[House Report 114-761]
[From the U.S. Government Publishing Office]
114th Congress } { Rept. 114-761
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
_______________________________________________________________________
SUSTAINING HEALTHCARE INTEGRITY AND FAIR TREATMENT ACT OF 2016
----------
R E P O R T
of the
COMMITTEE ON WAYS AND MEANS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
September 20, 2016.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
114th Congress } { Rept. 114-761
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
_______________________________________________________________________
SUSTAINING HEALTHCARE INTEGRITY AND FAIR TREATMENT ACT OF 2016
__________
R E P O R T
of the
COMMITTEE ON WAYS AND MEANS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
September 20, 2016.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
21-582 WASHINGTON : 2012
114th Congress } { Rept. 114-761
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
======================================================================
SUSTAINING HEALTHCARE INTEGRITY AND FAIR TREATMENT ACT OF 2016
_______
September 20, 2016.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 5713]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 5713) to provide for the extension of certain long-
term care hospital Medicare payment rules, clarify the
application of rules on the calculation of hospital length of
stay to certain moratorium-excepted long-term care hospitals,
and for other purposes, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Sustaining
Healthcare Integrity and Fair Treatment Act of 2016''.
(b) Table of Contents.--This table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--MEDICARE PART A PROVISIONS
Sec. 101. Extension of certain LTCH Medicare payment rules.
Sec. 102. Application of rules on the calculation of hospital length of
stay to all LTCHs.
Sec. 103. Change in Medicare classification for certain hospitals.
Sec. 104. Temporary exception to the application of the Medicare LTCH
site neutral provisions for certain spinal cord specialty hospitals.
Sec. 105. Temporary extension to the application of the Medicare LTCH
site neutral provisions for certain discharges with severe wounds.
TITLE II--OTHER PROVISIONS
Sec. 201. No payment for items and services furnished by newly enrolled
providers or suppliers within a temporary moratorium area.
TITLE I--MEDICARE PART A PROVISIONS
SEC. 101. EXTENSION OF CERTAIN LTCH MEDICARE PAYMENT RULES.
(a) 25-Percent Patient Threshold Payment Adjustment.--Section
114(c)(1)(A) of the Medicare, Medicaid, and SCHIP Extension Act of 2007
(42 U.S.C. 1395ww note), as amended by section 4302(a) of division B of
the American Recovery and Reinvestment Act (Public Law 111-5), sections
3106(a) and 10312(a) of Public Law 111-148, and section 1206(b)(1)(B)
of the Pathway for SGR Reform Act of 2013 (division B of Public Law
113-67), is amended by striking ``for a 9-year period'' and inserting
``through June 30, 2016, and for discharges occurring on or after
October 1, 2016, and before July 1, 2017''.
(b) Payment for Hospitals-within-hospitals.--Section 114(c)(2) of the
Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww
note), as amended by section 4302(a) of division B of the American
Recovery and Reinvestment Act (Public Law 111-5), sections 3106(a) and
10312(a) of Public Law 111-148, and section 1206(b)(1)(A) of the
Pathway for SGR Reform Act of 2013 (division B of Public Law 113-67),
is amended--
(1) in subparagraph (A), by inserting ``or any similar
provision,'' after ``Regulations,'';
(2) in subparagraph (B)--
(A) in clause (i), by inserting ``or any similar
provision,'' after ``Regulations,''; and
(B) in clause (ii), by inserting ``, or any similar
provision,'' after ``Regulations''; and
(3) in subparagraph (C), by striking ``for a 9-year period''
and inserting ``through June 30, 2016, and for discharges
occurring on or after October 1, 2016, and before July 1,
2017''.
SEC. 102. APPLICATION OF RULES ON THE CALCULATION OF HOSPITAL LENGTH OF
STAY TO ALL LTCHS.
(a) In General.--Section 1206(a)(3) of the Pathway for SGR Reform Act
of 2013 (division B of Public Law 113-67; 42 U.S.C. 1395ww note) is
amended--
(1) by striking subparagraph (B);
(2) by striking ``site neutral basis.--'' and all that
follows through ``For discharges occurring'' and inserting
``site neutral basis.--For discharges occurring'';
(3) by striking ``subject to subparagraph (B),''; and
(4) by redesignating clauses (i) and (ii) as subparagraphs
(A) and (B), respectively, and moving each of such
subparagraphs (as so redesignated) 2 ems to the left.
(b) Effective Date.--The amendments made by subsection (a) shall be
effective as if included in the enactment of section 1206(a)(3) of the
Pathway for SGR Reform Act of 2013 (division B of Public Law 113-67; 42
U.S.C. 1395ww note).
SEC. 103. CHANGE IN MEDICARE CLASSIFICATION FOR CERTAIN HOSPITALS.
(a) In General.--Subsection (d)(1)(B) of section 1886 of the Social
Security Act (42 U.S.C. 1395ww) is amended--
(1) in clause (iv)--
(A) in subclause (I), by striking ``or'' at the end;
(B) in subclause (II)--
(i) by striking ``, or'' at the end and
inserting a semicolon; and
(ii) by redesignating such subclause as
clause (vi) and by moving it to immediately
follow clause (v); and
(iii) in clause (v), by striking the
semicolon at the end and inserting ``, or'';
and
(C) by striking ``(iv)(I) a hospital'' and inserting
``(iv) a hospital''.
(b) Conforming Payment References.--The second sentence of subsection
(d)(1)(B) of such section is amended--
(1) by inserting ``(as in effect as of such date)'' after
``clause (iv)''; and
(2) by inserting ``(or, in the case of a hospital described
in clause (iv)(II), as so in effect, shall be classified under
clause (vi) on and after the effective date of such clause (vi)
and for cost reporting periods beginning on or after January 1,
2015, shall not be subject to subsection (m) as of the date of
such classification)'' after ``so classified''.
(c) Application.--
(1) In general.--For cost reporting periods beginning on or
after January 1, 2015, in the case of an applicable hospital
(as defined in paragraph (3)), the following shall apply:
(A) Payment for inpatient operating costs shall be
made on a reasonable cost basis in the manner provided
in section 412.526(c)(3) of title 42, Code of Federal
Regulations (as in effect on January 1, 2015) and in
any subsequent modifications.
(B) Payment for capital costs shall be made in the
manner provided by section 412.526(c)(4) of title 42,
Code of Federal Regulations (as in effect on such
date).
(C) Claims for payment for Medicare beneficiaries who
are discharged on or after January 1, 2017, shall be
processed as claims which are paid on a reasonable cost
basis as described in section 412.526(c) of title 42,
Code of Federal Regulations (as in effect on such
date).
(2) Applicable hospital defined.--In this subsection, the
term ``applicable hospital'' means a hospital that is
classified under clause (iv)(II) of section 1886(d)(1)(B) of
the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)) on the day
before the date of the enactment of this Act and which is
classified under clause (vi) of such section, as redesignated
and moved by subsection (a), on or after such date of
enactment.
(d) Conforming Technical Amendments.--
(1) Section 1899B(a)(2)(A)(iv) of the Social Security Act (42
U.S.C. 1395lll(a)(2)(A)(iv)) is amended by striking
``1886(d)(1)(B)(iv)(II)'' and inserting ``1886(d)(1)(B)(vi)''.
(2) Section 1886(m)(5)(F) of such Act (42 U.S.C.
1395ww(m)(5)(F)) is amended in each of clauses (i) and (ii) by
striking ``(d)(1)(B)(iv)(II)'' and inserting ``(d)(1)(B)(vi)''.
SEC. 104. TEMPORARY EXCEPTION TO THE APPLICATION OF THE MEDICARE LTCH
SITE NEUTRAL PROVISIONS FOR CERTAIN SPINAL CORD
SPECIALTY HOSPITALS.
(a) Exception.--Section 1886(m)(6) of the Social Security Act (42
U.S.C. 1395ww(m)(6)) is amended--
(1) in subparagraph (A)(i), by striking ``and (E)'' and
inserting ``, (E), and (F)''; and
(2) by adding at the end the following new subparagraph:
``(F) Temporary exception for certain spinal cord
specialty hospitals.--For discharges in cost reporting
periods beginning during fiscal years 2018 and 2019,
subparagraph (A)(i) shall not apply (and payment shall
be made to a long-term care hospital without regard to
this paragraph) if such discharge is from a long-term
care hospital that meets each of the following
requirements:
``(i) Not-for-profit.--The long-term care
hospital was a not-for-profit long-term care
hospital on June 1, 2014, as determined by cost
report data.
``(ii) Primarily providing treatment for
catastrophic spinal cord or acquired brain
injuries or other paralyzing neuromuscular
conditions.--Of the discharges in calendar year
2013 from the long-term care hospital for which
payment was made under this section, at least
50 percent were classified under MS-LTCH-DRGs
28, 29, 52, 57, 551, 573, and 963.
``(iii) Significant out-of-state
admissions.--
``(I) In general.--The long-term care
hospital discharged inpatients
(including both individuals entitled
to, or enrolled for, benefits under
this title and individuals not so
entitled or enrolled) during fiscal
year 2014 who had been admitted from at
least 20 of the 50 States, determined
by the States of residency of such
inpatients and based on such data
submitted by the hospital to the
Secretary as the Secretary may require.
``(II) Implementation.--
Notwithstanding any other provision of
law, the Secretary may implement
subclause (I) by program instruction or
otherwise.
``(III) Non-application of paperwork
reduction act.--Chapter 35 of title 44,
United States Code, shall not apply to
data collected under this clause.''.
(b) Study and Report on the Status and Viability of Certain Spinal
Cord Specialty Long-term Care Hospitals.--
(1) Study.--The Comptroller General of the United States
shall conduct a study on long-term care hospitals described in
section 1886(m)(6)(F) of the Social Security Act, as added by
subsection (a). Such report shall include an analysis of the
following:
(A) The impact on such hospitals of the
classification and facility licensure by State agencies
of such hospitals.
(B) The Medicare payment rates for such hospitals.
(C) Data on the number and health care needs of
Medicare beneficiaries who have been diagnosed with
catastrophic spinal cord or acquired brain injuries or
other paralyzing neuromuscular conditions (as described
within the discharge classifications specified in
clause (ii) of such section) who are receiving services
from such hospitals.
(2) Report.--Not later than October 1, 2018, the Comptroller
General shall submit to Congress a report on the study
conducted under paragraph (1), including recommendations for
such legislation and administrative action as the Comptroller
General determines appropriate.
SEC. 105. TEMPORARY EXTENSION TO THE APPLICATION OF THE MEDICARE LTCH
SITE NEUTRAL PROVISIONS FOR CERTAIN DISCHARGES WITH
SEVERE WOUNDS.
(a) In General.--Section 1886(m)(6) of the Social Security Act (42
U.S.C. 1395ww(m)(6)), as amended by section 104, is further amended--
(1) in subparagraph (A)(i) by striking ``and (F)'' and
inserting ``(F), and (G)'';
(2) in subparagraph (E)(i)(I)(aa), by striking ``the
amendment made'' and all that follows before the semicolon and
inserting ``the last sentence of subsection (d)(1)(B)''; and
(3) by adding at the end the following new subparagraph:
``(G) Additional temporary exception for certain
severe wound discharges from certain long-term care
hospitals.--
``(i) In general.--For a discharge occurring
in a cost reporting period beginning during
fiscal year 2018, subparagraph (A)(i) shall not
apply (and payment shall be made to a long-term
care hospital without regard to this paragraph)
if such discharge--
``(I) is from a long-term care
hospital identified by the last
sentence of subsection (d)(1)(B);
``(II) is classified under MS-LTCH-
DRG 602, 603, 539, or 540; and
``(III) is with respect to an
individual treated by a long-term care
hospital for a severe wound.
``(ii) Severe wound defined.--In this
subparagraph, the term `severe wound' means a
wound which is a stage 3 wound, stage 4 wound,
unstageable wound, non-healing surgical wound,
or fistula as identified in the claim from the
long-term care hospital.
``(iii) Wound defined.--In this subparagraph,
the term `wound' means an injury involving
division of tissue or rupture of the integument
or mucous membrane with exposure to the
external environment.''.
(c) Study and Report to Congress.--
(1) Study.--The Comptroller General of the United States
shall, in consultation with relevant stakeholders, conduct a
study on the treatment needs of individuals entitled to
benefits under part A of title XVIII of the Social Security Act
or enrolled under part B of such title who require specialized
wound care, and the cost, for such individuals and the Medicare
program under such title, of treating severe wounds in rural
and urban areas. Such study shall include an assessment of--
(A) access of such individuals to appropriate levels
of care for such cases;
(B) the potential impact that section
1886(m)(6)(A)(i) of such Act (42 U.S.C.
1395ww(m)(6)(A)(i)) will have on the access, quality,
and cost of care for such individuals; and
(C) how to appropriately pay for such care under the
Medicare program under such title.
(2) Report.--Not later than October 1, 2020, the Comptroller
General shall submit to Congress a report on the study
conducted under paragraph (1), including recommendations for
such legislation and administrative action as the Comptroller
General determines appropriate.
TITLE II--OTHER PROVISIONS
SEC. 201. NO PAYMENT FOR ITEMS AND SERVICES FURNISHED BY NEWLY ENROLLED
PROVIDERS OR SUPPLIERS WITHIN A TEMPORARY
MORATORIUM AREA.
(a) Medicare.--Section 1866(j)(7) of the Social Security Act (42
U.S.C. 1395cc(j)(7)) is amended--
(1) in the paragraph heading, by inserting ``; nonpayment''
before the period; and
(2) by adding at the end the following new subparagraph:
``(C) Nonpayment.--
``(i) In general.--No payment may be made
under this title or under a program described
in subparagraph (A) with respect to an item or
service described in clause (ii) furnished on
or after October 1, 2017.
``(ii) Item or service described.--An item or
service described in this clause is an item or
service furnished--
``(I) within a geographic area with
respect to which a temporary moratorium
imposed under subparagraph (A) is in
effect; and
``(II) by a provider of services or
supplier that meets the requirements of
clause (iii).
``(iii) Requirements.--For purposes of clause
(ii), the requirements of this clause are that
a provider of services or supplier--
``(I) enrolls under this title on or
after the effective date of such
temporary moratorium; and
``(II) is within a category of
providers of services and suppliers (as
described in subparagraph (A)) subject
to such temporary moratorium.
``(iv) Prohibition on charges for specified
items or services.--In no case shall a provider
of services or supplier described in clause
(ii)(II) charge an individual or other person
for an item or service described in clause (ii)
furnished on or after October 1, 2017, to an
individual entitled to benefits under part A or
enrolled under part B or an individual under a
program specified in subparagraph (A).''.
(b) Conforming Amendments.--
(1) Medicaid.--
(A) In general.--Section 1903(i)(2) of the Social
Security Act (42 U.S.C. 1396b(i)(2)) is amended--
(i) in subparagraph (A), by striking the
comma at the end and inserting a semicolon;
(ii) in subparagraph (B), by striking ``or''
at the end; and
(iii)
``(D) with respect to any amount expended for such an
item or service furnished during calendar quarters
beginning on or after October 1, 2017, subject to
section 1902(kk)(4)(A)(ii)(II), within a geographic
area that is subject to a moratorium imposed under
section 1866(j)(7) by a provider or supplier that meets
the requirements specified in subparagraph (C)(iii) of
such section, during the period of such moratorium;
or''.
(B) Exception with respect to access.--Section
1902(kk)(4)(A)(ii) of the Social Security Act (42
U.S.C. 1396a(kk)(4)(A)(ii)) is amended to read as
follows:
``(ii) Exceptions.--
``(I) Compliance with moratorium.--A
State shall not be required to comply
with a temporary moratorium described
in clause (i) if the State determines
that the imposition of such temporary
moratorium would adversely impact
beneficiaries' access to medical
assistance.
``(II) FFP available.--
Notwithstanding section 1903(i)(2)(D),
payment may be made to a State under
this title with respect to amounts
expended for items and services
described in such section if the
Secretary, in consultation with the
State agency administering the State
plan under this title (or a waiver of
the plan), determines that denying
payment to the State pursuant to such
section would adversely impact
beneficiaries' access to medical
assistance. ''.
(C) State plan requirement with respect to limitation
on charges to beneficiaries.--Section 1902(kk)(4)(A) of
the Social Security Act (42 U.S.C. 1396a(kk)(4)(A)) is
amended by adding at the end the following new clause:
``(iii) Limitation on charges to
beneficiaries.--With respect to any amount
expended for items or services furnished during
calendar quarters beginning on or after October
1, 2017, the State prohibits, during the period
of a temporary moratorium described in clause
(i), a provider meeting the requirements
specified in subparagraph (C)(iii) of section
1866(j)(7) from charging an individual or other
person eligible to receive medical assistance
under the State plan under this title (or a
waiver of the plan) for an item or service
described in section 1903(i)(2)(D) furnished to
such an individual.''.
(2) Correcting amendments to related provisions.--
(A) Section 1866(j).--Section 1866(j) of the Social
Security Act (42 U.S.C. 1395cc(j)) is amended--
(i) in paragraph (1)(A)--
(I) by striking ``paragraph (4)'' and
inserting ``paragraph (5)'';
(II) by striking ``moratoria in
accordance with paragraph (5)'' and
inserting ``moratoria in accordance
with paragraph (7)''; and
(III) by striking ``paragraph (6)''
and inserting ``paragraph (9)''; and
(ii) by redesignating the second paragraph
(8) (added by section 1304(1) of Public Law
111-152) as paragraph (9).
(B) Section 1902(kk).--Section 1902(kk) of such Act
(42 U.S.C. 1396a(kk)) is amended--
(i) in paragraph (1), by striking ``section
1886(j)(2)'' and inserting ``section
1866(j)(2)'';
(ii) in paragraph (2), by striking ``section
1886(j)(3)'' and inserting ``section
1866(j)(3)'';
(iii) in paragraph (3), by striking ``section
1886(j)(4)'' and inserting ``section
1866(j)(5)''; and
(iv) in paragraph (4)(A), by striking
``section 1886(j)(6)'' and inserting ``section
1866(j)(7)''.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 5713, the ``Sustaining Healthcare Integrity
and Fair Treatment (SHIFT) Act of 2016,'' as ordered reported
by the Committee on Ways and Means on July 13, 2016, provides
for prospective regulatory relief to all Long-Term Care
Hospitals (LTCHs) from the ``25 percent rule.'' In the Medicare
program, LTCHs are not able to receive full reimbursement if
the plurality (defined as exceeding 25 percent) of their total
annual Medicare discharges comes from only one inpatient acute
hospital. The SHIFT Act would reinstate the 50 percent
threshold that was in place prior to July 1, 2016, providing
relief for 9 months (October 1, 2016 through June 30, 2017).
The SHIFT Act also provides targeted relief from the site
neutral payment policy enacted as part of the Bipartisan Budget
Act of 2013 (BBA `13) for four specific LTCH groups. Finally,
the SHIFT Act provides three entitlement programs--Medicare,
Medicaid, and the Children's Health Insurance Program (CHIP)--
with the ability to pursue action against those newly enrolled
providers or suppliers that may be engaging in fraud, waste or
abuse. Specifically, such providers or suppliers will not
receive reimbursement if they attempt to exploit program
integrity loopholes.
B. Background and Need for Legislation
On July 11, 2016, Representative Tiberi (R-OH) and
Representative Pascrell (D-NJ) introduced H.R. 5713, the SHIFT
Act of 2016. The main focus of the SHIFT Act is to continue
providing regulatory relief from the Centers for Medicare &
Medicare Services' (CMS) enactment of the LTCH 25 percent rule.
In 2013, through the BBA `13, Congress established ``site
neutral payment'' for LTCHs, where if a LTCH discharge failed
to meet certain criteria, the discharge would be reimbursed at
the site neutral inpatient reimbursement rate. In its fiscal
year (FY) 2017 LTCH proposed regulation, CMS reported that
approximately 45 percent of LTCH discharges in FY 2017 would be
reimbursed at the site neutral rate for a per case decrease of
approximately 21 percent. Given these significant changes to
overall LTCH reimbursement, Congress believes additional
temporary relief from CMS' 25 percent rule is warranted.
The SHIFT Act also provides targeted relief from the site
neutral and other LTCH payment policies for four specific LTCH
groups. The first group is any ``new'' LTCH that has come into
the Medicare program since December 26, 2013. The second group
is any LTCH that was classified as a ``sub-clause II'' LTCH in
the Balanced Budget Act of 1997 (BBA '97). The third group is
any LTCH that primarily treats Medicare patients who have
severe spinal cord injuries. The fourth group is any LTCH that
was granted ``grandfather'' status as a ``hospital-within-
hospital'' in the BBA `97.
Finally, the SHIFT Act provides the Secretary of Health and
Human Services (Secretary) with the authority to deny
reimbursement for services by providers and suppliers within an
area the Secretary has designated as a moratoria area due to
fraud. The authority would apply across the Medicare, Medicaid,
and CHIP programs. As reported in the President's FY 2017
Budget, CMS has found that some providers and suppliers are
circumventing current program integrity efforts by enrolling in
localities that are just outside of temporary moratoria areas.
C. Legislative History
Background
H.R. 5713 was introduced on July 11, 2016, and was referred
to the Committee on Ways and Means and subsequently to the
Committee on Energy and Commerce.
Committee hearings
On June 8, 2016, the Committee on Ways and Means
Subcommittee on Health held a Member day hearing on issues in
the Medicare program, including LTCH issues.
On April 30, 2014, the Committee on Ways and Means
Subcommittee on Health held a hearing on Medicare fraud, waste
and abuse issues.
On June 14, 2013, the Committee on Ways and Means
Subcommittee on Health held a hearing on the post-acute care
issues in the Medicare program.
Committee action
The Committee on Ways and Means marked up H.R. 5713 on July
13, 2016, and ordered the bill favorably reported to the House
of Representatives as amended by a voice vote (with a quorum
being present).
II. EXPLANATION OF THE BILL
``Sustaining Healthcare Integrity and Fair Treatment (SHIFT) Act of
2016''
PRESENT LAW
Under current law, as finalized by CMS (42 Code of Federal
Regulations [CFR] 412.534 and 412. 536) in 2007, no more than
25 percent of a LTCH's admissions are allowed to come from the
same inpatient acute hospital in order for the LTCH to receive
full reimbursement. The 25 percent rule has been in affect
since July 1, 2016. Prior to July 1, 2016, Congress delayed the
enactment of the 25 percent rule four times, subsequently in
the Medicare, Medicaid and S-CHIP Extension Act (MMSEA) of
2007, the American Recovery and Reinvestment Act (ARRA) of
2009, the Affordable Care Act (ACA) of 2010 and the BBA `13.
The practical affect of delaying the 25 percent rule is
defaulting to a 50 percent rule.
Currently, as passed by BBA `13, LTCHs are receiving site
neutral payments for any discharges that fail to meet one of
the two following criteria: 1) prior to the LTCH stay, a
Medicare beneficiary was hospitalized in an intensive care unit
for a minimum of three days; or 2) the Medicare beneficiary was
on a ventilator while being treated in the LTCH. For site
neutral discharges in FY 2016, LTCHs are receiving a blended
payment rate, which consists of 50 percent of the inpatient
acute prospective rate and 50 percent of the LTCH rate.
Beginning in FY 2018, site neutral LTCH discharges will be
reimbursed at 100 percent of the inpatient acute prospective
rate.
Beginning in 2014, CMS used the authority provided in the
ACA to apply temporary moratoria on new provider and supplier
enrollment in areas where there is evidence of consistent
fraud, waste, and abuse. The authority was permitted for
application in the Medicare, Medicaid, and CHIP entitlement
programs. Currently, CMS has a temporary moratorium in place
for ambulance and home health services in select geographic
areas within the Medicare program. Further, CMS has indicated
that it may expand temporary moratoria to skilled nursing
facilities and independent diagnostic testing facilities.
REASONS FOR CHANGE
As stated above, in its FY 2017 LTCH proposed regulation,
CMS reported that approximately 45 percent of LTCH discharges
in FY 2017 would be reimbursed at the site neutral rate for a
per case decrease of approximately 21 percent. Given these
significant changes to overall LTCH reimbursement, Congress
feels additional temporary relief from CMS' 25 percent rule is
warranted. Further, due to the unique patient populations, such
as severe spinal cord injuries, which certain LTCHs typically
treat, additional relief to the site neutral payment policy was
also included in the SHIFT Act. Finally, additional authority
was given to the Secretary to apply to temporary moratorium
areas because CMS has found that some providers and suppliers
are circumventing its efforts by enrolling in localities that
are just outside of temporary moratorium areas.
EXPLANATION OF PROVISIONS
Section 101 makes a modification to the BBA `13. The BBA
`13 prohibited the Secretary from enforcing the LTCH 25 percent
rule through June 30, 2016. This section extends the
prohibition for an additional 9-months from October 1, 2016
through June 30, 2017.
Section 102 makes a modification to the BBA `13. The BBA
`13 carved-out Medicare Advantage (MA) and site neutral
discharges from the calculation of the statutory 25-day average
length of stay requirement for all LTCHs operating under the
Medicare program prior to December 26, 2013. This section
affords the same relief to any LTCH that takes advantage of the
current law LTCH moratorium exception.
Section 103 codifies, in statute, changes that the CMS made
to its regulations for certain applicable LTCHs who were ``sub-
clause II'' LTCHs in the BBA `97. This section also re-
designates sub-clause II LTCHs as a new subsection under
section 1886 of the ``Social Security Act''.
Section 104 provides for a temporary exception of the LTCH
site neutral criteria for FY 2018 and 2019. LTCHs who meet the
following criteria are eligible for relief: 1) must be
classified as a non-profit hospital prior to June 1, 2014; 2)
at least 50 percent of the LTCH's Medicare discharges were
classified under Medicare Severity Long-Term Care Diagnosis
Related Groups (MS-LTC-DRGs) 28/29 (spinal procedures), 52
(spinal disorders and injuries), 57 (degenerative nervous
system disorders), 551 (medical back problems), 573 (skin graft
for skin ulcer or cellulitis) and 963 (multiple significant
trauma) for calendar year 2013; and 3) the LTCH discharged
patients from at least 20 of the 50 States in FY 2014.
Section 105 provides for a temporary exception of the LTCH
site neutral criteria for FY 2018. LTCHs who are
``grandfathered'' (as defined by the BBA `97 and in 42 CFR
422.12(f)) are eligible for relief. The exception to the LTCH
site neutral criteria is limited to the following: 1) only
those discharges classified under MS-LTC-DRGs 539/540
(osteomyelitis) and 602/603 (cellulitis); and 2) only those
discharges with a secondary diagnosis code for severe wounds--
defined as a stage 3 or 4 wound, unstageable wound, non-healing
surgical wound, or fistula that involves injury with division
of tissue or rupture of skin to the external environment.
Section 201 provides the Secretary with the authority to
deny reimbursement for services by providers and suppliers
within an area the Secretary has designated as a moratoria
area. The authority would apply across the Medicare, Medicaid,
and CHIP programs.
EFFECTIVE DATE
The effective date of section 101 is October 1, 2016.
The effective date of section 102 is retroactive to
December 26, 2013.
The effective date of section 103 is retroactive to January
1, 2015.
The effective date of section 104 is October 1, 2017.
The effective date of section 105 is October 1, 2017.
The effective date of section 201 is October 1, 2017.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 5713, the ``Sustaining Healthcare
Integrity and Fair Treatment (SHIFT) Act of 2016,'' on July 13,
2016.
The bill, H.R. 5713, was ordered favorably reported as
amended by voice vote (with a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 5713, as
reported. The Committee agrees with the estimate prepared by
the Congressional Budget Office (CBO), which is included below.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee states further that the bill involves no new or
increased tax expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 25, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5713, the
Sustaining Healthcare Integrity and Fair Treatment Act of 2016.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Jamease
Kowalczyk, Kevin McNellis, and Lara Robillard.
Sincerely,
Keith Hall.
Enclosure.
H.R. 5713--Sustaining Healthcare Integrity and Fair Treatment Act of
2016
Summary: H.R. 5713 would modify Medicare's payments to
Long-Term Care Hospitals (LTCHs) and would prohibit Medicare
from paying for items or services furnished by certain newly
enrolled providers in select areas of the country. CBO
estimates that enacting the bill would, on net, increase direct
spending by $25 million over the 2017-2021 period but would
have no net effect over the 2017-2026 period.
Pay-as-you-go procedures apply because enacting the
legislation would affect direct spending. Enacting the bill
would not affect revenues. CBO estimates that enacting the
legislation would not increase net direct spending or on-budget
deficits in any of the four consecutive 10-year periods
beginning in 2027.
H.R. 5713 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary effect of H.R. 5713 is shown in the following table.
The costs of this legislation fall within budget functions 550
(health) and 570 (Medicare).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING
Long-Term Care Hospitals.......................... 38 5 2 0 0 0 0 0 0 0 45 45
Moratorium On Certain New Providers............... 0 -5 -5 -5 -5 -5 -5 -5 -5 -5 -20 -45
-----------------------------------------------------------------------------------------------------
Total Changes................................. 38 0 -3 -5 -5 -5 -5 -5 -5 -5 25 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Basis of estimate: CBO estimates that the changes in
payment rules for LTCHs would increase spending by $45 million
over the 2017-2026 period, while expanding the moratorium would
reduce spending by the same amount over that time period.
Long-term care hospitals
Under current law, certain hospitals that treat patients
considered to be medically complex with an average length of
stay that exceeds 25 days are designated as LTCHs. Medicare
payments for care provided in LTCHs are either made at rates
determined in the prospective payment system for LTCHs, or at a
so-called ``site-neutral'' rate. Through 2017, the site-neutral
rate is a blend of the LTCH rates and the substantially lower
rates that would be paid under the inpatient prospective
payment system (IPPS). Beginning in 2018 all payments will be
at the IPPS payment rate. Generally, discharges that involve
specific conditions for patients with a stay of at least three
days in an intensive care unit before being admitted to the
LTCH are paid based on the LTCH system. Other discharges are
paid at the site-neutral rate. Beginning on July 1, 2016, if
more than 25 percent of Medicare patients in an LTCH are
admitted from a single hospital, the site-neutral payment rate
will be applied to all cases admitted from that hospital in
excess of that 25 percent threshold.
Title I of H.R 5713 would suspend the application of site-
neutral payments for cases that exceed that 25 percent
threshold between October 1, 2016 and June 30, 2017. It also
would exempt inpatient services furnished to Medicare
beneficiaries who are treated during:
Fiscal years 2018 and 2019 for certain
conditions, including spinal and traumatic brain
injuries, that are treated at not-for-profit LTCHs that
specialize in the treatment of those conditions, and
Fiscal year 2018 for certain kinds of severe
wounds.
Based on analysis of administrative data, CBO estimates
that enacting those changes to payment rates for Medicare
patients treated in LTCHs would increase direct spending by $45
million over the 2017-2026 period.
Moratorium on certain new providers
Under current law, the Secretary of Health and Human
Services (HHS) may temporarily prevent individuals and firms
from enrolling to furnish services in Medicare, Medicaid, and
the Children's Health Insurance Program (CHIP) if the
prohibition would reduce the occurrence of fraud, waste, and
abuse. The authority is specific to certain geographic areas
and, since it became available, the Secretary has imposed
temporary moratoria for home health providers in six
metropolitan areas and for ambulance providers in two
metropolitan areas.
Title II would prohibit newly enrolled providers and
suppliers located outside an area with such a moratorium from
billing for services provided within a region covered by a
moratorium. CBO expects that the legislation would prevent
providers and suppliers from evading the intent of the
moratorium in certain areas. New providers and suppliers could
still furnish and bill for services provided outside the
moratorium zone.
Because enacting that provision would slightly reduce the
number of services for which Medicare, Medicaid, and CHIP would
pay, CBO estimates that enacting the provision would reduce
direct spending for those programs by about $45 million over
the 2017-2026 period. About three-quarters of that effect (or
$34 million) would come from reduced spending in Medicare and
the remainder (about $11 million) would be attributable to
Medicaid and CHIP.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 5713, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON JULY 13, 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------------------------------------------------------------------
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016-2021 2016-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact............ 0 38 0 -3 -5 -5 -5 -5 -5 -5 -5 25 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Increase in long-term direct spending and deficits: CBO
estimates that enacting the legislation would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2027.
Intergovernmental and private-sector impact: H.R. 5713
contains no intergovernmental or private-sector mandates as
defined in UMRA. The bill's limits on Medicaid and CHIP
payments to the providers that bill for services within
moratorium areas would result in reduced spending by states for
those programs of about $8 million over the 2017-2026 period.
Estimate prepared by: Federal costs: Jamease Kowalczyk,
Kevin McNellis and Lara Robillard; Impact on state, local, and
tribal governments: Zachary Byrum; Impact on the private
sector: Amy Petz.
Estimate approved by: Holly Harvey, Deputy Assistant
Director for Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule x of the House of Representatives, are
incorporated in the descriptive portions of this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
E. Duplication of Federal Programs
In compliance with Sec. 3(g)(2) of H. Res. 5 (114th
Congress), the Committee states that no provision of the bill
establishes or reauthorizes: (1) a program of the Federal
Government known to be duplicative of another Federal program;
(2) a program included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139; or (3) a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
F. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (114th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Text of Existing Law Amended or Repealed by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
MEDICARE, MEDICAID, AND SCHIP EXTENSION ACT OF 2007
* * * * * * *
TITLE I--MEDICARE
* * * * * * *
SEC. 114. LONG-TERM CARE HOSPITALS.
(a) (Omitted amendatory text)
(b) Study and Report on Long-Term Care Hospital Facility and
Patient Criteria.--
(1) In general.--The Secretary of Health and Human
Services (in this section referred to as the
``Secretary'') shall conduct a study on the
establishment of national long-term care hospital
facility and patient criteria for purposes of
determining medical necessity, appropriateness of
admission, and continued stay at, and discharge from,
long-term care hospitals.
(2) Report.--Not later than 18 months after the date
of the enactment of this Act, the Secretary shall
submit to Congress a report on the study conducted
under paragraph (1), together with recommendations for
such legislation and administrative actions, including
timelines for implementation of patient criteria or
other actions, as the Secretary determines appropriate.
(3) Considerations.--In conducting the study and
preparing the report under this subsection, the
Secretary shall consider--
(A) recommendations contained in a report to
Congress by the Medicare Payment Advisory
Commission in June 2004 for long-term care
hospital-specific facility and patient criteria
to ensure that patients admitted to long-term
care hospitals are medically complex and
appropriate to receive long-term care hospital
services; and
(B) ongoing work by the Secretary to evaluate
and determine the feasibility of such
recommendations.
(c) Payment for Long-Term Care Hospital Services.--
(1) Delay in application of 25 percent patient
threshold payment adjustment.--The Secretary shall not
apply, for cost reporting periods beginning on or after
July 1, 2007,--
(A) for a 9-year period, section 412.536 of
title 42, Code of Federal Regulations, or any
similar provision, to freestanding long-term
care hospitals or to a long-term care hospital,
or satellite facility, that as of December29,
2007, was co-located with an entity that is a
provider-based, off-campus location of a
subsection (d) hospital which did not provide
services payable under section 1886(d) of the
Social Security Act at the off-campus location;
and
(B) such section or section 412.534 of title
42, Code of Federal Regulations, or any similar
provisions, to a long-term care hospital
identified by the amendment made by section
4417(a) of the Balanced Budget Act of 1997
(Public Law 105-33).
(2) Payment for hospitals-within-hospitals.--
(A) In general.--Payment to an applicable
long-term care hospital or satellite facility
which is located in a rural area or which is
co-located with an urban single or MSA dominant
hospital under paragraphs (d)(1), (e)(1), and
(e)(4) of section 412.534 of title 42, Code of
Federal Regulations, shall not be subject to
any payment adjustment under such section if no
more than 75 percent of the hospital's Medicare
discharges (other than discharges described in
paragraph (d)(2) or (e)(3) of such section) are
admitted from a co-located hospital.
(B) Co-located long-term care hospitals and
satellite facilities.--
(i) In general.--Payment to an
applicable long-term care hospital or
satellite facility which is co-located
with another hospital shall not be
subject to any payment adjustment under
section 412.534 of title 42, Code of
Federal Regulations, if no more than 50
percent of the hospital's Medicare
discharges (other than discharges
described in paragraph (c)(3) of such
section) are admitted from a co-located
hospital.
(ii) Applicable long-term care
hospital or satellite facility
defined.--In this paragraph, the term
``applicable long-term care hospital or
satellite facility'' means a hospital
or satellite facility that is subject
to the transition rules under section
412.534(g) of title 42, Code of Federal
Regulations or that is described in
section 412.22(h)(3)(i) of such title.
(C) Effective date.--Subparagraphs (A) and
(B) shall apply to cost reporting periods
beginning on or after October 1, 2007 (or July
1, 2007, in the case of a satellite facility
described in section 412.22(h)(3)(i) of title
42, Code of Federal Regulations) for a 9-year
period.
(3) No application of very short-stay outlier
policy.--The Secretary shall not apply, for the 5-year
period beginning on the date of the enactment of this
Act, the amendments finalized on May 11, 2007 (72
Federal Register 26904, 26992) made to the short-stay
outlier payment provision for long-term care hospitals
contained in section 412.529(c)(3)(i) of title 42, Code
of Federal Regulations, or any similar provision.
(4) No application of one-time adjustment to standard
amount.--The Secretary shall not, for the 5-year period
beginning on the date of the enactment of this Act,
make the one-time prospective adjustment to long-term
care hospital prospective payment rates provided for in
section 412.523(d)(3) of title 42, Code of Federal
Regulations, or any similar provision.
(d) Moratorium on the Establishment of Long-Term Care
Hospitals, Long-Term Care Satellite Facilities and on the
Increase of Long-Term Care Hospital Beds in Existing Long-Term
Care Hospitals or Satellite Facilities.--
(1) In general.--During the 5-year period (and for
the period beginning on the date of the enactment of
paragraph (7) of this subsection and ending September
30, 2017) beginning on the date of the enactment of
this Act, the Secretary shall impose a moratorium for
purposes of the Medicare program under title XVIII of
the Social Security Act--
(A) subject to paragraph (2), on the
establishment and classification of a long-term
care hospital or satellite facility, other than
an existing long-term care hospital or
facility; and
(B) subject to paragraph (3), on an increase
of long-term care hospital beds in existing
long-term care hospitals or satellite
facilities.
(2) Exception for certain long-term care hospitals.--
The moratorium under paragraph (1)(A) shall not apply
to a long-term care hospital that as of the date of the
enactment of this Act--
(A) began its qualifying period for payment
as a long-term care hospital under section
412.23(e) of title 42, Code of Federal
Regulations, on or before the date of the
enactment of this Act;
(B) has a binding written agreement with an
outside, unrelated party for the actual
construction, renovation, lease, or demolition
for a long-term care hospital, and has
expended, before the date of the enactment of
this Act, at least 10 percent of the estimated
cost of the project (or, if less, $2,500,000);
or
(C) has obtained an approved certificate of
need in a State where one is required on or
before the date of the enactment of this Act.
(3) Exception for bed increases during moratorium.--
(A) In general.--Subject to subparagraph (B),
the moratorium under paragraph (1)(B) shall not
apply to an increase in beds in an existing
hospital or satellite facility if the hospital
or facility obtained a certificate of need for
an increase in beds that is in a State for
which such certificate of need is required and
that was issued on or after April 1, 2005, and
before December 29, 2007, or if the hospital or
facility--
(i) is located in a State where there
is only one other long-term care
hospital; and
(ii) requests an increase in beds
following the closure or the decrease
in the number of beds of another long-
term care hospital in the State.
(B) No effect on certain limitation.--The
exception under subparagraph (A) shall not
effect the limitation on increasing beds under
sections 412.22(h)(3) and 412.22(f) of title
42, Code of Federal Regulations.
(4) Existing hospital or satellite facility
defined.--For purposes of this subsection, the term
``existing'' means, with respect to a hospital or
satellite facility, a hospital or satellite facility
that received payment under the provisions of subpart O
of part 412 of title 42, Code of Federal Regulations,
as of the date of the enactment of this Act.
(5) Judicial review.--There shall be no
administrative or judicial review under section 1869 of
the Social Security Act (42 U.S.C. 1395ff), section
1878 of such Act (42 U.S.C. 1395oo), or otherwise, of
the application of this subsection by the Secretary.
(6) Limitation on application of exceptions.--
Paragraphs (2) and (3) shall not apply during the
period beginning on the date of the enactment of
paragraph (7) of this subsection and ending September
30, 2017.
(7) Additional exception for certain long-term care
hospitals.--The moratorium under paragraph (1)(A) shall
not apply to a long-term care hospital that--
(A) began its qualifying period for payment
as a long-term care hospital under section
412.23(e) of title 42, Code of Federal
Regulations, on or before the date of enactment
of this paragraph;
(B) has a binding written agreement as of the
date of the enactment of this paragraph with an
outside, unrelated party for the actual
construction, renovation, lease, or demolition
for a long-term care hospital, and has
expended, before such date of enactment, at
least 10 percent of the estimated cost of the
project (or, if less, $2,500,000); or
(C) has obtained an approved certificate of
need in a State where one is required on or
before such date of enactment.
(e) Long-Term Care Hospital Payment Update.--
(1) (Omitted amendatory text)
(2) Delayed effective date.--Subsection (m)(2) of
section 1886 of the Social Security Act, as added by
paragraph (1), shall not apply to discharges occurring
on or after July 1, 2007, and before April 1, 2008.
(f) Expanded Review of Medical Necessity.--
(1) In general.--The Secretary of Health and Human
Services shall provide, under contracts with one or
more appropriate fiscal intermediaries or medicare
administrative contractors under section 1874A(a)(4)(G)
of the Social Security Act (42 U.S.C. 1395kk-
1(a)(4)(G)), for reviews of the medical necessity of
admissions to long-term care hospitals (described in
section 1886(d)(1)(B)(iv) of such Act) and continued
stay at such hospitals, of individuals entitled to, or
enrolled for, benefits under part A of title XVIII of
such Act consistent with this subsection. Such reviews
shall be made for discharges occurring on or after
October 1, 2007.
(2) Review methodology.--The medical necessity
reviews under paragraph (1) shall be conducted on an
annual basis in accordance with rules specified by the
Secretary. Such reviews shall--
(A) provide for a statistically valid and
representative sample of admissions of such
individuals sufficient to provide results at a
95 percent confidence interval; and
(B) guarantee that at least 75 percent of
overpayments received by long-term care
hospitals for medically unnecessary admissions
and continued stays of individuals in long-term
care hospitals will be identified and recovered
and that related days of care will not be
counted toward the length of stay requirement
contained in section 1886(d)(1)(B)(iv) of the
Social Security Act (42 U.S.C.
1395ww(d)(1)(B)(iv)).
(3) Continuation of reviews.--Under contracts under
this subsection, the Secretary shall establish an error
rate with respect to such reviews that could require
further review of the medical necessity of admissions
and continued stay in the hospital involved and other
actions as determined by the Secretary.
(4) Termination of required reviews.--
(A) In general.--Subject to subparagraph (B),
the previous provisions of this subsection
shall cease to apply for discharges occurring
on or after October 1, 2010.
(B) Continuation.--As of the date specified
in subparagraph (A), the Secretary shall
determine whether to continue to guarantee,
through continued medical review and sampling
under this paragraph, recovery of at least 75
percent of overpayments received by long-term
care hospitals due to medically unnecessary
admissions and continued stays.
(5) Funding.--The costs to fiscal intermediaries or
medicare administrative contractors conducting the
medical necessity reviews under paragraph (1) shall be
funded from the aggregate overpayments recouped by the
Secretary of Health and Human Services from long-term
care hospitals due to medically unnecessary admissions
and continued stays. The Secretary may use an amount
not in excess of 40 percent of the overpayments
recouped under this paragraph to compensate the fiscal
intermediaries or Medicare administrative contractors
for the costs of services performed.
(g) Implementation.--For purposes of carrying out the
provisions of, and amendments made by, this title, in addition
to any amounts otherwise provided in this title, there are
appropriated to the Centers for Medicare & Medicaid Services
Program Management Account, out of any money in the Treasury
not otherwise appropriated, $35,000,000 for the period of
fiscal years 2008 and 2009.
* * * * * * *
----------
PATHWAY FOR SGR REFORM ACT OF 2013
* * * * * * *
DIVISION B--MEDICARE AND OTHER HEALTH PROVISIONS
* * * * * * *
TITLE II--OTHER HEALTH PROVISIONS
* * * * * * *
SEC. 1206. PAYMENT FOR INPATIENT SERVICES IN LONG-TERM CARE HOSPITALS
(LTCHS).
(a) Establishment of Criteria for Application of Site Neutral
Payment.--
(1) In general.--Section 1886(m) of the Social
Security Act (42 U.S.C. 1395ww(m)) is amended by adding
at the end the following:
``(6) Application of site neutral ipps payment rate
in certain cases.--
``(A) General application of site neutral
ipps payment amount for discharges failing to
meet applicable criteria.--
``(i) In general.--For a discharge in
cost reporting periods beginning on or
after October 1, 2015, except as
provided in clause (ii) and
subparagraph (C), payment under this
title to a long-term care hospital for
inpatient hospital services shall be
made at the applicable site neutral
payment rate (as defined in
subparagraph (B)).
``(ii) Exception for certain
discharges meeting criteria.--Clause
(i) shall not apply (and payment shall
be made to a long-term care hospital
without regard to this paragraph) for a
discharge if--
``(I) the discharge meets the
ICU criterion under clause
(iii) or the ventilator
criterion under clause (iv);
and
``(II) the discharge does not
have a principal diagnosis
relating to a psychiatric
diagnosis or to rehabilitation.
``(iii) Intensive care unit (icu)
criterion.--
``(I) In general.--The
criterion specified in this
clause (in this paragraph
referred to as the `ICU
criterion'), for a discharge
from a long-term care hospital,
is that the stay in the long-
term care hospital ending with
such discharge was immediately
preceded by a discharge from a
stay in a subsection (d)
hospital that included at least
3 days in an intensive care
unit (ICU), as determined by
the Secretary.
``(II) Determining icu
days.--In determining intensive
care unit days under subclause
(I), the Secretary shall use
data from revenue center codes
020x or 021x (or such successor
codes as the Secretary may
establish).
``(iv) Ventilator criterion.--The
criterion specified in this clause (in
this paragraph referred to as the
`ventilator criterion'), for a
discharge from a long-term care
hospital, is that--
``(I) the stay in the long-
term care hospital ending with
such discharge was immediately
preceded by a discharge from a
stay in a subsection (d)
hospital; and
``(II) the individual
discharged was assigned to a
Medicare-Severity-Long-Term-
Care-Diagnosis-Related-Group
(MS-LTC-DRG) based on the
receipt of ventilator services
of at least 96 hours.
``(B) Applicable site neutral payment rate
defined.--
``(i) In general.--In this paragraph,
the term `applicable site neutral
payment rate' means--
``(I) for discharges in cost
reporting periods beginning
during fiscal year 2016 or
fiscal year 2017, the blended
payment rate specified in
clause (iii); and
``(II) for discharges in cost
reporting periods beginning
during fiscal year 2018 or a
subsequent fiscal year, the
site neutral payment rate (as
defined in clause (ii)).
``(ii) Site neutral payment rate
defined.--In this paragraph, the term
`site neutral payment rate' means the
lower of--
``(I) the IPPS comparable per
diem amount determined under
paragraph (d)(4) of section
412.529 of title 42, Code of
Federal Regulations, including
any applicable outlier payments
under section 412.525 of such
title; or
``(II) 100 percent of the
estimated cost for the services
involved.
``(iii) Blended payment rate.--The
blended payment rate specified in this
clause, for a long-term care hospital
for inpatient hospital services for a
discharge, is comprised of--
``(I) half of the site
neutral payment rate (as
defined in clause (ii)) for the
discharge; and
``(II) half of the payment
rate that would otherwise be
applicable to such discharge
without regard to this
paragraph, as determined by the
Secretary.
``(C) Limiting payment for all hospital
discharges to site neutral payment rate for
hospitals failing to meet applicable ltch
discharge thresholds.--
``(i) Notice of ltch discharge
payment percentage.--For cost reporting
periods beginning during or after
fiscal year 2016, the Secretary shall
inform each long-term care hospital of
its LTCH discharge payment percentage
(as defined in clause (iv)) for such
period.
``(ii) Limitation.--For cost
reporting periods beginning during or
after fiscal year 2020, if the
Secretary determines for a long-term
care hospital that its LTCH discharge
payment percentage for the period is
not at least 50 percent--
``(I) the Secretary shall
inform the hospital of such
fact; and
``(II) subject to clause
(iii), for all discharges in
the hospital in each succeeding
cost reporting period, the
payment amount under this
subsection shall be the payment
amount that would apply under
subsection (d) for the
discharge if the hospital were
a subsection (d) hospital.
``(iii) Process for reinstatement.--
The Secretary shall establish a process
whereby a long-term care hospital may
seek to and have the provisions of
subclause (II) of clause (ii)
discontinued with respect to that
hospital.
``(iv) LTCH discharge payment
percentage.--In this subparagraph, the
term `LTCH discharge payment
percentage' means, with respect to a
long-term care hospital for a cost
reporting period beginning during or
after fiscal year 2020, the ratio
(expressed as a percentage) of--
``(I) the number of
discharges for such hospital
and period for which payment is
not made at the site neutral
payment rate, to
``(II) the total number of
discharges for such hospital
and period.
``(D) Inclusion of subsection (d) puerto rico
hospitals.--In this paragraph, any reference in
this paragraph to a subsection (d) hospital
shall be deemed to include a reference to a
subsection (d) Puerto Rico hospital.''.
(2) Medpac study and report on impact of changes.--
(A) Study.--The Medicare Payment Advisory
Commission shall examine the effect of applying
section 1886(m)(6) of the Social Security Act,
as added by the amendment made by paragraph
(1), on--
(i) the quality of patient care in
long-term care hospitals;
(ii) the use of hospice care and
post-acute care settings;
(iii) different types of long-term
care hospitals; and
(iv) the growth in Medicare spending
for services in such hospitals.
(B) Report.--Not later than June 30, 2019,
the Commission shall submit to Congress a
report on such study. The Commission shall
include in such report such recommendations for
changes in the application of such section as
the Commission deems appropriate as well as the
impact of the application of such section on
the need to continue applying the 25 percent
rule described under sections 412.534 and
412.536 of title 42, Code of Federal
Regulations.
(3) Calculation of length of stay excluding cases
paid on a site neutral basis.--
(A) In general.--For discharges occurring in
cost reporting periods beginning on or after
October 1, 2015, subject to subparagraph (B),
in calculating the length of stay requirement
applicable to a long-term care hospital or
satellite facility under section
1886(d)(1)(B)(iv)(I) of the Social Security Act
(42 U.S.C. 1395ww(d)(1)(B)(iv)(I)) and section
1861(ccc)(2) of such Act (42 U.S.C.
1395x(ccc)(2)), the Secretary of Health and
Human Services shall exclude the following:
(i) Site neutral payment.--Any patient for
whom payment is made at the site neutral
payment rate (as defined in section
1886(m)(6)(B)(ii)) of such Act, as added by
paragraph (1)).
(ii) Medicare advantage.--Any patient for
whom payment is made under a Medicare Advantage
plan under part C of title XVIII of such Act.
(B) Limitation on converting subsection (d)
hospitals.--Subparagraph (A) shall only apply
to a hospital that is classified as of December
10, 2013, as a long-term care hospital (as
defined in section 1861(ccc) of the Social
Security Act, 42 U.S.C. 1395x(ccc)) for
purposes of determining whether the
requirements of section 1886(d)(1)(B)(iv)(I) or
1861(ccc)(2) of such Act (42 U.S.C.
1395ww(d)(1)(B)(iv)(I), 1395x(ccc)(2)) are met.
(b) Extension of Certain LTCH Payment Rules and Moratorium on
the Establishment of Certain Hospitals and Facilities.--
(1) Extension of certain payment rules.--
(A) Payment for hospitals-within-hospitals.--
Paragraph (2)(C) of section 114(c) of the
Medicare, Medicaid, and SCHIP Extension Act of
2007 (42 U.S.C. 1395ww note), as amended by
sections 3106(a) and 10312(a) of Public Law
111-148, is amended by striking ``5-year
period'' and inserting ``9-year period''.
(B) 25 PERCENT PATIENT THRESHOLD PAYMENT
ADJUSTMENT; MAKING THE GRANDFATHERED EXEMPTION
FOR LONG-TERM CARE HOSPITALS PERMANENT.--
Section 114(c)(1) of the Medicare, Medicaid,
and SCHIP Extension Act of 2007 (42 U.S.C.
1395ww note), as amended by sections 3106(a)
and 10312(a) of Public Law 111-148, is
amended--
(i) in the matter preceding
subparagraph (A), by striking ``for a
5-year period''; and
(ii) in subparagraph (A), by
inserting ``for a 9-year period,''
before ``section 412.536''.
(C) Report assessing continued suspension of
25 percent rule.--Not later than 1 year before
the end of the 9-year period referred to in
section 114(c)(1) of the Medicare, Medicaid,
and SCHIP Extension Act of 2007 (42 U.S.C.
1395ww note), as amended by subparagraph (B),
the Secretary of Health and Human Services
shall submit to Congress a report on the need
for any further extensions (or modifications of
the extensions) of the 25 percent rule
described in sections 412.534 and 412.536 of
title 42, Code of Federal Regulations,
particularly taking into account the
application of section 1886(m)(6) of the Social
Security Act, as added by subsection (a)(1).
(2) Extension of moratorium on establishment of and
increase in beds for ltchs.--Section 114(d) of the
Medicare, Medicaid, and SCHIP Extension Act of 2007 (42
U.S.C. 1395ww note), as amended by sections 3106(b) and
10312(b) of Public Law 111-148, is amended--
(A) in paragraph (1), in the matter preceding
subparagraph (A), by inserting after ``5-year
period'' the following: ``(and for the period
beginning January 1, 2015, and ending September
30, 2017)''; and
(B) by adding at the end the following new
paragraph:
``(6) Limitation on application of exceptions.--
Paragraphs (2) and (3) shall not apply during the
period beginning January 1, 2015, and ending September
30, 2017.''.
(c) Additional Quality Measure.--Section 1886(m)(5)(D) of the
Social Security Act (42 U.S.C. 1395ww(m)(5)(D)) is amended by
adding at the end the following new clause:
``(iv) Additional quality measures.--
Not later than October 1, 2015, the
Secretary shall establish a functional
status quality measure for change in
mobility among inpatients requiring
ventilator support.''.
(d) Review of Treatment of Certain LTCHs.--
(1) Evaluation.--As part of the annual rulemaking for
fiscal year 2015 or fiscal year 2016 to carry out the
payment rates under subsection (d) of section 1886 of
the Social Security Act (42 U.S.C. 1395ww), the
Secretary shall evaluate both the payment rates and
regulations governing hospitals which are classified
under subclause (II) of subsection (d)(1)(B)(iv) of
such section.
(2) Adjustment authority.--Based upon such
evaluation, the Secretary may adjust payment rates
under subsection (b)(3) of section 1886 of the Social
Security Act (42 U.S.C. 1395ww) for a hospital so
classified (such as payment based upon the TEFRA-
payment model) and may adjust the regulations governing
such hospitals, including applying the regulations
governing hospitals which are classified under clause
(I) of subsection (d)(1)(B) of such section.
* * * * * * *
----------
SOCIAL SECURITY ACT
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part E--Miscellaneous Provisions
* * * * * * *
agreements with providers of services; enrollment processes
Sec. 1866. (a)(1) Any provider of services (except a fund
designated for purposes of section 1814(g) and section 1835(e))
shall be qualified to participate under this title and shall be
eligible for payments under this title if it files with the
Secretary an agreement--
(A)(i) not to charge, except as provided in paragraph
(2), any individual or any other person for items or
services for which such individual is entitled to have
payment made under this title (or for which he would be
so entitled if such provider of services had complied
with the procedural and other requirements under or
pursuant to this title or for which such provider is
paid pursuant to the provisions of section 1814(e)),
and (ii) not to impose any charge that is prohibited
under section 1902(n)(3),
(B) not to charge any individual or any other person
for items or services for which such individual is not
entitled to have payment made under this title because
payment for expenses incurred for such items or
services may not be made by reason of the provisions of
paragraph (1) or (9) of section 1862(a), but only if
(i) such individual was without fault in incurring such
expenses and (ii) the Secretary's determination that
such payment may not be made for such items and
services was made after the third year following the
year in which notice of such payment was sent to such
individual; except that the Secretary may reduce such
three-year period to not less than one year if he finds
such reduction is consistent with the objectives of
this title,
(C) to make adequate provision for return (or other
disposition, in accordance with regulations) of any
moneys incorrectly collected from such individual or
other person,
(D) to promptly notify the Secretary of its
employment of an individual who, at any time during the
year preceding such employment, was employed in a
managerial, accounting, auditing, or similar capacity
(as determined by the Secretary by regulation) by an
agency or organization which serves as a fiscal
intermediary or carrier (for purposes of part A or part
B, or both, of this title) with respect to the
provider,
(E) to release data with respect to patients of such
provider upon request to an organization having a
contract with the Secretary under part B of title XI as
may be necessary (i) to allow such organization to
carry out its functions under such contract, or (ii) to
allow such organization to carry out similar review
functions under any contract the organization may have
with a private or public agency paying for health care
in the same area with respect to patients who authorize
release of such data for such purposes,
(F)(i) in the case of hospitals which provide
inpatient hospital services for which payment may be
made under subsection (b), (c), or (d) of section 1886,
to maintain an agreement with a professional standards
review organization (if there is such an organization
in existence in the area in which the hospital is
located) or with a quality improvement organization
which has a contract with the Secretary under part B of
title XI for the area in which the hospital is located,
under which the organization will perform functions
under that part with respect to the review of the
validity of diagnostic information provided by such
hospital, the completeness, adequacy, and quality of
care provided, the appropriateness of admissions and
discharges, and the appropriateness of care provided
for which additional payments are sought under section
1886(d)(5), with respect to inpatient hospital services
for which payment may be made under part A of this
title (and for purposes of payment under this title,
the cost of such agreement to the hospital shall be
considered a cost incurred by such hospital in
providing inpatient services under part A, and (I)
shall be paid directly by the Secretary to such
organization on behalf of such hospital in accordance
with a rate per review established by the Secretary,
(II) shall be transferred from the Federal Hospital
Insurance Trust Fund, without regard to amounts
appropriated in advance in appropriation Acts, in the
same manner as transfers are made for payment for
services provided directly to beneficiaries, and (III)
shall not be less in the aggregate for a fiscal year
than the aggregate amount expended in fiscal year 1988
for direct and administrative costs (adjusted for
inflation and for any direct or administrative costs
incurred as a result of review functions added with
respect to a subsequent fiscal year) of such reviews),
(ii) in the case of hospitals, critical access
hospitals, skilled nursing facilities, and home health
agencies, to maintain an agreement with a quality
improvement organization (which has a contract with the
Secretary under part B of title XI for the area in
which the hospital, facility, or agency is located) to
perform the functions described in paragraph (3)(A),
(G) in the case of hospitals which provide inpatient
hospital services for which payment may be made under
subsection (b) or (d) of section 1886, not to charge
any individual or any other person for inpatient
hospital services for which such individual would be
entitled to have payment made under part A but for a
denial or reduction of payments under section
1886(f)(2),
(H)(i) in the case of hospitals which provide
services for which payment may be made under this title
and in the case of critical access hospitals which
provide critical access hospital services, to have all
items and services (other than physicians' services as
defined in regulations for purposes of section
1862(a)(14), and other than services described by
section 1861(s)(2)(K), certified nurse-midwife
services, qualified psychologist services, and services
of a certified registered nurse anesthetist) (I) that
are furnished to an individual who is a patient of the
hospital, and (II) for which the individual is entitled
to have payment made under this title, furnished by the
hospital or otherwise under arrangements (as defined in
section 1861(w)(1)) made by the hospital,
(ii) in the case of skilled nursing facilities which
provide covered skilled nursing facility services--
(I) that are furnished to an individual who
is a resident of the skilled nursing facility
during a period in which the resident is
provided covered post-hospital extended care
services (or, for services described in section
1861(s)(2)(D), that are furnished to such an
individual without regard to such period), and
(II) for which the individual is entitled to
have payment made under this title,
to have items and services (other than services
described in section 1888(e)(2)(A)(ii)) furnished by
the skilled nursing facility or otherwise under
arrangements (as defined in section 1861(w)(1)) made by
the skilled nursing facility,
(I) in the case of a hospital or critical access
hospital--
(i) to adopt and enforce a policy to ensure
compliance with the requirements of section
1867 and to meet the requirements of such
section,
(ii) to maintain medical and other records
related to individuals transferred to or from
the hospital for a period of five years from
the date of the transfer, and
(iii) to maintain a list of physicians who
are on call for duty after the initial
examination to provide treatment necessary to
stabilize an individual with an emergency
medical condition,
(J) in the case of hospitals which provide inpatient
hospital services for which payment may be made under
this title, to be a participating provider of medical
care under any health plan contracted for under section
1079 or 1086 of title 10, or under section 613 of title
38, United States Code, in accordance with admission
practices, payment methodology, and amounts as
prescribed under joint regulations issued by the
Secretary and by the Secretaries of Defense and
Transportation, in implementation of sections 1079 and
1086 of title 10, United States Code,
(K) not to charge any individual or any other person
for items or services for which payment under this
title is denied under section 1154(a)(2) by reason of a
determination under section 1154(a)(1)(B),
(L) in the case of hospitals which provide inpatient
hospital services for which payment may be made under
this title, to be a participating provider of medical
care under section 603 of title 38, United States Code,
in accordance with such admission practices, and such
payment methodology and amounts, as are prescribed
under joint regulations issued by the Secretary and by
the Secretary of Veterans Affairs in implementation of
such section,
(M) in the case of hospitals, to provide to each
individual who is entitled to benefits under part A (or
to a person acting on the individual's behalf), at or
about the time of the individual's admission as an
inpatient to the hospital, a written statement
(containing such language as the Secretary prescribes
consistent with this paragraph) which explains--
(i) the individual's rights to benefits for
inpatient hospital services and for post-
hospital services under this title,
(ii) the circumstances under which such an
individual will and will not be liable for
charges for continued stay in the hospital,
(iii) the individual's right to appeal
denials of benefits for continued inpatient
hospital services, including the practical
steps to initiate such an appeal, and
(iv) the individual's liability for payment
for services if such a denial of benefits is
upheld on appeal,--and which provides such
additional information as the Secretary may
specify,
(N) in the case of hospitals and critical access
hospitals--
(i) to make available to its patients the
directory or directories of participating
physicians (published under section 1842(h)(4))
for the area served by the hospital or critical
access hospital,
(ii) if hospital personnel (including staff
of any emergency or outpatient department)
refer a patient to a nonparticipating physician
for further medical care on an outpatient
basis, the personnel must inform the patient
that the physician is a nonparticipating
physician and, whenever practicable, must
identify at least one qualified participating
physician who is listed in such a directory and
from whom the patient may receive the necessary
services,
(iii) to post conspicuously in any emergency
department a sign (in a form specified by the
Secretary) specifying rights of individuals
under section 1867 with respect to examination
and treatment for emergency medical conditions
and women in labor, and
(iv) to post conspicuously (in a form
specified by the Secretary) information
indicating whether or not the hospital
participates in the medicaid program under a
State plan approved under title XIX,
(O) to accept as payment in full for services that
are covered under this title and are furnished to any
individual enrolled with a Medicare+Choice organization
under part C, with a PACE provider under section 1894
or 1934, or with an eligible organization with a risk-
sharing contract under section 1876, under section
1876(i)(2)(A) (as in effect before February 1, 1985),
under section 402(a) of the Social Security Amendments
of 1967, or under section 222(a) of the Social Security
Amendments of 1972, which does not have a contract (or,
in the case of a PACE provider, contract or other
agreement) establishing payment amounts for services
furnished to members of the organization or PACE
program eligible individuals enrolled with the PACE
provider, the amounts that would be made as a payment
in full under this title (less any payments under
sections 1886(d)(11) and 1886(h)(3)(D)) if the
individuals were not so enrolled,
(P) in the case of home health agencies which provide
home health services to individuals entitled to
benefits under this title who require catheters,
catheter supplies, ostomy bags, and supplies related to
ostomy car (described in section 1861(m)(5)), to offer
to furnish such supplies to such an individual as part
of their furnishing of home health services,
(Q) in the case of hospitals, skilled nursing
facilities, home health agencies, and hospice programs,
to comply with the requirement of subsection (f)
(relating to maintaining written policies and
procedures respecting advance directives),
(R) to contract only with a health care clearinghouse
(as defined in section 1171) that meets each standard
and implementation specification adopted or established
under part C of title XI on or after the date on which
the health care clearinghouse is required to comply
with the standard or specification,
(S) in the case of a hospital that has a financial
interest (as specified by the Secretary in regulations)
in an entity to which individuals are referred as
described in section 1861(ee)(2)(H)(ii), or in which
such an entity has such a financial interest, or in
which another entity has such a financial interest
(directly or indirectly) with such hospital and such an
entity, to maintain and disclose to the Secretary (in a
form and manner specified by the Secretary) information
on--
(i) the nature of such financial interest,
(ii) the number of individuals who were
discharged from the hospital and who were
identified as requiring home health services,
and
(iii) the percentage of such individuals who
received such services from such provider (or
another such provider),
(T) in the case of hospitals and critical access
hospitals, to furnish to the Secretary such data as the
Secretary determines appropriate pursuant to
subparagraph (E) of section 1886(d)(12) to carry out
such section,
(U) in the case of hospitals which furnish inpatient
hospital services for which payment may be made under
this title, to be a participating provider of medical
care both--
(i) under the contract health services
program funded by the Indian Health Service and
operated by the Indian Health Service, an
Indian tribe, or tribal organization (as those
terms are defined in section 4 of the Indian
Health Care Improvement Act), with respect to
items and services that are covered under such
program and furnished to an individual eligible
for such items and services under such program;
and
(ii) under any program funded by the Indian
Health Service and operated by an urban Indian
organization with respect to the purchase of
items and services for an eligible urban Indian
(as those terms are defined in such section 4),
in accordance with regulations promulgated by the
Secretary regarding admission practices, payment
methodology, and rates of payment (including the
acceptance of no more than such payment rate as payment
in full for such items and services,
(V) in the case of hospitals that are not otherwise
subject to the Occupational Safety and Health Act of
1970 (or a State occupational safety and health plan
that is approved under 18(b) of such Act), to comply
with the Bloodborne Pathogens standard under section
1910.1030 of title 29 of the Code of Federal
Regulations (or as subsequently redesignated),
(W)\60\ in the case of a hospital described
in section 1886(d)(1)(B)(v), to report quality
data to the Secretary in accordance with
subsection (k),
---------------------------------------------------------------------------
\60\Margin for subparagraph (W) (as added by section 3005(1)(C) of
Public Law 111-148) so in law. Also, the placement of subparagraph (W)
reflects the probable intent of Congress. The amendment insertion
instruction provides to insert this subparagraph at the end of
paragraph (1), which includes continuation text at the end following
these subparagraphs.
---------------------------------------------------------------------------
(X)\61\ maintain and, upon request of the
Secretary, provide access to documentation
relating to written orders or requests for
payment for durable medical equipment,
certifications for home health services, or
referrals for other items or services written
or ordered by the provider under this title, as
specified by the Secretary, and
---------------------------------------------------------------------------
\61\Margin for subparagraph (X) (as added as a subparagraph (W) by
section 6406(b)(3) of Public Law 111-148 and redesignated by section
2(3)(A) of Public Law 114-42) so in law.
---------------------------------------------------------------------------
(Y) beginning 12 months after the date of the
enactment of this subparagraph, in the case of a
hospital or critical access hospital, with respect to
each individual who receives observation services as an
outpatient at such hospital or critical access hospital
for more than 24 hours, to provide to such individual
not later than 36 hours after the time such individual
begins receiving such services (or, if sooner, upon
release)--
(i) such oral explanation of the written
notification described in clause (ii), and such
documentation of the provision of such
explanation, as the Secretary determines to be
appropriate;
(ii) a written notification (as specified by
the Secretary pursuant to rulemaking and
containing such language as the Secretary
prescribes consistent with this paragraph)
which--
(I) explains the status of the
individual as an outpatient receiving
observation services and not as an
inpatient of the hospital or critical
access hospital and the reasons for
such status of such individual;
(II) explains the implications of
such status on services furnished by
the hospital or critical access
hospital (including services furnished
on an inpatient basis), such as
implications for cost-sharing
requirements under this title and for
subsequent eligibility for coverage
under this title for services furnished
by a skilled nursing facility;
(III) includes such additional
information as the Secretary determines
appropriate;
(IV) either--
(aa) is signed by such
individual or a person acting
on such individual's behalf to
acknowledge receipt of such
notification; or
(bb) if such individual or
person refuses to provide the
signature described in item
(aa), is signed by the staff
member of the hospital or
critical access hospital who
presented the written
notification and includes the
name and title of such staff
member, a certification that
the notification was presented,
and the date and time the
notification was presented; and
(V) is written and formatted using
plain language and is made available in
appropriate languages as determined by
the Secretary.
In the case of a hospital which has an agreement in effect with
an organization described in subparagraph (F), which
organization's contract with the Secretary under part B of
title XI is terminated on or after October 1, 1984, the
hospital shall not be determined to be out of compliance with
the requirement of such subparagraph during the six month
period beginning on the date of the termination of that
contract.
(2)(A) A provider of services may charge such individual or
other person (i) the amount of any deduction or coinsurance
amount imposed pursuant to section 1813(a)(1), (a)(3), or
(a)(4), section 1833(b), or section 1861(y)(3) with respect to
such items and services (not in excess of the amount
customarily charged for such items and services by such
provider), and (ii) an amount equal to 20 per centum of the
reasonable charges for such items and services (not in excess
of 20 per centum of the amount customarily charged for such
items and services by such provider) for which payment is made
under part B or which are durable medical equipment furnished
as home health services (but in the case of items and services
furnished to individuals with end-stage renal disease, an
amount equal to 20 percent of the estimated amounts for such
items and services calculated on the basis established by the
Secretary). In the case of items and services described in
section 1833(c), clause (ii) of the preceding sentence shall be
applied by substituting for 20 percent the proportion which is
appropriate under such section. A provider of services may not
impose a charge under clause (ii) of the first sentence of this
subparagraph with respect to items and services described in
section 1861(s)(10)(A) and with respect to clinical diagnostic
laboratory tests for which payment is made under part B.
Notwithstanding the first sentence of this subparagraph, a home
health agency may charge such an individual or person, with
respect to covered items subject to payment under section
1834(a), the amount of any deduction imposed under section
1833(b) and 20 percent of the payment basis described in
section 1834(a)(1)(B). In the case of items and services for
which payment is made under part B under the prospective
payment system established under section 1833(t), clause (ii)
of the first sentence shall be applied by substituting for 20
percent of the reasonable charge, the applicable copayment
amount established under section 1833(t)(5). In the case of
services described in section 1833(a)(8) or section 1833(a)(9)
for which payment is made under part B under section 1834(k),
clause (ii) of the first sentence shall be applied by
substituting for 20 percent of the reasonable charge for such
services 20 percent of the lesser of the actual charge or the
applicable fee schedule amount (as defined in such section) for
such services.
(B) Where a provider of services has furnished, at the
request of such individual, items or services which are in
excess of or more expensive than the items or services with
respect to which payment may be made under this title, such
provider of services may also charge such individual or other
person for such more expensive items or services to the extent
that the amount customarily charged by it for the items or
services furnished at such request exceeds the amount
customarily charged by it for the items or services with
respect to which payment may be made under this title.
(C) A provider of services may in accordance with its
customary practice also appropriately charge any such
individual for any whole blood (or equivalent quantities of
packed red blood cells, as defined under regulations) furnished
him with respect to which a deductible is imposed under section
1813(a)(2), except that (i) any excess of such charge over the
cost to such provider for the blood (or equivalent quantities
of packed red blood cells, as so defined) shall be deducted
from any payment to such provider under this title, (ii) no
such charge may be imposed for the cost of administration of
such blood (or equivalent quantities of packed red blood cells,
as so defined), and (iii) such charge may not be made to the
extent such blood (or equivalent quantities of packed red blood
cells, as so defined) has been replaced on behalf of such
individual or arrangements have been made for its replacement
on his behalf. For purposes of subparagraph (C), whole blood
(or equivalent quantities of packed red blood cells, as so
defined) furnished an individual shall be deemed replaced when
the provider of services is given one pint of blood for each
pint of blood (or equivalent quantities of packed red blood
cells, as so defined) furnished such individual with respect to
which a deduction is imposed under section 1813(a)(2).
(D) Where a provider of services customarily furnishes items
or services which are in excess of or more expensive than the
items or services with respect to which payment may be made
under this title, such provider, notwithstanding the preceding
provisions of this paragraph, may not, under the authority of
section 1866(a)(2)(B)(ii), charge any individual or other
person any amount for such items or services in excess of the
amount of the payment which may otherwise be made for such
items or services under this title if the admitting physician
has a direct or indirect financial interest in such provider.
(3)(A) Under the agreement required under paragraph
(1)(F)(ii), the quality improvement organization must perform
functions (other than those covered under an agreement under
paragraph (1)(F)(i)) under the third sentence of section
1154(a)(4)(A) and under section 1154(a)(14) with respect to
services, furnished by the hospital, critical access hospital,
facility, or agency involved, for which payment may be made
under this title.
(B) For purposes of payment under this title, the cost of
such an agreement to the hospital, critical access hospital,
facility, or agency shall be considered a cost incurred by such
hospital, critical access hospital, facility, or agency in
providing covered services under this title and shall be paid
directly by the Secretary to the quality improvement
organization on behalf of such hospital, critical access
hospital, facility, or agency in accordance with a schedule
established by the Secretary.
(C) Such payments--
(i) shall be transferred in appropriate proportions
from the Federal Hospital Insurance Trust Fund and from
the Federal Supplementary Medical Insurance Trust Fund,
without regard to amounts appropriated in advance in
appropriation Acts, in the same manner as transfers are
made for payment for services provided directly to
beneficiaries, and
(ii) shall not be less in the aggregate for a fiscal
year--
(I) in the case of hospitals, than the amount
specified in paragraph (1)(F)(i)(III), and
(II) in the case of facilities, critical
access hospitals, and agencies, than the
amounts the Secretary determines to be
sufficient to cover the costs of such
organizations' conducting the activities
described in subparagraph (A) with respect to
such facilities, critical access hospitals, or
agencies under part B of title XI.
(b)(1) A provider of services may terminate an agreement with
the Secretary under this section at such time and upon such
notice to the Secretary and the public as may be provided in
regulations, except that notice of more than six months shall
not be required.
(2) The Secretary may refuse to enter into an agreement under
this section or, upon such reasonable notice to the provider
and the public as may be specified in regulations, may refuse
to renew or may terminate such an agreement after the
Secretary--
(A) has determined that the provider fails to comply
substantially with the provisions of the agreement,
with the provisions of this title and regulations
thereunder, or with a corrective action required under
section 1886(f)(2)(B),
(B) has determined that the provider fails
substantially to meet the applicable provisions of
section 1861,
(C) has excluded the provider from participation in a
program under this title pursuant to section 1128 or
section 1128A, or
(D) has ascertained that the provider has been
convicted of a felony under Federal or State law for an
offense which the Secretary determines is detrimental
to the best interests of the program or program
beneficiaries.
(3) A termination of an agreement or a refusal to renew an
agreement under this subsection shall become effective on the
same date and in the same manner as an exclusion from
participation under the programs under this title becomes
effective under section 1128(c).
(4)(A) A hospital that fails to comply with the requirement
of subsection (a)(1)(V) (relating to the Bloodborne Pathogens
standard) is subject to a civil money penalty in an amount
described in subparagraph (B), but is not subject to
termination of an agreement under this section.
(B) The amount referred to in subparagraph (A) is an amount
that is similar to the amount of civil penalties that may be
imposed under section 17 of the Occupational Safety and Health
Act of 1970 for a violation of the Bloodborne Pathogens
standard referred to in subsection (a)(1)(U) by a hospital that
is subject to the provisions of such Act.
(C) A civil money penalty under this paragraph shall be
imposed and collected in the same manner as civil money
penalties under subsection (a) of section 1128A are imposed and
collected under that section.
(c)(1) Where the Secretary has terminated or has refused to
renew an agreement under this title with a provider of
services, such provider may not file another agreement under
this title unless the Secretary finds that the reason for the
termination or nonrenewal has been removed and that there is
reasonable assurance that it will not recur.
(2) Where the Secretary has terminated or has refused to
renew an agreement under this title with a provider of
services, the Secretary shall promptly notify each State agency
which administers or supervises the administration of a State
plan approved under title XIX of such termination or
nonrenewal.
(d) If the Secretary finds that there is a substantial
failure to make timely review in accordance with section
1861(k) of long-stay cases in a hospital, he may, in lieu of
terminating his agreement with such hospital, decide that, with
respect to any individual admitted to such hospital after a
subsequent date specified by him, no payment shall be made
under this title for inpatient hospital services (including
inpatient psychiatric hospital services) after the 20th day of
a continuous period of such services. Such decision may be made
effective only after such notice to the hospital and to the
public, as may be prescribed by regulations, and its
effectiveness shall terminate when the Secretary finds that the
reason therefor has been removed and that there is reasonable
assurance that it will not recur. The Secretary shall not make
any such decision except after reasonable notice and
opportunity for hearing to the institution or agency affected
thereby.
(e) For purposes of this section, the term ``provider of
services'' shall include--
(1) a clinic, rehabilitation agency, or public health
agency if, in the case of a clinic or rehabilitation
agency, such clinic or agency meets the requirements of
section 1861(p)(4)(A) (or meets the requirements of
such section through the operation of subsection (g) or
(ll)(2) of section 1861), or if, in the case of a
public health agency, such agency meets the
requirements of section 1861(p)(4)(B) (or meets the
requirements of such section through the operation of
subsection (g) or (ll)(2) of section 1861), but only
with respect to the furnishing of outpatient physical
therapy services (as therein defined), (through the
operation of section 1861(g)) with respect to the
furnishing of outpatient occupational therapy services,
or (through the operation of section 1861(ll)(2)) with
respect to the furnishing of outpatient speech-language
pathology; and
(2) a community mental health center (as defined in
section 1861(ff)(3)(B)), but only with respect to the
furnishing of partial hospitalization services (as
described in section 1861(ff)(1)).
(f)(1) For purposes of subsection (a)(1)(Q) and sections
1819(c)(2)(E), 1833(s), 1855(i), 1876(c)(8), and 1891(a)(6),
the requirement of this subsection is that a provider of
services, Medicare+Choice organization, or prepaid or eligible
organization (as the case may be) maintain written policies and
procedures with respect to all adult individuals receiving
medical care by or through the provider or organization--
(A) to provide written information to each such
individual concerning--
(i) an individual's rights under State law
(whether statutory or as recognized by the
courts of the State) to make decisions
concerning such medical care, including the
right to accept or refuse medical or surgical
treatment and the right to formulate advance
directives (as defined in paragraph (3)), and
(ii) the written policies of the provider or
organization respecting the implementation of
such rights;
(B) to document in a prominent part of the
individual's current medical record whether or not the
individual has executed an advance directive;
(C) not to condition the provision of care or
otherwise discriminate against an individual based on
whether or not the individual has executed an advance
directive;
(D) to ensure compliance with requirements of State
law (whether statutory or as recognized by the courts
of the State) respecting advance directives at
facilities of the provider or organization; and
(E) to provide (individually or with others) for
education for staff and the community on issues
concerning advance directives.
Subparagraph (C) shall not be construed as requiring the
provision of care which conflicts with an advance directive.
(2) The written information described in paragraph (1)(A)
shall be provided to an adult individual--
(A) in the case of a hospital, at the time of the
individual's admission as an inpatient,
(B) in the case of a skilled nursing facility, at the
time of the individual's admission as a resident,
(C) in the case of a home health agency, in advance
of the individual coming under the care of the agency,
(D) in the case of a hospice program, at the time of
initial receipt of hospice care by the individual from
the program, and
(E) in the case of an eligible organization (as
defined in section 1876(b)) or an organization provided
payments under section 1833(a)(1)(A) or a
Medicare+Choice organization, at the time of enrollment
of the individual with the organization.
(3) In this subsection, the term ``advance directive'' means
a written instruction, such as a living will or durable power
of attorney for health care, recognized under State law
(whether statutory or as recognized by the courts of the State)
and relating to the provision of such care when the individual
is incapacitated.
(4) For construction relating to this subsection, see section
7 of the Assisted Suicide Funding Restriction Act of 1997
(relating to clarification respecting assisted suicide,
euthanasia, and mercy killing).
(g) Except as permitted under subsection (a)(2), any person
who knowingly and willfully presents, or causes to be
presented, a bill or request for payment inconsistent with an
arrangement under subsection (a)(1)(H) or in violation of the
requirement for such an arrangement, is subject to a civil
money penalty of not to exceed $2,000. The provisions of
section 1128A (other than subsections (a) and (b)) shall apply
to a civil money penalty under the previous sentence in the
same manner as such provisions apply to a penalty or proceeding
under section 1128A(a).
(h)(1)(A) Except as provided in paragraph (2), an institution
or agency dissatisfied with a determination by the Secretary
that it is not a provider of services or with a determination
described in subsection (b)(2) shall be entitled to a hearing
thereon by the Secretary (after reasonable notice) to the same
extent as is provided in section 205(b), and to judicial review
of the Secretary's final decision after such hearing as is
provided in section 205(g), except that, in so applying such
sections and in applying section 205(l) thereto, any reference
therein to the Commissioner of Social Security or the Social
Security Administration shall be considered a reference to the
Secretary or the Department of Health and Human Services,
respectively.
(B) An institution or agency described in subparagraph (A)
that has filed for a hearing under subparagraph (A) shall have
expedited access to judicial review under this subparagraph in
the same manner as providers of services, suppliers, and
individuals entitled to benefits under part A or enrolled under
part B, or both, may obtain expedited access to judicial review
under the process established under section 1869(b)(2). Nothing
in this subparagraph shall be construed to affect the
application of any remedy imposed under section 1819 during the
pendency of an appeal under this subparagraph.
(C)(i) The Secretary shall develop and implement a process to
expedite proceedings under this subsection in which--
(I) the remedy of termination of participation has
been imposed;
(II) a remedy described in clause (i) or (iii) of
section 1819(h)(2)(B) has been imposed, but only if
such remedy has been imposed on an immediate basis; or
(III) a determination has been made as to a finding
of substandard quality of care that results in the loss
of approval of a skilled nursing facility's nurse aide
training program.
(ii) Under such process under clause (i), priority shall be
provided in cases of termination described in clause (i)(I).
(iii) Nothing in this subparagraph shall be construed to
affect the application of any remedy imposed under section 1819
during the pendency of an appeal under this subparagraph.
(2) An institution or agency is not entitled to separate
notice and opportunity for a hearing under both section 1128
and this section with respect to a determination or
determinations based on the same underlying facts and issues.
(i)(1) If the Secretary determines that a psychiatric
hospital which has an agreement in effect under this section no
longer meets the requirements for a psychiatric hospital under
this title and further finds that the hospital's deficiencies--
(A) immediately jeopardize the health and safety of
its patients, the Secretary shall terminate such
agreement; or
(B) do not immediately jeopardize the health and
safety of its patients, the Secretary may terminate
such agreement, or provide that no payment will be made
under this title with respect to any individual
admitted to such hospital after the effective date of
the finding, or both.
(2) If a psychiatric hospital, found to have deficiencies
described in paragraph (1)(B), has not complied with the
requirements of this title--
(A) within 3 months after the date the hospital is
found to be out of compliance with such requirements,
the Secretary shall provide that no payment will be
made under this title with respect to any individual
admitted to such hospital after the end of such 3-month
period, or
(B) within 6 months after the date the hospital is
found to be out of compliance with such requirements,
no payment may be made under this title with respect to
any individual in the hospital until the Secretary
finds that the hospital is in compliance with the
requirements of this title.
(j) Enrollment Process for Providers of Services and
Suppliers.--
(1) Enrollment process.--
(A) In general.--The Secretary shall
establish by regulation a process for the
enrollment of providers of services and
suppliers under this title. Such process shall
include screening of providers and suppliers in
accordance with paragraph (2), a provisional
period of enhanced oversight in accordance with
paragraph (3), disclosure requirements in
accordance with paragraph (4), the imposition
of temporary enrollment moratoria in accordance
with paragraph (5), and the establishment of
compliance programs in accordance with
paragraph (6).
(B) Deadlines.--The Secretary shall establish
by regulation procedures under which there are
deadlines for actions on applications for
enrollment (and, if applicable, renewal of
enrollment). The Secretary shall monitor the
performance of medicare administrative
contractors in meeting the deadlines
established under this subparagraph.
(C) Consultation before changing provider
enrollment forms.--The Secretary shall consult
with providers of services and suppliers before
making changes in the provider enrollment forms
required of such providers and suppliers to be
eligible to submit claims for which payment may
be made under this title.
(2) Provider screening.--
(A) Procedures.--Not later than 180 days
after the date of enactment of this paragraph,
the Secretary, in consultation with the
Inspector General of the Department of Health
and Human Services, shall establish procedures
under which screening is conducted with respect
to providers of medical or other items or
services and suppliers under the program under
this title, the Medicaid program under title
XIX, and the CHIP program under title XXI.
(B) Level of screening.--The Secretary shall
determine the level of screening conducted
under this paragraph according to the risk of
fraud, waste, and abuse, as determined by the
Secretary, with respect to the category of
provider of medical or other items or services
or supplier. Such screening--
(i) shall include a licensure check,
which may include such checks across
States; and
(ii) may, as the Secretary determines
appropriate based on the risk of fraud,
waste, and abuse described in the
preceding sentence, include--
(I) a criminal background
check;
(II) fingerprinting;
(III) unscheduled and
unannounced site visits,
including preenrollment site
visits;
(IV) database checks
(including such checks across
States); and
(V) such other screening as
the Secretary determines
appropriate.
(C) Application fees.--
(i) Institutional providers.--Except
as provided in clause (ii), the
Secretary shall impose a fee on each
institutional provider of medical or
other items or services or supplier
(such as a hospital or skilled nursing
facility) with respect to which
screening is conducted under this
paragraph in an amount equal to--
(I) for 2010, $500; and
(II) for 2011 and each
subsequent year, the amount
determined under this clause
for the preceding year,
adjusted by the percentage
change in the consumer price
index for all urban consumers
(all items; United States city
average) for the 12-month
period ending with June of the
previous year.
(ii) Hardship exception; waiver for
certain medicaid providers.--The
Secretary may, on a case-by-case basis,
exempt a provider of medical or other
items or services or supplier from the
imposition of an application fee under
this subparagraph if the Secretary
determines that the imposition of the
application fee would result in a
hardship. The Secretary may waive the
application fee under this subparagraph
for providers enrolled in a State
Medicaid program for whom the State
demonstrates that imposition of the fee
would impede beneficiary access to
care.
(iii) Use of funds.--Amounts
collected as a result of the imposition
of a fee under this subparagraph shall
be used by the Secretary for program
integrity efforts, including to cover
the costs of conducting screening under
this paragraph and to carry out this
subsection and section 1128J.
(D) Application and enforcement.--
(i) New providers of services and
suppliers.--The screening under this
paragraph shall apply, in the case of a
provider of medical or other items or
services or supplier who is not
enrolled in the program under this
title, title XIX, or title XXI as of
the date of enactment of this
paragraph, on or after the date that is
1 year after such date of enactment.
(ii) Current providers of services
and suppliers.--The screening under
this paragraph shall apply, in the case
of a provider of medical or other items
or services or supplier who is enrolled
in the program under this title, title
XIX, or title XXI as of such date of
enactment, on or after the date that is
2 years after such date of enactment.
(iii) Revalidation of enrollment.--
Effective beginning on the date that is
180 days after such date of enactment,
the screening under this paragraph
shall apply with respect to the
revalidation of enrollment of a
provider of medical or other items or
services or supplier in the program
under this title, title XIX, or title
XXI.
(iv) Limitation on enrollment and
revalidation of enrollment.--In no case
may a provider of medical or other
items or services or supplier who has
not been screened under this paragraph
be initially enrolled or reenrolled in
the program under this title, title
XIX, or title XXI on or after the date
that is 3 years after such date of
enactment.
(E) Use of information from the department of
treasury concerning tax debts.--In reviewing
the application of a provider of services or
supplier to enroll or reenroll under the
program under this title, the Secretary shall
take into account the information supplied by
the Secretary of the Treasury pursuant to
section 6103(l)(22) of the Internal Revenue
Code of 1986, in determining whether to deny
such application or to apply enhanced oversight
to such provider of services or supplier
pursuant to paragraph (3) if the Secretary
determines such provider of services or
supplier owes such a debt.
(F) Expedited rulemaking.--The Secretary may
promulgate an interim final rule to carry out
this paragraph.
(3) Provisional period of enhanced oversight for new
providers of services and suppliers.--
(A) In general.--The Secretary shall
establish procedures to provide for a
provisional period of not less than 30 days and
not more than 1 year during which new providers
of medical or other items or services and
suppliers, as the Secretary determines
appropriate, including categories of providers
or suppliers, would be subject to enhanced
oversight, such as prepayment review and
payment caps, under the program under this
title, the Medicaid program under title XIX.
and the CHIP program under title XXI.
(B) Implementation.--The Secretary may
establish by program instruction or otherwise
the procedures under this paragraph.
(4) 90-day period of enhanced oversight for initial
claims of dme suppliers.--For periods beginning after
January 1, 2011, if the Secretary determines that there
is a significant risk of fraudulent activity among
suppliers of durable medical equipment, in the case of
a supplier of durable medical equipment who is within a
category or geographic area under title XVIII
identified pursuant to such determination and who is
initially enrolling under such title, the Secretary
shall, notwithstanding sections 1816(c), 1842(c), and
1869(a)(2), withhold payment under such title with
respect to durable medical equipment furnished by such
supplier during the 90-day period beginning on the date
of the first submission of a claim under such title for
durable medical equipment furnished by such supplier.
(5) Increased disclosure requirements.--
(A) Disclosure.--A provider of medical or
other items or services or supplier who submits
an application for enrollment or revalidation
of enrollment in the program under this title,
title XIX, or title XXI on or after the date
that is 1 year after the date of enactment of
this paragraph shall disclose (in a form and
manner and at such time as determined by the
Secretary) any current or previous affiliation
(directly or indirectly) with a provider of
medical or other items or services or supplier
that has uncollected debt, has been or is
subject to a payment suspension under a Federal
health care program (as defined in section
1128B(f)), has been excluded from participation
under the program under this title, the
Medicaid program under title XIX, or the CHIP
program under title XXI, or has had its billing
privileges denied or revoked.
(B) Authority to deny enrollment.--If the
Secretary determines that such previous
affiliation poses an undue risk of fraud,
waste, or abuse, the Secretary may deny such
application. Such a denial shall be subject to
appeal in accordance with paragraph (7).
(6) Authority to adjust payments of providers of
services and suppliers with the same tax identification
number for medicare obligations.--
(A) In general.--Notwithstanding any other
provision of this title, in the case of an
applicable provider of services or supplier,
the Secretary may make any necessary
adjustments to payments to the applicable
provider of services or supplier under the
program under this title in order to satisfy
any amount described in subparagraph (B)(ii)
due from such obligated provider of services or
supplier.
(B) Definitions.--In this paragraph:
(i) In general.--The term
``applicable provider of services or
supplier'' means a provider of services
or supplier that has the same taxpayer
identification number assigned under
section 6109 of the Internal Revenue
Code of 1986 as is assigned to the
obligated provider of services or
supplier under such section, regardless
of whether the applicable provider of
services or supplier is assigned a
different billing number or national
provider identification number under
the program under this title than is
assigned to the obligated provider of
services or supplier.
(ii) Obligated provider of services
or supplier.--The term ``obligated
provider of services or supplier''
means a provider of services or
supplier that owes an amount that is
more than the amount required to be
paid under the program under this title
(as determined by the Secretary).
(7) Temporary moratorium on enrollment of new
providers.--
(A) In general.--The Secretary may impose a
temporary moratorium on the enrollment of new
providers of services and suppliers, including
categories of providers of services and
suppliers, in the program under this title,
under the Medicaid program under title XIX, or
under the CHIP program under title XXI if the
Secretary determines such moratorium is
necessary to prevent or combat fraud, waste, or
abuse under either such program.
(B) Limitation on review.--There shall be no
judicial review under section 1869, section
1878, or otherwise, of a temporary moratorium
imposed under subparagraph (A).
(8) Compliance programs.--
(A) In general.--On or after the date of
implementation determined by the Secretary
under subparagraph (C), a provider of medical
or other items or services or supplier within a
particular industry sector or category shall,
as a condition of enrollment in the program
under this title, title XIX, or title XXI,
establish a compliance program that contains
the core elements established under
subparagraph (B) with respect to that provider
or supplier and industry or category.
(B) Establishment of core elements.--The
Secretary, in consultation with the Inspector
General of the Department of Health and Human
Services, shall establish core elements for a
compliance program under subparagraph (A) for
providers or suppliers within a particular
industry or category.
(C) Timeline for implementation.--The
Secretary shall determine the timeline for the
establishment of the core elements under
subparagraph (B) and the date of the
implementation of subparagraph (A) for
providers or suppliers within a particular
industry or category. The Secretary shall, in
determining such date of implementation,
consider the extent to which the adoption of
compliance programs by a provider of medical or
other items or services or supplier is
widespread in a particular industry sector or
with respect to a particular provider or
supplier category.
(8)\62\ Hearing rights in cases of denial or non-
renewal.--A provider of services or supplier whose
application to enroll (or, if applicable, to renew
enrollment) under this title is denied may have a
hearing and judicial review of such denial under the
procedures that apply under subsection (h)(1)(A) to a
provider of services that is dissatisfied with a
determination by the Secretary.
---------------------------------------------------------------------------
\62\Two paragraph (8)s' so in law. See amendments made by section
6401 of Public Law 111-148 and section 1304 of Public Law 111-152.
---------------------------------------------------------------------------
(k) Quality Reporting by Cancer Hospitals.--
(1) In general.--For purposes of fiscal year 2014 and
each subsequent fiscal year, a hospital described in
section 1886(d)(1)(B)(v) shall submit data to the
Secretary in accordance with paragraph (2) with respect
to such a fiscal year.
(2) Submission of quality data.--For fiscal year 2014
and each subsequent fiscal year, each hospital
described in such section shall submit to the Secretary
data on quality measures specified under paragraph (3).
Such data shall be submitted in a form and manner, and
at a time, specified by the Secretary for purposes of
this subparagraph.
(3) Quality measures.--
(A) In general.--Subject to subparagraph (B),
any measure specified by the Secretary under
this paragraph must have been endorsed by the
entity with a contract under section 1890(a).
(B) Exception.--In the case of a specified
area or medical topic determined appropriate by
the Secretary for which a feasible and
practical measure has not been endorsed by the
entity with a contract under section 1890(a),
the Secretary may specify a measure that is not
so endorsed as long as due consideration is
given to measures that have been endorsed or
adopted by a consensus organization identified
by the Secretary.
(C) Time frame.--Not later than October 1,
2012, the Secretary shall publish the measures
selected under this paragraph that will be
applicable with respect to fiscal year 2014.
(4) Public availability of data submitted.--The
Secretary shall establish procedures for making data
submitted under paragraph (4) available to the public.
Such procedures shall ensure that a hospital described
in section 1886(d)(1)(B)(v) has the opportunity to
review the data that is to be made public with respect
to the hospital prior to such data being made public.
The Secretary shall report quality measures of process,
structure, outcome, patients' perspective on care,
efficiency, and costs of care that relate to services
furnished in such hospitals on the Internet website of
the Centers for Medicare & Medicaid Services.
* * * * * * *
payment to hospitals for inpatient hospital services
Sec. 1886. (a)(1)(A)(i) The Secretary, in determining the
amount of the payments that may be made under this title with
respect to operating costs of inpatient hospital services (as
defined in paragraph (4)) shall not recognize as reasonable (in
the efficient delivery of health services) costs for the
provision of such services by a hospital for a cost reporting
period to the extent such costs exceed the applicable
percentage (as determined under clause (ii)) of the average of
such costs for all hospitals in the same grouping as such
hospital for comparable time periods.
(ii) For purposes of clause (i), the applicable percentage
for hospital cost reporting periods beginning--
(I) on or after October 1, 1982, and before October
1, 1983, is 120 percent;
(II) on or after October 1, 1983, and before October
1, 1984, is 115 percent; and
(III) on or after October 1, 1984, is 110 percent.
(B)(i) For purposes of subparagraph (A) the Secretary shall
establish case mix indexes for all short- term hospitals, and
shall set limits for each hospital based upon the general mix
of types of medical cases with respect to which such hospital
provides services for which payment may be made under this
title.
(ii) The Secretary shall set such limits for a cost reporting
period of a hospital--
(I) by updating available data for a previous period
to the immediate preceding cost reporting period by the
estimated average rate of change of hospital costs
industry-wide, and
(II) by projecting for the cost reporting period by
the applicable percentage increase (as defined in
subsection (b)(3)(B)).
(C) The limitation established under subparagraph (A) for any
hospital shall in no event be lower than the allowable
operating costs of inpatient hospital services (as defined in
paragraph (4)) recognized under this title for such hospital
for such hospital's last cost reporting period prior to the
hospital's first cost reporting period for which this section
is in effect.
(D) Subparagraph (A) shall not apply to cost reporting
periods beginning on or after October 1, 1983.
(2) The Secretary shall provide for such exemptions from, and
exceptions and adjustments to, the limitation established under
paragraph (1)(A) as he deems appropriate, including those which
he deems necessary to take into account--
(A) the special needs of sole community hospitals, of
new hospitals, of risk based health maintenance
organizations, and of hospitals which provide atypical
services or essential community services, and to take
into account extraordinary circumstances beyond the
hospital's control, medical and paramedical education
costs, significantly fluctuating population in the
service area of the hospital, and unusual labor costs,
(B) the special needs of psychiatric hospitals and of
public or other hospitals that serve a significantly
disproportionate number of patients who have low income
or are entitled to benefits under part A of this title,
and
(C) a decrease in the inpatient hospital services
that a hospital provides and that are customarily
provided directly by similar hospitals which results in
a significant distortion in the operating costs of
inpatient hospital services.
(3) The limitation established under paragraph (1)(A) shall
not apply with respect to any hospital which--
(A) is located outside of a standard metropolitan
statistical area, and
(B)(i) has less than 50 beds, and
(ii) was in operation and had less than 50 beds on
the date of the enactment of this section.
(4) For purposes of this section, the term ``operating costs
of inpatient hospital services'' includes all routine operating
costs, ancillary service operating costs, and special care unit
operating costs with respect to inpatient hospital services as
such costs are determined on an average per admission or per
discharge basis (as determined by the Secretary), and includes
the costs of all services for which payment may be made under
this title that are provided by the hospital (or by an entity
wholly owned or operated by the hospital) to the patient during
the 3 days (or, in the case of a hospital that is not a
subsection (d) hospital, during the 1 day) immediately
preceding the date of the patient's admission if such services
are diagnostic services (including clinical diagnostic
laboratory tests) or are other services related to the
admission (as defined by the Secretary). Such term does not
include costs of approved educational activities, a return on
equity capital, or, other capital-related costs (as defined by
the Secretary for periods before October 1, 1987). In applying
the first sentence of this paragraph, the term ``other services
related to the admission'' includes all services that are not
diagnostic services (other than ambulance and maintenance renal
dialysis services) for which payment may be made under this
title that are provided by a hospital (or an entity wholly
owned or operated by the hospital) to a patient--
(A)\71\ on the date of the patient's inpatient
admission; or
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\71\Margins so in law.
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(B) during the 3 days (or, in the case of a hospital
that is not a subsection (d) hospital, during the 1
day) immediately preceding the date of such admission
unless the hospital demonstrates (in a form and manner,
and at a time, specified by the Secretary) that such
services are not related (as determined by the
Secretary) to such admission.
(b)(1) Notwithstanding section 1814(b) but subject to the
provisions of section 1813, if the operating costs of inpatient
hospital services (as defined in subsection (a)(4)) of a
hospital (other than a subsection (d) hospital, as defined in
subsection (d)(1)(B) and other than a rehabilitation facility
described in subsection (j)(1)) for a cost reporting period
subject to this paragraph--
(A) are less than or equal to the target amount (as
defined in paragraph (3)) for that hospital for that
period, the amount of the payment with respect to such
operating costs payable under part A on a per discharge
or per admission basis (as the case may be) shall be
equal to the amount of such operating costs, plus--
(i) 15 percent of the amount by which the
target amount exceeds the amount of the
operating costs, or
(ii) 2 percent of the target amount,
whichever is less;
(B) are greater than the target amount but do not
exceed 110 percent of the target amount, the amount of
the payment with respect to those operating costs
payable under part A on a per discharge basis shall
equal the target amount; or
(C) are greater than 110 percent of the target
amount, the amount of the payment with respect to such
operating costs payable under part A on a per discharge
or per admission basis (as the case may be) shall be
equal to (i) the target amount, plus (ii) in the case
of cost reporting periods beginning on or after October
1, 1991, an additional amount equal to 50 percent of
the amount by which the operating costs exceed 110
percent of the target amount (except that such
additional amount may not exceed 10 percent of the
target amount) after any exceptions or adjustments are
made to such target amount for the cost reporting
period;
plus the amount, if any, provided under paragraph (2), except
that in no case may the amount payable under this title (other
than on the basis of a DRG prospective payment rate determined
under subsection (d)) with respect to operating costs of
inpatient hospital services exceed the maximum amount payable
with respect to such costs pursuant to subsection (a).
(2)(A) Except as provided in subparagraph (E), in addition to
the payment computed under paragraph (1), in the case of an
eligible hospital (described in subparagraph (B)) for a cost
reporting period beginning on or after October 1, 1997, the
amount of payment on a per discharge basis under paragraph (1)
shall be increased by the lesser of--
(i) 50 percent of the amount by which the operating
costs are less than the expected costs (as defined in
subparagraph (D)) for the period; or
(ii) 1 percent of the target amount for the period.
(B) For purposes of this paragraph, an ``eligible hospital''
means with respect to a cost reporting period, a hospital--
(i) that has received payments under this subsection
for at least 3 full cost reporting periods before that
cost reporting period, and
(ii) whose operating costs for the period are less
than the least of its target amount, its trended costs
(as defined in subparagraph (C)), or its expected costs
(as defined in subparagraph (D)) for the period.
(C) For purposes of subparagraph (B)(ii), the term ``trended
costs'' means for a hospital cost reporting period ending in a
fiscal year--
(i) in the case of a hospital for which its cost
reporting period ending in fiscal year 1996 was its
third or subsequent full cost reporting period for
which it receives payments under this subsection, the
lesser of the operating costs or target amount for that
hospital for its cost reporting period ending in fiscal
year 1996, or
(ii) in the case of any other hospital, the operating
costs for that hospital for its third full cost
reporting period for which it receives payments under
this subsection,
increased (in a compounded manner) for each succeeding fiscal
year (through the fiscal year involved) by the market basket
percentage increase for the fiscal year.
(D) For purposes of this paragraph, the term ``expected
costs'', with respect to the cost reporting period ending in a
fiscal year, means the lesser of the operating costs of
inpatient hospital services or target amount per discharge for
the previous cost reporting period updated by the market basket
percentage increase (as defined in paragraph (3)(B)(iii)) for
the fiscal year.
