II

106TH CONGRESS

2D SESSION S. 2835

To provide an appropriate transition from the interim payment system for

home health services to the prospective payment system for such services

under the medicare program.

IN THE SENATE OF THE UNITED STATES

JUNE 30, 2000

Mr. GRASSLEY (for himself and Mr. FEINGOLD.) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To provide an appropriate transition from the interim payment system for home health services to the prospective

payment system for such services 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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Medicare Home Health Refinement Act of 2000’’.

6 (b) TABLE OF CONTENTS.—The table of contents of

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.
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TITLE I—EMERGENCY CASH-FLOW ASSISTANCE FOR HOME

HEALTH AGENCIES

Sec. 101. Home Health Transitional Loan Program.

Sec. 102. Establishment of split-payment percentages under the PPS for home

health services.

Sec. 103. Prompt payment from medicare trust funds under the IPS and the

PPS for home health services.

TITLE II—REIMBURSEMENT OF HOME HEALTH AGENCIES FOR

UNFUNDED PPS RELATED COSTS

Sec. 201. Adjustment to reflect administrative costs not included in the PPS

for home health services.

TITLE III—REIMBURSEMENT OF HOME HEALTH AGENCIES FOR

OASIS LABOR COSTS

Sec. 301. Reimbursement for OASIS labor costs under the IPS and PPS for

home health services.

TITLE IV—NONROUTINE MEDICAL SUPPLIES FURNISHED BY

HOME HEALTH AGENCIES

Sec. 401. Exclusion of nonroutine medical supplies under the PPS for home

health services.

1 SEC. 2. FINDINGS.

2 Congress makes the following findings:

3 (1) Home health care is a vital component of

4 the medicare program under title XVIII of the So5 cial Security Act.

6 (2) Home health services provided under the

7 medicare program enable medicare beneficiaries who

8 are homebound and greatly risk costly institutional9 ized care to continue to live in their own homes and

10 communities.

11 (3) The Balanced Budget Act of 1997 reformed

12 Medicare home health care spending by instructing

13 the Health Care Financing Administration (in this
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1 section referred to as ‘‘HCFA’’) to implement a pro2 spective payment system.

3 (4) A number of HCFA’s regulations to imple4 ment the prospective payment system are adminis5 tratively burdensome and divert funds away from

6 needed beneficiary care.

7 (5) The vast majority of home health agencies

8 are small businesses or nonprofit institutions that

9 cannot operate with significant cash flow problems.

10 (6) The prospective payment system should not

11 penalize home health agencies that treat medicare

12 beneficiaries with higher-than-average medical needs.

13 TITLE I—EMERGENCY CASH14 FLOW ASSISTANCE FOR

15 HOME HEALTH AGENCIES

16 SEC. 101. HOME HEALTH TRANSITIONAL LOAN PROGRAM.

17 (a) ESTABLISHMENT OF HOME HEALTH TRANSI18 TIONAL LOAN PROGRAM.—There is established a Home

19 Health Transitional Loan Program under which the Sec20 retary of Health and Human Services (in this section re21 ferred to as the ‘‘Secretary’’) shall make loans from the

22 Federal Hospital Insurance Trust Fund to any qualified

23 home health agency (as defined in subsection (c)) in ac24 cordance with the terms and conditions described in sub-
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1 section (b) before the termination of the authority of the

2 Secretary to make such loans under subsection (d).

3 (b) TERMS AND CONDITIONS.—

4 (1) IN GENERAL.—Subject to paragraph (2),

5 the Secretary shall make loans on such terms and

6 conditions as the Secretary may specify.

7 (2) SPECIFIC TERMS AND CONDITIONS.—The

8 terms and conditions of each loan shall include the

9 following:

10 (A) APPLICATION.—The Secretary shall

11 approve each application for a loan under this

12 section submitted by a qualified home health

13 agency not later than 10 days after the Sec14 retary receives such application.

15 (B) AMOUNT.—The total amount of a loan

16 made to a qualified home health agency under

17 this section may not exceed the average total

18 costs incurred by such a home health agency

19 during a 3-month period as reported on such

20 home health agency’s most recently settled

21 medicare cost report.

22 (C) INTEREST RATE.—The interest rate of

23 the loans made under this section shall be zero

24 percent.
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1 (D) DURATION.—The home health agency

2 shall repay any loan made under this section

3 not later than 12 months after the date on

4 which such loan is made.

