Medicare Home Health Fair Payment Act of 1998

Summary: Medicare Home Health Fair Payment Act of 1998 - Amends title XVIII (Medicare) of the Social Security Act, with respect to the computation formula of the interim system of limited payments for services provided by home health agencies, as amended by the Balanced Budget Act of 1997, in order to:  (1) create a new formula for cost reporting periods beginning on or after October 1, 1998 with the agency-specific per beneficiary annual limitation calculated on a different basis which still makes use of the agency's census division; (2) revise the rules for new providers for cost reporting periods beginning on or after October 1, 1998; (3) provide for a five percent increase in per visit cost limits for such cost reporting periods; (4) provide for a one year delay in establishment of a prospective payment system (PPS) for home health services and in implementation of the mandatory 15 percent reduction in cost and per beneficiary limits under such interim system; and (5) adjust the home health market basket update for home health services under PPS and such interim system, reducing it by a specified percentage for any cost reporting period beginning in FY 2000 or 2001, and increasing it by another specified percentage for any cost reporting period beginning in FY 2004. 
Amends the Internal Revenue Code to treat:  (1) a taxpayer as having omitted a correct taxpayer identification number (TIN) for purposes of mathematical error assessment if information provided by the taxpayer on the return with respect to the individual whose TIN was provided differs from the information the Secretary of the Treasury obtains from the person issuing the TIN; and (2) as a mathematical error the inclusion on a return of a TIN if it is of an individual whose age affects the amount of the tax credit involved and the computation of such credit reflects the treatment of such individual as being of an age different from the individual's age based on such TIN. 
Adds the vaccine against rotavirus gastroenteritis to the list of taxable vaccines for Federal sales tax purposes. 
Limits specified liability losses for purposes of the net operating loss deduction to those attributable to a liability under a Federal or State law requiring the reclamation of land, decommissioning of a nuclear power plant (or any unit thereof), dismantlement of an offshore drilling platform, remediation of environmental contamination, or payment of workmen's compensation. 
Limits the rule waiving the accrual method requirement for any portion of payment amounts which will not be collected to persons performing services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting. 
Applies to any organization a significant trade or business of which is the lending of money the requirement of filing a return relating to the cancellation of indebtedness.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Home Health Fair Payment 
Act of 1998''.

SEC. 2. REVISION OF PER BENEFICIARY LIMITS AND PER VISIT PAYMENT LIMITS 
              FOR PAYMENT FOR HOME HEALTH SERVICES UNDER THE MEDICARE 
              PROGRAM.