(E)(i) In the case of an eligible hospital that is a hospital
or unit that is within a class of hospital described in clause
(ii) with a 12-month cost reporting period beginning before the
enactment of this subparagraph, in determining the amount of
the increase under subparagraph (A), the Secretary shall
substitute for the percentage of the target amount applicable
under subparagraph (A)(ii)--
(I) for a cost reporting period beginning on or after
October 1, 2000, and before September 30, 2001, 1.5
percent; and
(II) for a cost reporting period beginning on or
after October 1, 2001, and before September 30, 2002, 2
percent.
(ii) For purposes of clause (i), each of the following shall
be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(II) Hospitals described in clause (iv) of such
subsection.
(3)(A) Except as provided in subparagraph (C) and succeeding
subparagraphs and in paragraph (7)(A)(ii), for purposes of this
subsection, the term ``target amount'' means, with respect to a
hospital for a particular 12-month cost reporting period--
(i) in the case of the first such reporting period
for which this subsection is in effect, the allowable
operating costs of inpatient hospital services (as
defined in subsection (a)(4)) recognized under this
title for such hospital for the preceding 12-month cost
reporting period, and
(ii) in the case of a later reporting period, the
target amount for the preceding 12-month cost reporting
period,
increased by the applicable percentage increase under
subparagraph (B) for that particular cost reporting period.
(B)(i) For purposes of subsection (d) and subsection (j) for
discharges occurring during a fiscal year, the ``applicable
percentage increase'' shall be--
(I) for fiscal year 1986, \1/2\ percent,
(II) for fiscal year 1987, 1.15 percent,
(III) for fiscal year 1988, 3.0 percent for hospitals
located in a rural area, 1.5 percent for hospitals
located in a large urban area (as defined in subsection
(d)(2)(D)), and 1.0 percent for hospitals located in
other urban areas,
(IV) for fiscal year 1989, the market basket
percentage increase minus 1.5 percentage points for
hospitals located in a rural area, the market basket
percentage increase minus 2.0 percentage points for
hospitals located in a large urban area, and the market
basket percentage increase minus 2.5 percentage points
for hospitals located in other urban areas,
(V) for fiscal year 1990, the market basket
percentage increase plus 4.22 percentage points for
hospitals located in a rural area, the market basket
percentage increase plus 0.12 percentage points for
hospitals located in a large urban area, and the market
basket percentage increase minus 0.53 percentage points
for hospitals located in other urban areas,
(VI) for fiscal year 1991, the market basket
percentage increase minus 2.0 percentage points for
hospitals in a large urban or other urban area, and the
market basket percentage increase minus 0.7 percentage
point for hospitals located in a rural area,
(VII) for fiscal year 1992, the market basket
percentage increase minus 1.6 percentage points for
hospitals in a large urban or other urban area, and the
market basket percentage increase minus 0.6 percentage
point for hospitals located in a rural area,
(VIII) for fiscal year 1993, the market basket
percentage increase minus 1.55 percentage point for
hospitals in a large urban or other urban area, and the
market basket percentage increase minus 0.55 for
hospitals located in a rural area,
(IX) for fiscal year 1994, the market basket
percentage increase minus 2.5 percentage points for
hospitals located in a large urban or other urban area,
and the market basket percentage increase minus 1.0
percentage point for hospitals located in a rural area,
(X) for fiscal year 1995, the market basket
percentage increase minus 2.5 percentage points for
hospitals located in a large urban or other urban area,
and such percentage increase for hospitals located in a
rural area as will provide for the average standardized
amount determined under subsection (d)(3)(A) for
hospitals located in a rural area being equal to such
average standardized amount for hospitals located in an
urban area (other than a large urban area),
(XI) for fiscal year 1996, the market basket
percentage increase minus 2.0 percentage points for
hospitals in all areas,
(XII) for fiscal year 1997, the market basket
percentage increase minus 0.5 percentage point for
hospitals in all areas,
(XIII) for fiscal year 1998, 0 percent,
(XIV) for fiscal year 1999, the market basket
percentage increase minus 1.9 percentage points for
hospitals in all areas,
(XV) for fiscal year 2000, the market basket
percentage increase minus 1.8 percentage points for
hospitals in all areas,
(XVI) for fiscal year 2001, the market basket
percentage increase for hospitals in all areas,
(XVII) for fiscal year 2002, the market basket
percentage increase minus 0.55 percentage points for
hospitals in all areas,
(XVIII) for fiscal year 2003, the market basket
percentage increase minus 0.55 percentage points for
hospitals in all areas,
(XIX) for each of fiscal years 2004 through 2006,
subject to clause (vii), the market basket percentage
increase for hospitals in all areas; and
(XX) for each subsequent fiscal year, subject to
clauses (viii), (ix), (xi), and (xii), the market
basket percentage increase for hospitals in all areas.
(ii) For purposes of subparagraphs (A) and (E), the
``applicable percentage increase'' for 12-month cost reporting
periods beginning during--
(I) fiscal year 1986, is 0.5 percent,
(II) fiscal year 1987, is 1.15 percent,
(III) fiscal year 1988, is the market basket
percentage increase minus 2.0 percentage points,
(IV) a subsequent fiscal year ending on or before
September 30, 1993, is the market basket percentage
increase,
(V) fiscal years 1994 through 1997, is the market
basket percentage increase minus the applicable
reduction (as defined in clause (v)(II)), or in the
case of a hospital for a fiscal year for which the
hospital's update adjustment percentage (as defined in
clause (v)(I)) is at least 10 percent, the market
basket percentage increase,
(VI) for fiscal year 1998, is 0 percent,
(VII) for fiscal years 1999 through 2002, is the
applicable update factor specified under clause (vi)
for the fiscal year, and
(VIII) subsequent fiscal years is the market basket
percentage increase.
(iii) For purposes of this subparagraph, the term ``market
basket percentage increase'' means, with respect to cost
reporting periods and discharges occurring in a fiscal year,
the percentage, estimated by the Secretary before the beginning
of the period or fiscal year, by which the cost of the mix of
goods and services (including personnel costs but excluding
nonoperating costs) comprising routine, ancillary, and special
care unit inpatient hospital services, based on an index of
appropriately weighted indicators of changes in wages and
prices which are representative of the mix of goods and
services included in such inpatient hospital services, for the
period or fiscal year will exceed the cost of such mix of goods
and services for the preceding 12-month cost reporting period
or fiscal year.
(iv) For purposes of subparagraphs (C) and (D), the
``applicable percentage increase'' is--
(I) for 12-month cost reporting periods beginning
during fiscal years 1986 through 1993, the applicable
percentage increase specified in clause (ii),
(II) for fiscal year 1994, the market basket
percentage increase minus 2.3 percentage points
(adjusted to exclude any portion of a cost reporting
period beginning during fiscal year 1993 for which the
applicable percentage increase is determined under
subparagraph (I)),
(III) for fiscal year 1995, the market basket
percentage increase minus 2.2 percentage points, and
(IV) for fiscal year 1996 and each subsequent fiscal
year, the applicable percentage increase under clause
(i).
(v) For purposes of clause (ii)(V)--
(I) a hospital's ``update adjustment percentage'' for
a fiscal year is the percentage by which the hospital's
allowable operating costs of inpatient hospital
services recognized under this title for the cost
reporting period beginning in fiscal year 1990 exceeds
the hospital's target amount (as determined under
subparagraph (A)) for such cost reporting period,
increased for each fiscal year (beginning with fiscal
year 1994) by the sum of any of the hospital's
applicable reductions under subclause (V) for previous
fiscal years; and
(II) the ``applicable reduction'' with respect to a
hospital for a fiscal year is the lesser of 1
percentage point or the percentage point difference
between 10 percent and the hospital's update adjustment
percentage for the fiscal year.
(vi) For purposes of clause (ii)(VII) for a fiscal year, if a
hospital's allowable operating costs of inpatient hospital
services recognized under this title for the most recent cost
reporting period for which information is available--
(I) is equal to, or exceeds, 110 percent of the
hospital's target amount (as determined under
subparagraph (A)) for such cost reporting period, the
applicable update factor specified under this clause is
the market basket percentage;
(II) exceeds 100 percent, but is less than 110
percent, of such target amount for the hospital, the
applicable update factor specified under this clause is
0 percent or, if greater, the market basket percentage
minus 0.25 percentage points for each percentage point
by which such allowable operating costs (expressed as a
percentage of such target amount) is less than 110
percent of such target amount;
(III) is equal to, or less than 100 percent, but
exceeds \2/3\ of such target amount for the hospital,
the applicable update factor specified under this
clause is 0 percent or, if greater, the market basket
percentage minus 2.5 percentage points; or
(IV) does not exceed \2/3\ of such target amount for
the hospital, the applicable update factor specified
under this clause is 0 percent.
(vii)(I) For purposes of clause (i)(XIX) for fiscal years
2005 and 2006, in a case of a subsection (d) hospital that does
not submit data to the Secretary in accordance with subclause
(II) with respect to such a fiscal year, the applicable
percentage increase under such clause for such fiscal year
shall be reduced by 0.4 percentage points. Such reduction shall
apply only with respect to the fiscal year involved, and the
Secretary shall not take into account such reduction in
computing the applicable percentage increase under clause
(i)(XIX) for a subsequent fiscal year.
(II) For fiscal years 2005 and 2006, each subsection (d)
hospital shall submit to the Secretary quality data (for a set
of 10 indicators established by the Secretary as of November 1,
2003) that relate to the quality of care furnished by the
hospital in inpatient settings in a form and manner, and at a
time, specified by the Secretary for purposes of this clause,
but with respect to fiscal year 2005, the Secretary shall
provide for a 30-day grace period for the submission of data by
a hospital.
(viii)(I) For purposes of clause (i) for fiscal year 2007 and
each subsequent fiscal year, in the case of a subsection (d)
hospital that does not submit, to the Secretary in accordance
with this clause, data required to be submitted on measures
selected under this clause with respect to such a fiscal year,
the applicable percentage increase under clause (i) for such
fiscal year shall be reduced by 2.0 percentage points (or,
beginning with fiscal year 2015, by one-quarter of such
applicable percentage increase (determined without regard to
clause (ix), (xi), or (xii))). Such reduction shall apply only
with respect to the fiscal year involved and the Secretary
shall not take into account such reduction in computing the
applicable percentage increase under clause (i) for a
subsequent fiscal year, and the Secretary and the Medicare
Payment Advisory Commission shall carry out the requirements
under section 5001(b) of the Deficit Reduction Act of 2005.
(II) Each subsection (d) hospital shall submit data on
measures selected under this clause to the Secretary in a form
and manner, and at a time, specified by the Secretary for
purposes of this clause. The Secretary may require hospitals to
submit data on measures that are not used for the determination
of value-based incentive payments under subsection (o).
(III) The Secretary shall expand, beyond the measures
specified under clause (vii)(II) and consistent with the
succeeding subclauses, the set of measures that the Secretary
determines to be appropriate for the measurement of the quality
of care (including medication errors) furnished by hospitals in
inpatient settings.
(IV) Effective for payments beginning with fiscal year 2007,
in expanding the number of measures under subclause (III), the
Secretary shall begin to adopt the baseline set of performance
measures as set forth in the November 2005 report by the
Institute of Medicine of the National Academy of Sciences under
section 238(b) of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003.
(V) Effective for payments for fiscal years 2008 through
2012, the Secretary shall add other measures that reflect
consensus among affected parties and, to the extent feasible
and practicable, shall include measures set forth by one or
more national consensus building entities.
(VI) For purposes of this clause and clause (vii), the
Secretary may replace any measures or indicators in appropriate
cases, such as where all hospitals are effectively in
compliance or the measures or indicators have been subsequently
shown not to represent the best clinical practice.
(VII) The Secretary shall establish procedures for making
information regarding measures submitted under this clause
available to the public. Such procedures shall ensure that a
hospital has the opportunity to review the data that are to be
made public with respect to the hospital prior to such data
being made public. The Secretary shall report quality measures
of process, structure, outcome, patients' perspectives on care,
efficiency, and costs of care that relate to services furnished
in inpatient settings in hospitals on the Internet website of
the Centers for Medicare & Medicaid Services.
(VIII) Effective for payments beginning with fiscal year
2013, with respect to quality measures for outcomes of care,
the Secretary shall provide for such risk adjustment as the
Secretary determines to be appropriate to maintain incentives
for hospitals to treat patients with severe illnesses or
conditions.
(IX)(aa) Subject to item (bb), effective for payments
beginning with fiscal year 2013, each measure specified by the
Secretary under this clause shall be endorsed by the entity
with a contract under section 1890(a).
(bb) In the case of a specified area or medical topic
determined appropriate by the Secretary for which a feasible
and practical measure has not been endorsed by the entity with
a contract under section 1890(a), the Secretary may specify a
measure that is not so endorsed as long as due consideration is
given to measures that have been endorsed or adopted by a
consensus organization identified by the Secretary.
(X) To the extent practicable, the Secretary shall, with
input from consensus organizations and other stakeholders, take
steps to ensure that the measures specified by the Secretary
under this clause are coordinated and aligned with quality
measures applicable to--
(aa) physicians under section 1848(k); and
(bb) other providers of services and suppliers under
this title.
(XI) The Secretary shall establish a process to validate
measures specified under this clause as appropriate. Such
process shall include the auditing of a number of randomly
selected hospitals sufficient to ensure validity of the
reporting program under this clause as a whole and shall
provide a hospital with an opportunity to appeal the validation
of measures reported by such hospital.
(ix)(I) For purposes of clause (i) for fiscal year 2015 and
each subsequent fiscal year, in the case of an eligible
hospital (as defined in subsection (n)(6)(B)\72\) that is not a
meaningful EHR user (as defined in subsection (n)(3)) for an
EHR reporting period for such fiscal year, three-quarters of
the applicable percentage increase otherwise applicable under
clause (i) (determined without regard to clause (viii), (xi),
or (xii)) for such fiscal year shall be reduced by 33\1/3\
percent for fiscal year 2015, 66\2/3\ percent for fiscal year
2016, and 100 percent for fiscal year 2017 and each subsequent
fiscal year. Such reduction shall apply only with respect to
the fiscal year involved and the Secretary shall not take into
account such reduction in computing the applicable percentage
increase under clause (i) for a subsequent fiscal year.
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\72\Section 4(b)(1) of the Patient Access and Medicare Protection
Act (P.L. 114-115) attempts to amend the first sentence of clause
(ix)(I) by striking ``(n)(6)(A)'' and inserting ``(n)(6)''. Such
amendment could not be executed because the matter proposed to be
struck does not appear as a result of an earlier amendment made by
section 602(b)(1)(A) of division O of Public Law 114-113, which struck
``(n)(6)(A)'' and inserted ``(n)(6)(B)''.
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(II) The Secretary may, on a case-by-case basis (and, with
respect to the application of subclause (I) for fiscal year
2017, for categories of subsection (d) hospitals, as
established by the Secretary and posted on the Internet website
of the Centers for Medicare & Medicaid Services prior to
December 15, 2015, an application for which must be submitted
to the Secretary by not later than April 1, 2016), exempt an
eligible hospital from the application of subclause (I) with
respect to a fiscal year if the Secretary determines, subject
to annual renewal, that requiring such hospital to be a
meaningful EHR user during such fiscal year would result in a
significant hardship, such as in the case of a hospital in a
rural area without sufficient Internet access. In no case may a
hospital be granted an exemption under this subclause for more
than 5 years.
(III) For fiscal year 2015 and each subsequent fiscal year, a
State in which hospitals are paid for services under section
1814(b)(3) shall adjust the payments to each subsection (d)
hospital in the State that is not a meaningful EHR user (as
defined in subsection (n)(3)) in a manner that is designed to
result in an aggregate reduction in payments to hospitals in
the State that is equivalent to the aggregate reduction that
would have occurred if payments had been reduced to each
subsection (d) hospital in the State in a manner comparable to
the reduction under the previous provisions of this clause. The
State shall report to the Secretary the methodology it will use
to make the payment adjustment under the previous sentence.
(IV) For purposes of this clause, the term ``EHR reporting
period'' means, with respect to a fiscal year, any period (or
periods) as specified by the Secretary.
(x)(I) The Secretary shall develop standard Internet website
reports tailored to meet the needs of various stakeholders such
as hospitals, patients, researchers, and policymakers. The
Secretary shall seek input from such stakeholders in
determining the type of information that is useful and the
formats that best facilitate the use of the information.
(II) The Secretary shall modify the Hospital Compare Internet
website to make the use and navigation of that website readily
available to individuals accessing it.
(xi)(I) For 2012 and each subsequent fiscal year, after
determining the applicable percentage increase described in
clause (i) and after application of clauses (viii) and (ix),
such percentage increase shall be reduced by the productivity
adjustment described in subclause (II).
(II) The productivity adjustment described in this subclause,
with respect to a percentage, factor, or update for a fiscal
year, year, cost reporting period, or other annual period, is a
productivity adjustment equal to the 10-year moving average of
changes in annual economy-wide private nonfarm business multi-
factor productivity (as projected by the Secretary for the 10-
year period ending with the applicable fiscal year, year, cost
reporting period, or other annual period).
(III) The application of subclause (I) may result in the
applicable percentage increase described in clause (i) being
less than 0.0 for a fiscal year, and may result in payment
rates under this section for a fiscal year being less than such
payment rates for the preceding fiscal year.
(xii) After determining the applicable percentage increase
described in clause (i), and after application of clauses
(viii), (ix), and (xi), the Secretary shall reduce such
applicable percentage increase--
(I) for each of fiscal years 2010 and 2011, by 0.25
percentage point;
(II) for each of fiscal years 2012 and 2013, by 0.1
percentage point;
(III) for fiscal year 2014, by 0.3 percentage point;
(IV) for each of fiscal years 2015 and 2016, by 0.2
percentage point; and
(V) for each of fiscal years 2017, 2018, and 2019, by
0.75 percentage point.
The application of this clause may result in the applicable
percentage increase described in clause (i) being less than 0.0
for a fiscal year, and may result in payment rates under this
section for a fiscal year being less than such payment rates
for the preceding fiscal year.
(C) In the case of a hospital that is a sole community
hospital (as defined in subsection (d)(5)(D)(iii)), subject to
subparagraphs (I) and (L), the term ``target amount'' means--
(i) with respect to the first 12-month cost reporting
period in which this subparagraph is applied to the
hospital--
(I) the allowable operating costs of
inpatient hospital services (as defined in
subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost
reporting period (in this subparagraph referred
to as the ``base cost reporting period'')
preceding the first cost reporting period for
which this subsection was in effect with
respect to such hospital, increased (in a
compounded manner) by--
(II) the applicable percentage increases
applied to such hospital under this paragraph
for cost reporting periods after the base cost
reporting period and up to and including such
first 12-month cost reporting period,
(ii) with respect to a later cost reporting period
beginning before fiscal year 1994, the target amount
for the preceding 12-month cost reporting period,
increased by the applicable percentage increase under
subparagraph (B)(iv) for discharges occurring in the
fiscal year in which that later cost reporting period
begins,
(iii) with respect to discharges occurring in fiscal
year 1994, the target amount for the cost reporting
period beginning in fiscal year 1993 increased by the
applicable percentage increase under subparagraph
(B)(iv), or
(iv) with respect to discharges occurring in fiscal
year 1995 and each subsequent fiscal year, the target
amount for the preceding year increased by the
applicable percentage increase under subparagraph
(B)(iv).
There shall be substituted for the base cost reporting period
described in clause (i) a hospital's cost reporting period (if
any) beginning during fiscal year 1987 if such substitution
results in an increase in the target amount for the hospital.
(D) For cost reporting periods ending on or before September
30, 1994, and for cost reporting periods occurring on or after
October 1, 1997, and before October 1, 2017, in the case of a
hospital that is a medicare-dependent, small rural hospital (as
defined in subsection (d)(5)(G)), subject to subparagraph (K),
the term ``target amount'' means--
(i) with respect to the first 12-month cost reporting
period in which this subparagraph is applied to the
hospital--
(I) the allowable operating costs of
inpatient hospital services (as defined in
subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost
reporting period (in this subparagraph referred
to as the ``base cost reporting period'')
preceding the first cost reporting period for
which this subsection was in effect with
respect to such hospital, increased (in a
compounded manner) by--
(II) the applicable percentage increases
applied to such hospital under this paragraph
for cost reporting periods after the base cost
reporting period and up to and including such
first 12-month cost reporting period, or
(ii) with respect to a later cost reporting period
beginning before fiscal year 1994, the target amount
for the preceding 12-month cost reporting period,
increased by the applicable percentage increase under
subparagraph (B)(iv) for discharges occurring in the
fiscal year in which that later cost reporting period
begins,
(iii) with respect to discharges occurring in fiscal
year 1994, the target amount for the cost reporting
period beginning in fiscal year 1993 increased by the
applicable percentage increase under subparagraph
(B)(iv), and
(iv) with respect to discharges occurring during
fiscal year 1998 through fiscal year 2017, the target
amount for the preceding year increased by the
applicable percentage increase under subparagraph
(B)(iv).
There shall be substituted for the base cost reporting period
described in clause (i) a hospital's cost reporting period (if
any) beginning during fiscal year 1987 if such substitution
results in an increase in the target amount for the hospital.
(E) In the case of a hospital described in clause (v) of
subsection (d)(1)(B), the term ``target amount'' means--
(i) with respect to the first 12-month cost reporting
period in which this subparagraph is applied to the
hospital--
(I) the allowable operating costs of
inpatient hospital services (as defined in
subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost
reporting period (in this subparagraph referred
to as the ``base cost reporting period'')
preceding the first cost reporting period for
which this subsection was in effect with
respect to such hospital, increased (in a
compounded manner) by--
(II) the sum of the applicable percentage
increases applied to such hospital under this
paragraph for cost reporting periods after the
base cost reporting period and up to and
including such first 12-month cost reporting
period, or
(ii) with respect to a later cost reporting period,
the target amount for the preceding 12-month cost
reporting period, increased by the applicable
percentage increase under subparagraph (B)(ii) for that
later cost reporting period.
There shall be substituted for the base cost reporting period
described in clause (i) a hospital's cost reporting period (if
any) beginning during fiscal year 1987 if such substitution
results in an increase in the target amount for the hospital.
(F)(i) In the case of a hospital (or unit described in the
matter following clause (v) of subsection (d)(1)(B)) that
received payment under this subsection for inpatient hospital
services furnished during cost reporting periods beginning
before October 1, 1990, that is within a class of hospital
described in clause (iii), and that elects (in a form and
manner determined by the Secretary) this subparagraph to apply
to the hospital, the target amount for the hospital's 12-month
cost reporting period beginning during fiscal year 1998 is
equal to the average described in clause (ii).
(ii) The average described in this clause for a hospital or
unit shall be determined by the Secretary as follows:
(I) The Secretary shall determine the allowable
operating costs for inpatient hospital services for the
hospital or unit for each of the 5 cost reporting
periods for which the Secretary has the most recent
settled cost reports as of the date of the enactment of
this subparagraph.
(II) The Secretary shall increase the amount
determined under subclause (I) for each cost reporting
period by the applicable percentage increase under
subparagraph (B)(ii) for each subsequent cost reporting
period up to the cost reporting period described in
clause (i).
(III) The Secretary shall identify among such 5 cost
reporting periods the cost reporting periods for which
the amount determined under subclause (II) is the
highest, and the lowest.
(IV) The Secretary shall compute the averages of the
amounts determined under subclause (II) for the 3 cost
reporting periods not identified under subclause (III).
(iii) For purposes of this subparagraph, each of the
following shall be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(II) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the
matter following clause (v) of such subsection.
(III) Hospitals described in clause (iii) of such
subsection.
(IV) Hospitals described in clause (iv) of such
subsection.
(V) Hospitals described in clause (v) of such
subsection.
(G)(i) In the case of a qualified long-term care hospital (as
defined in clause (ii)) that elects (in a form and manner
determined by the Secretary) this subparagraph to apply to the
hospital, the target amount for the hospital's 12-month cost
reporting period beginning during fiscal year 1998 is equal to
the allowable operating costs of inpatient hospital services
(as defined in subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost reporting period
beginning during fiscal year 1996, increased by the applicable
percentage increase for the cost reporting period beginning
during fiscal year 1997.
(ii) In clause (i), a ``qualified long-term care hospital''
means, with respect to a cost reporting period, a hospital
described in clause (iv) of subsection (d)(1)(B) during each of
the 2 cost reporting periods for which the Secretary has the
most recent settled cost reports as of the date of the
enactment of this subparagraph for each of which--
(I) the hospital's allowable operating costs of
inpatient hospital services recognized under this title
exceeded 115 percent of the hospital's target amount,
and
(II) the hospital would have a disproportionate
patient percentage of at least 70 percent (as
determined by the Secretary under subsection
(d)(5)(F)(vi)) if the hospital were a subsection (d)
hospital.
(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 beginning during fiscal years 1998 through
2002, the target amount for such a hospital or unit may not
exceed the amount as updated up to or for such cost reporting
period under clause (ii).
(ii)(I) In the case of a hospital or unit that is within a
class of hospital described in clause (iv), the Secretary shall
estimate the 75th percentile of the target amounts for such
hospitals within such class for cost reporting periods ending
during fiscal year 1996, as adjusted under clause (iii).
(II) The Secretary shall update the amount determined under
subclause (I), for each cost reporting period after the cost
reporting period described in such subclause and up to the
first cost reporting period beginning on or after October 1,
1997, by a factor equal to the market basket percentage
increase.
(III) For cost reporting periods beginning during each of
fiscal years 1999 through 2002, subject to subparagraph (J),
the Secretary shall update such amount by a factor equal to the
market basket percentage increase.
(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.
(iv) For purposes of this subparagraph, each of the following
shall be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(II) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the
matter following clause (v) of such subsection.
(III) Hospitals described in clause (iv) of such
subsection.
(I)(i) Subject to subparagraph (L), for cost reporting
periods beginning on or after October 1, 2000, in the case of a
sole community hospital there shall be substituted for the
amount otherwise determined under subsection (d)(5)(D)(i), if
such substitution results in a greater amount of payment under
this section for the hospital--
(I) with respect to discharges occurring in fiscal
year 2001, 75 percent of the amount otherwise
applicable to the hospital under subsection
(d)(5)(D)(i) (referred to in this clause as the
``subsection (d)(5)(D)(i) amount'') and 25 percent of
the rebased target amount (as defined in clause (ii));
(II) with respect to discharges occurring in fiscal
year 2002, 50 percent of the subsection (d)(5)(D)(i)
amount and 50 percent of the rebased target amount;
(III) with respect to discharges occurring in fiscal
year 2003, 25 percent of the subsection (d)(5)(D)(i)
amount and 75 percent of the rebased target amount; and
(IV) with respect to discharges occurring after
fiscal year 2003, 100 percent of the rebased target
amount.
(ii) For purposes of this subparagraph, the ``rebased target
amount'' has the meaning given the term ``target amount'' in
subparagraph (C) except that--
(I) there shall be substituted for the base cost
reporting period the 12-month cost reporting period
beginning during fiscal year 1996;
(II) any reference in subparagraph (C)(i) to the
``first cost reporting period'' described in such
subparagraph is deemed a reference to the first cost
reporting period beginning on or after October 1, 2000;
and
(III) applicable increase percentage shall only be
applied under subparagraph (C)(iv) for discharges
occurring in fiscal years beginning with fiscal year
2002.
(iii) In no case shall a hospital be denied treatment as a
sole community hospital or payment (on the basis of a target
rate as such as a hospital) because data are unavailable for
any cost reporting period due to changes in ownership, changes
in fiscal intermediaries, or other extraordinary circumstances,
so long as data for at least one applicable base cost reporting
period is available.
(J) For cost reporting periods beginning during fiscal year
2001, for a hospital described in subsection (d)(1)(B)(iv)--
(i) the limiting or cap amount otherwise determined
under subparagraph (H) shall be increased by 2 percent;
and
(ii) the target amount otherwise determined under
subparagraph (A) shall be increased by 25 percent
(subject to the limiting or cap amount determined under
subparagraph (H), as increased by clause (i)).
(K)(i) With respect to discharges occurring on or after
October 1, 2006, in the case of a medicare-dependent, small
rural hospital, for purposes of applying subparagraph (D)--
(I) there shall be substituted for the base cost
reporting period described in subparagraph (D)(i) the
12-month cost reporting period beginning during fiscal
year 2002; and
(II) any reference in such subparagraph to the
``first cost reporting period'' described in such
subparagraph is deemed a reference to the first cost
reporting period beginning on or after October 1, 2006.
(ii) This subparagraph shall only apply to a hospital if the
substitution described in clause (i)(I) results in an increase
in the target amount under subparagraph (D) for the hospital.
(L)(i) For cost reporting periods beginning on or after
January 1, 2009, in the case of a sole community hospital there
shall be substituted for the amount otherwise determined under
subsection (d)(5)(D)(i) of this section, if such substitution
results in a greater amount of payment under this section for
the hospital, the subparagraph (L) rebased target amount.
(ii) For purposes of this subparagraph, the term
``subparagraph (L) rebased target amount'' has the meaning
given the term ``target amount'' in subparagraph (C), except
that--
(I) there shall be substituted for the base cost
reporting period the 12-month cost reporting period
beginning during fiscal year 2006;
(II) any reference in subparagraph (C)(i) to the
``first cost reporting period'' described in such
subparagraph is deemed a reference to the first cost
reporting period beginning on or after January 1, 2009;
and
(III) the applicable percentage increase shall only
be applied under subparagraph (C)(iv) for discharges
occurring on or after January 1, 2009.
(4)(A)(i) The Secretary shall provide for an exception and
adjustment to (and in the case of a hospital described in
subsection (d)(1)(B)(iii), may provide an exemption from) the
method under this subsection for determining the amount of
payment to a hospital where events beyond the hospital's
control or extraordinary circumstances, including changes in
the case mix of such hospital, create a distortion in the
increase in costs for a cost reporting period (including any
distortion in the costs for the base period against which such
increase is measured). The Secretary may provide for such other
exemptions from, and exceptions and adjustments to, such method
as the Secretary deems appropriate, including the assignment of
a new base period which is more representative, as determined
by the Secretary, of the reasonable and necessary cost of
inpatient services and including those which he deems necessary
to take into account a decrease in the inpatient hospital
services that a hospital provides and that are customarily
provided directly by similar hospitals which results in a
significant distortion in the operating costs of inpatient
hospital services. The Secretary shall announce a decision on
any request for an exemption, exception, or adjustment under
this paragraph not later than 180 days after receiving a
completed application from the intermediary for such exemption,
exception, or adjustment, and shall include in such decision a
detailed explanation of the grounds on which such request was
approved or denied.
(ii) The payment reductions under paragraph (3)(B)(ii)(V)
shall not be considered by the Secretary in making adjustments
pursuant to clause (i). In making such reductions, the
Secretary shall treat the applicable update factor described in
paragraph (3)(B)(vi) for a fiscal year as being equal to the
market basket percentage for that year.
(B) In determining under subparagraph (A) whether to assign a
new base period which is more representative of the reasonable
and necessary cost to a hospital of providing inpatient
services, the Secretary shall take into consideration--
(i) changes in applicable technologies and medical
practices, or differences in the severity of illness
among patients, that increase the hospital's costs;
(ii) whether increases in wages and wage-related
costs for hospitals located in the geographic area in
which the hospital is located exceed the average of the
increases in such costs paid by hospitals in the United
States; and
(iii) such other factors as the Secretary considers
appropriate in determining increases in the hospital's
costs of providing inpatient services.
(C) Paragraph (1) shall not apply to payment of hospitals
which is otherwise determined under paragraph (3) of section
1814(b).
(5) In the case of any hospital having any cost reporting
period of other than a 12-month period, the Secretary shall
determine the 12-month period which shall be used for purposes
of this section.
(6) In the case of any hospital which becomes subject to the
taxes under section 3111 of the Internal Revenue Code of 1954,
with respect to any or all of its employees, for part or all of
a cost reporting period, and was not subject to such taxes with
respect to any or all of its employees for all or part of the
12-month base cost reporting period referred to in subsection
(b)(3)(A)(i), the Secretary shall provide for an adjustment by
increasing the base period amount described in such subsection
for such hospital by an amount equal to the amount of such
taxes which would have been paid or accrued by such hospital
for such base period if such hospital had been subject to such
taxes for all of such base period with respect to all its
employees, minus the amount of any such taxes actually paid or
accrued for such base period.
(7)(A) Notwithstanding paragraph (1), in the case of a
hospital or unit that is within a class of hospital described
in subparagraph (B) which first receives payments under this
section on or after October 1, 1997--
(i) for each of the first 2 cost reporting periods
for which the hospital has a settled cost report, the
amount of the payment with respect to operating costs
described in paragraph (1) under part A on a per
discharge or per admission basis (as the case may be)
is equal to the lesser of--
(I) the amount of operating costs for such
respective period, or
(II) 110 percent of the national median (as
estimated by the Secretary) of the target
amount for hospitals in the same class as the
hospital for cost reporting periods ending
during fiscal year 1996, updated by the
hospital market basket increase percentage to
the fiscal year in which the hospital first
received payments under this section, as
adjusted under subparagraph (C); and
(ii) for purposes of computing the target amount for
the subsequent cost reporting period, the target amount
for the preceding cost reporting period is equal to the
amount determined under clause (i) for such preceding
period.
(B) For purposes of this paragraph, each of the following
shall be treated as a separate class of hospital:
(i) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(ii) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the
matter following clause (v) of such subsection.
(iii) Hospitals described in clause (iv) of such
subsection.
(C) In applying subparagraph (A)(i)(II) 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.
(c)(1) The Secretary may provide, in his discretion, that
payment with respect to services provided by a hospital in a
State may be made in accordance with a hospital reimbursement
control system in a State, rather than in accordance with the
other provisions of this title, if the chief executive officer
of the State requests such treatment and if--
(A) the Secretary determines that the system, if
approved under this subsection, will apply (i) to
substantially all non- Federal acute care hospitals (as
defined by the Secretary) in the State and (ii) to the
review of at least 75 percent of all revenues or
expenses in the State for inpatient hospital services
and of revenues or expenses for inpatient hospital
services provided under the State's plan approved under
title XIX;
(B) the Secretary has been provided satisfactory
assurances as to the equitable treatment under the
system of all entities (including Federal and State
programs) that pay hospitals for inpatient hospital
services, of hospital employees, and of hospital
patients;
(C) the Secretary has been provided satisfactory
assurances that under the system, over 36-month periods
(the first such period beginning with the first month
in which this subsection applies to that system in the
State), the amount of payments made under this title
under such system will not exceed the amount of
payments which would otherwise have been made under
this title not using such system;
(D) the Secretary determines that the system will not
preclude an eligible organization (as defined in
section 1876(b)) from negotiating directly with
hospitals with respect to the organization's rate of
payment for inpatient hospital services; and
(E) the Secretary determines that the system requires
hospitals to meet the requirement of section
1866(a)(1)(G) and the system provides for the exclusion
of certain costs in accordance with section 1862(a)(14)
(except for such waivers thereof as the Secretary
provides by regulation).
The Secretary cannot deny the application of a State under this
subsection on the ground that the State's hospital
reimbursement control system is based on a payment methodology
other than on the basis of a diagnosis-related group or on the
ground that the amount of payments made under this title under
such system must be less than the amount of payments which
would otherwise have been made under this title not using such
system. If the Secretary determines that the conditions
described in subparagraph (C) are based on maintaining payment
amounts at no more than a specified percentage increase above
the payment amounts in a base period, the State has the option
of applying such test (for inpatient hospital services under
part A) on an aggregate payment basis or on the basis of the
amount of payment per inpatient discharge or admission. If the
Secretary determines that the conditions described in
subparagraph (C) are based on maintaining aggregate payment
amounts below a national average percentage increase in total
payments under part A for inpatient hospital services, the
Secretary cannot deny the application of a State under this
subsection on the ground that the State's rate of increase in
such payments for such services must be less than such national
average rate of increase.
(2) In determining under paragraph (1)(C) the amount of
payment which would otherwise have been made under this title
for a State, the Secretary may provide for appropriate
adjustment of such amount to take into account previous
reductions effected in the amount of payments made under this
title in the State due to the operation of the hospital
reimbursement control system in the State if the system has
resulted in an aggregate rate of increase in operating costs of
inpatient hospital services (as defined in subsection (a)(4))
under this title for hospitals in the State which is less than
the aggregate rate of increase in such costs under this title
for hospitals in the United States.
(3) The Secretary shall discontinue payments under a system
described in paragraph (1) if the Secretary--
(A) determines that the system no longer meets the
requirements of subparagraphs (A), (D), and (E) of
paragraph (1) and, if applicable, the requirements of
paragraph (5), or
(B) has reason to believe that the assurances
described in subparagraph (B) or (C) of paragraph (1)
(or, if applicable, in paragraph (5)) are not being (or
will not be) met.
(4) The Secretary shall approve the request of a State under
paragraph (1) with respect to a hospital reimbursement control
system if--
(A) the requirements of subparagraphs (A), (B), (C),
(D), and (E) of paragraph (1) have been met with
respect to the system, and
(B) with respect to that system a waiver of certain
requirements of title XVIII of the Social Security Act
has been approved on or before (and which is in effect
as of) the date of the enactment of the Social Security
Amendments of 1983, pursuant to section 402(a) of the
Social Security Amendments of 1967 or section 222(a) of
the Social Security Amendments of 1972.
With respect to a State system described in this paragraph, the
Secretary shall judge the effectiveness of such system on the
basis of its rate of increase or inflation in inpatient
hospital payments for individuals under this title, as compared
to the national rate of increase or inflation for such
payments, with the State retaining the option to have the test
applied on the basis of the aggregate payments under the State
system as compared to aggregate payments which would have been
made under the national system since October 1, 1984, to the
most recent date for which annual data are available.
(5) The Secretary shall approve the request of a State under
paragraph (1) with respect to a hospital reimbursement control
system if--
(A) the requirements of subparagraphs (A), (B), (C),
(D), and (E) of paragraph (1) have been met with
respect to the system;
(B) the Secretary determines that the system--
(i) is operated directly by the State or by
an entity designated pursuant to State law,
(ii) provides for payment of hospitals
covered under the system under a methodology
(which sets forth exceptions and adjustments,
as well as any method for changes in the
methodology) by which rates or amounts to be
paid for hospital services during a specified
period are established under the system prior
to the defined rate period, and
(iii) hospitals covered under the system will
make such reports (in lieu of cost and other
reports, identified by the Secretary, otherwise
required under this title) as the Secretary may
require in order to properly monitor assurances
provided under this subsection;
(C) the State has provided the Secretary with
satisfactory assurances that operation of the system
will not result in any change in hospital admission
practices which result in--
(i) a significant reduction in the proportion
of patients (receiving hospital services
covered under the system) who have no third-
party coverage and who are unable to pay for
hospital services,
(ii) a significant reduction in the
proportion of individuals admitted to hospitals
for inpatient hospital services for which
payment is (or is likely to be) less than the
anticipated charges for or costs of such
services,
(iii) the refusal to admit patients who would
be expected to require unusually costly or
prolonged treatment for reasons other than
those related to the appropriateness of the
care available at the hospital, or
(iv) the refusal to provide emergency
services to any person who is in need of
emergency services if the hospital provides
such services;
(D) any change by the State in the system which has
the effect of materially reducing payments to hospitals
can only take effect upon 60 days notice to the
Secretary and to the hospitals the payment to which is
likely to be materially affected by the change; and
(E) the State has provided the Secretary with
satisfactory assurances that in the development of the
system the State has consulted with local governmental
officials concerning the impact of the system on public
hospitals.
The Secretary shall respond to requests of States under this
paragraph within 60 days of the date the request is submitted
to the Secretary.
(6) If the Secretary determines that the assurances described
in paragraph (1)(C) have not been met with respect to any 36-
month period, the Secretary may reduce payments under this
title to hospitals under the system in an amount equal to the
amount by which the payment under this title under such system
for such period exceeded the amount of payments which would
otherwise have been made under this title not using such
system.
(7) In the case of a State which made a request under
paragraph (5) before December 31, 1984, for the approval of a
State hospital reimbursement control system and which request
was approved--
(A) in applying paragraphs (1)(C) and (6), a
reference to a ``36-month period'' is deemed a
reference to a ``48-month period'', and
(B) in order to allow the State the opportunity to
provide the assurances described in paragraph (1)(C)
for a 48-month period, the Secretary may not
discontinue payments under the system, under the
authority of paragraph (3)(A) because the Secretary has
reason to believe that such assurances are not being
(or will not be) met, before July 1, 1986.
(d)(1)(A) Notwithstanding section 1814(b) but subject to the
provisions of section 1813, the amount of the payment with
respect to the operating costs of inpatient hospital services
(as defined in subsection (a)(4)) of a subsection (d) hospital
(as defined in subparagraph (B)) for inpatient hospital
discharges in a cost reporting period or in a fiscal year--
(i) beginning on or after October 1, 1983, and before
October 1, 1984, is equal to the sum of--
(I) the target percentage (as defined in
subparagraph (C)) of the hospital's target
amount for the cost reporting period (as
defined in subsection (b)(3)(A), but determined
without the application of subsection (a)), and
(II) the DRG percentage (as defined in
subparagraph (C)) of the regional adjusted DRG
prospective payment rate determined under
paragraph (2) for such discharges;
(ii) beginning on or after October 1, 1984, and
before October 1, 1987, is equal to the sum of--
(I) the target percentage (as defined in
subparagraph (C)) of the hospital's target
amount for the cost reporting period (as
defined in subsection (b)(3)(A), but determined
without the application of subsection (a)), and
(II) the DRG percentage (as defined in
subparagraph (C)) of the applicable combined
adjusted DRG prospective payment rate
determined under subparagraph (D) for such
discharges; or
(iii) beginning on or after April 1, 1988, is equal
to
(I) the national adjusted DRG prospective
payment rate determined under paragraph (3) for
such discharges, or
(II) for discharges occurring during a fiscal
year ending on or before September 30, 1996,
the sum of 85 percent of the national adjusted
DRG prospective payment rate determined under
paragraph (3) for such discharges and 15
percent of the regional adjusted DRG
prospective payment rate determined under such
paragraph, but only if the average standardized
amount (described in clause (i)(I) or clause
(ii)(I) of paragraph (3)(D)) for hospitals
within the region of, and in the same large
urban or other area (or, for discharges
occurring during a fiscal year ending on or
before September 30, 1994, the same rural,
large urban, or other urban area) as, the
hospital is greater than the average
standardized amount (described in the
respective clause) for hospitals within the
United States in that type of area for
discharges occurring during such fiscal year.
(B) As used in this section, the term ``subsection (d)
hospital'' means a hospital located in one of the fifty States
or the District of Columbia other than--
(i) a psychiatric hospital (as defined in section
1861(f)),
(ii) a rehabilitation hospital (as defined by the
Secretary),
(iii) a hospital whose inpatients are predominantly
individuals under 18 years of age,
(iv)(I) a hospital which has an average inpatient
length of stay (as determined by the Secretary) of
greater than 25 days, or
(II) a hospital that first received payment under
this subsection in 1986 which has an average inpatient
length of stay (as determined by the Secretary) of
greater than 20 days and that has 80 percent or more of
its annual medicare inpatient discharges with a
principal diagnosis that reflects a finding of
neoplastic disease in the 12-month cost reporting
period ending in fiscal year 1997, or
(v)(I) a hospital that the Secretary has classified,
at any time on or before December 31, 1990, (or, in the
case of a hospital that, as of the date of the
enactment of this clause, is located in a State
operating a demonstration project under section
1814(b), on or before December 31, 1991) for purposes
of applying exceptions and adjustments to payment
amounts under this subsection, as a hospital involved
extensively in treatment for or research on cancer,
(II) a hospital that was recognized as a
comprehensive cancer center or clinical cancer research
center by the National Cancer Institute of the National
Institutes of Health as of April 20, 1983, that is
located in a State which, as of December 19, 1989, was
not operating a demonstration project under section
1814(b), that applied and was denied, on or before
December 31, 1990, for classification as a hospital
involved extensively in treatment for or research on
cancer under this clause (as in effect on the day
before the date of the enactment of this subclause),
that as of the date of the enactment of this subclause,
is licensed for less than 50 acute care beds, and that
demonstrates for the 4-year period ending on December
31, 1996, that at least 50 percent of its total
discharges have a principal finding of neoplastic
disease, as defined in subparagraph (E), or
(III) a hospital that was recognized as a clinical
cancer research center by the National Cancer Institute
of the National Institutes of Health as of February 18,
1998, that has never been reimbursed for inpatient
hospital services pursuant to a reimbursement system
under a demonstration project under section 1814(b),
that is a freestanding facility organized primarily for
treatment of and research on cancer and is not a unit
of another hospital, that as of the date of the
enactment of this subclause, is licensed for 162 acute
care beds, and that demonstrates for the 4-year period
ending on June 30, 1999, that at least 50 percent of
its total discharges have a principal finding of
neoplastic disease, as defined in subparagraph (E);
and, in accordance with regulations of the Secretary, does not
include a psychiatric or rehabilitation unit of the hospital
which is a distinct part of the hospital (as defined by the
Secretary). A hospital that was classified by the Secretary on
or before September 30, 1995, as a hospital described in clause
(iv) shall continue to be so classified notwithstanding that it
is located in the same building as, or on the same campus as,
another hospital.
(C) For purposes of this subsection, for cost reporting
periods beginning--
(i) on or after October 1, 1983, and before October
1, 1984, the ``target percentage'' is 75 percent and
the ``DRG percentage'' is 25 percent;
(ii) on or after October 1, 1984, and before October
1, 1985, the ``target percentage'' is 50 percent and
the ``DRG percentage'' is 50 percent;
(iii) on or after October 1, 1985, and before October
1, 1986, the ``target percentage'' is 45 percent and
the ``DRG percentage'' is 55 percent; and
(iv) on or after October 1, 1986, and before October
1, 1987, the ``target percentage'' is 25 percent and
the ``DRG percentage'' is 75 percent.
(D) For purposes of subparagraph (A)(ii)(II), the
``applicable combined adjusted DRG prospective payment rate''
for discharges occurring--
(i) on or after October 1, 1984, and before October
1, 1986, is a combined rate consisting of 25 percent of
the national adjusted DRG prospective payment rate, and
75 percent of the regional adjusted DRG prospective
payment rate, determined under paragraph (3) for such
discharges; and
(ii) on or after October 1, 1986, and before October
1, 1987, is a combined rate consisting of 50 percent of
the national adjusted DRG prospective payment rate, and
50 percent of the regional adjusted DRG prospective
payment rate, determined under paragraph (3) for such
discharges.
(E) For purposes of subclauses (II) and (III) of subparagraph
(B)(v) only, the term ``principal finding of neoplastic
disease'' means the condition established after study to be
chiefly responsible for occasioning the admission of a patient
to a hospital, except that only discharges with ICD-9-CM
principal diagnosis codes of 140 through 239, V58.0, V58.1,
V66.1, V66.2, or 990 will be considered to reflect such a
principal diagnosis.
(2) The Secretary shall determine a national adjusted DRG
prospective payment rate, for each inpatient hospital discharge
in fiscal year 1984 involving inpatient hospital services of a
subsection (d) hospital in the United States, and shall
determine a regional adjusted DRG prospective payment rate for
such discharges in each region, for which payment may be made
under part A of this title. Each such rate shall be determined
for hospitals located in urban or rural areas within the United
States or within each such region, respectively, as follows:
(A) Determining allowable individual hospital costs
for base period.--The Secretary shall determine the
allowable operating costs per discharge of inpatient
hospital services for the hospital for the most recent
cost reporting period for which data are available.
(B) Updating for fiscal year 1984.--The Secretary
shall update each amount determined under subparagraph
(A) for fiscal year 1984 by--
(i) updating for fiscal year 1983 by the
estimated average rate of change of hospital
costs industry-wide between the cost reporting
period used under such subparagraph and fiscal
year 1983 and the most recent case-mix data
available, and
(ii) projecting for fiscal year 1984 by the
applicable percentage increase (as defined in
subsection (b)(3)(B)) for fiscal year 1984.
(C) Standardizing amounts.--The Secretary shall
standardize the amount updated under subparagraph (B)
for each hospital by--
(i) excluding an estimate of indirect medical
education costs (taking into account, for
discharges occurring after September 30, 1986,
the amendments made by section 9104(a) of the
Medicare and Medicaid Budget Reconciliation
Amendments of 1985), except that the Secretary
shall not take into account any reduction in
the amount of additional payments under
paragraph (5)(B)(ii) resulting from the
amendment made by section 4621(a)(1) of the
Balanced Budget Act of 1997 or any additional
payments under such paragraph resulting from
the application of section 111 of the Medicare,
Medicaid, and SCHIP Balanced Budget Refinement
Act of 1999, of section 302 of the Medicare,
Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, or the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003,
(ii) adjusting for variations among hospitals
by area in the average hospital wage level,
(iii) adjusting for variations in case mix
among hospitals, and
(iv) for discharges occurring on or after
October 1, 1986, excluding an estimate of the
additional payments to certain hospitals to be
made under paragraph (5)(F), except that the
Secretary shall not exclude additional payments
under such paragraph made as a result of the
enactment of section 6003(c) of the Omnibus
Budget Reconciliation Act of 1989, the
enactment of section 4002(b) of the Omnibus
Budget Reconciliation Act of 1990, the
enactment of section 303 of the Medicare,
Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, or the enactment of
section 402(a)(1) of the Medicare Prescription
Drug, Improvement, and Modernization Act of
2003.
(D) Computing urban and rural averages.--The
Secretary shall compute an average of the standardized
amounts determined under subparagraph (C) for the
United States and for each region--
(i) for all subsection (d) hospitals located
in an urban area within the United States or
that region, respectively, and
(ii) for all subsection (d) hospitals located
in a rural area within the United States or
that region, respectively.
For purposes of this subsection, the term ``region''
means one of the nine census divisions, comprising the
fifty States and the District of Columbia, established
by the Bureau of the Census for statistical and
reporting purposes; the term ``urban area'' means an
area within a Metropolitan Statistical Area (as defined
by the Office of Management and Budget) or within such
similar area as the Secretary has recognized under
subsection (a) by regulation; the term ``large urban
area'' means, with respect to a fiscal year, such an
urban area which the Secretary determines (in the
publications described in subsection (e)(5) before the
fiscal year) has a population of more than 1,000,000
(as determined by the Secretary based on the most
recent available population data published by the
Bureau of the Census); and the term ``rural area''
means any area outside such an area or similar area. A
hospital located in a Metropolitan Statistical Area
shall be deemed to be located in the region in which
the largest number of the hospitals in the same
Metropolitan Statistical Area are located, or, at the
option of the Secretary, the region in which the
majority of the inpatient discharges (with respect to
which payments are made under this title) from
hospitals in the same Metropolitan Statistical Area are
made.
(E) Reducing for value of outlier payments.--The
Secretary shall reduce each of the average standardized
amounts determined under subparagraph (D) by a
proportion equal to the proportion (estimated by the
Secretary) of the amount of payments under this
subsection based on DRG prospective payment rates which
are additional payments described in paragraph (5)(A)
(relating to outlier payments).
(F) Maintaining budget neutrality.--The Secretary
shall adjust each of such average standardized amounts
as may be required under subsection (e)(1)(B) for that
fiscal year.
(G) Computing drg-specific rates for urban and rural
hospitals in the united states and in each region.--For
each discharge classified within a diagnosis-related
group, the Secretary shall establish a national DRG
prospective payment rate and shall establish a regional
DRG prospective payment rate for each region, each of
which is equal--
(i) for hospitals located in an urban area in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (D),
reduced under subparagraph (E), and
adjusted under subparagraph (F)) for
hospitals located in an urban area in
the United States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group; and
(ii) for hospitals located in a rural area in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (D),
reduced under subparagraph (E), and
adjusted under subparagraph (F)) for
hospitals located in a rural area in
the United States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group.
(H) Adjusting for different area wage levels.--The
Secretary shall adjust the proportion, (as estimated by
the Secretary from time to time) of hospitals' costs
which are attributable to wages and wage-related costs,
of the national and regional DRG prospective payment
rates computed under subparagraph (G) for area
differences in hospital wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
hospital compared to the national average hospital wage
level.
(3) The Secretary shall determine a national adjusted DRG
prospective payment rate, for each inpatient hospital discharge
in a fiscal year after fiscal year 1984 involving inpatient
hospital services of a subsection (d) hospital in the United
States, and shall determine, for fiscal years before fiscal
year 1997, a regional adjusted DRG prospective payment rate for
such discharges in each region for which payment may be made
under part A of this title. Each such rate shall be determined
for hospitals located in large urban, other urban, or rural
areas within the United States and within each such region,
respectively, as follows:
(A) Updating previous standardized amounts.--(i) For
discharges occurring in a fiscal year beginning before
October 1, 1987, the Secretary shall compute an average
standardized amount for hospitals located in an urban
area and for hospitals located in a rural area within
the United States and for hospitals located in an urban
area and for hospitals located in a rural area within
each region, equal to the respective average
standardized amount computed for the previous fiscal
year under paragraph (2)(D) or under this subparagraph,
increased for the fiscal year involved by the
applicable percentage increase under subsection
(b)(3)(B). With respect to discharges occurring on or
after October 1, 1987, the Secretary shall compute
urban and rural averages on the basis of discharge
weighting rather than hospital weighting, making
appropriate adjustments to ensure that computation on
such basis does not result in total payments under this
section that are greater or less than the total
payments that would have been made under this section
but for this sentence, and making appropriate changes
in the manner of determining the reductions under
subparagraph (C)(ii).
(ii) For discharges occurring in a fiscal year
beginning on or after October 1, 1987, and ending on or
before September 30, 1994, the Secretary shall compute
an average standardized amount for hospitals located in
a large urban area, for hospitals located in a rural
area, and for hospitals located in other urban areas,
within the United States and within each region, equal
to the respective average standardized amount computed
for the previous fiscal year under this subparagraph
increased by the applicable percentage increase under
subsection (b)(3)(B)(i) with respect to hospitals
located in the respective areas for the fiscal year
involved.
(iii) For discharges occurring in the fiscal year
beginning on October 1, 1994, the average standardized
amount for hospitals located in a rural area shall be
equal to the average standardized amount for hospitals
located in an urban area. For discharges occurring on
or after October 1, 1994, the Secretary shall adjust
the ratio of the labor portion to non-labor portion of
each average standardized amount to equal such ratio
for the national average of all standardized amounts.
(iv)(I) Subject to subclause (II), for discharges
occurring in a fiscal year beginning on or after
October 1, 1995, the Secretary shall compute an average
standardized amount for hospitals located in a large
urban area and for hospitals located in other areas
within the United States and within each region equal
to the respective average standardized amount computed
for the previous fiscal year under this subparagraph
increased by the applicable percentage increase under
subsection (b)(3)(B)(i) with respect to hospitals
located in the respective areas for the fiscal year
involved.
(II) For discharges occurring in a fiscal year
(beginning with fiscal year 2004), the Secretary shall
compute a standardized amount for hospitals located in
any area within the United States and within each
region equal to the standardized amount computed for
the previous fiscal year under this subparagraph for
hospitals located in a large urban area (or, beginning
with fiscal year 2005, for all hospitals in the
previous fiscal year) increased by the applicable
percentage increase under subsection (b)(3)(B)(i) for
the fiscal year involved.
(v) Average standardized amounts computed under this
paragraph shall be adjusted to reflect the most recent
case-mix data available.
(vi) Insofar as the Secretary determines that the
adjustments under paragraph (4)(C)(i) for a previous
fiscal year (or estimates that such adjustments for a
future fiscal year) did (or are likely to) result in a
change in aggregate payments under this subsection
during the fiscal year that are a result of changes in
the coding or classification of discharges that do not
reflect real changes in case mix, the Secretary may
adjust the average standardized amounts computed under
this paragraph for subsequent fiscal years so as to
eliminate the effect of such coding or classification
changes.
(B) Reducing for value of outlier payments.--The
Secretary shall reduce each of the average standardized
amounts determined under subparagraph (A) by a factor
equal to the proportion of payments under this
subsection (as estimated by the Secretary) based on DRG
prospective payment amounts which are additional
payments described in paragraph (5)(A) (relating to
outlier payments).
(C)(i) Maintaining budget neutrality for fiscal year
1985.--For discharges occurring in fiscal year 1985,
the Secretary shall adjust each of such average
standardized amounts as may be required under
subsection (e)(1)(B) for that fiscal year.
(ii) Reducing for savings from amendment to indirect
teaching adjustment for discharges after September 30,
1986.--For discharges occurring after September 30,
1986, the Secretary shall further reduce each of the
average standardized amounts (in a proportion which
takes into account the differing effects of the
standardization effected under paragraph (2)(C)(i)) so
as to provide for a reduction in the total of the
payments (attributable to this paragraph) made for
discharges occurring on or after October 1, 1986, of an
amount equal to the estimated reduction in the payment
amounts under paragraph (5)(B) that would have resulted
from the enactment of the amendments made by section
9104 of the Medicare and Medicaid Budget Reconciliation
Amendments of 1985 and by section 4003(a)(1) of the
Omnibus Budget Reconciliation Act of 1987 if the factor
described in clause (ii)(II) of paragraph (5)(B)
(determined without regard to amendments made by the
Omnibus Budget Reconciliation Act of 1990) were applied
for discharges occurring on or after such date instead
of the factor described in clause (ii) of that
paragraph.
(D) Computing drg-specific rates for hospitals.--For
each discharge classified within a diagnosis-related
group, the Secretary shall establish for the fiscal
year a national DRG prospective payment rate and shall
establish, for fiscal years before fiscal year 1997, a
regional DRG prospective payment rate for each region
which is equal--
(i) for fiscal years before fiscal year 2004,
for hospitals located in a large urban area in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (A),
reduced under subparagraph (B), and
adjusted or reduced under subparagraph
(C)) for the fiscal year for hospitals
located in such a large urban area in
the United States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group;
(ii) for fiscal years before fiscal year
2004, for hospitals located in other areas in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (A),
reduced under subparagraph (B), and
adjusted or reduced under subparagraph
(C)) for the fiscal year for hospitals
located in other areas in the United
States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group; and
(iii) for a fiscal year beginning after
fiscal year 2003, for hospitals located in all
areas, to the product of--
(I) the applicable standardized
amount (computed under subparagraph
(A)), reduced under subparagraph (B),
and adjusted or reduced under
subparagraph (C) for the fiscal year;
and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group.
(E) Adjusting for different area wage levels.--
(i) In general.--Except as provided in clause
(ii) or (iii), the Secretary shall adjust the
proportion, (as estimated by the Secretary from
time to time) of hospitals' costs which are
attributable to wages and wage-related costs,
of the DRG prospective payment rates computed
under subparagraph (D) for area differences in
hospital wage levels by a factor (established
by the Secretary) reflecting the relative
hospital wage level in the geographic area of
the hospital compared to the national average
hospital wage level. Not later than October 1,
1990, and October 1, 1993 (and at least every
12 months thereafter), the Secretary shall
update the factor under the preceding sentence
on the basis of a survey conducted by the
Secretary (and updated as appropriate) of the
wages and wage-related costs of subsection (d)
hospitals in the United States. Not less often
than once every 3 years the Secretary (through
such survey or otherwise) shall measure the
earnings and paid hours of employment by
occupational category and shall exclude data
with respect to the wages and wage-related
costs incurred in furnishing skilled nursing
facility services. Any adjustments or updates
made under this subparagraph for a fiscal year
(beginning with fiscal year 1991) shall be made
in a manner that assures that the aggregate
payments under this subsection in the fiscal
year are not greater or less than those that
would have been made in the year without such
adjustment. The Secretary shall apply the
previous sentence for any period as if the
amendments made by section 403(a)(1) of the
Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 and the amendments
made by section 10324(a)(1) of the Patient
Protection and Affordable Care Act\73\ had not
been enacted.
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\73\Section 10324(a)(2) of Public Law 111-148 (124 Stat. 959)
provides for an amendment to the third sentence of section
1886(d)(3)(E) by inserting ``and the amendments made by section
10324(a)(1) of the Patient Protection and Affordable Care Act'' after
``2003''. Such amendment was carried out by inserting such language
after ``2003'' in the fifth sentence to reflect the probable intent of
Congress.
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(ii) Alternative proportion to be adjusted
beginning in fiscal year 2005.--For discharges
occurring on or after October 1, 2004, the
Secretary shall substitute ``62 percent'' for
the proportion described in the first sentence
of clause (i), unless the application of this
clause would result in lower payments to a
hospital than would otherwise be made.
(iii) Floor on area wage index for hospitals
in frontier states.--
(I) In general.--Subject to subclause
(IV), for discharges occurring on or
after October 1, 2010, the area wage
index applicable under this
subparagraph to any hospital which is
located in a frontier State (as defined
in subclause (II)) may not be less than
1.00.
(II) Frontier state defined.--In this
clause, the term ``frontier State''
means a State in which at least 50
percent of the counties in the State
are frontier counties.
(III) Frontier county defined.--In
this clause, the term ``frontier
county'' means a county in which the
population per square mile is less than
6.
(IV) Limitation.--This clause shall
not apply to any hospital located in a
State that receives a non-labor related
share adjustment under paragraph
(5)(H).
(4)(A) The Secretary shall establish a classification of
inpatient hospital discharges by diagnosis-related groups and a
methodology for classifying specific hospital discharges within
these groups.
(B) For each such diagnosis-related group the Secretary shall
assign an appropriate weighting factor which reflects the
relative hospital resources used with respect to discharges
classified within that group compared to discharges classified
within other groups.
(C)(i) The Secretary shall adjust the classifications and
weighting factors established under subparagraphs (A) and (B),
for discharges in fiscal year 1988 and at least annually
thereafter, to reflect changes in treatment patterns,
technology (including a new medical service or technology under
paragraph (5)(K)), and other factors which may change the
relative use of hospital resources.
(ii) For discharges in fiscal year 1990, the Secretary shall
reduce the weighting factor for each diagnosis-related group by
1.22 percent.
(iii) Any such adjustment under clause (i) for discharges in
a fiscal year (beginning with fiscal year 1991) shall be made
in a manner that assures that the aggregate payments under this
subsection for discharges in the fiscal year are not greater or
less than those that would have been made for discharges in the
year without such adjustment.
(D)(i) For discharges occurring on or after October 1, 2008,
the diagnosis-related group to be assigned under this paragraph
for a discharge described in clause (ii) shall be a diagnosis-
related group that does not result in higher payment based on
the presence of a secondary diagnosis code described in clause
(iv).
(ii) A discharge described in this clause is a discharge
which meets the following requirements:
(I) The discharge includes a condition identified by
a diagnosis code selected under clause (iv) as a
secondary diagnosis.
(II) But for clause (i), the discharge would have
been classified to a diagnosis-related group that
results in a higher payment based on the presence of a
secondary diagnosis code selected under clause (iv).
(III) At the time of admission, no code selected
under clause (iv) was present.
(iii) As part of the information required to be reported by a
hospital with respect to a discharge of an individual in order
for payment to be made under this subsection, for discharges
occurring on or after October 1, 2007, the information shall
include the secondary diagnosis of the individual at admission.
(iv) By not later than October 1, 2007, the Secretary shall
select diagnosis codes associated with at least two conditions,
each of which codes meets all of the following requirements (as
determined by the Secretary):
(I) Cases described by such code have a high cost or
high volume, or both, under this title.
(II) The code results in the assignment of a case to
a diagnosis-related group that has a higher payment
when the code is present as a secondary diagnosis.
(III) The code describes such conditions that could
reasonably have been prevented through the application
of evidence-based guidelines.
The Secretary may from time to time revise (through addition or
deletion of codes) the diagnosis codes selected under this
clause so long as there are diagnosis codes associated with at
least two conditions selected for discharges occurring during
any fiscal year.
(v) In selecting and revising diagnosis codes under clause
(iv), the Secretary shall consult with the Centers for Disease
Control and Prevention and other appropriate entities.
(vi) Any change resulting from the application of this
subparagraph shall not be taken into account in adjusting the
weighting factors under subparagraph (C)(i) or in applying
budget neutrality under subparagraph (C)(iii).
(5)(A)(i) For discharges occurring during fiscal years ending
on or before September 30, 1997, the Secretary shall provide
for an additional payment for a subsection (d) hospital for any
discharge in a diagnosis-related group, the length of stay of
which exceeds the mean length of stay for discharges within
that group by a fixed number of days, or exceeds such mean
length of stay by some fixed number of standard deviations,
whichever is the fewer number of days.
(ii) For cases which are not included in clause (i), a
subsection (d) hospital may request additional payments in any
case where charges, adjusted to cost, exceed a fixed multiple
of the applicable DRG prospective payment rate, or exceed such
other fixed dollar amount, whichever is greater, or for
discharges in fiscal years beginning on or after October 1,
1994, exceed the sum of the applicable DRG prospective payment
rate plus any amounts payable under subparagraphs (B) and (F)
plus a fixed dollar amount determined by the Secretary.
(iii) The amount of such additional payment under clauses (i)
and (ii) shall be determined by the Secretary and shall (except
as payments under clause (i) are required to be reduced to take
into account the requirements of clause (v)) approximate the
marginal cost of care beyond the cutoff point applicable under
clause (i) or (ii).
(iv) The total amount of the additional payments made under
this subparagraph for discharges in a fiscal year may not be
less than 5 percent nor more than 6 percent of the total
payments projected or estimated to be made based on DRG
prospective payment rates for discharges in that year.
(v) The Secretary shall provide that--
(I) the day outlier percentage for fiscal year 1995
shall be 75 percent of the day outlier percentage for
fiscal year 1994;
(II) the day outlier percentage for fiscal year 1996
shall be 50 percent of the day outlier percentage for
fiscal year 1994; and
(III) the day outlier percentage for fiscal year 1997
shall be 25 percent of the day outlier percentage for
fiscal year 1994.
(vi) For purposes of this subparagraph the term ``day outlier
percentage'' means, for a fiscal year, the percentage of the
total additional payments made by the Secretary under this
subparagraph for discharges in that fiscal year which are
additional payments under clause (i).
(B) The Secretary shall provide for an additional payment
amount for subsection (d) hospitals with indirect costs of
medical education, in an amount computed in the same manner as
the adjustment for such costs under regulations (in effect as
of January 1, 1983) under subsection (a)(2), except as follows:
(i) The amount of such additional payment shall be
determined by multiplying (I) the sum of the amount
determined under paragraph (1)(A)(ii)(II) (or, if
applicable, the amount determined under paragraph
(1)(A)(iii)) and, for cases qualifying for additional
payment under subparagraph (A)(i), the amount paid to
the hospital under subparagraph (A), by (II) the
indirect teaching adjustment factor described in clause
(ii).
(ii) For purposes of clause (i)(II), the indirect
teaching adjustment factor is equal to c
(((1+r) to the nth power) - 1), where ``r'' is the
ratio of the hospital's full-time equivalent interns
and residents to beds and ``n'' equals .405. Subject to
clause (ix), for discharges occurring--
(I) on or after October 1, 1988, and before
October 1, 1997, ``c'' is equal to 1.89;
(II) during fiscal year 1998, ``c'' is equal
to 1.72;
(III) during fiscal year 1999, ``c'' is equal
to 1.6;
(IV) during fiscal year 2000, ``c'' is equal
to 1.47;
(V) during fiscal year 2001, ``c'' is equal
to 1.54;
(VI) during fiscal year 2002, ``c'' is equal
to 1.6;
(VII) on or after October 1, 2002, and before
April 1, 2004, ``c'' is equal to 1.35;
(VIII) on or after April 1, 2004, and before
October 1, 2004, ``c'' is equal to 1.47;
(IX) during fiscal year 2005, ``c'' is equal
to 1.42;
(X) during fiscal year 2006, ``c'' is equal
to 1.37;
(XI) during fiscal year 2007, ``c'' is equal
to 1.32; and
(XII) on or after October 1, 2007, ``c'' is
equal to 1.35.
(iii) In determining such adjustment the Secretary
shall not distinguish between those interns and
residents who are employees of a hospital and those
interns and residents who furnish services to a
hospital but are not employees of such hospital.
(iv)(I) Effective for discharges occurring on or
after October 1, 1997, and before July 1, 2010, all the
time spent by an intern or resident in patient care
activities under an approved medical residency training
program at an entity in a nonhospital setting shall be
counted towards the determination of full-time
equivalency if the hospital incurs all, or
substantially all, of the costs for the training
program in that setting.
(II) Effective for discharges occurring on or after
July 1, 2010, all the time spent by an intern or
resident in patient care activities in a nonprovider
setting shall be counted towards the determination of
full-time equivalency if a hospital incurs the costs of
the stipends and fringe benefits of the intern or
resident during the time the intern or resident spends
in that setting. If more than one hospital incurs these
costs, either directly or through a third party, such
hospitals shall count a proportional share of the time,
as determined by written agreement between the
hospitals, that a resident spends training in that
setting.
(v) In determining the adjustment with respect to a
hospital for discharges occurring on or after October
1, 1997, the total number of full-time equivalent
interns and residents in the fields of allopathic and
osteopathic medicine in either a hospital or
nonhospital setting may not exceed the number (or, 130
percent of such number in the case of a hospital
located in a rural area) of such full-time equivalent
interns and residents in the hospital with respect to
the hospital's most recent cost reporting period ending
on or before December 31, 1996. Rules similar to the
rules of subsection (h)(4)(F)(ii) shall apply for
purposes of this clause. The provisions of subsections
(h)(4)(H)(vi), (h)(7), and (h)(8) shall apply with
respect to the first sentence of this clause in the
same manner as they apply with respect to subsection
(h)(4)(F)(i).\74\
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\74\The amendments to the second sentence of section
1886(d)(5)(B)(v) by sections 5503(b)(1) and 5506(b) of Public Law 111-
148 were carried out to the third sentence to reflect the probable
intent of Congress.
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(vi) For purposes of clause (ii)--
(I) ``r'' may not exceed the ratio of the
number of interns and residents, subject to the
limit under clause (v), with respect to the
hospital for its most recent cost reporting
period to the hospital's available beds (as
defined by the Secretary) during that cost
reporting period, and
(II) for the hospital's cost reporting
periods beginning on or after October 1, 1997,
subject to the limits described in clauses (iv)
and (v), the total number of full-time
equivalent residents for payment purposes shall
equal the average of the actual full-time
equivalent resident count for the cost
reporting period and the preceding two cost
reporting periods.
In the case of the first cost reporting period
beginning on or after October 1, 1997, subclause (II)
shall be applied by using the average for such period
and the preceding cost reporting period.
(vii) If any cost reporting period beginning on or
after October 1, 1997, is not equal to twelve months,
the Secretary shall make appropriate modifications to
ensure that the average full-time equivalent residency
count pursuant to subclause (II) of clause (vi) is
based on the equivalent of full twelve-month cost
reporting periods.
(viii) Rules similar to the rules of subsection
(h)(4)(H) shall apply for purposes of clauses (v) and
(vi).
(ix) For discharges occurring on or after July 1,
2005, insofar as an additional payment amount under
this subparagraph is attributable to resident positions
redistributed to a hospital under subsection (h)(7)(B),
in computing the indirect teaching adjustment factor
under clause (ii) the adjustment shall be computed in a
manner as if ``c'' were equal to 0.66 with respect to
such resident positions.
(x) For discharges occurring on or after July 1,
2011, insofar as an additional payment amount under
this subparagraph is attributable to resident positions
distributed to a hospital under subsection (h)(8)(B),
the indirect teaching adjustment factor shall be
computed in the same manner as provided under clause
(ii) with respect to such resident positions.
(x)(I)\75\ The provisions of subparagraph (K) of
subsection (h)(4) shall apply under this subparagraph
in the same manner as they apply under such subsection.
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\75\Two clauses designated as (x) so in law. See amendments made by
sections 5503(b)(2) and 5505(b) of Public Law 111-148.
---------------------------------------------------------------------------
(II) In determining the hospital's
number of full-time equivalent
residents for purposes of this
subparagraph, all the time spent by an
intern or resident in an approved
medical residency training program in
non-patient care activities, such as
didactic conferences and seminars, as
such time and activities are defined by
the Secretary, that occurs in the
hospital shall be counted toward the
determination of full-time equivalency
if the hospital--
(aa) is recognized as a
subsection (d) hospital;
(bb) is recognized as a
subsection (d) Puerto Rico
hospital;
(cc) is reimbursed under a
reimbursement system authorized
under section 1814(b)(3); or
(dd) is a provider-based
hospital outpatient department.
(III) In determining the hospital's
number of full-time equivalent
residents for purposes of this
subparagraph, all the time spent by an
intern or resident in an approved
medical residency training program in
research activities that are not
associated with the treatment or
diagnosis of a particular patient, as
such time and activities are defined by
the Secretary, shall not be counted
toward the determination of full-time
equivalency.
(C)(i) The Secretary shall provide for such exceptions and
adjustments to the payment amounts established under this
subsection (other than under paragraph (9)) as the Secretary
deems appropriate to take into account the special needs of
regional and national referral centers (including those
hospitals of 275 or more beds located in rural areas). A
hospital which is classified as a rural hospital may appeal to
the Secretary to be classified as a rural referral center under
this clause on the basis of criteria (established by the
Secretary) which shall allow the hospital to demonstrate that
it should be so reclassified by reason of certain of its
operating characteristics being similar to those of a typical
urban hospital located in the same census region and which
shall not require a rural osteopathic hospital to have more
than 3,000 discharges in a year in order to be classified as a
rural referral center. Such characteristics may include wages,
scope of services, service area, and the mix of medical
specialties. The Secretary shall publish the criteria not later
than August 17, 1984, for implementation by October 1, 1984. An
appeal allowed under this clause must be submitted to the
Secretary (in such form and manner as the Secretary may
prescribe) during the quarter before the first quarter of the
hospital's cost reporting period (or, in the case of a cost
reporting period beginning during October 1984, during the
first quarter of that period), and the Secretary must make a
final determination with respect to such appeal within 60 days
after the date the appeal was submitted. Any payment
adjustments necessitated by a reclassification based upon the
appeal shall be effective at the beginning of such cost
reporting period.
(ii) The Secretary shall provide, under clause (i), for the
classification of a rural hospital as a regional referral
center if the hospital has a case mix index equal to or greater
than the median case mix index for hospitals (other than
hospitals with approved teaching programs) located in an urban
area in the same region (as defined in paragraph (2)(D)), has
at least 5,000 discharges a year or, if less, the median number
of discharges in urban hospitals in the region in which the
hospital is located (or, in the case of a rural osteopathic
hospital, meets the criterion established by the Secretary
under clause (i) with respect to the annual number of
discharges for such hospitals), and meets any other criteria
established by the Secretary under clause (i).
(D)(i) For any cost reporting period beginning on or after
April 1, 1990, with respect to a subsection (d) hospital which
is a sole community hospital, payment under paragraph (1)(A)
shall be--
(I) an amount based on 100 percent of the hospital's
target amount for the cost reporting period, as defined
in subsection (b)(3)(C), or
(II) the amount determined under paragraph
(1)(A)(iii),
whichever results in greater payment to the hospital.
(ii) In the case of a sole community hospital that
experiences, in a cost reporting period compared to the
previous cost reporting period, a decrease of more than 5
percent in its total number of inpatient cases due to
circumstances beyond its control, the Secretary shall provide
for such adjustment to the payment amounts under this
subsection (other than under paragraph (9)) as may be necessary
to fully compensate the hospital for the fixed costs it incurs
in the period in providing inpatient hospital services,
including the reasonable cost of maintaining necessary core
staff and services.
(iii) For purposes of this title, the term ``sole community
hospital'' means any hospital--
(I) that the Secretary determines is located more
than 35 road miles from another hospital,
(II) that, by reason of factors such as the time
required for an individual to travel to the nearest
alternative source of appropriate inpatient care (in
accordance with standards promulgated by the
Secretary), location, weather conditions, travel
conditions, or absence of other like hospitals (as
determined by the Secretary), is the sole source of
inpatient hospital services reasonably available to
individuals in a geographic area who are entitled to
benefits under part A, or
(III) that is located in a rural area and designated
by the Secretary as an essential access community
hospital under section 1820(i)(1) as in effect on
September 30, 1997.
(iv) The Secretary shall promulgate a standard for
determining whether a hospital meets the criteria for
classification as a sole community hospital under clause
(iii)(II) because of the time required for an individual to
travel to the nearest alternative source of appropriate
inpatient care.
(v) If the Secretary determines that, in the case of a
hospital located in a rural area and designated by the
Secretary as an essential access community hospital under
section 1820(i)(1) as in effect on September 30, 1997, the
hospital has incurred increases in reasonable costs during a
cost reporting period as a result of becoming a member of a
rural health network (as defined in section 1820(d)) in the
State in which it is located, and in incurring such increases,
the hospital will increase its costs for subsequent cost
reporting periods, the Secretary shall increase the hospital's
target amount under subsection (b)(3)(C) to account for such
incurred increases.
(E)(i) The Secretary shall estimate the amount of
reimbursement made for services described in section
1862(a)(14) with respect to which payment was made under part B
in the base reporting periods referred to in paragraph (2)(A)
and with respect to which payment is no longer being made.
(ii) The Secretary shall provide for an adjustment to the
payment for subsection (d) hospitals in each fiscal year so as
appropriately to reflect the net amount described in clause
(i).
(F)(i) Subject to subsection (r), for discharges occurring on
or after May 1, 1986, the Secretary shall provide, in
accordance with this subparagraph, for an additional payment
amount for each subsection (d) hospital which--
(I) serves a significantly disproportionate number of
low-income patients (as defined in clause (v)), or
(II) is located in an urban area, has 100 or more
beds, and can demonstrate that its net inpatient care
revenues (excluding any of such revenues attributable
to this title or State plans approved under title XIX),
during the cost reporting period in which the
discharges occur, for indigent care from State and
local government sources exceed 30 percent of its total
of such net inpatient care revenues during the period.
(ii) Subject to clause (ix), the amount of such payment for
each discharge shall be determined by multiplying (I) the sum
of the amount determined under paragraph (1)(A)(ii)(II) (or, if
applicable, the amount determined under paragraph (1)(A)(iii))
and, for cases qualifying for additional payment under
subparagraph (A)(i), the amount paid to the hospital under
subparagraph (A) for that discharge, by (II) the
disproportionate share adjustment percentage established under
clause (iii) or (iv) for the cost reporting period in which the
discharge occurs.
(iii) The disproportionate share adjustment percentage for a
cost reporting period for a hospital described in clause
(i)(II) is equal to 35 percent.
(iv) The disproportionate share adjustment percentage for a
cost reporting period for a hospital that is not described in
clause (i)(II) and that--
(I) is located in an urban area and has 100 or more
beds or is described in the second sentence of clause
(v), is equal to the percent determined in accordance
with the applicable formula described in clause (vii);
(II) is located in an urban area and has less than
100 beds, is equal to 5 percent or, subject to clause
(xiv) and for discharges occurring on or after April 1,
2001, is equal to the percent determined in accordance
with clause (xiii);
(III) is located in a rural area and is not described
in subclause (IV) or (V) or in the second sentence of
clause (v), is equal to 4 percent or, subject to clause
(xiv) and for discharges occurring on or after April 1,
2001, is equal to the percent determined in accordance
with clause (xii);
(IV) is located in a rural area, is classified as a
rural referral center under subparagraph (C), and is
classified as a sole community hospital under
subparagraph (D), is equal to 10 percent or, if
greater, the percent determined in accordance with the
applicable formula described in clause (viii) or,
subject to clause (xiv) and for discharges occurring on
or after April 1, 2001, the greater of the percentages
determined under clause (x) or (xi);
(V) is located in a rural area, is classified as a
rural referral center under subparagraph (C), and is
not classified as a sole community hospital under
subparagraph (D), is equal to the percent determined in
accordance with the applicable formula described in
clause (viii) or, subject to clause (xiv) and for
discharges occurring on or after April 1, 2001, is
equal to the percent determined in accordance with
clause (xi); or
(VI) is located in a rural area, is classified as a
sole community hospital under subparagraph (D), and is
not classified as a rural referral center under
subparagraph (C), is 10 percent or, subject to clause
(xiv) and for discharges occurring on or after April 1,
2001, is equal to the percent determined in accordance
with clause (x).
(v) In this subparagraph, a hospital ``serves a significantly
disproportionate number of low income patients'' for a cost
reporting period if the hospital has a disproportionate patient
percentage (as defined in clause (vi)) for that period which
equals, or exceeds--
(I) 15 percent, if the hospital is located in an
urban area and has 100 or more beds,
(II) 30 percent (or 15 percent, for discharges
occurring on or after April 1, 2001), if the hospital
is located in a rural area and has more than 100 beds,
or is located in a rural area and is classified as a
sole community hospital under subparagraph (D),
(III) 40 percent (or 15 percent, for discharges
occurring on or after April 1, 2001), if the hospital
is located in an urban area and has less than 100 beds,
or
(IV) 45 percent (or 15 percent, for discharges
occurring on or after April 1, 2001), if the hospital
is located in a rural area and is not described in
subclause (II).
A hospital located in a rural area and with 500 or more beds
also ``serves a significantly disproportionate number of low
income patients'' for a cost reporting period if the hospital
has a disproportionate patient percentage (as defined in clause
(vi)) for that period which equals or exceeds a percentage
specified by the Secretary.
(vi) In this subparagraph, the term ``disproportionate
patient percentage'' means, with respect to a cost reporting
period of a hospital, the sum of--
(I) the fraction (expressed as a percentage), the
numerator of which is the number of such hospital's
patient days for such period which were made up of
patients who (for such days) were entitled to benefits
under part A of this title and were entitled to
supplementary security income benefits (excluding any
State supplementation) under title XVI of this Act, and
the denominator of which is the number of such
hospital's patient days for such fiscal year which were
made up of patients who (for such days) were entitled
to benefits under part A of this title, and
(II) the fraction (expressed as a percentage), the
numerator of which is the number of the hospital's
patient days for such period which consist of patients
who (for such days) were eligible for medical
assistance under a State plan approved under title XIX,
but who were not entitled to benefits under part A of
this title, and the denominator of which is the total
number of the hospital's patient days for such period.
In determining under subclause (II) the number of the
hospital's patient days for such period which consist of
patients who (for such days) were eligible for medical
assistance under a State plan approved under title XIX, the
Secretary may, to the extent and for the period the Secretary
determines appropriate, include patient days of patients not so
eligible but who are regarded as such because they receive
benefits under a demonstration project approved under title XI.
(vii) The formula used to determine the disproportionate
share adjustment percentage for a cost reporting period for a
hospital described in clause (iv)(I) is--
(I) in the case of such a hospital with a
disproportionate patient percentage (as defined in
clause (vi)) greater than 20.2--
(a) for discharges occurring on or after
April 1, 1990, and on or before December 31,
1990, (P-20.2)(.65) + 5.62,
(b) for discharges occurring on or after
January 1, 1991, and on or before September 30,
1993, (P-20.2)(.7) + 5.62,
(c) for discharges occurring on or after
October 1, 1993, and on or before September 30,
1994, (P-20.2)(.8) + 5.88, and
(d) for discharges occurring on or after
October 1, 1994, (P-20.2)(.825) + 5.88; or
(II) in the case of any other such hospital--
(a) for discharges occurring on or after
April 1, 1990, and on or before December 31,
1990, (P-15)(.6) + 2.5,
(b) for discharges occurring on or after
January 1, 1991, and on or before September 30,
1993, (P-15)(.6) + 2.5,
(c) for discharges occurring on or after
October 1, 1993, (P-15)(.65) + 2.5,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(viii) Subject to clause (xiv), the formula used to determine
the disproportionate share adjustment percentage for a cost
reporting period for a hospital described in clause (iv)(IV) or
(iv)(V) is the percentage determined in accordance with the
following formula:(P-30)(.6) + 4.0, where ``P'' is the
hospital's disproportionate patient percentage (as defined in
clause (vi)).
(ix) In the case of discharges occurring--
(I) during fiscal year 1998, the additional payment
amount otherwise determined under clause (ii) shall be
reduced by 1 percent;
(II) during fiscal year 1999, such additional payment
amount shall be reduced by 2 percent;
(III) during fiscal years 2000 and 2001, such
additional payment amount shall be reduced by 3 percent
and 2 percent, respectively;
(IV) during fiscal year 2002, such additional payment
amount shall be reduced by 3 percent; and
(V) during fiscal year 2003 and each subsequent
fiscal year, such additional payment amount shall be
reduced by 0 percent.
(x) Subject to clause (xiv), for purposes of clause (iv)(VI)
(relating to sole community hospitals), in the case of a
hospital for a cost reporting period with a disproportionate
patient percentage (as defined in clause (vi)) that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5;
(II) is equal to or exceeds 19.3, but is less than
30.0, such adjustment percentage is equal to 5.25
percent; or
(III) is equal to or exceeds 30, such adjustment
percentage is equal to 10 percent,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xi) Subject to clause (xiv), for purposes of clause (iv)(V)
(relating to rural referral centers), in the case of a hospital
for a cost reporting period with a disproportionate patient
percentage (as defined in clause (vi)) that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5;
(II) is equal to or exceeds 19.3, but is less than
30.0, such adjustment percentage is equal to 5.25
percent; or
(III) is equal to or exceeds 30, such adjustment
percentage is determined in accordance with the
following formula: (P-30)(.6) + 5.25,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xii) Subject to clause (xiv), for purposes of clause
(iv)(III) (relating to small rural hospitals generally), in the
case of a hospital for a cost reporting period with a
disproportionate patient percentage (as defined in clause (vi))
that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5; or
(II) is equal to or exceeds 19.3, such adjustment
percentage is equal to 5.25 percent,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xiii) Subject to clause (xiv), for purposes of clause
(iv)(II) (relating to urban hospitals with less than 100 beds),
in the case of a hospital for a cost reporting period with a
disproportionate patient percentage (as defined in clause (vi))
that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5; or
(II) is equal to or exceeds 19.3, such adjustment
percentage is equal to 5.25 percent,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xiv)(I) In the case of discharges occurring on or after
April 1, 2004, subject to subclause (II), there shall be
substituted for the disproportionate share adjustment
percentage otherwise determined under clause (iv) (other than
subclause (I)) or under clause (viii), (x), (xi), (xii), or
(xiii), the disproportionate share adjustment percentage
determined under clause (vii) (relating to large, urban
hospitals).
(II) Under subclause (I), the disproportionate share
adjustment percentage shall not exceed 12 percent for a
hospital that is not classified as a rural referral center
under subparagraph (C) or, in the case of discharges occurring
on or after October 1, 2006, as a medicare-dependent, small
rural hospital under subparagraph (G)(iv).
(G)(i) For any cost reporting period beginning on or after
April 1, 1990, and before October 1, 1994, or discharges
occurring on or after October 1, 1997, and before October 1,
2017, in the case of a subsection (d) hospital which is a
medicare-dependent, small rural hospital, payment under
paragraph (1)(A) shall be equal to the sum of the amount
determined under clause (ii) and the amount determined under
paragraph (1)(A)(iii).
(ii) The amount determined under this clause is--
(I) for discharges occurring during the 36-month
period beginning with the first day of the cost
reporting period that begins on or after April 1, 1990,
the amount by which the hospital's target amount for
the cost reporting period (as defined in subsection
(b)(3)(D)) exceeds the amount determined under
paragraph (1)(A)(iii); and
(II) for discharges occurring during any subsequent
cost reporting period (or portion thereof) and before
October 1, 1994, or discharges occurring on or after
October 1, 1997, and before October 1, 2017, 50 percent
(or 75 percent in the case of discharges occurring on
or after October 1, 2006) of the amount by which the
hospital's target amount for the cost reporting period
or for discharges in the fiscal year (as defined in
subsection (b)(3)(D)) exceeds the amount determined
under paragraph (1)(A)(iii).
(iii) In the case of a medicare dependent, small rural
hospital that experiences, in a cost reporting period compared
to the previous cost reporting period, a decrease of more than
5 percent in its total number of inpatient cases due to
circumstances beyond its control, the Secretary shall provide
for such adjustment to the payment amounts under this
subsection (other than under paragraph (9)) as may be necessary
to fully compensate the hospital for the fixed costs it incurs
in the period in providing inpatient hospital services,
including the reasonable cost of maintaining necessary core
staff and services.
(iv) The term ``medicare-dependent, small rural hospital''
means, with respect to any cost reporting period to which
clause (i) applies, any hospital--
(I) located in a rural area,
(II) that has not more than 100 beds,
(III) that is not classified as a sole community
hospital under subparagraph (D), and
(IV) for which not less than 60 percent of its
inpatient days or discharges during the cost reporting
period beginning in fiscal year 1987, or two of the
three most recently audited cost reporting periods for
which the Secretary has a settled cost report, were
attributable to inpatients entitled to benefits under
part A.
(H) The Secretary may provide for such adjustments to the
payment amounts under this subsection as the Secretary deems
appropriate to take into account the unique circumstances of
hospitals located in Alaska and Hawaii.
(I)(i) The Secretary shall provide by regulation for such
other exceptions and adjustments to such payment amounts under
this subsection as the Secretary deems appropriate.
(ii) In making adjustments under clause (i) for transfer
cases (as defined by the Secretary) in a fiscal year, not
taking in account the effect of subparagraph (J), the Secretary
may make adjustments to each of the average standardized
amounts determined under paragraph (3) to assure that the
aggregate payments made under this subsection for such fiscal
year are not greater or lesser than those that would have
otherwise been made in such fiscal year.
(J)(i) The Secretary shall treat the term ``transfer case''
(as defined in subparagraph (I)(ii)) as including the case of a
qualified discharge (as defined in clause (ii)), which is
classified within a diagnosis-related group described in clause
(iii), and which occurs on or after October 1, 1998. In the
case of a qualified discharge for which a substantial portion
of the costs of care are incurred in the early days of the
inpatient stay (as defined by the Secretary), in no case may
the payment amount otherwise provided under this subsection
exceed an amount equal to the sum of--
(I) 50 percent of the amount of payment under this
subsection for transfer cases (as established under
subparagraph (I)(i)), and
(II) 50 percent of the amount of payment which would
have been made under this subsection with respect to
the qualified discharge if no transfer were involved.
(ii) For purposes of clause (i), subject to clause (iii), the
term ``qualified discharge'' means a discharge classified with
a diagnosis-related group (described in clause (iii)) of an
individual from a subsection (d) hospital, if upon such
discharge the individual--
(I) is admitted as an inpatient to a hospital or
hospital unit that is not a subsection (d) hospital for
the provision of inpatient hospital services;
(II) is admitted to a skilled nursing facility;
(III) is provided home health services from a home
health agency, if such services relate to the condition
or diagnosis for which such individual received
inpatient hospital services from the subsection (d)
hospital, and if such services are provided within an
appropriate period (as determined by the Secretary); or
(IV) for discharges occurring on or after October 1,
2000, the individual receives post discharge services
described in clause (iv)(I).
(iii) Subject to clause (iv), a diagnosis-related group
described in this clause is--
(I) 1 of 10 diagnosis-related groups selected by the
Secretary based upon a high volume of discharges
classified within such groups and a disproportionate
use of post discharge services described in clause
(ii); and
(II) a diagnosis-related group specified by the
Secretary under clause (iv)(II).
(iv) The Secretary shall include in the proposed rule
published under subsection (e)(5)(A) for fiscal year 2001, a
description of the effect of this subparagraph. The Secretary
may include in the proposed rule (and in the final rule
published under paragraph (6)) for fiscal year 2001 or a
subsequent fiscal year, a description of--
(I) post-discharge services not described in
subclauses (I), (II), and (III) of clause (ii), the
receipt of which results in a qualified discharge; and
(II) diagnosis-related groups described in clause
(iii)(I) in addition to the 10 selected under such
clause.
(K)(i) Effective for discharges beginning on or after October
1, 2001, the Secretary shall establish a mechanism to recognize
the costs of new medical services and technologies under the
payment system established under this subsection. Such
mechanism shall be established after notice and opportunity for
public comment (in the publications required by subsection
(e)(5) for a fiscal year or otherwise). Such mechanism shall be
modified to meet the requirements of clause (viii).
(ii) The mechanism established pursuant to clause (i) shall--
(I) apply to a new medical service or technology if,
based on the estimated costs incurred with respect to
discharges involving such service or technology, the
DRG prospective payment rate otherwise applicable to
such discharges under this subsection is inadequate
(applying a threshold specified by the Secretary that
is the lesser of 75 percent of the standardized amount
(increased to reflect the difference between cost and
charges) or 75 percent of one standard deviation for
the diagnosis-related group involved);
(II) provide for the collection of data with respect
to the costs of a new medical service or technology
described in subclause (I) for a period of not less
than two years and not more than three years beginning
on the date on which an inpatient hospital code is
issued with respect to the service or technology;
(III) provide for additional payment to be made under
this subsection with respect to discharges involving a
new medical service or technology described in
subclause (I) that occur during the period described in
subclause (II) in an amount that adequately reflects
the estimated average cost of such service or
technology; and
(IV) provide that discharges involving such a service
or technology that occur after the close of the period
described in subclause (II) will be classified within a
new or existing diagnosis-related group with a
weighting factor under paragraph (4)(B) that is derived
from cost data collected with respect to discharges
occurring during such period.
(iii) For purposes of clause (ii)(II), the term ``inpatient
hospital code'' means any code that is used with respect to
inpatient hospital services for which payment may be made under
this subsection and includes an alphanumeric code issued under
the International Classification of Diseases, 9th Revision,
Clinical Modification (``ICD-9-CM'') and its subsequent
revisions.
(iv) For purposes of clause (ii)(III), the term ``additional
payment'' means, with respect to a discharge for a new medical
service or technology described in clause (ii)(I), an amount
that exceeds the prospective payment rate otherwise applicable
under this subsection to discharges involving such service or
technology that would be made but for this subparagraph.
(v) The requirement under clause (ii)(III) for an additional
payment may be satisfied by means of a new-technology group
(described in subparagraph (L)), an add-on payment, a payment
adjustment, or any other similar mechanism for increasing the
amount otherwise payable with respect to a discharge under this
subsection. The Secretary may not establish a separate fee
schedule for such additional payment for such services and
technologies, by utilizing a methodology established under
subsection (a) or (h) of section 1834 to determine the amount
of such additional payment, or by other similar mechanisms or
methodologies.
(vi) For purposes of this subparagraph and subparagraph (L),
a medical service or technology will be considered a ``new
medical service or technology'' if the service or technology
meets criteria established by the Secretary after notice and an
opportunity for public comment.
(vii) Under the mechanism under this subparagraph, the
Secretary shall provide for the addition of new diagnosis and
procedure codes in April 1 of each year, but the addition of
such codes shall not require the Secretary to adjust the
payment (or diagnosis-related group classification) under this
subsection until the fiscal year that begins after such date.
(viii) The mechanism established pursuant to clause (i) shall
be adjusted to provide, before publication of a proposed rule,
for public input regarding whether a new service or technology
represents an advance in medical technology that substantially
improves the diagnosis or treatment of individuals entitled to
benefits under part A as follows:
(I) The Secretary shall make public and periodically
update a list of all the services and technologies for
which an application for additional payment under this
subparagraph is pending.
(II) The Secretary shall accept comments,
recommendations, and data from the public regarding
whether the service or technology represents a
substantial improvement.
(III) The Secretary shall provide for a meeting at
which organizations representing hospitals, physicians,
such individuals, manufacturers, and any other
interested party may present comments, recommendations,
and data to the clinical staff of the Centers for
Medicare & Medicaid Services before publication of a
notice of proposed rulemaking regarding whether service
or technology represents a substantial improvement.
(ix) Before establishing any add-on payment under this
subparagraph with respect to a new technology, the Secretary
shall seek to identify one or more diagnosis-related groups
associated with such technology, based on similar clinical or
anatomical characteristics and the cost of the technology.
Within such groups the Secretary shall assign an eligible new
technology into a diagnosis-related group where the average
costs of care most closely approximate the costs of care of
using the new technology. No add-on payment under this
subparagraph shall be made with respect to such new technology
and this clause shall not affect the application of paragraph
(4)(C)(iii).
(L)(i) In establishing the mechanism under subparagraph (K),
the Secretary may establish new-technology groups into which a
new medical service or technology will be classified if, based
on the estimated average costs incurred with respect to
discharges involving such service or technology, the DRG
prospective payment rate otherwise applicable to such
discharges under this subsection is inadequate.
(ii) Such groups--
(I) shall not be based on the costs associated with a
specific new medical service or technology; but
(II) shall, in combination with the applicable
standardized amounts and the weighting factors assigned
to such groups under paragraph (4)(B), reflect such
cost cohorts as the Secretary determines are
appropriate for all new medical services and
technologies that are likely to be provided as
inpatient hospital services in a fiscal year.
(iii) The methodology for classifying specific hospital
discharges within a diagnosis-related group under paragraph
(4)(A) or a new-technology group shall provide that a specific
hospital discharge may not be classified within both a
diagnosis-related group and a new-technology group.
(6) The Secretary shall provide for publication in the
Federal Register, on or before the August 1 before each fiscal
year (beginning with fiscal year 1984), of a description of the
methodology and data used in computing the adjusted DRG
prospective payment rates under this subsection, including any
adjustments required under subsection (e)(1)(B).
(7) There shall be no administrative or judicial review under
section 1878 or otherwise of--
(A) the determination of the requirement, or the
proportional amount, of any adjustment effected
pursuant to subsection (e)(1) or the determination of
the applicable percentage increase under paragraph
(12)(A)(ii),
(B) the establishment of diagnosis-related groups, of
the methodology for the classification of discharges
within such groups, and of the appropriate weighting
factors thereof under paragraph (4), including the
selection and revision of codes under paragraph (4)(D),
and
(C)\76\ the determination of whether services
provided prior to a patient's inpatient admission are
related to the admission (as described in subsection
(a)(4)).
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\76\Margin so in law.
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(8)(A) In the case of any hospital which is located in an
area which is, at any time after April 20, 1983, reclassified
from an urban to a rural area, payments to such hospital for
the first two cost reporting periods for which such
reclassification is effective shall be made as follows:
(i) For the first such cost reporting period, payment
shall be equal to the amount payable to such hospital
for such reporting period on the basis of the rural
classification, plus an amount equal to two-thirds of
the amount (if any) by which--
(I) the amount which would have been payable
to such hospital for such reporting period on
the basis of an urban classification, exceeds
(II) the amount payable to such hospital for
such reporting period on the basis of the rural
classification.
(ii) For the second such cost reporting period,
payment shall be equal to the amount payable to such
hospital for such reporting period on the basis of the
rural classification, plus an amount equal to one-third
of the amount (if any) by which--
(I) the amount which would have been payable
to such hospital for such reporting period on
the basis of an urban classification, exceeds
(II) the amount payable to such hospital for
such reporting period on the basis of the rural
classification.
(B)(i) For purposes of this subsection, the Secretary shall
treat a hospital located in a rural county adjacent to one or
more urban areas as being located in the urban metropolitan
statistical area to which the greatest number of workers in the
county commute, if the rural county would otherwise be
considered part of an urban area, under the standards for
designating Metropolitan Statistical Areas (and for designating
New England County Metropolitan Areas) described in clause
(ii), if the commuting rates used in determining outlying
counties (or, for New England, similar recognized areas) were
determined on the basis of the aggregate number of resident
workers who commute to (and, if applicable under the standards,
from) the central county or counties of all contiguous
Metropolitan Statistical Areas (or New England County
Metropolitan Areas).
(ii) The standards described in this clause for cost
reporting periods beginning in a fiscal year--
(I) before fiscal year 2003, are the standards
published in the Federal Register on January 3, 1980,
or, at the election of the hospital with respect to
fiscal years 2001 and 2002, standards so published on
March 30, 1990; and
(II) after fiscal year 2002, are the standards
published in the Federal Register by the Director of
the Office of Management and Budget based on the most
recent available decennial population data.
Subparagraphs (C) and (D) shall not apply with respect to the
application of subclause (I).
(C)(i) If the application of subparagraph (B) or a decision
of the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10), by treating hospitals located
in a rural county or counties as being located in an urban
area, or by treating hospitals located in one urban area as
being located in another urban area--
(I) reduces the wage index for that urban area (as
applied under this subsection) by 1 percentage point or
less, the Secretary, in calculating such wage index
under this subsection, shall exclude those hospitals so
treated, or
(II) reduces the wage index for that urban area by
more than 1 percentage point (as applied under this
subsection), the Secretary shall calculate and apply
such wage index under this subsection separately to
hospitals located in such urban area (excluding all the
hospitals so treated) and to the hospitals so treated
(as if such hospitals were located in such urban area).
(ii) If the application of subparagraph (B) or a decision of
the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10), by treating hospitals located
in a rural county or counties as not being located in the rural
area in a State, reduces the wage index for that rural area (as
applied under this subsection), the Secretary shall calculate
and apply such wage index under this subsection as if the
hospitals so treated had not been excluded from calculation of
the wage index for that rural area.
(iii) The application of subparagraph (B) or a decision of
the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10) may not result in the reduction
of any county's wage index to a level below the wage index for
rural areas in the State in which the county is located.
(iv) The application of subparagraph (B) or a decision of the
Medicare Geographic Classification Review Board or of the
Secretary under paragraph (10) may not result in a reduction in
an urban area's wage index if--
(I) the urban area has a wage index below the wage
index for rural areas in the State in which it is
located; or
(II) the urban area is located in a State that is
composed of a single urban area.
(v) This subparagraph shall apply with respect to discharges
occurring in a fiscal year only if the Secretary uses a method
for making adjustments to the DRG prospective payment rate for
area differences in hospital wage levels under paragraph (3)(E)
for the fiscal year that is based on the use of Metropolitan
Statistical Area classifications.
(D) The Secretary shall make a proportional adjustment in the
standardized amounts determined under paragraph (3) to assure
that the provisions of subparagraphs (B) and (C) or a decision
of the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10) do not result in aggregate
payments under this section that are greater or less than those
that would otherwise be made.
(E)(i) For purposes of this subsection, not later than 60
days after the receipt of an application (in a form and manner
determined by the Secretary) from a subsection (d) hospital
described in clause (ii), the Secretary shall treat the
hospital as being located in the rural area (as defined in
paragraph (2)(D)) of the State in which the hospital is
located.
(ii) For purposes of clause (i), a subsection (d) hospital
described in this clause is a subsection (d) hospital that is
located in an urban area (as defined in paragraph (2)(D)) and
satisfies any of the following criteria:
(I) The hospital is located in a rural census tract
of a metropolitan statistical area (as determined under
the most recent modification of the Goldsmith
Modification, originally published in the Federal
Register on February 27, 1992 (57 Fed. Reg. 6725)).
(II) The hospital is located in an area designated by
any law or regulation of such State as a rural area (or
is designated by such State as a rural hospital).
(III) The hospital would qualify as a rural,
regional, or national referral center under paragraph
(5)(C) or as a sole community hospital under paragraph
(5)(D) if the hospital were located in a rural area.
(IV) The hospital meets such other criteria as the
Secretary may specify.
(9)(A) Notwithstanding section 1814(b) but subject to the
provisions of section 1813, the amount of the payment with
respect to the operating costs of inpatient hospital services
of a subsection (d) Puerto Rico hospital for inpatient hospital
discharges is equal to the sum of--
(i) the applicable Puerto Rico percentage (specified
in subparagraph (E)) of the Puerto Rico adjusted DRG
prospective payment rate (determined under subparagraph
(B) or (C)) for such discharges,
(ii) the applicable Federal percentage (specified in
subparagraph (E)) of--
(I) for discharges beginning in a fiscal year
beginning on or after October 1, 1997, and
before October 1, 2003, the discharge-weighted
average of--
(aa) the national adjusted DRG
prospective payment rate (determined
under paragraph (3)(D)) for hospitals
located in a large urban area,
(bb) such rate for hospitals located
in other urban areas, and
(cc) such rate for hospitals located
in a rural area,
for such discharges, adjusted in the manner
provided in paragraph (3)(E) for different area
wage levels; and
(II) for discharges in a fiscal year
beginning on or after October 1, 2003, the
national DRG prospective payment rate
determined under paragraph (3)(D)(iii) for
hospitals located in any area for such
discharges, adjusted in the manner provided in
paragraph (3)(E) for different area wage
levels.
