[House Report 106-44]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
1st Session             HOUSE OF REPRESENTATIVES                 106-44
_______________________________________________________________________


 
          NURSING HOME RESIDENT PROTECTION AMENDMENTS OF 1999

                                _______
                                

 March 8, 1999.--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. 540]

    The Committee on Commerce, to whom was referred the bill 
(H.R. 540) to amend title XIX of the Social Security Act to 
prohibit transfers or discharges of residents of nursing 
facilities as a result of a voluntary withdrawal from 
participation in the Medicaid Program, having considered the 
same, report favorably thereon without amendment and recommend 
that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     4
Committee Consideration..........................................     4
Rollcall Votes...................................................     5
Committee Oversight Findings.....................................     5
Committee on Government Reform Oversight Findings................     5
New Budget Authority, Entitlement Authority, and Tax Expenditures     5
Committee Cost Estimate..........................................     5
Congressional Budget Office Estimate.............................     5
Federal Mandates Statement.......................................     7
Advisory Committee Statement.....................................     7
Constitutional Authority Statement...............................     7
Applicability to Legislative Branch..............................     7
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill, as Reported............     8

                          Purpose and Summary

     The purpose of H.R. 540, the Nursing Home Resident 
Protection Amendments of 1999, is to amend title XIX of the 
Social Security Act to prohibit transfers or discharges of 
residents of nursing facilities as a result of a voluntary 
withdrawal from participation in the Medicaid Program.
     H.R. 540 affords protection from discharge or transfer 
based on Medicaid status to residents of nursing homes which 
decide to withdraw from the Medicaid program. The residents 
protected include those who are presently receiving Medicaid 
benefits in nursing homes, as well as those patients who are 
already residents but not yet dependent on Medicaid.
     For those individuals who take up residence in the nursing 
home after the effective date of the facility's withdrawal from 
the Medicaid program, H.R. 540 provides that they must be 
informed orally and in writing that the nursing home may 
transfer or discharge the resident once the resident is unable 
to pay the charges of the facility through non-Medicaid 
sources.

