Subchapter A--Payments For Home Health Services
SEC. 4601. RECAPTURING SAVINGS RESULTING FROM TEMPORARY FREEZE ON PAYMENT INCREASES FOR HOME HEALTH SERVICES.
(a) Basing Updates to Per Visit Cost Limits on Limits for Fiscal Year 1993.--Section 1861(v)(1)(L) (42 U.S.C. 1395x(v)(1)(L)) is amended by adding at the end the following: (iv) In establishing limits under this subparagraph for cost reporting periods beginning after September 30, 1997, the Secretary shall not take into account any changes in the home health market basket, as determined by the Secretary, with respect to cost reporting periods which began on or after July 1, 1994, and before July 1, 1996.".
(b) No Exceptions Permitted Based on Amendment.--The Secretary of Health and Human Services shall not consider the amendment made by subsection (a) in making any exemptions and exceptions pursuant to section 1861(v)(1)(L)(ii) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(ii)).
(a) Reductions in Cost Limits.--Section 1861(v)(1)(L)(i) (42 U.S.C.
1395x(v)(1)(L)(i)) is amended-- (1) by moving the indentation of subclauses (I) through (III) 2-ems to the left; (2) in subclause (I), by inserting "of the mean of the labor- related and nonlabor per visit costs for freestanding home health agencies" before the comma at the end; (3) in subclause (II), by striking ", or and inserting "of such mean,"; (4) in subclause (III)-- (A) by inserting "and before October 1, 1997," after "July 1, 1987,", and (B) by striking the comma at the end and inserting "of such mean, or"; and (5) by striking the matter following subclause (III) and inserting the following: (IV) October 1, 1997, 105 percent of the median of the labor- related and nonlabor per visit costs for freestanding home health agencies.
(b) Delay in Updates.--Section 1861(v)(1)(L)(iii) (42 U.S.C. 1395x(v)(1)(L)(iii)) is amended by inserting, "or on or after July 1, 1997, and before October 1, 1997" after "July 1, 1996".
(c) Additions to Cost Limits.--Section 1861(v)(1)(L) (42 U.S.C. 1395x(v)(1)(L)) (as amended by section 4601(a)) is amended by adding at the end the following new clauses: (v) For services furnished by home health agencies for cost reporting periods beginning on or after October 1, 1997, the Secretary shall provide for an interim system of limits. Payment shall not exceed the costs determined under the preceding provisions of this subparagraph or, if lower, the product of-- (I) an agency-specific per beneficiary annual limitation calculated based 75 percent on 98 percent of the reasonable costs (including nonroutine medical supplies) for the agency's 12-month cost reporting period ending during fiscal year 1994, and based 25 percent on 98 percent of the standardized regional average of such costs for the agency's census division, as applied to such agency, for cost reporting periods ending during fiscal year 1994, such costs updated by the home health market basket index; and (II) the agency's unduplicated census count of patients (entitled to benefits under this title) for the cost reporting period subject to the limitation.
(vi) For services furnished by home health agencies for cost reporting periods beginning on or after October 1, 1997, the following rules apply: (I) For new providers and those providers without a 12-month cost reporting period ending in fiscal year 1994, the per beneficiary limitation shall be equal to the median of these limits (or the Secretary's best estimates thereof) applied to other home health agencies as determined by the Secretary. A home health agency that has altered its corporate structure or name shall not be considered a new provider for this purpose.
(II) For beneficiaries who use services furnished by more than one home health agency, the per beneficiary limitations shall be prorated among the agencies.
(vii)(I) Not later than January 1, 1998, the Secretary shall establish per visit limits applicable for fiscal year 1998, and not later than April 1, 1998, the Secretary shall establish per beneficiary limits under clause (v)(I) for fiscal year 1998.
(II) Not later than August 1 of each year (beginning in 1998) the Secretary shall establish the limits applicable under this subparagraph for services furnished during the fiscal year beginning October 1 of the year.".
(d) Development of Case Mix System.--The Secretary of Health and Human Services shall expand research on a prospective payment system for home health agencies under the medicare program that ties prospective payments to a unit of service, including an intensive effort to develop a reliable case mix adjuster that explains a significant amount of the variances in costs.
(e) Submission of Data for Case Mix System.--Effective for cost reporting periods beginning on or after October 1, 1997, the Secretary of Health and Human Services may require all home health agencies to submit additional information that the Secretary considers necessary for the development of a reliable case mix system.
(a) In General.--Title XVIII (42 U.S.C. 1395 et seq.) (as amended by section 4801) is amended by adding at the end the following:
Sec. 1895. (a) In General.--Notwithstanding section 1861(v), the Secretary shall provide, for cost reporting periods beginning on or after October 1, 1999, for payments for home health services in accordance with a prospective payment system established by the Secretary under this section.
(b) System of Prospective Payment for Home Health Services.-- (1) In general.--The Secretary shall establish under this subsection a prospective payment system for payment for all costs of home health services. Under the system under this subsection all services covered and paid on a reasonable cost basis under the medicare home health benefit as of the date of the enactment of the this section, including medical supplies, shall be paid for on the basis of a prospective payment amount determined under this subsection and applicable to the services involved. In implementing the system, the Secretary may provide for a transition (of not longer than 4 years) during which a portion of such payment is based on agency-specific costs, but only if such transition does not result in aggregate payments under this title that exceed the aggregate payments that would be made if such a transition did not occur.
(2) Unit of payment.--In defining a prospective payment amount under the system under this subsection, the Secretary shall consider an appropriate unit of service and the number, type, and duration of visits provided within that unit, potential changes in the mix of services provided within that unit and their cost, and a general system design that provides for continued access to quality services.
(3) Payment basis.-- (A) Initial basis.-- (i) In general.--Under such system the Secretary shall provide for computation of a standard prospective payment amount (or amounts). Such amount (or amounts) shall initially be based on the most current audited cost report data available to the Secretary and shall be computed in a manner so that the total amounts payable under the system for fiscal year 2000 shall be equal to the total amount that would have been made if the system had not been in effect but if the reduction in limits described in clause (ii) had been in effect. Such amount shall be standardized in a manner that eliminates the effect of variations in relative case mix and wage levels among different home health agencies in a budget neutral manner consistent with the case mix and wage level adjustments provided under paragraph (4)(A). Under the system, the Secretary may recognize regional differences or differences based upon whether or not the services or agency are in an urbanized area.
