II

106TH CONGRESS

1ST SESSION S. 255

To combat waste, fraud, and abuse in payments for home health services

provided under the Medicare program, and to improve the quality of

those home health services.

IN THE SENATE OF THE UNITED STATES

JANUARY 20, 1999

Mr. GRASSLEY (for himself and Mr. BREAUX) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To combat waste, fraud, and abuse in payments for home

health services provided under the Medicare program,

and to improve the quality of those home health services.

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; TABLE OF CONTENTS.

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

5 ‘‘Home Health Integrity Preservation Act of 1999’’.

6 (b) TABLE OF CONTENTS.—The table of contents of

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Additional conditions of participation for home health agencies.

Sec. 3. Surveyor training in reimbursement and coverage policies.

Sec. 4. Surveys and reviews.
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Sec. 5. Prior patient load.

Sec. 6. Establishment of standards and procedures to improve quality of services.

Sec. 7. Notification of availability of a home health agency’s most recent survey

as part of discharge planning process.

Sec. 8. Home health integrity task force.

Sec. 9. Application of certain provisions of the bankruptcy code.

Sec. 10. Study and report to Congress.

Sec. 11. Effective date.

1 SEC. 2. ADDITIONAL CONDITIONS OF PARTICIPATION FOR

2 HOME HEALTH AGENCIES.

3 (a) QUALIFICATIONS OF MANAGING EMPLOYEES.—

4 Section 1891(a) of the Social Security Act (42 U.S.C.

5 1395bbb(a)) is amended by adding at the end the follow6 ing:

7 ‘‘(7) The agency shall have—

8 ‘‘(A) sufficient knowledge, as attested by

9 the managing employees (as defined in section

10 1126(b)) of the agency (pursuant to subsection

11 (c)(2)(C)(iv)(II)) using standards established by

12 the Secretary, of the requirements for reim13 bursement under this title, coverage criteria

14 and claims procedures, and the civil and crimi15 nal penalties for noncompliance with such re16 quirements; and

17 ‘‘(B) managing employees with sufficient

18 prior education or work experience, according to

19 standards determined by the Secretary, in the

20 delivery of health care.’’.
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1 (b) COMPLIANCE PROGRAM.—Section 1891(a) of the

2 Social Security Act (42 U.S.C. 1395bbb(a)) (as amended

3 by subsection (a)) is amended by adding at the end the

4 following:

5 ‘‘(8) The agency has developed and imple6 mented a fraud and abuse compliance program.’’.

7 (c) AVAILABILITY OF SURVEY.—Section 1891(a) of

8 the Social Security Act (42 U.S.C. 1395bbb(a)) (as

9 amended by subsection (b)) is amended by adding at the

10 end the following:

11 ‘‘(9) The agency, before the agency provides

12 any home health services to a beneficiary, makes

13 available to the beneficiary or the representative of

14 the beneficiary a summary of the pertinent findings

15 (including a list of any deficiencies) of the most re16 cent survey of the agency relating to the compliance

17 of such agency. Such summary shall be provided in

18 a standardized format and may, at the discretion of

19 the Secretary, also include other information regard20 ing the agency’s operations that are of potential in21 terest to beneficiaries, such as the number of pa22 tients served by the agency.’’.

23 (d) NOTICE OF NEW HOME HEALTH SERVICE, NEW

24 BRANCH OFFICE, AND NEW JOINT VENTURE.—Section
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1 1891(a)(2) of the Social Security Act (42 U.S.C.

