Therapy Services

• Suspends for two years (2000 and 2001) application of the caps on physical therapy, occupational therapy, and speech therapy services.

• The Secretary is to conduct focused medical reviews of therapy services during 2000 and 2001, with emphasis on claims for services provided to residents of SNFs.

• The Secretary is also required to submit a report to Congress with recommendations on the establishment of a mechanism for assuring appropriate utilization of outpatient therapy services and the establishment of an alternative payment policy based on classification of individuals by diagnostic category, functional status, prior use of services (in both inpatient and outpatient settings), and such other criteria as the Secretary determines appropriate, in place of the uniform dollar limitations.

• Increase of 20% for 15 categories of Medicare patients in SNFs starting April 1, 2000, and increases the federal rates for all categories of patients by 4% in FY2001 and FY2002

• Permits SNFs to elect, on or after December 15, 1999, to receive Medicare payments based 100% on the federal per diem rate rather than partially on a federal per diem rate and partially on a pre-PPS facility specific rate.

• Requires that certain ambulance services for dialysis patients, certain prostheses, and certain chemotherapy drugs for SNF patients be paid for by Medicare in addition to SNF PPS per diem amounts starting April 1, 2000 and then should be paid with a budget neutral adjustment to total payments beginning in FY2001.

• Includes the cost of Part B services in the computation of the facility specific component of the SNF per diem payment during the transition to the federal per diem PPS for SNFs that had participated in the Nursing Home Case Mix and Quality demonstration, including updates of the SNF market basket increase minus 1 percentage point.

• Provides that from enactment until September 30, 2001, PPS payments to certain SNFs will be based 50% on the facility specific rate and 50% on the federal per diem rate (rather than moving to 100% at the federal rate) if the SNF was in operation before July 1, 1992, and if at least 60% of the SNF's patients in cost reporting periods beginning in 1998 were immuno-compromised secondary to an infectious disease (with other diagnoses).

• Requires the Secretary to study and report within 18 months of enactment on the need for additional payments under the SNF PPS for facilities in Alaska and Hawaii.

• Requires the Secretary to study and report within 18 months of enactment on the variations in State licensure and certification standards regarding providers of respiratory therapy in SNFs and the need for Medicare to require examinations for, or certification of, workers providing respiratory therapy.

• Provides that the IME adjustment would be frozen at 6.5% through FY2000, reduced to 6.25% in FY2001 and then to 5.5% in FY2002 and subsequent years. The agreement also provides for a special adjustment to achieve the 6.5% IME payment for the first six months of FY2000.

• Freezes the reduction in the DSH payment formula to 3% in FY2001, changes the reduction to 4% in FY2002, and requires the Secretary to collect hospital cost data on uncompensated inpatient and outpatient care, including non-Medicare bad debt and charity care as well as Medicaid and indigent care charges for cost reporting periods beginning on or after October 1, 2001.

• Adjusts the labor-related portion of the 75% cap to reflect differences between the wage-related costs in the hospital's area and the national average of such costs within the same class of PPS-exempt hospitals beginning for cost reporting periods on or after October 1, 1999.

• Provides for an increase to the amount of continuous bonus payments to the eligible long-term care and psychiatric providers from 1% to 1.5% for cost reporting periods beginning on or after October 1, 2000, and before September 30, 2001, and 2% for cost reporting periods beginning on or after October 1, 2001, and before September 30, 2002.

• Requires the Secretary to report to the appropriate Congressional committees by October 1, 2001 on a discharge-based PPS with an adequate patient classification system for long-term care hospitals, which would be implemented in a budget neutral fashion for cost reporting periods beginning on or after October 1, 2002.

• Requires the Secretary to report to the appropriate Congressional committees by October 1, 2001 on a per-diem based PPS with an adequate patient classification system for psychiatric hospitals and units which would be implemented in a budget neutral fashion for cost reporting periods beginning on or after October 1, 2002.

• Requires the Secretary to base a PPS on discharges, establish classes of patient discharges of rehabilitation facilities by functional-related groups, based on impairment, age, co-morbidities, and functional capability of the patient and such other factors as the Secretary deems appropriate to improve the explanatory power of functional independence measure-function related groups, and submit a study to Congress not later than 3 years after PPS implementation on its impact on utilization and access.

