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106TH CONGRESS
1ST SESSION
H. R. 2628
To amend title XVIII of the Social Security Act to provide greater equity
to Medicare-certified home health agencies, and to ensure access of
Medicare beneficiaries to medically necessary home health services fur-
nished in an efficient manner under the Medicare Program.
IN THE HOUSE OF REPRESENTATIVES
JULY 27, 1999
Mr. WATTS of Oklahoma (for himself, Mr. LUCAS of Oklahoma, and Mr. WAT-
KINS) 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 jurisdiction of the
committee concerned
A BILL
To amend title XVIII of the Social Security Act to provide
greater equity to Medicare-certified home health agen-
cies, and to ensure access of Medicare beneficiaries to
medically necessary home health services furnished in
an efficient manner under the Medicare Program.
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 ‘‘Medicare Home Health
Services Equity Act of 1999’’.
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SEC. 2. FINDINGS.
Congress finds that the payment system for home
health services covered under Medicare as enacted by the
Balanced Budget Act of 1997 is having the following unin-
tended consequences:
(1) Many of the sickest, most frail Medicare
beneficiaries are being deprived of access to medi-
cally necessary home health services which are cov-
ered under the Medicare Program.
(2) The amount of reductions in reimbursement
for home health services furnished under the Medi-
care Program significantly exceeds the amount of re-
duction in reimbursement for any other service fur-
nished under the Medicare Program at a time when
the need for home health services by the Nation’s el-
derly citizens is growing.
(3) The per beneficiary limits imposed on home
health agencies do not, for a majority of such agen-
cies, accurately reflect the costs necessarily incurred
in the efficient delivery of needed home health serv-
ices to the individuals treated by those agencies, as
required under section 1861(v)(1)(A) of the Social
Security Act (42 U.S.C. 1395x(v)(1)(A)).
(4) Residents of certain States and regions of
the country are being afforded access to far fewer
home health services under the Medicare Program
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than residents of other States or regions who have
similar medical conditions.
(5) The prospective payment system scheduled
for implementation by October 1, 2000, is in danger
of being based on data which excludes many of the
costs of providing covered services to the sickest,
most frail Medicare beneficiaries.
(6) The additional 15 percent reduction in re-
imbursement currently scheduled for October 1,
2000, will result in reductions in Medicare spending
for home health services that are far in excess of
those intended by Congress when it passed the Bal-
anced Budget Act of 1997 and are unrelated to
needs of the patients.
(7) The home health interim payment system
enacted as part of the Balanced Budget Act of 1997
is not providing for a smooth transition from reason-
able cost reimbursement to prospective payment.
SEC. 
3. 
INTERIM 
PAYMENT 
SYSTEM 
OVERPAYMENT
RECOUPMENT.
(a) IN GENERAL.—Section 1861(v)(1)(L) of the So-
cial Security Act (42 U.S.C. 1395x(v)(1)(L)), as amended
by section 5101(a) of the Tax and Trade Relief Extension
Act of 1998 (Public Law 105–277), is amended by adding
at the end the following new clause:
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‘‘(x)(I) Notwithstanding any other provision of this
subparagraph, there shall be no recovery of any payments
for reasonable costs made before the cost reporting period
describe in subclause (II) to a home health agency in ex-
cess of the per beneficiary limitation applicable to that
agency.
‘‘(II) The cost reporting period referred to in sub-
clause (I) with respect to a home health agency is the cost
reporting period beginning during the fiscal year following
the fiscal year in which the home health agency received
written notice from the Secretary of its agency-specific per
beneficiary limitation.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply as if included in the enactment
of the Balanced Budget Act of 1997.
SEC. 4. ELIMINATION OF AUTOMATIC 15 PERCENT REDUC-
TION IN PAYMENT LIMITS.
(a) PROSPECTIVE PAYMENT SYSTEM.—
(1) ELIMINATION
OF
REDUCTION.—Section
1895(b)(3) of the Social Security Act (42 U.S.C.
1395fff(b)(3)(A)) is amended—
(A) in clause (i)—
(i) by striking ‘‘but if the reduction in
limits described in clause (ii) had been in
effect’’; and
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(ii) by striking ‘‘(i) IN GENERAL.—’’
and adjusting the margin accordingly; and
(B) by striking clause (ii).
