Short title; table of contents

(a)

Short title

This Act may be cited as the

Medicare Long-Term Care Patient Safety and Improvement Act of 2007

. (b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definition of long-term care hospital.

Sec. 3. Implementation of facility and patient criteria.

Sec. 4. Establishment of rehabilitation units within certain long-term care hospitals.

Sec. 5. Expanded review of medical necessity.

Sec. 6. Limited, qualified moratorium of long-term care hospitals.

Sec. 7. No application of 25 percent patient threshold payment adjustment to freestanding and grandfathered LTCHS.

Sec. 8. Payment for hospitals-within-hospitals.

Sec. 9. No application of very short-stay outlier policy.

Sec. 10. No application of one time adjustment to standard amount.

Sec. 11. Long-term care hospital quality improvement initiative.

Definition of long-term care hospital

(a)

Definition

Section 1861 of the Social Security Act (42 U.S.C. 1395x) is amended by adding at the end the following new subsection:

(ccc)

Long-Term Care Hospital

The term long-term care hospital means an institution which— (1)is primarily engaged in providing inpatient services, by or under the supervision of a physician, to Medicare beneficiaries whose medically complex conditions require a long hospital stay and programs of care provided by a long-term care hospital; (2)has an average inpatient length of stay (as determined by the Secretary) for Medicare beneficiaries of greater than 25 days, or as otherwise defined in section 1886(d)(1)(B)(iv); (3)satisfies the requirements of subsection (e); (4)meets the following facility criteria: (A)the institution has a patient review process, documented in the patient medical record, that screens patients prior to admission, validates within 48 hours of admission that patients meet admission criteria, regularly evaluates patients throughout their stay, and assesses the available discharge options when patients no longer meet the continued stay criteria; (B)the institution has active physician involvement with patients during their treatment through an organized medical staff, physician-directed treatment with physician on-site availability on a daily basis to review patient progress, and consulting physicians on call and capable of being at the patient’s side within a moderate period of time, as determined by the Secretary; (C)the institution has interdisciplinary team treatment for patients, requiring interdisciplinary teams of health care professionals, including physicians, to prepare and carry out an individualized treatment plan for each patient; and (5)meets patient criteria relating to patient mix and severity appropriate to the medically complex cases that long-term care hospitals are designed to treat, as measured under section 1886(m).

(b)

New patient criteria for long-term care hospital prospective payment

Section 1886 of such Act (42 U.S.C. 1395ww) is amended by adding at the end the following new subsection:

(m)

Patient criteria for prospective payment to long-term care hospitals

(1)

In general

To be eligible for prospective payment under this section as a long-term care hospital, a long-term care hospital must admit not less than a majority of patients who have a high level of severity and who are assigned to one or more of the following major diagnostic categories: (A)Circulatory diagnoses. (B)Digestive, endocrine, and metabolic diagnoses. (C)Infection disease diagnoses. (D)Neurological diagnoses. (E)Renal diagnoses. (F)Respiratory diagnoses. (G)Skin diagnoses. (H)Other major diagnostic categories as selected by the Secretary. (2)

Major diagnostic category defined

In paragraph (1), the term major diagnostic category means the medical categories formed by dividing all possible principle diagnosis into mutually exclusive diagnosis areas which are referred to in 67 Federal Register 49,985 (August 1, 2002).

(c)

Establishment of rehabilitation units within certain long-term care hospitals

If the Secretary of Health and Human Services does not include rehabilitation services within a major diagnostic category under section 1886(m)(2) of the Social Security Act, as added by subsection (b), the Secretary shall approve for purposes of title XVIII of such Act distinct part inpatient rehabilitation hospital units in long-term care hospitals consistent with the following: (1)A hospital that, on or before October 1, 2004, was classified by the Secretary as a long-term care hospital, as described in section 1886(d)(1)(B)(iv)(I) of such Act (42 U.S.C. 1395ww(d)(1)(V)(iv)(I)), and was accredited by the Commission on Accreditation of Rehabilitation Facilities, may establish a hospital rehabilitation unit that is a distinct part of the long-term care hospital, if the distinct part meets the requirements (including conditions of participation) that would otherwise apply to a distinct-part rehabilitation unit if the distinct part were established by a subsection (d) hospital in accordance with the matter following clause (v) of section 1886(d)(1)(B) of such Act, including any regulations adopted by the Secretary in accordance with this section, except that the one-year waiting period described in section 412.30(c) of title 42, Code of Federal Regulations, applicable to the conversion of hospital beds into a distinct-part rehabilitation unit shall not apply to such units. (2)Services provided in inpatient rehabilitation units established under paragraph (1) shall not be reimbursed as long-term care hospital services under section 1886 of such Act and shall be subject to payment policies established by the Secretary to reimburse services provided by inpatient hospital rehabilitation units. (d)

Effective date

The amendments made by subsections (a) and (b), and subsection (c), shall apply to discharges occurring on or after January 1, 2008.