2 1395bbb(a)(2)) is amended to read as follows:

3 ‘‘(2)(A) The agency notifies the agency’s fiscal

4 intermediary and the State entity responsible for the

5 licensing or certification of the agency—

6 ‘‘(i) of a change in the persons with an

7 ownership or control interest (as defined in sec8 tion 1124(a)(3)) in the agency,

9 ‘‘(ii) of a change in the persons who are of10 ficers, directors, agents, or managing employees

11 (as defined in section 1126(b)) of the agency,

12 ‘‘(iii) of a change in the corporation, asso13 ciation, or other company responsible for the

14 management of the agency,

15 ‘‘(iv) that the agency is providing a cat16 egory of skilled service that it was not providing

17 at the time of the agency’s most recent stand18 ard survey,

19 ‘‘(v) that the agency is operating a new

20 branch office that was not in operation at the

21 time of the agency’s most recent standard sur22 vey, and

23 ‘‘(vi) that the agency is involved in a new

24 joint venture with other health care providers or

25 other business entities.
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1 ‘‘(B) The notice required under subparagraph

2 (A) shall be provided—

3 ‘‘(i) for a change described in clauses (i),

4 (ii), and (iii) of such subparagraph, within 30

5 calendar days of the time of the change and

6 shall include the identity of each new person or

7 company described in the previous sentence,

8 ‘‘(ii) for a change described in clause (iv)

9 of such subparagraph, within 30 calendar days

10 of the time the agency begins providing the new

11 service and shall include a description of the

12 service,

13 ‘‘(iii) for a change described in clause (v)

14 of such subparagraph, within 30 calendar days

15 of the time the new branch office begins oper16 ations and shall include the location of the of17 fice and a description of the services that are

18 being provided at the office, and

19 ‘‘(iv) for a change described in clause (vi)

20 of such subparagraph, within 30 calendar days

21 of the time the agency enters into the joint ven22 ture agreement and shall include a description

23 of the joint venture and the participants in the

24 joint venture.’’.
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1 SEC. 3. SURVEYOR TRAINING IN REIMBURSEMENT AND

2 COVERAGE POLICIES.

3 Section 1891(d)(3) of the Social Security Act (42

4 U.S.C. 1395bbb(d)(3)) is amended—

5 (1) by striking ‘‘relating to the performance’’

6 and inserting ‘‘relating to—

7 ‘‘(A) the performance’’;

8 (2) by striking the period at the end and insert9 ing ‘‘; and’’; and

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

11 ‘‘(B) requirements for reimbursement and cov12 erage of services under this title.’’.

13 SEC. 4. SURVEYS AND REVIEWS.

14 (a) ADDITIONAL REQUIREMENTS FOR SURVEY.—

15 Section 1891(c)(2)(C) of the Social Security Act (42

16 U.S.C. 1395bbb(c)(2)(C)) is amended—

17 (1) in clause (i)(I)—

18 (A) by striking ‘‘purpose of evaluating’’

19 and inserting ‘‘purpose of—

20 ‘‘(aa) evaluating’’; and

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

22 ‘‘(bb) evaluating whether the individ23 uals are homebound for purposes of quali24 fying for receipt of benefits for home

25 health services under this title; and’’;

26 (2) in clause (ii), by striking ‘‘and’’ at the end;
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1 (3) in clause (iii), by striking the period at the

2 end and inserting ‘‘; and’’; and

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

4 ‘‘(iv) shall include—

5 ‘‘(I) an assessment of whether the agency

6 is in compliance with all of the conditions of

7 participation and requirements specified in or

8 pursuant to section 1861(o), this section, and

9 this title;

10 ‘‘(II) an assessment that the managing

11 employees (as defined in section 1126(b)) of the

12 agency have attested in writing to having suffi13 cient knowledge, as determined by the Sec14 retary, of the requirements for reimbursement

15 under this title, coverage criteria and claims

16 procedures, and the civil and criminal penalties

17 for noncompliance with such requirements; and

18 ‘‘(III) a review of the services provided by

19 subcontractors of the agency to ensure that

20 such services are being provided in a manner

21 consistent with the requirements of this title.’’.

