I
105TH CONGRESS
2D SESSION
H. R. 3567
To amend title XVIII of the Social Security Act to provide for equitable
payments to home health agencies under the Medicare Program.
IN THE HOUSE OF REPRESENTATIVES
MARCH 26, 1998
Mr. PAPPAS (for himself, Mr. SMITH of New Jersey, Mr. SAXTON, and Mr.
COYNE) introduced the following bill; which was referred to the Commit-
tee 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
for equitable payments to home health agencies 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.
The Act may be cited as the ‘‘Medicare Home Health
Equity Act of 1998’’.
SEC. 2. PAYMENTS TO HOME HEALTH AGENCIES UNDER
MEDICARE.
(a) RESTORATION OF PER VISIT COST LIMIT TO 112
PERCENT
OF
THE
MEAN
OF
COSTS.—Section
1861(v)(1)(L)(i) of the Social Security Act (42 U.S.C.
1395x(v)(1)(L)(i)), as amended by section 4602(a) of the
Balanced Budget Act of 1997, is amended—
(1) in subclause (II), by adding at the end
‘‘or’’;
(2) in subclause (III), by striking ‘‘and before
October 1, 1997,’’ and ‘‘or’’; and
(3) by striking subclause (IV).
(b) REVISION OF INTERIM PAYMENT SYSTEM FOR
HOME HEALTH SERVICES.—
(1) IN GENERAL.—Section 1861 (v)(1)(L) of
the Social Security Act (42 U.S.C. 1395x(v)(1)(L)),
as amended by section 4602(c) of the Balanced
Budget Act of 1997, is amended—
(A) by striking clauses (v) and (vi);
(B) by redesignating clause (vii) as clause
(viii); and
(C) by inserting after clause (iv) the fol-
lowing new clauses:
‘‘(v) For services furnished by home health agencies
for cost reporting periods beginning on or after October
1, 1997, the Secretary shall provide for an interim system
of limits. Payment shall not exceed the costs determined
under the preceding provisions of this subparagraph or,
if lower, the product of—
‘‘(I) an agency-specific per beneficiary annual
limitation calculated based 75 percent on the reason-
able costs (including nonroutine medical supplies) of
the standardized national average cost per patient in
fiscal year 1994 and 25 percent on the reasonable
costs (including nonroutine medical supplies) of the
standardized regional average cost per patient for
the agency’s census division in fiscal year 1995, such
national and regional costs adjusted as appropriate
under clause (vi) and 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)(I) The Secretary shall adjust the labor-related
portion of costs determined under clause (v)(I) by the area
wage index applicable under section 1886(d)(3)(E) for the
area in which the agency is located (as determined without
regard to any reclassification of the area under section
1886(d)(8)(B) or a decision of the Medicare Geographic
Classification Review Board or the Secretary under sec-
tion 1886(d)(10) for a cost reporting period beginning
after October 1, 1995).
‘‘(II) The Secretary shall provide for an addition or
adjustment to the payment amount otherwise made under
this subparagraph in the case of outliers because of un-
usual variations in the type or amount of medically nec-
essary care. The total amount of the additional payments
or payment adjustments made under this subclause with
respect to a fiscal year may not exceed the total payments
otherwise to be made under this subparagraph in that
year.
‘‘(vii) For beneficiaries who use services furnished by
more than one home health agency, the per beneficiary
limitations shall be prorated among the agencies.’’.
(2) 
CONFORMING
AMENDMENT.—Section
1861(v)(1)(L)(viii)) 
of 
such 
Act 
(42 
U.S.C.
1395x(v)(1)(L)(viii)), as so redesignated in para-
graph (1)(B), is amended by striking ‘‘April 1,
1998’’ and inserting ‘‘May 1, 1998’’.
(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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