                  Background and Need for Legislation

     H.R. 540 was introduced to respond to the practice of 
targeting Medicaid recipients for eviction from nursing homes.
     In April 1998, a nursing home operated by Vencor, Inc. in 
Tampa, Florida, attempted to evict 52 Medicaid residents 
ostensibly for the purpose of remodeling the nursing home 
facility. A judge halted the evictions, and the nursing home 
allowed the residents to remain. A State agency concluded that 
the evictions were based solely on the fact that these 
residents relied on Medicaid to pay their nursing home bills. 
Since that time, Vencor reversed its actions in Tampa and 
invited back all the discharged patients. In the Vencor case, 
Medicaid patients were protected by current law and regulations 
because the Vencor facility continued to participate in the 
Medicaid program. However, other facilities that have withdrawn 
from the Medicaid program are free to evict Medicaid patients.
     Over time, many residents of nursing homes are expected to 
exhaust their financial resources and become eligible for 
Medicaid coverage. According to some estimates, the rate of 
exhaustion of resources among the elderly for nursing home care 
is 63 percent over 13 weeks, 87 percent over 52 weeks. 
Medicaid, a partially Federally funded welfare program 
administered by the States, is not available to individuals 
until and unless they have limited assets and monthly incomes. 
Medicaid may be used to pay for nursing home care provided the 
nursing home has elected to participate in the Medicaid 
program.
     Providers do not often leave the Medicaid program. The 
large portion of Medicaid beneficiaries among the overall 
nursing home population (often over 60 percent of occupancy) 
and the general financial dependence of many homes on Medicaid 
revenues makes voluntary withdrawal an uncommon occurrence. 
When termination of participation does occur, it is usually 
caused by (1) a termination action by the State or Federal 
government, (2) a failure of the facility to meet 
recertification requirements for renewal of the provider 
agreement, or (3) in rare instances, the inadequacy of the 
payment structure under Medicaid. It is relatively uncommon for 
a nursing home to withdraw from the Medicaid program 
voluntarily, since Medicaid beds provide the majority of the 
revenue stream for most facilities. The Health Care Financing 
Administration (``HCFA'') estimates that an average of 58 
nursing homes voluntarily withdraw from the Medicaid program 
each year out of approximately 17,000 nursing homes in the 
United States.
     Notwithstanding the relatively few nursing homes that 
withdraw from the Medicaid program each year, ``[N]ursing 
`homes' become just that,'' according to the testimony provided 
by James L. Martin, President, The 60 Plus Association, at the 
February 11, 1999, Subcommittee on Health and Environment 
hearing on H.R. 540, ``They are not a hospital room, nor a 
hotel room, they are `home' to these patients * * *. Attrition, 
not eviction, should be the rule, so indigent patients do not 
suffer relocation trauma.''
     In an informal survey conducted by HCFA of forty-seven 
State nursing home ombudsmen, fifteen cited transfer and 
discharge violations as highly problematic. According to a 
February 8, 1999, letter to Health and Environment Subcommittee 
Chairman Michael Bilirakis in support of H.R. 540 from Geme G. 
Hernandez, Florida Secretary of Elder Affairs, ``The evidence 
is overwhelming that, without extraordinary preparatory efforts 
that are hardly ever made, any move is harmful for the 
preponderance of the frail elderly; the technical term is 
`transfer trauma.' ''
     Current law protects seniors from unreasonable transfer 
and discharge only if the nursing home remains in the Medicaid 
program. Section 1919 of the Social Security Act (42 U.S. C. 
1396r) sets forth transfer and discharge rules a skilled 
nursing facility must follow when transfer or discharge is 
under consideration.
     Under section 1919(c)(2), a skilled nursing facility must 
permit each resident to remain in the facility and must not 
transfer or discharge the resident from the facility unless:
          (i) the transfer or discharge is necessary to meet 
        the resident's welfare and the resident's welfare 
        cannot be met in the facility;
          (ii) the transfer or discharge is appropriate because 
        the resident's health has improved sufficiently so the 
        resident no longer needs the services provided by the 
        facility;
          (iii) the safety of individuals in the facility is 
        endangered;
          (iv) the health of individuals in the facility would 
        otherwise be endangered;
          (v) the resident has failed, after reasonable and 
        appropriate notice, to pay (or to have paid under this 
        title or title XVIII on the resident's behalf) for a 
        stay at the facility; or
          (vi) the facility ceases to operate.
     Nursing homes are required to accept Medicaid payment as 
payment in full for nursing home residents. Additionally, 
notice must be given at least 30 days prior to the transfer or 
discharge of a resident.
    H.R. 540 closes the loophole of nursing homes seeking to 
discharge or transfer patients based solely on their Medicaid-
eligible status. According to a February 8, 1999, letter to 
Health and Environment Subcommittee Chairman Michael Bilirakis 
from Horace B. Deets, Executive Director of the American 
Association of Retired Persons (``AARP''), ``H.R. 540 
establishes clear legal authority to prevent inappropriate 
discharges, even when a nursing home withdraws from the 
Medicaid program. AARP believes this is an important and 
necessary step in protecting access to nursing homes for our 
nation's most vulnerable citizens.''
    If a nursing facility were to decide to withdraw 
voluntarily from the Medicaid program, all residents of the 
facility prior to such a decision would be protected from 
transfer or discharge based on Medicaid status, regardless of 
whether they are Medicaid-eligible at the time or become 
eligible in the future.
    According to testimony delivered by Mike Hash, Deputy 
Administrator, Health Care Financing Administration at the 
February 11 hearing, ``without the legislation that you, 
Chairman Bilirakis, and Congressman Davis, have introduced, we 
cannot prevent the evictions of Medicaid patients if nursing 
homes leave participation in Medicaid. America's nursing home 
residents need this bill to be enacted into law * * *. I know 
that our staff has provided technical assistance to your staff 
and others in the drafting of this legislation. We look forward 
to working with you to further ensure passage of this bill * * 
* .''
    As Nona Bear Wegner, Senior Vice President, The Seniors 
Coalition, put it in a March 1, 1999, letter to Health and 
Environment Subcommittee Chairman Michael Bilirakis, ``We 
believe that this is a very fair and balanced piece of 
legislation which protects consumers while, at the same time, 
poses no unreasonable burden of compliance upon providers of 
care. Rather, it is a measure which will actually boost 
consumer confidence in the nursing home industry by providing 
patients and families with certain knowledge that care will not 
be unreasonably interrupted or withdrawn.''

