I 

110TH CONGRESS 

1ST SESSION H. R. 562 

To amend title XVIII of the Social Security Act to ensure and foster continued patient quality of care by establishing facility and patient criteria 

for long-term care hospitals and related improvements under the Medicare Program. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 18, 2007 

Mr. ENGLISH of Pennsylvania (for himself and Mr. POMEROY) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend title XVIII of the Social Security Act to ensure 

and foster continued patient quality of care by establishing facility and patient criteria for long-term care 

hospitals and related improvements 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 ‘‘Medicare Long-Term 

5 Care Hospital Improvement Act of 2007’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 


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1 (1) Long-term care hospitals (in this Act re2 ferred to as ‘‘LTCHs’’) serve a valuable role in the 

3 post-acute care continuum by providing care to 

4 medically complex patients needing long hospital 

5 stays. 

6 (2) The Medicare program should ensure that 

7 patients receive post-acute care in the most appro8 priate setting. The use of additional certification cri9 teria for LTCHs, including facility and patient cri10 teria, will promote the appropriate placement of se11 verely ill patients into LTCHs. Further, patient ad12 mission screening tools and continued stay and dis13 charge assessment tools can guide appropriate pa14 tient placement. 

15 (3) Certain long-term care diagnosis related 

16 groups (in this Act referred to as ‘‘LTC–DRGs’’) 

17 are associated with higher severity of illness levels, 

18 as measured by the APR–DRG system, and patients 

19 grouped into those LTC–DRGs are predicted to be 

20 appropriate for LTCH services. 

21 (4) Measuring and reporting on quality of care 

22 is an important function of any Medicare provider 

23 and a national quality initiative for LTCHs should 

24 be similar to short-term general acute care hospitals 

25 in the Medicare program. 


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1 (5) To conform the prospective payment system 

2 for LTCHs with certain aspects of the prospective 

3 payment system for short-term general acute care 

4 hospitals and promote payment stability, the Sec5 retary of Health and Human Services (in this Act 

6 referred to as the ‘‘Secretary’’) should— 

7 (A) perform an annual market basket up8 date; 

9 (B) conduct the LTC–DRG reweighting 

10 and wage level adjustments in a budget neutral 

11 manner each year; 

12 (C) not perform a proposed one-time budg13 et neutrality adjustment, and 

14 (D) not extend the 25 percent limitation 

15 on reimbursement of co-located hospital patient 

16 admissions to freestanding LTCHs. 

17 SEC. 3. NEW DEFINITION OF A LONG-TERM CARE HOSPITAL 

18 WITH FACILITY AND PATIENT CRITERIA. 

19 (a) DEFINITION.—Section 1861 of the Social Secu20 rity Act (42 U.S.C. 1395x) is amended by adding at the 

21 end the following new subsection: 

22 ‘‘Long-Term Care Hospital 

23 ‘‘(ccc) The term ‘long-term care hospital’ means an 

24 institution which— 


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1 ‘‘(1) is primarily engaged in providing inpatient 

2 care, by or under the supervision of a physician, to 

3 medically complex patients needing long hospital 

4 stays; 

5 ‘‘(2) has an average inpatient length of stay (as 

6 determined by the Secretary) for Medicare bene7 ficiaries of greater than 25 days, or as otherwise de8 fined in section 1886(d)(1)(B)(iv); 

9 ‘‘(3) satisfies the requirements of subsection 

10 (e), except paragraphs (1) and (9) of such sub11 section; 

12 ‘‘(4) meets the following facility criteria: 

13 ‘‘(A) the institution has a patient review 

14 process, documented in the patient medical 

15 record, that screens patients prior to admission, 

16 validates within 48 hours of admission that pa17 tients meet admission criteria, regularly evalu18 ates patients throughout their stay, and as19 sesses the available discharge options when pa20 tients no longer meet the continued stay cri21 teria; 

22 ‘‘(B) the institution applies a standard pa23 tient assessment tool, as determined by the Sec24 retary, that is a valid clinical tool appropriate 

25 for this level of care, uniformly used by all longVerDate Aug 31 2005 18:49 Jan 20, 2007 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H562.IH H562

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1 term care hospitals, to measure the severity of 

2 illness and intensity of service requirements for 

3 patients for the purposes of making admission, 

4 continuing stay and discharge medical necessity 

5 determinations taking into account the medical 

6 judgment of the patient’s physician, as provided 

7 for under sections 1814(a)(3) and 

8 1835(a)(2)(B); 

9 ‘‘(C) the institution has active physician 

10 involvement with patients during their treat11 ment through an organized medical staff, on12 site physician presence and physician review of 

13 patient progress on a daily basis, and con14 sulting physicians on call and capable of being 

15 at the patient’s side within a moderate period 

16 of time, as determined by the Secretary; 

17 ‘‘(D) the institution has interdisciplinary 

18 team treatment for patients, requiring inter19 disciplinary teams of health care professionals, 

20 including physicians, to prepare and carry out 

21 an individualized treatment plan for each pa22 tient; and 

23 ‘‘(E) the institution maintains a minimum 

24 staffing level of licensed health care profes25 sionals, as determined by the Secretary, to enVerDate Aug 31 2005 18:49 Jan 20, 2007 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H562.IH H562

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1 sure that long-term care hospitals provide an 

2 intensive level of care that is sufficient to meet 

3 the needs of medically complex patients needing 

4 long hospital stays; and 

5 ‘‘(5) meets patient criteria relating to patient 

6 mix and severity appropriate to the medically com7 plex cases that long-term care hospitals are uniquely 

8 designed to treat, as measured under section 

9 1886(m).’’. 

