I

104TH CONGRESS

2D SESSION H. R. 4229

To amend title XVIII of the Social Security Act to provide for prospective

payment for home health services under the Medicare program, and

for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 27, 1996

Mrs. JOHNSON of Connecticut introduced the following bill; which was referred

to the Committee on Ways and Means, and in addition to the Committee

on Commerce, for a period to be subsequently determined by the Speaker,

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend title XVIII of the Social Security Act to provide

for prospective payment for home health services under

the Medicare program, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Medicare Home Health

5 Services Prospective Payment Amendments of 1996’’.

6 SEC. 2. PAYMENT FOR HOME HEALTH SERVICES.

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

8 Act (42 U.S.C. 1395 et seq.), as amended by section 202
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1 of Public Law 104–191, is amended by adding at the end

2 the following new section:

3 ‘‘PAYMENT FOR HOME HEALTH SERVICES

4 ‘‘SEC. 1894. (a) IN GENERAL.—Notwithstanding sec5 tion 1861(v), the Secretary shall provide for payments for

6 home health services in accordance with a prospective pay7 ment system as follows:

8 ‘‘(1) PER VISIT PAYMENTS.—Subject to sub9 section (c), the Secretary shall make per visit pay10 ments to a home health agency in accordance with

11 this section for each type of home health service de12 scribed in paragraph (2) furnished to an individual

13 who at the time the service is furnished is under a

14 plan of care by the home health agency under this

15 title (without regard to whether or not the item or

16 service was furnished by the agency or by others

17 under arrangement with them made by the agency,

18 under any other contracting or consulting arrange19 ment, or otherwise).

20 ‘‘(2) TYPES OF SERVICES.—The types of home

21 health services described in this paragraph are the

22 following:

23 ‘‘(A) Part-time or intermittent nursing

24 care provided by or under the supervision of a

25 registered professional nurse.

26 ‘‘(B) Physical therapy.
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1 ‘‘(C) Occupational therapy.

2 ‘‘(D) Speech-language pathology services.

3 ‘‘(E) Medical social services under the di4 rection of a physician.

5 ‘‘(F) To the extent permitted in regula6 tions, part-time or intermittent services of a

7 home health aide who has successfully com8 pleted a training program approved by the Sec9 retary.

10 ‘‘(b) ESTABLISHMENT OF PER VISIT RATE FOR

11 EACH TYPE OF ASSISTANCE.—

12 ‘‘(1) IN GENERAL.—The Secretary shall, sub13 ject to paragraph (3), establish a per visit payment

14 rate for a home health agency in an area (which

15 shall be the same area used to determine the area

16 wage index applicable to hospitals under section

17 1886(d)(3)(E)) for each type of home health service

18 described in subsection (a)(2). Such rate shall be

19 equal to the national per visit payment rate deter20 mined under paragraph (2) for each such type, ex21 cept that the labor-related portion of such rate shall

22 be adjusted by the area wage index applicable under

23 section 1886(d)(3)(E) for the area in which the

24 agency is located (as determined without regard to

25 any reclassification of the area under section
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1 1886(d)(8)(B) or a decision of the Medicare Geo2 graphic Classification Review Board or the Secretary

3 under section 1886(d)(10) for cost reporting periods

4 beginning after October 1, 1995).

5 ‘‘(2) NATIONAL PER VISIT PAYMENT RATE.—

6 The national per visit payment rate for each type of

7 service described in subsection (a)(2)—

8 ‘‘(A) for fiscal year 1997, is an amount

9 equal to the national average amount reim10 bursed per visit under this title to home health

11 agencies for such type of service (including

12 medical supplies) during the most recent 12-

13 month cost reporting period ending on or before

14 December 31, 1994, updated by the home

15 health market basket percentage increase for

16 each year before the date in such fiscal year in

17 which this section first applies; and

18 ‘‘(B) for each subsequent fiscal year, is an

19 amount equal to the national per visit payment

20 rate in effect under this paragraph for the pre21 ceding fiscal year, increased by the home health

22 market basket percentage increase for such sub23 sequent fiscal year.

