Bill summaries are authored by CRS.

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Passed House amended (11/05/1999)

Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 -Title I: Provisions Relating to Part A - Subtitle A: PPS Hospitals - Amends SSA title XVIII part D (Miscellaneous), as amended by the Balanced Budget Act of 1997 (BBA '97), to provide for a one-year delay in the transition of the indirect teaching adjustment factor (under the prospective payment system (PPS) for hospital outpatient department (OPD) services) to its permanent value on or after October 1, 2001 (currently, on or after October 1, 2000) used in determining an additional payment amount for certain hospitals with indirect costs of medical education.

(Sec. 102) Modifies by lessening certain reductions in disproportionate share hospital (DSH) adjustment payment amounts for hospital discharges occurring during FY 2001 and 2002.

Directs the Secretary of Health and Human Services to require certain hospitals to submit to the Secretary in fiscal year cost reports 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 indigent care.

Subtitle B: PPS Exempt Hospitals - Amends SSA title XVIII part D to: (1) limit the target amount for described hospitals that are exempt from prospective payment system (PPS) payment; and (2) direct the Secretary to provide for an appropriate wage adjustment with regard to such hospitals.

(Sec. 112) Provides for increased target amounts in computing payments for long-term care and psychiatric hospitals until development of a PPS for those hospitals.

(Sec. 113) Directs the Secretary to develop, implement, and report to Congress on: (1) a per discharge PPS for payment for inpatient hospital services of Medicare long-term care hospitals; and (2) develop a per diem PPS for payment for inpatient hospital services of Medicare psychiatric hospitals.

(Sec. 115) Modifies the PPS for inpatient hospital services to allow a rehabilitation facility providing such services to apply the PPS fully with the prospective payment percentage set at 100 percent, among other changes.

Directs the Secretary to study and report to Congress on the impact of such PPS with regard to utilization and beneficiary access to such services.

Subtitle C: Adjustments to PPS Payments for Skilled Nursing Facilities - Directs the Secretary, for purposes of computing prospective payments for covered skilled nursing facilities (SNFs), to temporarily increase payments for covered skilled nursing facility services for certain high cost patients.

(Sec. 122) Amends SSA title XVIII part D to revise provisions on payment to hospitals for inpatient hospital services to: (1) increase for FY 2001 the SNF unadjusted federal per diem rate; (2) permit a SNF to waive a three year transition period and elect to have the amount of payment for all covered facility costs determined pursuant to the adjusted Federal per diem rate applicable to it; (3) exclude certain additional items and services from being covered facility items and services (thus providing for Medicare part A (Hospital Insurance) pass-through payment for such items and services, including certain ambulance services and chemotherapy items) while ensuring budget neutrality for FY 2001; (4) apply to facilities participating in the Nursing Home Case-Mix and Quality Demonstration Project requirements for determining base payments on a per diem basis; (5) modify requirements for the first cost reporting period update that is used in determining facility specific per diem rates; and (6) establish a payment rule for certain qualified acute SNFs serving individuals who are immuno-compromised secondary to an infectious disease, with specific diagnosis.

(Sec. 126) Directs the Secretary to assess the resource use of patients of SNFs serving such immuno-compromised individuals to determine whether or not any permanent adjustments are needed to take into account the resource uses and costs of these patients.

(Sec. 127) Directs the Medicare Payment Advisory Commission (MEDPAC) to study and report to Congress on SNFs furnishing covered SNF services to determine the need for an additional payment amount under Medicare to take into account SNFs in Alaska and Hawaii.

Subtitle D: Other - Makes various specified technical amendments to the Medicare rural hospital flexibility program under Medicare part A (Hospital Insurance) and to provisions on payment to hospitals for inpatient hospital services under Medicare part D (Miscellaneous), as well as to various specified miscellaneous provisions of BBA '97, such as provisions on payment for home hospice care based on location where care is furnished.

Title II: Provisions Relating to Part B - Subtitle A: Adjustments to Physician Payment Updates - Amends SSA title XVIII part B (Supplementary Medical Insurance) to modify provisions on: (1) payment for physicians' services with regard to updates to provide for new guidelines for determining updates for years beginning with 2000 and 2001; and (2) sustainable growth rate with regard to publication and with regard to the data to be used in determining such updates.