10 (b) NEW PATIENT CRITERIAFOR LONG-TERM CARE

11 HOSPITAL PROSPECTIVE PAYMENT.—Section 1886 of 

12 such Act (42 U.S.C. 1395ww) is amended by adding at 

13 the end the following new subsection: 

14 ‘‘(m) PATIENT CRITERIAFOR PROSPECTIVE PAY15 MENT TO LONG-TERM CARE HOSPITALS.— 

16 ‘‘(1) IN GENERAL.—To be eligible for prospec17 tive payment as a long-term care hospital, a long18 term care hospital must discharge the percentage es19 tablished in paragraph (4) of each hospital’s total 

20 patients who are entitled to benefits under part A 

21 and who were admitted with one or more of the 

22 medical conditions specified in paragraph (2). 

23 ‘‘(2) SELECTION OF LTC–DRGS.—The Secretary 

24 shall determine the long-term care diagnosis related 

25 groups (LTC–DRGs) under section 307(b) of the 


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1 Medicare, Medicaid, and SCHIP Benefits Improve2 ment and Protection Act of 2000, that are associ3 ated with a high severity of illness for the following 

4 specified medical conditions: 

5 ‘‘(A) Circulatory conditions. 

6 ‘‘(B) Digestive, endocrine, and metabolic 

7 conditions. 

8 ‘‘(C) Infectious disease. 

9 ‘‘(D) Neurological conditions. 

10 ‘‘(E) Renal conditions. 

11 ‘‘(F) Respiratory conditions. 

12 ‘‘(G) Skin conditions. 

13 ‘‘(H) Other medically complex conditions 

14 as defined by the Secretary. 

15 ‘‘(3) CHANGE TO DIFFERENT PATIENT CLASSI16 FICATION SYSTEM.—If the Secretary changes the 

17 patient classification system for the long-term care 

18 hospital prospective payment system (LTCH PPS) 

19 to a classification system other than the long-term 

20 care diagnosis related group (LTC–DRG) system, 

21 the Secretary shall determine the new patient classi22 fication categories that are associated with a high 

23 severity of illness for the medical conditions specified 

24 in paragraph (2) in a manner that maintains the 

25 same proportion of Medicare discharges as the longVerDate Aug 31 2005 18:49 Jan 20, 2007 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H562.IH H562

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1 term care diagnosis related groups (LTC–DRGs) in 

2 effect at the time. 

3 ‘‘(4) PERCENTAGE OF MEDICARE PATIENT DIS4 CHARGES.— 

5 ‘‘(A) IN GENERAL.—Subject to subpara6 graph (B), for each long-term care hospital, the 

7 proportion of discharges from the long-term 

8 care diagnosis related groups (LTC–DRGs) de9 termined under paragraph (2), or other patient 

10 classification categories designated pursuant to 

11 paragraph (3) if applicable, in a cost reporting 

12 year must be a percentage, as determined by 

13 the Secretary, that is not less than 50 percent 

14 and not greater than 75 percent. 

15 ‘‘(B) TRANSITION PERIOD.—The Secretary 

16 shall provide for a three-year transition period 

17 beginning on October 1, 2007, for hospitals 

18 that were certified as long-term care hospitals 

19 before such date. The applicable proportion of 

20 cases in the first year of the transition period 

21 shall be not less than 50 percent. 

22 ‘‘(5) NONCOMPLIANCE.—If a long-term care 

23 hospital in a cost reporting year does not discharge 

24 more than the applicable proportion of cases speci25 fied in paragraph (4), then the hospital must demVerDate Aug 31 2005 18:49 Jan 20, 2007 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H562.IH H562

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1 onstrate in a period of five out of six consecutive 

2 months at the end of the hospital’s next cost report3 ing year that it meets the applicable proportion of 

4 cases in paragraph (4). If the hospital cannot make 

5 such a demonstration, then the hospital shall be paid 

6 for all cases after the hospital’s next cost reporting 

7 year as a subsection (d) hospital under subsection 

8 (d).’’. 

9 (c) NEGOTIATED RULEMAKING TO DEVELOP LTCH 

10 FACILITY AND PATIENT CRITERIA.—The Secretary shall 

11 promulgate regulations to carry out the amendments made 

12 by this section on an expedited basis and using a nego13 tiated rulemaking process under subchapter III of chapter 

14 5 of title 5, United States Code. 