As used in this section, the term ``subsection (d) Puerto Rico
hospital'' means a hospital that is located in Puerto Rico and
that would be a subsection (d) hospital (as defined in
paragraph (1)(B)) if it were located in one of the 50 States.
(B) The Secretary shall determine a Puerto Rico adjusted DRG
prospective payment rate, for each inpatient hospital discharge
in fiscal year 1988 involving inpatient hospital services of a
subsection (d) Puerto Rico hospital for which payment may be
made under part A of this title. Such rate shall be determined
for such hospitals located in urban or rural areas within
Puerto Rico, as follows:
(i) The Secretary shall determine the target amount
(as defined in subsection (b)(3)(A)) for the hospital
for the cost reporting period beginning in fiscal year
1987 and increase such amount by prorating the
applicable percentage increase (as defined in
subsection (b)(3)(B)) to update the amount to the
midpoint in fiscal year 1988.
(ii) The Secretary shall standardize the amount
determined under clause (i) for each hospital by--
(I) excluding an estimate of indirect medical
education costs,
(II) adjusting for variations among hospitals
by area in the average hospital wage level,
(III) adjusting for variations in case mix
among hospitals, and
(IV) excluding an estimate of the additional
payments to certain subsection (d) Puerto Rico
hospitals to be made under subparagraph
(D)(iii) (relating to disproportionate share
payments).
(iii) The Secretary shall compute a discharge
weighted average of the standardized amounts determined
under clause (ii) for all hospitals located in an urban
area and for all hospitals located in a rural area (as
such terms are defined in paragraph (2)(D)).
(iv) The Secretary shall reduce the average
standardized amount by a proportion equal to the
proportion (estimated by the Secretary) of the amount
of payments under this paragraph which are additional
payments described in subparagraph (D)(i) (relating to
outlier payments).
(v) For each discharge classified within a diagnosis-
related group for hospitals located in an urban or
rural area, respectively, the Secretary shall establish
a Puerto Rico DRG prospective payment rate equal to the
product of--
(I) the average standardized amount (computed
under clause (iii) and reduced under clause
(iv)) for hospitals located in an urban or
rural area, respectively, and
(II) the weighting factor (determined under
paragraph (4)(B)) for that diagnosis-related
group.
(vi) The Secretary shall adjust the proportion (as
estimated by the Secretary from time to time) of
hospitals' costs which are attributable to wages and
wage-related costs, of the Puerto Rico DRG prospective
payment rate computed under clause (v) for area
differences in hospital wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
hospital compared to the Puerto Rican average hospital
wage level.
(C) The Secretary shall determine a Puerto Rico adjusted DRG
prospective payment rate, for each inpatient hospital discharge
after fiscal year 1988 involving inpatient hospital services of
a subsection (d) Puerto Rico hospital for which payment may be
made under part A of this title. Such rate shall be determined
for hospitals located in urban or rural areas within Puerto
Rico as follows:
(i)(I) For discharges in a fiscal year after fiscal
year 1988 and before fiscal year 2004, the Secretary
shall compute an average standardized amount for
hospitals located in an urban area and for hospitals
located in a rural area equal to the respective average
standardized amount computed for the previous fiscal
year under subparagraph (B)(iii) or under this clause,
increased for fiscal year 1989 by the applicable
percentage increase under subsection (b)(3)(B), and
adjusted for subsequent fiscal years in accordance with
the final determination of the Secretary under
subsection (e)(4), and adjusted to reflect the most
recent case-mix data available.
(II) For discharges occurring in a fiscal year
(beginning with fiscal year 2004), the Secretary shall
compute an average standardized amount for hospitals
located in any area of Puerto Rico that is equal to the
average standardized amount computed under subclause
(I) for fiscal year 2003 for hospitals in a large urban
area (or, beginning with fiscal year 2005, for all
hospitals in the previous fiscal year) increased by the
applicable percentage increase under subsection
(b)(3)(B) for the fiscal year involved.
(ii) The Secretary shall reduce each of the average
standardized amounts (or for fiscal year 2004 and
thereafter, the average standardized amount) by a
proportion equal to the proportion (estimated by the
Secretary) of the amount of payments under this
paragraph which are additional payments described in
subparagraph (D)(i) (relating to outlier payments).
(iii) For each discharge classified within a
diagnosis-related group for hospitals located in an
urban or rural area, respectively, the Secretary shall
establish a Puerto Rico DRG prospective payment rate
equal to the product of--
(I) the average standardized amount (computed
under clause (i) and reduced under clause
(ii)), and
(II) the weighting factor (determined under
paragraph (4)(B)) for that diagnosis-related
group.
(iv)(I) The Secretary shall adjust the proportion (as
estimated by the Secretary from time to time) of
hospitals' costs which are attributable to wages and
wage-related costs, of the Puerto Rico DRG prospective
payment rate computed under clause (iii) for area
differences in hospital wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
hospital compared to the Puerto Rico average hospital
wage level. The second and third sentences of paragraph
(3)(E)(i) shall apply to subsection (d) Puerto Rico
hospitals under this clause in the same manner as they
apply to subsection (d) hospitals under such paragraph
and, for purposes of this clause, any reference in such
paragraph to a subsection (d) hospital is deemed a
reference to a subsection (d) Puerto Rico hospital.
(II) For discharges occurring on or after October 1,
2004, the Secretary shall substitute ``62 percent'' for
the proportion described in the first sentence of
clause (i), unless the application of this subclause
would result in lower payments to a hospital than would
otherwise be made.
(D) The following provisions of paragraph (5) shall apply to
subsection (d) Puerto Rico hospitals receiving payment under
this paragraph in the same manner and to the extent as they
apply to subsection (d) hospitals receiving payment under this
subsection:
(i) Subparagraph (A) (relating to outlier payments).
(ii) Subparagraph (B) (relating to payments for
indirect medical education costs), except that for this
purpose the sum of the amount determined under
subparagraph (A) of this paragraph and the amount paid
to the hospital under clause (i) of this subparagraph
shall be substituted for the sum referred to in
paragraph (5)(B)(i)(I).
(iii) Subparagraph (F) (relating to disproportionate
share payments), except that for this purpose the sum
described in clause (ii) of this subparagraph shall be
substituted for the sum referred to in paragraph
(5)(F)(ii)(I).
(iv) Subparagraph (H) (relating to exceptions and
adjustments).
(E) For purposes of subparagraph (A), for discharges
occurring--
(i) on or after October 1, 1987, and before October
1, 1997, the applicable Puerto Rico percentage is 75
percent and the applicable Federal percentage is 25
percent;
(ii) on or after October 1, 1997, and before April 1,
2004, the applicable Puerto Rico percentage is 50
percent and the applicable Federal percentage is 50
percent;
(iii) on or after April 1, 2004, and before October
1, 2004, the applicable Puerto Rico percentage is 37.5
percent and the applicable Federal percentage is 62.5
percent;
(iv) on or after October 1, 2004, and before January
1, 2016, the applicable Puerto Rico percentage is 25
percent and the applicable Federal percentage is 75
percent; and
(v) on or after January 1, 2016, the applicable
Puerto Rico percentage is 0 percent and the applicable
Federal percentage is 100 percent.
(10)(A) There is hereby established the Medicare Geographic
Classification Review Board (hereinafter in this paragraph
referred to as the ``Board'').
(B)(i) The Board shall be composed of 5 members appointed by
the Secretary without regard to the provisions of title 5,
United States Code, governing appointments in the competitive
service. Two of such members shall be representative of
subsection (d) hospitals located in a rural area under
paragraph (2)(D). At least 1 member shall be knowledgeable in
the field of analyzing costs with respect to the provision of
inpatient hospital services.
(ii) The Secretary shall make initial appointments to the
Board as provided in this paragraph within 180 days after the
date of the enactment of this paragraph.
(C)(i) The Board shall consider the application of any
subsection (d) hospital requesting that the Secretary change
the hospital's geographic classification for purposes of
determining for a fiscal year--
(I) the hospital's average standardized amount under
paragraph (2)(D), or
(II) the factor used to adjust the DRG prospective
payment rate for area differences in hospital wage
levels that applies to such hospital under paragraph
(3)(E).
(ii) A hospital requesting a change in geographic
classification under clause (i) for a fiscal year shall submit
its application to the Board not later than the first day of
the 13-month period ending on September 30 of the preceding
fiscal year.
(iii)(I) The Board shall render a decision on an application
submitted under clause (i) not later than 180 days after the
deadline referred to in clause (ii).
(II) Appeal of decisions of the Board shall be subject to the
provisions of section 557b of title 5, United States Code. The
Secretary shall issue a decision on such an appeal not later
than 90 days after the date on which the appeal is filed. The
decision of the Secretary shall be final and shall not be
subject to judicial review.
(D)(i) The Secretary shall publish guidelines to be utilized
by the Board in rendering decisions on applications submitted
under this paragraph, and shall include in such guidelines the
following:
(I) Guidelines for comparing wages, taking into
account (to the extent the Secretary determines
appropriate) occupational mix, in the area in which the
hospital is classified and the area in which the
hospital is applying to be classified.
(II) Guidelines for determining whether the county in
which the hospital is located should be treated as
being a part of a particular Metropolitan Statistical
Area.
(III) Guidelines for considering information provided
by an applicant with respect to the effects of the
hospital's geographic classification on access to
inpatient hospital services by medicare beneficiaries.
(IV) Guidelines for considering the appropriateness
of the criteria used to define New England County
Metropolitan Areas.
(ii) Notwithstanding clause (i), if the Secretary uses a
method for making adjustments to the DRG prospective payment
rate for area differences in hospital wage levels under
paragraph (3)(E) that is not based on the use of Metropolitan
Statistical Area classifications, the Secretary may revise the
guidelines published under clause (i) to the extent such
guidelines are used to determine the appropriateness of the
geographic area in which the hospital is determined to be
located for purposes of making such adjustments.
(iii) Under the guidelines published by the Secretary under
clause (i), in the case of a hospital which has ever been
classified by the Secretary as a rural referral center under
paragraph (5)(C), the Board may not reject the application of
the hospital under this paragraph on the basis of any
comparison between the average hourly wage of the hospital and
the average hourly wage of hospitals in the area in which it is
located.
(iv) The Secretary shall publish the guidelines described in
clause (i) by July 1, 1990.
(v) Any decision of the Board to reclassify a subsection (d)
hospital for purposes of the adjustment factor described in
subparagraph (C)(i)(II) for fiscal year 2001 or any fiscal year
thereafter shall be effective for a period of 3 fiscal years,
except that the Secretary shall establish procedures under
which a subsection (d) hospital may elect to terminate such
reclassification before the end of such period.
(vi) Such guidelines shall provide that, in making decisions
on applications for reclassification for the purposes described
in clause (v) for fiscal year 2003 and any succeeding fiscal
year, the Board shall base any comparison of the average hourly
wage for the hospital with the average hourly wage for
hospitals in an area on--
(I) an average of the average hourly wage amount for
the hospital from the most recently published hospital
wage survey data of the Secretary (as of the date on
which the hospital applies for reclassification) and
such amount from each of the two immediately preceding
surveys; and
(II) an average of the average hourly wage amount for
hospitals in such area from the most recently published
hospital wage survey data of the Secretary (as of the
date on which the hospital applies for
reclassification) and such amount from each of the two
immediately preceding surveys.
(E)(i) The Board shall have full power and authority to make
rules and establish procedures, not inconsistent with the
provisions of this title or regulations of the Secretary, which
are necessary or appropriate to carry out the provisions of
this paragraph. In the course of any hearing the Board may
administer oaths and affirmations. The provisions of
subsections (d) and (e) of section 205 with respect to subpenas
shall apply to the Board to the same extent as such provisions
apply to the Secretary with respect to title II.
(ii) The Board is authorized to engage such technical
assistance and to receive such information as may be required
to carry out its functions, and the Secretary shall, in
addition, make available to the Board such secretarial,
clerical, and other assistance as the Board may require to
carry out its functions.
(F)(i) Each member of the Board who is not an officer or
employee of the Federal Government shall be compensated at a
rate equal to the daily equivalent of the annual rate of basic
pay prescribed for grade GS-18 of the General Schedule under
section 5332 of title 5, United States Code, for each day
(including travel time) during which such member is engaged in
the performance of the duties of the Board. Each member of the
Board who is an officer or employee of the United States shall
serve without compensation in addition to that received for
service as an officer or employee of the United States.
(ii) Members of the Board shall be allowed travel expenses,
including per diem in lieu of subsistence, at rates authorized
for employees of agencies under subchapter I of chapter 57 of
title 5, United States Code, while away from their homes or
regular places of business in the performance of services for
the Board.
(11) Additional payments for managed care
enrollees.--
(A) In general.--For portions of cost
reporting periods occurring on or after January
1, 1998, the Secretary shall provide for an
additional payment amount for each applicable
discharge of any subsection (d) hospital that
has an approved medical residency training
program.
(B) Applicable discharge.--For purposes of
this paragraph, the term ``applicable
discharge'' means the discharge of any
individual who is enrolled under a risk-sharing
contract with an eligible organization under
section 1876 and who is entitled to benefits
under part A or any individual who is enrolled
with a Medicare+Choice organization under part
C.
(C) Determination of amount.--The amount of
the payment under this paragraph with respect
to any applicable discharge shall be equal to
the applicable percentage (as defined in
subsection (h)(3)(D)(ii)) of the estimated
average per discharge amount that would
otherwise have been paid under paragraph (5)(B)
if the individuals had not been enrolled as
described in subparagraph (B).
(D) Special rule for hospitals under
reimbursement system.--The Secretary shall
establish rules for the application of this
paragraph to a hospital reimbursed under a
reimbursement system authorized under section
1814(b)(3) in the same manner as it would apply
to the hospital if it were not reimbursed under
such section.
(12) Payment adjustment for low-volume hospitals.--
(A) In general.--In addition to any payments
calculated under this section for a subsection
(d) hospital, for discharges occurring during a
fiscal year (beginning with fiscal year 2005),
the Secretary shall provide for an additional
payment amount to each low-volume hospital (as
defined in subparagraph (C)(i)) for discharges
occurring during that fiscal year that is equal
to the applicable percentage increase
(determined under subparagraph (B) or (D) for
the hospital involved) in the amount paid to
such hospital under this section for such
discharges (determined without regard to this
paragraph).
(B) Applicable percentage increase.--For
discharges occurring in fiscal years 2005
through 2010 and for discharges occurring in
fiscal year 2018 and subsequent fiscal years,
the Secretary shall determine an applicable
percentage increase for purposes of
subparagraph (A) as follows:
(i) The Secretary shall determine the
empirical relationship for subsection
(d) hospitals between the standardized
cost-per-case for such hospitals and
the total number of discharges of such
hospitals and the amount of the
additional incremental costs (if any)
that are associated with such number of
discharges.
(ii) The applicable percentage
increase shall be determined based upon
such relationship in a manner that
reflects, based upon the number of such
discharges for a subsection (d)
hospital, such additional incremental
costs.
(iii) In no case shall the applicable
percentage increase exceed 25 percent.
(C) Definitions.--
(i) Low-volume hospital.--For
purposes of this paragraph, the term
``low-volume hospital'' means, for a
fiscal year, a subsection (d) hospital
(as defined in paragraph (1)(B)) that
the Secretary determines is located
more than 25 road miles (or, with
respect to fiscal years 2011 through
2017, 15 road miles) from another
subsection (d) hospital and has less
than 800 discharges (or, with respect
to fiscal years 2011 through 2017,
1,600 discharges of individuals
entitled to, or enrolled for, benefits
under part A) during the fiscal year or
portion of fiscal year.
(ii) Discharge.--For purposes of
subparagraph (B) and clause (i), the
term ``discharge'' means an inpatient
acute care discharge of an individual
regardless of whether the individual is
entitled to benefits under part A.
(D) Temporary applicable percentage
increase.--For discharges occurring in fiscal
years 2011 through 2017, the Secretary shall
determine an applicable percentage increase for
purposes of subparagraph (A) using a continuous
linear sliding scale ranging from 25 percent
for low-volume hospitals with 200 or fewer
discharges of individuals entitled to, or
enrolled for, benefits under part A in the
fiscal year or the portion of fiscal year to 0
percent for low-volume hospitals with greater
than 1,600 discharges of such individuals in
the fiscal year.
(13)(A) In order to recognize commuting patterns among
geographic areas, the Secretary shall establish a process
through application or otherwise for an increase of the wage
index applied under paragraph (3)(E) for subsection (d)
hospitals located in a qualifying county described in
subparagraph (B) in the amount computed under subparagraph (D)
based on out-migration of hospital employees who reside in that
county to any higher wage index area.
(B) The Secretary shall establish criteria for a qualifying
county under this subparagraph based on the out-migration
referred to in subparagraph (A) and differences in the area
wage indices. Under such criteria the Secretary shall,
utilizing such data as the Secretary determines to be
appropriate, establish--
(i) a threshold percentage, established by the
Secretary, of the weighted average of the area wage
index or indices for the higher wage index areas
involved;
(ii) a threshold (of not less than 10 percent) for
minimum out-migration to a higher wage index area or
areas; and
(iii) a requirement that the average hourly wage of
the hospitals in the qualifying county equals or
exceeds the average hourly wage of all the hospitals in
the area in which the qualifying county is located.
(C) For purposes of this paragraph, the term ``higher wage
index area'' means, with respect to a county, an area with a
wage index that exceeds that of the county.
(D) The increase in the wage index under subparagraph (A) for
a qualifying county shall be equal to the percentage of the
hospital employees residing in the qualifying county who are
employed in any higher wage index area multiplied by the sum of
the products, for each higher wage index area of--
(i) the difference between--
(I) the wage index for such higher wage index
area, and
(II) the wage index of the qualifying county;
and
(ii) the number of hospital employees residing in the
qualifying county who are employed in such higher wage
index area divided by the total number of hospital
employees residing in the qualifying county who are
employed in any higher wage index area.
(E) The process under this paragraph may be based upon the
process used by the Medicare Geographic Classification Review
Board under paragraph (10). As the Secretary determines to be
appropriate to carry out such process, the Secretary may
require hospitals (including subsection (d) hospitals and other
hospitals) and critical access hospitals, as required under
section 1866(a)(1)(T), to submit data regarding the location of
residence, or the Secretary may use data from other sources.
(F) A wage index increase under this paragraph shall be
effective for a period of 3 fiscal years, except that the
Secretary shall establish procedures under which a subsection
(d) hospital may elect to waive the application of such wage
index increase.
(G) A hospital in a county that has a wage index increase
under this paragraph for a period and that has not waived the
application of such an increase under subparagraph (F) is not
eligible for reclassification under paragraph (8) or (10)
during that period.
(H) Any increase in a wage index under this paragraph for a
county shall not be taken into account for purposes of--
(i) computing the wage index for portions of the wage
index area (not including the county) in which the
county is located; or
(ii) applying any budget neutrality adjustment with
respect to such index under paragraph (8)(D).
(I) The thresholds described in subparagraph (B), data on
hospital employees used under this paragraph, and any
determination of the Secretary under the process described in
subparagraph (E) shall be final and shall not be subject to
judicial review.
(e)(1)(A) For cost reporting periods of hospitals beginning
in fiscal year 1984 or fiscal year 1985, the Secretary shall
provide for such proportional adjustment in the applicable
percentage increase (otherwise applicable to the periods under
subsection (b)(3)(B)) as may be necessary to assure that--
(i) the aggregate payment amounts otherwise provided
under subsection (d)(1)(A)(i)(I) for that fiscal year
for operating costs of inpatient hospital services of
hospitals (excluding payments made under section
1866(a)(1)(F)),
are not greater or less than--
(ii) the target percentage (as defined in subsection
(d)(1)(C)) of the payment amounts which would have been
payable for such services for those same hospitals for
that fiscal year under this section under the law as in
effect before the date of the enactment of the Social
Security Amendments of 1983 (excluding payments made
under section 1866(a)(1)(F));
except that the adjustment made under this subparagraph shall
apply only to subsection (d) hospitals and shall not apply for
purposes of making computations under subsection (d)(2)(B)(ii)
or subsection (d)(3)(A).
(B) For discharges occurring in fiscal year 1984 or fiscal
year 1985, the Secretary shall provide under subsections
(d)(2)(F) and (d)(3)(C) for such equal proportional adjustment
in each of the average standardized amounts otherwise computed
for that fiscal year as may be necessary to assure that--
(i) the aggregate payment amounts otherwise provided
under subsection (d)(1)(A)(i)(II) and (d)(5) for that
fiscal year for operating costs of inpatient hospital
services of hospitals (excluding payments made under
section 1866(a)(1)(F)),
are not greater or less than--
(ii) the DRG percentage (as defined in subsection
(d)(1)(C)) of the payment amounts which would have been
payable for such services for those same hospitals for
that fiscal year under this section under the law as in
effect before the date of the enactment of the Social
Security Amendments of 1983 (excluding payments made
under section 1866(a)(1)(F)).
(C) For discharges occurring in fiscal year 1988, the
Secretary shall provide for such equal proportional adjustment
in each of the average standardized amounts otherwise computed
under subsection (d)(3) for that fiscal year as may be
necessary to assure that--
(i) the aggregate payment amounts otherwise provided
under subsections (d)(1)(A)(iii), (d)(5), and (d)(9)
for that fiscal year for operating costs of inpatient
hospital services of subsection (d) hospitals and
subsection (d) Puerto Rico hospitals,
are not greater or less than--
(ii) the payment amounts that would have been payable
for such services for those same hospitals for that
fiscal year but for the enactment of the amendments
made by section 9304 of the Omnibus Budget
Reconciliation Act of 1986.
(4)(A) Taking into consideration the recommendations of the
Commission, the Secretary shall recommend for each fiscal year
(beginning with fiscal year 1988) an appropriate change factor
for inpatient hospital services for discharges in that fiscal
year which will take into account amounts necessary for the
efficient and effective delivery of medically appropriate and
necessary care of high quality. The appropriate change factor
may be different for all large urban subsection (d) hospitals,
other urban subsection (d) hospitals, urban subsection (d)
Puerto Rico hospitals, rural subsection (d) hospitals, and
rural subsection (d) Puerto Rico hospitals, and all other
hospitals and units not paid under subsection (d), and may vary
among such other hospitals and units.
(B) In addition to the recommendation made under subparagraph
(A), the Secretary shall, taking into consideration the
recommendations of the Commission under paragraph (2)(B),
recommend for each fiscal year (beginning with fiscal year
1992) other appropriate changes in each existing reimbursement
policy under this title under which payments to an institution
are based upon prospectively determined rates.
(5) The Secretary shall cause to have published in the
Federal Register, not later than--
(A) the April 1 before each fiscal year (beginning
with fiscal year 1986), the Secretary's proposed
recommendations under paragraph (4) for that fiscal
year for public comment, and
(B) the August 1 before such fiscal year after such
consideration of public comment on the proposal as is
feasible in the time available, the Secretary's final
recommendations under such paragraph for that year.
The Secretary shall include in the publication referred to in
subparagraph (A) for a fiscal year the report of the
Commission's recommendations submitted under paragraph (3) for
that fiscal year. To the extent that the Secretary's
recommendations under paragraph (4) differ from the
Commission's recommendations for that fiscal year, the
Secretary shall include in the publication referred to in
subparagraph (A) an explanation of the Secretary's grounds for
not following the Commission's recommendations.
(f)(1)(A) The Secretary shall maintain a system for the
reporting of costs of hospitals receiving payments computed
under subsection (d).
(B)(i) Subject to clause (ii), the Secretary shall place into
effect a standardized electronic cost reporting format for
hospitals under this title.
(ii) The Secretary may delay or waive the implementation of
such format in particular instances where such implementation
would result in financial hardship (in particular with respect
to hospitals with a small percentage of inpatients entitled to
benefits under this title).
(2) If the Secretary determines, based upon information
supplied by a quality improvement organization under part B of
title XI, that a hospital, in order to circumvent the payment
method established under subsection (b) or (d) of this section,
has taken an action that results in the admission of
individuals entitled to benefits under part A unnecessarily,
unnecessary multiple admissions of the same such individuals,
or other inappropriate medical or other practices with respect
to such individuals, the Secretary may--
(A) deny payment (in whole or in part) under part A
with respect to inpatient hospital services provided
with respect to such an unnecessary admission (or
subsequent admission of the same individual), or
(B) require the hospital to take other corrective
action necessary to prevent or correct the
inappropriate practice.
(3) The provisions of subsections (c) through (g) of section
1128 shall apply to determinations made under paragraph (2) in
the same manner as they apply to exclusions effected under
section 1128(b)(13).
(g)(1)(A) Notwithstanding section 1861(v), instead of any
amounts that are otherwise payable under this title with
respect to the reasonable costs of subsection (d) hospitals and
subsection (d) Puerto Rico hospitals for capital-related costs
of inpatient hospital services, the Secretary shall, for
hospital cost reporting periods beginning on or after October
1, 1991, provide for payments for such costs in accordance with
a prospective payment system established by the Secretary.
Aggregate payments made under subsection (d) and this
subsection during fiscal years 1992 through 1995 shall be
reduced in a manner that results in a reduction (as estimated
by the Secretary) in the amount of such payments equal to a 10
percent reduction in the amount of payments attributable to
capital-related costs that would otherwise have been made
during such fiscal year had the amount of such payments been
based on reasonable costs (as defined in section 1861(v)). For
discharges occurring after September 30, 1993, the Secretary
shall reduce by 7.4 percent the unadjusted standard Federal
capital payment rate (as described in 42 CFR 412.308(c), as in
effect on the date of the enactment of the Omnibus Budget
Reconciliation Act of 1993) and shall (for hospital cost
reporting periods beginning on or after October 1, 1993)
redetermine which payment methodology is applied to the
hospital under such system to take into account such reduction.
In addition to the reduction described in the preceding
sentence, for discharges occurring on or after October 1, 1997,
the Secretary shall apply the budget neutrality adjustment
factor used to determine the Federal capital payment rate in
effect on September 30, 1995 (as described in section 412.352
of title 42 of the Code of Federal Regulations), to (i) the
unadjusted standard Federal capital payment rate (as described
in section 412.308(c) of that title, as in effect on September
30, 1997), and (ii) the unadjusted hospital-specific rate (as
described in section 412.328(e)(1) of that title, as in effect
on September 30, 1997), and, for discharges occurring on or
after October 1, 1997, and before October 1, 2002, reduce the
rates described in clauses (i) and (ii) by 2.1 percent.
(B) Such system--
(i) shall provide for (I) a payment on a per
discharge basis, and (II) an appropriate weighting of
such payment amount as relates to the classification of
the discharge;
(ii) may provide for an adjustment to take into
account variations in the relative costs of capital and
construction for the different types of facilities or
areas in which they are located;
(iii) may provide for such exceptions (including
appropriate exceptions to reflect capital obligations)
as the Secretary determines to be appropriate, and
(iv) may provide for suitable adjustment to reflect
hospital occupancy rate.
(C) In this paragraph, the term ``capital-related costs'' has
the meaning given such term by the Secretary under subsection
(a)(4) as of September 30, 1987, and does not include a return
on equity capital.
(2)(A) The Secretary shall provide that the amount which is
allowable, with respect to reasonable costs of inpatient
hospital services for which payment may be made under this
title, for a return on equity capital for hospitals shall, for
cost reporting periods beginning on or after the date of the
enactment of this subsection, be equal to amounts otherwise
allowable under regulations in effect on March 1, 1983, except
that the rate of return to be recognized shall be equal to the
applicable percentage (described in subparagraph (B)) of the
average of the rates of interest, for each of the months any
part of which is included in the reporting period, on
obligations issued for purchase by the Federal Hospital
Insurance Trust Fund.
(B) In this paragraph, the ``applicable percentage'' is--
(i) 75 percent, for cost reporting periods beginning
during fiscal year 1987,
(ii) 50 percent, for cost reporting periods beginning
during fiscal year 1988,
(iii) 25 percent, for cost reporting periods
beginning during fiscal year 1989, and
(iv) 0 percent, for cost reporting periods beginning
on or after October 1, 1989.
(3)(A) Except as provided in subparagraph (B), in determining
the amount of the payments that may be made under this title
with respect to all the capital-related costs of inpatient
hospital services of a subsection (d) hospital and a subsection
(d) Puerto Rico hospital, the Secretary shall reduce the
amounts of such payments otherwise established under this title
by--
(i) 3.5 percent for payments attributable to portions
of cost reporting periods occurring during fiscal year
1987,
(ii) 7 percent for payments attributable to portions
of cost reporting periods or discharges (as the case
may be) occurring during fiscal year 1988 on or after
October 1, 1987, and before January 1, 1988,
(iii) 12 percent for payments attributable to
portions of cost reporting periods or discharges (as
the case may be) in fiscal year 1988, occurring on or
after January 1, 1988,
(iv) 15 percent for payments attributable to portions
of cost reporting periods or discharges (as the case
may be) occurring during fiscal year 1989, and
(v) 15 percent for payments attributable to portions
of cost reporting periods or discharges (as the case
may be) occurring during the period beginning January
1, 1990, and ending September 30, 1991.
(B) Subparagraph (A) shall not apply to payments with respect
to the capital-related costs of any hospital that is a sole
community hospital (as defined in subsection (d)(5)(D)(iii)) or
a critical access hospital (as defined in section 1861(mm)(1)).
(4) In determining the amount of the payments that are
attributable to portions of cost reporting periods occurring
during fiscal years 1998 through 2002 and that may be made
under this title with respect to capital-related costs of
inpatient hospital services of a hospital which is described in
clause (i), (ii), or (iv) of subsection (d)(1)(B) or a unit
described in the matter after clause (v) of such subsection,
the Secretary shall reduce the amounts of such payments
otherwise determined under this title by 15 percent.
(h) Payments for Direct Graduate Medical Education Costs.--
(1) Substitution of special payment rules.--
Notwithstanding section 1861(v), instead of any amounts
that are otherwise payable under this title with
respect to the reasonable costs of hospitals for direct
graduate medical education costs, the Secretary shall
provide for payments for such costs in accordance with
paragraph (3) of this subsection. In providing for such
payments, the Secretary shall provide for an allocation
of such payments between part A and part B (and the
trust funds established under the respective parts) as
reasonably reflects the proportion of direct graduate
medical education costs of hospitals associated with
the provision of services under each respective part.
(2) Determination of hospital-specific approved fte
resident amounts.--The Secretary shall determine, for
each hospital with an approved medical residency
training program, an approved FTE resident amount for
each cost reporting period beginning on or after July
1, 1985, as follows:
(A) Determining allowable average cost per
fte resident in a hospital's base period.--The
Secretary shall determine, for the hospital's
cost reporting period that began during fiscal
year 1984, the average amount recognized as
reasonable under this title for direct graduate
medical education costs of the hospital for
each full-time-equivalent resident.
(B) Updating to the first cost reporting
period.--
(i) In general.--The Secretary shall
update each average amount determined
under subparagraph (A) by the
percentage increase in the consumer
price index during the 12-month cost
reporting period described in such
subparagraph.
(ii) Exception.--The Secretary shall
not perform an update under clause (i)
in the case of a hospital if the
hospital's reporting period, described
in subparagraph (A), began on or after
July 1, 1984, and before October 1,
1984.
(C) Amount for first cost reporting period.--
For the first cost reporting period of the
hospital beginning on or after July 1, 1985,
the approved FTE resident amount for the
hospital is equal to the amount determined
under subparagraph (B) increased by 1 percent.
(D) Amount for subsequent cost reporting
periods.--
(i) In general.--Except as provided
in a subsequent clause, for each
subsequent cost reporting period, the
approved FTE resident amount for the
hospital is equal to the approved FTE
resident amount determined under this
paragraph for the previous cost
reporting period updated, through the
midpoint of the period, by projecting
the estimated percentage change in the
consumer price index during the 12-
month period ending at that midpoint,
with appropriate adjustments to reflect
previous under-or over-estimations
under this subparagraph in the
projected percentage change in the
consumer price index.
(ii) Freeze in update for fiscal
years 1994 and 1995.--For cost
reporting periods beginning during
fiscal year 1994 or fiscal year 1995,
the approved FTE resident amount for a
hospital shall not be updated under
clause (i) for a resident who is not a
primary care resident (as defined in
paragraph (5)(H)) or a resident
enrolled in an approved medical
residency training program in
obstetrics and gynecology.
(iii) Floor for locality adjusted
national average per resident amount.--
The approved FTE resident amount for a
hospital for the cost reporting period
beginning during fiscal year 2001 shall
not be less than 70 percent, and for
the cost reporting period beginning
during fiscal year 2002 shall not be
less than 85 percent, of the locality
adjusted national average per resident
amount computed under subparagraph (E)
for the hospital and period.
(iv) Adjustment in rate of increase
for hospitals with fte approved amount
above 140 percent of locality adjusted
national average per resident amount.--
(I) Freeze for fiscal years
2001 and 2002 and 2004 through
2013.--For a cost reporting
period beginning during fiscal
year 2001 or fiscal year 2002
or during the period beginning
with fiscal year 2004 and
ending with fiscal year 2013,
if the approved FTE resident
amount for a hospital for the
preceding cost reporting period
exceeds 140 percent of the
locality adjusted national
average per resident amount
computed under subparagraph (E)
for that hospital and period,
subject to subclause (III), the
approved FTE resident amount
for the period involved shall
be the same as the approved FTE
resident amount for the
hospital for such preceding
cost reporting period.
(II) 2 percent decrease in
update for fiscal years 2003,
2004, and 2005.--For the cost
reporting period beginning
during fiscal year 2003, if the
approved FTE resident amount
for a hospital for the
preceding cost reporting period
exceeds 140 percent of the
locality adjusted national
average per resident amount
computed under subparagraph (E)
for that hospital and preceding
period, the approved FTE
resident amount for the period
involved shall be updated in
the manner described in
subparagraph (D)(i) except
that, subject to subclause
(III), the consumer price index
applied for a 12-month period
shall be reduced (but not below
zero) by 2 percentage points.
(III) No adjustment below 140
percent.--In no case shall
subclause (I) or (II) reduce an
approved FTE resident amount
for a hospital for a cost
reporting period below 140
percent of the locality
adjusted national average per
resident amount computed under
subparagraph (E) for such
hospital and period.
(E) Determination of locality adjusted
national average per resident amount.--The
Secretary shall determine a locality adjusted
national average per resident amount with
respect to a cost reporting period of a
hospital beginning during a fiscal year as
follows:
(i) Determining hospital single per
resident amount.--The Secretary shall
compute for each hospital operating an
approved graduate medical education
program a single per resident amount
equal to the average (weighted by
number of full-time equivalent
residents, as determined under
paragraph (4)) of the primary care per
resident amount and the non-primary
care per resident amount computed under
paragraph (2) for cost reporting
periods ending during fiscal year 1997.
(ii) Standardizing per resident
amounts.--The Secretary shall compute a
standardized per resident amount for
each such hospital by dividing the
single per resident amount computed
under clause (i) by an average of the 3
geographic index values (weighted by
the national average weight for each of
the work, practice expense, and
malpractice components) as applied
under section 1848(e) for 1999 for the
fee schedule area in which the hospital
is located.
(iii) Computing of weighted
average.--The Secretary shall compute
the average of the standardized per
resident amounts computed under clause
(ii) for such hospitals, with the
amount for each hospital weighted by
the average number of full-time
equivalent residents at such hospital
(as determined under paragraph (4)).
(iv) Computing national average per
resident amount.--The Secretary shall
compute the national average per
resident amount, for a hospital's cost
reporting period that begins during
fiscal year 2001, equal to the weighted
average computed under clause (iii)
increased by the estimated percentage
increase in the consumer price index
for all urban consumers during the
period beginning with the month that
represents the midpoint of the cost
reporting periods described in clause
(i) and ending with the midpoint of the
hospital's cost reporting period that
begins during fiscal year 2001.
(v) Adjusting for locality.--The
Secretary shall compute the product
of--
(I) the national average per
resident amount computed under
clause (iv) for the hospital,
and
(II) the geographic index
value average (described and
applied under clause (ii)) for
the fee schedule area in which
the hospital is located.
(vi) Computing locality adjusted
amount.--The locality adjusted national
per resident amount for a hospital
for--
(I) the cost reporting period
beginning during fiscal year
2001 is the product computed
under clause (v); or
(II) each subsequent cost
reporting period is equal to
the locality adjusted national
per resident amount for the
hospital for the previous cost
reporting period (as determined
under this clause) updated,
through the midpoint of the
period, by projecting the
estimated percentage change in
the consumer price index for
all urban consumers during the
12-month period ending at that
midpoint.
(F) Treatment of certain hospitals.--In the
case of a hospital that did not have an
approved medical residency training program or
was not participating in the program under this
title for a cost reporting period beginning
during fiscal year 1984, the Secretary shall,
for the first such period for which it has such
a residency training program and is
participating under this title, provide for
such approved FTE resident amount as the
Secretary determines to be appropriate, based
on approved FTE resident amounts for comparable
programs.
(3) Hospital payment amount per resident.--
(A) In general.--The payment amount, for a
hospital cost reporting period beginning on or
after July 1, 1985, is equal to the product
of--
(i) the aggregate approved amount (as
defined in subparagraph (B)) for that
period, and
(ii) the hospital's medicare patient
load (as defined in subparagraph (C))
for that period.
(B) Aggregate approved amount.--As used in
subparagraph (A), the term ``aggregate approved
amount'' means, for a hospital cost reporting
period, the product of--
(i) the hospital's approved FTE
resident amount (determined under
paragraph (2)) for that period, and
(ii) the weighted average number of
full-time-equivalent residents (as
determined under paragraph (4)) in the
hospital's approved medical residency
training programs in that period.
The Secretary shall reduce the aggregate approved
amount to the extent payment is made under subsection
(k) for residents included in the hospital's count of
full-time equivalent residents.
(C) Medicare patient load.--As used in
subparagraph (A), the term ``medicare patient
load'' means, with respect to a hospital's cost
reporting period, the fraction of the total
number of inpatient-bed-days (as established by
the Secretary) during the period which are
attributable to patients with respect to whom
payment may be made under part A.
(D) Payment for managed care enrollees.--
(i) In general.--For portions of cost
reporting periods occurring on or after
January 1, 1998, the Secretary shall
provide for an additional payment
amount under this subsection for
services furnished to individuals who
are enrolled under a risk-sharing
contract with an eligible organization
under section 1876 and who are entitled
to part A or with a Medicare+Choice
organization under part C. The amount
of such a payment shall equal, subject
to clause (iii), the applicable
percentage of the product of--
(I) the aggregate approved
amount (as defined in
subparagraph (B)) for that
period; and
(II) the fraction of the
total number of inpatient-bed
days (as established by the
Secretary) during the period
which are attributable to such
enrolled individuals.
(ii) Applicable percentage.--For
purposes of clause (i), the applicable
percentage is--
(I) 20 percent in 1998,
(II) 40 percent in 1999,
(III) 60 percent in 2000,
(IV) 80 percent in 2001, and
(V) 100 percent in 2002 and
subsequent years.
(iii) Proportional reduction for
nursing and allied health education.--
The Secretary shall estimate a
proportional adjustment in payments to
all hospitals determined under clauses
(i) and (ii) for portions of cost
reporting periods beginning in a year
(beginning with 2000) such that the
proportional adjustment reduces
payments in an amount for such year
equal to the total additional payment
amounts for nursing and allied health
education determined under subsection
(l) for portions of cost reporting
periods occurring in that year.
(iv) Special rule for hospitals under
reimbursement system.--The Secretary
shall establish rules for the
application of this subparagraph to a
hospital reimbursed under a
reimbursement system authorized under
section 1814(b)(3) in the same manner
as it would apply to the hospital if it
were not reimbursed under such section.
(4) Determination of full-time-equivalent
residents.--
(A) Rules.--The Secretary shall establish
rules consistent with this paragraph for the
computation of the number of full-time-
equivalent residents in an approved medical
residency training program.
(B) Adjustment for part-year or part-time
residents.--Such rules shall take into account
individuals who serve as residents for only a
portion of a period with a hospital or
simultaneously with more than one hospital.
(C) Weighting factors for certain
residents.--Subject to subparagraph (D), such
rules shall provide, in calculating the number
of full-time-equivalent residents in an
approved residency program--
(i) before July 1, 1986, for each
resident the weighting factor is 1.00,
(ii) on or after July 1, 1986, for a
resident who is in the resident's
initial residency period (as defined in
paragraph (5)(F)), the weighting factor
is 1.00,
(iii) on or after July 1, 1986, and
before July 1, 1987, for a resident who
is not in the resident's initial
residency period (as defined in
paragraph (5)(F)), the weighting factor
is .75, and
(iv) on or after July 1, 1987, for a
resident who is not in the resident's
initial residency period (as defined in
paragraph (5)(F)), the weighting factor
is .50.
(D) Foreign medical graduates required to
pass fmgems examination.--
(i) In general.--Except as provided
in clause (ii), such rules shall
provide that, in the case of an
individual who is a foreign medical
graduate (as defined in paragraph
(5)(D)), the individual shall not be
counted as a resident on or after July
1, 1986, unless--
(I) the individual has passed
the FMGEMS examination (as
defined in paragraph (5)(E)),
or
(II) the individual has
previously received
certification from, or has
previously passed the
examination of, the Educational
Commission for Foreign Medical
Graduates.
(ii) Transition for current fmgs.--On
or after July 1, 1986, but before July
1, 1987, in the case of a foreign
medical graduate who--
(I) has served as a resident
before July 1, 1986, and is
serving as a resident after
that date, but
(II) has not passed the
FMGEMS examination or a
previous examination of the
Educational Commission for
Foreign Medical Graduates
before July 1, 1986,
the individual shall be counted as a
resident at a rate equal to one-half of
the rate at which the individual would
otherwise be counted.
(E) Counting time spent in outpatient
settings.--Subject to subparagraphs (J) and
(K), such rules shall provide that only time
spent in activities relating to patient care
shall be counted and that--
(i) effective for cost reporting
periods beginning before July 1, 2010,
all the time;\77\
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\77\So in law. Probably should read ``; and''. Amendment by section
5504(a)(2) of Public Law 111-148 attempts to add this word but the
instructions to strike the period at the end and insert ``; and'' did
not execute because there was no period at the end of clause (i) (as
added by such Public Law).
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(ii) effective for cost reporting
periods beginning on or after July 1,
2010, all the time so spent by a
resident shall be counted towards the
determination of full-time equivalency,
without regard to the setting in which
the activities are performed, if a
hospital incurs the costs of the
stipends and fringe benefits of the
resident during the time the resident
spends in that setting. If more than
one hospital incurs these costs, either
directly or through a third party, such
hospitals shall count a proportional
share of the time, as determined by
written agreement between the
hospitals, that a resident spends
training in that setting.
so spent by a resident under an approved
medical residency training program shall be
counted towards the determination of full-time
equivalency, without regard to the setting in
which the activities are performed, if the
hospital incurs all, or substantially all, of
the costs for the training program in that
setting.\78\
---------------------------------------------------------------------------
\78\The placement of language beginning with ``so spent by a
resident under'' through ``training program in that setting.'' that
appears after clause (ii) and before the continuation text at the end
(as added by section 5504(a) of Public Law 111-148), is so in law and
is based on text that existed prior to the enactment of such Public
Law.
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Any hospital claiming under this subparagraph
for time spent in a nonprovider setting shall
maintain and make available to the Secretary
records regarding the amount of such time and
such amount in comparison with amounts of such
time in such base year as the Secretary shall
specify.
(F) Limitation on number of residents in
allopathic and osteopathic medicine.--
(i) In general.--Such rules shall
provide that for purposes of a cost
reporting period beginning on or after
October 1, 1997, subject to paragraphs
(7) and (8), the total number of full-
time equivalent residents before
application of weighting factors (as
determined under this paragraph) with
respect to a hospital's approved
medical residency training program in
the fields of allopathic medicine and
osteopathic medicine may not exceed the
number (or, 130 percent of such number
in the case of a hospital located in a
rural area) of such full-time
equivalent residents for the hospital's
most recent cost reporting period
ending on or before December 31, 1996.
(ii) Counting primary care residents
on certain approved leaves of absence
in base year fte count.--
(I) In general.--In
determining the number of such
full-time equivalent residents
for a hospital's most recent
cost reporting period ending on
or before December 31, 1996,
for purposes of clause (i), the
Secretary shall count an
individual to the extent that
the individual would have been
counted as a primary care
resident for such period but
for the fact that the
individual, as determined by
the Secretary, was on maternity
or disability leave or a
similar approved leave of
absence.
(II) Limitation to 3 fte
residents for any hospital.--
The total number of individuals
counted under subclause (I) for
a hospital may not exceed 3
full-time equivalent residents.
(G) Counting interns and residents for fy
1998 and subsequent years.--
(i) In general.--For cost reporting
periods beginning during fiscal years
beginning on or after October 1, 1997,
subject to the limit described in
subparagraph (F), the total number of
full-time equivalent residents for
determining a hospital's graduate
medical education payment shall equal
the average of the actual full-time
equivalent resident counts for the cost
reporting period and the preceding two
cost reporting periods.
(ii) Adjustment for short periods.--
If any cost reporting period beginning
on or after October 1, 1997, is not
equal to twelve months, the Secretary
shall make appropriate modifications to
ensure that the average full-time
equivalent resident counts pursuant to
clause (i) are based on the equivalent
of full twelve-month cost reporting
periods.
(iii) Transition rule for 1998.--In
the case of a hospital's first cost
reporting period beginning on or after
October 1, 1997, clause (i) shall be
applied by using the average for such
period and the preceding cost reporting
period.
(H) Special rules for application of
subparagraphs (f) and (g).--
(i) New facilities.--The Secretary
shall, consistent with the principles
of subparagraphs (F) and (G) and
subject to paragraphs (7) and (8),
prescribe rules for the application of
such subparagraphs in the case of
medical residency training programs
established on or after January 1,
1995. In promulgating such rules for
purposes of subparagraph (F), the
Secretary shall give special
consideration to facilities that meet
the needs of underserved rural areas.
(ii) Aggregation.--The Secretary may
prescribe rules which allow
institutions which are members of the
same affiliated group (as defined by
the Secretary) to elect to apply the
limitation of subparagraph (F) on an
aggregate basis.
(iii) Data collection.--The Secretary
may require any entity that operates a
medical residency training program and
to which subparagraphs (F) and (G)
apply to submit to the Secretary such
additional information as the Secretary
considers necessary to carry out such
subparagraphs.
(iv) Nonrural hospitals operating
training programs in rural areas.--In
the case of a hospital that is not
located in a rural area but establishes
separately accredited approved medical
residency training programs (or rural
tracks) in an\79\ rural area or has an
accredited training program with an
integrated rural track, the Secretary
shall adjust the limitation under
subparagraph (F) in an appropriate
manner insofar as it applies to such
programs in such rural areas in order
to encourage the training of physicians
in rural areas.
---------------------------------------------------------------------------
\79\So in original. Probably should be ``a''.
---------------------------------------------------------------------------
(v) Special provider agreement.--If
an entity enters into a provider
agreement pursuant to section 1866(a)
to provide hospital services on the
same physical site previously used by
Medicare Provider No. 05-0578--
(I) the limitation on the
number of total full time
equivalent residents under
subparagraph (F) and clauses
(v) and (vi)(I) of subsection
(d)(5)(B) applicable to such
provider shall be equal to the
limitation applicable under
such provisions to Provider No.
05-0578 for its cost reporting
period ending on June 30, 2006;
and
(II) the provisions of
subparagraph (G) and subsection
(d)(5)(B)(vi)(II) shall not be
applicable to such provider for
the first three cost reporting
years in which such provider
trains residents under any
approved medical residency
training program.
(vi) Redistribution of residency
slots after a hospital closes.--
(I) In general.--Subject to
the succeeding provisions of
this clause, the Secretary
shall, by regulation, establish
a process under which, in the
case where a hospital (other
than a hospital described in
clause (v)) with an approved
medical residency program
closes on or after a date that
is 2 years before the date of
enactment of this clause, the
Secretary shall increase the
otherwise applicable resident
limit under this paragraph for
other hospitals in accordance
with this clause.
(II) Priority for hospitals
in certain areas.--Subject to
the succeeding provisions of
this clause, in determining for
which hospitals the increase in
the otherwise applicable
resident limit is provided
under such process, the
Secretary shall distribute the
increase to hospitals in the
following priority order (with
preference given within each
category to hospitals that are
members of the same affiliated
group (as defined by the
Secretary under clause (ii)) as
the closed hospital):
(aa) First, to
hospitals located in
the same core-based
statistical area as, or
a core-based
statistical area
contiguous to, the
hospital that closed.
(bb) Second, to
hospitals located in
the same State as the
hospital that closed.
(cc) Third, to
hospitals located in
the same region of the
country as the hospital
that closed.
(dd) Fourth, only if
the Secretary is not
able to distribute the
increase to hospitals
described in item (cc),
to qualifying hospitals
in accordance with the
provisions of paragraph
(8).
(III) Requirement hospital
likely to fill position within
certain time period.--The
Secretary may only increase the
otherwise applicable resident
limit of a hospital under such
process if the Secretary
determines the hospital has
demonstrated a likelihood of
filling the positions made
available under this clause
within 3 years.
(IV) Limitation.--The
aggregate number of increases
in the otherwise applicable
resident limits for hospitals
under this clause shall be
equal to the number of resident
positions in the approved
medical residency programs that
closed on or after the date
described in subclause (I).
(V) Administration.--Chapter
35 of title 44, United States
Code, shall not apply to the
implementation of this clause.
(J)\80\ Treatment of certain nonprovider and
didactic activities.--Such rules shall provide
that all time spent by an intern or resident in
an approved medical residency training program
in a nonprovider setting that is primarily
engaged in furnishing patient care (as defined
in paragraph (5)(K)) in non-patient care
activities, such as didactic conferences and
seminars, but not including research not
associated with the treatment or diagnosis of a
particular patient, as such time and activities
are defined by the Secretary, shall be counted
toward the determination of full-time
equivalency.
---------------------------------------------------------------------------
\80\There is no subparagraph (I) in section 1886(h)(4).
Subparagraphs (J) and (K) were added by section 5505(a)(1)(B) of Public
Law 111-148.
---------------------------------------------------------------------------
(K) Treatment of certain other activities.--
In determining the hospital's number of full-
time equivalent residents for purposes of this
subsection, all the time that is spent by an
intern or resident in an approved medical
residency training program on vacation, sick
leave, or other approved leave, as such time is
defined by the Secretary, and that does not
prolong the total time the resident is
participating in the approved program beyond
the normal duration of the program shall be
counted toward the determination of full-time
equivalency.
(5) Definitions and special rules.--As used in this
subsection:
(A) Approved medical residency training
program.--The term ``approved medical residency
training program'' means a residency or other
postgraduate medical training program
participation in which may be counted toward
certification in a specialty or subspecialty
and includes formal postgraduate training
programs in geriatric medicine approved by the
Secretary.
(B) Consumer price index.--The term
``consumer price index'' refers to the Consumer
Price Index for All Urban Consumers (United
States city average), as published by the
Secretary of Commerce.
(C) Direct graduate medical education
costs.--The term ``direct graduate medical
education costs'' means direct costs of
approved educational activities for approved
medical residency training programs.
(D) Foreign medical graduate.--The term
``foreign medical graduate'' means a resident
who is not a graduate of--
(i) a school of medicine accredited
by the Liaison Committee on Medical
Education of the American Medical
Association and the Association of
American Medical Colleges (or approved
by such Committee as meeting the
standards necessary for such
accreditation),
(ii) a school of osteopathy
accredited by the American Osteopathic
Association, or approved by such
Association as meeting the standards
necessary for such accreditation, or
(iii) a school of dentistry or
podiatry which is accredited (or meets
the standards for accreditation) by an
organization recognized by the
Secretary for such purpose.
(E) FMGEMS examination.--The term ``FMGEMS
examination'' means parts I and II of the
Foreign Medical Graduate Examination in the
Medical Sciences or any successor examination
recognized by the Secretary for this purpose.
(F) Initial residency period.--The term
``initial residency period'' means the period
of board eligibility, except that--
(i) except as provided in clause
(ii), in no case shall the initial
period of residency exceed an aggregate
period of formal training of more than
five years for any individual, and
(ii) a period, of not more than two
years, during which an individual is in
a geriatric residency or fellowship
program or a preventive medicine
residency or fellowship program which
meets such criteria as the Secretary
may establish, shall be treated as part
of the initial residency period, but
shall not be counted against any
limitation on the initial residency
period.
Subject to subparagraph (G)(v), the initial
residency period shall be determined, with
respect to a resident, as of the time the
resident enters the residency training program.
(G) Period of board eligibility.--
(i) General rule.--Subject to clauses
(ii), (iii), (iv), and (v), the term
``period of board eligibility'' means,
for a resident, the minimum number of
years of formal training necessary to
satisfy the requirements for initial
board eligibility in the particular
specialty for which the resident is
training.
(ii) Application of 1985-1986
directory.--Except as provided in
clause (iii), the period of board
eligibility shall be such period
specified in the 1985-1986 Directory of
Residency Training Programs published
by the Accreditation Council on
Graduate Medical Education.
(iii) Changes in period of board
eligibility.--On or after July 1, 1989,
if the Accreditation Council on
Graduate Medical Education, in its
Directory of Residency Training
Programs--
(I) increases the minimum
number of years of formal
training necessary to satisfy
the requirements for a
specialty, above the period
specified in its 1985-1986
Directory, the Secretary may
increase the period of board
eligibility for that specialty,
but not to exceed the period of
board eligibility specified in
that later Directory, or
(II) decreases the minimum
number of years of formal
training necessary to satisfy
the requirements for a
specialty, below the period
specified in its 1985-1986
Directory, the Secretary may
decrease the period of board
eligibility for that specialty,
but not below the period of
board eligibility specified in
that later Directory.
(iv) Special rule for certain primary
care combined residency programs.--(I)
In the case of a resident enrolled in a
combined medical residency training
program in which all of the individual
programs (that are combined) are for
training a primary care resident (as
defined in subparagraph (H)), the
period of board eligibility shall be
the minimum number of years of formal
training required to satisfy the
requirements for initial board
eligibility in the longest of the
individual programs plus one additional
year.
(II) A resident enrolled in a
combined medical residency training
program that includes an obstetrics and
gynecology program shall qualify for
the period of board eligibility under
subclause (I) if the other programs
such resident combines with such
obstetrics and gynecology program are
for training a primary care resident.
(v) Child neurology training
programs.--In the case of a resident
enrolled in a child neurology residency
training program, the period of board
eligibility and the initial residency
period shall be the period of board
eligibility for pediatrics plus 2
years.
(H) Primary care resident.--The term
``primary care resident'' means a resident
enrolled in an approved medical residency
training program in family medicine, general
internal medicine, general pediatrics,
preventive medicine, geriatric medicine, or
osteopathic general practice.
(I) Resident.--The term ``resident'' includes
an intern or other participant in an approved
medical residency training program.
(J) Adjustments for certain family practice
residency programs.--
(i) In general.--In the case of an
approved medical residency training
program (meeting the requirements of
clause (ii)) of a hospital which
received funds from the United States,
a State, or a political subdivision of
a State or an instrumentality of such a
State or political subdivision (other
than payments under this title or a
State plan under title XIX) for the
program during the cost reporting
period that began during fiscal year
1984, the Secretary shall--
(I) provide for an average
amount under paragraph (2)(A)
that takes into account the
Secretary's estimate of the
amount that would have been
recognized as reasonable under
this title if the hospital had
not received such funds, and
(II) reduce the payment
amount otherwise provided under
this subsection in an amount
equal to the proportion of such
program funds received during
the cost reporting period
involved that is allocable to
this title.
(ii) Additional requirements.--A
hospital's approved medical residency
program meets the requirements of this
clause if--
(I) the program is limited to
training for family and
community medicine;
(II) the program is the only
approved medical residency
program of the hospital; and
(III) the average amount
determined under paragraph
(2)(A) for the hospital (as
determined without regard to
the increase in such amount
described in clause (i)(I))
does not exceed $10,000.
(K) Nonprovider setting that is primarily
engaged in furnishing patient care.--The term
``nonprovider setting that is primarily engaged
in furnishing patient care'' means a
nonprovider setting in which the primary
activity is the care and treatment of patients,
as defined by the Secretary.
(6) Incentive payment under plans for voluntary
reduction in number of residents.--
(A) In general.--In the case of a voluntary
residency reduction plan for which an
application is approved under subparagraph (B),
subject to subparagraph (F), each hospital
which is part of the qualifying entity
submitting the plan shall be paid an applicable
hold harmless percentage (as specified in
subparagraph (E)) of the sum of--
(i) the amount (if any) by which--
(I) the amount of payment
which would have been made
under this subsection if there
had been a 5-percent reduction
in the number of full-time
equivalent residents in the
approved medical education
training programs of the
hospital as of June 30, 1997,
exceeds
(II) the amount of payment
which is made under this
subsection, taking into account
the reduction in such number
effected under the reduction
plan; and
(ii) the amount of the reduction in
payment under subsection (d)(5)(B) for
the hospital that is attributable to
the reduction in number of residents
effected under the plan below 95
percent of the number of full-time
equivalent residents in such programs
of the hospital as of June 30, 1997.
The determination of the amounts under clauses
(i) and (ii) for any year shall be made on the
basis of the provisions of this title in effect
on the application deadline date for the first
calendar year to which the reduction plan
applies.
(B) Approval of plan applications.--The
Secretary may not approve the application of an
qualifying entity unless--
(i) the application is submitted in a
form and manner specified by the
Secretary and by not later than
November 1, 1999,
(ii) the application provides for the
operation of a plan for the reduction
in the number of full-time equivalent
residents in the approved medical
residency training programs of the
entity consistent with the requirements
of subparagraph (D);
(iii) the entity elects in the
application the period of residency
training years (not greater than 5)
over which the reduction will occur;
(iv) the entity will not reduce the
proportion of its residents in primary
care (to the total number of residents)
below such proportion as in effect as
of the applicable time described in
subparagraph (D)(v); and
(v) the Secretary determines that the
application and the entity and such
plan meet such other requirements as
the Secretary specifies in regulations.
(C) Qualifying entity.--For purposes of this
paragraph, any of the following may be a
qualifying entity:
(i) Individual hospitals operating
one or more approved medical residency
training programs.
(ii) Two or more hospitals that
operate such programs and apply for
treatment under this paragraph as a
single qualifying entity.
(iii) A qualifying consortium (as
described in section 4628 of the
Balanced Budget Act of 1997).
(D) Residency reduction requirements.--
(i) Individual hospital applicants.--
In the case of a qualifying entity
described in subparagraph (C)(i), the
number of full-time equivalent
residents in all the approved medical
residency training programs operated by
or through the entity shall be reduced
as follows:
(I) If the base number of
residents exceeds 750
residents, by a number equal to
at least 20 percent of such
base number.
(II) Subject to subclause
(IV), if the base number of
residents exceeds 600 but is
less than 750 residents, by 150
residents.
(III) Subject to subclause
(IV), if the base number of
residents does not exceed 600
residents, by a number equal to
at least 25 percent of such
base number.
(IV) In the case of a
qualifying entity which is
described in clause (v) and
which elects treatment under
this subclause, by a number
equal to at least 20 percent of
the base number.
(ii) Joint applicants.--In the case
of a qualifying entity described in
subparagraph (C)(ii), the number of
full-time equivalent residents in the
aggregate for all the approved medical
residency training programs operated by
or through the entity shall be reduced
as follows:
(I) Subject to subclause
(II), by a number equal to at
least 25 percent of the base
number.
(II) In the case of such a
qualifying entity which is
described in clause (v) and
which elects treatment under
this subclause, by a number
equal to at least 20 percent of
the base number.
(iii) Consortia.--In the case of a
qualifying entity described in
subparagraph (C)(iii), the number of
full-time equivalent residents in the
aggregate for all the approved medical
residency training programs operated by
or through the entity shall be reduced
by a number equal to at least 20
percent of the base number.
(iv) Manner of reduction.--The
reductions specified under the
preceding provisions of this
subparagraph for a qualifying entity
shall be below the base number of
residents for that entity and shall be
fully effective not later than the 5th
residency training year in which the
application under subparagraph (B) is
effective.
(v) Entities providing assurance of
increase in primary care residents.--An
entity is described in this clause if--
(I) the base number of
residents for the entity is
less than 750 or the entity is
described in subparagraph
(C)(ii); and
(II) the entity represents in
its application under
subparagraph (B) that it will
increase the number of full-
time equivalent residents in
primary care by at least 20
percent (from such number
included in the base number of
residents) by not later than
the 5th residency training year
in which the application under
subparagraph (B) is effective.
If a qualifying entity fails to comply
with the representation described in
subclause (II) by the end of such 5th
residency training year, the entity
shall be subject to repayment of all
amounts paid under this paragraph, in
accordance with procedures established
to carry out subparagraph (F).
(vi) Base number of residents
defined.--For purposes of this
paragraph, the term ``base number of
residents'' means, with respect to a
qualifying entity (or its participating
hospitals) operating approved medical
residency training programs, the number
of full-time equivalent residents in
such programs (before application of
weighting factors) of the entity as of
the most recent residency training year
ending before June 30, 1997, or, if
less, for any subsequent residency
training year that ends before the date
the entity makes application under this
paragraph.
(E) Applicable hold harmless percentage.--For
purposes of subparagraph (A), the ``applicable
hold harmless percentage'' for the--
(i) first and second residency
training years in which the reduction
plan is in effect, 100 percent,
(ii) third such year, 75 percent,
(iii) fourth such year, 50 percent,
and
(iv) fifth such year, 25 percent.
(F) Penalty for noncompliance.--
(i) In general.--No payment may be
made under this paragraph to a hospital
for a residency training year if the
hospital has failed to reduce the
number of full-time equivalent
residents (in the manner required under
subparagraph (D)) to the number agreed
to by the Secretary and the qualifying
entity in approving the application
under this paragraph with respect to
such year.
(ii) Increase in number of residents
in subsequent years.--If payments are
made under this paragraph to a
hospital, and if the hospital increases
the number of full-time equivalent
residents above the number of such
residents permitted under the reduction
plan as of the completion of the plan,
then, as specified by the Secretary,
the entity is liable for repayment to
the Secretary of the total amounts paid
under this paragraph to the entity.
(G) Treatment of rotating residents.--In
applying this paragraph, the Secretary shall
establish rules regarding the counting of
residents who are assigned to institutions the
medical residency training programs in which
are not covered under approved applications
under this paragraph.
(7) Redistribution of unused resident positions.--
(A) Reduction in limit based on unused
positions.--
(i) Programs subject to reduction.--
(I) In general.--Except as
provided in subclause (II), if
a hospital's reference resident
level (specified in clause
(ii)) is less than the
otherwise applicable resident
limit (as defined in
subparagraph (C)(ii)),
effective for portions of cost
reporting periods occurring on
or after July 1, 2005, the
otherwise applicable resident
limit shall be reduced by 75
percent of the difference
between such otherwise
applicable resident limit and
such reference resident level.
(II) Exception for small
rural hospitals.--This
subparagraph shall not apply to
a hospital located in a rural
area (as defined in subsection
(d)(2)(D)(ii)) with fewer than
250 acute care inpatient beds.
(ii) Reference resident level.--
(I) In general.--Except as
otherwise provided in
subclauses (II) and (III), the
reference resident level
specified in this clause for a
hospital is the resident level
for the most recent cost
reporting period of the
hospital ending on or before
September 30, 2002, for which a
cost report has been settled
(or, if not, submitted (subject
to audit)), as determined by
the Secretary.
(II) Use of most recent
accounting period to recognize
expansion of existing
programs.--If a hospital
submits a timely request to
increase its resident level due
to an expansion of an existing
residency training program that
is not reflected on the most
recent settled cost report,
after audit and subject to the
discretion of the Secretary,
the reference resident level
for such hospital is the
resident level for the cost
reporting period that includes
July 1, 2003, as determined by
the Secretary.
(III) Expansions under newly
approved programs.--Upon the
timely request of a hospital,
the Secretary shall adjust the
reference resident level
specified under subclause (I)
or (II) to include the number
of medical residents that were
approved in an application for
a medical residency training
program that was approved by an
appropriate accrediting
organization (as determined by
the Secretary) before January
1, 2002, but which was not in
operation during the cost
reporting period used under
subclause (I) or (II), as the
case may be, as determined by
the Secretary.
(iii) Affiliation.--The provisions of
clause (i) shall be applied to
hospitals which are members of the same
affiliated group (as defined by the
Secretary under paragraph (4)(H)(ii))
as of July 1, 2003.
(B) Redistribution.--
(i) In general.--The Secretary is
authorized to increase the otherwise
applicable resident limit for each
qualifying hospital that submits a
timely application under this
subparagraph by such number as the
Secretary may approve for portions of
cost reporting periods occurring on or
after July 1, 2005. The aggregate
number of increases in the otherwise
applicable resident limits under this
subparagraph may not exceed the
Secretary's estimate of the aggregate
reduction in such limits attributable
to subparagraph (A).
(ii) Considerations in
redistribution.--In determining for
which hospitals the increase in the
otherwise applicable resident limit is
provided under clause (i), the
Secretary shall take into account the
demonstrated likelihood of the hospital
filling the positions within the first
3 cost reporting periods beginning on
or after July 1, 2005, made available
under this subparagraph, as determined
by the Secretary.
(iii) Priority for rural and small
urban areas.--In determining for which
hospitals and residency training
programs an increase in the otherwise
applicable resident limit is provided
under clause (i), the Secretary shall
distribute the increase to programs of
hospitals located in the following
priority order:
(I) First, to hospitals
located in rural areas (as
defined in subsection
(d)(2)(D)(ii)).
(II) Second, to hospitals
located in urban areas that are
not large urban areas (as
defined for purposes of
subsection (d)).
(III) Third, to other
hospitals in a State if the
residency training program
involved is in a specialty for
which there are not other
residency training programs in
the State.
Increases of residency limits within
the same priority category under this
clause shall be determined by the
Secretary.
(iv) Limitation.--In no case shall
more than 25 full-time equivalent
additional residency positions be made
available under this subparagraph with
respect to any hospital.
(v) Application of locality adjusted
national average per resident amount.--
With respect to additional residency
positions in a hospital attributable to
the increase provided under this
subparagraph, notwithstanding any other
provision of this subsection, the
approved FTE resident amount is deemed
to be equal to the locality adjusted
national average per resident amount
computed under paragraph (4)(E) for
that hospital.
(vi) Construction.--Nothing in this
subparagraph shall be construed as
permitting the redistribution of
reductions in residency positions
attributable to voluntary reduction
programs under paragraph (6), under a
demonstration project approved as of
October 31, 2003, under the authority
of section 402 of Public Law 90-248, or
as affecting the ability of a hospital
to establish new medical residency
training programs under paragraph
(4)(H).
(C) Resident level and limit defined.--In
this paragraph:
(i) Resident level.--The term
``resident level'' means, with respect
to a hospital, the total number of
full-time equivalent residents, before
the application of weighting factors
(as determined under paragraph (4)), in
the fields of allopathic and
osteopathic medicine for the hospital.
(ii) Otherwise applicable resident
limit.--The term ``otherwise applicable
resident limit'' means, with respect to
a hospital, the limit otherwise
applicable under subparagraphs (F)(i)
and (H) of paragraph (4) on the
resident level for the hospital
determined without regard to this
paragraph.
(D) Adjustment based on settled cost
report.--In the case of a hospital with a dual
accredited osteopathic and allopathic family
practice program for which--
(i) the otherwise applicable resident
limit was reduced under subparagraph
(A)(i)(I); and
(ii) such reduction was based on a
reference resident level that was
determined using a cost report and
where a revised or corrected notice of
program reimbursement was issued for
such cost report between September 1,
2006 and September 15, 2006, whether as
a result of an appeal or otherwise, and
the reference resident level under such
settled cost report is higher than the
level used for the reduction under
subparagraph (A)(i)(I);
the Secretary shall apply subparagraph
(A)(i)(I) using the higher resident reference
level and make any necessary adjustments to
such reduction. Any such necessary adjustments
shall be effective for portions of cost
reporting periods occurring on or after July 1,
2005.
(E) Judicial review.--There shall be no
administrative or judicial review under section
1869, 1878, or otherwise, with respect to
determinations made under this this\81\
paragraph, paragraph (8), or paragraph
(4)(H)(vi).
---------------------------------------------------------------------------
\81\So in law. See amendment made by section 5506(e) of Public Law
111-148.
---------------------------------------------------------------------------
(8) Distribution of additional residency positions.--
(A) Reductions in limit based on unused
positions.--
(i) In general.--Except as provided
in clause (ii), if a hospital's
reference resident level (as defined in
subparagraph (H)(i)) is less than the
otherwise applicable resident limit (as
defined in subparagraph (H)(iii)),
effective for portions of cost
reporting periods occurring on or after
July 1, 2011, the otherwise applicable
resident limit shall be reduced by 65
percent of the difference between such
otherwise applicable resident limit and
such reference resident level.
(ii) Exceptions.--This subparagraph
shall not apply to--
(I) a hospital located in a
rural area (as defined in
subsection (d)(2)(D)(ii)) with
fewer than 250 acute care
inpatient beds;
(II) a hospital that was part
of a qualifying entity which
had a voluntary residency
reduction plan approved under
paragraph (6)(B) or under the
authority of section 402 of
Public Law 90-248, if the
hospital demonstrates to the
Secretary that it has a
specified plan in place for
filling the unused positions by
not later than 2 years after
the date of enactment of this
paragraph; or
(III) a hospital described in
paragraph (4)(H)(v).
(B) Distribution.--
(i) In general.--The Secretary shall
increase the otherwise applicable
resident limit for each qualifying
hospital that submits an application
under this subparagraph by such number
as the Secretary may approve for
portions of cost reporting periods
occurring on or after July 1, 2011. The
aggregate number of increases in the
otherwise applicable resident limit
under this subparagraph shall be equal
to the aggregate reduction in such
limits attributable to subparagraph (A)
(as estimated by the Secretary).
(ii) Requirements.--Subject to clause
(iii), a hospital that receives an
increase in the otherwise applicable
resident limit under this subparagraph
shall ensure, during the 5-year period
beginning on the date of such increase,
that--
(I) the number of full-time
equivalent primary care
residents, as defined in
paragraph (5)(H) (as determined
by the Secretary), excluding
any additional positions under
subclause (II), is not less
than the average number of
full-time equivalent primary
care residents (as so
determined) during the 3 most
recent cost reporting periods
ending prior to the date of
enactment of this paragraph;
and
(II) not less than 75 percent
of the positions attributable
to such increase are in a
primary care or general surgery
residency (as determined by the
Secretary).
The Secretary may determine whether a
hospital has met the requirements under
this clause during such 5-year period
in such manner and at such time as the
Secretary determines appropriate,
including at the end of such 5-year
period.
(iii) Redistribution of positions if
hospital no longer meets certain
requirements.--In the case where the
Secretary determines that a hospital
described in clause (ii) does not meet
either of the requirements under
subclause (I) or (II) of such clause,
the Secretary shall--
(I) reduce the otherwise
applicable resident limit of
the hospital by the amount by
which such limit was increased
under this paragraph; and
(II) provide for the
distribution of positions
attributable to such reduction
in accordance with the
requirements of this paragraph.
(C) Considerations in redistribution.--In
determining for which hospitals the increase in
the otherwise applicable resident limit is
provided under subparagraph (B), the Secretary
shall take into account--
(i) the demonstration likelihood of
the hospital filling the positions made
available under this paragraph within
the first 3 cost reporting periods
beginning on or after July 1, 2011, as
determined by the Secretary; and
(ii) whether the hospital has an
accredited rural training track (as
described in paragraph (4)(H)(iv)).
(D) Priority for certain areas.--In
determining for which hospitals the increase in
the otherwise applicable resident limit is
provided under subparagraph (B), subject to
subparagraph (E), the Secretary shall
distribute the increase to hospitals based on
the following factors:
(i) Whether the hospital is located
in a State with a resident-to-
population ratio in the lowest quartile
(as determined by the Secretary).
(ii) Whether the hospital is located
in a State, a territory of the United
States, or the District of Columbia
that is among the top 10 States,
territories, or Districts in terms of
the ratio of--
(I) the total population of
the State, territory, or
District living in an area
designated (under such section
332(a)(1)(A)) as a health
professional shortage area (as
of the date of enactment of
this paragraph); to
(II) the total population of
the State, territory, or
District (as determined by the
Secretary based on the most
recent available population
data published by the Bureau of
the Census).
(iii) Whether the hospital is located
in a rural area (as defined in
subsection (d)(2)(D)(ii)).
(E) Reservation of positions for certain
hospitals.--
(i) In general.--Subject to clause
(ii), the Secretary shall reserve the
positions available for distribution
under this paragraph as follows:
(I) 70 percent of such
positions for distribution to
hospitals described in clause
(i) of subparagraph (D).
(II) 30 percent of such
positions for distribution to
hospitals described in clause
(ii) and (iii) of such
subparagraph.
(ii) Exception if positions not
redistributed by july 1, 2011.--In the
case where the Secretary does not
distribute positions to hospitals in
accordance with clause (i) by July 1,
2011, the Secretary shall distribute
such positions to other hospitals in
accordance with the considerations
described in subparagraph (C) and the
priority described in subparagraph (D).
(F) Limitation.--A hospital may not receive
more than 75 full-time equivalent additional
residency positions under this paragraph.
(G) Application of per resident amounts for
primary care and nonprimary care.--With respect
to additional residency positions in a hospital
attributable to the increase provided under
this paragraph, the approved FTE per resident
amounts are deemed to be equal to the hospital
per resident amounts for primary care and
nonprimary care computed under paragraph (2)(D)
for that hospital.
(H) Definitions.--In this paragraph:
(i) Reference resident level.--The
term ``reference resident level''
means, with respect to a hospital, the
highest resident level for any of the 3
most recent cost reporting periods
(ending before the date of the
enactment of this paragraph) of the
hospital for which a cost report has
been settled (or, if not, submitted
(subject to audit)), as determined by
the Secretary.
(ii) Resident level.--The term
``resident level'' has the meaning
given such term in paragraph (7)(C)(i).
(iii) Otherwise applicable resident
limit.--The term ``otherwise applicable
resident limit'' means, with respect to
a hospital, the limit otherwise
applicable under subparagraphs (F)(i)
and (H) of paragraph (4) on the
resident level for the hospital
determined without regard to this
paragraph but taking into account
paragraph (7)(A).
(I) Affiliation.--The provisions of this
paragraph shall be applied to hospitals which
are members of the same affiliated group (as
defined by the Secretary under paragraph
(4)(H)(ii)) and the reference resident level
for each such hospital shall be the reference
resident level with respect to the cost
reporting period that results in the smallest
difference between the reference resident level
and the otherwise applicable resident limit.
(i) Avoiding Duplicative Payments to Hospitals Participating
in Rural Demonstration Programs.--The Secretary shall reduce
any payment amounts otherwise determined under this section to
the extent necessary to avoid duplication of any payment made
under section 4005(e) of the Omnibus Budget Reconciliation Act
of 1987.
(j) Prospective Payment for Inpatient Rehabilitation
Services.--
(1) Payment during transition period.--
(A) In general.--Notwithstanding section
1814(b), but subject to the provisions of
section 1813, the amount of the payment with
respect to the operating and capital costs of
inpatient hospital services of a rehabilitation
hospital or a rehabilitation unit (in this
subsection referred to as a ``rehabilitation
facility''), other than a facility making an
election under subparagraph (F) in a cost
reporting period beginning on or after October
1, 2000, and before October 1, 2002, is equal
to the sum of--
(i) the TEFRA percentage (as defined
in subparagraph (C)) of the amount that
would have been paid under part A with
respect to such costs if this
subsection did not apply, and
(ii) the prospective payment
percentage (as defined in subparagraph
(C)) of the product of (I) the per unit
payment rate established under this
subsection for the fiscal year in which
the payment unit of service occurs, and
(II) the number of such payment units
occurring in the cost reporting period.
(B) Fully implemented system.--
Notwithstanding section 1814(b), but subject to
the provisions of section 1813, the amount of
the payment with respect to the operating and
capital costs of inpatient hospital services of
a rehabilitation facility for a payment unit in
a cost reporting period beginning on or after
October 1, 2002, or, in the case of a facility
making an election under subparagraph (F), for
any cost reporting period described in such
subparagraph, is equal to the per unit payment
rate established under this subsection for the
fiscal year in which the payment unit of
service occurs.
(C) TEFRA and prospective payment percentages
specified.--For purposes of subparagraph (A),
for a cost reporting period beginning--
(i) on or after October 1, 2000, and
before October 1, 2001, the ``TEFRA
percentage'' is 66\2/3\ percent and the
``prospective payment percentage'' is
33\1/3\ percent; and
(ii) on or after October 1, 2001, and
before October 1, 2002, the ``TEFRA
percentage'' is 33\1/3\ percent and the
``prospective payment percentage'' is
66\2/3\ percent.
(D) Payment unit.--For purposes of this
subsection, the term ``payment unit'' means a
discharge.
(E) Construction relating to transfer
authority.--Nothing in this subsection shall be
construed as preventing the Secretary from
providing for an adjustment to payments to take
into account the early transfer of a patient
from a rehabilitation facility to another site
of care.
(F) Election to apply full prospective
payment system.--A rehabilitation facility may
elect, not later than 30 days before its first
cost reporting period for which the payment
methodology under this subsection applies to
the facility, to have payment made to the
facility under this subsection under the
provisions of subparagraph (B) (rather than
subparagraph (A)) for each cost reporting
period to which such payment methodology
applies.
(2) Patient case mix groups.--
(A) Establishment.--The Secretary shall
establish--
(i) classes of patient discharges of
rehabilitation facilities by
functional-related groups (each in this
subsection referred to as a ``case mix
group''), based on impairment, age,
comorbidities, 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
(ii) a method of classifying specific
patients in rehabilitation facilities
within these groups.
(B) Weighting factors.--For each case mix
group the Secretary shall assign an appropriate
weighting which reflects the relative facility
resources used with respect to patients
classified within that group compared to
patients classified within other groups.
(C) Adjustments for case mix.--
(i) In general.--The Secretary shall
from time to time adjust the
classifications and weighting factors
established under this paragraph as
appropriate to reflect changes in
treatment patterns, technology, case
mix, number of payment units for which
payment is made under this title, and
other factors which may affect the
relative use of resources. Such
adjustments shall be made in a manner
so that changes in aggregate payments
under the classification system are a
result of real changes and are not a
result of changes in coding that are
unrelated to real changes in case mix.
(ii) Adjustment.--Insofar as the
Secretary determines that such
adjustments for a previous fiscal year
(or estimates that such adjustments for
a future fiscal year) did (or are
likely to) result in a change in
aggregate payments under the
classification system during the fiscal
year that are a result of changes in
the coding or classification of
patients that do not reflect real
changes in case mix, the Secretary
shall adjust the per payment unit
payment rate for subsequent years so as
to eliminate the effect of such coding
or classification changes.
(D) Data collection.--The Secretary is
authorized to require rehabilitation facilities
that provide inpatient hospital services to
submit such data as the Secretary deems
necessary to establish and administer the
prospective payment system under this
subsection.
(3) Payment rate.--
(A) In general.--The Secretary shall
determine a prospective payment rate for each
payment unit for which such rehabilitation
facility is entitled to receive payment under
this title. Subject to subparagraph (B), such
rate for payment units occurring during a
fiscal year shall be based on the average
payment per payment unit under this title for
inpatient operating and capital costs of
rehabilitation facilities using the most recent
data available (as estimated by the Secretary
as of the date of establishment of the system)
adjusted--
(i) by updating such per-payment-unit
amount to the fiscal year involved by
the weighted average of the applicable
percentage increases provided under
subsection (b)(3)(B)(ii) (for cost
reporting periods beginning during the
fiscal year) covering the period from
the midpoint of the period for such
data through the midpoint of fiscal
year 2000 and by an increase factor
(described in subparagraph (C))
specified by the Secretary for
subsequent fiscal years up to the
fiscal year involved;
(ii) by reducing such rates by a
factor equal to the proportion of
payments under this subsection (as
estimated by the Secretary) based on
prospective payment amounts which are
additional payments described in
paragraph (4) (relating to outlier and
related payments);
(iii) for variations among
rehabilitation facilities by area under
paragraph (6);
(iv) by the weighting factors
established under paragraph (2)(B); and
(v) by such other factors as the
Secretary determines are necessary to
properly reflect variations in
necessary costs of treatment among
rehabilitation facilities.
(B) Budget neutral rates.--The Secretary
shall establish the prospective payment amounts
under this subsection for payment units during
fiscal years 2001 and 2002 at levels such that,
in the Secretary's estimation, the amount of
total payments under this subsection for such
fiscal years (including any payment adjustments
pursuant to paragraphs (4) and (6) but not
taking into account any payment adjustment
resulting from an election permitted under
paragraph (1)(F)) shall be equal to 98 percent
for fiscal year 2001 and 100 percent for fiscal
year 2002 of the amount of payments that would
have been made under this title during the
fiscal years for operating and capital costs of
rehabilitation facilities had this subsection
not been enacted. In establishing such payment
amounts, the Secretary shall consider the
effects of the prospective payment system
established under this subsection on the total
number of payment units from rehabilitation
facilities and other factors described in
subparagraph (A).
(C) Increase factor.--
(i) In general.--For purposes of this
subsection for payment units in each
fiscal year (beginning with fiscal year
2001), the Secretary shall establish an
increase factor subject to clauses (ii)
and (iii). Such factor shall be based
on an appropriate percentage increase
in a market basket of goods and
services comprising services for which
payment is made under this subsection,
which may be the market basket
percentage increase described in
subsection (b)(3)(B)(iii). The increase
factor to be applied under this
subparagraph for each of fiscal years
2008 and 2009 shall be 0 percent.
(ii) Productivity and other
adjustment.--Subject to clause (iii),
after establishing the increase factor
described in clause (i) for a fiscal
year, the Secretary shall reduce such
increase factor--
(I) for fiscal year 2012 and
each subsequent fiscal year, by
the productivity adjustment
described in section
1886(b)(3)(B)(xi)(II); and
(II) for each of fiscal years
2010 through 2019, by the other
adjustment described in
subparagraph (D).
The application of this clause may
result in the increase factor under
this subparagraph being less than 0.0
for a fiscal year, and may result in
payment rates under this subsection for
a fiscal year being less than such
payment rates for the preceding fiscal
year.
(iii) Special rule for fiscal year
2018.--The increase factor to be
applied under this subparagraph for
fiscal year 2018, after the application
of clause (ii), shall be 1 percent.
(D) Other adjustment.--For purposes of
subparagraph (C)(ii)(II), the other adjustment
described in this subparagraph is--
(i) for each of fiscal years 2010 and
2011, 0.25 percentage point;
(ii) for each of fiscal years 2012
and 2013, 0.1 percentage point;
(iii) for fiscal year 2014, 0.3
percentage point;
(iv) for each of fiscal years 2015
and 2016, 0.2 percentage point; and
(v) for each of fiscal years 2017,
2018, and 2019, 0.75 percentage point.
(4) Outlier and special payments.--
(A) Outliers.--
(i) In general.--The Secretary may
provide for an additional payment to a
rehabilitation facility for patients in
a case mix group, based upon the
patient being classified as an outlier
based on an unusual length of stay,
costs, or other factors specified by
the Secretary.
(ii) Payment based on marginal cost
of care.--The amount of such additional
payment under clause (i) shall be
determined by the Secretary and shall
approximate the marginal cost of care
beyond the cutoff point applicable
under clause (i).
(iii) Total payments.--The total
amount of the additional payments made
under this subparagraph for payment
units in a fiscal year may not exceed 5
percent of the total payments projected
or estimated to be made based on
prospective payment rates for payment
units in that year.
(B) Adjustment.--The Secretary may provide
for such adjustments to the payment amounts
under this subsection as the Secretary deems
appropriate to take into account the unique
circumstances of rehabilitation facilities
located in Alaska and Hawaii.
(5) Publication.--The Secretary shall provide for
publication in the Federal Register, on or before
August 1 before each fiscal year (beginning with fiscal
year 2001), of the classification and weighting factors
for case mix groups under paragraph (2) for such fiscal
year and a description of the methodology and data used
in computing the prospective payment rates under this
subsection for that fiscal year.
(6) Area wage adjustment.--The Secretary shall adjust
the proportion (as estimated by the Secretary from time
to time) of rehabilitation facilities' costs which are
attributable to wages and wage-related costs, of the
prospective payment rates computed under paragraph (3)
for area differences in wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
rehabilitation facility compared to the national
average wage level for such facilities. Not later than
October 1, 2001 (and at least every 36 months
thereafter), the Secretary shall update the factor
under the preceding sentence on the basis of
information available to the Secretary (and updated as
appropriate) of the wages and wage-related costs
incurred in furnishing rehabilitation services. Any
adjustments or updates made under this paragraph for a
fiscal year shall be made in a manner that assures that
the aggregated payments under this subsection in the
fiscal year are not greater or less than those that
would have been made in the year without such
adjustment.
(7) Quality reporting.--
(A) Reduction in update for failure to
report.--
(i) In general.--For purposes of
fiscal year 2014 and each subsequent
fiscal year, in the case of a
rehabilitation facility that does not
submit data to the Secretary in
accordance with subparagraphs (C) and
(F) with respect to such a fiscal year,
after determining the increase factor
described in paragraph (3)(C), and
after application of subparagraphs
(C)(iii) and (D) of paragraph (3), the
Secretary shall reduce such increase
factor for payments for discharges
occurring during such fiscal year by 2
percentage points.
(ii) Special rule.--The application
of this subparagraph may result in the
increase factor described in paragraph
(3)(C) being less than 0.0 for a fiscal
year, and may result in payment rates
under this subsection for a fiscal year
being less than such payment rates for
the preceding fiscal year.
(B) Noncumulative application.--Any reduction
under subparagraph (A) shall apply only with
respect to the fiscal year involved and the
Secretary shall not take into account such
reduction in computing the payment amount under
this subsection for a subsequent fiscal year.
(C) Submission of quality data.--Subject to
subparagraph (G), for fiscal year 2014 and each
subsequent fiscal year, each rehabilitation
facility shall submit to the Secretary data on
quality measures specified under subparagraph
(D). Such data shall be submitted in a form and
manner, and at a time, specified by the
Secretary for purposes of this subparagraph.
(D) Quality measures.--
(i) In general.--Subject to clause
(ii), any measure specified by the
Secretary under this subparagraph must
have been endorsed by the entity with a
contract under section 1890(a).
(ii) Exception.--In the case of a
specified area or medical topic
determined appropriate by the Secretary
for which a feasible and practical
measure has not been endorsed by the
entity with a contract under section
1890(a), the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary.
(iii) Time frame.--Not later than
October 1, 2012, the Secretary shall
publish the measures selected under
this subparagraph that will be
applicable with respect to fiscal year
2014.
(E) Public availability of data submitted.--
The Secretary shall establish procedures for
making data submitted under subparagraph (C)
and subparagraph (F)(i) available to the
public. Such procedures shall ensure that a
rehabilitation facility has the opportunity to
review the data that is to be made public with
respect to the facility prior to such data
being made public. The Secretary shall report
quality measures that relate to services
furnished in inpatient settings in
rehabilitation facilities on the Internet
website of the Centers for Medicare & Medicaid
Services.
(F) Submission of additional data.--
(i) In general.--For the fiscal year
beginning on the specified application
date (as defined in subsection
(a)(2)(E) of section 1899B), as
applicable with respect to inpatient
rehabilitation facilities and quality
measures under subsection (c)(1) of
such section and measures under
subsection (d)(1) of such section, and
each subsequent fiscal year, in
addition to such data on the quality
measures described in subparagraph (C),
each rehabilitation facility shall
submit to the Secretary data on the
quality measures under such subsection
(c)(1) and any necessary data specified
by the Secretary under such subsection
(d)(1).
(ii) Standardized patient assessment
data.--For fiscal year 2019 and each
subsequent fiscal year, in addition to
such data described in clause (i), each
rehabilitation facility shall submit to
the Secretary standardized patient
assessment data required under
subsection (b)(1) of section 1899B.
(iii) Submission.--Such data shall be
submitted in the form and manner, and
at the time, specified by the Secretary
for purposes of this subparagraph.
(G) Non-duplication.--To the extent data
submitted under subparagraph (F) duplicates
other data required to be submitted under
subparagraph (C), the submission of such data
under subparagraph (F) shall be in lieu of the
submission of such data under subparagraph (C).
The previous sentence shall not apply insofar
as the Secretary determines it is necessary to
avoid a delay in the implementation of section
1899B, taking into account the different
specified application dates under subsection
(a)(2)(E) of such section.
(8) Limitation on review.--There shall be no
administrative or judicial review under section 1869,
1878, or otherwise of the establishment of--
(A) case mix groups, of the methodology for
the classification of patients within such
groups, and of the appropriate weighting
factors thereof under paragraph (2),
(B) the prospective payment rates under
paragraph (3),
(C) outlier and special payments under
paragraph (4), and
(D) area wage adjustments under paragraph
(6).
(k) Payment to Nonhospital Providers.--
(1) In general.--For cost reporting periods beginning
on or after October 1, 1997, the Secretary may
establish rules for payment to qualified nonhospital
providers for their direct costs of medical education,
if those costs are incurred in the operation of an
approved medical residency training program described
in subsection (h). Such rules shall specify the
amounts, form, and manner in which such payments will
be made and the portion of such payments that will be
made from each of the trust funds under this title.
(2) Qualified nonhospital providers.--For purposes of
this subsection, the term ``qualified nonhospital
providers'' means--
(A) a Federally qualified health center, as
defined in section 1861(aa)(4);
(B) a rural health clinic, as defined in
section 1861(aa)(2);
(C) Medicare+Choice organizations; and
(D) such other providers (other than
hospitals) as the Secretary determines to be
appropriate.
(l) Payment for Nursing and Allied Health Education for
Managed Care Enrollees.--
(1) In general.--For portions of cost reporting
periods occurring in a year (beginning with 2000), the
Secretary shall provide for an additional payment
amount for any hospital that receives payments for the
costs of approved educational activities for nurse and
allied health professional training under section
1861(v)(1).
(2) Payment amount.--The additional payment amount
under this subsection for each hospital for portions of
cost reporting periods occurring in a year shall be an
amount specified by the Secretary in a manner
consistent with the following:
(A) Determination of managed care enrollee
payment ratio for graduate medical education
payments.--The Secretary shall estimate the
ratio of payments for all hospitals for
portions of cost reporting periods occurring in
the year under subsection (h)(3)(D) to total
direct graduate medical education payments
estimated for such portions of periods under
subsection (h)(3).
(B) Application to fee-for-service nursing
and allied health education payments.--Such
ratio shall be applied to the Secretary's
estimate of total payments for nursing and
allied health education determined under
section 1861(v) for portions of cost reporting
periods occurring in the year to determine a
total amount of additional payments for nursing
and allied health education to be distributed
to hospitals under this subsection for portions
of cost reporting periods occurring in the
year; except that in no case shall such total
amount exceed $60,000,000 in any year.
(C) Application to hospital.--The amount of
payment under this subsection to a hospital for
portions of cost reporting periods occurring in
a year is equal to the total amount of payments
determined under subparagraph (B) for the year
multiplied by the ratio of--
(i) the product of (I) the
Secretary's estimate of the ratio of
the amount of payments made under
section 1861(v) to the hospital for
nursing and allied health education
activities for the hospital's cost
reporting period ending in the second
preceding fiscal year, to the
hospital's total inpatient days for
such period, and (II) the total number
of inpatient days (as established by
the Secretary) for such period which
are attributable to services furnished
to individuals who are enrolled under a
risk sharing contract with an eligible
organization under section 1876 and who
are entitled to benefits under part A
or who are enrolled with a
Medicare+Choice organization under part
C; to
(ii) the sum of the products
determined under clause (i) for such
cost reporting periods.
(m) Prospective Payment for Long-Term Care Hospitals.--
(1) Reference to establishment and implementation of
system.--For provisions related to the establishment
and implementation of a prospective payment system for
payments under this title for inpatient hospital
services furnished by a long-term care hospital
described in subsection (d)(1)(B)(iv), see section 123
of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 and section 307(b) of the
Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000.
(2) Update for rate year 2008.--In implementing the
system described in paragraph (1) for discharges
occurring during the rate year ending in 2008 for a
hospital, the base rate for such discharges for the
hospital shall be the same as the base rate for
discharges for the hospital occurring during the rate
year ending in 2007.
(3) Implementation for rate year 2010 and subsequent
years.--
(A) In general.--Subject to subparagraph (C),
in implementing the system described in
paragraph (1) for rate year 2010 and each
subsequent rate year, any annual update to a
standard Federal rate for discharges for the
hospital during the rate year, shall be
reduced--
(i) for rate year 2012 and each
subsequent rate year, by the
productivity adjustment described in
section 1886(b)(3)(B)(xi)(II); and
(ii) for each of rate years 2010
through 2019, by the other adjustment
described in paragraph (4).
(B) Special rule.--The application of this
paragraph may result in such annual update
being less than 0.0 for a rate year, and may
result in payment rates under the system
described in paragraph (1) for a rate year
being less than such payment rates for the
preceding rate year.
(C) Additional special rule.--For fiscal year
2018, the annual update under subparagraph (A)
for the fiscal year, after application of
clauses (i) and (ii) of subparagraph (A), shall
be 1 percent.
(4) Other adjustment.--For purposes of paragraph
(3)(A)(ii), the other adjustment described in this
paragraph is--
(A) for rate year 2010, 0.25 percentage
point;
(B) for rate year 2011, 0.50 percentage
point;
(C) for each of the rate years beginning in
2012 and 2013, 0.1 percentage point;
(D) for rate year 2014, 0.3 percentage point;
(E) for each of rate years 2015 and 2016, 0.2
percentage point; and
(F) for each of rate years 2017, 2018, and
2019, 0.75 percentage point.
(5) Quality reporting.--
(A) Reduction in update for failure to
report.--
(i) In general.--Under the system
described in paragraph (1), for rate
year 2014 and each subsequent rate
year, in the case of a long-term care
hospital that does not submit data to
the Secretary in accordance with
subparagraphs (C) and (F) with respect
to such a rate year, any annual update
to a standard Federal rate for
discharges for the hospital during the
rate year, and after application of
paragraph (3), shall be reduced by 2
percentage points.
(ii) Special rule.--The application
of this subparagraph may result in such
annual update being less than 0.0 for a
rate year, and may result in payment
rates under the system described in
paragraph (1) for a rate year being
less than such payment rates for the
preceding rate year.
(B) Noncumulative application.--Any reduction
under subparagraph (A) shall apply only with
respect to the rate year involved and the
Secretary shall not take into account such
reduction in computing the payment amount under
the system described in paragraph (1) for a
subsequent rate year.
(C) Submission of quality data.--Subject to
subparagraph (G), for rate year 2014 and each
subsequent rate year, each long-term care
hospital shall submit to the Secretary data on
quality measures specified under subparagraph
(D). Such data shall be submitted in a form and
manner, and at a time, specified by the
Secretary for purposes of this subparagraph.
(D) Quality measures.--
(i) In general.--Subject to clause
(ii), any measure specified by the
Secretary under this subparagraph must
have been endorsed by the entity with a
contract under section 1890(a).
(ii) Exception.--In the case of a
specified area or medical topic
determined appropriate by the Secretary
for which a feasible and practical
measure has not been endorsed by the
entity with a contract under section
1890(a), the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary.
(iii) Time frame.--Not later than
October 1, 2012, the Secretary shall
publish the measures selected under
this subparagraph that will be
applicable with respect to rate year
2014.
(iv) Additional quality measures.--
Not later than October 1, 2015, the
Secretary shall establish a functional
status quality measure for change in
mobility among inpatients requiring
ventilator support.
(E) Public availability of data submitted.--
The Secretary shall establish procedures for
making data submitted under subparagraph (C)
and subparagraph (F)(i) available to the
public. Such procedures shall ensure that a
long-term care hospital has the opportunity to
review the data that is to be made public with
respect to the hospital prior to such data
being made public. The Secretary shall report
quality measures that relate to services
furnished in inpatient settings in long-term
care hospitals on the Internet website of the
Centers for Medicare & Medicaid Services.
(F) Submission of additional data.--
(i) In general.--For the rate year
beginning on the specified application
date (as defined in subsection
(a)(2)(E) of section 1899B), as
applicable with respect to long-term
care hospitals and quality measures
under subsection (c)(1) of such section
and measures under subsection (d)(1) of
such section, and each subsequent rate
year, in addition to the data on the
quality measures described in
subparagraph (C), each long-term care
hospital (other than a hospital
classified under subsection
(d)(1)(B)(iv)(II)) shall submit to the
Secretary data on the quality measures
under such subsection (c)(1) and any
necessary data specified by the
Secretary under such subsection (d)(1).
(ii) Standardized patient assessment
data.--For rate year 2019 and each
subsequent rate year, in addition to
such data described in clause (i), each
long-term care hospital (other than a
hospital classified under subsection
(d)(1)(B)(iv)(II)) shall submit to the
Secretary standardized patient
assessment data required under
subsection (b)(1) of section 1899B.
(iii) Submission.--Such data shall be
submitted in the form and manner, and
at the time, specified by the Secretary
for purposes of this subparagraph.
(G) Non-duplication.--To the extent data
submitted under subparagraph (F) duplicates
other data required to be submitted under
subparagraph (C), the submission of such data
under subparagraph (F) shall be in lieu of the
submission of such data under subparagraph (C).
The previous sentence shall not apply insofar
as the Secretary determines it is necessary to
avoid a delay in the implementation of section
1899B, taking into account the different
specified application dates under subsection
(a)(2)(E) of such section.
(6) Application of site neutral ipps payment rate in
certain cases.--
(A) General application of site neutral ipps
payment amount for discharges failing to meet
applicable criteria.--
(i) In general.--For a discharge in
cost reporting periods beginning on or
after October 1, 2015, except as
provided in clause (ii) and
subparagraphs (C) and (E), payment
under this title to a long-term care
hospital for inpatient hospital
services shall be made at the
applicable site neutral payment rate
(as defined in subparagraph (B)).
(ii) Exception for certain discharges
meeting criteria.--Clause (i) shall not
apply (and payment shall be made to a
long-term care hospital without regard
to this paragraph) for a discharge if--
(I) the discharge meets the
ICU criterion under clause
(iii) or the ventilator
criterion under clause (iv);
and
(II) the discharge does not
have a principal diagnosis
relating to a psychiatric
diagnosis or to rehabilitation.
(iii) Intensive care unit (icu)
criterion.--
(I) In general.--The
criterion specified in this
clause (in this paragraph
referred to as the ``ICU
criterion''), for a discharge
from a long-term care hospital,
is that the stay in the long-
term care hospital ending with
such discharge was immediately
preceded by a discharge from a
stay in a subsection (d)
hospital that included at least
3 days in an intensive care
unit (ICU), as determined by
the Secretary.
(II) Determining icu days.--
In determining intensive care
unit days under subclause (I),
the Secretary shall use data
from revenue center codes 020x
or 021x (or such successor
codes as the Secretary may
establish).
(iv) Ventilator criterion.--The
criterion specified in this clause (in
this paragraph referred to as the
``ventilator criterion''), for a
discharge from a long-term care
hospital, is that--
(I) the stay in the long-term
care hospital ending with such
discharge was immediately
preceded by a discharge from a
stay in a subsection (d)
hospital; and
(II) the individual
discharged was assigned to a
Medicare-Severity-Long-Term-
Care-Diagnosis-Related-Group
(MS-LTC-DRG) based on the
receipt of ventilator services
of at least 96 hours.
(B) Applicable site neutral payment rate
defined.--
(i) In general.--In this paragraph,
the term ``applicable site neutral
payment rate'' means--
(I) for discharges in cost
reporting periods beginning
during fiscal year 2016 or
fiscal year 2017, the blended
payment rate specified in
clause (iii); and
(II) for discharges in cost
reporting periods beginning
during fiscal year 2018 or a
subsequent fiscal year, the
site neutral payment rate (as
defined in clause (ii)).
(ii) Site neutral payment rate
defined.--In this paragraph, the term
``site neutral payment rate'' means the
lower of--
(I) the IPPS comparable per
diem amount determined under
paragraph (d)(4) of section
412.529 of title 42, Code of
Federal Regulations, including
any applicable outlier payments
under section 412.525 of such
title; or
(II) 100 percent of the
estimated cost for the services
involved.
(iii) Blended payment rate.--The
blended payment rate specified in this
clause, for a long-term care hospital
for inpatient hospital services for a
discharge, is comprised of--
(I) half of the site neutral
payment rate (as defined in
clause (ii)) for the discharge;
and
(II) half of the payment rate
that would otherwise be
applicable to such discharge
without regard to this
paragraph, as determined by the
Secretary.
(C) Limiting payment for all hospital
discharges to site neutral payment rate for
hospitals failing to meet applicable ltch
discharge thresholds.--
(i) Notice of ltch discharge payment
percentage.--For cost reporting periods
beginning during or after fiscal year
2016, the Secretary shall inform each
long-term care hospital of its LTCH
discharge payment percentage (as
defined in clause (iv)) for such
period.
(ii) Limitation.--For cost reporting
periods beginning during or after
fiscal year 2020, if the Secretary
determines for a long-term care
hospital that its LTCH discharge
payment percentage for the period is
not at least 50 percent--
(I) the Secretary shall
inform the hospital of such
fact; and
(II) subject to clause (iii),
for all discharges in the
hospital in each succeeding
cost reporting period, the
payment amount under this
subsection shall be the payment
amount that would apply under
subsection (d) for the
discharge if the hospital were
a subsection (d) hospital.
(iii) Process for reinstatement.--The
Secretary shall establish a process
whereby a long-term care hospital may
seek to and have the provisions of
subclause (II) of clause (ii)
discontinued with respect to that
hospital.
(iv) LTCH discharge payment
percentage.--In this subparagraph, the
term ``LTCH discharge payment
percentage'' means, with respect to a
long-term care hospital for a cost
reporting period beginning during or
after fiscal year 2020, the ratio
(expressed as a percentage) of--
(I) the number of Medicare
fee-for-service discharges for
such hospital and period for
which payment is not made at
the site neutral payment rate,
to
(II) the total number of
Medicare fee-for-service
discharges for such hospital
and period.
(D) Inclusion of subsection (d) puerto rico
hospitals.--In this paragraph, any reference in
this paragraph to a subsection (d) hospital
shall be deemed to include a reference to a
subsection (d) Puerto Rico hospital.
(E) Temporary exception for certain severe
wound discharges from certain long-term care
hospitals.--
(i) In general.--In the case of a
discharge occurring prior to January 1,
2017, subparagraph (A)(i) shall not
apply (and payment shall be made to a
long-term care hospital without regard
to this paragraph) if such discharge--
(I) is from a long-term care
hospital that is--
(aa) identified by
the amendment made by
section 4417(a) of the
Balanced Budget Act of
1997 (42 U.S.C. 1395ww
note, Public Law 105-
33); and
(bb) located in a
rural area (as defined
in subsection
(d)(2)(D)) or treated
as being so located
pursuant to subsection
(d)(8)(E); and
(II) the individual
discharged has a severe wound.
(ii) Severe wound defined.--In this
subparagraph, the term ``severe wound''
means a stage 3 wound, stage 4 wound,
unstageable wound, non-healing surgical
wound, infected wound, fistula,
osteomyelitis, or wound with morbid
obesity, as identified in the claim
from the long-term care hospital.
