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106th CONGRESS
1st Session
H. R. 3075
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 8, 1999
Received
November 19, 1999
Read twice and referred to the Committee on Finance
_______________________________________________________________________
AN ACT
To amend titles XVIII, XIX, and XXI of the Social Security Act to make
corrections and refinements in the Medicare, Medicaid, and State
children's health insurance programs, as revised by the Balanced Budget
Act of 1997.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; REFERENCES
TO BBA; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Medicare,
Medicaid, and SCHIP Balanced Budget Refinement Act of 1999''.
(b) Amendments to Social Security Act.--Except as otherwise
specifically provided, whenever in this title an amendment is expressed
in terms of an amendment to or repeal of a section or other provision,
the reference shall be considered to be made to that section or other
provision of the Social Security Act.
(c) References to Balanced Budget Act of 1997.--In this Act, the
term ``BBA'' means the Balanced Budget Act of 1997 (Public Law 105-33).
(d) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; amendments to Social Security Act; references to
BBA; table of contents.
TITLE I--PROVISIONS RELATING TO PART A
Subtitle A--PPS Hospitals
Sec. 101. One-year delay in transition for indirect medical education
(IME) percentage adjustment.
Sec. 102. Decrease in reductions for disproportionate share hospitals;
data collection requirements.
Subtitle B--PPS Exempt Hospitals
Sec. 111. Wage adjustment of percentile cap for PPS-exempt hospitals.
Sec. 112. Enhanced payments for long-term care and psychiatric
hospitals until development of prospective
payment systems for those hospitals.
Sec. 113. Per discharge prospective payment system for long-term care
hospitals.
Sec. 114. Per diem prospective payment system for psychiatric
hospitals.
Sec. 115. Refinement of prospective payment system for inpatient
rehabilitation services.
Subtitle C--Adjustments to PPS Payments for Skilled Nursing Facilities
Sec. 121. Temporary increase in payment for certain high cost patients.
Sec. 122. Market basket increase.
Sec. 123. Authorizing facilities to elect immediate transition to
Federal rate.
Sec. 124. Part A pass-through payment for certain ambulance services,
prostheses, and chemotherapy drugs.
Sec. 125. Provision for part B add-ons for facilities participating in
the NHCMQ demonstration project.
Sec. 126. Special consideration for facilities serving specialized
patient populations.
Sec. 127. MedPAC study on special payment for facilities located in
Hawaii and Alaska.
Subtitle D--Other
Sec. 131. Part A BBA technical corrections.
TITLE II--PROVISIONS RELATING TO PART B
Subtitle A--Adjustments to Physician Payment Updates
Sec. 201. Modification of update adjustment factor provisions to reduce
update oscillations and require estimate
revisions.
Sec. 202. Use of data collected by organizations and entities in
determining practice expense relative
values.
Sec. 203. GAO study on resources required to provide safe and effective
outpatient cancer therapy.
Subtitle B--Hospital Outpatient Services
Sec. 211. Outlier adjustment and transitional pass-through for certain
medical devices, drugs, and biologicals.
Sec. 212. Establishing a transitional corridor for application of OPD
PPS.
Sec. 213. Delay in application of prospective payment system to cancer
center hospitals.
Sec. 214. Limitation on outpatient hospital copayment for a procedure
to the hospital deductible amount.
Subtitle C--Other
Sec. 221. Application of separate caps to physical and speech therapy
services.
Sec. 222. Transitional outlier payments for therapy services for
certain high acuity patients.
Sec. 223. Update in renal dialysis composite rate.
Sec. 224. Temporary update in durable medical equipment and oxygen
rates.
Sec. 225. Requirement for new proposed rulemaking for implementation of
inherent reasonableness policy.
Sec. 226. Increase in reimbursement for pap smears.
Sec. 227. Refinement of ambulance services demonstration project.
Sec. 228. Phase-in of PPS for ambulatory surgical centers.
