II

106TH CONGRESS

1ST SESSION S. 1582

To modify the provisions of the Balanced Budget Act of 1997 relating

to the Medicare program under title XVIII of the Social Security Act.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 14, 1999

Mr. DURBIN introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To modify the provisions of the Balanced Budget Act of

1997 relating to the Medicare program under title XVIII

of the Social Security Act.

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; AMENDMENTS TO SOCIAL SECU4 RITY ACT; TABLE OF CONTENTS.

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

6 ‘‘Health Care Preservation Act of 1999’’.

7 (b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex8 cept as otherwise specifically provided, whenever in this

9 Act an amendment is expressed in terms of an amendment

10 to or repeal of a section or other provision, the reference
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1 shall be considered to be made to that section or other

2 provision of the Social Security Act.

3 (c) TABLE OF CONTENTS.—The table of contents for

4 this Act is as follows:

Sec. 1. Short title; amendments to Social Security Act; table of contents.

TITLE I—TEACHING HOSPITALS

Sec. 101. Termination of multiyear reduction of indirect graduate medical education payments.

Sec. 102. Exclusion of nursing and allied health education costs in calculating

Medicare+Choice payment rate.

TITLE II—RURAL HOSPITALS

Sec. 201. Revision of criteria for designation as a critical access hospital.

Sec. 202. Authority to establish a prospective payment system for RHC services.

Sec. 203. Requirement to consider rural issues in establishing fee schedule for

ambulance services.

Sec. 204. Stop-loss protection for rural hospital OPD services.

TITLE III—SAFETY NET PROVIDERS

Sec. 301. New prospective payment system for Federally-qualified health centers and rural health clinics under the Medicaid program.

Sec. 302. Carving out DSH payments from payments to Medicare+Choice organizations and paying the amounts directly to DSH hospitals

enrolling Medicare+Choice enrollees.

Sec. 303. Limitation in reduction of payments to disproportionate share hospitals.

TITLE IV—OTHER HOSPITAL PROVISIONS

Sec. 401. Delay of financial limitation on rehabilitation services.

Sec. 402. Multiyear transition to prospective payment system for hospital outpatient department services.

TITLE V—SKILLED NURSING FACILITIES

Sec. 501. Modification of case mix categories for certain conditions.

Sec. 502. Exclusion of ambulance services to and from dialysis treatments and

prosthetic services from the PPS for SNFs.

Sec. 503. Waiver of 3-day prior hospitalization requirement for coverage of

skilled nursing facility services.

Sec. 504. Extension of certain Medicare community nursing organization demonstration projects.

TITLE VI—COST-EFFICIENT HOME HEALTH PROVIDERS

Sec. 601. Delay in contingency reduction.

Sec. 602. Elimination of 15-minute reporting requirement.

Sec. 603. Recoupment of overpayments.
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Sec. 604. Increase in per visit limit.

TITLE VII—MEDICARE+CHOICE AND MEDIGAP PROTECTIONS

FOR SENIORS AND THE DISABLED

Sec. 701. Two-year Medicare+Choice trial period.

Sec. 702. Permitting enrollment in alternative plans upon receipt of notice of

Medicare+Choice plan termination.

Sec. 703. Guaranteed issuance of certain Medigap policies in cases of a substantial change in benefits under a Medicare+Choice plan.

Sec. 704. Guaranteed issuance of certain Medigap policies to disabled

Medicare+Choice disenrollees.

Sec. 705. Issuance of same Medigap benefit package guaranteed for certain

Medicare+Choice disenrollees.

Sec. 706. Prohibition of attained-age rating of premiums for Medigap policies.

TITLE VIII—MEDICARE PRESERVATION THROUGH FRAUD

PREVENTION

Sec. 801. Site inspections and background checks.

Sec. 802. Registration of billing agencies.

Sec. 803. Expanded access to the health integrity protection database

(HIPDB).

Sec. 804. Liability of Medicare carriers and fiscal intermediaries for claims submitted by excluded providers.

Sec. 805. Community mental health centers.

Sec. 806. Limiting the discharge of debts in bankruptcy proceedings in cases

where a health care provider or a supplier engages in fraudulent activity.

Sec. 807. Illegal distribution of a Medicare or Medicaid beneficiary identification or provider number.

Sec. 808. Treatment of certain Social Security Act crimes as Federal health

care offenses.

Sec. 809. Authority of Office of Inspector General of the Department of Health

and Human Services.

Sec. 810. Universal product numbers on claims forms for reimbursement under

the Medicare program.

1 TITLE I—TEACHING HOSPITALS

2 SEC. 101. TERMINATION OF MULTIYEAR REDUCTION OF IN3 DIRECT GRADUATE MEDICAL EDUCATION

4 PAYMENTS.

5 Section 1886(d)(5)(B)(ii) (42 U.S.C.

6 1395ww(d)(5)(B)(ii)) is amended—

7 (1) by adding ‘‘and’’ at the end of subclause

8 (II); and
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1 (2) by striking subclauses (III), (IV), and (V)

2 and inserting the following:

3 ‘‘(III) on or after October 1,

4 1998, ‘c’ is equal to 1.6.’’.

5 SEC. 102. EXCLUSION OF NURSING AND ALLIED HEALTH

6 EDUCATION COSTS IN CALCULATING

7 MEDICARE+CHOICE PAYMENT RATE.

8 (a) EXCLUDING COSTS IN CALCULATING PAYMENT

9 RATE.—

10 (1) IN GENERAL.—Section 1853(c)(3)(C)(i) (42

11 U.S.C. 1395w–23(c)(3)(C)(i)) is amended—

12 (A) by striking ‘‘and’’ at the end of sub13 clause (I);

14 (B) by striking the period at the end of

15 subclause (II) and inserting ‘‘, and’’; and

16 (C) by adding at the end the following:

17 ‘‘(III) for costs attributable to

18 approved nursing and allied health

19 education programs under section

20 1861(v).’’.

21 (2) EFFECTIVE DATE.—The amendments made

22 by paragraph (1) apply in determining the annual

23 per capita rate of payment for years beginning with

24 2001.
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1 (b) PAYMENT TO HOSPITALS OF NURSING AND AL2 LIED HEALTH EDUCATION PROGRAM COSTS FOR

3 MEDICARE+CHOICE ENROLLEES.—Section 1861(v)(1) of

4 such Act (42 U.S.C. 1395x(v)(1)) is amended by adding

5 at the end the following:

6 ‘‘(V) In determining the amount of payment to a hos7 pital for cost reporting periods (or portions thereof) occur8 ring on or after January 1, 2001, with respect to the rea9 sonable costs for approved nursing and allied health edu10 cation programs, individuals who are enrolled with a

11 Medicare+Choice organization under part C shall be

12 treated as if they were not so enrolled.’’.

13 TITLE II—RURAL HOSPITALS

14 SEC. 201. REVISION OF CRITERIA FOR DESIGNATION AS A

15 CRITICAL ACCESS HOSPITAL.

16 (a) CONVERSION OF DOWNSIZED OR RECENTLY

17 CLOSED HOSPITALS TO CRITICAL ACCESS HOSPITALS.—

18 Section 1820(c)(2) (42 U.S.C. 1395i–4(c)(2)) is

19 amended—

20 (1) in subparagraph (A), by striking ‘‘subpara21 graph (B)’’ and inserting ‘‘subparagraphs (B), (C),

22 (D), and (E)’’; and

23 (2) by adding at the end the following:
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1 ‘‘(C) RECENTLY CLOSED FACILITIES.—A

2 State may designate a facility as a critical ac3 cess hospital if the facility—

4 ‘‘(i) was a nonprofit or public hospital

5 that ceased operations within the 3-year

6 period ending on the date of enactment of

7 the Health Care Preservation Act of 1999;

8 and

9 ‘‘(ii) as of the effective date of such

10 designation, meets the criteria for designa11 tion under subparagraph (B).

12 ‘‘(D) DOWNSIZED FACILITIES.—A State

13 may designate a health clinic or a health center

14 (as defined by the State) as a critical access

15 hospital if such clinic or center—

16 ‘‘(i) is licensed by the State as a

17 health clinic or a health center if the State

18 requires such licensure in order to operate

19 as a health clinic or health center;

20 ‘‘(ii) was a nonprofit or public hos21 pital that was downsized to a health clinic

22 or health center; and

23 ‘‘(iii) as of the effective date of such

24 designation, meets the criteria for designa25 tion under subparagraph (B).
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1 ‘‘(E) FEDERALLY-QUALIFIED HEALTH

2 CENTER.—A State may designate a Federally3 qualified health center (as defined in section

4 1905(l)(2)(B)) as a critical access hospital if

5 such center—

6 ‘‘(i) operates a laboratory that has in

7 effect a certificate issued under section

8 353 of the Public Health Service Act that

9 permits such laboratory to perform tests

10 categorized as high complexity;

11 ‘‘(ii) operates a radiology department;

12 and

13 ‘‘(iii) as of the effective date of such

14 designation, meets the criteria for designa15 tion under subparagraph (B).’’.

16 (b) REVISION OF CRITERIA FOR DESIGNATION AS A

17 CRITICAL ACCESS HOSPITAL.—Section 1820(c)(2)(B)(iii)

18 (42 U.S.C. 1395i–4(c)(2)(B)(iii)) is amended by striking

19 ‘‘not to exceed 96 hours’’ and all that follows to the semi20 colon and inserting ‘‘not to exceed, on average, 96 hours

21 per patient’’.

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

23 this section take effect on the date of enactment of this

24 Act.
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1 SEC. 202. AUTHORITY TO ESTABLISH A PROSPECTIVE PAY2 MENT SYSTEM FOR RHC SERVICES.

