I

105TH CONGRESS

1ST SESSION H. R. 734

To amend titles XVIII and XIX of the Social Security Act to require hospitals

participating in the Medicare or Medicaid program to provide notice

of availability of Medicare and Medicaid providers as part of discharge

planning and to maintain and disclose information on certain referrals.

IN THE HOUSE OF REPRESENTATIVES

Mr. STARK introduced the following bill; which was referred to the Committee

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

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 titles XVIII and XIX of the Social Security Act

to require hospitals participating in the Medicare or Medicaid program to provide notice of availability of Medicare and Medicaid providers as part of discharge planning and to maintain and disclose information on certain

referrals.

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 ‘‘Patient Freedom of

5 Choice Act of 1997’’.
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1 SEC. 2. NOTIFICATION OF AVAILABILITY OF PROVIDERS AS

2 PART OF DISCHARGE PLANNING PROCESS.

3 (a) MEDICARE REQUIREMENT.—Section 1861(ee)(2)

4 of the Social Security Act (42 U.S.C. 1395x(ee)(2)) is

5 amended—

6 (1) in subparagraph (D), by inserting before

7 the period the following: ‘‘, including the availability

8 of those services through individuals and entities

9 that participate in the program under this title and

10 that serve the area in which the patient resides and

11 that request to be listed by the hospital as avail12 able’’; and

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

14 ‘‘(H) Consistent with section 1802, the dis15 charge plan shall—

16 ‘‘(i) not specify or otherwise limit the

17 qualified provider which may provide post-hos18 pital care, and

19 ‘‘(ii) identify (in a form and manner speci20 fied by the Secretary) any provider (to whom

21 the individual is referred) in which the hospital

22 has a disclosable financial interest (as specified

23 by the Secretary consistent with section

24 1866(a)(1)(R)) or which has such an interest in

25 the hospital.’’.
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1 (b) REQUIREMENT FOR MEDICAID FUNDING.—Sec2 tion 1903(i) of such Act (42 U.S.C. 1396b(i)) is amend3 ed—

4 (1) by striking ‘‘or’’ at the end of paragraph

5 (14),

6 (2) by striking the period at the end of para7 graph (15) and inserting ‘‘; or’’, and

8 (3) by inserting after paragraph (15) the fol9 lowing new paragraph:

10 ‘‘(16) with respect to any amount expended for

11 inpatient hospital services of a hospital unless the

12 hospital has in place a discharge planning process

13 that meets the requirements of section 1861(ee) with

14 respect to individuals entitled to medical assistance

15 under this title in the same manner as such require16 ments otherwise apply to individuals entitled to ben17 efits under title XVIII.’’.

18 (c) ADDITIONAL ENFORCEMENT THROUGH CIVIL

19 MONEY PENALTIES.—Section 1128A(b) of such Act (42

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

21 following new paragraph:

22 ‘‘(4) Any hospital that participates in the program

23 under title XVIII or XIX and that fails to comply with

24 the discharge planning process described in section

25 1861(ee)(2) either—
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1 ‘‘(A) by failing to list participating individuals

2 and entities requested to be listed under subpara3 graph (D) of such section, or

4 ‘‘(B) by violating subparagraph (H) of such

5 section,

6 shall be subject, in addition to any other penalties that

7 may be prescribed by law, to a civil money penalty of not

8 more than $10,000 for each such violation.’’.

9 (d) EFFECTIVE DATES.—The amendments made by

10 subsection (a) shall apply to discharges occurring on or

11 after 90 days after the date of the enactment of this Act.

12 The amendments made by subsection (b) shall apply to

13 expenditures for inpatient hospital services with respect to

14 discharges occurring on or after 90 days after the date

15 of the enactment of this Act. The amendments made by

16 subsection (c) shall apply to failures and violations occur17 ring on or after 90 days after the date of the enactment

18 of this Act.

19 SEC. 3. MAINTENANCE AND DISCLOSURE OF INFORMATION

20 ON POST-HOSPITAL SERVICE PROVIDERS.

21 (a) MEDICARE REQUIREMENT.—Section 1866(a)(1)

22 of the Social Security Act (42 U.S.C. 1395cc(a)(1)) is

23 amended—

24 (1) by striking ‘‘and’’ at the end of subpara25 graph (P),
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1 (2) by striking the period at the end of sub2 paragraph (Q), and

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

4 ‘‘(R) in the case of a hospital that has a finan5 cial interest (as specified by the Secretary in regula6 tions) in a provider of post-hospital services (includ7 ing an entity that furnishes durable medical equip8 ment), or in which such a provider has such a finan9 cial interest, or in which another entity has such a

10 financial interest (directly or indirectly) with such

11 hospital and such a provider, to maintain and dis12 close to the Secretary (in a form and manner speci13 fied by the Secretary) information on—

14 ‘‘(i) the nature of such financial interest,

15 ‘‘(ii) the number of individuals who were dis16 charged from the hospital and who were identified as

17 requiring the type of post-hospital services provided

18 by such provider, and

19 ‘‘(iii) the percentage of such individuals who re20 ceived such services from such provider (or another

21 such provider).’’.

22 (b) REQUIREMENT FOR MEDICAID FUNDING.—Sec23 tion 1903(i)(16) of such Act (42 U.S.C. 1396b(i)), as in24 serted by section 2(b), is amended—

25 (1) by striking ‘‘(A)’’ after ‘‘unless’’, and
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1 (2) by inserting before the period at the end the

2 following: ‘‘, and (B) the hospital is complying with

3 the requirements of section 1866(a)(1)(R)’’.

4 (c) DISCLOSURE OF INFORMATION TO THE PUB5 LIC.—Title XI of such Act is amended by inserting after

6 section 1145 the following new section:

7 ‘‘PUBLIC DISCLOSURE OF CERTAIN INFORMATION ON

8 HOSPITAL FINANCIAL INTEREST AND REFERRAL

9 PATTERNS

10 ‘‘SEC. 1146. The Secretary shall make available to

11 the public, in a form and manner specified by the Sec12 retary, information disclosed to the Secretary pursuant to

13 section 1866(a)(1)(R) or section 1903(i)(16).’’.

14 (d) EFFECTIVE DATE.—The Secretary of Health and

15 Human Services shall issue regulations by not later than

16 1 year after the date of the enactment of this Act to carry

17 out the amendments made by this section and such

18 amendments shall take effect as of such date (on or after

19 the issuance of such regulations) as the Secretary specifies

20 in such regulations.

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