II

106TH CONGRESS

2D SESSION S. 2766

To amend title XVIII of the Social Security Act with respect to payments

made under the prospective payment system for home health services

furnished under the medicare program.

IN THE SENATE OF THE UNITED STATES

JUNE 22, 2000

Mr. KERRY (for himself and Ms. COLLINS) introduced the following bill; which

was read twice and referred to the Committee on Finance

A BILL

To amend title XVIII of the Social Security Act with respect

to payments made under the prospective payment system

for home health services furnished under the medicare

program.

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 ‘‘Equal Access to Medi5 care Home Health Care Act of 2000’’.

6 SEC. 2. FINDINGS.

7 Congress makes the following findings:
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1 (1) Over 30,000,000 beneficiaries under the

2 medicare program under title XVIII of the Social

3 Security Act rely on providers of home health serv4 ices to provide them with cost-effective, high quality

5 home health care.

6 (2) The medicare home health benefit enables

7 many medicare beneficiaries to remain at home and

8 to live with dignity and independence despite serious

9 health conditions.

10 (3) The medicare home health benefit helps al11 leviate the burden of medicare beneficiaries on hos12 pitals and skilled nursing facilities, where services

13 provided to medicare beneficiaries are more expen14 sive.

15 (4) The amendments made by the Balanced

16 Budget Act of 1997 to title XVIII of the Social Se17 curity Act were originally projected to cut

18 $16,100,000,000 from the medicare home health

19 benefit between fiscal years 1998 and 2002.

20 (5) The Congressional Budget Office recently

21 projected that those amendments made by the Bal22 anced Budget Act of 1997 will actually cut

23 $69,400,000,000 from the medicare home health

24 benefit between fiscal years 1998 and 2002.
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1 (6) The recent projections by the Congressional

2 Budget Office represent more than 4 times the

3 amount of the reduction in the medicare home

4 health benefit originally projected to take effect as

5 a result of the amendments made by the Balanced

6 Budget Act of 1997.

7 (7) The failure of the Health Care Financing

8 Administration to disburse payments under the in9 terim payment system established by the Balanced

10 Budget Act of 1997 under section 1861(v)(1)(L) of

11 the Social Security Act in a timely manner has re12 sulted in medicare overpayments to thousands of

13 providers of home health services, leaving many of

14 these providers on precarious financial footing.

15 (8) Access to care, particularly for high-cost

16 and long-term patients, has become a growing prob17 lem because the amount of payment for these types

18 of patients under the current interim payment sys19 tem is insufficient.

20 (9) Under the proposed regulation imple21 menting the new prospective payment system, 50

22 percent of the prospective payment amount will be

23 paid upon receipt and processing of the providers

24 initial claim for reimbursement and 50 percent of
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1 that amount will be delayed until the final claim is

2 processed at the end of the 60-day episode period.

3 (10) Medicare beneficiaries incur most home

4 health care expenses during the first 30 days of a

5 60-day episode period and providers of home health

6 services do not have large cash reserves to support

7 delayed payment for those services under the medi8 care program.

9 (11) It is essential that the Administrator of

10 the Health Care Financing Administration ensure

11 that the initial payment to providers of home health

12 services during a 60-day episode period of home

13 health care provided under the medicare home

14 health benefit provides a steady cash flow for those

15 providers so that medicare beneficiaries may con16 tinue to receive necessary home health services.

17 (12) Studies by the Medicare Payment Advisory

18 Commission established under section 1805 of the

19 Social Security Act have indicated that certain popu20 lations of medicare beneficiaries risk not receiving

21 necessary home health services because of the sys22 temic changes made by the Balanced Budget Act of

23 1997.

24 (13) Because the aggregate amount of payment

25 made for all home health services during the first
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1 year in which payment will be made for those serv2 ices under the prospective payment system is limited

3 to the amount that would have been paid in such

4 year for those services under the interim payment

5 system, there is an enormous risk that this limited

6 amount will be insufficient, resulting in a perpetua7 tion of the current crisis under the interim payment

8 system for home health services.