3 (a) ESTABLISHMENT OF SYSTEM.—Section 1833 (42

4 U.S.C. 1395l) is amended by adding at the end the fol5 lowing:

6 ‘‘(u) AUTHORITY TO ESTABLISH PROSPECTIVE PAY7 MENT SYSTEM FOR RURAL HEALTH CLINIC SERVICES.—

8 ‘‘(1) IN GENERAL.—Notwithstanding sub9 sections (a)(3) and (f), the Secretary may establish

10 by regulation a prospective payment system for rural

11 health clinic services (except for such services pro12 vided by a rural health clinic located in a rural hos13 pital with less than 50 beds).

14 ‘‘(2) BUDGET NEUTRAL PAYMENTS.—If the

15 Secretary establishes a prospective payment system

16 pursuant to paragraph (1), the Secretary shall es17 tablish the initial payment levels under such system

18 in a manner that results in aggregate payments (in19 cluding payments by individuals to whom services

20 are provided) for the first year, as estimated by the

21 Secretary, approximately equal to the aggregate pay22 ments that would have otherwise been made under

23 this part.’’.

24 (b) CONFORMING AMENDMENTS.—
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1 (1) PAYMENT.—Section 1833(a)(3) (42 U.S.C.

2 1395l(a)(3)) is amended by inserting ‘‘subject to

3 subsection (u),’’ before ‘‘in the case’’.

4 (2) LIMITS.—Section 1833(f) (42 U.S.C.

5 1395l(f)) is amended by striking ‘‘In establishing’’

6 and inserting ‘‘Subject to subsection (u), in estab7 lishing’’.

8 (3) REQUIREMENT FOR RURAL HEALTH CLIN9 ICS.—Clause (ii) of the second sentence of section

10 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended

11 by inserting ‘‘(and section 1833(u) if the Secretary

12 implements a prospective payment system under

13 that section)’’ after ‘‘section 1833’’.

14 SEC. 203. REQUIREMENT TO CONSIDER RURAL ISSUES IN

15 ESTABLISHING FEE SCHEDULE FOR AMBU16 LANCE SERVICES.

17 (a) IN GENERAL.—Section 1834(l)(2)(C) (42 U.S.C.

18 1395m(l)(2)(C)) is amended by inserting ‘‘, including dif19 ferences in rural and non-rural areas’’ after ‘‘differences’’.

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

21 subsection (a) takes effect as if included in the enactment

22 of the Balanced Budget Act of 1997 (Public Law 105–

23 33; 111 Stat. 251).
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1 SEC. 204. STOP-LOSS PROTECTION FOR RURAL HOSPITAL

2 OPD SERVICES.

3 (a) IN GENERAL.—Section 1833(t)(10)(D)(i) (42

4 U.S.C. 1395l(t)(10)(D)(i)) (as added by section 402) is

5 amended by adding at the end the following:

6 ‘‘The applicable percentage shall be 100

7 percent with respect to covered OPD serv8 ices furnished during a transition year in

9 a rural hospital.’’.

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

11 subsection (a) take effect as if included in the amendments

12 made by section 4523 of the Balanced Budget Act of 1997

13 (Public Law 105–33; 111 Stat. 445).

14 TITLE III—SAFETY NET

15 PROVIDERS

16 SEC. 301. NEW PROSPECTIVE PAYMENT SYSTEM FOR FED17 ERALLY-QUALIFIED HEALTH CENTERS AND

18 RURAL HEALTH CLINICS UNDER THE MED19 ICAID PROGRAM.

20 (a) IN GENERAL.—Section 1902(a)(13) (42 U.S.C.

21 1396a(a)(13)) is amended—

22 (1) in subparagraph (A), by adding ‘‘and’’ at

23 the end;

24 (2) in subparagraph (B), by striking ‘‘and’’ at

25 the end; and

26 (3) by striking subparagraph (C).
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1 (b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section

2 1902 (42 U.S.C. 1396a) is amended by adding at the end

3 the following:

4 ‘‘(aa) PAYMENT FOR SERVICES PROVIDED BY FED5 ERALLY-QUALIFIED HEALTH CENTERS AND RURAL

6 HEALTH CLINICS.—

7 ‘‘(1) IN GENERAL.—Beginning with fiscal year

8 2000 and each succeeding fiscal year, the State plan

9 shall provide for payment for services described in

10 section 1905(a)(2)(C) furnished by a Federally11 qualified health center and services described in sec12 tion 1905(a)(2)(B) furnished by a rural health clinic

13 in accordance with the provisions of this subsection.

14 ‘‘(2) FISCAL YEAR 2000.—For fiscal year 2000,

15 the State plan shall provide for payment for such

16 services in an amount (calculated on a per visit

17 basis) that is equal to 100 percent of the costs in18 curred by the center or clinic in furnishing such

19 services during fiscal year 1999 which are reason20 able and related to the cost of furnishing such serv21 ices, or based on such other tests of reasonableness

22 as the Secretary prescribes in regulations under sec23 tion 1833(a)(3), or in the case of services to which

24 such regulations do not apply, the same methodology

25 used under section 1833(a)(3), adjusted to take into
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1 account any increase in the scope of such services

2 furnished by the center or clinic during fiscal year

3 2000.

4 ‘‘(3) FISCAL YEAR 2001 AND SUCCEEDING

5 YEARS.—For fiscal year 2001 and each succeeding

6 fiscal year, the State plan shall provide for payment

7 for such services in an amount (calculated on a per

8 visit basis) that is equal to the amount calculated for

9 such services under this subsection for the preceding

10 fiscal year—

11 ‘‘(A) increased by the percentage increase

12 in the MEI (Medicare economic index) (as de13 fined in section 1842(i)(3)) applicable to pri14 mary care services (as defined in section

15 1842(i)(4)) for that fiscal year; and

16 ‘‘(B) adjusted to take into account any in17 crease in the scope of such services furnished by

18 the center or clinic during that fiscal year.

19 ‘‘(4) ESTABLISHMENT OF INITIAL YEAR PAY20 MENT AMOUNT FOR NEW CENTERS OR CLINICS.—In

21 any case in which an entity first qualifies as a Fed22 erally-qualified health center or rural health clinic

23 after October 1, 2000, the State plan shall provide

24 for payment for services described in section

25 1905(a)(2)(C) furnished by the center or services
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1 described in section 1905(a)(2)(B) furnished by the

2 clinic in the first fiscal year in which the center or

3 clinic qualifies in an amount (calculated on a per

4 visit basis) that is equal to 100 percent of the costs

5 of furnishing such services during such fiscal year in

6 accordance with the regulations and methodology re7 ferred to in paragraph (2). For each fiscal year fol8 lowing the fiscal year in which the entity first quali9 fies as a Federally-qualified health center or rural

10 health clinic, the State plan shall provide for the

11 payment amount to be calculated in accordance with

12 paragraph (3) of this subsection.

13 ‘‘(5) ADMINISTRATION IN THE CASE OF MAN14 AGED CARE.—In the case of services furnished by a

15 Federally-qualified health center or rural health clin16 ic pursuant to a contract between the center or clinic

17 and a managed care entity (as defined in section

18 1932(a)(1)(B)), the State plan shall provide for pay19 ment to the center or clinic (at least quarterly) by

20 the State of a supplemental payment equal to the

21 amount (if any) by which the amount determined

22 under paragraphs (2), (3), and (4) of this subsection

23 exceeds the amount of the payments provided under

24 the contract.
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1 ‘‘(6) ALTERNATIVE PAYMENT SYSTEM.—Not2 withstanding any other provision of this section, the

3 State plan may provide for payment in any fiscal

4 year to a Federally-qualified health center (as de5 fined in section 1905(l)(2)(B)) for services described

6 in section 1905(a)(2)(C) or to a rural health clinic

7 for services described in section 1905(a)(2)(B) in an

8 amount that is in excess of the amount otherwise re9 quired to be paid to the center or clinic under this

10 subsection.’’.

11 (c) CONFORMING AMENDMENTS.—

12 (1) Section 4712 of the Balanced Budget Act

13 of 1997 (Public Law 105–33; 111 Stat. 508) is

14 amended by striking subsection (c).

15 (2) Section 1915(b) (42 U.S.C. 1396n(b)) is

16 amended by striking ‘‘1902(a)(13)(E)’’ and insert17 ing ‘‘1902(aa)’’.

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

19 this section take effect on October 1, 1999.
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1 SEC. 302. CARVING OUT DSH PAYMENTS FROM PAYMENTS

2 TO MEDICARE+CHOICE ORGANIZATIONS AND

3 PAYING THE AMOUNTS DIRECTLY TO DSH

4 HOSPITALS ENROLLING MEDICARE+CHOICE

5 ENROLLEES.

6 (a) IN GENERAL.—Section 1853(c)(3) (42 U.S.C.

7 1395w–23(c)(3)) is amended—

8 (1) in subparagraph (A), by striking ‘‘subpara9 graph (B)’’ and inserting ‘‘subparagraphs (B) and

10 (D)’’;

11 (2) by redesignating subparagraph (D) as sub12 paragraph (E); and

13 (3) by inserting after subparagraph (C) the fol14 lowing:

15 ‘‘(D) REMOVAL OF PAYMENTS ATTRIB16 UTABLE TO DISPROPORTIONATE SHARE PAY17 MENTS FROM CALCULATION OF ADJUSTED AV18 ERAGE PER CAPITA COST.—

19 ‘‘(i) IN GENERAL.—In determining

20 the area-specific Medicare+Choice capita21 tion rate under subparagraph (A) for a

22 year (beginning with 2001), the annual per

23 capita rate of payment for 1997 deter24 mined under section 1876(a)(1)(C) shall be

25 adjusted, subject to clause (ii), to exclude

26 from the rate the additional payments that
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1 the Secretary estimates were made during

2 1997 for additional payments described in

3 section 1886(d)(5)(F).