(n) Incentives for Adoption and Meaningful Use of Certified
EHR Technology.--
(1) In general.--Subject to the succeeding provisions
of this subsection, with respect to inpatient hospital
services furnished by an eligible hospital during a
payment year (as defined in paragraph (2)(G)), if the
eligible hospital is a meaningful EHR user (as
determined under paragraph (3)) for the EHR reporting
period with respect to such year, in addition to the
amount otherwise paid under this section, there also
shall be paid to the eligible hospital, from the
Federal Hospital Insurance Trust Fund established under
section 1817, an amount equal to the applicable amount
specified in paragraph (2)(A) for the hospital for such
payment year.
(2) Payment amount.--
(A) In general.--Subject to the succeeding
subparagraphs of this paragraph, the applicable
amount specified in this subparagraph for an
eligible hospital for a payment year is equal
to the product of the following:
(i) Initial amount.--The sum of--
(I) the base amount specified
in subparagraph (B); plus
(II) the discharge related
amount specified in
subparagraph (C) for a 12-month
period selected by the
Secretary with respect to such
payment year.
(ii) Medicare share.--The Medicare
share as specified in subparagraph (D)
for the eligible hospital for a period
selected by the Secretary with respect
to such payment year.
(iii) Transition factor.--The
transition factor specified in
subparagraph (E) for the eligible
hospital for the payment year.
(B) Base amount.--The base amount specified
in this subparagraph is $2,000,000.
(C) Discharge related amount.--The discharge
related amount specified in this subparagraph
for a 12-month period selected by the Secretary
shall be determined as the sum of the amount,
estimated based upon total discharges for the
eligible hospital (regardless of any source of
payment) for the period, for each discharge up
to the 23,000th discharge as follows:
(i) For the first through 1,149th
discharge, $0.
(ii) For the 1,150th through the
23,000th discharge, $200.
(iii) For any discharge greater than
the 23,000th, $0.
(D) Medicare share.--The Medicare share
specified under this subparagraph for an
eligible hospital for a period selected by the
Secretary for a payment year is equal to the
fraction--
(i) the numerator of which is the sum
(for such period and with respect to
the eligible hospital) of--
(I) the estimated number of
inpatient-bed-days (as
established by the Secretary)
which are attributable to
individuals with respect to
whom payment may be made under
part A; and
(II) the estimated number of
inpatient-bed-days (as so
established) which are
attributable to individuals who
are enrolled with a Medicare
Advantage organization under
part C; and
(ii) the denominator of which is the
product of--
(I) the estimated total
number of inpatient-bed-days
with respect to the eligible
hospital during such period;
and
(II) the estimated total
amount of the eligible
hospital's charges during such
period, not including any
charges that are attributable
to charity care (as such term
is used for purposes of
hospital cost reporting under
this title), divided by the
estimated total amount of the
hospital's charges during such
period.
Insofar as the Secretary determines that data
are not available on charity care necessary to
calculate the portion of the formula specified
in clause (ii)(II), the Secretary shall use
data on uncompensated care and may adjust such
data so as to be an appropriate proxy for
charity care including a downward adjustment to
eliminate bad debt data from uncompensated care
data. In the absence of the data necessary,
with respect to a hospital, for the Secretary
to compute the amount described in clause
(ii)(II), the amount under such clause shall be
deemed to be 1. In the absence of data, with
respect to a hospital, necessary to compute the
amount described in clause (i)(II), the amount
under such clause shall be deemed to be 0.
(E) Transition factor specified.--
(i) In general.--Subject to clause
(ii), the transition factor specified
in this subparagraph for an eligible
hospital for a payment year is as
follows:
(I) For the first payment
year for such hospital, 1.
(II) For the second payment
year for such hospital, \3/4\.
(III) For the third payment
year for such hospital, \1/2\.
(IV) For the fourth payment
year for such hospital, \1/4\.
(V) For any succeeding
payment year for such hospital,
0.
(ii) Phase down for eligible
hospitals first adopting ehr after
2013.--If the first payment year for an
eligible hospital is after 2013, then
the transition factor specified in this
subparagraph for a payment year for
such hospital is the same as the amount
specified in clause (i) for such
payment year for an eligible hospital
for which the first payment year is
2013. If the first payment year for an
eligible hospital is after 2015 then
the transition factor specified in this
subparagraph for such hospital and for
such year and any subsequent year shall
be 0.
(F) Form of payment.--The payment under this
subsection for a payment year may be in the
form of a single consolidated payment or in the
form of such periodic installments as the
Secretary may specify.
(G) Payment year defined.--
(i) In general.--For purposes of this
subsection, the term ``payment year''
means a fiscal year beginning with
fiscal year 2011.
(ii) First, second, etc. payment
year.--The term ``first payment year''
means, with respect to inpatient
hospital services furnished by an
eligible hospital, the first fiscal
year for which an incentive payment is
made for such services under this
subsection. The terms ``second payment
year'', ``third payment year'', and
``fourth payment year'' mean, with
respect to an eligible hospital, each
successive year immediately following
the first payment year for that
hospital.
(3) Meaningful ehr user.--
(A) In general.--For purposes of paragraph
(1), an eligible hospital shall be treated as a
meaningful EHR user for an EHR reporting period
for a payment year (or, for purposes of
subsection (b)(3)(B)(ix), for an EHR reporting
period under such subsection for a fiscal year)
if each of the following requirements are met:
(i) Meaningful use of certified ehr
technology.--The eligible hospital
demonstrates to the satisfaction of the
Secretary, in accordance with
subparagraph (C)(i), that during such
period the hospital is using certified
EHR technology in a meaningful manner.
(ii) Information exchange.--The
eligible hospital demonstrates to the
satisfaction of the Secretary, in
accordance with subparagraph (C)(i),
that during such period such certified
EHR technology is connected in a manner
that provides, in accordance with law
and standards applicable to the
exchange of information, for the
electronic exchange of health
information to improve the quality of
health care, such as promoting care
coordination, and the hospital
demonstrates (through a process
specified by the Secretary, such as the
use of an attestation) that the
hospital has not knowingly and
willfully taken action (such as to
disable functionality) to limit or
restrict the compatibility or
interoperability of the certified EHR
technology.
(iii) Reporting on measures using
ehr.--Subject to subparagraph (B)(ii)
and using such certified EHR
technology, the eligible hospital
submits information for such period, in
a form and manner specified by the
Secretary, on such clinical quality
measures and such other measures as
selected by the Secretary under
subparagraph (B)(i).
The Secretary shall seek to improve the use of
electronic health records and health care
quality over time by requiring more stringent
measures of meaningful use selected under this
paragraph.
(B) Reporting on measures.--
(i) Selection.--The Secretary shall
select measures for purposes of
subparagraph (A)(iii) but only
consistent with the following:
(I) The Secretary shall
provide preference to clinical
quality measures that have been
selected for purposes of
applying subsection
(b)(3)(B)(viii) or that have
been endorsed by the entity
with a contract with the
Secretary under section
1890(a).
(II) Prior to any measure
(other than a clinical quality
measure that has been selected
for purposes of applying
subsection (b)(3)(B)(viii))
being selected under this
subparagraph, the Secretary
shall publish in the Federal
Register such measure and
provide for a period of public
comment on such measure.
(ii) Limitations.--The Secretary may
not require the electronic reporting of
information on clinical quality
measures under subparagraph (A)(iii)
unless the Secretary has the capacity
to accept the information
electronically, which may be on a pilot
basis.
(iii) Coordination of reporting of
information.--In selecting such
measures, and in establishing the form
and manner for reporting measures under
subparagraph (A)(iii), the Secretary
shall seek to avoid redundant or
duplicative reporting with reporting
otherwise required, including reporting
under subsection (b)(3)(B)(viii).
(C) Demonstration of meaningful use of
certified ehr technology and information
exchange.--
(i) In general.--An eligible hospital
may satisfy the demonstration
requirement of clauses (i) and (ii) of
subparagraph (A) through means
specified by the Secretary, which may
include--
(I) an attestation;
(II) the submission of claims
with appropriate coding (such
as a code indicating that
inpatient care was documented
using certified EHR
technology);
(III) a survey response;
(IV) reporting under
subparagraph (A)(iii); and
(V) other means specified by
the Secretary.
(ii) Use of part d data.--
Notwithstanding sections 1860D-
15(d)(2)(B) and 1860D-15(f)(2), the
Secretary may use data regarding drug
claims submitted for purposes of
section 1860D-15 that are necessary for
purposes of subparagraph (A).
(4) Application.--
(A) Limitations on review.--There shall be no
administrative or judicial review under section
1869, section 1878, or otherwise, of--
(i) the methodology and standards for
determining payment amounts under this
subsection and payment adjustments
under subsection (b)(3)(B)(ix),
including selection of periods under
paragraph (2) for determining, and
making estimates or using proxies of,
discharges under paragraph (2)(C) and
inpatient-bed-days, hospital charges,
charity charges, and Medicare share
under paragraph (2)(D);
(ii) the methodology and standards
for determining a meaningful EHR user
under paragraph (3), including
selection of measures under paragraph
(3)(B), specification of the means of
demonstrating meaningful EHR use under
paragraph (3)(C), and the hardship
exception under subsection
(b)(3)(B)(ix)(II); and
(iii) the specification of EHR
reporting periods under paragraph
(6)(B) and the selection of the form of
payment under paragraph (2)(F).
(B) Posting on website.--The Secretary shall
post on the Internet website of the Centers for
Medicare & Medicaid Services, in an easily
understandable format, a list of the names of
the eligible hospitals that are meaningful EHR
users under this subsection or subsection
(b)(3)(B)(ix) (and a list of the names of
critical access hospitals to which paragraph
(3) or (4) of section 1814(l) applies), and
other relevant data as determined appropriate
by the Secretary. The Secretary shall ensure
that an eligible hospital (or critical access
hospital) has the opportunity to review the
other relevant data that are to be made public
with respect to the hospital (or critical
access hospital) prior to such data being made
public.
(5) Certified ehr technology defined.--The term
``certified EHR technology'' has the meaning given such
term in section 1848(o)(4).
(6) Definitions.--For purposes of this subsection:
(A) EHR reporting period.--The term ``EHR
reporting period'' means, with respect to a
payment year, any period (or periods) as
specified by the Secretary.
(B) Eligible hospital.--The term ``eligible
hospital'' means a hospital that is a
subsection (d) hospital or a subsection (d)
Puerto Rico hospital.
(o) Hospital Value-Based Purchasing Program.--
(1) Establishment.--
(A) In general.--Subject to the succeeding
provisions of this subsection, the Secretary
shall establish a hospital value-based
purchasing program (in this subsection referred
to as the ``Program'') under which value-based
incentive payments are made in a fiscal year to
hospitals that meet the performance standards
under paragraph (3) for the performance period
for such fiscal year (as established under
paragraph (4)).
(B) Program to begin in fiscal year 2013.--
The Program shall apply to payments for
discharges occurring on or after October 1,
2012.
(C) Applicability of program to hospitals.--
(i) In general.--For purposes of this
subsection, subject to clause (ii), the
term ``hospital'' means a subsection
(d) hospital (as defined in subsection
(d)(1)(B)).
(ii) Exclusions.--The term
``hospital'' shall not include, with
respect to a fiscal year, a hospital--
(I) that is subject to the
payment reduction under
subsection (b)(3)(B)(viii)(I)
for such fiscal year;
(II) for which, during the
performance period for such
fiscal year, the Secretary has
cited deficiencies that pose
immediate jeopardy to the
health or safety of patients;
(III) for which there are not
a minimum number (as determined
by the Secretary) of measures
that apply to the hospital for
the performance period for such
fiscal year; or
(IV) for which there are not
a minimum number (as determined
by the Secretary) of cases for
the measures that apply to the
hospital for the performance
period for such fiscal year.
(iii) Independent analysis.--For
purposes of determining the minimum
numbers under subclauses (III) and (IV)
of clause (ii), the Secretary shall
have conducted an independent analysis
of what numbers are appropriate.
(iv) Exemption.--In the case of a
hospital that is paid under section
1814(b)(3), the Secretary may exempt
such hospital from the application of
this subsection if the State which is
paid under such section submits an
annual report to the Secretary
describing how a similar program in the
State for a participating hospital or
hospitals achieves or surpasses the
measured results in terms of patient
health outcomes and cost savings
established under this subsection.
(2) Measures.--
(A) In general.--The Secretary shall select
measures, other than measures of readmissions,
for purposes of the Program. Such measures
shall be selected from the measures specified
under subsection (b)(3)(B)(viii).
(B) Requirements.--
(i) For fiscal year 2013.--For value-
based incentive payments made with
respect to discharges occurring during
fiscal year 2013, the Secretary shall
ensure the following:
(I) Conditions or
procedures.--Measures are
selected under subparagraph (A)
that cover at least the
following 5 specific conditions
or procedures:
(aa) Acute myocardial
infarction (AMI).
(bb) Heart failure.
(cc) Pneumonia.
(dd) Surgeries, as
measured by the
Surgical Care
Improvement Project
(formerly referred to
as ``Surgical Infection
Prevention'' for
discharges occurring
before July 2006).
(ee) Healthcare-
associated infections,
as measured by the
prevention metrics and
targets established in
the HHS Action Plan to
Prevent Healthcare-
Associated Infections
(or any successor plan)
of the Department of
Health and Human
Services.
(II) HCAHPS.--Measures
selected under subparagraph (A)
shall be related to the
Hospital Consumer Assessment of
Healthcare Providers and
Systems survey (HCAHPS).
(ii) Inclusion of efficiency
measures.--For value-based incentive
payments made with respect to
discharges occurring during fiscal year
2014 or a subsequent fiscal year, the
Secretary shall ensure that measures
selected under subparagraph (A) include
efficiency measures, including measures
of ``Medicare spending per
beneficiary''. Such measures shall be
adjusted for factors such as age, sex,
race, severity of illness, and other
factors that the Secretary determines
appropriate.
(C) Limitations.--
(i) Time requirement for prior
reporting and notice.--The Secretary
may not select a measure under
subparagraph (A) for use under the
Program with respect to a performance
period for a fiscal year (as
established under paragraph (4)) unless
such measure has been specified under
subsection (b)(3)(B)(viii) and included
on the Hospital Compare Internet
website for at least 1 year prior to
the beginning of such performance
period.
(ii) Measure not applicable unless
hospital furnishes services appropriate
to the measure.--A measure selected
under subparagraph (A) shall not apply
to a hospital if such hospital does not
furnish services appropriate to such
measure.
(D) Replacing measures.--Subclause (VI) of
subsection (b)(3)(B)(viii) shall apply to
measures selected under subparagraph (A) in the
same manner as such subclause applies to
measures selected under such subsection.
(3) Performance standards.--
(A) Establishment.--The Secretary shall
establish performance standards with respect to
measures selected under paragraph (2) for a
performance period for a fiscal year (as
established under paragraph (4)).
(B) Achievement and improvement.--The
performance standards established under
subparagraph (A) shall include levels of
achievement and improvement.
(C) Timing.--The Secretary shall establish
and announce the performance standards under
subparagraph (A) not later than 60 days prior
to the beginning of the performance period for
the fiscal year involved.
(D) Considerations in establishing
standards.--In establishing performance
standards with respect to measures under this
paragraph, the Secretary shall take into
account appropriate factors, such as--
(i) practical experience with the
measures involved, including whether a
significant proportion of hospitals
failed to meet the performance standard
during previous performance periods;
(ii) historical performance
standards;
(iii) improvement rates; and
(iv) the opportunity for continued
improvement.
(4) Performance period.--For purposes of the Program,
the Secretary shall establish the performance period
for a fiscal year. Such performance period shall begin
and end prior to the beginning of such fiscal year.
(5) Hospital performance score.--
(A) In general.--Subject to subparagraph (B),
the Secretary shall develop a methodology for
assessing the total performance of each
hospital based on performance standards with
respect to the measures selected under
paragraph (2) for a performance period (as
established under paragraph (4)). Using such
methodology, the Secretary shall provide for an
assessment (in this subsection referred to as
the ``hospital performance score'') for each
hospital for each performance period.
(B) Application.--
(i) Appropriate distribution.--The
Secretary shall ensure that the
application of the methodology
developed under subparagraph (A)
results in an appropriate distribution
of value-based incentive payments under
paragraph (6) among hospitals achieving
different levels of hospital
performance scores, with hospitals
achieving the highest hospital
performance scores receiving the
largest value-based incentive payments.
(ii) Higher of achievement or
improvement.--The methodology developed
under subparagraph (A) shall provide
that the hospital performance score is
determined using the higher of its
achievement or improvement score for
each measure.
(iii) Weights.--The methodology
developed under subparagraph (A) shall
provide for the assignment of weights
for categories of measures as the
Secretary determines appropriate.
(iv) No minimum performance
standard.--The Secretary shall not set
a minimum performance standard in
determining the hospital performance
score for any hospital.
(v) Reflection of measures applicable
to the hospital.--The hospital
performance score for a hospital shall
reflect the measures that apply to the
hospital.
(6) Calculation of value-based incentive payments.--
(A) In general.--In the case of a hospital
that the Secretary determines meets (or
exceeds) the performance standards under
paragraph (3) for the performance period for a
fiscal year (as established under paragraph
(4)), the Secretary shall increase the base
operating DRG payment amount (as defined in
paragraph (7)(D)), as determined after
application of paragraph (7)(B)(i), for a
hospital for each discharge occurring in such
fiscal year by the value-based incentive
payment amount.
(B) Value-based incentive payment amount.--
The value-based incentive payment amount for
each discharge of a hospital in a fiscal year
shall be equal to the product of--
(i) the base operating DRG payment
amount (as defined in paragraph (7)(D))
for the discharge for the hospital for
such fiscal year; and
(ii) the value-based incentive
payment percentage specified under
subparagraph (C) for the hospital for
such fiscal year.
(C) Value-based incentive payment
percentage.--
(i) In general.--The Secretary shall
specify a value-based incentive payment
percentage for a hospital for a fiscal
year.
(ii) Requirements.--In specifying the
value-based incentive payment
percentage for each hospital for a
fiscal year under clause (i), the
Secretary shall ensure that--
(I) such percentage is based
on the hospital performance
score of the hospital under
paragraph (5); and
(II) the total amount of
value-based incentive payments
under this paragraph to all
hospitals in such fiscal year
is equal to the total amount
available for value-based
incentive payments for such
fiscal year under paragraph
(7)(A), as estimated by the
Secretary.
(7) Funding for value-based incentive payments.--
(A) Amount.--The total amount available for
value-based incentive payments under paragraph
(6) for all hospitals for a fiscal year shall
be equal to the total amount of reduced
payments for all hospitals under subparagraph
(B) for such fiscal year, as estimated by the
Secretary.
(B) Adjustment to payments.--
(i) In general.--The Secretary shall
reduce the base operating DRG payment
amount (as defined in subparagraph (D))
for a hospital for each discharge in a
fiscal year (beginning with fiscal year
2013) by an amount equal to the
applicable percent (as defined in
subparagraph (C)) of the base operating
DRG payment amount for the discharge
for the hospital for such fiscal year.
The Secretary shall make such
reductions for all hospitals in the
fiscal year involved, regardless of
whether or not the hospital has been
determined by the Secretary to have
earned a value-based incentive payment
under paragraph (6) for such fiscal
year.
(ii) No effect on other payments.--
Payments described in items (aa) and
(bb) of subparagraph (D)(i)(II) for a
hospital shall be determined as if this
subsection had not been enacted.
(C) Applicable percent defined.--For purposes
of subparagraph (B), the term ``applicable
percent'' means--
(i) with respect to fiscal year 2013,
1.0 percent;
(ii) with respect to fiscal year
2014, 1.25 percent;
(iii) with respect to fiscal year
2015, 1.5 percent;
(iv) with respect to fiscal year
2016, 1.75 percent; and
(v) with respect to fiscal year 2017
and succeeding fiscal years, 2 percent.
(D) Base operating drg payment amount
defined.--
(i) In general.--Except as provided
in clause (ii), in this subsection, the
term ``base operating DRG payment
amount'' means, with respect to a
hospital for a fiscal year--
(I) the payment amount that
would otherwise be made under
subsection (d) (determined
without regard to subsection
(q)) for a discharge if this
subsection did not apply;
reduced by
(II) any portion of such
payment amount that is
attributable to--
(aa) payments under
paragraphs (5)(A),
(5)(B), (5)(F), and
(12) of subsection (d);
and
(bb) such other
payments under
subsection (d)
determined appropriate
by the Secretary.
(ii) Special rules for certain
hospitals.--
(I) Sole community hospitals
and medicare-dependent, small
rural hospitals.--In the case
of a medicare-dependent, small
rural hospital (with respect to
discharges occurring during
fiscal year 2012 and 2013) or a
sole community hospital, in
applying subparagraph (A)(i),
the payment amount that would
otherwise be made under
subsection (d) shall be
determined without regard to
subparagraphs (I) and (L) of
subsection (b)(3) and
subparagraphs (D) and (G) of
subsection (d)(5).
(II) Hospitals paid under
section 1814.--In the case of a
hospital that is paid under
section 1814(b)(3), the term
``base operating DRG payment
amount'' means the payment
amount under such section.
(8) Announcement of net result of adjustments.--Under
the Program, the Secretary shall, not later than 60
days prior to the fiscal year involved, inform each
hospital of the adjustments to payments to the hospital
for discharges occurring in such fiscal year under
paragraphs (6) and (7)(B)(i).
(9) No effect in subsequent fiscal years.--The value-
based incentive payment under paragraph (6) and the
payment reduction under paragraph (7)(B)(i) shall each
apply only with respect to the fiscal year involved,
and the Secretary shall not take into account such
value-based incentive payment or payment reduction in
making payments to a hospital under this section in a
subsequent fiscal year.
(10) Public reporting.--
(A) Hospital specific information.--
(i) In general.--The Secretary shall
make information available to the
public regarding the performance of
individual hospitals under the Program,
including--
(I) the performance of the
hospital with respect to each
measure that applies to the
hospital;
(II) the performance of the
hospital with respect to each
condition or procedure; and
(III) the hospital
performance score assessing the
total performance of the
hospital.
(ii) Opportunity to review and submit
corrections.--The Secretary shall
ensure that a hospital has the
opportunity to review, and submit
corrections for, the information to be
made public with respect to the
hospital under clause (i) prior to such
information being made public.
(iii) Website.--Such information
shall be posted on the Hospital Compare
Internet website in an easily
understandable format.
(B) Aggregate information.--The Secretary
shall periodically post on the Hospital Compare
Internet website aggregate information on the
Program, including--
(i) the number of hospitals receiving
value-based incentive payments under
paragraph (6) and the range and total
amount of such value-based incentive
payments; and
(ii) the number of hospitals
receiving less than the maximum value-
based incentive payment available to
the hospital for the fiscal year
involved and the range and amount of
such payments.
(11) Implementation.--
(A) Appeals.--The Secretary shall establish a
process by which hospitals may appeal the
calculation of a hospital's performance
assessment with respect to the performance
standards established under paragraph (3)(A)
and the hospital performance score under
paragraph (5). The Secretary shall ensure that
such process provides for resolution of such
appeals in a timely manner.
(B) Limitation on review.--Except as provided
in subparagraph (A), there shall be no
administrative or judicial review under section
1869, section 1878, or otherwise of the
following:
(i) The methodology used to determine
the amount of the value-based incentive
payment under paragraph (6) and the
determination of such amount.
(ii) The determination of the amount
of funding available for such value-
based incentive payments under
paragraph (7)(A) and the payment
reduction under paragraph (7)(B)(i).
(iii) The establishment of the
performance standards under paragraph
(3) and the performance period under
paragraph (4).
(iv) The measures specified under
subsection (b)(3)(B)(viii) and the
measures selected under paragraph (2).
(v) The methodology developed under
paragraph (5) that is used to calculate
hospital performance scores and the
calculation of such scores.
(vi) The validation methodology
specified in subsection
(b)(3)(B)(viii)(XI).
(C) Consultation with small hospitals.--The
Secretary shall consult with small rural and
urban hospitals on the application of the
Program to such hospitals.
(12) Promulgation of regulations.--The Secretary
shall promulgate regulations to carry out the Program,
including the selection of measures under paragraph
(2), the methodology developed under paragraph (5) that
is used to calculate hospital performance scores, and
the methodology used to determine the amount of value-
based incentive payments under paragraph (6).
(p) Adjustment to Hospital Payments for Hospital Acquired
Conditions.--
(1) In general.--In order to provide an incentive for
applicable hospitals to reduce hospital acquired
conditions under this title, with respect to discharges
from an applicable hospital occurring during fiscal
year 2015 or a subsequent fiscal year, the amount of
payment under this section or section 1814(b)(3), as
applicable, for such discharges during the fiscal year
shall be equal to 99 percent of the amount of payment
that would otherwise apply to such discharges under
this section or section 1814(b)(3) (determined after
the application of subsections (o) and (q) and section
1814(l)(4) but without regard to this subsection).
(2) Applicable hospitals.--
(A) In general.--For purposes of this
subsection, the term ``applicable hospital''
means a subsection (d) hospital that meets the
criteria described in subparagraph (B).
(B) Criteria described.--
(i) In general.--The criteria
described in this subparagraph, with
respect to a subsection (d) hospital,
is that the subsection (d) hospital is
in the top quartile of all subsection
(d) hospitals, relative to the national
average, of hospital acquired
conditions during the applicable
period, as determined by the Secretary.
(ii) Risk adjustment.--In carrying
out clause (i), the Secretary shall
establish and apply an appropriate risk
adjustment methodology.
(C) Exemption.--In the case of a hospital
that is paid under section 1814(b)(3), the
Secretary may exempt such hospital from the
application of this subsection if the State
which is paid under such section submits an
annual report to the Secretary describing how a
similar program in the State for a
participating hospital or hospitals achieves or
surpasses the measured results in terms of
patient health outcomes and cost savings
established under this subsection.
(3) Hospital acquired conditions.--For purposes of
this subsection, the term ``hospital acquired
condition'' means a condition identified for purposes
of subsection (d)(4)(D)(iv) and any other condition
determined appropriate by the Secretary that an
individual acquires during a stay in an applicable
hospital, as determined by the Secretary.
(4) Applicable period.--In this subsection, the term
``applicable period'' means, with respect to a fiscal
year, a period specified by the Secretary.
(5) Reporting to hospitals.--Prior to fiscal year
2015 and each subsequent fiscal year, the Secretary
shall provide confidential reports to applicable
hospitals with respect to hospital acquired conditions
of the applicable hospital during the applicable
period.
(6) Reporting hospital specific information.--
(A) In general.--The Secretary shall make
information available to the public regarding
hospital acquired conditions of each applicable
hospital.
(B) Opportunity to review and submit
corrections.--The Secretary shall ensure that
an applicable hospital has the opportunity to
review, and submit corrections for, the
information to be made public with respect to
the hospital under subparagraph (A) prior to
such information being made public.
(C) Website.--Such information shall be
posted on the Hospital Compare Internet website
in an easily understandable format.
(7) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of the following:
(A) The criteria described in paragraph
(2)(A).
(B) The specification of hospital acquired
conditions under paragraph (3).
(C) The specification of the applicable
period under paragraph (4).
(D) The provision of reports to applicable
hospitals under paragraph (5) and the
information made available to the public under
paragraph (6).
(q) Hospital Readmissions Reduction Program.--
(1) In general.--With respect to payment for
discharges from an applicable hospital (as defined in
paragraph (5)(C)) occurring during a fiscal year
beginning on or after October 1, 2012, in order to
account for excess readmissions in the hospital, the
Secretary shall make payments (in addition to the
payments described in paragraph (2)(A)(ii)) for such a
discharge to such hospital under subsection (d) (or
section 1814(b)(3), as the case may be) in an amount
equal to the product of--
(A) the base operating DRG payment amount (as
defined in paragraph (2)) for the discharge;
and
(B) the adjustment factor (described in
paragraph (3)(A)) for the hospital for the
fiscal year.
(2) Base operating drg payment amount defined.--
(A) In general.--Except as provided in
subparagraph (B), in this subsection, the term
``base operating DRG payment amount'' means,
with respect to a hospital for a fiscal year--
(i) the payment amount that would
otherwise be made under subsection (d)
(determined without regard to
subsection (o)) for a discharge if this
subsection did not apply; reduced by
(ii) any portion of such payment
amount that is attributable to payments
under paragraphs (5)(A), (5)(B),
(5)(F), and (12) of subsection (d).
(B) Special rules for certain hospitals.--
(i) Sole community hospitals and
medicare-dependent, small rural
hospitals.--In the case of a medicare-
dependent, small rural hospital (with
respect to discharges occurring during
fiscal years 2012 and 2013) or a sole
community hospital, in applying
subparagraph (A)(i), the payment amount
that would otherwise be made under
subsection (d) shall be determined
without regard to subparagraphs (I) and
(L) of subsection (b)(3) and
subparagraphs (D) and (G) of subsection
(d)(5).
(ii) Hospitals paid under section
1814.--In the case of a hospital that
is paid under section 1814(b)(3), the
Secretary may exempt such hospitals
provided that States paid under such
section submit an annual report to the
Secretary describing how a similar
program in the State for a
participating hospital or hospitals
achieves or surpasses the measured
results in terms of patient health
outcomes and cost savings established
herein with respect to this section.
(3) Adjustment factor.--
(A) In general.--For purposes of paragraph
(1), the adjustment factor under this paragraph
for an applicable hospital for a fiscal year is
equal to the greater of--
(i) the ratio described in
subparagraph (B) for the hospital for
the applicable period (as defined in
paragraph (5)(D)) for such fiscal year;
or
(ii) the floor adjustment factor
specified in subparagraph (C).
(B) Ratio.--The ratio described in this
subparagraph for a hospital for an applicable
period is equal to 1 minus the ratio of--
(i) the aggregate payments for excess
readmissions (as defined in paragraph
(4)(A)) with respect to an applicable
hospital for the applicable period; and
(ii) the aggregate payments for all
discharges (as defined in paragraph
(4)(B)) with respect to such applicable
hospital for such applicable period.
(C) Floor adjustment factor.--For purposes of
subparagraph (A), the floor adjustment factor
specified in this subparagraph for--
(i) fiscal year 2013 is 0.99;
(ii) fiscal year 2014 is 0.98; or
(iii) fiscal year 2015 and subsequent
fiscal years is 0.97.
(4) Aggregate payments, excess readmission ratio
defined.--For purposes of this subsection:
(A) Aggregate payments for excess
readmissions.--The term ``aggregate payments
for excess readmissions'' means, for a hospital
for an applicable period, the sum, for
applicable conditions (as defined in paragraph
(5)(A)), of the product, for each applicable
condition, of--
(i) the base operating DRG payment
amount for such hospital for such
applicable period for such condition;
(ii) the number of admissions for
such condition for such hospital for
such applicable period; and
(iii) the excess readmissions ratio
(as defined in subparagraph (C)) for
such hospital for such applicable
period minus 1.
(B) Aggregate payments for all discharges.--
The term ``aggregate payments for all
discharges'' means, for a hospital for an
applicable period, the sum of the base
operating DRG payment amounts for all
discharges for all conditions from such
hospital for such applicable period.
(C) Excess readmission ratio.--
(i) In general.--Subject to clause
(ii), the term ``excess readmissions
ratio'' means, with respect to an
applicable condition for a hospital for
an applicable period, the ratio (but
not less than 1.0) of--
(I) the risk adjusted
readmissions based on actual
readmissions, as determined
consistent with a readmission
measure methodology that has
been endorsed under paragraph
(5)(A)(ii)(I), for an
applicable hospital for such
condition with respect to such
applicable period; to
(II) the risk adjusted
expected readmissions (as
determined consistent with such
a methodology) for such
hospital for such condition
with respect to such applicable
period.
(ii) Exclusion of certain
readmissions.--For purposes of clause
(i), with respect to a hospital, excess
readmissions shall not include
readmissions for an applicable
condition for which there are fewer
than a minimum number (as determined by
the Secretary) of discharges for such
applicable condition for the applicable
period and such hospital.
(5) Definitions.--For purposes of this subsection:
(A) Applicable condition.--The term
``applicable condition'' means, subject to
subparagraph (B), a condition or procedure
selected by the Secretary among conditions and
procedures for which--
(i) readmissions (as defined in
subparagraph (E)) that represent
conditions or procedures that are high
volume or high expenditures under this
title (or other criteria specified by
the Secretary); and
(ii) measures of such readmissions--
(I) have been endorsed by the
entity with a contract under
section 1890(a); and
(II) such endorsed measures
have exclusions for
readmissions that are unrelated
to the prior discharge (such as
a planned readmission or
transfer to another applicable
hospital).
(B) Expansion of applicable conditions.--
Beginning with fiscal year 2015, the Secretary
shall, to the extent practicable, expand the
applicable conditions beyond the 3 conditions
for which measures have been endorsed as
described in subparagraph (A)(ii)(I) as of the
date of the enactment of this subsection to the
additional 4 conditions that have been
identified by the Medicare Payment Advisory
Commission in its report to Congress in June
2007 and to other conditions and procedures as
determined appropriate by the Secretary. In
expanding such applicable conditions, the
Secretary shall seek the endorsement described
in subparagraph (A)(ii)(I) but may apply such
measures without such an endorsement in the
case of a specified area or medical topic
determined appropriate by the Secretary for
which a feasible and practical measure has not
been endorsed by the entity with a contract
under section 1890(a) as long as due
consideration is given to measures that have
been endorsed or adopted by a consensus
organization identified by the Secretary.
(C) Applicable hospital.--The term
``applicable hospital'' means a subsection (d)
hospital or a hospital that is paid under
section 1814(b)(3), as the case may be.
(D) Applicable period.--The term ``applicable
period'' means, with respect to a fiscal year,
such period as the Secretary shall specify.
(E) Readmission.--The term ``readmission''
means, in the case of an individual who is
discharged from an applicable hospital, the
admission of the individual to the same or
another applicable hospital within a time
period specified by the Secretary from the date
of such discharge. Insofar as the discharge
relates to an applicable condition for which
there is an endorsed measure described in
subparagraph (A)(ii)(I), such time period (such
as 30 days) shall be consistent with the time
period specified for such measure.
(6) Reporting hospital specific information.--
(A) In general.--The Secretary shall make
information available to the public regarding
readmission rates of each subsection (d)
hospital under the program.
(B) Opportunity to review and submit
corrections.--The Secretary shall ensure that a
subsection (d) hospital has the opportunity to
review, and submit corrections for, the
information to be made public with respect to
the hospital under subparagraph (A) prior to
such information being made public.
(C) Website.--Such information shall be
posted on the Hospital Compare Internet website
in an easily understandable format.
(7) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of the following:
(A) The determination of base operating DRG
payment amounts.
(B) The methodology for determining the
adjustment factor under paragraph (3),
including excess readmissions ratio under
paragraph (4)(C), aggregate payments for excess
readmissions under paragraph (4)(A), and
aggregate payments for all discharges under
paragraph (4)(B), and applicable periods and
applicable conditions under paragraph (5).
(C) The measures of readmissions as described
in paragraph (5)(A)(ii).
(8) Readmission rates for all patients.--
(A) Calculation of readmission.--The
Secretary shall calculate readmission rates for
all patients (as defined in subparagraph (D))
for a specified hospital (as defined in
subparagraph (D)(ii)) for an applicable
condition (as defined in paragraph (5)(B)) and
other conditions deemed appropriate by the
Secretary for an applicable period (as defined
in paragraph (5)(D)) in the same manner as used
to calculate such readmission rates for
hospitals with respect to this title and posted
on the CMS Hospital Compare website.
(B) Posting of hospital specific all patient
readmission rates.--The Secretary shall make
information on all patient readmission rates
calculated under subparagraph (A) available on
the CMS Hospital Compare website in a form and
manner determined appropriate by the Secretary.
The Secretary may also make other information
determined appropriate by the Secretary
available on such website.
(C) Hospital submission of all patient
data.--
(i) Except as provided for in clause
(ii), each specified hospital (as
defined in subparagraph (D)(ii)) shall
submit to the Secretary, in a form,
manner and time specified by the
Secretary, data and information
determined necessary by the Secretary
for the Secretary to calculate the all
patient readmission rates described in
subparagraph (A).
(ii) Instead of a specified hospital
submitting to the Secretary the data
and information described in clause
(i), such data and information may be
submitted to the Secretary, on behalf
of such a specified hospital, by a
state or an entity determined
appropriate by the Secretary.
(D) Definitions.--For purposes of this
paragraph:
(i) The term ``all patients'' means
patients who are treated on an
inpatient basis and discharged from a
specified hospital (as defined in
clause (ii)).
(ii) The term ``specified hospital''
means a subsection (d) hospital,
hospitals described in clauses (i)
through (v) of subsection (d)(1)(B)
and, as determined feasible and
appropriate by the Secretary, other
hospitals not otherwise described in
this subparagraph.
(r) Adjustments to Medicare DSH Payments.--
(1) Empirically justified dsh payments.--For fiscal
year 2014 and each subsequent fiscal year, instead of
the amount of disproportionate share hospital payment
that would otherwise be made under subsection (d)(5)(F)
to a subsection (d) hospital for the fiscal year, the
Secretary shall pay to the subsection (d) hospital 25
percent of such amount (which represents the
empirically justified amount for such payment, as
determined by the Medicare Payment Advisory Commission
in its March 2007 Report to the Congress).
(2) Additional payment.--In addition to the payment
made to a subsection (d) hospital under paragraph (1),
for fiscal year 2014 and each subsequent fiscal year,
the Secretary shall pay to such subsection (d)
hospitals an additional amount equal to the product of
the following factors:
(A) Factor one.--A factor equal to the
difference between--
(i) the aggregate amount of payments
that would be made to subsection (d)
hospitals under subsection (d)(5)(F) if
this subsection did not apply for such
fiscal year (as estimated by the
Secretary); and
(ii) the aggregate amount of payments
that are made to subsection (d)
hospitals under paragraph (1) for such
fiscal year (as so estimated).
(B) Factor two.--
(i) Fiscal years 2014, 2015, 2016,
and 2017.--For each of fiscal years
2014, 2015, 2016, and 2017, a factor
equal to 1 minus the percent change in
the percent of individuals under the
age of 65 who are uninsured, as
determined by comparing the percent of
such individuals--
(I) who are uninsured in
2013, the last year before
coverage expansion under the
Patient Protection and
Affordable Care Act (as
calculated by the Secretary
based on the most recent
estimates available from the
Director of the Congressional
Budget Office before a vote in
either House on the Health Care
and Education Reconciliation
Act of 2010 that, if determined
in the affirmative, would clear
such Act for enrollment); and
(II) who are uninsured in the
most recent period for which
data is available (as so
calculated),
minus 0.1 percentage points for fiscal
year 2014 and minus 0.2 percentage
points for each of fiscal years 2015,
2016, and 2017.
(ii) 2018 and subsequent years.--For
fiscal year 2018 and each subsequent
fiscal year, a factor equal to 1 minus
the percent change in the percent of
individuals who are uninsured, as
determined by comparing the percent of
individuals--
(I) who are uninsured in 2013
(as estimated by the Secretary,
based on data from the Census
Bureau or other sources the
Secretary determines
appropriate, and certified by
the Chief Actuary of the
Centers for Medicare & Medicaid
Services); and
(II) who are uninsured in the
most recent period for which
data is available (as so
estimated and certified),
minus 0.2 percentage points for each of
fiscal years 2018 and 2019.
(C) Factor three.--A factor equal to the
percent, for each subsection (d) hospital, that
represents the quotient of--
(i) the amount of uncompensated care
for such hospital for a period selected
by the Secretary (as estimated by the
Secretary, based on appropriate data
(including, in the case where the
Secretary determines that alternative
data is available which is a better
proxy for the costs of subsection (d)
hospitals for treating the uninsured,
the use of such alternative data)); and
(ii) the aggregate amount of
uncompensated care for all subsection
(d) hospitals that receive a payment
under this subsection for such period
(as so estimated, based on such data).
(3) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of the following:
(A) Any estimate of the Secretary for
purposes of determining the factors described
in paragraph (2).
(B) Any period selected by the Secretary for
such purposes.
(s) Prospective Payment for Psychiatric Hospitals.--
(1) Reference to establishment and implementation of
system.--For provisions related to the establishment
and implementation of a prospective payment system for
payments under this title for inpatient hospital
services furnished by psychiatric hospitals (as
described in clause (i) of subsection (d)(1)(B)) and
psychiatric units (as described in the matter following
clause (v) of such subsection), see section 124 of the
Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999.
(2) Implementation for rate year beginning in 2010
and subsequent rate years.--
(A) In general.--In implementing the system
described in paragraph (1) for the rate year
beginning in 2010 and any subsequent rate year,
any update to a base rate for days during the
rate year for a psychiatric hospital or unit,
respectively, shall be reduced--
(i) for the rate year beginning in
2012 and each subsequent rate year, by
the productivity adjustment described
in section 1886(b)(3)(B)(xi)(II); and
(ii) for each of the rate years
beginning in 2010 through 2019, by the
other adjustment described in paragraph
(3).
(B) Special rule.--The application of this
paragraph may result in such update being less
than 0.0 for a rate year, and may result in
payment rates under the system described in
paragraph (1) for a rate year being less than
such payment rates for the preceding rate year.
(3) Other adjustment.--For purposes of paragraph
(2)(A)(ii), the other adjustment described in this
paragraph is--
(A) for each of the rate years beginning in
2010 and 2011, 0.25 percentage point;
(B) for each of the rate years beginning in
2012 and 2013, 0.1 percentage point;
(C) for the rate year beginning in 2014, 0.3
percentage point;
(D) for each of the rate years beginning in
2015 and 2016, 0.2 percentage point; and
(E) for each of the rate years beginning in
2017, 2018, and 2019, 0.75 percentage point.
(4) Quality reporting.--
(A) Reduction in update for failure to
report.--
(i) In general.--Under the system
described in paragraph (1), for rate
year 2014 and each subsequent rate
year, in the case of a psychiatric
hospital or psychiatric unit that does
not submit data to the Secretary in
accordance with subparagraph (C) with
respect to such a rate year, any annual
update to a standard Federal rate for
discharges for the hospital during the
rate year, and after application of
paragraph (2), shall be reduced by 2
percentage points.
(ii) Special rule.--The application
of this subparagraph may result in such
annual update being less than 0.0 for a
rate year, and may result in payment
rates under the system described in
paragraph (1) for a rate year being
less than such payment rates for the
preceding rate year.
(B) Noncumulative application.--Any reduction
under subparagraph (A) shall apply only with
respect to the rate year involved and the
Secretary shall not take into account such
reduction in computing the payment amount under
the system described in paragraph (1) for a
subsequent rate year.
(C) Submission of quality data.--For rate
year 2014 and each subsequent rate year, each
psychiatric hospital and psychiatric unit shall
submit to the Secretary data on quality
measures specified under subparagraph (D). Such
data shall be submitted in a form and manner,
and at a time, specified by the Secretary for
purposes of this subparagraph.
(D) Quality measures.--
(i) In general.--Subject to clause
(ii), any measure specified by the
Secretary under this subparagraph must
have been endorsed by the entity with a
contract under section 1890(a).
(ii) Exception.--In the case of a
specified area or medical topic
determined appropriate by the Secretary
for which a feasible and practical
measure has not been endorsed by the
entity with a contract under section
1890(a), the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary.
(iii) Time frame.--Not later than
October 1, 2012, the Secretary shall
publish the measures selected under
this subparagraph that will be
applicable with respect to rate year
2014.
(E) Public availability of data submitted.--
The Secretary shall establish procedures for
making data submitted under subparagraph (C)
available to the public. Such procedures shall
ensure that a psychiatric hospital and a
psychiatric unit has the opportunity to review
the data that is to be made public with respect
to the hospital or unit prior to such data
being made public. The Secretary shall report
quality measures that relate to services
furnished in inpatient settings in psychiatric
hospitals and psychiatric units on the Internet
website of the Centers for Medicare & Medicaid
Services.
* * * * * * *
SEC. 1899B. STANDARDIZED POST-ACUTE CARE (PAC) ASSESSMENT DATA FOR
QUALITY, PAYMENT, AND DISCHARGE PLANNING.
(a) Requirement for Standardized Assessment Data.--
(1) In general.--The Secretary shall--
(A) require under the applicable reporting
provisions post-acute care providers (as
defined in paragraph (2)(A)) to report--
(i) standardized patient assessment
data in accordance with subsection (b);
(ii) data on quality measures under
subsection (c)(1); and
(iii) data on resource use and other
measures under subsection (d)(1);
(B) require data described in subparagraph
(A) to be standardized and interoperable so as
to allow for the exchange of such data among
such post-acute care providers and other
providers and the use by such providers of such
data that has been so exchanged, including by
using common standards and definitions, in
order to provide access to longitudinal
information for such providers to facilitate
coordinated care and improved Medicare
beneficiary outcomes; and
(C) in accordance with subsections (b)(1) and
(c)(2), modify PAC assessment instruments (as
defined in paragraph (2)(B)) applicable to
post-acute care providers to--
(i) provide for the submission of
standardized patient assessment data
under this title with respect to such
providers; and
(ii) enable comparison of such
assessment data across all such
providers to whom such data are
applicable.
(2) Definitions.--For purposes of this section:
(A) Post-acute care (pac) provider.--The
terms ``post-acute care provider'' and ``PAC
provider'' mean--
(i) a home health agency;
(ii) a skilled nursing facility;
(iii) an inpatient rehabilitation
facility; and
(iv) a long-term care hospital (other
than a hospital classified under
section 1886(d)(1)(B)(iv)(II)).
(B) PAC assessment instrument.--The term
``PAC assessment instrument'' means--
(i) in the case of home health
agencies, the instrument used for
purposes of reporting and assessment
with respect to the Outcome and
Assessment Information Set (OASIS), as
described in sections 484.55 and
484.250 of title 42, the Code of
Federal Regulations, or any successor
regulation, or any other instrument
used with respect to home health
agencies for such purposes;
(ii) in the case of skilled nursing
facilities, the resident's assessment
under section 1819(b)(3);
(iii) in the case of inpatient
rehabilitation facilities, any Medicare
beneficiary assessment instrument
established by the Secretary for
purposes of section 1886(j); and
(iv) in the case of long-term care
hospitals, the Medicare beneficiary
assessment instrument used with respect
to such hospitals for the collection of
data elements necessary to calculate
quality measures as described in the
August 18, 2011, Federal Register (76
Fed. Reg. 51754-51755), including for
purposes of section 1886(m)(5)(C), or
any other instrument used with respect
to such hospitals for assessment
purposes.
(C) Applicable reporting provision.--The term
``applicable reporting provision'' means--
(i) for home health agencies, section
1895(b)(3)(B)(v);
(ii) for skilled nursing facilities,
section 1888(e)(6);
(iii) for inpatient rehabilitation
facilities, section 1886(j)(7); and
(iv) for long-term care hospitals,
section 1886(m)(5).
(D) PAC payment system.--The term ``PAC
payment system'' means--
(i) with respect to a home health
agency, the prospective payment system
under section 1895;
(ii) with respect to a skilled
nursing facility, the prospective
payment system under section 1888(e);
(iii) with respect to an inpatient
rehabilitation facility, the
prospective payment system under
section 1886(j); and
(iv) with respect to a long-term care
hospital, the prospective payment
system under section 1886(m).
(E) Specified application date.--The term
``specified application date'' means the
following:
(i) Quality measures.--In the case of
quality measures under subsection
(c)(1)--
(I) with respect to the
domain described in subsection
(c)(1)(A) (relating to
functional status, cognitive
function, and changes in
function and cognitive
function)--
(aa) for PAC
providers described in
clauses (ii) and (iii)
of paragraph (2)(A),
October 1, 2016;
(bb) for PAC
providers described in
clause (iv) of such
paragraph, October 1,
2018; and
(cc) for PAC
providers described in
clause (i) of such
paragraph, January 1,
2019;
(II) with respect to the
domain described in subsection
(c)(1)(B) (relating to skin
integrity and changes in skin
integrity)--
(aa) for PAC
providers described in
clauses (ii), (iii),
and (iv) of paragraph
(2)(A), October 1,
2016; and
(bb) for PAC
providers described in
clause (i) of such
paragraph, January 1,
2017;
(III) with respect to the
domain described in subsection
(c)(1)(C) (relating to
medication reconciliation)--
(aa) for PAC
providers described in
clause (i) of such
paragraph, January 1,
2017; and
(bb) for PAC
providers described in
clauses (ii), (iii),
and (iv) of such
paragraph, October 1,
2018;
(IV) with respect to the
domain described in subsection
(c)(1)(D) (relating to
incidence of major falls)--
(aa) for PAC
providers described in
clauses (ii), (iii),
and (iv) of paragraph
(2)(A), October 1,
2016; and
(bb) for PAC
providers described in
clause (i) of such
paragraph, January 1,
2019; and
(V) with respect to the
domain described in subsection
(c)(1)(E) (relating to
accurately communicating the
existence of and providing for
the transfer of health
information and care
preferences)--
(aa) for PAC
providers described in
clauses (ii), (iii),
and (iv) of paragraph
(2)(A), October 1,
2018; and
(bb) for PAC
providers described in
clause (i) of such
paragraph, January 1,
2019.
(ii) Resource use and other
measures.--In the case of resource use
and other measures under subsection
(d)(1)--
(I) for PAC providers
described in clauses (ii),
(iii), and (iv) of paragraph
(2)(A), October 1, 2016; and
(II) for PAC providers
described in clause (i) of such
paragraph, January 1, 2017.
(F) Medicare beneficiary.--The term
``Medicare beneficiary'' means an individual
entitled to benefits under part A or, as
appropriate, enrolled for benefits under part
B.
(b) Standardized Patient Assessment Data.--
(1) Requirement for reporting assessment data.--
(A) In general.--Beginning not later than
October 1, 2018, for PAC providers described in
clauses (ii), (iii), and (iv) of subsection
(a)(2)(A) and January 1, 2019, for PAC
providers described in clause (i) of such
subsection, the Secretary shall require PAC
providers to submit to the Secretary, under the
applicable reporting provisions and through the
use of PAC assessment instruments, the
standardized patient assessment data described
in subparagraph (B). The Secretary shall
require such data be submitted with respect to
admission and discharge of an individual (and
may be submitted more frequently as the
Secretary deems appropriate).
(B) Standardized patient assessment data
described.--For purposes of subparagraph (A),
the standardized patient assessment data
described in this subparagraph is data required
for at least the quality measures described in
subsection (c)(1) and that is with respect to
the following categories:
(i) Functional status, such as
mobility and self care at admission to
a PAC provider and before discharge
from a PAC provider.
(ii) Cognitive function, such as
ability to express ideas and to
understand, and mental status, such as
depression and dementia.
(iii) Special services, treatments,
and interventions, such as need for
ventilator use, dialysis, chemotherapy,
central line placement, and total
parenteral nutrition.
(iv) Medical conditions and co-
morbidities, such as diabetes,
congestive heart failure, and pressure
ulcers.
(v) Impairments, such as incontinence
and an impaired ability to hear, see,
or swallow.
(vi) Other categories deemed
necessary and appropriate by the
Secretary.
(2) Alignment of claims data with standardized
patient assessment data.--To the extent practicable,
not later than October 1, 2018, for PAC providers
described in clauses (ii), (iii), and (iv) of
subsection (a)(2)(A), and January 1, 2019, for PAC
providers described in clause (i) of such subsection,
the Secretary shall match claims data with assessment
data pursuant to this section for purposes of assessing
prior service use and concurrent service use, such as
antecedent hospital or PAC provider use, and may use
such matched data for such other uses as the Secretary
determines appropriate.
(3) Replacement of certain existing data.--In the
case of patient assessment data being used with respect
to a PAC assessment instrument that duplicates or
overlaps with standardized patient assessment data
within a category described in paragraph (1), the
Secretary shall, as soon as practicable, revise or
replace such existing data with the standardized data.
(4) Clarification.--Standardized patient assessment
data submitted pursuant to this subsection shall not be
used to require individuals to be provided post-acute
care by a specific type of PAC provider in order for
such care to be eligible for payment under this title.
(c) Quality Measures.--
(1) Requirement for reporting quality measures.--Not
later than the specified application date, as
applicable to measures and PAC providers, the Secretary
shall specify quality measures on which PAC providers
are required under the applicable reporting provisions
to submit standardized patient assessment data
described in subsection (b)(1) and other necessary data
specified by the Secretary. Such measures shall be with
respect to at least the following domains:
(A) Functional status, cognitive function,
and changes in function and cognitive function.
(B) Skin integrity and changes in skin
integrity.
(C) Medication reconciliation.
(D) Incidence of major falls.
(E) Accurately communicating the existence of
and providing for the transfer of health
information and care preferences of an
individual to the individual, family caregiver
of the individual, and providers of services
furnishing items and services to the
individual, when the individual transitions--
(i) from a hospital or critical
access hospital to another applicable
setting, including a PAC provider or
the home of the individual; or
(ii) from a PAC provider to another
applicable setting, including a
different PAC provider, a hospital, a
critical access hospital, or the home
of the individual.
(2) Reporting through pac assessment instruments.--
(A) In general.--To the extent possible, the
Secretary shall require such reporting by a PAC
provider of quality measures under paragraph
(1) through the use of a PAC assessment
instrument and shall modify such PAC assessment
instrument as necessary to enable the use of
such instrument with respect to such quality
measures.
(B) Limitation.--The Secretary may not make
significant modifications to a PAC assessment
instrument more than once per calendar year or
fiscal year, as applicable, unless the
Secretary publishes in the Federal Register a
justification for such significant
modification.
(3) Adjustments.--
(A) In general.--The Secretary shall consider
applying adjustments to the quality measures
under this subsection taking into consideration
the studies under section 2(d) of the IMPACT
Act of 2014.
(B) Risk adjustment.--Such quality measures
shall be risk adjusted, as determined
appropriate by the Secretary.
(d) Resource Use and Other Measures.--
(1) Requirement for resource use and other
measures.--Not later than the specified application
date, as applicable to measures and PAC providers, the
Secretary shall specify resource use and other measures
on which PAC providers are required under the
applicable reporting provisions to submit any necessary
data specified by the Secretary, which may include
standardized assessment data in addition to claims
data. Such measures shall be with respect to at least
the following domains:
(A) Resource use measures, including total
estimated Medicare spending per beneficiary.
(B) Discharge to community.
(C) Measures to reflect all-condition risk-
adjusted potentially preventable hospital
readmission rates.
(2) Aligning methodology adjustments for resource use
measures.--
(A) Period of time.--With respect to the
period of time used for calculating measures
under paragraph (1)(A), the Secretary shall, to
the extent the Secretary determines
appropriate, align resource use with the
methodology used for purposes of section
1886(o)(2)(B)(ii).
(B) Geographic and other adjustments.--The
Secretary shall standardize measures with
respect to the domain described in paragraph
(1)(A) for geographic payment rate differences
and payment differentials (and other
adjustments, as applicable) consistent with the
methodology published in the Federal Register
on August 18, 2011 (76 Fed. Reg. 51624 through
51626), or any subsequent modifications made to
the methodology.
(C) Medicare spending per beneficiary.--The
Secretary shall adjust, as appropriate,
measures with respect to the domain described
in paragraph (1)(A) for the factors applied
under section 1886(o)(2)(B)(ii).
(3) Adjustments.--
(A) In general.--The Secretary shall consider
applying adjustments to the resource use and
other measures specified under this subsection
with respect to the domain described in
paragraph (1)(A), taking into consideration the
studies under section 2(d) of the IMPACT Act of
2014.
(B) Risk adjustment.--Such resource use and
other measures shall be risk adjusted, as
determined appropriate by the Secretary.
(e) Measurement Implementation Phases; Selection of Quality
Measures and Resource Use and Other Measures.--
(1) Measurement implementation phases.--In the case
of quality measures specified under subsection (c)(1)
and resource use and other measures specified under
subsection (d)(1), the provisions of this section shall
be implemented in accordance with the following phases:
(A) Initial implementation phase.--The
initial implementation phase, with respect to
such a measure, shall, in accordance with
subsections (c) and (d), as applicable, consist
of--
(i) measure specification, including
informing the public of the measure's
numerator, denominator, exclusions, and
any other aspects the Secretary
determines necessary;
(ii) data collection, including, in
the case of quality measures, requiring
PAC providers to report data elements
needed to calculate such a measure; and
(iii) data analysis, including, in
the case of resource use and other
measures, the use of claims data to
calculate such a measure.
(B) Second implementation phase.--The second
implementation phase, with respect to such a
measure, shall consist of the provision of
feedback reports to PAC providers, in
accordance with subsection (f).
(C) Third implementation phase.--The third
implementation phase, with respect to such a
measure, shall consist of public reporting of
PAC providers' performance on such measure in
accordance with subsection (g).
(2) Consensus-based entity.--
(A) In general.--Subject to subparagraph (B),
each measure specified by the Secretary under
this section shall be endorsed by the entity
with a contract under section 1890(a).
(B) Exception.--In the case of a specified
area or medical topic determined appropriate by
the Secretary for which a feasible and
practical measure has not been endorsed by the
entity with a contract under section 1890(a),
the Secretary may specify a measure that is not
so endorsed as long as due consideration is
given to measures that have been endorsed or
adopted by a consensus organization identified
by the Secretary.
(3) Treatment of application of pre-rulemaking
process (measure applications partnership process).--
(A) In general.--Subject to subparagraph (B),
the provisions of section 1890A shall apply in
the case of a quality measure specified under
subsection (c) or a resource use or other
measure specified under subsection (d).
(B) Exceptions.--
(i) Expedited procedures.--For
purposes of satisfying subparagraph
(A), the Secretary may use expedited
procedures, such as ad-hoc reviews, as
necessary, in the case of a quality
measure specified under subsection (c)
or a resource use or other measure
specified in subsection (d) required
with respect to data submissions under
the applicable reporting provisions
during the 1-year period before the
specified application date applicable
to such a measure and provider
involved.
(ii) Option to waive provisions.--The
Secretary may waive the application of
the provisions of section 1890A in the
case of a quality measure or resource
use or other measure described in
clause (i), if the application of such
provisions (including through the use
of an expedited procedure described in
such clause) would result in the
inability of the Secretary to satisfy
any deadline specified in this section
with respect to such measure.
(f) Feedback Reports to PAC Providers.--
(1) In general.--Beginning one year after the
specified application date, as applicable to PAC
providers and quality measures and resource use and
other measures under this section, the Secretary shall
provide confidential feedback reports to such PAC
providers on the performance of such providers with
respect to such measures required under the applicable
provisions.
(2) Frequency.--To the extent feasible, the Secretary
shall provide feedback reports described in paragraph
(1) not less frequently than on a quarterly basis.
Notwithstanding the previous sentence, with respect to
measures described in such paragraph that are reported
on an annual basis, the Secretary may provide such
feedback reports on an annual basis.
(g) Public Reporting of PAC Provider Performance.--
(1) In general.--Subject to the succeeding paragraphs
of this subsection, the Secretary shall provide for
public reporting of PAC provider performance on quality
measures under subsection (c)(1) and the resource use
and other measures under subsection (d)(1), including
by establishing procedures for making available to the
public information regarding the performance of
individual PAC providers with respect to such measures.
(2) Opportunity to review.--The procedures under
paragraph (1) shall ensure, including through a process
consistent with the process applied under section
1886(b)(3)(B)(viii)(VII) for similar purposes, that a
PAC provider has the opportunity to review and submit
corrections to the data and information that is to be
made public with respect to the provider prior to such
data being made public.
(3) Timing.--Such procedures shall provide that the
data and information described in paragraph (1), with
respect to a measure and PAC provider, is made publicly
available beginning not later than two years after the
specified application date applicable to such a measure
and provider.
(4) Coordination with existing programs.--Such
procedures shall provide that data and information
described in paragraph (1) with respect to quality
measures and resource use and other measures under
subsections (c)(1) and (d)(1) shall be made publicly
available consistent with the following provisions:
(A) In the case of home health agencies,
section 1895(b)(3)(B)(v)(III).
(B) In the case of skilled nursing
facilities, sections 1819(i) and 1919(i).
(C) In the case of inpatient rehabilitation
facilities, section 1886(j)(7)(E).
(D) In the case of long-term care hospitals,
section 1886(m)(5)(E).
(h) Removing, Suspending, or Adding Measures.--
(1) In general.--The Secretary may remove, suspend,
or add a quality measure or resource use or other
measure described in subsection (c)(1) or (d)(1), so
long as, subject to paragraph (2), the Secretary
publishes in the Federal Register (with a notice and
comment period) a justification for such removal,
suspension, or addition.
(2) Exception.--In the case of such a quality measure
or resource use or other measure for which there is a
reason to believe that the continued collection of such
measure raises potential safety concerns or would cause
other unintended consequences, the Secretary may
promptly suspend or remove such measure and satisfy
paragraph (1) by publishing in the Federal Register a
justification for such suspension or removal in the
next rulemaking cycle following such suspension or
removal.
(i) Use of Standardized Assessment Data, Quality Measures,
and Resource Use and Other Measures to Inform Discharge
Planning and Incorporate Patient Preference.--
(1) In general.--Not later than January 1, 2016, and
periodically thereafter (but not less frequently than
once every 5 years), the Secretary shall promulgate
regulations to modify conditions of participation and
subsequent interpretive guidance applicable to PAC
providers, hospitals, and critical access hospitals.
Such regulations and interpretive guidance shall
require such providers to take into account quality,
resource use, and other measures under the applicable
reporting provisions (which, as available, shall
include measures specified under subsections (c) and
(d), and other relevant measures) in the discharge
planning process. Specifically, such regulations and
interpretive guidance shall address the settings to
which a patient may be discharged in order to assist
subsection (d) hospitals, critical access hospitals,
hospitals described in section 1886(d)(1)(B)(v), PAC
providers, patients, and families of such patients with
discharge planning from inpatient settings, including
such hospitals, and from PAC provider settings. In
addition, such regulations and interpretive guidance
shall include procedures to address--
(A) treatment preferences of patients; and
(B) goals of care of patients.
(2) Discharge planning.--All requirements applied
pursuant to paragraph (1) shall be used to help inform
and mandate the discharge planning process.
(3) Clarification.--Such regulations shall not
require an individual to be provided post-acute care by
a specific type of PAC provider in order for such care
to be eligible for payment under this title.
(j) Stakeholder Input.--Before the initial rulemaking process
to implement this section, the Secretary shall allow for
stakeholder input, such as through town halls, open door
forums, and mail-box submissions.
(k) Funding.--For purposes of carrying out this section, the
Secretary shall provide for the transfer to the Centers for
Medicare & Medicaid Services Program Management Account, from
the Federal Hospital Insurance Trust Fund under section 1817
and the Federal Supplementary Medical Insurance Trust Fund
under section 1841, in such proportion as the Secretary
determines appropriate, of $130,000,000. Fifty percent of such
amount shall be available on the date of the enactment of this
section and fifty percent of such amount shall be equally
proportioned for each of fiscal years 2015 through 2019. Such
sums shall remain available until expended.
(l) Limitation.--There shall be no administrative or judicial
review under sections 1869 and 1878 or otherwise of the
specification of standardized patient assessment data required,
the determination of measures, and the systems to report such
standardized data under this section.
(m) Non-application of Paperwork Reduction Act.--Chapter 35
of title 44, United States Code (commonly referred to as the
``Paperwork Reduction Act of 1995'') shall not apply to this
section and the sections referenced in subsection (a)(2)(B)
that require modification in order to achieve the
standardization of patient assessment data.
TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS
* * * * * * *
STATE PLANS FOR MEDICAL ASSISTANCE
Sec. 1902. (a) A State plan for medical assistance must--
(1) provide that it shall be in effect in all
political subdivisions of the State, and, if
administered by them, be mandatory upon them;
(2) provide for financial participation by the State
equal to not less than 40 per centum of the non-Federal
share of the expenditures under the plan with respect
to which payments under section 1903 are authorized by
this title; and, effective July 1, 1969, provide for
financial participation by the State equal to all of
such non-Federal share or provide for distribution of
funds from Federal or State sources, for carrying out
the State plan, on an equalization or other basis which
will assure that the lack of adequate funds from local
sources will not result in lowering the amount,
duration, scope, or quality of care and services
available under the plan;
(3) provide for granting an opportunity for a fair
hearing before the State agency to any individual whose
claim for medical assistance under the plan is denied
or is not acted upon with reasonable promptness;
(4) provide (A) such methods of administration
(including methods relating to the establishment and
maintenance of personnel standards on a merit basis,
except that the Secretary shall exercise no authority
with respect to the selection, tenure of office, and
compensation of any individual employed in accordance
with such methods, and including provision for
utilization of professional medical personnel in the
administration and, where administered locally,
supervision of administration of the plan) as are found
by the Secretary to be necessary for the proper and
efficient operation of the plan, (B) for the training
and effective use of paid subprofessional staff, with
particular emphasis on the full-time or part-time
employment of recipients and other persons of low
income, as community service aides, in the
administration of the plan and for the use of nonpaid
or partially paid volunteers in a social service
volunteer program in providing services to applicants
and recipients and in assisting any advisory committees
established by the State agency, (C) that each State or
local officer, employee, or independent contractor who
is responsible for the expenditure of substantial
amounts of funds under the State plan, each individual
who formerly was such an officer, employee, or
contractor, and each partner of such an officer,
employee, or contractor shall be prohibited from
committing any act, in relation to any activity under
the plan, the commission of which, in connection with
any activity concerning the United States Government,
by an officer or employee of the United States
Government, an individual who was such an officer or
employee, or a partner of such an officer or employee
is prohibited by section 207 or 208 of title 18, United
States Code, and (D) that each State or local officer,
employee, or independent contractor who is responsible
for selecting, awarding, or otherwise obtaining items
and services under the State plan shall be subject to
safeguards against conflicts of interest that are at
least as stringent as the safeguards that apply under
section 27 of the Office of Federal Procurement Policy
Act (41 U.S.C. 423) to persons described in subsection
(a)(2) of such section of that Act;
(5) either provide for the establishment or
designation of a single State agency to administer or
to supervise the administration of the plan; or provide
for the establishment or designation of a single State
agency to administer or to supervise the administration
of the plan, except that the determination of
eligibility for medical assistance under the plan shall
be made by the State or local agency administering the
State plan approved under title I or XVI (insofar as it
relates to the aged) if the State is eligible to
participate in the State plan program established under
title XVI, or by the agency or agencies administering
the supplemental security income program established
under title XVI or the State plan approved under part A
of title IV if the State is not eligible to participate
in the State plan program established under title XVI;
(6) provide that the State agency will make such
reports, in such form and containing such information,
as the Secretary may from time to time require, and
comply with such provisions as the Secretary may from
time to time find necessary to assure the correctness
and verification of such reports;
(7) provide--
(A) safeguards which restrict the use or
disclosure of information concerning applicants
and recipients to purposes directly connected
with--
(i) the administration of the plan;
and
(ii) the exchange of information
necessary to certify or verify the
certification of eligibility of
children for free or reduced price
breakfasts under the Child Nutrition
Act of 1966 and free or reduced price
lunches under the Richard B. Russell
National School Lunch Act, in
accordance with section 9(b) of that
Act, using data standards and formats
established by the State agency; and
(B) that, notwithstanding the Express Lane
option under subsection (e)(13), the State may
enter into an agreement with the State agency
administering the school lunch program
established under the Richard B. Russell
National School Lunch Act under which the State
shall establish procedures to ensure that--
(i) a child receiving medical
assistance under the State plan under
this title whose family income does not
exceed 133 percent of the poverty line
(as defined in section 673(2) of the
Community Services Block Grant Act,
including any revision required by such
section), as determined without regard
to any expense, block, or other income
disregard, applicable to a family of
the size involved, may be certified as
eligible for free lunches under the
Richard B. Russell National School
Lunch Act and free breakfasts under the
Child Nutrition Act of 1966 without
further application; and
(ii) the State agencies responsible
for administering the State plan under
this title, and for carrying out the
school lunch program established under
the Richard B. Russell National School
Lunch Act (42 U.S.C. 1751 et seq.) or
the school breakfast program
established by section 4 of the Child
Nutrition Act of 1966 (42 U.S.C. 1773),
cooperate in carrying out paragraphs
(3)(F) and (15) of section 9(b) of that
Act;
(8) provide that all individuals wishing to make
application for medical assistance under the plan shall
have opportunity to do so, and that such assistance
shall be furnished with reasonable promptness to all
eligible individuals;
(9) provide--
(A) that the State health agency, or other
appropriate State medical agency (whichever is
utilized by the Secretary for the purpose
specified in the first sentence of section
1864(a)), shall be responsible for establishing
and maintaining health standards for private or
public institutions in which recipients of
medical assistance under the plan may receive
care or services,
(B) for the establishment or designation of a
State authority or authorities which shall be
responsible for establishing and maintaining
standards, other than those relating to health,
for such institutions,
(C) that any laboratory services paid for
under such plan must be provided by a
laboratory which meets the applicable
requirements of section 1861(e)(9) or
paragraphs (16) and (17) of section 1861(s),
or, in the case of a laboratory which is in a
rural health clinic, of section 1861(aa)(2)(G),
and
(D) that the State maintain a consumer-
oriented website providing useful information
to consumers regarding all skilled nursing
facilities and all nursing facilities in the
State, including for each facility, Form 2567
State inspection reports (or a successor form),
complaint investigation reports, the facility's
plan of correction, and such other information
that the State or the Secretary considers
useful in assisting the public to assess the
quality of long term care options and the
quality of care provided by individual
facilities;
(10) provide--
(A) for making medical assistance available,
including at least the care and services listed
in paragraphs (1) through (5), (17), (21), and
(28) of section 1905(a), to--
(i) all individuals--
(I) who are receiving aid or
assistance under any plan of
the State approved under title
I, X, XIV, or XVI, or part A or
part E of title IV (including
individuals eligible under this
title by reason of section
402(a)(37), 406(h), or 473(b),
or considered by the State to
be receiving such aid as
authorized under section
482(e)(6)\2\),
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\2\So in law. Section 108(e) of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (P.L. 104-193) repealed
sections 481 through 487 of the Social Security Act.
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(II)(aa) with respect to whom
supplemental security income
benefits are being paid under
title XVI (or were being paid
as of the date of the enactment
of section 211(a) of the
Personal Responsibility and
Work Opportunity Reconciliation
Act of 1996 (P.L. 104-193) and
would continue to be paid but
for the enactment of that
section), (bb) who are
qualified severely impaired
individuals (as defined in
section 1905(q)), or (cc) who
are under 21 years of age and
with respect to whom
supplemental security income
benefits would be paid under
title XVI if subparagraphs (A)
and (B) of section 1611(c)(7)
were applied without regard to
the phrase ``the first day of
the month following'',
(III) who are qualified
pregnant women or children as
defined in section 1905(n),
(IV) who are described in
subparagraph (A) or (B) of
subsection (l)(1) and whose
family income does not exceed
the minimum income level the
State is required to establish
under subsection (l)(2)(A) for
such a family;
(V) who are qualified family
members as defined in section
1905(m)(1),
(VI) who are described in
subparagraph (C) of subsection
(l)(1) and whose family income
does not exceed the income
level the State is required to
establish under subsection
(l)(2)(B) for such a family,
(VII) who are described in
subparagraph (D) of subsection
(l)(1) and whose family income
does not exceed the income
level the State is required to
establish under subsection
(l)(2)(C) for such a family;
(VIII) beginning January 1,
2014, who are under 65 years of
age, not pregnant, not entitled
to, or enrolled for, benefits
under part A of title XVIII, or
enrolled for benefits under
part B of title XVIII, and are
not described in a previous
subclause of this clause, and
whose income (as determined
under subsection (e)(14)) does
not exceed 133 percent of the
poverty line (as defined in
section 2110(c)(5)) applicable
to a family of the size
involved, subject to subsection
(k); or
(IX) who--
(aa) are under 26
years of age;
(bb) are not
described in or
enrolled under any of
subclauses (I) through
(VII) of this clause or
are described in any of
such subclauses but
have income that
exceeds the level of
income applicable under
the State plan for
eligibility to enroll
for medical assistance
under such subclause;
(cc) were in foster
care under the
responsibility of the
State on the date of
attaining 18 years of
age or such higher age
as the State has
elected under section
475(8)(B)(iii); and
(dd) were enrolled in
the State plan under
this title or under a
waiver of the plan
while in such foster
care;
(ii) at the option of the State, to
any group or groups of individuals
described in section 1905(a) (or, in
the case of individuals described in
section 1905(a)(i), to any reasonable
categories of such individuals) who are
not individuals described in clause (i)
of this subparagraph but--
(I) who meet the income and
resources requirements of the
appropriate State plan
described in clause (i) or the
supplemental security income
program (as the case may be),
(II) who would meet the
income and resources
requirements of the appropriate
State plan described in clause
(i) if their work-related child
care costs were paid from their
earnings rather than by a State
agency as a service
expenditure,
(III) who would be eligible
to receive aid under the
appropriate State plan
described in clause (i) if
coverage under such plan was as
broad as allowed under Federal
law,
(IV) with respect to whom
there is being paid, or who are
eligible, or would be eligible
if they were not in a medical
institution, to have paid with
respect to them, aid or
assistance under the
appropriate State plan
described in clause (i),
supplemental security income
benefits under title XVI, or a
State supplementary payment;
(V) who are in a medical
institution for a period of not
less than 30 consecutive days
(with eligibility by reason of
this subclause beginning on the
first day of such period), who
meet the resource requirements
of the appropriate State plan
described in clause (i) or the
supplemental security income
program, and whose income does
not exceed a separate income
standard established by the
State which is consistent with
the limit established under
section 1903(f)(4)(C),
(VI) who would be eligible
under the State plan under this
title if they were in a medical
institution, with respect to
whom there has been a
determination that but for the
provision of home or community-
based services described in
subsection (c), (d), or (e) of
section 1915 they would require
the level of care provided in a
hospital, nursing facility or
intermediate care facility for
the mentally retarded the cost
of which could be reimbursed
under the State plan, and who
will receive home or community-
based services pursuant to a
waiver granted by the Secretary
under subsection (c), (d), or
(e) of section 1915,
(VII) who would be eligible
under the State plan under this
title if they were in a medical
institution, who are terminally
ill, and who will receive
hospice care pursuant to a
voluntary election described in
section 1905(o);
(VIII) who is a child
described in section
1905(a)(i)--
(aa) for whom there
is in effect an
adoption assistance
agreement (other than
an agreement under part
E of title IV) between
the State and an
adoptive parent or
parents,
(bb) who the State
agency responsible for
adoption assistance has
determined cannot be
placed with adoptive
parents without medical
assistance because such
child has special needs
for medical or
rehabilitative care,
and
(cc) who was eligible
for medical assistance
under the State plan
prior to the adoption
assistance agreement
being entered into, or
who would have been
eligible for medical
assistance at such time
if the eligibility
standards and
methodologies of the
State's foster care
program under part E of
title IV were applied
rather than the
eligibility standards
and methodologies of
the State's aid to
families with dependent
children program under
part A of title IV;
(IX) who are described in
subsection (l)(1) and are not
described in clause (i)(IV),
clause (i)(VI), or clause
(i)(VII);
(X) who are described in
subsection (m)(1);
(XI) who receive only an
optional State supplementary
payment based on need and paid
on a regular basis, equal to
the difference between the
individual's countable income
and the income standard used to
determine eligibility for such
supplementary payment (with
countable income being the
income remaining after
deductions as established by
the State pursuant to standards
that may be more restrictive
than the standards for
supplementary security income
benefits under title XVI),
which are available to all
individuals in the State (but
which may be based on different
income standards by political
subdivision according to cost
of living differences), and
which are paid by a State that
does not have an agreement with
the Commissioner of Social
Security under section 1616 or
1634;
(XII) who are described in
subsection (z)(1) (relating to
certain TB-infected
individuals);
(XIII) who are in families
whose income is less than 250
percent of the income official
poverty line (as defined by the
Office of Management and
Budget, and revised annually in
accordance with section 673(2)
of the Omnibus Budget
Reconciliation Act of 1981)
applicable to a family of the
size involved, and who but for
earnings in excess of the limit
established under section
1905(q)(2)(B), would be
considered to be receiving
supplemental security income
(subject, notwithstanding
section 1916, to payment of
premiums or other cost-sharing
charges (set on a sliding scale
based on income) that the State
may determine);
(XIV) who are optional
targeted low-income children
described in section
1905(u)(2)(B);
(XV) who, but for earnings in
excess of the limit established
under section 1905(q)(2)(B),
would be considered to be
receiving supplemental security
income, who is at least 16, but
less than 65, years of age, and
whose assets, resources, and
earned or unearned income (or
both) do not exceed such
limitations (if any) as the
State may establish;
(XVI) who are employed
individuals with a medically
improved disability described
in section 1905(v)(1) and whose
assets, resources, and earned
or unearned income (or both) do
not exceed such limitations (if
any) as the State may
establish, but only if the
State provides medical
assistance to individuals
described in subclause (XV);
(XVII) who are independent
foster care adolescents (as
defined in section 1905(w)(1)),
or who are within any
reasonable categories of such
adolescents specified by the
State;
(XVIII) who are described in
subsection (aa) (relating to
certain breast or cervical
cancer patients);
(XIX) who are disabled
children described in
subsection (cc)(1);
(XX) beginning January 1,
2014, who are under 65 years of
age and are not described in or
enrolled under a previous
subclause of this clause, and
whose income (as determined
under subsection (e)(14))
exceeds 133 percent of the
poverty line (as defined in
section 2110(c)(5)) applicable
to a family of the size
involved but does not exceed
the highest income eligibility
level established under the
State plan or under a waiver of
the plan, subject to subsection
(hh);
(XXI) who are described in
subsection (ii) (relating to
individuals who meet certain
income standards); or
(XXII) who are eligible for
home and community-based
services under needs-based
criteria established under
paragraph (1)(A) of section
1915(i), or who are eligible
for home and community-based
services under paragraph (6) of
such section, and who will
receive home and community-
based services pursuant to a
State plan amendment under such
subsection;
(B) that the medical assistance made
available to any individual described in
subparagraph (A)--
(i) shall not be less in amount,
duration, or scope than the medical
assistance made available to any other
such individual, and
(ii) shall not be less in amount,
duration, or scope than the medical
assistance made available to
individuals not described in
subparagraph (A);
(C) that if medical assistance is included
for any group of individuals described in
section 1905(a) who are not described in
subparagraph (A) or (E), then--
(i) the plan must include a
description of (I) the criteria for
determining eligibility of individuals
in the group for such medical
assistance, (II) the amount, duration,
and scope of medical assistance made
available to individuals in the group,
and (III) the single standard to be
employed in determining income and
resource eligibility for all such
groups, and the methodology to be
employed in determining such
eligibility, which shall be no more
restrictive than the methodology which
would be employed under the
supplemental security income program in
the case of groups consisting of aged,
blind, or disabled individuals in a
State in which such program is in
effect, and which shall be no more
restrictive than the methodology which
would be employed under the appropriate
State plan (described in subparagraph
(A)(i)) to which such group is most
closely categorically related in the
case of other groups;
(ii) the plan must make available
medical assistance--
(I) to individuals under the
age of 18 who (but for income
and resources) would be
eligible for medical assistance
as an individual described in
subparagraph (A)(i), and
(II) to pregnant women,
during the course of their
pregnancy, who (but for income
and resources) would be
eligible for medical assistance
as an individual described in
subparagraph (A);
(iii) such medical assistance must
include (I) with respect to children
under 18 and individuals entitled to
institutional services, ambulatory
services, and (II) with respect to
pregnant women, prenatal care and
delivery services; and
(iv) if such medical assistance
includes services in institutions for
mental diseases or in an intermediate
care facility for the mentally retarded
(or both) for any such group, it also
must include for all groups covered at
least the care and services listed in
paragraphs (1) through (5) and (17) of
section 1905(a) or the care and
services listed in any 7 of the
paragraphs numbered (1) through (24) of
such section;
(D) for the inclusion of home health services
for any individual who, under the State plan,
is entitled to nursing facility services;
(E)(i) for making medical assistance
available for medicare cost-sharing (as defined
in section 1905(p)(3)) for qualified medicare
beneficiaries described in section 1905(p)(1);
(ii) for making medical assistance available
for payment of medicare cost-sharing described
in section 1905(p)(3)(A)(i) for qualified
disabled and working individuals described in
section 1905(s);
(iii) for making medical assistance available
for medicare cost sharing described in section
1905(p)(3)(A)(ii) subject to section
1905(p)(4), for individuals who would be
qualified medicare beneficiaries described in
section 1905(p)(1) but for the fact that their
income exceeds the income level established by
the State under section 1905(p)(2) but is less
than 110 percent in 1993 and 1994, and 120
percent in 1995 and years thereafter of the
official poverty line (referred to in such
section) for a family of the size involved; and
(iv) subject to sections 1933 and 1905(p)(4),
for making medical assistance available for
medicare cost-sharing described in section
1905(p)(3)(A)(ii) for individuals who would be
qualified medicare beneficiaries described in
section 1905(p)(1) but for the fact that their
income exceeds the income level established by
the State under section 1905(p)(2) and is at
least 120 percent, but less than 135 percent,
of the official poverty line (referred to in
such section) for a family of the size involved
and who are not otherwise eligible for medical
assistance under the State plan;
(F) at the option of a State, for making
medical assistance available for COBRA premiums
(as defined in subsection (u)(2)) for qualified
COBRA continuation beneficiaries described in
section 1902(u)(1); and
(G) that, in applying eligibility criteria of
the supplemental security income program under
title XVI for purposes of determining
eligibility for medical assistance under the
State plan of an individual who is not
receiving supplemental security income, the
State will disregard the provisions of
subsections (c) and (e) of section 1613;
except that (I) the making available of the services
described in paragraph (4), (14), or (16) of section
1905(a) to individuals meeting the age requirements
prescribed therein shall not, by reason of this
paragraph (10), require the making available of any
such services, or the making available of such services
of the same amount, duration, and scope, to individuals
of any other ages, (II) the making available of
supplementary medical insurance benefits under part B
of title XVIII to individuals eligible therefor (either
pursuant to an agreement entered into under section
1843 or by reason of the payment of premiums under such
title by the State agency on behalf of such
individuals), or provision for meeting part or all of
the cost of deductibles, cost sharing, or similar
charges under part B of title XVIII for individuals
eligible for benefits under such part, shall not, by
reason of this paragraph (10), require the making
available of any such benefits, or the making available
of services of the same amount, duration, and scope, to
any other individuals, (III) the making available of
medical assistance equal in amount, duration, and scope
to the medical assistance made available to individuals
described in clause (A) to any classification of
individuals approved by the Secretary with respect to
whom there is being paid, or who are eligible, or would
be eligible if they were not in a medical institution,
to have paid with respect to them, a State
supplementary payment shall not, by reason of this
paragraph (10), require the making available of any
such assistance, or the making available of such
assistance of the same amount, duration, and scope, to
any other individuals not described in clause (A), (IV)
the imposition of a deductible, cost sharing, or
similar charge for any item or service furnished to an
individual not eligible for the exemption under section
1916(a)(2) or (b)(2) shall not require the imposition
of a deductible, cost sharing, or similar charge for
the same item or service furnished to an individual who
is eligible for such exemption, (V) the making
available to pregnant women covered under the plan of
services relating to pregnancy (including prenatal,
delivery, and postpartum services) or to any other
condition which may complicate pregnancy shall not, by
reason of this paragraph (10), require the making
available of such services, or the making available of
such services of the same amount, duration, and scope,
to any other individuals, provided such services are
made available (in the same amount, duration, and
scope) to all pregnant women covered under the State
plan, (VI) with respect to the making available of
medical assistance for hospice care to terminally ill
individuals who have made a voluntary election
described in section 1905(o) to receive hospice care
instead of medical assistance for certain other
services, such assistance may not be made available in
an amount, duration, or scope less than that provided
under title XVIII, and the making available of such
assistance shall not, by reason of this paragraph (10),
require the making available of medical assistance for
hospice care to other individuals or the making
available of medical assistance for services waived by
such terminally ill individuals, (VII) the medical
assistance made available to an individual described in
subsection (l)(1)(A) who is eligible for medical
assistance only because of subparagraph (A)(i)(IV) or
(A)(ii)(IX) shall be limited to medical assistance for
services related to pregnancy (including prenatal,
delivery, postpartum, and family planning services) and
to other conditions which may complicate pregnancy,
(VIII) the medical assistance made available to a
qualified medicare beneficiary described in section
1905(p)(1) who is only entitled to medical assistance
because the individual is such a beneficiary shall be
limited to medical assistance for medicare cost-sharing
(described in section 1905(p)(3)), subject to the
provisions of subsection (n) and section 1916(b), (IX)
the making available of respiratory care services in
accordance with subsection (e)(9) shall not, by reason
of this paragraph (10), require the making available of
such services, or the making available of such services
of the same amount, duration, and scope, to any
individuals not included under subsection (e)(9)(A),
provided such services are made available (in the same
amount, duration, and scope) to all individuals
described in such subsection, (X) if the plan provides
for any fixed durational limit on medical assistance
for inpatient hospital services (whether or not such a
limit varies by medical condition or diagnosis), the
plan must establish exceptions to such a limit for
medically necessary inpatient hospital services
furnished with respect to individuals under one year of
age in a hospital defined under the State plan,
pursuant to section 1923(a)(1)(A), as a
disproportionate share hospital and subparagraph (B)
(relating to comparability) shall not be construed as
requiring such an exception for other individuals,
services, or hospitals, (XI) the making available of
medical assistance to cover the costs of premiums,
deductibles, coinsurance, and other cost-sharing
obligations for certain individuals for private health
coverage as described in section 1906 shall not, by
reason of paragraph (10), require the making available
of any such benefits or the making available of
services of the same amount, duration, and scope of
such private coverage to any other individuals, (XII)
the medical assistance made available to an individual
described in subsection (u)(1) who is eligible for
medical assistance only because of subparagraph (F)
shall be limited to medical assistance for COBRA
continuation premiums (as defined in subsection
(u)(2)), (XIII) the medical assistance made available
to an individual described in subsection (z)(1) who is
eligible for medical assistance only because of
subparagraph (A)(ii)(XII) shall be limited to medical
assistance for TB-related services (described in
subsection (z)(2)), (XIV) the medical assistance made
available to an individual described in subsection (aa)
who is eligible for medical assistance only because of
subparagraph (A)(10)(ii)(XVIII) shall be limited to
medical assistance provided during the period in which
such an individual requires treatment for breast or
cervical cancer (XV)\3\ the medical assistance made
available to an individual described in subparagraph
(A)(i)(VIII) shall be limited to medical assistance
described in subsection (k)(1), (XVI) the medical
assistance made available to an individual described in
subsection (ii) shall be limited to family planning
services and supplies described in section
1905(a)(4)(C) including medical diagnosis and treatment
services that are provided pursuant to a family
planning service in a family planning setting and
(XVII) if an individual is described in subclause (IX)
of subparagraph (A)(i) and is also described in
subclause (VIII) of that subparagraph, the medical
assistance shall be made available to the individual
through subclause (IX) instead of through subclause
(VIII);
---------------------------------------------------------------------------
\3\So in law. There probably should be a comma preceding ``(XV)''.
See amendments made by sections 2001(a)(5)(A) and 2303(a)(3)(A) of
Public Law 111-148. The latter amendment does not execute because it
attempts to strike ``and (XV)'' and insert ``(XV)'' but the word
``and'' does not appear preceding ``(XV)'' (as amended by the former
amendment). Also, section 10201(a)(2) of such Public Law attempts to
strike ``and (XV)'' and insert ``(XV)'' which could not be executed.
---------------------------------------------------------------------------
(11)(A) provide for entering into cooperative
arrangements with the State agencies responsible for
administering or supervising the administration of
health services and vocational rehabilitation services
in the State looking toward maximum utilization of such
services in the provision of medical assistance under
the plan, (B) provide, to the extent prescribed by the
Secretary, for entering into agreements, with any
agency, institution, or organization receiving payments
under (or through an allotment under) title V, (i)
providing for utilizing such agency, institution, or
organization in furnishing care and services which are
available under such title or allotment and which are
included in the State plan approved under this section
(ii) making such provision as may be appropriate for
reimbursing such agency, institution, or organization
for the cost of any such care and services furnished
any individual for which payment would otherwise be
made to the State with respect to the individual under
section 1903, and (iii) providing for coordination of
information and education on pediatric vaccinations and
delivery of immunization services, and (C) provide for
coordination of the operations under this title,
including the provision of information and education on
pediatric vaccinations and the delivery of immunization
services, with the State's operations under the special
supplemental nutrition program for women, infants, and
children under section 17 of the Child Nutrition Act of
1966;
(12) provide that, in determining whether an
individual is blind, there shall be an examination by a
physician skilled in the diseases of the eye or by an
optometrist, whichever the individual may select;
(13) provide--
(A) for a public process for determination of
rates of payment under the plan for hospital
services, nursing facility services, and
services of intermediate care facilities for
the mentally retarded under which--
(i) proposed rates, the methodologies
underlying the establishment of such
rates, and justifications for the
proposed rates are published,
(ii) providers, beneficiaries and
their representatives, and other
concerned State residents are given a
reasonable opportunity for review and
comment on the proposed rates,
methodologies, and justifications,
(iii) final rates, the methodologies
underlying the establishment of such
rates, and justifications for such
final rates are published, and
(iv) in the case of hospitals, such
rates take into account (in a manner
consistent with section 1923) the
situation of hospitals which serve a
disproportionate number of low-income
patients with special needs;
(B) for payment for hospice care in amounts
no lower than the amounts, using the same
methodology, used under part A of title XVIII
and for payment of amounts under section
1905(o)(3); except that in the case of hospice
care which is furnished to an individual who is
a resident of a nursing facility or
intermediate care facility for the mentally
retarded, and who would be eligible under the
plan for nursing facility services or services
in an intermediate care facility for the
mentally retarded if he had not elected to
receive hospice care, there shall be paid an
additional amount, to take into account the
room and board furnished by the facility, equal
to at least 95 percent of the rate that would
have been paid by the State under the plan for
facility services in that facility for that
individual; and
(C) payment for primary care services (as
defined in subsection (jj)) furnished in 2013
and 2014 by a physician with a primary
specialty designation of family medicine,
general internal medicine, or pediatric
medicine at a rate not less than 100 percent of
the payment rate that applies to such services
and physician under part B of title XVIII (or,
if greater, the payment rate that would be
applicable under such part if the conversion
factor under section 1848(d) for the year
involved were the conversion factor under such
section for 2009);
(14) provide that enrollment fees, premiums, or
similar charges, and deductions, cost sharing, or
similar charges, may be imposed only as provided in
section 1916;
(15) provide for payment for services described in
clause (B) or (C) of section 1905(a)(2) under the plan
in accordance with subsection (bb);
(16) provide for inclusion, to the extent required by
regulations prescribed by the Secretary, of provisions
(conforming to such regulations) with respect to the
furnishing of medical assistance under the plan to
individuals who are residents of the State but are
absent therefrom;
(17) except as provided in subsections (e)(14),
(e)(14),\4\ (l)(3), (m)(3), and (m)(4), include
reasonable standards (which shall be comparable for all
groups and may, in accordance with standards prescribed
by the Secretary, differ with respect to income levels,
but only in the case of applicants or recipients of
assistance under the plan who are not receiving aid or
assistance under any plan of the State approved under
title I, X, XIV, or XVI, or part A of title IV, and
with respect to whom supplemental security income
benefits are not being paid under title XVI, based on
the variations between shelter costs in urban areas and
in rural areas) for determining eligibility for and the
extent of medical assistance under the plan which (A)
are consistent with the objectives of this title, (B)
provide for taking into account only such income and
resources as are, as determined in accordance with
standards prescribed by the Secretary, available to the
applicant or recipient and (in the case of any
applicant or recipient who would, except for income and
resources, be eligible for aid or assistance in the
form of money payments under any plan of the State
approved under title I, X, XIV, or XVI, or part A of
title IV, or to have paid with respect to him
supplemental security income benefits under title XVI)
as would not be disregarded (or set aside for future
needs) in determining his eligibility for such aid,
assistance, or benefits, (C) provide for reasonable
evaluation of any such income or resources, and (D) do
not take into account the financial responsibility of
any individual for any applicant or recipient of
assistance under the plan unless such applicant or
recipient is such individual's spouse or such
individual's child who is under age 21 or (with respect
to States eligible to participate in the State program
established under title XVI), is blind or permanently
and totally disabled, or is blind or disabled as
defined in section 1614 (with respect to States which
are not eligible to participate in such program); and
provide for flexibility in the application of such
standards with respect to income by taking into
account, except to the extent prescribed by the
Secretary, the costs (whether in the form of insurance
premiums, payments made to the State under section
1903(f)(2)(B), or otherwise and regardless of whether
such costs are reimbursed under another public program
of the State or political subdivision thereof) incurred
for medical care or for any other type of remedial care
recognized under State law;
---------------------------------------------------------------------------
\4\The references to ``(e)(14),'' are so in law but relate to two
distinct paragraph (14)s' of subsection (e). See amendments made by
section 2002(b) of Public Law 111-148 and section 3(c)(2) of Public Law
111-255 (124 Stat. 2641).
The amendment by section 3(c)(2) of Public Law 111-255 is a
conforming amendment in order to include a reference to (e)(14) in
section 1902(a)(17). Such amendment conforms to a new paragraph (14)
added at the end of section 1902(e) (relating to exclusion of
compensation for participation in a clinical trial for testing of
treatments for a rare disease or condition) of this Act.
---------------------------------------------------------------------------
(18) comply with the provisions of section 1917 with
respect to liens, adjustments and recoveries of medical
assistance correctly paid, transfers of assets, and
treatment of certain trusts;
(19) provide such safeguards as may be necessary to
assure that eligibility for care and services under the
plan will be determined, and such care and services
will be provided, in a manner consistent with
simplicity of administration and the best interests of
the recipients;
(20) if the State plan includes medical assistance in
behalf of individuals 65 years of age or older who are
patients in institutions for mental diseases--
(A) provide for having in effect such
agreements or other arrangements with State
authorities concerned with mental diseases,
and, where appropriate, with such institutions,
as may be necessary for carrying out the State
plan, including arrangements for joint planning
and for development of alternate methods of
care, arrangements providing assurance of
immediate readmittance to institutions where
needed for individuals under alternate plans of
care, and arrangements providing for access to
patients and facilities, for furnishing
information, and for making reports;
(B) provide for an individual plan for each
such patient to assure that the institutional
care provided to him is in his best interests,
including, to that end, assurances that there
will be initial and periodic review of his
medical and other needs, that he will be given
appropriate medical treatment within the
institution, and that there will be a periodic
determination of his need for continued
treatment in the institution; and
(C) provide for the development of alternate
plans of care, making maximum utilization of
available resources, for recipients 65 years of
age or older who would otherwise need care in
such institutions, including appropriate
medical treatment and other aid or assistance;
for services referred to in section
3(a)(4)(A)(i) and (ii) or section
1603(a)(4)(A)(i) and (ii) which are appropriate
for such recipients and for such patients; and
for methods of administration necessary to
assure that the responsibilities of the State
agency under the State plan with respect to
such recipients and such patients will be
effectively carried out;
(21) if the State plan includes medical assistance in
behalf of individuals 65 years of age or older who are
patients in public institutions for mental diseases,
show that the State is making satisfactory progress
toward developing and implementing a comprehensive
mental health program, including provision for
utilization of community mental health centers, nursing
facilities, and other alternatives to care in public
institutions for mental diseases;
(22) include descriptions of (A) the kinds and
numbers of professional medical personnel and
supporting staff that will be used in the
administration of the plan and of the responsibilities
they will have, (B) the standards, for private or
public institutions in which recipients of medical
assistance under the plan may receive care or services,
that will be utilized by the State authority or
authorities responsible for establishing and
maintaining such standards, (C) the cooperative
arrangements with State health agencies and State
vocational rehabilitation agencies entered into with a
view to maximum utilization of and coordination of the
provision of medical assistance with the services
administered or supervised by such agencies, and (D)
other standards and methods that the State will use to
assure that medical or remedial care and services
provided to recipients of medical assistance are of
high quality;
(23) provide that (A) any individual eligible for
medical assistance (including drugs) may obtain such
assistance from any institution, agency, community
pharmacy, or person, qualified to perform the service
or services required (including an organization which
provides such services, or arranges for their
availability, on a prepayment basis), who undertakes to
provide him such services, and (B) an enrollment of an
individual eligible for medical assistance in a primary
care case-management system (described in section
1915(b)(1)), a medicaid managed care organization, or a
similar entity shall not restrict the choice of the
qualified person from whom the individual may receive
services under section 1905(a)(4)(C), except as
provided in subsection (g) and in section 1915, except
that this paragraph shall not apply in the case of
Puerto Rico, the Virgin Islands, and Guam, and except
that nothing in this paragraph shall be construed as
requiring a State to provide medical assistance for
such services furnished by a person or entity convicted
of a felony under Federal or State law for an offense
which the State agency determines is inconsistent with
the best interests of beneficiaries under the State
plan or by a provider or supplier to which a moratorium
under subsection (kk)(4) is applied during the period
of such moratorium';
(24) effective July 1, 1969, provide for consultative
services by health agencies and other appropriate
agencies of the State to hospitals, nursing facilities,
home health agencies, clinics, laboratories, and such
other institutions as the Secretary may specify in
order to assist them (A) to qualify for payments under
this Act, (B) to establish and maintain such fiscal
records as may be necessary for the proper and
efficient administration of this Act, and (C) to
provide information needed to determine payments due
under this Act on account of care and services
furnished to individuals;
(25) provide--
(A) that the State or local agency
administering such plan will take all
reasonable measures to ascertain the legal
liability of third parties (including health
insurers, self-insured plans, group health
plans (as defined in section 607(1) of the
Employee Retirement Income Security Act of
1974), service benefit plans, managed care
organizations, pharmacy benefit managers, or
other parties that are, by statute, contract,
or agreement, legally responsible for payment
of a claim for a health care item or service)
to pay for care and services available under
the plan, including--
(i) the collection of sufficient
information (as specified by the
Secretary in regulations) to enable the
State to pursue claims against such
third parties, with such information
being collected at the time of any
determination or redetermination of
eligibility for medical assistance, and
(ii) the submission to the Secretary
of a plan (subject to approval by the
Secretary) for pursuing claims against
such third parties, which plan shall be
integrated with, and be monitored as a
part of the Secretary's review of, the
State's mechanized claims processing
and information retrieval systems
required under section 1903(r);
(B)\5\ that in any case where such a legal
liability is found to exist after medical
assistance has been made available on behalf of
the individual and where the amount of
reimbursement the State can reasonably expect
to recover exceeds the costs of such recovery,
the State or local agency will seek
reimbursement for such assistance to the extent
of such legal liability;
---------------------------------------------------------------------------
\5\Section 1902(a)(25)(B) is amended by section 202(b)(1)(A) of
division A of Public Law 113-67 by striking ``to the extent of such
legal liability''. Subsection (c) of section 202 (42 U.S.C. 1396a note)
of such Public Law (as amended) provides "[t]he amendments made by this
section shall take effect on October 1, 2016".
---------------------------------------------------------------------------
(C) that in the case of an individual who is
entitled to medical assistance under the State
plan with respect to a service for which a
third party is liable for payment, the person
furnishing the service may not seek to collect
from the individual (or any financially
responsible relative or representative of that
individual) payment of an amount for that
service (i) if the total of the amount of the
liabilities of third parties for that service
is at least equal to the amount payable for
that service under the plan (disregarding
section 1916), or (ii) in an amount which
exceeds the lesser of (I) the amount which may
be collected under section 1916, or (II) the
amount by which the amount payable for that
service under the plan (disregarding section
1916) exceeds the total of the amount of the
liabilities of third parties for that service;
(D) that a person who furnishes services and
is participating under the plan may not refuse
to furnish services to an individual (who is
entitled to have payment made under the plan
for the services the person furnishes) because
of a third party's potential liability for
payment for the service;
(E) that in the case of prenatal or
preventive pediatric care (including early and
periodic screening and diagnosis services under
section 1905(a)(4)(B)) covered under the State
plan, the State shall--
(i) make payment for such service in
accordance with the usual payment
schedule under such plan for such
services without regard to the
liability of a third party for payment
for such services\6\; and
---------------------------------------------------------------------------
\6\Section 1902(a)(25)(E)(i) is amended by section 202(a)(1) of
division A of Public Law 113-67 by inserting ``, except that the State
may, if the State determines doing so is cost-effective and will not
adversely affect access to care, only make such payment if a third
party so liable has not made payment within 90 days after the date the
provider of such services has initially submitted a claim to such third
party for payment for such services'' before the semicolon at the end.
Subsection (c) of section 202 (42 U.S.C. 1396a note) of such Public Law
(as amended) provides ``[t]he amendments made by this section shall
take effect on October 1, 2016''.
