I
107TH CONGRESS
2D SESSION
H. R. 4030
To amend titles XVIII and XIX of the Social Security Act with respect
to reform of Federal survey and certification process of nursing facilities
under the Medicare and Medicaid Programs.
IN THE HOUSE OF REPRESENTATIVES
MARCH 20, 2002
Mr. CAMP introduced the following bill; which was referred to the Committee
on Ways and Means, and in addition to the Committee on Energy and
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 titles XVIII and XIX of the Social Security Act
with respect to reform of Federal survey and certification
process of nursing facilities under the Medicare and Med-
icaid Programs.
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 and Medicaid
Nursing Facility Quality Improvement Act of 2002’’.
SEC. 2. QUALITY IMPROVEMENT FOR NURSING FACILITIES
UNDER THE MEDICARE AND MEDICAID PRO-
GRAMS.
(a) INCENTIVES FOR IMMEDIATE IMPROVEMENT AND
PROTECTION OF NEEDED TRAINING PROGRAMS.—
(1) MEDICARE PROGRAM.—Section 1819(f)(2)
of the Social Security Act (42 U.S.C. 1395i–3(f)(2))
is amended—
(A) in subparagraph (B)(iii), by striking
‘‘subparagraph (C)’’ and inserting ‘‘subpara-
graphs (C) and (D)’’; and
(B) by adding at the end the following new
subparagraph:
‘‘(D) 
RESTORATION
OF
NURSE
AIDE
TRAINING UPON DEMONSTRATION OF COMPLI-
ANCE.—The prohibition on program approval
described in subparagraph (B)(iii)(I) shall not
be continued when the facility involved through
on-site verification demonstrates compliance
with the applicable standards.’’.
(2) MEDICAID
PROGRAM.—Section 1919(f)(2)
of such Act (42 U.S.C. 1396r(f)(2)) is amended—
(A) in subparagraph (B)(iii), by striking
‘‘subparagraph (C)’’ and inserting ‘‘subpara-
graphs (C) and (D)’’; and
(B) by adding at the end the following new
subparagraph:
‘‘(D) 
RESTORATION
OF
NURSE
AIDE
TRAINING UPON DEMONSTRATION OF COMPLI-
ANCE.—The prohibition on program approval
described in subparagraph (B)(iii)(I) shall not
be continued when the facility involved through
on-site verification demonstrates compliance
with the applicable standards.’’.
(b) REQUIREMENTS FOR NURSE AIDE TRAINING.—
(1) 
MEDICARE
PROGRAM.—Section
1819(f)(2)(B)(iii)(I) of such Act (42 U.S.C. 1395i–
3(f)(2)(B)(iii)(I)) is amended—
(A) in the matter before subdivision (a), by
striking ‘‘, within the previous 2 years’’;
(B) in subdivision (a), by striking ‘‘has op-
erated’’ and inserting ‘‘is operating’’;
(C) in subdivision (b), by striking ‘‘has
been subject’’ and inserting ‘‘is subject’’; and
(D) in subdivision (c), by inserting ‘‘within
the previous 2 years’’ after ‘‘(c)’’.
(2) 
MEDICAID
PROGRAM.—Section
1919(f)(2)(B)(iii)(I) 
of 
such 
Act 
(42 
U.S.C.
1396r(f)(2)(B)(iii)(I)) is amended—
(A) in the matter before subdivision (a), by
striking ‘‘, within the previous 2 years’’;
(B) in subdivision (a), by striking ‘‘has op-
erated’’ and inserting ‘‘is operating’’;
(C) in subdivision (b), by striking ‘‘has
been subject’’ and inserting ‘‘is subject’’; and
(D) in subdivision (c), by inserting ‘‘within
the previous 2 years’’ after ‘‘(c)’’.
(c) PROMOTING INNOVATION
AND QUALITY IM-
PROVEMENT THROUGH STATE WAIVERS.—
(1) MEDICARE PROGRAM.—Section 1819(g) of
such Act (42 U.S.C. 1395i–3(g)) is amended by add-
ing at the end the following new paragraph:
‘‘(6) WAIVER DEMONSTRATION AUTHORITY TO
PROMOTE
INNOVATION
AND
QUALITY
IMPROVE-
MENT.—
‘‘(A) IN GENERAL.—At the request of a
State, but not to exceed a total of 8 States, the
Secretary may waive provisions of this sub-
section relating to survey and certification pro-
cedures in order to test and implement innova-
tive alternatives to the survey process otherwise
applicable. The Secretary shall provide special
consideration to the application of alternative
procedures that increase the use of outcome
measures, the incorporation of quality of life
measures, and improve consistency and accu-
racy in deficiency determinations and survey re-
sults. The Secretary shall approve a waiver re-
quest if applicant demonstrates significant po-
tential for improving the quality of care, quality
of life, and safety of residents.