(Sec. 202) Directs the Secretary to: (1) establish a process to use data collected by entities and certain organizations in determining the practice expense component for purposes of determining relative values for payment for physicians' services under the appropriate fee schedule under Medicare part B; and (2) include in the publication of the estimated and final updates a description of such process for the use of external data in making adjustments in relative value units and the extent to which the Secretary has used such external data in making such adjustments for each year.

(Sec. 203) Directs the Comptroller General to study and report to Congress on the physician and non-physician clinical resources necessary to provide safe outpatient cancer therapy services and the appropriate payment rates for such services under the Medicare program.

Subtitle B: Hospital Outpatient Services - Amends SSA title XVIII part B to revise requirements for the PPS for hospital OPD services to: (1) require the Secretary to provide for a specified outlier adjustment for covered OPD services, as well as transitional pass-through payments for additional costs of "innovative" medical devices, drugs, and biologicals, while ensuring budget neutrality; (3) include medical devices as covered OPD services; (4) allow the Secretary to elect to establish relative payment weights based on mean hospital costs for covered OPD services; (5) limit, generally, the variation of costs of covered OPD services classified within a group for purposes of comparable treatment with respect to the use of resources; (6) change the Secretary's optional periodic review of PPS components to a mandatory annual review; and (7) establish a transitional adjustment in the amount of PPS payment for covered OPD services to limit declining payments under Medicare for such services, with a special rule for small rural hospitals, without regard to budget neutrality.

(Sec. 211) Directs the Secretary to: (1) study and report to Congress on the extent to which intravenous immune globulin could be delivered and reimbursed under Medicare outside of a hospital or physician's office; and (2) report to Congress on whether the PPS for Medicare-covered outpatient services should apply to specified rural hospitals, clinics, and services for which payment may be made under Medicare.

(Sec. 213) Amends SSA title XVIII part B to delay application of the PPS for hospital outpatient department services to cancer center hospitals.

(Sec. 214) Limits the outpatient hospital copayment amount for a procedure to the amount of the inpatient hospital deductible amount. Increases the amount in payment in the Medicare payment amount for a covered OPD service to reflect any copayment reduction applicable to a covered OPD service.

Subtitle C: Other - Amends SSA title XVIII to provide for: (1) application of separate currently existing caps for speech-language pathology and for other outpatient physical therapy services on a per beneficiary, per facility (or provider) basis; (2) establishment of a process under which a facility or a provider that is providing certain physical therapy services to which the applicable payment limitation applies to a beneficiary may apply to the Secretary for an increase in such limitation under this paragraph for services furnished in 2000 or in 2001; (3) limitation of the aggregate amount of additional payments resulting from such process for FY 2000 through 2002; (4) annual mandatory updated end stage renal disease dialysis composite rates; and (5) revised annual covered item updates for 2001 and 2002 for certain durable medical equipment.

(Sec. 223) Directs MEDPAC to study and report to the Congress on the appropriateness of the differential in Medicare payment for hemodialysis services furnished in a facility and those furnished in a home.

(Sec. 225) Prohibits the Secretary from exercising inherent reasonableness authority with regard to the payment amount proposed to be established with respect to an item or service before implementing such authority in accordance with new proposed rulemaking.

(Sec. 226) Amends SSA title XVIII to direct the Secretary to establish a minimum payment amount in all areas for a diagnostic or screening pap smear laboratory test.

Expresses the sense of the Congress that: (1) the Health Care Financing Administration (HCFA) has been slow to incorporate or provide incentives for providers to use new screening diagnostic health care technologies in the area of cervical cancer: (2) some new technologies have been developed which optimize the effectiveness of pap smear screening; and (3) HCFA should institute an appropriate increase in the payment rate for new cervical cancer screening technologies that have been approved by the Food and Drug Administration as significantly more effective than a conventional pap smear.

(Sec. 227) Amends BBA '97 to revise the capitated payment rate used in demonstration projects under contract with a local government under which it furnishes ambulance services payable under Medicare part B.

(Sec. 228) Provides that, if the Secretary implements a revised PPS for services of ambulatory surgical facilities under Medicare part B, before incorporating data from the 1999 Medicare cost survey, such system shall be implemented in a specified manner so that payment for such services shall be split, with one specified portion made in accordance with the PPS and the remainder in accordance with current regulations.

(Sec. 229) Directs the Secretary to extend through FY 2004 the period of Medicare coverage of immunosuppressive drugs to certain individuals under specified terms and conditions.

