II

106TH CONGRESS

2D SESSION S. 3034

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

SEPTEMBER 12, 2000

Mr. KERRY 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 ‘‘Home Health Refine5 ment Amendments of 2000’’.
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1 SEC. 2. ELIMINATION OF 15 PERCENT REDUCTION IN PAY2 MENT RATES UNDER THE MEDICARE PRO3 SPECTIVE PAYMENT SYSTEM FOR HOME

4 HEALTH SERVICES.

5 (a) IN GENERAL.—Section 1895(b)(3)(A) of the So6 cial Security Act (42 U.S.C. 1395fff(b)(3)(A)), as amend7 ed by sections 302(b) and 303(f) of the Medicare, Med8 icaid, and SCHIP Balanced Budget Refinement Act of

9 1999 (113 Stat. 1501A–359, 361), as enacted into law

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

11 to read as follows:

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

13 the Secretary shall provide for computation of

14 a standard prospective payment amount (or

15 amounts). Such amount (or amounts) shall ini16 tially be based on the most current audited cost

17 report data available to the Secretary and shall

18 be computed in a manner so that the total

19 amounts payable under the system for the 12-

20 month period beginning on the date the Sec21 retary implements the system shall be equal to

22 the total amount that would have been made if

23 the system had not been in effect and if section

24 1861(v)(1)(L)(ix) had not been enacted. Each

25 such amount shall be standardized in a manner

26 that eliminates the effect of variations in rel-
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1 ative case mix and area wage adjustments

2 among different home health agencies in a

3 budget neutral manner consistent with the case

4 mix and wage level adjustments provided under

5 paragraph (4)(A). Under the system, the Sec6 retary may recognize regional differences or dif7 ferences based upon whether or not the services

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

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

10 subsection (a) shall take effect as if included in the enact11 ment of the Medicare, Medicaid, and SCHIP Balanced

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

13 SEC. 3. ADDITIONAL PAYMENTS FOR OUTLIERS.

14 (a) IN GENERAL.—Section 1895(b)(5) of the Social

15 Security Act (42 U.S.C. 1395fff(b)(5)) is amended—

16 (1) by striking ‘‘OUTLIERS.—The Secretary’’

17 and inserting the following (and conforming the in18 dentation of the succeeding matter accordingly):

19 ‘‘OUTLIERS.—

20 ‘‘(A) IN GENERAL.—The Secretary’’; and

21 (2) by adding at the end the following new sub22 paragraph:

23 ‘‘(B) TEMPORARY ADDITIONAL PAYMENTS

24 FOR OUTLIERS.—For the purposes described in

25 the first sentence of subparagraph (A), there
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1 are authorized to be appropriated from the

2 trust funds (as defined in section 1896(a)(8))

3 in appropriate part, as determined by the Sec4 retary, for each of fiscal years 2001 through

5 2005 an amount equal to $500,000,000. Such

6 amounts shall be in addition to amounts avail7 able for payment under this section and shall

8 not result in an reduction of the standard pro9 spective payment amount (or amounts). In

10 making payments under this subparagraph, the

11 Secretary shall use a loss-sharing ratio of 90

12 percent.’’.

13 (b) CONFORMING AMENDMENT.—Section

14 1895(b)(3)(C) of such Act (42 U.S.C. 1395fff(b)(3)(C))

15 is amended by striking ‘‘paragraph (5)’’ and inserting

16 ‘‘paragraph (5)(A)’’.

17 SEC. 4. ADDITIONAL PAYMENTS UNDER THE PROSPECTIVE

18 PAYMENT SYSTEM FOR SERVICES FUR19 NISHED IN RURAL AREAS AND SECURITY

20 SERVICES.

21 (a) INCREASE IN PAYMENT RATES FOR RURAL

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

23 (42 U.S.C. 1395fff(b)) is amended by adding at the end

24 the following new paragraph:
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1 ‘‘(7) ADDITIONAL PAYMENT AMOUNT FOR

2 SERVICES FURNISHED IN RURAL AREAS.—In the

3 case of home health services furnished in a rural

4 area (as defined in section 1886(d)(2)(D)), notwith5 standing any other provision of this subsection, the

6 amount of payment for such services is equal to 110

7 percent of the payment amount otherwise made

8 under this section (but for this paragraph) for serv9 ices furnished in a rural area.’’.

10 (b) ADDITIONAL PAYMENT FOR SECURITY SERV11 ICES.—Section 1895(b) of such Act (42 U.S.C.

12 1395fff(b)(3)), as amended by subsection (a), is further

13 amended by adding at the end the following paragraph:

14 ‘‘(8) ADDITIONAL PAYMENT FOR SECURITY

15 SERVICES.—The Secretary shall provide for an addi16 tion or adjustment to the payment amount otherwise

17 made under this section for the reasonable cost (as

18 defined in section 1861(v)(1)(A)) of furnishing pro19 tective services to individuals furnishing home health

20 services under this title in areas where such individ21 uals are at risk of physical harm, as determined by

22 the Secretary.’’.