24 ‘‘(3) PAYMENTS ABOVE PER VISIT RATES.—
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1 ‘‘(A) ELECTION.—A home health agency

2 may elect to receive per visit payments in excess

3 of the per visit payment rate under paragraph

4 (1) up to the per visit payment limit under sub5 paragraph (B) if the agency can demonstrate to

6 the satisfaction of the Secretary that it can rea7 sonably expect to incur such costs and that

8 total payments will not exceed the agency’s ag9 gregate limit under subsection (c). The Sec10 retary shall further provide for exemptions, ex11 ceptions, and adjustments to the per visit pay12 ment limit of this section on the same basis as

13 are provided under subsection (c)(3) with re14 spect to the limitations on final payment.

15 ‘‘(B) PER VISIT PAYMENT LIMIT.—For fis16 cal year 1997, the per visit payment limit under

17 this subparagraph is calculated as established

18 by section 1861(v)(1)(L). For each subsequent

19 year, such payment limit is equal to the limit

20 for the preceding fiscal year under this sub21 paragraph increased by the home health market

22 basket index for the fiscal year involved.

23 ‘‘(4) HOME HEALTH MARKET BASKET PER24 CENTAGE INCREASE.—For purposes of this sub25 section, the term ‘home health market basket per-
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1 centage increase’ means, with respect to a fiscal

2 year, a percentage (estimated by the Secretary be3 fore the beginning of the fiscal year) determined and

4 applied with respect to the types of home health

5 services described in subsection (a)(2) in the same

6 manner as the market basket percentage increase

7 under section 1886(b)(3)(B)(iii) is determined and

8 applied to inpatient hospital services for discharges

9 in the fiscal year.

10 ‘‘(c) AGGREGATE LIMITS.—

11 ‘‘(1) PHASE I AGGREGATE LIMIT.—

12 ‘‘(A) IN GENERAL.—Before the end of the

13 second 12-month period beginning on the effec14 tive date of this section, except as provided in

15 paragraphs (3) and (4), a home health agency

16 may not receive aggregate per visit payments

17 under subsection (a) for such a 12-month pe18 riod in excess of an amount equal to the prod19 uct of—

20 ‘‘(i) the number of unduplicated medi21 care beneficiaries receiving home health

22 services from the agency during the period;

23 and

24 ‘‘(ii) the per patient limit determined

25 for such period.
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1 ‘‘(B) ESTABLISHMENT OF PER PATIENT

2 LIMITS FOR INITIAL YEAR.—

3 ‘‘(i) IN GENERAL.—For the initial 12-

4 month period, the per patient limit for an

5 agency is equal to the product of—

6 ‘‘(I) the sum of 75 percent of the

7 updated per visit costs described in

8 clause (ii) for the agency and 25 per9 cent of the regional average described

10 in clause (iii) for the agency; and

11 ‘‘(II) the average annual number

12 of medicare home health agency visits

13 per unduplicated medicare beneficiary

14 for fiscal year 1995.

15 ‘‘(ii) UPDATED PER VISIT COSTS.—

16 The updated per visit costs described in

17 this clause, for a home health agency for

18 a payment period, is the average per visit

19 reasonable costs for home health services

20 of the agency, calculated for the base year,

21 based on fiscal year 1994 cost per visit,

22 updated by the home health market basket

23 percentage increase through the payment

24 period involved.
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1 ‘‘(iii) REGIONAL AVERAGE.—The re2 gional average described in this clause, for

3 a home health agency for a payment pe4 riod, is the average of the updated per visit

5 costs described in clause (ii) for the period

6 for home health agencies located in the

7 same census region in which the agency is

8 located.