(Sec. 230) Requires studies and reports to Congress by: (1) MEDPAC on the cost-effectiveness and efficacy of Medicare coverage for post-surgical recovery care center services, and on the regulatory burdens placed on providers under Medicare parts A and B; and (2) an Administrator for Health Care Policy and Research on the quality of ultrasound and other imaging services furnished under Medicare and Medicaid in relationship to whether or not the providers of such services are privately credentialed.

Directs the Comptroller General to continue (for reports to Congress) monitoring begun under the Department of Justice Appropriations Act, 1999 of Department of Justice compliance with guidelines on the use of the False Claims Act in civil health care matters.

Title III: Provisions Relating to Parts A and B - Subtitle A: Home Health Services - Provides in the case of a home health agency that furnishes home health services to a Medicare beneficiary, that for each beneficiary furnished such services during the agency's cost reporting period beginning in fiscal year 2000, the Secretary shall, in accordance with specified restrictions, pay to the agency a specified amount out of the Medicare trust funds that is in addition to any other amount of payment to defray agency costs attributable to data collection and reporting requirements under the Outcome and Assessment Information (OASIS) required under BBA '97.

(Sec. 301) Directs the Comptroller General to: (1) report to Congress on specified matters with respect to the data collection requirement of patients of such agencies under the OASIS standard as part of the comprehensive assessment of patients; and (2) conduct an independent audit of the costs incurred by Medicare home health agencies in complying with such data collection requirement for a report to Congress.

(Sec. 302) Amends BBA '97 and Medicare with regard to the PPS for home health services to delay until one year after implementation of such PPS the application of the 15 percent reduction in payment rates for home health services.

Directs the Secretary to analyze and report to Congress on the need for the 15 percent reduction in cost limits and per beneficiary limits under such PPS, or for any reduction, in the computation of the base payment amounts under the PPS for home health services.

(Sec. 303) Revises surety bond requirements with respect to home health agencies.

Amends part A of SSA title XI to provide for the coordination of Medicare and Medicaid surety bond provisions.

(Sec. 304) Makes a technical amendment with regard to the applicable market basket increase for such PPS.

Subtitle B: Direct Graduate Medical Education - Amends SSA title XVIII to provide for the use of national average per resident payment system in computing payments for direct graduate medical education (DGME) costs.

(Sec. 312) Amends SSA title XVIII to treat as part of an initial residency period a period of up to three years during which an individual is in a child neurology residency program.

Directs MEDPAC to report to Congress on whether there should be an extension of the initial residency period for other residency training programs in a speciality requiring preliminary years of study in another speciality.

Subtitle C: Other - Directs the Comptroller General to study and report to Congress on hospital geographic reclassification and whether it results in more accurate payments for all hospitals.

(Sec. 322) Directs MEDPAC to study and report to Congress on Medicare payment policy with respect to professional clinical training of different classes of non-physician health care professionals, and the basis for any differences in treatment among such classes.

Title IV: Rural Provider Provisions - Amends SSA title XVIII to permit the reclassification of certain urban hospitals as rural ones.

(Sec. 402) Ties the standards applied for geographic reclassification of certain rural hospitals to the most recently available census data.

(Sec. 403) Revises the critical access hospital program, permitting for-profit hospitals to qualify for designation as a critical access hospital. Provides for an all-inclusive payment option for outpatient critical access hospital services. Eliminates coinsurance payments for clinical diagnostic laboratory tests furnished by a critical access hospital on an outpatient basis. Allows certain currently excluded hospitals to be providers of extended care services.

(Sec. 404) Extends for five years the Medicare-dependent, small rural hospital program.

(Sec. 405) Mandates rebasing for certain sole community hospitals that elect such treatment, in accordance with specified guidelines with respect to select fiscal year discharges.

(Sec. 406) Revises provisions on payments for direct and indirect graduate medical education costs to expand current graduate medical education training programs for hospitals located in rural areas, and to encourage the training of physicians in underserved rural areas.

(Sec. 407) Eliminates the requirement for State certification of need and certain restrictions on a hospital with more than 49 beds that provides extended care services.

(Sec. 408) Authorizes the Secretary to award grants to assist eligible small rural hospitals in meeting the costs of implementing data systems required to meet Medicare requirements established by BBA '97.