    (a) Revision of Per Beneficiary Limits.--
            (1) In general.--Section 1861(v)(1)(L)(v) of the Social 
        Security Act (42 U.S.C. 1395x(v)(1)(L)(v)) is amended to read 
        as follows:
    ``(v)(I) For services furnished by home health agencies for cost 
reporting periods beginning on or after October 1, 1997, the Secretary 
shall provide for an interim system of limits. Payment shall not exceed 
the costs determined under the preceding provisions of this 
subparagraph or, if lower, the product of--
            ``(aa) the applicable limit determined under subclause (II) 
        or (III) for the cost reporting period involved; and
            ``(bb) the agency's unduplicated census count of patients 
        (entitled to benefits under this title) for the cost reporting 
        period subject to the limitation.
    ``(II) The applicable limit for cost reporting periods beginning in 
fiscal year 1998 is an agency-specific per beneficiary annual 
limitation calculated based 75 percent on 98 percent of the reasonable 
costs (including nonroutine medical supplies) for the agency's 12-month 
cost reporting period ending during fiscal year 1994, and based 25 
percent on 98 percent of the standardized regional average of such 
costs for the agency's census division, as applied to such agency, for 
cost reporting periods ending during fiscal year 1994, such costs 
updated by the home health market basket index.
    ``(III) The applicable limit for cost reporting periods beginning 
on or after October 1, 1998, and that are not subject to the 
prospective payment system under section 1895, is an agency-specific 
per beneficiary annual limitation calculated--
            ``(aa) based 50 percent on the per beneficiary annual 
        limitation determined under subclause (II) for the agency;
            ``(bb) based 25 percent on the standardized national mean 
        equal to $3,708.25 for fiscal year 1999 (of which $2,880.12 is 
        the labor component, and $828.13 is the non-labor component); 
        and
            ``(cc) based 25 percent on the standardized regional 
        average of the limits for the agency's census division (as 
        specified in tables 3B and 3D published in the Federal Register 
        on August 11, 1998 (63 Fed. Reg. 42926));
such limits updated by the home health market basket index for each 
subsequent fiscal year (if any) through the fiscal year involved.''.
            (2) New agencies.--Section 1861(v)(1)(L)(vi) of the Social 
        Security Act (42 U.S.C. 1395x(v)(1)(L)(vi)) is amended--
                    (A) in subclause (I), by striking ``For new'' and 
                inserting ``Subject to subclause (II), for new'';
                    (B) by redesignating subclause (II) as subclause 
                (III); and
                    (C) by inserting after subclause (I) the following:
            ``(II) In the case of cost reporting periods beginning on 
        or after October 1, 1998, the limits in subclause (I) shall be 
        determined as if any reference in clause (v)(II) to `98 
        percent' were a reference to `100 percent'.''.
            (3) Conforming amendment.--Section 1861(v)(1)(L)(vii)(I) of 
        the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(vii)(I)) is 
        amended by striking ``clause (v)(I)'' and inserting ``clause 
        (v)(II)''.
    (b) Revision of Per Visit Limits.--Section 1861(v)(1)(L)(i) of the 
Social Security Act (42 U.S.C. 1395x(v)(1)(L)(i)) is amended--
            (1) in subclause (III), by striking ``or'';
            (2) in subclause (IV)--
                    (A) by inserting ``and before October 1, 1998,'' 
                after ``October 1, 1997,''; and
                    (B) by striking the period at the end and inserting 
                ``, or''; and
            (3) by adding at the end the following:
            ``(V) October 1, 1998, 110 percent of such median.
For fiscal year 1999, the limits determined under this clause shall be 
equal to the per visit limits as specified in table 3A published in the 
Federal Register on August 11, 1998 (63 Fed. Reg. 42925) and as 
subsequently corrected, increased by 4.76 percent (which is equal to 
110 divided by 105).''.
    (c) One-Year Delay in Implementation of Prospective Payment System 
for Home Health Services and Contingency Reduction in Payment Limits.--
            (1) Prospective payment system.--Section 1895 of the Social 
        Security Act (42 U.S.C. 1395fff) is amended--
                    (A) in subsection (a), by striking ``October 1, 
                1999'' and inserting ``October 1, 2000'';
                    (B) in subsection (b)(3)--
                            (i) in subparagraph (A)(i), by striking 
                        ``fiscal year 2000'' and inserting ``fiscal 
                        year 2001'';
                            (ii) in subparagraph (A)(ii), by striking 
                        ``September 30, 1999'' and inserting 
                        ``September 30, 2000''; and
                            (iii) in subparagraph (B)(i), by striking 
                        ``fiscal year 2001'' and inserting ``fiscal 
                        year 2002''; and
                    (C) in subsection (c), in the matter preceding 
                paragraph (1), by striking ``October 1, 1998'' and 
                inserting ``October 1, 1999''.
            (2) Change in effective date.--Section 4603(d) of the 
        Balanced Budget Act of 1997 (42 U.S.C. 1395fff note) is amended 
        by striking ``October 1, 1999'' and inserting ``October 1, 
        2000''.
            (3) Contingency reduction.--Section 4603(e) of the Balanced 
        Budget Act of 1997 (42 U.S.C. 1395fff note) is amended by 
        striking ``September 30, 1999'' and inserting ``September 30, 
        2000''.
    (d) Change in Home Health Market Basket Increase for Home Health 
Services.--
            (1) Interim payment system.--Section 1861(v)(1)(L) of the 
        Social Security Act (42 U.S.C. 1395x(v)(1)(L)) is amended by 
        adding at the end the following:
    ``(viii) Notwithstanding any other provision of this subparagraph, 
any home health market basket update to any limit under this 
subparagraph shall--
            ``(I) be reduced by 0.5 percentage point for any cost 
        reporting period beginning in fiscal year 2000 or 2001; and
            ``(I) be increased by 1 percentage point for any cost 
        reporting period beginning in fiscal year 2004.''.
            (2) Prospective payment system.--Section 1895(b)(3)(B)(ii) 
        of the Social Security Act (42 U.S.C. 1395fff(b)(3)(B)(ii)) is 
        amended by adding at the end the following: ``Such increase 
        shall be reduced by 0.5 percentage point for any cost reporting 
        period beginning in fiscal year 2001 and shall be increased by 
        1 percentage point for any cost reporting period beginning in 
        fiscal year 2004.''.
    (e) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply to cost reporting periods beginning on or after October 1, 
1998.

SEC. 3. CLARIFICATION AND EXPANSION OF MATHEMATICAL ERROR ASSESSMENT 
              PROCEDURES.