9 SEC. 3. ELIMINATION OF 15 PERCENT REDUCTION IN PAY10 MENT RATES UNDER THE MEDICARE PRO11 SPECTIVE PAYMENT SYSTEM FOR HOME

12 HEALTH SERVICES.

13 (a) IN GENERAL.—Section 1895(b)(3)(A) of the So14 cial Security Act (42 U.S.C. 1395fff(b)(3)(A)), as amend15 ed by sections 302(b) and 303(f) of the Medicare, Med16 icaid, and SCHIP Balanced Budget Refinement Act of

17 1999 (113 Stat. 1501A–359, 361), as enacted into law

18 by section 1000(a)(6) of Public Law 106–113, is amended

19 to read as follows:

20 ‘‘(A) INITIAL BASIS.—Under such system

21 the Secretary shall provide for computation of

22 a standard prospective payment amount (or

23 amounts). Such amount (or amounts) shall ini24 tially be based on the most current audited cost

25 report data available to the Secretary and shall
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1 be computed in a manner so that the total

2 amounts payable under the system for the 12-

3 month period beginning on the date the Sec4 retary implements the system shall be equal to

5 the total amount that would have been made

6 if the system had not been in effect and if sec7 tion 1861(v)(1)(L)(ix) had not been enacted.

8 Each such amount shall be standardized in a

9 manner that eliminates the effect of variations

10 in relative case mix and area wage adjustments

11 among different home health agencies in a

12 budget neutral manner consistent with the case

13 mix and wage level adjustments provided under

14 paragraph (4)(A). Under the system, the Sec15 retary may recognize regional differences or dif16 ferences based upon whether or not the services

17 or agency are in an urbanized area.’’.

18 (b) EFFECTIVE DATE.—The amendment made by

19 subsection (a) shall take effect as if included in the enact20 ment of the Medicare, Medicaid, and SCHIP Balanced

21 Budget Refinement Act of 1999 (Public Law 106–113).

22 SEC. 4. OVERPAYMENTS.

23 (a) 36-MONTH REPAYMENT PERIOD.—In the case of

24 an overpayment by the Secretary of Health and Human

25 Services to a home health agency for home health services
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1 furnished during a cost reporting period beginning on or

2 after October 1, 1997, as a result of payment limitations

3 provided for under clause (v), (vi), or (viii) of section

4 1861(v)(1)(L) of the Social Security Act (42 U.S.C.

5 1395x(v)(1)(L)), the home health agency may elect to

6 repay the amount of such overpayment over a 36-month

7 period beginning on the date of notification of such over8 payment.

9 (b) INTEREST ON OVERPAYMENT AMOUNTS.—

10 (1) 36-MONTH GRACE PERIOD.—

11 (A) IN GENERAL.—In the case of an agen12 cy that makes an election under subsection (a),

13 no interest shall accrue on the outstanding bal14 ance of the amount of overpayment during such

15 36-month period.

16 (B) OVERDUE BALANCES.—In the case of

17 such an agency, interest shall accrue on any

18 outstanding balance of the amount of overpay19 ment after termination of such 36-month pe20 riod. Interest shall accrue under this subpara21 graph at the rate of interest charged by banks

22 for loans to their most favored commercial cus23 tomers, as published in the Wall Street Journal

24 on the Friday immediately following the date of

25 the enactment of this Act.
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1 (2) OTHER AGENCIES.—In the case of an agen2 cy described in subsection (a) that does not make an

3 election under subsection (a), interest shall accrue

4 on the outstanding balance of the amount of over5 payment at the rate described in the second sentence

6 of paragraph (1)(B).

7 (c) TERMINATION.—No election under subsection (a)

8 may be made for cost reporting periods, or portions of cost

9 reporting periods, beginning on or after the date of the

10 implementation of the prospective payment system for

11 home health services under section 1895 of the Social Se12 curity Act (42 U.S.C. 1395fff).

