Sustaining Healthcare Integrity and Fair Treatment Act of 2016

To provide for the extension of certain long-term care hospital Medicare payment rules, clarify the application of rules on the calculation of hospital length of stay to certain moratorium-excepted long-term care hospitals, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the Sustaining Healthcare Integrity and Fair Treatment Act of 2016 (b) Table of contents This table of contents of this Act is as follows: Sec. 1. Short title; table of contents. Title I—Medicare Part A Provisions Sec. 101. Extension of certain LTCH Medicare payment rules. Sec. 102. Application of rules on the calculation of hospital length of stay to all LTCHs. Sec. 103. Change in Medicare classification for certain hospitals. Sec. 104. Temporary exception to the application of the Medicare LTCH site neutral provisions for certain spinal cord specialty hospitals. Sec. 105. Temporary extension to the application of the Medicare LTCH site neutral provisions for certain discharges with severe wounds. Title II—Other Provisions Sec. 201. No payment for items and services furnished by newly enrolled providers or suppliers within a temporary moratorium area. I Medicare Part A Provisions 101. Extension of certain LTCH Medicare payment rules (a) 25–Percent patient threshold payment adjustment Section 114(c)(1)(A) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 ( 42 U.S.C. 1395ww Public Law 111–5 Public Law 111–148 Public Law 113–67 for a 9-year period through June 30, 2016, and for discharges occurring on or after October 1, 2016, and before July 1, 2017 (b) Payment for hospitals-within-hospitals Section 114(c)(2) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 ( 42 U.S.C. 1395ww Public Law 111–5 Public Law 111–148 Public Law 113–67 (1) in subparagraph (A), by inserting or any similar provision, Regulations, (2) in subparagraph (B)— (A) in clause (i), by inserting or any similar provision, Regulations, (B) in clause (ii), by inserting , or any similar provision, Regulations (3) in subparagraph (C), by striking for a 9-year period through June 30, 2016, and for discharges occurring on or after October 1, 2016, and before July 1, 2017 102. Application of rules on the calculation of hospital length of stay to all LTCHs (a) In general Section 1206(a)(3) of the Pathway for SGR Reform Act of 2013 (division B of Public Law 113–67 42 U.S.C. 1395ww (1) by striking subparagraph (B); (2) by striking site neutral basis.— For discharges occurring site neutral basis.— (3) by striking subject to subparagraph (B), (4) by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively, and moving each of such subparagraphs (as so redesignated) 2 ems to the left. (b) Effective date The amendments made by subsection (a) shall be effective as if included in the enactment of section 1206(a)(3) of the Pathway for SGR Reform Act of 2013 (division B of Public Law 113–67 42 U.S.C. 1395ww 103. Change in Medicare classification for certain hospitals (a) In general Subsection (d)(1)(B) of section 1886 of the Social Security Act ( 42 U.S.C. 1395ww (1) in clause (iv)— (A) in subclause (I), by striking or (B) in subclause (II)— (i) by striking , or (ii) by redesignating such subclause as clause (vi) and by moving it to immediately follow clause (v); and (iii) in clause (v), by striking the semicolon at the end and inserting , or (C) by striking (iv) (I) (iv) (b) Conforming payment references The second sentence of subsection (d)(1)(B) of such section is amended— (1) by inserting (as in effect as of such date) clause (iv) (2) by inserting (or, in the case of a hospital described in clause (iv)(II), as so in effect, shall be classified under clause (vi) on and after the effective date of such clause (vi) and for cost reporting periods beginning on or after January 1, 2015, shall not be subject to subsection (m) as of the date of such classification) so classified (c) Application (1) In general For cost reporting periods beginning on or after January 1, 2015, in the case of an applicable hospital (as defined in paragraph (3)), the following shall apply: (A) Payment for inpatient operating costs shall be made on a reasonable cost basis in the manner provided in section 412.526(c)(3) of title 42, Code of Federal Regulations (as in effect on January 1, 2015) and in any subsequent modifications. (B) Payment for capital costs shall be made in the manner provided by section 412.526(c)(4) of title 42, Code of Federal Regulations (as in effect on such date). (C) Claims for payment for Medicare beneficiaries who are discharged on or after January 1, 2017, shall be processed as claims which are paid on a reasonable cost basis as described in section 412.526(c) of title 42, Code of Federal Regulations (as in effect on such date). (2) Applicable hospital defined In this subsection, the term applicable hospital 42 U.S.C. 1395ww(d)(1)(B) (d) Conforming technical amendments (1) Section 1899B(a)(2)(A)(iv) of the Social Security Act ( 42 U.S.C. 1395lll(a)(2)(A)(iv) 1886(d)(1)(B)(iv)(II) 1886(d)(1)(B)(vi) (2) Section 1886(m)(5)(F) of such Act ( 42 U.S.C. 1395ww(m)(5)(F) (d)(1)(B)(iv)(II) (d)(1)(B)(vi) 104. Temporary exception to the application of the Medicare LTCH site neutral provisions for certain spinal cord specialty hospitals (a) Exception Section 1886(m)(6) of the Social Security Act ( 42 U.S.C. 1395ww(m)(6) (1) in subparagraph (A)(i), by striking and (E) , (E), and (F) (2) by adding at the end the following new subparagraph: (F) Temporary exception for certain spinal cord specialty hospitals For discharges in cost reporting periods beginning during fiscal years 2018 and 2019, subparagraph (A)(i) shall not apply (and payment shall be made