22 (b) ADDITIONAL EVENTS TRIGGERING A SURVEY.—

23 Section 1891(c)(2)(B) of the Social Security Act (42

24 U.S.C. 1395bbb(c)(2)(B)) is amended—

25 (1) by striking ‘‘and’’ at the end of clause (i);
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1 (2) by striking the period at the end of clause

2 (ii) and inserting a comma; and

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

4 ‘‘(iii) shall be conducted not less than

5 annually for the first 2 years after the ini6 tial standard survey of the agency,

7 ‘‘(iv) after the agency’s first 2 years

8 of participation under this title, shall be

9 conducted within 90 calendar days of the

10 date that the agency notifies the Secretary

11 that it is providing a category of skilled

12 service that the agency was not providing

13 at the time of the agency’s most recent

14 standard survey,

15 ‘‘(v) if the agency is operating a new

16 branch office that was not in operation at

17 the time of the agency’s most recent stand18 ard survey, shall be conducted within the

19 12-month period following the date that

20 the new branch office began operations to

21 ensure that such office is providing quality

22 care and that it is appropriately classified

23 as a branch office, and shall include direct

24 scrutiny of the operations of the branch of25 fice, and
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1 ‘‘(vi) shall be conducted on randomly

2 selected agencies on an occasional basis,

3 with the number of such surveys to be de4 termined by the Secretary.’’.

5 (c) REVIEW BY FISCAL INTERMEDIARY.—Section

6 1816 of the Social Security Act (42 U.S.C. 1395h) is

7 amended by adding at the end the following:

8 ‘‘(m) An agreement with an agency or organization

9 under this section shall require that the agency or organi10 zation conduct a review of the overall business structure

11 of a home health agency submitting a claim for reimburse12 ment for home health services, including any related orga13 nizations of the home health agency.’’.

14 SEC. 5. PRIOR PATIENT LOAD.

15 Section 1891 of the Social Security Act (42 U.S.C.

16 1395bbb) is amended by adding at the end the following:

17 ‘‘(h) PRIOR PATIENT LOAD.—

18 ‘‘(1) IN GENERAL.—The Secretary shall not

19 enter into an agreement for the first time with a

20 home health agency to provide items and services

21 under this title unless the Secretary determines that,

22 before the date the agreement is entered into, the

23 agency—

24 ‘‘(A) had been in operation for at least 60

25 calendar days; and
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1 ‘‘(B) had at least 10 patients during that

2 period of prior operation.

3 ‘‘(2) EXCEPTIONS.—

4 ‘‘(A) BENEFICIARY ACCESS.—If the Sec5 retary determines appropriate, the Secretary

6 may waive the requirements of paragraph (1) in

7 order to establish or maintain beneficiary access

8 to home health services in an area.

9 ‘‘(B) CHANGE OF OWNERSHIP.—The re10 quirements of paragraph (1) shall not apply to

11 a home health agency at the time of a change

12 in ownership of such agency.’’.

13 SEC. 6. ESTABLISHMENT OF STANDARDS AND PROCE14 DURES TO IMPROVE QUALITY OF SERVICES.

15 (a) IN GENERAL.—Section 1891 of the Social Secu16 rity Act (42 U.S.C. 1395bbb) (as amended by section 5)

17 is amended by adding at the end the following:

18 ‘‘(i) ESTABLISHMENT OF STANDARDS AND PROCE19 DURES.—

20 ‘‘(1) SCREENING OF EMPLOYEES.—The Sec21 retary shall establish procedures to improve the

22 background screening performed by a home health

23 agency on individuals that the agency is considering

24 hiring as home health aides (as defined in subsection
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1 (a)(3)(E)) and licensed health professionals (as de2 fined in subsection (a)(3)(F)).

3 ‘‘(2) COST REPORTS.—The Secretary shall es4 tablish additional procedures regarding the require5 ment for attestation of cost reports to ensure greater

6 accountability on the part of a home health agency

7 and its managing employees (as defined in section

8 1126(b)) for the accuracy of the information pro9 vided to the Secretary in any such cost reports.

10 ‘‘(3) MONITORING AGENCY AFTER EXTENDED

11 SURVEY.—The Secretary shall establish procedures

12 to ensure that a home health agency that is subject

13 to an extended (or partial extended) survey is closely

14 monitored from the period immediately following the

15 extended survey through the agency’s subsequent

16 standard survey to ensure that the agency is in com17 pliance with all the conditions of participation and

18 requirements specified in or pursuant to section

19 1861(o), this section, and this title.