5 (c) QUALIFIED HOME HEALTH AGENCY DEFINED.—

6 The term ‘‘qualified home health agency’’ means a home

7 health agency (as defined in section 1861(o) of the Social

8 Security Act (42 U.S.C. 1395x(o))) that the Secretary de9 termines does not have sufficient cash reserves to transi10 tion from the interim payment system for home health

11 services under section 1861(v)(1)(L) of such Act (42

12 U.S.C. 1395x(v)(1)(L)) (in this section referred to as the

13 ‘‘IPS’’ to the prospective payment system for such services

14 under section 1895 of such Act (42 U.S.C. 1395fff) (in

15 this section referred to as the ‘‘PPS’’) because of—

16 (1) the repayment by the home health agency of

17 overpayments made under the IPS;

18 (2) the discontinuation of the periodic interim

19 payment for home health agencies by section

20 4603(b) of the Balanced Budget Act of 1997 (Public

21 Law 105–133; 111 Stat. 470); or

22 (3) the payment amounts under the PPS being

23 less than the payment amounts under the IPS.
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1 (d) TERMINATION OF AUTHORITY.—The Secretary

2 may not make any loan under this section after the date

3 that is 6 months after the date of enactment of this Act.

4 (e) EFFECTIVE DATE.—This section shall take effect

5 on the later of—

6 (1) the date of enactment of this Act; or

7 (2) the date on which the Secretary implements

8 the prospective payment system under section 1895

9 of the Social Security Act (42 U.S.C. 1395fff).

10 SEC. 102. ESTABLISHMENT OF SPLIT-PAYMENT PERCENT11 AGES UNDER THE PPS FOR HOME HEALTH

12 SERVICES.

13 (a) ESTABLISHMENT.—Section 1895(b) of the Social

14 Security Act (42 U.S.C. 1395fff) is amended by adding

15 at the end the following new paragraph:

16 ‘‘(7) ESTABLISHMENT OF SPLIT-PAYMENT PER17 CENTAGES.—In making payments under this sec18 tion, the Secretary shall pay to the agency 80 per19 cent of the prospective payment amount upon the

20 transmittal of the notice of patient admission and 20

21 percent of such amount upon transmittal of the final

22 episode claim.’’.

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

24 subsection (a) shall take effect on the date of enactment

25 of this Act.
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1 SEC. 103. PROMPT PAYMENT FROM MEDICARE TRUST

2 FUNDS UNDER THE IPS AND THE PPS FOR

3 HOME HEALTH SERVICES.

4 (a) UNDER THE IPS.—Section 1861(v)(1)(L) of the

5 Social Security Act (42 U.S.C. 1395x(v)(1)(L)) is amend6 ed by adding at the end the following new clause:

7 ‘‘(xi) To ensure that payment of claims of home

8 health agencies are not delayed because the Secretary

9 must determine from which trust fund to pay a claim

10 under this subparagraph, the Secretary shall pay the full

11 amount of each claim for an episode of care from the Fed12 eral Supplementary Medical Insurance Trust Fund, and,

13 in the case that any amount paid from such Trust Fund

14 should have been paid from the Federal Hospital Insur15 ance Trust Fund, the Secretary shall transfer such

16 amount from the Federal Hospital Insurance Trust Fund

17 to the Federal Supplementary Medical Insurance Trust

18 Fund.’’.

19 (b) UNDER THE PPS.—Section 1895(b) of the Social

20 Security Act (42 U.S.C. 1395fff) (as amended by section

21 102) is amended by adding at the end the following new

22 paragraph:

23 ‘‘(8) PROMPT PAYMENTS FROM TRUST

24 FUNDS.—To ensure that payment of claims of home

25 health agencies are not delayed because the Sec26 retary must determine from which trust fund to pay
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1 a claim under this section, the Secretary shall pay

2 the full amount of each claim for an episode of care

3 from the Federal Supplementary Medical Insurance

4 Trust Fund, and, in the case that any amount paid

5 from such Trust Fund should have been paid from

6 the Federal Hospital Insurance Trust Fund, the

7 Secretary shall transfer such amount from the Fed8 eral Hospital Insurance Trust Fund to the Federal

9 Supplementary Medical Insurance Trust Fund.’’.

10 (c) EFFECTIVE DATE.—The amendments made by

11 this section shall take effect on the date of enactment of

12 this Act.