4 ‘‘(ii) TREATMENT OF PAYMENTS COV5 ERED UNDER STATE HOSPITAL REIM6 BURSEMENT SYSTEM.—To the extent that

7 the Secretary estimates that an annual per

8 capita rate of payment for 1997 described

9 in clause (i) reflects payments to hospitals

10 reimbursed under section 1814(b)(3), the

11 Secretary shall estimate a payment adjust12 ment that is comparable to the payment

13 adjustment that would have been made

14 under clause (i) if the hospitals had not

15 been reimbursed under such section.’’.

16 (b) ADDITIONAL PAYMENTS FOR MANAGED CARE

17 ENROLLEES.—Section 1886(d)(5)(F) (42 U.S.C.

18 1395ww(d)(5)(F)) is amended—

19 (1) in clause (ii), by striking ‘‘clause (ix)’’ and

20 inserting ‘‘clauses (ix) and (x)’’; and

21 (2) by adding at the end the following:

22 ‘‘(x)(I) For cost reporting periods (or portions there23 of) occurring on or after January 1, 2001, the Secretary

24 shall provide for an additional payment amount for each

25 applicable discharge of any subsection (d) hospital that is
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1 a disproportionate share hospital (as described in clause

2 (i)).

3 ‘‘(II) For purposes of this clause, the term ‘applicable

4 discharge’ means the discharge of any individual who is

5 enrolled with a Medicare+Choice organization under part

6 C.

7 ‘‘(III) The amount of the payment under this clause

8 with respect to any applicable discharge shall be equal to

9 the estimated average per discharge amount (as deter10 mined by the Secretary) that would otherwise have been

11 paid under this subparagraph if the individual had not

12 been enrolled as described in subclause (II).

13 ‘‘(IV) The Secretary shall establish rules for an addi14 tional payment amount for any hospital reimbursed under

15 a reimbursement system authorized under section

16 1814(b)(3) if such hospital would qualify as a dispropor17 tionate share hospital under clause (i) were it not so reim18 bursed. Such payment shall be determined in the same

19 manner as the amount of payment is determined under

20 this clause for disproportionate share hospitals.’’.

21 SEC. 303. LIMITATION IN REDUCTION OF PAYMENTS TO

22 DISPROPORTIONATE SHARE HOSPITALS.

23 (a) IN GENERAL.—Section 1886(d)(5)(F)(ix) (42

24 U.S.C. 1395ww(d)(5)(F)(ix)) is amended—
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1 (1) in subclause (IV), by striking ‘‘4’’ and in2 serting ‘‘3’’; and

3 (2) in subclause (V), by striking ‘‘5’’ and in4 serting ‘‘3’’.

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

6 subsection (a) takes effect as if included in the amend7 ments made by section 4403 of the Balanced Budget Act

8 of 1997 (Public Law 105–33; 111 Stat. 398).

9 TITLE IV—OTHER HOSPITAL

10 PROVISIONS

11 SEC. 401. DELAY OF FINANCIAL LIMITATION ON REHABILI12 TATION SERVICES.

13 (a) IN GENERAL.—Section 1833(g) (42 U.S.C.

14 1395l(g)) is amended by adding at the end the following:

15 ‘‘(4) Notwithstanding the preceding provisions of this

16 subsection, for outpatient physical therapy services, out17 patient occupational therapy services, and outpatient

18 speech-language pathology services covered under this title

19 and furnished on or after January 1, 2000, and before

20 January 1, 2002, the Secretary shall implement a pay21 ment methodology based on the classification of individ22 uals by diagnostic category, functional status, and prior

23 use of services in both inpatient and outpatient settings.’’.

24 (b) BUDGET NEUTRALITY IN IMPLEMENTATION.—

25 The payment methodology implemented under section
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1 1833(g)(4) (42 U.S.C. 1395l(g)(4)), as added by sub2 section (a), shall be designed so that the methodology, tak3 ing into account the increased expenditures resulting from

4 the implementation of such methodology, does not result

5 in any increase or decrease in the expenditures under title

6 XVIII of the Social Security Act on a fiscal year basis.

7 SEC. 402. MULTIYEAR TRANSITION TO PROSPECTIVE PAY8 MENT SYSTEM FOR HOSPITAL OUTPATIENT

9 DEPARTMENT SERVICES.

10 (a) IN GENERAL.—Section 1833(t) (42 U.S.C.

11 1395l(t)) is amended by adding at the end the following:

12 ‘‘(10) MULTIYEAR TRANSITION.—

13 ‘‘(A) IN GENERAL.—In the case of covered

14 OPD services furnished by a hospital during a

15 transition year, the Secretary shall increase the

16 payments for such services under the prospec17 tive payment system established under this sub18 section by the amount (if any) which the Sec19 retary determines necessary to ensure that the

20 payment to cost ratio of the hospital for the

21 transition year equals a ratio equal to the appli22 cable percentage of the payment to cost ratio of

23 the hospital for 1996.

24 ‘‘(B) PAYMENT TO COST RATIO.—
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1 ‘‘(i) IN GENERAL.—The payment to

2 cost ratio of a hospital for any year is the

3 ratio which—

4 ‘‘(I) the hospital’s reimbursement

5 under this title for covered OPD serv6 ices furnished during the year, includ7 ing through cost-sharing described in

8 subparagraph (D)(ii), bears to

9 ‘‘(II) the cost of such services.

10 ‘‘(ii) CALCULATION OF 1996 PAYMENT

11 TO COST RATIO.—The Secretary shall de12 termine each hospital’s payment to cost

13 ratio for 1996 as if the amendments made

14 to this title by the provisions of section

15 4521 of the Balanced Budget Act of 1997

16 were in effect in 1996.

17 ‘‘(iii) TRANSITION YEARS.—The Sec18 retary shall estimate each payment to cost

19 ratio of a hospital for any transition year

20 before the beginning of such year.

21 ‘‘(C) INTERIM PAYMENTS.—

22 ‘‘(i) IN GENERAL.—The Secretary

23 shall make interim payments to a hospital

24 during any transition year for which the
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1 Secretary estimates a payment is required

2 under subparagraph (A).

3 ‘‘(ii) ADJUSTMENTS.—If the Secretary

4 makes payments under clause (i) for any

5 transition year, the Secretary shall make

6 retrospective adjustments to each hospital

7 based on its settled cost report so that the

8 amount of any additional payment to a

9 hospital for such year equals the amount

10 described in subparagraph (A).

11 ‘‘(D) DEFINITIONS.—In this paragraph:

12 ‘‘(i) APPLICABLE PERCENTAGE.—The

13 term ‘applicable percentage’ means, with

14 respect to covered OPD services furnished

15 during—

16 ‘‘(I) the first full year (and any

17 portion of the immediately preceding

18 year) for which the prospective pay19 ment system under this subsection is

20 in effect, 95 percent;

21 ‘‘(II) the second full calendar

22 year for which such system is in ef23 fect, 90 percent; and
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1 ‘‘(III) the third full calendar year

2 for which such system is in effect, 85

3 percent.

4 ‘‘(ii) COST-SHARING.—The term ‘cost5 sharing’ includes—

6 ‘‘(I) copayment amounts de7 scribed in paragraph (5);

8 ‘‘(II) coinsurance described in

9 section 1866(a)(2)(A)(ii); and

10 ‘‘(III) the deductible described

11 under section 1833(b).

12 ‘‘(iii) TRANSITION YEAR.—The term

13 ‘transition year’ means any year (or por14 tion thereof) described in clause (i).

15 ‘‘(E) EFFECT ON COPAYMENTS.—Nothing

16 in this paragraph shall be construed as affect17 ing the unadjusted copayment amount de18 scribed in paragraph (3)(B).

19 ‘‘(F) APPLICATION WITHOUT REGARD TO

20 BUDGET NEUTRALITY.—The transitional pay21 ments made under this paragraph—

22 ‘‘(i) shall not be considered an adjust23 ment under paragraph (2)(E); and

24 ‘‘(ii) shall not be implemented in a

25 budget neutral manner.’’.
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1 (b) EFFECTIVE DATE.—The amendments made by

2 this section take effect as if included in the amendments

3 made by section 4523 of the Balanced Budget Act of 1997

4 (Public Law 105–33; 111 Stat. 445).

5 TITLE V—SKILLED NURSING

6 FACILITIES

7 SEC. 501. MODIFICATION OF CASE MIX CATEGORIES FOR

8 CERTAIN CONDITIONS.

9 (a) IN GENERAL.—For purposes of applying any for10 mula under paragraph (1) of section 1888(e) of the Social

11 Security Act (42 U.S.C. 1395yy(e)), for services provided

12 on or after October 1, 1999, and before the earlier of Oc13 tober 1, 2001, or the date described in subsection (c), the

14 Secretary of Health and Human Services shall increase

15 the adjusted Federal per diem rate otherwise determined

16 under paragraph (4) of such section for services provided

17 to any individual during the period in which such indi18 vidual is in a RUG III category by the applicable payment

19 add-on as determined in accordance with the following

20 table:

RUG III category Applicable payment add-on

SE3 .......................................................................................... $75.87

SE2 .......................................................................................... $65.70

SE1 .......................................................................................... $58.46

SSC .......................................................................................... $57.15

SSB .......................................................................................... $54.52

SSA .......................................................................................... $53.21

CC2 .......................................................................................... $56.82

CC1 .......................................................................................... $52.55

CB2 .......................................................................................... $49.93

CB1 .......................................................................................... $47.62
24

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RUG III category Applicable payment add-on

CA2 .......................................................................................... $47.30

CA1 .......................................................................................... $44.67.

