[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1958 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1958

 To amend title XVIII of the Social Security Act to ensure and foster 
continued patient quality of care by establishing facility and patient 
 criteria for long-term care hospitals and related improvements under 
                         the Medicare program.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 2, 2007

   Mr. Conrad (for himself, Mr. Hatch, Mr. Kerry, Ms. Stabenow, Mrs. 
Lincoln, Mr. Cornyn, Mr. Lott, Mr. Cochran, Mr. Dorgan, Mr. Wyden, and 
 Mr. Coleman) 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 ensure and foster 
continued patient quality of care by establishing facility and patient 
 criteria for long-term care hospitals and related improvements 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.

    This Act may be cited as the ``Medicare Long-Term Care Hospital 
Patient Safety and Improvement Act of 2007''.

SEC. 2. LONG-TERM CARE HOSPITALS.

    (a) Long-Term Care Hospital Payment Update.--
            (1) In general.--Section 1886 of the Social Security Act 
        (42 U.S.C. 1395ww) is amended by adding at the end the 
        following new subsection:
    ``(m) Prospective Payment for Long-Term Care Hospitals.--
            ``(1) Reference to establishment and implementation of 
        system.--For provisions related to the establishment and 
        implementation of a prospective payment system for payments 
        under this title for inpatient hospital services furnished by a 
        long-term care hospital described in subsection (d)(1)(B)(iv), 
        see section 123 of the Medicare, Medicaid, and SCHIP Balanced 
        Budget Refinement Act of 1999 and section 307(b) of Medicare, 
        Medicaid, and SCHIP Benefits Improvement and Protection Act of 
        2000.
            ``(2) Update for rate year 2008.--In implementing the 
        system described in paragraph (1) for discharges occurring 
        during the rate year ending in 2008 for a hospital, the base 
        rate for such discharges for the hospital shall be the same as 
        the base rate for discharges for the hospital occurring during 
        the previous rate year.''.
            (2) Delayed effective date.--Subsection (m)(2) of section 
        1886 of the Social Security Act, as added by paragraph (1), 
        shall not apply to discharges occurring on or after July 1, 
        2007, and before January 1, 2008.
    (b) Payment for Long-Term Care Hospital Services; Patient and 
Facility Criteria.--
            (1) 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:

                       ``Long-Term Care Hospital

    ``(ccc) 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 for appropriateness of 
                admission to a long-term care hospital, validates 
                within 48 hours of admission that patients meet 
                admission criteria for long-term care hospitals, 
                regularly evaluates patients throughout their stay for 
                continuation of care in a long-term care hospital, and 
                assesses the available discharge options when patients 
                no longer meet such 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), as amended by subsection (a), is 
                further amended by adding at the end the following new 
                subsection:
    ``(n) 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, as defined by the Secretary, 
        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 49985 (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(n)(2) of the Social 
                Security Act, as added by subparagraph (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:
                            (i) 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.
                            (ii) Services provided in inpatient 
                        rehabilitation units established under clause 
                        (i) 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 
                subparagraphs (A) and (B), and the provisions of 
                subparagraph (C), shall apply to discharges occurring 
                on or after January 1, 2008.
            (2) 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 section 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(n) of the Social 
                Security Act, as added by subparagraphs (A) and (B), 
                respectively, of paragraph (1). 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 subparagraph (A), 
                the Secretary shall, after rulemaking, implement the 
                national long-term care hospital facility and patient 
                criteria referred to in such subparagraph. 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)).
            (3) Expanded review of medical necessity.--
                    (A) In general.--The Secretary of Health and Human 
                Services shall provide, under contracts with one or 
                more appropriate utilization and quality control peer 
                review organizations under part B of title XI of the 
                Social Security Act (42 U.S.C. 1320c et seq.), for 
                reviews of the medical necessity of admissions to long-
                term care hospitals (described in section 
                1886(d)(1)(B)(iv) of such Act (42 U.S.C. 
                1395ww(d)(1)(B)(iv))) and continued stay at such 
                hospitals, of individuals entitled to, or enrolled for, 
                benefits under part A of title XVIII of such Act on a 
                hospital-specific basis consistent with this paragraph. 
                Such reviews shall be made for discharges occurring on 
                or after October 1, 2007.
                    (B) Review methodology.--The medical necessity 
                reviews under paragraph (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 at least 75 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)(1)(B)(iv) of the 
                        Social Security Act (42 U.S.C. 
                        1395ww(d)(1)(B)(iv)).
                    (C) Continuation of reviews.--Under contracts under 
                this paragraph, 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) Termination of required reviews.--
                            (i) In general.--Subject to clause (iii), 
                        the previous provisions of this subsection 
                        shall cease to apply as of the date specified 
                        in clause (ii).
                            (ii) Date specified.--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 paragraph (2)(B).
                            (iii) Continuation.--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 at least 75 
                        percent of overpayments received by long-term 
                        care hospitals due to medically unnecessary 
                        admissions and continued stays.
                    (E) Funding.--The costs to utilization and quality 
                control peer review organizations conducting the 
                medical necessity reviews under subparagraph (A) shall 
                be funded from the aggregate overpayments recouped by 
                the Secretary of Health and Human Services from long-
                term care hospitals due to medically unnecessary 
                admissions and continued stays. The Secretary may use 
                an amount not in excess of 40 percent of the 
                overpayments recouped under this paragraph to 
                compensate the utilization and quality control peer 
                review organizations for the costs of services 
                performed.
            (4) Limited, qualified moratorium of long-term care 
        hospitals.--
                    (A) In general.--Subject to subparagraph (B), the 
                Secretary shall impose a temporary moratorium on the 
                certification of new long-term care hospitals (and 
                satellite facilities), and new long-term care hospital 
                and satellite facility beds, for purposes of the 
                Medicare program under title XVIII of the Social 
                Security Act. The moratorium shall terminate at the end 
                of the 4-year period beginning on the date of the 
                enactment of this Act.
                    (B) Exceptions.--
                            (i) In general.--The moratorium under 
                        subparagraph (A) shall not apply as follows:
                                    (I) To a long-term care hospital, 
                                satellite facility, or additional beds 
                                under development as of the date of the 
                                enactment of this Act.
                                    (II) To a new 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 a presumption in 
                                favor of the moratorium, which may be 
                                rebutted by evidence the Secretary 
                                deems sufficient to show the need for 
                                long-term care hospital services in 
                                that area.
                                    (III) To an existing long-term care 
                                hospital that requests to increase its 
                                number of long-term care hospital beds, 
                                if the Secretary determines there is a 
                                need at the long-term care hospital for 
                                additional beds to accommodate--
                                            (aa) infectious disease 
                                        issues for isolation of 
                                        patients;
                                            (bb) bedside dialysis 
                                        services;
                                            (cc) single-sex 
                                        accommodation issues;
                                            (dd) behavioral issues;
                                            (ee) any requirements of 
                                        State or local law; or
                                            (ff) other clinical issues 
                                        the Secretary determines 
                                        warrant additional beds, in the 
                                        best interest of Medicare 
                                        beneficiaries.
                                    (IV) To an existing long-term care 