(ii) Reduction.--The reduction described in this clause is a reduction by 15 percent in the cost limits and per beneficiary limits described in section 1861(v)(1)(L), as those limits are in effect on September 30, 1999.
(B) Annual update.-- (i) In general.--The standard prospective payment amount (or amounts) shall be adjusted for each fiscal year (beginning with fiscal year 2001) in a prospective manner specified by the Secretary by the home health market basket percentage increase applicable to the fiscal year involved.
(ii) Home health market basket percentage increase.-- For purposes of this subsection, the term 'home health market basket percentage increase' means, with respect to a fiscal year, a percentage (estimated by the Secretary before the beginning of the fiscal year) determined and applied with respect to the mix of goods and services included in home health services in the same manner as the market basket percentage increase under section 1886(b)(3)(B)(iii) is determined and applied to the mix of goods and services comprising inpatient hospital services for the fiscal year.
(C) Adjustment for outliers.--The Secretary shall reduce the standard prospective payment amount (or amounts) under this paragraph applicable to home health services furnished during a period by such proportion as will result in an aggregate reduction in payments for the period equal to the aggregate increase in payments resulting from the application of paragraph (5) (relating to outliers).
(4) Payment computation.-- (A) In general.--The payment amount for a unit of home health services shall be the applicable standard prospective payment amount adjusted as follows: (i) Case mix adjustment.--The amount shall be adjusted by an appropriate case mix adjustment factor (established under subparagraph (B)).
(ii) Area wage adjustment.--The portion of such amount that the Secretary estimates to be attributable to wages and wage-related costs shall be adjusted for geographic differences in such costs by an area wage adjustment factor (established under subparagraph (C)) for the area in which the services are furnished or such other area as the Secretary may specify.
(B) Establishment of case mix adjustment factors.--The Secretary shall establish appropriate case mix adjustment factors for home health services in a manner that explains a significant amount of the variation in cost among different units of services.
(C) Establishment of area wage adjustment factors.--The Secretary shall establish area wage adjustment factors that reflect the relative level of wages and wage-related costs applicable to the furnishing of home health services in a geographic area compared to the national average applicable level. Such factors may be the factors used by the Secretary for purposes of section 1886(d)(3)(E).
(5) Outliers.--The Secretary may provide for an addition or adjustment to the payment amount otherwise made in the case of outliers because of unusual variations in the type or amount of medically necessary care. The total amount of the additional payments or payment adjustments made under this paragraph with respect to a fiscal year may not exceed 5 percent of the total payments projected or estimated to be made based on the prospective payment system under this subsection in that year.
(6) Proration of prospective payment amounts.--If a beneficiary elects to transfer to, or receive services from, another home health agency within the period covered by the prospective payment amount, the payment shall be prorated between the home health agencies involved.
(c) Requirements for Payment Information.--With respect to home health services furnished on or after October 1, 1998, no claim for such a service may be paid under this title unless-- (1) the claim has the unique identifier (provided under section 1842(r)) for the physician who prescribed the services or made the certification described in section 1814(a)(2) or 1835(a)(2)(A); and (2) in the case of a service visit described in paragraph (1), (2), (3), or (4) of section 1861(m), the claim contains a code (or codes) specified by the Secretary that identifies the length of time of the service visit, as measured in 15 minute increments.
(d) Limitation on Review.--There shall be no administrative or judicial review under section 1869, 1878, or otherwise of-- (1) the establishment of a transition period under subsection (b)(1); (2) the definition and application of payment units under subsection (b)(2); (3) the computation of initial standard prospective payment amounts under subsection (b)(3)(A) (including the reduction described in clause (ii) of such subsection); (4) the establishment of the adjustment for outliers under subsection (b)(3)(C); (5) the establishment of case mix and area wage adjustments under subsection (b)(4); and (6) the establishment of any adjustments for outliers under subsection (b)(5).".
(b) Elimination of Periodic Interim Payments for Home Health Agencies.--Section 1815(e)(2) (42 U.S.C. 1395g(e)(2)) is amended-- (1) by inserting "and" at the end of subparagraph (C), (2) by striking subparagraph (D), and (3) by redesignating subparagraph (E) as subparagraph (D).
(c) Conforming Amendments.-- (1) Payments under part a.--Section 1814(b) (42 U.S.C. 1395f(b)) is amended in the matter preceding paragraph (1) by striking "and 1886" and inserting "1886, and 1895".
(2) Treatment of items and services paid under part b.-- (A) Payments under part b.--Section 1833(a)(2) (42 U.S.C. 1395l(a)(2)) is amended-- (i) by amending subparagraph (A) to read as follows: (A) with respect to home health services (other than a covered osteoporosis drug) (as defined in section 1861(kk)), the amount determined under the prospective payment system under section 1895;"; (ii) by striking "and" at the end of subparagraph (E); (iii) by adding "and" at the end of subparagraph (F); and (iv) by adding at the end the following new subparagraph: (G) with respect to items and services described in section 1861(s)(10)(A), the lesser of-- (i) the reasonable cost of such services, as determined under section 1861(v), or (ii) the customary charges with respect to such services, or, if such services are furnished by a public provider of services, or by another provider which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low-income (and requests that payment be made under this provision), free of charge or at nominal charges to the public, the amount determined in accordance with section 1814(b)(2);
(B) Requiring payment for all items and services to be made to agency.-- (i) In general.--The first sentence of section 1842(b)(6) (42 U.S.C. 1395u(b)(6)) (as amended by section 4432(b)(2)) is amended--
(I) by striking "and (E)" and inserting "(E)"; and (II) by striking the period at the end and inserting the following: , and (F) in the case of home health services furnished to an individual who (at the time the item or service is furnished) is under a plan of care of a home health agency, payment shall be made to the agency (without regard to whether or not the item or service was furnished by the agency, by others under arrangement with them made by the agency, or when any other contracting or consulting arrangement, or otherwise).
(ii) Conforming amendment.--Section 1832(a)(1) (42 U.S.C. 1395k(a)(1)) (as amended by section 4432(b)(5)(B)) is amended by striking section 1842(b)(6)(E); and inserting subparagraphs (E) and (F) of section 1842(b)(6);".
