II 

110TH CONGRESS 

1ST SESSION S. 338 

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 SENATE OF THE UNITED STATES 

JANUARY 18, 2007 

Mr. CONRAD (for himself, Mr. HATCH, Mr. WYDEN, Mr. VITTER, Mr. DORGAN, and Mrs. LINCOLN) 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 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, continued stay, and discharge screening 

13 tools can guide appropriate patient placement. 

14 (3) Measuring and reporting on quality of care 

15 is an important function of any Medicare provider 

16 and a national quality initiative for LTCHs should 

17 be similar to short-term general acute care hospitals 

18 in the Medicare program. 

19 (4) To conform the prospective payment system 

20 for LTCHs with certain aspects of the prospective 

21 payment system for short-term general acute care 

22 hospitals and promote payment stability, the Sec23 retary of Health and Human Services (in this Act 

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


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1 (A) perform an annual market basket up2 date; 

3 (B) conduct the long term care diagnosis 

4 related groups (in this Act referred to as 

5 ‘‘LTCDRGs’’) reweighting and wage level ad6 justments in a budget neutral manner each 

7 year; 

8 (C) not perform a proposed one-time budg9 et neutrality adjustment; and 

10 (D) not extend the 25-percent limitation 

11 on reimbursement of co-located hospital patient 

12 admissions to freestanding LTCHs. 

13 (5) LTCHs co-located with another hospital in 

14 underserved areas, including rural areas and areas 

15 with an urban single or MSA dominant hospital, 

16 should be afforded greater relief from the 50 percent 

17 limitation on reimbursement of co-located hospital 

18 patient admissions. 

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

20 WITH FACILITY AND PATIENT CRITERIA. 

21 (a) DEFINITION.—Section 1861 of the Social Secu22 rity Act (42 U.S.C. 1395x) is amended by adding at the 

23 end the following new subsection: 


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1 ‘‘Long-Term Care Hospital 

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

3 institution which—’’ 

4 ‘‘(1) is primarily engaged in providing, by or 

5 under the supervision of physicians, to medically 

6 complex inpatients needing long hospital stays— 

7 ‘‘(A) diagnostic services and therapeutic 

8 services for medical diagnosis, treatment, and 

9 care of injured, disabled, or sick persons; or 

10 ‘‘(B) rehabilitation services for the reha11 bilitation of injured, disabled, or sick persons; 

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

13 determined by the Secretary) for beneficiaries under 

14 this title of greater than 25 days, or as otherwise de15 fined in section 1886(d)(1)(B)(iv); 

16 ‘‘(3) satisfies the requirements of paragraphs 

17 (2) through (9) of subsection (e); 

18 ‘‘(4) meets the following additional facility cri19 teria: 

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

21 process, documented in the patient medical 

22 record, that screens patients prior to admission, 

23 validates within 48 hours of admission that pa24 tients meet admission criteria, regularly evalu25 ates patients throughout their stay, and asVerDate Aug 31 2005 03:33 Jan 20, 2007 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S338.IS S338

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1 sesses the available discharge options when pa2 tients no longer meet the continued stay cri3 teria; 

4 ‘‘(B) the institution applies a standard pa5 tient screening tool, as determined by the Sec6 retary, that is a valid clinical tool appropriate 

7 for this level of care, uniformly used by all long8 term care hospitals, to measure the severity of 

9 illness and intensity of service requirements for 

10 patients for the purposes of making admission, 

11 continuing stay, and discharge medical neces12 sity determinations taking into account the 

13 medical judgment of the patient’s physician, as 

14 provided for under sections 1814(a)(3) and 

15 1835(a)(2)(B); 

16 ‘‘(C) the institution has active physician 

17 involvement with patients during their treat18 ment through an organized medical staff, physi19 cian review of patient progress on a daily basis, 

20 and consulting physicians on call and capable of 

21 being at the patient’s side within a moderate 

22 period of time, as determined by the Secretary; 

23 ‘‘(D) the institution has interdisciplinary 

24 team treatment for patients, requiring inter25 disciplinary teams of health care professionals, 


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1 including physicians, to prepare and carry out 

2 an individualized treatment plan for each pa3 tient; and 

4 ‘‘(E) the institution maintains adequate 

5 staffing levels of licensed health care profes6 sionals, as determined by the Secretary, to en7 sure that long-term care hospitals provide the 

8 intensive level of care that is sufficient to meet 

9 the needs of medically complex patients needing 

10 long hospital stays; and 

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

12 mix and severity appropriate to the medically com13 plex cases that long-term care hospitals are uniquely 

14 designed to treat, as measured under section 

15 1886(m).’’. 