9 ‘‘(C) ESTABLISHMENT OF PER PATIENT

10 LIMITS FOR SECOND YEAR.—For the second 12-

11 month period, the per patient limit for an agen12 cy is equal to the product of—

13 ‘‘(i) the sum of—

14 ‘‘(I) 50 percent of the updated

15 per visit costs described in subpara16 graph (B)(ii) for the agency for the

17 period, and

18 ‘‘(II) 50 percent of the regional

19 average described in subparagraph

20 (B)(iii) for the agency for the period;

21 and

22 ‘‘(ii) the average annual number of

23 medicare home health agency visits per

24 unduplicated medicare beneficiary for fiscal

25 year 1995.
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1 ‘‘(D) NEW PROVIDERS AND PROVIDERS

2 WITHOUT BASE YEAR.—For a new home health

3 agency or a home health agency for which there

4 is no base year under subparagraph (B)(ii), the

5 per patient limit shall be equal to the mean of

6 these limits applied to home health agencies in

7 the same census region in which the agency is

8 located as determined by the Secretary. A home

9 health agency shall not be treated as a new

10 home health agency by reason of any corporate

11 restructuring or change of name.

12 ‘‘(2) PHASE II AGGREGATE LIMITS.—

13 ‘‘(A) IN GENERAL.—After the end of the

14 second 12-month period beginning on the effec15 tive date of this section and until the effective

16 date of any episodic prospective payment sys17 tem (including a system developed under sub18 section (h)) that is enacted by the Congress, ex19 cept as provided in paragraphs (3) and (4), a

20 home health agency may not receive aggregate

21 per visit payments under subsection (a) for a

22 12-month payment period in excess of an

23 amount equal to the sum of the following:
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1 ‘‘(i) The sum (for all case-mix cat2 egories) of the products (determined sepa3 rately for each such category) of—

4 ‘‘(I) the total number of episodes

5 for the category for which the agency

6 receives payments during the payment

7 period, and

8 ‘‘(II) the per episode limit deter9 mined under subparagraph (B) for

10 the category and payment year.

11 ‘‘(ii) The product of—

12 ‘‘(I) the number of unduplicated

13 medicare beneficiaries receiving home

14 health services from the agency be15 yond 120 days during the payment

16 year, and

17 ‘‘(II) the per patient limit for

18 services provided beyond 120 days, as

19 specified in subparagraph (E).

20 ‘‘(B) ESTABLISHMENT OF PER EPISODE

21 LIMITS FOR FIRST 120 DAYS.—

22 ‘‘(i) IN GENERAL.—The per episode

23 limit under this subparagraph for a pay24 ment year for a case-mix category for the

25 area in which a home health agency is lo-
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1 cated (which shall be the same area used

2 to determine the area wage index applica3 ble to hospitals under section

4 1886(d)(3)(E)) is equal to the product

5 of—

6 ‘‘(I) the mean number of visits

7 for each type of home health service

8 described in subsection (a)(2) fur9 nished during an episode of such case10 mix category in such area during fis11 cal year 1995; and

12 ‘‘(II) the per visit payment rate

13 established under subsection (b) for

14 such type of home health service for

15 the fiscal year for which the deter16 mination is being made.

17 ‘‘(ii) DETERMINATION OF AREA.—In

18 the case of an area which the Secretary de19 termines has an insufficient number of

20 home health agencies to establish an ap21 propriate per episode limit under this sub22 paragraph, the Secretary may establish an

23 area other than the area used to determine

24 the area wage under section 1886(d)(3)(E)
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1 for purposes of establishing an appropriate

2 per episode limit.

3 ‘‘(C) CASE-MIX CATEGORY.—For purposes

4 of this paragraph, the term ‘case-mix category’

5 means each of the 18 case-mix categories estab6 lished under the Home Health Agency Prospec7 tive Payment Demonstration Project conducted

8 by the Health Care Financing Administration.

