[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2970 Introduced in Senate (IS)]
107th CONGRESS
2d Session
S. 2970
To amend title XVIII of the Social Security Act to assure fair and
adequate payment for high-risk medicare beneficiaries and to establish
payment incentives and to evaluate clinical methods for assuring
quality services to people with serious and disabling chronic
conditions.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 19, 2002
Mr. Feingold introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to assure fair and
adequate payment for high-risk medicare beneficiaries and to establish
payment incentives and to evaluate clinical methods for assuring
quality services to people with serious and disabling chronic
conditions.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Promoting Care for the Frail Elderly
Act of 2002''.
SEC. 2. PROMOTION OF CARE FOR THE FRAIL ELDERLY.
(a) Revisions to Risk Adjustment Methodology.--
(1) In general.--The Secretary shall revise the risk
adjustment methodology under section 1853(a)(3) of the Social
Security Act (42 U.S.C. 1395w-23(a)(3)) applicable to payments
to Medicare+Choice organizations offering, whether directly or
under a contract, specialized programs for frail elderly or at-
risk beneficiaries to take into account variations in costs
incurred by such organizations.
(2) Methods considered.--In revising the risk adjustment
methodology under paragraph (1), the Secretary shall consider--
(A) hybrid risk adjustment payment systems, such as
partial capitation;
(B) new diagnostic and service markers that
accurately predict high risk;
(C) including structural components to reduce
payment lag and to account for specific risk factors,
such as high end-of-life costs and high death rates;
(D) providing for adjustments to payment amounts
for beneficiaries with comorbidities;
(E) testing concurrent risk adjustment
methodologies;
(F) testing payment methods using data from
specialized programs for frail elderly or at-risk
beneficiaries; and
(G) the recommendations contained in the report
required to be submitted under subsection (e)(2).
(3) Implementation.--The Secretary shall implement the
revisions required under paragraph (1) not later than January
1, 2006.
(b) Interim Continuation of Blended Rate for Specialized Programs
for Frail Elderly and At-Risk Medicare Beneficiaries Residing in
Institutions.--In the case of a Medicare+Choice organization that
offers a Medicare+Choice plan that offers, either directly or under a
contract, a specialized program for frail elderly or at-risk
beneficiaries that exclusively serves beneficiaries in institutions or
beneficiaries who are entitled to medical assistance under a State plan
under title XIX, notwithstanding section 1853(a)(3)(C)(ii) of the
Social Security Act (42 U.S.C. 1395w-23(a)(3)(C)(ii)), such
organization shall be paid according to the method described in
subclause (I) of such section until such time as the Secretary has
implemented the revised risk adjustment methodology required under
subsection (a).
(c) Interim Continuation of Payment Methodologies for Demonstration
Programs.--Notwithstanding any other provision of law, payment
methodologies for medicare demonstration programs for specialized
programs for frail elderly or at-risk beneficiaries (as defined in
subsection (f)) shall continue under the terms and conditions of the
demonstration authority for such programs in effect during 2002,
including the risk adjustment factors and formula used for paying such
demonstration programs. Such terms and conditions shall continue to
apply with respect to each specialized program for frail elderly or at-
risk beneficiaries offered by a Medicare+Choice organization that
participated in a demonstration program after the termination of such
program until such time as the Secretary has implemented the revised
risk adjustment methodology required under subsection (a).
(d) Demonstration Program for Medicare+Choice Payment Reform for
Specialized Programs.--
(1) In general.--The Secretary shall establish a 5-year
demonstration program to develop and evaluate--
(A) payment models that pay appropriately for
specialized Medicare+Choice plans that exclusively
serve, or serve a disproportionate number of, frail
elderly or at-risk beneficiaries (either directly or
under a contract); and
(B) clinical models that improve outcomes.
(2) Requirements.--A Medicare+Choice organization that
offers, either directly or under a contract, a specialized
program for frail elderly or at-risk beneficiaries may
participate in the demonstration program under this subsection
if such Medicare+Choice organization meets the following
requirements:
(A) Plan composition.--The specialized program for
frail elderly or at-risk beneficiaries shall--
(i) serve frail elderly or at-risk
beneficiaries exclusively;
(ii) serve a disproportionate number of
frail or at-risk beneficiaries; or
(iii) serve a disproportionate number of
frail or at-risk beneficiaries who are also
entitled to benefits under a State plan under
title XIX.
