284 
(B) IMPLEMENTATION.—No later than 1 
year after the date of submittal of the report 
under subparagraph (A), the Secretary shall, 
after rulemaking, implement the national long- 
term care hospital facility and patient criteria 
referred to in such subparagraph. Such long-term 
care hospital facility and patient criteria shall 
be used to screen patients in determining the 
medical necessity and appropriateness of a Medi-
care beneficiary’s admission to, continued stay 
at, and discharge from, long-term care hospitals 
under the Medicare program and shall take into 
account the medical judgment of the patient’s 
physician, as provided for under sections 
1814(a)(3) and 1835(a)(2)(B) of the Social Secu-
rity 
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 con-
tracts with one or more appropriate fiscal inter-
mediaries or medicare administrative contrac-
tors under section 1874A(a)(4)(G) of the Social 
Security Act (42 U.S.C. 1395kk(a)(4)(G)), for re-
VerDate Aug 31 2005 
02:09 Aug 02, 2007
Jkt 059200
PO 00000
Frm 00284
Fmt 6652
Sfmt 6203
E:\BILLS\H3162.RH
H3162
bajohnson on PROD1PC69 with BILLS
285 
views of the medical necessity of admissions to 
long-term care hospitals (described in section 
1886(d)(1)(B)(iv) of such Act) and continued 
stay at such hospitals, of individuals entitled to, 
or enrolled for, benefits under part A of title 
XVIII of such Act on a hospital-specific basis 
consistent with this paragraph. Such reviews 
shall be made for discharges occurring on or 
after October 1, 2007. 
(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 results 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 
VerDate Aug 31 2005 
02:09 Aug 02, 2007
Jkt 059200
PO 00000
Frm 00285
Fmt 6652
Sfmt 6203
E:\BILLS\H3162.RH
H3162
bajohnson on PROD1PC69 with BILLS
286 
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 re-
view 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 speci-
fied 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 guarantee, 
VerDate Aug 31 2005 
02:09 Aug 02, 2007
Jkt 059200
PO 00000
Frm 00286
Fmt 6652
Sfmt 6203
E:\BILLS\H3162.RH
H3162
bajohnson on PROD1PC69 with BILLS
287 
through continued medical review and sam-
pling under this paragraph, recovery of at 
least 75 percent of overpayments received by 
long-term care hospitals due to medically 
unnecessary 
admissions 
and 
continued 
stays. 
(E) FUNDING.—The costs to fiscal inter-
mediaries or medicare administrative contrac-
tors conducting the medical necessity reviews 
under subparagraph (A) shall be funded from the 
aggregate overpayments recouped by the Sec-
retary of Health and Human Services from long- 
term care hospitals due to medically unnecessary 
admissions and continued stays. The Secretary 
may use an amount not in excess of 40 percent 
of the overpayments recouped under this para-
graph to compensate the fiscal intermediaries or 
Medicare administrative contractors for the costs 
of services performed. 
(4) LIMITED, QUALIFIED MORATORIUM OF LONG- 
TERM CARE HOSPITALS.— 
(A) IN GENERAL.—Subject to subparagraph 
(B), the Secretary shall impose a temporary 
moratorium on the certification of new long-term 
care hospitals (and satellite facilities), and new 
VerDate Aug 31 2005 
02:09 Aug 02, 2007
Jkt 059200
PO 00000
Frm 00287
Fmt 6652
Sfmt 6203
E:\BILLS\H3162.RH
H3162
bajohnson on PROD1PC69 with BILLS