SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Home Health Access Preservation Act 
of 1998''.

SEC. 2. REVISION OF INTERIM PAYMENT SYSTEM FOR HOME HEALTH SERVICES.

    (a) Revision of Per Beneficiary Limit.--Section 1861(v)(1)(L) of 
the Social Security Act (42 U.S.C. 1395x(v)(1)(L)) is amended--
            (1) in clause (v)(I)--
                    (A) by inserting ``for a cost reporting period 
                beginning during fiscal year 1998,'' after ``(I)'', and
                    (B) by inserting before the semicolon the 
                following: ``, and for a cost reporting period 
                beginning after fiscal year 1998, the per beneficiary 
                annual limitation as determined under clause (viii)(II) 
                for such period''; and
            (2) by adding at the end the following:
    ``(viii)(I) For purposes of this clause, for home health agencies 
in a census division, the base regional limit is equal to the sum of 
the labor and nonlabor components of the standardized per-beneficiary 
limitation by census region division (as specified in the table 
entitled `Standardized Per-Beneficiary Limitations by Census Region 
Division, Labor/Nonlabor', prepared by the Health Care Financing 
Administration, and published in the Federal Register on July 31, 1998, 
or during August 1998) for the census division, and the base national 
limit is equal to the mean of such base regional limits.
    ``(II) For home health services furnished during a cost reporting 
period that begins after fiscal year 1998 and that is not subject to 
the prospective payment system under section 1895, the per beneficiary 
annual limitation for a home health agency in a census division is 
equal to the sum of 50 percent of the base regional limit (specified 
under subclause (I)) for agencies in such division and 50 percent of 
the base national limit (as specified under such subclause), updated by 
the home health market basket index for each fiscal year (after fiscal 
year 1998 and through the fiscal year involved), and adjusted as 
provided under subclause (III).
    ``(III) The Secretary shall adjust the labor-related portion of the 
updated sum calculated under subclause (II) by the area wage index 
applicable under section 1886(d)(3)(E) and determined in the manner 
described in clause (iii) for cost reporting periods beginning during 
the fiscal year involved. In applying this subclause for services 
furnished during cost reporting periods beginning during fiscal year 
1999, the Secretary shall use the area wage index specified in the 
tables entitled `Wage Index for Urban Areas' and `Wage Index for Rural 
Areas', prepared by the Health Care Financing Administration, and 
published in the Federal Register on July 31, 1998, or during August 
1998.''.
    (b) Elimination of Special Rule for New Agencies.--Section 
1861(v)(1)(L)(vi) of such Act (42 U.S.C. 1395x(v)(1)(L)(vi)) is amended 
by striking ``the following rules apply'' and all that follows through 
``For beneficiaries'' and inserting ``in the case of beneficiaries'', 
and correcting the indentation of the matter that follows accordingly.
    (c) Increase in Per Visit Cost Limits.--Section 1861(v)(1)(L)(i) of 
such 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 new subclause:
            ``(V) October 1, 1998, 108 percent of such median.''.
    (d) Prompt Publication of New Limits.--Section 1861(v)(1)(L)(vii) 
of such Act (42 U.S.C. 1395x(v)(1)(L)(vii)) is amended--
            (1) in subclause (II), by redesignating such subclause as 
        subclause (III) and by striking ``1998'' and inserting 
        ``1999''; and
            (2) by inserting after subclause (I) the following:
    ``(II) The Secretary shall establish the per beneficiary annual 
limitation under clause (viii)(II) and the per visit limits applicable 
under clause (i)(V) for cost reporting periods beginning during fiscal 
year 1999 as soon as practicable after the date of the enactment of 
such clauses.''.
    (e) Effective Dates.--(1) Except as provided in paragraph (2), the 
amendments made by this section take effect on the date of the 
enactment of this Act.
    (2) The amendment made by subsection (b) applies to services 
furnished in cost reporting periods beginning after fiscal year 1998.
    (3) There shall be no administrative or judicial review under 
section 1869 or 1878 of the Social Security Act, or under any other 
provision of law, of any action taken by the Secretary of Health and 
Human Services to implement the amendments made by this section.