(C) Exclusions from coverage.--Section 1862(a) (42 U.S.C. 1395y(a)) (as amended by sections 4319(b), 4432(b), 4507(a)(2)(B) and 4541(b)) is amended-- (i) by striking "or" at the end of paragraph (19); (ii) by striking the period at the end of paragraph (20) and inserting "; or"; and (iii) by inserting after paragraph (20) the following: (21) where such expenses are for home health services furnished to an individual who is under a plan of care of the home health agency if the claim for payment for such services is not submitted by the agency.
(d) Effective Date.--Except as otherwise provided, the amendments made by this section shall apply to cost reporting periods beginning on or after October 1, 1999.
(e) Contingency.--If the Secretary of Health and Human Services for any reason does not establish and implement the prospective payment system for home health services described in section 1895(b) of the Social Security Act (as added by subsection (a)) for cost reporting periods described in subsection (d), for such cost reporting periods the Secretary shall provide for a reduction by 15 percent in the cost limits and per beneficiary limits described in section 1861(v)(1)(L) of such Act, as those limits would otherwise be in effect on September 30, 1999.
(a) Conditions of Participation.--Section 1891 (42 U.S.C. 1395bbb) is amended by adding at the end the following: (g) Payment on Basis of Location of Service.--A home health agency shall submit claims for payment for home health services under this title only on the basis of the geographic location at which the service is furnished, as determined by the Secretary.
(b) Wage Adjustment.--Section 1861(v)(1)(L)(iii) (42 U.S.C. 1395x(v)(1)(L)(iii)) is amended by striking "agency is located" and inserting "service is furnished".
(c) Effective Date.--The amendments made by this section apply to cost reporting periods beginning on or after October 1, 1997.
SEC. 4611. MODIFICATION OF PART A HOME HEALTH BENEFIT FOR INDIVIDUALS ENROLLED UNDER PART B.
(a) In General.--Section 1812 (42 U.S.C. 1395d) is amended-- (1) in subsection (a)(3), by striking "home health services" and inserting "for individuals not enrolled in part B, home health services, and for individuals so enrolled, post-institutional home health services furnished during a home health spell of illness for up to 100 visits during such spell of illness"; and (2) in subsection (b), by adding after and below paragraph (3) the following: Payment under this part for post-institutional home health services furnished an individual during a home health spell of illness may not be made for such services beginning after such services have been furnished for a total of 100 visits such spell.
(b) Post-Institutional Home Health Services Defined.--Section 1861 (42 U.S.C. 1395x), as amended by sections 4103(a), 4104(a), 4105(a), 4106(a), and 4454, is amended by adding at the end the following:
(tt)(1) The term 'post-institutional home health services' means home health services furnished to an individual-- (A) after discharge from a hospital or rural primary care hospital in which the individual was an inpatient for not less than 3 consecutive days before such discharge if such home health services were initiated within 14 days after the date of such discharge; or (B) after discharge from a skilled nursing facility in which the individual was provided post-hospital extended care services if such home health services were initiated within 14 days after the date of such discharge.
(2) The term 'home health spell of illness' with respect to any individual means a period of consecutive days-- (A) beginning with the first day (not included in a previous home health spell of illness) (i) on which such individual is furnished post-institutional home health services, and (ii) which occurs in a month for which the individual is entitled to benefits under part A, and (B) ending with the close of the first period of 60 consecutive days thereafter on each of which the individual is neither an inpatient of a hospital or rural primary care hospital nor an inpatient of a facility described in section 1819(a)(1) or subsection (y)(1) nor provided home health services.".
(c) Maintaining Appeal Rights for Home Health Services.--Section 1869(b)(2)(B) (42 U.S.C. 1395ff(b)(2)(B)) is amended by inserting "(or $100 in the case of home health services)" after "$500".
(d) Maintaining Seamless Administration Through Fiscal Intermediaries.--Section 1842(b)(2) (42 U.S.C. 1395u(b)(2)) is amended by adding at the end the following: (E) With respect to the payment of claims for home health services under this part that, but for the amendments made by section 4611 of the Balanced Budget Act of 1997, would be payable under part A instead of under this part, the Secretary shall continue administration of such claims through fiscal intermediaries under section 1816.".
(e) Transition.-- (1) In general.--Notwithstanding any provision of title XVIII of the Social Security Act, the Secretary of Health and Human Services shall establish a transition for the aggregate amount of expenditures that are transferred from part A, to part B, of title XVIII of the Social Security Act, as a result of the amendments made by this section, during each of the years during the period beginning with 1998 and ending with 2002 according to this subsection. Under the transition for each such year, the Secretary shall effect such transfer, between the trust funds under such parts, as will result in only the proportion (specified in paragraph (2)) of such aggregate expenditures for the year being transferred from such part A to such part B.
(2) Proportion specified.--The proportion specified in this paragraph for-- (A) 1998 is \1/6\, (B) 1999 is \1/3\, (C) 2000 is \1/2\, (D) 2001 is \2/3\, and (E) 2002 is \5/6\.
(3) Application in establishing monthly premiums for 1998 through 2003.-- (A) In general.--For purposes only of computing the monthly premium under section 1839 of the Social Security Act (42 U.S.C. 1395r), the monthly actuarial rate for enrollees age 65 and over shall be computed as though any reference in paragraph (1) of this subsection to 2002 were a reference to 2003 and as if the following proportions were substituted for the proportions specified in paragraph (2): (i) For 1998, \1/7\.
(ii) For 1999, \2/7\.
(iii) For 2000, \3/7\.
(iv) For 2001, \4/7\.
(v) For 2002, \5/7\.
(vi) For 2003, \6/7\.
(B) No impact on government contribution.--Subparagraph (A) does not apply in determining the amount of the Government contribution under section 1844 of the Social Security Act (42 U.S.C. 1395w).
(f) Effective Date.--The amendments made by this section apply to services furnished on or after January 1, 1998. For purpose of applying such amendments, any home health spell of illness that began, but not did not end, before such date shall be considered to have begun as of such date.