1 (b) UPDATE.—The Secretary shall adjust the applica2 ble payment add-on under subsection (a) for fiscal year

3 2001 by the skilled nursing facility market basket percent4 age change (as defined under section 1888(e)(5)(B) of the

5 Social Security Act (42 U.S.C. 1395yy(e)(5)(B))) applica6 ble to such fiscal year.

7 (c) DATE DESCRIBED.—The date described in this

8 subsection is the date on which the Secretary of Health

9 and Human Services implements a case mix methodology

10 under section 1888(e)(4)(G)(i) of the Social Security Act

11 (42 U.S.C. 1395yy(e)(4)(G)(i)) that takes into account

12 adjustments for the provision of nontherapy ancillary serv13 ices and supplies such as drugs and respiratory therapy.

14 SEC. 502. EXCLUSION OF AMBULANCE SERVICES TO AND

15 FROM DIALYSIS TREATMENTS AND PROS16 THETIC SERVICES FROM THE PPS FOR SNFs.

17 (a) IN GENERAL.—The first sentence of section

18 1888(e)(2)(A)(ii) (42 U.S.C. 1395yy(e)(2)(A)(ii)) is

19 amended by inserting ‘‘ambulance services furnished an

20 individual in conjunction with a renal dialysis service,

21 prosthetic and orthotic devices, including testing, fitting,

22 or training in the use of prosthetic and orthotic devices,’’

23 after ‘‘subparagraphs (F) and (O) of section 1861(s)(2),’’.
25

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

2 this section applies to services furnished on or after the

3 date of enactment of this Act.

4 SEC. 503. WAIVER OF 3-DAY PRIOR HOSPITALIZATION RE5 QUIREMENT FOR COVERAGE OF SKILLED

6 NURSING FACILITY SERVICES.

7 (a) IN GENERAL.—Not later than October 1, 2000,

8 the Secretary of Health and Human Services (in this sec9 tion referred to as the ‘‘Secretary’’) shall provide for cov10 erage under section 1812(f) of the Social Security Act (42

11 U.S.C. 1395d(f)) of extended care services (as defined in

12 section 1861(h) of such Act (42 U.S.C. 1395x(h))) for in13 dividuals with a condition that is classifiable within a diag14 nosis-related group identified under subsection (b).

15 (b) IDENTIFICATION OF DRGS.—For purposes of

16 subsection (a) and subject to subsections (f) through (h),

17 the diagnosis-related groups identified under this sub18 section are—

19 (1) diagnosis-related group code 410 (relating

20 to chemotherapy without acute leukemia as sec21 ondary diagnosis); and

22 (2) the diagnosis-related groups described in

23 subsections (c) through (e).

24 (c) IDENTIFICATION OF DRGS THROUGH A MEDI25 CARE SELECT STUDY AND REPORT.—
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1 (1) IN GENERAL.—The diagnosis related groups

2 described in this subsection are those diagnosis-re3 lated groups identified in the report submitted under

4 paragraph (3) and determined to reduce the total of

5 payments made under the Medicare program under

6 title XVIII of the Social Security Act (42 U.S.C.

7 1395 et seq.) (in this section referred to as the

8 ‘‘Medicare program’’).

9 (2) STUDY.—

10 (A) IN GENERAL.—The Secretary shall

11 conduct a study of extended care services pro12 vided in skilled nursing facilities for which cov13 erage is provided under the Medicare select pro14 gram under section 1882(t) of the Social Secu15 rity Act (42 U.S.C. 1395ss(t)) to obtain data

16 concerning—

17 (i) the length of stay of individuals in

18 hospitals; and

19 (ii) extended care services provided to

20 individuals in skilled nursing facilities.

21 (B) DRGS IDENTIFIED.—The study con22 ducted under subparagraph (A) shall include

23 the identification of those diagnosis-related

24 groups that are generally treated with less than

25 a 3-day hospital stay under such program.
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1 (3) REPORT.—Not later than January 1, 2001,

2 the Secretary shall submit to the appropriate com3 mittees of Congress a report on the study conducted

4 under paragraph (2) that shall include—

5 (A) a description of each diagnosis-related

6 group identified under subparagraph (B) of

7 such paragraph; and

8 (B) a determination as to whether waiving

9 the 3-day hospitalization stay requirement with

10 respect to each diagnosis-related group would

11 reduce the total of payments made under the

12 Medicare program.

13 (d) IDENTIFICATION OF DRGS THROUGH DEM14 ONSTRATION PROGRAMS.—

15 (1) IN GENERAL.—The diagnosis related groups

16 described in this subsection are those diagnosis-re17 lated groups identified in the report submitted under

18 paragraph (3) and determined to reduce the total of

19 payments made under the Medicare program.

20 (2) DEMONSTRATION PROGRAMS.—

21 (A) ESTABLISHMENT.—The Secretary

22 shall—

23 (i) establish demonstration programs

24 under which the Secretary provides for

25 coverage under section 1812(f) of the So-
28

•S 1582 IS

1 cial Security Act (42 U.S.C. 1395d(f)) of

2 extended care services for individuals with

3 a condition that is classifiable within a di4 agnosis-related group identified by the Sec5 retary under subparagraph (B) in the geo6 graphic areas selected under subparagraph

7 (C); and

8 (ii) collect the data described in sub9 paragraph (D).

10 (B) DRGS IDENTIFIED.—The Secretary

11 shall identify those diagnosis-related groups for

12 which waiver of the 3-day hospitalization stay

13 requirement is likely to reduce the total of pay14 ments made under the Medicare program.

15 (C) SELECTION OF GEOGRAPHIC AREAS.—

16 The geographic areas selected under this sub17 paragraph are those geographic areas that the

18 Secretary expects—

19 (i) to maximize the provision of appro20 priate statistically relevant data on the

21 cost of—

22 (I) extended care services pro23 vided in skilled nursing facilities; and

24 (II) inpatient hospital services

25 (as defined in section 1861(b) of the
29

•S 1582 IS

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

2 1395x(b))); and

3 (ii) to minimize regional differences in

4 the practice of medicine.

5 (D) COLLECTION OF DATA.—The Sec6 retary shall collect appropriate statistically rel7 evant data on the cost of extended care services

8 and inpatient hospital services provided—

9 (i) in the geographic areas selected

10 under subparagraph (C)—

11 (I) before the implementation of

12 the demonstration programs under

13 this subsection; and

14 (II) after the implementation of

15 such programs; and

16 (ii) in the geographic areas not se17 lected under such subparagraph for the pe18 riods described in subclauses (I) and (II)

19 of clause (i).

20 (3) REPORT.—

21 (A) IN GENERAL.—Not later than January

22 1, 2002, the Secretary shall submit to the ap23 propriate committees of Congress a report—

24 (i) on the demonstration programs

25 conducted under paragraph (2); and
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1 (ii) comparing the effect of the waiver

2 of 3-day prior hospitalization requirement

3 for coverage of extended care services—

4 (I) among geographic areas; and

5 (II) before and after the imple6 mentation of the programs established

7 under paragraph (2).

8 (B) CONTENTS.—The report submitted

9 under subparagraph (A) shall contain—

10 (i) a description of each diagnosis-re11 lated group for which a demonstration pro12 gram is implemented under paragraph (2);

13 and

14 (ii) a determination as to whether

15 waiving the 3-day hospitalization stay re16 quirement with respect to each diagnosis17 related group would reduce the total of

18 payments made under the Medicare pro19 gram.

20 (C) CONSIDERATION OF DATA.—In pre21 paring such report, the Secretary shall consider

22 the data collected under paragraph (2)(D).

23 (e) IDENTIFICATION OF ADDITIONAL DRGS.—The

24 diagnosis related groups described in this subsection are

25 those diagnosis-related groups not otherwise identified
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1 under this section that the Secretary determines would re2 duce the total of payments made under the Medicare pro3 gram if such diagnosis-related group were identified under

4 subsection (b).

5 (f) REQUIREMENT OF HOSPITAL DEDUCTIBLES AND

6 COINSURANCE.—

7 (1) IN GENERAL.—For purposes of this section,

8 when the requirement for a 3-day hospitalization

9 stay has been waived under this section, the Sec10 retary shall require the application of any

11 deductibles and coinsurance under section 1813 of

12 the Social Security Act (42 U.S.C. 1395e) beginning

13 with the first day of extended care services provided

14 in a skilled nursing facility.

15 (2) REDUCTION OF AMOUNT.—The Secretary

16 shall reduce the amount of any deductible or coin17 surance applied under this subsection based on the

18 best estimate of the Secretary of the difference be19 tween the average cost of hospital inpatient services

20 for the individual involved and the average cost of

21 services provided to that individual in a skilled nurs22 ing facility.

23 (g) RECOVERY OF INCREASED PAYMENTS.—If the

24 Secretary determines that the application of this section

25 in a fiscal year has resulted in any increase in the total
32

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1 of payments made under the Medicare program for the

2 fiscal year above the total of such payments that would

3 have been made in the fiscal year if this section did not

4 apply (taking into account any reduction in the total of

5 payments made under such program as a result of the

6 elimination of or a reduction in the length of hospitaliza7 tion), the Secretary—

8 (1) shall, notwithstanding any other provision

9 of law, provide for a reduction in the amounts other10 wise payable under part A of such title (42 U.S.C.

