[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2835 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2835

 To provide an appropriate transition from the interim payment system 
  for home health services to the prospective payment system for such 
                  services under the medicare program.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 30, 2000

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

_______________________________________________________________________

                                 A BILL


 
 To provide an appropriate transition from the interim payment system 
  for home health services to the prospective payment system for such 
                  services under the medicare program.

    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 ``Medicare Home 
Health Refinement Act of 2000''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
    TITLE I--EMERGENCY CASH-FLOW ASSISTANCE FOR HOME HEALTH AGENCIES

Sec. 101. Home Health Transitional Loan Program.
Sec. 102. Establishment of split-payment percentages under the PPS for 
                            home health services.
Sec. 103. Prompt payment from medicare trust funds under the IPS and 
                            the PPS for home health services.
   TITLE II--REIMBURSEMENT OF HOME HEALTH AGENCIES FOR UNFUNDED PPS 
                             RELATED COSTS

Sec. 201. Adjustment to reflect administrative costs not included in 
                            the PPS for home health services.
 TITLE III--REIMBURSEMENT OF HOME HEALTH AGENCIES FOR OASIS LABOR COSTS

Sec. 301. Reimbursement for OASIS labor costs under the IPS and PPS for 
                            home health services.
TITLE IV--NONROUTINE MEDICAL SUPPLIES FURNISHED BY HOME HEALTH AGENCIES

Sec. 401. Exclusion of nonroutine medical supplies under the PPS for 
                            home health services.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Home health care is a vital component of the medicare 
        program under title XVIII of the Social Security Act.
            (2) Home health services provided under the medicare 
        program enable medicare beneficiaries who are homebound and 
        greatly risk costly institutionalized care to continue to live 
        in their own homes and communities.
            (3) The Balanced Budget Act of 1997 reformed Medicare home 
        health care spending by instructing the Health Care Financing 
        Administration (in this section referred to as ``HCFA'') to 
        implement a prospective payment system.
            (4) A number of HCFA's regulations to implement the 
        prospective payment system are administratively burdensome and 
        divert funds away from needed beneficiary care.
            (5) The vast majority of home health agencies are small 
        businesses or nonprofit institutions that cannot operate with 
        significant cash flow problems.
            (6) The prospective payment system should not penalize home 
        health agencies that treat medicare beneficiaries with higher-
        than-average medical needs.

    TITLE I--EMERGENCY CASH-FLOW ASSISTANCE FOR HOME HEALTH AGENCIES

SEC. 101. HOME HEALTH TRANSITIONAL LOAN PROGRAM.

    (a) Establishment of Home Health Transitional Loan Program.--There 
is established a Home Health Transitional Loan Program under which the 
Secretary of Health and Human Services (in this section referred to as 
the ``Secretary'') shall make loans from the Federal Hospital Insurance 
Trust Fund to any qualified home health agency (as defined in 
subsection (c)) in accordance with the terms and conditions described 
in subsection (b) before the termination of the authority of the 
Secretary to make such loans under subsection (d).
    (b) Terms and Conditions.--
            (1) In general.--Subject to paragraph (2), the Secretary 
        shall make loans on such terms and conditions as the Secretary 
        may specify.
            (2) Specific terms and conditions.--The terms and 
        conditions of each loan shall include the following:
                    (A) Application.--The Secretary shall approve each 
                application for a loan under this section submitted by 
                a qualified home health agency not later than 10 days 
                after the Secretary receives such application.
                    (B) Amount.--The total amount of a loan made to a 
                qualified home health agency under this section may not 
                exceed the average total costs incurred by such a home 
                health agency during a 3-month period as reported on 
                such home health agency's most recently settled 
                medicare cost report.
                    (C) Interest rate.--The interest rate of the loans 
                made under this section shall be zero percent.
                    (D) Duration.--The home health agency shall repay 
                any loan made under this section not later than 12 
                months after the date on which such loan is made.
    (c) Qualified Home Health Agency Defined.--The term ``qualified 
home health agency'' means a home health agency (as defined in section 
1861(o) of the Social Security Act (42 U.S.C. 1395x(o))) that the 
Secretary determines does not have sufficient cash reserves to 
transition from the interim payment system for home health services 
under section 1861(v)(1)(L) of such Act (42 U.S.C. 1395x(v)(1)(L)) (in 
this section referred to as the ``IPS'' to the prospective payment 
system for such services under section 1895 of such Act (42 U.S.C. 
1395fff) (in this section referred to as the ``PPS'') because of--
            (1) the repayment by the home health agency of overpayments 
        made under the IPS;
            (2) the discontinuation of the periodic interim payment for 
        home health agencies by section 4603(b) of the Balanced Budget 
        Act of 1997 (Public Law 105-133; 111 Stat. 470); or
            (3) the payment amounts under the PPS being less than the 
        payment amounts under the IPS.
    (d) Termination of Authority.--The Secretary may not make any loan 
under this section after the date that is 6 months after the date of 
enactment of this Act.
    (e) Effective Date.--This section shall take effect on the later 
of--
            (1) the date of enactment of this Act; or
            (2) the date on which the Secretary implements the 
        prospective payment system under section 1895 of the Social 
        Security Act (42 U.S.C. 1395fff).