9 The Secretary may develop and apply a more

10 accurate methodology for determining case-mix

11 categories subject to prior public notice and

12 comment under section 553 of title 5, United

13 States Code.

14 ‘‘(D) EPISODE.—

15 ‘‘(i) IN GENERAL.—For purposes of

16 this paragraph, the term ‘episode’ means

17 the continuous 120-day period that—

18 ‘‘(I) begins on the date of an in19 dividual’s first visit for a type of home

20 health service described in subsection

21 (a)(2) for a case-mix category, and

22 ‘‘(II) is immediately preceded by

23 a 45-day period in which the individ24 ual did not receive visits for a type of
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1 home health service described in sub2 section (a)(2).

3 ‘‘(ii) PRORATION OF EPISODE LIMIT

4 SPANNING PAYMENT YEARS.—The Sec5 retary shall provide for such rules as ap6 propriate to prorate episode limits under

7 this paragraph which begin during a pay8 ment year and end in a subsequent pay9 ment year.

10 ‘‘(E) ESTABLISHMENT OF A PER PATIENT

11 ANNUAL LIMIT FOR SERVICES PROVIDED AFTER

12 120 DAYS.—

13 ‘‘(i) IN GENERAL.—The per patient

14 limit for services provided by a home

15 health agency after 120 days for a pay16 ment period is equal to the product of—

17 ‘‘(I) the sum of 50 percent of the

18 updated per visit costs described in

19 paragraph (1)(B)(ii) for the agency

20 and year and 50 percent of the re21 gional average described in paragraph

22 (1)(B)(iii) for the agency and year;

23 and

24 ‘‘(II) the average annual number

25 of medicare home health agency visits
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1 over 120 days per unduplicated medi2 care beneficiary for fiscal year 1995.

3 ‘‘(ii) NEW PROVIDERS AND PROVID4 ERS WITHOUT BASE YEAR.—The provisions

5 of subparagraph (D) of paragraph (1)

6 shall apply with respect to clause (i)(I) in

7 the same manner as they apply to subpara8 graph (B)(ii) of paragraph (1).

9 ‘‘(3) EXEMPTIONS AND EXCEPTIONS.—

10 ‘‘(A) EXTRAORDINARY COSTS.—The Sec11 retary shall provide for an exemption from, or

12 an exception and adjustment to, at the request

13 of the home health agency, the methods under

14 this subsection for determining payment limits

15 where events beyond the home health agency’s

16 control or extraordinary circumstances, includ17 ing the case mix of such home health agency,

18 create reasonable costs for a payment year

19 which exceed the applicable payment limits.

20 ‘‘(B) OTHER FACTORS.—The Secretary

21 may provide for such other exemptions from,

22 and exceptions and adjustments to, such meth23 ods, as the Secretary deems appropriate, as de24 termined by the Secretary.
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1 ‘‘(C) TIMELY DETERMINATION.—The Sec2 retary shall announce a decision on any request

3 for an exemption, exception, or adjustment

4 under this paragraph not later than 120 days

5 after receiving a completed application from the

6 home health agency for such exemption, excep7 tion, or adjustment, and shall include in such

8 decision a detailed explanation of the grounds

9 on which such request was approved or denied.

10 ‘‘(D) LIMITATION.—The cumulative ex11 penditures for exemptions and exceptions under

12 this paragraph shall not exceed the cumulative

13 amount that would have been payable under

14 paragraph (4)(B) if the 10 percent limitation

15 under clause (ii) of such paragraph did not

16 apply.

17 ‘‘(4) RECONCILIATION OF AMOUNTS.—

18 ‘‘(A) PAYMENTS IN EXCESS OF LIMITS.—

19 If a home health agency has received aggregate

20 per visit payments under subsection (a) for a

21 fiscal year in excess of the amount determined

22 under paragraph (1) with respect to such home

23 health agency for such fiscal year, the Secretary

24 shall reduce payments under this section to the

25 home health agency in the following fiscal year
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1 in such manner as the Secretary considers ap2 propriate (including on an installment basis) to

3 recapture the amount of such excess.

