I
106TH CONGRESS
1ST SESSION
H. R. 1543
To amend title XVIII of the Social Security Act to combat fraud and abuse
under the Medicare Program with respect to partial hospitalization services.
IN THE HOUSE OF REPRESENTATIVES
APRIL 22, 1999
Mr. STARK (for himself, Mrs. THURMAN, Mr. SHAYS, Mr. WEYGAND, Mr.
LEWIS of Georgia, Ms. DEGETTE, Mr. BROWN of Ohio, Mr. CROWLEY,
Mr. CLEMENT, Mr. LAMPSON, Mr. RODRIGUEZ, Mr. GREEN of Texas,
and Mr. PAUL) introduced 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 consideration of such provisions as fall within the juris-
diction of the committee concerned
A BILL
To amend title XVIII of the Social Security Act to combat
fraud and abuse under the Medicare Program with re-
spect to partial hospitalization services.
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 ‘‘Partial Hospitalization
Services Integrity Act of 1999’’.
SEC. 2. LIMITATION ON LOCATION OF PROVISION OF SERV-
ICES.
(a) IN GENERAL.—Section 1861(ff)(2) of the Social
Security Act (42 U.S.C. 1395x(ff)(2)) is amended in the
matter following subparagraph (I)—
(1) by striking ‘‘and furnished’’ and inserting
‘‘furnished’’; and
(2) by inserting before the period the following:
‘‘, and furnished other than in a skilled nursing fa-
cility, residential treatment facility or other residen-
tial setting (as determined by the Secretary)’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) apply with respect to partial hospitalization
services furnished on or after the first day of the third
month beginning after the date of the enactment of this
Act.
SEC. 
3. 
QUALIFICATIONS 
FOR 
COMMUNITY 
MENTAL
HEALTH CENTERS.
(a) IN GENERAL.—Section 1861(ff)(3)(B) of the So-
cial Security Act (42 U.S.C. 1395x(ff)(3)(B)) is amended
by striking ‘‘entity’’ and all that follows and inserting the
following: ‘‘entity that—
‘‘(i)(I) provides the mental health services de-
scribed in section 1913(c)(1) of the Public Health
Service Act; or
‘‘(II) in the case of an entity operating in a
State that by law precludes the entity from pro-
viding a service described in such section itself, pro-
vides for such service by contract with an approved
organization or entity (as determined by the Sec-
retary);
‘‘(ii) meets applicable licensing or certification
requirements for community mental health centers
in the State in which it is located; and
‘‘(iii) meets such additional conditions as the
Secretary shall specify to ensure (I) the health and
safety of individuals being furnished such services,
(II) the effective and efficient furnishing of such
services, and (III) the compliance of such entity with
the criteria described in such section.’’.
(b) CLARIFICATION OF CRITERIA FOR COMMUNITY
MENTAL HEALTH CENTERS.—Section 1913(c)(1)(E) of
the Public Health Service Act (42 U.S.C. 300x–
3(c)(1)(E)) is amended to read as follows:
‘‘(E) Determining the clinical appropriate-
ness of admissions to any inpatient psychiatric
hospitals by engaging a full-time mental health
professional who is licensed or certified to make
such a determination by the State involved.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section apply with respect to community mental
health centers furnishing services under the medicare pro-
gram on or after the first day of the third month begin-
ning after the date of the enactment of this Act.
SEC. 4. GUIDELINES FOR ITEMS AND SERVICES COM-
PRISING PARTIAL HOSPITALIZATION SERV-
ICES.
Not later than 180 days after the date of the enact-
ment of this Act, the Secretary shall first adopt national
coverage and administrative policies for partial hos-
pitalization services furnished under title XVIII of the So-
cial Security Act, using a negotiated rulemaking process
under subchapter III of chapter 5 of title 5, United States
Code.
SEC. 5. REFINEMENT OF PERIODICITY OF REVIEW OF PLAN
FOR PARTIAL HOSPITALIZATION SERVICES.
(a) IN GENERAL.—Section 1835(a)(2)(F)(ii) of the
Social Security Act (42 U.S.C. 1395n(a)(2)(F)(ii)) is
amended by inserting ‘‘at a reasonable rate (as determined
by the Secretary)’’ after ‘‘is reviewed periodically’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies with respect to plans for furnishing
partial hospitalization services established on or after the
first day of the third month beginning after the date of
the enactment of this Act.
SEC. 6. RECERTIFICATION OF PROVIDERS OF PARTIAL
HOSPITALIZATION SERVICES.
(a) IN GENERAL.—With respect to each community
mental health center that furnishes partial hospitalization
services for which payment is made under title XVIII of
the Social Security Act, the Secretary of Health and
Human Services shall provide for periodic recertification
to ensure that the provision of such services complies with
applicable requirements of such title.
