[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2031 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 2031

To combat waste, fraud, and abuse in payments for home health services 
  provided under the medicare program, and to improve the quality of 
                      those home health services.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 5, 1998

  Mr. Grassley (for himself and Mr. Breaux) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To combat waste, fraud, and abuse in payments for home health services 
  provided under the medicare program, and to improve the quality of 
                      those home health services.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Home Health 
Integrity Preservation Act of 1998''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Revision of surety bond requirement for home health agencies.
Sec. 3. Additional conditions of participation for home health 
                            agencies.
Sec. 4. Surveyor training in reimbursement and coverage policies.
Sec. 5. Surveys and reviews.
Sec. 6. Prior patient load.
Sec. 7. Establishment of standards and procedures to improve quality of 
                            services.
Sec. 8. Notification of availability of a home health agency's most 
                            recent survey as part of discharge planning 
                            process.
Sec. 9. Home health integrity task force.
Sec. 10. Application of certain provisions of the bankruptcy code.
Sec. 11. Study and report to Congress.
Sec. 12. Effective date.

SEC. 2. REVISION OF SURETY BOND REQUIREMENT FOR HOME HEALTH AGENCIES.

    (a) In General.--Section 1861(o)(7) of the Social Security Act (42 
U.S.C. 1395x(o)) (as added by section 4312(b) of the Balanced Budget 
Act of 1997) is amended to read as follows:
            ``(7) provides the Secretary, prior to the initial 
        certification of the home health agency and for 1 year 
        thereafter, with a surety bond against fraudulent or abusive 
        activities in a form specified by the Secretary and in an 
        amount equal to $25,000; and''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of enactment of this Act.

SEC. 3. ADDITIONAL CONDITIONS OF PARTICIPATION FOR HOME HEALTH 
              AGENCIES.

    (a) Qualifications of Managing Employees.--Section 1891(a) of the 
Social Security Act (42 U.S.C. 1395bbb(a)) is amended by adding at the 
end the following:
            ``(7) The agency shall have--
                    ``(A) sufficient knowledge, as attested by the 
                managing employees (as defined in section 1126(b)) of 
                the agency (pursuant to subsection (c)(2)(C)(iv)(II)) 
                using standards established by the Secretary, of the 
                requirements for reimbursement under this title, 
                coverage criteria and claims procedures, and the civil 
                and criminal penalties for noncompliance with such 
                requirements; and
                    ``(B) managing employees with sufficient prior 
                education or work experience, according to standards 
                determined by the Secretary, in the delivery of health 
                care.''.
    (b) Compliance Program.--Section 1891(a) of the Social Security Act 
(42 U.S.C. 1395bbb(a)) (as amended by subsection (a)) is amended by 
adding at the end the following:
            ``(8) The agency has developed and implemented a fraud and 
        abuse compliance program.''.
    (c) Availability of Survey.--Section 1891(a) of the Social Security 
Act (42 U.S.C. 1395bbb(a)) (as amended by subsection (b)) is amended by 
adding at the end the following:
            ``(9) The agency, before the agency provides any home 
        health services to a beneficiary, makes available to the 
        beneficiary or the representative of the beneficiary a summary 
        of the pertinent findings (including a list of any 
        deficiencies) of the most recent survey of the agency relating 
        to the compliance of such agency. Such summary shall be 
        provided in a standardized format and may, at the discretion of 
        the Secretary, also include other information regarding the 
        agency's operations that are of potential interest to 
        beneficiaries, such as the number of patients served by the 
        agency.''.
    (d) Notice of New Home Health Service, New Branch Office, and New 
Joint Venture.--Section 1891(a)(2) of the Social Security Act (42 
U.S.C. 1395bbb(a)(2)) is amended to read as follows:
            ``(2)(A) The agency notifies the agency's fiscal 
        intermediary and the State entity responsible for the licensing 
        or certification of the agency--
                    ``(i) of a change in the persons with an ownership 
                or control interest (as defined in section 1124(a)(3)) 
                in the agency,
                    ``(ii) of a change in the persons who are officers, 
                directors, agents, or managing employees (as defined in 
                section 1126(b)) of the agency,
                    ``(iii) of a change in the corporation, 
                association, or other company responsible for the 
                management of the agency,
                    ``(iv) that the agency is providing a category of 
                skilled service that it was not providing at the time 
                of the agency's most recent standard survey,
                    ``(v) that the agency is operating a new branch 
                office that was not in operation at the time of the 
                agency's most recent standard survey, and
                    ``(vi) that the agency is involved in a new joint 
                venture with other health care providers or other 
                business entities.
            ``(B) The notice required under subparagraph (A) shall be 
        provided--
                    ``(i) for a change described in clauses (i), (ii), 
                and (iii) of such subparagraph, within 30 calendar days 
                of the time of the change and shall include the 
                identity of each new person or company described in the 
                previous sentence,
                    ``(ii) for a change described in clause (iv) of 
                such subparagraph, within 30 calendar days of the time 
                the agency begins providing the new service and shall 
                include a description of the service,
                    ``(iii) for a change described in clause (v) of 
                such subparagraph, within 30 calendar days of the time 
                the new branch office begins operations and shall 
                include the location of the office and a description of 
                the services that are being provided at the office, and
                    ``(iv) for a change described in clause (vi) of 
                such subparagraph, within 30 calendar days of the time 
                the agency enters into the joint venture agreement and 
                shall include a description of the joint venture and 
                the participants in the joint venture.''.