---------------------------------------------------------------------------
(ii) seek reimbursement from such
third party in accordance with
subparagraph (B);
(F) that in the case of any services covered
under such plan which are provided to an
individual on whose behalf child support
enforcement is being carried out by the State
agency under part D of title IV of this Act,
the State shall--
(i) make payment for such service in
accordance with the usual payment
schedule under such plan for such
services without regard to any third-
party liability for payment for such
services, if such third-party liability
is derived (through insurance or
otherwise) from the parent whose
obligation to pay support is being
enforced by such agency, if payment has
not been made by such third party
within 30 days after such services are
furnished;
(ii) seek reimbursement from such
third party in accordance with
subparagraph (B);
(G) that the State prohibits any health
insurer (including a group health plan, as
defined in section 607(1) of the Employee
Retirement Income Security Act of 1974, a self-
insured plan, a service benefit plan, a managed
care organization, a pharmacy benefit manager,
or other party that is, by statute, contract,
or agreement, legally responsible for payment
of a claim for a health care item or service),
in enrolling an individual or in making any
payments for benefits to the individual or on
the individual's behalf, from taking into
account that the individual is eligible for or
is provided medical assistance under a plan
under this title for such State, or any other
State;
(H) that to the extent that payment has been
made under the State plan for medical
assistance in any case where a third party has
a legal liability to make payment for such
assistance, the State has in effect laws under
which, to the extent that payment has been made
under the State plan for medical assistance for
health care items or services furnished to an
individual, the State is considered to have
acquired the rights of such individual to
payment by any other party for such health care
items or services; and
(I) that the State shall provide assurances
satisfactory to the Secretary that the State
has in effect laws requiring health insurers,
including self-insured plans, group health
plans (as defined in section 607(1) of the
Employee Retirement Income Security Act of
1974), service benefit plans, managed care
organizations, pharmacy benefit managers, or
other parties that are, by statute, contract,
or agreement, legally responsible for payment
of a claim for a health care item or service,
as a condition of doing business in the State,
to--
(i) provide, with respect to
individuals who are eligible (and, at
State option, individuals who apply or
whose eligibility for medical
assistance is being evaluated in
accordance with section 1902(e)(13)(D))
for, or are provided, medical
assistance under the State plan under
this title (and, at State option, child
health assistance under title XXI),
upon the request of the State,
information to determine during what
period the individual or their spouses
or their dependents may be (or may have
been) covered by a health insurer and
the nature of the coverage that is or
was provided by the health insurer
(including the name, address, and
identifying number of the plan) in a
manner prescribed by the Secretary;
(ii) accept the State's right of
recovery and the assignment to the
State of any right of an individual or
other entity to payment from the party
for an item or service for which
payment has been made under the State
plan;
(iii) respond to any inquiry by the
State regarding a claim for payment for
any health care item or service that is
submitted not later than 3 years after
the date of the provision of such
health care item or service; and
(iv) agree not to deny a claim
submitted by the State solely on the
basis of the date of submission of the
claim, the type or format of the claim
form, or a failure to present proper
documentation at the point-of-sale that
is the basis of the claim, if--
(I) the claim is submitted by
the State within the 3-year
period beginning on the date on
which the item or service was
furnished; and
(II) any action by the State
to enforce its rights with
respect to such claim is
commenced within 6 years of the
State's submission of such
claim;
(26) if the State plan includes medical assistance
for inpatient mental hospital services, provide, with
respect to each patient receiving such services, for a
regular program of medical review (including medical
evaluation) of his need for such services, and for a
written plan of care;
(27) provide for agreements with every person or
institution providing services under the State plan
under which such person or institution agrees (A) to
keep such records as are necessary fully to disclose
the extent of the services provided to individuals
receiving assistance under the State plan, and (B) to
furnish the State agency or the Secretary with such
information, regarding any payments claimed by such
person or institution for providing services under the
State plan, as the State agency or the Secretary may
from time to time request;
(28) provide--
(A) that any nursing facility receiving
payments under such plan must satisfy all the
requirements of subsections (b) through (d) of
section 1919 as they apply to such facilities;
(B) for including in ``nursing facility
services'' at least the items and services
specified (or deemed to be specified) by the
Secretary under section 1919(f)(7) and making
available upon request a description of the
items and services so included;
(C) for procedures to make available to the
public the data and methodology used in
establishing payment rates for nursing
facilities under this title; and
(D) for compliance (by the date specified in
the respective sections) with the requirements
of--
(i) section 1919(e);
(ii) section 1919(g) (relating to
responsibility for survey and
certification of nursing facilities);
and
(iii) sections 1919(h)(2)(B) and
1919(h)(2)(D) (relating to
establishment and application of
remedies);
(29) include a State program which meets the
requirements set forth in section 1908, for the
licensing of administrators of nursing homes;
(30)(A) provide such methods and procedures relating
to the utilization of, and the payment for, care and
services available under the plan (including but not
limited to utilization review plans as provided for in
section 1903(i)(4)) as may be necessary to safeguard
against unnecessary utilization of such care and
services and to assure that payments are consistent
with efficiency, economy, and quality of care and are
sufficient to enlist enough providers so that care and
services are available under the plan at least to the
extent that such care and services are available to the
general population in the geographic area; and
(B) provide, under the program described in
subparagraph (A), that--
(i) each admission to a hospital,
intermediate care facility for the mentally
retarded, or hospital for mental diseases is
reviewed or screened in accordance with
criteria established by medical and other
professional personnel who are not themselves
directly responsible for the care of the
patient involved, and who do not have a
significant financial interest in any such
institution and are not, except in the case of
a hospital, employed by the institution
providing the care involved, and
(ii) the information developed from such
review or screening, along with the data
obtained from prior reviews of the necessity
for admission and continued stay of patients by
such professional personnel, shall be used as
the basis for establishing the size and
composition of the sample of admissions to be
subject to review and evaluation by such
personnel, and any such sample may be of any
size up to 100 percent of all admissions and
must be of sufficient size to serve the purpose
of (I) identifying the patterns of care being
provided and the changes occurring over time in
such patterns so that the need for modification
may be ascertained, and (II) subjecting
admissions to early or more extensive review
where information indicates that such
consideration is warranted to a hospital,
intermediate care facility for the mentally
retarded, or hospital for mental diseases;
(31) with respect to services in an intermediate care
facility for the mentally retarded (where the State
plan includes medical assistance for such services)
provide, with respect to each patient receiving such
services, for a written plan of care, prior to
admission to or authorization of benefits in such
facility, in accordance with regulations of the
Secretary, and for a regular program of independent
professional review (including medical evaluation)
which shall periodically review his need for such
services;
(32) provide that no payment under the plan for any
care or service provided to an individual shall be made
to anyone other than such individual or the person or
institution providing such care or service, under an
assignment or power of attorney or otherwise; except
that--
(A) in the case of any care or service
provided by a physician, dentist, or other
individual practitioner, such payment may be
made (i) to the employer of such physician,
dentist, or other practitioner if such
physician, dentist, or practitioner is required
as a condition of his employment to turn over
his fee for such care or service to his
employer, or (ii) (where the care or service
was provided in a hospital, clinic, or other
facility) to the facility in which the care or
service was provided if there is a contractual
arrangement between such physician, dentist, or
practitioner and such facility under which such
facility submits the bill for such care or
service;
(B) nothing in this paragraph shall be
construed (i) to prevent the making of such a
payment in accordance with an assignment from
the person or institution providing the care or
service involved if such assignment is made to
a governmental agency or entity or is
established by or pursuant to the order of a
court of competent jurisdiction, or (ii) to
preclude an agent of such person or institution
from receiving any such payment if (but only
if) such agent does so pursuant to an agency
agreement under which the compensation to be
paid to the agent for his services for or in
connection with the billing or collection of
payments due such person or institution under
the plan is unrelated (directly or indirectly)
to the amount of such payments or the billings
therefor, and is not dependent upon the actual
collection of any such payment;
(C) in the case of services furnished (during
a period that does not exceed 14 continuous
days in the case of an informal reciprocal
arrangement or 90 continuous days (or such
longer period as the Secretary may provide) in
the case of an arrangement involving per diem
or other fee-for-time compensation) by, or
incident to the services of, one physician to
the patients of another physician who submits
the claim for such services, payment shall be
made to the physician submitting the claim (as
if the services were furnished by, or incident
to, the physician's services), but only if the
claim identifies (in a manner specified by the
Secretary) the physician who furnished the
services; and
(D) in the case of payment for a childhood
vaccine administered before October 1, 1994, to
individuals entitled to medical assistance
under the State plan, the State plan may make
payment directly to the manufacturer of the
vaccine under a voluntary replacement program
agreed to by the State pursuant to which the
manufacturer (i) supplies doses of the vaccine
to providers administering the vaccine, (ii)
periodically replaces the supply of the
vaccine, and (iii) charges the State the
manufacturer's price to the Centers for Disease
Control and Prevention for the vaccine so
administered (which price includes a reasonable
amount to cover shipping and the handling of
returns);
(33) provide--
(A) that the State health agency, or other
appropriate State medical agency, shall be
responsible for establishing a plan, consistent
with regulations prescribed by the Secretary,
for the review by appropriate professional
health personnel of the appropriateness and
quality of care and services furnished to
recipients of medical assistance under the plan
in order to provide guidance with respect
thereto in the administration of the plan to
the State agency established or designated
pursuant to paragraph (5) and, where
applicable, to the State agency described in
the second sentence of this subsection; and
(B) that, except as provided in section
1919(g), the State or local agency utilized by
the Secretary for the purpose specified in the
first sentence of section 1864(a), or, if such
agency is not the State agency which is
responsible for licensing health institutions,
the State agency responsible for such
licensing, will perform for the State agency
administering or supervising the administration
of the plan approved under this title the
function of determining whether institutions
and agencies meet the requirements for
participation in the program under such plan,
except that, if the Secretary has cause to
question the adequacy of such determinations,
the Secretary is authorized to validate State
determinations and, on that basis, make
independent and binding determinations
concerning the extent to which individual
institutions and agencies meet the requirements
for participation;
(34) provide that in the case of any individual who
has been determined to be eligible for medical
assistance under the plan, such assistance will be made
available to him for care and services included under
the plan and furnished in or after the third month
before the month in which he made application (or
application was made on his behalf in the case of a
deceased individual) for such assistance if such
individual was (or upon application would have been)
eligible for such assistance at the time such care and
services were furnished;
(35) provide that any disclosing entity (as defined
in section 1124(a)(2)) receiving payments under such
plan complies with the requirements of section 1124;
(36) provide that within 90 days following the
completion of each survey of any health care facility,
laboratory, agency, clinic, or organization, by the
appropriate State agency described in paragraph (9),
such agency shall (in accordance with regulations of
the Secretary) make public in readily available form
and place the pertinent findings of each such survey
relating to the compliance of each such health care
facility, laboratory, clinic, agency, or organization
with (A) the statutory conditions of participation
imposed under this title, and (B) the major additional
conditions which the Secretary finds necessary in the
interest of health and safety of individuals who are
furnished care or services by any such facility,
laboratory, clinic, agency, or organization;
(37) provide for claims payment procedures which (A)
ensure that 90 per centum of claims for payment (for
which no further written information or substantiation
is required in order to make payment) made for services
covered under the plan and furnished by health care
practitioners through individual or group practices or
through shared health facilities are paid within 30
days of the date of receipt of such claims and that 99
per centum of such claims are paid within 90 days of
the date of receipt of such claims, and (B) provide for
procedures of prepayment and postpayment claims review,
including review of appropriate data with respect to
the recipient and provider of a service and the nature
of the service for which payment is claimed, to ensure
the proper and efficient payment of claims and
management of the program;
(38) require that an entity (other than an individual
practitioner or a group of practitioners) that
furnishes, or arranges for the furnishing of, items or
services under the plan, shall supply (within such
period as may be specified in regulations by the
Secretary or by the single State agency which
administers or supervises the administration of the
plan) upon request specifically addressed to such
entity by the Secretary or such State agency, the
information described in section 1128(b)(9);
(39) provide that the State agency shall exclude any
specified individual or entity from participation in
the program under the State plan for the period
specified by the Secretary, when required by him to do
so pursuant to section 1128 or section 1128A, terminate
the participation of any individual or entity in such
program if (subject to such exceptions as are permitted
with respect to exclusion under sections 1128(c)(3)(B)
and 1128(d)(3)(B)) participation of such individual or
entity is terminated under title XVIII or any other
State plan under this title, and provide that no
payment may be made under the plan with respect to any
item or service furnished by such individual or entity
during such period;
(40) require each health services facility or
organization which receives payments under the plan and
of a type for which a uniform reporting system has been
established under section 1121(a) to make reports to
the Secretary of information described in such section
in accordance with the uniform reporting system
(established under such section) for that type of
facility or organization;
(41) provide that whenever a provider of services or
any other person is terminated, suspended, or otherwise
sanctioned or prohibited from participating under the
State plan, the State agency shall promptly notify the
Secretary and, in the case of a physician and
notwithstanding paragraph (7), the State medical
licensing board of such action;
(42) provide that--
(A) the records of any entity participating
in the plan and providing services reimbursable
on a cost-related basis will be audited as the
Secretary determines to be necessary to insure
that proper payments are made under the plan;
and
(B) not later than December 31, 2010, the
State shall--
(i) establish a program under which
the State contracts (consistent with
State law and in the same manner as the
Secretary enters into contracts with
recovery audit contractors under
section 1893(h), subject to such
exceptions or requirements as the
Secretary may require for purposes of
this title or a particular State) with
1 or more recovery audit contractors
for the purpose of identifying
underpayments and overpayments and
recouping overpayments under the State
plan and under any waiver of the State
plan with respect to all services for
which payment is made to any entity
under such plan or waiver; and
(ii) provide assurances satisfactory
to the Secretary that--
(I) under such contracts,
payment shall be made to such a
contractor only from amounts
recovered;
(II) from such amounts
recovered, payment--
(aa) shall be made on
a contingent basis for
collecting
overpayments; and
(bb) may be made in
such amounts as the
State may specify for
identifying
underpayments;
(III) the State has an
adequate process for entities
to appeal any adverse
determination made by such
contractors; and
(IV) such program is carried
out in accordance with such
requirements as the Secretary
shall specify, including--
(aa) for purposes of
section 1903(a)(7),
that amounts expended
by the State to carry
out the program shall
be considered amounts
expended as necessary
for the proper and
efficient
administration of the
State plan or a waiver
of the plan;
(bb) that section
1903(d) shall apply to
amounts recovered under
the program; and
(cc) that the State
and any such
contractors under
contract with the State
shall coordinate such
recovery audit efforts
with other contractors
or entities performing
audits of entities
receiving payments
under the State plan or
waiver in the State,
including efforts with
Federal and State law
enforcement with
respect to the
Department of Justice,
including the Federal
Bureau of
Investigations, the
Inspector General of
the Department of
Health and Human
Services, and the State
medicaid fraud control
unit; and\10\
---------------------------------------------------------------------------
\10\So in law. The word ``and'' after the semicolong at the end of
paragraph (42) probably should not appear.
---------------------------------------------------------------------------
(43) provide for--
(A) informing all persons in the State who
are under the age of 21 and who have been
determined to be eligible for medical
assistance including services described in
section 1905(a)(4)(B), of the availability of
early and periodic screening, diagnostic, and
treatment services as described in section
1905(r) and the need for age-appropriate
immunizations against vaccine-preventable
diseases,
(B) providing or arranging for the provision
of such screening services in all cases where
they are requested,
(C) arranging for (directly or through
referral to appropriate agencies,
organizations, or individuals) corrective
treatment the need for which is disclosed by
such child health screening services, and
(D) reporting to the Secretary (in a uniform
form and manner established by the Secretary,
by age group and by basis of eligibility for
medical assistance, and by not later than April
1 after the end of each fiscal year, beginning
with fiscal year 1990) the following
information relating to early and periodic
screening, diagnostic, and treatment services
provided under the plan during each fiscal
year:
(i) the number of children provided
child health screening services,
(ii) the number of children referred
for corrective treatment (the need for
which is disclosed by such child health
screening services),
(iii) the number of children
receiving dental services, and other
information relating to the provision
of dental services to such children
described in section 2108(e)\11\ and
---------------------------------------------------------------------------
\11\Missing punctuation in clause (iii) so in law. See amendment
made by section 501(e)(1) of Public Law 111-3.
---------------------------------------------------------------------------
(iv) the State's results in attaining
the participation goals set for the
State under section 1905(r);
(44) in each case for which payment for inpatient
hospital services, services in an intermediate care
facility for the mentally retarded, or inpatient mental
hospital services is made under the State plan--
(A) a physician (or, in the case of skilled
nursing facility services or intermediate care
facility services, a physician, or a nurse
practitioner or clinical nurse specialist who
is not an employee of the facility but is
working in collaboration with a physician)
certifies at the time of admission, or, if
later, the time the individual applies for
medical assistance under the State plan (and a
physician, a physician assistant under the
supervision of a physician, or, in the case of
skilled nursing facility services or
intermediate care facility services, a
physician, or a nurse practitioner or clinical
nurse specialist who is not an employee of the
facility but is working in collaboration with a
physician, recertifies, where such services are
furnished over a period of time, in such cases,
at least as often as required under section
1903(g)(6) (or, in the case of services that
are services provided in an intermediate care
facility for the mentally retarded, every
year), and accompanied by such supporting
material, appropriate to the case involved, as
may be provided in regulations of the
Secretary), that such services are or were
required to be given on an inpatient basis
because the individual needs or needed such
services, and
(B) such services were furnished under a plan
established and periodically reviewed and
evaluated by a physician, or, in the case of
skilled nursing facility services or
intermediate care facility services, a
physician, or a nurse practitioner or clinical
nurse specialist who is not an employee of the
facility but is working in collaboration with a
physician;
(45) provide for mandatory assignment of rights of
payment for medical support and other medical care owed
to recipients, in accordance with section 1912;
(46)(A) provide that information is requested and
exchanged for purposes of income and eligibility
verification in accordance with a State system which
meets the requirements of section 1137 of this Act; and
(B) provide, with respect to an individual declaring
to be a citizen or national of the United States for
purposes of establishing eligibility under this title,
that the State shall satisfy the requirements of--
(i) section 1903(x); or
(ii) subsection (ee);
(47) provide--
(A) at the option of the State, for making
ambulatory prenatal care available to pregnant
women during a presumptive eligibility period
in accordance with section 1920 and provide for
making medical assistance for items and
services described in subsection (a) of section
1920A available to children during a
presumptive eligibility period in accordance
with such section and provide for making
medical assistance available to individuals
described in subsection (a) of section 1920B
during a presumptive eligibility period in
accordance with such section and provide for
making medical assistance available to
individuals described in subsection (a) of
section 1920C during a presumptive eligibility
period in accordance with such section; and
(B) that any hospital that is a participating
provider under the State plan may elect to be a
qualified entity for purposes of determining,
on the basis of preliminary information,
whether any individual is eligible for medical
assistance under the State plan or under a
waiver of the plan for purposes of providing
the individual with medical assistance during a
presumptive eligibility period, in the same
manner, and subject to the same requirements,
as apply to the State options with respect to
populations described in section 1920, 1920A,
1920B, or 1920C (but without regard to whether
the State has elected to provide for a
presumptive eligibility period under any such
sections), subject to such guidance as the
Secretary shall establish;
(48) provide a method of making cards evidencing
eligibility for medical assistance available to an
eligible individual who does not reside in a permanent
dwelling or does not have a fixed home or mailing
address;
(49) provide that the State will provide information
and access to certain information respecting sanctions
taken against health care practitioners and providers
by State licensing authorities in accordance with
section 1921;
(50) provide, in accordance with subsection (q), for
a monthly personal needs allowance for certain
institutionalized individuals and couples;
(51) meet the requirements of section 1924 (relating
to protection of community spouses);
(52) meet the requirements of section 1925 (relating
to extension of eligibility for medical assistance);
(53) provide--
(A) for notifying in a timely manner all
individuals in the State who are determined to
be eligible for medical assistance and who are
pregnant women, breastfeeding or postpartum
women (as defined in section 17 of the Child
Nutrition Act of 1966), or children below the
age of 5, of the availability of benefits
furnished by the special supplemental nutrition
program under such section, and
(B) for referring any such individual to the
State agency responsible for administering such
program;
(54) in the case of a State plan that provides
medical assistance for covered outpatient drugs (as
defined in section 1927(k)), comply with the applicable
requirements of section 1927;
(55) provide for receipt and initial processing of
applications of individuals for medical assistance
under subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI),
(a)(10)(A)(i)(VII), or (a)(10)(A)(ii)(IX)--
(A) at locations which are other than those
used for the receipt and processing of
applications for aid under part A of title IV
and which include facilities defined as
disproportionate share hospitals under section
1923(a)(1)(A) and Federally-qualified health
centers described in section 1905(1)(2)(B), and
(B) using applications which are other than
those used for applications for aid under such
part;
(56) provide, in accordance with subsection (s), for
adjusted payments for certain inpatient hospital
services;
(57) provide that each hospital, nursing facility,
provider of home health care or personal care services,
hospice program, or medicaid managed care organization
(as defined in section 1903(m)(1)(A)) receiving funds
under the plan shall comply with the requirements of
subsection (w);
(58) provide that the State, acting through a State
agency, association, or other private nonprofit entity,
develop a written description of the law of the State
(whether statutory or as recognized by the courts of
the State) concerning advance directives that would be
distributed by providers or organizations under the
requirements of subsection (w);
(59) maintain a list (updated not less often than
monthly, and containing each physician's unique
identifier provided under the system established under
subsection (x)) of all physicians who are certified to
participate under the State plan;
(60) provide that the State agency shall provide
assurances satisfactory to the Secretary that the State
has in effect the laws relating to medical child
support required under section 1908A;
(61) provide that the State must demonstrate that it
operates a medicaid fraud and abuse control unit
described in section 1903(q) that effectively carries
out the functions and requirements described in such
section, as determined in accordance with standards
established by the Secretary, unless the State
demonstrates to the satisfaction of the Secretary that
the effective operation of such a unit in the State
would not be cost-effective because minimal fraud
exists in connection with the provision of covered
services to eligible individuals under the State plan,
and that beneficiaries under the plan will be protected
from abuse and neglect in connection with the provision
of medical assistance under the plan without the
existence of such a unit;
(62) provide for a program for the distribution of
pediatric vaccines to program-registered providers for
the immunization of vaccine-eligible children in
accordance with section 1928;
(63) provide for administration and determinations of
eligibility with respect to individuals who are (or
seek to be) eligible for medical assistance based on
the application of section 1931;
(64) provide, not later than 1 year after the date of
the enactment of this paragraph, a mechanism to receive
reports from beneficiaries and others and compile data
concerning alleged instances of waste, fraud, and abuse
relating to the operation of this title;
(65) provide that the State shall issue provider
numbers for all suppliers of medical assistance
consisting of durable medical equipment, as defined in
section 1861(n), and the State shall not issue or renew
such a supplier number for any such supplier unless--
(A)(i) full and complete information as to
the identity of each person with an ownership
or control interest (as defined in section
1124(a)(3)) in the supplier or in any
subcontractor (as defined by the Secretary in
regulations) in which the supplier directly or
indirectly has a 5 percent or more ownership
interest; and
(ii) to the extent determined to be feasible
under regulations of the Secretary, the name of
any disclosing entity (as defined in section
1124(a)(2)) with respect to which a person with
such an ownership or control interest in the
supplier is a person with such an ownership or
control interest in the disclosing entity; and
(B) a surety bond in a form specified by the
Secretary under section 1834(a)(16)(B) and in
an amount that is not less than $50,000 or such
comparable surety bond as the Secretary may
permit under the second sentence of such
section;
(66) provide for making eligibility determinations
under section 1935(a);
(67) provide, with respect to services covered under
the State plan (but not under title XVIII) that are
furnished to a PACE program eligible individual
enrolled with a PACE provider by a provider
participating under the State plan that does not have a
contract or other agreement with the PACE provider that
establishes payment amounts for such services, that
such participating provider may not require the PACE
provider to pay the participating provider an amount
greater than the amount that would otherwise be payable
for the service to the participating provider under the
State plan for the State where the PACE provider is
located (in accordance with regulations issued by the
Secretary);
(68) provide that any entity that receives or makes
annual payments under the State plan of at least
$5,000,000, as a condition of receiving such payments,
shall--
(A) establish written policies for all
employees of the entity (including management),
and of any contractor or agent of the entity,
that provide detailed information about the
False Claims Act established under sections
3729 through 3733 of title 31, United States
Code, administrative remedies for false claims
and statements established under chapter 38 of
title 31, United States Code, any State laws
pertaining to civil or criminal penalties for
false claims and statements, and whistleblower
protections under such laws, with respect to
the role of such laws in preventing and
detecting fraud, waste, and abuse in Federal
health care programs (as defined in section
1128B(f));
(B) include as part of such written policies,
detailed provisions regarding the entity's
policies and procedures for detecting and
preventing fraud, waste, and abuse; and
(C) include in any employee handbook for the
entity, a specific discussion of the laws
described in subparagraph (A), the rights of
employees to be protected as whistleblowers,
and the entity's policies and procedures for
detecting and preventing fraud, waste, and
abuse;
(69) provide that the State must comply with any
requirements determined by the Secretary to be
necessary for carrying out the Medicaid Integrity
Program established under section 1936;
(70) at the option of the State and notwithstanding
paragraphs (1), (10)(B), and (23), provide for the
establishment of a non-emergency medical transportation
brokerage program in order to more cost-effectively
provide transportation for individuals eligible for
medical assistance under the State plan who need access
to medical care or services and have no other means of
transportation which--
(A) may include a wheelchair van, taxi,
stretcher car, bus passes and tickets, secured
transportation, and such other transportation
as the Secretary determines appropriate; and
(B) may be conducted under contract with a
broker who--
(i) is selected through a competitive
bidding process based on the State's
evaluation of the broker's experience,
performance, references, resources,
qualifications, and costs;
(ii) has oversight procedures to
monitor beneficiary access and
complaints and ensure that transport
personnel are licensed, qualified,
competent, and courteous;
(iii) is subject to regular auditing
and oversight by the State in order to
ensure the quality of the
transportation services provided and
the adequacy of beneficiary access to
medical care and services; and
(iv) complies with such requirements
related to prohibitions on referrals
and conflict of interest as the
Secretary shall establish (based on the
prohibitions on physician referrals
under section 1877 and such other
prohibitions and requirements as the
Secretary determines to be
appropriate);
(71) provide that the State will implement an asset
verification program as required under section 1940;
(72) provide that the State will not prevent a
Federally-qualified health center from entering into
contractual relationships with private practice dental
providers in the provision of Federally-qualified
health center services;
(73) in the case of any State in which 1 or more
Indian Health Programs or Urban Indian Organizations
furnishes health care services, provide for a process
under which the State seeks advice on a regular,
ongoing basis from designees of such Indian Health
Programs and Urban Indian Organizations on matters
relating to the application of this title that are
likely to have a direct effect on such Indian Health
Programs and Urban Indian Organizations and that--
(A) shall include solicitation of advice
prior to submission of any plan amendments,
waiver requests, and proposals for
demonstration projects likely to have a direct
effect on Indians, Indian Health Programs, or
Urban Indian Organizations; and
(B) may include appointment of an advisory
committee and of a designee of such Indian
Health Programs and Urban Indian Organizations
to the medical care advisory committee advising
the State on its State plan under this title;
(74) provide for maintenance of effort under the
State plan or under any waiver of the plan in
accordance with subsection (gg); and\12\
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\12\So in law. The word ``and'' probably should not appear at the
end of paragraph (74). Section 4302(b)(1)(A)(i) of Public Law 111-148
provides for an amendment to strike ``paragraph 4), by striking `and'
at the end'' but could not be executed. Such amendment probably should
have been made to paragraph (74).
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(75) provide that, beginning January 2015, and
annually thereafter, the State shall submit a report to
the Secretary that contains--
(A) the total number of enrolled and newly
enrolled individuals in the State plan or under
a waiver of the plan for the fiscal year ending
on September 30 of the preceding calendar year,
disaggregated by population, including
children, parents, nonpregnant childless
adults, disabled individuals, elderly
individuals, and such other categories or sub-
categories of individuals eligible for medical
assistance under the State plan or under a
waiver of the plan as the Secretary may
require;
(B) a description, which may be specified by
population, of the outreach and enrollment
processes used by the State during such fiscal
year; and
(C) any other data reporting determined
necessary by the Secretary to monitor
enrollment and retention of individuals
eligible for medical assistance under the State
plan or under a waiver of the plan;
(76) provide that any data collected under the State
plan meets the requirements of section 3101 of the
Public Health Service Act;
(77) provide that the State shall comply with
provider and supplier screening, oversight, and
reporting requirements in accordance with subsection
(kk);
(79) provide that any agent, clearinghouse, or other
alternate payee (as defined by the Secretary) that
submits claims on behalf of a health care provider must
register with the State and the Secretary in a form and
manner specified by the Secretary;
(80) provide that the State shall not provide any
payments for items or services provided under the State
plan or under a waiver to any financial institution or
entity located outside of the United States; and
(81) provide for implementation of the payment models
specified by the Secretary under section 1115A(c) for
implementation on a nationwide basis unless the State
demonstrates to the satisfaction of the Secretary that
implementation would not be administratively feasible
or appropriate to the health care delivery system of
the State.
Notwithstanding paragraph (5), if on January 1, 1965, and on
the date on which a State submits its plan for approval under
this title, the State agency which administered or supervised
the administration of the plan of such State approved under
title X (or title XVI, insofar as it relates to the blind) was
different from the State agency which administered or
supervised the administration of the State plan approved under
title I (or title XVI, insofar as it relates to the aged), the
State agency which administered or supervised the
administration of such plan approved under title X (or title
XVI, insofar as it relates to the blind) may be designated to
administer or supervise the administration of the portion of
the State plan for medical assistance which relates to blind
individuals and a different State agency may be established or
designated to administer or supervise the administration of the
rest of the State plan for medical assistance; and in such case
the part of the plan which each such agency administers, or the
administration of which each such agency supervises, shall be
regarded as a separate plan for purposes of this title (except
for purposes of paragraph (10)). The provisions of paragraphs
(9)(A), (31), and (33) and of section 1903(i)(4) shall not
apply to a religious nonmedical health care institution (as
defined in section 1861(ss)(1)).
For purposes of paragraph (10) any individual who, for the
month of August 1972, was eligible for or receiving aid or
assistance under a State plan approved under title I, X, XIV,
or XVI, or part A of title IV and who for such month was
entitled to monthly insurance benefits under title II shall for
purposes of this title only be deemed to be eligible for
financial aid or assistance for any month thereafter if such
individual would have been eligible for financial aid or
assistance for such month had the increase in monthly insurance
benefits under title II resulting from enactment of Public Law
92-336 not been applicable to such individual.
The requirement of clause (A) of paragraph (37) with respect
to a State plan may be waived by the Secretary if he finds that
the State has exercised good faith in trying to meet such
requirement. For purposes of this title, any child who meets
the requirements of paragraph (1) or (2) of section 473(b)
shall be deemed to be a dependent child as defined in section
406 and shall be deemed to be a recipient of aid to families
with dependent children under part A of title IV in the State
where such child resides. Notwithstanding paragraph (10)(B) or
any other provision of this subsection, a State plan shall
provide medical assistance with respect to an alien who is not
lawfully admitted for permanent residence or otherwise
permanently residing in the United States under color of law
only in accordance with section 1903(v).
(b) The Secretary shall approve any plan which fulfills the
conditions specified in subsection (a) of this section, except
that he shall not approve any plan which imposes, as a
condition of eligibility for medical assistance under the
plan--
(1) an age requirement of more than 65 years; or
(2) any residence requirement which excludes any
individual who resides in the State, regardless of
whether or not the residence is maintained permanently
or at a fixed address; or
(3) any citizenship requirement which excludes any
citizen of the United States.
(c) Notwithstanding subsection (b), the Secretary shall not
approve any State plan for medical assistance if the State
requires individuals described in subsection (l)(1) to apply
for assistance under the State program funded under part A of
title IV as a condition of applying for or receiving medical
assistance under this title.
(d) If a State contracts with an entity which meets the
requirements of section 1152, as determined by the Secretary,
or a utilization and quality control peer review organization
having a contract with the Secretary under part B of title XI
for the performance of medical or utilization review functions
(including quality review functions described in subsection
(a)(30)(C)) required under this title of a State plan with
respect to specific services or providers (or services or
providers in a geographic area of the State), such requirements
shall be deemed to be met for those services or providers (or
services or providers in that area) by delegation to such an
entity or organization under the contract of the State's
authority to conduct such review activities if the contract
provides for the performance of activities not inconsistent
with part B of title XI and provides for such assurances of
satisfactory performance by such an entity or organization as
the Secretary may prescribe.
(e)(1) Beginning April 1, 1990, for provisions relating to
the extension of eligibility for medical assistance for certain
families who have received aid pursuant to a State plan
approved under part A of title IV and have earned income, see
section 1925.
(2)(A) In the case of an individual who is enrolled with a
medicaid managed care organization (as defined in section
1903(m)(1)(A)), with a primary care case manager (as defined in
section 1905(t)), or with an eligible organization with a
contract under section 1876 and who would (but for this
paragraph) lose eligibility for benefits under this title
before the end of the minimum enrollment period (defined in
subparagraph (B)), the State plan may provide, notwithstanding
any other provision of this title, that the individual shall be
deemed to continue to be eligible for such benefits until the
end of such minimum period, but, except for benefits furnished
under section 1905(a)(4)(C), only with respect to such benefits
provided to the individual as an enrollee of such organization
or entity or by or through the case manager.
(B) For purposes of subparagraph (A), the term ``minimum
enrollment period'' means, with respect to an individual's
enrollment with an organization or entity under a State plan, a
period, established by the State, of not more than six months
beginning on the date the individual's enrollment with the
organization or entity becomes effective.
(3) At the option of the State, any individual who--
(A) is 18 years of age or younger and qualifies as a
disabled individual under section 1614(a);
(B) with respect to whom there has been a
determination by the State that--
(i) the individual requires a level of care
provided in a hospital, nursing facility, or
intermediate care facility for the mentally
retarded,
(ii) it is appropriate to provide such care
for the individual outside such an institution,
and
(iii) the estimated amount which would be
expended for medical assistance for the
individual for such care outside an institution
is not greater than the estimated amount which
would otherwise be expended for medical
assistance for the individual within an
appropriate institution; and
(C) if the individual were in a medical institution,
would be eligible for medical assistance under the
State plan under this title,
shall be deemed, for purposes of this title only, to be
an individual with respect to whom a supplemental
security income payment, or State supplemental payment,
respectively, is being paid under title XVI.
(4) A child born to a woman eligible for and receiving
medical assistance under a State plan on the date of the
child's birth shall be deemed to have applied for medical
assistance and to have been found eligible for such assistance
under such plan on the date of such birth and to remain
eligible for such assistance for a period of one year. During
the period in which a child is deemed under the preceding
sentence to be eligible for medical assistance, the medical
assistance eligibility identification number of the mother
shall also serve as the identification number of the child, and
all claims shall be submitted and paid under such number
(unless the State issues a separate identification number for
the child before such period expires). Notwithstanding the
preceding sentence, in the case of a child who is born in the
United States to an alien mother for whom medical assistance
for the delivery of the child is made available pursuant to
section 1903(v), the State immediately shall issue a separate
identification number for the child upon notification by the
facility at which such delivery occurred of the child's birth.
(5) A woman who, while pregnant, is eligible for, has applied
for, and has received medical assistance under the State plan,
shall continue to be eligible under the plan, as though she
were pregnant, for all pregnancy-related and postpartum medical
assistance under the plan, through the end of the month in
which the 60-day period (beginning on the last day of her
pregnancy) ends.
(6) In the case of a pregnant woman described in subsection
(a)(10) who, because of a change in income of the family of
which she is a member, would not otherwise continue to be
described in such subsection, the woman shall be deemed to
continue to be an individual described in subsection
(a)(10)(A)(i)(IV) and subsection (l)(1)(A) without regard to
such change of income through the end of the month in which the
60-day period (beginning on the last day of her pregnancy)
ends. The preceding sentence shall not apply in the case of a
woman who has been provided ambulatory prenatal care pursuant
to section 1920 during a presumptive eligibility period and is
then, in accordance with such section, determined to be
ineligible for medical assistance under the State plan.
(7) In the case of an infant or child described in
subparagraph (B), (C), or (D) of subsection (l)(1) or paragraph
(2) of section 1905(n)--
(A) who is receiving inpatient services for which
medical assistance is provided on the date the infant
or child attains the maximum age with respect to which
coverage is provided under the State plan for such
individuals, and
(B) who, but for attaining such age, would remain
eligible for medical assistance under such subsection,
the infant or child shall continue to be treated as an
individual described in such respective provision until the end
of the stay for which the inpatient services are furnished.
(8) If an individual is determined to be a qualified medicare
beneficiary (as defined in section 1905(p)(1)), such
determination shall apply to services furnished after the end
of the month in which the determination first occurs. For
purposes of payment to a State under section 1903(a), such
determination shall be considered to be valid for an individual
for a period of 12 months, except that a State may provide for
such determinations more frequently, but not more frequently
than once every 6 months for an individual.
(9)(A) At the option of the State, the plan may include as
medical assistance respiratory care services for any individual
who--
(i) is medically dependent on a ventilator for life
support at least six hours per day;
(ii) has been so dependent for at least 30
consecutive days (or the maximum number of days
authorized under the State plan, whichever is less) as
an inpatient;
(iii) but for the availability of respiratory care
services, would require respiratory care as an
inpatient in a hospital, nursing facility, or
intermediate care facility for the mentally retarded
and would be eligible to have payment made for such
inpatient care under the State plan;
(iv) has adequate social support services to be cared
for at home; and
(v) wishes to be cared for at home.
(B) The requirements of subparagraph (A)(ii) may be satisfied
by a continuous stay in one or more hospitals, nursing
facilities, or intermediate care facilities for the mentally
retarded.
(C) For purposes of this paragraph, respiratory care services
means services provided on a part-time basis in the home of the
individual by a respiratory therapist or other health care
professional trained in respiratory therapy (as determined by
the State), payment for which is not otherwise included within
other items and services furnished to such individual as
medical assistance under the plan.
(10)(A) The fact that an individual, child, or pregnant woman
may be denied aid under part A of title IV pursuant to section
402(a)(43) shall not be construed as denying (or permitting a
State to deny) medical assistance under this title to such
individual, child, or woman who is eligible for assistance
under this title on a basis other than the receipt of aid under
such part.
(B) If an individual, child, or pregnant woman is receiving
aid under part A of title IV and such aid is terminated
pursuant to section 402(a)(43), the State may not discontinue
medical assistance under this title for the individual, child,
or woman until the State has determined that the individual,
child, or woman is not eligible for assistance under this title
on a basis other than the receipt of aid under such part.
(11)(A) In the case of an individual who is enrolled with a
group health plan under section 1906 and who would (but for
this paragraph) lose eligibility for benefits under this title
before the end of the minimum enrollment period (defined in
subparagraph (B)), the State plan may provide, notwithstanding
any other provision of this title, that the individual shall be
deemed to continue to be eligible for such benefits until the
end of such minimum period, but only with respect to such
benefits provided to the individual as an enrollee of such
plan.
(B) For purposes of subparagraph (A), the term ``minimum
enrollment period'' means, with respect to an individual's
enrollment with a group health plan, a period established by
the State, of not more than 6 months beginning on the date the
individual's enrollment under the plan becomes effective.
(12) At the option of the State, the plan may provide that an
individual who is under an age specified by the State (not to
exceed 19 years of age) and who is determined to be eligible
for benefits under a State plan approved under this title under
subsection (a)(10)(A) shall remain eligible for those benefits
until the earlier of--
(A) the end of a period (not to exceed 12 months)
following the determination; or
(B) the time that the individual exceeds that age.
(13) Express Lane Option.--
(A) In general.--
(i) Option to use a finding from an express
lane agency.--At the option of the State, the
State plan may provide that in determining
eligibility under this title for a child (as
defined in subparagraph (G)), the State may
rely on a finding made within a reasonable
period (as determined by the State) from an
Express Lane agency (as defined in subparagraph
(F)) when it determines whether a child
satisfies one or more components of eligibility
for medical assistance under this title. The
State may rely on a finding from an Express
Lane agency notwithstanding sections
1902(a)(46)(B) and 1137(d) or any differences
in budget unit, disregard, deeming or other
methodology, if the following requirements are
met:
(I) Prohibition on determining
children ineligible for coverage.--If a
finding from an Express Lane agency
would result in a determination that a
child does not satisfy an eligibility
requirement for medical assistance
under this title and for child health
assistance under title XXI, the State
shall determine eligibility for
assistance using its regular
procedures.
(II) Notice requirement.--For any
child who is found eligible for medical
assistance under the State plan under
this title or child health assistance
under title XXI and who is subject to
premiums based on an Express Lane
agency's finding of such child's income
level, the State shall provide notice
that the child may qualify for lower
premium payments if evaluated by the
State using its regular policies and of
the procedures for requesting such an
evaluation.
(III) Compliance with screen and
enroll requirement.--The State shall
satisfy the requirements under
subparagraphs (A) and (B) of section
2102(b)(3) (relating to screen and
enroll) before enrolling a child in
child health assistance under title
XXI. At its option, the State may
fulfill such requirements in accordance
with either option provided under
subparagraph (C) of this paragraph.
(IV) Verification of citizenship or
nationality status.--The State shall
satisfy the requirements of section
1902(a)(46)(B) or 2105(c)(9), as
applicable for verifications of
citizenship or nationality status.
(V) Coding.--The State meets the
requirements of subparagraph (E).
(ii) Option to apply to renewals and
redeterminations.--The State may apply the
provisions of this paragraph when conducting
initial determinations of eligibility,
redeterminations of eligibility, or both, as
described in the State plan.
(B) Rules of construction.--Nothing in this paragraph
shall be construed--
(i) to limit or prohibit a State from taking
any actions otherwise permitted under this
title or title XXI in determining eligibility
for or enrolling children into medical
assistance under this title or child health
assistance under title XXI; or
(ii) to modify the limitations in section
1902(a)(5) concerning the agencies that may
make a determination of eligibility for medical
assistance under this title.
(C) Options for satisfying the screen and enroll
requirement.--
(i) In general.--With respect to a child
whose eligibility for medical assistance under
this title or for child health assistance under
title XXI has been evaluated by a State agency
using an income finding from an Express Lane
agency, a State may carry out its duties under
subparagraphs (A) and (B) of section 2102(b)(3)
(relating to screen and enroll) in accordance
with either clause (ii) or clause (iii).
(ii) Establishing a screening threshold.--
(I) In general.--Under this clause,
the State establishes a screening
threshold set as a percentage of the
Federal poverty level that exceeds the
highest income threshold applicable
under this title to the child by a
minimum of 30 percentage points or, at
State option, a higher number of
percentage points that reflects the
value (as determined by the State and
described in the State plan) of any
differences between income
methodologies used by the program
administered by the Express Lane agency
and the methodologies used by the State
in determining eligibility for medical
assistance under this title.
(II) Children with income not above
threshold.--If the income of a child
does not exceed the screening
threshold, the child is deemed to
satisfy the income eligibility criteria
for medical assistance under this title
regardless of whether such child would
otherwise satisfy such criteria.
(III) Children with income above
threshold.--If the income of a child
exceeds the screening threshold, the
child shall be considered to have an
income above the Medicaid applicable
income level described in section
2110(b)(4) and to satisfy the
requirement under section 2110(b)(1)(C)
(relating to the requirement that CHIP
matching funds be used only for
children not eligible for Medicaid). If
such a child is enrolled in child
health assistance under title XXI, the
State shall provide the parent,
guardian, or custodial relative with
the following:
(aa) Notice that the child
may be eligible to receive
medical assistance under the
State plan under this title if
evaluated for such assistance
under the State's regular
procedures and notice of the
process through which a parent,
guardian, or custodial relative
can request that the State
evaluate the child's
eligibility for medical
assistance under this title
using such regular procedures.
(bb) A description of
differences between the medical
assistance provided under this
title and child health
assistance under title XXI,
including differences in cost-
sharing requirements and
covered benefits.
(iii) Temporary enrollment in chip pending
screen and enroll.--
(I) In general.--Under this clause, a
State enrolls a child in child health
assistance under title XXI for a
temporary period if the child appears
eligible for such assistance based on
an income finding by an Express Lane
agency.
(II) Determination of eligibility.--
During such temporary enrollment
period, the State shall determine the
child's eligibility for child health
assistance under title XXI or for
medical assistance under this title in
accordance with this clause.
(III) Prompt follow up.--In making
such a determination, the State shall
take prompt action to determine whether
the child should be enrolled in medical
assistance under this title or child
health assistance under title XXI
pursuant to subparagraphs (A) and (B)
of section 2102(b)(3) (relating to
screen and enroll).
(IV) Requirement for simplified
determination.--In making such a
determination, the State shall use
procedures that, to the maximum
feasible extent, reduce the burden
imposed on the individual of such
determination. Such procedures may not
require the child's parent, guardian,
or custodial relative to provide or
verify information that already has
been provided to the State agency by an
Express Lane agency or another source
of information unless the State agency
has reason to believe the information
is erroneous.
(V) Availability of chip matching
funds during temporary enrollment
period.--Medical assistance for items
and services that are provided to a
child enrolled in title XXI during a
temporary enrollment period under this
clause shall be treated as child health
assistance under such title.
(D) Option for automatic enrollment.--
(i) In general.--The State may initiate and
determine eligibility for medical assistance
under the State Medicaid plan or for child
health assistance under the State CHIP plan
without a program application from, or on
behalf of, the child based on data obtained
from sources other than the child (or the
child's family), but a child can only be
automatically enrolled in the State Medicaid
plan or the State CHIP plan if the child or the
family affirmatively consents to being enrolled
through affirmation in writing, by telephone,
orally, through electronic signature, or
through any other means specified by the
Secretary or by signature on an Express Lane
agency application, if the requirement of
clause (ii) is met.
(ii) Information requirement.--The
requirement of this clause is that the State
informs the parent, guardian, or custodial
relative of the child of the services that will
be covered, appropriate methods for using such
services, premium or other cost sharing charges
(if any) that apply, medical support
obligations (under section 1912(a)) created by
enrollment (if applicable), and the actions the
parent, guardian, or relative must take to
maintain enrollment and renew coverage.
(E) Coding; application to enrollment error rates.--
(i) In general.--For purposes of subparagraph
(A)(iv), the requirement of this subparagraph
for a State is that the State agrees to--
(I) assign such codes as the
Secretary shall require to the children
who are enrolled in the State Medicaid
plan or the State CHIP plan through
reliance on a finding made by an
Express Lane agency for the duration of
the State's election under this
paragraph;
(II) annually provide the Secretary
with a statistically valid sample (that
is approved by Secretary) of the
children enrolled in such plans through
reliance on such a finding by
conducting a full Medicaid eligibility
review of the children identified for
such sample for purposes of determining
an eligibility error rate (as described
in clause (iv)) with respect to the
enrollment of such children (and shall
not include such children in any data
or samples used for purposes of
complying with a Medicaid Eligibility
Quality Control (MEQC) review or a
payment error rate measurement (PERM)
requirement);
(III) submit the error rate
determined under subclause (II) to the
Secretary;
(IV) if such error rate exceeds 3
percent for either of the first 2
fiscal years in which the State elects
to apply this paragraph, demonstrate to
the satisfaction of the Secretary the
specific corrective actions implemented
by the State to improve upon such error
rate; and
(V) if such error rate exceeds 3
percent for any fiscal year in which
the State elects to apply this
paragraph, a reduction in the amount
otherwise payable to the State under
section 1903(a) for quarters for that
fiscal year, equal to the total amount
of erroneous excess payments determined
for the fiscal year only with respect
to the children included in the sample
for the fiscal year that are in excess
of a 3 percent error rate with respect
to such children.
(ii) No punitive action based on error
rate.--The Secretary shall not apply the error
rate derived from the sample under clause (i)
to the entire population of children enrolled
in the State Medicaid plan or the State CHIP
plan through reliance on a finding made by an
Express Lane agency, or to the population of
children enrolled in such plans on the basis of
the State's regular procedures for determining
eligibility, or penalize the State on the basis
of such error rate in any manner other than the
reduction of payments provided for under clause
(i)(V).
(iii) Rule of construction.--Nothing in this
paragraph shall be construed as relieving a
State that elects to apply this paragraph from
being subject to a penalty under section
1903(u), for payments made under the State
Medicaid plan with respect to ineligible
individuals and families that are determined to
exceed the error rate permitted under that
section (as determined without regard to the
error rate determined under clause (i)(II)).
(iv) Error rate defined.--In this
subparagraph, the term ``error rate'' means the
rate of erroneous excess payments for medical
assistance (as defined in section
1903(u)(1)(D)) for the period involved, except
that such payments shall be limited to
individuals for which eligibility
determinations are made under this paragraph
and except that in applying this paragraph
under title XXI, there shall be substituted for
references to provisions of this title
corresponding provisions within title XXI.
(F) Express lane agency.--
(i) In general.--In this paragraph, the term
``Express Lane agency'' means a public agency
that--
(I) is determined by the State
Medicaid agency or the State CHIP
agency (as applicable) to be capable of
making the determinations of one or
more eligibility requirements described
in subparagraph (A)(i);
(II) is identified in the State
Medicaid plan or the State CHIP plan;
and
(III) notifies the child's family--
(aa) of the information which
shall be disclosed in
accordance with this paragraph;
(bb) that the information
disclosed will be used solely
for purposes of determining
eligibility for medical
assistance under the State
Medicaid plan or for child
health assistance under the
State CHIP plan; and
(cc) that the family may
elect to not have the
information disclosed for such
purposes; and
(IV) enters into, or is subject to,
an interagency agreement to limit the
disclosure and use of the information
disclosed.
(ii) Inclusion of specific public agencies
and indian tribes and tribal organizations.--
Such term includes the following:
(I) A public agency that determines
eligibility for assistance under any of
the following:
(aa) The temporary assistance
for needy families program
funded under part A of title
IV.
(bb) A State program funded
under part D of title IV.
(cc) The State Medicaid plan.
(dd) The State CHIP plan.
(ee) The Food and Nutrition
Act of 2008 (7 U.S.C. 2011 et
seq.).
(ff) The Head Start Act (42
U.S.C. 9801 et seq.).
(gg) The Richard B. Russell
National School Lunch Act (42
U.S.C. 1751 et seq.).
(hh) The Child Nutrition Act
of 1966 (42 U.S.C. 1771 et
seq.).
(ii) The Child Care and
Development Block Grant Act of
1990 (42 U.S.C. 9858 et seq.).
(jj) The Stewart B. McKinney
Homeless Assistance Act (42
U.S.C. 11301 et seq.).
(kk) The United States
Housing Act of 1937 (42 U.S.C.
1437 et seq.).
(ll) The Native American
Housing Assistance and Self-
Determination Act of 1996 (25
U.S.C. 4101 et seq.).
(II) A State-specified governmental
agency that has fiscal liability or
legal responsibility for the accuracy
of the eligibility determination
findings relied on by the State.
(III) A public agency that is subject
to an interagency agreement limiting
the disclosure and use of the
information disclosed for purposes of
determining eligibility under the State
Medicaid plan or the State CHIP plan.
(IV)\13\ The Indian Health Service,
an Indian Tribe, Tribal Organization,
or Urban Indian Organization (as
defined in section 1139(c)).
---------------------------------------------------------------------------
\13\Margin for subclause (IV) so in law. See amendment made by
section 2901(c)(2) of Public Law 111-148 which added this new
subclause.
---------------------------------------------------------------------------
(iii) Exclusions.--Such term does not include
an agency that determines eligibility for a
program established under the Social Services
Block Grant established under title XX or a
private, for-profit organization.
(iv) Rules of construction.--Nothing in this
paragraph shall be construed as--
(I) exempting a State Medicaid agency
from complying with the requirements of
section 1902(a)(4) relating to merit-
based personnel standards for employees
of the State Medicaid agency and
safeguards against conflicts of
interest); or
(II) authorizing a State Medicaid
agency that elects to use Express Lane
agencies under this subparagraph to use
the Express Lane option to avoid
complying with such requirements for
purposes of making eligibility
determinations under the State Medicaid
plan.
(v) Additional definitions.--In this
paragraph:
(I) State.--The term ``State'' means
1 of the 50 States or the District of
Columbia.
(II) State chip agency.--The term
``State CHIP agency'' means the State
agency responsible for administering
the State CHIP plan.
(III) State chip plan.--The term
``State CHIP plan'' means the State
child health plan established under
title XXI and includes any waiver of
such plan.
(IV) State medicaid agency.--The term
``State Medicaid agency'' means the
State agency responsible for
administering the State Medicaid plan.
(V) State medicaid plan.--The term
``State Medicaid plan'' means the State
plan established under title XIX and
includes any waiver of such plan.
(G) Child defined.--For purposes of this paragraph,
the term ``child'' means an individual under 19 years
of age, or, at the option of a State, such higher age,
not to exceed 21 years of age, as the State may elect.
(H) State option to rely on state income tax data or
return.--At the option of the State, a finding from an
Express Lane agency may include gross income or
adjusted gross income shown by State income tax records
or returns.
(I) Application.--This paragraph shall not apply with
respect to eligibility determinations made after
September 30, 2017.
(14)\14\ Income determined using modified adjusted
gross income.--
---------------------------------------------------------------------------
\14\There is another paragraph designated as paragraph (14) that
appears in a note after this paragraph (14) that was added by section
3(c)(1) of Public Law 111-255.
---------------------------------------------------------------------------
(A) In general.--Notwithstanding subsection
(r) or any other provision of this title,
except as provided in subparagraph (D), for
purposes of determining income eligibility for
medical assistance under the State plan or
under any waiver of such plan and for any other
purpose applicable under the plan or waiver for
which a determination of income is required,
including with respect to the imposition of
premiums and cost-sharing, a State shall use
the modified adjusted gross income of an
individual and, in the case of an individual in
a family greater than 1, the household income
of such family. A State shall establish income
eligibility thresholds for populations to be
eligible for medical assistance under the State
plan or a waiver of the plan using modified
adjusted gross income and household income that
are not less than the effective income
eligibility levels that applied under the State
plan or waiver on the date of enactment of the
Patient Protection and Affordable Care Act. For
purposes of complying with the maintenance of
effort requirements under subsection (gg)
during the transition to modified adjusted
gross income and household income, a State
shall, working with the Secretary, establish an
equivalent income test that ensures individuals
eligible for medical assistance under the State
plan or under a waiver of the plan on the date
of enactment of the Patient Protection and
Affordable Care Act, do not lose coverage under
the State plan or under a waiver of the plan.
The Secretary may waive such provisions of this
title and title XXI as are necessary to ensure
that States establish income and eligibility
determination systems that protect
beneficiaries.
(B) No income or expense disregards.--Subject
to subparagraph (I), no type of expense, block,
or other income disregard shall be applied by a
State to determine income eligibility for
medical assistance under the State plan or
under any waiver of such plan or for any other
purpose applicable under the plan or waiver for
which a determination of income is required.
(C) No assets test.--A State shall not apply
any assets or resources test for purposes of
determining eligibility for medical assistance
under the State plan or under a waiver of the
plan.
(D) Exceptions.--
(i) Individuals eligible because of
other aid or assistance, elderly
individuals, medically needy
individuals, and individuals eligible
for medicare cost-sharing.--
Subparagraphs (A), (B), and (C) shall
not apply to the determination of
eligibility under the State plan or
under a waiver for medical assistance
for the following:
(I) Individuals who are
eligible for medical assistance
under the State plan or under a
waiver of the plan on a basis
that does not require a
determination of income by the
State agency administering the
State plan or waiver, including
as a result of eligibility for,
or receipt of, other Federal or
State aid or assistance,
individuals who are eligible on
the basis of receiving (or
being treated as if receiving)
supplemental security income
benefits under title XVI, and
individuals who are eligible as
a result of being or being
deemed to be a child in foster
care under the responsibility
of the State.
(II) Individuals who have
attained age 65.
(III) Individuals who qualify
for medical assistance under
the State plan or under any
waiver of such plan on the
basis of being blind or
disabled (or being treated as
being blind or disabled)
without regard to whether the
individual is eligible for
supplemental security income
benefits under title XVI on the
basis of being blind or
disabled and including an
individual who is eligible for
medical assistance on the basis
of section 1902(e)(3).
(IV) Individuals described in
subsection (a)(10)(C).
(V) Individuals described in
any clause of subsection
(a)(10)(E).
(ii) Express lane agency findings.--
In the case of a State that elects the
Express Lane option under paragraph
(13), notwithstanding subparagraphs
(A), (B), and (C), the State may rely
on a finding made by an Express Lane
agency in accordance with that
paragraph relating to the income of an
individual for purposes of determining
the individual's eligibility for
medical assistance under the State plan
or under a waiver of the plan.
(iii) Medicare prescription drug
subsidies determinations.--
Subparagraphs (A), (B), and (C) shall
not apply to any determinations of
eligibility for premium and cost-
sharing subsidies under and in
accordance with section 1860D-14 made
by the State pursuant to section
1935(a)(2).
(iv) Long-term care.--Subparagraphs
(A), (B), and (C) shall not apply to
any determinations of eligibility of
individuals for purposes of medical
assistance for nursing facility
services, a level of care in any
institution equivalent to that of
nursing facility services, home or
community-based services furnished
under a waiver or State plan amendment
under section 1915 or a waiver under
section 1115, and services described in
section 1917(c)(1)(C)(ii).
(v) Grandfather of current enrollees
until date of next regular
redetermination.--An individual who, on
January 1, 2014, is enrolled in the
State plan or under a waiver of the
plan and who would be determined
ineligible for medical assistance
solely because of the application of
the modified adjusted gross income or
household income standard described in
subparagraph (A), shall remain eligible
for medical assistance under the State
plan or waiver (and subject to the same
premiums and cost-sharing as applied to
the individual on that date) through
March 31, 2014, or the date on which
the individual's next regularly
scheduled redetermination of
eligibility is to occur, whichever is
later.
(E) Transition planning and oversight.--Each
State shall submit to the Secretary for the
Secretary's approval the income eligibility
thresholds proposed to be established using
modified adjusted gross income and household
income, the methodologies and procedures to be
used to determine income eligibility using
modified adjusted gross income and household
income and, if applicable, a State plan
amendment establishing an optional eligibility
category under subsection (a)(10)(A)(ii)(XX).
To the extent practicable, the State shall use
the same methodologies and procedures for
purposes of making such determinations as the
State used on the date of enactment of the
Patient Protection and Affordable Care Act. The
Secretary shall ensure that the income
eligibility thresholds proposed to be
established using modified adjusted gross
income and household income, including under
the eligibility category established under
subsection (a)(10)(A)(ii)(XX), and the
methodologies and procedures proposed to be
used to determine income eligibility, will not
result in children who would have been eligible
for medical assistance under the State plan or
under a waiver of the plan on the date of
enactment of the Patient Protection and
Affordable Care Act no longer being eligible
for such assistance.
(F) Limitation on secretarial authority.--The
Secretary shall not waive compliance with the
requirements of this paragraph except to the
extent necessary to permit a State to
coordinate eligibility requirements for dual
eligible individuals (as defined in section
1915(h)(2)(B)) under the State plan or under a
waiver of the plan and under title XVIII and
individuals who require the level of care
provided in a hospital, a nursing facility, or
an intermediate care facility for the mentally
retarded.
(G) Definitions of modified adjusted gross
income and household income.--In this
paragraph, the terms ``modified adjusted gross
income'' and ``household income'' have the
meanings given such terms in section 36B(d)(2)
of the Internal Revenue Code of 1986.
(H) Continued application of medicaid rules
regarding point-in-time income and sources of
income.--The requirement under this paragraph
for States to use modified adjusted gross
income and household income to determine income
eligibility for medical assistance under the
State plan or under any waiver of such plan and
for any other purpose applicable under the plan
or waiver for which a determination of income
is required shall not be construed as affecting
or limiting the application of--
(i) the requirement under this title
and under the State plan or a waiver of
the plan to determine an individual's
income as of the point in time at which
an application for medical assistance
under the State plan or a waiver of the
plan is processed; or
(ii) any rules established under this
title or under the State plan or a
waiver of the plan regarding sources of
countable income.
(I) Treatment of portion of modified adjusted
gross income.--For purposes of determining the
income eligibility of an individual for medical
assistance whose eligibility is determined
based on the application of modified adjusted
gross income under subparagraph (A), the State
shall--
(i) determine the dollar equivalent
of the difference between the upper
income limit on eligibility for such an
individual (expressed as a percentage
of the poverty line) and such upper
income limit increased by 5 percentage
points; and
(ii) notwithstanding the requirement
in subparagraph (A) with respect to use
of modified adjusted gross income,
utilize as the applicable income of
such individual, in determining such
income eligibility, an amount equal to
the modified adjusted gross income
applicable to such individual reduced
by such dollar equivalent amount.
(14)\15\ Exclusion of compensation for participation
in a clinical trial for testing of treatments for a
rare disease or condition.--The first $2,000 received
by an individual (who has attained 19 years of age) as
compensation for participation in a clinical trial
meeting the requirements of section 1612(b)(26) shall
be disregarded for purposes of determining the income
eligibility of such individual for medical assistance
under the State plan or any waiver of such plan.
---------------------------------------------------------------------------
\15\There is another paragraph designated as paragraph (14) that
appears in a note before this paragraph (14) that was added by section
2002(a) of Public Law 111-148.
---------------------------------------------------------------------------
(f) Notwithstanding any other provision of this title, except
as provided in subsection (e) and section 1619(b)(3) and
section 1924, except with respect to qualified disabled and
working individuals (described in section 1905(s)), and except
with respect to qualified medicare beneficiaries, qualified
severely impaired individuals, and individuals described in
subsection (m)(1), no State not eligible to participate in the
State plan program established under title XVI shall be
required to provide medical assistance to any aged, blind, or
disabled individual (within the meaning of title XVI) for any
month unless such State would be (or would have been) required
to provide medical assistance to such individual for such month
had its plan for medical assistance approved under this title
and in effect on January 1, 1972, been in effect in such month,
except that for this purpose any such individual shall be
deemed eligible for medical assistance under such State plan if
(in addition to meeting such other requirements as are or may
be imposed under the State plan) the income of any such
individual as determined in accordance with section 1903(f)
(after deducting any supplemental security income payment and
State supplementary payment made with respect to such
individual, and incurred expenses for medical care as
recognized under State law regardless of whether such expenses
are reimbursed under another public program of the State or
political subdivision thereof) is not in excess of the standard
for medical assistance established under the State plan as in
effect on January 1, 1972. In States which provide medical
assistance to individuals pursuant to paragraph (10)(C) of
subsection (a) of this section, an individual who is eligible
for medical assistance by reason of the requirements of this
section concerning the deduction of incurred medical expenses
from income shall be considered an individual eligible for
medical assistance under paragraph (10)(A) of that subsection
if that individual is, or is eligible to be (1) an individual
with respect to whom there is payable a State supplementary
payment on the basis of which similarly situated individuals
are eligible to receive medical assistance equal in amount,
duration, and scope to that provided to individuals eligible
under paragraph (10)(A), or (2) an eligible individual or
eligible spouse, as defined in title XVI, with respect to whom
supplemental security income benefits are payable; otherwise
that individual shall be considered to be an individual
eligible for medical assistance under paragraph (10)(C) of that
subsection. In States which do not provide medical assistance
to individuals pursuant to paragraph (10)(C) of that
subsection, an individual who is eligible for medical
assistance by reason of the requirements of this section
concerning the deduction of incurred medical expenses from
income shall be considered an individual eligible for medical
assistance under paragraph (10)(A) of that subsection.
(g) In addition to any other sanction available to a State, a
State may provide for a reduction of any payment amount
otherwise due with respect to a person who furnishes services
under the plan in an amount equal to up to three times the
amount of any payment sought to be collected by that person in
violation of subsection (a)(25)(C).
(h) Nothing in this title (including subsections (a)(13) and
(a)(30) of this section) shall be construed as authorizing the
Secretary to limit the amount of payment that may be made under
a plan under this title for home and community care.
(i)(1) In addition to any other authority under State law,
where a State determines that a intermediate care facility for
the mentally retarded which is certified for participation
under its plan no longer substantially meets the requirements
for such a facility under this title and further determines
that the facility's deficiencies--
(A) immediately jeopardize the health and safety of
its patients, the State shall provide for the
termination of the facility's certification for
participation under the plan and may provide, or
(B) do not immediately jeopardize the health and
safety of its patients, the State may, in lieu of
providing for terminating the facility's certification
for participation under the plan, establish alternative
remedies if the State demonstrates to the Secretary's
satisfaction that the alternative remedies are
effective in deterring noncompliance and correcting
deficiencies, and may provide
that no payment will be made under the State plan with respect
to any individual admitted to such facility after a date
specified by the State.
(2) The State shall not make such a decision with respect to
a facility until the facility has had a reasonable opportunity,
following the initial determination that it no longer
substantially meets the requirements for such a facility under
this title, to correct its deficiencies, and, following this
period, has been given reasonable notice and opportunity for a
hearing.
(3) The State's decision to deny payment may be made
effective only after such notice to the public and to the
facility as may be provided for by the State, and its
effectiveness shall terminate (A) when the State finds that the
facility is in substantial compliance (or is making good faith
efforts to achieve substantial compliance) with the
requirements for such a facility under this title, or (B) in
the case described in paragraph (1)(B), with the end of the
eleventh month following the month such decision is made
effective, whichever occurs first. If a facility to which
clause (B) of the previous sentence applies still fails to
substantially meet the provisions of the respective section on
the date specified in such clause, the State shall terminate
such facility's certification for participation under the plan
effective with the first day of the first month following the
month specified in such clause.
(j) Notwithstanding any other requirement of this title, the
Secretary may waive or modify any requirement of this title
with respect to the medical assistance program in American
Samoa and the Northern Mariana Islands, other than a waiver of
the Federal medical assistance percentage, the limitation in
section 1108(f), or the requirement that payment may be made
for medical assistance only with respect to amounts expended by
American Samoa or the Northern Mariana Islands for care and
services described in a numbered paragraph of section 1905(a).
(k)(1) The medical assistance provided to an individual
described in subclause (VIII) of subsection (a)(10)(A)(i) shall
consist of benchmark coverage described in section 1937(b)(1)
or benchmark equivalent coverage described in section
1937(b)(2). Such medical assistance shall be provided subject
to the requirements of section 1937, without regard to whether
a State otherwise has elected the option to provide medical
assistance through coverage under that section, unless an
individual described in subclause (VIII) of subsection
(a)(10)(A)(i) is also an individual for whom, under
subparagraph (B) of section 1937(a)(2), the State may not
require enrollment in benchmark coverage described in
subsection (b)(1) of section 1937 or benchmark equivalent
coverage described in subsection (b)(2) of that section.
(2) Beginning with the first day of any fiscal year quarter
that begins on or after April 1, 2010, and before January 1,
2014, a State may elect through a State plan amendment to
provide medical assistance to individuals who would be
described in subclause (VIII) of subsection (a)(10)(A)(i) if
that subclause were effective before January 1, 2014. A State
may elect to phase-in the extension of eligibility for medical
assistance to such individuals based on income, so long as the
State does not extend such eligibility to individuals described
in such subclause with higher income before making individuals
described in such subclause with lower income eligible for
medical assistance.
(3) If an individual described in subclause (VIII) of
subsection (a)(10)(A)(i) is the parent of a child who is under
19 years of age (or such higher age as the State may have
elected) who is eligible for medical assistance under the State
plan or under a waiver of such plan (under that subclause or
under a State plan amendment under paragraph (2), the
individual may not be enrolled under the State plan unless the
individual's child is enrolled under the State plan or under a
waiver of the plan or is enrolled in other health insurance
coverage. For purposes of the preceding sentence, the term
``parent'' includes an individual treated as a caretaker
relative for purposes of carrying out section 1931.
(l)(1) Individuals described in this paragraph are--
(A) women during pregnancy (and during the 60-day
period beginning on the last day of the pregnancy),
(B) infants under one year of age,
(C) children who have attained one year of age but
have not attained 6 years of age, and
(D) children born after September 30, 1983 (or, at
the option of a State, after any earlier date), who
have attained 6 years of age but have not attained 19
years of age,
who are not described in any of subclauses (I) through (III) of
subsection (a)(10)(A)(i) and whose family income does not
exceed the income level established by the State under
paragraph (2) for a family size equal to the size of the
family, including the woman, infant, or child.
(2)(A)(i) For purposes of paragraph (1) with respect to
individuals described in subparagraph (A) or (B) of that
paragraph, the State shall establish an income level which is a
percentage (not less than the percentage provided under clause
(ii) and not more than 185 percent) of the income official
poverty line (as defined by the Office of Management and
Budget, and revised annually in accordance with section 673(2)
of the Omnibus Budget Reconciliation Act of 1981) applicable to
a family of the size involved.
(ii) The percentage provided under this clause, with respect
to eligibility for medical assistance on or after--
(I) July 1, 1989, is 75 percent, or, if greater, the
percentage provided under clause (iii), and
(II) April 1, 1990, 133 percent, or, if greater, the
percentage provided under clause (iv).
(iii) In the case of a State which, as of the date of the
enactment of this clause, has elected to provide, and provides,
medical assistance to individuals described in this subsection
or has enacted legislation authorizing, or appropriating funds,
to provide such assistance to such individuals before July 1,
1989, the percentage provided under clause (ii)(I) shall not be
less than--
(I) the percentage specified by the State in an
amendment to its State plan (whether approved or not)
as of the date of the enactment of this clause, or
(II) if no such percentage is specified as of the
date of the enactment of this clause, the percentage
established under the State's authorizing legislation
or provided for under the State's appropriations;
but in no case shall this clause require the percentage
provided under clause (ii)(I) to exceed 100 percent.
(iv) In the case of a State which, as of the date of the
enactment of this clause, has established under clause (i), or
has enacted legislation authorizing, or appropriating funds, to
provide for, a percentage (of the income official poverty line)
that is greater than 133 percent, the percentage provided under
clause (ii) for medical assistance on or after April 1, 1990,
shall not be less than--
(I) the percentage specified by the State in an
amendment to its State plan (whether approved or not)
as of the date of the enactment of this clause, or
(II) if no such percentage is specified as of the
date of the enactment of this clause, the percentage
established under the State's authorizing legislation
or provided for under the State's appropriations.
(B) For purposes of paragraph (1) with respect to individuals
described in subparagraph (C) of such paragraph, the State
shall establish an income level which is equal to 133 percent
of the income official poverty line described in subparagraph
(A) applicable to a family of the size involved.
(C) For purposes of paragraph (1) with respect to individuals
described in subparagraph (D) of that paragraph, the State
shall establish an income level which is equal to 100 percent
(or, beginning January 1, 2014, 133 percent) of the income
official poverty line described in subparagraph (A) applicable
to a family of the size involved.
(3) Notwithstanding subsection (a)(17), for individuals who
are eligible for medical assistance because of subsection
(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or
(a)(10)(A)(ii)(IX)--
(A) application of a resource standard shall be at
the option of the State;
(B) any resource standard or methodology that is
applied with respect to an individual described in
subparagraph (A) of paragraph (1) may not be more
restrictive than the resource standard or methodology
that is applied under title XVI;
(C) any resource standard or methodology that is
applied with respect to an individual described in
subparagraph (B), (C), or (D) of paragraph (1) may not
be more restrictive than the corresponding methodology
that is applied under the State plan under part A of
title IV;
(D) the income standard to be applied is the
appropriate income standard established under paragraph
(2); and
(E) family income shall be determined in accordance
with the methodology employed under the State plan
under part A or E of title IV (except to the extent
such methodology is inconsistent with clause (D) of
subsection (a)(17)), and costs incurred for medical
care or for any other type of remedial care shall not
be taken into account.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(17), require
or permit such treatment for other individuals.
(4)(A) In the case of any State which is providing medical
assistance to its residents under a waiver granted under
section 1115, the Secretary shall require the State to provide
medical assistance for pregnant women and infants under age 1
described in subsection (a)(10)(A)(i)(IV) and for children
described in subsection (a)(10)(A)(i)(VI) or subsection
(a)(10)(A)(i)(VII) in the same manner as the State would be
required to provide such assistance for such individuals if the
State had in effect a plan approved under this title.
(B) In the case of a State which is not one of the 50 States
or the District of Columbia, the State need not meet the
requirement of subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI),
or (a)(10)(A)(i)(VII) and, for purposes of paragraph (2)(A),
the State may substitute for the percentage provided under
clause (ii) of such paragraph any percentage.
(m)(1) Individuals described in this paragraph are
individuals--
(A) who are 65 years of age or older or are disabled
individuals (as determined under section 1614(a)(3)),
(B) whose income (as determined under section 1612
for purposes of the supplemental security income
program, except as provided in paragraph (2)(C)) does
not exceed an income level established by the State
consistent with paragraph (2)(A), and
(C) whose resources (as determined under section 1613
for purposes of the supplemental security income
program) do not exceed (except as provided in paragraph
(2)(B)) the maximum amount of resources that an
individual may have and obtain benefits under that
program.
(2)(A) The income level established under paragraph (1)(B)
may not exceed a percentage (not more than 100 percent) of the
official poverty line (as defined by the Office of Management
and Budget, and revised annually in accordance with section
673(2) of the Omnibus Budget Reconciliation Act of 1981)
applicable to a family of the size involved.
(B) In the case of a State that provides medical assistance
to individuals not described in subsection (a)(10)(A) and at
the State's option, the State may use under paragraph (1)(C)
such resource level (which is higher than the level described
in that paragraph) as may be applicable with respect to
individuals described in paragraph (1)(A) who are not described
in subsection (a)(10)(A).
(C) The provisions of section 1905(p)(2)(D) shall apply to
determinations of income under this subsection in the same
manner as they apply to determinations of income under section
1905(p).
(3) Notwithstanding subsection (a)(17), for individuals
described in paragraph (1) who are covered under the State plan
by virtue of subsection (a)(10)(A)(ii)(X)--
(A) the income standard to be applied is the income
standard described in paragraph (1)(B), and
(B) except as provided in section 1612(b)(4)(B)(ii),
costs incurred for medical care or for any other type
of remedial care shall not be taken into account in
determining income.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(17), require
or permit such treatment for other individuals.
(4) Notwithstanding subsection (a)(17), for qualified
medicare beneficiaries described in section 1905(p)(1)--
(A) the income standard to be applied is the income
standard described in section 1905(p)(1)(B), and
(B) except as provided in section 1612(b)(4)(B)(ii),
costs incurred for medical care or for any other type
of remedial care shall not be taken into account in
determining income.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(17), require
or permit such treatment for other individuals.
(n)(1) In the case of medical assistance furnished under this
title for medicare cost-sharing respecting the furnishing of a
service or item to a qualified medicare beneficiary, the State
plan may provide payment in an amount with respect to the
service or item that results in the sum of such payment amount
and any amount of payment made under title XVIII with respect
to the service or item exceeding the amount that is otherwise
payable under the State plan for the item or service for
eligible individuals who are not qualified medicare
beneficiaries.
(2) In carrying out paragraph (1), a State is not required to
provide any payment for any expenses incurred relating to
payment for deductibles, coinsurance, or copayments for
medicare cost-sharing to the extent that payment under title
XVIII for the service would exceed the payment amount that
otherwise would be made under the State plan under this title
for such service if provided to an eligible recipient other
than a medicare beneficiary.
(3) In the case in which a State's payment for medicare cost-
sharing for a qualified medicare beneficiary with respect to an
item or service is reduced or eliminated through the
application of paragraph (2)--
(A) for purposes of applying any limitation under
title XVIII on the amount that the beneficiary may be
billed or charged for the service, the amount of
payment made under title XVIII plus the amount of
payment (if any) under the State plan shall be
considered to be payment in full for the service;
(B) the beneficiary shall not have any legal
liability to make payment to a provider or to an
organization described in section 1903(m)(1)(A) for the
service; and
(C) any lawful sanction that may be imposed upon a
provider or such an organization for excess charges
under this title or title XVIII shall apply to the
imposition of any charge imposed upon the individual in
such case.
This paragraph shall not be construed as preventing payment of
any medicare cost-sharing by a medicare supplemental policy or
an employer retiree health plan on behalf of an individual.
(o) Notwithstanding any provision of subsection (a) to the
contrary, a State plan under this title shall provide that any
supplemental security income benefits paid by reason of
subparagraph (E) or (G) of section 1611(e)(1) to an individual
who--
(1) is eligible for medical assistance under the
plan, and
(2) is in a hospital, skilled nursing facility, or
intermediate care facility at the time such benefits
are paid,
will be disregarded for purposes of determining the amount of
any post-eligibility contribution by the individual to the cost
of the care and services provided by the hospital, skilled
nursing facility, or intermediate care facility.
(p)(1) In addition to any other authority, a State may
exclude any individual or entity for purposes of participating
under the State plan under this title for any reason for which
the Secretary could exclude the individual or entity from
participation in a program under title XVIII under section
1128, 1128A, or 1866(b)(2).
(2) In order for a State to receive payments for medical
assistance under section 1903(a), with respect to payments the
State makes to a medicaid managed care organization (as defined
in section 1903(m)) or to an entity furnishing services under a
waiver approved under section 1915(b)(1), the State must
provide that it will exclude from participation, as such an
organization or entity, any organization or entity that--
(A) could be excluded under section 1128(b)(8)
(relating to owners and managing employees who have
been convicted of certain crimes or received other
sanctions),
(B) has, directly or indirectly, a substantial
contractual relationship (as defined by the Secretary)
with an individual or entity that is described in
section 1128(b)(8)(B), or
(C) employs or contracts with any individual or
entity that is excluded from participation under this
title under section 1128 or 1128A for the provision of
health care, utilization review, medical social work,
or administrative services or employs or contracts with
any entity for the provision (directly or indirectly)
through such an excluded individual or entity of such
services.
(3) As used in this subsection, the term ``exclude'' includes
the refusal to enter into or renew a participation agreement or
the termination of such an agreement.
(q)(1)(A) In order to meet the requirement of subsection
(a)(50), the State plan must provide that, in the case of an
institutionalized individual or couple described in
subparagraph (B), in determining the amount of the individual's
or couple's income to be applied monthly to payment for the
cost of care in an institution, there shall be deducted from
the monthly income (in addition to other allowances otherwise
provided under the State plan) a monthly personal needs
allowance--
(i) which is reasonable in amount for clothing and
other personal needs of the individual (or couple)
while in an institution, and
(ii) which is not less (and may be greater) than the
minimum monthly personal needs allowance described in
paragraph (2).
(B) In this subsection, the term ``institutionalized
individual or couple'' means an individual or married couple--
(i) who is an inpatient (or who are inpatients) in a
medical institution or nursing facility for which
payments are made under this title throughout a month,
and
(ii) who is or are determined to be eligible for
medical assistance under the State plan.
(2) The minimum monthly personal needs allowance described in
this paragraph is $30 for an institutionalized individual and
$60 for an institutionalized couple (if both are aged, blind,
or disabled, and their incomes are considered available to each
other in determining eligibility).
(r)(1)(A) For purposes of sections 1902(a)(17) and
1924(d)(1)(D) and for purposes of a waiver under section 1915,
with respect to the post-eligibility treatment of income of
individuals who are institutionalized or receiving home or
community-based services under such a waiver, the treatment
described in subparagraph (B) shall apply, there shall be
disregarded reparation payments made by the Federal Republic of
Germany, and there shall be taken into account amounts for
incurred expenses for medical or remedial care that are not
subject to payment by a third party, including--
(i) medicare and other health insurance premiums,
deductibles, or coinsurance, and
(ii) necessary medical or remedial care recognized
under State law but not covered under the State plan
under this title, subject to reasonable limits the
State may establish on the amount of these expenses.
(B)(i) In the case of a veteran who does not have a spouse or
a child, if the veteran--
(I) receives, after the veteran has been determined
to be eligible for medical assistance under the State
plan under this title, a veteran's pension in excess of
$90 per month, and
(II) resides in a State veterans home with respect to
which the Secretary of Veterans Affairs makes per diem
payments for nursing home care pursuant to section
1741(a) of title 38, United States Code,
any such pension payment, including any payment made due to the
need for aid and attendance, or for unreimbursed medical
expenses, that is in excess of $90 per month shall be counted
as income only for the purpose of applying such excess payment
to the State veterans home's cost of providing nursing home
care to the veteran.
(ii) The provisions of clause (i) shall apply with respect to
a surviving spouse of a veteran who does not have a child in
the same manner as they apply to a veteran described in such
clause.
(2)(A) The methodology to be employed in determining income
and resource eligibility for individuals under subsection
(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI),
(a)(10)(A)(i)(VII), (a)(10)(A)(ii), (a)(10)(C)(i)(III), or (f)
or under section 1905(p) may be less restrictive, and shall be
no more restrictive, than the methodology--
(i) in the case of groups consisting of aged, blind,
or disabled individuals, under the supplemental
security income program under title XVI, or
(ii) in the case of other groups, under the State
plan most closely categorically related.
(B) For purposes of this subsection and subsection (a)(10),
methodology is considered to be ``no more restrictive'' if,
using the methodology, additional individuals may be eligible
for medical assistance and no individuals who are otherwise
eligible are made ineligible for such assistance.
(s) In order to meet the requirements of subsection (a)(55),
the State plan must provide that payments to hospitals under
the plan for inpatient hospital services furnished to infants
who have not attained the age of 1 year, and to children who
have not attained the age of 6 years and who receive such
services in a disproportionate share hospital described in
section 1923(b)(1), shall--
(1) if made on a prospective basis (whether per diem,
per case, or otherwise) provide for an outlier
adjustment in payment amounts for medically necessary
inpatient hospital services involving exceptionally
high costs or exceptionally long lengths of stay,
(2) not be limited by the imposition of day limits
with respect to the delivery of such services to such
individuals, and
(3) not be limited by the imposition of dollar limits
(other than such limits resulting from prospective
payments as adjusted pursuant to paragraph (1)) with
respect to the delivery of such services to any such
individual who has not attained their first birthday
(or in the case of such an individual who is an
inpatient on his first birthday until such individual
is discharged).
(t) Nothing in this title (including sections 1903(a) and
1905(a)) shall be construed as authorizing the Secretary to
deny or limit payments to a State for expenditures, for medical
assistance for items or services, attributable to taxes of
general applicability imposed with respect to the provision of
such items or services.
(u)(1) Individuals described in this paragraph are
individuals--
(A) who are entitled to elect COBRA continuation
coverage (as defined in paragraph (3)),
(B) whose income (as determined under section 1612
for purposes of the supplemental security income
program) does not exceed 100 percent of the official
poverty line (as defined by the Office of Management
and Budget, and revised annually in accordance with
section 673(2) of the Omnibus Budget Reconciliation Act
of 1981) applicable to a family of the size involved,
(C) whose resources (as determined under section 1613
for purposes of the supplemental security income
program) do not exceed twice the maximum amount of
resources that an individual may have and obtain
benefits under that program, and
(D) with respect to whose enrollment for COBRA
continuation coverage the State has determined that the
savings in expenditures under this title resulting from
such enrollment is likely to exceed the amount of
payments for COBRA premiums made.
(2) For purposes of subsection (a)(10)(F) and this
subsection, the term ``COBRA premiums'' means the applicable
premium imposed with respect to COBRA continuation coverage.
(3) In this subsection, the term ``COBRA continuation
coverage'' means coverage under a group health plan provided by
an employer with 75 or more employees provided pursuant to
title XXII of the Public Health Service Act, section 4980B of
the Internal Revenue Code of 1986, or title VI of the Employee
Retirement Income Security Act of 1974.
(4) Notwithstanding subsection (a)(17), for individuals
described in paragraph (1) who are covered under the State plan
by virtue of subsection (a)(10)(A)(ii)(XI)--
(A) the income standard to be applied is the income
standard described in paragraph (1)(B), and
(B) except as provided in section 1612(b)(4)(B)(ii),
costs incurred for medical care or for any other type
of remedial care shall not be taken into account in
determining income.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(10)(B) or
(a)(17), require or permit such treatment for other
individuals.
(v) A State plan may provide for the making of determinations
of disability or blindness for the purpose of determining
eligibility for medical assistance under the State plan by the
single State agency or its designee, and make medical
assistance available to individuals whom it finds to be blind
or disabled and who are determined otherwise eligible for such
assistance during the period of time prior to which a final
determination of disability or blindness is made by the Social
Security Administration with respect to such an individual. In
making such determinations, the State must apply the
definitions of disability and blindness found in section
1614(a) of the Social Security Act.
(w)(1) For purposes of subsection (a)(57) and sections
1903(m)(1)(A) and 1919(c)(2)(E), the requirement of this
subsection is that a provider or organization (as the case may
be) maintain written policies and procedures with respect to
all adult individuals receiving medical care by or through the
provider or organization--
(A) to provide written information to each such
individual concerning--
(i) an individual's rights under State law
(whether statutory or as recognized by the
courts of the State) to make decisions
concerning such medical care, including the
right to accept or refuse medical or surgical
treatment and the right to formulate advance
directives (as defined in paragraph (3)), and
(ii) the provider's or organization's written
policies respecting the implementation of such
rights;
(B) to document in the individual's medical record
whether or not the individual has executed an advance
directive;
(C) not to condition the provision of care or
otherwise discriminate against an individual based on
whether or not the individual has executed an advance
directive;
(D) to ensure compliance with requirements of State
law (whether statutory or as recognized by the courts
of the State) respecting advance directives; and
(E) to provide (individually or with others) for
education for staff and the community on issues
concerning advance directives.
Subparagraph (C) shall not be construed as requiring the
provision of care which conflicts with an advance directive.
(2) The written information described in paragraph (1)(A)
shall be provided to an adult individual--
(A) in the case of a hospital, at the time of the
individual's admission as an inpatient,
(B) in the case of a nursing facility, at the time of
the individual's admission as a resident,
(C) in the case of a provider of home health care or
personal care services, in advance of the individual
coming under the care of the provider,
(D) in the case of a hospice program, at the time of
initial receipt of hospice care by the individual from
the program, and
(E) in the case of a medicaid managed care
organization, at the time of enrollment of the
individual with the organization.
(3) Nothing in this section shall be construed to prohibit
the application of a State law which allows for an objection on
the basis of conscience for any health care provider or any
agent of such provider which as a matter of conscience cannot
implement an advance directive.
(4) In this subsection, the term ``advance directive'' means
a written instruction, such as a living will or durable power
of attorney for health care, recognized under State law
(whether statutory or as recognized by the courts of the State)
and relating to the provision of such care when the individual
is incapacitated.
(5) For construction relating to this subsection, see section
7 of the Assisted Suicide Funding Restriction Act of 1997
(relating to clarification respecting assisted suicide,
euthanasia, and mercy killing).
(x) The Secretary shall establish a system, for
implementation by not later than July 1, 1991, which provides
for a unique identifier for each physician who furnishes
services for which payment may be made under a State plan
approved under this title.
(y)(1) In addition to any other authority under State law,
where a State determines that a psychiatric hospital which is
certified for participation under its plan no longer meets the
requirements for a psychiatric hospital (referred to in section
1905(h)) and further finds that the hospital's deficiencies--
(A) immediately jeopardize the health and safety of
its patients, the State shall terminate the hospital's
participation under the State plan; or
(B) do not immediately jeopardize the health and
safety of its patients, the State may terminate the
hospital's participation under the State plan, or
provide that no payment will be made under the State
plan with respect to any individual admitted to such
hospital after the effective date of the finding, or
both.
(2) Except as provided in paragraph (3), if a psychiatric
hospital described in paragraph (1)(B) has not complied with
the requirements for a psychiatric hospital under this title--
(A) within 3 months after the date the hospital is
found to be out of compliance with such requirements,
the State shall provide that no payment will be made
under the State plan with respect to any individual
admitted to such hospital after the end of such 3-month
period, or
(B) within 6 months after the date the hospital is
found to be out of compliance with such requirements,
no Federal financial participation shall be provided
under section 1903(a) with respect to further services
provided in the hospital until the State finds that the
hospital is in compliance with the requirements of this
title.
(3) The Secretary may continue payments, over a period of not
longer than 6 months from the date the hospital is found to be
out of compliance with such requirements, if--
(A) the State finds that it is more appropriate to
take alternative action to assure compliance of the
hospital with the requirements than to terminate the
certification of the hospital,
(B) the State has submitted a plan and timetable for
corrective action to the Secretary for approval and the
Secretary approves the plan of corrective action, and
(C) the State agrees to repay to the Federal
Government payments received under this paragraph if
the corrective action is not taken in accordance with
the approved plan and timetable.
(z)(1) Individuals described in this paragraph are
individuals not described in subsection (a)(10)(A)(i)--
(A) who are infected with tuberculosis;
(B) whose income (as determined under the State plan
under this title with respect to disabled individuals)
does not exceed the maximum amount of income a disabled
individual described in subsection (a)(10)(A)(i) may
have and obtain medical assistance under the plan; and
(C) whose resources (as determined under the State
plan under this title with respect to disabled
individuals) do not exceed the maximum amount of
resources a disabled individual described in subsection
(a)(10)(A)(i) may have and obtain medical assistance
under the plan.
(2) For purposes of subsection (a)(10), the term ``TB-related
services'' means each of the following services relating to
treatment of infection with tuberculosis:
(A) Prescribed drugs.
(B) Physicians' services and services described in
section 1905(a)(2).
(C) Laboratory and X-ray services (including services
to confirm the presence of infection).
(D) Clinic services and Federally-qualified health
center services.
(E) Case management services (as defined in section
1915(g)(2)).
(F) Services (other than room and board) designed to
encourage completion of regimens of prescribed drugs by
outpatients, including services to observe directly the
intake of prescribed drugs.
(aa) Individuals described in this subsection are individuals
who--
(1) are not described in subsection (a)(10)(A)(i);
(2) have not attained age 65;
(3) have been screened for breast and cervical cancer
under the Centers for Disease Control and Prevention
breast and cervical cancer early detection program
established under title XV of the Public Health Service
Act (42 U.S.C. 300k et seq.) in accordance with the
requirements of section 1504 of that Act (42 U.S.C.
300n) and need treatment for breast or cervical cancer;
and
(4) are not otherwise covered under creditable
coverage, as defined in section 2701(c) of the Public
Health Service Act (42 U.S.C. 300gg(c)), but applied
without regard to paragraph (1)(F) of such section.
(bb) Payment for Services Provided by Federally-Qualified
Health Centers and Rural Health Clinics.--
(1) In general.--Beginning with fiscal year 2001 with
respect to services furnished on or after January 1,
2001, and each succeeding fiscal year, the State plan
shall provide for payment for services described in
section 1905(a)(2)(C) furnished by a Federally-
qualified health center and services described in
section 1905(a)(2)(B) furnished by a rural health
clinic in accordance with the provisions of this
subsection.
(2) Fiscal year 2001.--Subject to paragraph (4), for
services furnished on and after January 1, 2001, during
fiscal year 2001, the State plan shall provide for
payment for such services in an amount (calculated on a
per visit basis) that is equal to 100 percent of the
average of the costs of the center or clinic of
furnishing such services during fiscal years 1999 and
2000 which are reasonable and related to the cost of
furnishing such services, or based on such other tests
of reasonableness as the Secretary prescribes in
regulations under section 1833(a)(3), or, in the case
of services to which such regulations do not apply, the
same methodology used under section 1833(a)(3),
adjusted to take into account any increase or decrease
in the scope of such services furnished by the center
or clinic during fiscal year 2001.
(3) Fiscal year 2002 and succeeding fiscal years.--
Subject to paragraph (4), for services furnished during
fiscal year 2002 or a succeeding fiscal year, the State
plan shall provide for payment for such services in an
amount (calculated on a per visit basis) that is equal
to the amount calculated for such services under this
subsection for the preceding fiscal year--
(A) increased by the percentage increase in
the MEI (as defined in section 1842(i)(3))
applicable to primary care services (as defined
in section 1842(i)(4)) for that fiscal year;
and
(B) adjusted to take into account any
increase or decrease in the scope of such
services furnished by the center or clinic
during that fiscal year.
(4) Establishment of initial year payment amount for
new centers or clinics.--In any case in which an entity
first qualifies as a Federally-qualified health center
or rural health clinic after fiscal year 2000, the
State plan shall provide for payment for services
described in section 1905(a)(2)(C) furnished by the
center or services described in section 1905(a)(2)(B)
furnished by the clinic in the first fiscal year in
which the center or clinic so qualifies in an amount
(calculated on a per visit basis) that is equal to 100
percent of the costs of furnishing such services during
such fiscal year based on the rates established under
this subsection for the fiscal year for other such
centers or clinics located in the same or adjacent area
with a similar case load or, in the absence of such a
center or clinic, in accordance with the regulations
and methodology referred to in paragraph (2) or based
on such other tests of reasonableness as the Secretary
may specify. For each fiscal year following the fiscal
year in which the entity first qualifies as a
Federally-qualified health center or rural health
clinic, the State plan shall provide for the payment
amount to be calculated in accordance with paragraph
(3).
(5) Administration in the case of managed care.--
(A) In general.--In the case of services
furnished by a Federally-qualified health
center or rural health clinic pursuant to a
contract between the center or clinic and a
managed care entity (as defined in section
1932(a)(1)(B)), the State plan shall provide
for payment to the center or clinic by the
State of a supplemental payment equal to the
amount (if any) by which the amount determined
under paragraphs (2), (3), and (4) of this
subsection exceeds the amount of the payments
provided under the contract.
(B) Payment schedule.--The supplemental
payment required under subparagraph (A) shall
be made pursuant to a payment schedule agreed
to by the State and the Federally-qualified
health center or rural health clinic, but in no
case less frequently than every 4 months.
(6) Alternative payment methodologies.--
Notwithstanding any other provision of this section,
the State plan may provide for payment in any fiscal
year to a Federally-qualified health center for
services described in section 1905(a)(2)(C) or to a
rural health clinic for services described in section
1905(a)(2)(B) in an amount which is determined under an
alternative payment methodology that--
(A) is agreed to by the State and the center
or clinic; and
(B) results in payment to the center or
clinic of an amount which is at least equal to
the amount otherwise required to be paid to the
center or clinic under this section.
(cc)(1) Individuals described in this paragraph are
individuals--
(A) who are children who have not attained 19 years
of age and are born--
(i) on or after January 1, 2001 (or, at the
option of a State, on or after an earlier
date), in the case of the second, third, and
fourth quarters of fiscal year 2007;
(ii) on or after October 1, 1995 (or, at the
option of a State, on or after an earlier
date), in the case of each quarter of fiscal
year 2008; and
(iii) after October 1, 1989, in the case of
each quarter of fiscal year 2009 and each
quarter of any fiscal year thereafter;
(B) who would be considered disabled under section
1614(a)(3)(C) (as determined under title XVI for
children but without regard to any income or asset
eligibility requirements that apply under such title
with respect to children); and
(C) whose family income does not exceed such income
level as the State establishes and does not exceed--
(i) 300 percent of the poverty line (as
defined in section 2110(c)(5)) applicable to a
family of the size involved; or
(ii) such higher percent of such poverty line
as a State may establish, except that--
(I) any medical assistance provided
to an individual whose family income
exceeds 300 percent of such poverty
line may only be provided with State
funds; and
(II) no Federal financial
participation shall be provided under
section 1903(a) for any medical
assistance provided to such an
individual.
(2)(A) If an employer of a parent of an individual described
in paragraph (1) offers family coverage under a group health
plan (as defined in section 2791(a) of the Public Health
Service Act), the State shall--
(i) notwithstanding section 1906, require such parent
to apply for, enroll in, and pay premiums for such
coverage as a condition of such parent's child being or
remaining eligible for medical assistance under
subsection (a)(10)(A)(ii)(XIX) if the parent is
determined eligible for such coverage and the employer
contributes at least 50 percent of the total cost of
annual premiums for such coverage; and
(ii) if such coverage is obtained--
(I) subject to paragraph (2) of section
1916(h), reduce the premium imposed by the
State under that section in an amount that
reasonably reflects the premium contribution
made by the parent for private coverage on
behalf of a child with a disability; and
(II) treat such coverage as a third party
liability under subsection (a)(25).
(B) In the case of a parent to which subparagraph (A)
applies, a State, notwithstanding section 1906 but subject to
paragraph (1)(C)(ii), may provide for payment of any portion of
the annual premium for such family coverage that the parent is
required to pay. Any payments made by the State under this
subparagraph shall be considered, for purposes of section
1903(a), to be payments for medical assistance.
(dd) Electronic Transmission of Information.--If the State
agency determining eligibility for medical assistance under
this title or child health assistance under title XXI verifies
an element of eligibility based on information from an Express
Lane Agency (as defined in subsection (e)(13)(F)), or from
another public agency, then the applicant's signature under
penalty of perjury shall not be required as to such element.
Any signature requirement for an application for medical
assistance may be satisfied through an electronic signature, as
defined in section 1710(1) of the Government Paperwork
Elimination Act (44 U.S.C. 3504 note). The requirements of
subparagraphs (A) and (B) of section 1137(d)(2) may be met
through evidence in digital or electronic form.
(ee)(1) For purposes of subsection (a)(46)(B)(ii), the
requirements of this subsection with respect to an individual
declaring to be a citizen or national of the United States for
purposes of establishing eligibility under this title, are, in
lieu of requiring the individual to present satisfactory
documentary evidence of citizenship or nationality under
section 1903(x) (if the individual is not described in
paragraph (2) of that section), as follows:
(A) The State submits the name and social security
number of the individual to the Commissioner of Social
Security as part of the program established under
paragraph (2).
(B) If the State receives notice from the
Commissioner of Social Security that the name or social
security number, or the declaration of citizenship or
nationality, of the individual is inconsistent with
information in the records maintained by the
Commissioner--
(i) the State makes a reasonable effort to
identify and address the causes of such
inconsistency, including through typographical
or other clerical errors, by contacting the
individual to confirm the accuracy of the name
or social security number submitted or
declaration of citizenship or nationality and
by taking such additional actions as the
Secretary, through regulation or other
guidance, or the State may identify, and
continues to provide the individual with
medical assistance while making such effort;
and
(ii) in the case such inconsistency is not
resolved under clause (i), the State--
(I) notifies the individual of such
fact;
(II) provides the individual with a
period of 90 days from the date on
which the notice required under
subclause (I) is received by the
individual to either present
satisfactory documentary evidence of
citizenship or nationality (as defined
in section 1903(x)(3)) or resolve the
inconsistency with the Commissioner of
Social Security (and continues to
provide the individual with medical
assistance during such 90-day period);
and
(III) disenrolls the individual from
the State plan under this title within
30 days after the end of such 90-day
period if no such documentary evidence
is presented or if such inconsistency
is not resolved.
(2)(A) Each State electing to satisfy the requirements of
this subsection for purposes of section 1902(a)(46)(B) shall
establish a program under which the State submits at least
monthly to the Commissioner of Social Security for comparison
of the name and social security number, of each individual
newly enrolled in the State plan under this title that month
who is not described in section 1903(x)(2) and who declares to
be a United States citizen or national, with information in
records maintained by the Commissioner.
(B) In establishing the State program under this paragraph,
the State may enter into an agreement with the Commissioner of
Social Security--
(i) to provide, through an on-line system or
otherwise, for the electronic submission of, and
response to, the information submitted under
subparagraph (A) for an individual enrolled in the
State plan under this title who declares to be citizen
or national on at least a monthly basis; or
(ii) to provide for a determination of the
consistency of the information submitted with the
information maintained in the records of the
Commissioner through such other method as agreed to by
the State and the Commissioner and approved by the
Secretary, provided that such method is no more
burdensome for individuals to comply with than any
burdens that may apply under a method described in
clause (i).
(C) The program established under this paragraph shall
provide that, in the case of any individual who is required to
submit a social security number to the State under subparagraph
(A) and who is unable to provide the State with such number,
shall be provided with at least the reasonable opportunity to
present satisfactory documentary evidence of citizenship or
nationality (as defined in section 1903(x)(3)) as is provided
under clauses (i) and (ii) of section 1137(d)(4)(A) to an
individual for the submittal to the State of evidence
indicating a satisfactory immigration status.
(3)(A) The State agency implementing the plan approved under
this title shall, at such times and in such form as the
Secretary may specify, provide information on the percentage
each month that the inconsistent submissions bears to the total
submissions made for comparison for such month. For purposes of
this subparagraph, a name, social security number, or
declaration of citizenship or nationality of an individual
shall be treated as inconsistent and included in the
determination of such percentage only if--
(i) the information submitted by the individual is
not consistent with information in records maintained
by the Commissioner of Social Security;
(ii) the inconsistency is not resolved by the State;
(iii) the individual was provided with a reasonable
period of time to resolve the inconsistency with the
Commissioner of Social Security or provide satisfactory
documentation of citizenship status and did not
successfully resolve such inconsistency; and
(iv) payment has been made for an item or service
furnished to the individual under this title.
(B) If, for any fiscal year, the average monthly percentage
determined under subparagraph (A) is greater than 3 percent--
(i) the State shall develop and adopt a corrective
plan to review its procedures for verifying the
identities of individuals seeking to enroll in the
State plan under this title and to identify and
implement changes in such procedures to improve their
accuracy; and
(ii) pay to the Secretary an amount equal to the
amount which bears the same ratio to the total payments
under the State plan for the fiscal year for providing
medical assistance to individuals who provided
inconsistent information as the number of individuals
with inconsistent information in excess of 3 percent of
such total submitted bears to the total number of
individuals with inconsistent information.
(C) The Secretary may waive, in certain limited cases, all or
part of the payment under subparagraph (B)(ii) if the State is
unable to reach the allowable error rate despite a good faith
effort by such State.
(D) Subparagraphs (A) and (B) shall not apply to a State for
a fiscal year if there is an agreement described in paragraph
(2)(B) in effect as of the close of the fiscal year that
provides for the submission on a real-time basis of the
information described in such paragraph.
(4) Nothing in this subsection shall affect the rights of any
individual under this title to appeal any disenrollment from a
State plan.
(ff) Notwithstanding any other requirement of this title or
any other provision of Federal or State law, a State shall
disregard the following property from resources for purposes of
determining the eligibility of an individual who is an Indian
for medical assistance under this title:
(1) Property, including real property and
improvements, that is held in trust, subject to Federal
restrictions, or otherwise under the supervision of the
Secretary of the Interior, located on a reservation,
including any federally recognized Indian Tribe's
reservation, pueblo, or colony, including former
reservations in Oklahoma, Alaska Native regions
established by the Alaska Native Claims Settlement Act,
and Indian allotments on or near a reservation as
designated and approved by the Bureau of Indian Affairs
of the Department of the Interior.
(2) For any federally recognized Tribe not described
in paragraph (1), property located within the most
recent boundaries of a prior Federal reservation.
(3) Ownership interests in rents, leases, royalties,
or usage rights related to natural resources (including
extraction of natural resources or harvesting of
timber, other plants and plant products, animals, fish,
and shellfish) resulting from the exercise of federally
protected rights.
(4) Ownership interests in or usage rights to items
not covered by paragraphs (1) through (3) that have
unique religious, spiritual, traditional, or cultural
significance or rights that support subsistence or a
traditional lifestyle according to applicable tribal
law or custom.
(gg) Maintenance of Effort.--
(1) General requirement to maintain eligibility
standards until state exchange is fully operational.--
Subject to the succeeding paragraphs of this
subsection, during the period that begins on the date
of enactment of the Patient Protection and Affordable
Care Act and ends on the date on which the Secretary
determines that an Exchange established by the State
under section 1311 of the Patient Protection and
Affordable Care Act is fully operational, as a
condition for receiving any Federal payments under
section 1903(a) for calendar quarters occurring during
such period, a State shall not have in effect
eligibility standards, methodologies, or procedures
under the State plan under this title or under any
waiver of such plan that is in effect during that
period, that are more restrictive than the eligibility
standards, methodologies, or procedures, respectively,
under the plan or waiver that are in effect on the date
of enactment of the Patient Protection and Affordable
Care Act.
(2) Continuation of eligibility standards for
children until october 1, 2019.--The requirement under
paragraph (1) shall continue to apply to a State
through September 30, 2019, with respect to the
eligibility standards, methodologies, and procedures
under the State plan under this title or under any
waiver of such plan that are applicable to determining
the eligibility for medical assistance of any child who
is under 19 years of age (or such higher age as the
State may have elected).
(3) Nonapplication.--During the period that begins on
January 1, 2011, and ends on December 31, 2013, the
requirement under paragraph (1) shall not apply to a
State with respect to nonpregnant, nondisabled adults
who are eligible for medical assistance under the State
plan or under a waiver of the plan at the option of the
State and whose income exceeds 133 percent of the
poverty line (as defined in section 2110(c)(5))
applicable to a family of the size involved if, on or
after December 31, 2010, the State certifies to the
Secretary that, with respect to the State fiscal year
during which the certification is made, the State has a
budget deficit, or with respect to the succeeding State
fiscal year, the State is projected to have a budget
deficit. Upon submission of such a certification to the
Secretary, the requirement under paragraph (1) shall
not apply to the State with respect to any remaining
portion of the period described in the preceding
sentence.
(4) Determination of compliance.--
(A) States shall apply modified adjusted
gross income.--A State's determination of
income in accordance with subsection (e)(14)
shall not be considered to be eligibility
standards, methodologies, or procedures that
are more restrictive than the standards,
methodologies, or procedures in effect under
the State plan or under a waiver of the plan on
the date of enactment of the Patient Protection
and Affordable Care Act for purposes of
determining compliance with the requirements of
paragraph (1), (2), or (3).
(B) States may expand eligibility or move
waivered populations into coverage under the
state plan.--With respect to any period
applicable under paragraph (1), (2), or (3), a
State that applies eligibility standards,
methodologies, or procedures under the State
plan under this title or under any waiver of
the plan that are less restrictive than the
eligibility standards, methodologies, or
procedures, applied under the State plan or
under a waiver of the plan on the date of
enactment of the Patient Protection and
Affordable Care Act, or that makes individuals
who, on such date of enactment, are eligible
for medical assistance under a waiver of the
State plan, after such date of enactment
eligible for medical assistance through a State
plan amendment with an income eligibility level
that is not less than the income eligibility
level that applied under the waiver, or as a
result of the application of subclause (VIII)
of section 1902(a)(10)(A)(i), shall not be
considered to have in effect eligibility
standards, methodologies, or procedures that
are more restrictive than the standards,
methodologies, or procedures in effect under
the State plan or under a waiver of the plan on
the date of enactment of the Patient Protection
and Affordable Care Act for purposes of
determining compliance with the requirements of
paragraph (1), (2), or (3).