                                hospital that requests an increase in 
                                beds because of the closure of a long-
                                term care hospital or significant 
                                decrease in the number of long-term 
                                care hospital beds, in a State where 
                                there is only one other long-term care 
                                hospital.
                        There shall be no administrative or judicial 
                        review from a decision of the Secretary under 
                        this subparagraph.
                            (ii) ``Under development'' defined.--For 
                        purposes of clause (i)(I), 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:
                                    (I) The hospital or a related party 
                                has a binding written agreement with an 
                                outside, unrelated party for the 
                                construction, reconstruction, lease, 
                                rental, or financing of the long-term 
                                care hospital.
                                    (II) Actual construction, 
                                renovation or demolition for the long-
                                term care hospital has begun.
                                    (III) A certificate of need has 
                                been approved in a State where one is 
                                required or other necessary approvals 
                                from appropriate State agencies have 
                                been received for the operation of the 
                                hospital.
                                    (IV) 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.
                                    (V) There is other evidence 
                                presented that the Secretary determines 
                                would indicate that the hospital or 
                                satellite is under development.
            (5) No application of 25 percent patient threshold payment 
        adjustment to freestanding and grandfathered ltchs.--The 
        Secretary shall not apply, during the 5-year period beginning 
        on the date of the enactment of this Act, 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.
            (6) 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.--
                            (i) 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 co-located 
                        hospital.
                            (ii) Applicable long-term care hospital or 
                        satellite facility defined.--In this paragraph, 
                        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.--Subparagraphs (A) and (B) 
                shall apply to discharges occurring on or after October 
                1, 2007, and before October 1, 2012.
            (7) No application of very short-stay outlier policy.--The 
        Secretary shall not apply, during the 5-year period beginning 
        on the date of the enactment of this Act, the amendments 
        finalized on May 11, 2007 (72 Federal Register 26904) 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.
            (8) No application of one time adjustment to standard 
        amount.--The Secretary shall not, during the 5-year period 
        beginning on the date of the enactment of this Act, 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.
    (c) Separate Classification for Certain Long-Stay Cancer 
Hospitals.--
            (1) In general.--Subsection (d)(1)(B) of section 1886 of 
        the Social Security Act (42 U.S.C. 1395ww) is amended--
                    (A) in clause (iv)--
                            (i) in subclause (I), by striking 
                        ``(iv)(I)'' and inserting ``(iv)'' and by 
                        striking ``or'' at the end; and
                            (ii) in subclause (II)--
                                    (I) by striking ``, or'' at the end 
                                and inserting a semicolon; and
                                    (II) by redesignating such 
                                subclause as clause (vi) and by moving 
                                it to immediately follow clause (v); 
                                and
                    (B) in clause (v), by striking the semicolon at the 
                end and inserting ``, or''.
            (2) Conforming payment references.--Subsection (b) of such 
        section is amended--
                    (A) in paragraph (2)(E)(ii), by adding at the end 
                the following new subclause:
                                    ``(III) Hospitals described in 
                                clause (vi) of such subsection.'';
                    (B) in paragraph (3)(F)(iii), by adding at the end 
                the following new subclause:
                                    ``(VI) Hospitals described in 
                                clause (vi) of such subsection.'';
                    (C) in paragraphs (3)(G)(ii), (3)(H)(i), and 
                (3)(H)(ii)(I), by inserting ``or (vi)'' after ``clause 
                (iv)'' each place it appears;
                    (D) in paragraph (3)(H)(iv), by adding at the end 
                the following new subclause:
                                    ``(IV) Hospitals described in 
                                clause (vi) of such subsection.'';
                    (E) in paragraph (3)(J), by striking ``subsection 
                (d)(1)(B)(iv)'' and inserting ``clause (iv) or (vi) of 
                subsection (d)(1)(B)''; and
                    (F) in paragraph (7)(B), by adding at the end the 
                following new clause:
                            ``(iv) Hospitals described in clause (vi) 
                        of such subsection.''.
            (3) Additional conforming amendments.--The second sentence 
        of subsection (d)(1)(B) of such section is amended--
                    (A) by inserting ``(as in effect as of such date)'' 
                after ``clause (iv)''; and
                    (B) by inserting ``(or, in the case of a hospital 
                classified under clause (iv)(II), as so in effect, 
                shall be classified under clause (vi) on and after the 
                effective date of such clause)'' after ``so 
                classified''.
            (4) Transition rule.--In the case of a hospital that is 
        classified under clause (iv)(II) of section 1886(d)(1)(B) of 
        the Social Security Act immediately before the date of the 
        enactment of this Act and which is classified under clause (vi) 
        of such section after such date of enactment, payments under 
        section 1886 of such Act for cost reporting periods beginning 
        after the date of the enactment of this Act shall be based upon 
        payment rates in effect for the cost reporting period for such 
        hospital beginning during fiscal year 2001, increased for each 
        succeeding cost reporting period (beginning before the date of 
        the enactment of this Act) by the applicable percentage 
        increase under section 1886(b)(3)(B)(ii) of such Act.
            (5) Clarification of treatment of satellite facilities and 
        remote locations.--A long-stay cancer hospital described in 
        section 1886(d)(1)(B)(vi) of the Social Security Act, as 
        designated under paragraph (1), shall include satellites or 
        remote site locations for such hospital established before or 
        after the date of the enactment of this Act if the provider-
        based requirements under section 413.65 of title 42, Code of 
        Federal Regulations, applicable certification requirements 
        under title XVIII of the Social Security Act, and such other 
        applicable State licensure and certificate of need requirements 
        are met with respect to such satellites or remote site 
        locations.
                                 <all>