SEC. 4. SURVEYOR TRAINING IN REIMBURSEMENT AND COVERAGE POLICIES.

    Section 1891(d)(3) of the Social Security Act (42 U.S.C. 
1395bbb(d)(3)) is amended--
            (1) by striking ``relating to the performance'' and 
        inserting ``relating to--
            ``(A) the performance'';
            (2) by striking the period at the end and inserting ``; 
        and''; and
            (3) by adding at the end the following:
            ``(B) requirements for reimbursement and coverage of 
        services under this title.''.

SEC. 5. SURVEYS AND REVIEWS.

    (a) Additional Requirements for Survey.--Section 1891(c)(2)(C) of 
the Social Security Act (42 U.S.C. 1395bbb(c)(2)(C)) is amended--
            (1) in clause (i)(I)--
                    (A) by striking ``purpose of evaluating'' and 
                inserting ``purpose of--
                            ``(aa) evaluating''; and
                    (B) by adding at the end the following:
                            ``(bb) evaluating whether the individuals 
                        are homebound for purposes of qualifying for 
                        receipt of benefits for home health services 
                        under this title; and'';
            (2) in clause (ii), by striking ``and'' at the end;
            (3) in clause (iii), by striking the period at the end and 
        inserting ``; and''; and
            (4) by adding at the end the following:
            ``(iv) shall include--
                    ``(I) an assessment of whether the agency is in 
                compliance with all of the conditions of participation 
                and requirements specified in or pursuant to section 
                1861(o), this section, and this title;
                    ``(II) an assessment that the managing employees 
                (as defined in section 1126(b)) of the agency have 
                attested in writing to having sufficient knowledge, as 
                determined by the Secretary, of the requirements for 
                reimbursement under this title, coverage criteria and 
                claims procedures, and the civil and criminal penalties 
                for noncompliance with such requirements; and
                    ``(III) a review of the services provided by 
                subcontractors of the agency to ensure that such 
                services are being provided in a manner consistent with 
                the requirements of this title.''.
    (b) Additional Events Triggering a Survey.--Section 1891(c)(2)(B) 
of the Social Security Act (42 U.S.C. 1395bbb(c)(2)(B)) is amended--
            (1) by striking ``and'' at the end of clause (i);
            (2) by striking the period at the end of clause (ii) and 
        inserting a comma; and
            (3) by adding at the end the following:
                            ``(iii) shall be conducted not less than 
                        annually for the first 2 years after the 
                        initial standard survey of the agency;
                            ``(iv) after the agency's first 2 years of 
                        participation under this title, shall be 
                        conducted within 90 calendar days of the date 
that the agency notifies the Secretary that it is providing a category 
of skilled service that the agency was not providing at the time of the 
agency's most recent standard survey;
                            ``(v) if the agency is operating a new 
                        branch office that was not in operation at the 
                        time of the agency's most recent standard 
                        survey, shall be conducted within the 12-month 
                        period following the date that the new branch 
                        office began operations to ensure that such 
                        office is providing quality care and that it is 
                        appropriately classified as a branch office, 
                        and shall include direct scrutiny of the 
                        operations of the branch office; and
                            ``(vi) shall be conducted on randomly 
                        selected agencies on an occasional basis, with 
                        the number of such surveys to be determined by 
                        the Secretary.''.
    (c) Review by Fiscal Intermediary.--Section 1816 of the Social 
Security Act (42 U.S.C. 1395h) is amended by adding at the end the 
following:
    ``(m) An agreement with an agency or organization under this 
section shall require that the agency or organization conduct a review 
of the overall business structure of a home health agency submitting a 
claim for reimbursement for home health services, including any related 
organizations of the home health agency.''.