13 TITLE II—REIMBURSEMENT OF

14 HOME HEALTH AGENCIES

15 FOR UNFUNDED PPS RE16 LATED COSTS

17 SEC. 201. ADJUSTMENT TO REFLECT ADMINISTRATIVE

18 COSTS NOT INCLUDED IN THE PPS FOR

19 HOME HEALTH SERVICES.

20 (a) ADJUSTMENT TO REFLECT ADMINISTRATIVE

21 COSTS.—In the case of a home health agency that fur22 nishes home health services to a medicare beneficiary, for

23 each such beneficiary to whom the agency furnished such

24 services during the agency’s cost reporting period begin25 ning in fiscal year 2000, the Secretary of Health and
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1 Human Services shall pay the agency, in addition to any

2 amount of payment made under section 1861(v)(1)(L) of

3 the Social Security Act (42 U.S.C. 1395x(v)(1)(L)) for the

4 beneficiary and only for such cost reporting period, an ag5 gregate amount of $10 to defray costs incurred by the

6 agency attributable to technology costs required for com7 pliance with the prospective payment system for home

8 health services under section 1895 of the Social Security

9 Act (42 U.S.C. 1395fff), including the acquisition of com10 puter hardware and software necessary for classification

11 of patients, and accounting, billing, and transmitting data

12 in the manner required under such payment system.

13 (b) PAYMENT 30 DAYS AFTER SETTLED COST RE14 PORT.—The Secretary shall pay the amounts payable to

15 an agency under this section no later than 30 days after

16 the later of—

17 (1) the date of enactment of this Act; or

18 (2) the date on which the cost report submitted

19 by the agency for the cost reporting period begin20 ning in fiscal year 2000 is settled.

21 (c) PAYMENT FROM MEDICARE TRUST FUNDS.—

22 Payments under this section shall be made, in appropriate

23 part as specified by the Secretary, from the Federal Hos24 pital Insurance Trust Fund and from the Federal Supple25 mentary Medical Insurance Trust Fund.
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1 (d) DEFINITIONS.—In this section:

2 (1) HOME HEALTH AGENCY.—The term ‘‘home

3 health agency’’ has the meaning given that term

4 under section 1861(o) of the Social Security Act (42

5 U.S.C. 1395x(o)).

6 (2) HOME HEALTH SERVICES.—The term

7 ‘‘home health services’’ has the meaning given that

8 term under section 1861(m) of such Act (42 U.S.C.

9 1395x(m)).

10 (3) MEDICARE BENEFICIARY.—The term

11 ‘‘medicare beneficiary’’ means a beneficiary de12 scribed in section 1861(v)(1)(L)(vi)(II) of the Social

13 Security Act (42 U.S.C. 1395x(v)(1)(L)(vi)(II)).

14 TITLE III—REIMBURSEMENT OF

15 HOME HEALTH AGENCIES

16 FOR OASIS LABOR COSTS

17 SEC. 301. REIMBURSEMENT FOR OASIS LABOR COSTS

18 UNDER THE IPS AND PPS FOR HOME HEALTH

19 SERVICES.

20 (a) ADJUSTMENT TO REFLECT ADMINISTRATIVE

21 COSTS.—

22 (1) UNDER THE INTERIM PAYMENT SYSTEM.—

23 Section 301(a) of the Medicare, Medicaid, and

24 SCHIP Balanced Budget Refinement Act of 1999

25 (42 U.S.C. 1395fff note) is amended—
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1 (A) in paragraph (1)—

2 (i) by inserting ‘‘and each subsequent

3 fiscal year before the implementation of

4 the prospective payment system under sec5 tion 1895 of the Social Security Act (42

6 U.S.C. 1395fff)’’ after ‘‘beginning in fiscal

7 year 2000’’; and

8 (ii) by striking ‘‘$10’’ and inserting

9 ‘‘$30’’;

10 (B) in paragraph (2)—

11 (i) by redesignating subparagraphs

12 (A) and (B) as clauses (i) and (ii), respec13 tively;

14 (ii) by inserting after the heading the

15 following:

16 ‘‘(A) FOR FISCAL YEAR 2000.—’’; and

17 (iii) by adding at the end the fol18 lowing new subparagraph:

19 ‘‘(B) FOR SUBSEQUENT FISCAL YEARS.—

20 For each cost reporting period beginning after

21 fiscal year 2000 and before the implementation

22 of the prospective payment system under sec23 tion 1895 of the Social Security Act (42 U.S.C.