20 ‘‘(4) ADDITIONAL AUDITS.—

21 ‘‘(A) IN GENERAL.—

22 ‘‘(i) STANDARDS.—The Secretary

23 shall establish objective standards regard24 ing the determination of—
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1 ‘‘(I) whether an agency is a home

2 health agency described in subpara3 graph (B); and

4 ‘‘(II) the circumstances that trig5 ger an audit for a home health agency

6 described in subparagraph (B), and

7 the content of such an audit.

8 ‘‘(ii) INFORMATION.—In establishing

9 standards under clause (i), the Secretary

10 shall ensure that the individuals perform11 ing the audits under this section are pro12 vided with the necessary information, in13 cluding information from intermediaries,

14 carriers, and law enforcement sources, in

15 order to determine if a particular home

16 health agency is an agency described in

17 subparagraph (B) and whether the cir18 cumstances triggering an audit for such an

19 agency has occurred.

20 ‘‘(B) AGENCY DESCRIBED.—A home health

21 agency is described in this subparagraph if it is

22 an agency that has—

23 ‘‘(i) experienced unusually rapid

24 growth as compared to other home health

25 agencies in the area and in the country;
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1 ‘‘(ii) had unusually high utilization

2 patterns as compared to other home health

3 agencies in the area and in the country;

4 ‘‘(iii) unusually high costs per patient

5 as compared to other home health agencies

6 in the area and in the country;

7 ‘‘(iv) unusually high levels of overpay8 ment or coverage denials as compared to

9 other home health agencies in the area and

10 in the country; or

11 ‘‘(v) operations that otherwise raise

12 concerns such that the Secretary deter13 mines that an audit is appropriate.

14 ‘‘(5) BRANCH OFFICES.—

15 ‘‘(A) SURVEYS.—The Secretary shall es16 tablish standards for periodic surveys of branch

17 offices of a home health agency in order to as18 sess whether the branch offices meet the Sec19 retary’s national criteria for branch office des20 ignation and for quality of care. Such surveys

21 shall include home visits to beneficiaries served

22 by the branch office (but only with the consent

23 of the beneficiary).

24 ‘‘(B) UNIFORM NATIONAL DEFINITION.—

25 The Secretary shall establish a uniform national
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1 definition of a branch office of a home health

2 agency.

3 ‘‘(6) CERTAIN QUALIFICATIONS OF MANAGING

4 EMPLOYEES.—The Secretary shall establish stand5 ards regarding the knowledge and prior education or

6 work experience that a managing employee (as de7 fined in section 1126(b)) of an agency must possess

8 in order to comply with the requirements described

9 in subsection (a)(7).

10 ‘‘(7) CLAIMS PROCESSING.—

11 ‘‘(A) IN GENERAL.—The Secretary shall

12 establish standards to improve and strengthen

13 the procedures by which claims for reimburse14 ment by home health agencies are identified as

15 being fraudulent, wasteful, or abusive.

16 ‘‘(B) PROCEDURES.—The standards estab17 lished by the Secretary pursuant to subpara18 graph (A) shall include, to the extent prac19 ticable, standards for a minimum number of—

20 ‘‘(i) intensive focused medical reviews

21 of the services provided to beneficiaries by

22 an agency;

23 ‘‘(ii) interviews with beneficiaries, em24 ployees of the agency, and other individ-
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1 uals providing services on behalf of the

2 agency; and

3 ‘‘(iii) random spot checks of visits to

4 a beneficiary’s home by employees of the

5 agency (but only with the consent of the

6 beneficiary).

7 ‘‘(C) REPORT TO CONGRESS.—Not later

8 than 90 days after the date of enactment of the

9 Home Health Integrity Preservation Act of

10 1999, the Secretary shall submit a report to

11 Congress containing a detailed description of—

12 ‘‘(i) the current levels of activity by

13 the Secretary with regard to the reviews,

14 interviews, and spot checks described in

15 subparagraph (B); and

16 ‘‘(ii) the Secretary’s plans to increase

17 those levels pursuant to the procedures de18 scribed in subparagraphs (A) and (B).

