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HR 3162 PCS
stay at, and discharge from, long-term care hos-
pitals under the Medicare program and shall 
take into account the medical judgment of the 
patient’s physician, as provided for under sec-
tions 1814(a)(3) and 1835(a)(2)(B) of the So-
cial Security Act (42 U.S.C. 1395f(a)(3), 
1395n(a)(2)(B)). 
(3) EXPANDED
REVIEW
OF
MEDICAL
NECES-
SITY.— 
(A) 
IN
GENERAL.—The 
Secretary 
of 
Health and Human Services shall provide, 
under contracts with one or more appropriate 
fiscal intermediaries or medicare administrative 
contractors under section 1874A(a)(4)(G) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395kk(a)(4)(G)), for reviews of the medical 
necessity of admissions to long-term care hos-
pitals (described in section 1886(d)(1)(B)(iv) of 
such Act) and continued stay at such hospitals, 
of individuals entitled to, or enrolled for, bene-
fits under part A of title XVIII of such Act on 
a hospital-specific basis consistent with this 
paragraph. Such reviews shall be made for dis-
charges occurring on or after October 1, 2007. 
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(B) REVIEW METHODOLOGY.—The medical 
necessity reviews under paragraph (A) shall be 
conducted for each such long-term care hospital 
on an annual basis in accordance with rules (in-
cluding a sample methodology) specified by the 
Secretary. Such sample methodology shall— 
(i) provide for a statistically valid and 
representative sample of admissions of 
such individuals sufficient to provide re-
sults at a 95 percent confidence interval; 
and 
(ii) guarantee that at least 75 percent 
of overpayments received by long-term care 
hospitals for medically unnecessary admis-
sions and continued stays of individuals in 
long-term care hospitals will be identified 
and recovered and that related days of care 
will not be counted toward the length of 
stay requirement contained in section 
1886(d)(1)(B)(iv) of the Social Security 
Act (42 U.S.C. 1395ww(d)(1)(B)(iv)). 
(C) CONTINUATION OF REVIEWS.—Under 
contracts under this paragraph, the Secretary 
shall establish a denial rate with respect to such 
reviews that, if exceeded, could require further 
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review of the medical necessity of admissions 
and continued stay in the hospital involved. 
(D) TERMINATION
OF
REQUIRED
RE-
VIEWS.— 
(i) IN
GENERAL.—Subject to clause 
(iii), the previous provisions of this sub-
section shall cease to apply as of the date 
specified in clause (ii). 
(ii) DATE SPECIFIED.—The date spec-
ified in this clause is the later of January 
1, 2013, or the date of implementation of 
national long-term care hospital facility 
and patient criteria under section para-
graph (2)(B). 
(iii) CONTINUATION.—As of the date 
specified in clause (ii), the Secretary shall 
determine whether to continue to guar-
antee, through continued medical review 
and sampling under this paragraph, recov-
ery of at least 75 percent of overpayments 
received by long-term care hospitals due to 
medically unnecessary admissions and con-
tinued stays. 
(E) FUNDING.—The costs to fiscal inter-
mediaries or medicare administrative contrac-
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tors conducting the medical necessity reviews 
under subparagraph (A) shall be funded from 
the aggregate overpayments recouped by the 
Secretary of Health and Human Services from 
long-term care hospitals due to medically un-
necessary admissions and continued stays. The 
Secretary may use an amount not in excess of 
40 percent of the overpayments recouped under 
this paragraph to compensate the fiscal inter-
mediaries or Medicare administrative contrac-
tors for the costs of services performed. 
(4) LIMITED, 
QUALIFIED
MORATORIUM
OF 
LONG-TERM CARE HOSPITALS.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary shall impose a tem-
porary moratorium on the certification of new 
long-term care hospitals (and satellite facilities), 
and new long-term care hospital and satellite 
facility beds, for purposes of the Medicare pro-
gram under title XVIII of the Social Security 
Act. The moratorium shall terminate at the end 
of the 4-year period beginning on the date of 
the enactment of this Act. 
(B) EXCEPTIONS.— 
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(i) IN
GENERAL.—The moratorium 
under subparagraph (A) shall not apply as 
follows: 
(I) To a long-term care hospital, 
satellite facility, or additional beds 
under development as of the date of 
the enactment of this Act. 
(II) To an existing long-term 
care hospital that requests to increase 
its number of long-term care hospital 
beds, if the Secretary determines 
there is a need at the long-term care 
hospital for additional beds to accom-
modate— 
(aa) infectious disease issues 
for isolation of patients; 
(bb) bedside dialysis serv-
ices; 
(cc) single-sex accommoda-
tion issues; 
(dd) behavioral issues; or 
(ee) any requirements of 
State or local law. 
(III) To an existing long-term 
care hospital that requests an increase 
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in beds because of the closure of a 
long-term care hospital or significant 
decrease in the number of long-term 
care hospital beds, in a State where 
there is only one other long-term care 
hospital. 
There shall be no administrative or judicial 
review from a decision of the Secretary 
under this subparagraph. 
(ii) ‘‘UNDER
DEVELOPMENT’’ 
DE-
FINED.—For purposes of clause (i)(I), a 
long-term care hospital or satellite facility 
is considered to be ‘‘under development’’ as 
of a date if any of the following have oc-
curred on or before such date: 
(I) The hospital or a related 
party has a binding written agreement 
with an outside, unrelated party for 
the construction, reconstruction, lease, 
rental, or financing of the long-term 
care hospital and the hospital has ex-
pended, before the date of the enact-
ment of this Act, at least 10 percent 
of the estimated cost of the project 
(or, if less, $2,500,000). 
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