II 

109TH CONGRESS 

1ST SESSION S. 708 

To amend title XVIII of the Social Security Act to provide medicare beneficiaries with access to information concerning the quality of care provided by skilled nursing facilities and to provide incentives to skilled 

nursing facilities to improve the quality of care provided by those facilities by linking the amount of payment under the medicare program 

to quality reporting and performance requirements, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 5, 2005 

Mr. WYDEN (for himself and Mr. SMITH) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend title XVIII of the Social Security Act to provide 

medicare beneficiaries with access to information concerning the quality of care provided by skilled nursing 

facilities and to provide incentives to skilled nursing facilities to improve the quality of care provided by those 

facilities by linking the amount of payment under the 

medicare program to quality reporting and performance 

requirements, 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, 
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Long Term Care Qual3 ity and Consumer Information Improvement Act of 

4 2005’’. 

5 SEC. 2. MEDICARE PAYMENT ADJUSTMENTS FOR SKILLED 

6 NURSING FACILITIES BASED ON QUALITY 

7 DATA. 

8 (a) IN GENERAL.—Section 1888(e) of the Social Se9 curity Act (42 U.S.C. 1395yy(e)) is amended by adding 

10 at the end the following new paragraph: 

11 ‘‘(13) PAYMENT ADJUSTMENTS BASED ON

12 QUALITY DATA.— 

13 ‘‘(A) ESTABLISHMENT OF QUALITY MEAS14 URES.— 

15 ‘‘(i) IN GENERAL.—Subject to the 

16 succeeding provisions of this subparagraph, 

17 not later than 6 months after the date of 

18 enactment of the Long Term Care Quality 

19 and Consumer Information Improvement 

20 Act of 2005, the Secretary shall establish 

21 between 10 and 15 quality measures appli22 cable with respect to skilled nursing facili23 ties in addition to any quality measures 

24 applicable with respect to such facilities es25 tablished prior to January 1, 2005. 
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1 ‘‘(ii) CONSULTATION.—In establishing 

2 the quality measures under clause (i), the 

3 Secretary shall consult with— 

4 ‘‘(I) residents of skilled nursing 

5 facilities; 

6 ‘‘(II) representatives of patient 

7 advocacy organizations; 

8 ‘‘(III) State regulatory represent9 atives; 

10 ‘‘(IV) representatives from the 

11 skilled nursing facility industry; and 

12 ‘‘(V) experts on quality measures. 

13 ‘‘(iii) STAFFING AND MIX OF LI14 CENSED STAFF.—At least one of the qual15 ity measures established under clause (i) 

16 shall relate to the level of skilled nursing 

17 facility staffing and the mix of licensed 

18 staff. 

19 ‘‘(iv) ESTABLISHMENT AND APPLICA20 TION OF RISK ADJUSTMENT METHOD21 OLOGY.—The quality measures established 

22 under clause (i) shall take into account the 

23 relative risks associated with the popu24 lation of each skilled nursing facility to en25 sure that the differences in the quality 
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1 measures reflect differences in the care 

2 provided by the facilities and not dif3 ferences in resident population characteris4 tics by using a risk adjustment method5 ology established for purposes of this sub6 section. The risk adjustment methodology 

7 established and applied under this clause 

8 may exclude certain types of residents, 

9 stratify residents into high-risk and low10 risk groups, or use a statistical adjust11 ment, such as a regression analysis, that 

12 takes into consideration multiple character13 istics for each resident. 

14 ‘‘(v) SPECIAL PROVISION FOR SMALL

15 SKILLED NURSING FACILITIES.—The Sec16 retary, in consultation with the individuals 

17 and groups described in clause (ii), shall 

18 establish criteria for determining which 

19 quality measures established under clause 

20 (i) do not apply with respect to skilled 

21 nursing facilities that are not large enough 

22 to yield meaningful data with respect to 

23 such measure. 

24 ‘‘(vi) ANNUAL REVIEW AND REVI25 SION.—The Secretary, in consultation with 
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1 the individuals and groups described in 

2 clause (ii), shall annually review and revise 

3 the quality measures established under 

4 clause (i), as the Secretary, in consultation 

5 with such individuals and groups, deter6 mines appropriate. 

7 ‘‘(B) REPORTING ON QUALITY MEAS8 URES.— 

9 ‘‘(i) SUBMISSION OF DATA.—Each 

10 skilled nursing facility that desires to re11 ceive a payment adjustment under sub12 paragraph (C) shall submit such data at 

13 such time and in such form and manner as 

14 the Secretary, in consultation with the in15 dividuals and groups described in subpara16 graph (A)(ii), requires for purposes of ap17 plying the quality measures established 

18 under subparagraph (A)(i). 