    (a) TIN Deemed Incorrect if Information on Return Differs With 
Agency Records.--Section 6213(g)(2) of the Internal Revenue Code of 
1986 (defining mathematical or clerical error) is amended by adding at 
the end the following flush sentence:
        ``A taxpayer shall be treated as having omitted a correct TIN 
        for purposes of the preceding sentence if information provided 
        by the taxpayer on the return with respect to the individual 
        whose TIN was provided differs from the information the 
        Secretary obtains from the person issuing the TIN.''
    (b) Expansion of Mathematical Error Procedures to Cases Where TIN 
Establishes Individual Not Eligible for Tax Credit.--Section 6213(g)(2) 
of the Internal Revenue Code of 1986 is amended by striking ``and'' at 
the end of subparagraph (I), by striking the period at the end of the 
first subparagraph (J) (relating to higher education credit) and 
inserting a comma, by redesignating the second subparagraph (J) 
(relating to earned income credit) as subparagraph (K) and by striking 
the period at the end and inserting ``, and'', and by adding at the end 
the following new subparagraph:
                    ``(L) the inclusion on a return of a TIN required 
                to be included on the return under section 21, 24, or 
                32 if--
                            ``(i) such TIN is of an individual whose 
                        age affects the amount of the credit under such 
                        section, and
                            ``(ii) the computation of the credit on the 
                        return reflects the treatment of such 
                        individual as being of an age different from 
                        the individual's age based on such TIN.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 4. INCLUSION OF ROTAVIRUS GASTROENTERITIS TO LIST OF TAXABLE 
              VACCINES.

    (a) In General.--Section 4132(1) of the Internal Revenue Code of 
1986 (defining taxable vaccine) is amended by adding at the end the 
following new subparagraph:
                    ``(K) Any vaccine against rotavirus 
                gastroenteritis.''
    (b) Effective Date.--
            (1) Sales.--The amendment made by this section shall apply 
        to sales after the date of enactment of this Act.
            (2) Deliveries.--For purposes of paragraph (1), in the case 
        of sales on or before the date of enactment of this Act for 
        which delivery is made after such date, the delivery date shall 
        be considered the sale date.

SEC. 5. CLARIFICATION OF DEFINITION OF SPECIFIED LIABILITY LOSS.

    (a) In General.--Subparagraph (B) of section 172(f)(1) of the 
Internal Revenue Code of 1986 (defining specified liability loss) is 
amended to read as follows:
                    ``(B) Any amount (not described in subparagraph 
                (A)) allowable as a deduction under this chapter which 
                is attributable to a liability--
                            ``(i) under a Federal or State law 
                        requiring the reclamation of land, 
                        decommissioning of a nuclear power plant (or 
                        any unit thereof), dismantlement of an offshore 
                        drilling platform, remediation of environmental 
                        contamination, or payment of workmen's 
                        compensation, and
                            ``(ii) with respect to which the act (or 
                        failure to act) giving rise to such liability 
                        occurs at least 3 years before the beginning of 
                        the taxable year.''
    (b) Effective Date.--The amendment made by this section shall apply 
to net operating losses for taxable years ending after the date of the 
enactment of this Act.

SEC. 6. LIMITATION ON REQUIRED ACCRUAL OF AMOUNTS RECEIVED FOR 
              PERFORMANCE OF CERTAIN PERSONAL SERVICES.

    (a) In General.--Paragraph (5) of section 448(d) of the Internal 
Revenue Code of 1986 (relating to special rule for services) is amended 
by inserting ``in fields referred to in paragraph (2)(A)'' after 
``services by such person''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1998.
    (c) Coordination With Section 481.--In the case of any taxpayer 
required by this section to change its method of accounting for any 
taxable year--
            (1) such change shall be treated as initiated by the 
        taxpayer;
            (2) such change shall be treated as made with the consent 
        of the Secretary of the Treasury; and
            (3) the period for taking into account the adjustments 
        under section 481 by reason of such change shall be 3 years.

SEC. 7. RETURNS RELATING TO CANCELLATIONS OF INDEBTEDNESS BY 
              ORGANIZATIONS LENDING MONEY.

    (a) In General.--Paragraph (2) of section 6050P(c) of the Internal 
Revenue Code of 1986 (relating to definitions and special rules) is 
amended by striking ``and'' at the end of subparagraph (B), by striking 
the period at the end of subparagraph (C) and inserting ``; and'', and 
by inserting after subparagraph (C) the following new subparagraph:
                    ``(D) any organization a significant trade or 
                business of which is the lending of money.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to discharges of indebtedness after December 31, 1998.