I

106TH CONGRESS

2D SESSION H. R. 5449

To amend title XVIII of the Social Security Act to combat fraud and abuse

under the Medicare Program with respect to partial hospitalization services.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 11, 2000

Mr. STARK introduced the following bill; which was referred to the Committee

on Ways and Means, and in addition to the Committee on Commerce,

for a period to be subsequently determined by the Speaker, in each case

for consideration of such provisions as fall within the jurisdiction of the

committee concerned

A BILL

To amend title XVIII of the Social Security Act to combat

fraud and abuse under the Medicare Program with respect to partial hospitalization services.

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 ‘‘Medicare Partial Hos5 pitalization Services Restoration and Integrity Act of

6 2000’’.
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1 SEC. 2. MENTAL HEALTH PARTIAL HOSPITALIZATION SERV2 ICES.

3 (a) IMPROVEMENT OF MENTAL HEALTH PARTIAL

4 HOSPITALIZATION SERVICES PROGRAM.—Section

5 1861(ff) of the Social Security Act (42 U.S.C. 1395x(ff))

6 is amended to read as follows:

7 ‘‘Partial Hospitalization Services

8 ‘‘(ff)(1) The term ‘‘partial hospitalization services’’

9 means the items and services described in paragraph (2)

10 prescribed by a physician after a direct patient-physician

11 encounter and provided under a distinct and organized in12 tensive treatment program of mental health services offer13 ing less than 24-hour-daily care and furnished by a facility

14 described in paragraph (3) under the supervision of a phy15 sician pursuant to an individual written plan of care estab16 lished and periodically reviewed by a physician (in con17 sultation with appropriate staff participating in such pro18 gram), which plan sets forth the physician’s diagnosis, the

19 type, amount, frequency, and duration of the items and

20 services provided under the plan, and the goals for treat21 ment under the plan.

22 ‘‘(2) The items and services described in this para23 graph are the following items and services that are reason24 able and necessary for the diagnosis or treatment of the

25 individual’s condition (which may be acute or chronic),

26 reasonably expected to improve or maintain the individ-
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1 ual’s condition and functional level and to prevent relapse

2 or hospitalization, and furnished pursuant to standards

3 relating to frequency and duration of services and quality

4 of care as the Secretary establishes by regulation under

5 paragraph (5) (taking into account accepted norms of

6 medical practice):

7 ‘‘(A) Individual and group therapy with physi8 cians or psychologists (or other mental health pro9 fessionals to the extent authorized under State law).

10 ‘‘(B) Occupational therapy requiring the skills

11 of a qualified occupational therapist.

12 ‘‘(C) Services of social workers, trained psy13 chiatric nurses, and other staff trained to work with

14 psychiatric patients.

15 ‘‘(D) Drugs and biologicals furnished for thera16 peutic purposes (which cannot, as determined in ac17 cordance with regulations, be self-administered).

18 ‘‘(E) Individual activity therapies to the extent

19 that such therapies are closely and clearly related to

20 the individual’s care and treatment, and are not pri21 marily recreational or diversionary.

22 ‘‘(F) Family counseling (the primary purpose of

23 which is treatment of the individual’s condition).

24 ‘‘(G) Patient training and education to the ex25 tent that such training and educational activities are
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1 closely and clearly related to the individual’s care

2 and treatment.

3 ‘‘(H) Diagnostic services.

4 ‘‘(I) Individual case management services.

5 ‘‘(J) Such other items and services as the Sec6 retary may provide (but in no event to include meals

7 and transportation).

8 ‘‘(3)(A)(i) Subject to clause (ii), a facility described

9 in this paragraph is a hospital or a community mental

10 health center (as defined in subparagraph (B)) that fur11 nishes partial hospitalization services and that provides

12 the Secretary with such information on the sites at which

13 the services described in paragraph (2) are furnished as

14 the Secretary may require to monitor and survey services

15 furnished at such sites for compliance with applicable re16 quirements.

17 ‘‘(ii) In no case may a facility described in this para18 graph furnish partial hospitalization services in a skilled

19 nursing facility, residential treatment facility or other resi20 dential setting (as determined by the Secretary).