to a long-term care hospital without regard to this paragraph) if such discharge is from a long-term care hospital that meets each of the following requirements: (i) Not-for-profit The long-term care hospital was a not-for-profit long-term care hospital on June 1, 2014, as determined by cost report data. (ii) Primarily providing treatment for catastrophic spinal cord or acquired brain injuries or other paralyzing neuromuscular conditions Of the discharges in calendar year 2013 from the long-term care hospital for which payment was made under this section, at least 50 percent were classified under MS–LTCH–DRGs 28, 29, 52, 57, 551, 573, and 963. (iii) Significant out-of-State admissions (I) In general The long-term care hospital discharged inpatients (including both individuals entitled to, or enrolled for, benefits under this title and individuals not so entitled or enrolled) during fiscal year 2014 who had been admitted from at least 20 of the 50 States, determined by the States of residency of such inpatients and based on such data submitted by the hospital to the Secretary as the Secretary may require. (II) Implementation Notwithstanding any other provision of law, the Secretary may implement subclause (I) by program instruction or otherwise. (III) Non-application of Paperwork Reduction Act Chapter 35 . (b) Study and report on the status and viability of certain spinal cord specialty long-term care hospitals (1) Study The Comptroller General of the United States shall conduct a study on long-term care hospitals described in section 1886(m)(6)(F) of the Social Security Act, as added by subsection (a). Such report shall include an analysis of the following: (A) The impact on such hospitals of the classification and facility licensure by State agencies of such hospitals. (B) The Medicare payment rates for such hospitals. (C) Data on the number and health care needs of Medicare beneficiaries who have been diagnosed with catastrophic spinal cord or acquired brain injuries or other paralyzing neuromuscular conditions (as described within the discharge classifications specified in clause (ii) of such section) who are receiving services from such hospitals. (2) Report Not later than October 1, 2018, the Comptroller General shall submit to Congress a report on the study conducted under paragraph (1), including recommendations for such legislation and administrative action as the Comptroller General determines appropriate. 105. Temporary extension to the application of the Medicare LTCH site neutral provisions for certain discharges with severe wounds (a) In general Section 1886(m)(6) of the Social Security Act ( 42 U.S.C. 1395ww(m)(6) (1) in subparagraph (A)(i) by striking and (F) (F), and (G) (2) in subparagraph (E)(i)(I)(aa), by striking the amendment made the last sentence of subsection (d)(1)(B) (3) by adding at the end the following new subparagraph: (G) Additional temporary exception for certain severe wound discharges from certain long-term care hospitals (i) In general For a discharge occurring in a cost reporting period beginning during fiscal year 2018, subparagraph (A)(i) shall not apply (and payment shall be made to a long-term care hospital without regard to this paragraph) if such discharge— (I) is from a long-term care hospital identified by the last sentence of subsection (d)(1)(B); (II) is classified under MS–LTCH–DRG 602, 603, 539, or 540; and (III) is with respect to an individual treated by a long-term care hospital for a severe wound. (ii) Severe wound defined In this subparagraph, the term severe wound (iii) Wound defined In this subparagraph, the term wound . (c) Study and report to Congress (1) Study The Comptroller General of the United States shall, in consultation with relevant stakeholders, conduct a study on the treatment needs of individuals entitled to benefits under part A of title XVIII of the Social Security Act or enrolled under part B of such title who require specialized wound care, and the cost, for such individuals and the Medicare program under such title, of treating severe wounds in rural and urban areas. Such study shall include an assessment of— (A) access of such individuals to appropriate levels of care for such cases; (B) the potential impact that section 1886(m)(6)(A)(i) of such Act ( 42 U.S.C. 1395ww(m)(6)(A)(i) (C) how to appropriately pay for such care under the Medicare program under such title. (2) Report Not later than October 1, 2020, the Comptroller General shall submit to Congress a report on the study conducted under paragraph (1), including recommendations for such legislation and administrative action as the Comptroller General determines appropriate. II Other Provisions 201. No payment for items and services furnished by newly enrolled providers or suppliers within a temporary moratorium area (a) Medicare Section 1866(j)(7) of the Social Security Act ( 42 U.S.C. 1395cc(j)(7) (1) in the paragraph heading, by inserting ; Nonpayment (2) by adding at the end the following new subparagraph: (C) Nonpayment (i) In general No payment may be made under this title or under a program described in subparagraph (A) with respect to an item or service described in clause (ii) furnished on or after October 1, 2017. (ii) Item or service described An item or service described in this clause is an item or service furnished— (I) within a geographic area with respect to which a temporary moratorium imposed under subparagraph (A) is in effect; and (II) by a provider of services or supplier that meets the requirements of clause (iii). (iii) Requirements For purposes of clause (ii), the requirements of this clause are that a provider of services or supplier— (I) enrolls under this title on or