SEC. 102. ESTABLISHMENT OF SPLIT-PAYMENT PERCENTAGES UNDER THE PPS FOR 
              HOME HEALTH SERVICES.

     (a) Establishment.--Section 1895(b) of the Social Security Act (42 
U.S.C. 1395fff) is amended by adding at the end the following new 
paragraph:
            ``(7) Establishment of split-payment percentages.--In 
        making payments under this section, the Secretary shall pay to 
        the agency 80 percent of the prospective payment amount upon 
        the transmittal of the notice of patient admission and 20 
        percent of such amount upon transmittal of the final episode 
        claim.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of enactment of this Act.

SEC. 103. PROMPT PAYMENT FROM MEDICARE TRUST FUNDS UNDER THE IPS AND 
              THE PPS FOR HOME HEALTH SERVICES.

    (a) Under the IPS.--Section 1861(v)(1)(L) of the Social Security 
Act (42 U.S.C. 1395x(v)(1)(L)) is amended by adding at the end the 
following new clause:
    ``(xi) To ensure that payment of claims of home health agencies are 
not delayed because the Secretary must determine from which trust fund 
to pay a claim under this subparagraph, the Secretary shall pay the 
full amount of each claim for an episode of care from the Federal 
Supplementary Medical Insurance Trust Fund, and, in the case that any 
amount paid from such Trust Fund should have been paid from the Federal 
Hospital Insurance Trust Fund, the Secretary shall transfer such amount 
from the Federal Hospital Insurance Trust Fund to the Federal 
Supplementary Medical Insurance Trust Fund.''.
    (b) Under the PPS.--Section 1895(b) of the Social Security Act (42 
U.S.C. 1395fff) (as amended by section 102) is amended by adding at the 
end the following new paragraph:
            ``(8) Prompt payments from trust funds.--To ensure that 
        payment of claims of home health agencies are not delayed 
        because the Secretary must determine from which trust fund to 
        pay a claim under this section, the Secretary shall pay the 
        full amount of each claim for an episode of care from the 
        Federal Supplementary Medical Insurance Trust Fund, and, in the 
        case that any amount paid from such Trust Fund should have been 
        paid from the Federal Hospital Insurance Trust Fund, the 
        Secretary shall transfer such amount from the Federal Hospital 
        Insurance Trust Fund to the Federal Supplementary Medical 
        Insurance Trust Fund.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.

   TITLE II--REIMBURSEMENT OF HOME HEALTH AGENCIES FOR UNFUNDED PPS 
                             RELATED COSTS

SEC. 201. ADJUSTMENT TO REFLECT ADMINISTRATIVE COSTS NOT INCLUDED IN 
              THE PPS FOR HOME HEALTH SERVICES.

    (a) Adjustment To Reflect Administrative Costs.--In the case of a 
home health agency that furnishes home health services to a medicare 
beneficiary, for each such beneficiary to whom the agency furnished 
such services during the agency's cost reporting period beginning in 
fiscal year 2000, the Secretary of Health and Human Services shall pay 
the agency, in addition to any amount of payment made under section 
1861(v)(1)(L) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)) for 
the beneficiary and only for such cost reporting period, an aggregate 
amount of $10 to defray costs incurred by the agency attributable to 
technology costs required for compliance with the prospective payment 
system for home health services under section 1895 of the Social 
Security Act (42 U.S.C. 1395fff), including the acquisition of computer 
hardware and software necessary for classification of patients, and 
accounting, billing, and transmitting data in the manner required under 
such payment system.
    (b) Payment 30 Days After Settled Cost Report.--The Secretary shall 
pay the amounts payable to an agency under this section no later than 
30 days after the later of--
            (1) the date of enactment of this Act; or
            (2) the date on which the cost report submitted by the 
        agency for the cost reporting period beginning in fiscal year 
        2000 is settled.
    (c) Payment From Medicare Trust Funds.--Payments under this section 
shall be made, in appropriate part as specified by the Secretary, from 
the Federal Hospital Insurance Trust Fund and from the Federal 
Supplementary Medical Insurance Trust Fund.
    (d) Definitions.--In this section:
            (1) Home health agency.--The term ``home health agency'' 
        has the meaning given that term under section 1861(o) of the 
        Social Security Act (42 U.S.C. 1395x(o)).
            (2) Home health services.--The term ``home health 
        services'' has the meaning given that term under section 
        1861(m) of such Act (42 U.S.C. 1395x(m)).
            (3) Medicare beneficiary.--The term ``medicare 
        beneficiary'' means a beneficiary described in section 
        1861(v)(1)(L)(vi)(II) of the Social Security Act (42 U.S.C. 
        1395x(v)(1)(L)(vi)(II)).