Implementation of facility and patient criteria

(a)

Report

No later than 1 year after the date of the enactment of this Act, the Secretary of Health and Human Services (in this Act referred to as the Secretary) shall submit to the appropriate committees of Congress a report containing recommendations regarding the promulgation of the national long-term care hospital facility and patient criteria for application under paragraphs (4) and (5) of section 1861(ccc) and section 1886(m) of the Social Security Act, as added by section 2. In the report, the Secretary shall consider recommendations contained in a report to Congress by the Medicare Payment Advisory Commission in June 2004 for long-term care hospital-specific facility and patient criteria to ensure that patients admitted to long-term care hospitals are medically complex and appropriate to receive long-term care hospital services. (b)

Implementation

No later than 1 year after the date of submittal of the report under subsection (a), the Secretary shall, after rulemaking, implement the national long-term care hospital facility and patient criteria referred to in such subsection. Such long-term care hospital facility and patient criteria shall be used to screen patients in determining the medical necessity and appropriateness of a Medicare beneficiary’s admission to, continued stay at, and discharge from, long-term care hospitals under the Medicare program and shall take into account the medical judgment of the patient’s physician, as provided for under sections 1814(a)(3) and 1835(a)(2)(B) of the Social Security Act (42 U.S.C. 1395f(a)(3), 1395n(a)(2)(B)).

Expanded review of medical necessity

(a)

Expanded duties of QIOs

Section 1154(a) of the Social Security Act (42 U.S.C. 1320c–3(a)) is amended by adding at the end the following new paragraph:

(18)(A)The organization shall review the medical necessity of admissions to long-term care hospitals (described in section 1886(d)(1)(B)(iv)(I)) and continued stay at such hospitals, of individuals entitled to, or enrolled for, benefits under part A of title XVIII, on a hospital-specific basis. (B)The medical necessity reviews under subparagraph (A) shall be conducted for each such long-term care hospital on an annual basis in accordance with rules (including a sample methodology) specified by the Secretary. Such sample methodology shall— (i)provide for a statistically valid and representative sample of admissions of such individuals sufficient to provide results at a 95 percent confidence interval; and (ii)guarantee that no less than 65 percent of overpayments received by long-term care hospitals for medically unnecessary admissions and continued stays of individuals in long-term care hospitals will be identified and recovered and that related days of care will not be counted toward the length of stay requirement contained in section 1886(d)(i)(B)(iv)(I). (C)The Secretary shall establish a denial rate with respect to such reviews that, if exceeded, could require further review of the medical necessity of admissions and continued stay in the hospital involved. (D)(i)Subject to clause (iii), the previous provisions of this paragraph shall cease to apply as of the date specified in clause (ii). (ii)The date specified in this clause is the later of January 1, 2013, or the date of implementation of national long-term care hospital facility and patient criteria under section 3 of the Medicare Long-Term Care Patient Safety and Improvement Act of 2007. (iii)As of the date specified in clause (ii), the Secretary shall determine whether to continue to guarantee, through continued medical review and sampling under this paragraph, recovery of no less than 65 percent of overpayments received by long-term care hospitals due to medically unnecessary admissions and continued stays.

(b)

Effective date

The amendment made by subsection (a) shall apply to discharges occurring on or after October 1, 2007.

Limited, qualified moratorium of long-term care hospitals

(a)

In general

Subject to subsection (b), the Secretary shall impose a temporary moratorium on the certification of new long-term care hospitals (and satellite facilities) for purposes of the Medicare program under title XVIII of the Social Security Act. The moratorium shall terminate at the end of the 3-year period beginning on the date of the enactment of this Act. (b)

Exceptions

(1)

In general

The moratorium under subsection (a) shall not apply— (A)to a long-term care hospital or satellite facility that is under development as of the date of the enactment of this Act; or (B)to a long-term care hospital in an area in which there is not a long-term care hospital, if the Secretary determines it to be in the best interest to provide access to long-term care hospital services to Medicare beneficiaries residing in such area.

There shall be no administrative or judicial review from a decision of the Secretary under this paragraph. Where there is no long-term care hospital in a rural area or metropolitan statistical area, the Secretary shall provide a presumption that the establishment of a new long-term care hospital is in the best interest of Medicare program beneficiaries.

