SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Home Health Services Equity 
Act of 1999''.

SEC. 2. FINDINGS.

    Congress finds that the payment system for home health services 
covered under Medicare as enacted by the Balanced Budget Act of 1997 is 
having the following unintended consequences:
            (1) Many of the sickest, most frail Medicare beneficiaries 
        are being deprived of access to medically necessary home health 
        services which are covered under the Medicare Program.
            (2) The amount of reductions in reimbursement for home 
        health services furnished under the Medicare Program 
        significantly exceeds the amount of reduction in reimbursement 
        for any other service furnished under the Medicare Program at a 
        time when the need for home health services by the Nation's 
        elderly citizens is growing.
            (3) The per beneficiary limits imposed on home health 
        agencies do not, for a majority of such agencies, accurately 
        reflect the costs necessarily incurred in the efficient 
        delivery of needed home health services to the individuals 
        treated by those agencies, as required under section 
        1861(v)(1)(A) of the Social Security Act (42 U.S.C. 
        1395x(v)(1)(A)).
            (4) Residents of certain States and regions of the country 
        are being afforded access to far fewer home health services 
        under the Medicare Program than residents of other States or 
        regions who have similar medical conditions.
            (5) The prospective payment system scheduled for 
        implementation by October 1, 2000, is in danger of being based 
        on data which excludes many of the costs of providing covered 
        services to the sickest, most frail Medicare beneficiaries.
            (6) The additional 15 percent reduction in reimbursement 
        currently scheduled for October 1, 2000, will result in 
        reductions in Medicare spending for home health services that 
        are far in excess of those intended by Congress when it passed 
        the Balanced Budget Act of 1997 and are unrelated to needs of 
        the patients.
            (7) The home health interim payment system enacted as part 
        of the Balanced Budget Act of 1997 is not providing for a 
        smooth transition from reasonable cost reimbursement to 
        prospective payment.

SEC. 3. INTERIM PAYMENT SYSTEM OVERPAYMENT RECOUPMENT.

    (a) In General.--Section 1861(v)(1)(L) of the Social Security Act 
(42 U.S.C. 1395x(v)(1)(L)), as amended by section 5101(a) of the Tax 
and Trade Relief Extension Act of 1998 (Public Law 105-277), is amended 
by adding at the end the following new clause:
    ``(x)(I) Notwithstanding any other provision of this subparagraph, 
there shall be no recovery of any payments for reasonable costs made 
before the cost reporting period describe in subclause (II) to a home 
health agency in excess of the per beneficiary limitation applicable to 
that agency.
    ``(II) The cost reporting period referred to in subclause (I) with 
respect to a home health agency is the cost reporting period beginning 
during the fiscal year following the fiscal year in which the home 
health agency received written notice from the Secretary of its agency-
specific per beneficiary limitation.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply as if included in the enactment of the Balanced Budget Act of 
1997.

SEC. 4. ELIMINATION OF AUTOMATIC 15 PERCENT REDUCTION IN PAYMENT 
              LIMITS.

    (a) Prospective Payment System.--
            (1) Elimination of reduction.--Section 1895(b)(3) of the 
        Social Security Act (42 U.S.C. 1395fff(b)(3)(A)) is amended--
                    (A) in clause (i)--
                            (i) by striking ``but if the reduction in 
                        limits described in clause (ii) had been in 
                        effect''; and
                            (ii) by striking ``(i) In general.--'' and 
                        adjusting the margin accordingly; and
                    (B) by striking clause (ii).
            (2) Conforming amendment.--Section 1895(d)(3) of such Act 
        (42 U.S.C. 1395fff(d)(3)) is amended by striking ``(including 
        the reduction described in clause (ii) of such subsection)''.
    (b) Interim Payment System.--Section 4603 of the Balanced Budget 
Act of 1997 (Public Law 105-33), as amended by section 5101(c)(3) of 
the Tax and Trade Relief Extension Act of 1998 (Public Law 105-277), is 
amended by striking subsection (e).

SEC. 5. 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 (IV), by striking ``or'';
            (2) in subclause (V)--
                    (A) by inserting ``and before October 1, 1999'' 
                after ``October 1, 1998,''; and
                    (B) by striking the period at the end and inserting 
                ``, or''; and
            (3) by adding at the end the following new subclause:
                    ``(VI) October 1, 1999, 108 percent of such 
                median.''.

SEC. 6. ENSURING BENEFICIARY CHOICE OF PROVIDER WITH PRORATED LIMITS.

    (a) In General.--Section 1861(v)(1)(L)(vi)(II) of the Social 
Security Act (42 U.S.C. 1395x(v) (1)(L)(vi)(II)) is amended by 
inserting ``only if the Secretary determines that the agency knew or 
should have known that the individual, to whom home health services 
were furnished, used home health services furnished by more than one 
home health agency'' before the period.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to cost reporting periods beginning on or after October 1, 1999.

SEC. 7. EXCEPTIONS AND EXEMPTIONS; OUTLIERS.

    (a) Exceptions and Exemptions.--
            (1) In general.--Section 1861(v)(1)(L)(ii) of the Social 
        Security Act (42 U.S.C. 1395x(v)(1)(L)(ii)) is amended by 
        adding at the end the following: ``With respect to the limits 
        under clauses (v) through (ix), the Secretary shall provide for 
        the following exceptions and exemptions:
            ``(I) Home health agencies furnishing home health services 
        exclusively in medically underserved areas shall be exempt from 
        such limits.
            ``(II) The Secretary shall provide for a payment amount (in 
        an amount determined by the Secretary) in addition to the 
        amounts applicable under such limits for a home health agency 
        that demonstrates to the Secretary that it incurred costs above 
        such limits due to costs attributable to additional Federal 
        regulatory requirements imposed after fiscal year 1994.''.
            (2) Expenditure limits on exceptions.--The aggregate amount 
        of additional payments or payment adjustments made under 
        section 1861(v)(1)(L)(ii)(II), as added by paragraph (1), with 
        respect to a fiscal year may not exceed 5 percent of the 
        aggregate payments projected or estimated by the Secretary to 
        be made under section 1861(v)(1)(L) for such fiscal year.
    (b) Additional Payments for Outliers.--Section 1861(v)(1)(L) of 
such Act (42 U.S.C. 1395x(v)(1)(L)), as amended by section 3(a), is 
further amended by adding at the end the following new clause:
    ``(xi) Notwithstanding clauses (v) through (ix), the Secretary 
shall provide for an additional payment amount to a provider equal to 
the difference between the reasonable cost incurred by the provider and 
the limit under such clauses applicable to the provider if the provider 
demonstrates to the Secretary that--
            ``(I) the provider incurred costs in excess of the limits 
        applicable under such clauses with respect to an individual 
        described in subclause (II);
            ``(II) with respect to an individual to whom the provider 
        furnished home health services under this title, the individual 
        requires the most expensive home health services (case 
        outliers) or requires such services for a far longer than 
        average period of time (case and duration outliers), such 
        outliers determined by the Secretary; and
            ``(III) such incurred costs are reasonable.
No payment shall be made under this clause to a provider that, as of 
October 1, 1999, has ceased furnishing home health services for which 
payment may be made under this title.''.
    (c) Effective Date.--The amendments made by this section shall 
apply as if included in the enactment of the Balanced Budget Act of 
1997.
Amends SSA title XVIII, as amended by the Tax and Trade Relief Extension Act of 1998, to: (1) deny recoupment of reasonable costs to a home health agency in excess of the applicable per beneficiary limitation; (2) eliminate the automatic 15 percent reduction in payment limits; and (3) revise per visit limits.
Medicare Home Health Services Equity Act of 1999