 TITLE III--REIMBURSEMENT OF HOME HEALTH AGENCIES FOR OASIS LABOR COSTS

SEC. 301. REIMBURSEMENT FOR OASIS LABOR COSTS UNDER THE IPS AND PPS FOR 
              HOME HEALTH SERVICES.

    (a) Adjustment To Reflect Administrative Costs.--
            (1) Under the interim payment system.--Section 301(a) of 
        the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
        Act of 1999 (42 U.S.C. 1395fff note) is amended--
                    (A) in paragraph (1)--
                            (i) by inserting ``and each subsequent 
                        fiscal year before the implementation of the 
                        prospective payment system under section 1895 
                        of the Social Security Act (42 U.S.C. 
                        1395fff)'' after ``beginning in fiscal year 
                        2000''; and
                            (ii) by striking ``$10'' and inserting 
                        ``$30'';
                    (B) in paragraph (2)--
                            (i) by redesignating subparagraphs (A) and 
                        (B) as clauses (i) and (ii), respectively;
                            (ii) by inserting after the heading the 
                        following:
                    ``(A) For fiscal year 2000.--''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(B) For subsequent fiscal years.--For each cost 
                reporting period beginning after fiscal year 2000 and 
                before the implementation of the prospective payment 
                system under section 1895 of the Social Security Act 
                (42 U.S.C. 1395fff), the Secretary shall pay the 
                amounts payable to an agency under this subsection no 
                later than 30 days after the date on which the cost 
                report submitted by the agency for the cost reporting 
                period beginning in such fiscal year is settled.''.
            (2) Under the prospective payment system.--Section 1895(b) 
        of the Social Security Act (42 U.S.C. 1395fff) (as amended by 
        section 103) is amended by adding at the end the following new 
        paragraph:
            ``(9) Adjustment to reflect oasis administrative costs.--In 
        the case of a home health agency that furnishes home health 
        services to a medicare beneficiary, for each such beneficiary 
        to whom the agency furnished such services during the agency's 
        cost reporting period for which payment is made to such agency 
        under this section, the Secretary shall include in such payment 
        an aggregate amount of $30 to defray costs incurred by the 
        agency attributable to data collection and reporting 
        requirements under the Outcome and Assessment Information Set 
        (OASIS) required by reason of section 4602(e) of BBA (42 U.S.C. 
        1395fff note).
    (b) Waiving Budget Neutrality.--Section 1895(b)(3) of such Act (42 
U.S.C. 1395fff(b)(3)) is amended by adding at the end the following new 
subparagraph:
                    ``(D) No adjustment for additional payments for 
                oasis administrative costs.--The Secretary shall not 
                reduce the standard prospective payment amount (or 
                amounts) under this paragraph applicable to home health 
                services furnished during a period to offset the 
                increase in payments resulting from the application of 
                paragraph (9).''.
    (c) Effective Date.--The amendments made by subsection (a) shall 
take effect as if included in the enactment of the Medicare, Medicaid, 
and SCHIP Balanced Budget Refinement Act of 1999 (113 Stat. 1501A-358), 
as enacted into law by section 1000(a)(6) of Public Law (106-113).

TITLE IV--NONROUTINE MEDICAL SUPPLIES FURNISHED BY HOME HEALTH AGENCIES

SEC. 401. EXCLUSION OF NONROUTINE MEDICAL SUPPLIES UNDER THE PPS FOR 
              HOME HEALTH SERVICES.

    (a) In General.--Section 1895 of the Social Security Act (42 U.S.C. 
1395fff) is amended by adding at the end the following new subsection:
    ``(e) Exclusion of Nonroutine Medical Supplies.--
            ``(1) In general.--Notwithstanding the preceding provisions 
        of this section, in the case of all nonroutine medical supplies 
        (as defined by the Secretary) furnished by a home health agency 
        during a year (beginning with 2001) for which payment is 
        otherwise made on the basis of the prospective payment amount 
        under this section, payment under this section shall instead be 
        based on the lesser of--
                    ``(A) the actual charge for the nonroutine medical 
                supply, or
                    ``(B) the amount determined under the fee schedule 
                established by the Secretary for purposes of making 
                payment under this subsection for nonroutine medical 
                supplies furnished during that year.
            ``(2) Budget neutrality adjustment.--The Secretary shall 
        provide for an appropriate proportional reduction in payments 
        under this section so that beginning with fiscal year 2001, the 
        aggregate amount of such reductions is equal to the aggregate 
        increase in payments attributable to the exclusion effected 
        under paragraph (1).''.
    (b) Conforming Amendment.--Section 1895(b)(1) of the Social 
Security Act (42 U.S.C. 1395fff(b)(1)) is amended by striking ``The 
Secretary'' and inserting ``Subject to subsection (e), the Secretary''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.
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