19 ‘‘(8) EXPANSION OF FINANCIAL STATEMENT.—

20 The Secretary shall establish procedures to expand

21 the financial statement audit process to include com22 pliance and integrity reviews.’’.

23 (b) EFFECTIVE DATE.—By not later than 180 cal24 endar days after the date of enactment of this Act, the

25 Secretary shall establish the standards and procedures de-
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1 scribed in paragraphs (1) through (8) of section 1891(i)

2 of the Social Security Act (42 U.S.C. 1395bbb(i)) (as

3 added by subsection (a)) by regulation or other sufficient

4 means.

5 SEC. 7. NOTIFICATION OF AVAILABILITY OF A HOME

6 HEALTH AGENCY’S MOST RECENT SURVEY AS

7 PART OF DISCHARGE PLANNING PROCESS.

8 Section 1861(ee)(2)(D) of the Social Security Act (42

9 U.S.C. 1395x(ee)(2)(D)) (as amended by section 4321(a)

10 of the Balanced Budget Act of 1997) is amended—

11 (1) by striking ‘‘including the availability’’ and

12 inserting ‘‘including—

13 ‘‘(i) the availability’’; and

14 (2) by inserting before the period the following:

15 ‘‘; and

16 ‘‘(ii) the availability of (and procedures for

17 obtaining from a home health agency) a sum18 mary document described in section

19 1891(a)(9)’’.

20 SEC. 8. HOME HEALTH INTEGRITY TASK FORCE.

21 (a) ESTABLISHMENT.—The Secretary of Health and

22 Human Services (in this section referred to as the ‘‘Sec23 retary’’) shall establish within the Office of the Inspector

24 General of the Department of Health and Human Services
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1 a home health integrity task force (in this section referred

2 to as the ‘‘Task Force’’).

3 (b) DIRECTOR.—The Inspector General of the De4 partment of Health and Human Services shall appoint the

5 Director of the Task Force.

6 (c) DUTIES.—The Task Force shall target, inves7 tigate, and pursue any available civil or criminal actions

8 against individuals who organize, direct, finance, or are

9 otherwise engaged in fraud in the provision of home health

10 services (as defined in section 1861(m) of the Social Secu11 rity Act (42 U.S.C. 1395x(m))) under the medicare pro12 gram under such Act.

13 (d) OUTSIDE AGENCIES AND ENTITIES.—In carrying

14 out the duties described in subsection (c), the Task Force

15 shall work in coordination with other Federal, State, and

16 local agencies, including the Health Care Financing Ad17 ministration, and with private entities. All Federal, State,

18 and local employees and all private entities are encouraged

19 to provide maximum cooperation to the Task Force.

20 SEC. 9. APPLICATION OF CERTAIN PROVISIONS OF THE

21 BANKRUPTCY CODE.

22 (a) RESTRICTED APPLICABILITY OF BANKRUPTCY

23 STAY, DISCHARGE, AND PREFERENTIAL TRANSFER PRO24 VISIONS TO CERTAIN MEDICARE DEBTS.—Title XI of the
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1 Social Security Act (42 U.S.C. 1301 et seq.) is amended

2 by inserting after section 1143 the following:

3 ‘‘APPLICATION OF CERTAIN PROVISIONS OF THE

4 BANKRUPTCY CODE

5 ‘‘SEC. 1144. (a) CERTAIN MEDICARE ACTIONS NOT

6 STAYED BY BANKRUPTCY PROCEEDINGS.—The com7 mencement or continuation of any action against a debtor

8 (as defined in subsection (d)) under this title or title

9 XVIII, including any action or proceeding to exclude or

10 suspend such debtor from program participation, assess

11 civil monetary penalties, recoup or set off overpayments,

12 or deny or suspend payment of claims shall not be subject

13 to a stay under section 362(a) of title 11, United States

14 Code.

15 ‘‘(b) CERTAIN MEDICARE DEBT NOT DISCHARGE16 ABLE IN BANKRUPTCY.—A debt owed to the United

17 States or to a State by a debtor for an overpayment under

18 title XVIII, or for a penalty, fine, or assessment under

19 this title or title XVIII, shall not be dischargeable under

20 any provision of title 11, United States Code.

21 ‘‘(c) REPAYMENT OF CERTAIN DEBTS CONSIDERED

22 FINAL.—Payments made to repay a debt to the United

23 States or to a State by a debtor with respect to items and

24 services provided, or claims for payment made for such

25 items and services, under title XVIII (including repayment

26 of an overpayment), or to pay a penalty, fine, or assess-
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1 ment under this title or title XVIII, shall be considered

2 final and not avoidable transfers under section 547 of title

3 11, United States Code.

4 ‘‘(d) DEBTOR DEFINED.—In this section, the term

5 ‘debtor’ means a provider of services (as defined in section

6 1861(u)) that has commenced a case under title 11,

7 United States Code.’’.

8 (b) MEDICARE RULES APPLICABLE TO BANKRUPTCY

9 PROCEEDINGS OF A MEDICARE PROVIDER OF SERV10 ICES.—Title XVIII of the Social Security Act (42 U.S.C.

11 1395 et seq.) is amended by adding at the end the follow12 ing:

13 ‘‘APPLICATION OF PROVISIONS OF THE BANKRUPTCY

14 CODE

15 ‘‘SEC. 1897. (a) USE OF MEDICARE STANDARDS AND

16 PROCEDURES.—Notwithstanding any provision of title 11,

17 United States Code, or any other provision of law, in the

18 case of claims by a debtor (as defined in section 1144(d))

19 for payment under this title, the determination of whether

20 the claim is allowable, and of the amount payable, shall

21 be made in accordance with the provisions of this title,

22 title XI, and implementing regulations.

23 ‘‘(b) NOTICE TO CREDITOR OF BANKRUPTCY PETI24 TIONER.—In the case of a debt owed by a debtor (as so

25 defined) to the United States with respect to items and

26 services provided, or claims for payment made, under this
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1 title (including a debt arising from an overpayment or a

2 penalty, fine, or assessment under title XI or this title),

3 the notices to the creditor of bankruptcy petitions, pro4 ceedings, and relief required under title 11, United States

5 Code (including under section 342 of that title and rule

6 2002(j) of the Federal Rules of Bankruptcy Procedure),

7 shall be given to the Secretary. Provision of such notice

8 to a fiscal agent of the Secretary shall not be considered

9 to satisfy this requirement.

10 ‘‘(c) TURNOVER OF PROPERTY TO THE BANKRUPTCY

11 ESTATE.—For purposes of section 542(b) of title 11,

12 United States Code, a claim for payment under this title

13 shall not be considered to be a matured debt payable to

14 the estate of a debtor (as so defined) until such claim has

15 been allowed by the Secretary in accordance with proce16 dures established under this title.’’.

17 SEC. 10. STUDY AND REPORT TO CONGRESS.

18 (a) STUDY.—

19 (1) IN GENERAL.—The Secretary of Health and

20 Human Services (in this section referred to as the

21 ‘‘Secretary’’) shall conduct a study on all matters re22 lating to the appropriate home health services to be

23 provided under the Medicare program under title

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

25 seq.) to individuals with chronic conditions.
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1 (2) MATTERS STUDIED.—The matters studied

2 by the Secretary shall include—

3 (A) methods to strengthen the role of a

4 physician in developing a plan of care for a ben5 eficiary receiving home health benefits under

6 this title; and

7 (B) the need for an individual or entity

8 (other than the home health agency or the

9 beneficiary’s physician) to have responsibility

10 for approving the type and quantity of home

11 health services provided to the beneficiary.

12 (b) REPORT.—Not later than 1 year after the date

13 of enactment of this Act, the Secretary shall submit a re14 port to Congress on the study conducted under subsection

15 (a). The Secretary shall include in the report such rec16 ommendations regarding the utilization of home health

17 services under the Medicare program as the Secretary de18 termines to be appropriate.

19 SEC. 11. EFFECTIVE DATE.

20 Except as otherwise provided in this Act, the amend21 ments made by this Act shall take effect on the expiration

22 of the date that is 180 calendar days after the date of

23 enactment of this Act.

Æ