I 

108TH CONGRESS 

1ST SESSION H. R. 787

To amend titles XVIII and XIX of the Social Security Act with respect 

to reform of Federal survey and certification process of nursing facilities 

under the Medicare and Medicaid Programs. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 13, 2003

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

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

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 titles XVIII and XIX of the Social Security Act 

with respect to reform of Federal survey and certification 

process of nursing facilities under the Medicare and Medicaid Programs.

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 and Medicaid 

5 Nursing Facility Quality Improvement Act of 2003’’. 
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1 SEC. 2. QUALITY IMPROVEMENT FOR NURSING FACILITIES 

2 UNDER THE MEDICARE AND MEDICAID PRO3 GRAMS. 

4 (a) INCENTIVES FOR IMMEDIATE IMPROVEMENT AND

5 PROTECTION OF NEEDED TRAINING PROGRAMS.—

6 (1) MEDICARE PROGRAM.—Section 1819(f)(2) 

7 of the Social Security Act (42 U.S.C. 1395i–3(f)(2)) 

8 is amended—

9 (A) in subparagraph (B)(iii), by striking 

10 ‘‘subparagraph (C)’’ and inserting ‘‘subpara11 graphs (C) and (D)’’; and 

12 (B) by adding at the end the following new 

13 subparagraph: 

14 ‘‘(D) RESTORATION OF NURSE AIDE

15 TRAINING UPON DEMONSTRATION OF COMPLI16 ANCE.—The prohibition on program approval 

17 described in subparagraph (B)(iii)(I) shall not 

18 be continued when the facility involved through 

19 on-site verification demonstrates compliance 

20 with the applicable standards.’’. 

21 (2) MEDICAID PROGRAM.—Section 1919(f)(2) 

22 of such Act (42 U.S.C. 1396r(f)(2)) is amended—

23 (A) in subparagraph (B)(iii), by striking 

24 ‘‘subparagraph (C)’’ and inserting ‘‘subpara25 graphs (C) and (D)’’; and 
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1 (B) by adding at the end the following new 

2 subparagraph: 

3 ‘‘(D) RESTORATION OF NURSE AIDE

4 TRAINING UPON DEMONSTRATION OF COMPLI5 ANCE.—The prohibition on program approval 

6 described in subparagraph (B)(iii)(I) shall not 

7 be continued when the facility involved through 

8 on-site verification demonstrates compliance 

9 with the applicable standards.’’. 

10 (b) REQUIREMENTS FOR NURSE AIDE TRAINING.—

11 (1) MEDICARE PROGRAM.—Section 

12 1819(f)(2)(B)(iii)(I) of such Act (42 U.S.C. 1395i–

13 3(f)(2)(B)(iii)(I)) is amended—

14 (A) in the matter before subdivision (a), by 

15 striking ‘‘, within the previous 2 years’’; 

16 (B) in subdivision (a), by striking ‘‘has op17 erated’’ and inserting ‘‘is operating’’; 

18 (C) in subdivision (b), by striking ‘‘has 

19 been subject’’ and inserting ‘‘is subject’’; and 

20 (D) in subdivision (c), by inserting ‘‘within 

21 the previous 2 years’’ after ‘‘(c)’’.

22 (2) MEDICAID PROGRAM.—Section 

23 1919(f)(2)(B)(iii)(I) of such Act (42 U.S.C. 

24 1396r(f)(2)(B)(iii)(I)) is amended—
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1 (A) in the matter before subdivision (a), by 

2 striking ‘‘, within the previous 2 years’’; 

3 (B) in subdivision (a), by striking ‘‘has op4 erated’’ and inserting ‘‘is operating’’; 

5 (C) in subdivision (b), by striking ‘‘has 

6 been subject’’ and inserting ‘‘is subject’’; and 

7 (D) in subdivision (c), by inserting ‘‘within 

8 the previous 2 years’’ after ‘‘(c)’’. 