(B) Clinical capacity.--The specialized program for
frail elderly or at-risk beneficiaries shall employ a
clinical delivery system that meets the needs of frail
elderly or at-risk beneficiaries, including--
(i) initiatives to prevent, delay, or
minimize the progression of chronic disease and
disabilities;
(ii) high-risk screening to identify risk
of hospitalization, nursing home placement,
functional decline, death, and other factors
that increase the costs of care provided;
(iii) staff with special training in
chronic care and geriatric care such as
geriatricians, geriatric nurse practitioners,
and geriatric care managers;
(iv) initiatives for promoting integration
of care, financing, and administrative
functions across health care settings; and
(v) clinical protocols for specific high
cost conditions identified by the Secretary for
which outcomes will be evaluated as part of the
demonstration program under this subsection.
(C) Data collection.--Each Medicare+Choice
organization that participates in the demonstration
program under this subsection shall collect such data
in such format as the Secretary may require to monitor
the quality of services provided, outcomes, and costs,
including functional and diagnostic data and
information collected through the Health Outcomes
Survey or another appropriate mechanism.
(D) Quality assurance.--Each Medicare+Choice
organization that participates in the demonstration
program under this section shall employ such quality
standards and track such quality indicators as the
Secretary may specify that are relevant to the special
needs of enrollees. The Secretary shall identify such
quality standards and indicators prior to implementing
the demonstration program under this subsection.
(3) Payment.--
(A) Minimum amount.--The Secretary shall ensure
that each Medicare+Choice organization that
participates in the demonstration program under this
subsection is not paid less than the amount that would
have been paid with respect to each frail elderly or
at-risk beneficiary enrolled in a specialized program
for frail elderly or at-risk beneficiaries offered by
such organization than would have been paid with
respect to such beneficiaries if such beneficiaries
received benefits under the original medicare fee-for-
service program under parts A and B of title XVIII of
the Social Security Act.
(B) Model.--The Secretary shall establish a payment
model applicable under the demonstration program that
is based upon the CMS-HCC 61 significant condition
model.
(C) Payment for standard benefits.--The Secretary
shall pay Medicare+Choice organizations participating
in the demonstration program under the standard CMS-HCC
61-condition model for nonfrail members and under a
special frailty-adjusted payment for the frail or at-
risk members based on requirements under parts A and B
of title XVIII of the Social Security Act.
(D) Payment for additional benefits.--
Medicare+Choice organizations that participate in the
demonstration program and that agree to an additional
mandate for benefits exceeding those required under
parts A and B of title XVIII of the Social Security Act
shall be compensated separately for providing such
benefits.
(E) Frailty adjuster.--The Secretary shall
establish and apply a frailty adjuster that is
structured as an add-on payment in relation to the
amount of underpayment resulting from the standard
formula.
(F) Reinsurance.--The Secretary shall provide
reinsurance above a specified threshold.
(G) Financial incentives.--The Secretary shall
provide for financial incentives for Medicare+Choice
organizations that participate in the demonstration
program, including bonus payments that shall be made in
relation to meeting predefined outcome targets.
(4) Waiver authority.--The Secretary may waive such
requirements of titles XI and XVIII of the Social Security Act
as may be necessary to carry out the demonstration program
under this subsection.
(5) Funding.--From the sums already authorized to be
appropriated for demonstration projects to be conducted by the
Secretary, $25,000,000 may be appropriated to carry out the
demonstration program under this subsection.
(6) Budget neutrality adjustment factor.--Upon enactment of
this subsection, the Secretary shall provide for an adjustment
to Medicare+Choice payment rates for the year to ensure that
the aggregate payments under this part in that year shall be
equal to aggregate payments that would have been made under the
Medicare+Choice program in that year if this subsection had not
been enacted.