(hh)(1) A State may elect to phase-in the extension of
eligibility for medical assistance to individuals described in
subclause (XX) of subsection (a)(10)(A)(ii) based on the
categorical group (including nonpregnant childless adults) or
income, so long as the State does not extend such eligibility
to individuals described in such subclause with higher income
before making individuals described in such subclause with
lower income eligible for medical assistance.
(2) If an individual described in subclause (XX) of
subsection (a)(10)(A)(ii) is the parent of a child who is under
19 years of age (or such higher age as the State may have
elected) who is eligible for medical assistance under the State
plan or under a waiver of such plan, the individual may not be
enrolled under the State plan unless the individual's child is
enrolled under the State plan or under a waiver of the plan or
is enrolled in other health insurance coverage. For purposes of
the preceding sentence, the term ``parent'' includes an
individual treated as a caretaker relative for purposes of
carrying out section 1931.
(ii)(1) Individuals described in this subsection are
individuals--
(A) whose income does not exceed an income
eligibility level established by the State that
does not exceed the highest income eligibility
level established under the State plan under
this title (or under its State child health
plan under title XXI) for pregnant women; and
(B) who are not pregnant.
(2) At the option of a State, individuals described
in this subsection may include individuals who, had
individuals applied on or before January 1, 2007, would
have been made eligible pursuant to the standards and
processes imposed by that State for benefits described
in clause (XVI) of the matter following subparagraph
(G) of section subsection (a)(10) pursuant to a waiver
granted under section 1115.
(3) At the option of a State, for purposes of
subsection (a)(17)(B), in determining eligibility for
services under this subsection, the State may consider
only the income of the applicant or recipient.
(jj) Primary Care Services Defined.--For purposes of
subsection (a)(13)(C), the term ``primary care services''
means--
(1) evaluation and management services that are
procedure codes (for services covered under title
XVIII) for services in the category designated
Evaluation and Management in the Healthcare Common
Procedure Coding System (established by the Secretary
under section 1848(c)(5) as of December 31, 2009, and
as subsequently modified); and
(2) services related to immunization administration
for vaccines and toxoids for which CPT codes 90465,
90466, 90467, 90468, 90471, 90472, 90473, or 90474 (as
subsequently modified) apply under such System.
(kk) Provider and Supplier Screening, Oversight, and
Reporting Requirements.--For purposes of subsection (a)(77),
the requirements of this subsection are the following:
(1) Screening.--The State complies with the process
for screening providers and suppliers under this title,
as established by the Secretary under section
1886(j)(2).
(2) Provisional period of enhanced oversight for new
providers and suppliers.--The State complies with
procedures to provide for a provisional period of
enhanced oversight for new providers and suppliers
under this title, as established by the Secretary under
section 1886(j)(3).
(3) Disclosure requirements.--The State requires
providers and suppliers under the State plan or under a
waiver of the plan to comply with the disclosure
requirements established by the Secretary under section
1886(j)(4).
(4) Temporary moratorium on enrollment of new
providers or suppliers.--
(A) Temporary moratorium imposed by the
secretary.--
(i) In general.--Subject to clause
(ii), the State complies with any
temporary moratorium on the enrollment
of new providers or suppliers imposed
by the Secretary under section
1886(j)(6).
(ii) Exception.--A State shall not be
required to comply with a temporary
moratorium described in clause (i) if
the State determines that the
imposition of such temporary moratorium
would adversely impact beneficiaries'
access to medical assistance.
(B) Moratorium on enrollment of providers and
suppliers.--At the option of the State, the
State imposes, for purposes of entering into
participation agreements with providers or
suppliers under the State plan or under a
waiver of the plan, periods of enrollment
moratoria, or numerical caps or other limits,
for providers or suppliers identified by the
Secretary as being at high-risk for fraud,
waste, or abuse as necessary to combat fraud,
waste, or abuse, but only if the State
determines that the imposition of any such
period, cap, or other limits would not
adversely impact beneficiaries' access to
medical assistance.
(5) Compliance programs.--The State requires
providers and suppliers under the State plan or under a
waiver of the plan to establish, in accordance with the
requirements of section 1866(j)(7), a compliance
program that contains the core elements established
under subparagraph (B) of that section 1866(j)(7) for
providers or suppliers within a particular industry or
category.
(6) Reporting of adverse provider actions.--The State
complies with the national system for reporting
criminal and civil convictions, sanctions, negative
licensure actions, and other adverse provider actions
to the Secretary, through the Administrator of the
Centers for Medicare & Medicaid Services, in accordance
with regulations of the Secretary.
(7) Enrollment and npi of ordering or referring
providers.--The State requires--
(A) all ordering or referring physicians or
other professionals to be enrolled under the
State plan or under a waiver of the plan as a
participating provider; and
(B) the national provider identifier of any
ordering or referring physician or other
professional to be specified on any claim for
payment that is based on an order or referral
of the physician or other professional.
(8) Other state oversight.--Nothing in this
subsection shall be interpreted to preclude or limit
the ability of a State to engage in provider and
supplier screening or enhanced provider and supplier
oversight activities beyond those required by the
Secretary.
payment to states
Sec. 1903. (a) From the sums appropriated therefor, the
Secretary (except as otherwise provided in this section) shall
pay to each State which has a plan approved under this title,
for each quarter, beginning with the quarter commencing January
1, 1966--
(1) an amount equal to the Federal medical assistance
percentage (as defined in section 1905(b), subject to
subsections (g) and (j) of this section and subsection
1923(f)) of the total amount expended during such
quarter as medical assistance under the State plan;
plus
(2)(A) an amount equal to 75 per centum of so much of
the sums expended during such quarter (as found
necessary by the Secretary for the proper and efficient
administration of the State plan) as are attributable
to compensation or training of skilled professional
medical personnel, and staff directly supporting such
personnel, of the State agency or any other public
agency; plus
(B) notwithstanding paragraph (1) or subparagraph
(A), with respect to amounts expended for nursing aide
training and competency evaluation programs, and
competency evaluation programs, described in section
1919(e)(1) (including the costs for nurse aides to
complete such competency evaluation programs),
regardless of whether the programs are provided in or
outside nursing facilities or of the skill of the
personnel involved in such programs, an amount equal to
50 percent (or, for calendar quarters beginning on or
after July 1, 1988, and before October 1, 1990, the
lesser of 90 percent or the Federal medical assistance
percentage plus 25 percentage points) of so much of the
sums expended during such quarter (as found necessary
by the Secretary for the proper and efficient
administration of the State plan) as are attributable
to such programs; plus
(C) an amount equal to 75 percent of so much of the
sums expended during such quarter (as found necessary
by the Secretary for the proper and efficient
administration of the State plan) as are attributable
to preadmission screening and resident review
activities conducted by the State under section
1919(e)(7); plus
(D) for each calendar quarter during--
(i) fiscal year 1991, an amount equal to 90
percent,
(ii) fiscal year 1992, an amount equal to 85
percent,
(iii) fiscal year 1993, an amount equal to 80
percent, and
(iv) fiscal year 1994 and thereafter, an
amount equal to 75 percent,
of so much of the sums expended during such quarter (as
found necessary by the Secretary for the proper and
efficient administration of the State plan) as are
attributable to State activities under section 1919(g);
plus
(E) an amount equal to 75 percent of so much of the
sums expended during such quarter (as found necessary
by the Secretary for the proper and efficient
administration of the State plan) as are attributable
to translation or interpretation services in connection
with the enrollment of, retention of, and use of
services under this title by, children of families for
whom English is not the primary language; plus
(3) an amount equal to--
(A)(i) 90 per centum of so much of the sums
expended during such quarter as are
attributable to the design, development, or
installation of such mechanized claims
processing and information retrieval systems as
the Secretary determines are likely to provide
more efficient, economical, and effective
administration of the plan and to be compatible
with the claims processing and information
retrieval systems utilized in the
administration of title XVIII, including the
State's share of the cost of installing such a
system to be used jointly in the administration
of such State's plan and the plan of any other
State approved under this title,
(ii) 90 per centum of so much of the sums
expended during any such quarter in the fiscal
year ending June 30, 1972, or the fiscal year
ending June 30, 1973, as are attributable to
the design, development, or installation of
cost determination systems for State-owned
general hospitals (except that the total amount
paid to all States under this clause for either
such fiscal year shall not exceed $150,000),
and
(iii) an amount equal to the Federal medical
assistance percentage (as defined in section
1905(b)) of so much of the sums expended during
such quarter (as found necessary by the
Secretary for the proper and efficient
administration of the State plan) as are
attributable to such developments or
modifications of systems of the type described
in clause (i) as are necessary for the
efficient collection and reporting on child
health measures; and
(B) 75 per centum of so much of the sums
expended during such quarter as are
attributable to the operation of systems
(whether such systems are operated directly by
the State or by another person under a contract
with the State) of the type described in
subparagraph (A)(i) (whether or not designed,
developed, or installed with assistance under
such subparagraph) which are approved by the
Secretary and which include provision for
prompt written notice to each individual who is
furnished services covered by the plan, or to
each individual in a sample group of
individuals who are furnished such services, of
the specific services (other than confidential
services) so covered, the name of the person or
persons furnishing the services, the date or
dates on which the services were furnished, and
the amount of the payment or payments made
under the plan on account of the services; and
(C)(i) 75 per centum of the sums expended
with respect to costs incurred during such
quarter (as found necessary by the Secretary
for the proper and efficient administration of
the State plan) as are attributable to the
performance of medical and utilization review
by a utilization and quality control peer
review organization or by an entity which meets
the requirements of section 1152, as determined
by the Secretary, under a contract entered into
under section 1902(d); and
(ii) 75 percent of the sums expended with
respect to costs incurred during such quarter
(as found necessary by the Secretary for the
proper and efficient administration of the
State plan) as are attributable to the
performance of independent external reviews
conducted under section 1932(c)(2); and
(D) 75 percent of so much of the sums
expended by the State plan during a quarter in
1991, 1992, or 1993, as the Secretary
determines is attributable to the statewide
adoption of a drug use review program which
conforms to the requirements of section
1927(g);
(E) 50 percent of the sums expended with
respect to costs incurred during such quarter
as are attributable to providing--
(i) services to identify and educate
individuals who are likely to be
eligible for medical assistance under
this title and who have Sickle Cell
Disease or who are carriers of the
sickle cell gene, including education
regarding how to identify such
individuals; or
(ii) education regarding the risks of
stroke and other complications, as well
as the prevention of stroke and other
complications, in individuals who are
likely to be eligible for medical
assistance under this title and who
have Sickle Cell Disease; and
(F)(i) 100 percent of so much of the sums
expended during such quarter as are
attributable to payments to Medicaid providers
described in subsection (t)(1) to encourage the
adoption and use of certified EHR technology;
and
(ii) 90 percent of so much of the sums
expended during such quarter as are
attributable to payments for reasonable
administrative expenses related to the
administration of payments described in clause
(i) if the State meets the condition described
in subsection (t)(9); plus
(H)(i)\16\ 90 percent of the sums expended
during the quarter as are attributable to the
design, development, or installation of such
mechanized verification and information
retrieval systems as the Secretary determines
are necessary to implement section 1902(ee)
(including a system described in paragraph
(2)(B) thereof), and
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\16\So in law, there is no subparagraph (G).
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(ii) 75 percent of the sums expended during
the quarter as are attributable to the
operation of systems to which clause (i)
applies, plus
(4) an amount equal to 100 percent of the sums
expended during the quarter which are attributable to
the costs of the implementation and operation of the
immigration status verification system described in
section 1137(d); plus
(5) an amount equal to 90 per centum of the sums
expended during such quarter which are attributable to
the offering, arranging, and furnishing (directly or on
a contract basis) of family planning services and
supplies;
(6) subject to subsection (b)(3), an amount equal
to--
(A) 90 per centum of the sums expended during
such a quarter within the twelve-quarter period
beginning with the first quarter in which a
payment is made to the State pursuant to this
paragraph, and
(B) 75 per centum of the sums expended during
each succeeding calendar quarter,
with respect to costs incurred during such quarter (as
found necessary by the Secretary for the elimination of
fraud in the provision and administration of medical
assistance provided under the State plan) which are
attributable to the establishment and operation of
(including the training of personnel employed by) a
State medicaid fraud control unit (described in
subsection (q)); plus
(7) subject to section 1919(g)(3)(B), an amount equal
to 50 per centum of the remainder of the amounts
expended during such quarter as found necessary by the
Secretary for the proper and efficient administration
of the State plan.
(b)(1) Notwithstanding the preceding provisions of this
section, the amount determined under subsection (a)(1) for any
State for any quarter beginning after December 31, 1969, shall
not take into account any amounts expended as medical
assistance with respect to individuals aged 65 or over and
disabled individuals entitled to hospital insurance benefits
under title XVIII which would not have been so expended if the
individuals involved had been enrolled in the insurance program
established by part B of title XVIII, other than amounts
expended under provisions of the plan of such State required by
section 1902(a)(34).
(2) For limitation on Federal participation for capital
expenditures which are out of conformity with a comprehensive
plan of a State or areawide planning agency, see section 1122.
(3) The amount of funds which the Secretary is otherwise
obligated to pay a State during a quarter under subsection
(a)(6) may not exceed the higher of--
(A) $125,000, or
(B) one-quarter of 1 per centum of the sums expended
by the Federal, State, and local governments during the
previous quarter in carrying out the State's plan under
this title.
(4) Amounts expended by a State for the use of an enrollment
broker in marketing medicaid managed care organizations and
other managed care entities to eligible individuals under this
title shall be considered, for purposes of subsection (a)(7),
to be necessary for the proper and efficient administration of
the State plan but only if the following conditions are met
with respect to the broker:
(A) The broker is independent of any such entity and
of any health care providers (whether or not any such
provider participates in the State plan under this
title) that provide coverage of services in the same
State in which the broker is conducting enrollment
activities.
(B) No person who is an owner, employee, consultant,
or has a contract with the broker either has any direct
or indirect financial interest with such an entity or
health care provider or has been excluded from
participation in the program under this title or title
XVIII or debarred by any Federal agency, or subject to
a civil money penalty under this Act.
(5) Notwithstanding the preceding provisions of this section,
the amount determined under subsection (a)(1) for any State
shall be decreased in a quarter by the amount of any health
care related taxes (described in section 1902(w)(3)(A)) that
are imposed on a hospital described in subsection\17\ (w)(3)(F)
in that quarter.
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\17\So in original. Probably should be ``section 1902''.
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(c) Nothing in this title shall be construed as prohibiting
or restricting, or authorizing the Secretary to prohibit or
restrict, payment under subsection (a) for medical assistance
for covered services furnished to a child with a disability
because such services are included in the child's
individualized education program established pursuant to part B
of the Individuals with Disabilities Education Act or furnished
to an infant or toddler with a disability because such services
are included in the child's individualized family service plan
adopted pursuant to part C of such Act.
(d)(1) Prior to the beginning of each quarter, the Secretary
shall estimate the amount to which a State will be entitled
under subsections (a) and (b) for such quarter, such estimates
to be based on (A) a report filed by the State containing its
estimate of the total sum to be expended in such quarter in
accordance with the provisions of such subsections, and stating
the amount appropriated or made available by the State and its
political subdivisions for such expenditures in such quarter,
and if such amount is less than the State's proportionate share
of the total sum of such estimated expenditures, the source or
sources from which the difference is expected to be derived,
and (B) such other investigation as the Secretary may find
necessary.
(2)(A) The Secretary shall then pay to the State, in such
installments as he may determine, the amount so estimated,
reduced or increased to the extent of any overpayment or
underpayment which the Secretary determines was made under this
section to such State for any prior quarter and with respect to
which adjustment has not already been made under this
subsection.
(B) Expenditures for which payments were made to the State
under subsection (a) shall be treated as an overpayment to the
extent that the State or local agency administering such plan
has been reimbursed for such expenditures by a third party
pursuant to the provisions of its plan in compliance with
section 1902(a)(25).
(C) For purposes of this subsection, when an overpayment is
discovered, which was made by a State to a person or other
entity, the State shall have a period of 1 year in which to
recover or attempt to recover such overpayment before
adjustment is made in the Federal payment to such State on
account of such overpayment. Except as otherwise provided in
subparagraph (D), the adjustment in the Federal payment shall
be made at the end of the 1-year period, whether or not
recovery was made.
(D)(i) In any case where the State is unable to recover a
debt which represents an overpayment (or any portion thereof)
made to a person or other entity on account of such debt having
been discharged in bankruptcy or otherwise being uncollectable,
no adjustment shall be made in the Federal payment to such
State on account of such overpayment (or portion thereof).
(ii) In any case where the State is unable to recover a debt
which represents an overpayment (or any portion thereof) made
to a person or other entity due to fraud within 1 year of
discovery because there is not a final determination of the
amount of the overpayment under an administrative or judicial
process (as applicable), including as a result of a judgment
being under appeal, no adjustment shall be made in the Federal
payment to such State on account of such overpayment (or
portion thereof) before the date that is 30 days after the date
on which a final judgment (including, if applicable, a final
determination on an appeal) is made.
(3)(A) The pro rata share to which the United States is
equitably entitled, as determined by the Secretary, of the net
amount recovered during any quarter by the State or any
political subdivision thereof with respect to medical
assistance furnished under the State plan shall be considered
an overpayment to be adjusted under this subsection.
(B)(i) Subparagraph (A) and paragraph (2)(B) shall not apply
to any amount recovered or paid to a State as part of the
comprehensive settlement of November 1998 between manufacturers
of tobacco products, as defined in section 5702(d) of the
Internal Revenue Code of 1986, and State Attorneys General, or
as part of any individual State settlement or judgment reached
in litigation initiated or pursued by a State against one or
more such manufacturers.
(ii) Except as provided in subsection (i)(19), a State may
use amounts recovered or paid to the State as part of a
comprehensive or individual settlement, or a judgment,
described in clause (i) for any expenditures determined
appropriate by the State.
(4) Upon the making of any estimate by the Secretary under
this subsection, any appropriations available for payments
under this section shall be deemed obligated.
(5) In any case in which the Secretary estimates that there
has been an overpayment under this section to a State on the
basis of a claim by such State that has been disallowed by the
Secretary under section 1116(d), and such State disputes such
disallowance, the amount of the Federal payment in controversy
shall, at the option of the State, be retained by such State or
recovered by the Secretary pending a final determination with
respect to such payment amount. If such final determination is
to the effect that any amount was properly disallowed, and the
State chose to retain payment of the amount in controversy, the
Secretary shall offset, from any subsequent payments made to
such State under this title, an amount equal to the proper
amount of the disallowance plus interest on such amount
disallowed for the period beginning on the date such amount was
disallowed and ending on the date of such final determination
at a rate (determined by the Secretary) based on the average of
the bond equivalent of the weekly 90-day treasury bill auction
rates during such period.
(6)(A) Each State (as defined in subsection (w)(7)(D)) shall
include, in the first report submitted under paragraph (1)
after the end of each fiscal year, information related to--
(i) provider-related donations made to the State or
units of local government during such fiscal year, and
(ii) health care related taxes collected by the State
or such units during such fiscal year.
(B) Each State shall include, in the first report submitted
under paragraph (1) after the end of each fiscal year,
information related to the total amount of payment adjustments
made, and the amount of payment adjustments made to individual
providers (by provider), under section 1923(c) during such
fiscal year.
(e) A State plan approved under this title may include, as a
cost with respect to hospital services under the plan under
this title, periodic expenditures made to reflect transitional
allowances established with respect to a hospital closure or
conversion under section 1884.
(f)(1)(A) Except as provided in paragraph (4), payment under
the preceding provisions of this section shall not be made with
respect to any amount expended as medical assistance in a
calendar quarter, in any State, for any member of a family the
annual income of which exceeds the applicable income limitation
determined under this paragraph.
(B)(i) Except as provided in clause (ii) of this
subparagraph, the applicable income limitation with respect to
any family is the amount determined, in accordance with
standards prescribed by the Secretary, to be equivalent to
133\1/3\ percent of the highest amount which would ordinarily
be paid to a family of the same size without any income or
resources, in the form of money payments, under the plan of the
State approved under part A of title IV of this Act.
(ii) If the Secretary finds that the operation of a uniform
maximum limits payments to families of more than one size, he
may adjust the amount otherwise determined under clause (i) to
take account of families of different sizes.
(C) The total amount of any applicable income limitation
determined under subparagraph (B) shall, if it is not a
multiple of $100 or such other amount as the Secretary may
prescribe, be rounded to the next higher multiple of $100 or
such other amount, as the case may be.
(2)(A) In computing a family's income for purposes of
paragraph (1), there shall be excluded any costs (whether in
the form of insurance premiums or otherwise and regardless of
whether such costs are reimbursed under another public program
of the State or political subdivision thereof) incurred by such
family for medical care or for any other type of remedial care
recognized under State law or, (B) notwithstanding section 1916
at State option, an amount paid by such family, at the family's
option, to the State, provided that the amount, when combined
with costs incurred in prior months, is sufficient when
excluded from the family's income to reduce such family's
income below the applicable income limitation described in
paragraph (1). The amount of State expenditures for which
medical assistance is available under subsection (a)(1) will be
reduced by amounts paid to the State pursuant to this
subparagraph.
(3) For purposes of paragraph (1)(B), in the case of a family
consisting of only one individual, the ``highest amount which
would ordinarily be paid'' to such family under the State's
plan approved under part A of title IV of this Act shall be the
amount determined by the State agency (on the basis of
reasonable relationship to the amounts payable under such plan
to families consisting of two or more persons) to be the amount
of the aid which would ordinarily be payable under such plan to
a family (without any income or resources) consisting of one
person if such plan provided for aid to such a family.
(4) The limitations on payment imposed by the preceding
provisions of this subsection shall not apply with respect to
any amount expended by a State as medical assistance for any
individual described in section 1902(a)(10)(A)(i)(III),
1902(a)(10)(A)(i)(IV), 1902(a)(10)(A)(i)(V),
1902(a)(10)(A)(i)(VI), 1902(a)(10)(A)(i)(VII),
1902(a)(10)(A)(i)(VIII),1902(a)(10)(A)(i)(IX),
1902(a)(10)(A)(ii)(IX), 1902(a)(10)(A)(ii)(X),
1902(a)(10)(A)(ii)(XIII), 1902(a)(10)(A)(ii)(XIV),
or\18\1902(a)(10)(A)(ii)(XV), 1902(a)(10)(A)(ii)(XVI),
1902(a)(10)(A)(ii)(XVII), 1902(a)(10)(A)(ii)(XVIII),
1902(a)(10)(A)(ii)(XIX), 1902(a)(10)(A)(ii)(XX),
1902(a)(10)(A)(ii)(XXI), 1902(a)(10)(A)(ii)(XXII), 1905(p)(1)
or for any individual--
---------------------------------------------------------------------------
\18\So in law. The word ``or'' probably should precede
``1905(p)(1).
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(A) who is receiving aid or assistance under any plan
of the State approved under title I, X, XIV or XVI, or
part A of title IV, or with respect to whom
supplemental security income benefits are being paid
under title XVI, or
(B) who is not receiving such aid or assistance, and
with respect to whom such benefits are not being paid,
but (i) is eligible to receive such aid or assistance,
or to have such benefits paid with respect to him, or
(ii) would be eligible to receive such aid or
assistance, or to have such benefits paid with respect
to him if he were not in a medical institution, or
(C) with respect to whom there is being paid, or who
is eligible, or would be eligible if he were not in a
medical institution, to have paid with respect to him,
a State supplementary payment and is eligible for
medical assistance equal in amount, duration, and scope
to the medical assistance made available to individuals
described in section 1902(a)(10)(A), or who is a PACE
program eligible individual enrolled in a PACE program
under section 1934, but only if the income of such
individual (as determined under section 1612, but
without regard to subsection (b) thereof) does not
exceed 300 percent of the supplemental security income
benefit rate established by section 1611(b)(1),
at the time of the provision of the medical assistance giving
rise to such expenditure.
(g)(1) Subject to paragraph (3), with respect to amounts paid
for the following services furnished under the State plan after
June 30, 1973 (other than services furnished pursuant to a
contract with a health maintenance organization as defined in
section 1876 or which is a qualified health maintenance
organization (as defined in section 1310(d) of the Public
Health Service Act)), the Federal medical assistance percentage
shall be decreased as follows: After an individual has received
inpatient hospital services or services in an intermediate care
facility for the mentally retarded for 60 days or inpatient
mental hospital services for 90 days (whether or not such days
are consecutive), during any fiscal year, the Federal medical
assistance percentage with respect to amounts paid for any such
care furnished thereafter to such individual shall be decreased
by a per centum thereof (determined under paragraph (5)) unless
the State agency responsible for the administration of the plan
makes a showing satisfactory to the Secretary that, with
respect to each calendar quarter for which the State submits a
request for payment at the full Federal medical assistance
percentage for amounts paid for inpatient hospital services or
services in an intermediate care facility for the mentally
retarded furnished beyond 60 days (or inpatient mental hospital
services furnished beyond 90 days), such State has an effective
program of medical review of the care of patients in mental
hospitals and intermediate care facilities for the mentally
retarded pursuant to paragraphs (26) and (31) of section
1902(a) whereby the professional management of each case is
reviewed and evaluated at least annually by independent
professional review teams. In determining the number of days on
which an individual has received services described in this
subsection, there shall not be counted any days with respect to
which such individual is entitled to have payments made (in
whole or in part) on his behalf under section 1812.
(2) The Secretary shall, as part of his validation procedures
under this subsection, conduct timely sample onsite surveys of
private and public institutions in which recipients of medical
assistance may receive care and services under a State plan
approved under this title, and his findings with respect to
such surveys (as well as the showings of the State agency
required under this subsection) shall be made available for
public inspection.
(3)(A) No reduction in the Federal medical assistance
percentage of a State otherwise required to be imposed under
this subsection shall take effect--
(i) if such reduction is due to the State's
unsatisfactory or invalid showing made with respect to
a calendar quarter beginning before January 1, 1977;
(ii) before January 1, 1978;
(iii) unless a notice of such reduction has been
provided to the State at least 30 days before the date
such reduction takes effect; or
(iv) due to the State's unsatisfactory or invalid
showing made with respect to a calendar quarter
beginning after September 30, 1977, unless notice of
such reduction has been provided to the State no later
than the first day of the fourth calendar quarter
following the calendar quarter with respect to which
such showing was made.
(B) The Secretary shall waive application of any reduction in
the Federal medical assistance percentage of a State otherwise
required to be imposed under paragraph (1) because a showing by
the State, made under such paragraph with respect to a calendar
quarter ending after January 1, 1977, and before January 1,
1978, is determined to be either unsatisfactory under such
paragraph or invalid under paragraph (2), if the Secretary
determines that the State's showing made under paragraph (1)
with respect to any calendar quarter ending on or before
December 31, 1978, is satisfactory under such paragraph and is
valid under paragraph (2).
(4)(A) The Secretary may not find the showing of a State,
with respect to a calendar quarter under paragraph (1), to be
satisfactory if the showing is submitted to the Secretary later
than the 30th day after the last day of the calendar quarter,
unless the State demonstrates to the satisfaction of the
Secretary good cause for not meeting such deadline.
(B) The Secretary shall find a showing of a State, with
respect to a calendar quarter under paragraph (1), to be
satisfactory under such paragraph with respect to the
requirement that the State conduct annual onsite inspections in
mental hospitals and intermediate care facilities for the
mentally retarded under paragraphs (26) and (31) of section
1902(a), if the showing demonstrates that the State has
conducted such an onsite inspection during the 12-month period
ending on the last date of the calendar quarter--
(i) in each of not less than 98 per centum of the
number of such hospitals and facilities requiring such
inspection, and
(ii) in every such hospital or facility which has 200
or more beds,
and that, with respect to such hospitals and facilities not
inspected within such period, the State has exercised good
faith and due diligence in attempting to conduct such
inspection, or if the State demonstrates to the satisfaction of
the Secretary that it would have made such a showing but for
failings of a technical nature only.
(5) In the case of a State's unsatisfactory or invalid
showing made with respect to a type of facility or
institutional services in a calendar quarter, the per centum
amount of the reduction of the State's Federal medical
assistance percentage for that type of services under paragraph
(1) is equal to 33\1/3\ per centum multiplied by a fraction,
the denominator of which is equal to the total number of
patients receiving that type of services in that quarter under
the State plan in facilities or institutions for which a
showing was required to be made under this subsection, and the
numerator of which is equal to the number of such patients
receiving such type of services in that quarter in those
facilities or institutions for which a satisfactory and valid
showing was not made for that calendar quarter.
(6)(A) Recertifications required under section 1902(a)(44)
shall be conducted at least every 60 days in the case of
inpatient hospital services.
(B) Such recertifications in the case of services in an
intermediate care facility for the mentally retarded shall be
conducted at least--
(i) 60 days after the date of the initial
certification,
(ii) 180 days after the date of the initial
certification,
(iii) 12 months after the date of the initial
certification,
(iv) 18 months after the date of the initial
certification,
(v) 24 months after the date of the initial
certification, and
(vi) every 12 months thereafter.
(C) For purposes of determining compliance with the schedule
established by this paragraph, a recertification shall be
considered to have been done on a timely basis if it was
performed not later than 10 days after the date the
recertification was otherwise required and the State
establishes good cause why the physician or other person making
such recertification did not meet such schedule.
(i) Payment under the preceding provisions of this section
shall not be made--
(1) for organ transplant procedures unless the State
plan provides for written standards respecting the
coverage of such procedures and unless such standards
provide that--
(A) similarly situated individuals are
treated alike; and
(B) any restriction, on the facilities or
practitioners which may provide such
procedures, is consistent with the
accessibility of high quality care to
individuals eligible for the procedures under
the State plan; or
(2) with respect to any amount expended for an item
or service (other than an emergency item or service,
not including items or services furnished in an
emergency room of a hospital) furnished--
(A) under the plan by any individual or
entity during any period when the individual or
entity is excluded from participation under
title V, XVIII, or XX or under this title
pursuant to section 1128, 1128A, 1156, or
1842(j)(2),
(B) at the medical direction or on the
prescription of a physician, during the period
when such physician is excluded from
participation under title V, XVIII, or XX or
under this title pursuant to section 1128,
1128A, 1156, or 1842(j)(2) and when the person
furnishing such item or service knew or had
reason to know of the exclusion (after a
reasonable time period after reasonable notice
has been furnished to the person); or
(C) by any individual or entity to whom the
State has failed to suspend payments under the
plan during any period when there is pending an
investigation of a credible allegation of fraud
against the individual or entity, as determined
by the State in accordance with regulations
promulgated by the Secretary for purposes of
section 1862(o) and this subparagraph, unless
the State determines in accordance with such
regulations there is good cause not to suspend
such payments; or
(3) with respect to any amount expended for inpatient
hospital services furnished under the plan (other than
amounts attributable to the special situation of a
hospital which serves a disproportionate number of low
income patients with special needs) to the extent that
such amount exceeds the hospital's customary charges
with respect to such services or (if such services are
furnished under the plan by a public institution free
of charge or at nominal charges to the public) exceeds
an amount determined on the basis of those items
(specified in regulations prescribed by the Secretary)
included in the determination of such payment which the
Secretary finds will provide fair compensation to such
institution for such services; or
(4) with respect to any amount expended for care or
services furnished under the plan by a hospital unless
such hospital has in effect a utilization review plan
which meets the requirements imposed by section 1861(k)
for purposes of title XVIII; and if such hospital has
in effect such a utilization review plan for purposes
of title XVIII, such plan shall serve as the plan
required by this subsection (with the same standards
and procedures and the same review committee or group)
as a condition of payment under this title; the
Secretary is authorized to waive the requirements of
this paragraph if the State agency demonstrates to his
satisfaction that it has in operation utilization
review procedures which are superior in their
effectiveness to the procedures required under section
1861(k); or
(5) with respect to any amount expended for any drug
product for which payment may not be made under part B
of title XVIII because of section 1862(c); or
(6) with respect to any amount expended for inpatient
hospital tests (other than in emergency situations) not
specifically ordered by the attending physician or
other responsible practitioner; or
(7) with respect to any amount expended for clinical
diagnostic laboratory tests performed by a physician,
independent laboratory, or hospital, to the extent such
amount exceeds the amount that would be recognized
under section 1833(h) for such tests performed for an
individual enrolled under part B of title XVIII; or
(8) with respect to any amount expended for medical
assistance (A) for nursing facility services to
reimburse (or otherwise compensate) a nursing facility
for payment of a civil money penalty imposed under
section 1919(h) or (B) for home and community care to
reimburse (or otherwise compensate) a provider of such
care for payment of a civil money penalty imposed under
this title or title XI or for legal expenses in defense
of an exclusion or civil money penalty under this title
or title XI if there is no reasonable legal ground for
the provider's case; or
(10)(A) with respect to covered outpatient drugs
unless there is a rebate agreement in effect under
section 1927 with respect to such drugs or unless
section 1927(a)(3) applies,
(B) with respect to any amount expended for an
innovator multiple source drug (as defined in section
1927(k)) dispensed on or after July 1, 1991, if, under
applicable State law, a less expensive multiple source
drug could have been dispensed, but only to the extent
that such amount exceeds the upper payment limit for
such multiple source drug;
(C)\19\ with respect to covered outpatient
drugs described in section 1927(a)(7), unless
information respecting utilization data and
coding on such drugs that is required to be
submitted under such section is submitted in
accordance with such section, and
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\19\Margin so in law.
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(D) with respect to any amount expended for
reimbursement to a pharmacy under this title for the
ingredient cost of a covered outpatient drug for which
the pharmacy has already received payment under this
title (other than with respect to a reasonable
restocking fee for such drug); or
(11) with respect to any amount expended for
physicians' services furnished on or after the first
day of the first quarter beginning more than 60 days
after the date of establishment of the physician
identifier system under section 1902(x), unless the
claim for the services includes the unique physician
identifier provided under such system; or
(13) with respect to any amount expended to reimburse
(or otherwise compensate) a nursing facility for
payment of legal expenses associated with any action
initiated by the facility that is dismissed on the
basis that no reasonable legal ground existed for the
institution of such action; or
(14) with respect to any amount expended on
administrative costs to carry out the program under
section 1928; or
(15) with respect to any amount expended for a
single-antigen vaccine and its administration in any
case in which the administration of a combined-antigen
vaccine was medically appropriate (as determined by the
Secretary); or
(16) with respect to any amount expended for which
funds may not be used under the Assisted Suicide
Funding Restriction Act of 1997; or
(17) with respect to any amount expended for roads,
bridges, stadiums, or any other item or service not
covered under a State plan under this title; or
(18) with respect to any amount expended for home
health care services provided by an agency or
organization unless the agency or organization provides
the State agency on a continuing basis a surety bond in
a form specified by the Secretary under paragraph (7)
of section 1861(o) and in an amount that is not less
than $50,000 or such comparable surety bond as the
Secretary may permit under the last sentence of such
section; or
(19) with respect to any amount expended on
administrative costs to initiate or pursue litigation
described in subsection (d)(3)(B);
(20) with respect to amounts expended for medical
assistance provided to an individual described in
subclause (XV) or (XVI) of section 1902(a)(10)(A)(ii)
for a fiscal year unless the State demonstrates to the
satisfaction of the Secretary that the level of State
funds expended for such fiscal year for programs to
enable working individuals with disabilities to work
(other than for such medical assistance) is not less
than the level expended for such programs during the
most recent State fiscal year ending before the date of
the enactment of this paragraph;
(21) with respect to amounts expended for covered
outpatient drugs described in section 1927(d)(2)(K)
(relating to drugs when used for treatment of sexual or
erectile dysfunction);
(22) with respect to amounts expended for medical
assistance for an individual who declares under section
1137(d)(1)(A) to be a citizen or national of the United
States for purposes of establishing eligibility for
benefits under this title, unless the requirement of
section 1902(a)(46)(B) is met;
(23) with respect to amounts expended for medical
assistance for covered outpatient drugs (as defined in
section 1927(k)(2)) for which the prescription was
executed in written (and non-electronic) form unless
the prescription was executed on a tamper-resistant
pad;
(24) if a State is required to implement an asset
verification program under section 1940 and fails to
implement such program in accordance with such section,
with respect to amounts expended by such State for
medical assistance for individuals subject to asset
verification under such section, unless--
(A) the State demonstrates to the Secretary's
satisfaction that the State made a good faith
effort to comply;
(B) not later than 60 days after the date of
a finding that the State is in noncompliance,
the State submits to the Secretary (and the
Secretary approves) a corrective action plan to
remedy such noncompliance; and
(C) not later than 12 months after the date
of such submission (and approval), the State
fulfills the terms of such corrective action
plan;
(25)\20\ with respect to any amounts expended for
medical assistance for individuals for whom the State
does not report enrollee encounter data (as defined by
the Secretary) to the Medicaid Statistical Information
System (MSIS) in a timely manner (as determined by the
Secretary);
---------------------------------------------------------------------------
\20\The placement of paragraph (25) after paragraph (24) as shown
above has been carried out to reflect the probable intent of Congress.
Section 6402(c)(3) of Public Law 111-148 inserts paragraph (25) ``at
the end'' of subsection (i), which would result in paragraph (25)
technically appearing after the continuation text in subsection (i).
The identical placement issue with paragraph (26) as with
paragraph (25). See amendment made by section 2001(a)(2)(B)(iii) of
Public Law 111-148.
---------------------------------------------------------------------------
(26) with respect to any amounts expended for medical
assistance for individuals described in subclause
(VIII) of subsection (a)(10)(A)(i) other than medical
assistance provided through benchmark coverage
described in section 1937(b)(1) or benchmark equivalent
coverage described in section 1937(b)(2); or
(27) with respect to any amounts expended by the
State on the basis of a fee schedule for items
described in section 1861(n) and furnished on or after
January 1, 2019, as determined in the aggregate with
respect to each class of such items as defined by the
Secretary, in excess of the aggregate amount, if any,
that would be paid for such items within such class on
a fee-for-service basis under the program under part B
of title XVIII, including, as applicable, under a
competitive acquisition program under section 1847 in
an area of the State.
Nothing in paragraph (1) shall be construed as permitting a
State to provide services under its plan under this title that
are not reasonable in amount, duration, and scope to achieve
their purpose. Paragraphs (1), (2), (16), (17), and (18) shall
apply with respect to items or services furnished and amounts
expended by or through a managed care entity (as defined in
section 1932(a)(1)(B)) in the same manner as such paragraphs
apply to items or services furnished and amounts expended
directly by the State.
(j) Notwithstanding the preceding provisions of this section,
the amount determined under subsection (a)(1) for any State for
any quarter shall be adjusted in accordance with section 1914.
(k) The Secretary is authorized to provide at the request of
any State (and without cost to such State) such technical and
actuarial assistance as may be necessary to assist such State
to contract with any medicaid managed care organization which
meets the requirements of subsection (m) of this section for
the purpose of providing medical care and services to
individuals who are entitled to medical assistance under this
title.
(m)(1)(A) The term ``medicaid managed care organization''
means a health maintenance organization, an eligible
organization with a contract under section 1876 or a
Medicare+Choice organization with a contract under part C of
title XVIII, a provider sponsored organization, or any other
public or private organization, which meets the requirement of
section 1902(w) and--
(i) makes services it provides to individuals
eligible for benefits under this title accessible to
such individuals, within the area served by the
organization, to the same extent as such services are
made accessible to individuals (eligible for medical
assistance under the State plan) not enrolled with the
organization, and
(ii) has made adequate provision against the risk of
insolvency, which provision is satisfactory to the
State, meets the requirements of subparagraph (C)(i)
(if applicable), and which assures that individuals
eligible for benefits under this title are in no case
held liable for debts of the organization in case of
the organization's insolvency.
An organization that is a qualified health maintenance
organization (as defined in section 1310(d) of the Public
Health Service Act) is deemed to meet the requirements of
clauses (i) and (ii).
(B) The duties and functions of the Secretary, insofar as
they involve making determinations as to whether an
organization is a medicaid managed care organization within the
meaning of subparagraph (A), shall be integrated with the
administration of section 1312 (a) and (b) of the Public Health
Service Act.
(C)(i) Subject to clause (ii), a provision meets the
requirements of this subparagraph for an organization if the
organization meets solvency standards established by the State
for private health maintenance organizations or is licensed or
certified by the State as a risk-bearing entity.
(ii) Clause (i) shall not apply to an organization if--
(I) the organization is not responsible for the
provision (directly or through arrangements with
providers of services) of inpatient hospital services
and physicians' services;
(II) the organization is a public entity;
(III) the solvency of the organization is guaranteed
by the State; or
(IV) the organization is (or is controlled by) one or
more Federally-qualified\21\ health centers and meets
solvency standards established by the State for such an
organization.
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\21\So in original. Probably should be ``federally qualified''.
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For purposes of subclause (IV), the term ``control'' means the
possession, whether direct or indirect, of the power to direct
or cause the direction of the management and policies of the
organization through membership, board representation, or an
ownership interest equal to or greater than 50.1 percent.
(2)(A) Except as provided in subparagraphs (B), (C), and (G),
no payment shall be made under this title to a State with
respect to expenditures incurred by it for payment (determined
under a prepaid capitation basis or under any other risk basis)
for services provided by any entity (including a health
insuring organization) which is responsible for the provision
(directly or through arrangements with providers of services)
of inpatient hospital services and any other service described
in paragraph (2), (3), (4), (5), or (7) of section 1905(a) or
for the provision of any three or more of the services
described in such paragraphs unless--
(i) the Secretary has determined that the entity is a
medicaid managed care organization organization as
defined in paragraph (1);
(iii) such services are provided for the benefit of
individuals eligible for benefits under this title in
accordance with a contract between the State and the
entity under which prepaid payments to the entity are
made on an actuarially sound basis and under which the
Secretary must provide prior approval for contracts
providing for expenditures in excess of $1,000,000 for
1998 and, for a subsequent year, the amount established
under this clause for the previous year increased by
the percentage increase in the consumer price index for
all urban consumers over the previous year;
(iv) such contract provides that the Secretary and
the State (or any person or organization designated by
either) shall have the right to audit and inspect any
books and records of the entity (and of any
subcontractor) that pertain (I) to the ability of the
entity to bear the risk of potential financial losses,
or (II) to services performed or determinations of
amounts payable under the contract;
(v) such contract provides that in the entity's
enrollment, reenrollment, or disenrollment of
individuals who are eligible for benefits under this
title and eligible to enroll, reenroll, or disenroll
with the entity pursuant to the contract, the entity
will not discriminate among such individuals on the
basis of their health status or requirements for health
care services;
(vi) such contract (I) permits individuals who have
elected under the plan to enroll with the entity for
provision of such benefits to terminate such enrollment
in accordance with section 1932(a)(4), and (II)
provides for notification in accordance with such
section of each such individual, at the time of the
individual's enrollment, of such right to terminate
such enrollment;
(vii) such contract provides that, in the case of
medically necessary services which were provided (I) to
an individual enrolled with the entity under the
contract and entitled to benefits with respect to such
services under the State's plan and (II) other than
through the organization because the services were
immediately required due to an unforeseen illness,
injury, or condition, either the entity or the State
provides for reimbursement with respect to those
services,
(viii) such contract provides for disclosure of
information in accordance with section 1124 and
paragraph (4) of this subsection;
(ix)\22\ such contract provides, in the case of an
entity that has entered into a contract for the
provision of services with a Federally-qualified health
center or a rural health clinic, that the entity shall
provide payment that is not less than the level and
amount of payment which the entity would make for the
services if the services were furnished by a provider
which is not a Federally-qualified health center or a
rural health clinic;
---------------------------------------------------------------------------
\22\Section 4712(c)(2) of Public Law 105-33 (111 Stat. 509)
provides as follows:
(c) End of Transitional Payment Rules.--Effective for services
furnished on or after October 1, 2003--
---------------------------------------------------------------------------
(1) * * *
(2) clause (ix) of section 1903(m)(2)(A) (42 U.S.C.
1396b(m)(2)(A)) is repealed.
(x) any physician incentive plan that it operates
meets the requirements described in section 1876(i)(8);
(xi) such contract provides for maintenance of
sufficient patient encounter data to identify the
physician who delivers services to patients and for the
provision of such data to the State at a frequency and
level of detail to be specified by the Secretary;
(xii) such contract, and the entity complies with the
applicable requirements of section 1932; and
(xiii)\23\ such contract provides that (I)
covered outpatient drugs dispensed to
individuals eligible for medical assistance who
are enrolled with the entity shall be subject
to the same rebate required by the agreement
entered into under section 1927 as the State is
subject to and that the State shall collect
such rebates from manufacturers, (II)
capitation rates paid to the entity shall be
based on actual cost experience related to
rebates and subject to the Federal regulations
requiring actuarially sound rates, and (III)
the entity shall report to the State, on such
timely and periodic basis as specified by the
Secretary in order to include in the
information submitted by the State to a
manufacturer and the Secretary under section
1927(b)(2)(A), information on the total number
of units of each dosage form and strength and
package size by National Drug Code of each
covered outpatient drug dispensed to
individuals eligible for medical assistance who
are enrolled with the entity and for which the
entity is responsible for coverage of such drug
under this subsection (other than covered
outpatient drugs that under subsection (j)(1)
of section 1927 are not subject to the
requirements of that section) and such other
data as the Secretary determines necessary to
carry out this subsection.
---------------------------------------------------------------------------
\23\Margin for clause (xiii) so in law.
---------------------------------------------------------------------------
(B) Subparagraph (A) except with respect to clause (ix) of
subparagraph (A), does not apply with respect to payments under
this title to a State with respect to expenditures incurred by
it for payment for services provided by an entity which--
(i)(I) received a grant of at least $100,000 in the
fiscal year ending June 30, 1976, under section
329(d)(1)(A) or 330(d)(1) of the Public Health Service
Act, and for the period beginning July 1, 1976, and
ending on the expiration of the period for which
payments are to be made under this title has been the
recipient of a grant under either such section; and
(II) provides to its enrollees, on a prepaid
capitation risk basis or on any other risk basis, all
of the services and benefits described in paragraphs
(1), (2), (3), (4)(C), and (5) of section 1905(a) and,
to the extent required by section 1902(a)(10)(D) to be
provided under a State plan for medical assistance, the
services and benefits described in paragraph (7) of
section 1905(a); or
(ii) is a nonprofit primary health care entity
located in a rural area (as defined by the Appalachian
Regional Commission)--
(I) which received in the fiscal year ending
June 30, 1976, at least $100,000 (by grant,
subgrant, or subcontract) under the Appalachian
Regional Development Act of 1965, and
(II) for the period beginning July 1, 1976,
and ending on the expiration of the period for
which payments are to be made under this title
either has been the recipient of a grant,
subgrant, or subcontract under such Act or has
provided services under a contract (initially
entered into during a year in which the entity
was the recipient of such a grant, subgrant, or
subcontract) with a State agency under this
title on a prepaid capitation risk basis or on
any other risk basis; or
(iii) which has contracted with the single State
agency for the provision of services (but not including
inpatient hospital services) to persons eligible under
this title on a prepaid risk basis prior to 1970.
(G) In the case of an entity which is receiving (and has
received during the previous two years) a grant of at least
$100,000 under section 329(d)(1)(A) or 330(d)(1) of the Public
Health Service Act or is receiving (and has received during the
previous two years) at least $100,000 (by grant, subgrant, or
subcontract) under the Appalachian Regional Development Act of
1965, clause (i) of subparagraph (A) shall not apply.
(H) In the case of an individual who--
(i) in a month is eligible for benefits under this
title and enrolled with a medicaid managed care
organization with a contract under this paragraph or
with a primary care case manager with a contract
described in section 1905(t)(3),
(ii) in the next month (or in the next 2 months) is
not eligible for such benefits, but
(iii) in the succeeding month is again eligible for
such benefits,
the State plan, subject to subparagraph (A)(vi), may enroll the
individual for that succeeding month with the organization
described in clause (i) if the organization continues to have a
contract under this paragraph with the State or with the
manager described in such clause if the manager continues to
have a contract described in section 1905(t)(3) with the State.
(4)(A) Each medicaid managed care organization which is not a
qualified health maintenance organization (as defined in
section 1310(d) of the Public Health Service Act) must report
to the State and, upon request, to the Secretary, the Inspector
General of the Department of Health and Human Services, and the
Comptroller General a description of transactions between the
organization and a party in interest (as defined in section
1318(b) of such Act), including the following transactions:
(i) Any sale or exchange, or leasing of any property
between the organization and such a party.
(ii) Any furnishing for consideration of goods,
services (including management services), or facilities
between the organization and such a party, but not
including salaries paid to employees for services
provided in the normal course of their employment.
(iii) Any lending of money or other extension of
credit between the organization and such a party.
The State or Secretary may require that information reported
respecting an organization which controls, or is controlled by,
or is under common control with, another entity be in the form
of a consolidated financial statement for the organization and
such entity.
(B) Each organization shall make the information reported
pursuant to subparagraph (A) available to its enrollees upon
reasonable request.
(5)(A) If the Secretary determines that an entity with a
contract under this subsection--
(i) fails substantially to provide medically
necessary items and services that are required (under
law or under the contract) to be provided to an
individual covered under the contract, if the failure
has adversely affected (or has substantial likelihood
of adversely affecting) the individual;
(ii) imposes premiums on individuals enrolled under
this subsection in excess of the premiums permitted
under this title;
(iii) acts to discriminate among individuals in
violation of the provision of paragraph (2)(A)(v),
including expulsion or refusal to re-enroll an
individual or engaging in any practice that would
reasonably be expected to have the effect of denying or
discouraging enrollment (except as permitted by this
subsection) by eligible individuals with the
organization whose medical condition or history
indicates a need for substantial future medical
services;
(iv) misrepresents or falsifies information that is
furnished--
(I) to the Secretary or the State under this
subsection, or
(II) to an individual or to any other entity
under this subsection, or
(v) fails to comply with the requirements of section
1876(i)(8),
the Secretary may provide, in addition to any other remedies
available under law, for any of the remedies described in
subparagraph (B).
(B) The remedies described in this subparagraph are--
(i) civil money penalties of not more than $25,000
for each determination under subparagraph (A), or, with
respect to a determination under clause (iii) or
(iv)(I) of such subparagraph, of not more than $100,000
for each such determination, plus, with respect to a
determination under subparagraph (A)(ii), double the
excess amount charged in violation of such subparagraph
(and the excess amount charged shall be deducted from
the penalty and returned to the individual concerned),
and plus, with respect to a determination under
subparagraph (A)(iii), $15,000 for each individual not
enrolled as a result of a practice described in such
subparagraph, or
(ii) denial of payment to the State for medical
assistance furnished under the contract under this
subsection for individuals enrolled after the date the
Secretary notifies the organization of a determination
under subparagraph (A) and until the Secretary is
satisfied that the basis for such determination has
been corrected and is not likely to recur.
The provisions of section 1128A (other than subsections (a) and
(b)) shall apply to a civil money penalty under clause (i) in
the same manner as such provisions apply to a penalty or
proceeding under section 1128A(a).
(6)(A) For purposes of this subsection and section
1902(e)(2)(A), in the case of the State of New Jersey, the term
``contract'' shall be deemed to include an undertaking by the
State agency, in the State plan under this title, to operate a
program meeting all requirements of this subsection.
(B) The undertaking described in subparagraph (A) must
provide--
(i) for the establishment of a separate entity
responsible for the operation of a program meeting the
requirements of this subsection, which entity may be a
subdivision of the State agency administering the State
plan under this title;
(ii) for separate accounting for the funds used to
operate such program; and
(iii) for setting the capitation rates and any other
payment rates for services provided in accordance with
this subsection using a methodology satisfactory to the
Secretary designed to ensure that total Federal
matching payments under this title for such services
will be lower than the matching payments that would be
made for the same services, if provided under the State
plan on a fee for service basis to an actuarially
equivalent population.
(C) The undertaking described in subparagraph (A) shall be
subject to approval (and annual re-approval) by the Secretary
in the same manner as a contract under this subsection.
(D) The undertaking described in subparagraph (A) shall not
be eligible for a waiver under section 1915(b).
(o) Notwithstanding the preceding provisions of this section,
no payment shall be made to a State under the preceding
provisions of this section for expenditures for medical
assistance provided for an individual under its State plan
approved under this title to the extent that a private insurer
(as defined by the Secretary by regulation and including a
group health plan (as defined in section 607(1) of the Employee
Retirement Income Security Act of 1974), a service benefit
plan, and a health maintenance organization) would have been
obligated to provide such assistance but for a provision of its
insurance contract which has the effect of limiting or
excluding such obligation because the individual is eligible
for or is provided medical assistance under the plan.
(p)(1) When a political subdivision of a State makes, for the
State of which it is a political subdivision, or one State
makes, for another State, the enforcement and collection of
rights of support or payment assigned under section 1912,
pursuant to a cooperative arrangement under such section
(either within or outside of such State), there shall be paid
to such political subdivision or such other State from amounts
which would otherwise represent the Federal share of payments
for medical assistance provided to the eligible individuals on
whose behalf such enforcement and collection was made, an
amount equal to 15 percent of any amount collected which is
attributable to such rights of support or payment.
(2) Where more than one jurisdiction is involved in such
enforcement or collection, the amount of the incentive payment
determined under paragraph (1) shall be allocated among the
jurisdictions in a manner to be prescribed by the Secretary.
(q) For the purposes of this section, the term ``State
medicaid fraud control unit'' means a single identifiable
entity of the State government which the Secretary certifies
(and annually recertifies) as meeting the following
requirements:
(1) The entity (A) is a unit of the office of the
State Attorney General or of another department of
State government which possesses statewide authority to
prosecute individuals for criminal violations, (B) is
in a State the constitution of which does not provide
for the criminal prosecution of individuals by a
statewide authority and has formal procedures, approved
by the Secretary, that (i) assure its referral of
suspected criminal violations relating to the program
under this title to the appropriate authority or
authorities in the State for prosecution and (ii)
assure its assistance of, and coordination with, such
authority or authorities in such prosecutions, or (C)
has a formal working relationship with the office of
the State Attorney General and has formal procedures
(including procedures for its referral of suspected
criminal violations to such office) which are approved
by the Secretary and which provide effective
coordination of activities between the entity and such
office with respect to the detection, investigation,
and prosecution of suspected criminal violations
relating to the program under this title.
(2) The entity is separate and distinct from the
single State agency that administers or supervises the
administration of the State plan under this title.
(3) The entity's function is conducting a statewide
program for the investigation and prosecution of
violations of all applicable State laws regarding any
and all aspects of fraud in connection with (A) any
aspect of the provision of medical assistance and the
activities of providers of such assistance under the
State plan under this title; and (B) upon the approval
of the Inspector General of the relevant Federal
agency, any aspect of the provision of health care
services and activities of providers of such services
under any Federal health care program (as defined in
section 1128B(f)(1)), if the suspected fraud or
violation of law in such case or investigation is
primarily related to the State plan under this title.
(4)(A) The entity has--
(i) procedures for reviewing complaints of
abuse or neglect of patients in health care
facilities which receive payments under the
State plan under this title;
(ii) at the option of the entity, procedures
for reviewing complaints of abuse or neglect of
patients residing in board and care facilities;
and
(iii) procedures for acting upon such
complaints under the criminal laws of the State
or for referring such complaints to other State
agencies for action.
(B) For purposes of this paragraph, the term ``board
and care facility'' means a residential setting which
receives payment (regardless of whether such payment is
made under the State plan under this title) from or on
behalf of two or more unrelated adults who reside in
such facility, and for whom one or both of the
following is provided:
(i) Nursing care services provided by, or
under the supervision of, a registered nurse,
licensed practical nurse, or licensed nursing
assistant.
(ii) A substantial amount of personal care
services that assist residents with the
activities of daily living, including personal
hygiene, dressing, bathing, eating, toileting,
ambulation, transfer, positioning, self-
medication, body care, travel to medical
services, essential shopping, meal preparation,
laundry, and housework.
(5) The entity provides for the collection, or
referral for collection to a single State agency, of
overpayments that are made under the State plan or
under any Federal health care program (as so defined)
to health care facilities and that are discovered by
the entity in carrying out its activities. All funds
collected in accordance with this paragraph shall be
credited exclusively to, and available for expenditure
under, the Federal health care program (including the
State plan under this title) that was subject to the
activity that was the basis for the collection.
(6) The entity employs such auditors, attorneys,
investigators, and other necessary personnel and is
organized in such a manner as is necessary to promote
the effective and efficient conduct of the entity's
activities.
(7) The entity submits to the Secretary an
application and annual reports containing such
information as the Secretary determines, by regulation,
to be necessary to determine whether the entity meets
the other requirements of this subsection.
(r)(1) In order to receive payments under subsection (a) for
use of automated data systems in administration of the State
plan under this title, a State must, in addition to meeting the
requirements of paragraph (3), have in operation mechanized
claims processing and information retrieval systems that meet
the requirements of this subsection and that the Secretary has
found--
(A) are adequate to provide efficient, economical,
and effective administration of such State plan;
(B) are compatible with the claims processing and
information retrieval systems used in the
administration of title XVIII, and for this purpose--
(i) have a uniform identification coding
system for providers, other payees, and
beneficiaries under this title or title XVIII;
(ii) provide liaison between States and
carriers and intermediaries with agreements
under title XVIII to facilitate timely exchange
of appropriate data;
(iii) provide for exchange of data between
the States and the Secretary with respect to
persons sanctioned under this title or title
XVIII; and
(iv) effective for claims filed on or after
October 1, 2010, incorporate compatible
methodologies of the National Correct Coding
Initiative administered by the Secretary (or
any successor initiative to promote correct
coding and to control improper coding leading
to inappropriate payment) and such other
methodologies of that Initiative (or such other
national correct coding methodologies) as the
Secretary identifies in accordance with
paragraph (4);
(C) are capable of providing accurate and timely
data;
(D) are complying with the applicable provisions of
part C of title XI;
(E) are designed to receive provider claims in
standard formats to the extent specified by the
Secretary; and
(F) effective for claims filed on or after January 1,
1999, provide for electronic transmission of claims
data in the format specified by the Secretary and
consistent with the Medicaid Statistical Information
System (MSIS) (including detailed individual enrollee
encounter data and other information that the Secretary
may find necessary and including, for data submitted to
the Secretary on or after January 1, 2010, data
elements from the automated data system that the
Secretary determines to be necessary for program
integrity, program oversight, and administration, at
such frequency as the Secretary shall determine).
(2) In order to meet the requirements of this paragraph,
mechanized claims processing and information retrieval systems
must meet the following requirements:
(A) The systems must be capable of developing
provider, physician, and patient profiles which are
sufficient to provide specific information as to the
use of covered types of services and items, including
prescribed drugs.
(B) The State must provide that information on
probable fraud or abuse which is obtained from, or
developed by, the systems, is made available to the
State's medicaid fraud control unit (if any) certified
under subsection (q) of this section.
(C) The systems must meet all performance standards
and other requirements for initial approval developed
by the Secretary.
(3) In order to meet the requirements of this paragraph, a
State must have in operation an eligibility determination
system which provides for data matching through the Public
Assistance Reporting Information System (PARIS) facilitated by
the Secretary (or any successor system), including matching
with medical assistance programs operated by other States.
(4) For purposes of paragraph (1)(B)(iv), the Secretary shall
do the following:
(A) Not later than September 1, 2010:
(i) Identify those methodologies of the
National Correct Coding Initiative administered
by the Secretary (or any successor initiative
to promote correct coding and to control
improper coding leading to inappropriate
payment) which are compatible to claims filed
under this title.
(ii) Identify those methodologies of such
Initiative (or such other national correct
coding methodologies) that should be
incorporated into claims filed under this title
with respect to items or services for which
States provide medical assistance under this
title and no national correct coding
methodologies have been established under such
Initiative with respect to title XVIII.
(iii) Notify States of--
(I) the methodologies identified
under subparagraphs (A) and (B) (and of
any other national correct coding
methodologies identified under
subparagraph (B)); and
(II) how States are to incorporate
such methodologies into claims filed
under this title.
(B) Not later than March 1, 2011, submit a report to
Congress that includes the notice to States under
clause (iii) of subparagraph (A) and an analysis
supporting the identification of the methodologies made
under clauses (i) and (ii) of subparagraph (A).
(s) Notwithstanding the preceding provisions of this section,
no payment shall be made to a State under this section for
expenditures for medical assistance under the State plan
consisting of a designated health service (as defined in
subsection (h)(6) of section 1877) furnished to an individual
on the basis of a referral that would result in the denial of
payment for the service under title XVIII if such title
provided for coverage of such service to the same extent and
under the same terms and conditions as under the State plan,
and subsections (f) and (g)(5) of such section shall apply to a
provider of such a designated health service for which payment
may be made under this title in the same manner as such
subsections apply to a provider of such a service for which
payment may be made under such title.
(t)(1) For purposes of subsection (a)(3)(F), the payments
described in this paragraph to encourage the adoption and use
of certified EHR technology are payments made by the State in
accordance with this subsection --
(A) to Medicaid providers described in paragraph
(2)(A) not in excess of 85 percent of net average
allowable costs (as defined in paragraph (3)(E)) for
certified EHR technology (and support services
including maintenance and training that is for, or is
necessary for the adoption and operation of, such
technology) with respect to such providers; and
(B) to Medicaid providers described in paragraph
(2)(B) not in excess of the maximum amount permitted
under paragraph (5) for the provider involved.
(2) In this subsection and subsection (a)(3)(F), the term
``Medicaid provider'' means--
(A) an eligible professional (as defined in paragraph
(3)(B))--
(i) who is not hospital-based and has at
least 30 percent of the professional's patient
volume (as estimated in accordance with a
methodology established by the Secretary)
attributable to individuals who are receiving
medical assistance under this title;
(ii) who is not described in clause (i), who
is a pediatrician, who is not hospital-based,
and who has at least 20 percent of the
professional's patient volume (as estimated in
accordance with a methodology established by
the Secretary) attributable to individuals who
are receiving medical assistance under this
title; and
(iii) who practices predominantly in a
Federally qualified health center or rural
health clinic and has at least 30 percent of
the professional's patient volume (as estimated
in accordance with a methodology established by
the Secretary) attributable to needy
individuals (as defined in paragraph (3)(F));
and
(B)(i) a children's hospital, or
(ii) an acute-care hospital that is not described in
clause (i) and that has at least 10 percent of the
hospital's patient volume (as estimated in accordance
with a methodology established by the Secretary)
attributable to individuals who are receiving medical
assistance under this title.
An eligible professional shall not qualify as a Medicaid
provider under this subsection unless any right to payment
under sections 1848(o) and 1853(l) with respect to the eligible
professional has been waived in a manner specified by the
Secretary. For purposes of calculating patient volume under
subparagraph (A)(iii), insofar as it is related to
uncompensated care, the Secretary may require the adjustment of
such uncompensated care data so that it would be an appropriate
proxy for charity care, including a downward adjustment to
eliminate bad debt data from uncompensated care. In applying
subparagraphs (A) and (B)(ii), the methodology established by
the Secretary for patient volume shall include individuals
enrolled in a Medicaid managed care plan (under section 1903(m)
or section 1932).
(3) In this subsection and subsection (a)(3)(F):
(A) The term ``certified EHR technology'' means a
qualified electronic health record (as defined in
3000(13) of the Public Health Service Act) that is
certified pursuant to section 3001(c)(5) of such Act as
meeting standards adopted under section 3004 of such
Act that are applicable to the type of record involved
(as determined by the Secretary, such as an ambulatory
electronic health record for office-based physicians or
an inpatient hospital electronic health record for
hospitals).
(B) The term ``eligible professional'' means a--
(i) physician;
(ii) dentist;
(iii) certified nurse mid-wife;
(iv) nurse practitioner; and
(v) physician assistant insofar as the
assistant is practicing in a rural health
clinic that is led by a physician assistant or
is practicing in a Federally qualified health
center that is so led.
(C) The term ``average allowable costs'' means, with
respect to certified EHR technology of Medicaid
providers described in paragraph (2)(A) for--
(i) the first year of payment with respect to
such a provider, the average costs for the
purchase and initial implementation or upgrade
of such technology (and support services
including training that is for, or is necessary
for the adoption and initial operation of, such
technology) for such providers, as determined
by the Secretary based upon studies conducted
under paragraph (4)(C); and
(ii) a subsequent year of payment with
respect to such a provider, the average costs
not described in clause (i) relating to the
operation, maintenance, and use of such
technology for such providers, as determined by
the Secretary based upon studies conducted
under paragraph (4)(C).
(D) The term ``hospital-based'' means, with respect
to an eligible professional, a professional (such as a
pathologist, anesthesiologist, or emergency physician)
who furnishes substantially all of the individual's
professional services in a hospital inpatient or
emergency room setting and through the use of the
facilities and equipment, including qualified
electronic health records, of the hospital. The
determination of whether an eligible professional is a
hospital-based eligible professional shall be made on
the basis of the site of service (as defined by the
Secretary) and without regard to any employment or
billing arrangement between the eligible professional
and any other provider.
(E) The term ``net average allowable costs'' means,
with respect to a Medicaid provider described in
paragraph (2)(A), average allowable costs reduced by
the average payment the Secretary estimates will be
made to such Medicaid providers (determined on a
percentage or other basis for such classes or types of
providers as the Secretary may specify) from other
sources (other than under this subsection, or by the
Federal government or a State or local government) that
is directly attributable to payment for certified EHR
technology or support services described in
subparagraph (C).
(F) The term ``needy individual'' means, with respect
to a Medicaid provider, an individual--
(i) who is receiving assistance under this
title;
(ii) who is receiving assistance under title
XXI;
(iii) who is furnished uncompensated care by
the provider; or
(iv) for whom charges are reduced by the
provider on a sliding scale basis based on an
individual's ability to pay.
(4)(A) With respect to a Medicaid provider described in
paragraph (2)(A), subject to subparagraph (B), in no case
shall--
(i) the net average allowable costs under
this subsection for the first year of payment
(which may not be later than 2016), which is
intended to cover the costs described in
paragraph (3)(C)(i), exceed $25,000 (or such
lesser amount as the Secretary determines based
on studies conducted under subparagraph (C));
(ii) the net average allowable costs under
this subsection for a subsequent year of
payment, which is intended to cover costs
described in paragraph (3)(C)(ii), exceed
$10,000; and
(iii) payments be made for costs described in
clause (ii) after 2021 or over a period of
longer than 5 years.
(B) In the case of Medicaid provider described in paragraph
(2)(A)(ii), the dollar amounts specified in subparagraph (A)
shall be \2/3\ of the dollar amounts otherwise specified.
(C) For the purposes of determining average allowable costs
under this subsection, the Secretary shall study the average
costs to Medicaid providers described in paragraph (2)(A) of
purchase and initial implementation and upgrade of certified
EHR technology described in paragraph (3)(C)(i) and the average
costs to such providers of operations, maintenance, and use of
such technology described in paragraph (3)(C)(ii). In
determining such costs for such providers, the Secretary may
utilize studies of such amounts submitted by States.
(5)(A) In no case shall the payments described in paragraph
(1)(B) with respect to a Medicaid provider described in
paragraph (2)(B) exceed--
(i) in the aggregate the product of--
(I) the overall hospital EHR amount
for the provider computed under
subparagraph (B); and
(II) the Medicaid share for such
provider computed under subparagraph
(C);
(ii) in any year 50 percent of the product described
in clause (i); and
(iii) in any 2-year period 90 percent of such
product.
(B) For purposes of this paragraph, the overall hospital EHR
amount, with respect to a Medicaid provider, is the sum of the
applicable amounts specified in section 1886(n)(2)(A) for such
provider for the first 4 payment years (as estimated by the
Secretary) determined as if the Medicare share specified in
clause (ii) of such section were 1. The Secretary shall
establish, in consultation with the State, the overall hospital
EHR amount for each such Medicaid provider eligible for
payments under paragraph (1)(B). For purposes of this
subparagraph in computing the amounts under section
1886(n)(2)(C) for payment years after the first payment year,
the Secretary shall assume that in subsequent payment years
discharges increase at the average annual rate of growth of the
most recent 3 years for which discharge data are available per
year.
(C) The Medicaid share computed under this subparagraph, for
a Medicaid provider for a period specified by the Secretary,
shall be calculated in the same manner as the Medicare share
under section 1886(n)(2)(D) for such a hospital and period,
except that there shall be substituted for the numerator under
clause (i) of such section the amount that is equal to the
number of inpatient-bed-days (as established by the Secretary)
which are attributable to individuals who are receiving medical
assistance under this title and who are not described in
section 1886(n)(2)(D)(i). In computing inpatient-bed-days under
the previous sentence, the Secretary shall take into account
inpatient-bed-days attributable to inpatient-bed-days that are
paid for individuals enrolled in a Medicaid managed care plan
(under section 1903(m) or section 1932).
(D) In no case may the payments described in paragraph (1)(B)
with respect to a Medicaid provider described in paragraph
(2)(B) be paid--
(i) for any year beginning after 2016 unless the
provider has been provided payment under paragraph
(1)(B) for the previous year; and
(ii) over a period of more than 6 years of payment.
(6) Payments described in paragraph (1) are not in accordance
with this subsection unless the following requirements are met:
(A)(i) The State provides assurances satisfactory to
the Secretary that amounts received under subsection
(a)(3)(F) with respect to payments to a Medicaid
provider are paid, subject to clause (ii), directly to
such provider (or to an employer or facility to which
such provider has assigned payments) without any
deduction or rebate.
(ii) Amounts described in clause (i) may also be paid
to an entity promoting the adoption of certified EHR
technology, as designated by the State, if
participation in such a payment arrangement is
voluntary for the eligible professional involved and if
such entity does not retain more than 5 percent of such
payments for costs not related to certified EHR
technology (and support services including maintenance
and training) that is for, or is necessary for the
operation of, such technology.
(B) A Medicaid provider described in paragraph (2)(A)
is responsible for payment of the remaining 15 percent
of the net average allowable cost and shall be
determined to have met such responsibility to the
extent that the payment to the Medicaid provider is not
in excess of 85 percent of the net average allowable
cost.
(C)(i) Subject to clause (ii), with respect to
payments to a Medicaid provider--
(I) for the first year of payment to the
Medicaid provider under this subsection, the
Medicaid provider demonstrates that it is
engaged in efforts to adopt, implement, or
upgrade certified EHR technology; and
(II) for a year of payment, other than the
first year of payment to the Medicaid provider
under this subsection, the Medicaid provider
demonstrates meaningful use of certified EHR
technology through a means that is approved by
the State and acceptable to the Secretary, and
that may be based upon the methodologies
applied under section 1848(o) or 1886(n).
(ii) In the case of a Medicaid provider who has
completed adopting, implementing, or upgrading such
technology prior to the first year of payment to the
Medicaid provider under this subsection, clause (i)(I)
shall not apply and clause (i)(II) shall apply to each
year of payment to the Medicaid provider under this
subsection, including the first year of payment.
(D) To the extent specified by the Secretary, the
certified EHR technology is compatible with State or
Federal administrative management systems.
For purposes of subparagraph (B), a Medicaid provider described
in paragraph (2)(A) may accept payments for the costs described
in such subparagraph from a State or local government. For
purposes of subparagraph (C), in establishing the means
described in such subparagraph, which may include clinical
quality reporting to the State, the State shall ensure that
populations with unique needs, such as children, are
appropriately addressed.
(7) With respect to Medicaid providers described in paragraph
(2)(A), the Secretary shall ensure coordination of payment with
respect to such providers under sections 1848(o) and 1853(l)
and under this subsection to assure no duplication of funding.
Such coordination shall include, to the extent practicable, a
data matching process between State Medicaid agencies and the
Centers for Medicare & Medicaid Services using national
provider identifiers. For such purposes, the Secretary may
require the submission of such data relating to payments to
such Medicaid providers as the Secretary may specify.
(8) In carrying out paragraph (6)(C), the State and Secretary
shall seek, to the maximum extent practicable, to avoid
duplicative requirements from Federal and State governments to
demonstrate meaningful use of certified EHR technology under
this title and title XVIII. In doing so, the Secretary may deem
satisfaction of requirements for such meaningful use for a
payment year under title XVIII to be sufficient to qualify as
meaningful use under this subsection. The Secretary may also
specify the reporting periods under this subsection in order to
carry out this paragraph.
(9) In order to be provided Federal financial participation
under subsection (a)(3)(F)(ii), a State must demonstrate to the
satisfaction of the Secretary, that the State--
(A) is using the funds provided for the purposes of
administering payments under this subsection, including
tracking of meaningful use by Medicaid providers;
(B) is conducting adequate oversight of the program
under this subsection, including routine tracking of
meaningful use attestations and reporting mechanisms;
and
(C) is pursuing initiatives to encourage the adoption
of certified EHR technology to promote health care
quality and the exchange of health care information
under this title, subject to applicable laws and
regulations governing such exchange.
(10) The Secretary shall periodically submit reports to the
Committee on Energy and Commerce of the House of
Representatives and the Committee on Finance of the Senate on
status, progress, and oversight of payments described in
paragraph (1), including steps taken to carry out paragraph
(7). Such reports shall also describe the extent of adoption of
certified EHR technology among Medicaid providers resulting
from the provisions of this subsection and any improvements in
health outcomes, clinical quality, or efficiency resulting from
such adoption.
(u)(1)(A) Notwithstanding subsection (a)(1), if the ratio of
a State's erroneous excess payments for medical assistance (as
defined in subparagraph (D)) to its total expenditures for
medical assistance under the State plan approved under this
title exceeds 0.03, for the period consisting of the third and
fourth quarters of fiscal year 1983, or for any full fiscal
year thereafter, then the Secretary shall make no payment for
such period or fiscal year with respect to so much of such
erroneous excess payments as exceeds such allowable error rate
of 0.03.
(B) The Secretary may waive, in certain limited cases, all or
part of the reduction required under subparagraph (A) with
respect to any State if such State is unable to reach the
allowable error rate for a period or fiscal year despite a good
faith effort by such State.
(C) In estimating the amount to be paid to a State under
subsection (d), the Secretary shall take into consideration the
limitation on Federal financial participation imposed by
subparagraph (A) and shall reduce the estimate he makes under
subsection (d)(1), for purposes of payment to the State under
subsection (d)(3), in light of any expected erroneous excess
payments for medical assistance (estimated in accordance with
such criteria, including sampling procedures, as he may
prescribe and subject to subsequent adjustment, if necessary,
under subsection (d)(2)).
(D)(i) For purposes of this subsection, the term ``erroneous
excess payments for medical assistance'' means the total of--
(I) payments under the State plan with respect to
ineligible individuals and families, and
(II) overpayments on behalf of eligible individuals
and families by reason of error in determining the
amount of expenditures for medical care required of an
individual or family as a condition of eligibility.
(ii) In determining the amount of erroneous excess payments
for medical assistance to an ineligible individual or family
under clause (i)(I), if such ineligibility is the result of an
error in determining the amount of the resources of such
individual or family, the amount of the erroneous excess
payment shall be the smaller of (I) the amount of the payment
with respect to such individual or family, or (II) the
difference between the actual amount of such resources and the
allowable resource level established under the State plan.
(iii) In determining the amount of erroneous excess payments
for medical assistance to an individual or family under clause
(i)(II), the amount of the erroneous excess payment shall be
the smaller of (I) the amount of the payment on behalf of the
individual or family, or (II) the difference between the actual
amount incurred for medical care by the individual or family
and the amount which should have been incurred in order to
establish eligibility for medical assistance.
(iv) In determining the amount of erroneous excess payments,
there shall not be included any error resulting from a failure
of an individual to cooperate or give correct information with
respect to third-party liability as required under section
1912(a)(1)(C) or 402(a)(26)(C) or with respect to payments made
in violation of section 1906.
(v) In determining the amount of erroneous excess payments,
there shall not be included any erroneous payments made for
ambulatory prenatal care provided during a presumptive
eligibility period (as defined in section 1920(b)(1)), for
items and services described in subsection (a) of section 1920A
provided to a child during a presumptive eligibility period
under such section, for medical assistance provided to an
individual described in subsection (a) of section 1920B during
a presumptive eligibility period under such section, or for
medical assistance provided to an individual during a
presumptive eligibility period resulting from a determination
of presumptive eligibility made by a hospital that elects under
section 1902(a)(47)(B) to be a qualified entity for such
purpose.\24\
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\24\Effective on date of enactment of Public Law 111-148 (March 23,
2010), section 2303(b)(2)(B) of Public Law 111-148 to section
1903(u)(1)(D)(v) (as amended by section 2202(b) of such Public Law)
attempts to amend this clause by inserting ``or for medical assistance
provided to an individual described in subsection (a) of section 1920C
during a presumptive eligibility period under such section,'' after
``1920B during a presumptive eligibility period under such section,''.
Such amendment could not be carried out because a comma at the end of
the phrase specifying where to place new language does not appear in
law.
---------------------------------------------------------------------------
(E) For purposes of subparagraph (D), there shall be
excluded, in determining both erroneous excess payments for
medical assistance and total expenditures for medical
assistance--
(i) payments with respect to any individual whose
eligibility therefor was determined exclusively by the
Secretary under an agreement pursuant to section 1634
and such other classes of individuals as the Secretary
may by regulation prescribe whose eligibility was
determined in part under such an agreement; and
(ii) payments made as the result of a technical
error.
(2) The State agency administering the plan approved under
this title shall, at such times and in such form as the
Secretary may specify, provide information on the rates of
erroneous excess payments made (or expected, with respect to
future periods specified by the Secretary) in connection with
its administration of such plan, together with any other data
he requests that are reasonably necessary for him to carry out
the provisions of this subsection.
(3)(A) If a State fails to cooperate with the Secretary in
providing information necessary to carry out this subsection,
the Secretary, directly or through contractual or such other
arrangements as he may find appropriate, shall establish the
error rates for that State on the basis of the best data
reasonably available to him and in accordance with such
techniques for sampling and estimating as he finds appropriate.
(B) In any case in which it is necessary for the Secretary to
exercise his authority under subparagraph (A) to determine a
State's error rates for a fiscal year, the amount that would
otherwise be payable to such State under this title for
quarters in such year shall be reduced by the costs incurred by
the Secretary in making (directly or otherwise) such
determination.
(4) This subsection shall not apply with respect to Puerto
Rico, Guam, the Virgin Islands, the Northern Mariana Islands,
or American Samoa.
(v)(1) Notwithstanding the preceding provisions of this
section, except as provided in paragraphs (2) and (4), no
payment may be made to a State under this section for medical
assistance furnished to an alien who is not lawfully admitted
for permanent residence or otherwise permanently residing in
the United States under color of law.
(2) Payment shall be made under this section for care and
services that are furnished to an alien described in paragraph
(1) only if--
(A) such care and services are necessary for the
treatment of an emergency medical condition of the
alien,
(B) such alien otherwise meets the eligibility
requirements for medical assistance under the State
plan approved under this title (other than the
requirement of the receipt of aid or assistance under
title IV, supplemental security income benefits under
title XVI, or a State supplementary payment), and
(C) such care and services are not related to an
organ transplant procedure.
(3) For purposes of this subsection, the term ``emergency
medical condition'' means a medical condition (including
emergency labor and delivery) manifesting itself by acute
symptoms of sufficient severity (including severe pain) such
that the absence of immediate medical attention could
reasonably be expected to result in--
(A) placing the patient's health in serious jeopardy,
(B) serious impairment to bodily functions, or
(C) serious dysfunction of any bodily organ or part.
(4)(A) A State may elect (in a plan amendment under this
title) to provide medical assistance under this title,
notwithstanding sections 401(a), 402(b), 403, and 421 of the
Personal Responsibility and Work Opportunity Reconciliation Act
of 1996, to children and pregnant women who are lawfully
residing in the United States (including battered individuals
described in section 431(c) of such Act) and who are otherwise
eligible for such assistance, within either or both of the
following eligibility categories:
(i) Pregnant women.--Women during pregnancy (and
during the 60-day period beginning on the last day of
the pregnancy).
(ii) Children.--Individuals under 21 years of age,
including optional targeted low-income children
described in section 1905(u)(2)(B).
(B) In the case of a State that has elected to provide
medical assistance to a category of aliens under subparagraph
(A), no debt shall accrue under an affidavit of support against
any sponsor of such an alien on the basis of provision of
assistance to such category and the cost of such assistance
shall not be considered as an unreimbursed cost.
(C) As part of the State's ongoing eligibility
redetermination requirements and procedures for an individual
provided medical assistance as a result of an election by the
State under subparagraph (A), a State shall verify that the
individual continues to lawfully reside in the United States
using the documentation presented to the State by the
individual on initial enrollment. If the State cannot
successfully verify that the individual is lawfully residing in
the United States in this manner, it shall require that the
individual provide the State with further documentation or
other evidence to verify that the individual is lawfully
residing in the United States.
(w)(1)(A) Notwithstanding the previous provisions of this
section, for purposes of determining the amount to be paid to a
State (as defined in paragraph (7)(D)) under subsection (a)(1)
for quarters in any fiscal year, the total amount expended
during such fiscal year as medical assistance under the State
plan (as determined without regard to this subsection) shall be
reduced by the sum of any revenues received by the State (or by
a unit of local government in the State) during the fiscal
year--
(i) from provider-related donations (as defined in
paragraph (2)(A)), other than--
(I) bona fide provider-related donations (as
defined in paragraph (2)(B)), and
(II) donations described in paragraph (2)(C);
(ii) from health care related taxes (as defined in
paragraph (3)(A)), other than broad-based health care
related taxes (as defined in paragraph (3)(B));
(iii) from a broad-based health care related tax, if
there is in effect a hold harmless provision (described
in paragraph (4)) with respect to the tax; or
(iv) only with respect to State fiscal years (or
portions thereof) occurring on or after January 1,
1992, and before October 1, 1995, from broad-based
health care related taxes to the extent the amount of
such taxes collected exceeds the limit established
under paragraph (5).
(B) Notwithstanding the previous provisions of this section,
for purposes of determining the amount to be paid to a State
under subsection (a)(7) for all quarters in a Federal fiscal
year (beginning with fiscal year 1993), the total amount
expended during the fiscal year for administrative expenditures
under the State plan (as determined without regard to this
subsection) shall be reduced by the sum of any revenues
received by the State (or by a unit of local government in the
State) during such quarters from donations described in
paragraph (2)(C), to the extent the amount of such donations
exceeds 10 percent of the amounts expended under the State plan
under this title during the fiscal year for purposes described
in paragraphs (2), (3), (4), (6), and (7) of subsection (a).
(C)(i) Except as otherwise provided in clause (ii),
subparagraph (A)(i) shall apply to donations received on or
after January 1, 1992.
(ii) Subject to the limits described in clause (iii) and
subparagraph (E), subparagraph (A)(i) shall not apply to
donations received before the effective date specified in
subparagraph (F) if such donations are received under programs
in effect or as described in State plan amendments or related
documents submitted to the Secretary by September 30, 1991, and
applicable to State fiscal year 1992, as demonstrated by State
plan amendments, written agreements, State budget
documentation, or other documentary evidence in existence on
that date.
(iii) In applying clause (ii) in the case of donations
received in State fiscal year 1993, the maximum amount of such
donations to which such clause may be applied may not exceed
the total amount of such donations received in the
corresponding period in State fiscal year 1992 (or not later
than 5 days after the last day of the corresponding period).
(D)(i) Except as otherwise provided in clause (ii),
subparagraphs (A)(ii) and (A)(iii) shall apply to taxes
received on or after January 1, 1992.
(ii) Subparagraphs (A)(ii) and (A)(iii) shall not apply to
impermissible taxes (as defined in clause (iii)) received
before the effective date specified in subparagraph (F) to the
extent the taxes (including the tax rate or base) were in
effect, or the legislation or regulations imposing such taxes
were enacted or adopted, as of November 22, 1991.
(iii) In this subparagraph and subparagraph (E), the term
``impermissible tax'' means a health care related tax for which
a reduction may be made under clause (ii) or (iii) of
subparagraph (A).
(E)(i) In no case may the total amount of donations and taxes
permitted under the exception provided in subparagraphs (C)(ii)
and (D)(ii) for the portion of State fiscal year 1992 occurring
during calendar year 1992 exceed the limit under paragraph (5)
minus the total amount of broad-based health care related taxes
received in the portion of that fiscal year.
(ii) In no case may the total amount of donations and taxes
permitted under the exception provided in subparagraphs (C)(ii)
and (D)(ii) for State fiscal year 1993 exceed the limit under
paragraph (5) minus the total amount of broad-based health care
related taxes received in that fiscal year.
(F) In this paragraph in the case of a State--
(i) except as provided in clause (iii), with a State
fiscal year beginning on or before July 1, the
effective date is October 1, 1992,
(ii) except as provided in clause (iii), with a State
fiscal year that begins after July 1, the effective
date is January 1, 1993, or
(iii) with a State legislature which is not scheduled
to have a regular legislative session in 1992, with a
State legislature which is not scheduled to have a
regular legislative session in 1993, or with a
provider-specific tax enacted on November 4, 1991, the
effective date is July 1, 1993.
(2)(A) In this subsection (except as provided in paragraph
(6)), the term ``provider-related donation'' means any donation
or other voluntary payment (whether in cash or in kind) made
(directly or indirectly) to a State or unit of local government
by--
(i) a health care provider (as defined in paragraph
(7)(B)),
(ii) an entity related to a health care provider (as
defined in paragraph (7)(C)), or
(iii) an entity providing goods or services under the
State plan for which payment is made to the State under
paragraph (2), (3), (4), (6), or (7) of subsection (a).
(B) For purposes of paragraph (1)(A)(i)(I), the term ``bona
fide provider-related donation'' means a provider-related
donation that has no direct or indirect relationship (as
determined by the Secretary) to payments made under this title
to that provider, to providers furnishing the same class of
items and services as that provider, or to any related entity,
as established by the State to the satisfaction of the
Secretary. The Secretary may by regulation specify types of
provider-related donations described in the previous sentence
that will be considered to be bona fide provider-related
donations.
(C) For purposes of paragraph (1)(A)(i)(II), donations
described in this subparagraph are funds expended by a
hospital, clinic, or similar entity for the direct cost
(including costs of training and of preparing and distributing
outreach materials) of State or local agency personnel who are
stationed at the hospital, clinic, or entity to determine the
eligibility of individuals for medical assistance under this
title and to provide outreach services to eligible or
potentially eligible individuals.
(3)(A) In this subsection (except as provided in paragraph
(6)), the term ``health care related tax'' means a tax (as
defined in paragraph (7)(F)) that--
(i) is related to health care items or services, or
to the provision of, the authority to provide, or
payment for, such items or services, or
(ii) is not limited to such items or services but
provides for treatment of individuals or entities that
are providing or paying for such items or services that
is different from the treatment provided to other
individuals or entities.
In applying clause (i), a tax is considered to relate to health
care items or services if at least 85 percent of the burden of
such tax falls on health care providers.
(B) In this subsection, the term ``broad-based health care
related tax'' means a health care related tax which is imposed
with respect to a class of health care items or services (as
described in paragraph (7)(A)) or with respect to providers of
such items or services and which, except as provided in
subparagraphs (D), (E), and (F)--
(i) is imposed at least with respect to all items or
services in the class furnished by all non-Federal,
nonpublic providers in the State (or, in the case of a
tax imposed by a unit of local government, the area
over which the unit has jurisdiction) or is imposed
with respect to all non-Federal, nonpublic providers in
the class; and
(ii) is imposed uniformly (in accordance with
subparagraph (C)).
(C)(i) Subject to clause (ii), for purposes of subparagraph
(B)(ii), a tax is considered to be imposed uniformly if--
(I) in the case of a tax consisting of a licensing
fee or similar tax on a class of health care items or
services (or providers of such items or services), the
amount of the tax imposed is the same for every
provider providing items or services within the class;
(II) in the case of a tax consisting of a licensing
fee or similar tax imposed on a class of health care
items or services (or providers of such services) on
the basis of the number of beds (licensed or otherwise)
of the provider, the amount of the tax is the same for
each bed of each provider of such items or services in
the class;
(III) in the case of a tax based on revenues or
receipts with respect to a class of items or services
(or providers of items or services) the tax is imposed
at a uniform rate for all items and services (or
providers of such items of services) in the class on
all the gross revenues or receipts, or net operating
revenues, relating to the provision of all such items
or services (or all such providers) in the State (or,
in the case of a tax imposed by a unit of local
government within the State, in the area over which the
unit has jurisdiction); or
(IV) in the case of any other tax, the State
establishes to the satisfaction of the Secretary that
the tax is imposed uniformly.
(ii) Subject to subparagraphs (D) and (E), a tax imposed with
respect to a class of health care items and services is not
considered to be imposed uniformly if the tax provides for any
credits, exclusions, or deductions which have as their purpose
or effect the return to providers of all or a portion of the
tax paid in a manner that is inconsistent with subclauses (I)
and (II) of subparagraph (E)(ii) or provides for a hold
harmless provision described in paragraph (4).
(D) A tax imposed with respect to a class of health care
items and services is considered to be imposed uniformly--
(i) notwithstanding that the tax is not imposed with
respect to items or services (or the providers thereof)
for which payment is made under a State plan under this
title or title XVIII, or
(ii) in the case of a tax described in subparagraph
(C)(i)(III), notwithstanding that the tax provides for
exclusion (in whole or in part) of revenues or receipts
from a State plan under this title or title XVIII.
(E)(i) A State may submit an application to the Secretary
requesting that the Secretary treat a tax as a broad-based
health care related tax, notwithstanding that the tax does not
apply to all health care items or services in class (or all
providers of such items and services), provides for a credit,
deduction, or exclusion, is not applied uniformly, or otherwise
does not meet the requirements of subparagraph (B) or (C).
Permissible waivers may include exemptions for rural or sole-
community providers.
(ii) The Secretary shall approve such an application if the
State establishes to the satisfaction of the Secretary that--
(I) the net impact of the tax and associated
expenditures under this title as proposed by the State
is generally redistributive in nature, and
(II) the amount of the tax is not directly correlated
to payments under this title for items or services with
respect to which the tax is imposed.
The Secretary shall by regulation specify types of credits,
exclusions, and deductions that will be considered to meet the
requirements of this subparagraph.
(F) In no case shall a tax not qualify as a broad-based
health care related tax under this paragraph because it does
not apply to a hospital that is described in section 501(c)(3)
of the Internal Revenue Code of 1986 and exempt from taxation
under section 501(a) of such Code and that does not accept
payment under the State plan under this title or under title
XVIII.
(4) For purposes of paragraph (1)(A)(iii), there is in effect
a hold harmless provision with respect to a broad-based health
care related tax imposed with respect to a class of items or
services if the Secretary determines that any of the following
applies:
(A) The State or other unit of government imposing
the tax provides (directly or indirectly) for a payment
(other than under this title) to taxpayers and the
amount of such payment is positively correlated either
to the amount of such tax or to the difference between
the amount of the tax and the amount of payment under
the State plan.
(B) All or any portion of the payment made under this
title to the taxpayer varies based only upon the amount
of the total tax paid.
(C)(i) The State or other unit of government imposing
the tax provides (directly or indirectly) for any
payment, offset, or waiver that guarantees to hold
taxpayers harmless for any portion of the costs of the
tax.
(ii) For purposes of clause (i), a determination of
the existence of an indirect guarantee shall be made
under paragraph (3)(i) of section 433.68(f) of title
42, Code of Federal Regulations, as in effect on
November 1, 2006, except that for portions of fiscal
years beginning on or after January 1, 2008, and before
October 1, 2011, ``5.5 percent'' shall be substituted
for ``6 percent'' each place it appears.
The provisions of this paragraph shall not prevent use of the
tax to reimburse health care providers in a class for
expenditures under this title nor preclude States from relying
on such reimbursement to justify or explain the tax in the
legislative process.
(5)(A) For purposes of this subsection, the limit under this
subparagraph with respect to a State is an amount equal to 25
percent (or, if greater, the State base percentage, as defined
in subparagraph (B)) of the non-Federal share of the total
amount expended under the State plan during a State fiscal year
(or portion thereof), as it would be determined pursuant to
paragraph (1)(A) without regard to paragraph (1)(A)(iv).
(B)(i) In subparagraph (A), the term ``State base
percentage'' means, with respect to a State, an amount
(expressed as a percentage) equal to--
(I) the total of the amount of health care related
taxes (whether or not broad-based) and the amount of
provider-related donations (whether or not bona fide)
projected to be collected (in accordance with clause
(ii)) during State fiscal year 1992, divided by
(II) the non-Federal share of the total amount
estimated to be expended under the State plan during
such State fiscal year.
(ii) For purposes of clause (i)(I), in the case of a tax that
is not in effect throughout State fiscal year 1992 or the rate
(or base) of which is increased during such fiscal year, the
Secretary shall project the amount to be collected during such
fiscal year as if the tax (or increase) were in effect during
the entire State fiscal year.
(C)(i) The total amount of health care related taxes under
subparagraph (B)(i)(I) shall be determined by the Secretary
based on only those taxes (including the tax rate or base)
which were in effect, or for which legislation or regulations
imposing such taxes were enacted or adopted, as of November 22,
1991.
(ii) The amount of provider-related donations under
subparagraph (B)(i)(I) shall be determined by the Secretary
based on programs in effect on September 30, 1991, and
applicable to State fiscal year 1992, as demonstrated by State
plan amendments, written agreements, State budget
documentation, or other documentary evidence in existence on
that date.
(iii) The amount of expenditures described in subparagraph
(B)(i)(II) shall be determined by the Secretary based on the
best data available as of the date of the enactment of this
subsection.
(6)(A) Notwithstanding the provisions of this subsection, the
Secretary may not restrict States' use of funds where such
funds are derived from State or local taxes (or funds
appropriated to State university teaching hospitals)
transferred from or certified by units of government within a
State as the non-Federal share of expenditures under this
title, regardless of whether the unit of government is also a
health care provider, except as provided in section 1902(a)(2),
unless the transferred funds are derived by the unit of
government from donations or taxes that would not otherwise be
recognized as the non-Federal share under this section.
(B) For purposes of this subsection, funds the use of which
the Secretary may not restrict under subparagraph (A) shall not
be considered to be a provider-related donation or a health
care related tax.
(7) For purposes of this subsection:
(A) Each of the following shall be considered a
separate class of health care items and services:
(i) Inpatient hospital services.
(ii) Outpatient hospital services.
(iii) Nursing facility services (other than
services of intermediate care facilities for
the mentally retarded).
(iv) Services of intermediate care facilities
for the mentally retarded.
(v) Physicians' services.
(vi) Home health care services.
(vii) Outpatient prescription drugs.
(viii) Services of managed care organizations
(including health maintenance organizations,
preferred provider organizations, and such
other similar organizations as the Secretary
may specify by regulation).
(ix) Such other classification of health care
items and services consistent with this
subparagraph as the Secretary may establish by
regulation.
(B) The term ``health care provider'' means an
individual or person that receives payments for the
provision of health care items or services.
(C) An entity is considered to be ``related'' to a
health care provider if the entity--
(i) is an organization, association,
corporation or partnership formed by or on
behalf of health care providers;
(ii) is a person with an ownership or control
interest (as defined in section 1124(a)(3)) in
the provider;
(iii) is the employee, spouse, parent, child,
or sibling of the provider (or of a person
described in clause (ii)); or
(iv) has a similar, close relationship (as
defined in regulations) to the provider.
(D) The term ``State'' means only the 50 States and
the District of Columbia but does not include any State
whose entire program under this title is operated under
a waiver granted under section 1115.
(E) The ``State fiscal year'' means, with respect to
a specified year, a State fiscal year ending in that
specified year.
(F) The term ``tax'' includes any licensing fee,
assessment, or other mandatory payment, but does not
include payment of a criminal or civil fine or penalty
(other than a fine or penalty imposed in lieu of or
instead of a fee, assessment, or other mandatory
payment).
(G) The term ``unit of local government'' means, with
respect to a State, a city, county, special purpose
district, or other governmental unit in the State.
(x)(1) For purposes of section 1902(a)(46)(B)(i), the
requirement of this subsection is, with respect to an
individual declaring to be a citizen or national of the United
States, that, subject to paragraph (2), there is presented
satisfactory documentary evidence of citizenship or nationality
(as defined in paragraph (3)) of the individual.
(2) The requirement of paragraph (1) shall not apply to an
individual declaring to be a citizen or national of the United
States who is eligible for medical assistance under this
title--
(A) and is entitled to or enrolled for benefits under
any part of title XVIII;
(B) and is receiving--
(i) disability insurance benefits under
section 223 or monthly insurance benefits under
section 202 based on such individual's
disability (as defined in section 223(d)); or
(ii) supplemental security income benefits
under title XVI;
(C) and with respect to whom--
(i) child welfare services are made available
under part B of title IV on the basis of being
a child in foster care; or
(ii) adoption or foster care assistance is
made available under part E of title IV;
(D) pursuant to the application of section 1902(e)(4)
(and, in the case of an individual who is eligible for
medical assistance on such basis, the individual shall
be deemed to have provided satisfactory documentary
evidence of citizenship or nationality and shall not be
required to provide further documentary evidence on any
date that occurs during or after the period in which
the individual is eligible for medical assistance on
such basis); or
(E) on such basis as the Secretary may specify under
which satisfactory documentary evidence of citizenship
or nationality has been previously presented.
(3)(A) For purposes of this subsection, the term
``satisfactory documentary evidence of citizenship or
nationality'' means--
(i) any document described in subparagraph (B); or
(ii) a document described in subparagraph (C) and a
document described in subparagraph (D).
(B) The following are documents described in this
subparagraph:
(i) A United States passport.
(ii) Form N-550 or N-570 (Certificate of
Naturalization).
(iii) Form N-560 or N-561 (Certificate of United
States Citizenship).
(iv) A valid State-issued driver's license or other
identity document described in section 274A(b)(1)(D) of
the Immigration and Nationality Act, but only if the
State issuing the license or such document requires
proof of United States citizenship before issuance of
such license or document or obtains a social security
number from the applicant and verifies before
certification that such number is valid and assigned to
the applicant who is a citizen.
(v)(I) Except as provided in subclause (II), a
document issued by a federally recognized Indian tribe
evidencing membership or enrollment in, or affiliation
with, such tribe (such as a tribal enrollment card or
certificate of degree of Indian blood).
(II) With respect to those federally recognized
Indian tribes located within States having an
international border whose membership includes
individuals who are not citizens of the United States,
the Secretary shall, after consulting with such tribes,
issue regulations authorizing the presentation of such
other forms of documentation (including tribal
documentation, if appropriate) that the Secretary
determines to be satisfactory documentary evidence of
citizenship or nationality for purposes of satisfying
the requirement of this subsection.
(vi) Such other document as the Secretary may
specify, by regulation, that provides proof of United
States citizenship or nationality and that provides a
reliable means of documentation of personal identity.
(C) The following are documents described in this
subparagraph:
(i) A certificate of birth in the United States.
(ii) Form FS-545 or Form DS-1350 (Certification of
Birth Abroad).
(iii) Form I-197 (United States Citizen
Identification Card).
(iv) Form FS-240 (Report of Birth Abroad of a Citizen
of the United States).
(v) Such other document (not described in
subparagraph (B)(iv)) as the Secretary may specify that
provides proof of United States citizenship or
nationality.
(D) The following are documents described in this
subparagraph:
(i) Any identity document described in section
274A(b)(1)(D) of the Immigration and Nationality Act.
(ii) Any other documentation of personal identity of
such other type as the Secretary finds, by regulation,
provides a reliable means of identification.
(E) A reference in this paragraph to a form includes a
reference to any successor form.
(4) In the case of an individual declaring to be a citizen or
national of the United States with respect to whom a State
requires the presentation of satisfactory documentary evidence
of citizenship or nationality under section 1902(a)(46)(B)(i),
the individual shall be provided at least the reasonable
opportunity to present satisfactory documentary evidence of
citizenship or nationality under this subsection as is provided
under clauses (i) and (ii) of section 1137(d)(4)(A) to an
individual for the submittal to the State of evidence
indicating a satisfactory immigration status.
(5) Nothing in subparagraph (A) or (B) of section
1902(a)(46), the preceding paragraphs of this subsection, or
the Deficit Reduction Act of 2005, including section 6036 of
such Act, shall be construed as changing the requirement of
section 1902(e)(4) that a child born in the United States to an
alien mother for whom medical assistance for the delivery of
such child is available as treatment of an emergency medical
condition pursuant to subsection (v) shall be deemed eligible
for medical assistance during the first year of such child's
life.
(y) Payments for Establishment of Alternate Non-Emergency
Services Providers.--
(1) Payments.--In addition to the payments otherwise
provided under subsection (a), subject to paragraph
(2), the Secretary shall provide for payments to States
under such subsection for the establishment of
alternate non-emergency service providers (as defined
in section 1916A(e)(5)(B)), or networks of such
providers.
(2) Limitation.--The total amount of payments under
this subsection shall not exceed $50,000,000 during the
4-year period beginning with 2006. This subsection
constitutes budget authority in advance of
appropriations Acts and represents the obligation of
the Secretary to provide for the payment of amounts
provided under this subsection.
(3) Preference.--In providing for payments to States
under this subsection, the Secretary shall provide
preference to States that establish, or provide for,
alternate non-emergency services providers or networks
of such providers that--
(A) serve rural or underserved areas where
beneficiaries under this title may not have
regular access to providers of primary care
services; or
(B) are in partnership with local community
hospitals.
(4) Form and manner of payment.--Payment to a State
under this subsection shall be made only upon the
filing of such application in such form and in such
manner as the Secretary shall specify. Payment to a
State under this subsection shall be made in the same
manner as other payments under section 1903(a).
(z) Medicaid Transformation Payments.--
(1) In general.--In addition to the payments provided
under subsection (a), subject to paragraph (4), the
Secretary shall provide for payments to States for the
adoption of innovative methods to improve the
effectiveness and efficiency in providing medical
assistance under this title.
(2) Permissible uses of funds.--The following are
examples of innovative methods for which funds provided
under this subsection may be used:
(A) Methods for reducing patient error rates
through the implementation and use of
electronic health records, electronic clinical
decision support tools, or e-prescribing
programs.
(B) Methods for improving rates of collection
from estates of amounts owed under this title.
(C) Methods for reducing waste, fraud, and
abuse under the program under this title, such
as reducing improper payment rates as measured
by annual payment error rate measurement (PERM)
project rates.
(D) Implementation of a medication risk
management program as part of a drug use review
program under section 1927(g).
(E) Methods in reducing, in clinically
appropriate ways, expenditures under this title
for covered outpatient drugs, particularly in
the categories of greatest drug utilization, by
increasing the utilization of generic drugs
through the use of education programs and other
incentives to promote greater use of generic
drugs.
(F) Methods for improving access to primary
and specialty physician care for the uninsured
using integrated university-based hospital and
clinic systems.
(3) Application; terms and conditions.--
(A) In general.--No payments shall be made to
a State under this subsection unless the State
applies to the Secretary for such payments in a
form, manner, and time specified by the
Secretary.
(B) Terms and conditions.--Such payments are
made under such terms and conditions consistent
with this subsection as the Secretary
prescribes.
(C) Annual report.--Payment to a State under
this subsection is conditioned on the State
submitting to the Secretary an annual report on
the programs supported by such payment. Such
report shall include information on--
(i) the specific uses of such
payment;
(ii) an assessment of quality
improvements and clinical outcomes
under such programs; and
(iii) estimates of cost savings
resulting from such programs.
(4) Funding.--
(A) Limitation on funds.--The total amount of
payments under this subsection shall be equal
to, and shall not exceed--
(i) $75,000,000 for fiscal year 2007;
and
(ii) $75,000,000 for fiscal year
2008.
This subsection constitutes budget authority in
advance of appropriations Acts and represents
the obligation of the Secretary to provide for
the payment of amounts provided under this
subsection.
(B) Allocation of funds.--The Secretary shall
specify a method for allocating the funds made
available under this subsection among States.