9 (c) PROMOTING INNOVATION AND QUALITY IM10 PROVEMENT THROUGH STATE WAIVERS.—

11 (1) MEDICARE PROGRAM.—Section 1819(g) of 

12 such Act (42 U.S.C. 1395i–3(g)) is amended by add13 ing at the end the following new paragraph: 

14 ‘‘(6) WAIVER DEMONSTRATION AUTHORITY TO

15 PROMOTE INNOVATION AND QUALITY IMPROVE16 MENT.—

17 ‘‘(A) IN GENERAL.—At the request of a 

18 State, but not to exceed a total of 8 States, the 

19 Secretary may waive provisions of this sub20 section relating to survey and certification pro21 cedures in order to test and implement innova22 tive alternatives to the survey process otherwise 

23 applicable. The Secretary shall provide special 

24 consideration to the application of alternative 

25 procedures that increase the use of outcome
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1 measures, the incorporation of quality of life 

2 measures, and improve consistency and accu3 racy in deficiency determinations and survey re4 sults. The Secretary shall approve a waiver re5 quest if applicant demonstrates significant po6 tential for improving the quality of care, quality 

7 of life, and safety of residents. 

8 ‘‘(B) CONSIDERATION OF VIEWS OF

9 STAKEHOLDERS.—The Secretary shall only con10 sider waiver applications under this paragraph 

11 from a State under this paragraph if the State 

12 has convened and consulted with appropriate 

13 stakeholders in the State, including representa14 tives of nursing facilities, consumers groups, 

15 the State long term care ombudsman, labor or16 ganizations (and where such organizations are 

17 not present in the industry, other employee rep18 resentatives), and licensed health care pro19 viders, to assist in developing their alternative 

20 system. In determining whether to grant such 

21 waivers the Secretary shall take into consider22 ation the views of the stakeholders convened by 

23 the State.’’. 
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1 (2) MEDICAID PROGRAM.—Section 1919(g) of 

2 such Act (42 U.S.C. 1396r(g)) is amended by add3 ing at the end the following new paragraph: 

4 ‘‘(6) WAIVER DEMONSTRATION AUTHORITY TO

5 PROMOTE INNOVATION AND QUALITY IMPROVE6 MENT.—

7 ‘‘(A) IN GENERAL.—At the request of a 

8 State, but not to exceed a total of 8 States, the 

9 Secretary may waive provisions of this sub10 section relating to survey and certification pro11 cedures in order to test and implement innova12 tive alternatives to the survey process otherwise 

13 applicable. The Secretary shall provide special 

14 consideration to the application of alternative 

15 procedures that increase the use of outcome 

16 measures, the incorporation of quality of life 

17 measures, and improve consistency and accu18 racy in deficiency determinations and survey re19 sults. The Secretary shall approve a waiver re20 quest if it demonstrates significant potential for 

21 improving the quality of care, quality of life, 

22 and safety of residents. 

23 ‘‘(B) CONSIDERATION OF VIEWS OF

24 STAKEHOLDERS.—The Secretary shall only con25 sider waiver applications under this paragraph 
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1 from a State under this paragraph if the State 

2 has convened and consulted with appropriate 

3 stakeholders in the State, including representa4 tives of nursing facilities, consumers groups, 

5 the State long term care ombudsman, labor or6 ganizations (and where such organizations are 

7 not present in the industry, other employee rep8 resentatives), and licensed health care pro9 viders, to assist in developing their alternative 

10 system. In determining whether to grant such 

11 waivers the Secretary shall take into consider12 ation the views of the stakeholders convened by 

13 the State.’’. 