4 ‘‘(B) SHARE OF SAVINGS.—

5 ‘‘(i) COMPUTATION.—If a home health

6 agency has received aggregate per visit

7 payments under subsection (a) for a pay8 ment year in an amount less than the limit

9 determined under paragraph (1) or (2) (as

10 applicable) with respect to such home

11 health agency for such payment year and,

12 with respect only to paragraphs (1) and

13 (2)(E), the home health agency has an av14 erage payment per unduplicated medicare

15 beneficiary at or below 125 percent of the

16 regional average (described in paragraph

17 (1)(B)(iii) or (2)(E)(iii), respectively), sub18 ject to clause (ii), the Secretary shall pay

19 such home health agency a payment equal

20 to 50 percent of the difference between the

21 aggregate payment and each applicable

22 limit under paragraphs (1), (2)(B), or

23 (2)(E).

24 ‘‘(ii) LIMITATION.—In no case shall

25 payments under clause (i) for an agency
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1 for a year exceed 10 percent of the aggre2 gate per visit payments made to the agency

3 for the year.

4 ‘‘(iii) INSTALLMENT PAYMENTS.—The

5 Secretary may make the payments to a

6 home health agency under clause (i) during

7 a payment year on an installment basis

8 based on the estimated payment that the

9 agency would be eligible to receive with re10 spect to such payment year.

11 ‘‘(d) MEDICAL REVIEW PROCESS.—The Secretary

12 shall implement a medical review process for the system

13 of payments described in this section that shall provide

14 an assessment of the pattern of care furnished to individ15 uals receiving home health services for which payments are

16 made under this section to ensure that such individuals

17 receive appropriate home health services.

18 ‘‘(e) ADJUSTMENTS.—

19 ‘‘(1) IN GENERAL.—The Secretary shall provide

20 for appropriate adjustments to payments to a home

21 health agency under this section to ensure that the

22 agency does not engage in the following for the pur23 poses of circumventing the limits:

24 ‘‘(A) Discharging patients to another home

25 health agency or similar provider.
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1 ‘‘(B) Altering corporate structure or name

2 to avoid being subject to this section or for the

3 purpose of increasing payments under this title.

4 ‘‘(2) TRACKING OF PATIENTS THAT SWITCH

5 HOME HEALTH AGENCIES.—

6 ‘‘(A) DEVELOPMENT OF SYSTEM.—The

7 Secretary shall develop a system that tracks

8 home health patients that receive home health

9 services described in subsection (a)(2) from

10 more than 1 home health agency.

11 ‘‘(B) ADJUSTMENT OF LIMITS.—The Sec12 retary shall adjust limits under this section to

13 each home health agency that furnishes an indi14 vidual with a type of home health service de15 scribed in subsection (a)(2) to ensure that ag16 gregate payments on behalf of such individual

17 during such episode do not exceed the amount

18 that would be paid under this section if the in19 dividual received such services from a single

20 home health agency.

21 ‘‘(3) MONITORING LOW-COST CASES.—

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

23 develop and implement a system designed to

24 monitor significant changes in the percentage

25 distribution of low-cost and high-cost patients
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1 for which home health services are furnished by

2 a home health agency over such percentage dis3 tribution determined for the agency under sub4 paragraph (B).

5 ‘‘(B) DISTRIBUTION.—The Secretary shall

6 profile home health service patients to deter7 mine the distribution of patients for the pur8 pose of determining regional and national

9 trends.

10 ‘‘(C) LOW-COST AND HIGH-COST PA11 TIENTS.—For purposes of this paragraph, the

12 Secretary shall define a low-cost and high-cost

13 patient in a manner that provides that a home

14 health agency has an incentive to be cost effi15 cient in delivering home health services and

16 that the volume of such services does not in17 crease as a result of factors other than patient

18 needs.

19 ‘‘(D) REPORT ON ACCESS.—The Secretary

20 shall report to Congress on an annual basis

21 findings and recommendations for ensuring ac22 cess to appropriate home health services.