• Increases payment rates to hospices by 0.5% in FY2001 and by 0.75% in FY2002.

• Requires the GAO to study the cost factors used to determine hospice payment rates and amounts and report to Congress within 1 year of enactment.

• Requires MedPAC, within 18 months of enactment, to submit to Congress a study of Medicare payment policy with respect to professional clinical training of different types of non-physician health care professionals (such as nurses, nurse practitioners, allied health professionals, physician assistants, and psychologists).

• Deems that Northwest Mississippi Regional Medical Center meets the case mix index criteria for classification as a referral center for FY2000.

• Provides that Iredell County, NC is to be considered part of Charlotte-Gastonia Rock Hill NC-SC metropolitan statistical area (MSA) and Orange County, NY is to be considered part of the large urban area of New York, NY for the purposes of Medicare inpatient PPS in FY2000 and FY2001. In addition, Lake County, Indiana and Lee County, Illinois are deemed to be considered part of the Chicago, Illinois MSA; Hamilton-Middletown, Ohio is deemed to be considered part of the Cincinnati, Ohio-Kentucky-Indiana MSA; Brazoria County, Texas is deemed to be considered part of the Houston, Texas MSA; and Chittenden County is deemed to be considered part of the Boston-Worcester-Lawrence-Lowell-Brockton, Massachusetts-New Hampshire MSA. For FY2001, these reclassifications should be treated as a decision of the Medicare Geographic Reclassification Review Board.

• Requires the Secretary to recalculate and apply the Hattiesburg, MS MSA wage index for FY2000 using FY1996 wage and hour data for Wesley Medical Center without adjusting the wage indices in any other areas.

• Provides that the Secretary will calculate and apply the wage index for the Allentown-Bethlehem-Easton MSA for FY2000 and FY2001 as if Lehigh Valley Hospital were classified in such area and, for FY2000 not adjust the wage index for any other area.

• Provides that PPS payments for certain facilities in Baldwin or Mobile County, Alabama are to be based on 100% of the facility specific component of the SNF PPS rates for cost reporting periods starting in FY2000 or FY2001.

• Permits the Secretary to provide for 2 to 3 years of payments in addition to hospital outpatient PPS payments ("pass-through") for certain devices, drugs, and biologicals. It also allows additional payments to hospitals high cost cases for which costs for each covered service exceed a fixed multiple of the PPS amount, plus pass-through payments, plus additional amounts. Such payments cannot exceed a certain portion of all outpatient payments and must be budget neutral. The agreement extends the 5.8% reduction for hospital operating costs and 10% for capital-related costs until the outpatient PPS is implemented.

• Provides payments in addition to PPS payments to hospitals during the first 3 years of the PPS if their payments are less than their pre-PPS payments in 1996 (determined according to a certain formula), but as if the formula-driven overpayment correction in BBA had been in effect in 1996. The additional payments are a specified percentage of the difference between old and new payment levels. The agreement temporarily holds certain rural hospitals harmless from payment reductions under the PPS and holds cancer hospitals harmless from such reductions permanently; requires BBA 97 beneficiary copayment amounts to be unaffected by these provisions.

• Requires MedPAC to report to Congress within 2 years of enactment on the appropriateness of and method for covering certain rural and cancer hospitals under the PPS.

• Limits the amount for which a Medicare beneficiary can be billed for an outpatient procedure to the Medicare deductible amount for an inpatient stay ($776 in 2000), and it provides funds to compensate hospitals for the difference.

• Makes technical changes to limit oscillations in the annual update to the conversion factor beginning in 2001 and provides that the sustainable growth rate is calculated on a calendar year basis. The Secretary is required to conduct a study on the utilization of physician services under the fee-for-service program.

• Requires the Secretary, in determining practice expense relative values, to establish by regulation a process under which the Secretary would accept for use and would use, to the maximum extent practicable and consistent with sound data practices, data collected by outside organizations and entities.