24 1395fff), the Secretary shall pay the amounts

25 payable to an agency under this subsection no
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1 later than 30 days after the date on which the

2 cost report submitted by the agency for the cost

3 reporting period beginning in such fiscal year is

4 settled.’’.

5 (2) UNDER THE PROSPECTIVE PAYMENT SYS6 TEM.—Section 1895(b) of the Social Security Act

7 (42 U.S.C. 1395fff) (as amended by section 103) is

8 amended by adding at the end the following new

9 paragraph:

10 ‘‘(9) ADJUSTMENT TO REFLECT OASIS ADMINIS11 TRATIVE COSTS.—In the case of a home health

12 agency that furnishes home health services to a

13 medicare beneficiary, for each such beneficiary to

14 whom the agency furnished such services during the

15 agency’s cost reporting period for which payment is

16 made to such agency under this section, the Sec17 retary shall include in such payment an aggregate

18 amount of $30 to defray costs incurred by the agen19 cy attributable to data collection and reporting re20 quirements under the Outcome and Assessment In21 formation Set (OASIS) required by reason of section

22 4602(e) of BBA (42 U.S.C. 1395fff note).

23 (b) WAIVING BUDGET NEUTRALITY.—Section

24 1895(b)(3) of such Act (42 U.S.C. 1395fff(b)(3)) is
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1 amended by adding at the end the following new subpara2 graph:

3 ‘‘(D) NO ADJUSTMENT FOR ADDITIONAL

4 PAYMENTS FOR OASIS ADMINISTRATIVE

5 COSTS.—The Secretary shall not reduce the

6 standard prospective payment amount (or

7 amounts) under this paragraph applicable to

8 home health services furnished during a period

9 to offset the increase in payments resulting

10 from the application of paragraph (9).’’.

11 (c) EFFECTIVE DATE.—The amendments made by

12 subsection (a) shall take effect as if included in the enact13 ment of the Medicare, Medicaid, and SCHIP Balanced

14 Budget Refinement Act of 1999 (113 Stat. 1501A–358),

15 as enacted into law by section 1000(a)(6) of Public Law

16 (106–113).

17 TITLE IV—NONROUTINE MED18 ICAL SUPPLIES FURNISHED

19 BY HOME HEALTH AGENCIES

20 SEC. 401. EXCLUSION OF NONROUTINE MEDICAL SUPPLIES

21 UNDER THE PPS FOR HOME HEALTH SERV22 ICES.

23 (a) IN GENERAL.—Section 1895 of the Social Secu24 rity Act (42 U.S.C. 1395fff) is amended by adding at the

25 end the following new subsection:
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1 ‘‘(e) EXCLUSION OF NONROUTINE MEDICAL SUP2 PLIES.—

3 ‘‘(1) IN GENERAL.—Notwithstanding the pre4 ceding provisions of this section, in the case of all

5 nonroutine medical supplies (as defined by the Sec6 retary) furnished by a home health agency during a

7 year (beginning with 2001) for which payment is

8 otherwise made on the basis of the prospective pay9 ment amount under this section, payment under this

10 section shall instead be based on the lesser of—

11 ‘‘(A) the actual charge for the nonroutine

12 medical supply, or

13 ‘‘(B) the amount determined under the fee

14 schedule established by the Secretary for pur15 poses of making payment under this subsection

16 for nonroutine medical supplies furnished dur17 ing that year.

18 ‘‘(2) BUDGET NEUTRALITY ADJUSTMENT.—The

19 Secretary shall provide for an appropriate propor20 tional reduction in payments under this section so

21 that beginning with fiscal year 2001, the aggregate

22 amount of such reductions is equal to the aggregate

23 increase in payments attributable to the exclusion ef24 fected under paragraph (1).’’.
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1 (b) CONFORMING AMENDMENT.—Section 1895(b)(1)

2 of the Social Security Act (42 U.S.C. 1395fff(b)(1)) is

3 amended by striking ‘‘The Secretary’’ and inserting ‘‘Sub4 ject to subsection (e), the Secretary’’.

5 (c) EFFECTIVE DATE.—The amendments made by

6 this section shall take effect on the date of enactment of

7 this Act.

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