‘‘(B) 
CONSIDERATION
OF
VIEWS
OF
STAKEHOLDERS.—The Secretary shall only con-
sider waiver applications under this paragraph
from a State under this paragraph if the State
has convened and consulted with appropriate
stakeholders in the State, including representa-
tives of nursing facilities, consumers groups,
the State long term care ombudsman, labor or-
ganizations (and where such organizations are
not present in the industry, other employee rep-
resentatives), and licensed health care pro-
viders, to assist in developing their alternative
system. In determining whether to grant such
waivers the Secretary shall take into consider-
ation the views of the stakeholders convened by
the State.’’.
(2) MEDICAID PROGRAM.—Section 1919(g) of
such Act (42 U.S.C. 1396r(g)) is amended by add-
ing at the end the following new paragraph:
‘‘(6) WAIVER DEMONSTRATION AUTHORITY TO
PROMOTE
INNOVATION
AND
QUALITY
IMPROVE-
MENT.—
‘‘(A) IN GENERAL.—At the request of a
State, but not to exceed a total of 8 States, the
Secretary may waive provisions of this sub-
section relating to survey and certification pro-
cedures in order to test and implement innova-
tive alternatives to the survey process otherwise
applicable. The Secretary shall provide special
consideration to the application of alternative
procedures that increase the use of outcome
measures, the incorporation of quality of life
measures, and improve consistency and accu-
racy in deficiency determinations and survey re-
sults. The Secretary shall approve a waiver re-
quest if it demonstrates significant potential for
improving the quality of care, quality of life,
and safety of residents.
‘‘(B) 
CONSIDERATION
OF
VIEWS
OF
STAKEHOLDERS.—The Secretary shall only con-
sider waiver applications under this paragraph
from a State under this paragraph if the State
has convened and consulted with appropriate
stakeholders in the State, including representa-
tives of nursing facilities, consumers groups,
the State long term care ombudsman, labor or-
ganizations (and where such organizations are
not present in the industry, other employee rep-
resentatives), and licensed health care pro-
viders, to assist in developing their alternative
system. In determining whether to grant such
waivers the Secretary shall take into consider-
ation the views of the stakeholders convened by
the State.’’.
(d) REMOVAL OF INFLEXIBILITY IN PROVIDER TER-
MINATION.—
(1) MEDICARE PROGRAM.—Section 1819(h)(2)
of such Act (42 U.S.C. 1395i–3(h)(2)) is amended—
(A) in subparagraph (D), by striking ‘‘If’’
and inserting ‘‘Subject to subparagraph (F),
if’’;
(B) in subparagraph (E), by striking ‘‘In’’
and inserting ‘‘Subject to subparagraph (F),
in’’; and
(C) by adding at the end the following new
subparagraph:
(A) in subparagraph (C), by striking ‘‘If’’
and inserting ‘‘Subject to subparagraph (G),
if’’;
(B) in subparagraph (D), by striking ‘‘In’’
and inserting ‘‘Subject to subparagraph (G),
in’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(G) CONTINUATION OF PAYMENTS PEND-
ING REMEDIATION WHEN FLEXIBILITY NEEDED
TO PROTECT RESIDENTS.—The Secretary may
continue payments, over a period not longer
than 12 months after the effective date of the
findings, under this title with respect to a nurs-
ing facility not in compliance with a require-
ment of subsection (b), (c), or (d), if—
‘‘(i) the State survey agency finds
that ceasing payments is not in the best
interests of residents and that continuation
of payments would not jeopardize resi-
dents’ health and safety;
‘‘(ii) the State survey agency finds
that it is more appropriate to take alter-
native action to assure compliance of the
facility with the requirements than to ter-
minate the certification of the facility; and
‘‘(iii) the State has submitted a plan
and timetable for corrective action to the
Secretary for approval and the Secretary
approves the plan of corrective action.’’.
(e) ACCESS
TO INFORMAL DISPUTE RESOLUTION
PROCESS.—
(1) MEDICARE PROGRAM.—Section 1819(g)(1)
of such Act (42 U.S.C. 1395i–3(g)(1)) is amended
by adding at the end the following new subpara-
graph:
‘‘(F) 
ESTABLISHMENT
OF
INFORMAL,
INDEPENDENT
DISPUTE
RESOLUTION
PROC-
ESS.—Each State shall establish an informal
dispute resolution process that allows facilities
to settle disputes involving compliance with the
standards established under this section. Such
process shall rely on independent third parties,
not related to the State survey agency or the
facilities, in resolving disputes.’’.
(2) MEDICAID PROGRAM.—Section 1919(g)(1)
of such Act (42 U.S.C. 1396r(g)(1)) is amended by
adding at the end the following new subparagraph:
‘‘(F) 
ESTABLISHMENT
OF
INFORMAL,
INDEPENDENT
DISPUTE
RESOLUTION
PROC-
ESS.—Each State shall establish an informal
dispute resolution process that allows facilities
to settle disputes involving compliance with the
standards established under this section. Such
process shall rely on independent third parties,
not related to the State survey agency or the
facilities, in resolving disputes.’’.
