Summary: H.R.1868 — 99th Congress (1985-1986)All Information (Except Text)

Bill summaries are authored by CRS.

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Reported to Senate with amendment(s) (10/02/1986)

(Reported to Senate from the Committee on Finance with amendment, S. Rept. 99-520)

Medicare and Medicaid Patient and Program Protection Act of 1986 - Title I: Fraud and Abuse - Amends part A (General Provisions) of title XI of the Social Security Act to direct the Secretary of Health and Human Services to exclude from participation in programs under title XVIII (Medicare) of the Social Security Act and to require the prohibition from participation in any State health care program of any individual or entity: (1) convicted of a criminal offense related to the delivery of an item or service under title XVIII or under titles XIX (Medicaid), V (Maternal and Child Health Block Grant), or XX (Block Grants to States for Social Services) of such Act; or (2) convicted of a criminal offense related to neglect or abuse of patients in connection with the delivery of a health care item or service. Authorizes the Secretary to exclude from Medicare participation and to require the prohibition from participation in any State health care program of any individual or entity: (1) convicted of fraud with respect to any Federal, State, or locally financed health care program; (2) convicted of interferring with the investigation of health care fraud or patient abuse; (3) convicted of a felony for manufacturing, distributing, or dispensing a controlled substance; (4) whose health care license has been suspended or revoked; (5) suspended or excluded from participation in a Federal health care program; (6) claiming excessive charges or providing unnecessary services; (7) committing certain acts prohibited under title XI; (8) owned or controlled by an individual convicted of health care related crimes, fined for health care abuses, or excluded from Medicare or a State health care program; (9) failing to supply certain information; and (10) defaulting on health education loans or scholarship obligations made or secured by the Secretary. Authorizes the Secretary to exclude any hospital failing to comply with corrective action required under title XVIII.

Sets forth provisions relating to notice requirements, judicial review, and period of exclusion. Directs the Secretary to promptly notify each appropriate State agency administering or supervising the administration of a State health care program of each exclusion and the period of exclusion. Permits an excluded individual or entity to apply, following a period of exclusion, to the Secretary for reinstatement.

Sets forth provisions providing for civil and criminal penalties for acts involving Medicare or State health care programs abuse, including penalties for physician misrepresentations.

Requires a State, as a condition of Medicaid plan approval, to provide for the following: (1) a system of reporting any type of adverse action concluded against any health care practitioner or entity by the State or a local licensing authority; and (2) such access to documents as may be necessary by the Secretary. Requires the Secretary to provide suitable safeguards for the confidentiality of such information.

Requires any health care provider providing health care services for which payment may be made under the Act to assure that services or items furnished: (1) will be provided economically and only when, and to the extent, medically necessary; (2) will be quality services which meet professionally recognized standards of health care; and (3) will be supported by evidence of medical necessity and quality in such form and fashion and at such time as may reasonably be required by a reviewing peer review organization in the exercise of its duties and responsibilities.

Permits a State to exclude from Medicaid participation any individual or entity excluded under Medicare pursuant to the patient and program protection provisions. Requires a State in order to receive Federal payments with respect to a health maintenance organization (HMO) to exclude any HMO that: (1) could be excluded because of the conviction of the owners or managers of certain crimes; or (2) contracts with any individual or entity convicted of such crimes. Prohibits Federal payments with respect to any amount expended for items or services furnished by or at the direction of any individual or entity excluded from Medicaid participation because of the patient and program protection provisions.

Prohibits a State under title V from making payments with respect to any amount expended for items or services furnished by or at the direction of any individual or entity excluded from participation pursuant to the patient and program protection provisions of title XI.

Prohibits Federal payments with respect to any amount expended for items or services furnished by or at the direction of any individual or entity excluded from Medicare because of the patient and program protection provisions of title XI.

Prohibits using a grant under title XX for payment for any item or service furnished by or at the direction of a person excluded from title XX participation because of the patient and program protection provisions of title XI.

Revises disclosure requirements under part A of title XI. Revises Medicare provisions concerning agreements with providers.