13 (d) EFFECTIVE DATE.—The provisions of subsection

14 (a) shall take effect as if included in the enactment of the

15 Balanced Budget Act of 1997.

16 SEC. 5. ADDITIONAL PAYMENTS UNDER THE PROSPECTIVE

17 PAYMENT SYSTEM FOR SERVICES FUR18 NISHED IN RURAL AREAS AND SECURITY

19 SERVICES.

20 (a) INCREASE IN PAYMENT RATES FOR RURAL

21 AGENCIES.—Section 1895(b) of the Social Security Act

22 (42 U.S.C. 1395fff(b)) is amended by adding at the end

23 the following new paragraph:

24 ‘‘(7) ADDITIONAL PAYMENT AMOUNT FOR

25 SERVICES FURNISHED IN RURAL AREAS.—In the
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1 case of home health services furnished in a rural

2 area (as defined in section 1886(d)(2)(D)), the Sec3 retary shall provide for an addition or adjustment to

4 the payment amount otherwise made under this sec5 tion for services furnished in a rural area in an

6 amount equal to 10 percent of the amount otherwise

7 determined under this subsection.’’.

8 (b) ADDITIONAL PAYMENT FOR SECURITY SERV9 ICES.—Section 1895(b) of such Act (42 U.S.C.

10 1395fff(b)(3)), as amended by subsection (a), is further

11 amended by adding at the end the following paragraph:

12 ‘‘(8) ADDITIONAL PAYMENT FOR SECURITY

13 SERVICES.—The Secretary shall provide for an addi14 tion or adjustment to the payment amount otherwise

15 made under this section for the reasonable cost (as

16 defined in section 1861(v)(1)(A)) of furnishing pro17 tective services to individuals furnishing home health

18 services under this title in areas where such individ19 uals are at risk of physical harm, as determined by

20 the Secretary.’’.

21 (c) WAIVING BUDGET NEUTRALITY.—Section

22 1895(b)(3) of such Act (42 U.S.C. 1395fff(b)(3)) is

23 amended by adding at the end the following new subpara24 graph:
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1 ‘‘(D) NO ADJUSTMENT FOR ADDITIONAL

2 PAYMENTS FOR RURAL SERVICES AND SECU3 RITY SERVICES.—The Secretary shall not re4 duce the standard prospective payment amount

5 (or amounts) under this paragraph applicable

6 to home health services furnished during a pe7 riod to offset the increase in payments resulting

8 from the application of paragraph (7) (relating

9 to services furnished in rural areas) and para10 graph (8) (relating to costs of security serv11 ices).’’.

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

13 this section shall take effect on the date that is 270 days

14 after the date of the enactment of this Act.

15 SEC. 6. RULE OF CONSTRUCTION RELATING TO

16 TELEHOMEHEALTH SERVICES.

17 (a) IN GENERAL.—Section 1895(b) of such Act (42

18 U.S.C. 1395fff(b)(3)), as amended by section 3, is further

19 amended by adding at the end the following paragraph:

20 ‘‘(9) RULE OF CONSTRUCTION RELATING TO

21 TELEHOMEHEALTH SERVICES.—

22 ‘‘(A) IN GENERAL.—Nothing in this sec23 tion, or in section 4206(a) of the Balanced

24 Budget Act of 1997 (42 U.S.C. 1395l note),

25 shall be construed as preventing a home health
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1 agency receiving payment under this section

2 from furnishing a home health service via a

3 telecommunications system.

4 ‘‘(B) LIMITATION.—The Secretary shall

5 not consider a home health service provided in

6 the manner described in subparagraph (A) to

7 be a home health visit for purposes of—

8 ‘‘(i) determining the amount of pay9 ment to be made under this section; or

10 ‘‘(ii) any requirement relating to the

11 certification of a physician required under

12 section 1814(a)(2)(C).’’.

13 (b) REPORT.—Not later than one year after the date

14 of the enactment of this Act, the Secretary of Health and

15 Human Services shall submit to Congress a report con16 taining the recommendations of the Secretary with respect

17 to the feasibility and advisability of including home health

18 services furnished by telecommunications systems as a

19 home health service for purposes of—

20 (1) payment for such services under section

21 1895 of the Social Security Act (42 U.S.C. 1395fff),

22 and

23 (2) requirements with respect to physician cer24 tification of the need for home health services under
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1 section 1814(a)(2)(C) of such Act (42 U.S.C.

2 1395f(a)(2)(C)).

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