H. R. 2015—217
‘‘(I) an agency-specific per beneficiary annual limitation
calculated based 75 percent on 98 percent of the reasonable
costs (including nonroutine medical supplies) for the agency’s
12-month cost reporting period ending during fiscal year 1994,
and based 25 percent on 98 percent of the standardized regional
average of such costs for the agency’s census division, as applied
to such agency, for cost reporting periods ending during fiscal
year 1994, such costs updated by the home health market
basket index; and
‘‘(II) the agency’s unduplicated census count of patients
(entitled to benefits under this title) for the cost reporting
period subject to the limitation.
‘‘(vi) For services furnished by home health agencies for cost
reporting periods beginning on or after October 1, 1997, the follow-
ing rules apply:
‘‘(I) For new providers and those providers without a 12-
month cost reporting period ending in fiscal year 1994, the
per beneficiary limitation shall be equal to the median of these
limits (or the Secretary’s best estimates thereof) applied to
other home health agencies as determined by the Secretary.
A home health agency that has altered its corporate structure
or name shall not be considered a new provider for this purpose.
‘‘(II) For beneficiaries who use services furnished by more
than one home health agency, the per beneficiary limitations
shall be prorated among the agencies.
‘‘(vii)(I) Not later than January 1, 1998, the Secretary shall
establish per visit limits applicable for fiscal year 1998, and not
later than April 1, 1998, the Secretary shall establish per bene-
ficiary limits under clause (v)(I) for fiscal year 1998.
‘‘(II) Not later than August 1 of each year (beginning in 1998)
the Secretary shall establish the limits applicable under this
subparagraph for services furnished during the fiscal year beginning
October 1 of the year.’’.
(d) DEVELOPMENT
OF CASE MIX SYSTEM.—The Secretary of
Health and Human Services shall expand research on a prospective
payment system for home health agencies under the medicare pro-
gram that ties prospective payments to a unit of service, including
an intensive effort to develop a reliable case mix adjuster that
explains a significant amount of the variances in costs.
(e) SUBMISSION
OF DATA
FOR CASE MIX SYSTEM.—Effective
for cost reporting periods beginning on or after October 1, 1997,
the Secretary of Health and Human Services may require all home
health agencies to submit additional information that the Secretary
considers necessary for the development of a reliable case mix
system.
SEC. 4603. PROSPECTIVE PAYMENT FOR HOME HEALTH SERVICES.
(a) IN GENERAL.—Title XVIII (42 U.S.C. 1395 et seq.) (as
amended by section 4801) is amended by adding at the end the
following:
‘‘PROSPECTIVE PAYMENT FOR HOME HEALTH SERVICES
‘‘SEC. 1895. (a) IN GENERAL.—Notwithstanding section 1861(v),
the Secretary shall provide, for cost reporting periods beginning
on or after October 1, 1999, for payments for home health services
in accordance with a prospective payment system established by
the Secretary under this section.
H. R. 2015—218
‘‘(b) SYSTEM
OF PROSPECTIVE PAYMENT
FOR HOME HEALTH
SERVICES.—
‘‘(1) IN GENERAL.—The Secretary shall establish under this
subsection a prospective payment system for payment for all
costs of home health services. Under the system under this
subsection all services covered and paid on a reasonable cost
basis under the medicare home health benefit as of the date
of the enactment of the this section, including medical supplies,
shall be paid for on the basis of a prospective payment amount
determined under this subsection and applicable to the services
involved. In implementing the system, the Secretary may pro-
vide for a transition (of not longer than 4 years) during which
a portion of such payment is based on agency-specific costs,
but only if such transition does not result in aggregate pay-
ments under this title that exceed the aggregate payments
that would be made if such a transition did not occur.
‘‘(2) UNIT OF PAYMENT.—In defining a prospective payment
amount under the system under this subsection, the Secretary
shall consider an appropriate unit of service and the number,
type, and duration of visits provided within that unit, potential
changes in the mix of services provided within that unit and
their cost, and a general system design that provides for contin-
ued access to quality services.
‘‘(3) PAYMENT BASIS.—
‘‘(A) INITIAL BASIS.—
‘‘(i) IN GENERAL.—Under such system the Secretary
shall provide for computation of a standard prospective
payment amount (or amounts). Such amount (or
amounts) shall initially be based on the most current
audited cost report data available to the Secretary
and shall be computed in a manner so that the total
amounts payable under the system for fiscal year 2000
shall be equal to the total amount that would have
been made if the system had not been in effect but
if the reduction in limits described in clause (ii) had
been in effect. Such amount shall be standardized in
a manner that eliminates the effect of variations in
relative case mix and wage levels among different home
health agencies in a budget neutral manner consistent
with the case mix and wage level adjustments provided
under paragraph (4)(A). Under the system, the Sec-
retary may recognize regional differences or differences
based upon whether or not the services or agency are
in an urbanized area.
‘‘(ii) REDUCTION.—The reduction described in this
clause is a reduction by 15 percent in the cost limits
and per beneficiary limits described in section
1861(v)(1)(L), as those limits are in effect on September
30, 1999.
‘‘(B) ANNUAL UPDATE.—
‘‘(i) IN GENERAL.—The standard prospective pay-
ment amount (or amounts) shall be adjusted for each
fiscal year (beginning with fiscal year 2001) in a
prospective manner specified by the Secretary by the
home health market basket percentage increase
applicable to the fiscal year involved.
