II

106TH CONGRESS

1ST SESSION S. 1277

To amend title XIX of the Social Security Act to establish a new prospective

payment system for Federally-qualified health centers and rural health clinics.

IN THE SENATE OF THE UNITED STATES

JUNE 24, 1999

Mr. GRASSLEY (for himself, Mr. BAUCUS, Mr. MURKOWSKI, Mr. ROCKEFELLER, Mr. CONRAD, Mr. HARKIN, and Mr. ROBB) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend title XIX of the Social Security Act to establish

a new prospective payment system for Federally-qualified

health centers and rural health clinics.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Safety Net Preserva5 tion Act of 1999’’.
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1 SEC. 2. NEW PROSPECTIVE PAYMENT SYSTEM FOR FEDER2 ALLY-QUALIFIED HEALTH CENTERS AND

3 RURAL HEALTH CLINICS.

4 (a) IN GENERAL.—Section 1902(a) of the Social Se5 curity Act (42 U.S.C. 1396a(a)) is amended—

6 (1) in paragraph (13)—

7 (A) in subparagraph (A), by adding ‘‘and’’

8 at the end;

9 (B) in subparagraph (B), by striking

10 ‘‘and’’ at the end; and

11 (C) by striking subparagraph (C); and

12 (2) by inserting after paragraph (14) the fol13 lowing new paragraph:

14 ‘‘(15) for payment for services described in

15 clause (B) or (C) of section 1905(a)(2) under the

16 plan in accordance with subsection (aa);’’.

17 (b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section

18 1902 of the Social Security Act (42 U.S.C. 1396a) is

19 amended by adding at the end the following:

20 ‘‘(aa) PAYMENT FOR SERVICES PROVIDED BY FED21 ERALLY-QUALIFIED HEALTH CENTERS AND RURAL

22 HEALTH CLINICS.—

23 ‘‘(1) IN GENERAL.—Beginning with fiscal year

24 2000 and each succeeding fiscal year, the State plan

25 shall provide for payment for services described in

26 section 1905(a)(2)(C) furnished by a Federally-
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1 qualified health center and services described in sec2 tion 1905(a)(2)(B) furnished by a rural health clinic

3 in accordance with the provisions of this subsection.

4 ‘‘(2) FISCAL YEAR 2000.—Subject to paragraph

5 (4), for services furnished during fiscal year 2000,

6 the State plan shall provide for payment for such

7 services in an amount (calculated on a per visit

8 basis) that is equal to 100 percent of the costs of

9 the center or clinic of furnishing such services dur10 ing fiscal year 1999 which are reasonable and re11 lated to the cost of furnishing such services, or

12 based on such other tests of reasonableness as the

13 Secretary prescribes in regulations under section

14 1833(a)(3), or, in the case of services to which such

15 regulations do not apply, the same methodology used

16 under section 1833(a)(3), adjusted to take into ac17 count any increase in the scope of such services fur18 nished by the center or clinic during fiscal year

19 2000.

20 ‘‘(3) FISCAL YEAR 2001 AND SUCCEEDING FIS21 CAL YEARS.—Subject to paragraph (4), for services

22 furnished during fiscal year 2001 or a succeeding

23 fiscal year, the State plan shall provide for payment

24 for such services in an amount (calculated on a per

25 visit basis) that is equal to the amount calculated for
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1 such services under this subsection for the preceding

2 fiscal year—

3 ‘‘(A) increased by the percentage increase

4 in the MEI (as defined in section 1842(i)(3))

5 applicable to primary care services (as defined

6 in section 1842(i)(4)) for that fiscal year; and

7 ‘‘(B) adjusted to take into account any in8 crease in the scope of such services furnished by

9 the center or clinic during that fiscal year.

10 ‘‘(4) ESTABLISHMENT OF INITIAL YEAR PAY11 MENT AMOUNT FOR NEW CENTERS OR CLINICS.—In

12 any case in which an entity first qualifies as a Fed13 erally-qualified health center or rural health clinic

14 after fiscal year 1999, the State plan shall provide

15 for payment for services described in section

16 1905(a)(2)(C) furnished by the center or services

17 described in section 1905(a)(2)(B) furnished by the

18 clinic in the first fiscal year in which the center or

19 clinic so qualifies in an amount (calculated on a per

20 visit basis) that is equal to 100 percent of the costs

21 of furnishing such services during such fiscal year in

22 accordance with the regulations and methodology re23 ferred to in paragraph (2). For each fiscal year fol24 lowing the fiscal year in which the entity first quali25 fies as a Federally-qualified health center or rural
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1 health clinic, the State plan shall provide for the

2 payment amount to be calculated in accordance with

3 paragraph (3).

4 ‘‘(5) ADMINISTRATION IN THE CASE OF MAN5 AGED CARE.—In the case of services furnished by a

6 Federally-qualified health center or rural health clin7 ic pursuant to a contract between the center or clinic

8 and a managed care entity (as defined in section

9 1932(a)(1)(B)), the State plan shall provide for pay10 ment to the center or clinic (at least quarterly) by

11 the State of a supplemental payment equal to the

12 amount (if any) by which the amount determined

13 under paragraphs (2), (3), and (4) of this subsection

14 exceeds the amount of the payments provided under

15 the contract.

16 ‘‘(6) ALTERNATIVE PAYMENT METHODOLO17 GIES.—Notwithstanding any other provision of this

18 section, the State plan may provide for payment in

19 any fiscal year to a Federally-qualified health center

20 for services described in section 1905(a)(2)(C) or to

21 a rural health clinic for services described in section

22 1905(a)(2)(B) in an amount which is determined

23 under an alternative payment methodology that—

24 ‘‘(A) is agreed to by the State and the cen25 ter or clinic; and
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1 ‘‘(B) results in payment to the center or

2 clinic of an amount which is at least equal to

3 the amount otherwise required to be paid to the

4 center or clinic under this section.’’.

5 (c) CONFORMING AMENDMENTS.—

6 (1) Section 4712 of the Balanced Budget Act

7 of 1997 (Public Law 105–33; 111 Stat. 508) is

8 amended by striking subsection (c).

9 (2) Section 1915(b) of the Social Security Act

10 (42 U.S.C. 1396n(b)) is amended by striking

11 ‘‘1902(a)(13)(E)’’ and inserting ‘‘1902(a)(15),

12 1902(aa),’’.

13 (d) EFFECTIVE DATE.—The amendments made by

14 this section take effect on October 1, 1999, and apply to

15 services furnished on or after such date.

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