HR 4937 IH

To amend title XVIII of the Social Security Act to provide relief to providers of services under the Medicare Program by correcting reductions in payment rates instituted under the Balanced Budget Act of 1997.

July 24, 2000

Mr. Smith of Washington introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To amend title XVIII of the Social Security Act to provide relief to providers of services under the Medicare Program by correcting reductions in payment rates instituted under 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; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Medicare Protection and Fairness Act of 2000'.

(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--INCREASE IN PAYMENTS FOR INPATIENT HOSPITAL SERVICES

Sec. 101. Elimination of reduction to market basket percentage increase in fiscal years 2001 and 2002.

Sec. 102. Increase in payments for disproportionate share hospitals (DSH) in fiscal years 2001 and 2002.

Sec. 103. Elimination of reduction in payments for indirect costs of graduate medical education (IME).

TITLE II--INCREASE IN PAYMENTS FOR HOME HEALTH SERVICES

Sec. 201. Elimination of 15 percent reduction under the prospective payment system.

TITLE III--INCREASE IN PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS

Subtitle A--Modifications to Risk Adjustment Methodology

Sec. 301. Application of budget neutrality principle to the new Medicare+Choice risk adjustment methodology.

Sec. 302. 10-year phase in for risk adjustment.

Subtitle B--Modifications to the Blended Capitation Rate

Sec. 311. Election of application in 2001 and 2002 of 50:50 area-specific and national percentages.

Sec. 312. Increase in national per capita Medicare+Choice growth percentage in 2001 and 2002.

Subtitle C--Reporting Requirements for Medicare Health Care Services Furnished in Military Treatment Facilities

Sec. 321. Reporting costs incurred under Medicare Subvention Demonstration Project for military retirees.

TITLE I--INCREASE IN PAYMENTS FOR INPATIENT HOSPITAL SERVICES

SEC. 101. ELIMINATION OF REDUCTION TO MARKET BASKET PERCENTAGE INCREASE IN FISCAL YEARS 2001 AND 2002.

Section 1886(b)(3)(B)(i) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(i)) is amended--

(1) by striking subclauses (XVI) and (XVII);

(2) by inserting `and' at the end of subclause (XV);

(3) by redesignating subclause (XVIII) as subclause (XVI); and

(4) in subclause (XVI), as so redesignated, by striking `2003' and inserting `2001'.

SEC. 102. INCREASE IN PAYMENTS FOR DISPROPORTIONATE SHARE HOSPITALS (DSH) IN FISCAL YEARS 2001 AND 2002.

Section 1886(d)(5)(F)(ix) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(F)(ix)) is amended--

(1) in subclause (III), by striking `each of fiscal years 2000 and 2001,' and inserting `fiscal year 2000,'; and

(2) in subclause (IV)--

(A) by striking `fiscal year 2002,' and inserting `each of fiscal years 2001 and 2002,'; and

(B) by striking `reduced by 4 percent' and inserting `reduced by 2 percent'.

SEC. 103. ELIMINATION OF REDUCTION IN PAYMENTS FOR INDIRECT COSTS OF GRADUATE MEDICAL EDUCATION (IME).

Section 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended--

(1) by striking subclauses (V), and (VI);

(2) by adding `and' at the end of subclause (III); and

(3) in subclause (IV)--

(A) by striking `during fiscal year 2000,' and inserting `on or after October 1, 1999,'; and

(B) by striking the semicolon at the end and inserting a period.

TITLE II--INCREASE IN PAYMENTS FOR HOME HEALTH SERVICES

SEC. 201. ELIMINATION OF 15 PERCENT REDUCTION UNDER THE PROSPECTIVE PAYMENT SYSTEM.

(a) IN GENERAL- Section 1895(b)(3)(A) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(A)), as amended by sections 302(b) and 303(f) of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (113 Stat. 1501A-359, 361), as enacted into law by section 1000(a)(6) of Public Law 106-113, is amended to read as follows:

`(A) INITIAL BASIS- Under such system the Secretary shall provide for computation of a standard prospective payment amount (or amounts). Such amount (or amounts) shall initially be based on the most current audited cost report data available to the Secretary and shall be computed in a manner so that the total amounts payable under the system for the 12-month period beginning on the date the Secretary implements the system shall be equal to the total amount that would have been made if the system had not been in effect and if section 1861(v)(1)(L)(ix) had not been enacted. Each such amount shall be standardized in a manner that eliminates the effect of variations in relative case mix and area wage adjustments among different home health agencies in a budget neutral manner consistent with the case mix and wage level adjustments provided under paragraph (4)(A). Under the system, the Secretary may recognize regional differences or differences based upon whether or not the services or agency are in an urbanized area.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect as if included in the enactment of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (Public Law 106-113).