SEC. 3. GRANT PROGRAM TO PROVIDE FOR ADJUSTMENT FOR OUTLIERS TO ASSIST 
              TRANSITION TO PROSPECTIVE PAYMENT SYSTEM.

    Section 1895 of the Social Security Act (42 U.S.C. 1395fff) is 
amended by adding at the end the following new subsection:
    ``(e) Grant Program To Provide for Adjustment for Outliers To 
Assist Transition to Prospective Payment System.--
            ``(1) Appropriations; total allotment.--For the purpose of 
        making payments to States under allotments under paragraph (2), 
        there is appropriated, out of any money in the Treasury not 
        otherwise appropriated--
                    ``(A) for fiscal year 1999, $250,000,000;
                    ``(B) for fiscal year 2000, $250,000,000;
                    ``(C) for fiscal year 2001, $250,000,000; and
                    ``(D) for fiscal year 2002, $250,000,000.
        Such amounts shall be available for allotment under paragraph 
        (2) for the respective fiscal years.
            ``(2) Allotments to states.--
                    ``(A) In general.--Of the amount available for 
                allotment under paragraph (1) for a fiscal year, the 
                Secretary shall allot to each State the same proportion 
                as the sum of the following (as determined by the 
                Secretary based upon data for the most recent fiscal 
                year ending before the fiscal year involved) for the 
                State bears to the total of all such sums for all the 
                States:
                            ``(i) 40 percent based on number of 
                        medicare beneficiaries.--40 percent multiplied 
                        by a fraction (expressed as a percentage)--
                                    ``(I) the numerator of which is the 
                                number of individuals entitled to 
                                benefits under part A or enrolled under 
                                part B, or both, residing in the State; 
                                and
                                    ``(II) the denominator of which is 
                                the total of the numbers computed under 
                                subclause (I) for all the States.
                            ``(ii) 60 percent based on number of 
                        medicare beneficiaries receiving home health 
                        services.--60 percent multiplied by a fraction 
                        (expressed as a percentage)--
                                    ``(I) the numerator of which is the 
                                number of individuals described in 
                                clause (i)(I) in the State with 
respect to whom a claim for benefits for home health services under 
this title has been received; and
                                    ``(II) the denominator of which is 
                                the total of the numbers computed under 
                                subclause (I) for all the States.
                    ``(B) 1-year availability of amounts allotted.--
                Amounts allotted to a State pursuant to this paragraph 
                for a fiscal year shall remain available for obligation 
                by the State through the end of the fiscal year (or, in 
                the case of an allotment for fiscal year 1999 through 
                the end of fiscal year 2000). Amounts reallotted to a 
                State under subparagraph (C) shall be available for 
                obligation by the State through the end of the fiscal 
                year in which they are reallotted.
                    ``(C) Procedure for redistribution of unused 
                allotments.--The Secretary shall determine an 
                appropriate procedure for redistribution of allotments 
                from States that were provided allotments under this 
                paragraph for a fiscal year but that do not obligate 
                all of the amount of such allotments during the period 
                in which such allotments are available for obligation 
                under subparagraph (B), to States that have fully 
                obligated the amount of their allotments under this 
                paragraph.
            ``(3) Use and payment of funds.--
                    ``(A) In general.--From the allotments made under 
                paragraph (2) to a State for a fiscal year, the 
                Secretary shall pay to each State amounts the State 
                demonstrates were paid by the State in the fiscal 
                year--
                            ``(i) for qualifying payments to qualified 
                        home health agencies; and
                            ``(ii) subject to subparagraph (D), for 
                        administrative expenses incurred by the State 
                        in carrying out this subsection.
                In no case shall the payments to a State under this 
                paragraph in a fiscal year exceed the amount of the 
                allotments made available for obligation to the State 
                under paragraph (2) for the fiscal year.
                    ``(B) Qualifying payment defined.--For purposes of 
                this paragraph, a `qualifying payment' to a qualified 
                home health agency is the amount by which--
                            ``(i) the amount of the reasonable costs of 
                        the agency of furnishing home health services 
                        under this title in the State, incurred for 
                        cost reporting periods beginning on or after 
                        October 1, 1997, and before the first cost 
                        reporting period for which payment under this 
                        title to the agency is made under subsection 
                        (a), exceeds
                            ``(ii) the amount of the reimbursement for 
                        such services under this title.
                The amount of the reasonable costs under clause (i) may 
                be determined using estimates of such costs based on 
                non-settled cost reports or other reliable information.
                    ``(C) Qualified home health agency defined.--For 
                purposes of this paragraph, the term `qualified home 
                health agency' means a home health agency that--
                            ``(i) has a participation agreement in 
                        effect under section 1866(a);
                            ``(ii) demonstrates to the State a severe 
                        adverse impact of the payment limitation 
                        amendments under section 4602 of the Balanced 
                        Budget Act of 1997 because of a more costly-
                        than-average type or amount of services; and
                            ``(iii) demonstrates to the State efficient 
                        management of the agency.
                    ``(D) Limitation on payment for administrative 
                expenses.--Not more than 5 percent of the amount paid 
                to a State under subparagraph (A) for expenditures in a 
                fiscal year may be paid under subparagraph (A)(ii).
                    ``(E) Limitation on use to satisfy matching 
                requirement.--Amounts paid to a State under 
                subparagraph (A) may not be used to satisfy any 
                requirement for the expenditure of non-Federal funds as 
                a condition for the receipt of Federal funds.
                    ``(F) Construction.--Nothing in this paragraph 
                shall be construed as requiring a State to provide 
                payment under this paragraph to all qualified home 
                health agencies in the State or in the full amount of 
                qualifying payments for any qualified home health 
                agency receiving such a payment.
                    ``(G) Advance payment; retrospective adjustment.--
                The Secretary may make payments under this subsection 
                for a fiscal year on the basis of advance estimates of 
                expenditures submitted by the State and such other 
                investigation as the Secretary may find necessary, and 
                may reduce or increase the payments as necessary to 
                adjust for any overpayment or underpayment for a prior 
                fiscal year.
            ``(4) State entitlement.--This subsection constitutes 
        budget authority in advance of appropriations Acts and 
        represents the obligation of the Federal Government to provide 
        for the payment to States of amounts provided under this 
        subsection.''.