SEC. 6. PRIOR PATIENT LOAD.

    Section 1891 of the Social Security Act (42 U.S.C. 1395bbb) is 
amended by adding at the end the following:
    ``(h) Prior Patient Load.--
            ``(1) In general.--The Secretary shall not enter into an 
        agreement for the first time with a home health agency to 
        provide items and services under this title unless the 
        Secretary determines that, before the date the agreement is 
        entered into, the agency--
                    ``(A) had been in operation for at least 60 
                calendar days; and
                    ``(B) had at least 10 patients during that period 
                of prior operation.
            ``(2) Exceptions.--
                    ``(A) Beneficiary access.--If the Secretary 
                determines appropriate, the Secretary may waive the 
                requirements of paragraph (1) in order to establish or 
                maintain beneficiary access to home health services in 
                an area.
                    ``(B) Change of ownership.--The requirements of 
                paragraph (1) shall not apply to a home health agency 
                at the time of a change in ownership of such agency.''.

SEC. 7. ESTABLISHMENT OF STANDARDS AND PROCEDURES TO IMPROVE QUALITY OF 
              SERVICES.

    (a) In General.--Section 1891 of the Social Security Act (42 U.S.C. 
1395bbb) (as amended by section 6) is amended by adding at the end the 
following:
    ``(i) Establishment of Standards and Procedures.--
            ``(1) Screening of employees.--The Secretary shall 
        establish procedures to improve the background screening 
        performed by a home health agency on individuals that the 
        agency is considering hiring as home health aides (as defined 
        in subsection (a)(3)(E)) and licensed health professionals (as 
        defined in subsection (a)(3)(F)).
            ``(2) Cost reports.--The Secretary shall establish 
        additional procedures regarding the requirement for attestation 
        of cost reports to ensure greater accountability on the part of 
        a home health agency and its managing employees (as defined in 
        section 1126(b)) for the accuracy of the information provided 
        to the Secretary in any such cost reports.
            ``(3) Monitoring agency after extended survey.--The 
        Secretary shall establish procedures to ensure that a home 
        health agency that is subject to an extended (or partial 
        extended) survey is closely monitored from the period 
        immediately following the extended survey through the agency's 
        subsequent standard survey to ensure that the agency is in 
        compliance with all the conditions of participation and 
        requirements specified in or pursuant to section 1861(o), this 
        section, and this title.
            ``(4) Additional audits.--
                    ``(A) In general.--
                            ``(i) Standards.--The Secretary shall 
                        establish objective standards regarding the 
                        determination of--
                                    ``(I) whether an agency is a home 
                                health agency described in subparagraph 
                                (B); and
                                    ``(II) the circumstances that 
                                trigger an audit for a home health 
                                agency described in subparagraph (B), 
                                and the content of such an audit.
                            ``(ii) Information.--In establishing 
                        standards under clause (i), the Secretary shall 
                        ensure that the individuals performing the 
                        audits under this section are provided with the 
                        necessary information, including information 
                        from intermediaries, carriers, and law 
                        enforcement sources, in order to determine if a 
                        particular home health agency is an agency 
                        described in subparagraph (B) and whether the 
                        circumstances triggering an audit for such an 
                        agency has occurred.
                    ``(B) Agency described.--A home health agency is 
                described in this subparagraph if it is an agency that 
                has--
                            ``(i) experienced unusually rapid growth as 
                        compared to other home health agencies in the 
                        area and in the country;
                            ``(ii) had unusually high utilization 
                        patterns as compared to other home health 
                        agencies in the area and in the country;
                            ``(iii) unusually high costs per patient as 
                        compared to other home health agencies in the 
                        area and in the country;
                            ``(iv) unusually high levels of overpayment 
                        or coverage denials as compared to other home 
                        health agencies in the area and in the country; 
                        or
                            ``(v) operations that otherwise raise 
                        concerns such that the Secretary determines 
                        that an audit is appropriate.
            ``(5) Branch offices.--
                    ``(A) Surveys.--The Secretary shall establish 
                standards for periodic surveys of branch offices of a 
                home health agency in order to assess whether the 
                branch offices meet the Secretary's national criteria 
                for branch office designation and for quality of care. 
                Such surveys shall include home visits to beneficiaries 
                served by the branch office (but only with the consent 
                of the beneficiary).
                    ``(B) Uniform national definition.--The Secretary 
                shall establish a uniform national definition of a 
                branch office of a home health agency.
            ``(6) Certain qualifications of managing employees.--The 
        Secretary shall establish standards regarding the knowledge and 
        prior education or work experience that a managing employee (as 
        defined in section 1126(b)) of an agency must possess in order 
        to comply with the requirements described in subsection (a)(7).
            ``(7) Claims processing.--
                    ``(A) In general.--The Secretary shall establish 
                standards to improve and strengthen the procedures by 
                which claims for reimbursement by home health agencies 
                are identified as being fraudulent, wasteful, or 
                abusive.
                    ``(B) Procedures.--The standards established by the 
                Secretary pursuant to subparagraph (A) shall include, 
                to the extent practicable, standards for a minimum 
                number of--
                            ``(i) intensive focused medical reviews of 
                        the services provided to beneficiaries by an 
                        agency;
                            ``(ii) interviews with beneficiaries, 
                        employees of the agency, and other individuals 
                        providing services on behalf of the agency; and
                            ``(iii) random spot checks of visits to a 
                        beneficiary's home by employees of the agency 
                        (but only with the consent of the beneficiary).
                    ``(C) Report to congress.--Not later than 90 days 
                after the date of enactment of the Home Health 
                Integrity Preservation Act of 1998, the Secretary shall 
                submit a report to Congress containing a detailed 
                description of--
                            ``(i) the current levels of activity by the 
                        Secretary with regard to the reviews, 
                        interviews, and spot checks described in 
                        subparagraph (B); and
                            ``(ii) the Secretary's plans to increase 
                        those levels pursuant to the procedures 
                        described in subparagraphs (A) and (B).
            ``(8) Expansion of financial statement.--The Secretary 
        shall establish procedures to expand the financial statement 
        audit process to include compliance and integrity reviews.''.
    (b) Effective Date.--By not later than 180 calendar days after the 
date of enactment of this Act, the Secretary shall establish the 
standards and procedures described in paragraphs (1) through (8) of 
section 1891(i) of the Social Security Act (42 U.S.C. 1395bbb(i)) (as 
added by subsection (a)) by regulation or other sufficient means.