after the effective date of such temporary moratorium; and (II) is within a category of providers of services and suppliers (as described in subparagraph (A)) subject to such temporary moratorium. (iv) Prohibition on charges for specified items or services In no case shall a provider of services or supplier described in clause (ii)(II) charge an individual or other person for an item or service described in clause (ii) furnished on or after October 1, 2017, to an individual entitled to benefits under part A or enrolled under part B or an individual under a program specified in subparagraph (A). . (b) Conforming amendments (1) Medicaid (A) In general Section 1903(i)(2) of the Social Security Act ( 42 U.S.C. 1396b(i)(2) (i) in subparagraph (A), by striking the comma at the end and inserting a semicolon; (ii) in subparagraph (B), by striking or (iii) (D) with respect to any amount expended for such an item or service furnished during calendar quarters beginning on or after October 1, 2017, subject to section 1902(kk)(4)(A)(ii)(II), within a geographic area that is subject to a moratorium imposed under section 1866(j)(7) by a provider or supplier that meets the requirements specified in subparagraph (C)(iii) of such section, during the period of such moratorium; or . (B) Exception with respect to access Section 1902(kk)(4)(A)(ii) of the Social Security Act ( 42 U.S.C. 1396a(kk)(4)(A)(ii) (ii) Exceptions (I) Compliance with moratorium A State shall not be required to comply with a temporary moratorium described in clause (i) if the State determines that the imposition of such temporary moratorium would adversely impact beneficiaries’ access to medical assistance. (II) FFP available Notwithstanding section 1903(i)(2)(D), payment may be made to a State under this title with respect to amounts expended for items and services described in such section if the Secretary, in consultation with the State agency administering the State plan under this title (or a waiver of the plan), determines that denying payment to the State pursuant to such section would adversely impact beneficiaries’ access to medical assistance. . (C) State plan requirement with respect to limitation on charges to beneficiaries Section 1902(kk)(4)(A) of the Social Security Act ( 42 U.S.C. 1396a(kk)(4)(A) (iii) Limitation on charges to beneficiaries With respect to any amount expended for items or services furnished during calendar quarters beginning on or after October 1, 2017, the State prohibits, during the period of a temporary moratorium described in clause (i), a provider meeting the requirements specified in subparagraph (C)(iii) of section 1866(j)(7) from charging an individual or other person eligible to receive medical assistance under the State plan under this title (or a waiver of the plan) for an item or service described in section 1903(i)(2)(D) furnished to such an individual. . (2) Correcting amendments to related provisions (A) Section 1866(j) Section 1866(j) of the Social Security Act ( 42 U.S.C. 1395cc(j) (i) in paragraph (1)(A)— (I) by striking paragraph (4) paragraph (5) (II) by striking moratoria in accordance with paragraph (5) moratoria in accordance with paragraph (7) (III) by striking paragraph (6) paragraph (9) (ii) by redesignating the second paragraph (8) (added by section 1304(1) of Public Law 111–152 (B) Section 1902(kk) Section 1902(kk) of such Act ( 42 U.S.C. 1396a(kk) (i) in paragraph (1), by striking section 1886(j)(2) section 1866(j)(2) (ii) in paragraph (2), by striking section 1886(j)(3) section 1866(j)(3) (iii) in paragraph (3), by striking section 1886(j)(4) section 1866(j)(5) (iv) in paragraph (4)(A), by striking section 1886(j)(6) section 1866(j)(7) September 20, 2016 Reported from the Committee on Ways and Means September 20, 2016 The Committee on Energy and Commerce

Summary: Sustaining Healthcare Integrity and Fair Treatment Act of 2016 This bill amends titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act, among other Acts, to modify provisions related to long-term care hospital (LTCH) payments under Medicare. (Sec. 101) The bill amends the Medicare, Medicaid, and SCHIP Extension Act of 2007 to revise the applicability of certain Medicare payment rules exempting LTCHs from negative payment adjustments for admissions from certain co-located hospitals beyond specified thresholds. These rules shall apply for an additional period beginning on October 1, 2016. (Sec. 102) In addition, the bill amends the Pathway for SGR Reform Act of 2013 to expand to all LTCHs the application of a payment rule that requires the exclusion of certain patients for purposes of calculating length of stay. Under current law, the payment rule applies only to a hospital that was classified as an LTCH as of a specified date. (Sec. 103) The bill removes certain hospitals specializing in neoplastic disease from their classification as LTCHs for purposes of Medicare payment. (Sec. 104) With specified exceptions, current law applies certain payment limits to inpatient services for LTCHs that do not meet specified discharge requirements. The bill: (1) establishes a new temporary exception to these limits for certain spinal cord specialty hospitals, and (2) expands an existing temporary exception with respect to certain discharges involving severe wounds. (Sec. 201) Current law allows the Centers for Medicare & Medicaid Services to impose a temporary moratorium on the enrollment of new providers under Medicare, Medicaid, or the Children's Health Insurance Program (CHIP) if necessary to combat fraud, waste, or abuse. With specified exceptions, the bill prohibits payment under these programs to new providers in areas subject to such temporary moratorium.