I

106TH CONGRESS

1ST SESSION H. R. 1392

To amend title XVIII of the Social Security Act to authorize the Secretary

of Health and Human Services to enter into contracts with providers

of services to furnish certain inpatient hospital services at an all-inclusive

rate of payment.

IN THE HOUSE OF REPRESENTATIVES

APRIL 13, 1999

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 authorize

the Secretary of Health and Human Services to enter

into contracts with providers of services to furnish certain inpatient hospital services at an all-inclusive rate

of payment.

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

3 SECTION 1. CENTERS OF EXCELLENCE.

4 (a) IN GENERAL.—Title XVIII of the Social Security

5 Act is amended by inserting after section 1896 the fol6 lowing new section:
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1 ‘‘CENTERS OF EXCELLENCE

2 ‘‘SEC. 1897. (a) IN GENERAL.—The Secretary shall

3 use a competitive process to contract with specific hos4 pitals or other entities for furnishing services related to

5 surgical procedures, and for furnished services (unrelated

6 to surgical procedures) to hospital inpatients that the Sec7 retary determines to be appropriate. Such services may in8 clude any services covered under this title that the Sec9 retary determines to be appropriate, including post-hos10 pital services.

11 ‘‘(b) QUALITY STANDARDS.—Only entities that meet

12 quality standards established by the Secretary shall be eli13 gible to contract under this section. In considering quality,

14 the Secretary shall take into account the quality, experi15 ence, and quantity of services of physicians who provide

16 services in more than one entity. Contracting entities shall

17 implement a quality improvement plan approved by the

18 Secretary.

19 ‘‘(c) PAYMENT.—Payment under this section shall be

20 made on the basis of negotiated all-inclusive rates. The

21 amount of payment made by the Secretary to an entity

22 under this title for services covered under a contract shall

23 be less than the aggregate amount of the payments that

24 the Secretary would have otherwise made for the services.
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1 ‘‘(d) CONTRACT PERIOD.—A contract period shall be

2 3 years (subject to renewal), as long as the entity con3 tinues to meet quality and other contractual standards.

4 ‘‘(e) INCENTIVES FOR USE OF CENTERS.—The Sec5 retary may permit entities under a contract under this sec6 tion to furnish additional services or waive beneficiary

7 cost-sharing, subject to the approval of the Secretary.

8 ‘‘(f) LIMIT ON NUMBER OF CENTERS.—The Sec9 retary shall limit the number of centers in a geographic

10 area to the number needed to meet projected demand for

11 contracted services.’’.

12 (b) EFFECTIVE DATES.—

13 (1) The amendment made by subsection (a) ap14 plies to services furnished on or after October 1,

15 2001.

16 (2) By October 1, 2001, the Secretary shall

17 enter into contracts under the amendment made by

18 subsection (a) for coronary artery by-pass surgery

19 and other heart procedures, (b) knee, and hip re20 placement surgery, and (c) organ transplantation in

21 geographic areas nationwide such that at least 20

22 percent of the projected number of those procedures

23 can be provided under such contracts.

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