II 109th CONGRESS 1st Session S. 708 IN THE SENATE OF THE UNITED STATES April 5, 2005 Mr. Wyden (for himself and Mr. Smith) 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 provide medicare beneficiaries with access to information concerning the quality of care provided by skilled nursing facilities and to provide incentives to skilled nursing facilities to improve the quality of care provided by those facilities by linking the amount of payment under the medicare program to quality reporting and performance requirements, and for other purposes.

1.

Short title

This Act may be cited as the Long Term Care Quality and Consumer Information Improvement Act of 2005 .

2.

Medicare payment adjustments for skilled nursing facilities based on quality data

(a)

In general

Section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)) is amended by adding at the end the following new paragraph: (13)

Payment adjustments based on quality data

(A)

Establishment of quality measures

(i)

In general

Subject to the succeeding provisions of this subparagraph, not later than 6 months after the date of enactment of the Long Term Care Quality and Consumer Information Improvement Act of 2005, the Secretary shall establish between 10 and 15 quality measures applicable with respect to skilled nursing facilities in addition to any quality measures applicable with respect to such facilities established prior to January 1, 2005. (ii)

Consultation

In establishing the quality measures under clause (i), the Secretary shall consult with— (I) residents of skilled nursing facilities; (II) representatives of patient advocacy organizations; (III) State regulatory representatives; (IV) representatives from the skilled nursing facility industry; and (V) experts on quality measures. (iii)

Staffing and mix of licensed staff

At least one of the quality measures established under clause (i) shall relate to the level of skilled nursing facility staffing and the mix of licensed staff. (iv)

Establishment and application of risk adjustment methodology

The quality measures established under clause (i) shall take into account the relative risks associated with the population of each skilled nursing facility to ensure that the differences in the quality measures reflect differences in the care provided by the facilities and not differences in resident population characteristics by using a risk adjustment methodology established for purposes of this subsection. The risk adjustment methodology established and applied under this clause may exclude certain types of residents, stratify residents into high-risk and low-risk groups, or use a statistical adjustment, such as a regression analysis, that takes into consideration multiple characteristics for each resident. (v)

Special provision for small skilled nursing facilities

The Secretary, in consultation with the individuals and groups described in clause (ii), shall establish criteria for determining which quality measures established under clause (i) do not apply with respect to skilled nursing facilities that are not large enough to yield meaningful data with respect to such measure. (vi)

Annual review and revision

The Secretary, in consultation with the individuals and groups described in clause (ii), shall annually review and revise the quality measures established under clause (i), as the Secretary, in consultation with such individuals and groups, determines appropriate. (B)

Reporting on quality measures

(i)

Submission of data

Each skilled nursing facility that desires to receive a payment adjustment under subparagraph (C) shall submit such data at such time and in such form and manner as the Secretary, in consultation with the individuals and groups described in subparagraph (A)(ii), requires for purposes of applying the quality measures established under subparagraph (A)(i). (ii)

Publication of quality ratings

Not less frequently than annually, the Secretary shall cause to be posted on the Internet website of the Centers for Medicare & Medicaid Services and to be published in newspapers with a national circulation a quality rating for each skilled nursing facility submitting data under clause (i) by using such data to apply the quality measures established under subparagraph (A)(i) to each facility. (C)

Additional payment amount

(i)

In general

Subject to clause (iv), each skilled nursing facility that submits data under subparagraph (B)(i) shall receive the update described in clause (ii) and the payment adjustment described in clause (iii). (ii)

Full market basket update

Notwithstanding paragraph (4)(E)(ii) or any other provision of law, each skilled nursing facility described in clause (i) shall receive the full market basket update for the year following the year in which such data is submitted. (iii)

Payments based on quality

The Secretary shall adjust the total payment amount under this subsection for skilled nursing facilities described in clause (i) as follows: (I) Beginning with fiscal year 2007, for each of the skilled nursing facilities that the Secretary determines, based on the quality measures established under subparagraph (A)(i) for the preceding fiscal year, to be— (aa) in the top 10 percent of all nursing facilities that submitted data under subparagraph (B)(i) during the preceding fiscal year, each payment amount determined under the other provisions of this subsection shall be increased by 2 percent of that amount; and (bb) below the top 10 percent of such nursing facilities, but within the top 20 percent of such facilities, each payment amount determined under the other provisions of this subsection shall be increased by 1 percent of that amount. (II) Beginning with fiscal year 2008, for each of the skilled nursing facilities that the Secretary determines, based on the quality measures established under subparagraph (A)(i), to be in the bottom 20 percent of all nursing facilities that submitted data under subparagraph (B)(i), each payment amount determined under the other provisions of this subsection shall be decreased by 1 percent of that amount. (iv)

Special provision for small skilled nursing facilities

The Secretary may not refuse to provide a full market basket update under clause (ii) or to provide an increase or reduction under clause (iii) with respect to a skilled nursing facility because such facility does not submit data with respect to a quality measure that does not apply to the nursing facility as a result of the application of the criteria established under subparagraph (A)(v). (D)

Budget neutrality

In implementing this paragraph, the Secretary shall ensure that the aggregate amount of expenditures made by the Secretary under this title in a fiscal year does not exceed the aggregate amount which the Secretary would have expended under this title in the year if this paragraph had not been enacted. In determining the aggregate amount which the Secretary would have expended under this title in the year if this paragraph had not been enacted, the Secretary shall assume a current services budget baseline that includes in the assumption of current services a level of expenditures for covered skilled nursing facility services that reflects a continuation of the Resource Utilization Groups (RUGS) that were used for making payments under this section during fiscal year 2005. . (b)

Evaluation and report

(1)

Evaluation

The Secretary of Health and Human Services shall conduct an evaluation of the implementation of the amendment made by subsection (a), including an evaluation of the number of skilled nursing facilities that submit the data pursuant to paragraph (13)(B) of section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)), as added by subsection (a). (2)

Report

Not later than December 31, 2008, the Secretary of Health and Human Services shall submit a report to Congress on the evaluation conducted under paragraph (1) together with recommendations for such legislation and administrative actions as the Secretary considers appropriate.