Sec. 229. Extension of Medicare benefits for immunosuppressive drugs.
Sec. 230. Additional studies.
TITLE III--PROVISIONS RELATING TO PARTS A AND B
Subtitle A--Home Health Services
Sec. 301. Adjustment to reflect administrative costs not included in
the interim payment system.
Sec. 302. Delay in application of 15 percent reduction in payment rates
for home health services until 1 year after
implementation of prospective payment
system.
Sec. 303. Clarification of surety bond requirements.
Sec. 304. Technical amendment clarifying applicable market basket
increase for PPS.
Subtitle B--Direct Graduate Medical Education
Sec. 311. Use of national average payment methodology in computing
direct graduate medical education (DGME)
payments.
Sec. 312. Initial residency period for child neurology residency
training programs.
Subtitle C--Other
Sec. 321. GAO study on geographic reclassification.
Sec. 322. MedPAC study on Medicare payment for non-physician health
professional clinical training in
hospitals.
TITLE IV--RURAL PROVIDER PROVISIONS
Sec. 401. Permitting reclassification of certain urban hospitals as
rural hospitals.
Sec. 402. Update of standards applied for geographic reclassification
for certain hospitals.
Sec. 403. Improvements in the critical access hospital (CAH) program.
Sec. 404. Five-year extension of Medicare dependent hospital (MDH)
program.
Sec. 405. Rebasing for certain sole community hospitals.
Sec. 406. Increased flexibility in providing graduate physician
training in rural areas.
Sec. 407. Elimination of certain restrictions with respect to hospital
swing bed program.
Sec. 408. Grant program for rural hospital transition to prospective
payment.
Sec. 409. MedPAC study of rural providers.
Sec. 410. Expansion of access to paramedic intercept services in rural
areas.
TITLE V--PROVISIONS RELATING TO PART C (MEDICARE+CHOICE PROGRAM)
Subtitle A--Medicare+Choice
Sec. 501. Phase-in of new risk adjustment methodology.
Sec. 502. Encouraging offering of Medicare+Choice plans in areas
without plans.
Sec. 503. Modification of 5-year re-entry rule for contract
terminations.
Sec. 504. Continued computation and publication of AAPCC data.
Sec. 505. Changes in Medicare+Choice enrollment rules.
Sec. 506. Allowing variation in premium waivers within a service area
if Medicare+Choice payment rates vary
within the area.
Sec. 507. Delay in deadline for submission of adjusted community rates
and related information.
Sec. 508. Two-year extension of Medicare cost contracts.
Sec. 509. Medicare+Choice nursing and allied health professional
education payments.
Sec. 510. Reduction in adjustment in national per capita
Medicare+Choice growth percentage for 2002.
Sec. 511. Deeming of Medicare+Choice organization to meet requirements.
Sec. 512. Miscellaneous changes and studies.
Sec. 513. MedPAC report on Medicare MSA (medical savings account)
plans.
Sec. 514. Clarification of nonapplicability of certain provisions of
discharge planning process to
Medicare+Choice plans.
Subtitle B--Managed Care Demonstration Projects
Sec. 521. Extension of social health maintenance organization
demonstration (SHMO) project authority.
Sec. 522. Extension of Medicare community nursing organization
demonstration project.
Sec. 523. Medicare+Choice competitive bidding demonstration project.
Sec. 524. Extension of Medicare municipal health services demonstration
projects.
Sec. 525. Medicare coordinated care demonstration project.
TITLE VI--MEDICAID
Sec. 601. Making Medicaid DSH transition rule permanent.
Sec. 602. Increase in DSH allotment for certain States and the District
of Columbia.
Sec. 603. New prospective payment system for Federally-qualified health
centers and rural health clinics.
Sec. 604. Parity in reimbursement for certain utilization and quality
control services.
TITLE VII--STATE CHILDREN'S HEALTH INSURANCE PROGRAM (SCHIP)
Sec. 701. Stabilizing the SCHIP allotment formula.