11 1395 et seq.) for post-hospital extended care services

12 (as defined in section 1861(i) of the Social Security

13 Act (42 U.S.C. 1395x(i))) in the following fiscal

14 year by such proportion as will reduce the total of

15 payments made in such fiscal year under such part

16 by the total amount of such an increase in the pre17 vious fiscal year; and

18 (2) may rescind the selection of any diagnosis19 related group identified under subsection (b) if the

20 application of this section with respect to such group

21 has resulted in an increase in the total of payments

22 made under the Medicare program.

23 (h) SPECIAL RULE FOR DUAL ELIGIBLES.—In the

24 case of an individual eligible for assistance for nursing fa25 cility services under title XIX of the Social Security Act
33

•S 1582 IS

1 (42 U.S.C. 1396 et seq.), the provisions of such title shall

2 apply as if this section had not been enacted.

3 SEC. 504. EXTENSION OF CERTAIN MEDICARE COMMUNITY

4 NURSING ORGANIZATION DEMONSTRATION

5 PROJECTS.

6 Notwithstanding any other provision of law, dem7 onstration projects conducted under section 4079 of the

8 Omnibus Budget Reconciliation Act of 1987 may be con9 ducted for an additional period of 5 years, and the dead10 line for any report required relating to the results of such

11 projects shall be not later than 6 months before the end

12 of such additional period.

13 TITLE VI—COST-EFFICIENT

14 HOME HEALTH PROVIDERS

15 SEC. 601. DELAY IN CONTINGENCY REDUCTION.

16 (a) IN GENERAL.—Section 4603(e) of the Balanced

17 Budget Act of 1997 (42 U.S.C. 1395fff note), as amended

18 by section 5101(c)(3) of the Tax and Trade Relief Exten19 sion Act of 1998 (contained in division J of Public Law

20 105–277), is amended—

21 (1) by striking ‘‘described in subsection (d),’’

22 and inserting ‘‘beginning on or after September 30,

23 2001’’; and

24 (2) by striking ‘‘September 30, 2000’’ and in25 serting ‘‘September 30, 2001’’.
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1 (b) EFFECTIVE DATE.—The amendments made by

2 this section take effect as if included in the enactment of

3 the Balanced Budget Act of 1997 (Public Law 105–33;

4 111 Stat. 251).

5 SEC. 602. ELIMINATION OF 15-MINUTE REPORTING RE6 QUIREMENT.

7 (a) IN GENERAL.—Section 1895(c)(2) (42 U.S.C.

8 1395fff(c)(2)) is amended by striking ‘‘, as measured in

9 15 minute increments’’.

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

11 subsection (a) takes effect as if included in the amend12 ments made by section 4603 of the Balanced Budget Act

13 of 1997 (Public Law 105–33; 111 Stat. 467).

14 SEC. 603. RECOUPMENT OF OVERPAYMENTS.

15 (a) 36-MONTH REPAYMENT PERIOD.—

16 (1) IN GENERAL.—Except as provided in para17 graph (2), in the case of an overpayment by the Sec18 retary of Health and Human Services to a home

19 health agency for home health services furnished

20 during a cost reporting period beginning on or after

21 October 1, 1997, as a result of payment limitations

22 provided for under clause (v), (vi), or (viii) of section

23 1861(v)(1)(L) of the Social Security Act (42 U.S.C.

24 1395x(v)(1)(L)), the home health agency may elect

25 to repay the amount of such overpayment over a 36-
35

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1 month period beginning on the date of notification

2 of such overpayment.

3 (2) EXCEPTION.—No home health agency may

4 make an election under paragraph (1) if any final

5 adverse action (as defined in section 1128E(g)(1) of

6 such Act (42 U.S.C. 1320a–7e(g)(1))) has been

7 taken against such agency.

8 (b) NO INTEREST ON OVERPAYMENT AMOUNTS.—In

9 the case of an agency that makes an election under sub10 section (a), no interest shall accrue on the outstanding

11 balance of the amount of overpayment during such 36-

12 month period.

13 (c) TERMINATION.—No election under subsection (a)

14 may be made for cost reporting periods (or portions there15 of) beginning on or after the date of implementation of

16 the prospective payment system for home health services

17 under section 1895 of the Social Security Act (42 U.S.C.

18 1395fff).

19 (d) EFFECTIVE DATE.—The provisions of subsection

20 (a) take effect as if included in the enactment of the Bal21 anced Budget Act of 1997 (Public Law 105–33; 111 Stat.

22 251).

23 SEC. 604. INCREASE IN PER VISIT LIMIT.

24 Section 1861(v)(1)(L)(i) (42 U.S.C.

25 1395x(v)(1)(L)(i)), as amended by section 5101(b) of the
36

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1 Tax and Trade Relief Extension Act of 1998 (contained

2 in division J of Public Law 105–277), is amended—

3 (1) in subclause (IV), by striking ‘‘or’’;

4 (2) in subclause (V)—

5 (A) by inserting ‘‘and before October 1,

6 1999,’’ after ‘‘October 1, 1998,’’; and

7 (B) by striking the period and inserting ‘‘,

8 or’’; and

9 (3) by adding at the end the following:

10 ‘‘(VI) October 1, 1999, 112 percent of such me11 dian.’’.

12 TITLE VII—MEDICARE+CHOICE

13 AND MEDIGAP PROTECTIONS

14 FOR SENIORS AND THE DIS15 ABLED

16 SEC. 701. TWO-YEAR MEDICARE+CHOICE TRIAL PERIOD.

17 (a) IN GENERAL.—Section 1882(s)(3)(B) (42 U.S.C.

18 1395ss(s)(3)(B)) is amended—

19 (1) in clause (v)(III), by striking ‘‘12’’ and in20 serting ‘‘24’’; and

21 (2) in clause (vi), by striking ‘‘12’’ and insert22 ing ‘‘24’’.

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

24 subsection (a) applies to terminations and
37

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1 discontinuations occurring on or after the date of enact2 ment of this Act.

3 SEC. 702. PERMITTING ENROLLMENT IN ALTERNATIVE

4 PLANS UPON RECEIPT OF NOTICE OF

5 MEDICARE+CHOICE PLAN TERMINATION.

6 (a) MEDICARE+CHOICE PLANS.—Section 1851(e)(4)

7 (42 U.S.C. 1395w–21(e)(4)) is amended by striking sub8 paragraph (A) and inserting the following:

9 ‘‘(A)(i) the certification of the organization

10 or plan under this part has been terminated, or

11 the organization or plan has notified the indi12 vidual of an impending termination of such cer13 tification; or

14 ‘‘(ii) the organization has terminated or

15 otherwise discontinued providing the plan in the

16 area in which the individual resides, or has no17 tified the individual of an impending termi18 nation or discontinuation of such plan;’’.

19 (b) MEDIGAP PLANS.—

20 (1) IN GENERAL.—Section 1882(s)(3)(A) (42

21 U.S.C. 1395ss(s)(3)(A)) is amended in the matter

22 following clause (iii)—

23 (A) by inserting ‘‘(92 days in the case of

24 a termination or discontinuation of coverage
38

•S 1582 IS

1 under the types of circumstances described in

2 section 1851(e)(4)(A))’’ after ‘‘63 days’’;

3 (B) by inserting ‘‘(or, if elected by the in4 dividual, the date of notification of the indi5 vidual by the plan or organization of the im6 pending termination or discontinuance of the

7 plan in the area in which the individual re8 sides)’’ after ‘‘the date of the termination of en9 rollment described in such subparagraph’’; and

10 (C) by inserting ‘‘(or date of such notifica11 tion)’’ after ‘‘the date of termination or

12 disenrollment’’.

13 (2) EFFECTIVE DATE.—The amendments made

14 by this subsection apply to notices of intended termi15 nation made by group health plans and

16 Medicare+Choice organizations after the date of en17 actment of this Act.

18 SEC. 703. GUARANTEED ISSUANCE OF CERTAIN MEDIGAP

19 POLICIES IN CASES OF A SUBSTANTIAL

20 CHANGE IN BENEFITS UNDER A

21 MEDICARE+CHOICE PLAN.

22 (a) IN GENERAL.—Section 1851(e)(4)(C) (42 U.S.C.

23 1395w–21(e)(4)(C)) is amended—

24 (1) in clause (i), by striking ‘‘or’’ at the end;

25 and
39

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1 (2) by adding at the end the following:

2 ‘‘(iii) the organization offering the

3 plan substantially changed the benefits of4 fered under the plan in which the indi5 vidual enrolled; or’’.

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

7 subsection (a) applies to terminations and

8 discontinuations occurring on or after the date of enact9 ment of this Act.

10 SEC. 704. GUARANTEED ISSUANCE OF CERTAIN MEDIGAP

11 POLICIES TO DISABLED MEDICARE+CHOICE

12 DISENROLLEES.

13 (a) IN GENERAL.—Section 1882(s)(3)(C) (42 U.S.C.

14 1395ss(s)(3)(C)) is amended by adding at the end the fol15 lowing:

16 ‘‘(E) For purposes of this paragraph, in the case of

17 an individual otherwise described in subparagraph (B)(v)

18 except that such individual is under age 65, such indi19 vidual shall be deemed to be an individual described in

20 such subparagraph’’.

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

22 subsection (a) applies to terminations and

23 discontinuations occurring on or after the date of enact24 ment of this Act.
40

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1 SEC. 705. ISSUANCE OF SAME MEDIGAP BENEFIT PACKAGE

2 GUARANTEED FOR CERTAIN

3 MEDICARE+CHOICE DISENROLLEES.

4 (a) IN GENERAL.—Section 1882(s)(3)(C)(ii) (42

5 U.S.C. 1395ss(s)(3)(C)(ii)) is amended by striking ‘‘, if

6 available from the same issuer, or, if not so available,’’

7 and inserting ‘‘or, if not available,’’.