14 (d) REMOVAL OF INFLEXIBILITY IN PROVIDER TER15 MINATION.—

16 (1) MEDICARE PROGRAM.—Section 1819(h)(2) 

17 of such Act (42 U.S.C. 1395i–3(h)(2)) is amended—

18 (A) in subparagraph (D), by striking ‘‘If’’ 

19 and inserting ‘‘Subject to subparagraph (F), 

20 if’’; 

21 (B) in subparagraph (E), by striking ‘‘In’’ 

22 and inserting ‘‘Subject to subparagraph (F), 

23 in’’; and 

24 (C) by adding at the end the following new 

25 subparagraph: 
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1 ‘‘(F) CONTINUATION OF PAYMENTS PEND2 ING REMEDIATION WHEN FLEXIBILITY NEEDED

3 TO PROTECT RESIDENTS.—The Secretary may 

4 continue payments, over a period not longer 

5 than 12 months after the effective date of the 

6 findings, under this title with respect to a nurs7 ing facility not in compliance with a require8 ment of subsection (b), (c), or (d), if—

9 ‘‘(i) the State survey agency finds 

10 that ceasing payments is not in the best 

11 interests of residents and that continuation 

12 of payments would not jeopardize resi13 dents’ health and safety; 

14 ‘‘(ii) the State survey agency finds 

15 that it is more appropriate to take alter16 native action to assure compliance of the

17 facility with the requirements than to ter18 minate the certification of the facility; and 

19 ‘‘(iii) the State has submitted a plan 

20 and timetable for corrective action to the 

21 Secretary for approval and the Secretary 

22 approves the plan of corrective action.’’. 

23 (2) MEDICAID PROGRAM.—Section 1919(h)(2) 

24 of such Act (42 U.S.C. 1396r(h)(2)) is amended—
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1 (A) in subparagraph (C), by striking ‘‘If’’ 

2 and inserting ‘‘Subject to subparagraph (G), 

3 if’’; 

4 (B) in subparagraph (D), by striking ‘‘In’’ 

5 and inserting ‘‘Subject to subparagraph (G), 

6 in’’; and 

7 (C) by adding at the end the following new 

8 subparagraph: 

9 ‘‘(G) CONTINUATION OF PAYMENTS PEND10 ING REMEDIATION WHEN FLEXIBILITY NEEDED

11 TO PROTECT RESIDENTS.—The Secretary may 

12 continue payments, over a period not longer 

13 than 12 months after the effective date of the 

14 findings, under this title with respect to a nurs15 ing facility not in compliance with a require16 ment of subsection (b), (c), or (d), if—

17 ‘‘(i) the State survey agency finds 

18 that ceasing payments is not in the best 

19 interests of residents and that continuation 

20 of payments would not jeopardize resi21 dents’ health and safety; 

22 ‘‘(ii) the State survey agency finds 

23 that it is more appropriate to take alter24 native action to assure compliance of the 
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1 facility with the requirements than to ter2 minate the certification of the facility; and 

3 ‘‘(iii) the State has submitted a plan 

4 and timetable for corrective action to the 

5 Secretary for approval and the Secretary 

6 approves the plan of corrective action.’’. 

7 (e) ACCESS TO INFORMAL DISPUTE RESOLUTION

8 PROCESS.—

9 (1) MEDICARE PROGRAM.—Section 1819(g)(1) 

10 of such Act (42 U.S.C. 1395i–3(g)(1)) is amended 

11 by adding at the end the following new subpara12 graph: 

13 ‘‘(F) ESTABLISHMENT OF INFORMAL, 

14 INDEPENDENT DISPUTE RESOLUTION PROC15 ESS.—Each State shall establish an informal 

16 dispute resolution process that allows facilities 

17 to settle disputes involving compliance with the 

18 standards established under this section. Such 

19 process shall rely on independent third parties, 

20 not related to the State survey agency or the 

21 facilities, in resolving disputes.’’. 

