[House Report 104-817]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-817
_______________________________________________________________________


 
    CHANGE IN MEDICAID NURSING FACILITY RESIDENT REVIEW REQUIREMENTS

                                _______
                                

 September 23, 1996.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                        [To accompany H.R. 3632]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Commerce, to whom was referred the bill 
(H.R. 3632) to amend title XIX of the Social Security Act to 
repeal the requirement for annual resident review for nursing 
facilities under the Medicaid program and to require resident 
reviews for mentally ill or mentally retarded residents when 
there is a significant change in physical or mental condition, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     2
Committee Consideration..........................................     2
Rollcall Votes...................................................     2
Committee Oversight Findings.....................................     3
Committee on Government Reform and Oversight.....................     3
New Budget Authority and Tax Expenditures........................     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     3
Inflationary Impact Statement....................................     4
Advisory Committee Statement.....................................     4
Section-by-Section Analysis of the Legislation...................     4
Changes in Existing Law Made by the Bill, as Reported............     4

                          Purpose and Summary

    H.R. 3632 amends Title XIX of the Social Security Act to 
repeal the requirement for an annual resident review for 
nursing facilities under the Medicaid Program and to require 
resident reviews for mentally ill or mentally retarded 
residents when there is a significant change in their physical 
or mental condition.

                  Background and Need for Legislation

    Since its enactment as part of the Omnibus Budget 
Reconciliation Act of 1987 (OBRA 1987), the quality assurance 
standards for nursing home facilities have periodically been 
amended because of the complexity of the underlying statute and 
to correct for the unintended consequences caused by the 
implementation of the statutory provisions. One of the 
requirements of the Act was an annual resident assessment for 
all Medicaid nursing home residents. The underlying statute 
also has as a requirement in Section 1919(e)(7)(B) (i) and (ii) 
that for each resident of a nursing facility who is mentally 
ill or mentally retarded, the State mental health or mental 
retardation authority must review and determine, based on an 
independent physical and mental evaluation, whether or not the 
resident requires the level of services provided by a nursing 
facility. These annual reviews have proved to be an additional 
review, and, therefore, costly and unnecessary. The Committee, 
the States, and the Administration agree that this additional 
annual review is unnecessary.
    H.R. 3632 repeals the requirement for an annual resident 
assessment for the mentally ill and the mentally retarded. This 
bill would require, as an alternative, these additional 
resident reviews by the State mental health or mental 
retardation authority for mentally ill or mentally retarded 
residents when there is a significant change in the resident's 
physical or mental condition.

                                Hearings

    The Committee on Commerce has not held hearings on this 
specific legislation, however, this duplication was discussed 
during the overview hearings on the Reform of the Medicaid 
Program.

                        Committee Consideration

    On September 18, 1996, the Committee on Commerce met in 
open markup session and ordered H.R. 3632, a bill to amend 
Title XIX of the Social Security Act to repeal the requirement 
for annual resident review for nursing facilities under the 
Medicaid Program and to require resident reviews for mentally 
ill or mentally retarded residents when there is a significant 
change in physical or mental condition, reported to the House, 
without amendment, by a voice vote, a quorum being present.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI of the Rules of the House 
requires the Committee to list the recorded votes on the motion 
to report legislation and amendments thereto. There were no 
recorded votes taken in connection with ordering H.R. 3632 
reported. A motion by Mr. Bliley to order H.R. 3632 reported to 
the House, without amendment, was agreed to by a voice vote, a 
quorum being present.

                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of 
the House of Representatives, the Committee has not held 
oversight or legislative hearings on this legislation.

              Committee on Government Reform and Oversight

    Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of 
the House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight.

               New Budget Authority and Tax Expenditures

    In compliance with clause 2(l)(3)(B) of rule XI of the 
Rules of the House of Representatives, the Committee states 
that H.R. 3632 would result in no new or increased budget 
authority or tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 403 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of 
the House of Representatives, the following is the cost 
estimate provided by the Congressional Budget Office pursuant 
to section 403 of the Congressional Budget Act of 1974:
                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 18, 1996.
Hon. Thomas J. Bliley, Jr.,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 3632 as ordered reported by the Committee on 
Commerce on September 18, 1996. The bill would repeal the 
requirement for annual resident review for nursing facilities 
under the Medicaid program and would require resident reviews 
for mentally ill or mentally retarded residents only when there 
is a significant change in their physical or mental condition. 
Pay-as-you-go procedures would apply because the bill would 
affect administrative costs of the Medicaid program, which are 
direct spending.
    Pre-admission screening and annual resident review 
requirements (PASARR) for nursing facility residents were 
enacted as part of the Omnibus Budget Reconciliation Act of 
1987. CBO estimates the repeal of the requirement for annual 
resident review for mentally retarded and mentally ill nursing 
facility residents would reduce Medicaid administrative costs 
by $8.5 million annually, about one-quarter of the total 
federal expenses of implementing PASARR.
    This bill contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4) and would save states $3.5 million annually 
in Medicaid payments.
    If you wish for further details on this estimate, we would 
be pleased to provide them. The CBO staff contact is Robin 
Rudowitz, who can be reached at 226-9010.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds that H.R. 3632 
would have no inflationary impact.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act are created by this 
legislation.