(2) 
CONFORMING
AMENDMENT.—Section
1895(d)(3) of such Act (42 U.S.C. 1395fff(d)(3)) is
amended by striking ‘‘(including the reduction de-
scribed in clause (ii) of such subsection)’’.
(b) INTERIM PAYMENT SYSTEM.—Section 4603 of
the Balanced Budget Act of 1997 (Public Law 105–33),
as amended by section 5101(c)(3) of the Tax and Trade
Relief Extension Act of 1998 (Public Law 105–277), is
amended by striking subsection (e).
SEC. 5. REVISION OF PER VISIT LIMITS.
Section 1861(v)(1)(L)(i) of the Social Security Act
(42 U.S.C. 1395x(v)(1)(L)(i)) is amended—
(1) in subclause (IV), by striking ‘‘or’’;
(2) in subclause (V)—
(A) by inserting ‘‘and before October 1,
1999’’ after ‘‘October 1, 1998,’’; and
(B) by striking the period at the end and
inserting ‘‘, or’’; and
(3) by adding at the end the following new sub-
clause:
‘‘(VI) October 1, 1999, 108 percent of
such median.’’.
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SEC. 6. ENSURING BENEFICIARY CHOICE OF PROVIDER
WITH PRORATED LIMITS.
(a) IN GENERAL.—Section 1861(v)(1)(L)(vi)(II) of
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395x(v)
(1)(L)(vi)(II)) is amended by inserting ‘‘only if the Sec-
retary determines that the agency knew or should have
known that the individual, to whom home health services
were furnished, used home health services furnished by
more than one home health agency’’ before the period.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to cost reporting periods begin-
ning on or after October 1, 1999.
SEC. 7. EXCEPTIONS AND EXEMPTIONS; OUTLIERS.
(a) EXCEPTIONS AND EXEMPTIONS.—
(1) IN GENERAL.—Section 1861(v)(1)(L)(ii) of
the 
Social 
Security 
Act 
(42 
U.S.C.
1395x(v)(1)(L)(ii)) is amended by adding at the end
the following: ‘‘With respect to the limits under
clauses (v) through (ix), the Secretary shall provide
for the following exceptions and exemptions:
‘‘(I) Home health agencies furnishing home
health services exclusively in medically underserved
areas shall be exempt from such limits.
‘‘(II) The Secretary shall provide for a payment
amount (in an amount determined by the Secretary)
in addition to the amounts applicable under such
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limits for a home health agency that demonstrates
to the Secretary that it incurred costs above such
limits due to costs attributable to additional Federal
regulatory requirements imposed after fiscal year
1994.’’.
(2) EXPENDITURE LIMITS ON EXCEPTIONS.—
The aggregate amount of additional payments or
payment 
adjustments 
made 
under 
section
1861(v)(1)(L)(ii)(II), as added by paragraph (1),
with respect to a fiscal year may not exceed 5 per-
cent of the aggregate payments projected or esti-
mated by the Secretary to be made under section
1861(v)(1)(L) for such fiscal year.
(b) ADDITIONAL PAYMENTS FOR OUTLIERS.—Sec-
tion 
1861(v)(1)(L) 
of 
such 
Act 
(42 
U.S.C.
1395x(v)(1)(L)), as amended by section 3(a), is further
amended by adding at the end the following new clause:
‘‘(xi) Notwithstanding clauses (v) through (ix), the
Secretary shall provide for an additional payment amount
to a provider equal to the difference between the reason-
able cost incurred by the provider and the limit under such
clauses applicable to the provider if the provider dem-
onstrates to the Secretary that—
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‘‘(I) the provider incurred costs in excess of the
limits applicable under such clauses with respect to
an individual described in subclause (II);
‘‘(II) with respect to an individual to whom the
provider furnished home health services under this
title, the individual requires the most expensive
home health services (case outliers) or requires such
services for a far longer than average period of time
(case and duration outliers), such outliers deter-
mined by the Secretary; and
‘‘(III) such incurred costs are reasonable.
No payment shall be made under this clause to a provider
that, as of October 1, 1999, has ceased furnishing home
health services for which payment may be made under this
title.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply as if included in the enactment
of the Balanced Budget Act of 1997.
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