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

9 subsection (a) applies to terminations and

10 discontinuations occurring on or after the date of enact11 ment of this Act.

12 SEC. 706. PROHIBITION OF ATTAINED-AGE RATING OF PRE13 MIUMS FOR MEDIGAP POLICIES.

14 Section 1882 (42 U.S.C. 1395ss) is amended by add15 ing at the end the following:

16 ‘‘(v)(1) A Medicare supplemental policy may not be

17 issued or renewed (or otherwise provide coverage after the

18 deadline established under paragraph (2)) in any State

19 unless the premiums for the policy do not increase for an

20 individual under the policy based on the aging of the indi21 vidual.

22 ‘‘(2) The requirement of paragraph (1) shall apply

23 to premiums for policies under a timetable, recognized by

24 the Secretary, that provides for an appropriate phase-in

25 of such requirement. The Secretary shall recognize as the

26 timetable such timetable as the National Association of
41

•S 1582 IS

1 Insurance Commissioners may recommend to the Sec2 retary within 9 months after the date of enactment of this

3 subsection.’’.

4 TITLE VIII—MEDICARE PRESER5 VATION THROUGH FRAUD

6 PREVENTION

7 SEC. 801. SITE INSPECTIONS AND BACKGROUND CHECKS.

8 (a) SITE INSPECTIONS FOR DME SUPPLIERS, COM9 MUNITY MENTAL HEALTH CENTERS, AND OTHER PRO10 VIDER GROUPS.—Title XVIII (42 U.S.C. 1395 et seq.) is

11 amended by adding at the end the following:

12 ‘‘SITE INSPECTIONS FOR DME SUPPLIERS, COMMUNITY

13 MENTAL HEALTH CENTERS, AND OTHER PROVIDER

14 GROUPS

15 ‘‘SEC. 1897. (a) SITE INSPECTIONS.—

16 ‘‘(1) IN GENERAL.—The Secretary shall con17 duct a site inspection for each applicable provider

18 (as defined in paragraph (2)) that applies for a pro19 vider number in order to provide items or services

20 under this title. Such site inspection shall be in addi21 tion to any other site inspection that the Secretary

22 would otherwise conduct with regard to an applica23 ble provider.

24 ‘‘(2) APPLICABLE PROVIDER DEFINED.—
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1 ‘‘(A) IN GENERAL.—Except as provided in

2 subparagraph (B), in this section, the term ‘ap3 plicable provider’ means—

4 ‘‘(i) a supplier of durable medical

5 equipment (including items described in

6 section 1834(a)(13));

7 ‘‘(ii) a supplier of prosthetics,

8 orthotics, or supplies (including items de9 scribed in paragraphs (8) and (9) of sec10 tion 1861(s));

11 ‘‘(iii) a community mental health cen12 ter; or

13 ‘‘(iv) any other provider group, as de14 termined by the Secretary.

15 ‘‘(B) EXCEPTION.—In this section, the

16 term ‘applicable provider’ does not include—

17 ‘‘(i) a physician that provides durable

18 medical equipment (as so described) or

19 prosthetics, orthotics, or supplies (as so de20 scribed) to an individual as incident to an

21 office visit by such individual; or

22 ‘‘(ii) a hospital that provides durable

23 medical equipment (as described in sub24 paragraph (A)(i)) or prosthetics, orthotics,

25 or supplies (as described in subparagraph
43

•S 1582 IS

1 (A)(ii)) to an individual as incident to an

2 emergency room visit by such individual.

3 ‘‘(b) STANDARDS AND REQUIREMENTS.—In con4 ducting the site inspection pursuant to subsection (a), the

5 Secretary shall ensure that the site being inspected is in

6 full compliance with all the conditions and standards of

7 participation and requirements for obtaining Medicare

8 billing privileges under this title.

9 ‘‘(c) TIME.—The Secretary shall conduct the site in10 spection for an applicable provider prior to the issuance

11 of a provider number to such provider.

12 ‘‘(d) TIMELY REVIEW.—The Secretary shall provide

13 for procedures to ensure that the site inspection required

14 under this section does not unreasonably delay the

15 issuance of a provider number to an applicable provider.’’.

16 (b) BACKGROUND CHECKS.—Title XVIII (42 U.S.C.

17 1395 et seq.) (as amended by subsection (a)) is amended

18 by adding at the end the following:

19 ‘‘BACKGROUND CHECKS

20 ‘‘SEC. 1898. (a) BACKGROUND CHECK REQUIRED.—

21 Except as provided in subsection (b), the Secretary shall

22 conduct a background check on any individual or entity

23 that applies to the Secretary for a provider number for

24 the purpose of furnishing any item or service under this

25 title. In performing the background check, the Secretary

26 shall—
44

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1 ‘‘(1) conduct the background check before

2 issuing a provider number to an individual or entity;

3 ‘‘(2) include a search of criminal records in the

4 background check; and

5 ‘‘(3) provide for procedures that ensure the

6 background check does not unreasonably delay the

7 issuance of a provider number to an eligible indi8 vidual or entity.

9 ‘‘(b) USE OF STATE LICENSING PROCEDURE.—The

10 Secretary may use the results of a State licensing proce11 dure as a background check under subsection (a) if the

12 State licensing procedure meets the requirements of sub13 section (a).

14 ‘‘(c) ATTORNEY GENERAL REQUIRED TO PROVIDE

15 INFORMATION.—

16 ‘‘(1) IN GENERAL.—Upon request of the Sec17 retary, the Attorney General shall provide the crimi18 nal background check information referred to in sub19 section (a)(2) to the Secretary.

20 ‘‘(2) RESTRICTION ON USE OF DISCLOSED IN21 FORMATION.—The Secretary may only use the infor22 mation disclosed under subsection (a) for the pur23 pose of carrying out the Secretary’s responsibilities

24 under this title.

25 ‘‘(d) REFUSAL TO ISSUE PROVIDER NUMBER.—
45

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1 ‘‘(1) AUTHORITY.—In addition to any other

2 remedy available to the Secretary, the Secretary may

3 refuse to issue a provider number to an individual

4 or entity if the Secretary determines, after a back5 ground check conducted under this section, that

6 such individual or entity has a history of acts that

7 indicate issuance of a provider number to such indi8 vidual or entity would be detrimental to the best in9 terests of the program or program beneficiaries.

10 Such acts may include, but are not limited to—

11 ‘‘(A) any bankruptcy;

12 ‘‘(B) any act resulting in a civil judgment

13 against such individual or entity; or

14 ‘‘(C) any felony conviction under Federal

15 or State law.

16 ‘‘(2) REPORTING OF REFUSAL TO ISSUE PRO17 VIDER NUMBER TO THE HEALTH INTEGRITY PRO18 TECTION DATABASE (HIPDB).—A determination to

19 refuse to issue a provider number to an individual

20 or entity as a result of a background check con21 ducted under this section shall be reported to the

22 health integrity protection database established

23 under section 1128E in accordance with the proce24 dures for reporting final adverse actions taken
46

•S 1582 IS

1 against a health care provider, supplier, or practi2 tioner under that section.’’.

3 (c) REGULATIONS; EFFECTIVE DATE.—

4 (1) REGULATIONS.—Not later than 1 year after

5 the date of enactment of this Act, the Secretary of

6 Health and Human Services shall promulgate such

7 regulations as are necessary to implement the

8 amendments made by subsections (a) and (b).

9 (2) EFFECTIVE DATE.—The amendments made

10 by subsections (a) and (b) apply to applications re11 ceived by the Secretary of Health and Human Serv12 ices on or after January 1, 2000.

13 (d) USE OF MEDICARE INTEGRITY PROGRAM

14 FUNDS.—The Secretary of Health and Human Services

15 may use funds appropriated or transferred for purposes

16 of carrying out the Medicare integrity program established

17 under section 1893 of the Social Security Act (42 U.S.C.

18 1395ddd) to carry out the provisions of sections 1897 and

19 1898 of that Act (as added by subsections (a) and (b)).

20 SEC. 802. REGISTRATION OF BILLING AGENCIES.

21 (a) REGISTRATION OF BILLING AGENCIES AND INDI22 VIDUALS.—Title XVIII (42 U.S.C. 1395 et seq.) (as

23 amended by section 801(b)) is amended by adding at the

24 end the following:
47

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1 ‘‘REGISTRATION OF BILLING AGENCIES AND INDIVIDUALS

2 ‘‘SEC. 1899. (a) REGISTRATION.—The Secretary

3 shall establish procedures for the registration of all appli4 cable persons.

5 ‘‘(b) REQUIRED APPLICATION.—Each applicable per6 son shall submit a registration application to the Secretary

7 at such time, in such manner, and accompanied by such

8 information as the Secretary may require.

9 ‘‘(c) IDENTIFICATION NUMBER.—If the Secretary ap10 proves an application submitted under subsection (b), the

11 Secretary shall assign a unique identification number to

12 the applicable person.

13 ‘‘(d) REQUIREMENT.—Every claim for reimburse14 ment under this title that is compiled and submitted by

15 an applicable person shall contain the identification num16 ber that is assigned to the applicable person pursuant to

17 subsection (c).

18 ‘‘(e) TIMELY REVIEW.—The Secretary shall provide

19 for procedures that ensure the timely consideration and

20 determination regarding approval of applications under

21 this section.

22 ‘‘(f) DEFINITION OF APPLICABLE PERSON.—In this

23 section, the term ‘applicable person’ means an individual

24 or an entity that compiles and submits claims for reim-
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1 bursement under this title to the Secretary on behalf of

2 any individual or entity.’’.