H. R. 2015—219
‘‘(ii) HOME HEALTH MARKET BASKET PERCENTAGE
INCREASE.—For purposes of this subsection, the term
‘home health market basket percentage increase’
means, with respect to a fiscal year, a percentage (esti-
mated by the Secretary before the beginning of the
fiscal year) determined and applied with respect to
the mix of goods and services included in home health
services in the same manner as the market basket
percentage increase under section 1886(b)(3)(B)(iii) is
determined and applied to the mix of goods and serv-
ices comprising inpatient hospital services for the fiscal
year.
‘‘(C) ADJUSTMENT FOR OUTLIERS.—The Secretary shall
reduce the standard prospective payment amount (or
amounts) under this paragraph applicable to home health
services furnished during a period by such proportion as
will result in an aggregate reduction in payments for the
period equal to the aggregate increase in payments result-
ing from the application of paragraph (5) (relating to
outliers).
‘‘(4) PAYMENT COMPUTATION.—
‘‘(A) IN
GENERAL.—The payment amount for a unit
of home health services shall be the applicable standard
prospective payment amount adjusted as follows:
‘‘(i) CASE MIX ADJUSTMENT.—The amount shall be
adjusted by an appropriate case mix adjustment factor
(established under subparagraph (B)).
‘‘(ii) AREA WAGE ADJUSTMENT.—The portion of such
amount that the Secretary estimates to be attributable
to wages and wage-related costs shall be adjusted for
geographic differences in such costs by an area wage
adjustment factor (established under subparagraph
(C)) for the area in which the services are furnished
or such other area as the Secretary may specify.
‘‘(B) ESTABLISHMENT OF CASE MIX ADJUSTMENT FAC-
TORS.—The Secretary shall establish appropriate case mix
adjustment factors for home health services in a manner
that explains a significant amount of the variation in cost
among different units of services.
‘‘(C) ESTABLISHMENT OF AREA WAGE ADJUSTMENT FAC-
TORS.—The Secretary shall establish area wage adjustment
factors that reflect the relative level of wages and wage-
related costs applicable to the furnishing of home health
services in a geographic area compared to the national
average applicable level. Such factors may be the factors
used by the Secretary for purposes of section 1886(d)(3)(E).
‘‘(5) OUTLIERS.—The Secretary may provide for an addition
or adjustment to the payment amount otherwise made in the
case of outliers because of unusual variations in the type or
amount of medically necessary care. The total amount of the
additional payments or payment adjustments made under this
paragraph with respect to a fiscal year may not exceed 5
percent of the total payments projected or estimated to be
made based on the prospective payment system under this
subsection in that year.
‘‘(6) PRORATION OF PROSPECTIVE PAYMENT AMOUNTS.—If a
beneficiary elects to transfer to, or receive services from,
H. R. 2015—220
another home health agency within the period covered by the
prospective payment amount, the payment shall be prorated
between the home health agencies involved.
‘‘(c) REQUIREMENTS FOR PAYMENT INFORMATION.—With respect
to home health services furnished on or after October 1, 1998,
no claim for such a service may be paid under this title unless—
‘‘(1) the claim has the unique identifier (provided under
section 1842(r)) for the physician who prescribed the services
or made the certification described in section 1814(a)(2) or
1835(a)(2)(A); and
‘‘(2) in the case of a service visit described in paragraph
(1), (2), (3), or (4) of section 1861(m), the claim contains a
code (or codes) specified by the Secretary that identifies the
length of time of the service visit, as measured in 15 minute
increments.
‘‘(d) LIMITATION ON REVIEW.—There shall be no administrative
or judicial review under section 1869, 1878, or otherwise of—
‘‘(1) the establishment of a transition period under sub-
section (b)(1);
‘‘(2) the definition and application of payment units under
subsection (b)(2);
‘‘(3) the computation of initial standard prospective pay-
ment amounts under subsection (b)(3)(A) (including the reduc-
tion described in clause (ii) of such subsection);
‘‘(4) the establishment of the adjustment for outliers under
subsection (b)(3)(C);
‘‘(5) the establishment of case mix and area wage adjust-
ments under subsection (b)(4); and
‘‘(6) the establishment of any adjustments for outliers under
subsection (b)(5).’’.
(b) ELIMINATION OF PERIODIC INTERIM PAYMENTS FOR HOME
HEALTH AGENCIES.—Section 1815(e)(2) (42 U.S.C. 1395g(e)(2)) is
amended—
(1) by inserting ‘‘and’’ at the end of subparagraph (C),
(2) by striking subparagraph (D), and
(3) by redesignating subparagraph (E) as subparagraph
(D).
(c) CONFORMING AMENDMENTS.—
(1) PAYMENTS UNDER PART A.—Section 1814(b) (42 U.S.C.
1395f(b)) is amended in the matter preceding paragraph (1)
by striking ‘‘and 1886’’ and inserting ‘‘1886, and 1895’’.
(2) TREATMENT OF ITEMS AND SERVICES PAID UNDER PART
B.—
(A) PAYMENTS UNDER PART B.—Section 1833(a)(2) (42
U.S.C. 1395l(a)(2)) is amended—
(i) by amending subparagraph (A) to read as fol-
lows:
‘‘(A) with respect to home health services (other than
a covered osteoporosis drug) (as defined in section
1861(kk)), the amount determined under the prospective
payment system under section 1895;’’;
(ii) by striking ‘‘and’’ at the end of subparagraph
(E);
(iii) by adding ‘‘and’’ at the end of subparagraph
(F); and
(iv) by adding at the end the following new
subparagraph: