SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Partial Hospitalization Services 
Integrity Act of 1999''.

SEC. 2. LIMITATION ON LOCATION OF PROVISION OF SERVICES.

    (a) In General.--Section 1861(ff)(2) of the Social Security Act (42 
U.S.C. 1395x(ff)(2)) is amended in the matter following subparagraph 
(I)--
            (1) by striking ``and furnished'' and inserting 
        ``furnished''; and
            (2) by inserting before the period the following: ``, and 
        furnished other than in a skilled nursing facility, residential 
        treatment facility or other residential setting (as determined 
        by the Secretary)''.
    (b) Effective Date.--The amendments made by subsection (a) apply 
with respect to partial hospitalization services furnished on or after 
the first day of the third month beginning after the date of the 
enactment of this Act.

SEC. 3. QUALIFICATIONS FOR COMMUNITY MENTAL HEALTH CENTERS.

    (a) In General.--Section 1861(ff)(3)(B) of the Social Security Act 
(42 U.S.C. 1395x(ff)(3)(B)) is amended by striking ``entity'' and all 
that follows and inserting the following: ``entity that--
            ``(i)(I) provides the mental health services described in 
        section 1913(c)(1) of the Public Health Service Act; or
            ``(II) in the case of an entity operating in a State that 
        by law precludes the entity from providing a service described 
        in such section itself, provides for such service by contract 
        with an approved organization or entity (as determined by the 
        Secretary);
            ``(ii) meets applicable licensing or certification 
        requirements for community mental health centers in the State 
        in which it is located; and
            ``(iii) meets such additional conditions as the Secretary 
        shall specify to ensure (I) the health and safety of 
        individuals being furnished such services, (II) the effective 
        and efficient furnishing of such services, and (III) the 
        compliance of such entity with the criteria described in such 
        section.''.
    (b) Clarification of Criteria for Community Mental Health 
Centers.--Section 1913(c)(1)(E) of the Public Health Service Act (42 
U.S.C. 300x-3(c)(1)(E)) is amended to read as follows:
                    ``(E) Determining the clinical appropriateness of 
                admissions to any inpatient psychiatric hospitals by 
                engaging a full-time mental health professional who is 
                licensed or certified to make such a determination by 
                the State involved.''.
    (c) Effective Date.--The amendments made by this section apply with 
respect to community mental health centers furnishing services under 
the medicare program on or after the first day of the third month 
beginning after the date of the enactment of this Act.

SEC. 4. GUIDELINES FOR ITEMS AND SERVICES COMPRISING PARTIAL 
              HOSPITALIZATION SERVICES.

    Not later than 180 days after the date of the enactment of this 
Act, the Secretary shall first adopt national coverage and 
administrative policies for partial hospitalization services furnished 
under title XVIII of the Social Security Act, using a negotiated 
rulemaking process under subchapter III of chapter 5 of title 5, United 
States Code.

SEC. 5. REFINEMENT OF PERIODICITY OF REVIEW OF PLAN FOR PARTIAL 
              HOSPITALIZATION SERVICES.

    (a) In General.--Section 1835(a)(2)(F)(ii) of the Social Security 
Act (42 U.S.C. 1395n(a)(2)(F)(ii)) is amended by inserting ``at a 
reasonable rate (as determined by the Secretary)'' after ``is reviewed 
periodically''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
with respect to plans for furnishing partial hospitalization services 
established on or after the first day of the third month beginning 
after the date of the enactment of this Act.

SEC. 6. RECERTIFICATION OF PROVIDERS OF PARTIAL HOSPITALIZATION 
              SERVICES.

    (a) In General.--With respect to each community mental health 
center that furnishes partial hospitalization services for which 
payment is made under title XVIII of the Social Security Act, the 
Secretary of Health and Human Services shall provide for periodic 
recertification to ensure that the provision of such services complies 
with applicable requirements of such title.
    (b) Deadline for First Recertification.--The first recertification 
under subsection (a) shall be completed not later than one year after 
the date of the enactment of this Act.

SEC. 7. CIVIL MONETARY PENALTIES FOR FALSE CERTIFICATION OF ELIGIBILITY 
              FOR HOSPICE CARE OR PARTIAL HOSPITALIZATION SERVICES.

    (a) In General.--Section 1128A(b)(3) of the Social Security Act (42 
U.S.C. 1320a-7a(b)(3)) is amended--
            (1) in subparagraph (A)(ii), by inserting ``, hospice care, 
        or partial hospitalization services'' after ``home health 
        services''; and
            (2) in subparagraph (B), by inserting ``, section 
        1814(a)(7) in the case of hospice care, or section 
        1835(a)(2)(F) in the case of partial hospitalization services'' 
        after ``in the case of home health services''.
    (b) Effective Date.--The amendments made by subsection (a) apply 
with respect to certifications of eligibility for hospice care or 
partial hospitalization services under the medicare program made on or 
after the first day of the third month beginning after the date of the 
enactment of this Act.

SEC. 8. DEMONSTRATION FOR COST EFFECTIVE WRAP AROUND MENTAL HEALTH 
              SERVICES.