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

16 this section shall apply to discharges occurring on or after 

17 October 1, 2007. 

18 SEC. 4. LTCH QUALITY IMPROVEMENT INITIATIVE. 

19 (a) STUDY TO ESTABLISH QUALITY MEASURES.— 

20 The Secretary shall conduct a study (in this section re21 ferred to as the ‘‘study’’) to determine appropriate quality 

22 measures for Medicare patients receiving care in LTCHs. 

23 (b) REPORT.—Not later than October 1, 2007, the 

24 Secretary shall submit to Congress a report on the results 

25 of the study. 


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1 (c) SELECTION OF QUALITY MEASURES.—Subject to 

2 subsection (e), the Secretary shall choose 3 quality meas3 ures from the study to be reported by LTCHs. 

4 (d) REQUIREMENT FOR SUBMISSION OF DATA.— 

5 (1) IN GENERAL.—LTCHs must collect data on 

6 the three quality measures chosen under subsection 

7 (c) and submit all required quality data to the Sec8 retary. 

9 (2) FAILURE TO SUBMIT DATA.—Any LTCH 

10 which does not submit the required quality data 

11 under paragraph (1) to the Secretary in any fiscal 

12 year shall have the applicable LTCH market basket 

13 under section 1886 reduced by not more than 0.4 

14 percent for such year. 

15 (e) EXPANSION OF QUALITY MEASURES.—The Sec16 retary may expand the number of quality indicators re17 quired to be reported by LTCHs under the study. If the 

18 Secretary adds other measures, the measures shall reflect 

19 consensus among the affected parties. The Secretary may 

20 replace any measures in appropriate cases, such as where 

21 all hospitals are effectively in compliance or where meas22 ures have been shown not to represent the best clinical 

23 practice. 


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1 (f) AVAILABILITY OF DATA TO PUBLIC.—The Sec2 retary shall establish procedures for making the quality 

3 data submitted under this section available to the public. 

4 SEC. 5. CONFORMING LTCH PPS UPDATES TO THE INPA5 TIENT PPS. 

6 (a) REQUIRING ANNUAL UPDATES OF BASE RATES

7 AND WAGE INDICES AND ANNUAL UPDATES AND

8 REWEIGHTING OF LTC–DRGS.—The second sentence of 

9 section 307(b) of the Medicare, Medicaid, and SCHIP 

10 Benefits Improvement and Protection Act of 2000 is 

11 amended by inserting before the period at the end the fol12 lowing: ‘‘, and shall provide (consistent with updating and 

13 reweighting provided for subsection (d) hospitals under 

14 paragraphs (2)(B)(ii), (3)(D)(iii), and (3)(E) of section 

15 1886(d) of the Social Security Act) for an annual update 

16 under such system in payment rates, in the wage indices 

17 (in a budget neutral manner), in the classification and 

18 reweighting (in a budget neutral manner) of the diagnosis19 related groups applied under such system’’. Pursuant to 

20 the amendment made by the preceeding sentence, the Sec21 retary shall provide annual updates to the LTCH base 

22 rate, as is specified for the IPPS at section 

23 1886(d)(2)(B)(ii) of the Social Security Act (42 U.S.C. 

24 1395ww(d)(2)(B)(ii)). The Secretary shall annually up25 date and reweight the LTC–DRGs under section 307(b) 


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1 of the Medicare, Medicaid, and SCHIP Benefits Improve2 ment and Protection Act of 2000 or an alternative patient 

3 classification system in a budget neutral manner, con4 sistent with such updating and reweighting applied under 

5 section 1886(d)(3)(D)(iii) of the Social Security Act (42 

6 U.S.C. 1395ww(d)(3)(D)(iii)). The Secretary shall annu7 ally update wage levels for LTCHs in a budget neutral 

8 manner, consistent with such annual updating applied 

9 under section 1886(d)(3)(E) of the Social Security Act 

10 (42 U.S.C. 1395ww(d)(3)(E)). 

11 (b) ELIMINATION OF ONE-TIME BUDGET NEU12 TRALITY ADJUSTMENT.—The Secretary shall not make a 

13 one-time prospective adjustment to the LTCH PPS rates 

14 under section 412.523(d)(3) of title 42, Code of Federal 

15 Regulations, or otherwise conduct any budget neutrality 

16 adjustment to address such rates during the transition pe17 riod specified in section 412.533 of such title from cost18 based payment to the prospective payment system for 

19 LTCHs. 

20 (c) NO APPLICATION OF 25 PERCENT PATIENT

21 THRESHOLD PAYMENT ADJUSTMENT TO FREESTANDING

22 LTCHS.—The Secretary shall not extend the 25 percent 

23 (or applicable percentage) patient threshold payment ad24 justment under section 412.534 of title 42, Code of FedVerDate Aug 31 2005 18:49 Jan 20, 2007 Jkt 059200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H562.IH H562

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1 eral Regulations, or any similar provision, to freestanding 

2 LTCHs. 

Æ 


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