SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Home Health Beneficiary 
Protection Act of 1998''.

SEC. 2. MODIFICATION OF HOME HEALTH SERVICES COST LIMITS.

    (a) Establishment of a Moratorium on Implementation of Per 
Beneficiary Limits Under Interim Payment System.--Section 1861(v)(1)(L) 
of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)) (as amended by 
section 4602(c) of the Balanced Budget Act of 1997) is amended by 
striking clauses (v), (vi), and (vii).
    (b) Per Visit Cost Limits.--
            (1) Basis for limits.--Section 1861(v)(1)(L)(i) of the 
        Social Security Act (42 U.S.C. 1395x(v)(1)(L)(i)) (as amended 
        by section 4602(a) of the Balanced Budget Act of 1997) is 
        amended--
                    (A) in subclause (III)--
                            (i) by striking ``October 1, 1997'' and 
                        inserting ``July 1, 1997''; and
                            (ii) by striking ``or'' at the end;
                    (B) by amending subclause (IV) to read as follows:
            ``(IV) July 1, 1997, and before July 1, 2000, 112 percent 
        of such mean applicable for cost reporting periods beginning on 
        or after July 1, 1996, and before July 1, 1997, and''; and
                    (C) by adding at the end the following:
            ``(V) July 1, 2000, 112 percent of the mean of the labor-
        related and nonlabor per visit costs for freestanding home 
        health agencies.''.
            (2) Establishing a 3-year freeze on cost limits.--Section 
        1861(v)(1)(L)(iii) of such Act (42 U.S.C. 1395x(v)(1)(L)(iii)) 
        (as amended by section 4602 of the Balanced Budget Act of 1997) 
        is amended by striking ``October 1, 1997'' and inserting ``July 
        1, 2000''.

SEC. 3. STRENGTHENING MEDICARE OVERSIGHT OF HOME HEALTH SERVICES 
              EXPENDITURES.

    (a) In General.--Section 4614 of the Balanced Budget Act of 1997 is 
amended by redesignating subsection (c) as subsection (d) and inserting 
after subsection (b) the following:
    ``(c) Procedures To Eliminate Inappropriate Utilization of Home 
Health Services.--
            ``(1) In general.--The Secretary of Health and Human 
        Services shall establish a process for eliminating 
        inappropriate utilization of home health services by reviewing 
        claims for reimbursement of such services furnished under the 
        medicare program under title XVIII of the Social Security Act 
        (42 U.S.C. 1395 et seq.) in which the number of home health 
        visits provided to a beneficiary in a year exceeds the regional 
        average of per beneficiary annual visits.
            ``(2) Referral to ig.--If the Secretary of Health and Human 
        Services determines appropriate, the Secretary shall--
                    ``(A) issue a determination denying payment for a 
                claim described in paragraph (1); and
                    ``(B) refer the name of the provider that submitted 
                such claim to the Office of Inspector General of the 
                Department of Health and Human Services for 
                investigation.
            ``(3) Application.--This subsection shall apply to claims 
        for reimbursement submitted after the process described in 
        paragraph (1) is established.''.
    (b) Reports to Congress.--Section 4616(b) of the Balanced Budget 
Act of 1997 (42 U.S.C 1395y note) is amended by adding at the end the 
following: ``The Secretary shall include in each of the reports for 
fiscal years 1999 through 2002 recommendations regarding changes to the 
method of payment, claims review, and scope of benefits that the 
Secretary determines is necessary to achieve actual outlays under such 
parts for such services during the following fiscal year that are equal 
to the estimated outlays under subsection (a) for such year.''.

SEC. 4. MODIFICATION OF CALCULATION OF PAYMENT AMOUNT FOR HOME HEALTH 
              SERVICES UNDER THE PROSPECTIVE PAYMENT SYSTEM.

