I 
109TH CONGRESS 
1ST SESSION H. R. 3437 
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 
JULY 26, 2005 
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 2005’’.
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)— 
(i) by adding ‘‘and’’ at the end of 
clause (i); 
(ii) by striking ‘‘; and’’ at the end of 
clause (ii) and inserting a period; and 
(iii) by striking clause (iii); and 
(B) by striking subparagraphs (C) and 
(D). 
(2) MEDICAID
PROGRAM.—Section 1919(f)(2) 
of such Act (42 U.S.C.1396r(f)(2)) is amended— 
(A) in subparagraph (B)— 
(i) by adding ‘‘and’’ at the end of 
clause (i); 
(ii) by striking ‘‘; and’’ at the end of 
clause (ii) and inserting a period; and 
(iii) by striking clause (iii); and 
(B) by striking subparagraphs (C) and 
(D).
(b) SPECIFIED REMEDIES.— 
(1) 
MEDICARE
PROGRAM.—Section 
1819(h)(2)(B) of such Act (42 U.S.C. 1395i– 
3(h)(2)(B)) is amended— 
(A) by redesignating clause (iii) as clause 
(iv); and 
(B) by inserting after clause (ii) the fol-
lowing new clause: 
‘‘(iii) DISAPPROVAL OF NURSE AIDE 
TRAINING AND COMPETENCY EVALUATION 
PROGRAMS.—In 
consultation 
with 
the 
State, the Secretary may disapprove nurse 
aide training and competency evaluation 
programs offered by the facility.’’. 
(2) 
MEDICAID
PROGRAM.—Section 
1919(h)(2)(A) 
of 
such 
Act 
(42 
U.S.C. 
1396r(h)(2)(A)) is amended— 
(A) by redesignating clauses (iii) and (iv) 
as clauses (iv) and (v), respectively; and 
(B) by inserting after clause (ii) the fol-
lowing new clause: 
‘‘(iii) In consultation with the State, 
the Secretary may disapprove nurse aide 
training and competency evaluation pro-
grams offered by the facility.’’.
(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 3 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 3 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: 
‘‘(F) 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.’’. 
(2) MEDICAID PROGRAM.—Section 1919(h)(2) 
of such Act (42 U.S.C. 1396r(h)(2)) is amended— 
(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) 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.’’. 
(g) ALLOWING APPEALS OF ALL DEFICIENCIES.— 
(1) MEDICARE PROGRAM.—Section 1819(h) of 
such Act, as amended by subsection (f)(1), is further 
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.’’. 
(2) MEDICAID PROGRAM.—Section 1919(h) of 
such Act, as amended by subsection (f)(2), is further 
amended by adding at the end the following new 
paragraph: 
‘‘(11) 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.’’.
(h) JOINT PROVIDERS/SURVEYOR TRAINING.— 
(1) MEDICARE PROGRAM.—Section 1819(e) of 
such Act (42 U.S.C. 1395i–3(e)) is amended by add-
ing at the end the following new paragraph: 
‘‘(6) JOINT PROVIDER/SURVEYOR TRAINING.— 
The Secretary shall require the State to establish a 
process for joint training and education of surveyors 
and providers at least annually and periodically as 
changes to regulations, guidelines, and policy gov-
erning nursing facility operations are implemented 
and used in surveys of participating facilities.’’. 
(2) MEDICAID PROGRAM.—Section 1919(e) of 
such Act (42 U.S.C. 1396r(e)) is amended by adding 
at the end the following new paragraph: 
‘‘(8) JOINT PROVIDER/SURVEYOR TRAINING.— 
The State shall establish a process for joint training 
and education to surveyors and providers at least 
annually and periodically as changes to regulations, 
guidelines, and policy governing nursing facility op-
erations are implemented and used in surveys of 
participating facilities.’’ 
(i) FACILITY-BASED
TRAINING
FOR
NEW
SUR-
VEYORS.— 
(1) MEDICARE PROGRAM.—Section 1819(e) of 
such Act (42 U.S.C. 1395i–3(e)), as amended by
subsection (h)(1), is amended by adding at the end 
the following new paragraph: 
‘‘(7) FACILITY-BASED TRAINING FOR NEW SUR-
VEYORS.—The Secretary shall require the State to 
establish a process for assuring that— 
‘‘(A) each individual newly hired as a nurs-
ing home surveyor, as part of the individual’s 
basic training, is assigned full-time to a partici-
pating nursing facility for at least 5 days within 
a 7-day period to observe actual operations out-
side of the survey process before the individual 
begins oversight responsibilities; 
‘‘(B) such individual shall not assume 
oversight responsibility during this training pe-
riod and such observations may not be the sole 
basis of a deficiency citation against the facility; 
and 
‘‘(C) such individual shall not be assigned 
as a member of a survey team for the facility 
in which the individual received training for two 
standard surveys following the training period 
in the facility.’’. 
(2) MEDICAID PROGRAM.—Section 1919(e) of 
such Act (42 U.S.C. 1396r(e)), as amended by sub-
section (h)(2), is amended by adding at the end the 
following new paragraph: 
‘‘(9) FACILITY-BASED TRAINING FOR NEW SUR-
VEYORS.—The State shall establish a process for as-
suring that— 
‘‘(A) each individual newly hired as a nurs-
ing home surveyor, as part of the individual’s 
basic training, is assigned full-time to a partici-
pating nursing facility for at least 5 days within 
a 7-day period to observe actual operations out-
side of the survey process before the individual 
begins oversight responsibilities; 
‘‘(B) such individual shall not assume 
oversight responsibility during this training pe-
riod and such observations may not be the sole 
basis of a deficiency citation against the facility; 
and 
‘‘(C) such individual shall not be assigned 
as a member of a survey team for the facility 
in which the individual received training for two 
standard surveys following the training period 
in the facility.’’. 
(j) EFFECTIVE DATE.—The amendments made by 
this section shall take effect one month after the date of 
the enactment of this Act, except in cases where regula-
tions are needed to implement these amendments and in 
such cases shall be effective 6 months after such enact-
ment date. 
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