(f) DEFERENCE TO ATTENDING PHYSICIAN DIAG-
NOSIS AND TREATMENT DECISIONS DURING THE SURVEY
PROCESS.—
(1) MEDICARE PROGRAM.—Section 1819(g)(2)
of such Act (42 U.S.C. 1395i–3(g)(2)) is amended
by inserting at the end the following new subpara-
graph:
‘‘(F) DEFERENCE TO ATTENDING PHYSI-
CIAN DIAGNOSIS AND TREATMENT.—
‘‘(i) IN GENERAL.—In the conduct of
any surveys under this subsection and the
compliance decisions made thereunder, sur-
veyors shall defer to the diagnosis and
treatment decisions of the resident’s at-
tending physician and of the facility’s med-
ical director, and to a plan of care estab-
lished pursuant to subsection (b)(2), as
long as such decisions and plans are con-
sistent with acceptable standards of prac-
tice.
‘‘(ii) FAILURE TO DEFER TO TREAT-
ING DECISION.—Each State and the Sec-
retary shall implement programs to mon-
itor and correct instances of failure of sur-
veyors to adhere to the requirements of
this subparagraph.’’.
(2) MEDICAID PROGRAM.—Section 1919(g)(2)
of such Act (42 U.S.C. 1396r(g)(2)) is amended by
inserting at the end the following new subparagraph:
‘‘(F) DEFERENCE TO ATTENDING PHYSI-
CIAN DIAGNOSIS AND TREATMENT.—
‘‘(i) IN GENERAL.—In the conduct of
any surveys under this subsection and the
compliance decisions made thereunder, sur-
veyors shall defer to the diagnosis and
treatment decisions of the resident’s at-
tending physician and of the facility’s med-
ical director, and to a plan of care estab-
lished pursuant to subsection (b)(2), as
long as such decisions and plans are con-
sistent with acceptable standards of prac-
tice.
‘‘(ii) FAILURE TO DEFER TO TREAT-
ING DECISION.—The State and the Sec-
retary shall implement programs to mon-
itor and correct instances of failure of sur-
veyors to adhere to the requirements of
this subparagraph.’’.
(g) DISSEMINATION
OF INFORMATION
ON BEST
PRACTICES.—
(1) 
MEDICARE
PROGRAM.—Section
1819(g)(2)(E) of such Act (42 U.S.C. 1395i–
3(g)(2)(E)) is amended by adding at the end the fol-
lowing new clause:
‘‘(iv) PERMITTING DISSEMINATION OF
INFORMATION ON BEST AND INNOVATIVE
PRACTICES.—Nothing in this section shall
be construed as precluding a member of a
survey team from providing information to
facility staff on best or innovative practices
in complying with the requirements of this
section.’’.
(2) 
MEDICAID
PROGRAM.—Section
1919(g)(2)(E) 
of 
such 
Act 
(42 
U.S.C.
1396r(g)(2)(E)) is amended by adding at the end
the following new clause:
‘‘(iv) PERMITTING DISSEMINATION OF
INFORMATION ON BEST AND INNOVATIVE
PRACTICES.—Nothing in this section shall
be construed as precluding a member of a
survey team from providing information to
facility staff on best or innovative practices
in complying with the requirements of this
section.’’.
(h) REMOVING BARRIERS THAT DETER NEW MAN-
AGEMENT FROM TAKING OVER AND IMPROVING PROB-
LEM FACILITIES.—
(1) MEDICARE PROGRAM.—Section 1819(h) of
such Act (42 U.S.C. 1395i–3(h)) is amended by
adding at the end the following new paragraph:
‘‘(7) FOSTERING IMPROVEMENT OF FACILITIES
WITH
POOR
COMPLIANCE
HISTORIES.—The Sec-
retary shall provide incentives for operators with his-
tories of good compliance to acquire facilities with
poor compliance histories. Such incentives shall be
designed to promote the sustained provision of high-
quality care and shall only be made available in the
case of bona fide, arm’s-length sale of facilities with
poor compliance histories.’’.
(2) MEDICAID PROGRAM.—Section 1919(h) of
such Act (42 U.S.C. 1396r(h)) is amended by add-
ing at the end the following new paragraph:
‘‘(10) FOSTERING
IMPROVEMENT
OF
FACILI-
TIES
WITH
POOR
COMPLIANCE
HISTORIES.—The
Secretary shall provide incentives for operators with
histories of good compliance to acquire facilities with
poor compliance histories. Such incentives shall be
designed to promote the sustained provision of high-
quality care and shall only be made available in the
case of bona fide, arm’s-length sale of facilities with
poor compliance histories.’’.
(i) ALLOWING APPEALS OF ALL DEFICIENCIES.—
(1) MEDICARE PROGRAM.—Section 1819(h) of
such Act, as amended by subsection (g)(1), is fur-
ther amended by adding at the end the following
new paragraph:
‘‘(8) RIGHT TO APPEAL ALL DEFICIENCY CITA-
TIONS.—Notwithstanding any other provision of law,
a facility may appeal any deficiency determination
under this section with respect to which a penalty
has not been imposed in the same manner as the fa-
cility may appeal such determination if a penalty
had been imposed.’’.