1.This Act may be cited as the Long Term Care Quality Improvement Act of 2004
.
2.Improvement in quality of long term care in skilled nursing facilities under medicare
(a)Detailed reporting of nursing expendituresSection 1888 of the Social Security Act (42 U.S.C. 1395yy) is amended by adding at the end the following new subsection:
(f)Detailed reporting of nursing expenditures
(1)For cost reports submitted for cost reporting periods beginning on or after four months after the date of the enactment of this subsection, skilled nursing facilities shall separately report expenditures for wages and benefits for nursing staff (by staff level, breaking out at a minimum registered nurses, licensed professional nurses, and certified nurse assistants).
(2)The Secretary, in consultation with private sector accountants experienced with medicare and medicaid nursing facility home cost reports, shall redesign such reports to meet the requirement of paragraph (1)..
(b)Development and reporting of new quality measuresSuch section is further amended by adding at the end the following new subsection:
(g)
(1)The Secretary shall identify and develop in accordance with this subsection quality measures appropriate for use with a payment system under this subsection. Such measures shall be developed in consultation with measurement experts, the Medicare Payment Advisory Commission, the Institute of Medicine, and representatives of providers and consumers.
(2)The quality measures under this subsection—
(A)shall include process measures;
(B)may include structural measures, such as spending on direct care staffing or implementation of new technologies;
(C)may include outcome measures that are risk adjusted with sufficient precision to be used in a payment system;
(D)shall be valid and reliable;
(E)shall be structured so that data collection systems involving new technologies can be used in a manner that minimizes provider burden and increases accuracy, particularly with respect to process measures;
(F)shall include at least one quality measure that addresses nursing home staffing level and mix; and
(G)shall make special provision for small skilled nursing facilities by establishing criteria for determining whether a nursing facility is large enough to yield meaningful data on each measure.
(3)The Secretary shall post on the Secretary’s website relating to the medicare program a description of the new quality performance measures that are developed under this subsection when they are implemented..
(c)Linking payments to quality performanceSuch section is further amended by adding at the end the following new subsection:
(h)Base payments; adjustment in payment for quality performance
(1)Maintenance of fiscal year 2005 payment rates as a floorExcept as provided under this subsection, and notwithstanding any other provision of law, the payment rates established under subsection (e) shall in no case be less than the RUG rates that are effective as of October 1, 2004, as adjusted annually under subsection (e)(4)(E).
(2)Development of payment adjustment methods
(A)The Secretary shall develop and test one or more methods for linking payment rates under this section to quality. Such methods shall be identified in consultation with the Institute of Medicine, the Medicare Payment Advisory Commission, measurement experts, and representatives of consumers and providers.
(B)Such methods shall make a portion of a provider’s payment under this title dependent on performance on one or more appropriate indicators of quality, as measured under subsection (f). At least one of the methods tested shall involve special payments for facilities that enhance quality by providing more direct care staffing than others, controlling for case mix. The Secretary may test such methods through pilot studies, demonstration projects, and other appropriate methods.
(C) Development and testing of appropriate quality measures and new payment methods for skilled nursing facilities under this subsection shall be completed, to the extent feasible, in conformance with timelines that may be recommended by the Institute of Medicine in its report on linking payments under this section to performance, but in no case later than 54 months after the date of the enactment of this subsection..
(d)Analysis of the adequacy of public payments and future financing optionsThe Secretary of Health and Human Services shall conduct a study of current and future financing of quality nursing facility care. Such study shall include an examination of the following:
(1)The adequacy of Medicaid financing to pay for the quality of care required by State and Federal law and regulations.
(2)Medicare’s cross-subsidization of care for Medicaid patients.
(3)Total industry margins for skilled nursing facilities.
(4)The impact of current trends, including litigation and staffing shortages, on nursing facility costs.
(5)The impact of demographic changes in relation to provision of long-term care services.
(6)Options for redressing any current problems with payment for nursing facility services.
(7)Options for financing quality long term care, including nursing home care, over the next five decades.
(e)
(1)The Secretary shall submit annually to Congress a report on the amendments made by subsections (a) through (c) until the submission of the final report under paragraph (2).
(2)The Secretary shall submit to Congress a final report on such activities not later than 5 years after the date of the enactment of this Act. The final report shall include the following:
(A)The results of the study performed under subsection (d) and the impact of such amendments on the quality of care in skilled nursing facilities.
(B)Recommendations for changes to the medicare payment system for extended care services in order to enhance quality in skilled nursing facilities.
(C)An analysis of the pros and cons of alternative approaches to addressing other issues identified in such study.