 1890(h)'' after ``section 1861(s)(10)''. (6) Section 1862(a) (42 U.S.C. 1395y(a)), as amended by sections 4034(b)(4), 4118(b), and 2001(c), is further amended (A) in paragraph (7), by striking ``or under paragraph (1)(F)'' and inserting ``, under paragraph (1)(F), or under a contract under section 1890'', (B) by striking ``or'' at the end of paragraph (16), (C) by striking the period at the end of paragraph (17) and inserting ``; or'', and (D) by inserting after paragraph (17) the following new paragraph: ``(18) which are furnished to an individual and related to a health condition with respect to which he is subject to case management through a point-of-service network under section 1890 but which are not included in the plan of care developed for such individual and agreed to by him and the case manager.''. (c) Effective Date. The amendments made by this subsection shall take effect January 1, 1996.