(Sec. 409) Directs the Medicare Payment Advisory Commission (MEDPAC) to study and report to Congress on rural providers under Medicare.

(Sec. 410) Amends BBA '97 to provide for the expansion of access to paramedic intercept services in rural areas.

Title V: Provisions Relating to Part C (Medicare+Choice Program) - Subtitle A: Medicare+Choice - Amends SSA title XVIII part C (Medicare+Choice) and D (Miscellaneous) to provide for: (1) phased-in new risk adjustment methodology under provisions for payments to Medicare+Choice organizations; (2) increased monthly payments under such provisions for a limited period to encourage the offering of Medicare+Choice plans in certain areas where such a plan has either not been offered or is offered but slated for termination; (3) modification of the five-year reentry rule for Medicare+Choice organizations whose contracts have been terminated; (4) continued annual computation and publication of county-specific per capita fee-for-service expenditure information; (5) enrollment in alternative Medicare+Choice plans and Medicare supplemental health insurance policy (Medigap) coverage in case of involuntary termination of Medicare+Choice enrollment, and other specified changes in Medicare+Choice enrollment rules; (6) authorized variation in premium values within a service area if the annual Medicare+Choice capitation rates vary within the area; (7) a delayed deadline for submission of adjusted community rates and related information; (8) extension of Medicare reasonable cost reimbursement contracts under provisions for payments to health maintenance organizations (HMOs) and competitive medical plans; (9) permission for religious fraternal benefit societies to offer a range of Medicare+Choice plans; (10) an additional payment for each applicable discharge of any DSH hospital that has direct costs of approved education activities for nurse and allied health professional training; (11) reduction in the adjustment in the national per capita Medicare+Choice growth percentage for 2002; (12) revised treatment of accreditation provisions under the Medicare+Choice quality assurance program; and (13) authorization for a hospital furnishing inpatient services to a Medicare+Choice plan enrollee to specify the provider of post-hospital home health or other post-hospital services under the plan.

(Sec. 512) Directs the Secretary, jointly with the Secretaries of Defense and of Veterans Affairs, to report to Congress on the estimated use of health care services furnished by the Departments of Defense and of Veterans Affairs to Medicare beneficiaries, including both beneficiaries under the original Medicare fee-for-service program and under the Medicare+Choice program.

Amends BBA '97 to set a deadline for the Secretary to award a grant for the informatics, telemedicine, and education demonstration project.

(Sec. 513) Directs MEDPAC to report to Congress on specific legislative changes that should be made to make Medicare medical savings account plans a viable option under the Medicare+Choice program.

Subtitle B: Managed Care Demonstration Projects - Amends the Omnibus Budget Reconciliation Act of 1987 to: (1) provide for extension of social health maintenance organization (SHMO) demonstration project authority; and (2) replace the current limit on the number of individuals who may participate in a SHMO I or II project site with an aggregate limit for all sites.

(Sec. 522) Provides for a further two-year extension of certain Medicare community nursing and ambulatory care organization demonstration projects under the Omnibus Budget Reconciliation Act of 1987.

(Sec. 523) Amends BBA '97 to delay implementation of the Medicare+Choice prepaid competitive pricing demonstration project until after a certain report to Congress has been filed on specified topics.

(Sec. 524) Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to provide for the extension of Medicare municipal health services demonstration projects.

(Sec. 525) Amends BBA '97 to revise funding requirements for a Medicare coordinated care demonstration project operated by a nonprofit academic medical center that maintains a National Cancer Institute certified comprehensive cancer center.

Title VI: Medicaid - Amends BBA '97 to make a specified Medicaid DSH transition rule for California permanent.

(Sec. 602) Amends SSA XIX (Medicaid) to: (1) increase the DSH allotment for the District of Columbia, Minnesota, New Mexico, and Wyoming; (2) create a new PPS for Federally-qualified health centers and rural health clinics; and (3) revise payment to States requirements with regard to utilization and quality control for the stated purpose of providing parity in reimbursement for certain utilization and quality control services.

Title VII: State Children's Health Insurance Program (SCHIP) - Amends SSA title XXI (State Children's Health Insurance Program) to: (1) modify provisions on allotments to States and the District of Columbia, including provisions on a floor for States, replacing them with provisions on floors and ceilings in State allotments, for the stated purpose of stabilizing the SCHIP allotment formula; and (2) increase appropriations for additional allotments for territories under SCHIP.