19 ‘‘(ii) PUBLICATION OF QUALITY RAT20 INGS.—Not less frequently than annually, 

21 the Secretary shall cause to be posted on 

22 the Internet website of the Centers for 

23 Medicare & Medicaid Services and to be 

24 published in newspapers with a national 

25 circulation a quality rating for each skilled 
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1 nursing facility submitting data under 

2 clause (i) by using such data to apply the 

3 quality measures established under sub4 paragraph (A)(i) to each facility. 

5 ‘‘(C) ADDITIONAL PAYMENT AMOUNT.— 

6 ‘‘(i) IN GENERAL.—Subject to clause 

7 (iv), each skilled nursing facility that sub8 mits data under subparagraph (B)(i) shall 

9 receive the update described in clause (ii) 

10 and the payment adjustment described in 

11 clause (iii). 

12 ‘‘(ii) FULL MARKET BASKET UP13 DATE.—Notwithstanding paragraph 

14 (4)(E)(ii) or any other provision of law, 

15 each skilled nursing facility described in 

16 clause (i) shall receive the full market bas17 ket update for the year following the year 

18 in which such data is submitted. 

19 ‘‘(iii) PAYMENTS BASED ON QUAL20 ITY.—The Secretary shall adjust the total 

21 payment amount under this subsection for 

22 skilled nursing facilities described in clause 

23 (i) as follows: 

24 ‘‘(I) Beginning with fiscal year 

25 2007, for each of the skilled nursing 
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1 facilities that the Secretary deter2 mines, based on the quality measures 

3 established under subparagraph (A)(i) 

4 for the preceding fiscal year, to be— 

5 ‘‘(aa) in the top 10 percent 

6 of all nursing facilities that sub7 mitted data under subparagraph 

8 (B)(i) during the preceding fiscal 

9 year, each payment amount de10 termined under the other provi11 sions of this subsection shall be 

12 increased by 2 percent of that 

13 amount; and 

14 ‘‘(bb) below the top 10 per15 cent of such nursing facilities, 

16 but within the top 20 percent of 

17 such facilities, each payment 

18 amount determined under the 

19 other provisions of this sub20 section shall be increased by 1 

21 percent of that amount. 

22 ‘‘(II) Beginning with fiscal year 

23 2008, for each of the skilled nursing 

24 facilities that the Secretary deter25 mines, based on the quality measures 
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1 established under subparagraph 

2 (A)(i), to be in the bottom 20 percent 

3 of all nursing facilities that submitted 

4 data under subparagraph (B)(i), each 

5 payment amount determined under 

6 the other provisions of this subsection 

7 shall be decreased by 1 percent of 

8 that amount. 

9 ‘‘(iv) SPECIAL PROVISION FOR SMALL

10 SKILLED NURSING FACILITIES.—The Sec11 retary may not refuse to provide a full 

12 market basket update under clause (ii) or 

13 to provide an increase or reduction under 

14 clause (iii) with respect to a skilled nursing 

15 facility because such facility does not sub16 mit data with respect to a quality measure 

17 that does not apply to the nursing facility 

18 as a result of the application of the criteria 

19 established under subparagraph (A)(v). 

20 ‘‘(D) BUDGET NEUTRALITY.—In imple21 menting this paragraph, the Secretary shall en22 sure that the aggregate amount of expenditures 

23 made by the Secretary under this title in a fis24 cal year does not exceed the aggregate amount 

25 which the Secretary would have expended under 
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1 this title in the year if this paragraph had not 

2 been enacted. In determining the aggregate 

3 amount which the Secretary would have ex4 pended under this title in the year if this para5 graph had not been enacted, the Secretary shall 

6 assume a current services budget baseline that 

7 includes in the assumption of current services a 

8 level of expenditures for covered skilled nursing 

9 facility services that reflects a continuation of 

10 the Resource Utilization Groups (RUGS) that 

11 were used for making payments under this sec12 tion during fiscal year 2005.’’. 

13 (b) EVALUATION AND REPORT.— 

14 (1) EVALUATION.—The Secretary of Health 

15 and Human Services shall conduct an evaluation of 

16 the implementation of the amendment made by sub17 section (a), including an evaluation of the number of 

18 skilled nursing facilities that submit the data pursu19 ant to paragraph (13)(B) of section 1888(e) of the 

20 Social Security Act (42 U.S.C. 1395yy(e)), as added 

21 by subsection (a). 

22 (2) REPORT.—Not later than December 31, 

23 2008, the Secretary of Health and Human Services 

24 shall submit a report to Congress on the evaluation 

25 conducted under paragraph (1) together with rec-
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1 ommendations for such legislation and administra2 tive actions as the Secretary considers appropriate. 

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