3 (b) PERMISSIVE EXCLUSION.—Section 1128(b) (42

4 U.S.C. 1320a–7(b)) is amended by adding at the end the

5 following:

6 ‘‘(16) FRAUD BY APPLICABLE PERSON.—An ap7 plicable person (as defined in section 1899(f)) that

8 the Secretary determines knowingly submitted or

9 caused to be submitted a claim for reimbursement

10 under title XVIII that the applicable person knows

11 or should know is false or fraudulent.’’.

12 (c) REGULATIONS; EFFECTIVE DATE.—

13 (1) REGULATIONS.—Not later than 1 year after

14 the date of enactment of this Act, the Secretary of

15 Health and Human Services shall promulgate such

16 regulations as are necessary to implement the

17 amendments made by subsections (a) and (b).

18 (2) EFFECTIVE DATE.—The amendments made

19 by subsections (a) and (b) take effect on January 1,

20 2000.

21 SEC. 803. EXPANDED ACCESS TO THE HEALTH INTEGRITY

22 PROTECTION DATABASE (HIPDB).

23 (a) IN GENERAL.—Section 1128E(d)(1) (42 U.S.C.

24 1320a–7e(d)(1)) is amended to read as follows:
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1 ‘‘(1) AVAILABILITY.—The information in the

2 database maintained under this section shall be

3 available to—

4 ‘‘(A) Federal and State government agen5 cies and health plans, and any health care pro6 vider, supplier, or practitioner entering an em7 ployment or contractual relationship with an in8 dividual or entity who could potentially be the

9 subject of a final adverse action, in any case in

10 which the contract involves the furnishing of

11 items or services reimbursed by 1 or more Fed12 eral health care programs (regardless of wheth13 er the individual or entity is paid by the pro14 grams directly, or whether the items or services

15 are reimbursed directly or indirectly through

16 the claims of a direct provider); and

17 ‘‘(B) utilization and quality control peer

18 review organizations and accreditation entities

19 as defined by the Secretary, including but not

20 limited to organizations described in part B of

21 this title and in section 1154(a)(4)(C).’’.

22 (b) CRIMINAL PENALTY FOR MISUSE OF INFORMA23 TION.—Section 1128B(b) (42 U.S.C. 1320a–7b(b)) is

24 amended by adding at the end the following:
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1 ‘‘(4) Whoever knowingly uses information maintained

2 in the health integrity protection database maintained in

3 accordance with section 1128E for a purpose other than

4 a purpose authorized under that section shall be impris5 oned for not more than 3 years or fined under title 18,

6 United States Code, or both.’’.

7 (c) EFFECTIVE DATES.—

8 (1) AVAILABILITY.—The amendment made by

9 subsection (a) takes effect on the date of enactment

10 of this Act.

11 (2) CRIMINAL PENALTY FOR MISUSE OF INFOR12 MATION.—The amendment made by subsection (b)

13 takes effect on the date of enactment of this Act and

14 applies to acts committed on or after the date of en15 actment of this Act.

16 SEC. 804. LIABILITY OF MEDICARE CARRIERS AND FISCAL

17 INTERMEDIARIES FOR CLAIMS SUBMITTED

18 BY EXCLUDED PROVIDERS.

19 (a) REIMBURSEMENT TO THE SECRETARY FOR

20 AMOUNTS PAID TO EXCLUDED PROVIDERS.—

21 (1) REQUIREMENTS FOR FISCAL INTER22 MEDIARIES.—

23 (A) IN GENERAL.—Section 1816 (42

24 U.S.C. 1395h) is amended by adding at the end

25 the following:
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1 ‘‘(m) An agreement with an agency or organization

2 under this section shall require that such agency or orga3 nization reimburse the Secretary for any amounts paid by

4 the agency or organization for a service under this title

5 which is furnished by an individual or entity during any

6 period for which the individual or entity is excluded, pur7 suant to section 1128, 1128A, or 1156, from participation

8 in the health care program under this title if the amounts

9 are paid to the individual or entity excluded from

10 participation—

11 ‘‘(1) after the 60-day period beginning on the

12 date the Secretary provides notice of the exclusion to

13 the agency or organization, unless the payment was

14 made as a result of incorrect information provided

15 by the Secretary; or

16 ‘‘(2) which has concealed or altered their iden17 tity.’’.

18 (B) CONFORMING AMENDMENT.—Section

19 1816(i) (42 U.S.C. 1395h(i)) is amended by

20 adding at the end the following:

21 ‘‘(4) Nothing in this subsection shall be con22 strued to prohibit reimbursement by an agency or

23 organization pursuant to subsection (m).’’.

24 (2) REQUIREMENTS FOR CARRIERS.—Section

25 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended—
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1 (A) by striking ‘‘and’’ at the end of sub2 paragraph (I); and

3 (B) by inserting after subparagraph (I) the

4 following:

5 ‘‘(J) will reimburse the Secretary for any

6 amounts paid by the carrier for an item or service

7 under this part which is furnished by an individual

8 or entity during any period for which the individual

9 or entity is excluded, pursuant to section 1128,

10 1128A, or 1156, from participation in the health

11 care program under this title if the amounts are

12 paid to the individual or entity excluded from

13 participation—

14 ‘‘(1) after the 60-day period beginning on the

15 date the Secretary provides notice of the exclusion to

16 the agency or organization, unless the payment was

17 made as a result of incorrect information provided

18 by the Secretary; or

19 ‘‘(2) which has concealed or altered their iden20 tity; and’’.

21 (b) CONFORMING REPEAL OF MANDATORY PAYMENT

22 RULE.—Section 1862(e) (42 U.S.C. 1395y(e)) is

23 amended—
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1 (1) in paragraph (1)(B), by striking ‘‘and when

2 the person’’ and all that follows through ‘‘person)’’;

3 and

4 (2) by amending paragraph (2) to read as fol5 lows:

6 ‘‘(2) No individual or entity may bill (or collect any

7 amount from) any individual for any item or service for

8 which payment is denied under paragraph (1). No indi9 vidual is liable for payment of any amounts billed for such

10 an item or service in violation of the preceding sentence.’’.

11 (c) EFFECTIVE DATE.—

12 (1) IN GENERAL.—The amendments made by

13 this section apply to claims for payment submitted

14 on or after the date of enactment of this Act.

15 (2) CONTRACT MODIFICATION.—The Secretary

16 of Health and Human Services shall take such steps

17 as may be necessary to modify contracts and agree18 ments entered into, renewed, or extended prior to

19 the date of enactment of this Act to conform such

20 contracts or agreements to the provisions of this sec21 tion.

22 SEC. 805. COMMUNITY MENTAL HEALTH CENTERS.

23 (a) IN GENERAL.—Section 1861(ff)(3)(B) (42

24 U.S.C. 1395x(ff)(3)(B)) is amended by striking ‘‘entity’’
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1 and all that follows and inserting the following: ‘‘entity

2 that—

3 ‘‘(i) provides the community mental health serv4 ices specified in paragraph (1) of section 1913(c) of

5 the Public Health Service Act;

6 ‘‘(ii) meets applicable certification or licensing

7 requirements for community mental health centers

8 in the State in which it is located;

9 ‘‘(iii) provides a significant share of its services

10 to individuals who are not eligible for benefits under

11 this title; and

12 ‘‘(iv) meets such additional standards or re13 quirements for obtaining Medicare billing privileges

14 as the Secretary may specify to ensure—

15 ‘‘(I) the health and safety of beneficiaries

16 receiving such services; or

17 ‘‘(II) the furnishing of such services in an

18 effective and efficient manner.’’.

19 (b) RESTRICTION.—Section 1861(ff)(3)(A) (42

20 U.S.C. 1395x(ff)(3)(A)) is amended by inserting ‘‘other

21 than in an individual’s home or in an inpatient or residen22 tial setting’’ before the period.

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

24 this section apply to items and services furnished after the
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1 sixth month that begins after the date of enactment of

2 this Act.

3 SEC. 806. LIMITING THE DISCHARGE OF DEBTS IN BANK4 RUPTCY PROCEEDINGS IN CASES WHERE A

5 HEALTH CARE PROVIDER OR A SUPPLIER EN6 GAGES IN FRAUDULENT ACTIVITY.

7 (a) IN GENERAL.—

8 (1) CIVIL MONETARY PENALTIES.—Section

9 1128A(a) (42 U.S.C. 1320a–7a(a)) is amended by

10 adding at the end the following: ‘‘Notwithstanding

11 any other provision of law, amounts made payable

12 under this section are not dischargeable under sec13 tion 727, 1141, 1228 (a) or (b), or 1328 of title 11,

14 United States Code, or any other provision of such

15 title.’’.

16 (2) RECOVERY OF OVERPAYMENT TO PRO17 VIDERS OF SERVICES UNDER PART A OF MEDI18 CARE.—Section 1815(d) (42 U.S.C. 1395g(d)) is

19 amended—

20 (A) by inserting ‘‘(1)’’ after ‘‘(d)’’; and

21 (B) by adding at the end the following:

22 ‘‘(2) Notwithstanding any other provision of law,

23 amounts due to the Secretary under this section are not

24 dischargeable under section 727, 1141, 1228 (a) or (b),

25 or 1328 of title 11, United States Code, or any other pro-
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1 vision of such title if the overpayment was the result of

2 fraudulent activity, as may be defined by the Secretary.’’.

3 (3) RECOVERY OF OVERPAYMENT OF BENEFITS

4 UNDER PART B OF MEDICARE.—Section 1833(j) (42

5 U.S.C. 1395l(j)) is amended—

6 (A) by inserting ‘‘(1)’’ after ‘‘(j)’’; and

7 (B) by adding at the end the following:

8 ‘‘(2) Notwithstanding any other provision of law,

9 amounts due to the Secretary under this section are not

10 dischargeable under section 727, 1141, 1228 (a) or (b),

11 or 1328 of title 11, United States Code, or any other pro12 vision of such title if the overpayment was the result of

13 fraudulent activity, as may be defined by the Secretary.’’.