Modifies the Medicaid moratorium provisions of the Deficit Reduction Act of 1984 to consider a State's Medicaid plan to include any plan change and any policy or guideline delineated in the State Medicaid operation or program manuals submitted to the Secretary either before or after the enactment of that Act and whether or not approved or disapproved by the Secretary. Requires the Secretary to restore, for the duration of the moratorium, the policy in effect at the beginning of the moratorium regarding the period when homeownership by an institutionalized individual is permitted and the time permitted for the sale of a home.

Amends the Medicare program to provide payment to beneficiaries for services rendered by an individual or entity which has been excluded from Medicare participation if such beneficiary did not know or have reason to know of the exclusion.

Revises the definition under title XI of a "person with an ownership or control interest" in a provider of services under title V, XVIII, or XIX to limit reporting on ownership interests to those interest at or exceeding five percent of the entity's assets.

Authorizes the Secretary or a State to impose an intermediate sanction on a provider or supplier whose noncompliance with its Medicare or Medicaid participation agreement does not immediately threaten patient health and safety by denying it payment for services it provides after receiving notice of the sanction and before correcting its deficiencies.

Authorizes the Secretary and the States to deny Medicare and Medicaid payments to health maintenance organizations (HMOs) and competitive medical plans (CMPs) for new enrollees when more than 50 percent of the organization's members are Medicare or Medicaid beneficiaries. Permits the Secretary to assess civil money penalties against HMOs and CMPs which: (1) charge an enrollee for more than is permitted; (2) fail to provide an enrollee with covered, medically indicated treatment; (3) disenroll beneficiaries in an impermissible manner; (4) engage in any practice reasonably expected to exclude from enrollment Medicare or Medicaid-eligible individuals likely to need substantial future medical services; and (5) misrepresent or falsify enrollment information.

Provides that individuals who knowingly and willfully (currently, the intent must be knowing or willful) make a false statement or misrepresent a material fact in the sale of Medicare supplemental health insurance shall be guilty of a felony.

Authorizes the Secretary to deny Federal payments for Medicaid services provided by an individual or entity that fails to furnish information required under Medicare or Medicaid.

Makes the Medicaid utilization control requirements for long-term stays in health facilities applicable to a consecutive stay which occurs on more than one fiscal year.

Subjects a physician who fails to provide medically necessary services or supplies, or fails to admit a beneficiary based on the amount of services or length of stay required, to civil monetary penalties if: (1) the failure adversely affects the health and safety of the individual; and (2) the hospital provides incentives to the physician to limit the hospital stay of or services provided to the patient. Subjects the hospital which provides physician incentives in such circumstances to civil monetary penalties. Requires a hospital participating in Medicare to provide the Secretary with a detailed description of any physician incentive plan. Directs the Secretary to report to the Congress by 1988 regarding the need to expand prohibitions to encompass other physician incenative plans which result in inappropriate hospital discharges or service reductions.

Exempts providers who are paid on a risk basis under the Medicare or Medicaid program and participate in group purchasing organizations (GPOs) as well as vendors furnishing goods and services to such GPOs from the Acts anti-kickback provisions if the GPO has a written agreement with each such hospital, provider, and vendor to disclose all payments it recieves.

Exempts certain hospitals which waive the Medicare part A (Hospital Insurance) deductible or coinsurance requirements from anti-kickback provisions. Requires such hospitals to develop and adhere to written guidelines regarding the waiver of such deductible or coinsurance amount. Amends part B (Peer Review) of title XI to require peer review organizations (PROs) to conduct a preadmission review on a substantial sample of individuals to determine whether the inpatient setting is appropriate when a hospital has waived cost-sharing requirements. Requires the Comptroller General to study and report to the Congress within two years of enactment of this Act on the impact the requirements imposed on hospitals which waive deductibles or coinsurance amounts have on beneficiary access and competition in health care.

Directs the Secretary to promulgate final regulations within 18 months of enactment of this Act specifying other payment practices which shall not be considered as violating the Act's anti-kickback provisions.

Sets forth effective date provisions.

Title II: Medicare, Medicaid, and Other Amendments - Subtitle A: Provisions Relating to Medicare - Amends the Medicare program to adjust the diagnosis-related group (DRG) categories and weighting factors for FY 1988 and at least once every fiscal year thereafter. (Currently, such adjustments must occur at least once every four years.) Authorizes the Secretary to recalibrate individual DRGs in response to changes affecting the relative use of hospital resources.