• Requires the GAO to study and determine the physician and nonphysician resources necessary to provide safe outpatient cancer therapy services and the appropriate rates for such services.

• Updates the composite rate for payment by 1.2% for renal dialysis services furnished during CY2000 and an additional 1.2% for such services furnished in CY2001.

• Prohibits the Secretary from exercising inherent reasonableness authority until after both the GAO releases its report on the issue and the Secretary has issued final rule-making.

• Sets the minimum payment for the test component of a Pap smear at $14.60, and expresses the sense of Congress that HCFA should institute an appropriate increase for new cervical cancer screening technologies approved by the FDA.

• Modifies the ambulance services demonstration project provision, added by BBA 97, to require the Secretary to publish a request for proposals by July 1, 2000, and to specify that the capitated rate is to be based on the most current data available.

• Requires phasing-in over 3 years new ASC rates based on pre-1999 survey data (new rates based on 1994 data are currently scheduled to go into effect in July 2000).

• Provides for an extension of the current 36-month limit on coverage of immunosuppressive drugs for persons exhausting their coverage in 2000 - 2005. In each calendar year there will be an extension, specified by the Secretary (as a number of months or partial months), applicable to persons exhausting their benefits in that year. The increase for persons exhausting benefits in 2000 is 8 months; the minimum increase for persons exhausting benefits in 2001 is 8 months. Total expenditures are limited to $150 million over the 5 years.

• Increases payment rates for durable medical equipment by 0.3% in 2001 and by 0.6% in 2002, but those increases will not be included in the base for calculating increases after 2002.

• Requires the following studies: (1) MedPAC study on cost-effectiveness of covering services of a post-surgical recovery center; (2) Agency for Health Care Policy and Research (AHCPR) study comparing differences in the quality of ultrasound and other imaging services provided by credentialed individuals versus those provided by non-credentialed individuals; (3) MedPAC comprehensive study of the regulatory burdens placed on all classes of providers under fee-for-service Medicare and the associated costs; and (4) GAO monitoring of Department of Justice application of guidelines on use of False Claims Act in civil health care matters.

• Provides home health agencies with $10 per beneficiary for administration of the Outcome and Assessment Information Set (OASIS) questionnaire to new home health patients for services furnished during cost reporting periods in FY2000. One-half of the payment will be made in April 2000 and the remainder at cost report settlement. It requires GAO to study the costs of collecting these data and to report by April 1, 2000.

• Delays the 15% reduction required under the PPS by the BBA regarding payments to home health agencies until 12 months after implementation of the PPS and requires the Secretary to report within 6 months of implementation of the PPS on the need for the 15% or other reduction.

• Requires that per beneficiary limits under the BBA 97 home health interim payment system be increased by 2% in cost reporting periods starting in FY2000 for those home health agencies for which the per beneficiary limit is below the national median; the increase will not be included in the base for determining PPS amounts.

• Establishes the lesser of $50,000 or 10% of a home health agency's Medicare payments in the previous year as the annual amount of an agency's surety bond requirement, and it requires the bond to be in effect for 4 years or longer if ownership changes. Prior periods covered by a bond may be counted and Medicare and Medicaid bond requirements are to be coordinated.

• Excludes durable medical equipment, including oxygen and oxygen supplies, from the home health consolidated billing program.

• Clarifies that the increase in the home health PPS in FY2002 and FY2003 will be the market basket increase minus 1.1 percentage point.

• Requires MedPAC to study and report within 2 years of enactment on the feasibility and advisability of excluding rural home health agencies and beneficiaries living in rural areas from the home health PPS.

• Changes the methodology for Medicare's direct graduate medical education (DGME) payments to teaching hospitals to incorporate a national average amount based on FY1997 hospital-specific per resident amounts. In FY2001, hospitals would receive no less than 70% of a geographically adjusted national average amount. Hospitals with per resident amounts above 140% of the geographically adjusted national average amount would have payments frozen at current levels for FY2001 and FY2002, and in FY 2003-FY2005 would receive an update of the Consumer Price Index (CPI) minus 2 percentage points. Hospitals with per resident amounts between 70% and 140% of the geographically adjusted national average would continue to receive payments based on their hospital-specific per resident amounts updated for inflation.

• Provides that the period of initial residency for individuals enrolled in child neurology training programs will be the period of initial residency for pediatrics plus 2 years. MedPAC is required to report to Congress on the appropriateness of extending this policy to other combined residencies by March 2001.

• Requires the Secretary to treat certain urban hospitals as rural hospitals no later than 60 days after their application for such treatment if the hospitals: (1) are located in a rural census tract of a metropolitan statistical area (as determined by the most recent Goldsmith Modification, originally published in the Federal Register on February 27, 1992); (2) are located in an area designated by State law or regulation as a rural area or designated by the State as rural providers; or (3) meet other criteria as the Secretary specifies.

• Updates existing criteria used to designate outlying rural counties as part of metropolitan statistical areas (MSAs).

• Applies the 96-hour length of stay limitation on an average annual basis rather than on a per case basis; permits for-profit hospitals, state-designated hospitals that have closed within the past 10 years, and downsized facilities that are state-licensed health centers or health clinics to be CAHs; specifies the payment methods for outpatient critical access hospital services, and clarifies CAHs' ability to participate in Medicare swing-bed program.

• Extends the Medicare Dependent Hospital program through FY2006.

• Permits sole community hospitals that are now paid using the federal rate to transition over time to payment based on their hospital-specific FY1996 costs.

• Updates the FY2000 target amount by the market basket for discharges from sole community hospitals occurring in FY2001.

• Permits hospitals to increase the number of primary care residents that it counts in the base year limit by up to 3 full-time equivalent residents if those individuals were on maternity, disability, or a similar approved leave of absence. Hospitals located in rural areas are permitted to increase their resident limits by 30% for direct and indirect medical education payments. In addition, non-rural facilities that operate separately accredited rural training programs in rural areas, or that operate accredited training programs with integrated rural tracks, may receive direct graduate medical education and indirect medical education payments for cost reporting periods beginning on April 1, 2000 and for discharges occurring on or after April 1, 2000 respectively. The agreement also includes the Senate provision regarding an exception to the count of residents to include those who participated in GME at a Veterans Affairs (VA) facility and were subsequently transferred.

• Eliminates the existing requirement that states review the need for swing beds through the Certificate of Need (CON) process and removes other constraints on length of stay.

• Permits rural hospitals with fewer than 50 beds to apply for grants not to exceed $50,000 to pay for data systems required to meet BBA 97 amendments, including the costs associated with purchase of computer software and hardware, education and training of hospital staff, and costs related to the implementation of PPS systems.

• Requires GAO to submit a report to Congress no later than 18 months after enactment on the current laws and regulations for geographic reclassification of hospitals under Medicare.

• Requires MedPAC to conduct a study on rural providers, evaluate the adequacy and appropriateness of the categories of special Medicare payments (and payment methodologies) for rural hospitals, and their impact on beneficiary access and quality of health services and submit a report to Congress no later than 18 months of enactment.

• Expands the coverage of medically necessary, advanced life support (ALS) services provided by a paramedic intercept service provider in a rural area to include areas designated as rural areas by any State law or regulation or those located in a rural census tract of a metropolitan statistical area (as determined under the most recent Goldsmith Modification, originally published in the Federal Register on February 27, 1992).

• Requires the Secretary to award without additional review the diabetes mellitus telemedicine demonstration project no later than 3 months after enactment to the best technical proposal as of the bill's enactment date.

• Establishes a special election period for persons in a plan which has notified the individual of an impending termination and permits these persons to choose a Medigap plan within 63 days of receiving a notice from their plan rather than waiting for the contract to end. The agreement also establishes a continuous open enrollment period for institutionalized beneficiaries. Further, a plan leaving a service area may offer enrollees the option to continue to receive all their basic services from plan providers in another service area.

• Specifies that any enrollment changes made after the 10^th of a month do not take effect until the beginning of the second calendar month thereafter.

• Extends the cost contract program through 2004.

• Changes the phase-in of the new risk adjustment method based on health status to a blend of 10% new health status method/90% old demographic method in 2000 and 2001, and not more than 20% health status in 2002.

