To amend titles XVIII and XIX of the Social Security Act to require automatic fire sprinkler systems in all nursing facilities participating in the Medicare or Medicaid Programs.

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Nursing Home Fire 
Safety Act of 2004''.
    (b) Findings.--Congress finds the following:
            (1) On February 26, 2003, a fire at a Hartford, 
        Connecticut, nursing facility without an automatic fire 
        sprinkler system claimed the lives of 16 patients.
            (2) On September 27, 2003, a fire at a Nashville, 
        Tennessee, nursing facility without an automatic fire sprinkler 
        system claimed the lives of 15 patients.
            (3) The National Fire Protection Association finds no 
        record of a multiple death fire in a nursing facility equipped 
        with an automatic fire sprinkler system.
            (4) An estimated 1.5 million of the nation's elderly 
        population reside in nursing facilities.
            (5) The Centers for Medicare and Medicaid Services 
        estimates that of the approximate 17,000 nursing facilities 
        nationwide, about 25 percent do not have an automatic fire 
        sprinkler system.
            (6) Many State governments lack requirements for their 
        nursing facilities that were not originally equipped with 
        automatic fire sprinkler systems to be retrofitted with such 
        systems.
            (7) Automatic fire sprinkler systems greatly improve the 
        chances of survival for older adults in the event of a fire.

SEC. 2. REQUIRING AUTOMATIC FIRE SPRINKLER SYSTEMS IN MEDICARE AND 
              MEDICAID FUNDED NURSING FACILITIES.