SEC. 8. NOTIFICATION OF AVAILABILITY OF A HOME HEALTH AGENCY'S MOST 
              RECENT SURVEY AS PART OF DISCHARGE PLANNING PROCESS.

    Section 1861(ee)(2)(D) of the Social Security Act (42 U.S.C. 
1395x(ee)(2)(D)) (as amended by section 4321(a) of the Balanced Budget 
Act of 1997) is amended--
            (1) by striking ``including the availability'' and 
        inserting ``including--
                    ``(i) the availability''; and
            (2) by inserting before the period the following: ``; and
                    ``(ii) the availability of (and procedures for 
                obtaining from a home health agency) a summary document 
                described in section 1891(a)(9)''.

SEC. 9. HOME HEALTH INTEGRITY TASK FORCE.

    (a) Establishment.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall establish within 
the Office of the Inspector General of the Department of Health and 
Human Services a home health integrity task force (in this section 
referred to as the ``Task Force'').
    (b) Director.--The Inspector General of the Department of Health 
and Human Services shall appoint the Director of the Task Force.
    (c) Duties.--The Task Force shall target, investigate, and pursue 
any available civil or criminal actions against individuals who 
organize, direct, finance, or are otherwise engaged in fraud in the 
provision of home health services (as defined in section 1861(m) of the 
Social Security Act (42 U.S.C. 1395x(m))) under the medicare program 
under such Act.
    (d) Outside Agencies and Entities.--In carrying out the duties 
described in subsection (c), the Task Force shall work in coordination 
with other Federal, State, and local agencies, including the Health 
Care Financing Administration, and with private entities. All Federal, 
State, and local employees and all private entities are encouraged to 
provide maximum cooperation to the Task Force.

SEC. 10. APPLICATION OF CERTAIN PROVISIONS OF THE BANKRUPTCY CODE.