22 (2) MEDICAID PROGRAM.—Section 1919(g)(1) 

23 of such Act (42 U.S.C. 1396r(g)(1)) is amended by 

24 adding at the end the following new subparagraph: 
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1 ‘‘(F) ESTABLISHMENT OF INFORMAL, 

2 INDEPENDENT DISPUTE RESOLUTION PROC3 ESS.—Each State shall establish an informal 

4 dispute resolution process that allows facilities 

5 to settle disputes involving compliance with the 

6 standards established under this section. Such 

7 process shall rely on independent third parties, 

8 not related to the State survey agency or the 

9 facilities, in resolving disputes.’’. 

10 (f) DEFERENCE TO ATTENDING PHYSICIAN DIAG11 NOSIS AND TREATMENT DECISIONS DURING THE SURVEY

12 PROCESS.—

13 (1) MEDICARE PROGRAM.—Section 1819(g)(2) 

14 of such Act (42 U.S.C. 1395i–3(g)(2)) is amended 

15 by inserting at the end the following new subpara16 graph: 

17 ‘‘(F) DEFERENCE TO ATTENDING PHYSI18 CIAN DIAGNOSIS AND TREATMENT.—

19 ‘‘(i) IN GENERAL.—In the conduct of 

20 any surveys under this subsection and the 

21 compliance decisions made thereunder, sur22 veyors shall defer to the diagnosis and 

23 treatment decisions of the resident’s at24 tending physician and of the facility’s med25 ical director, and to a plan of care estab-
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1 lished pursuant to subsection (b)(2), as 

2 long as such decisions and plans are con3 sistent with acceptable standards of prac4 tice. 

5 ‘‘(ii) FAILURE TO DEFER TO TREAT6 ING DECISION.—Each State and the Sec7 retary shall implement programs to mon8 itor and correct instances of failure of sur9 veyors to adhere to the requirements of 

10 this subparagraph.’’. 

11 (2) MEDICAID PROGRAM.—Section 1919(g)(2) 

12 of such Act (42 U.S.C. 1396r(g)(2)) is amended by 

13 inserting at the end the following new subparagraph: 

14 ‘‘(F) DEFERENCE TO ATTENDING PHYSI15 CIAN DIAGNOSIS AND TREATMENT.—

16 ‘‘(i) IN GENERAL.—In the conduct of 

17 any surveys under this subsection and the 

18 compliance decisions made thereunder, sur19 veyors shall defer to the diagnosis and 

20 treatment decisions of the resident’s at21 tending physician and of the facility’s med22 ical director, and to a plan of care estab23 lished pursuant to subsection (b)(2), as 

24 long as such decisions and plans are con-
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1 sistent with acceptable standards of prac2 tice. 

3 ‘‘(ii) FAILURE TO DEFER TO TREAT4 ING DECISION.—The State and the Sec5 retary shall implement programs to mon6 itor and correct instances of failure of sur7 veyors to adhere to the requirements of 

8 this subparagraph.’’. 

9 (g) DISSEMINATION OF INFORMATION ON BEST

10 PRACTICES.—

11 (1) MEDICARE PROGRAM.—Section 

12 1819(g)(2)(E) of such Act (42 U.S.C. 1395i–

13 3(g)(2)(E)) is amended by adding at the end the fol14 lowing new clause: 

15 ‘‘(iv) PERMITTING DISSEMINATION OF

16 INFORMATION ON BEST AND INNOVATIVE

17 PRACTICES.—Nothing in this section shall 

18 be construed as precluding a member of a 

19 survey team from providing information to 

20 facility staff on best or innovative practices 

21 in complying with the requirements of this 

22 section.’’. 

23 (2) MEDICAID PROGRAM.—Section 

24 1919(g)(2)(E) of such Act (42 U.S.C.
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1 1396r(g)(2)(E)) is amended by adding at the end 

2 the following new clause: 

3 ‘‘(iv) PERMITTING DISSEMINATION OF

4 INFORMATION ON BEST AND INNOVATIVE

5 PRACTICES.—Nothing in this section shall 

6 be construed as precluding a member of a 

7 survey team from providing information to 

8 facility staff on best or innovative practices 

9 in complying with the requirements of this 

10 section.’’. 