Directs the Secretary to rebase the prospective payment system (PPS) rates for FY 1988 to reflect the reasonable costs reported by urban and rural hospitals in hospital cost reporting periods beginning in FY 1984 under the reasonable cost payment methodology then in effect.

Requires the Secretary to maintain the PPS hospital cost reporting system through FY 1993. Directs the Secretary to report to the Congress within one year of this Act's enactment on ways to improve the hospital cost reporting system.

Requires the inclusion of Puerto Rican hospitals into the PPS. Sets the prospective payment rate for such hospitals at 75 percent of the Puerto Rican standardized rate and 25 percent of the national standardized rate, providing for adjustments necessitated by certain cost and care variations among hospitals. Exempts Puerto Rican hospitals from restrictions regarding direct medical education payments for foreign medical graduates. Requires the restandardization of national payment rates to include Puerto Rican hospitals without increasing aggregate PPS payments by reason of such inclusion. Directs the Secretary to report to the Congress within one year of enactment of this Act regarding the need for special adjustments for nonlabor costs, such as supplies and equipment.

Directs the Secretary to: (1) establish a separate DRG for the implantation of penile prosthesis; and (2) adjust the heart pacemaker DRGs to distinguish between dual-chamber or functionally similar pacemakers, and single-chamber pacemakers.

Varies the portion of prospective payments set-aside for outlier payments to urban, rural, and regional hospitals to take into account variations in the portion of outlier payments received by such differently situated hospitals.

Directs the Prospective Payment Assessment Commission to study and report to the Congress by April 1, 1987, regarding: (1) possible PPS modifications to better accommodate outliers for burn cases; and (2) the need for separate payment rates for burn center hospitals. Provides for an increase in payment rates for burn outliers until new rates are established pursuant to the Commission's study.

Extends indefinitely the provision providing an additional payment to sole community providers experiencing an annual decrease of more than five percent in patient volume due to circumstances beyond their control. Directs the Secretary to report to the Congress within one year of enactment of this Act regarding new payment methodologies which appropriately address the problems of sole community hospitals and other low-volume rural hospitals.

Requires regulatory impact analyses to include a specific analysis of the impact of all proposed Medicare and Medicaid regulations on small rural hospitals.

Directs that with regard to hospitals in States which were PPS-exempt by reason of a waiver lasting until the close of calendar year 1985, the Secretary shall determine regional referral center status on the basis of data for the first nine months of 1986.

Provides for the inclusion of the services of a clinical psychologist as inpatient hospital services.

Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to extend the requirement that Medicare-participating hospitals participate in CHAMPUS (Civilian Health and Medical Program of the Uniformed Services) and CHAMPVA (Civilian Health and Medical Program of the Veterans' Administration) to hospitals with Medicare agreements entered into before the enactment of such Act.

Requires the Secretary to: (1) designate an office to coordinate the development of studies on quality of care under PPS; and (2) establish a task force to assist in the development of an agenda for quality studies. Sets forth reporting requirements.

Directs the Secretary to: (1) submit a legislative proposal to the Congress by 1988 to improve PPS and the outlier payment system so that such systems more adequately account for variations in severity of illness and case complexity; (2) report to the Congress within two years of enactment of this Act as to whether current hospital Medicare participation standards are adequate to assure the quality of hospital services; (3) assess and report to the Congress by 1988 regarding the need for a separate payment to hospitals for administratively necessary days (days of inpatient hospital care due to the unavailability of nursing home space); (4) develop and report to the Congress within one year of enactment of this Act regarding a uniform needs assessment instrument which evaluates an individual's need for post-hospital extended care services, home health services, and long-term care services of a health-related or supportive nature; and (5) include in the annual PPS report to the Congress information on the quality and patient access to Medicare post-hospital services.

Amends the Tax Equity and Fiscal Responsibility Act of 1982 to permanently waive, for hospices which began operation before 1975, the requirement that Medicare certified hospices limit inpatient care days to no more than 20 percent of patient care days. Requires such hospices to limit inpatient care days to no more than 50 percent of patient care days.

Amends the Medicare program to allow hospitals which are attempting to qualify for additional Medicare payments by reason of having served a disproportionate share of low-income patients to demonstrate that general payments made by State and local governments to defray the operating deficit of the hospital were related to indigent care.

