I
105TH CONGRESS
2D SESSION
H. R. 4404
To amend title XVIII of the Social Security Act to modify the standards
for calculating the per beneficiary payment limits under the interim
payment system for home health services furnished by home health
agencies under the Medicare Program and the standards for setting
payments rates under the prospective payment system for such services
to achieve fair reimbursement payment rates.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 5, 1998
Mr. HILLEARY (for himself, Mr. RAHALL, Mr. ADERHOLT, Mr. COOK, Mr.
HALL of Texas, Mr. MCINTOSH, Mr. SANDERS, and Ms. STABENOW) in-
troduced 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 consider-
ation of such provisions as fall within the jurisdiction of the committee
concerned
A BILL
To amend title XVIII of the Social Security Act to modify
the standards for calculating the per beneficiary payment
limits under the interim payment system for home health
services furnished by home health agencies under the
Medicare Program and the standards for setting pay-
ments rates under the prospective payment system for
such services to achieve fair reimbursement payment
rates.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Homebound Elderly
Relief Opportunity Act of 1998’’.
SEC. 2. MODIFICATION OF HOME HEALTH SERVICES PAY-
MENT LIMITS.
(a) MORATORIUM
ON IMPLEMENTATION
OF PER
BENEFICIARY LIMITS UNDER INTERIM PAYMENT SYS-
TEM.—Section 1861(v)(1)(L)(iv) of the Social Security
Act (42 U.S.C. 1395x(v)(1)(L)(iv)) is amended to read as
follows:
‘‘(iv)(I) The interim system of payments under clause
(v) shall apply only if aggregate expenditures for home
health services in a fiscal year exceed the applicable
amount described in subclause (II).
‘‘(II) For purposes of subclause (I), the applicable
amount for fiscal year 1998 is $18,200,000,000 and for
fiscal year 1999 is $19,300,000,000.
‘‘(III) In the case of an excess under subclause (I),
the Secretary shall implement such system beginning Jan-
uary 1 of the year following the fiscal year in which such
aggregate expenditures exceed the applicable amount. The
Secretary shall adjust payments under such system so that
aggregate expenditures for home health services for fiscal
years 
1998 
through 
2002 
do 
not 
exceed
$101,000,000,000.
‘‘(IV) Not later than the October 31 that precedes
a year in which such system is implemented, the Secretary
shall publish in the Federal Register proposed per bene-
ficiary limits for the subsequent year, along with the
standards and methods utilized in calculating and apply-
ing the limits in compliance with the rulemaking provi-
sions under section 553 of the Administrative Procedures
Act (5 U.S.C. 553). Not later than the December 31 that
precedes such year, the Secretary shall publish in the Fed-
eral Register the per beneficiary limits for home health
services furnished during cost reporting periods beginning
in that year.’’.
(b) ESTABLISHMENT
OF
UNIFORM
PER
BENE-
FICIARY LIMITS UNDER INTERIM PAYMENT SYSTEM.—
Section 1861(v)(1)(L)(v) of such Act (42 U.S.C.
1395x(v)(1)(L))(v)), is amended—
(1) in the first sentence, by striking ‘‘For’’ and
inserting ‘‘Subject to clause (iv), for’’; and
(2) in subclause (I), by striking ‘‘calculated
based 75 percent on 98 percent’’ through ‘‘periods
ending during fiscal year 1994, such costs’’ and in-
serting ‘‘equal to the greater of 75 percent of the
standardized regional average of reasonable costs
(including nonroutine medical supplies) for cost re-
porting periods ending during fiscal year 1994 for
the agency’s census division and 25 percent of the
standardized national average of such costs or 25
percent of the standardized regional average of such
costs for the agency’s census division and 75 percent
of the standardized national average of such costs,
such costs determined separately for agencies in
rural and nonrural areas and’’.
(c) 
ADJUSTMENT
FOR
OUTLIERS.—Section
1861(v)(1)(L) of such Act (42 U.S.C. 1395x(v)(1)(L)) is
amended by adding at the end the following new clause:
‘‘(viii)(I) Subject to subclause (II), in the case of a
home health agency that exceeds the per beneficiary limit
under clause (v), the Secretary shall provide for an addi-
tional payment where the reasonable cost for home health
services provided to an individual exceeds such limit by
a fixed number of standard deviations. Such additional
payment amount shall be determined prior to the fiscal
year in which subsection (iv) is applicable.
‘‘(II) The aggregate amount of such additional pay-
ments in a fiscal year may not exceed 5 percent of the
aggregate payments projected or estimated by the Sec-
retary to be made under clause (v) in that year.’’.