TITLE III--INCREASE IN PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS

Subtitle A--Modifications to Risk Adjustment Methodology

SEC. 301. APPLICATION OF BUDGET NEUTRALITY PRINCIPLE TO THE NEW MEDICARE+CHOICE RISK ADJUSTMENT METHODOLOGY.

(a) IN GENERAL- Section 1853(a)(3) of the Social Security Act (42 U.S.C. 1395w-23(a)(3)) is amended by adding at the end the following new subparagraph:

`(E) IMPLEMENTATION IN A BUDGET NEUTRAL MANNER- The methodology under this paragraph shall be designed and implemented in a manner so that it does not result in any material change in the aggregate level of expenditures under this title compared to the level that would have occurred if such methodology had not been implemented (and if the previous risk adjustment methodology used in 1998 had continued to be implemented).'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) takes effect on the date of the enactment of this Act and applies to payments for months beginning on or after January 2001.

SEC. 302. 10-YEAR PHASE-IN FOR RISK ADJUSTMENT.

Section 1853(a)(3)(C)(ii) of the Social Security Act (42 U.S.C. 1395w-23(a)(3)(C)(ii)) is amended to read as follows:

`(ii) PHASE-IN- Such risk adjustment methodology shall be implemented in a phased-in manner so that the methodology insofar as it makes adjustments to capitation rates for health status applies to 10 percent of 1/12 of the annual Medicare+Choice capitation rate in each of 2000 through 2009.

Subtitle B--Modifications to the Blended Capitation Rate

SEC. 311. ELECTION OF APPLICATION IN 2001 AND 2002 OF 50:50 AREA-SPECIFIC AND NATIONAL PERCENTAGES.

Section 1853(c)(2) of the Social Security Act (42 U.S.C. 1395w-23(c)(2)) is amended--

(1) by striking the period at the end of subparagraph (F) and inserting a semicolon; and

(2) by adding after and below subparagraph (F) the following:

`except that for either or both 2001 and 2002, a Medicare+Choice organization may elect to apply subparagraph (F) (rather than, with respect to 2001, subparagraph (D) or, with respect to 2002, subparagraph (E)).'.

SEC. 312. INCREASE IN NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH PERCENTAGE IN 2001 AND 2002.

Section 1853(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-23(c)(6)(B)) is amended--

(1) by adding `and' at the end of clause (iii);

(2) by striking clauses (iv) and (v); and

(3) in clause (vi), by redesignating such clause as clause (iv) and by striking `2002' and inserting `2000'.

Subtitle C--Reporting Requirements for Medicare Health Care Services Furnished in Military Treatment Facilities

SEC. 321. REPORTING COSTS INCURRED UNDER MEDICARE SUBVENTION DEMONSTRATION PROJECT FOR MILITARY RETIREES.

(a) IN GENERAL- Section 1896 of the Social Security Act (42 U.S.C. 1395ggg) is amended by adding at the end the following new subsection:

`(l) REPORTING COSTS INCURRED UNDER THE PROJECT FOR PURPOSES OF CALCULATING MEDICARE+CHOICE PAYMENT RATES-

`(1) DETERMINATION OF COSTS- For a year in which the project is carried out in a military treatment facility, the facility shall determine the aggregate costs that are incurred under the project (and for which payment will be made from the trust funds) for furnishing medicare health care services to medicare-eligible military retirees or dependents under the project in that year.

`(2) REPORT OF CALCULATED COSTS- For purposes of including the costs incurred under the project (as described in paragraph (1)) in the calculation the annual Medicare+Choice capitation rates in each Medicare+Choice payment area, a military treatment facility shall submit to the Secretary the determination made under paragraph (1) by not later than March 31 of the year that follows the year for which the facility has made such determination.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply with respect to years beginning on or after January 1, 2000.

END