21 ‘‘(B) For purposes of subparagraph (A), the term

22 ‘‘community mental health center’’ means an entity that—

23 ‘‘(i)(I) provides the mental health services de24 scribed in subparagraphs (A) through (D) of section

25 1913(c)(1) of the Public Health Service Act and also
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1 determines the clinical appropriateness of admissions

2 to inpatient psychiatric hospitals by engaging a full3 time mental health professional who is licensed or

4 certified to make such a determination by the State

5 involved; or

6 ‘‘(II) in the case of an entity operating in a

7 State that by law precludes the entity from pro8 viding a service described in such section itself, pro9 vides for such service by contract with an approved

10 organization or entity (as determined by the Sec11 retary);

12 ‘‘(ii) meets applicable licensing or certification

13 requirements for community mental health centers

14 in the State in which it is located or, in the case of

15 a center which is located in a State that does not

16 have any applicable licensing or certification require17 ments, meets certification requirements established

18 by the Secretary; and

19 ‘‘(iii) meets such additional conditions as the

20 Secretary shall specify to ensure (I) the health and

21 safety of individuals being furnished such services,

22 (II) the effective and efficient furnishing of such

23 services, (III) the quality of such services, and (IV)

24 the compliance of such entity with the criteria estab25 lishes by regulation under paragraph (5)(E).
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1 With respect to each community mental health center that

2 furnishes partial hospitalization services for which pay3 ment is made under this title, the Secretary shall provide

4 for periodic recertification to ensure that the provision of

5 such services complies with applicable requirements of this

6 title. The first recertification under this subparagraph

7 shall be completed not later than one year after the date

8 of the enactment of this subparagraph.

9 ‘‘(4) The Secretary shall provide, through peer review

10 organizations under section 1154(a)(12) and otherwise,

11 for the monitoring of the quality of partial hospitalization

12 services furnished using an appropriate patient assess13 ment instrument established by the Secretary.

14 ‘‘(5) Not later than one year after the date of the

15 enactment of this paragraph, the Secretary shall promul16 gate revised regulations to carry out this subsection and

17 section 1835(a)(2)(F) using a negotiated rulemaking proc18 ess under subchapter III of chapter 5 of title 5, United

19 States Code. Such regulations shall take into account the

20 following matters:

21 ‘‘(A) Eligibility for benefits for partial hos22 pitalization services, including certification and re23 certification of the need for such services under sec24 tion 1835(a)(2)(F).
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1 ‘‘(B) The type and level of partial hospitaliza2 tion services covered under this title, including the

3 frequency and duration of services based on an indi4 vidual’s condition and functional level.

5 ‘‘(C) Quality of care standards to be applied

6 under this paragraph.

7 ‘‘(D) Review standards to be applied by carriers

8 (including through manual instructions) in making

9 payment for partial hospitalization services.

10 ‘‘(E) Certification and recertification require11 ments referred to in paragraph (3)(B).’’.

12 (b) DESIGNATION OF CARRIERS FOR PARTIAL HOS13 PITALIZATION SERVICES.—Section 1842(b)(2) of the So14 cial Security Act (42 U.S.C. 1395u(b)(2)) is amended by

15 adding at the end the following new subparagraph:

16 ‘‘(F) The Secretary shall designate under this section

17 not more than 5 carriers to process all claims for partial

18 hospitalization services under this part.’’.

19 (c) CONFORMING AMENDMENTS.—

20 (1) ROLE OF PEER REVIEW ORGANIZATIONS.—

21 Section 1154(a) of the Social Security Act (42

22 U.S.C. 1320c–3(a)) is amended by inserting after

23 paragraph (11) the following new paragraph:

24 ‘‘(12) The organization shall review data on the

25 quality of partial hospitalization services furnished
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1 under title XVIII, using patient assessment instru2 ments described in section 1861(ff)(4) applied with

3 respect to such services.’’.

4 (2) CONFORMING STANDARD FOR PHYSICIAN

5 CERTIFICATION FOR COVERAGE.—Section

6 1835(a)(2)(F)(i) of such Act (42 U.S.C.

7 1395n(a)(2)(F)(i)) is amended by striking ‘‘the indi8 vidual would require inpatient psychiatric care in the

9 absence of such services’’ and all that follows and in10 serting ‘‘that those services are reasonably expected

11 to improve or maintain the individual’s condition

12 and functional level and to prevent relapse or hos13 pitalization.’’.

14 (d) EFFECTIVE DATE.—Except as otherwise pro15 vided in this section, the amendments made by this section

16 apply with respect to partial hospitalization services fur17 nished on or after the first day of the third month begin18 ning after the date of the enactment of this Act.

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