(a) In General.--Section 1861(m) (42 U.S.C. 1395x(m)) is amended by adding at the end the following: For purposes of paragraphs (1) and (4), the term 'part-time or intermittent services' means skilled nursing and home health aide services furnished any number of days per week as long as they are furnished (combined) less than 8 hours each day and 28 or fewer hours each week (or, subject to review on a case- by-case basis as to the need for care, less than 8 hours each day and 35 or fewer hours per week). For purposes of sections 1814(a)(2)(C) and 1835(a)(2)(A), 'intermittent' means skilled nursing care that is either provided or needed on fewer than 7 days each week, or less than 8 hours of each day for periods of 21 days or less (with extensions in exceptional circumstances when the need for additional care is finite and predictable).".
(b) Effective Date.--The amendment made by subsection (a) applies to services furnished on or after October 1, 1997.
(a) Study.--The Secretary of Health and Human Services shall conduct a study of the criteria that should be applied, and the method of applying such criteria, in the determination of whether an individual is homebound for purposes of qualifying for receipt of benefits for home health services under the medicare program. Such criteria shall include the extent and circumstances under which a person may be absent from the home but nonetheless qualify.
(b) Report.--Not later than October 1, 1998, the Secretary shall submit a report to Congress on the study conducted under subsection (a). The report shall include specific recommendations on such criteria and methods.
(a) In General.--Section 1862(a)(1) (42 U.S.C. 1395y(a)(1)) (as amended by section 4104(c)) is amended-- (1) by striking "and" at the end of subparagraph (G), (2) by striking the semicolon at the end of subparagraph (H) and inserting ", and", and (3) by inserting after subparagraph (H) the following new subparagraph: (I) the frequency and duration of home health services which are in excess of normative guidelines that the Secretary shall establish by regulation;".
(b) Notification.--The Secretary of Health and Human Services may establish a process for notifying a physician in cases in which the number of home health visits, furnished under title XVIII of the Social Security Act pursuant to a prescription or certification of the physician, significantly exceeds such threshold (or thresholds) as the Secretary specifies. The Secretary may adjust such threshold to reflect demonstrated differences in the need for home health services among different beneficiaries.
(c) Effective Date.--The amendments made by this section apply to services furnished on or after October 1, 1997.
(a) In General.--Sections 1814(a)(2)(C) and 1835(a)(2)(A) (42 U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A)) are each amended by inserting "(other than solely venipuncture for the purpose of obtaining a blood sample)" after "skilled nursing care".
(b) Effective Date.--The amendments made by subsection (a) apply to home health services furnished after the 6-month period beginning after the date of enactment of this Act.
(a) Estimate.--Not later than October 1, 1997, the Secretary of Health and Human Services shall submit to the Committees on Commerce and Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report that includes an estimate of the outlays that will be made under parts A and B of title XVIII of the Social Security Act for the provision of home health services during each of fiscal years 1998 through 2002.
(b) Annual Report.--Not later than the end of each of years 1999 through 2002, the Secretary shall submit to such Committees a report that compares the actual outlays under such parts for such services during the fiscal year ending in the year, to the outlays estimated under subsection (a) for such fiscal year. If the Secretary finds that such actual outlays were greater than such estimated outlays for the fiscal year, the Secretary shall include in the report recommendations regarding beneficiary copayments for home health services provided under the medicare program or such other methods as will reduce the growth in outlays for home health services under the medicare program.
Subchapter A--Indirect Medical Education
SEC. 4621. INDIRECT GRADUATE MEDICAL EDUCATION PAYMENTS.
(a) Multiyear Transition Regarding Percentages.-- (1) In general.--Section 1886(d)(5)(B)(ii) (42 U.S.C. 1395ww(d)(5)(B)(ii)) is amended to read as follows: (ii) For purposes of clause (i)(II), the indirect teaching adjustment factor is equal to c <greek-e> (((1+r) to the nth power) - 1), where 'r' is the ratio of the hospital's full-time equivalent interns and residents to beds and 'n' equals .405. For discharges occurring-- (I) on or after October 1, 1988, and before October 1, 1997, 'c' is equal to 1.89; (II) during fiscal year 1998, 'c' is equal to 1.72; (III) during fiscal year 1999, 'c' is equal to 1.6; (IV) during fiscal year 2000, 'c' is equal to 1.47; and (V) on or after October 1, 2000, 'c' is equal to 1.35.
(2) Conforming amendment relating to determination of standardized amount.--Section 1886(d)(2)(C)(i) (42 U.S.C. 1395ww(d)(2)(C)(i)) is amended by adding at the end the following: except that the Secretary shall not take into account any reduction in the amount of additional payments under paragraph (5)(B)(ii) resulting from the amendment made by section 4621(a)(1) of the Balanced Budget Act of 1997.
(b) Limitation on Number of Residents for Certain Fiscal Years.-- (1) In general.--Section 1886(d)(5)(B) (42 U.S.C. 1395ww(d)(5)(B)) is amended by adding after clause (iv) the following: (v) In determining the adjustment with respect to a hospital for discharges occurring on or after October 1, 1997, the total number of full-time equivalent interns and residents in the fields of allopathic and osteopathic medicine in either a hospital or nonhospital setting may not exceed the number of such full-time equivalent interns and residents in the hospital with respect to the hospital's most recent cost reporting period ending on or before December 31, 1996.
(vi) For purposes of clause (ii)-- (I) 'r' may not exceed the ratio of the number of interns and residents, subject to the limit under clause (v), with respect to the hospital for its most recent cost reporting period to the hospital's available beds (as defined by the Secretary) during that cost reporting period, and (II) for the hospital's cost reporting periods beginning on or after October 1, 1997, subject to the limits described in clauses (iv) and (v), the total number of full-time equivalent residents for payment purposes shall equal the average of the actual full-time equivalent resident count for the cost reporting period and the preceding two cost reporting periods.
In the case of the first cost reporting period beginning on or after October 1, 1997, subclause (II) shall be applied by using the average for such period and the preceding cost reporting period.
(vii) If any cost reporting period beginning on or after October 1, 1997, is not equal to twelve months, the Secretary shall make appropriate modifications to ensure that the average full-time equivalent residency count pursuant to subclause (II) of clause (vi) is based on the equivalent of full twelve-month cost reporting periods.
(viii) Rules similar to the rules of subsection (h)(4)(H) shall apply for purposes of clauses (v) and (vi).
(2) Payment for interns and residents providing off-site services.--Section 1886(d)(5)(B)(iv) (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amended to read as follows: (iv) Effective for discharges occurring on or after October 1, 1997, all the time spent by an intern or resident in patient care activities under an approved medical residency training program at an entity in a nonhospital setting shall be counted towards the determination of full-time equivalency if the hospital incurs all, or substantially all, of the costs for the training program in that setting.