    (a) Establishment.--
            (1) In general.--The Secretary of Health and Human Services 
        shall implement a demonstration project (in this section 
        referred to as the ``project'') under part B of title XVIII of 
        the Social Security Act under which community mental health 
        centers may offer wrap around mental health services (as 
        defined in paragraph (2)(A)) for purposes of providing for a 
        full continuum of ambulatory behavioral health care services.
            (2) Definitions.--
                    (A) Wrap around mental health services defined.--
                The term ``wrap around mental health services'' means 
                comprehensive outpatient mental health services 
                furnished to an individual pursuant to an 
                individualized treatment plan developed by a mental 
                health professional, in consultation with the family of 
                the individual (if available). Such services are 
                furnished to the individual through a comprehensive, 
                multidisciplinary health and social services delivery 
                system that provides coordinated therapeutic 
                interventions, including medical services, 
                psychotherapy services, occupational therapy services, 
                and social work services.
                    (B) Licensed mental health professional.--The term 
                ``mental health professional'' means any of the 
                following individuals who are licensed by the State in 
                which the individual furnishes services (as that term 
                is defined in paragraphs (1), (2)(M), and (2)(N) of 
                section 1861(s) of the Social Security Act (42 U.S.C. 
                1395x(s))) to design and execute treatment plans 
                described in subparagraph (A) without the supervision 
                of another health care practitioner:
                            (i) A physician, as defined in section 
                        1861(r)(1) of such Act (42 U.S.C. 1395x(r)(1)).
                            (ii) A clinical psychologist, as defined by 
                        the Secretary pursuant to section 1861(ii) of 
                        such Act (42 U.S.C. 1395x(ii)).
                            (iii) A clinical social worker, as defined 
                        in section 1861(hh) of such Act (42 U.S.C. 
                        1395x(hh)).
    (b) Selection of Centers.--For purposes of implementing such 
project, the Secretary shall select for participation in the project 
community mental health centers that serve populations in three 
different States, one of which predominantly serves rural populations.
    (c) Capitated Payment.--The Secretary shall establish and make 
prospective monthly payments of a capitation amount for individuals 
receiving wrap around mental health services under this project.
    (d) Evaluation and Report.--
            (1) Evaluation.--The Secretary shall evaluate the project. 
        Such evaluation shall include an examination of--
                    (A) the project's effect on the health, well-being, 
                condition, and functional level of beneficiaries 
                receiving wrap around mental health services;
                    (B) any savings to the medicare program by reason 
                of capitated payments for wrap around medical services 
                consisting of partial hospitalization services (as that 
                term is defined in section 1861(ff) of the Social 
                Security Act (42 U.S.C. 1395x(ff));
                    (C) the impact of basing payment for such services 
                on a capitated basis; and
                    (D) the project's effect on utilization of 
                inpatient services (including inpatient mental health 
                services) and associated costs.
            (2) Report.--Not later than four years after the date of 
        the enactment of this Act, the Secretary shall submit to 
        Congress a report containing a statement of the findings and 
        conclusions of the Secretary pursuant to the evaluation 
        conducted under paragraph (1), together with any 
        recommendations for legislation the Secretary considers 
        appropriate with respect to--
                    (A) the provision of additional mental health 
                services by community mental health centers under 
                partial hospitalization services; and
                    (B) payment for such services on a capitated basis.
    (e) Duration.--The project shall be conducted for a three year 
period.
    (f) Funding.--The Secretary shall provide for the transfer from the 
Federal Hospital Insurance Trust Fund, established under section 1817 
of the Social Security Act (42 U.S.C. 1395i), of such funds as are 
necessary for the costs of carrying out the demonstration project under 
this section.
Partial Hospitalization Services Integrity Act of 1999 - Amends title XVIII (Medicare) of the Social Security Act to provide for the following: (1) denial of Medicare coverage for partial hospitalization services (for psychiatric treatment) furnished in a skilled nursing facility, a residential treatment facility, or any other type of residential setting determined by the Secretary of Health and Human Services; (2) new qualifications for community mental health centers (centers) as the Secretary is required to specify to ensure the health and safety of individuals being furnished mental health services and their effective and efficient furnishing; and (3) national coverage and administrative policies for partial hospitalization services under Medicare that the Secretary is to first adopt using negotiated rulemaking. 
Directs the Secretary to do the following: (1) provide for periodic recertification to ensure that the provision of such Medicare-reimbursable services by centers complies with applicable Medicare requirements; and (2) implement a specified demonstration project under Medicare part B (Supplementary Medical Insurance) under which centers may offer wrap around mental health services for purposes of providing for a full continuum of ambulatory behavioral health care services.  Provides for funding for demonstration project costs. 
Makes miscellaneous technical amendments concerning criteria for centers under the Public Health Service Act, and periodic physician review of physician written, individualized plans for partial hospitalization services under Medicare. 
Amends SSA title XI to provide for civil monetary penalties for false certification of eligibility for hospice care or partial hospitalization services.
Partial Hospitalization Services Integrity Act of 1999