                                Hearings

    The Subcommittee on Health and Environment held a hearing 
on H.R. 540, the Nursing Home Resident Protection Amendments of 
1999, on February 11, 1999. The Subcommittee received testimony 
from: the Honorable Jim Davis, U.S. House of Representatives, 
Eleventh Congressional District, State of Florida; Michael 
Hash, Deputy Administrator, Health Care Financing 
Administration; Nelson Mongiovi of Tampa, Florida; Nona Bear 
Wegner, Senior Vice President, The Seniors Coalition; James L. 
Martin, President, 60 Plus; Kelley Schild, Administrator, 
Floridian Nursing and Rehabilitation Center, testifying on 
behalf of the American Health Care Association; and Robyn 
Grant, Severns & Bennet, representing the National Coalition 
for Nursing Home Reform.
    Subcommittee Chairman Bilirakis entered into the record 
letters in support of H.R. 540 from AARP, the National Senior 
Citizens Law Center, the Florida Department of Elder Affairs, 
and the American Health Care Association.

                        Committee Consideration

    On March 2, 1999, the Subcommittee on Health and 
Environment met in open markup session and approved H.R. 540 
for Full Committee consideration, without amendment, by a voice 
vote. On March 4, 1999, the Full Committee met in open markup 
session and ordered H.R. 540 reported favorably to the House, 
without amendment, by a voice vote, a quorum being present.

                             Rollcall Votes

    Clause 3(b) of rule XIII 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. 540 
reported. A motion by Mr. Bliley to order H.R. 540 reported to 
the House, without amendment, was agreed to by a voice vote, a 
quorum being present.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held a legislative 
hearing and made findings that are reflected in this report.

           Committee on Government Reform Oversight Findings

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
540, Nursing Home Resident Protection Amendments of 1999, would 
result in no new or increased budget authority, entitlement 
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 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 5, 1999.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 540, Nursing Home 
Resident Protection Amendments of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Jeanne De 
Sa and Dorothy Rosenbaum.
            Sincerely,
                                          Barry B. Anderson
                                    (for Dan L. Crippen, Director).
    Enclosure.

H.R. 540--Nursing Home Resident Protection Amendments of 1999

    CBO estimates that enactment of H.R. 540 would not affect 
federal spending. Because the bill would not affect direct 
spending or receipts, pay-as-you-go procedures would not apply. 
H.R. 540 contains no intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act of 1995 (UMRA) and would not 
affect the budgets of state, local, or tribal governments. The 
bill does contain a private-sector mandate on nursing 
facilities currently participating in the Medicaid program, but 
the cost of that mandate to the affected facilities would be 
small.
    H.R. 540 would amend Medicaid law to prohibit transfers or 
discharges of residents of nursing facilities as a result of a 
facility's voluntary withdrawal from participation in the 
Medicaid program. The bill would not affect federal Medicaid 
spending because nursing facility residents would be likely to 
continue to receive Medicaid benefits if a facility withdraws 
from the program under both current law and the bill's new 
requirements.
    Current Medicaid law includes a set of requirements 
regarding residents' transfer and discharge rights for nursing 
facilities that participate in the Medicaid program and 
establishes mechanisms that states and the federal government 
may use to punish violation of those requirements. The bill 
would add a new requirement that a participating facility agree 
that in the event that it decides to withdraw from the Medicaid 
program in the future, it would continue to care for residents 
who were in its care at the time. In that instance, the 
facility would be deemed to be participating in the Medicaid 
program and would continue to receive payments for residents 
who were in its care at the time of withdrawal until the legal 
discharge or transfer of those residents. The requirement would 
apply only to facilities that continue to provide nursing 
facility services.
    CBO estimates that this bill would not affect federal 
Medicaid spending. Because nursing facilities are highly 
dependent on Medicaid revenue, it is unlikely that there would 
be a largescale withdrawal from Medicaid program participation 
under current law. Furthermore, in many states, withdrawal from 
the Medicaid program carries risk of civil monetary penaltiesor 
other sanction. For instance, some states require Medicaid 
participation as a condition of licensure. Even in the rare instance 
where a facility does withdraw from the program under current law, the 
state or the Health Care Financing Administration would likely find new 
placement for Medicaid-eligible residents. As national occupancy rates 
in nursing facilities are about 86 percent, it would be unlikely that a 
new placement would not be found.
    CBO finds that the new requirements of H.R. 540 would be 
considered a private-sector mandate under UMRA. For facilities 
now participating in Medicaid who chose to leave the program, 
the requirement to continue to care for current residents would 
be a new duty they could not avoid, even though it was not part 
of their agreement when they joined the program. Because few 
nursing facilities leave the program, however, and because 
those who did choose to leave would continue to receive 
Medicaid payments, the aggregate cost to affected facilities of 
this mandate would be small.
    The CBO staff contacts for the federal costs of this 
estimate are Jeanne De Sa and Dorothy Rosenbaum. Bruce 
Vavrichek is the staff contact for private sector mandate 
costs. This estimate was approved by Paul N. Van de Water, 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

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

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

                         Section 1. Short Title

    Section 1 provides the short title of the Act, the 
``Nursing Home Resident Protection Amendments of 1999.''