14 (4) COLLECTION OF PAST-DUE OBLIGATIONS

15 ARISING FROM BREACH OF SCHOLARSHIP AND LOAN

16 CONTRACT.—Section 1892(a) (42 U.S.C.

17 1395ccc(a)) is amended by adding at the end the

18 following:

19 ‘‘(5) Notwithstanding any other provision of

20 law, amounts due to the Secretary under this section

21 are not dischargeable under section 727, 1141, 1228

22 (a) or (b), or 1328 of title 11, United States Code,

23 or any other provision of such title.’’.
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1 (b) EFFECTIVE DATE.—The amendments made by

2 subsection (a) apply to bankruptcy petitions filed after the

3 date of enactment of this Act.

4 SEC. 807. ILLEGAL DISTRIBUTION OF A MEDICARE OR MED5 ICAID BENEFICIARY IDENTIFICATION OR

6 PROVIDER NUMBER.

7 (a) IN GENERAL.—Section 1128B(b) (42 U.S.C.

8 1320a–7b(b)), as amended by section 803(b), is amended

9 by adding at the end the following:

10 ‘‘(5) Whoever knowingly, intentionally, and with the

11 intent to defraud purchases, sells or distributes, or ar12 ranges for the purchase, sale, or distribution of 2 or more

13 Medicare or Medicaid beneficiary identification numbers

14 or provider numbers shall be imprisoned for not more than

15 3 years or fined under title 18, United States Code (or,

16 if greater, an amount equal to the monetary loss to the

17 Federal and any State government as a result of such

18 acts), or both.’’.

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

20 subsection (a) takes effect on the date of enactment of

21 this Act and applies to acts committed on or after the date

22 of enactment of this Act.
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1 SEC. 808. TREATMENT OF CERTAIN SOCIAL SECURITY ACT

2 CRIMES AS FEDERAL HEALTH CARE OF3 FENSES.

4 (a) IN GENERAL.—Section 24(a) of title 18, United

5 States Code, is amended—

6 (1) by striking the period at the end of para7 graph (2) and inserting ‘‘; or’’; and

8 (2) by adding at the end the following:

9 ‘‘(3) section 1128B of the Social Security Act

10 (42 U.S.C. 1320a–7b).’’.

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

12 subsection (a) takes effect on the date of enactment of

13 this Act and applies to acts committed on or after the date

14 of enactment of this Act.

15 SEC. 809. AUTHORITY OF OFFICE OF INSPECTOR GENERAL

16 OF THE DEPARTMENT OF HEALTH AND

17 HUMAN SERVICES.

18 (a) AUTHORITY.—Notwithstanding any other provi19 sion of law, upon designation by the Inspector General of

20 the Department of Health and Human Services, any

21 criminal investigator of the Office of Inspector General of

22 such department may, in accordance with guidelines

23 issued by the Secretary of Health and Human Services

24 and approved by the Attorney General, while engaged in

25 activities within the lawful jurisdiction of such Inspector

26 General—
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1 (1) obtain and execute any warrant or other

2 process issued under the authority of the United

3 States;

4 (2) make an arrest without a warrant for—

5 (A) any offense against the United States

6 committed in the presence of such investigator;

7 or

8 (B) any felony offense against the United

9 States, if such investigator has reasonable cause

10 to believe that the person to be arrested has

11 committed or is committing that felony offense;

12 and

13 (3) exercise any other authority necessary to

14 carry out the authority described in paragraphs (1)

15 and (2).

16 (b) FUNDS.—The Office of Inspector General of the

17 Department of Health and Human Services may receive

18 and expend funds that represent the equitable share from

19 the forfeiture of property in investigations in which the

20 Office of Inspector General participated, and that are

21 transferred to the Office of Inspector General by the De22 partment of Justice, the Department of the Treasury, or

23 the United States Postal Service. Such equitable sharing

24 funds shall be deposited in a separate account and shall

25 remain available until expended.
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1 SEC. 810. UNIVERSAL PRODUCT NUMBERS ON CLAIMS

2 FORMS FOR REIMBURSEMENT UNDER THE

3 MEDICARE PROGRAM.

4 (a) UPNS ON CLAIMS FORMS FOR REIMBURSEMENT

5 UNDER THE MEDICARE PROGRAM.—

6 (1) ACCOMMODATION OF UPNS ON MEDICARE

7 CLAIMS FORMS.—Not later than February 1, 2001,

8 all claims forms developed or used by the Secretary

9 of Health and Human Services for reimbursement

10 under the Medicare program under title XVIII of

11 the Social Security Act (42 U.S.C. 1395 et seq.)

12 shall accommodate the use of universal product

13 numbers for a UPN covered item.

14 (2) REQUIREMENT FOR PAYMENT OF CLAIMS.—

15 Title XVIII (42 U.S.C. 1395 et seq.) (as amended

16 by section 802(a)) is amended by adding at the end

17 the following:

18 ‘‘USE OF UNIVERSAL PRODUCT NUMBERS

19 ‘‘SEC. 1899A. (a) IN GENERAL.—No payment shall

20 be made under this title for any claim for reimbursement

21 for any UPN covered item unless the claim contains the

22 universal product number of the UPN covered item.

23 ‘‘(b) DEFINITIONS.—In this section:

24 ‘‘(1) UPN COVERED ITEM.—
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1 ‘‘(A) IN GENERAL.—Except as provided in

2 subparagraph (B), the term ‘UPN covered

3 item’ means—

4 ‘‘(i) a covered item (as defined in sec5 tion 1834(a)(13));

6 ‘‘(ii) an item described in paragraph

7 (8) or (9) of section 1861(s);

8 ‘‘(iii) an item described in paragraph

9 (5) of section 1861(s); and

10 ‘‘(iv) any other item for which pay11 ment is made under this title that the Sec12 retary determines to be appropriate.

13 ‘‘(B) EXCLUSION.—The term ‘UPN cov14 ered item’ does not include a customized item

15 for which payment is made under this title.

16 ‘‘(2) UNIVERSAL PRODUCT NUMBER.—The

17 term ‘universal product number’ means a number

18 that is—

19 ‘‘(A) affixed by the manufacturer to each

20 individual UPN covered item that uniquely

21 identifies the item at each packaging level; and

22 ‘‘(B) based on commercially acceptable

23 identification standards, such as standards es24 tablished by the Uniform Code Council-Inter25 national Article Numbering System or the
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1 Health Industry Business Communication

2 Council.’’.

3 (3) DEVELOPMENT AND IMPLEMENTATION OF

4 PROCEDURES.—

5 (A) INFORMATION INCLUDED IN UPN.—

6 The Secretary of Health and Human Services,

7 in consultation with manufacturers and entities

8 with appropriate expertise, shall determine the

9 relevant descriptive information appropriate for

10 inclusion in a universal product number for a

11 UPN covered item.

12 (B) REVIEW OF PROCEDURE.—From the

13 information obtained by the use of universal

14 product numbers on claims for reimbursement

15 under the Medicare program under title XVIII

16 of the Social Security Act (42 U.S.C. 1395 et

17 seq.), the Secretary of Health and Human

18 Services, in consultation with interested parties,

19 shall periodically review the UPN covered items

20 billed under the Health Care Financing Admin21 istration Common Procedure Coding System

22 and adjust such coding system to ensure that

23 functionally equivalent UPN covered items are

24 billed and reimbursed under the same codes.
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1 (4) EFFECTIVE DATE.—The amendment made

2 by paragraph (2) applies to claims for reimburse3 ment submitted on and after February 1, 2002.

4 (b) STUDY AND REPORTS TO CONGRESS.—

5 (1) STUDY.—The Secretary of Health and

6 Human Services shall conduct a study on the results

7 of the implementation of the provisions in para8 graphs (1) and (3) of subsection (a) and the amend9 ment to the Social Security Act in paragraph (2) of

10 that subsection.

11 (2) REPORTS.—

12 (A) PROGRESS REPORT.—Not later than 6

13 months after the date of enactment of this Act,

14 the Secretary of Health and Human Services

15 shall submit a report to the appropriate com16 mittees of Congress that contains a detailed de17 scription of the progress of the matters studied

18 pursuant to paragraph (1).

19 (B) IMPLEMENTATION.—Not later than 18

20 months after the date of enactment of this Act,

21 and annually thereafter for 3 years, the Sec22 retary of Health and Human Services shall sub23 mit a report to the appropriate committees of

24 Congress that contains a detailed description of

25 the results of the study conducted pursuant to
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1 paragraph (1), together with the Secretary’s

2 recommendations regarding the use of universal

3 product numbers and the use of data obtained

4 from the use of such numbers.

5 (c) DEFINITIONS.—In this section:

6 (1) UPN COVERED ITEM.—The term ‘‘UPN

7 covered item’’ has the meaning given such term in

8 section 1899A(b)(1) of the Social Security Act (as

9 added by subsection (a)(2)).

10 (2) UNIVERSAL PRODUCT NUMBER.—The term

11 ‘‘universal product number’’ has the meaning given

12 such term in section 1899A(b)(2) of the Social Secu13 rity Act (as added by subsection (a)(2)).

14 (d) AUTHORIZATION OF APPROPRIATIONS.—There

15 are authorized to be appropriated such sums as may be

16 necessary for the purpose of carrying out the provisions

17 in paragraphs (1) and (3) of subsection (a), subsection

18 (b), and section 1899A of the Social Security Act (as

19 added by subsection (a)(2)).

Æ