Section 1886(d) (42 U.S.C. 1395ww(d)) is amended by adding at the end the following: (11) Additional payments for managed care enrollees.-- (A) In general.--For portions of cost reporting periods occurring on or after January 1, 1998, the Secretary shall provide for an additional payment amount for each applicable discharge of any subsection (d) hospital that has an approved medical residency training program.
(B) Applicable discharge.--For purposes of this paragraph, the term 'applicable discharge' means the discharge of any individual who is enrolled under a risk-sharing contract with an eligible organization under section 1876 and who is entitled to benefits under part A or any individual who is enrolled with a Medicare+Choice organization under part C.
(C) Determination of amount.--The amount of the payment under this paragraph with respect to any applicable discharge shall be equal to the applicable percentage (as defined in subsection (h)(3)(D)(ii)) of the estimated average per discharge amount that would otherwise have been paid under paragraph (5)(B) if the individuals had not been enrolled as described in subparagraph (B).
(D) Special rule for hospitals under reimbursement system.--The Secretary shall establish rules for the application of this paragraph to a hospital reimbursed under a reimbursement system authorized under section 1814(b)(3) in the same manner as it would apply to the hospital if it were not reimbursed under such section.".
SEC. 4623. LIMITATION ON NUMBER OF RESIDENTS AND ROLLING AVERAGE FTE COUNT.
Section 1886(h)(4) (42 U.S.C. 1395ww(h)(4)) is amended by adding after subparagraph (E) the following: (F) Limitation on number of residents in allopathic and osteopathic medicine.--Such rules shall provide that for purposes of a cost reporting period beginning on or after October 1, 1997, the total number of full-time equivalent residents before application of weighting factors (as determined under this paragraph) with respect to a hospital's approved medical residency training program in the fields of allopathic medicine and osteopathic medicine may not exceed the number of such full-time equivalent residents for the hospital's most recent cost reporting period ending on or before December 31, 1996.
(G) Counting interns and residents for fy 1998 and subsequent years.-- (i) In general.--For cost reporting periods beginning during fiscal years beginning on or after October 1, 1997, subject to the limit described in subparagraph (F), the total number of full-time equivalent residents for determining a hospital's graduate medical education payment shall equal the average of the actual full-time equivalent resident counts for the cost reporting period and the preceding two cost reporting periods.
(ii) Adjustment for short periods.--If any cost reporting period beginning on or after October 1, 1997, is not equal to twelve months, the Secretary shall make appropriate modifications to ensure that the average full- time equivalent resident counts pursuant to clause (i) are based on the equivalent of full twelve-month cost reporting periods.
(iii) Transition rule for 1998.--In the case of a hospital's first cost reporting period beginning on or after October 1, 1997, clause (i) shall be applied by using the average for such period and the preceding cost reporting period.
(H) Special rules for application of subparagraphs (f) and (g).-- (i) New facilities.--The Secretary shall, consistent with the principles of subparagraphs (F) and (G), prescribe rules for the application of such subparagraphs in the case of medical residency training programs established on or after January 1, 1995. In promulgating such rules for purposes of subparagraph (F), the Secretary shall give special consideration to facilities that meet the needs of underserved rural areas.
(ii) Aggregation.--The Secretary may prescribe rules which allow institutions which are members of the same affiliated group (as defined by the Secretary) to elect to apply the limitation of subparagraph (F) on an aggregate basis.
(iii) Data collection.--The Secretary may require any entity that operates a medical residency training program and to which subparagraphs (F) and (G) apply to submit to the Secretary such additional information as the Secretary considers necessary to carry out such subparagraphs.".
Section 1886(h)(3) (42 U.S.C. 1395ww(h)(3)) is amended by adding after subparagraph (C) the following: (D) Payment for managed care enrollees.-- (i) In general.--For portions of cost reporting periods occurring on or after January 1, 1998, the Secretary shall provide for an additional payment amount under this subsection for services furnished to individuals who are enrolled under a risk-sharing contract with an eligible organization under section 1876 and who are entitled to part A or with a Medicare+Choice organization under part C. The amount of such a payment shall equal the applicable percentage of the product of--
(I) the aggregate approved amount (as defined in subparagraph (B)) for that period; and (II) the fraction of the total number of inpatient-bed days (as established by the Secretary) during the period which are attributable to such enrolled individuals.
(ii) Applicable percentage.--For purposes of clause (i), the applicable percentage is--
(I) 20 percent in 1998, (II) 40 percent in 1999, (III) 60 percent in 2000, and (IV) 80 percent in 2001, and (V) 100 percent in 2002 and subsequent years.
(iii) Special rule for hospitals under reimbursement system.--The Secretary shall establish rules for the application of this subparagraph to a hospital reimbursed under a reimbursement system authorized under section 1814(b)(3) in the same manner as it would apply to the hospital if it were not reimbursed under such section.".
(a) In General.--Section 1886 (42 U.S.C. 1395ww), as amended by section 4421(a), is amended by adding at the end the following: (k) Payment to Nonhospital Providers.-- (1) In general.--For cost reporting periods beginning on or after October 1, 1997, the Secretary may establish rules for payment to qualified nonhospital providers for their direct costs of medical education, if those costs are incurred in the operation of an approved medical residency training program described in subsection (h). Such rules shall specify the amounts, form, and manner in which such payments will be made and the portion of such payments that will be made from each of the trust funds under this title.
(2) Qualified nonhospital providers.--For purposes of this subsection, the term 'qualified nonhospital providers' means-- (A) a Federally qualified health center, as defined in section 1861(aa)(4); (B) a rural health clinic, as defined in section 1861(aa)(2); (C) Medicare+Choice organizations; and (D) such other providers (other than hospitals) as the Secretary determines to be appropriate.".
(b) Prohibition on Double Payments.--Section 1886(h)(3)(B) (42 U.S.C. 1395ww(h)(3)(B)) is amended by adding at the end the following: The Secretary shall reduce the aggregate approved amount to the extent payment is made under subsection (k) for residents included in the hospital's count of full-time equivalent residents.".