(d) 
PER
VISIT
COST
LIMITS.—Section
1861(v)(1)(L)(i)(IV) 
of 
such 
Act 
(42 
U.S.C.
1395x(v)(1)(L)(i)(IV)) is amended to read as follows:
‘‘(IV) October 1, 1997, 110 percent of such
mean.’’.
(e) ELIMINATION
OF SPECIAL PER BENEFICIARY
PAYMENT
RULE
FOR
NEW
AGENCIES.—Section
1861(v)(1)(L)(vi) 
of 
such 
Act 
(42 
U.S.C.
1395x(v)(1)(L)(vi)) is amended to read as follows:
‘‘(vi) Where the Secretary establishes that bene-
ficiaries use services furnished by more than one home
health agency for purposes of circumventing the per bene-
ficiary annual limitation under clause (v), the per bene-
ficiary limitation shall be prorated among the agencies.’’.
(f) 
PUBLICATION
OF
NEW
LIMITS.—Section
1861(v)(1)(L)(vii) 
of 
such 
Act 
(42 
U.S.C.
1395x(v)(1)(L)(vii)) is amended by adding at the end the
following new subclause:
‘‘(III) Notwithstanding subclause (II), in the case of
per visit or per beneficiary limits for fiscal year 1999 es-
tablished by reason of the Homebound Elderly Relief Op-
portunity Act of 1998, the Secretary shall establish such
limits by not later than 90 days after the date of the en-
actment of such Act.’’.
SEC. 3. MODIFICATION OF CALCULATION OF PAYMENT
AMOUNT 
FOR 
HOME 
HEALTH 
SERVICES
UNDER THE PROSPECTIVE PAYMENT SYS-
TEM.
(a) ESTABLISHMENT
OF EQUITABLE LIMITS
FOR
CALCULATING PROSPECTIVE PAYMENT RATES.—
(1) IN GENERAL.—Section 1895(b)(3)(A)(i) of
the 
Social 
Security 
Act 
(42 
U.S.C.
1395fff(b)(3)(A)(i)) is amended by inserting ‘‘the
greater of $19,000,000,000 or’’ after ‘‘equal to’’.
(2) CONTINGENCY.—Section 4603(e) of the
Balanced Budget Act of 1997 (42 U.S.C. 1395fff
note) is amended to read as follows:
‘‘(e) CONTINGENCY.—
‘‘(1) IN GENERAL.—If the Secretary of Health
and Human Services for any reason does not estab-
lish and implement the prospective payment system
for home health services described in section 1895(b)
of the Social Security Act (as added by subsection
(a)) for cost reporting periods described in sub-
section (d), the Secretary shall provide—
‘‘(A) for such cost reporting periods that
begin before October 1, 2002, an adjustment to
the 
cost 
limits 
described 
in 
section
1861(v)(1)(L) 
of 
such 
Act 
(42 
U.S.C.
1395x(v)(1)(L)) so that the aggregate amounts
payable for such services in a fiscal year do not
exceed the greater of—
‘‘(i) the applicable amount (as defined
in paragraph (2)); or
‘‘(ii) the aggregate amount of pay-
ments for such services that would have
been made in such fiscal year if such cost
limits (as those limits would otherwise be
in effect on September 30, 1999) had been
reduced by 15 percent; and
‘‘(B) for such cost reporting periods that
begin on or after October 1, 2002, a reduction
by 15 percent in such cost limits (as so in ef-
fect).
‘‘(2) APPLICABLE AMOUNT DEFINED.—In para-
graph (1) the term ‘applicable amount’ means, with
respect to a fiscal year, the following amount:
‘‘(A) For fiscal year 2000, $19,000,000,000.
‘‘(B) For fiscal year 2001, $21,400,000,000.
‘‘(C) For fiscal year 2002, $23,100,000,000.’’.
(b) TEMPORARY RESTORATION
OF PERIODIC IN-
TERIM PAYMENT FOR HOME HEALTH SERVICES.—Sec-
tion 1815(e)(2) of the Social Security Act (42 U.S.C.
1395g(e)(2)) is amended—
(1) in subparagraph (C), by striking ‘‘and’’ at
the end;
(2) by redesignating subparagraph (D) as sub-
paragraph (E); and
(3) by inserting after subparagraph (C) the fol-
lowing:
‘‘(D) home health services until the end of the
12-month period following the date that the prospec-
tive payment system for such services is imple-
mented under section 1895; and’’.
SEC. 4. EFFECTIVE DATE.
The amendments made by this Act shall take effect
as if included in the enactment of the Balanced Budget
Act of 1997.
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