• Provides for a MedPAC study and report on the new risk adjustment procedure.

• Provides for a study and report by the Secretary regarding reporting of encounter data.

• Provides for payment of a new entry bonus of 5% of the monthly Medicare+Choice payment rate in the first 12 months and 3% in the subsequent 12 months to organizations that offer a plan in a payment area without a Medicare+Choice plan since 1997, or in an area where all organizations have announced their withdrawal from the area as of October 13, 1999.

• Reduces the exclusion period from 5-years to 2-years for organizations seeking to re-enter the Medicare+Choice program after withdrawing. Specific exceptions are permitted where there is a change in payment policy. Nothing affects the Secretary's authority to provide additional exceptions including those specified in HCFA's Operational Policy Letter #103 (which permits an exception in areas served by 2 or fewer plans).

• Provides for the publication of various payment-related information for the original Medicare fee-for-service program for each Medicare+Choice payment area.

• Allows organizations to vary premiums, benefits, and cost-sharing across individuals enrolled in the plan so long as these are uniform within segments comprising 1 or more Medicare+Choice payment areas.

• Provides for submission of adjusted community rates by July 1 instead of May 1.

• Provides for a reduction in the national per capita Medicare+Choice growth percentage of 0.3 percentage points in 2002 instead of the 0.5 percentage point reduction now scheduled in law.

• Requires the Secretary within 210 days of receiving an application from a private accrediting organization, to determine whether such organization's processes meets the requirements for M+C plan accreditors. If it does, the Secretary would be required to deem that a M+C plan accredited by such organization met certain standards required of M+C plans. A private accreditation organization could elect to deem one or more of the following standards required of M+C plans: quality assurance, confidentiality of records, antidiscrimination, access to services, information on advance directives, and provider participation.

• Permits HCFA to conduct the health information campaign during the fall season, rather than just November.

• Requires preferred provider organizations to meet the same quality assurance requirements as are applicable to private fee-for-service plans and non-network MSAs. MedPAC is required to study appropriate quality improvement standards that should apply to each type of M+C plan (including each type of coordinated care plans) and to the original Medicare program.

• Specifies that a Medicare+Choice discharge planning evaluation is not required to include information on the availability of home health services provided by individuals or entities that do not have a contract with the organization. Further, the plan may specify or limit the provider or providers of post-hospital home health services or other post-hospital services.

• Specifies that the total amount of funds available in a fiscal year to the Secretary to carry out annual beneficiary education functions is limited to $100 million. The agreement specifies that the aggregate amount of user fees that can be imposed on M+C plans, to fund these activities, will be restricted and proportionate to the percentage of Medicare beneficiaries enrolled in M+C plans. A Medicare+Choice plan's share of the total is the same proportion as its share of the total Medicare population. The remainder of these activities must be funded through standard appropriations processes.

• Permits religious fraternal benefit societies to restrict enrollment in any of their Medicare+Choice plans (not just coordinated care plans) to their members.

• Clarifies that there is an exception for Medicare+Choice coordinated care plans to both the ownership and compensation prohibitions of the self-referral law.

• Extends the Medicare waivers for SHMOs until 18 months after the Secretary submits a report with a plan for integration and transition of SHMOs into an option under Medicare+Choice. It requires the Secretary to submit a final report 21 months after the integration and transition report. Six months after the Secretary's final report, MedPAC is required to submit a report with recommendations. The agreement specifies that no enrollment limit may be imposed under the project, other than the aggregate limit on enrollment at all sites, which remains not less than 324,000.

• Extends the Community Nursing Organization demonstration project for 2 years but limits total federal expenditures for it to the amount that would be spent if the demonstration were not in operation; it requires the Secretary to report to Congress on the results of the demonstration by July 1, 2001.

• Delays implementation of the Medicare +Choice Competitive Bidding Demonstration project until January 1, 2002 or, if later, 6 months after Competitive Pricing Advisory Committee (CPAC) submits reports on (a) incorporating original fee-for-service Medicare into the demonstration; (b) quality activities required by participating plans; (c) the viability of expanding the demonstration project to a rural site; and (d) the nature of the benefit structure required from plans that participate in the demonstration. The Secretary is also required, subject to recommendations by CPAC, to allow plans that make bids below the established government contribution rate, to offer beneficiaries rebates on their Part B premiums.