    (a) Establishment of Equitable Limits for Calculating Prospective 
Payment Rates.--
            (1) In general.--Section 1895(b)(3)(A)(i) of the Social 
        Security Act (42 U.S.C. 1395fff(b)(3)(A)(i)) (as added by 
        section 4603 of the Balanced Budget Act of 1997) is amended by 
        inserting ``the greater of $21,200,000,000 or'' after ``equal 
        to''.
            (2) Contingency.--Section 4603(e) of the Balanced Budget 
        Act of 1997 (42 U.S.C. 1395fff note) is amended--
                    (A) by striking ``If'' and inserting the following:
            ``(1) In general.--If'';
                    (B) in paragraph (1) (as redesignated by 
                subparagraph (A)), by striking ``provide for a 
                reduction by 15 percent'' and all that follows and 
                inserting the following: ``provide--
                    ``(A) for such cost reporting periods that begin 
                before October 1, 2002, for an adjustment to the cost 
                limits described in section 1861(v)(1)(L) of such Act 
                so that the total amounts payable for such services in 
                a fiscal year is equal to the greater of--
                            ``(i) the applicable amount (as defined in 
                        paragraph (2); or
                            ``(ii) the total amount of payments for 
                        such services that would have been made in such 
                        fiscal year if such cost limits (as those 
                        limits would otherwise be in effect on 
                        September 30, 1999) had been reduced by 15 
                        percent; and
                    ``(B) for such cost reporting periods that begin on 
                or after October 1, 2002, for a reduction by 15 percent 
                in such cost limits (as so in effect).''; and
                    (C) by adding at the end the following:
            ``(2) Applicable amount defined.--In paragraph (1), the 
        term `applicable amount' means the following amount:
                    ``(A) For fiscal year 2000, $21,200,000,000.
                    ``(B) For fiscal year 2001, $23,300,000,000.
                    ``(C) For fiscal year 2002, $25,200,000,000.''.
    (b) Temporary Restoration of Periodic Interim Payment for Home 
Health Services.--Section 1815(e)(2) of the Social Security Act (42 
U.S.C. 1395g(e)(2)) (as amended by section 4603(b) of the Balanced 
Budget Act of 1997) is amended--
            (1) in subparagraph (C), by striking ``and'' at the end;
            (2) by redesignating subparagraph (D) as subparagraph (E); 
        and
            (3) by inserting after subparagraph (C) the following:
            ``(D) home health services until the end of the 12-month 
        period following the date that the prospective payment system 
        for such services is implemented pursuant to section 1895; 
        and''.

SEC. 5. EFFECTIVE DATE.

    The amendments made by this Act shall take effect as if included in 
the provisions of the Balanced Budget Act of 1997 to which they apply.
Medicare Home Health Beneficiary Protection Act of 1998 - Amends part D (Miscellaneous Provisions) of title XVIII (Medicare) of the Social Security Act (SSA), as amended by the Balanced Budget Act of 1997 (BBA '97), to revise reasonable cost requirements with regard to the interim system of limited payments for services provided by home health agencies.  Establishes a moratorium on implementation of per beneficiary limits and a three-year freeze on cost limits. 
Amends BBA '97 to direct the Secretary of Health and Human Services (HHS) to:  (1) establish a process for eliminating inappropriate utilization of Medicare home health services by reviewing claims in which the number of home health visits provided to a beneficiary in a year exceeds the regional average of per beneficiary annual visits; (2) if appropriate, issue a determination denying payment for such a claim, and refer the name of the claimant-provider to the HHS Inspector General for investigation; and (3) include in the annual reports to the Congress on home health cost containment any recommendations for changes to the method of payment, claims review, and scope of benefits that the Secretary determines is necessary to achieve actual outlays equal to estimated outlays under Medicare parts A (Hospital Insurance) and B (Supplementary Medical Insurance) for such services during the following fiscal year. 
(Sec. 4) Amends SSA title XVIII to provide for:  (1) establishment of limits for calculating prospective payment rates for home health services under the payment system for such services; and (2) temporary restoration of periodic interim payment for such services.
Medicare Home Health Beneficiary Protection Act of 1998