16 (b) NEW PATIENT CRITERIAFOR LONG-TERM CARE

17 HOSPITAL PROSPECTIVE PAYMENT.—Section 1886 of 

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

19 the end the following new subsection: 

20 ‘‘(m) PATIENT CRITERIAFOR PROSPECTIVE PAY21 MENT TO LONG-TERM CARE HOSPITALS.— 

22 ‘‘(1) IN GENERAL.—To be eligible for prospec23 tive payment as a long-term care hospital, a major24 ity of the total number of patients entitled to bene25 fits under part A who are discharged from a longVerDate Aug 31 2005 03:33 Jan 20, 2007 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S338.IS S338

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1 term care hospital must be medically complex pa2 tients admitted with a high severity of illness, as 

3 that term is defined by the Secretary for payment 

4 purposes, with 1 or more enumerated medical condi5 tions specified in paragraph (2). 

6 ‘‘(2) MEDICALLY COMPLEX MEDICAL CONDI7 TIONS.—The Secretary shall determine a list of 

8 medical conditions associated with a high severity of 

9 illness of patients who are appropriate for treatment 

10 in long-term care hospitals, as indicated by the pres11 ence of clinical comorbidities in accordance with a 

12 methodology specified by the Secretary. Such list 

13 shall include the following medical conditions: 

14 ‘‘(A) Circulatory conditions. 

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

16 conditions. 

17 ‘‘(C) Infectious disease. 

18 ‘‘(D) Neurological conditions. 

19 ‘‘(E) Renal conditions. 

20 ‘‘(F) Respiratory conditions. 

21 ‘‘(G) Skin conditions. 

22 ‘‘(H) Other medically complex conditions 

23 as defined by the Secretary.’’. 

24 (c) NEGOTIATED RULEMAKING TO DEVELOP LTCH 

25 FACILITY AND PATIENT CRITERIA.—The Secretary shall 


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1 promulgate regulations to carry out the amendments made 

2 by this section on an expedited basis and using a nego3 tiated rulemaking process under subchapter III of chapter 

4 5 of title 5, United States Code. 

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

6 this section shall apply to discharges occurring on or after 

7 October 1, 2007. 

8 SEC. 4. LTCH QUALITY IMPROVEMENT INITIATIVE. 

9 (a) STUDY TO ESTABLISH QUALITY MEASURES.— 

10 The Secretary shall conduct a study (in this section re11 ferred to as the ‘‘study’’) to determine appropriate quality 

12 measures for Medicare beneficiaries receiving care in 

13 LTCHs. 

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

15 Secretary shall submit to Congress a report on the results 

16 of the study. 

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

18 subsection (e), the Secretary shall choose 3 quality meas19 ures from the study to be reported by LTCHs. 

20 (d) REQUIREMENT FOR SUBMISSION OF DATA.— 

21 (1) IN GENERAL.—LTCHs shall— 

22 (A) collect data on the 3 quality measures 

23 chosen under subsection (c); and 

24 (B) submit all required quality data to the 

25 Secretary. 


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

2 which does not submit the required quality data to 

3 the Secretary in any fiscal year shall have the appli4 cable LTCH market basket under section 1886 re5 duced by not more than 0.4 percent for such year. 

6 (e) EXPANSION OF QUALITY MEASURES.—The Sec7 retary may expand the number of quality indicators re8 quired to be reported by LTCHs under the study. If the 

9 Secretary adds other measures, the measures shall reflect 

10 consensus among the affected parties. The Secretary may 

11 replace any measures in appropriate cases, such as where 

12 all hospitals are effectively in compliance or where meas13 ures have been shown not to represent the best clinical 

14 practice. 

15 (f) AVAILABILITY OF DATA TO PUBLIC.—The Sec16 retary shall establish procedures for making the quality 

17 data submitted under this section available to the public. 