11 (h) REMOVING BARRIERS THAT DETER NEW MAN12 AGEMENT FROM TAKING OVER AND IMPROVING PROB13 LEM FACILITIES.—

14 (1) MEDICARE PROGRAM.—Section 1819(h) of 

15 such Act (42 U.S.C. 1395i–3(h)) is amended by 

16 adding at the end the following new paragraph: 

17 ‘‘(7) FOSTERING IMPROVEMENT OF FACILITIES

18 WITH POOR COMPLIANCE HISTORIES.—The Sec19 retary shall provide incentives for operators with his20 tories of good compliance to acquire facilities with 

21 poor compliance histories. Such incentives shall be 

22 designed to promote the sustained provision of high23 quality care and shall only be made available in the 

24 case of bona fide, arm’s-length sale of facilities with 

25 poor compliance histories.’’. 
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1 (2) MEDICAID PROGRAM.—Section 1919(h) of 

2 such Act (42 U.S.C. 1396r(h)) is amended by add3 ing at the end the following new paragraph: 

4 ‘‘(10) FOSTERING IMPROVEMENT OF FACILI5 TIES WITH POOR COMPLIANCE HISTORIES.—The 

6 Secretary shall provide incentives for operators with 

7 histories of good compliance to acquire facilities with 

8 poor compliance histories. Such incentives shall be 

9 designed to promote the sustained provision of high10 quality care and shall only be made available in the 

11 case of bona fide, arm’s-length sale of facilities with 

12 poor compliance histories.’’. 

13 (i) ALLOWING APPEALS OF ALL DEFICIENCIES.—

14 (1) MEDICARE PROGRAM.—Section 1819(h) of 

15 such Act, as amended by subsection (g)(1), is fur16 ther amended by adding at the end the following 

17 new paragraph: 

18 ‘‘(8) RIGHT TO APPEAL ALL DEFICIENCY CITA19 TIONS.—Notwithstanding any other provision of law, 

20 a facility may appeal any deficiency determination 

21 under this section with respect to which a penalty 

22 has not been imposed in the same manner as the fa23 cility may appeal such determination if a penalty 

24 had been imposed.’’. 
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1 (2) MEDICAID PROGRAM.—Section 1919(h) of 

2 such Act, as amended by subsection (g)(2), is fur3 ther amended by adding at the end the following 

4 new paragraph: 

5 ‘‘(11) RIGHT TO APPEAL ALL DEFICIENCY CITA6 TIONS.—Notwithstanding any other provision of law, 

7 a facility may appeal any deficiency determination 

8 under this section with respect to which a penalty 

9 has not been imposed in the same manner as the fa10 cility may appeal such determination if a penalty 

11 had been imposed.’’. 

12 (j) ENCOURAGEMENT OF EXCELLENCE IN NURSING

13 FACILITY CARE.—

14 (1) MEDICARE PROGRAM.—Section 1819(h)(2) 

15 of such Act is amended by adding at the end the fol16 lowing new subparagraph: 

17 ‘‘(F) AWARD PROGRAMS.—The Secretary 

18 shall establish a program that rewards skilled 

19 nursing facilities that provide the highest qual20 ity care in a manner similar to that required to 

21 be established by States under section 

22 1919(h)(2)(F). Such program may use public 

23 recognition, incentive payments, or other 

24 means.’’. 
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1 (2) MEDICAID PROGRAM.—Section 

2 1919(h)(2)(F) of such Act is amended by striking 

3 ‘‘may establish’’ and inserting ‘‘shall establish’’. 

4 (k) EFFECTIVE DATE.—The amendments made by 

5 this section shall take effect 1 month after the date of 

6 the enactment of this Act except in cases where regula7 tions are needed to implement these changes and in such 

8 cases shall be effective 6 months after such enactment 

9 date.

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