• Extends the Medicare Municipal Health Services Demonstration Project for 2 years, through 2002.

• Specifies that funding for the coordinated care demonstration project to be located in the District of Columbia is to come from Medicare trust fund.

• Extends certain Medigap guaranteed issue protections to PACE enrollees over age 65 whose PACE enrollment is discontinued under circumstances parallel to those which would permit guaranteed issue if Medicare+Choice enrollment was discontinued.

• Provides that hospitals with approved nursing and allied health professional training programs would receive additional payments to reflect utilization of Medicare+Choice enrollees. In no case would the total payment under this section exceed $60 million.

• Requires the Secretaries of HHS, DOD, and VA to submit to Congress a report no later than April 1, 2001 on the use of health services furnished by DOD and VA to Medicare beneficiaries, including both Medicare+Choice enrollees and Medicare fee-for-service beneficiaries.

• Requires MedPAC to: 1) conduct a study and report to Congress, on the development of a payment methodology under Medicare+Choice for frail elderly beneficiaries enrolled in specialized programs; and 2) submit to Congress a report on specific legislative changes that would make MSA plans a viable option under the M+C program.

• Requires GAO to conduct: 1) a study of Medigap policies, and 2) an annual audit of the Secretary's expenditures for providing M+C information to beneficiaries.

• Makes technical corrections to the table included in the Balanced Budget Act of 1997 establishing limits on payments to hospitals treating a disproportionate share of uninsured and low-income patients. These technical corrections affect Minnesota, New Mexico, Wyoming, and the District of Columbia for fiscal years 1999 through 2002.

• Extends beyond fiscal year 2000 the availability of a fund of $500 million created to assist with the transitional costs of new Medicaid eligibility activities resulting from welfare reform, and allows these funds to be used for costs incurred after the first three years following welfare reform.

• Slows the phase-out of the cost-based system of reimbursement for services provided by FQHCs and RHCs and authorizes a study of the impact of reducing or modifying payments to such providers.

• Provides that states will receive enhanced matching payments for medical and utilization reviews for Medicaid fee-for-service when conducted by certain entities similar to peer review organizations. The agreement also eliminates duplicative requirements for external review and requires the Secretary of Health and Human Services (HHS) to certify to Congress that the external review requirements are fully implemented.

• Clarifies that Medicaid disproportionate share hospital (DSH) payments are matched at the Medicaid federal matching percentage and not at the enhanced federal matching percentage authorized under Title XXI.

• Allows rebate agreements entered into after the date of enactment of this act to become effective on the date on which the agreement is entered into, or at state option, any date before or after the date on which the agreement is entered into.

• Extends a technical provision included in the Balanced Budget Act of 1997 related to allocation of DSH funds among California's hospitals.

• Makes technical corrections to cross-references in Title XIX.

• Modifies the allotment distribution formula set forth in the Balanced Budget Act of 1997 by establishing floors and ceilings to limit the amount a state's allocation can fluctuate from one year to the next.

• Provides additional allotments for the commonwealths and territories for fiscal years 2000 through 2007.

• Provides funding for the collection of data to produce reliable annual state-level estimates of the number of uninsured children, and a federal evaluation of SCHIP to identify effective outreach and enrollment practices for both SCHIP and Medicaid, barriers to enrollment, and factors influencing beneficiary drop-out. The agreement also requires: (1) an inspector general audit and GAO report on enrollment of Medicaid-eligible children in SCHIP, (2) states to report annually the number of deliveries to pregnant women and the number of infants who received services under the Maternal and Child Health Services Block Grant or who were entitled to SCHIP benefits, and (3) the Secretary of HHS to establish a clearinghouse for the consolidation and coordination of all Federal databases and reports regarding children's health.

• Requires that the Secretary of HHS use the term State Children's Health Insurance Program and SCHIP instead of Children's Health Insurance Program and CHIP.