23 ‘‘(f) SPECIAL RULE FOR CHRISTIAN SCIENCE PRO24 VIDERS.—
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1 ‘‘(1) PAYMENT PERMITTED FOR SERVICES.—

2 Notwithstanding any other provision of this title,

3 payment shall be made under this title for home

4 health services furnished by Christian Science pro5 viders who meet applicable requirements of the First

6 Church of Christ, Scientist, Boston, Massachusetts,

7 and are certified for purposes of this title under cri8 teria established by the Secretary, in accordance

9 with a payment methodology established by the Sec10 retary.

11 ‘‘(2) EFFECTIVE DATE.—Paragraph (1) shall

12 apply to services furnished during cost reporting pe13 riods which begin after the date on which the Sec14 retary establishes the payment methodology and the

15 certification criteria described in paragraph (1).

16 ‘‘(g) REPORT BY MEDICARE PROSPECTIVE PAYMENT

17 REVIEW COMMISSION.—During the first 3 years in which

18 payments are made under this section, the Medicare Pro19 spective Payment Review Commission shall annually sub20 mit a report to Congress on the effectiveness of the pay21 ment methodology established under this section that shall

22 include recommendations regarding the following:

23 ‘‘(1) Case-mix and volume increases.

24 ‘‘(2) Quality monitoring of home health agency

25 practices.
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1 ‘‘(3) Whether providers of service are ade2 quately reimbursed.

3 ‘‘(4) On the adequacy of the exemptions and ex4 ceptions to the limits provided under subsection

5 (c)(1)(E).

6 ‘‘(5) The appropriateness of the methods pro7 vided under this section to adjust the aggregate lim8 its and annual payment updates to reflect changes

9 in the mix of services, number of visits, and assign10 ment to case categories to reflect changing patterns

11 of home health care.

12 ‘‘(6) The geographic areas used to determine

13 the per episode and per patient limits.

14 ‘‘(h) DEVELOPMENT OF EPISODIC PROSPECTIVE

15 PAYMENT SYSTEM FOR HOME HEALTH SERVICES.—

16 ‘‘(1) IN GENERAL.—The Secretary shall develop

17 a method payments for home health services under

18 this title in accordance with an episodic prospective

19 payment system. In developing the system, the Sec20 retary shall take into consideration—

21 ‘‘(A) the data and processes from sub22 section (c)(2) that have proven valid and reli23 able, and

24 ‘‘(B) the degree of disruption resulting

25 from changing the payment system.
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1 ‘‘(2) ADDITIONAL CONSIDERATIONS.—The per

2 episode amount under the system shall include all

3 services covered and paid under home health services

4 under this title as of the date of the enactment of

5 this section, including medical supplies. In defining

6 an episode of care under the system, the Secretary

7 shall consider an appropriate length of time for an

8 episode, the use of services and the number of visits

9 provided within an episode, potential changes in the

10 mix of services provided within an episode and their

11 cost, and a general system design that will provide

12 for continued access to quality services. The per epi13 sode amount shall be based on the most current data

14 available to the Secretary and shall include consider15 ation of the cost of new regulatory requirements,

16 changes in technology, and new care practices.

17 ‘‘(3) USE OF CASE MIX ADJUSTER.—Under the

18 system the Secretary shall employ an appropriate

19 case mix adjuster that explains a significant amount

20 of the variation in cost.

21 ‘‘(4) UPDATES AND LABOR ADJUSTMENT.—

22 Under the system, the episode payment amount shall

23 be updated annually by the home health market bas24 ket index and the labor portion of the episode

25 amount shall be adjusted for geographic differences
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1 in labor-related costs based on the most current hos2 pital wage index.

3 ‘‘(5) OUTLIERS.—Under the system the Sec4 retary may designate a payment provision for

5 outliers, recognizing the need to adjust payments

6 due to unusual variations in the type or amount of

7 medically necessary care.