(a) In General.--Section 1886(h) (42 U.S.C. 1395ww(h)) is amended by adding at the end the following new paragraph: (6) Incentive payment under plans for voluntary reduction in number of residents.-- (A) In general.--In the case of a voluntary residency reduction plan for which an application is approved under subparagraph (B), subject to subparagraph (F), each hospital which is part of the qualifying entity submitting the plan shall be paid an applicable hold harmless percentage (as specified in subparagraph (E)) of the sum of-- (i) the amount (if any) by which--
(I) the amount of payment which would have been made under this subsection if there had been a 5- percent reduction in the number of full-time equivalent residents in the approved medical education training programs of the hospital as of June 30, 1997, exceeds (II) the amount of payment which is made under this subsection, taking into account the reduction in such number effected under the reduction plan; and
(ii) the amount of the reduction in payment under subsection (d)(5)(B) for the hospital that is attributable to the reduction in number of residents effected under the plan below 95 percent of the number of full-time equivalent residents in such programs of the hospital as of June 30, 1997.
The determination of the amounts under clauses (i) and (ii) for any year shall be made on the basis of the provisions of this title in effect on the application deadline date for the first calendar year to which the reduction plan applies.
(B) Approval of plan applications.--The Secretary may not approve the application of an qualifying entity unless-- (i) the application is submitted in a form and manner specified by the Secretary and by not later than November 1, 1999, (ii) the application provides for the operation of a plan for the reduction in the number of full-time equivalent residents in the approved medical residency training programs of the entity consistent with the requirements of subparagraph (D); (iii) the entity elects in the application the period of residency training years (not greater than 5) over which the reduction will occur; (iv) the entity will not reduce the proportion of its residents in primary care (to the total number of residents) below such proportion as in effect as of the applicable time described in subparagraph (D)(v); and (v) the Secretary determines that the application and the entity and such plan meet such other requirements as the Secretary specifies in regulations.
(C) Qualifying entity.--For purposes of this paragraph, any of the following may be a qualifying entity: (i) Individual hospitals operating one or more approved medical residency training programs.
(ii) Two or more hospitals that operate such programs and apply for treatment under this paragraph as a single qualifying entity.
(iii) A qualifying consortium (as described in section 4628 of the Balanced Budget Act of 1997).
(D) Residency reduction requirements.-- (i) Individual hospital applicants.--In the case of a qualifying entity described in subparagraph (C)(i), the number of full-time equivalent residents in all the approved medical residency training programs operated by or through the entity shall be reduced as follows:
(I) If the base number of residents exceeds 750 residents, by a number equal to at least 20 percent of such base number.
(II) Subject to subclause (IV), if the base number of residents exceeds 600 but is less than 750 residents, by 150 residents.
(III) Subject to subclause (IV), if the base number of residents does not exceed 600 residents, by a number equal to at least 25 percent of such base number.
(IV) In the case of a qualifying entity which is described in clause (v) and which elects treatment under this subclause, by a number equal to at least 20 percent of the base number.
(ii) Joint applicants.--In the case of a qualifying entity described in subparagraph (C)(ii), the number of full-time equivalent residents in the aggregate for all the approved medical residency training programs operated by or through the entity shall be reduced as follows:
(I) Subject to subclause (II), by a number equal to at least 25 percent of the base number.
(II) In the case of such a qualifying entity which is described in clause (v) and which elects treatment under this subclause, by a number equal to at least 20 percent of the base number.
(iii) Consortia.--In the case of a qualifying entity described in subparagraph (C)(iii), the number of full-time equivalent residents in the aggregate for all the approved medical residency training programs operated by or through the entity shall be reduced by a number equal to at least 20 percent of the base number.
(iv) Manner of reduction.--The reductions specified under the preceding provisions of this subparagraph for a qualifying entity shall be below the base number of residents for that entity and shall be fully effective not later than the 5th residency training year in which the application under subparagraph (B) is effective.
(v) Entities providing assurance of increase in primary care residents.--An entity is described in this clause if--
(I) the base number of residents for the entity is less than 750 or the entity is described in subparagraph (C)(ii); and (II) the entity represents in its application under subparagraph (B) that it will increase the number of full-time equivalent residents in primary care by at least 20 percent (from such number included in the base number of residents) by not later than the 5th residency training year in which the application under subparagraph (B) is effective.
If a qualifying entity fails to comply with the representation described in subclause (II) by the end of such 5th residency training year, the entity shall be subject to repayment of all amounts paid under this paragraph, in accordance with procedures established to carry out subparagraph (F).
(vi) Base number of residents defined.--For purposes of this paragraph, the term 'base number of residents' means, with respect to a qualifying entity (or its participating hospitals) operating approved medical residency training programs, the number of full-time equivalent residents in such programs (before application of weighting factors) of the entity as of the most recent residency training year ending before June 30, 1997, or, if less, for any subsequent residency training year that ends before the date the entity makes application under this paragraph.
(E) Applicable hold harmless percentage.--For purposes of subparagraph (A), the 'applicable hold harmless percentage' for the-- (i) first and second residency training years in which the reduction plan is in effect, 100 percent, (ii) third such year, 75 percent, (iii) fourth such year, 50 percent, and (iv) fifth such year, 25 percent.
(F) Penalty for noncompliance.-- (i) In general.--No payment may be made under this paragraph to a hospital for a residency training year if the hospital has failed to reduce the number of full-time equivalent residents (in the manner required under subparagraph (D)) to the number agreed to by the Secretary and the qualifying entity in approving the application under this paragraph with respect to such year.
(ii) Increase in number of residents in subsequent years.--If payments are made under this paragraph to a hospital, and if the hospital increases the number of full- time equivalent residents above the number of such residents permitted under the reduction plan as of the completion of the plan, then, as specified by the Secretary, the entity is liable for repayment to the Secretary of the total amounts paid under this paragraph to the entity.
(G) Treatment of rotating residents.--In applying this paragraph, the Secretary shall establish rules regarding the counting of residents who are assigned to institutions the medical residency training programs in which are not covered under approved applications under this paragraph.".
(b) Relation to Demonstration Projects and Authority.-- (1) Section 1886(h)(6) of the Social Security Act, added by subsection (a), other than subparagraph (F)(ii) thereof, shall not apply to any residency training program with respect to which a demonstration project described in paragraph (3) has been approved by the Health Care Financing Administration as of May 27, 1997.