Such method shall provide preference for States
that design programs that target health
providers that treat significant numbers of
Medicaid beneficiaries. Such method shall
provide that not less than 25 percent of such
funds shall be allocated among States the
population of which (as determined according to
data collected by the United States Census
Bureau) as of July 1, 2004, was more than 105
percent of the population of the respective
State (as so determined) as of April 1, 2000.
(C) Form and manner of payment.--Payment to a
State under this subsection shall be made in
the same manner as other payments under section
1903(a). There is no requirement for State
matching funds to receive payments under this
subsection.
(5) Medication risk management program.--
(A) In general.--For purposes of this
subsection, the term ``medication risk
management program'' means a program for
targeted beneficiaries that ensures that
covered outpatient drugs are appropriately used
to optimize therapeutic outcomes through
improved medication use and to reduce the risk
of adverse events.
(B) Elements.--Such program may include the
following elements:
(i) The use of established principles
and standards for drug utilization
review and best practices to analyze
prescription drug claims of targeted
beneficiaries and identify outlier
physicians.
(ii) On an ongoing basis provide
outlier physicians--
(I) a comprehensive pharmacy
claims history for each
targeted beneficiary under
their care;
(II) information regarding
the frequency and cost of
relapses and hospitalizations
of targeted beneficiaries under
the physician's care; and
(III) applicable best
practice guidelines and
empirical references.
(iii) Monitor outlier physician's
prescribing, such as failure to refill,
dosage strengths, and provide
incentives and information to encourage
the adoption of best clinical
practices.
(C) Targeted beneficiaries.--For purposes of
this paragraph, the term ``targeted
beneficiaries'' means Medicaid eligible
beneficiaries who are identified as having high
prescription drug costs and medical costs, such
as individuals with behavioral disorders or
multiple chronic diseases who are taking
multiple medications.
* * * * * * *
B. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in
which no change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows (new
matter is printed in italic and existing law in which no change
is proposed is shown in roman):
MEDICARE, MEDICAID, AND SCHIP EXTENSION ACT OF 2007
* * * * * * *
TITLE I--MEDICARE
* * * * * * *
SEC. 114. LONG-TERM CARE HOSPITALS.
(a) (Omitted amendatory text)
(b) Study and Report on Long-Term Care Hospital Facility and
Patient Criteria.--
(1) In general.--The Secretary of Health and Human
Services (in this section referred to as the
``Secretary'') shall conduct a study on the
establishment of national long-term care hospital
facility and patient criteria for purposes of
determining medical necessity, appropriateness of
admission, and continued stay at, and discharge from,
long-term care hospitals.
(2) Report.--Not later than 18 months after the date
of the enactment of this Act, the Secretary shall
submit to Congress a report on the study conducted
under paragraph (1), together with recommendations for
such legislation and administrative actions, including
timelines for implementation of patient criteria or
other actions, as the Secretary determines appropriate.
(3) Considerations.--In conducting the study and
preparing the report under this subsection, the
Secretary shall consider--
(A) recommendations contained in a report to
Congress by the Medicare Payment Advisory
Commission in June 2004 for long-term care
hospital-specific facility and patient criteria
to ensure that patients admitted to long-term
care hospitals are medically complex and
appropriate to receive long-term care hospital
services; and
(B) ongoing work by the Secretary to evaluate
and determine the feasibility of such
recommendations.
(c) Payment for Long-Term Care Hospital Services.--
(1) Delay in application of 25 percent patient
threshold payment adjustment.--The Secretary shall not
apply, for cost reporting periods beginning on or after
July 1, 2007,--
(A) [for a 9-year period] through June 30,
2016, and for discharges occurring on or after
October 1, 2016, and before July 1, 2017,
section 412.536 of title 42, Code of Federal
Regulations, or any similar provision, to
freestanding long-term care hospitals or to a
long-term care hospital, or satellite facility,
that as of December 29, 2007, was co-located
with an entity that is a provider-based, off-
campus location of a subsection (d) hospital
which did not provide services payable under
section 1886(d) of the Social Security Act at
the off-campus location; and
(B) such section or section 412.534 of title
42, Code of Federal Regulations, or any similar
provisions, to a long-term care hospital
identified by the amendment made by section
4417(a) of the Balanced Budget Act of 1997
(Public Law 105-33).
(2) Payment for hospitals-within-hospitals.--
(A) In general.--Payment to an applicable
long-term care hospital or satellite facility
which is located in a rural area or which is
co-located with an urban single or MSA dominant
hospital under paragraphs (d)(1), (e)(1), and
(e)(4) of section 412.534 of title 42, Code of
Federal Regulations, or any similar provision,
shall not be subject to any payment adjustment
under such section if no more than 75 percent
of the hospital's Medicare discharges (other
than discharges described in paragraph (d)(2)
or (e)(3) of such section) are admitted from a
co-located hospital.
(B) Co-located long-term care hospitals and
satellite facilities.--
(i) In general.--Payment to an
applicable long-term care hospital or
satellite facility which is co-located
with another hospital shall not be
subject to any payment adjustment under
section 412.534 of title 42, Code of
Federal Regulations, or any similar
provision, if no more than 50 percent
of the hospital's Medicare discharges
(other than discharges described in
paragraph (c)(3) of such section) are
admitted from a co-located hospital.
(ii) Applicable long-term care
hospital or satellite facility
defined.--In this paragraph, the term
``applicable long-term care hospital or
satellite facility'' means a hospital
or satellite facility that is subject
to the transition rules under section
412.534(g) of title 42, Code of Federal
Regulations, or any similar provision,
or that is described in section
412.22(h)(3)(i) of such title.
(C) Effective date.--Subparagraphs (A) and
(B) shall apply to cost reporting periods
beginning on or after October 1, 2007 (or July
1, 2007, in the case of a satellite facility
described in section 412.22(h)(3)(i) of title
42, Code of Federal Regulations) [for a 9-year
period] through June 30, 2016, and for
discharges occurring on or after October 1,
2016, and before July 1, 2017.
(3) No application of very short-stay outlier
policy.--The Secretary shall not apply, for the 5-year
period beginning on the date of the enactment of this
Act, the amendments finalized on May 11, 2007 (72
Federal Register 26904, 26992) made to the short-stay
outlier payment provision for long-term care hospitals
contained in section 412.529(c)(3)(i) of title 42, Code
of Federal Regulations, or any similar provision.
(4) No application of one-time adjustment to standard
amount.--The Secretary shall not, for the 5-year period
beginning on the date of the enactment of this Act,
make the one-time prospective adjustment to long-term
care hospital prospective payment rates provided for in
section 412.523(d)(3) of title 42, Code of Federal
Regulations, or any similar provision.
(d) Moratorium on the Establishment of Long-Term Care
Hospitals, Long-Term Care Satellite Facilities and on the
Increase of Long-Term Care Hospital Beds in Existing Long-Term
Care Hospitals or Satellite Facilities.--
(1) In general.--During the 5-year period (and for
the period beginning on the date of the enactment of
paragraph (7) of this subsection and ending September
30, 2017) beginning on the date of the enactment of
this Act, the Secretary shall impose a moratorium for
purposes of the Medicare program under title XVIII of
the Social Security Act--
(A) subject to paragraph (2), on the
establishment and classification of a long-term
care hospital or satellite facility, other than
an existing long-term care hospital or
facility; and
(B) subject to paragraph (3), on an increase
of long-term care hospital beds in existing
long-term care hospitals or satellite
facilities.
(2) Exception for certain long-term care hospitals.--
The moratorium under paragraph (1)(A) shall not apply
to a long-term care hospital that as of the date of the
enactment of this Act--
(A) began its qualifying period for payment
as a long-term care hospital under section
412.23(e) of title 42, Code of Federal
Regulations, on or before the date of the
enactment of this Act;
(B) has a binding written agreement with an
outside, unrelated party for the actual
construction, renovation, lease, or demolition
for a long-term care hospital, and has
expended, before the date of the enactment of
this Act, at least 10 percent of the estimated
cost of the project (or, if less, $2,500,000);
or
(C) has obtained an approved certificate of
need in a State where one is required on or
before the date of the enactment of this Act.
(3) Exception for bed increases during moratorium.--
(A) In general.--Subject to subparagraph (B),
the moratorium under paragraph (1)(B) shall not
apply to an increase in beds in an existing
hospital or satellite facility if the hospital
or facility obtained a certificate of need for
an increase in beds that is in a State for
which such certificate of need is required and
that was issued on or after April 1, 2005, and
before December 29, 2007, or if the hospital or
facility--
(i) is located in a State where there
is only one other long-term care
hospital; and
(ii) requests an increase in beds
following the closure or the decrease
in the number of beds of another long-
term care hospital in the State.
(B) No effect on certain limitation.--The
exception under subparagraph (A) shall not
effect the limitation on increasing beds under
sections 412.22(h)(3) and 412.22(f) of title
42, Code of Federal Regulations.
(4) Existing hospital or satellite facility
defined.--For purposes of this subsection, the term
``existing'' means, with respect to a hospital or
satellite facility, a hospital or satellite facility
that received payment under the provisions of subpart O
of part 412 of title 42, Code of Federal Regulations,
as of the date of the enactment of this Act.
(5) Judicial review.--There shall be no
administrative or judicial review under section 1869 of
the Social Security Act (42 U.S.C. 1395ff), section
1878 of such Act (42 U.S.C. 1395oo), or otherwise, of
the application of this subsection by the Secretary.
(6) Limitation on application of exceptions.--
Paragraphs (2) and (3) shall not apply during the
period beginning on the date of the enactment of
paragraph (7) of this subsection and ending September
30, 2017.
(7) Additional exception for certain long-term care
hospitals.--The moratorium under paragraph (1)(A) shall
not apply to a long-term care hospital that--
(A) began its qualifying period for payment
as a long-term care hospital under section
412.23(e) of title 42, Code of Federal
Regulations, on or before the date of enactment
of this paragraph;
(B) has a binding written agreement as of the
date of the enactment of this paragraph with an
outside, unrelated party for the actual
construction, renovation, lease, or demolition
for a long-term care hospital, and has
expended, before such date of enactment, at
least 10 percent of the estimated cost of the
project (or, if less, $2,500,000); or
(C) has obtained an approved certificate of
need in a State where one is required on or
before such date of enactment.
(e) Long-Term Care Hospital Payment Update.--
(1) (Omitted amendatory text)
(2) Delayed effective date.--Subsection (m)(2) of
section 1886 of the Social Security Act, as added by
paragraph (1), shall not apply to discharges occurring
on or after July 1, 2007, and before April 1, 2008.
(f) Expanded Review of Medical Necessity.--
(1) In general.--The Secretary of Health and Human
Services shall provide, under contracts with one or
more appropriate fiscal intermediaries or medicare
administrative contractors under section 1874A(a)(4)(G)
of the Social Security Act (42 U.S.C. 1395kk-
1(a)(4)(G)), for reviews of the medical necessity of
admissions to long-term care hospitals (described in
section 1886(d)(1)(B)(iv) of such Act) and continued
stay at such hospitals, of individuals entitled to, or
enrolled for, benefits under part A of title XVIII of
such Act consistent with this subsection. Such reviews
shall be made for discharges occurring on or after
October 1, 2007.
(2) Review methodology.--The medical necessity
reviews under paragraph (1) shall be conducted on an
annual basis in accordance with rules specified by the
Secretary. Such reviews shall--
(A) provide for a statistically valid and
representative sample of admissions of such
individuals sufficient to provide results at a
95 percent confidence interval; and
(B) guarantee that at least 75 percent of
overpayments received by long-term care
hospitals for medically unnecessary admissions
and continued stays of individuals in long-term
care hospitals will be identified and recovered
and that related days of care will not be
counted toward the length of stay requirement
contained in section 1886(d)(1)(B)(iv) of the
Social Security Act (42 U.S.C.
1395ww(d)(1)(B)(iv)).
(3) Continuation of reviews.--Under contracts under
this subsection, the Secretary shall establish an error
rate with respect to such reviews that could require
further review of the medical necessity of admissions
and continued stay in the hospital involved and other
actions as determined by the Secretary.
(4) Termination of required reviews.--
(A) In general.--Subject to subparagraph (B),
the previous provisions of this subsection
shall cease to apply for discharges occurring
on or after October 1, 2010.
(B) Continuation.--As of the date specified
in subparagraph (A), the Secretary shall
determine whether to continue to guarantee,
through continued medical review and sampling
under this paragraph, recovery of at least 75
percent of overpayments received by long-term
care hospitals due to medically unnecessary
admissions and continued stays.
(5) Funding.--The costs to fiscal intermediaries or
medicare administrative contractors conducting the
medical necessity reviews under paragraph (1) shall be
funded from the aggregate overpayments recouped by the
Secretary of Health and Human Services from long-term
care hospitals due to medically unnecessary admissions
and continued stays. The Secretary may use an amount
not in excess of 40 percent of the overpayments
recouped under this paragraph to compensate the fiscal
intermediaries or Medicare administrative contractors
for the costs of services performed.
(g) Implementation.--For purposes of carrying out the
provisions of, and amendments made by, this title, in addition
to any amounts otherwise provided in this title, there are
appropriated to the Centers for Medicare & Medicaid Services
Program Management Account, out of any money in the Treasury
not otherwise appropriated, $35,000,000 for the period of
fiscal years 2008 and 2009.
* * * * * * *
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PATHWAY FOR SGR REFORM ACT OF 2013
* * * * * * *
DIVISION B--MEDICARE AND OTHER HEALTH PROVISIONS
* * * * * * *
TITLE II--OTHER HEALTH PROVISIONS
* * * * * * *
SEC. 1206. PAYMENT FOR INPATIENT SERVICES IN LONG-TERM CARE HOSPITALS
(LTCHS).
(a) Establishment of Criteria for Application of Site Neutral
Payment.--
(1) In general.--Section 1886(m) of the Social
Security Act (42 U.S.C. 1395ww(m)) is amended by adding
at the end the following:
``(6) Application of site neutral ipps payment rate
in certain cases.--
``(A) General application of site neutral
ipps payment amount for discharges failing to
meet applicable criteria.--
``(i) In general.--For a discharge in
cost reporting periods beginning on or
after October 1, 2015, except as
provided in clause (ii) and
subparagraph (C), payment under this
title to a long-term care hospital for
inpatient hospital services shall be
made at the applicable site neutral
payment rate (as defined in
subparagraph (B)).
``(ii) Exception for certain
discharges meeting criteria.--Clause
(i) shall not apply (and payment shall
be made to a long-term care hospital
without regard to this paragraph) for a
discharge if--
``(I) the discharge meets the
ICU criterion under clause
(iii) or the ventilator
criterion under clause (iv);
and
``(II) the discharge does not
have a principal diagnosis
relating to a psychiatric
diagnosis or to rehabilitation.
``(iii) Intensive care unit (icu)
criterion.--
``(I) In general.--The
criterion specified in this
clause (in this paragraph
referred to as the `ICU
criterion'), for a discharge
from a long-term care hospital,
is that the stay in the long-
term care hospital ending with
such discharge was immediately
preceded by a discharge from a
stay in a subsection (d)
hospital that included at least
3 days in an intensive care
unit (ICU), as determined by
the Secretary.
``(II) Determining icu
days.--In determining intensive
care unit days under subclause
(I), the Secretary shall use
data from revenue center codes
020x or 021x (or such successor
codes as the Secretary may
establish).
``(iv) Ventilator criterion.--The
criterion specified in this clause (in
this paragraph referred to as the
`ventilator criterion'), for a
discharge from a long-term care
hospital, is that--
``(I) the stay in the long-
term care hospital ending with
such discharge was immediately
preceded by a discharge from a
stay in a subsection (d)
hospital; and
``(II) the individual
discharged was assigned to a
Medicare-Severity-Long-Term-
Care-Diagnosis-Related-Group
(MS-LTC-DRG) based on the
receipt of ventilator services
of at least 96 hours.
``(B) Applicable site neutral payment rate
defined.--
``(i) In general.--In this paragraph,
the term `applicable site neutral
payment rate' means--
``(I) for discharges in cost
reporting periods beginning
during fiscal year 2016 or
fiscal year 2017, the blended
payment rate specified in
clause (iii); and
``(II) for discharges in cost
reporting periods beginning
during fiscal year 2018 or a
subsequent fiscal year, the
site neutral payment rate (as
defined in clause (ii)).
``(ii) Site neutral payment rate
defined.--In this paragraph, the term
`site neutral payment rate' means the
lower of--
``(I) the IPPS comparable per
diem amount determined under
paragraph (d)(4) of section
412.529 of title 42, Code of
Federal Regulations, including
any applicable outlier payments
under section 412.525 of such
title; or
``(II) 100 percent of the
estimated cost for the services
involved.
``(iii) Blended payment rate.--The
blended payment rate specified in this
clause, for a long-term care hospital
for inpatient hospital services for a
discharge, is comprised of--
``(I) half of the site
neutral payment rate (as
defined in clause (ii)) for the
discharge; and
``(II) half of the payment
rate that would otherwise be
applicable to such discharge
without regard to this
paragraph, as determined by the
Secretary.
``(C) Limiting payment for all hospital
discharges to site neutral payment rate for
hospitals failing to meet applicable ltch
discharge thresholds.--
``(i) Notice of ltch discharge
payment percentage.--For cost reporting
periods beginning during or after
fiscal year 2016, the Secretary shall
inform each long-term care hospital of
its LTCH discharge payment percentage
(as defined in clause (iv)) for such
period.
``(ii) Limitation.--For cost
reporting periods beginning during or
after fiscal year 2020, if the
Secretary determines for a long-term
care hospital that its LTCH discharge
payment percentage for the period is
not at least 50 percent--
``(I) the Secretary shall
inform the hospital of such
fact; and
``(II) subject to clause
(iii), for all discharges in
the hospital in each succeeding
cost reporting period, the
payment amount under this
subsection shall be the payment
amount that would apply under
subsection (d) for the
discharge if the hospital were
a subsection (d) hospital.
``(iii) Process for reinstatement.--
The Secretary shall establish a process
whereby a long-term care hospital may
seek to and have the provisions of
subclause (II) of clause (ii)
discontinued with respect to that
hospital.
``(iv) LTCH discharge payment
percentage.--In this subparagraph, the
term `LTCH discharge payment
percentage' means, with respect to a
long-term care hospital for a cost
reporting period beginning during or
after fiscal year 2020, the ratio
(expressed as a percentage) of--
``(I) the number of
discharges for such hospital
and period for which payment is
not made at the site neutral
payment rate, to
``(II) the total number of
discharges for such hospital
and period.
``(D) Inclusion of subsection (d) puerto rico
hospitals.--In this paragraph, any reference in
this paragraph to a subsection (d) hospital
shall be deemed to include a reference to a
subsection (d) Puerto Rico hospital.''.
(2) Medpac study and report on impact of changes.--
(A) Study.--The Medicare Payment Advisory
Commission shall examine the effect of applying
section 1886(m)(6) of the Social Security Act,
as added by the amendment made by paragraph
(1), on--
(i) the quality of patient care in
long-term care hospitals;
(ii) the use of hospice care and
post-acute care settings;
(iii) different types of long-term
care hospitals; and
(iv) the growth in Medicare spending
for services in such hospitals.
(B) Report.--Not later than June 30, 2019,
the Commission shall submit to Congress a
report on such study. The Commission shall
include in such report such recommendations for
changes in the application of such section as
the Commission deems appropriate as well as the
impact of the application of such section on
the need to continue applying the 25 percent
rule described under sections 412.534 and
412.536 of title 42, Code of Federal
Regulations.
(3) Calculation of length of stay excluding cases
paid on a [site neutral basis.--]
[(A) In general.--For discharges occurring]
site neutral basis._For discharges occurring
in cost reporting periods beginning on or after
October 1, 2015, [subject to subparagraph (B),]
in calculating the length of stay requirement
applicable to a long-term care hospital or
satellite facility under section
1886(d)(1)(B)(iv)(I) of the Social Security Act
(42 U.S.C. 1395ww(d)(1)(B)(iv)(I)) and section
1861(ccc)(2) of such Act (42 U.S.C.
1395x(ccc)(2)), the Secretary of Health and
Human Services shall exclude the following:
[(i)] (A) Site neutral payment.--Any patient
for whom payment is made at the site neutral
payment rate (as defined in section
1886(m)(6)(B)(ii)) of such Act, as added by
paragraph (1)).
[(ii)] (B) Medicare advantage.--Any patient
for whom payment is made under a Medicare
Advantage plan under part C of title XVIII of
such Act.
[(B) Limitation on converting subsection (d)
hospitals.--Subparagraph (A) shall only apply
to a hospital that is classified as of December
10, 2013, as a long-term care hospital (as
defined in section 1861(ccc) of the Social
Security Act, 42 U.S.C. 1395x(ccc)) for
purposes of determining whether the
requirements of section 1886(d)(1)(B)(iv)(I) or
1861(ccc)(2) of such Act (42 U.S.C.
1395ww(d)(1)(B)(iv)(I), 1395x(ccc)(2)) are
met.]
(b) Extension of Certain LTCH Payment Rules and Moratorium on
the Establishment of Certain Hospitals and Facilities.--
(1) Extension of certain payment rules.--
(A) Payment for hospitals-within-hospitals.--
Paragraph (2)(C) of section 114(c) of the
Medicare, Medicaid, and SCHIP Extension Act of
2007 (42 U.S.C. 1395ww note), as amended by
sections 3106(a) and 10312(a) of Public Law
111-148, is amended by striking ``5-year
period'' and inserting ``9-year period''.
(B) 25 percent patient threshold payment
adjustment; making the grandfathered exemption
for long-term care hospitals permanent.--
Section 114(c)(1) of the Medicare, Medicaid,
and SCHIP Extension Act of 2007 (42 U.S.C.
1395ww note), as amended by sections 3106(a)
and 10312(a) of Public Law 111-148, is
amended--
(i) in the matter preceding
subparagraph (A), by striking ``for a
5-year period''; and
(ii) in subparagraph (A), by
inserting ``for a 9-year period,''
before ``section 412.536''.
(C) Report assessing continued suspension of
25 percent rule.--Not later than 1 year before
the end of the 9-year period referred to in
section 114(c)(1) of the Medicare, Medicaid,
and SCHIP Extension Act of 2007 (42 U.S.C.
1395ww note), as amended by subparagraph (B),
the Secretary of Health and Human Services
shall submit to Congress a report on the need
for any further extensions (or modifications of
the extensions) of the 25 percent rule
described in sections 412.534 and 412.536 of
title 42, Code of Federal Regulations,
particularly taking into account the
application of section 1886(m)(6) of the Social
Security Act, as added by subsection (a)(1).
(2) Extension of moratorium on establishment of and
increase in beds for ltchs.--Section 114(d) of the
Medicare, Medicaid, and SCHIP Extension Act of 2007 (42
U.S.C. 1395ww note), as amended by sections 3106(b) and
10312(b) of Public Law 111-148, is amended--
(A) in paragraph (1), in the matter preceding
subparagraph (A), by inserting after ``5-year
period'' the following: ``(and for the period
beginning January 1, 2015, and ending September
30, 2017)''; and
(B) by adding at the end the following new
paragraph:
``(6) Limitation on application of exceptions.--
Paragraphs (2) and (3) shall not apply during the
period beginning January 1, 2015, and ending September
30, 2017.''.
(c) Additional Quality Measure.--Section 1886(m)(5)(D) of the
Social Security Act (42 U.S.C. 1395ww(m)(5)(D)) is amended by
adding at the end the following new clause:
``(iv) Additional quality measures.--
Not later than October 1, 2015, the
Secretary shall establish a functional
status quality measure for change in
mobility among inpatients requiring
ventilator support.''.
(d) Review of Treatment of Certain LTCHs.--
(1) Evaluation.--As part of the annual rulemaking for
fiscal year 2015 or fiscal year 2016 to carry out the
payment rates under subsection (d) of section 1886 of
the Social Security Act (42 U.S.C. 1395ww), the
Secretary shall evaluate both the payment rates and
regulations governing hospitals which are classified
under subclause (II) of subsection (d)(1)(B)(iv) of
such section.
(2) Adjustment authority.--Based upon such
evaluation, the Secretary may adjust payment rates
under subsection (b)(3) of section 1886 of the Social
Security Act (42 U.S.C. 1395ww) for a hospital so
classified (such as payment based upon the TEFRA-
payment model) and may adjust the regulations governing
such hospitals, including applying the regulations
governing hospitals which are classified under clause
(I) of subsection (d)(1)(B) of such section.
* * * * * * *
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SOCIAL SECURITY ACT
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part E--Miscellaneous Provisions
* * * * * * *
agreements with providers of services; enrollment processes
Sec. 1866. (a)(1) Any provider of services (except a fund
designated for purposes of section 1814(g) and section 1835(e))
shall be qualified to participate under this title and shall be
eligible for payments under this title if it files with the
Secretary an agreement--
(A)(i) not to charge, except as provided in paragraph
(2), any individual or any other person for items or
services for which such individual is entitled to have
payment made under this title (or for which he would be
so entitled if such provider of services had complied
with the procedural and other requirements under or
pursuant to this title or for which such provider is
paid pursuant to the provisions of section 1814(e)),
and (ii) not to impose any charge that is prohibited
under section 1902(n)(3),
(B) not to charge any individual or any other person
for items or services for which such individual is not
entitled to have payment made under this title because
payment for expenses incurred for such items or
services may not be made by reason of the provisions of
paragraph (1) or (9) of section 1862(a), but only if
(i) such individual was without fault in incurring such
expenses and (ii) the Secretary's determination that
such payment may not be made for such items and
services was made after the third year following the
year in which notice of such payment was sent to such
individual; except that the Secretary may reduce such
three-year period to not less than one year if he finds
such reduction is consistent with the objectives of
this title,
(C) to make adequate provision for return (or other
disposition, in accordance with regulations) of any
moneys incorrectly collected from such individual or
other person,
(D) to promptly notify the Secretary of its
employment of an individual who, at any time during the
year preceding such employment, was employed in a
managerial, accounting, auditing, or similar capacity
(as determined by the Secretary by regulation) by an
agency or organization which serves as a fiscal
intermediary or carrier (for purposes of part A or part
B, or both, of this title) with respect to the
provider,
(E) to release data with respect to patients of such
provider upon request to an organization having a
contract with the Secretary under part B of title XI as
may be necessary (i) to allow such organization to
carry out its functions under such contract, or (ii) to
allow such organization to carry out similar review
functions under any contract the organization may have
with a private or public agency paying for health care
in the same area with respect to patients who authorize
release of such data for such purposes,
(F)(i) in the case of hospitals which provide
inpatient hospital services for which payment may be
made under subsection (b), (c), or (d) of section 1886,
to maintain an agreement with a professional standards
review organization (if there is such an organization
in existence in the area in which the hospital is
located) or with a quality improvement organization
which has a contract with the Secretary under part B of
title XI for the area in which the hospital is located,
under which the organization will perform functions
under that part with respect to the review of the
validity of diagnostic information provided by such
hospital, the completeness, adequacy, and quality of
care provided, the appropriateness of admissions and
discharges, and the appropriateness of care provided
for which additional payments are sought under section
1886(d)(5), with respect to inpatient hospital services
for which payment may be made under part A of this
title (and for purposes of payment under this title,
the cost of such agreement to the hospital shall be
considered a cost incurred by such hospital in
providing inpatient services under part A, and (I)
shall be paid directly by the Secretary to such
organization on behalf of such hospital in accordance
with a rate per review established by the Secretary,
(II) shall be transferred from the Federal Hospital
Insurance Trust Fund, without regard to amounts
appropriated in advance in appropriation Acts, in the
same manner as transfers are made for payment for
services provided directly to beneficiaries, and (III)
shall not be less in the aggregate for a fiscal year
than the aggregate amount expended in fiscal year 1988
for direct and administrative costs (adjusted for
inflation and for any direct or administrative costs
incurred as a result of review functions added with
respect to a subsequent fiscal year) of such reviews),
(ii) in the case of hospitals, critical access
hospitals, skilled nursing facilities, and home health
agencies, to maintain an agreement with a quality
improvement organization (which has a contract with the
Secretary under part B of title XI for the area in
which the hospital, facility, or agency is located) to
perform the functions described in paragraph (3)(A),
(G) in the case of hospitals which provide inpatient
hospital services for which payment may be made under
subsection (b) or (d) of section 1886, not to charge
any individual or any other person for inpatient
hospital services for which such individual would be
entitled to have payment made under part A but for a
denial or reduction of payments under section
1886(f)(2),
(H)(i) in the case of hospitals which provide
services for which payment may be made under this title
and in the case of critical access hospitals which
provide critical access hospital services, to have all
items and services (other than physicians' services as
defined in regulations for purposes of section
1862(a)(14), and other than services described by
section 1861(s)(2)(K), certified nurse-midwife
services, qualified psychologist services, and services
of a certified registered nurse anesthetist) (I) that
are furnished to an individual who is a patient of the
hospital, and (II) for which the individual is entitled
to have payment made under this title, furnished by the
hospital or otherwise under arrangements (as defined in
section 1861(w)(1)) made by the hospital,
(ii) in the case of skilled nursing facilities which
provide covered skilled nursing facility services--
(I) that are furnished to an individual who
is a resident of the skilled nursing facility
during a period in which the resident is
provided covered post-hospital extended care
services (or, for services described in section
1861(s)(2)(D), that are furnished to such an
individual without regard to such period), and
(II) for which the individual is entitled to
have payment made under this title,
to have items and services (other than services
described in section 1888(e)(2)(A)(ii)) furnished by
the skilled nursing facility or otherwise under
arrangements (as defined in section 1861(w)(1)) made by
the skilled nursing facility,
(I) in the case of a hospital or critical access
hospital--
(i) to adopt and enforce a policy to ensure
compliance with the requirements of section
1867 and to meet the requirements of such
section,
(ii) to maintain medical and other records
related to individuals transferred to or from
the hospital for a period of five years from
the date of the transfer, and
(iii) to maintain a list of physicians who
are on call for duty after the initial
examination to provide treatment necessary to
stabilize an individual with an emergency
medical condition,
(J) in the case of hospitals which provide inpatient
hospital services for which payment may be made under
this title, to be a participating provider of medical
care under any health plan contracted for under section
1079 or 1086 of title 10, or under section 613 of title
38, United States Code, in accordance with admission
practices, payment methodology, and amounts as
prescribed under joint regulations issued by the
Secretary and by the Secretaries of Defense and
Transportation, in implementation of sections 1079 and
1086 of title 10, United States Code,
(K) not to charge any individual or any other person
for items or services for which payment under this
title is denied under section 1154(a)(2) by reason of a
determination under section 1154(a)(1)(B),
(L) in the case of hospitals which provide inpatient
hospital services for which payment may be made under
this title, to be a participating provider of medical
care under section 603 of title 38, United States Code,
in accordance with such admission practices, and such
payment methodology and amounts, as are prescribed
under joint regulations issued by the Secretary and by
the Secretary of Veterans Affairs in implementation of
such section,
(M) in the case of hospitals, to provide to each
individual who is entitled to benefits under part A (or
to a person acting on the individual's behalf), at or
about the time of the individual's admission as an
inpatient to the hospital, a written statement
(containing such language as the Secretary prescribes
consistent with this paragraph) which explains--
(i) the individual's rights to benefits for
inpatient hospital services and for post-
hospital services under this title,
(ii) the circumstances under which such an
individual will and will not be liable for
charges for continued stay in the hospital,
(iii) the individual's right to appeal
denials of benefits for continued inpatient
hospital services, including the practical
steps to initiate such an appeal, and
(iv) the individual's liability for payment
for services if such a denial of benefits is
upheld on appeal,--and which provides such
additional information as the Secretary may
specify,
(N) in the case of hospitals and critical access
hospitals--
(i) to make available to its patients the
directory or directories of participating
physicians (published under section 1842(h)(4))
for the area served by the hospital or critical
access hospital,
(ii) if hospital personnel (including staff
of any emergency or outpatient department)
refer a patient to a nonparticipating physician
for further medical care on an outpatient
basis, the personnel must inform the patient
that the physician is a nonparticipating
physician and, whenever practicable, must
identify at least one qualified participating
physician who is listed in such a directory and
from whom the patient may receive the necessary
services,
(iii) to post conspicuously in any emergency
department a sign (in a form specified by the
Secretary) specifying rights of individuals
under section 1867 with respect to examination
and treatment for emergency medical conditions
and women in labor, and
(iv) to post conspicuously (in a form
specified by the Secretary) information
indicating whether or not the hospital
participates in the medicaid program under a
State plan approved under title XIX,
(O) to accept as payment in full for services that
are covered under this title and are furnished to any
individual enrolled with a Medicare+Choice organization
under part C, with a PACE provider under section 1894
or 1934, or with an eligible organization with a risk-
sharing contract under section 1876, under section
1876(i)(2)(A) (as in effect before February 1, 1985),
under section 402(a) of the Social Security Amendments
of 1967, or under section 222(a) of the Social Security
Amendments of 1972, which does not have a contract (or,
in the case of a PACE provider, contract or other
agreement) establishing payment amounts for services
furnished to members of the organization or PACE
program eligible individuals enrolled with the PACE
provider, the amounts that would be made as a payment
in full under this title (less any payments under
sections 1886(d)(11) and 1886(h)(3)(D)) if the
individuals were not so enrolled,
(P) in the case of home health agencies which provide
home health services to individuals entitled to
benefits under this title who require catheters,
catheter supplies, ostomy bags, and supplies related to
ostomy car (described in section 1861(m)(5)), to offer
to furnish such supplies to such an individual as part
of their furnishing of home health services,
(Q) in the case of hospitals, skilled nursing
facilities, home health agencies, and hospice programs,
to comply with the requirement of subsection (f)
(relating to maintaining written policies and
procedures respecting advance directives),
(R) to contract only with a health care clearinghouse
(as defined in section 1171) that meets each standard
and implementation specification adopted or established
under part C of title XI on or after the date on which
the health care clearinghouse is required to comply
with the standard or specification,
(S) in the case of a hospital that has a financial
interest (as specified by the Secretary in regulations)
in an entity to which individuals are referred as
described in section 1861(ee)(2)(H)(ii), or in which
such an entity has such a financial interest, or in
which another entity has such a financial interest
(directly or indirectly) with such hospital and such an
entity, to maintain and disclose to the Secretary (in a
form and manner specified by the Secretary) information
on--
(i) the nature of such financial interest,
(ii) the number of individuals who were
discharged from the hospital and who were
identified as requiring home health services,
and
(iii) the percentage of such individuals who
received such services from such provider (or
another such provider),
(T) in the case of hospitals and critical access
hospitals, to furnish to the Secretary such data as the
Secretary determines appropriate pursuant to
subparagraph (E) of section 1886(d)(12) to carry out
such section,
(U) in the case of hospitals which furnish inpatient
hospital services for which payment may be made under
this title, to be a participating provider of medical
care both--
(i) under the contract health services
program funded by the Indian Health Service and
operated by the Indian Health Service, an
Indian tribe, or tribal organization (as those
terms are defined in section 4 of the Indian
Health Care Improvement Act), with respect to
items and services that are covered under such
program and furnished to an individual eligible
for such items and services under such program;
and
(ii) under any program funded by the Indian
Health Service and operated by an urban Indian
organization with respect to the purchase of
items and services for an eligible urban Indian
(as those terms are defined in such section 4),
in accordance with regulations promulgated by the
Secretary regarding admission practices, payment
methodology, and rates of payment (including the
acceptance of no more than such payment rate as payment
in full for such items and services,
(V) in the case of hospitals that are not otherwise
subject to the Occupational Safety and Health Act of
1970 (or a State occupational safety and health plan
that is approved under 18(b) of such Act), to comply
with the Bloodborne Pathogens standard under section
1910.1030 of title 29 of the Code of Federal
Regulations (or as subsequently redesignated),
(W) in the case of a hospital described in
section 1886(d)(1)(B)(v), to report quality
data to the Secretary in accordance with
subsection (k),
(X) maintain and, upon request of the
Secretary, provide access to documentation
relating to written orders or requests for
payment for durable medical equipment,
certifications for home health services, or
referrals for other items or services written
or ordered by the provider under this title, as
specified by the Secretary, and
(Y) beginning 12 months after the date of the
enactment of this subparagraph, in the case of a
hospital or critical access hospital, with respect to
each individual who receives observation services as an
outpatient at such hospital or critical access hospital
for more than 24 hours, to provide to such individual
not later than 36 hours after the time such individual
begins receiving such services (or, if sooner, upon
release)--
(i) such oral explanation of the written
notification described in clause (ii), and such
documentation of the provision of such
explanation, as the Secretary determines to be
appropriate;
(ii) a written notification (as specified by
the Secretary pursuant to rulemaking and
containing such language as the Secretary
prescribes consistent with this paragraph)
which--
(I) explains the status of the
individual as an outpatient receiving
observation services and not as an
inpatient of the hospital or critical
access hospital and the reasons for
such status of such individual;
(II) explains the implications of
such status on services furnished by
the hospital or critical access
hospital (including services furnished
on an inpatient basis), such as
implications for cost-sharing
requirements under this title and for
subsequent eligibility for coverage
under this title for services furnished
by a skilled nursing facility;
(III) includes such additional
information as the Secretary determines
appropriate;
(IV) either--
(aa) is signed by such
individual or a person acting
on such individual's behalf to
acknowledge receipt of such
notification; or
(bb) if such individual or
person refuses to provide the
signature described in item
(aa), is signed by the staff
member of the hospital or
critical access hospital who
presented the written
notification and includes the
name and title of such staff
member, a certification that
the notification was presented,
and the date and time the
notification was presented; and
(V) is written and formatted using
plain language and is made available in
appropriate languages as determined by
the Secretary.
In the case of a hospital which has an agreement in effect with
an organization described in subparagraph (F), which
organization's contract with the Secretary under part B of
title XI is terminated on or after October 1, 1984, the
hospital shall not be determined to be out of compliance with
the requirement of such subparagraph during the six month
period beginning on the date of the termination of that
contract.
(2)(A) A provider of services may charge such individual or
other person (i) the amount of any deduction or coinsurance
amount imposed pursuant to section 1813(a)(1), (a)(3), or
(a)(4), section 1833(b), or section 1861(y)(3) with respect to
such items and services (not in excess of the amount
customarily charged for such items and services by such
provider), and (ii) an amount equal to 20 per centum of the
reasonable charges for such items and services (not in excess
of 20 per centum of the amount customarily charged for such
items and services by such provider) for which payment is made
under part B or which are durable medical equipment furnished
as home health services (but in the case of items and services
furnished to individuals with end-stage renal disease, an
amount equal to 20 percent of the estimated amounts for such
items and services calculated on the basis established by the
Secretary). In the case of items and services described in
section 1833(c), clause (ii) of the preceding sentence shall be
applied by substituting for 20 percent the proportion which is
appropriate under such section. A provider of services may not
impose a charge under clause (ii) of the first sentence of this
subparagraph with respect to items and services described in
section 1861(s)(10)(A) and with respect to clinical diagnostic
laboratory tests for which payment is made under part B.
Notwithstanding the first sentence of this subparagraph, a home
health agency may charge such an individual or person, with
respect to covered items subject to payment under section
1834(a), the amount of any deduction imposed under section
1833(b) and 20 percent of the payment basis described in
section 1834(a)(1)(B). In the case of items and services for
which payment is made under part B under the prospective
payment system established under section 1833(t), clause (ii)
of the first sentence shall be applied by substituting for 20
percent of the reasonable charge, the applicable copayment
amount established under section 1833(t)(5). In the case of
services described in section 1833(a)(8) or section 1833(a)(9)
for which payment is made under part B under section 1834(k),
clause (ii) of the first sentence shall be applied by
substituting for 20 percent of the reasonable charge for such
services 20 percent of the lesser of the actual charge or the
applicable fee schedule amount (as defined in such section) for
such services.
(B) Where a provider of services has furnished, at the
request of such individual, items or services which are in
excess of or more expensive than the items or services with
respect to which payment may be made under this title, such
provider of services may also charge such individual or other
person for such more expensive items or services to the extent
that the amount customarily charged by it for the items or
services furnished at such request exceeds the amount
customarily charged by it for the items or services with
respect to which payment may be made under this title.
(C) A provider of services may in accordance with its
customary practice also appropriately charge any such
individual for any whole blood (or equivalent quantities of
packed red blood cells, as defined under regulations) furnished
him with respect to which a deductible is imposed under section
1813(a)(2), except that (i) any excess of such charge over the
cost to such provider for the blood (or equivalent quantities
of packed red blood cells, as so defined) shall be deducted
from any payment to such provider under this title, (ii) no
such charge may be imposed for the cost of administration of
such blood (or equivalent quantities of packed red blood cells,
as so defined), and (iii) such charge may not be made to the
extent such blood (or equivalent quantities of packed red blood
cells, as so defined) has been replaced on behalf of such
individual or arrangements have been made for its replacement
on his behalf. For purposes of subparagraph (C), whole blood
(or equivalent quantities of packed red blood cells, as so
defined) furnished an individual shall be deemed replaced when
the provider of services is given one pint of blood for each
pint of blood (or equivalent quantities of packed red blood
cells, as so defined) furnished such individual with respect to
which a deduction is imposed under section 1813(a)(2).
(D) Where a provider of services customarily furnishes items
or services which are in excess of or more expensive than the
items or services with respect to which payment may be made
under this title, such provider, notwithstanding the preceding
provisions of this paragraph, may not, under the authority of
section 1866(a)(2)(B)(ii), charge any individual or other
person any amount for such items or services in excess of the
amount of the payment which may otherwise be made for such
items or services under this title if the admitting physician
has a direct or indirect financial interest in such provider.
(3)(A) Under the agreement required under paragraph
(1)(F)(ii), the quality improvement organization must perform
functions (other than those covered under an agreement under
paragraph (1)(F)(i)) under the third sentence of section
1154(a)(4)(A) and under section 1154(a)(14) with respect to
services, furnished by the hospital, critical access hospital,
facility, or agency involved, for which payment may be made
under this title.
(B) For purposes of payment under this title, the cost of
such an agreement to the hospital, critical access hospital,
facility, or agency shall be considered a cost incurred by such
hospital, critical access hospital, facility, or agency in
providing covered services under this title and shall be paid
directly by the Secretary to the quality improvement
organization on behalf of such hospital, critical access
hospital, facility, or agency in accordance with a schedule
established by the Secretary.
(C) Such payments--
(i) shall be transferred in appropriate proportions
from the Federal Hospital Insurance Trust Fund and from
the Federal Supplementary Medical Insurance Trust Fund,
without regard to amounts appropriated in advance in
appropriation Acts, in the same manner as transfers are
made for payment for services provided directly to
beneficiaries, and
(ii) shall not be less in the aggregate for a fiscal
year--
(I) in the case of hospitals, than the amount
specified in paragraph (1)(F)(i)(III), and
(II) in the case of facilities, critical
access hospitals, and agencies, than the
amounts the Secretary determines to be
sufficient to cover the costs of such
organizations' conducting the activities
described in subparagraph (A) with respect to
such facilities, critical access hospitals, or
agencies under part B of title XI.
(b)(1) A provider of services may terminate an agreement with
the Secretary under this section at such time and upon such
notice to the Secretary and the public as may be provided in
regulations, except that notice of more than six months shall
not be required.
(2) The Secretary may refuse to enter into an agreement under
this section or, upon such reasonable notice to the provider
and the public as may be specified in regulations, may refuse
to renew or may terminate such an agreement after the
Secretary--
(A) has determined that the provider fails to comply
substantially with the provisions of the agreement,
with the provisions of this title and regulations
thereunder, or with a corrective action required under
section 1886(f)(2)(B),
(B) has determined that the provider fails
substantially to meet the applicable provisions of
section 1861,
(C) has excluded the provider from participation in a
program under this title pursuant to section 1128 or
section 1128A, or
(D) has ascertained that the provider has been
convicted of a felony under Federal or State law for an
offense which the Secretary determines is detrimental
to the best interests of the program or program
beneficiaries.
(3) A termination of an agreement or a refusal to renew an
agreement under this subsection shall become effective on the
same date and in the same manner as an exclusion from
participation under the programs under this title becomes
effective under section 1128(c).
(4)(A) A hospital that fails to comply with the requirement
of subsection (a)(1)(V) (relating to the Bloodborne Pathogens
standard) is subject to a civil money penalty in an amount
described in subparagraph (B), but is not subject to
termination of an agreement under this section.
(B) The amount referred to in subparagraph (A) is an amount
that is similar to the amount of civil penalties that may be
imposed under section 17 of the Occupational Safety and Health
Act of 1970 for a violation of the Bloodborne Pathogens
standard referred to in subsection (a)(1)(U) by a hospital that
is subject to the provisions of such Act.
(C) A civil money penalty under this paragraph shall be
imposed and collected in the same manner as civil money
penalties under subsection (a) of section 1128A are imposed and
collected under that section.
(c)(1) Where the Secretary has terminated or has refused to
renew an agreement under this title with a provider of
services, such provider may not file another agreement under
this title unless the Secretary finds that the reason for the
termination or nonrenewal has been removed and that there is
reasonable assurance that it will not recur.
(2) Where the Secretary has terminated or has refused to
renew an agreement under this title with a provider of
services, the Secretary shall promptly notify each State agency
which administers or supervises the administration of a State
plan approved under title XIX of such termination or
nonrenewal.
(d) If the Secretary finds that there is a substantial
failure to make timely review in accordance with section
1861(k) of long-stay cases in a hospital, he may, in lieu of
terminating his agreement with such hospital, decide that, with
respect to any individual admitted to such hospital after a
subsequent date specified by him, no payment shall be made
under this title for inpatient hospital services (including
inpatient psychiatric hospital services) after the 20th day of
a continuous period of such services. Such decision may be made
effective only after such notice to the hospital and to the
public, as may be prescribed by regulations, and its
effectiveness shall terminate when the Secretary finds that the
reason therefor has been removed and that there is reasonable
assurance that it will not recur. The Secretary shall not make
any such decision except after reasonable notice and
opportunity for hearing to the institution or agency affected
thereby.
(e) For purposes of this section, the term ``provider of
services'' shall include--
(1) a clinic, rehabilitation agency, or public health
agency if, in the case of a clinic or rehabilitation
agency, such clinic or agency meets the requirements of
section 1861(p)(4)(A) (or meets the requirements of
such section through the operation of subsection (g) or
(ll)(2) of section 1861), or if, in the case of a
public health agency, such agency meets the
requirements of section 1861(p)(4)(B) (or meets the
requirements of such section through the operation of
subsection (g) or (ll)(2) of section 1861), but only
with respect to the furnishing of outpatient physical
therapy services (as therein defined), (through the
operation of section 1861(g)) with respect to the
furnishing of outpatient occupational therapy services,
or (through the operation of section 1861(ll)(2)) with
respect to the furnishing of outpatient speech-language
pathology; and
(2) a community mental health center (as defined in
section 1861(ff)(3)(B)), but only with respect to the
furnishing of partial hospitalization services (as
described in section 1861(ff)(1)).
(f)(1) For purposes of subsection (a)(1)(Q) and sections
1819(c)(2)(E), 1833(s), 1855(i), 1876(c)(8), and 1891(a)(6),
the requirement of this subsection is that a provider of
services, Medicare+Choice organization, or prepaid or eligible
organization (as the case may be) maintain written policies and
procedures with respect to all adult individuals receiving
medical care by or through the provider or organization--
(A) to provide written information to each such
individual concerning--
(i) an individual's rights under State law
(whether statutory or as recognized by the
courts of the State) to make decisions
concerning such medical care, including the
right to accept or refuse medical or surgical
treatment and the right to formulate advance
directives (as defined in paragraph (3)), and
(ii) the written policies of the provider or
organization respecting the implementation of
such rights;
(B) to document in a prominent part of the
individual's current medical record whether or not the
individual has executed an advance directive;
(C) not to condition the provision of care or
otherwise discriminate against an individual based on
whether or not the individual has executed an advance
directive;
(D) to ensure compliance with requirements of State
law (whether statutory or as recognized by the courts
of the State) respecting advance directives at
facilities of the provider or organization; and
(E) to provide (individually or with others) for
education for staff and the community on issues
concerning advance directives.
Subparagraph (C) shall not be construed as requiring the
provision of care which conflicts with an advance directive.
(2) The written information described in paragraph (1)(A)
shall be provided to an adult individual--
(A) in the case of a hospital, at the time of the
individual's admission as an inpatient,
(B) in the case of a skilled nursing facility, at the
time of the individual's admission as a resident,
(C) in the case of a home health agency, in advance
of the individual coming under the care of the agency,
(D) in the case of a hospice program, at the time of
initial receipt of hospice care by the individual from
the program, and
(E) in the case of an eligible organization (as
defined in section 1876(b)) or an organization provided
payments under section 1833(a)(1)(A) or a
Medicare+Choice organization, at the time of enrollment
of the individual with the organization.
(3) In this subsection, the term ``advance directive'' means
a written instruction, such as a living will or durable power
of attorney for health care, recognized under State law
(whether statutory or as recognized by the courts of the State)
and relating to the provision of such care when the individual
is incapacitated.
(4) For construction relating to this subsection, see section
7 of the Assisted Suicide Funding Restriction Act of 1997
(relating to clarification respecting assisted suicide,
euthanasia, and mercy killing).
(g) Except as permitted under subsection (a)(2), any person
who knowingly and willfully presents, or causes to be
presented, a bill or request for payment inconsistent with an
arrangement under subsection (a)(1)(H) or in violation of the
requirement for such an arrangement, is subject to a civil
money penalty of not to exceed $2,000. The provisions of
section 1128A (other than subsections (a) and (b)) shall apply
to a civil money penalty under the previous sentence in the
same manner as such provisions apply to a penalty or proceeding
under section 1128A(a).
(h)(1)(A) Except as provided in paragraph (2), an institution
or agency dissatisfied with a determination by the Secretary
that it is not a provider of services or with a determination
described in subsection (b)(2) shall be entitled to a hearing
thereon by the Secretary (after reasonable notice) to the same
extent as is provided in section 205(b), and to judicial review
of the Secretary's final decision after such hearing as is
provided in section 205(g), except that, in so applying such
sections and in applying section 205(l) thereto, any reference
therein to the Commissioner of Social Security or the Social
Security Administration shall be considered a reference to the
Secretary or the Department of Health and Human Services,
respectively.
(B) An institution or agency described in subparagraph (A)
that has filed for a hearing under subparagraph (A) shall have
expedited access to judicial review under this subparagraph in
the same manner as providers of services, suppliers, and
individuals entitled to benefits under part A or enrolled under
part B, or both, may obtain expedited access to judicial review
under the process established under section 1869(b)(2). Nothing
in this subparagraph shall be construed to affect the
application of any remedy imposed under section 1819 during the
pendency of an appeal under this subparagraph.
(C)(i) The Secretary shall develop and implement a process to
expedite proceedings under this subsection in which--
(I) the remedy of termination of participation has
been imposed;
(II) a remedy described in clause (i) or (iii) of
section 1819(h)(2)(B) has been imposed, but only if
such remedy has been imposed on an immediate basis; or
(III) a determination has been made as to a finding
of substandard quality of care that results in the loss
of approval of a skilled nursing facility's nurse aide
training program.
(ii) Under such process under clause (i), priority shall be
provided in cases of termination described in clause (i)(I).
(iii) Nothing in this subparagraph shall be construed to
affect the application of any remedy imposed under section 1819
during the pendency of an appeal under this subparagraph.
(2) An institution or agency is not entitled to separate
notice and opportunity for a hearing under both section 1128
and this section with respect to a determination or
determinations based on the same underlying facts and issues.
(i)(1) If the Secretary determines that a psychiatric
hospital which has an agreement in effect under this section no
longer meets the requirements for a psychiatric hospital under
this title and further finds that the hospital's deficiencies--
(A) immediately jeopardize the health and safety of
its patients, the Secretary shall terminate such
agreement; or
(B) do not immediately jeopardize the health and
safety of its patients, the Secretary may terminate
such agreement, or provide that no payment will be made
under this title with respect to any individual
admitted to such hospital after the effective date of
the finding, or both.
(2) If a psychiatric hospital, found to have deficiencies
described in paragraph (1)(B), has not complied with the
requirements of this title--
(A) within 3 months after the date the hospital is
found to be out of compliance with such requirements,
the Secretary shall provide that no payment will be
made under this title with respect to any individual
admitted to such hospital after the end of such 3-month
period, or
(B) within 6 months after the date the hospital is
found to be out of compliance with such requirements,
no payment may be made under this title with respect to
any individual in the hospital until the Secretary
finds that the hospital is in compliance with the
requirements of this title.
(j) Enrollment Process for Providers of Services and
Suppliers.--
(1) Enrollment process.--
(A) In general.--The Secretary shall
establish by regulation a process for the
enrollment of providers of services and
suppliers under this title. Such process shall
include screening of providers and suppliers in
accordance with paragraph (2), a provisional
period of enhanced oversight in accordance with
paragraph (3), disclosure requirements in
accordance with [paragraph (4)] paragraph (5),
the imposition of temporary enrollment
[moratoria in accordance with paragraph (5)]
moratoria in accordance with paragraph (7), and
the establishment of compliance programs in
accordance with [paragraph (6)] paragraph (9).
(B) Deadlines.--The Secretary shall establish
by regulation procedures under which there are
deadlines for actions on applications for
enrollment (and, if applicable, renewal of
enrollment). The Secretary shall monitor the
performance of medicare administrative
contractors in meeting the deadlines
established under this subparagraph.
(C) Consultation before changing provider
enrollment forms.--The Secretary shall consult
with providers of services and suppliers before
making changes in the provider enrollment forms
required of such providers and suppliers to be
eligible to submit claims for which payment may
be made under this title.
(2) Provider screening.--
(A) Procedures.--Not later than 180 days
after the date of enactment of this paragraph,
the Secretary, in consultation with the
Inspector General of the Department of Health
and Human Services, shall establish procedures
under which screening is conducted with respect
to providers of medical or other items or
services and suppliers under the program under
this title, the Medicaid program under title
XIX, and the CHIP program under title XXI.
(B) Level of screening.--The Secretary shall
determine the level of screening conducted
under this paragraph according to the risk of
fraud, waste, and abuse, as determined by the
Secretary, with respect to the category of
provider of medical or other items or services
or supplier. Such screening--
(i) shall include a licensure check,
which may include such checks across
States; and
(ii) may, as the Secretary determines
appropriate based on the risk of fraud,
waste, and abuse described in the
preceding sentence, include--
(I) a criminal background
check;
(II) fingerprinting;
(III) unscheduled and
unannounced site visits,
including preenrollment site
visits;
(IV) database checks
(including such checks across
States); and
(V) such other screening as
the Secretary determines
appropriate.
(C) Application fees.--
(i) Institutional providers.--Except
as provided in clause (ii), the
Secretary shall impose a fee on each
institutional provider of medical or
other items or services or supplier
(such as a hospital or skilled nursing
facility) with respect to which
screening is conducted under this
paragraph in an amount equal to--
(I) for 2010, $500; and
(II) for 2011 and each
subsequent year, the amount
determined under this clause
for the preceding year,
adjusted by the percentage
change in the consumer price
index for all urban consumers
(all items; United States city
average) for the 12-month
period ending with June of the
previous year.
(ii) Hardship exception; waiver for
certain medicaid providers.--The
Secretary may, on a case-by-case basis,
exempt a provider of medical or other
items or services or supplier from the
imposition of an application fee under
this subparagraph if the Secretary
determines that the imposition of the
application fee would result in a
hardship. The Secretary may waive the
application fee under this subparagraph
for providers enrolled in a State
Medicaid program for whom the State
demonstrates that imposition of the fee
would impede beneficiary access to
care.
(iii) Use of funds.--Amounts
collected as a result of the imposition
of a fee under this subparagraph shall
be used by the Secretary for program
integrity efforts, including to cover
the costs of conducting screening under
this paragraph and to carry out this
subsection and section 1128J.
(D) Application and enforcement.--
(i) New providers of services and
suppliers.--The screening under this
paragraph shall apply, in the case of a
provider of medical or other items or
services or supplier who is not
enrolled in the program under this
title, title XIX, or title XXI as of
the date of enactment of this
paragraph, on or after the date that is
1 year after such date of enactment.
(ii) Current providers of services
and suppliers.--The screening under
this paragraph shall apply, in the case
of a provider of medical or other items
or services or supplier who is enrolled
in the program under this title, title
XIX, or title XXI as of such date of
enactment, on or after the date that is
2 years after such date of enactment.
(iii) Revalidation of enrollment.--
Effective beginning on the date that is
180 days after such date of enactment,
the screening under this paragraph
shall apply with respect to the
revalidation of enrollment of a
provider of medical or other items or
services or supplier in the program
under this title, title XIX, or title
XXI.
(iv) Limitation on enrollment and
revalidation of enrollment.--In no case
may a provider of medical or other
items or services or supplier who has
not been screened under this paragraph
be initially enrolled or reenrolled in
the program under this title, title
XIX, or title XXI on or after the date
that is 3 years after such date of
enactment.
(E) Use of information from the department of
treasury concerning tax debts.--In reviewing
the application of a provider of services or
supplier to enroll or reenroll under the
program under this title, the Secretary shall
take into account the information supplied by
the Secretary of the Treasury pursuant to
section 6103(l)(22) of the Internal Revenue
Code of 1986, in determining whether to deny
such application or to apply enhanced oversight
to such provider of services or supplier
pursuant to paragraph (3) if the Secretary
determines such provider of services or
supplier owes such a debt.
(F) Expedited rulemaking.--The Secretary may
promulgate an interim final rule to carry out
this paragraph.
(3) Provisional period of enhanced oversight for new
providers of services and suppliers.--
(A) In general.--The Secretary shall
establish procedures to provide for a
provisional period of not less than 30 days and
not more than 1 year during which new providers
of medical or other items or services and
suppliers, as the Secretary determines
appropriate, including categories of providers
or suppliers, would be subject to enhanced
oversight, such as prepayment review and
payment caps, under the program under this
title, the Medicaid program under title XIX.
and the CHIP program under title XXI.
(B) Implementation.--The Secretary may
establish by program instruction or otherwise
the procedures under this paragraph.
(4) 90-day period of enhanced oversight for initial
claims of dme suppliers.--For periods beginning after
January 1, 2011, if the Secretary determines that there
is a significant risk of fraudulent activity among
suppliers of durable medical equipment, in the case of
a supplier of durable medical equipment who is within a
category or geographic area under title XVIII
identified pursuant to such determination and who is
initially enrolling under such title, the Secretary
shall, notwithstanding sections 1816(c), 1842(c), and
1869(a)(2), withhold payment under such title with
respect to durable medical equipment furnished by such
supplier during the 90-day period beginning on the date
of the first submission of a claim under such title for
durable medical equipment furnished by such supplier.
(5) Increased disclosure requirements.--
(A) Disclosure.--A provider of medical or
other items or services or supplier who submits
an application for enrollment or revalidation
of enrollment in the program under this title,
title XIX, or title XXI on or after the date
that is 1 year after the date of enactment of
this paragraph shall disclose (in a form and
manner and at such time as determined by the
Secretary) any current or previous affiliation
(directly or indirectly) with a provider of
medical or other items or services or supplier
that has uncollected debt, has been or is
subject to a payment suspension under a Federal
health care program (as defined in section
1128B(f)), has been excluded from participation
under the program under this title, the
Medicaid program under title XIX, or the CHIP
program under title XXI, or has had its billing
privileges denied or revoked.
(B) Authority to deny enrollment.--If the
Secretary determines that such previous
affiliation poses an undue risk of fraud,
waste, or abuse, the Secretary may deny such
application. Such a denial shall be subject to
appeal in accordance with paragraph (7).
(6) Authority to adjust payments of providers of
services and suppliers with the same tax identification
number for medicare obligations.--
(A) In general.--Notwithstanding any other
provision of this title, in the case of an
applicable provider of services or supplier,
the Secretary may make any necessary
adjustments to payments to the applicable
provider of services or supplier under the
program under this title in order to satisfy
any amount described in subparagraph (B)(ii)
due from such obligated provider of services or
supplier.
(B) Definitions.--In this paragraph:
(i) In general.--The term
``applicable provider of services or
supplier'' means a provider of services
or supplier that has the same taxpayer
identification number assigned under
section 6109 of the Internal Revenue
Code of 1986 as is assigned to the
obligated provider of services or
supplier under such section, regardless
of whether the applicable provider of
services or supplier is assigned a
different billing number or national
provider identification number under
the program under this title than is
assigned to the obligated provider of
services or supplier.
(ii) Obligated provider of services
or supplier.--The term ``obligated
provider of services or supplier''
means a provider of services or
supplier that owes an amount that is
more than the amount required to be
paid under the program under this title
(as determined by the Secretary).
(7) Temporary moratorium on enrollment of new
providers; nonpayment.--
(A) In general.--The Secretary may impose a
temporary moratorium on the enrollment of new
providers of services and suppliers, including
categories of providers of services and
suppliers, in the program under this title,
under the Medicaid program under title XIX, or
under the CHIP program under title XXI if the
Secretary determines such moratorium is
necessary to prevent or combat fraud, waste, or
abuse under either such program.
(B) Limitation on review.--There shall be no
judicial review under section 1869, section
1878, or otherwise, of a temporary moratorium
imposed under subparagraph (A).
(C) Nonpayment.--
(i) In general.--No payment may be
made under this title or under a
program described in subparagraph (A)
with respect to an item or service
described in clause (ii) furnished on
or after October 1, 2017.
(ii) Item or service described.--An
item or service described in this
clause is an item or service
furnished--
(I) within a geographic area
with respect to which a
temporary moratorium imposed
under subparagraph (A) is in
effect; and
(II) by a provider of
services or supplier that meets
the requirements of clause
(iii).
(iii) Requirements.--For purposes of
clause (ii), the requirements of this
clause are that a provider of services
or supplier--
(I) enrolls under this title
on or after the effective date
of such temporary moratorium;
and
(II) is within a category of
providers of services and
suppliers (as described in
subparagraph (A)) subject to
such temporary moratorium.
(iv) Prohibition on charges for
specified items or services.--In no
case shall a provider of services or
supplier described in clause (ii)(II)
charge an individual or other person
for an item or service described in
clause (ii) furnished on or after
October 1, 2017, to an individual
entitled to benefits under part A or
enrolled under part B or an individual
under a program specified in
subparagraph (A).
(8) Compliance programs.--
(A) In general.--On or after the date of
implementation determined by the Secretary
under subparagraph (C), a provider of medical
or other items or services or supplier within a
particular industry sector or category shall,
as a condition of enrollment in the program
under this title, title XIX, or title XXI,
establish a compliance program that contains
the core elements established under
subparagraph (B) with respect to that provider
or supplier and industry or category.
(B) Establishment of core elements.--The
Secretary, in consultation with the Inspector
General of the Department of Health and Human
Services, shall establish core elements for a
compliance program under subparagraph (A) for
providers or suppliers within a particular
industry or category.
(C) Timeline for implementation.--The
Secretary shall determine the timeline for the
establishment of the core elements under
subparagraph (B) and the date of the
implementation of subparagraph (A) for
providers or suppliers within a particular
industry or category. The Secretary shall, in
determining such date of implementation,
consider the extent to which the adoption of
compliance programs by a provider of medical or
other items or services or supplier is
widespread in a particular industry sector or
with respect to a particular provider or
supplier category.
[(8)] (9) Hearing rights in cases of denial or non-
renewal.--A provider of services or supplier whose
application to enroll (or, if applicable, to renew
enrollment) under this title is denied may have a
hearing and judicial review of such denial under the
procedures that apply under subsection (h)(1)(A) to a
provider of services that is dissatisfied with a
determination by the Secretary.
(k) Quality Reporting by Cancer Hospitals.--
(1) In general.--For purposes of fiscal year 2014 and
each subsequent fiscal year, a hospital described in
section 1886(d)(1)(B)(v) shall submit data to the
Secretary in accordance with paragraph (2) with respect
to such a fiscal year.
(2) Submission of quality data.--For fiscal year 2014
and each subsequent fiscal year, each hospital
described in such section shall submit to the Secretary
data on quality measures specified under paragraph (3).
Such data shall be submitted in a form and manner, and
at a time, specified by the Secretary for purposes of
this subparagraph.
(3) Quality measures.--
(A) In general.--Subject to subparagraph (B),
any measure specified by the Secretary under
this paragraph must have been endorsed by the
entity with a contract under section 1890(a).
(B) Exception.--In the case of a specified
area or medical topic determined appropriate by
the Secretary for which a feasible and
practical measure has not been endorsed by the
entity with a contract under section 1890(a),
the Secretary may specify a measure that is not
so endorsed as long as due consideration is
given to measures that have been endorsed or
adopted by a consensus organization identified
by the Secretary.
(C) Time frame.--Not later than October 1,
2012, the Secretary shall publish the measures
selected under this paragraph that will be
applicable with respect to fiscal year 2014.
(4) Public availability of data submitted.--The
Secretary shall establish procedures for making data
submitted under paragraph (4) available to the public.
Such procedures shall ensure that a hospital described
in section 1886(d)(1)(B)(v) has the opportunity to
review the data that is to be made public with respect
to the hospital prior to such data being made public.
The Secretary shall report quality measures of process,
structure, outcome, patients' perspective on care,
efficiency, and costs of care that relate to services
furnished in such hospitals on the Internet website of
the Centers for Medicare & Medicaid Services.
* * * * * * *
payment to hospitals for inpatient hospital services
Sec. 1886. (a)(1)(A)(i) The Secretary, in determining the
amount of the payments that may be made under this title with
respect to operating costs of inpatient hospital services (as
defined in paragraph (4)) shall not recognize as reasonable (in
the efficient delivery of health services) costs for the
provision of such services by a hospital for a cost reporting
period to the extent such costs exceed the applicable
percentage (as determined under clause (ii)) of the average of
such costs for all hospitals in the same grouping as such
hospital for comparable time periods.
(ii) For purposes of clause (i), the applicable percentage
for hospital cost reporting periods beginning--
(I) on or after October 1, 1982, and before October
1, 1983, is 120 percent;
(II) on or after October 1, 1983, and before October
1, 1984, is 115 percent; and
(III) on or after October 1, 1984, is 110 percent.
(B)(i) For purposes of subparagraph (A) the Secretary shall
establish case mix indexes for all short- term hospitals, and
shall set limits for each hospital based upon the general mix
of types of medical cases with respect to which such hospital
provides services for which payment may be made under this
title.
(ii) The Secretary shall set such limits for a cost reporting
period of a hospital--
(I) by updating available data for a previous period
to the immediate preceding cost reporting period by the
estimated average rate of change of hospital costs
industry-wide, and
(II) by projecting for the cost reporting period by
the applicable percentage increase (as defined in
subsection (b)(3)(B)).
(C) The limitation established under subparagraph (A) for any
hospital shall in no event be lower than the allowable
operating costs of inpatient hospital services (as defined in
paragraph (4)) recognized under this title for such hospital
for such hospital's last cost reporting period prior to the
hospital's first cost reporting period for which this section
is in effect.
(D) Subparagraph (A) shall not apply to cost reporting
periods beginning on or after October 1, 1983.
(2) The Secretary shall provide for such exemptions from, and
exceptions and adjustments to, the limitation established under
paragraph (1)(A) as he deems appropriate, including those which
he deems necessary to take into account--
(A) the special needs of sole community hospitals, of
new hospitals, of risk based health maintenance
organizations, and of hospitals which provide atypical
services or essential community services, and to take
into account extraordinary circumstances beyond the
hospital's control, medical and paramedical education
costs, significantly fluctuating population in the
service area of the hospital, and unusual labor costs,
(B) the special needs of psychiatric hospitals and of
public or other hospitals that serve a significantly
disproportionate number of patients who have low income
or are entitled to benefits under part A of this title,
and
(C) a decrease in the inpatient hospital services
that a hospital provides and that are customarily
provided directly by similar hospitals which results in
a significant distortion in the operating costs of
inpatient hospital services.
(3) The limitation established under paragraph (1)(A) shall
not apply with respect to any hospital which--
(A) is located outside of a standard metropolitan
statistical area, and
(B)(i) has less than 50 beds, and
(ii) was in operation and had less than 50 beds on
the date of the enactment of this section.
(4) For purposes of this section, the term ``operating costs
of inpatient hospital services'' includes all routine operating
costs, ancillary service operating costs, and special care unit
operating costs with respect to inpatient hospital services as
such costs are determined on an average per admission or per
discharge basis (as determined by the Secretary), and includes
the costs of all services for which payment may be made under
this title that are provided by the hospital (or by an entity
wholly owned or operated by the hospital) to the patient during
the 3 days (or, in the case of a hospital that is not a
subsection (d) hospital, during the 1 day) immediately
preceding the date of the patient's admission if such services
are diagnostic services (including clinical diagnostic
laboratory tests) or are other services related to the
admission (as defined by the Secretary). Such term does not
include costs of approved educational activities, a return on
equity capital, or, other capital-related costs (as defined by
the Secretary for periods before October 1, 1987). In applying
the first sentence of this paragraph, the term ``other services
related to the admission'' includes all services that are not
diagnostic services (other than ambulance and maintenance renal
dialysis services) for which payment may be made under this
title that are provided by a hospital (or an entity wholly
owned or operated by the hospital) to a patient--
(A) on the date of the patient's inpatient admission;
or
(B) during the 3 days (or, in the case of a hospital
that is not a subsection (d) hospital, during the 1
day) immediately preceding the date of such admission
unless the hospital demonstrates (in a form and manner,
and at a time, specified by the Secretary) that such
services are not related (as determined by the
Secretary) to such admission.
(b)(1) Notwithstanding section 1814(b) but subject to the
provisions of section 1813, if the operating costs of inpatient
hospital services (as defined in subsection (a)(4)) of a
hospital (other than a subsection (d) hospital, as defined in
subsection (d)(1)(B) and other than a rehabilitation facility
described in subsection (j)(1)) for a cost reporting period
subject to this paragraph--
(A) are less than or equal to the target amount (as
defined in paragraph (3)) for that hospital for that
period, the amount of the payment with respect to such
operating costs payable under part A on a per discharge
or per admission basis (as the case may be) shall be
equal to the amount of such operating costs, plus--
(i) 15 percent of the amount by which the
target amount exceeds the amount of the
operating costs, or
(ii) 2 percent of the target amount,
whichever is less;
(B) are greater than the target amount but do not
exceed 110 percent of the target amount, the amount of
the payment with respect to those operating costs
payable under part A on a per discharge basis shall
equal the target amount; or
(C) are greater than 110 percent of the target
amount, the amount of the payment with respect to such
operating costs payable under part A on a per discharge
or per admission basis (as the case may be) shall be
equal to (i) the target amount, plus (ii) in the case
of cost reporting periods beginning on or after October
1, 1991, an additional amount equal to 50 percent of
the amount by which the operating costs exceed 110
percent of the target amount (except that such
additional amount may not exceed 10 percent of the
target amount) after any exceptions or adjustments are
made to such target amount for the cost reporting
period;
plus the amount, if any, provided under paragraph (2), except
that in no case may the amount payable under this title (other
than on the basis of a DRG prospective payment rate determined
under subsection (d)) with respect to operating costs of
inpatient hospital services exceed the maximum amount payable
with respect to such costs pursuant to subsection (a).
(2)(A) Except as provided in subparagraph (E), in addition to
the payment computed under paragraph (1), in the case of an
eligible hospital (described in subparagraph (B)) for a cost
reporting period beginning on or after October 1, 1997, the
amount of payment on a per discharge basis under paragraph (1)
shall be increased by the lesser of--
(i) 50 percent of the amount by which the operating
costs are less than the expected costs (as defined in
subparagraph (D)) for the period; or
(ii) 1 percent of the target amount for the period.
(B) For purposes of this paragraph, an ``eligible hospital''
means with respect to a cost reporting period, a hospital--
(i) that has received payments under this subsection
for at least 3 full cost reporting periods before that
cost reporting period, and
(ii) whose operating costs for the period are less
than the least of its target amount, its trended costs
(as defined in subparagraph (C)), or its expected costs
(as defined in subparagraph (D)) for the period.
(C) For purposes of subparagraph (B)(ii), the term ``trended
costs'' means for a hospital cost reporting period ending in a
fiscal year--
(i) in the case of a hospital for which its cost
reporting period ending in fiscal year 1996 was its
third or subsequent full cost reporting period for
which it receives payments under this subsection, the
lesser of the operating costs or target amount for that
hospital for its cost reporting period ending in fiscal
year 1996, or
(ii) in the case of any other hospital, the operating
costs for that hospital for its third full cost
reporting period for which it receives payments under
this subsection,
increased (in a compounded manner) for each succeeding fiscal
year (through the fiscal year involved) by the market basket
percentage increase for the fiscal year.
(D) For purposes of this paragraph, the term ``expected
costs'', with respect to the cost reporting period ending in a
fiscal year, means the lesser of the operating costs of
inpatient hospital services or target amount per discharge for
the previous cost reporting period updated by the market basket
percentage increase (as defined in paragraph (3)(B)(iii)) for
the fiscal year.
(E)(i) In the case of an eligible hospital that is a hospital
or unit that is within a class of hospital described in clause
(ii) with a 12-month cost reporting period beginning before the
enactment of this subparagraph, in determining the amount of
the increase under subparagraph (A), the Secretary shall
substitute for the percentage of the target amount applicable
under subparagraph (A)(ii)--
(I) for a cost reporting period beginning on or after
October 1, 2000, and before September 30, 2001, 1.5
percent; and
(II) for a cost reporting period beginning on or
after October 1, 2001, and before September 30, 2002, 2
percent.
(ii) For purposes of clause (i), each of the following shall
be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(II) Hospitals described in clause (iv) of such
subsection.
(3)(A) Except as provided in subparagraph (C) and succeeding
subparagraphs and in paragraph (7)(A)(ii), for purposes of this
subsection, the term ``target amount'' means, with respect to a
hospital for a particular 12-month cost reporting period--
(i) in the case of the first such reporting period
for which this subsection is in effect, the allowable
operating costs of inpatient hospital services (as
defined in subsection (a)(4)) recognized under this
title for such hospital for the preceding 12-month cost
reporting period, and
(ii) in the case of a later reporting period, the
target amount for the preceding 12-month cost reporting
period,
increased by the applicable percentage increase under
subparagraph (B) for that particular cost reporting period.
(B)(i) For purposes of subsection (d) and subsection (j) for
discharges occurring during a fiscal year, the ``applicable
percentage increase'' shall be--
(I) for fiscal year 1986, \1/2\ percent,
(II) for fiscal year 1987, 1.15 percent,
(III) for fiscal year 1988, 3.0 percent for hospitals
located in a rural area, 1.5 percent for hospitals
located in a large urban area (as defined in subsection
(d)(2)(D)), and 1.0 percent for hospitals located in
other urban areas,
(IV) for fiscal year 1989, the market basket
percentage increase minus 1.5 percentage points for
hospitals located in a rural area, the market basket
percentage increase minus 2.0 percentage points for
hospitals located in a large urban area, and the market
basket percentage increase minus 2.5 percentage points
for hospitals located in other urban areas,
(V) for fiscal year 1990, the market basket
percentage increase plus 4.22 percentage points for
hospitals located in a rural area, the market basket
percentage increase plus 0.12 percentage points for
hospitals located in a large urban area, and the market
basket percentage increase minus 0.53 percentage points
for hospitals located in other urban areas,
(VI) for fiscal year 1991, the market basket
percentage increase minus 2.0 percentage points for
hospitals in a large urban or other urban area, and the
market basket percentage increase minus 0.7 percentage
point for hospitals located in a rural area,
(VII) for fiscal year 1992, the market basket
percentage increase minus 1.6 percentage points for
hospitals in a large urban or other urban area, and the
market basket percentage increase minus 0.6 percentage
point for hospitals located in a rural area,
(VIII) for fiscal year 1993, the market basket
percentage increase minus 1.55 percentage point for
hospitals in a large urban or other urban area, and the
market basket percentage increase minus 0.55 for
hospitals located in a rural area,
(IX) for fiscal year 1994, the market basket
percentage increase minus 2.5 percentage points for
hospitals located in a large urban or other urban area,
and the market basket percentage increase minus 1.0
percentage point for hospitals located in a rural area,
(X) for fiscal year 1995, the market basket
percentage increase minus 2.5 percentage points for
hospitals located in a large urban or other urban area,
and such percentage increase for hospitals located in a
rural area as will provide for the average standardized
amount determined under subsection (d)(3)(A) for
hospitals located in a rural area being equal to such
average standardized amount for hospitals located in an
urban area (other than a large urban area),
(XI) for fiscal year 1996, the market basket
percentage increase minus 2.0 percentage points for
hospitals in all areas,
(XII) for fiscal year 1997, the market basket
percentage increase minus 0.5 percentage point for
hospitals in all areas,
(XIII) for fiscal year 1998, 0 percent,
(XIV) for fiscal year 1999, the market basket
percentage increase minus 1.9 percentage points for
hospitals in all areas,
(XV) for fiscal year 2000, the market basket
percentage increase minus 1.8 percentage points for
hospitals in all areas,
(XVI) for fiscal year 2001, the market basket
percentage increase for hospitals in all areas,
(XVII) for fiscal year 2002, the market basket
percentage increase minus 0.55 percentage points for
hospitals in all areas,
(XVIII) for fiscal year 2003, the market basket
percentage increase minus 0.55 percentage points for
hospitals in all areas,
(XIX) for each of fiscal years 2004 through 2006,
subject to clause (vii), the market basket percentage
increase for hospitals in all areas; and
(XX) for each subsequent fiscal year, subject to
clauses (viii), (ix), (xi), and (xii), the market
basket percentage increase for hospitals in all areas.
(ii) For purposes of subparagraphs (A) and (E), the
``applicable percentage increase'' for 12-month cost reporting
periods beginning during--
(I) fiscal year 1986, is 0.5 percent,
(II) fiscal year 1987, is 1.15 percent,
(III) fiscal year 1988, is the market basket
percentage increase minus 2.0 percentage points,
(IV) a subsequent fiscal year ending on or before
September 30, 1993, is the market basket percentage
increase,
(V) fiscal years 1994 through 1997, is the market
basket percentage increase minus the applicable
reduction (as defined in clause (v)(II)), or in the
case of a hospital for a fiscal year for which the
hospital's update adjustment percentage (as defined in
clause (v)(I)) is at least 10 percent, the market
basket percentage increase,
(VI) for fiscal year 1998, is 0 percent,
(VII) for fiscal years 1999 through 2002, is the
applicable update factor specified under clause (vi)
for the fiscal year, and
(VIII) subsequent fiscal years is the market basket
percentage increase.
(iii) For purposes of this subparagraph, the term ``market
basket percentage increase'' means, with respect to cost
reporting periods and discharges occurring in a fiscal year,
the percentage, estimated by the Secretary before the beginning
of the period or fiscal year, by which the cost of the mix of
goods and services (including personnel costs but excluding
nonoperating costs) comprising routine, ancillary, and special
care unit inpatient hospital services, based on an index of
appropriately weighted indicators of changes in wages and
prices which are representative of the mix of goods and
services included in such inpatient hospital services, for the
period or fiscal year will exceed the cost of such mix of goods
and services for the preceding 12-month cost reporting period
or fiscal year.
(iv) For purposes of subparagraphs (C) and (D), the
``applicable percentage increase'' is--
(I) for 12-month cost reporting periods beginning
during fiscal years 1986 through 1993, the applicable
percentage increase specified in clause (ii),
(II) for fiscal year 1994, the market basket
percentage increase minus 2.3 percentage points
(adjusted to exclude any portion of a cost reporting
period beginning during fiscal year 1993 for which the
applicable percentage increase is determined under
subparagraph (I)),
(III) for fiscal year 1995, the market basket
percentage increase minus 2.2 percentage points, and
(IV) for fiscal year 1996 and each subsequent fiscal
year, the applicable percentage increase under clause
(i).
(v) For purposes of clause (ii)(V)--
(I) a hospital's ``update adjustment percentage'' for
a fiscal year is the percentage by which the hospital's
allowable operating costs of inpatient hospital
services recognized under this title for the cost
reporting period beginning in fiscal year 1990 exceeds
the hospital's target amount (as determined under
subparagraph (A)) for such cost reporting period,
increased for each fiscal year (beginning with fiscal
year 1994) by the sum of any of the hospital's
applicable reductions under subclause (V) for previous
fiscal years; and
(II) the ``applicable reduction'' with respect to a
hospital for a fiscal year is the lesser of 1
percentage point or the percentage point difference
between 10 percent and the hospital's update adjustment
percentage for the fiscal year.
(vi) For purposes of clause (ii)(VII) for a fiscal year, if a
hospital's allowable operating costs of inpatient hospital
services recognized under this title for the most recent cost
reporting period for which information is available--
(I) is equal to, or exceeds, 110 percent of the
hospital's target amount (as determined under
subparagraph (A)) for such cost reporting period, the
applicable update factor specified under this clause is
the market basket percentage;
(II) exceeds 100 percent, but is less than 110
percent, of such target amount for the hospital, the
applicable update factor specified under this clause is
0 percent or, if greater, the market basket percentage
minus 0.25 percentage points for each percentage point
by which such allowable operating costs (expressed as a
percentage of such target amount) is less than 110
percent of such target amount;
(III) is equal to, or less than 100 percent, but
exceeds \2/3\ of such target amount for the hospital,
the applicable update factor specified under this
clause is 0 percent or, if greater, the market basket
percentage minus 2.5 percentage points; or
(IV) does not exceed \2/3\ of such target amount for
the hospital, the applicable update factor specified
under this clause is 0 percent.
(vii)(I) For purposes of clause (i)(XIX) for fiscal years
2005 and 2006, in a case of a subsection (d) hospital that does
not submit data to the Secretary in accordance with subclause
(II) with respect to such a fiscal year, the applicable
percentage increase under such clause for such fiscal year
shall be reduced by 0.4 percentage points. Such reduction shall
apply only with respect to the fiscal year involved, and the
Secretary shall not take into account such reduction in
computing the applicable percentage increase under clause
(i)(XIX) for a subsequent fiscal year.
(II) For fiscal years 2005 and 2006, each subsection (d)
hospital shall submit to the Secretary quality data (for a set
of 10 indicators established by the Secretary as of November 1,
2003) that relate to the quality of care furnished by the
hospital in inpatient settings in a form and manner, and at a
time, specified by the Secretary for purposes of this clause,
but with respect to fiscal year 2005, the Secretary shall
provide for a 30-day grace period for the submission of data by
a hospital.
(viii)(I) For purposes of clause (i) for fiscal year 2007 and
each subsequent fiscal year, in the case of a subsection (d)
hospital that does not submit, to the Secretary in accordance
with this clause, data required to be submitted on measures
selected under this clause with respect to such a fiscal year,
the applicable percentage increase under clause (i) for such
fiscal year shall be reduced by 2.0 percentage points (or,
beginning with fiscal year 2015, by one-quarter of such
applicable percentage increase (determined without regard to
clause (ix), (xi), or (xii))). Such reduction shall apply only
with respect to the fiscal year involved and the Secretary
shall not take into account such reduction in computing the
applicable percentage increase under clause (i) for a
subsequent fiscal year, and the Secretary and the Medicare
Payment Advisory Commission shall carry out the requirements
under section 5001(b) of the Deficit Reduction Act of 2005.
(II) Each subsection (d) hospital shall submit data on
measures selected under this clause to the Secretary in a form
and manner, and at a time, specified by the Secretary for
purposes of this clause. The Secretary may require hospitals to
submit data on measures that are not used for the determination
of value-based incentive payments under subsection (o).
(III) The Secretary shall expand, beyond the measures
specified under clause (vii)(II) and consistent with the
succeeding subclauses, the set of measures that the Secretary
determines to be appropriate for the measurement of the quality
of care (including medication errors) furnished by hospitals in
inpatient settings.
(IV) Effective for payments beginning with fiscal year 2007,
in expanding the number of measures under subclause (III), the
Secretary shall begin to adopt the baseline set of performance
measures as set forth in the November 2005 report by the
Institute of Medicine of the National Academy of Sciences under
section 238(b) of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003.
(V) Effective for payments for fiscal years 2008 through
2012, the Secretary shall add other measures that reflect
consensus among affected parties and, to the extent feasible
and practicable, shall include measures set forth by one or
more national consensus building entities.
(VI) For purposes of this clause and clause (vii), the
Secretary may replace any measures or indicators in appropriate
cases, such as where all hospitals are effectively in
compliance or the measures or indicators have been subsequently
shown not to represent the best clinical practice.
(VII) The Secretary shall establish procedures for making
information regarding measures submitted under this clause
available to the public. Such procedures shall ensure that a
hospital has the opportunity to review the data that are to be
made public with respect to the hospital prior to such data
being made public. The Secretary shall report quality measures
of process, structure, outcome, patients' perspectives on care,
efficiency, and costs of care that relate to services furnished
in inpatient settings in hospitals on the Internet website of
the Centers for Medicare & Medicaid Services.
(VIII) Effective for payments beginning with fiscal year
2013, with respect to quality measures for outcomes of care,
the Secretary shall provide for such risk adjustment as the
Secretary determines to be appropriate to maintain incentives
for hospitals to treat patients with severe illnesses or
conditions.
(IX)(aa) Subject to item (bb), effective for payments
beginning with fiscal year 2013, each measure specified by the
Secretary under this clause shall be endorsed by the entity
with a contract under section 1890(a).
(bb) In the case of a specified area or medical topic
determined appropriate by the Secretary for which a feasible
and practical measure has not been endorsed by the entity with
a contract under section 1890(a), the Secretary may specify a
measure that is not so endorsed as long as due consideration is
given to measures that have been endorsed or adopted by a
consensus organization identified by the Secretary.
(X) To the extent practicable, the Secretary shall, with
input from consensus organizations and other stakeholders, take
steps to ensure that the measures specified by the Secretary
under this clause are coordinated and aligned with quality
measures applicable to--
(aa) physicians under section 1848(k); and
(bb) other providers of services and suppliers under
this title.
(XI) The Secretary shall establish a process to validate
measures specified under this clause as appropriate. Such
process shall include the auditing of a number of randomly
selected hospitals sufficient to ensure validity of the
reporting program under this clause as a whole and shall
provide a hospital with an opportunity to appeal the validation
of measures reported by such hospital.
(ix)(I) For purposes of clause (i) for fiscal year 2015 and
each subsequent fiscal year, in the case of an eligible
hospital (as defined in subsection (n)(6)(B)) that is not a
meaningful EHR user (as defined in subsection (n)(3)) for an
EHR reporting period for such fiscal year, three-quarters of
the applicable percentage increase otherwise applicable under
clause (i) (determined without regard to clause (viii), (xi),
or (xii)) for such fiscal year shall be reduced by 33\1/3\
percent for fiscal year 2015, 66\2/3\ percent for fiscal year
2016, and 100 percent for fiscal year 2017 and each subsequent
fiscal year. Such reduction shall apply only with respect to
the fiscal year involved and the Secretary shall not take into
account such reduction in computing the applicable percentage
increase under clause (i) for a subsequent fiscal year.
(II) The Secretary may, on a case-by-case basis (and, with
respect to the application of subclause (I) for fiscal year
2017, for categories of subsection (d) hospitals, as
established by the Secretary and posted on the Internet website
of the Centers for Medicare & Medicaid Services prior to
December 15, 2015, an application for which must be submitted
to the Secretary by not later than April 1, 2016), exempt an
eligible hospital from the application of subclause (I) with
respect to a fiscal year if the Secretary determines, subject
to annual renewal, that requiring such hospital to be a
meaningful EHR user during such fiscal year would result in a
significant hardship, such as in the case of a hospital in a
rural area without sufficient Internet access. In no case may a
hospital be granted an exemption under this subclause for more
than 5 years.
(III) For fiscal year 2015 and each subsequent fiscal year, a
State in which hospitals are paid for services under section
1814(b)(3) shall adjust the payments to each subsection (d)
hospital in the State that is not a meaningful EHR user (as
defined in subsection (n)(3)) in a manner that is designed to
result in an aggregate reduction in payments to hospitals in
the State that is equivalent to the aggregate reduction that
would have occurred if payments had been reduced to each
subsection (d) hospital in the State in a manner comparable to
the reduction under the previous provisions of this clause. The
State shall report to the Secretary the methodology it will use
to make the payment adjustment under the previous sentence.
(IV) For purposes of this clause, the term ``EHR reporting
period'' means, with respect to a fiscal year, any period (or
periods) as specified by the Secretary.
(x)(I) The Secretary shall develop standard Internet website
reports tailored to meet the needs of various stakeholders such
as hospitals, patients, researchers, and policymakers. The
Secretary shall seek input from such stakeholders in
determining the type of information that is useful and the
formats that best facilitate the use of the information.
(II) The Secretary shall modify the Hospital Compare Internet
website to make the use and navigation of that website readily
available to individuals accessing it.
(xi)(I) For 2012 and each subsequent fiscal year, after
determining the applicable percentage increase described in
clause (i) and after application of clauses (viii) and (ix),
such percentage increase shall be reduced by the productivity
adjustment described in subclause (II).
(II) The productivity adjustment described in this subclause,
with respect to a percentage, factor, or update for a fiscal
year, year, cost reporting period, or other annual period, is a
productivity adjustment equal to the 10-year moving average of
changes in annual economy-wide private nonfarm business multi-
factor productivity (as projected by the Secretary for the 10-
year period ending with the applicable fiscal year, year, cost
reporting period, or other annual period).
(III) The application of subclause (I) may result in the
applicable percentage increase described in clause (i) being
less than 0.0 for a fiscal year, and may result in payment
rates under this section for a fiscal year being less than such
payment rates for the preceding fiscal year.
(xii) After determining the applicable percentage increase
described in clause (i), and after application of clauses
(viii), (ix), and (xi), the Secretary shall reduce such
applicable percentage increase--
(I) for each of fiscal years 2010 and 2011, by 0.25
percentage point;
(II) for each of fiscal years 2012 and 2013, by 0.1
percentage point;
(III) for fiscal year 2014, by 0.3 percentage point;
(IV) for each of fiscal years 2015 and 2016, by 0.2
percentage point; and
(V) for each of fiscal years 2017, 2018, and 2019, by
0.75 percentage point.
The application of this clause may result in the applicable
percentage increase described in clause (i) being less than 0.0
for a fiscal year, and may result in payment rates under this
section for a fiscal year being less than such payment rates
for the preceding fiscal year.
(C) In the case of a hospital that is a sole community
hospital (as defined in subsection (d)(5)(D)(iii)), subject to
subparagraphs (I) and (L), the term ``target amount'' means--
(i) with respect to the first 12-month cost reporting
period in which this subparagraph is applied to the
hospital--
(I) the allowable operating costs of
inpatient hospital services (as defined in
subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost
reporting period (in this subparagraph referred
to as the ``base cost reporting period'')
preceding the first cost reporting period for
which this subsection was in effect with
respect to such hospital, increased (in a
compounded manner) by--
(II) the applicable percentage increases
applied to such hospital under this paragraph
for cost reporting periods after the base cost
reporting period and up to and including such
first 12-month cost reporting period,
(ii) with respect to a later cost reporting period
beginning before fiscal year 1994, the target amount
for the preceding 12-month cost reporting period,
increased by the applicable percentage increase under
subparagraph (B)(iv) for discharges occurring in the
fiscal year in which that later cost reporting period
begins,
(iii) with respect to discharges occurring in fiscal
year 1994, the target amount for the cost reporting
period beginning in fiscal year 1993 increased by the
applicable percentage increase under subparagraph
(B)(iv), or
(iv) with respect to discharges occurring in fiscal
year 1995 and each subsequent fiscal year, the target
amount for the preceding year increased by the
applicable percentage increase under subparagraph
(B)(iv).
There shall be substituted for the base cost reporting period
described in clause (i) a hospital's cost reporting period (if
any) beginning during fiscal year 1987 if such substitution
results in an increase in the target amount for the hospital.
(D) For cost reporting periods ending on or before September
30, 1994, and for cost reporting periods occurring on or after
October 1, 1997, and before October 1, 2017, in the case of a
hospital that is a medicare-dependent, small rural hospital (as
defined in subsection (d)(5)(G)), subject to subparagraph (K),
the term ``target amount'' means--
(i) with respect to the first 12-month cost reporting
period in which this subparagraph is applied to the
hospital--
(I) the allowable operating costs of
inpatient hospital services (as defined in
subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost
reporting period (in this subparagraph referred
to as the ``base cost reporting period'')
preceding the first cost reporting period for
which this subsection was in effect with
respect to such hospital, increased (in a
compounded manner) by--
(II) the applicable percentage increases
applied to such hospital under this paragraph
for cost reporting periods after the base cost
reporting period and up to and including such
first 12-month cost reporting period, or
(ii) with respect to a later cost reporting period
beginning before fiscal year 1994, the target amount
for the preceding 12-month cost reporting period,
increased by the applicable percentage increase under
subparagraph (B)(iv) for discharges occurring in the
fiscal year in which that later cost reporting period
begins,
(iii) with respect to discharges occurring in fiscal
year 1994, the target amount for the cost reporting
period beginning in fiscal year 1993 increased by the
applicable percentage increase under subparagraph
(B)(iv), and
(iv) with respect to discharges occurring during
fiscal year 1998 through fiscal year 2017, the target
amount for the preceding year increased by the
applicable percentage increase under subparagraph
(B)(iv).
There shall be substituted for the base cost reporting period
described in clause (i) a hospital's cost reporting period (if
any) beginning during fiscal year 1987 if such substitution
results in an increase in the target amount for the hospital.
(E) In the case of a hospital described in clause (v) of
subsection (d)(1)(B), the term ``target amount'' means--
(i) with respect to the first 12-month cost reporting
period in which this subparagraph is applied to the
hospital--
(I) the allowable operating costs of
inpatient hospital services (as defined in
subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost
reporting period (in this subparagraph referred
to as the ``base cost reporting period'')
preceding the first cost reporting period for
which this subsection was in effect with
respect to such hospital, increased (in a
compounded manner) by--
(II) the sum of the applicable percentage
increases applied to such hospital under this
paragraph for cost reporting periods after the
base cost reporting period and up to and
including such first 12-month cost reporting
period, or
(ii) with respect to a later cost reporting period,
the target amount for the preceding 12-month cost
reporting period, increased by the applicable
percentage increase under subparagraph (B)(ii) for that
later cost reporting period.
There shall be substituted for the base cost reporting period
described in clause (i) a hospital's cost reporting period (if
any) beginning during fiscal year 1987 if such substitution
results in an increase in the target amount for the hospital.
(F)(i) In the case of a hospital (or unit described in the
matter following clause (v) of subsection (d)(1)(B)) that
received payment under this subsection for inpatient hospital
services furnished during cost reporting periods beginning
before October 1, 1990, that is within a class of hospital
described in clause (iii), and that elects (in a form and
manner determined by the Secretary) this subparagraph to apply
to the hospital, the target amount for the hospital's 12-month
cost reporting period beginning during fiscal year 1998 is
equal to the average described in clause (ii).
(ii) The average described in this clause for a hospital or
unit shall be determined by the Secretary as follows:
(I) The Secretary shall determine the allowable
operating costs for inpatient hospital services for the
hospital or unit for each of the 5 cost reporting
periods for which the Secretary has the most recent
settled cost reports as of the date of the enactment of
this subparagraph.
(II) The Secretary shall increase the amount
determined under subclause (I) for each cost reporting
period by the applicable percentage increase under
subparagraph (B)(ii) for each subsequent cost reporting
period up to the cost reporting period described in
clause (i).
(III) The Secretary shall identify among such 5 cost
reporting periods the cost reporting periods for which
the amount determined under subclause (II) is the
highest, and the lowest.
(IV) The Secretary shall compute the averages of the
amounts determined under subclause (II) for the 3 cost
reporting periods not identified under subclause (III).
(iii) For purposes of this subparagraph, each of the
following shall be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(II) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the
matter following clause (v) of such subsection.
(III) Hospitals described in clause (iii) of such
subsection.
(IV) Hospitals described in clause (iv) of such
subsection.
(V) Hospitals described in clause (v) of such
subsection.
(G)(i) In the case of a qualified long-term care hospital (as
defined in clause (ii)) that elects (in a form and manner
determined by the Secretary) this subparagraph to apply to the
hospital, the target amount for the hospital's 12-month cost
reporting period beginning during fiscal year 1998 is equal to
the allowable operating costs of inpatient hospital services
(as defined in subsection (a)(4)) recognized under this title
for the hospital for the 12-month cost reporting period
beginning during fiscal year 1996, increased by the applicable
percentage increase for the cost reporting period beginning
during fiscal year 1997.
(ii) In clause (i), a ``qualified long-term care hospital''
means, with respect to a cost reporting period, a hospital
described in clause (iv) of subsection (d)(1)(B) during each of
the 2 cost reporting periods for which the Secretary has the
most recent settled cost reports as of the date of the
enactment of this subparagraph for each of which--
(I) the hospital's allowable operating costs of
inpatient hospital services recognized under this title
exceeded 115 percent of the hospital's target amount,
and
(II) the hospital would have a disproportionate
patient percentage of at least 70 percent (as
determined by the Secretary under subsection
(d)(5)(F)(vi)) if the hospital were a subsection (d)
hospital.
(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 beginning during fiscal years 1998 through
2002, the target amount for such a hospital or unit may not
exceed the amount as updated up to or for such cost reporting
period under clause (ii).
(ii)(I) In the case of a hospital or unit that is within a
class of hospital described in clause (iv), the Secretary shall
estimate the 75th percentile of the target amounts for such
hospitals within such class for cost reporting periods ending
during fiscal year 1996, as adjusted under clause (iii).
(II) The Secretary shall update the amount determined under
subclause (I), for each cost reporting period after the cost
reporting period described in such subclause and up to the
first cost reporting period beginning on or after October 1,
1997, by a factor equal to the market basket percentage
increase.
(III) For cost reporting periods beginning during each of
fiscal years 1999 through 2002, subject to subparagraph (J),
the Secretary shall update such amount by a factor equal to the
market basket percentage increase.
(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.
(iv) For purposes of this subparagraph, each of the following
shall be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(II) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the
matter following clause (v) of such subsection.
(III) Hospitals described in clause (iv) of such
subsection.
(I)(i) Subject to subparagraph (L), for cost reporting
periods beginning on or after October 1, 2000, in the case of a
sole community hospital there shall be substituted for the
amount otherwise determined under subsection (d)(5)(D)(i), if
such substitution results in a greater amount of payment under
this section for the hospital--
(I) with respect to discharges occurring in fiscal
year 2001, 75 percent of the amount otherwise
applicable to the hospital under subsection
(d)(5)(D)(i) (referred to in this clause as the
``subsection (d)(5)(D)(i) amount'') and 25 percent of
the rebased target amount (as defined in clause (ii));
(II) with respect to discharges occurring in fiscal
year 2002, 50 percent of the subsection (d)(5)(D)(i)
amount and 50 percent of the rebased target amount;
(III) with respect to discharges occurring in fiscal
year 2003, 25 percent of the subsection (d)(5)(D)(i)
amount and 75 percent of the rebased target amount; and
(IV) with respect to discharges occurring after
fiscal year 2003, 100 percent of the rebased target
amount.
(ii) For purposes of this subparagraph, the ``rebased target
amount'' has the meaning given the term ``target amount'' in
subparagraph (C) except that--
(I) there shall be substituted for the base cost
reporting period the 12-month cost reporting period
beginning during fiscal year 1996;
(II) any reference in subparagraph (C)(i) to the
``first cost reporting period'' described in such
subparagraph is deemed a reference to the first cost
reporting period beginning on or after October 1, 2000;
and
(III) applicable increase percentage shall only be
applied under subparagraph (C)(iv) for discharges
occurring in fiscal years beginning with fiscal year
2002.
(iii) In no case shall a hospital be denied treatment as a
sole community hospital or payment (on the basis of a target
rate as such as a hospital) because data are unavailable for
any cost reporting period due to changes in ownership, changes
in fiscal intermediaries, or other extraordinary circumstances,
so long as data for at least one applicable base cost reporting
period is available.
(J) For cost reporting periods beginning during fiscal year
2001, for a hospital described in subsection (d)(1)(B)(iv)--
(i) the limiting or cap amount otherwise determined
under subparagraph (H) shall be increased by 2 percent;
and
(ii) the target amount otherwise determined under
subparagraph (A) shall be increased by 25 percent
(subject to the limiting or cap amount determined under
subparagraph (H), as increased by clause (i)).
(K)(i) With respect to discharges occurring on or after
October 1, 2006, in the case of a medicare-dependent, small
rural hospital, for purposes of applying subparagraph (D)--
(I) there shall be substituted for the base cost
reporting period described in subparagraph (D)(i) the
12-month cost reporting period beginning during fiscal
year 2002; and
(II) any reference in such subparagraph to the
``first cost reporting period'' described in such
subparagraph is deemed a reference to the first cost
reporting period beginning on or after October 1, 2006.
(ii) This subparagraph shall only apply to a hospital if the
substitution described in clause (i)(I) results in an increase
in the target amount under subparagraph (D) for the hospital.
(L)(i) For cost reporting periods beginning on or after
January 1, 2009, in the case of a sole community hospital there
shall be substituted for the amount otherwise determined under
subsection (d)(5)(D)(i) of this section, if such substitution
results in a greater amount of payment under this section for
the hospital, the subparagraph (L) rebased target amount.
(ii) For purposes of this subparagraph, the term
``subparagraph (L) rebased target amount'' has the meaning
given the term ``target amount'' in subparagraph (C), except
that--
(I) there shall be substituted for the base cost
reporting period the 12-month cost reporting period
beginning during fiscal year 2006;
(II) any reference in subparagraph (C)(i) to the
``first cost reporting period'' described in such
subparagraph is deemed a reference to the first cost
reporting period beginning on or after January 1, 2009;
and
(III) the applicable percentage increase shall only
be applied under subparagraph (C)(iv) for discharges
occurring on or after January 1, 2009.
(4)(A)(i) The Secretary shall provide for an exception and
adjustment to (and in the case of a hospital described in
subsection (d)(1)(B)(iii), may provide an exemption from) the
method under this subsection for determining the amount of
payment to a hospital where events beyond the hospital's
control or extraordinary circumstances, including changes in
the case mix of such hospital, create a distortion in the
increase in costs for a cost reporting period (including any
distortion in the costs for the base period against which such
increase is measured). The Secretary may provide for such other
exemptions from, and exceptions and adjustments to, such method
as the Secretary deems appropriate, including the assignment of
a new base period which is more representative, as determined
by the Secretary, of the reasonable and necessary cost of
inpatient services and including those which he deems necessary
to take into account a decrease in the inpatient hospital
services that a hospital provides and that are customarily
provided directly by similar hospitals which results in a
significant distortion in the operating costs of inpatient
hospital services. The Secretary shall announce a decision on
any request for an exemption, exception, or adjustment under
this paragraph not later than 180 days after receiving a
completed application from the intermediary for such exemption,
exception, or adjustment, and shall include in such decision a
detailed explanation of the grounds on which such request was
approved or denied.
(ii) The payment reductions under paragraph (3)(B)(ii)(V)
shall not be considered by the Secretary in making adjustments
pursuant to clause (i). In making such reductions, the
Secretary shall treat the applicable update factor described in
paragraph (3)(B)(vi) for a fiscal year as being equal to the
market basket percentage for that year.
(B) In determining under subparagraph (A) whether to assign a
new base period which is more representative of the reasonable
and necessary cost to a hospital of providing inpatient
services, the Secretary shall take into consideration--
(i) changes in applicable technologies and medical
practices, or differences in the severity of illness
among patients, that increase the hospital's costs;
(ii) whether increases in wages and wage-related
costs for hospitals located in the geographic area in
which the hospital is located exceed the average of the
increases in such costs paid by hospitals in the United
States; and
(iii) such other factors as the Secretary considers
appropriate in determining increases in the hospital's
costs of providing inpatient services.
