SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Patient Freedom of Choice Act of 
1997''.

SEC. 2. NOTIFICATION OF AVAILABILITY OF PROVIDERS AS PART OF DISCHARGE 
              PLANNING PROCESS.

    (a) Medicare Requirement.--Section 1861(ee)(2) of the Social 
Security Act (42 U.S.C. 1395x(ee)(2)) is amended--
            (1) in subparagraph (D), by inserting before the period the 
        following: ``, including the availability of those services 
        through individuals and entities that participate in the 
        program under this title and that serve the area in which the 
        patient resides and that request to be listed by the hospital 
        as available''; and
            (2) by adding at the end the following:
            ``(H) Consistent with section 1802, the discharge plan 
        shall--
                    ``(i) not specify or otherwise limit the qualified 
                provider which may provide post-hospital care, and
                    ``(ii) identify (in a form and manner specified by 
                the Secretary) any provider (to whom the individual is 
                referred) in which the hospital has a disclosable 
                financial interest (as specified by the Secretary 
                consistent with section 1866(a)(1)(R)) or which has 
                such an interest in the hospital.''.
    (b) Requirement for Medicaid Funding.--Section 1903(i) of such Act 
(42 U.S.C. 1396b(i)) is amended--
            (1) by striking ``or'' at the end of paragraph (14),
            (2) by striking the period at the end of paragraph (15) and 
        inserting ``; or'', and
            (3) by inserting after paragraph (15) the following new 
        paragraph:
            ``(16) with respect to any amount expended for inpatient 
        hospital services of a hospital unless the hospital has in 
        place a discharge planning process that meets the requirements 
        of section 1861(ee) with respect to individuals entitled to 
        medical assistance under this title in the same manner as such 
        requirements otherwise apply to individuals entitled to 
        benefits under title XVIII.''.
    (c) Additional Enforcement Through Civil Money Penalties.--Section 
1128A(b) of such Act (42 U.S.C. 1320a-7a(b)) is amended by adding at 
the end the following new paragraph:
    ``(4) Any hospital that participates in the program under title 
XVIII or XIX and that fails to comply with the discharge planning 
process described in section 1861(ee)(2) either--
            ``(A) by failing to list participating individuals and 
        entities requested to be listed under subparagraph (D) of such 
        section, or
            ``(B) by violating subparagraph (H) of such section,
shall be subject, in addition to any other penalties that may be 
prescribed by law, to a civil money penalty of not more than $10,000 
for each such violation.''.
    (d) Effective Dates.--The amendments made by subsection (a) shall 
apply to discharges occurring on or after 90 days after the date of the 
enactment of this Act. The amendments made by subsection (b) shall 
apply to expenditures for inpatient hospital services with respect to 
discharges occurring on or after 90 days after the date of the 
enactment of this Act. The amendments made by subsection (c) shall 
apply to failures and violations occurring on or after 90 days after 
the date of the enactment of this Act.

SEC. 3. MAINTENANCE AND DISCLOSURE OF INFORMATION ON POST-HOSPITAL 
              SERVICE PROVIDERS.

    (a) Medicare Requirement.--Section 1866(a)(1) of the Social 
Security Act (42 U.S.C. 1395cc(a)(1)) is amended--
            (1) by striking ``and'' at the end of subparagraph (P),
            (2) by striking the period at the end of subparagraph (Q), 
        and
            (3) by adding at the end the following:
            ``(R) in the case of a hospital that has a financial 
        interest (as specified by the Secretary in regulations) in a 
        provider of post-hospital services (including an entity that 
        furnishes durable medical equipment), or in which such a 
        provider has such a financial interest, or in which another 
        entity has such a financial interest (directly or indirectly) 
        with such hospital and such a provider, to maintain and 
        disclose to the Secretary (in a form and manner specified by 
        the Secretary) information on--
            ``(i) the nature of such financial interest,
            ``(ii) the number of individuals who were discharged from 
        the hospital and who were identified as requiring the type of 
        post-hospital services provided by such provider, and
            ``(iii) the percentage of such individuals who received 
        such services from such provider (or another such provider).''.
    (b) Requirement for Medicaid Funding.--Section 1903(i)(16) of such 
Act (42 U.S.C. 1396b(i)), as inserted by section 2(b), is amended--
            (1) by striking ``(A)'' after ``unless'', and
            (2) by inserting before the period at the end the 
        following: ``, and (B) the hospital is complying with the 
        requirements of section 1866(a)(1)(R)''.
    (c) Disclosure of Information to the Public.--Title XI of such Act 
is amended by inserting after section 1145 the following new section:

   ``public disclosure of certain information on hospital financial 
                     interest and referral patterns

    ``Sec. 1146. The Secretary shall make available to the public, in a 
form and manner specified by the Secretary, information disclosed to 
the Secretary pursuant to section 1866(a)(1)(R) or section 
1903(i)(16).''.
    (d) Effective Date.--The Secretary of Health and Human Services 
shall issue regulations by not later than 1 year after the date of the 
enactment of this Act to carry out the amendments made by this section 
and such amendments shall take effect as of such date (on or after the 
issuance of such regulations) as the Secretary specifies in such 
regulations.
Patient Freedom of Choice Act of 1997 - Amends titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act (SSA) to require hospitals participating in the Medicare or Medicaid programs to:  (1) give notice of availability of providers as part of the discharge planning process; and (2) maintain and disclose information on certain referrals.  Provides for additional enforcement of such requirement through civil money penalties. 
Amends SSA title XI to provide for disclosure of certain information on hospital financial interest and referral patterns to the Secretary of Health and Human Services, who shall in turn make such information public.
Patient Freedom of Choice Act of 1997