23 (c) INAPPLICABILITY OF ADJUSTMENTS FOR BUDG24 ET NEUTRALITY.—Section 1895(b)(3) of such Act (42
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1 U.S.C. 1395fff(b)(3)) is amended by adding at the end

2 the following new subparagraph:

3 ‘‘(D) NO ADJUSTMENT FOR ADDITIONAL

4 PAYMENTS FOR RURAL SERVICES AND SECU5 RITY SERVICES.—The Secretary shall not re6 duce the standard prospective payment amount

7 (or amounts) under this paragraph applicable

8 to home health services furnished during a pe9 riod to offset the increase in payments resulting

10 from the application of paragraph (7) (relating

11 to services furnished in rural areas) and para12 graph (8) (relating to costs of security serv13 ices).’’.

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

15 this section apply with respect to items and services fur16 nished on or after October 1, 2000.

17 SEC. 5. EXCLUSION OF NONROUTINE MEDICAL SUPPLIES

18 UNDER THE PPS FOR HOME HEALTH SERV19 ICES.

20 (a) IN GENERAL.—Section 1895 of the Social Secu21 rity Act (42 U.S.C. 1395fff) is amended by adding at the

22 end the following new subsection:

23 ‘‘(e) EXCLUSION OF NONROUTINE MEDICAL SUP24 PLIES.—
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1 ‘‘(1) IN GENERAL.—Notwithstanding the pre2 ceding provisions of this section, in the case of all

3 nonroutine medical supplies (as defined by the Sec4 retary) furnished by a home health agency during a

5 year (beginning with 2001) for which payment is

6 otherwise made on the basis of the prospective pay7 ment amount under this section, payment under this

8 section shall instead be based on the lesser of—

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

10 medical supply, or

11 ‘‘(B) the amount determined for such sup12 ply under the applicable fee schedule under part

13 B.

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

15 Secretary shall provide for an appropriate propor16 tional reduction in payments under this section so

17 that beginning with fiscal year 2001, the aggregate

18 amount of such reductions is equal to the aggregate

19 increase in payments (as estimated by the Secretary)

20 attributable to the exclusion effected under para21 graph (1).’’.

22 (b) CONFORMING AMENDMENTS.—(1) Section

23 1895(b)(1) of the Social Security Act (42 U.S.C.

24 1395fff(b)(1)) is amended by striking ‘‘The Secretary’’

25 and inserting ‘‘Subject to subsection (e), the Secretary’’.
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1 (2) Sections 1842(b)(6)(F) and 1862(a)(21) of the

2 Social Security Act (42 U.S.C. 1395u(b)(6)(F);

3 1395y(a)(21)) are each amended by striking ‘‘(including

4 medical supplies described in section 1861(m)(5), but ex5 cluding durable medical equipment to the extent provided

6 for in such section)’’ and inserting ‘‘(other than medical

7 supplies and durable medical equipment described in sec8 tion 1861(m)(5))’’.

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

10 this section apply with respect to items and services fur11 nished on or after October 1, 2000.

12 SEC. 6. RULE OF CONSTRUCTION RELATING TO

13 TELEHOMEHEALTH SERVICES.

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

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

16 amended by adding at the end the following paragraph:

17 ‘‘(9) RULE OF CONSTRUCTION RELATING TO

18 TELEHOMEHEALTH SERVICES.—

19 ‘‘(A) IN GENERAL.—Nothing in this sec20 tion, or in section 4206(a) of the Balanced

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

22 shall be construed as preventing a home health

23 agency receiving payment under this section

24 from furnishing a home health service via a

25 telecommunications system. Each home health
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1 agency that submits a cost report to the Sec2 retary under this section shall include, in such

3 cost report, data with respect to the costs in4 curred in furnishing home health services to

5 medicare beneficiaries via such telecommuni6 cations systems.

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

8 not consider a home health service provided in

9 the manner described in subparagraph (A) to

10 be a home health visit for purposes of—

11 ‘‘(i) determining the amount of pay12 ment to be made under this section; or

13 ‘‘(ii) any requirement relating to the

14 certification of a physician required under

15 section 1814(a)(2)(C).’’.

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

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

18 Human Services shall submit to Congress a report con19 taining the recommendations of the Secretary with respect

20 to the feasibility and advisability of including home health

21 services furnished by telecommunications systems as a

22 home health service for purposes of—

23 (1) payment for such services under section

24 1895 of the Social Security Act (42 U.S.C. 1395fff),

25 and
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1 (2) requirements with respect to physician cer2 tification of the need for home health services under

3 section 1814(a)(2)(C) of such Act (42 U.S.C.

4 1395f(a)(2)(C)).

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