18 SEC. 5. CONFORMING LTCH PPS UPDATES TO THE INPA19 TIENT PPS. 

20 (a) REQUIRING ANNUAL UPDATES OF BASE RATES

21 AND WAGE INDICES AND ANNUAL UPDATES AND

22 REWEIGHTING OF LTCDRGS.— 

23 (1) IN GENERAL.—The second sentence of sec24 tion 307(b)(1) of the Medicare, Medicaid, and 

25 SCHIP Benefits Improvement and Protection Act of 


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1 2000 (114 Stat. 2763A–496), as enacted into law by 

2 section 1(a)(6) of Public Law 106–554, is amended 

3 by inserting before the period at the end the fol4 lowing: ‘‘, and shall provide (consistent with updat5 ing and reweighting provided for subsection (d) hos6 pitals under paragraphs (2)(B)(ii), (3)(D)(iii), and 

7 (3)(E) of section 1886 of the Social Security Act) 

8 for an annual update under such system in payment 

9 rates, in the wage indices (in a budget neutral man10 ner), and in the classification and reweighting (in a 

11 budget neutral manner) of the diagnosis-related 

12 groups applied under such system’’. 

13 (2) APPLICATION.—Pursuant to the amend14 ment made by paragraph (1), the Secretary shall 

15 provide annual updates to the LTCH base rate, as 

16 is specified for the inpatient hospital prospective 

17 payment system under section 1886(d)(2)(B)(ii) of 

18 the Social Security Act (42 U.S.C. 

19 1395ww(d)(2)(B)(ii)). The Secretary shall annually 

20 update and reweight the LTCDRGs under section 

21 307(b) of the Medicare, Medicaid, and SCHIP Bene22 fits Improvement and Protection Act of 2000 or an 

23 alternative patient classification system in a budget 

24 neutral manner, consistent with such updating and 

25 reweighting applied under section 1886(d)(3)(D)(iii) 


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1 of the Social Security Act (42 U.S.C. 

2 1395ww(d)(3)(D)(iii)). The Secretary shall annually 

3 update wage levels for LTCHs in a budget neutral 

4 manner, consistent with such annual updating ap5 plied under section 1886(d)(3)(E) of the Social Se6 curity Act (42 U.S.C. 1395ww(d)(3)(E)). 

7 (b) ELIMINATION OF ONE-TIME BUDGET NEU8 TRALITY ADJUSTMENT.—The Secretary shall not make a 

9 one-time prospective adjustment to the LTCH prospective 

10 payment system rates under section 412.523(d)(3) of title 

11 42, Code of Federal Regulations, or otherwise conduct any 

12 budget neutrality adjustment to address such rates, dur13 ing the transition period specified in section 412.533 of 

14 such title from cost-based payment to the prospective pay15 ment system for LTCHs. 

16 (c) NO APPLICATION OF 25 PERCENT PATIENT

17 THRESHOLD PAYMENT ADJUSTMENT TO FREESTANDING

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

19 (or applicable percentage) patient threshold payment ad20 justment under section 412.534 of title 42, Code of Fed21 eral Regulations, or any similar provision, to freestanding 

22 LTCHs. 


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1 SEC. 6. RELIEF FOR CERTAIN LONG-TERM CARE HOS2 PITALS AND SATELLITE FACILITIES THAT 

3 ARE CO-LOCATED WITH OTHER HOSPITALS. 

4 (a) URBAN SINGLE AND MSA DOMINANT HOS5 PITALS.—The Secretary shall permit up to 75 percent of 

6 the discharged Medicare impatient population of an appli7 cable hospital to be admitted from a co-located urban sin8 gle or co-located MSA dominant hospital (as defined in 

9 section 412.534(e)(4) of title 42, Code of Federal Regula10 tions) without adjustment to the hospital’s LTCH pro11 spective payment system payment in the manner described 

12 in section 412.534(e) of such title. 

13 (b) RURAL HOSPITALS.—The Secretary shall permit 

14 up to 75 percent of the discharged Medicare impatient 

15 population of an applicable hospital which is located in a 

16 rural area (as defined in section 412.64(b)(1)(ii)(C) of 

17 title 42, Code of Federal Regulations) to be admitted from 

18 a co-located hospital without adjustment to the hospital’s 

19 LTCH prospective payment system payment in the man20 ner described in section 412.534(d) of such title. 

21 (c) APPLICABLE LONG-TERM CARE HOSPITAL DE22 FINED.—In this section, the term ‘‘applicable long-term 

23 care hospital’’ means— 

24 (1) a long-term care hospital that meets the cri25 teria in section 412.22(e) of title 42, Code of Fed26 eral Regulations; and 


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1 (2) a satellite facility of a long-term care hos2 pital that meet the criteria in section 412.22(h) of 

3 such title. 

Æ 


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