Sec. 702. Increased allotments for territories under the State
children's health insurance program.
TITLE I--PROVISIONS RELATING TO PART A
Subtitle A--PPS Hospitals
SEC. 101. ONE-YEAR DELAY IN TRANSITION FOR INDIRECT MEDICAL EDUCATION
(IME) PERCENTAGE ADJUSTMENT.
(a) In General.--Section 1886(d)(5)(B)(ii) (42 U.S.C.
1395ww(d)(5)(B)(ii)), as amended by section 4621(a)(1) of BBA, is
amended--
(1) in subclause (IV), by inserting ``and 2001'' after
``2000''; and
(2) by striking ``2000'' in subclause (V) and inserting
``2001''.
(b) Conforming Amendment Relating to Determination of Standardized
Amount.--Section 1886(d)(2)(C)(i) (42 U.S.C. 1395ww(d)(2)(C)(i)), as
amended by section 4621(a)(2) of BBA, is amended by inserting ``or any
additional payments under such paragraph resulting from the amendment
made by section 101(a) of Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999'' after ``Balanced Budget Act of 1997''.
SEC. 102. DECREASE IN REDUCTIONS FOR DISPROPORTIONATE SHARE HOSPITALS;
DATA COLLECTION REQUIREMENTS.
(a) In General.--Section 1886(d)(5)(F)(ix) (42 U.S.C.
1395ww(d)(5)(F)(ix)), as added by section 4403(a) of BBA, is amended--
(1) in subclause (III), by striking ``during fiscal year
2000'' and inserting ``during each of fiscal years 2000 and
2001'';
(2) by striking subclause (IV);
(3) by redesignating subclauses (V) and (VI) and subclauses
(IV) and (V), respectively; and
(4) in subclause (IV), as so redesignated, by striking
``reduced by 5 percent'' and inserting ``reduced by 4
percent''.
(b) Data Collection.--
(1) In general.--The Secretary of Health and Human Services
shall require any subsection (d) hospital (as defined in
section 1886(d)(1)(B) of the Social Security Act (42 U.S.C.
1395ww(d)(1)(B)) to submit to the Secretary, in the cost
reports submitted to the Secretary by such hospital for
discharges occurring during a fiscal year, data on the costs
incurred by the hospital for providing inpatient and outpatient
hospital services for which the hospital is not compensated,
including non-Medicare bad debt, charity care, and charges for
Medicaid an indigent care.
(2) Effective date.--The Secretary shall require the
submission of the data described in paragraph (1) in cost
reports for cost reporting periods beginning on or after the
date of the enactment of this Act.
Subtitle B--PPS-Exempt Hospitals
SEC. 111. WAGE ADJUSTMENT OF PERCENTILE CAP FOR PPS-EXEMPT HOSPITALS.
(a) In General.--Section 1886(b)(3)(H) (42 U.S.C. 1395ww(b)(3)(H)),
as amended by section 4414 of BBA, is amended--
(1) in clause (i), by inserting ``, as adjusted under
clause (iii)'' before the period;
(2) in clause (ii), by striking ``clause (i)'' and ``such
clause'' and inserting ``subclause (I)'' and ``such subclause''
respectively;
(3) by striking ``(H)(i)'' and inserting ``(ii)(I)'';
(4) by redesignating clauses (ii) and (iii) as subclauses
(II) and (III);
(5) by inserting after clause (ii), as so redesignated, the
following new clause:
``(iii) In applying clause (ii)(I) in the case of a hospital or
unit, the Secretary shall provide for an appropriate adjustment to the
labor-related portion of the amount determined under such subparagraph
to take into account differences between average wage-related costs in
the area of the hospital and the national average of such costs within
the same class of hospital.''; and
(6) by inserting before clause (ii), as so redesignated,
the following new clause:
``(H)(i) In the case of a hospital or unit that is within a class
of hospital described in clause (iv), for a cost reporting period
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