Section 2. Restrictions on Transfers or Discharges of Nursing Facility 
Residents in the Case of Voluntary Withdrawal from Participation under 
                          the Medicaid Program

    Section 2 provides for restrictions on transfers or 
discharges of nursing facility residents in the case of 
voluntary withdrawal from participation under the Medicaid 
program. In general, this section provides that a nursing 
home's voluntary withdrawal from the Medicaid program is not an 
acceptable basis for the transfer or discharge based on 
Medicaid status of individuals who had taken up residence in 
the facility on the day before the effective date of 
withdrawal, including those who were not Medicaid eligible at 
that time. In the case of each individual who takes up 
residence in the nursing home after the effective date of such 
withdrawal, the nursing home must provide notice both orally 
and in writing that the nursing home will no longer participate 
in the Medicaid program. This section further identifies what 
constitutes notice and acknowledgments of notice. The effective 
date is the date of enactment of the Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) 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) * * *

           *       *       *       *       *       *       *

  (c) Requirements Relating to Residents' Rights.--
          (1) * * *
          (2) Transfer and discharge rights.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (F) Continuing rights in case of voluntary 
                withdrawal from participation.--
                          (i) In general.--In the case of a 
                        nursing facility that voluntarily 
                        withdraws from participation in a State 
                        plan under this title but continues to 
                        provide services of the type provided 
                        by nursing facilities--
                                  (I) the facility's voluntary 
                                withdrawal from participation 
                                is not an acceptable basis for 
                                the transfer or discharge of 
                                residents of the facility who 
                                were residing in the facility 
                                on the day before the effective 
                                date of the withdrawal 
                                (including those residents who 
                                were not entitled to medical 
                                assistance as of such day);
                                  (II) the provisions of this 
                                section continue to apply to 
                                such residents until the date 
                                of their discharge from the 
                                facility; and
                                  (III) in the case of each 
                                individual who begins residence 
                                in the facility after the 
                                effective date of such 
                                withdrawal, the facility shall 
                                provide notice orally and in a 
                                prominent manner in writing on 
                                a separate page at the time the 
                                individual begins residence of 
                                the information described in 
                                clause (ii) and shall obtain 
                                from each such individual at 
                                such time an acknowledgment of 
                                receipt of such information 
                                that is in writing, signed by 
                                the individual, and separate 
                                from other documents signed by 
                                such individual.
                        Nothing in this subparagraph shall be 
                        construed as affecting any requirement 
                        of a participation agreement that a 
                        nursing facility provide advance notice 
                        to the State or the Secretary, or both, 
                        of its intention to terminate the 
                        agreement.
                          (ii) Information for new residents.--
                        The information described in this 
                        clause for a resident is the following:
                                  (I) The facility is not 
                                participating in the program 
                                under this title with respect 
                                to that resident.
                                  (II) The facility may 
                                transfer or discharge the 
                                resident from the facility at 
                                such time as the resident is 
                                unable to pay the charges of 
                                the facility, even though the 
                                resident may have become 
                                eligible for medical assistance 
                                for nursing facility services 
                                under this title.
                          (iii) Continuation of payments and 
                        oversight authority.--Notwithstanding 
                        any other provision of this title, with 
                        respect to the residents described in 
                        clause (i)(I), a participation 
                        agreement of a facility described in 
                        clause (i) is deemed to continue in 
                        effect under such plan after the 
                        effective date of the facility's 
                        voluntary withdrawal from participation 
                        under the State plan for purposes of--
                                  (I) receiving payments under 
                                the State plan for nursing 
                                facility services provided to 
                                such residents;
                                  (II) maintaining compliance 
                                with all applicable 
                                requirements of this title; and
                                  (III) continuing to apply the 
                                survey, certification, and 
                                enforcement authority provided 
                                under subsections (g) and (h) 
                                (including involuntary 
                                termination of a participation 
                                agreement deemed continued 
                                under this clause).
                          (iv) No application to new 
                        residents.--This paragraph (other than 
                        subclause (III) of clause (i)) shall 
                        not apply to an individual who begins 
                        residence in a facility on or after the 
                        effective date of the withdrawal from 
                        participation under this subparagraph.

           *       *       *       *       *       *       *


                                