    (a) Restricted Applicability of Bankruptcy Stay, Discharge, and 
Preferential Transfer Provisions to Certain Medicare Debts.--Title XI 
of the Social Security Act (42 U.S.C. 1301 et seq.) is amended by 
inserting after section 1143 the following:

       ``application of certain provisions of the bankruptcy code

    ``Sec. 1144. (a) Certain Medicare Actions Not Stayed by Bankruptcy 
Proceedings.--The commencement or continuation of any action against a 
debtor (as defined in subsection (d)) under this title or title XVIII, 
including any action or proceeding to exclude or suspend such debtor 
from program participation, assess civil monetary penalties, recoup or 
set off overpayments, or deny or suspend payment of claims shall not be 
subject to a stay under section 362(a) of title 11, United States Code.
    ``(b) Certain Medicare Debt Not Dischargeable in Bankruptcy.--A 
debt owed to the United States or to a State by a debtor for an 
overpayment under title XVIII, or for a penalty, fine, or assessment 
under this title or title XVIII, shall not be dischargeable under any 
provision of title 11, United States Code.
    ``(c) Repayment of Certain Debts Considered Final.--Payments made 
to repay a debt to the United States or to a State by a debtor with 
respect to items and services provided, or claims for payment made for 
such items and services, under title XVIII (including repayment of an 
overpayment), or to pay a penalty, fine, or assessment under this title 
or title XVIII, shall be considered final and not avoidable transfers 
under section 547 of title 11, United States Code.
    ``(d) Debtor Defined.--In this section, the term `debtor' means a 
provider of services (as defined in section 1861(u)) that has commenced 
a case under title 11, United States Code.''.
    (b) Medicare Rules Applicable to Bankruptcy Proceedings of a 
Medicare Provider of Services.--Title XVIII of the Social Security Act 
(42 U.S.C. 1395 et seq.) (as amended by section 4015 of the Balanced 
Budget Act of 1997) is amended by adding at the end the following:

           ``application of provisions of the bankruptcy code

    ``Sec. 1897. (a) Use of Medicare Standards and Procedures.--
Notwithstanding any provision of title 11, United States Code, or any 
other provision of law, in the case of claims by a debtor (as defined 
in section 1144(d)) for payment under this title, the determination of 
whether the claim is allowable, and of the amount payable, shall be 
made in accordance with the provisions of this title, title XI, and 
implementing regulations.
    ``(b) Notice to Creditor of Bankruptcy Petitioner.--In the case of 
a debt owed by a debtor (as so defined) to the United States with 
respect to items and services provided, or claims for payment made, 
under this title (including a debt arising from an overpayment or a 
penalty, fine, or assessment under title XI or this title), the notices 
to the creditor of bankruptcy petitions, proceedings, and relief 
required under title 11, United States Code (including under section 
342 of that title and rule 2002(j) of the Federal Rules of Bankruptcy 
Procedure), shall be given to the Secretary. Provision of such notice 
to a fiscal agent of the Secretary shall not be considered to satisfy 
this requirement.
    ``(c) Turnover of Property to the Bankruptcy Estate.--For purposes 
of section 542(b) of title 11, United States Code, a claim for payment 
under this title shall not be considered to be a matured debt payable 
to the estate of a debtor (as so defined) until such claim has been 
allowed by the Secretary in accordance with procedures established 
under this title.''.

SEC. 11. STUDY AND REPORT TO CONGRESS.

    (a) Study.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        conduct a study on all matters relating to the appropriate home 
        health services to be provided under the medicare program under 
        title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) 
        to individuals with chronic conditions.
            (2) Matters studied.--The matters studied by the Secretary 
        shall include--
                    (A) methods to strengthen the role of a physician 
                in developing a plan of care for a beneficiary 
                receiving home health benefits under this title; and
                    (B) the need for an individual or entity (other 
                than the home health agency or the beneficiary's 
                physician) to have responsibility for approving the 
                type and quantity of home health services provided to 
                the beneficiary.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall submit a report to Congress on the study 
conducted under subsection (a). The Secretary shall include in the 
report such recommendations regarding the utilization of home health 
services under the medicare program as the Secretary determines to be 
appropriate.

SEC. 12. EFFECTIVE DATE.

    Except as otherwise provided in this Act, the amendments made by 
this Act shall take effect on the expiration of the date that is 180 
calendar days after the date of enactment of this Act.
                                 <all>