Requires the Director of the Congressional Office of Technology Assessment to appoint two additional members to the Prospective Payment Assessment Commission within 60 days of this Act's enactment.

Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to delay until 1988 the requirement that laboratory services provided in a physician's office be paid on an assigned basis. (Currently such requirement goes into effect in 1987.)

Provides Medicare part B (Supplementary Medical Insurance) coverage of anesthesia and related care provided by a certified registered nurse anesthetist. Authorizes payments equal to 80 percent of an amount determined under a fee schedule established by the Secretary and adjusted so as to maintain the total payments for such care at the level they would have attained pursuant to the prior reimbursement scheme. Requires nurse anethetists to accept assignment for all Medicare services.

Provides part B coverage of physician-supervised services performed by a physician's assistant in a hospital, skilled nursing facility, or as an assistant at surgery. Requires assigned payments to be made to the employer of the physician assistant.

Includes the services of a clinical psychologist within the definition of covered rural health clinic services even if such services are not furnished under a physician's supervision.

Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to extend until one year after this Act's enactment the moratorium on demonstration projects involving competitive bidding for the purchase of clinical laboratory services. Requires the Secretary to publish a description of such a project at least 90 days before its implementation.

Directs the Secretary to conduct a 48-month clinical trial to determine the efficacy and economic feasibility of providing Medicare coverage for personal emergency response systems. Requires the Secretary to report to the Congress on the results of the trial within one year of the trial's completion.

Amends the Consolidated Omnibus Reconciliation Act of 1985 to require that at least one of the five sites chosen for the preventive health services demonstration program serve a rural area. Increases authorized funding for the administrative costs of such program.

Amends part B (Peer Review) of title XI of the Act to require each peer review organization to name at least one consumer representative to its governing board.

Amends the Medicare program to direct the Secretary to consolidate existing renal disease network areas into no less than 14 areas and designate a network administrative organization for each such area in accordance with published criteria. Expands the list of network organization responsibilities to include the: (1) implementation of a procedure for resolving patient grievances; (2) development of medical care standards; (3) collection of data for specified reports; and (4) development of patient advocacy mechanisms. Requires the Secretary to establish a national end stage renal disease registry by 1988 to assemble and analyze the data reported by network organizations, transplant centers, and other sources on end stage renal disease patients. Requires the Secretary to report to the Congress by April 1, 1987, on progress made in establishing such registry.

Requires providers and facilities that reuse renal dialysis devices and supplies to inform patients in writing of the materials used in reprocessing such devices and supplies as well as the known risks and benefits of reuse.

Requires hospitals performing transplants to abide by the rules of the Organ Procurement and Transplantation Network (Network). Conditions Medicare and Medicaid (title XIX of the Act) coverage of an organ procurement agency's organ procurement costs on the agency's being: (1) a "qualified organ procurement organization" under the Public Health Service Act or biennially certified as meeting the standards required of such organizations; and (2) a member of and in compliance with the rules of the Network. Prohibits the Secretary from providing coverage to more than one organization per service area.

Requires that the Medicare Automated Data Retrieval System include information on beneficiary claims beginning in FY 1980 unless the Secretary deems it appropriate to begin from FY 1982.

Subtitle B: Provisions Relating to Medicaid - Amends the Medicaid program to prohibit otherwise eligible individuals from being denied Medicaid benefits by reason of their failure to maintain a fixed address.

Requires States which do not provide Medicaid hospice benefits to make a payment to a Medicare certified hospice for the room and board furnished by a skilled nursing or intermediate care facility to beneficiaries dually eligible for Medicare and Medicaid.

Provides that Medicaid payment rates for inpatient hospital, skilled nursing, or intermediate care facility services which exceed those which would have been paid under Medicare reimbursement principles shall not be deemed unreasonable if they are due to appropriate factors such as payment adjustments for hospitals which serve a disproportionate share of low income patients.

Waives the prohibition of Medicaid payments for care provided preceding a three-month period before the date an application is filed by a potential Medicaid beneficiary to authorize payments to the Medical University of South Carolina for care provided between October 1, 1984, and June 30, 1985, to children and pregnant women who, but for the lack of an application, would have been eligible for such care under Medicaid at the time it was provided. Requires eligibility determinations to be made within six months of this Act's enactment.