(2) Effective May 27, 1997, the Secretary of Health and Human Services is not authorized to approve any demonstration project described in paragraph (3) for any residency training year beginning before July 1, 2006.
(3) A demonstration project described in this paragraph is a project that primarily provides for additional payments under title XVIII of the Social Security Act in connection with a reduction in the number of residents in a medical residency training program.
(c) Interim, Final Regulations.--In order to carry out the amendment made by subsection (a) in a timely manner, the Secretary of Health and Human Services may first promulgate regulations, that take effect on an interim basis, after notice and pending opportunity for public comment, by not later than 6 months after the date of the enactment of this Act.
(a) In General.--Section 1886(h)(5)(G) of the Social Security Act (42 U.S.C. 1395ww(h)(5)(G)) is amended-- (1) in clause (i), by striking "and (iii)" and inserting ", (iii), and (iv)"; and (2) by adding at the end the following: (iv) Special rule for certain primary care combined residency programs.--(I) In the case of a resident enrolled in a combined medical residency training program in which all of the individual programs (that are combined) are for training a primary care resident (as defined in subparagraph (H)), the period of board eligibility shall be the minimum number of years of formal training required to satisfy the requirements for initial board eligibility in the longest of the individual programs plus one additional year.
(II) A resident enrolled in a combined medical residency training program that includes an obstetrics and gynecology program shall qualify for the period of board eligibility under subclause (I) if the other programs such resident combines with such obstetrics and gynecology program are for training a primary care resident.".
(b) Effective Date.--The amendments made by subsection (a) apply to combined medical residency training programs in effect for residency years beginning on or after July 1, 1997.
(a) In General.--The Secretary of Health and Human Services (in this section referred to as the Secretary") shall establish a demonstration project under which, instead of making payments to teaching hospitals pursuant to section 1886(h) of the Social Security Act, the Secretary shall make payments under this section to each consortium that meets the requirements of subsection (b) and that applies to be included under the project.
(b) Qualifying Consortia.--For purposes of subsection (a), a consortium meets the requirements of this subsection if the consortium is in compliance with the following: (1) The consortium consists of a teaching hospital with one or more approved medical residency training programs and one or more of the following entities: (A) A school of allopathic medicine or osteopathic medicine.
(B) Another teaching hospital, which may be a children's hospital.
(C) A Federally qualified health center.
(D) A medical group practice.
(E) A managed care entity.
(F) An entity furnishing outpatient services.
(G) Such other entity as the Secretary determines to be appropriate.
(2) The members of the consortium have agreed to participate in the programs of graduate medical education that are operated by the entities in the consortium.
(3) With respect to the receipt by the consortium of payments made pursuant to this section, the members of the consortium have agreed on a method for allocating the payments among the members.
(4) The consortium meets such additional requirements as the Secretary may establish.
(c) Amount and Source of Payment.--The total of payments to a qualifying consortium for a fiscal year pursuant to subsection (a) shall not exceed the amount that would have been paid under section 1886 (h) or (k) of the Social Security Act for the teaching hospital (or hospitals) in the consortium. Such payments shall be made in such proportion from each of the trust funds established under title XVIII of such Act as the Secretary specifies.
(a) In General.--The Medicare Payment Advisory Commission (established under section 1805 of the Social Security Act and in this section referred to as the Commission") shall examine and develop recommendations on whether and to what extent medicare payment policies and other Federal policies regarding teaching hospitals and graduate medical education should be changed. Such recommendations shall include recommendations regarding each of the following: (1) Possible methodologies for making payments for graduate medical education and the selection of entities to receive such payments. Matters considered under this paragraph shall include-- (A) issues regarding children's hospitals and approved medical residency training programs in pediatrics, and (B) whether and to what extent payments are being made (or should be made) for training in the nursing and other allied health professions.
(2) Federal policies regarding international medical graduates.
(3) The dependence of schools of medicine on service-generated income.
(4) Whether and to what extent the needs of the United States regarding the supply of physicians, in the aggregate and in different specialties, will change during the 10-year period beginning on October 1, 1997, and whether and to what extent any such changes will have significant financial effects on teaching hospitals.
(5) Methods for promoting an appropriate number, mix, and geographical distribution of health professionals.
(b) Consultation.--In conducting the study under subsection (a), the Commission shall consult with the Council on Graduate Medical Education and individuals with expertise in the area of graduate medical education, including-- (1) deans from allopathic and osteopathic schools of medicine; (2) chief executive officers (or equivalent administrative heads) from academic health centers, integrated health care systems, approved medical residency training programs, and teaching hospitals that sponsor approved medical residency training programs; (3) chairs of departments or divisions from allopathic and osteopathic schools of medicine, schools of dentistry, and approved medical residency training programs in oral surgery; (4) individuals with leadership experience from representative fields of non-physician health professionals; (5) individuals with substantial experience in the study of issues regarding the composition of the health care workforce of the United States; and (6) individuals with expertise in health care payment policies.
(c) Report.--Not later than 2 years after the date of the enactment of this Act, the Commission shall submit to the Congress a report providing its recommendations under this section and the reasons and justifications for such recommendations.
(a) In General.--The Secretary of Health and Human Services shall conduct a study with respect to-- (1) variations among hospitals in the hospital overhead and supervisory physician components of their direct medical education costs taken into account under section 1886(h) of the Social Security Act, and (2) the reasons for such variations.
(b) Report.--Not later than 1 year after the date of the enactment of this Act, the Secretary shall report the results of the study conducted under subsection (a) to the appropriate committees of Congress, including recommendations for legislation reducing variations described in subsection (a) that the Secretary finds inappropriate.
SEC. 4631. PERMANENT EXTENSION AND REVISION OF CERTAIN SECONDARY PAYER PROVISIONS.
(a) Application to Disabled Individuals in Large Group Health Plans.-- (1) In general.--Section 1862(b)(1)(B) (42 U.S.C. 1395y(b)(1)(B)) is amended-- (A) in clause (i), by striking "clause (iv)" and inserting clause (iii)"; (B) by striking clause (iii); and (C) by redesignating clause (iv) as clause (iii).
(2) Conforming amendments.--Paragraphs (1) through (3) of section 1837(i) (42 U.S.C. 1395p(i)) and the second sentence of section 1839(b) (42 U.S.C. 1395r(b)) are each amended by striking "1862(b)(1)(B)(iv)" each place it appears and inserting "1862(b)(1)(B)(iii)".