SEC. 4. UPDATE ON IMPLEMENTATION OF PROSPECTIVE PAYMENT SYSTEM FOR HOME 
              HEALTH AGENCIES.

    Not later than 90 days after the date of enactment of this Act, and 
every 90 days thereafter until the prospective payment system for home 
health agencies (established by section 1895 of the Social Security Act 
(42 U.S.C. 1395fff)) is implemented, the Secretary of Health and Human 
Services shall meet with the staff of the appropriate committees of 
Congress to provide an informal update regarding the progress of the 
Secretary in implementing such payment system.
Home Health Access Preservation Act of 1998 - Amends title XVIII (Medicare) of the Social Security Act (SSA), as amended by the Balanced Budget Act of 1997, with respect to the computation formula of the interim system of limited payments for services provided by home health agencies.  Revises such formula for cost reporting periods beginning after FY 1998 to replace the current agency-specific per beneficiary annual limits with limits based on specified base regional limits, a base national limit, and an area wage index. 
Eliminates the special rule for new agencies with respect to determination of the reasonable cost of home health services. 
Provides for a three percent increase in per-visit cost limits for cost reporting periods beginning on or after October 1, 1997. 
Directs the Secretary of Health and Human Services to allot grants to States, according to a specified formula, to provide for adjustment for outliers to assist in the transition to the prospective payment system for home health services.  Makes necessary appropriations. 
Directs the Secretary to meet every 90 days with appropriate congressional committee staff to provide informal updates of progress in implementing the prospective payment system for home health agencies under Medicare.
Home Health Access Preservation Act of 1998