Authorizes New York to pay the inpatient rate for hospital patients receiving services at an inappropriate level of care if the occupancy rate in the hospital or region exceeds 80 percent and enough hospital beds in the State have been decertified so as to reduce Medicaid payments to hospitals by an amount equal to or greater than any increase in such payments occasioned by reimbursements for inappropriate levels of care.

Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to allow States to exercise the option, upon enactment of such Act, of correcting nonlife threatening deficiencies in an intermediate care facility for the mentally retarded by gradually reducing the facility's population.

Subtitle C: Provisions Relating to Medicare and Medicaid - Authorizes the Secretary to grant Medicare and Medicaid waivers to up to ten community-based organizations so that they may provide comprehensive health care services on a capitated basis to frail elderly patients at risk of institutionalization.

Makes changes in the conditions on which skilled nursing and intermediate care facilities participate in the Medicare and Medicaid programs to require that: (1) all nurses aides providing direct patient care complete a State-approved training program; (2) criminal background checks be conducted on all employees providing direct patient care; (3) the State office of long-term care ombudsman be given access to such facilities and their residents, as well as to the resident's medical and social records with the resident's permission; (4) clinical records be maintained on all patients; (5) patient assessments be conducted by or under the supervision of a registered nurse upon the patient's admission and periodically thereafter which include the identification of medical problems and measurement of physical, mental, and psychosocial functioning; (6) patients be provided with a supportive, comfortable, homelike environment in which they have a reasonable choice over their surroundings, schedules, health care, and activities; (7) no reprisal be made against any patient or employee for filing a complaint about the facility with the Secretary or ombudsman; and (8) Medicare or Medicaid recipients not be required to assume financial responsibility for facility charges, pay a nonrefundable deposit, or receive services differing in quality or effectiveness from those received by nonrecipients. Lists patient civil and legal rights which skilled nursing and intermediate care facilities must protect as a condition of participation in the Medicare and Medicaid programs.

Directs the Secretary to submit proposed legislation to the Congress by 1988 replacing the separate categories of long-term care facilities under the Medicare and Medicaid programs with a facility of single designation which provides and is reimbursed for various levels of long-term care.

Prohibits State agencies which have agreed to survey nursing facilities' compliance with Medicare participation conditions from providing such facilities with consultation services regarding such conditions. Amends part A (General Provisions) of title XI to authorize the Secretary to release Medicare or Medicaid inspection reports after the subject of such report has a reasonable opportunity, consisting of at most 30 days (currently, 60 days), to review and comment on such report, but authorizes its immediate release to the State long-term care ombudsman.

Amends the Medicare program to require that nursing facility surveys: (1) be unannounced; (2) be conducted by a multidisciplinary team of professionals trained for their duties; (3) focus on the quality of care provided to patients; (4) include a private meeting between patients and survey personnel to discuss a facility's regard for patient's rights and compliance with Medicare standards; and (5) be performed for each facility on a regular basis, the frequency of such surveys depending upon the facility's record. Directs State agencies to provide for the investigation of complaints against nursing facilities and to use specialized survey teams to survey and carry out enforcement action against chronically substandard facilities and other facilities threatening patients' well-being.

Directs the Secretary to establish criteria and procedures for evaluating an institution's plans for the correction of its violations of nursing facility standards.

Subtitle D: Other Provisions - Amends title V (Maternal and Child Health Block Grant) of the Act to authorize increased appropriations beginning with FY 1987. Requires that one-third of the increase in authorized appropriations be used in promoting access to primary health services for children and community-based service networks and case management for children with special health care needs.

Directs the Secretary to conduct a survey, in FY 1987 and every tenth fiscal year thereafter, to evaluate the impact, during the ten preceding fiscal years, of expenditures for health care programs, including information on such impact for all groups within the United States.

Amends part E (Foster Care and Adoption Assistance) of title IV of the Act to direct the Secretary to establish an Advisory Committee on Adoption and Foster Care Information to study and submit to the Congress, before 1988, its evaluation of the various methods of establishing, administering, and financing a comprehensive adoption and foster care data collection system. Requires the Secretary to report to the Congress, by 1988, on a proposed system and implement final regulations, by July 1988, providing for the implementation of such a system by October 1991.