(b) DEADLINE FOR FIRST RECERTIFICATION.—The
first recertification under subsection (a) shall be com-
pleted not later than one year after the date of the enact-
ment of this Act.
SEC. 7. CIVIL MONETARY PENALTIES FOR FALSE CERTIFI-
CATION OF ELIGIBILITY FOR HOSPICE CARE
OR PARTIAL HOSPITALIZATION SERVICES.
(a) IN GENERAL.—Section 1128A(b)(3) of the Social
Security Act (42 U.S.C. 1320a–7a(b)(3)) is amended—
(1) in subparagraph (A)(ii), by inserting ‘‘, hos-
pice care, or partial hospitalization services’’ after
‘‘home health services’’; and
(2) in subparagraph (B), by inserting ‘‘, section
1814(a)(7) in the case of hospice care, or section
1835(a)(2)(F) in the case of partial hospitalization
services’’ after ‘‘in the case of home health services’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) apply with respect to certifications of eligi-
bility for hospice care or partial hospitalization services
under the medicare program made on or after the first
day of the third month beginning after the date of the
enactment of this Act.
SEC. 8. DEMONSTRATION FOR COST EFFECTIVE WRAP
AROUND MENTAL HEALTH SERVICES.
(a) ESTABLISHMENT.—
(1) IN GENERAL.—The Secretary of Health and
Human Services shall implement a demonstration
project (in this section referred to as the ‘‘project’’)
under part B of title XVIII of the Social Security
Act under which community mental health centers
may offer wrap around mental health services (as
defined in paragraph (2)(A)) for purposes of pro-
viding for a full continuum of ambulatory behavioral
health care services.
(2) DEFINITIONS.—
(A) WRAP
AROUND
MENTAL
HEALTH
SERVICES DEFINED.—The term ‘‘wrap around
mental health services’’ means comprehensive
outpatient mental health services furnished to
an individual pursuant to an individualized
treatment plan developed by a mental health
professional, in consultation with the family of
the individual (if available). Such services are
furnished to the individual through a com-
prehensive, multidisciplinary health and social
services delivery system that provides coordi-
nated therapeutic interventions, including med-
ical services, psychotherapy services, occupa-
tional therapy services, and social work services.
(B) LICENSED MENTAL HEALTH PROFES-
SIONAL.—The term ‘‘mental health profes-
sional’’ means any of the following individuals
who are licensed by the State in which the indi-
vidual furnishes services (as that term is de-
fined in paragraphs (1), (2)(M), and (2)(N) of
section 1861(s) of the Social Security Act (42
U.S.C. 1395x(s))) to design and execute treat-
ment plans described in subparagraph (A) with-
out the supervision of another health care prac-
titioner:
(i) A physician, as defined in section
1861(r)(1) 
of 
such 
Act 
(42 
U.S.C.
1395x(r)(1)).
(ii) A clinical psychologist, as defined
by the Secretary pursuant to section
1861(ii) of such Act (42 U.S.C. 1395x(ii)).
(iii) A clinical social worker, as de-
fined in section 1861(hh) of such Act (42
U.S.C. 1395x(hh)).
(b) SELECTION OF CENTERS.—For purposes of im-
plementing such project, the Secretary shall select for par-
ticipation in the project community mental health centers
that serve populations in three different States, one of
which predominantly serves rural populations.
(c) CAPITATED PAYMENT.—The Secretary shall es-
tablish and make prospective monthly payments of a capi-
tation amount for individuals receiving wrap around men-
tal health services under this project.
(d) EVALUATION AND REPORT.—
(1) EVALUATION.—The Secretary shall evaluate
the project. Such evaluation shall include an exam-
ination of—
(A) the project’s effect on the health, well-
being, condition, and functional level of bene-
ficiaries receiving wrap around mental health
services;
(B) any savings to the medicare program
by reason of capitated payments for wrap
around medical services consisting of partial
hospitalization services (as that term is defined
in section 1861(ff) of the Social Security Act
(42 U.S.C. 1395x(ff));
(C) the impact of basing payment for such
services on a capitated basis; and
(D) the project’s effect on utilization of in-
patient services (including inpatient mental
health services) and associated costs.
(2) REPORT.—Not later than four years after
the date of the enactment of this Act, the Secretary
shall submit to Congress a report containing a state-
ment of the findings and conclusions of the Sec-
retary pursuant to the evaluation conducted under
paragraph (1), together with any recommendations
for legislation the Secretary considers appropriate
with respect to—
(A) the provision of additional mental
health services by community mental health
centers under partial hospitalization services;
and
(B) payment for such services on a
capitated basis.
(e) DURATION.—The project shall be conducted for
a three year period.
(f) FUNDING.—The Secretary shall provide for the
transfer from the Federal Hospital Insurance Trust Fund,
established under section 1817 of the Social Security Act
(42 U.S.C. 1395i), of such funds as are necessary for the
costs of carrying out the demonstration project under this
section.
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