8 ‘‘(6) COORDINATION REQUIREMENT.—Under

9 the system, a home health agency shall be respon10 sible for coordinating all care for a beneficiary under

11 this title.

12 ‘‘(7) INPUT.—The system shall be developed

13 with input from and coordination with representa14 tives from the home health services industry and

15 consumers of home health services.

16 ‘‘(8) PROPOSAL.—The Secretary shall submit to

17 Congress a proposal for the system, consistent with

18 this subsection, not later than 4 years after the date

19 of the enactment of this section.

20 ‘‘(9) IMPLEMENTATION.—The system developed

21 under this subsection shall become effective only

22 pursuant to an Act of Congress. It is the intent of

23 Congress that the effective date of the system be not

24 later than 18 months after the enactment of such an

25 Act.
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1 ‘‘(i) DEVELOPMENT OF DATA BASE.—Within 60

2 days after the date of the enactment of this section, the

3 Secretary shall initiate the development of a data base

4 upon which a fair and accurate case mix adjustor, as re5 quired by subsections (c)(2)(C) and (h)(3), can be devel6 oped and implemented. The data base must—

7 ‘‘(1) be capable of linking case mix data with

8 cost and utilization data;

9 ‘‘(2) contain data from HCFA Forms 485 and

10 UB–92;

11 ‘‘(3) contain additional data elements sufficient

12 to support the case-mix categories in subsection

13 (c)(2)(C); and

14 ‘‘(4) contain any additional data elements de15 termined necessary by the Secretary in consultation

16 with representatives of the home health industry.’’.

17 (b) APPEALS TO PROVIDER REIMBURSEMENT RE18 VIEW BOARD.—Section 1878(a) of such Act (42 U.S.C.

19 1395oo(a)) is amended by inserting ‘‘, any home health

20 agency which has received payment pursuant to section

21 1894 may obtain a hearing by the Board, with respect

22 to such payment,’’ after ‘‘subsection (h)’’.

23 (c) SUNSET OF REASONABLE COST LIMITATIONS.—

24 Section 1861(v)(1)(L) of such Act (42 U.S.C.
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1 1395x(v)(1)(L)) is amended by adding at the end the fol2 lowing new clause:

3 ‘‘(iv) This subparagraph shall apply only to services

4 furnished by home health agencies before the effective

5 date of section 1894.’’.

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

7 subsections (a) and (c) shall apply to payment for home

8 health services furnished on or after such date (not later

9 than 6 months after the date of the enactment of this Act)

10 as the Secretary of Health and Human Services specifies.

11 SEC. 3. REVIEW BY PEER REVIEW ORGANIZATION OF HOME

12 HEALTH SERVICES.

13 (a) IN GENERAL.—Section 1154 of the Social Secu14 rity Act (42 U.S.C. 1320c–3) is amended following new

15 subsections:

16 ‘‘(g)(1) Each contract under this part shall require

17 that the utilization and quality control peer review organi18 zation’s review responsibility pursuant to subsection (a)(1)

19 will include review of the level of care and quality of serv20 ices provided individuals receiving home health services

21 pursuant to sections 1812(a)(3) and 1832(a)(2)(A)(i).

22 ‘‘(2) If—

23 ‘‘(A) a home health agency has determined that

24 a patient does not meet the conditions for payment
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1 of home health services under section 1814 or sec2 tion 1833,

3 ‘‘(B) the home health agency has determined

4 that a patient no longer requires home health serv5 ices,

6 ‘‘(C) the home health agency has determined

7 that a patient requires a level of care which is incon8 sistent with the care prescribed by the patient’s at9 tending physician, or

10 ‘‘(D) the patient has been authorized by the

11 home health agency to receive a level of care less

12 than that considered by the patient as appropriate

13 to meet the patient’s needs,

14 the home health agency shall provide the patient (or the

15 patient’s representative) with a notice (meeting the condi16 tions prescribed by the Secretary under section 1879) of

17 the determination.

18 ‘‘(3)(A) If the patient (or patient’s representative)—

19 ‘‘(i) has received a notice under paragraph

20 (2), and

21 ‘‘(ii) requests the appropriate peer review

22 organization to review the determination,

23 the organization shall conduct a review under sub24 section (a) of the validity of the home health agen25 cy’s determination and shall provide notice (by tele-
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1 phone and in writing) to the patient or representa2 tive and the home health agency and attending phy3 sician involved of the results of the review. Such re4 view shall be conducted regardless of whether the

5 home health agency will charge for continued home

6 health services or whether the patient will be liable

7 for payment for such continued care.

8 ‘‘(B) If a patient (or a patient’s representative) re9 quests review under subparagraph (A) while the patient

10 is still a patient of the home health agency and not later

11 than noon of the first working day after the date the pa12 tient receives the notice under paragraph (2), then—

13 ‘‘(i) the home health agency shall provide to the

14 appropriate peer review organization the records re15 quired to review the determination by the close of

16 business of such first working day, and

17 ‘‘(ii) the peer review organization must provide

18 the notice under subparagraph (A) by not later than

19 one full working day after the date the organization

20 has received the request and such records.

21 ‘‘(4) If—

22 ‘‘(A) a request is made under paragraph (3)(A)

23 not later than noon of the first working day after

24 the date that the patient (or patient’s representa25 tive) receives the notice under paragraph (2), and
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1 ‘‘(B) the conditions described in section

2 1879(a)(2) with respect to the patient or representa3 tive are met,

4 the home health agency shall not charge the patient for

5 home health services furnished before noon of the day

6 after the date the patient or representative receives notice

7 of the peer review organization’s decision.

8 ‘‘(5) In any review conducted under paragraph (2)

9 or (3), the organization shall solicit the views of the pa10 tient involved (or the patient’s representative).

11 ‘‘(h) The utilization and quality control peer review

12 organization shall monitor the delivery of home health

13 services in a manner which includes a review of home

14 health agencies that present significant variation in utili15 zation.’’.

16 (b) HEARING RIGHTS.—Section 1155 of such Act (42

17 U.S.C. 1320c–4) is amended by adding at the end the fol18 lowing: ‘‘Notwithstanding the previous provisions of this

19 section, any beneficiary receiving home health services

20 subject to review under section 1154(g), and the provider,

21 who is dissatisfied with a determination, shall be entitled

22 to a hearing by the Secretary and to judicial review of

23 any final determination to the same extent as provided

24 under section 1869.’’.
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1 (c) ELIMINATION OF CERTAIN FISCAL

2 INTERMEDIARY RESPONSIBILITIES.—Section 1816(j) of

3 such Act (42 U.S.C. 1395h(j)) is amended by striking

4 ‘‘home health services,’’.

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

6 subsections (a) and (c) shall apply to contract years begin7 ning after the date of the enactment of this Act.

8 SEC. 4. RETROACTIVE REINSTATEMENT OF PRESUMPTIVE

9 WAIVER OF LIABILITY.

10 (a) IN GENERAL.—Section 9305(g)(3) of the Omni11 bus Budget Reconciliation Act of 1986, as amended by

12 section 426(d) of the Medicare Catastrophic Coverage Act

13 of 1988 and section 4207(b)(3) of the Omnibus Budget

14 Reconciliation Act of 1990 (as renumbered by section

15 160(d)(4) of the Social Security Act Amendments of

16 1994), is amended by striking ‘‘December 31, 1995’’ and

17 inserting ‘‘the date of implementation of a prospective

18 payment system for home health care services under sec19 tion 1894(h) of the Social Security Act’’.

20 (b) PRESUMPTION.—The second sentence of section

21 9205 of the Consolidated Omnibus Budget Reconciliation

22 Act of 1985 is amended by striking ‘‘December 31, 1995’’

23 and inserting ‘‘the date of implementation of a prospective
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1 payment system for home health care services under sec2 tion 1894(h) of such Act’’.

Æ