(e) MedPAC Study To Identify Frailty Indicators and Develop Frailty
Adjustment to Medicare+Choice Payments.--
(1) Study.--
(A) In general.--The Medicare Payment Advisory
Commission, in consultation with private organizations
representing Medicare+Choice organizations that offer
specialized programs for frail elderly or at-risk
beneficiaries, shall conduct a study on the feasibility
and advisability of establishing a frailty adjustment
to the Medicare+Choice risk adjustment methodology that
ensures that an appropriate level of payment is made to
Medicare+Choice plans that serve a disproportionate
number of frail or at-risk beneficiaries.
(B) Study parameters.--The study shall identify
indicators of frailty, medical complexity, or risk that
result in higher costs for certain risk groups within
the medicare population such as institutionalized
residents, nursing home certifiable residents living in
the community, beneficiaries with multiple complex
chronic conditions, beneficiaries with late-stage
diseases or conditions, medicare beneficiaries with
functional or cognitive impairments that limit the
ability of such beneficiaries to live independently,
and other indicators of higher health care utilization.
(C) Frailty indicators.--The indicators of frailty
described in subparagraph (B) may include--
(i) specific diagnoses or clusters of
diagnoses;
(ii) the presence of multiple serious
chronic conditions;
(iii) certain groupings of chronic
conditions;
(iv) the presence of functional impairments
or, alone or in combination with diagnostic
factors, a specific hierarchy of functional
loss; or
(v) other factors that result in the need
for complex medical care or higher medical
costs.
(2) Report.--Not later than the date that is 2 years after
the date of enactment of this Act, the Medicare Payment
Advisory Commission shall submit to Congress and the Secretary
a report on the study conducted under paragraph (1) together
with such recommendations for legislation or administrative
action as the Secretary determines appropriate.
(f) Definitions.--In this section:
(1) Activities of daily living.--The term ``activities of
daily living'' means each of the following:
(A) Eating.
(B) Toileting.
(C) Transferring.
(D) Bathing.
(E) Dressing.
(F) Continence.
(2) Disproportionate.--The term ``disproportionate'' means,
in relation to the composition of a Medicare+Choice plan, a
higher percentage of frail or at-risk beneficiaries than the
national average for all Medicare+Choice plans.
(3) Frail or at-risk beneficiary.--The term ``frail or at-
risk beneficiary'' means an individual who--
(A) has a level of disability such that the
individual is unable to perform for a period of at
least 90 days due to a loss of functional capacity--
(i) at least 2 activities of daily living;
or
(ii) such number of instrumental activities
of daily living that is equivalent (as
determined by the Secretary) to the level of
disability described in clause (i);
(B) requires substantial supervision to protect the
individual from threats to health and safety due to
severe cognitive impairment;
(C) has multiple medically complex chronic
conditions;
(D) is at risk of hospitalization, nursing home
placement, functional decline, or death within 12
months or other factors that increase the costs of
medical care; and
(E) has a severity of condition that makes the
individual frail or disabled (as determined under
guidelines approved by the Secretary).
(4) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(5) Specialized programs for frail elderly or at-risk
beneficiaries.--The term ``specialized programs for frail
elderly or at-risk beneficiaries'' means--
(A) demonstrations approved by the Secretary for
purposes of testing the integration of acute and
expanded care services under prepaid financing which
include prescription drugs and other noncovered
ancillary services, care coordination, and home and
community-based services, such as the social health
maintenance organization demonstration project
authorized under section 2355 of the Deficit Reduction
Act of 1984 and expanded under section 4207(b)(4)(B)(i)
of the Omnibus Reconciliation Act of 1990;
(B) demonstrations approved by the Secretary for
purposes of improving quality of care and preventing
hospitalizations for nursing home residents, such as
the EverCare demonstration project;
(C) demonstrations approved by the Secretary for
purposes of testing methods for integrating medicare
and medicaid benefits for the dually eligible, such as
the Minnesota Senior Health Options program, the
Wisconsin Partnership program, the Massachusetts Senior
Care Organization program, and the Rochester Continuing
Care Network program (Seniors Health Plus);
(D) demonstrations approved by the Secretary under
subsection (d);
(E) specialized provider-based programs that focus
on improving the quality of care provided to, and
preventing the hospitalizations of, residents of
skilled nursing facilities; and
(F) such other demonstrations or programs approved
by the Secretary for similar purposes, as determined by
the Secretary.
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