(2)

Under development defined

For purposes of paragraph (1)(A), a long-term care hospital or satellite facility is considered to be under development as of a date if any of the following have occurred on or before such date: (A)All or substantially all funding has been committed or received for development of the hospital or facility. (B)Zoning requirements have been met for the construction of the hospital or facility. (C)Necessary approvals from appropriate State agencies have been received for the operation of the hospital or facility. (D)The hospital documents that it is within a 6-month long-term care hospital demonstration period required by section 412.23(e)(1)–(3) of title 42, Code of Federal Regulations, to demonstrate that it has a greater than 25 day average length of stay. (E)There is other evidence presented that the Secretary determines would indicate that the hospital or satellite is under development.

No application of 25 percent patient threshold payment adjustment to freestanding and grandfathered LTCHS

The Secretary shall not apply section 412.536 of title 42, Code of Federal Regulations, or any similar provision, to freestanding long-term care hospitals and the Secretary shall not apply such section or section 412.534 of title 42, Code of Federal Regulations, or any similar provisions, to a long-term care hospital identified by section 4417(a) of the Balanced Budget Act of 1997 (Public Law 105–33). A long-term care hospital identified by such section 4417(a) shall be deemed to be a freestanding long-term care hospital for the purpose of this section. Section 412.536 of title 42, Code of Federal Regulations, shall be void and of no effect.

Payment for hospitals-within-hospitals

(a)

In general

Payments to an applicable long-term care hospital or satellite facility which is located in a rural area or which is co-located with an urban single or MSA dominant hospital under paragraphs (d)(1), (e)(1), and (e)(4) of section 412.534 of title 42, Code of Federal Regulations, shall not be subject to any payment adjustment under such section if no more than 75 percent of the hospital’s Medicare discharges (other than discharges described in paragraphs (d)(2) or (e)(3) of such section) are admitted from a co-located hospital. (b)

Co-located long-term care hospitals and satellite facilities

(1)

In general

Payment to an applicable long-term care hospital or satellite facility which is co-located with another hospital shall not be subject to any payment adjustment under section 412.534 of title 42, Code of Federal Regulations, if no more than 50 percent of the hospital’s Medicare discharges (other than discharges described in section 412.534(c)(3) of such title) are admitted from a collocated hospital. (2)

Applicable long-term care hospital or satellite facility defined

In this section, the term applicable long-term care hospital or satellite facility means a hospital or satellite facility that is subject to the transition rules under section 412.534(g) of title 42, Code of Federal Regulations. (c)

Effective date

Subsections (a) and (b) shall apply to discharges occurring on or after October 1, 2007.

No application of very short-stay outlier policy

The Secretary shall not apply amendments proposed on May 11, 2007 (72 Federal Register 26870) to be made to the short-stay outlier payment provision for long-term care hospitals contained in section 412.529(c)(3)(i) of title 42, Code of Federal Regulations, or any similar provision.

No application of one time adjustment to standard amount

The Secretary shall not make the one-time prospective adjustment to long-term care hospital prospective payment rates provided for in section 412.523(d)(3) of title 42, Code of Federal Regulations, or any similar provision.

10.

Long-term care hospital quality improvement initiative

(a)

Study To establish quality measures

(1)

In general

The Secretary shall conduct a study (in this section referred to as the study) to determine appropriate quality measures for Medicare patients receiving care in long-term care hospitals. (2)

Report

By not later than July 1, 2008, the Secretary shall submit to Congress a report on the results of the study under paragraph (1). (b)

Selection of quality measures

(1)

In general

After completion of the study under subsection (a), subject to paragraph (2), the Secretary shall choose 3 quality measures recommended in the study to be reported by long-term care hospitals. (2)

Expansion of quality measures

The Secretary may expand the number of quality measures required to be reported by long-term care hospitals beyond those chosen under paragraph (1). If the Secretary adds additional measures, the measures shall reflect a consensus among the affected parties. The Secretary may replace any measures in appropriate cases, such as where all hospitals are effectively in compliance or where measures have been shown not to represent the best clinical practice. (c)

Requirement for submission of data

(1)

In general

Long-term care hospitals must collect data on the three quality measures chosen under subsection (b) and submit all required quality data to the Secretary. (2)

Failure to submit data

Any long-term care hospital which does not submit the required quality data to the Secretary in any fiscal year shall have the applicable percentage increase applicable to such long-term care hospital under section 1886(b)(3)(B)(ii)) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(ii)) reduced by not more than 0.4 percentage points. (d)

Availability of data to public

The Secretary shall establish procedures for making the quality data submitted under this section available to the public.