(b) Individuals With End Stage Renal Disease.--Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended-- (1) in the last sentence by striking "October 1, 1998" and inserting "the date of enactment of the Balanced Budget Act of 1997"; and (2) by adding at the end the following: Effective for items and services furnished on or after the date of enactment of the Balanced Budget Act of 1997, (with respect to periods beginning on or after the date that is 18 months prior to such date), clauses (i) and (ii) shall be applied by substituting '30-month' for '12- month' each place it appears."
(c) IRS-SSA-HCFA Data Match.-- (1) Social security act.--Section 1862(b)(5)(C) (42 U.S.C. 1395y(b)(5)(C)) is amended by striking clause (iii).
(2) Internal revenue code.--Section 6103(l)(12) of the Internal Revenue Code of 1986 is amended by striking subparagraph (F).
(a) Extension of Claims Filing Period.--Section 1862(b)(2)(B) (42 U.S.C. 1395y(b)(2)(B)) is amended by adding at the end the following new clause: (v) Claims-filing period.--Notwithstanding any other time limits that may exist for filing a claim under an employer group health plan, the United States may seek to recover conditional payments in accordance with this subparagraph where the request for payment is submitted to the entity required or responsible under this subsection to pay with respect to the item or service (or any portion thereof) under a primary plan within the 3-year period beginning on the date on which the item or service was furnished.".
(b) Effective Date.--The amendments made by this section apply to items and services furnished on or after the date of the enactment of this Act.
(a) Permitting Recovery Against Third Party Administrators of Primary Plans.--Section 1862(b)(2)(B)(ii) (42 U.S.C. 1395y(b)(2)(B)(ii)) is amended-- (1) by striking "under this subsection to pay" and inserting "(directly, as a third-party administrator, or otherwise) to make payment"; and (2) by adding at the end the following: The United States may not recover from a third-party administrator under this clause in cases where the third-party administrator would not be able to recover the amount at issue from the employer or group health plan and is not employed by or under contract with the employer or group health plan at the time the action for recovery is initiated by the United States or for whom it provides administrative services due to the insolvency or bankruptcy of the employer or plan.
(b) Clarification of Beneficiary Liability.--Section 1862(b)(1) (42 U.S.C. 1395y(b)(1)) is amended by adding at the end the following new subparagraph: (F) Limitation on beneficiary liability.--An individual who is entitled to benefits under this title and is furnished an item or service for which such benefits are incorrectly paid is not liable for repayment of such benefits under this paragraph unless payment of such benefits was made to the individual.".
(c) Effective Date.--The amendments made by this section apply to items and services furnished on or after the date of the enactment of this Act.
SEC. 4641. PLACEMENT OF ADVANCE DIRECTIVE IN MEDICAL RECORD.
(a) In General.--Section 1866(f)(1)(B) (42 U.S.C. 1395cc(f)(1)(B)) is amended by striking "in the individual's medical record" and inserting "in a prominent part of the individual's current medical record".
(b) Effective Date.--The amendment made by subsection (a) shall apply to provider agreements entered into, renewed, or extended on or after such date (not later than 1 year after the date of the enactment of this Act) as the Secretary of Health and Human Services specifies.
Section 1138(b)(1)(A)(ii) (42 U.S.C. 1320b-8(b)(1)(A)(ii)) is amended by striking "two years" and inserting "2 years (4 years if the Secretary determines appropriate for an organization on the basis of its past practices)".
Section 1117 (42 U.S.C. 1317) is amended-- (1) in the heading, by inserting "and chief actuary" after "the administrator"; (2) by inserting "(a)" before "The Administrator"; and (3) by adding at the end the following: (b)(1) There is established in the Health Care Financing Administration the position of Chief Actuary. The Chief Actuary shall be appointed by, and in direct line of authority to, the Administrator of such Administration. The Chief Actuary shall be appointed from among individuals who have demonstrated, by their education and experience, superior expertise in the actuarial sciences. The Chief Actuary shall exercise such duties as are appropriate for the office of the Chief Actuary and in accordance with professional standards of actuarial independence. The Chief Actuary may be removed only for cause.
(2) The Chief Actuary shall be compensated at the highest rate of basic pay for the Senior Executive Service under section 5382(b) of title 5, United States Code.".
(a) DRG Prospective Payment Rate Methodology.-- (1) In general.--Section 1886(d)(6) (42 U.S.C. 1395ww(d)(6)) is amended by striking "September 1" and inserting "August 1".
(2) Transition rule for fiscal year 1998.--With respect to the publication in the Federal Register of the DRG prospective payment rate methodology under such section for fiscal year 1998, the term "60 days" in section 801(a)(3)(A) and section 802(a) of title 5, United States Code, is deemed to be a reference to "30 days.
(b) Hospital Payment Updates.-- (1) In general.--Section 1886(e) (42 U.S.C. 1395ww(e) is amended-- (A) in paragraph (5)(A) by striking "May 1" and inserting "April 1"; and (B) in paragraph (5)(B) by striking "September 1" and inserting "August 1".
(2) Transition rule for fiscal year 1998.--With respect to the publication in the Federal Register of the appropriate change factor for inpatient hospital services for discharges in fiscal year 1998 under section 1886(e)(5)(B) (42 U.S.C. 1395ww(e)(5)(B)), the term "60 days" in section 801(a)(3)(A) and section 802(a) of title 5, United States Code, is deemed to be a reference to "30 days".
(c) Applications for Geographic Reclassification.-- (1) In general.--Section 1886(d)(10)(C) (42 U.S.C. 1395ww(d)(10)(C)) is amended in clause (ii), by striking "the first day of the preceding fiscal year." and inserting "the first day of the 13-month period ending on September 30 of the preceding fiscal year." (2) Special rule for applications received in fiscal year 1997.--In the case of an application for a change in geographic classification under such section for fiscal year 1999, the Secretary of Health and Human Services shall shorten the deadlines under such section so as to permit completion of a final decision by the Secretary by June 15, 1998.
(d) Physician Fee Schedule.--Section 1848(b)(1) (42 U.S.C. 1395w- 4(b)(1)) is amended by striking "Before January 1 of each year beginning with 1992" and inserting "Before November 1 of the preceding year, for each year beginning with 1998".