             Section-by-Section Analysis of the Legislation

Section 1. Repeal of requirement for annual resident review for 
        mentally ill and mentally retarded nursing facility residents

    Section 1 repeals the requirement under the Medicaid 
program for an annual resident review for mentally ill and 
mentally retarded residents who reside in nursing facilities. 
These amendments become effective on the date of enactment of 
this Act.

Section 2. Requirement for review in case of significant change in 
        physical or mental condition of mentally ill or mentally 
        retarded nursing facility residents

    Section 2(a) requires that a nursing facility shall 
promptly notify the State mental health authority or State 
mental retardation or developmental disability authority, as 
applicable, after a significant change in the physical or 
mental condition of a resident who is mentally ill or mentally 
retarded.
    Section 2(b) adds a new requirement that an assessment 
review must be conducted promptly after a nursing facility has 
notified the appropriate State authority that there has been a 
significant change in a resident's physical or mental 
condition.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                SECTION 1919 OF THE SOCIAL SECURITY ACT

                  requirements for nursing facilities

    Sec. 1919. (a) * * *
    (b) Requirements Relating to Provision of Services.--
          (1) * * *
          * * * * * * *
          (3) Residents' assessment.--
                  (A) * * *
          * * * * * * *
                  (E) Coordination.--Such assessments shall be 
                coordinated with any State-required 
                preadmission screening program to the maximum 
                extent practicable in order to avoid 
                duplicative testing and effort. In addition, a 
                nursing facility shall notify the State mental 
                health authority or State mental retardation or 
                developmental disability authority, as 
                applicable, promptly after a significant change 
                in the physical or mental condition of a 
                resident who is mentally ill or mentally 
                retarded.
          * * * * * * *
    (e) State Requirements Relating to Nursing Facility 
Requirements.--As a condition of approval of its plan under 
this title, a State must provide for the following:
          (1) * * *
          * * * * * * *
          (7) State requirements for preadmission screening and 
        resident review.--
                  (A) * * *
                  (B) State requirement for [annual] resident 
                review.--
                  (i) * * *
          * * * * * * *
                  [(iii) Frequency of reviews.--
                                  [(I) Annual.--Except as 
                                provided in subclauses (II) and 
                                (III), the reviews and 
                                determinations under clauses 
                                (i) and (ii) must be conducted 
                                with respect to each mentally 
                                ill or mentally retarded 
                                resident not less often than 
                                annually.
                                  [(II) Preadmission review 
                                cases.--In the case of a 
                                resident subject to a 
                                preadmission review under 
                                subsection (b)(3)(F), the 
                                review and determination under 
                                clause (i) or (ii) need not be 
                                done until the resident has 
                                resided in the nursing facility 
                                for 1 year.
                                  [(III) Initial review.--The 
                                reviews and determinations 
                                under clauses (i) and (ii) must 
                                first be conducted (for each 
                                resident not subject to 
                                preadmission review under 
                                subsection (b)(3)(F)) by not 
                                later than April 1, 1990.]
                          (iii) Review required upon change in 
                        resident's condition.--A review and 
                        determination under clause (i) or (ii) 
                        must be conducted promptly after a 
                        nursing facility has notified the State 
                        mental health authority or State mental 
                        retardation or developmental disability 
                        authority, as applicable, under 
                        subsection (b)(3)(E) with respect to a 
                        mentally ill or mentally retarded 
                        resident, that there has been a 
                        significant change in the resident's 
                        physical or mental condition.
          * * * * * * *
                  (D) Denial of payment.--
                  (i) For failure to conduct preadmission 
                screening or [annual] review.--No payment may 
                be made under section 1903(a) with respect to 
                nursing facility services furnished to an 
                individual for whom a determination is required 
                under subsection (b)(3)(F) or subparagraph (B) 
                but for whom the determination is not made.
          * * * * * * *