    (a) Requirement for Medicare Skilled Nursing Facilities.--
            (1) In general.--Section 1819(d)(2) of the Social Security 
        Act (42 U.S.C. 1395i-3(d)(2)) is amended--
                    (A) in subparagraph (B), by inserting ``, subject 
                to subparagraph (C)'' after ``except that''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(C) Automatic fire sprinkler system.--
                            ``(i) In general.--A skilled nursing 
                        facility shall be equipped with an operational 
                        automatic fire sprinkler system that meets the 
                        requirements for such a system under the 
                        National Fire Protection Association's Standard 
                        for the Installation of Sprinkler Systems (1999 
                        edition), or, at the option of a facility, such 
                        later edition of standard as the Secretary may 
                        recognize.
                            ``(ii) Period for compliance and disclosure 
                        of compliance for current facilities.--In the 
                        case of a skilled nursing facility that is 
                        providing extended care services for which 
                        payment is made under this title as of the date 
                        of the enactment of this subparagraph and that 
                        was not in compliance with the requirement of 
                        clause (i) as of such date--
                                    ``(I) the requirement of clause (i) 
                                shall not apply until such date, not 
                                earlier than 3 years and not later than 
                                5 years after the date of the enactment 
                                of this subparagraph, as the Secretary 
                                shall specify; and
                                    ``(II) the facility shall provide 
                                for public disclosure, in a form and 
                                manner specified by the Secretary, of 
                                whether the facility is in compliance 
                                with the standard described in clause 
                                (i).
                            ``(iii) Treatment of earlier state 
                        deadline.--Nothing in clause (ii)(I) shall be 
                        construed to prevent a State from establishing 
                        a deadline for the installation of automatic 
                        fire sprinkler systems for skilled nursing 
                        facilities that is earlier than the deadline 
                        specified by the Secretary under such 
                        clause.''.
            (2) Reimbursement of additional costs.--Section 1888(e) of 
        such Act (42 U.S.C. 1395yy(e)) is amended--
                    (A) in paragraph (1) by striking ``and (12)'' and 
                inserting ``(12), and (13)''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(13) Additional amount to amortize for costs of 
        installing automatic fire sprinkler system.--
                    ``(A) In general.--In the case of a skilled nursing 
                facility that, as of a date that is on or after 
                September 11, 2003, is participating in the program 
                under this title, is not participating in the program 
                under title XIX, and does not have installed an 
                automatic fire sprinkler system that met the 
                requirements described in section 1819(d)(2)(C), and 
                which subsequently incurs expenses in order to meet 
                such requirements, in addition to any other payments 
                made to the facility under this subsection, there shall 
                be paid, in an amortized manner over a five year 
                period, an amount equal to the reasonable amount 
                incurred by the facility in meeting such requirements, 
                less the amount of any payment made before October 1, 
                2004, under this title or title XIX that is directly 
                attributable (such as through depreciation) to such 
                expenses. Such payments shall be made by the Secretary 
                in such form and manner as the Secretary shall specify 
                and based upon the presentation of such information as 
                the Secretary requires.
                    ``(B) No effect on other payments.--The additional 
                payment under subparagraph (A) shall not affect the 
                amount of any other payment made under this subsection 
                and the incurred expenses described in subparagraph (A) 
                shall not be taken into account in making any other 
                payments to a facility under this title.''.
    (b) Requirement for Medicaid Nursing Facilities.--
            (1) In general.--Section 1919(d)(2) of the Social Security 
        Act (42 U.S.C. 1396r(d)(2)) is amended--
                    (A) in subparagraph (B), by inserting ``, subject 
                to subparagraph (C)'' after ``except that''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(C) Automatic fire sprinkler system.--
                            ``(i) In general.--A nursing facility shall 
                        be equipped with an operational automatic fire 
                        sprinkler system that meets the requirements 
                        for such a system under the National Fire 
                        Protection Association's Standard for the 
                        Installation of Sprinkler Systems (1999 
                        edition), or, at the option of a facility, such 
                        later edition of standard as the Secretary may 
                        recognize.
                            ``(ii) Period for compliance and disclosure 
                        of compliance for current facilities.--In the 
                        case of a nursing facility that is providing 
                        nursing facility services for which payment is 
                        made under this title as of the date of the 
                        enactment of this subparagraph and that was not 
                        in compliance with the requirement of clause 
                        (i) as of such date--
                                    ``(I) the requirement of clause (i) 
                                shall not apply until such date, not 
                                earlier than 3 years and not later than 
                                5 years after the date of the enactment 
                                of this subparagraph, as the Secretary 
                                shall specify; and
                                    ``(II) the facility shall provide 
                                for public disclosure, in a form and 
                                manner specified by the Secretary, of 
                                whether the facility is in compliance 
                                with the standard described in clause 
                                (i).
                            ``(iii) Treatment of earlier state 
                        deadline.--Nothing in clause (ii)(I) shall be 
                        construed to prevent a State from establishing 
                        a deadline for the installation of automatic 
                        fire sprinkler systems for nursing facilities 
                        that is earlier than the deadline specified by 
                        the Secretary under such clause.''.
            (2) Reimbursement of additional costs.--Section 
        1902(a)(13)(A) of such Act (42 U.S.C. 1396a(a)(13)(A)) is 
        amended--
                    (A) by striking ``and'' at the end of clause (iii);
                    (B) by striking ``; and'' at the end of clause (iv) 
                and inserting ``, and''; and
                    (C) by adding at the end the following new clause:
                            ``(v) in the case of nursing facility 
                        services furnished by a nursing facility that, 
                        as of a date that is on or after September 11, 
                        2003, is participating in the program under 
                        this title but does not have installed an 
                        automatic fire sprinkler system that met the 
                        requirements described in section 
                        1919(d)(2)(C), and that subsequently incurs 
                        expenses in order to meet such requirements, 
                        such rates shall provide for the payment, in an 
                        amortized manner over a five year period and in 
                        addition to the payment amounts otherwise 
                        provided, of an amount equal to the reasonable 
                        amount incurred by the facility in meeting such 
                        requirements, less the payment amounts under 
                        this title or title XVIII made before October 
                        1, 2004, that are directly attributable (such 
                        as through depreciation) to such expenses, and 
                        the payment rates otherwise provided shall not 
                        take into account such costs incurred in 
                        meeting such requirements; and''.
            (3) Full federal payment.--
                    (A) In general.--The third sentence of section 1905 
                of such Act (42 U.S.C. 1396d) is amended by inserting 
                before the period at the end the following: ``and with 
                respect to amounts expended as medical assistance in 
                providing the payment amounts required under section 
                1902(a)(13)(A)(v)''.
                    (B) Conforming amendment to apply to territories.--
                Section 1108 of such Act (42 U.S.C. 1308) is amended--
                            (i) in subsection (f), by striking 
                        ``subsection (g)'' and inserting ``subsections 
                        (g) and (h)''; and
                            (ii) by adding at the end the following new 
                        subsection:
    ``(h) Exception for Payment for Automatic Fire Sprinkler Systems.--
The limitations on payments under subsection (f) shall not apply to 
payments that are attributable to payments for medical assistance for 
expenditures made under section 1902(a)(13)(A)(v).''.
    (c) Reduction in Tax Basis.--Section 1016(a) of the Internal 
Revenue Code of 1986 is amended by striking ``and'' at the end of 
paragraph (27), by striking the period at the end of paragraph (28) and 
inserting ``, and'', and by adding at the end the following new 
paragraph:
            ``(29) in the case of property with respect to which any 
        payment is made under section 1888(e)(13) or 1902(a)(13)(A)(v) 
        of the Social Security Act, by reducing the basis of such 
        property by the amount of such payment.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act, except that the 
amendments made by subsections (a)(2) and (b)(2) shall apply to 
payments to facilities for periods beginning on or after October 1, 
2004, regardless of whether the payments are for expenses incurred 
before, on, or after such date.

Summary: Nursing Home Fire Safety Act of 2004 - Amends title XVIII (Medicare) and XIX (Medicaid) of the Social Security Act to require automatic fire sprinkler systems in all Medicare and Medicaid funded nursing facilities and provide for reimbursement of the additional costs incurred with respect to installing such systems.