(C) Paragraph (1) shall not apply to payment of hospitals
which is otherwise determined under paragraph (3) of section
1814(b).
(5) In the case of any hospital having any cost reporting
period of other than a 12-month period, the Secretary shall
determine the 12-month period which shall be used for purposes
of this section.
(6) In the case of any hospital which becomes subject to the
taxes under section 3111 of the Internal Revenue Code of 1954,
with respect to any or all of its employees, for part or all of
a cost reporting period, and was not subject to such taxes with
respect to any or all of its employees for all or part of the
12-month base cost reporting period referred to in subsection
(b)(3)(A)(i), the Secretary shall provide for an adjustment by
increasing the base period amount described in such subsection
for such hospital by an amount equal to the amount of such
taxes which would have been paid or accrued by such hospital
for such base period if such hospital had been subject to such
taxes for all of such base period with respect to all its
employees, minus the amount of any such taxes actually paid or
accrued for such base period.
(7)(A) Notwithstanding paragraph (1), in the case of a
hospital or unit that is within a class of hospital described
in subparagraph (B) which first receives payments under this
section on or after October 1, 1997--
(i) for each of the first 2 cost reporting periods
for which the hospital has a settled cost report, the
amount of the payment with respect to operating costs
described in paragraph (1) under part A on a per
discharge or per admission basis (as the case may be)
is equal to the lesser of--
(I) the amount of operating costs for such
respective period, or
(II) 110 percent of the national median (as
estimated by the Secretary) of the target
amount for hospitals in the same class as the
hospital for cost reporting periods ending
during fiscal year 1996, updated by the
hospital market basket increase percentage to
the fiscal year in which the hospital first
received payments under this section, as
adjusted under subparagraph (C); and
(ii) for purposes of computing the target amount for
the subsequent cost reporting period, the target amount
for the preceding cost reporting period is equal to the
amount determined under clause (i) for such preceding
period.
(B) For purposes of this paragraph, each of the following
shall be treated as a separate class of hospital:
(i) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
(ii) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the
matter following clause (v) of such subsection.
(iii) Hospitals described in clause (iv) of such
subsection.
(C) In applying subparagraph (A)(i)(II) 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.
(c)(1) The Secretary may provide, in his discretion, that
payment with respect to services provided by a hospital in a
State may be made in accordance with a hospital reimbursement
control system in a State, rather than in accordance with the
other provisions of this title, if the chief executive officer
of the State requests such treatment and if--
(A) the Secretary determines that the system, if
approved under this subsection, will apply (i) to
substantially all non- Federal acute care hospitals (as
defined by the Secretary) in the State and (ii) to the
review of at least 75 percent of all revenues or
expenses in the State for inpatient hospital services
and of revenues or expenses for inpatient hospital
services provided under the State's plan approved under
title XIX;
(B) the Secretary has been provided satisfactory
assurances as to the equitable treatment under the
system of all entities (including Federal and State
programs) that pay hospitals for inpatient hospital
services, of hospital employees, and of hospital
patients;
(C) the Secretary has been provided satisfactory
assurances that under the system, over 36-month periods
(the first such period beginning with the first month
in which this subsection applies to that system in the
State), the amount of payments made under this title
under such system will not exceed the amount of
payments which would otherwise have been made under
this title not using such system;
(D) the Secretary determines that the system will not
preclude an eligible organization (as defined in
section 1876(b)) from negotiating directly with
hospitals with respect to the organization's rate of
payment for inpatient hospital services; and
(E) the Secretary determines that the system requires
hospitals to meet the requirement of section
1866(a)(1)(G) and the system provides for the exclusion
of certain costs in accordance with section 1862(a)(14)
(except for such waivers thereof as the Secretary
provides by regulation).
The Secretary cannot deny the application of a State under this
subsection on the ground that the State's hospital
reimbursement control system is based on a payment methodology
other than on the basis of a diagnosis-related group or on the
ground that the amount of payments made under this title under
such system must be less than the amount of payments which
would otherwise have been made under this title not using such
system. If the Secretary determines that the conditions
described in subparagraph (C) are based on maintaining payment
amounts at no more than a specified percentage increase above
the payment amounts in a base period, the State has the option
of applying such test (for inpatient hospital services under
part A) on an aggregate payment basis or on the basis of the
amount of payment per inpatient discharge or admission. If the
Secretary determines that the conditions described in
subparagraph (C) are based on maintaining aggregate payment
amounts below a national average percentage increase in total
payments under part A for inpatient hospital services, the
Secretary cannot deny the application of a State under this
subsection on the ground that the State's rate of increase in
such payments for such services must be less than such national
average rate of increase.
(2) In determining under paragraph (1)(C) the amount of
payment which would otherwise have been made under this title
for a State, the Secretary may provide for appropriate
adjustment of such amount to take into account previous
reductions effected in the amount of payments made under this
title in the State due to the operation of the hospital
reimbursement control system in the State if the system has
resulted in an aggregate rate of increase in operating costs of
inpatient hospital services (as defined in subsection (a)(4))
under this title for hospitals in the State which is less than
the aggregate rate of increase in such costs under this title
for hospitals in the United States.
(3) The Secretary shall discontinue payments under a system
described in paragraph (1) if the Secretary--
(A) determines that the system no longer meets the
requirements of subparagraphs (A), (D), and (E) of
paragraph (1) and, if applicable, the requirements of
paragraph (5), or
(B) has reason to believe that the assurances
described in subparagraph (B) or (C) of paragraph (1)
(or, if applicable, in paragraph (5)) are not being (or
will not be) met.
(4) The Secretary shall approve the request of a State under
paragraph (1) with respect to a hospital reimbursement control
system if--
(A) the requirements of subparagraphs (A), (B), (C),
(D), and (E) of paragraph (1) have been met with
respect to the system, and
(B) with respect to that system a waiver of certain
requirements of title XVIII of the Social Security Act
has been approved on or before (and which is in effect
as of) the date of the enactment of the Social Security
Amendments of 1983, pursuant to section 402(a) of the
Social Security Amendments of 1967 or section 222(a) of
the Social Security Amendments of 1972.
With respect to a State system described in this paragraph, the
Secretary shall judge the effectiveness of such system on the
basis of its rate of increase or inflation in inpatient
hospital payments for individuals under this title, as compared
to the national rate of increase or inflation for such
payments, with the State retaining the option to have the test
applied on the basis of the aggregate payments under the State
system as compared to aggregate payments which would have been
made under the national system since October 1, 1984, to the
most recent date for which annual data are available.
(5) The Secretary shall approve the request of a State under
paragraph (1) with respect to a hospital reimbursement control
system if--
(A) the requirements of subparagraphs (A), (B), (C),
(D), and (E) of paragraph (1) have been met with
respect to the system;
(B) the Secretary determines that the system--
(i) is operated directly by the State or by
an entity designated pursuant to State law,
(ii) provides for payment of hospitals
covered under the system under a methodology
(which sets forth exceptions and adjustments,
as well as any method for changes in the
methodology) by which rates or amounts to be
paid for hospital services during a specified
period are established under the system prior
to the defined rate period, and
(iii) hospitals covered under the system will
make such reports (in lieu of cost and other
reports, identified by the Secretary, otherwise
required under this title) as the Secretary may
require in order to properly monitor assurances
provided under this subsection;
(C) the State has provided the Secretary with
satisfactory assurances that operation of the system
will not result in any change in hospital admission
practices which result in--
(i) a significant reduction in the proportion
of patients (receiving hospital services
covered under the system) who have no third-
party coverage and who are unable to pay for
hospital services,
(ii) a significant reduction in the
proportion of individuals admitted to hospitals
for inpatient hospital services for which
payment is (or is likely to be) less than the
anticipated charges for or costs of such
services,
(iii) the refusal to admit patients who would
be expected to require unusually costly or
prolonged treatment for reasons other than
those related to the appropriateness of the
care available at the hospital, or
(iv) the refusal to provide emergency
services to any person who is in need of
emergency services if the hospital provides
such services;
(D) any change by the State in the system which has
the effect of materially reducing payments to hospitals
can only take effect upon 60 days notice to the
Secretary and to the hospitals the payment to which is
likely to be materially affected by the change; and
(E) the State has provided the Secretary with
satisfactory assurances that in the development of the
system the State has consulted with local governmental
officials concerning the impact of the system on public
hospitals.
The Secretary shall respond to requests of States under this
paragraph within 60 days of the date the request is submitted
to the Secretary.
(6) If the Secretary determines that the assurances described
in paragraph (1)(C) have not been met with respect to any 36-
month period, the Secretary may reduce payments under this
title to hospitals under the system in an amount equal to the
amount by which the payment under this title under such system
for such period exceeded the amount of payments which would
otherwise have been made under this title not using such
system.
(7) In the case of a State which made a request under
paragraph (5) before December 31, 1984, for the approval of a
State hospital reimbursement control system and which request
was approved--
(A) in applying paragraphs (1)(C) and (6), a
reference to a ``36-month period'' is deemed a
reference to a ``48-month period'', and
(B) in order to allow the State the opportunity to
provide the assurances described in paragraph (1)(C)
for a 48-month period, the Secretary may not
discontinue payments under the system, under the
authority of paragraph (3)(A) because the Secretary has
reason to believe that such assurances are not being
(or will not be) met, before July 1, 1986.
(d)(1)(A) Notwithstanding section 1814(b) but subject to the
provisions of section 1813, the amount of the payment with
respect to the operating costs of inpatient hospital services
(as defined in subsection (a)(4)) of a subsection (d) hospital
(as defined in subparagraph (B)) for inpatient hospital
discharges in a cost reporting period or in a fiscal year--
(i) beginning on or after October 1, 1983, and before
October 1, 1984, is equal to the sum of--
(I) the target percentage (as defined in
subparagraph (C)) of the hospital's target
amount for the cost reporting period (as
defined in subsection (b)(3)(A), but determined
without the application of subsection (a)), and
(II) the DRG percentage (as defined in
subparagraph (C)) of the regional adjusted DRG
prospective payment rate determined under
paragraph (2) for such discharges;
(ii) beginning on or after October 1, 1984, and
before October 1, 1987, is equal to the sum of--
(I) the target percentage (as defined in
subparagraph (C)) of the hospital's target
amount for the cost reporting period (as
defined in subsection (b)(3)(A), but determined
without the application of subsection (a)), and
(II) the DRG percentage (as defined in
subparagraph (C)) of the applicable combined
adjusted DRG prospective payment rate
determined under subparagraph (D) for such
discharges; or
(iii) beginning on or after April 1, 1988, is equal
to
(I) the national adjusted DRG prospective
payment rate determined under paragraph (3) for
such discharges, or
(II) for discharges occurring during a fiscal
year ending on or before September 30, 1996,
the sum of 85 percent of the national adjusted
DRG prospective payment rate determined under
paragraph (3) for such discharges and 15
percent of the regional adjusted DRG
prospective payment rate determined under such
paragraph, but only if the average standardized
amount (described in clause (i)(I) or clause
(ii)(I) of paragraph (3)(D)) for hospitals
within the region of, and in the same large
urban or other area (or, for discharges
occurring during a fiscal year ending on or
before September 30, 1994, the same rural,
large urban, or other urban area) as, the
hospital is greater than the average
standardized amount (described in the
respective clause) for hospitals within the
United States in that type of area for
discharges occurring during such fiscal year.
(B) As used in this section, the term ``subsection (d)
hospital'' means a hospital located in one of the fifty States
or the District of Columbia other than--
(i) a psychiatric hospital (as defined in section
1861(f)),
(ii) a rehabilitation hospital (as defined by the
Secretary),
(iii) a hospital whose inpatients are predominantly
individuals under 18 years of age,
(iv)[(I) a hospital] a hospital which has an average
inpatient length of stay (as determined by the
Secretary) of greater than 25 days, [or]
(v)(I) a hospital that the Secretary has classified,
at any time on or before December 31, 1990, (or, in the
case of a hospital that, as of the date of the
enactment of this clause, is located in a State
operating a demonstration project under section
1814(b), on or before December 31, 1991) for purposes
of applying exceptions and adjustments to payment
amounts under this subsection, as a hospital involved
extensively in treatment for or research on cancer,
(II) a hospital that was recognized as a
comprehensive cancer center or clinical cancer research
center by the National Cancer Institute of the National
Institutes of Health as of April 20, 1983, that is
located in a State which, as of December 19, 1989, was
not operating a demonstration project under section
1814(b), that applied and was denied, on or before
December 31, 1990, for classification as a hospital
involved extensively in treatment for or research on
cancer under this clause (as in effect on the day
before the date of the enactment of this subclause),
that as of the date of the enactment of this subclause,
is licensed for less than 50 acute care beds, and that
demonstrates for the 4-year period ending on December
31, 1996, that at least 50 percent of its total
discharges have a principal finding of neoplastic
disease, as defined in subparagraph (E), or
(III) a hospital that was recognized as a clinical
cancer research center by the National Cancer Institute
of the National Institutes of Health as of February 18,
1998, that has never been reimbursed for inpatient
hospital services pursuant to a reimbursement system
under a demonstration project under section 1814(b),
that is a freestanding facility organized primarily for
treatment of and research on cancer and is not a unit
of another hospital, that as of the date of the
enactment of this subclause, is licensed for 162 acute
care beds, and that demonstrates for the 4-year period
ending on June 30, 1999, that at least 50 percent of
its total discharges have a principal finding of
neoplastic disease, as defined in subparagraph (E)[;],
or
[(II)] (vi) a hospital that first received payment
under this subsection in 1986 which has an average
inpatient length of stay (as determined by the
Secretary) of greater than 20 days and that has 80
percent or more of its annual medicare inpatient
discharges with a principal diagnosis that reflects a
finding of neoplastic disease in the 12-month cost
reporting period ending in fiscal year 1997[, or];
and, in accordance with regulations of the Secretary, does not
include a psychiatric or rehabilitation unit of the hospital
which is a distinct part of the hospital (as defined by the
Secretary). A hospital that was classified by the Secretary on
or before September 30, 1995, as a hospital described in clause
(iv) (as in effect as of such date) shall continue to be so
classified (or, in the case of a hospital described in clause
(iv)(II), as so in effect, shall be classified under clause
(vi) on and after the effective date of such clause (vi) and
for cost reporting periods beginning on or after January 1,
2015, shall not be subject to subsection (m) as of the date of
such classification) notwithstanding that it is located in the
same building as, or on the same campus as, another hospital.
(C) For purposes of this subsection, for cost reporting
periods beginning--
(i) on or after October 1, 1983, and before October
1, 1984, the ``target percentage'' is 75 percent and
the ``DRG percentage'' is 25 percent;
(ii) on or after October 1, 1984, and before October
1, 1985, the ``target percentage'' is 50 percent and
the ``DRG percentage'' is 50 percent;
(iii) on or after October 1, 1985, and before October
1, 1986, the ``target percentage'' is 45 percent and
the ``DRG percentage'' is 55 percent; and
(iv) on or after October 1, 1986, and before October
1, 1987, the ``target percentage'' is 25 percent and
the ``DRG percentage'' is 75 percent.
(D) For purposes of subparagraph (A)(ii)(II), the
``applicable combined adjusted DRG prospective payment rate''
for discharges occurring--
(i) on or after October 1, 1984, and before October
1, 1986, is a combined rate consisting of 25 percent of
the national adjusted DRG prospective payment rate, and
75 percent of the regional adjusted DRG prospective
payment rate, determined under paragraph (3) for such
discharges; and
(ii) on or after October 1, 1986, and before October
1, 1987, is a combined rate consisting of 50 percent of
the national adjusted DRG prospective payment rate, and
50 percent of the regional adjusted DRG prospective
payment rate, determined under paragraph (3) for such
discharges.
(E) For purposes of subclauses (II) and (III) of subparagraph
(B)(v) only, the term ``principal finding of neoplastic
disease'' means the condition established after study to be
chiefly responsible for occasioning the admission of a patient
to a hospital, except that only discharges with ICD-9-CM
principal diagnosis codes of 140 through 239, V58.0, V58.1,
V66.1, V66.2, or 990 will be considered to reflect such a
principal diagnosis.
(2) The Secretary shall determine a national adjusted DRG
prospective payment rate, for each inpatient hospital discharge
in fiscal year 1984 involving inpatient hospital services of a
subsection (d) hospital in the United States, and shall
determine a regional adjusted DRG prospective payment rate for
such discharges in each region, for which payment may be made
under part A of this title. Each such rate shall be determined
for hospitals located in urban or rural areas within the United
States or within each such region, respectively, as follows:
(A) Determining allowable individual hospital costs
for base period.--The Secretary shall determine the
allowable operating costs per discharge of inpatient
hospital services for the hospital for the most recent
cost reporting period for which data are available.
(B) Updating for fiscal year 1984.--The Secretary
shall update each amount determined under subparagraph
(A) for fiscal year 1984 by--
(i) updating for fiscal year 1983 by the
estimated average rate of change of hospital
costs industry-wide between the cost reporting
period used under such subparagraph and fiscal
year 1983 and the most recent case-mix data
available, and
(ii) projecting for fiscal year 1984 by the
applicable percentage increase (as defined in
subsection (b)(3)(B)) for fiscal year 1984.
(C) Standardizing amounts.--The Secretary shall
standardize the amount updated under subparagraph (B)
for each hospital by--
(i) excluding an estimate of indirect medical
education costs (taking into account, for
discharges occurring after September 30, 1986,
the amendments made by section 9104(a) of the
Medicare and Medicaid Budget Reconciliation
Amendments of 1985), except that the Secretary
shall not take into account any reduction in
the amount of additional payments under
paragraph (5)(B)(ii) resulting from the
amendment made by section 4621(a)(1) of the
Balanced Budget Act of 1997 or any additional
payments under such paragraph resulting from
the application of section 111 of the Medicare,
Medicaid, and SCHIP Balanced Budget Refinement
Act of 1999, of section 302 of the Medicare,
Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, or the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003,
(ii) adjusting for variations among hospitals
by area in the average hospital wage level,
(iii) adjusting for variations in case mix
among hospitals, and
(iv) for discharges occurring on or after
October 1, 1986, excluding an estimate of the
additional payments to certain hospitals to be
made under paragraph (5)(F), except that the
Secretary shall not exclude additional payments
under such paragraph made as a result of the
enactment of section 6003(c) of the Omnibus
Budget Reconciliation Act of 1989, the
enactment of section 4002(b) of the Omnibus
Budget Reconciliation Act of 1990, the
enactment of section 303 of the Medicare,
Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, or the enactment of
section 402(a)(1) of the Medicare Prescription
Drug, Improvement, and Modernization Act of
2003.
(D) Computing urban and rural averages.--The
Secretary shall compute an average of the standardized
amounts determined under subparagraph (C) for the
United States and for each region--
(i) for all subsection (d) hospitals located
in an urban area within the United States or
that region, respectively, and
(ii) for all subsection (d) hospitals located
in a rural area within the United States or
that region, respectively.
For purposes of this subsection, the term ``region''
means one of the nine census divisions, comprising the
fifty States and the District of Columbia, established
by the Bureau of the Census for statistical and
reporting purposes; the term ``urban area'' means an
area within a Metropolitan Statistical Area (as defined
by the Office of Management and Budget) or within such
similar area as the Secretary has recognized under
subsection (a) by regulation; the term ``large urban
area'' means, with respect to a fiscal year, such an
urban area which the Secretary determines (in the
publications described in subsection (e)(5) before the
fiscal year) has a population of more than 1,000,000
(as determined by the Secretary based on the most
recent available population data published by the
Bureau of the Census); and the term ``rural area''
means any area outside such an area or similar area. A
hospital located in a Metropolitan Statistical Area
shall be deemed to be located in the region in which
the largest number of the hospitals in the same
Metropolitan Statistical Area are located, or, at the
option of the Secretary, the region in which the
majority of the inpatient discharges (with respect to
which payments are made under this title) from
hospitals in the same Metropolitan Statistical Area are
made.
(E) Reducing for value of outlier payments.--The
Secretary shall reduce each of the average standardized
amounts determined under subparagraph (D) by a
proportion equal to the proportion (estimated by the
Secretary) of the amount of payments under this
subsection based on DRG prospective payment rates which
are additional payments described in paragraph (5)(A)
(relating to outlier payments).
(F) Maintaining budget neutrality.--The Secretary
shall adjust each of such average standardized amounts
as may be required under subsection (e)(1)(B) for that
fiscal year.
(G) Computing drg-specific rates for urban and rural
hospitals in the united states and in each region.--For
each discharge classified within a diagnosis-related
group, the Secretary shall establish a national DRG
prospective payment rate and shall establish a regional
DRG prospective payment rate for each region, each of
which is equal--
(i) for hospitals located in an urban area in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (D),
reduced under subparagraph (E), and
adjusted under subparagraph (F)) for
hospitals located in an urban area in
the United States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group; and
(ii) for hospitals located in a rural area in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (D),
reduced under subparagraph (E), and
adjusted under subparagraph (F)) for
hospitals located in a rural area in
the United States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group.
(H) Adjusting for different area wage levels.--The
Secretary shall adjust the proportion, (as estimated by
the Secretary from time to time) of hospitals' costs
which are attributable to wages and wage-related costs,
of the national and regional DRG prospective payment
rates computed under subparagraph (G) for area
differences in hospital wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
hospital compared to the national average hospital wage
level.
(3) The Secretary shall determine a national adjusted DRG
prospective payment rate, for each inpatient hospital discharge
in a fiscal year after fiscal year 1984 involving inpatient
hospital services of a subsection (d) hospital in the United
States, and shall determine, for fiscal years before fiscal
year 1997, a regional adjusted DRG prospective payment rate for
such discharges in each region for which payment may be made
under part A of this title. Each such rate shall be determined
for hospitals located in large urban, other urban, or rural
areas within the United States and within each such region,
respectively, as follows:
(A) Updating previous standardized amounts.--(i) For
discharges occurring in a fiscal year beginning before
October 1, 1987, the Secretary shall compute an average
standardized amount for hospitals located in an urban
area and for hospitals located in a rural area within
the United States and for hospitals located in an urban
area and for hospitals located in a rural area within
each region, equal to the respective average
standardized amount computed for the previous fiscal
year under paragraph (2)(D) or under this subparagraph,
increased for the fiscal year involved by the
applicable percentage increase under subsection
(b)(3)(B). With respect to discharges occurring on or
after October 1, 1987, the Secretary shall compute
urban and rural averages on the basis of discharge
weighting rather than hospital weighting, making
appropriate adjustments to ensure that computation on
such basis does not result in total payments under this
section that are greater or less than the total
payments that would have been made under this section
but for this sentence, and making appropriate changes
in the manner of determining the reductions under
subparagraph (C)(ii).
(ii) For discharges occurring in a fiscal year
beginning on or after October 1, 1987, and ending on or
before September 30, 1994, the Secretary shall compute
an average standardized amount for hospitals located in
a large urban area, for hospitals located in a rural
area, and for hospitals located in other urban areas,
within the United States and within each region, equal
to the respective average standardized amount computed
for the previous fiscal year under this subparagraph
increased by the applicable percentage increase under
subsection (b)(3)(B)(i) with respect to hospitals
located in the respective areas for the fiscal year
involved.
(iii) For discharges occurring in the fiscal year
beginning on October 1, 1994, the average standardized
amount for hospitals located in a rural area shall be
equal to the average standardized amount for hospitals
located in an urban area. For discharges occurring on
or after October 1, 1994, the Secretary shall adjust
the ratio of the labor portion to non-labor portion of
each average standardized amount to equal such ratio
for the national average of all standardized amounts.
(iv)(I) Subject to subclause (II), for discharges
occurring in a fiscal year beginning on or after
October 1, 1995, the Secretary shall compute an average
standardized amount for hospitals located in a large
urban area and for hospitals located in other areas
within the United States and within each region equal
to the respective average standardized amount computed
for the previous fiscal year under this subparagraph
increased by the applicable percentage increase under
subsection (b)(3)(B)(i) with respect to hospitals
located in the respective areas for the fiscal year
involved.
(II) For discharges occurring in a fiscal year
(beginning with fiscal year 2004), the Secretary shall
compute a standardized amount for hospitals located in
any area within the United States and within each
region equal to the standardized amount computed for
the previous fiscal year under this subparagraph for
hospitals located in a large urban area (or, beginning
with fiscal year 2005, for all hospitals in the
previous fiscal year) increased by the applicable
percentage increase under subsection (b)(3)(B)(i) for
the fiscal year involved.
(v) Average standardized amounts computed under this
paragraph shall be adjusted to reflect the most recent
case-mix data available.
(vi) Insofar as the Secretary determines that the
adjustments under paragraph (4)(C)(i) for a previous
fiscal year (or estimates that such adjustments for a
future fiscal year) did (or are likely to) result in a
change in aggregate payments under this subsection
during the fiscal year that are a result of changes in
the coding or classification of discharges that do not
reflect real changes in case mix, the Secretary may
adjust the average standardized amounts computed under
this paragraph for subsequent fiscal years so as to
eliminate the effect of such coding or classification
changes.
(B) Reducing for value of outlier payments.--The
Secretary shall reduce each of the average standardized
amounts determined under subparagraph (A) by a factor
equal to the proportion of payments under this
subsection (as estimated by the Secretary) based on DRG
prospective payment amounts which are additional
payments described in paragraph (5)(A) (relating to
outlier payments).
(C)(i) Maintaining budget neutrality for fiscal year
1985.--For discharges occurring in fiscal year 1985,
the Secretary shall adjust each of such average
standardized amounts as may be required under
subsection (e)(1)(B) for that fiscal year.
(ii) Reducing for savings from amendment to indirect
teaching adjustment for discharges after September 30,
1986.--For discharges occurring after September 30,
1986, the Secretary shall further reduce each of the
average standardized amounts (in a proportion which
takes into account the differing effects of the
standardization effected under paragraph (2)(C)(i)) so
as to provide for a reduction in the total of the
payments (attributable to this paragraph) made for
discharges occurring on or after October 1, 1986, of an
amount equal to the estimated reduction in the payment
amounts under paragraph (5)(B) that would have resulted
from the enactment of the amendments made by section
9104 of the Medicare and Medicaid Budget Reconciliation
Amendments of 1985 and by section 4003(a)(1) of the
Omnibus Budget Reconciliation Act of 1987 if the factor
described in clause (ii)(II) of paragraph (5)(B)
(determined without regard to amendments made by the
Omnibus Budget Reconciliation Act of 1990) were applied
for discharges occurring on or after such date instead
of the factor described in clause (ii) of that
paragraph.
(D) Computing drg-specific rates for hospitals.--For
each discharge classified within a diagnosis-related
group, the Secretary shall establish for the fiscal
year a national DRG prospective payment rate and shall
establish, for fiscal years before fiscal year 1997, a
regional DRG prospective payment rate for each region
which is equal--
(i) for fiscal years before fiscal year 2004,
for hospitals located in a large urban area in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (A),
reduced under subparagraph (B), and
adjusted or reduced under subparagraph
(C)) for the fiscal year for hospitals
located in such a large urban area in
the United States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group;
(ii) for fiscal years before fiscal year
2004, for hospitals located in other areas in
the United States or that region
(respectively), to the product of--
(I) the average standardized amount
(computed under subparagraph (A),
reduced under subparagraph (B), and
adjusted or reduced under subparagraph
(C)) for the fiscal year for hospitals
located in other areas in the United
States or that region, and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group; and
(iii) for a fiscal year beginning after
fiscal year 2003, for hospitals located in all
areas, to the product of--
(I) the applicable standardized
amount (computed under subparagraph
(A)), reduced under subparagraph (B),
and adjusted or reduced under
subparagraph (C) for the fiscal year;
and
(II) the weighting factor (determined
under paragraph (4)(B)) for that
diagnosis-related group.
(E) Adjusting for different area wage levels.--
(i) In general.--Except as provided in clause
(ii) or (iii), the Secretary shall adjust the
proportion, (as estimated by the Secretary from
time to time) of hospitals' costs which are
attributable to wages and wage-related costs,
of the DRG prospective payment rates computed
under subparagraph (D) for area differences in
hospital wage levels by a factor (established
by the Secretary) reflecting the relative
hospital wage level in the geographic area of
the hospital compared to the national average
hospital wage level. Not later than October 1,
1990, and October 1, 1993 (and at least every
12 months thereafter), the Secretary shall
update the factor under the preceding sentence
on the basis of a survey conducted by the
Secretary (and updated as appropriate) of the
wages and wage-related costs of subsection (d)
hospitals in the United States. Not less often
than once every 3 years the Secretary (through
such survey or otherwise) shall measure the
earnings and paid hours of employment by
occupational category and shall exclude data
with respect to the wages and wage-related
costs incurred in furnishing skilled nursing
facility services. Any adjustments or updates
made under this subparagraph for a fiscal year
(beginning with fiscal year 1991) shall be made
in a manner that assures that the aggregate
payments under this subsection in the fiscal
year are not greater or less than those that
would have been made in the year without such
adjustment. The Secretary shall apply the
previous sentence for any period as if the
amendments made by section 403(a)(1) of the
Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 and the amendments
made by section 10324(a)(1) of the Patient
Protection and Affordable Care Act had not been
enacted.
(ii) Alternative proportion to be adjusted
beginning in fiscal year 2005.--For discharges
occurring on or after October 1, 2004, the
Secretary shall substitute ``62 percent'' for
the proportion described in the first sentence
of clause (i), unless the application of this
clause would result in lower payments to a
hospital than would otherwise be made.
(iii) Floor on area wage index for hospitals
in frontier states.--
(I) In general.--Subject to subclause
(IV), for discharges occurring on or
after October 1, 2010, the area wage
index applicable under this
subparagraph to any hospital which is
located in a frontier State (as defined
in subclause (II)) may not be less than
1.00.
(II) Frontier state defined.--In this
clause, the term ``frontier State''
means a State in which at least 50
percent of the counties in the State
are frontier counties.
(III) Frontier county defined.--In
this clause, the term ``frontier
county'' means a county in which the
population per square mile is less than
6.
(IV) Limitation.--This clause shall
not apply to any hospital located in a
State that receives a non-labor related
share adjustment under paragraph
(5)(H).
(4)(A) The Secretary shall establish a classification of
inpatient hospital discharges by diagnosis-related groups and a
methodology for classifying specific hospital discharges within
these groups.
(B) For each such diagnosis-related group the Secretary shall
assign an appropriate weighting factor which reflects the
relative hospital resources used with respect to discharges
classified within that group compared to discharges classified
within other groups.
(C)(i) The Secretary shall adjust the classifications and
weighting factors established under subparagraphs (A) and (B),
for discharges in fiscal year 1988 and at least annually
thereafter, to reflect changes in treatment patterns,
technology (including a new medical service or technology under
paragraph (5)(K)), and other factors which may change the
relative use of hospital resources.
(ii) For discharges in fiscal year 1990, the Secretary shall
reduce the weighting factor for each diagnosis-related group by
1.22 percent.
(iii) Any such adjustment under clause (i) for discharges in
a fiscal year (beginning with fiscal year 1991) shall be made
in a manner that assures that the aggregate payments under this
subsection for discharges in the fiscal year are not greater or
less than those that would have been made for discharges in the
year without such adjustment.
(D)(i) For discharges occurring on or after October 1, 2008,
the diagnosis-related group to be assigned under this paragraph
for a discharge described in clause (ii) shall be a diagnosis-
related group that does not result in higher payment based on
the presence of a secondary diagnosis code described in clause
(iv).
(ii) A discharge described in this clause is a discharge
which meets the following requirements:
(I) The discharge includes a condition identified by
a diagnosis code selected under clause (iv) as a
secondary diagnosis.
(II) But for clause (i), the discharge would have
been classified to a diagnosis-related group that
results in a higher payment based on the presence of a
secondary diagnosis code selected under clause (iv).
(III) At the time of admission, no code selected
under clause (iv) was present.
(iii) As part of the information required to be reported by a
hospital with respect to a discharge of an individual in order
for payment to be made under this subsection, for discharges
occurring on or after October 1, 2007, the information shall
include the secondary diagnosis of the individual at admission.
(iv) By not later than October 1, 2007, the Secretary shall
select diagnosis codes associated with at least two conditions,
each of which codes meets all of the following requirements (as
determined by the Secretary):
(I) Cases described by such code have a high cost or
high volume, or both, under this title.
(II) The code results in the assignment of a case to
a diagnosis-related group that has a higher payment
when the code is present as a secondary diagnosis.
(III) The code describes such conditions that could
reasonably have been prevented through the application
of evidence-based guidelines.
The Secretary may from time to time revise (through addition or
deletion of codes) the diagnosis codes selected under this
clause so long as there are diagnosis codes associated with at
least two conditions selected for discharges occurring during
any fiscal year.
(v) In selecting and revising diagnosis codes under clause
(iv), the Secretary shall consult with the Centers for Disease
Control and Prevention and other appropriate entities.
(vi) Any change resulting from the application of this
subparagraph shall not be taken into account in adjusting the
weighting factors under subparagraph (C)(i) or in applying
budget neutrality under subparagraph (C)(iii).
(5)(A)(i) For discharges occurring during fiscal years ending
on or before September 30, 1997, the Secretary shall provide
for an additional payment for a subsection (d) hospital for any
discharge in a diagnosis-related group, the length of stay of
which exceeds the mean length of stay for discharges within
that group by a fixed number of days, or exceeds such mean
length of stay by some fixed number of standard deviations,
whichever is the fewer number of days.
(ii) For cases which are not included in clause (i), a
subsection (d) hospital may request additional payments in any
case where charges, adjusted to cost, exceed a fixed multiple
of the applicable DRG prospective payment rate, or exceed such
other fixed dollar amount, whichever is greater, or for
discharges in fiscal years beginning on or after October 1,
1994, exceed the sum of the applicable DRG prospective payment
rate plus any amounts payable under subparagraphs (B) and (F)
plus a fixed dollar amount determined by the Secretary.
(iii) The amount of such additional payment under clauses (i)
and (ii) shall be determined by the Secretary and shall (except
as payments under clause (i) are required to be reduced to take
into account the requirements of clause (v)) approximate the
marginal cost of care beyond the cutoff point applicable under
clause (i) or (ii).
(iv) The total amount of the additional payments made under
this subparagraph for discharges in a fiscal year may not be
less than 5 percent nor more than 6 percent of the total
payments projected or estimated to be made based on DRG
prospective payment rates for discharges in that year.
(v) The Secretary shall provide that--
(I) the day outlier percentage for fiscal year 1995
shall be 75 percent of the day outlier percentage for
fiscal year 1994;
(II) the day outlier percentage for fiscal year 1996
shall be 50 percent of the day outlier percentage for
fiscal year 1994; and
(III) the day outlier percentage for fiscal year 1997
shall be 25 percent of the day outlier percentage for
fiscal year 1994.
(vi) For purposes of this subparagraph the term ``day outlier
percentage'' means, for a fiscal year, the percentage of the
total additional payments made by the Secretary under this
subparagraph for discharges in that fiscal year which are
additional payments under clause (i).
(B) The Secretary shall provide for an additional payment
amount for subsection (d) hospitals with indirect costs of
medical education, in an amount computed in the same manner as
the adjustment for such costs under regulations (in effect as
of January 1, 1983) under subsection (a)(2), except as follows:
(i) The amount of such additional payment shall be
determined by multiplying (I) the sum of the amount
determined under paragraph (1)(A)(ii)(II) (or, if
applicable, the amount determined under paragraph
(1)(A)(iii)) and, for cases qualifying for additional
payment under subparagraph (A)(i), the amount paid to
the hospital under subparagraph (A), by (II) the
indirect teaching adjustment factor described in clause
(ii).
(ii) For purposes of clause (i)(II), the indirect
teaching adjustment factor is equal to c
(((1+r) to the nth power) - 1), where ``r'' is the
ratio of the hospital's full-time equivalent interns
and residents to beds and ``n'' equals .405. Subject to
clause (ix), for discharges occurring--
(I) on or after October 1, 1988, and before
October 1, 1997, ``c'' is equal to 1.89;
(II) during fiscal year 1998, ``c'' is equal
to 1.72;
(III) during fiscal year 1999, ``c'' is equal
to 1.6;
(IV) during fiscal year 2000, ``c'' is equal
to 1.47;
(V) during fiscal year 2001, ``c'' is equal
to 1.54;
(VI) during fiscal year 2002, ``c'' is equal
to 1.6;
(VII) on or after October 1, 2002, and before
April 1, 2004, ``c'' is equal to 1.35;
(VIII) on or after April 1, 2004, and before
October 1, 2004, ``c'' is equal to 1.47;
(IX) during fiscal year 2005, ``c'' is equal
to 1.42;
(X) during fiscal year 2006, ``c'' is equal
to 1.37;
(XI) during fiscal year 2007, ``c'' is equal
to 1.32; and
(XII) on or after October 1, 2007, ``c'' is
equal to 1.35.
(iii) In determining such adjustment the Secretary
shall not distinguish between those interns and
residents who are employees of a hospital and those
interns and residents who furnish services to a
hospital but are not employees of such hospital.
(iv)(I) Effective for discharges occurring on or
after October 1, 1997, and before July 1, 2010, all the
time spent by an intern or resident in patient care
activities under an approved medical residency training
program at an entity in a nonhospital setting shall be
counted towards the determination of full-time
equivalency if the hospital incurs all, or
substantially all, of the costs for the training
program in that setting.
(II) Effective for discharges occurring on or after
July 1, 2010, all the time spent by an intern or
resident in patient care activities in a nonprovider
setting shall be counted towards the determination of
full-time equivalency if a hospital incurs the costs of
the stipends and fringe benefits of the intern or
resident during the time the intern or resident spends
in that setting. If more than one hospital incurs these
costs, either directly or through a third party, such
hospitals shall count a proportional share of the time,
as determined by written agreement between the
hospitals, that a resident spends training in that
setting.
(v) In determining the adjustment with respect to a
hospital for discharges occurring on or after October
1, 1997, the total number of full-time equivalent
interns and residents in the fields of allopathic and
osteopathic medicine in either a hospital or
nonhospital setting may not exceed the number (or, 130
percent of such number in the case of a hospital
located in a rural area) of such full-time equivalent
interns and residents in the hospital with respect to
the hospital's most recent cost reporting period ending
on or before December 31, 1996. Rules similar to the
rules of subsection (h)(4)(F)(ii) shall apply for
purposes of this clause. The provisions of subsections
(h)(4)(H)(vi), (h)(7), and (h)(8) shall apply with
respect to the first sentence of this clause in the
same manner as they apply with respect to subsection
(h)(4)(F)(i).
(vi) For purposes of clause (ii)--
(I) ``r'' may not exceed the ratio of the
number of interns and residents, subject to the
limit under clause (v), with respect to the
hospital for its most recent cost reporting
period to the hospital's available beds (as
defined by the Secretary) during that cost
reporting period, and
(II) for the hospital's cost reporting
periods beginning on or after October 1, 1997,
subject to the limits described in clauses (iv)
and (v), the total number of full-time
equivalent residents for payment purposes shall
equal the average of the actual full-time
equivalent resident count for the cost
reporting period and the preceding two cost
reporting periods.
In the case of the first cost reporting period
beginning on or after October 1, 1997, subclause (II)
shall be applied by using the average for such period
and the preceding cost reporting period.
(vii) If any cost reporting period beginning on or
after October 1, 1997, is not equal to twelve months,
the Secretary shall make appropriate modifications to
ensure that the average full-time equivalent residency
count pursuant to subclause (II) of clause (vi) is
based on the equivalent of full twelve-month cost
reporting periods.
(viii) Rules similar to the rules of subsection
(h)(4)(H) shall apply for purposes of clauses (v) and
(vi).
(ix) For discharges occurring on or after July 1,
2005, insofar as an additional payment amount under
this subparagraph is attributable to resident positions
redistributed to a hospital under subsection (h)(7)(B),
in computing the indirect teaching adjustment factor
under clause (ii) the adjustment shall be computed in a
manner as if ``c'' were equal to 0.66 with respect to
such resident positions.
(x) For discharges occurring on or after July 1,
2011, insofar as an additional payment amount under
this subparagraph is attributable to resident positions
distributed to a hospital under subsection (h)(8)(B),
the indirect teaching adjustment factor shall be
computed in the same manner as provided under clause
(ii) with respect to such resident positions.
(x)(I) The provisions of subparagraph (K) of
subsection (h)(4) shall apply under this subparagraph
in the same manner as they apply under such subsection.
(II) In determining the hospital's
number of full-time equivalent
residents for purposes of this
subparagraph, all the time spent by an
intern or resident in an approved
medical residency training program in
non-patient care activities, such as
didactic conferences and seminars, as
such time and activities are defined by
the Secretary, that occurs in the
hospital shall be counted toward the
determination of full-time equivalency
if the hospital--
(aa) is recognized as a
subsection (d) hospital;
(bb) is recognized as a
subsection (d) Puerto Rico
hospital;
(cc) is reimbursed under a
reimbursement system authorized
under section 1814(b)(3); or
(dd) is a provider-based
hospital outpatient department.
(III) In determining the hospital's
number of full-time equivalent
residents for purposes of this
subparagraph, all the time spent by an
intern or resident in an approved
medical residency training program in
research activities that are not
associated with the treatment or
diagnosis of a particular patient, as
such time and activities are defined by
the Secretary, shall not be counted
toward the determination of full-time
equivalency.
(C)(i) The Secretary shall provide for such exceptions and
adjustments to the payment amounts established under this
subsection (other than under paragraph (9)) as the Secretary
deems appropriate to take into account the special needs of
regional and national referral centers (including those
hospitals of 275 or more beds located in rural areas). A
hospital which is classified as a rural hospital may appeal to
the Secretary to be classified as a rural referral center under
this clause on the basis of criteria (established by the
Secretary) which shall allow the hospital to demonstrate that
it should be so reclassified by reason of certain of its
operating characteristics being similar to those of a typical
urban hospital located in the same census region and which
shall not require a rural osteopathic hospital to have more
than 3,000 discharges in a year in order to be classified as a
rural referral center. Such characteristics may include wages,
scope of services, service area, and the mix of medical
specialties. The Secretary shall publish the criteria not later
than August 17, 1984, for implementation by October 1, 1984. An
appeal allowed under this clause must be submitted to the
Secretary (in such form and manner as the Secretary may
prescribe) during the quarter before the first quarter of the
hospital's cost reporting period (or, in the case of a cost
reporting period beginning during October 1984, during the
first quarter of that period), and the Secretary must make a
final determination with respect to such appeal within 60 days
after the date the appeal was submitted. Any payment
adjustments necessitated by a reclassification based upon the
appeal shall be effective at the beginning of such cost
reporting period.
(ii) The Secretary shall provide, under clause (i), for the
classification of a rural hospital as a regional referral
center if the hospital has a case mix index equal to or greater
than the median case mix index for hospitals (other than
hospitals with approved teaching programs) located in an urban
area in the same region (as defined in paragraph (2)(D)), has
at least 5,000 discharges a year or, if less, the median number
of discharges in urban hospitals in the region in which the
hospital is located (or, in the case of a rural osteopathic
hospital, meets the criterion established by the Secretary
under clause (i) with respect to the annual number of
discharges for such hospitals), and meets any other criteria
established by the Secretary under clause (i).
(D)(i) For any cost reporting period beginning on or after
April 1, 1990, with respect to a subsection (d) hospital which
is a sole community hospital, payment under paragraph (1)(A)
shall be--
(I) an amount based on 100 percent of the hospital's
target amount for the cost reporting period, as defined
in subsection (b)(3)(C), or
(II) the amount determined under paragraph
(1)(A)(iii),
whichever results in greater payment to the hospital.
(ii) In the case of a sole community hospital that
experiences, in a cost reporting period compared to the
previous cost reporting period, a decrease of more than 5
percent in its total number of inpatient cases due to
circumstances beyond its control, the Secretary shall provide
for such adjustment to the payment amounts under this
subsection (other than under paragraph (9)) as may be necessary
to fully compensate the hospital for the fixed costs it incurs
in the period in providing inpatient hospital services,
including the reasonable cost of maintaining necessary core
staff and services.
(iii) For purposes of this title, the term ``sole community
hospital'' means any hospital--
(I) that the Secretary determines is located more
than 35 road miles from another hospital,
(II) that, by reason of factors such as the time
required for an individual to travel to the nearest
alternative source of appropriate inpatient care (in
accordance with standards promulgated by the
Secretary), location, weather conditions, travel
conditions, or absence of other like hospitals (as
determined by the Secretary), is the sole source of
inpatient hospital services reasonably available to
individuals in a geographic area who are entitled to
benefits under part A, or
(III) that is located in a rural area and designated
by the Secretary as an essential access community
hospital under section 1820(i)(1) as in effect on
September 30, 1997.
(iv) The Secretary shall promulgate a standard for
determining whether a hospital meets the criteria for
classification as a sole community hospital under clause
(iii)(II) because of the time required for an individual to
travel to the nearest alternative source of appropriate
inpatient care.
(v) If the Secretary determines that, in the case of a
hospital located in a rural area and designated by the
Secretary as an essential access community hospital under
section 1820(i)(1) as in effect on September 30, 1997, the
hospital has incurred increases in reasonable costs during a
cost reporting period as a result of becoming a member of a
rural health network (as defined in section 1820(d)) in the
State in which it is located, and in incurring such increases,
the hospital will increase its costs for subsequent cost
reporting periods, the Secretary shall increase the hospital's
target amount under subsection (b)(3)(C) to account for such
incurred increases.
(E)(i) The Secretary shall estimate the amount of
reimbursement made for services described in section
1862(a)(14) with respect to which payment was made under part B
in the base reporting periods referred to in paragraph (2)(A)
and with respect to which payment is no longer being made.
(ii) The Secretary shall provide for an adjustment to the
payment for subsection (d) hospitals in each fiscal year so as
appropriately to reflect the net amount described in clause
(i).
(F)(i) Subject to subsection (r), for discharges occurring on
or after May 1, 1986, the Secretary shall provide, in
accordance with this subparagraph, for an additional payment
amount for each subsection (d) hospital which--
(I) serves a significantly disproportionate number of
low-income patients (as defined in clause (v)), or
(II) is located in an urban area, has 100 or more
beds, and can demonstrate that its net inpatient care
revenues (excluding any of such revenues attributable
to this title or State plans approved under title XIX),
during the cost reporting period in which the
discharges occur, for indigent care from State and
local government sources exceed 30 percent of its total
of such net inpatient care revenues during the period.
(ii) Subject to clause (ix), the amount of such payment for
each discharge shall be determined by multiplying (I) the sum
of the amount determined under paragraph (1)(A)(ii)(II) (or, if
applicable, the amount determined under paragraph (1)(A)(iii))
and, for cases qualifying for additional payment under
subparagraph (A)(i), the amount paid to the hospital under
subparagraph (A) for that discharge, by (II) the
disproportionate share adjustment percentage established under
clause (iii) or (iv) for the cost reporting period in which the
discharge occurs.
(iii) The disproportionate share adjustment percentage for a
cost reporting period for a hospital described in clause
(i)(II) is equal to 35 percent.
(iv) The disproportionate share adjustment percentage for a
cost reporting period for a hospital that is not described in
clause (i)(II) and that--
(I) is located in an urban area and has 100 or more
beds or is described in the second sentence of clause
(v), is equal to the percent determined in accordance
with the applicable formula described in clause (vii);
(II) is located in an urban area and has less than
100 beds, is equal to 5 percent or, subject to clause
(xiv) and for discharges occurring on or after April 1,
2001, is equal to the percent determined in accordance
with clause (xiii);
(III) is located in a rural area and is not described
in subclause (IV) or (V) or in the second sentence of
clause (v), is equal to 4 percent or, subject to clause
(xiv) and for discharges occurring on or after April 1,
2001, is equal to the percent determined in accordance
with clause (xii);
(IV) is located in a rural area, is classified as a
rural referral center under subparagraph (C), and is
classified as a sole community hospital under
subparagraph (D), is equal to 10 percent or, if
greater, the percent determined in accordance with the
applicable formula described in clause (viii) or,
subject to clause (xiv) and for discharges occurring on
or after April 1, 2001, the greater of the percentages
determined under clause (x) or (xi);
(V) is located in a rural area, is classified as a
rural referral center under subparagraph (C), and is
not classified as a sole community hospital under
subparagraph (D), is equal to the percent determined in
accordance with the applicable formula described in
clause (viii) or, subject to clause (xiv) and for
discharges occurring on or after April 1, 2001, is
equal to the percent determined in accordance with
clause (xi); or
(VI) is located in a rural area, is classified as a
sole community hospital under subparagraph (D), and is
not classified as a rural referral center under
subparagraph (C), is 10 percent or, subject to clause
(xiv) and for discharges occurring on or after April 1,
2001, is equal to the percent determined in accordance
with clause (x).
(v) In this subparagraph, a hospital ``serves a significantly
disproportionate number of low income patients'' for a cost
reporting period if the hospital has a disproportionate patient
percentage (as defined in clause (vi)) for that period which
equals, or exceeds--
(I) 15 percent, if the hospital is located in an
urban area and has 100 or more beds,
(II) 30 percent (or 15 percent, for discharges
occurring on or after April 1, 2001), if the hospital
is located in a rural area and has more than 100 beds,
or is located in a rural area and is classified as a
sole community hospital under subparagraph (D),
(III) 40 percent (or 15 percent, for discharges
occurring on or after April 1, 2001), if the hospital
is located in an urban area and has less than 100 beds,
or
(IV) 45 percent (or 15 percent, for discharges
occurring on or after April 1, 2001), if the hospital
is located in a rural area and is not described in
subclause (II).
A hospital located in a rural area and with 500 or more beds
also ``serves a significantly disproportionate number of low
income patients'' for a cost reporting period if the hospital
has a disproportionate patient percentage (as defined in clause
(vi)) for that period which equals or exceeds a percentage
specified by the Secretary.
(vi) In this subparagraph, the term ``disproportionate
patient percentage'' means, with respect to a cost reporting
period of a hospital, the sum of--
(I) the fraction (expressed as a percentage), the
numerator of which is the number of such hospital's
patient days for such period which were made up of
patients who (for such days) were entitled to benefits
under part A of this title and were entitled to
supplementary security income benefits (excluding any
State supplementation) under title XVI of this Act, and
the denominator of which is the number of such
hospital's patient days for such fiscal year which were
made up of patients who (for such days) were entitled
to benefits under part A of this title, and
(II) the fraction (expressed as a percentage), the
numerator of which is the number of the hospital's
patient days for such period which consist of patients
who (for such days) were eligible for medical
assistance under a State plan approved under title XIX,
but who were not entitled to benefits under part A of
this title, and the denominator of which is the total
number of the hospital's patient days for such period.
In determining under subclause (II) the number of the
hospital's patient days for such period which consist of
patients who (for such days) were eligible for medical
assistance under a State plan approved under title XIX, the
Secretary may, to the extent and for the period the Secretary
determines appropriate, include patient days of patients not so
eligible but who are regarded as such because they receive
benefits under a demonstration project approved under title XI.
(vii) The formula used to determine the disproportionate
share adjustment percentage for a cost reporting period for a
hospital described in clause (iv)(I) is--
(I) in the case of such a hospital with a
disproportionate patient percentage (as defined in
clause (vi)) greater than 20.2--
(a) for discharges occurring on or after
April 1, 1990, and on or before December 31,
1990, (P-20.2)(.65) + 5.62,
(b) for discharges occurring on or after
January 1, 1991, and on or before September 30,
1993, (P-20.2)(.7) + 5.62,
(c) for discharges occurring on or after
October 1, 1993, and on or before September 30,
1994, (P-20.2)(.8) + 5.88, and
(d) for discharges occurring on or after
October 1, 1994, (P-20.2)(.825) + 5.88; or
(II) in the case of any other such hospital--
(a) for discharges occurring on or after
April 1, 1990, and on or before December 31,
1990, (P-15)(.6) + 2.5,
(b) for discharges occurring on or after
January 1, 1991, and on or before September 30,
1993, (P-15)(.6) + 2.5,
(c) for discharges occurring on or after
October 1, 1993, (P-15)(.65) + 2.5,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(viii) Subject to clause (xiv), the formula used to determine
the disproportionate share adjustment percentage for a cost
reporting period for a hospital described in clause (iv)(IV) or
(iv)(V) is the percentage determined in accordance with the
following formula:(P-30)(.6) + 4.0, where ``P'' is the
hospital's disproportionate patient percentage (as defined in
clause (vi)).
(ix) In the case of discharges occurring--
(I) during fiscal year 1998, the additional payment
amount otherwise determined under clause (ii) shall be
reduced by 1 percent;
(II) during fiscal year 1999, such additional payment
amount shall be reduced by 2 percent;
(III) during fiscal years 2000 and 2001, such
additional payment amount shall be reduced by 3 percent
and 2 percent, respectively;
(IV) during fiscal year 2002, such additional payment
amount shall be reduced by 3 percent; and
(V) during fiscal year 2003 and each subsequent
fiscal year, such additional payment amount shall be
reduced by 0 percent.
(x) Subject to clause (xiv), for purposes of clause (iv)(VI)
(relating to sole community hospitals), in the case of a
hospital for a cost reporting period with a disproportionate
patient percentage (as defined in clause (vi)) that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5;
(II) is equal to or exceeds 19.3, but is less than
30.0, such adjustment percentage is equal to 5.25
percent; or
(III) is equal to or exceeds 30, such adjustment
percentage is equal to 10 percent,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xi) Subject to clause (xiv), for purposes of clause (iv)(V)
(relating to rural referral centers), in the case of a hospital
for a cost reporting period with a disproportionate patient
percentage (as defined in clause (vi)) that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5;
(II) is equal to or exceeds 19.3, but is less than
30.0, such adjustment percentage is equal to 5.25
percent; or
(III) is equal to or exceeds 30, such adjustment
percentage is determined in accordance with the
following formula: (P-30)(.6) + 5.25,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xii) Subject to clause (xiv), for purposes of clause
(iv)(III) (relating to small rural hospitals generally), in the
case of a hospital for a cost reporting period with a
disproportionate patient percentage (as defined in clause (vi))
that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5; or
(II) is equal to or exceeds 19.3, such adjustment
percentage is equal to 5.25 percent,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xiii) Subject to clause (xiv), for purposes of clause
(iv)(II) (relating to urban hospitals with less than 100 beds),
in the case of a hospital for a cost reporting period with a
disproportionate patient percentage (as defined in clause (vi))
that--
(I) is less than 19.3, the disproportionate share
adjustment percentage is determined in accordance with
the following formula: (P-15)(.65) + 2.5; or
(II) is equal to or exceeds 19.3, such adjustment
percentage is equal to 5.25 percent,
where ``P'' is the hospital's disproportionate patient
percentage (as defined in clause (vi)).
(xiv)(I) In the case of discharges occurring on or after
April 1, 2004, subject to subclause (II), there shall be
substituted for the disproportionate share adjustment
percentage otherwise determined under clause (iv) (other than
subclause (I)) or under clause (viii), (x), (xi), (xii), or
(xiii), the disproportionate share adjustment percentage
determined under clause (vii) (relating to large, urban
hospitals).
(II) Under subclause (I), the disproportionate share
adjustment percentage shall not exceed 12 percent for a
hospital that is not classified as a rural referral center
under subparagraph (C) or, in the case of discharges occurring
on or after October 1, 2006, as a medicare-dependent, small
rural hospital under subparagraph (G)(iv).
(G)(i) For any cost reporting period beginning on or after
April 1, 1990, and before October 1, 1994, or discharges
occurring on or after October 1, 1997, and before October 1,
2017, in the case of a subsection (d) hospital which is a
medicare-dependent, small rural hospital, payment under
paragraph (1)(A) shall be equal to the sum of the amount
determined under clause (ii) and the amount determined under
paragraph (1)(A)(iii).
(ii) The amount determined under this clause is--
(I) for discharges occurring during the 36-month
period beginning with the first day of the cost
reporting period that begins on or after April 1, 1990,
the amount by which the hospital's target amount for
the cost reporting period (as defined in subsection
(b)(3)(D)) exceeds the amount determined under
paragraph (1)(A)(iii); and
(II) for discharges occurring during any subsequent
cost reporting period (or portion thereof) and before
October 1, 1994, or discharges occurring on or after
October 1, 1997, and before October 1, 2017, 50 percent
(or 75 percent in the case of discharges occurring on
or after October 1, 2006) of the amount by which the
hospital's target amount for the cost reporting period
or for discharges in the fiscal year (as defined in
subsection (b)(3)(D)) exceeds the amount determined
under paragraph (1)(A)(iii).
(iii) In the case of a medicare dependent, small rural
hospital that experiences, in a cost reporting period compared
to the previous cost reporting period, a decrease of more than
5 percent in its total number of inpatient cases due to
circumstances beyond its control, the Secretary shall provide
for such adjustment to the payment amounts under this
subsection (other than under paragraph (9)) as may be necessary
to fully compensate the hospital for the fixed costs it incurs
in the period in providing inpatient hospital services,
including the reasonable cost of maintaining necessary core
staff and services.
(iv) The term ``medicare-dependent, small rural hospital''
means, with respect to any cost reporting period to which
clause (i) applies, any hospital--
(I) located in a rural area,
(II) that has not more than 100 beds,
(III) that is not classified as a sole community
hospital under subparagraph (D), and
(IV) for which not less than 60 percent of its
inpatient days or discharges during the cost reporting
period beginning in fiscal year 1987, or two of the
three most recently audited cost reporting periods for
which the Secretary has a settled cost report, were
attributable to inpatients entitled to benefits under
part A.
(H) The Secretary may provide for such adjustments to the
payment amounts under this subsection as the Secretary deems
appropriate to take into account the unique circumstances of
hospitals located in Alaska and Hawaii.
(I)(i) The Secretary shall provide by regulation for such
other exceptions and adjustments to such payment amounts under
this subsection as the Secretary deems appropriate.
(ii) In making adjustments under clause (i) for transfer
cases (as defined by the Secretary) in a fiscal year, not
taking in account the effect of subparagraph (J), the Secretary
may make adjustments to each of the average standardized
amounts determined under paragraph (3) to assure that the
aggregate payments made under this subsection for such fiscal
year are not greater or lesser than those that would have
otherwise been made in such fiscal year.
(J)(i) The Secretary shall treat the term ``transfer case''
(as defined in subparagraph (I)(ii)) as including the case of a
qualified discharge (as defined in clause (ii)), which is
classified within a diagnosis-related group described in clause
(iii), and which occurs on or after October 1, 1998. In the
case of a qualified discharge for which a substantial portion
of the costs of care are incurred in the early days of the
inpatient stay (as defined by the Secretary), in no case may
the payment amount otherwise provided under this subsection
exceed an amount equal to the sum of--
(I) 50 percent of the amount of payment under this
subsection for transfer cases (as established under
subparagraph (I)(i)), and
(II) 50 percent of the amount of payment which would
have been made under this subsection with respect to
the qualified discharge if no transfer were involved.
(ii) For purposes of clause (i), subject to clause (iii), the
term ``qualified discharge'' means a discharge classified with
a diagnosis-related group (described in clause (iii)) of an
individual from a subsection (d) hospital, if upon such
discharge the individual--
(I) is admitted as an inpatient to a hospital or
hospital unit that is not a subsection (d) hospital for
the provision of inpatient hospital services;
(II) is admitted to a skilled nursing facility;
(III) is provided home health services from a home
health agency, if such services relate to the condition
or diagnosis for which such individual received
inpatient hospital services from the subsection (d)
hospital, and if such services are provided within an
appropriate period (as determined by the Secretary); or
(IV) for discharges occurring on or after October 1,
2000, the individual receives post discharge services
described in clause (iv)(I).
(iii) Subject to clause (iv), a diagnosis-related group
described in this clause is--
(I) 1 of 10 diagnosis-related groups selected by the
Secretary based upon a high volume of discharges
classified within such groups and a disproportionate
use of post discharge services described in clause
(ii); and
(II) a diagnosis-related group specified by the
Secretary under clause (iv)(II).
(iv) The Secretary shall include in the proposed rule
published under subsection (e)(5)(A) for fiscal year 2001, a
description of the effect of this subparagraph. The Secretary
may include in the proposed rule (and in the final rule
published under paragraph (6)) for fiscal year 2001 or a
subsequent fiscal year, a description of--
(I) post-discharge services not described in
subclauses (I), (II), and (III) of clause (ii), the
receipt of which results in a qualified discharge; and
(II) diagnosis-related groups described in clause
(iii)(I) in addition to the 10 selected under such
clause.
(K)(i) Effective for discharges beginning on or after October
1, 2001, the Secretary shall establish a mechanism to recognize
the costs of new medical services and technologies under the
payment system established under this subsection. Such
mechanism shall be established after notice and opportunity for
public comment (in the publications required by subsection
(e)(5) for a fiscal year or otherwise). Such mechanism shall be
modified to meet the requirements of clause (viii).
(ii) The mechanism established pursuant to clause (i) shall--
(I) apply to a new medical service or technology if,
based on the estimated costs incurred with respect to
discharges involving such service or technology, the
DRG prospective payment rate otherwise applicable to
such discharges under this subsection is inadequate
(applying a threshold specified by the Secretary that
is the lesser of 75 percent of the standardized amount
(increased to reflect the difference between cost and
charges) or 75 percent of one standard deviation for
the diagnosis-related group involved);
(II) provide for the collection of data with respect
to the costs of a new medical service or technology
described in subclause (I) for a period of not less
than two years and not more than three years beginning
on the date on which an inpatient hospital code is
issued with respect to the service or technology;
(III) provide for additional payment to be made under
this subsection with respect to discharges involving a
new medical service or technology described in
subclause (I) that occur during the period described in
subclause (II) in an amount that adequately reflects
the estimated average cost of such service or
technology; and
(IV) provide that discharges involving such a service
or technology that occur after the close of the period
described in subclause (II) will be classified within a
new or existing diagnosis-related group with a
weighting factor under paragraph (4)(B) that is derived
from cost data collected with respect to discharges
occurring during such period.
(iii) For purposes of clause (ii)(II), the term ``inpatient
hospital code'' means any code that is used with respect to
inpatient hospital services for which payment may be made under
this subsection and includes an alphanumeric code issued under
the International Classification of Diseases, 9th Revision,
Clinical Modification (``ICD-9-CM'') and its subsequent
revisions.
(iv) For purposes of clause (ii)(III), the term ``additional
payment'' means, with respect to a discharge for a new medical
service or technology described in clause (ii)(I), an amount
that exceeds the prospective payment rate otherwise applicable
under this subsection to discharges involving such service or
technology that would be made but for this subparagraph.
(v) The requirement under clause (ii)(III) for an additional
payment may be satisfied by means of a new-technology group
(described in subparagraph (L)), an add-on payment, a payment
adjustment, or any other similar mechanism for increasing the
amount otherwise payable with respect to a discharge under this
subsection. The Secretary may not establish a separate fee
schedule for such additional payment for such services and
technologies, by utilizing a methodology established under
subsection (a) or (h) of section 1834 to determine the amount
of such additional payment, or by other similar mechanisms or
methodologies.
(vi) For purposes of this subparagraph and subparagraph (L),
a medical service or technology will be considered a ``new
medical service or technology'' if the service or technology
meets criteria established by the Secretary after notice and an
opportunity for public comment.
(vii) Under the mechanism under this subparagraph, the
Secretary shall provide for the addition of new diagnosis and
procedure codes in April 1 of each year, but the addition of
such codes shall not require the Secretary to adjust the
payment (or diagnosis-related group classification) under this
subsection until the fiscal year that begins after such date.
(viii) The mechanism established pursuant to clause (i) shall
be adjusted to provide, before publication of a proposed rule,
for public input regarding whether a new service or technology
represents an advance in medical technology that substantially
improves the diagnosis or treatment of individuals entitled to
benefits under part A as follows:
(I) The Secretary shall make public and periodically
update a list of all the services and technologies for
which an application for additional payment under this
subparagraph is pending.
(II) The Secretary shall accept comments,
recommendations, and data from the public regarding
whether the service or technology represents a
substantial improvement.
(III) The Secretary shall provide for a meeting at
which organizations representing hospitals, physicians,
such individuals, manufacturers, and any other
interested party may present comments, recommendations,
and data to the clinical staff of the Centers for
Medicare & Medicaid Services before publication of a
notice of proposed rulemaking regarding whether service
or technology represents a substantial improvement.
(ix) Before establishing any add-on payment under this
subparagraph with respect to a new technology, the Secretary
shall seek to identify one or more diagnosis-related groups
associated with such technology, based on similar clinical or
anatomical characteristics and the cost of the technology.
Within such groups the Secretary shall assign an eligible new
technology into a diagnosis-related group where the average
costs of care most closely approximate the costs of care of
using the new technology. No add-on payment under this
subparagraph shall be made with respect to such new technology
and this clause shall not affect the application of paragraph
(4)(C)(iii).
(L)(i) In establishing the mechanism under subparagraph (K),
the Secretary may establish new-technology groups into which a
new medical service or technology will be classified if, based
on the estimated average costs incurred with respect to
discharges involving such service or technology, the DRG
prospective payment rate otherwise applicable to such
discharges under this subsection is inadequate.
(ii) Such groups--
(I) shall not be based on the costs associated with a
specific new medical service or technology; but
(II) shall, in combination with the applicable
standardized amounts and the weighting factors assigned
to such groups under paragraph (4)(B), reflect such
cost cohorts as the Secretary determines are
appropriate for all new medical services and
technologies that are likely to be provided as
inpatient hospital services in a fiscal year.
(iii) The methodology for classifying specific hospital
discharges within a diagnosis-related group under paragraph
(4)(A) or a new-technology group shall provide that a specific
hospital discharge may not be classified within both a
diagnosis-related group and a new-technology group.
(6) The Secretary shall provide for publication in the
Federal Register, on or before the August 1 before each fiscal
year (beginning with fiscal year 1984), of a description of the
methodology and data used in computing the adjusted DRG
prospective payment rates under this subsection, including any
adjustments required under subsection (e)(1)(B).
(7) There shall be no administrative or judicial review under
section 1878 or otherwise of--
(A) the determination of the requirement, or the
proportional amount, of any adjustment effected
pursuant to subsection (e)(1) or the determination of
the applicable percentage increase under paragraph
(12)(A)(ii),
(B) the establishment of diagnosis-related groups, of
the methodology for the classification of discharges
within such groups, and of the appropriate weighting
factors thereof under paragraph (4), including the
selection and revision of codes under paragraph (4)(D),
and
(C) the determination of whether services provided
prior to a patient's inpatient admission are related to
the admission (as described in subsection (a)(4)).
(8)(A) In the case of any hospital which is located in an
area which is, at any time after April 20, 1983, reclassified
from an urban to a rural area, payments to such hospital for
the first two cost reporting periods for which such
reclassification is effective shall be made as follows:
(i) For the first such cost reporting period, payment
shall be equal to the amount payable to such hospital
for such reporting period on the basis of the rural
classification, plus an amount equal to two-thirds of
the amount (if any) by which--
(I) the amount which would have been payable
to such hospital for such reporting period on
the basis of an urban classification, exceeds
(II) the amount payable to such hospital for
such reporting period on the basis of the rural
classification.
(ii) For the second such cost reporting period,
payment shall be equal to the amount payable to such
hospital for such reporting period on the basis of the
rural classification, plus an amount equal to one-third
of the amount (if any) by which--
(I) the amount which would have been payable
to such hospital for such reporting period on
the basis of an urban classification, exceeds
(II) the amount payable to such hospital for
such reporting period on the basis of the rural
classification.
(B)(i) For purposes of this subsection, the Secretary shall
treat a hospital located in a rural county adjacent to one or
more urban areas as being located in the urban metropolitan
statistical area to which the greatest number of workers in the
county commute, if the rural county would otherwise be
considered part of an urban area, under the standards for
designating Metropolitan Statistical Areas (and for designating
New England County Metropolitan Areas) described in clause
(ii), if the commuting rates used in determining outlying
counties (or, for New England, similar recognized areas) were
determined on the basis of the aggregate number of resident
workers who commute to (and, if applicable under the standards,
from) the central county or counties of all contiguous
Metropolitan Statistical Areas (or New England County
Metropolitan Areas).
(ii) The standards described in this clause for cost
reporting periods beginning in a fiscal year--
(I) before fiscal year 2003, are the standards
published in the Federal Register on January 3, 1980,
or, at the election of the hospital with respect to
fiscal years 2001 and 2002, standards so published on
March 30, 1990; and
(II) after fiscal year 2002, are the standards
published in the Federal Register by the Director of
the Office of Management and Budget based on the most
recent available decennial population data.
Subparagraphs (C) and (D) shall not apply with respect to the
application of subclause (I).
(C)(i) If the application of subparagraph (B) or a decision
of the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10), by treating hospitals located
in a rural county or counties as being located in an urban
area, or by treating hospitals located in one urban area as
being located in another urban area--
(I) reduces the wage index for that urban area (as
applied under this subsection) by 1 percentage point or
less, the Secretary, in calculating such wage index
under this subsection, shall exclude those hospitals so
treated, or
(II) reduces the wage index for that urban area by
more than 1 percentage point (as applied under this
subsection), the Secretary shall calculate and apply
such wage index under this subsection separately to
hospitals located in such urban area (excluding all the
hospitals so treated) and to the hospitals so treated
(as if such hospitals were located in such urban area).
(ii) If the application of subparagraph (B) or a decision of
the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10), by treating hospitals located
in a rural county or counties as not being located in the rural
area in a State, reduces the wage index for that rural area (as
applied under this subsection), the Secretary shall calculate
and apply such wage index under this subsection as if the
hospitals so treated had not been excluded from calculation of
the wage index for that rural area.
(iii) The application of subparagraph (B) or a decision of
the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10) may not result in the reduction
of any county's wage index to a level below the wage index for
rural areas in the State in which the county is located.
(iv) The application of subparagraph (B) or a decision of the
Medicare Geographic Classification Review Board or of the
Secretary under paragraph (10) may not result in a reduction in
an urban area's wage index if--
(I) the urban area has a wage index below the wage
index for rural areas in the State in which it is
located; or
(II) the urban area is located in a State that is
composed of a single urban area.
(v) This subparagraph shall apply with respect to discharges
occurring in a fiscal year only if the Secretary uses a method
for making adjustments to the DRG prospective payment rate for
area differences in hospital wage levels under paragraph (3)(E)
for the fiscal year that is based on the use of Metropolitan
Statistical Area classifications.
(D) The Secretary shall make a proportional adjustment in the
standardized amounts determined under paragraph (3) to assure
that the provisions of subparagraphs (B) and (C) or a decision
of the Medicare Geographic Classification Review Board or the
Secretary under paragraph (10) do not result in aggregate
payments under this section that are greater or less than those
that would otherwise be made.
(E)(i) For purposes of this subsection, not later than 60
days after the receipt of an application (in a form and manner
determined by the Secretary) from a subsection (d) hospital
described in clause (ii), the Secretary shall treat the
hospital as being located in the rural area (as defined in
paragraph (2)(D)) of the State in which the hospital is
located.
(ii) For purposes of clause (i), a subsection (d) hospital
described in this clause is a subsection (d) hospital that is
located in an urban area (as defined in paragraph (2)(D)) and
satisfies any of the following criteria:
(I) The hospital is located in a rural census tract
of a metropolitan statistical area (as determined under
the most recent modification of the Goldsmith
Modification, originally published in the Federal
Register on February 27, 1992 (57 Fed. Reg. 6725)).
(II) The hospital is located in an area designated by
any law or regulation of such State as a rural area (or
is designated by such State as a rural hospital).
(III) The hospital would qualify as a rural,
regional, or national referral center under paragraph
(5)(C) or as a sole community hospital under paragraph
(5)(D) if the hospital were located in a rural area.
(IV) The hospital meets such other criteria as the
Secretary may specify.
(9)(A) Notwithstanding section 1814(b) but subject to the
provisions of section 1813, the amount of the payment with
respect to the operating costs of inpatient hospital services
of a subsection (d) Puerto Rico hospital for inpatient hospital
discharges is equal to the sum of--
(i) the applicable Puerto Rico percentage (specified
in subparagraph (E)) of the Puerto Rico adjusted DRG
prospective payment rate (determined under subparagraph
(B) or (C)) for such discharges,
(ii) the applicable Federal percentage (specified in
subparagraph (E)) of--
(I) for discharges beginning in a fiscal year
beginning on or after October 1, 1997, and
before October 1, 2003, the discharge-weighted
average of--
(aa) the national adjusted DRG
prospective payment rate (determined
under paragraph (3)(D)) for hospitals
located in a large urban area,
(bb) such rate for hospitals located
in other urban areas, and
(cc) such rate for hospitals located
in a rural area,
for such discharges, adjusted in the manner
provided in paragraph (3)(E) for different area
wage levels; and
(II) for discharges in a fiscal year
beginning on or after October 1, 2003, the
national DRG prospective payment rate
determined under paragraph (3)(D)(iii) for
hospitals located in any area for such
discharges, adjusted in the manner provided in
paragraph (3)(E) for different area wage
levels.
As used in this section, the term ``subsection (d) Puerto Rico
hospital'' means a hospital that is located in Puerto Rico and
that would be a subsection (d) hospital (as defined in
paragraph (1)(B)) if it were located in one of the 50 States.
(B) The Secretary shall determine a Puerto Rico adjusted DRG
prospective payment rate, for each inpatient hospital discharge
in fiscal year 1988 involving inpatient hospital services of a
subsection (d) Puerto Rico hospital for which payment may be
made under part A of this title. Such rate shall be determined
for such hospitals located in urban or rural areas within
Puerto Rico, as follows:
(i) The Secretary shall determine the target amount
(as defined in subsection (b)(3)(A)) for the hospital
for the cost reporting period beginning in fiscal year
1987 and increase such amount by prorating the
applicable percentage increase (as defined in
subsection (b)(3)(B)) to update the amount to the
midpoint in fiscal year 1988.
(ii) The Secretary shall standardize the amount
determined under clause (i) for each hospital by--
(I) excluding an estimate of indirect medical
education costs,
(II) adjusting for variations among hospitals
by area in the average hospital wage level,
(III) adjusting for variations in case mix
among hospitals, and
(IV) excluding an estimate of the additional
payments to certain subsection (d) Puerto Rico
hospitals to be made under subparagraph
(D)(iii) (relating to disproportionate share
payments).
(iii) The Secretary shall compute a discharge
weighted average of the standardized amounts determined
under clause (ii) for all hospitals located in an urban
area and for all hospitals located in a rural area (as
such terms are defined in paragraph (2)(D)).
(iv) The Secretary shall reduce the average
standardized amount by a proportion equal to the
proportion (estimated by the Secretary) of the amount
of payments under this paragraph which are additional
payments described in subparagraph (D)(i) (relating to
outlier payments).
(v) For each discharge classified within a diagnosis-
related group for hospitals located in an urban or
rural area, respectively, the Secretary shall establish
a Puerto Rico DRG prospective payment rate equal to the
product of--
(I) the average standardized amount (computed
under clause (iii) and reduced under clause
(iv)) for hospitals located in an urban or
rural area, respectively, and
(II) the weighting factor (determined under
paragraph (4)(B)) for that diagnosis-related
group.
(vi) The Secretary shall adjust the proportion (as
estimated by the Secretary from time to time) of
hospitals' costs which are attributable to wages and
wage-related costs, of the Puerto Rico DRG prospective
payment rate computed under clause (v) for area
differences in hospital wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
hospital compared to the Puerto Rican average hospital
wage level.
(C) The Secretary shall determine a Puerto Rico adjusted DRG
prospective payment rate, for each inpatient hospital discharge
after fiscal year 1988 involving inpatient hospital services of
a subsection (d) Puerto Rico hospital for which payment may be
made under part A of this title. Such rate shall be determined
for hospitals located in urban or rural areas within Puerto
Rico as follows:
(i)(I) For discharges in a fiscal year after fiscal
year 1988 and before fiscal year 2004, the Secretary
shall compute an average standardized amount for
hospitals located in an urban area and for hospitals
located in a rural area equal to the respective average
standardized amount computed for the previous fiscal
year under subparagraph (B)(iii) or under this clause,
increased for fiscal year 1989 by the applicable
percentage increase under subsection (b)(3)(B), and
adjusted for subsequent fiscal years in accordance with
the final determination of the Secretary under
subsection (e)(4), and adjusted to reflect the most
recent case-mix data available.
(II) For discharges occurring in a fiscal year
(beginning with fiscal year 2004), the Secretary shall
compute an average standardized amount for hospitals
located in any area of Puerto Rico that is equal to the
average standardized amount computed under subclause
(I) for fiscal year 2003 for hospitals in a large urban
area (or, beginning with fiscal year 2005, for all
hospitals in the previous fiscal year) increased by the
applicable percentage increase under subsection
(b)(3)(B) for the fiscal year involved.
(ii) The Secretary shall reduce each of the average
standardized amounts (or for fiscal year 2004 and
thereafter, the average standardized amount) by a
proportion equal to the proportion (estimated by the
Secretary) of the amount of payments under this
paragraph which are additional payments described in
subparagraph (D)(i) (relating to outlier payments).
(iii) For each discharge classified within a
diagnosis-related group for hospitals located in an
urban or rural area, respectively, the Secretary shall
establish a Puerto Rico DRG prospective payment rate
equal to the product of--
(I) the average standardized amount (computed
under clause (i) and reduced under clause
(ii)), and
(II) the weighting factor (determined under
paragraph (4)(B)) for that diagnosis-related
group.
(iv)(I) The Secretary shall adjust the proportion (as
estimated by the Secretary from time to time) of
hospitals' costs which are attributable to wages and
wage-related costs, of the Puerto Rico DRG prospective
payment rate computed under clause (iii) for area
differences in hospital wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
hospital compared to the Puerto Rico average hospital
wage level. The second and third sentences of paragraph
(3)(E)(i) shall apply to subsection (d) Puerto Rico
hospitals under this clause in the same manner as they
apply to subsection (d) hospitals under such paragraph
and, for purposes of this clause, any reference in such
paragraph to a subsection (d) hospital is deemed a
reference to a subsection (d) Puerto Rico hospital.
(II) For discharges occurring on or after October 1,
2004, the Secretary shall substitute ``62 percent'' for
the proportion described in the first sentence of
clause (i), unless the application of this subclause
would result in lower payments to a hospital than would
otherwise be made.
(D) The following provisions of paragraph (5) shall apply to
subsection (d) Puerto Rico hospitals receiving payment under
this paragraph in the same manner and to the extent as they
apply to subsection (d) hospitals receiving payment under this
subsection:
(i) Subparagraph (A) (relating to outlier payments).
(ii) Subparagraph (B) (relating to payments for
indirect medical education costs), except that for this
purpose the sum of the amount determined under
subparagraph (A) of this paragraph and the amount paid
to the hospital under clause (i) of this subparagraph
shall be substituted for the sum referred to in
paragraph (5)(B)(i)(I).
(iii) Subparagraph (F) (relating to disproportionate
share payments), except that for this purpose the sum
described in clause (ii) of this subparagraph shall be
substituted for the sum referred to in paragraph
(5)(F)(ii)(I).
(iv) Subparagraph (H) (relating to exceptions and
adjustments).
(E) For purposes of subparagraph (A), for discharges
occurring--
(i) on or after October 1, 1987, and before October
1, 1997, the applicable Puerto Rico percentage is 75
percent and the applicable Federal percentage is 25
percent;
(ii) on or after October 1, 1997, and before April 1,
2004, the applicable Puerto Rico percentage is 50
percent and the applicable Federal percentage is 50
percent;
(iii) on or after April 1, 2004, and before October
1, 2004, the applicable Puerto Rico percentage is 37.5
percent and the applicable Federal percentage is 62.5
percent;
(iv) on or after October 1, 2004, and before January
1, 2016, the applicable Puerto Rico percentage is 25
percent and the applicable Federal percentage is 75
percent; and
(v) on or after January 1, 2016, the applicable
Puerto Rico percentage is 0 percent and the applicable
Federal percentage is 100 percent.
(10)(A) There is hereby established the Medicare Geographic
Classification Review Board (hereinafter in this paragraph
referred to as the ``Board'').
(B)(i) The Board shall be composed of 5 members appointed by
the Secretary without regard to the provisions of title 5,
United States Code, governing appointments in the competitive
service. Two of such members shall be representative of
subsection (d) hospitals located in a rural area under
paragraph (2)(D). At least 1 member shall be knowledgeable in
the field of analyzing costs with respect to the provision of
inpatient hospital services.
(ii) The Secretary shall make initial appointments to the
Board as provided in this paragraph within 180 days after the
date of the enactment of this paragraph.
(C)(i) The Board shall consider the application of any
subsection (d) hospital requesting that the Secretary change
the hospital's geographic classification for purposes of
determining for a fiscal year--
(I) the hospital's average standardized amount under
paragraph (2)(D), or
(II) the factor used to adjust the DRG prospective
payment rate for area differences in hospital wage
levels that applies to such hospital under paragraph
(3)(E).
(ii) A hospital requesting a change in geographic
classification under clause (i) for a fiscal year shall submit
its application to the Board not later than the first day of
the 13-month period ending on September 30 of the preceding
fiscal year.
(iii)(I) The Board shall render a decision on an application
submitted under clause (i) not later than 180 days after the
deadline referred to in clause (ii).
(II) Appeal of decisions of the Board shall be subject to the
provisions of section 557b of title 5, United States Code. The
Secretary shall issue a decision on such an appeal not later
than 90 days after the date on which the appeal is filed. The
decision of the Secretary shall be final and shall not be
subject to judicial review.
(D)(i) The Secretary shall publish guidelines to be utilized
by the Board in rendering decisions on applications submitted
under this paragraph, and shall include in such guidelines the
following:
(I) Guidelines for comparing wages, taking into
account (to the extent the Secretary determines
appropriate) occupational mix, in the area in which the
hospital is classified and the area in which the
hospital is applying to be classified.
(II) Guidelines for determining whether the county in
which the hospital is located should be treated as
being a part of a particular Metropolitan Statistical
Area.
(III) Guidelines for considering information provided
by an applicant with respect to the effects of the
hospital's geographic classification on access to
inpatient hospital services by medicare beneficiaries.
(IV) Guidelines for considering the appropriateness
of the criteria used to define New England County
Metropolitan Areas.
(ii) Notwithstanding clause (i), if the Secretary uses a
method for making adjustments to the DRG prospective payment
rate for area differences in hospital wage levels under
paragraph (3)(E) that is not based on the use of Metropolitan
Statistical Area classifications, the Secretary may revise the
guidelines published under clause (i) to the extent such
guidelines are used to determine the appropriateness of the
geographic area in which the hospital is determined to be
located for purposes of making such adjustments.
(iii) Under the guidelines published by the Secretary under
clause (i), in the case of a hospital which has ever been
classified by the Secretary as a rural referral center under
paragraph (5)(C), the Board may not reject the application of
the hospital under this paragraph on the basis of any
comparison between the average hourly wage of the hospital and
the average hourly wage of hospitals in the area in which it is
located.
(iv) The Secretary shall publish the guidelines described in
clause (i) by July 1, 1990.
(v) Any decision of the Board to reclassify a subsection (d)
hospital for purposes of the adjustment factor described in
subparagraph (C)(i)(II) for fiscal year 2001 or any fiscal year
thereafter shall be effective for a period of 3 fiscal years,
except that the Secretary shall establish procedures under
which a subsection (d) hospital may elect to terminate such
reclassification before the end of such period.
(vi) Such guidelines shall provide that, in making decisions
on applications for reclassification for the purposes described
in clause (v) for fiscal year 2003 and any succeeding fiscal
year, the Board shall base any comparison of the average hourly
wage for the hospital with the average hourly wage for
hospitals in an area on--
(I) an average of the average hourly wage amount for
the hospital from the most recently published hospital
wage survey data of the Secretary (as of the date on
which the hospital applies for reclassification) and
such amount from each of the two immediately preceding
surveys; and
(II) an average of the average hourly wage amount for
hospitals in such area from the most recently published
hospital wage survey data of the Secretary (as of the
date on which the hospital applies for
reclassification) and such amount from each of the two
immediately preceding surveys.
(E)(i) The Board shall have full power and authority to make
rules and establish procedures, not inconsistent with the
provisions of this title or regulations of the Secretary, which
are necessary or appropriate to carry out the provisions of
this paragraph. In the course of any hearing the Board may
administer oaths and affirmations. The provisions of
subsections (d) and (e) of section 205 with respect to subpenas
shall apply to the Board to the same extent as such provisions
apply to the Secretary with respect to title II.
(ii) The Board is authorized to engage such technical
assistance and to receive such information as may be required
to carry out its functions, and the Secretary shall, in
addition, make available to the Board such secretarial,
clerical, and other assistance as the Board may require to
carry out its functions.
(F)(i) Each member of the Board who is not an officer or
employee of the Federal Government shall be compensated at a
rate equal to the daily equivalent of the annual rate of basic
pay prescribed for grade GS-18 of the General Schedule under
section 5332 of title 5, United States Code, for each day
(including travel time) during which such member is engaged in
the performance of the duties of the Board. Each member of the
Board who is an officer or employee of the United States shall
serve without compensation in addition to that received for
service as an officer or employee of the United States.
(ii) Members of the Board shall be allowed travel expenses,
including per diem in lieu of subsistence, at rates authorized
for employees of agencies under subchapter I of chapter 57 of
title 5, United States Code, while away from their homes or
regular places of business in the performance of services for
the Board.
(11) Additional payments for managed care
enrollees.--
(A) In general.--For portions of cost
reporting periods occurring on or after January
1, 1998, the Secretary shall provide for an
additional payment amount for each applicable
discharge of any subsection (d) hospital that
has an approved medical residency training
program.
(B) Applicable discharge.--For purposes of
this paragraph, the term ``applicable
discharge'' means the discharge of any
individual who is enrolled under a risk-sharing
contract with an eligible organization under
section 1876 and who is entitled to benefits
under part A or any individual who is enrolled
with a Medicare+Choice organization under part
C.
(C) Determination of amount.--The amount of
the payment under this paragraph with respect
to any applicable discharge shall be equal to
the applicable percentage (as defined in
subsection (h)(3)(D)(ii)) of the estimated
average per discharge amount that would
otherwise have been paid under paragraph (5)(B)
if the individuals had not been enrolled as
described in subparagraph (B).
(D) Special rule for hospitals under
reimbursement system.--The Secretary shall
establish rules for the application of this
paragraph to a hospital reimbursed under a
reimbursement system authorized under section
1814(b)(3) in the same manner as it would apply
to the hospital if it were not reimbursed under
such section.
(12) Payment adjustment for low-volume hospitals.--
(A) In general.--In addition to any payments
calculated under this section for a subsection
(d) hospital, for discharges occurring during a
fiscal year (beginning with fiscal year 2005),
the Secretary shall provide for an additional
payment amount to each low-volume hospital (as
defined in subparagraph (C)(i)) for discharges
occurring during that fiscal year that is equal
to the applicable percentage increase
(determined under subparagraph (B) or (D) for
the hospital involved) in the amount paid to
such hospital under this section for such
discharges (determined without regard to this
paragraph).
(B) Applicable percentage increase.--For
discharges occurring in fiscal years 2005
through 2010 and for discharges occurring in
fiscal year 2018 and subsequent fiscal years,
the Secretary shall determine an applicable
percentage increase for purposes of
subparagraph (A) as follows:
(i) The Secretary shall determine the
empirical relationship for subsection
(d) hospitals between the standardized
cost-per-case for such hospitals and
the total number of discharges of such
hospitals and the amount of the
additional incremental costs (if any)
that are associated with such number of
discharges.
(ii) The applicable percentage
increase shall be determined based upon
such relationship in a manner that
reflects, based upon the number of such
discharges for a subsection (d)
hospital, such additional incremental
costs.
(iii) In no case shall the applicable
percentage increase exceed 25 percent.
(C) Definitions.--
(i) Low-volume hospital.--For
purposes of this paragraph, the term
``low-volume hospital'' means, for a
fiscal year, a subsection (d) hospital
(as defined in paragraph (1)(B)) that
the Secretary determines is located
more than 25 road miles (or, with
respect to fiscal years 2011 through
2017, 15 road miles) from another
subsection (d) hospital and has less
than 800 discharges (or, with respect
to fiscal years 2011 through 2017,
1,600 discharges of individuals
entitled to, or enrolled for, benefits
under part A) during the fiscal year or
portion of fiscal year.
(ii) Discharge.--For purposes of
subparagraph (B) and clause (i), the
term ``discharge'' means an inpatient
acute care discharge of an individual
regardless of whether the individual is
entitled to benefits under part A.
(D) Temporary applicable percentage
increase.--For discharges occurring in fiscal
years 2011 through 2017, the Secretary shall
determine an applicable percentage increase for
purposes of subparagraph (A) using a continuous
linear sliding scale ranging from 25 percent
for low-volume hospitals with 200 or fewer
discharges of individuals entitled to, or
enrolled for, benefits under part A in the
fiscal year or the portion of fiscal year to 0
percent for low-volume hospitals with greater
than 1,600 discharges of such individuals in
the fiscal year.
(13)(A) In order to recognize commuting patterns among
geographic areas, the Secretary shall establish a process
through application or otherwise for an increase of the wage
index applied under paragraph (3)(E) for subsection (d)
hospitals located in a qualifying county described in
subparagraph (B) in the amount computed under subparagraph (D)
based on out-migration of hospital employees who reside in that
county to any higher wage index area.
(B) The Secretary shall establish criteria for a qualifying
county under this subparagraph based on the out-migration
referred to in subparagraph (A) and differences in the area
wage indices. Under such criteria the Secretary shall,
utilizing such data as the Secretary determines to be
appropriate, establish--
(i) a threshold percentage, established by the
Secretary, of the weighted average of the area wage
index or indices for the higher wage index areas
involved;
(ii) a threshold (of not less than 10 percent) for
minimum out-migration to a higher wage index area or
areas; and
(iii) a requirement that the average hourly wage of
the hospitals in the qualifying county equals or
exceeds the average hourly wage of all the hospitals in
the area in which the qualifying county is located.
(C) For purposes of this paragraph, the term ``higher wage
index area'' means, with respect to a county, an area with a
wage index that exceeds that of the county.
(D) The increase in the wage index under subparagraph (A) for
a qualifying county shall be equal to the percentage of the
hospital employees residing in the qualifying county who are
employed in any higher wage index area multiplied by the sum of
the products, for each higher wage index area of--
(i) the difference between--
(I) the wage index for such higher wage index
area, and
(II) the wage index of the qualifying county;
and
(ii) the number of hospital employees residing in the
qualifying county who are employed in such higher wage
index area divided by the total number of hospital
employees residing in the qualifying county who are
employed in any higher wage index area.
(E) The process under this paragraph may be based upon the
process used by the Medicare Geographic Classification Review
Board under paragraph (10). As the Secretary determines to be
appropriate to carry out such process, the Secretary may
require hospitals (including subsection (d) hospitals and other
hospitals) and critical access hospitals, as required under
section 1866(a)(1)(T), to submit data regarding the location of
residence, or the Secretary may use data from other sources.
(F) A wage index increase under this paragraph shall be
effective for a period of 3 fiscal years, except that the
Secretary shall establish procedures under which a subsection
(d) hospital may elect to waive the application of such wage
index increase.
(G) A hospital in a county that has a wage index increase
under this paragraph for a period and that has not waived the
application of such an increase under subparagraph (F) is not
eligible for reclassification under paragraph (8) or (10)
during that period.
(H) Any increase in a wage index under this paragraph for a
county shall not be taken into account for purposes of--
(i) computing the wage index for portions of the wage
index area (not including the county) in which the
county is located; or
(ii) applying any budget neutrality adjustment with
respect to such index under paragraph (8)(D).
(I) The thresholds described in subparagraph (B), data on
hospital employees used under this paragraph, and any
determination of the Secretary under the process described in
subparagraph (E) shall be final and shall not be subject to
judicial review.
(e)(1)(A) For cost reporting periods of hospitals beginning
in fiscal year 1984 or fiscal year 1985, the Secretary shall
provide for such proportional adjustment in the applicable
percentage increase (otherwise applicable to the periods under
subsection (b)(3)(B)) as may be necessary to assure that--
(i) the aggregate payment amounts otherwise provided
under subsection (d)(1)(A)(i)(I) for that fiscal year
for operating costs of inpatient hospital services of
hospitals (excluding payments made under section
1866(a)(1)(F)),
are not greater or less than--
(ii) the target percentage (as defined in subsection
(d)(1)(C)) of the payment amounts which would have been
payable for such services for those same hospitals for
that fiscal year under this section under the law as in
effect before the date of the enactment of the Social
Security Amendments of 1983 (excluding payments made
under section 1866(a)(1)(F));
except that the adjustment made under this subparagraph shall
apply only to subsection (d) hospitals and shall not apply for
purposes of making computations under subsection (d)(2)(B)(ii)
or subsection (d)(3)(A).
(B) For discharges occurring in fiscal year 1984 or fiscal
year 1985, the Secretary shall provide under subsections
(d)(2)(F) and (d)(3)(C) for such equal proportional adjustment
in each of the average standardized amounts otherwise computed
for that fiscal year as may be necessary to assure that--
(i) the aggregate payment amounts otherwise provided
under subsection (d)(1)(A)(i)(II) and (d)(5) for that
fiscal year for operating costs of inpatient hospital
services of hospitals (excluding payments made under
section 1866(a)(1)(F)),
are not greater or less than--
(ii) the DRG percentage (as defined in subsection
(d)(1)(C)) of the payment amounts which would have been
payable for such services for those same hospitals for
that fiscal year under this section under the law as in
effect before the date of the enactment of the Social
Security Amendments of 1983 (excluding payments made
under section 1866(a)(1)(F)).
(C) For discharges occurring in fiscal year 1988, the
Secretary shall provide for such equal proportional adjustment
in each of the average standardized amounts otherwise computed
under subsection (d)(3) for that fiscal year as may be
necessary to assure that--
(i) the aggregate payment amounts otherwise provided
under subsections (d)(1)(A)(iii), (d)(5), and (d)(9)
for that fiscal year for operating costs of inpatient
hospital services of subsection (d) hospitals and
subsection (d) Puerto Rico hospitals,
are not greater or less than--
(ii) the payment amounts that would have been payable
for such services for those same hospitals for that
fiscal year but for the enactment of the amendments
made by section 9304 of the Omnibus Budget
Reconciliation Act of 1986.
(4)(A) Taking into consideration the recommendations of the
Commission, the Secretary shall recommend for each fiscal year
(beginning with fiscal year 1988) an appropriate change factor
for inpatient hospital services for discharges in that fiscal
year which will take into account amounts necessary for the
efficient and effective delivery of medically appropriate and
necessary care of high quality. The appropriate change factor
may be different for all large urban subsection (d) hospitals,
other urban subsection (d) hospitals, urban subsection (d)
Puerto Rico hospitals, rural subsection (d) hospitals, and
rural subsection (d) Puerto Rico hospitals, and all other
hospitals and units not paid under subsection (d), and may vary
among such other hospitals and units.
(B) In addition to the recommendation made under subparagraph
(A), the Secretary shall, taking into consideration the
recommendations of the Commission under paragraph (2)(B),
recommend for each fiscal year (beginning with fiscal year
1992) other appropriate changes in each existing reimbursement
policy under this title under which payments to an institution
are based upon prospectively determined rates.
(5) The Secretary shall cause to have published in the
Federal Register, not later than--
(A) the April 1 before each fiscal year (beginning
with fiscal year 1986), the Secretary's proposed
recommendations under paragraph (4) for that fiscal
year for public comment, and
(B) the August 1 before such fiscal year after such
consideration of public comment on the proposal as is
feasible in the time available, the Secretary's final
recommendations under such paragraph for that year.
The Secretary shall include in the publication referred to in
subparagraph (A) for a fiscal year the report of the
Commission's recommendations submitted under paragraph (3) for
that fiscal year. To the extent that the Secretary's
recommendations under paragraph (4) differ from the
Commission's recommendations for that fiscal year, the
Secretary shall include in the publication referred to in
subparagraph (A) an explanation of the Secretary's grounds for
not following the Commission's recommendations.
(f)(1)(A) The Secretary shall maintain a system for the
reporting of costs of hospitals receiving payments computed
under subsection (d).
(B)(i) Subject to clause (ii), the Secretary shall place into
effect a standardized electronic cost reporting format for
hospitals under this title.
(ii) The Secretary may delay or waive the implementation of
such format in particular instances where such implementation
would result in financial hardship (in particular with respect
to hospitals with a small percentage of inpatients entitled to
benefits under this title).
(2) If the Secretary determines, based upon information
supplied by a quality improvement organization under part B of
title XI, that a hospital, in order to circumvent the payment
method established under subsection (b) or (d) of this section,
has taken an action that results in the admission of
individuals entitled to benefits under part A unnecessarily,
unnecessary multiple admissions of the same such individuals,
or other inappropriate medical or other practices with respect
to such individuals, the Secretary may--
(A) deny payment (in whole or in part) under part A
with respect to inpatient hospital services provided
with respect to such an unnecessary admission (or
subsequent admission of the same individual), or
(B) require the hospital to take other corrective
action necessary to prevent or correct the
inappropriate practice.
(3) The provisions of subsections (c) through (g) of section
1128 shall apply to determinations made under paragraph (2) in
the same manner as they apply to exclusions effected under
section 1128(b)(13).
(g)(1)(A) Notwithstanding section 1861(v), instead of any
amounts that are otherwise payable under this title with
respect to the reasonable costs of subsection (d) hospitals and
subsection (d) Puerto Rico hospitals for capital-related costs
of inpatient hospital services, the Secretary shall, for
hospital cost reporting periods beginning on or after October
1, 1991, provide for payments for such costs in accordance with
a prospective payment system established by the Secretary.
Aggregate payments made under subsection (d) and this
subsection during fiscal years 1992 through 1995 shall be
reduced in a manner that results in a reduction (as estimated
by the Secretary) in the amount of such payments equal to a 10
percent reduction in the amount of payments attributable to
capital-related costs that would otherwise have been made
during such fiscal year had the amount of such payments been
based on reasonable costs (as defined in section 1861(v)). For
discharges occurring after September 30, 1993, the Secretary
shall reduce by 7.4 percent the unadjusted standard Federal
capital payment rate (as described in 42 CFR 412.308(c), as in
effect on the date of the enactment of the Omnibus Budget
Reconciliation Act of 1993) and shall (for hospital cost
reporting periods beginning on or after October 1, 1993)
redetermine which payment methodology is applied to the
hospital under such system to take into account such reduction.
In addition to the reduction described in the preceding
sentence, for discharges occurring on or after October 1, 1997,
the Secretary shall apply the budget neutrality adjustment
factor used to determine the Federal capital payment rate in
effect on September 30, 1995 (as described in section 412.352
of title 42 of the Code of Federal Regulations), to (i) the
unadjusted standard Federal capital payment rate (as described
in section 412.308(c) of that title, as in effect on September
30, 1997), and (ii) the unadjusted hospital-specific rate (as
described in section 412.328(e)(1) of that title, as in effect
on September 30, 1997), and, for discharges occurring on or
after October 1, 1997, and before October 1, 2002, reduce the
rates described in clauses (i) and (ii) by 2.1 percent.
(B) Such system--
(i) shall provide for (I) a payment on a per
discharge basis, and (II) an appropriate weighting of
such payment amount as relates to the classification of
the discharge;
(ii) may provide for an adjustment to take into
account variations in the relative costs of capital and
construction for the different types of facilities or
areas in which they are located;
(iii) may provide for such exceptions (including
appropriate exceptions to reflect capital obligations)
as the Secretary determines to be appropriate, and
(iv) may provide for suitable adjustment to reflect
hospital occupancy rate.
(C) In this paragraph, the term ``capital-related costs'' has
the meaning given such term by the Secretary under subsection
(a)(4) as of September 30, 1987, and does not include a return
on equity capital.
(2)(A) The Secretary shall provide that the amount which is
allowable, with respect to reasonable costs of inpatient
hospital services for which payment may be made under this
title, for a return on equity capital for hospitals shall, for
cost reporting periods beginning on or after the date of the
enactment of this subsection, be equal to amounts otherwise
allowable under regulations in effect on March 1, 1983, except
that the rate of return to be recognized shall be equal to the
applicable percentage (described in subparagraph (B)) of the
average of the rates of interest, for each of the months any
part of which is included in the reporting period, on
obligations issued for purchase by the Federal Hospital
Insurance Trust Fund.
(B) In this paragraph, the ``applicable percentage'' is--
(i) 75 percent, for cost reporting periods beginning
during fiscal year 1987,
(ii) 50 percent, for cost reporting periods beginning
during fiscal year 1988,
(iii) 25 percent, for cost reporting periods
beginning during fiscal year 1989, and
(iv) 0 percent, for cost reporting periods beginning
on or after October 1, 1989.
(3)(A) Except as provided in subparagraph (B), in determining
the amount of the payments that may be made under this title
with respect to all the capital-related costs of inpatient
hospital services of a subsection (d) hospital and a subsection
(d) Puerto Rico hospital, the Secretary shall reduce the
amounts of such payments otherwise established under this title
by--
(i) 3.5 percent for payments attributable to portions
of cost reporting periods occurring during fiscal year
1987,
(ii) 7 percent for payments attributable to portions
of cost reporting periods or discharges (as the case
may be) occurring during fiscal year 1988 on or after
October 1, 1987, and before January 1, 1988,
(iii) 12 percent for payments attributable to
portions of cost reporting periods or discharges (as
the case may be) in fiscal year 1988, occurring on or
after January 1, 1988,
(iv) 15 percent for payments attributable to portions
of cost reporting periods or discharges (as the case
may be) occurring during fiscal year 1989, and
(v) 15 percent for payments attributable to portions
of cost reporting periods or discharges (as the case
may be) occurring during the period beginning January
1, 1990, and ending September 30, 1991.
(B) Subparagraph (A) shall not apply to payments with respect
to the capital-related costs of any hospital that is a sole
community hospital (as defined in subsection (d)(5)(D)(iii)) or
a critical access hospital (as defined in section 1861(mm)(1)).
(4) In determining the amount of the payments that are
attributable to portions of cost reporting periods occurring
during fiscal years 1998 through 2002 and that may be made
under this title with respect to capital-related costs of
inpatient hospital services of a hospital which is described in
clause (i), (ii), or (iv) of subsection (d)(1)(B) or a unit
described in the matter after clause (v) of such subsection,
the Secretary shall reduce the amounts of such payments
otherwise determined under this title by 15 percent.
(h) Payments for Direct Graduate Medical Education Costs.--
(1) Substitution of special payment rules.--
Notwithstanding section 1861(v), instead of any amounts
that are otherwise payable under this title with
respect to the reasonable costs of hospitals for direct
graduate medical education costs, the Secretary shall
provide for payments for such costs in accordance with
paragraph (3) of this subsection. In providing for such
payments, the Secretary shall provide for an allocation
of such payments between part A and part B (and the
trust funds established under the respective parts) as
reasonably reflects the proportion of direct graduate
medical education costs of hospitals associated with
the provision of services under each respective part.
(2) Determination of hospital-specific approved fte
resident amounts.--The Secretary shall determine, for
each hospital with an approved medical residency
training program, an approved FTE resident amount for
each cost reporting period beginning on or after July
1, 1985, as follows:
(A) Determining allowable average cost per
fte resident in a hospital's base period.--The
Secretary shall determine, for the hospital's
cost reporting period that began during fiscal
year 1984, the average amount recognized as
reasonable under this title for direct graduate
medical education costs of the hospital for
each full-time-equivalent resident.
(B) Updating to the first cost reporting
period.--
(i) In general.--The Secretary shall
update each average amount determined
under subparagraph (A) by the
percentage increase in the consumer
price index during the 12-month cost
reporting period described in such
subparagraph.
(ii) Exception.--The Secretary shall
not perform an update under clause (i)
in the case of a hospital if the
hospital's reporting period, described
in subparagraph (A), began on or after
July 1, 1984, and before October 1,
1984.
(C) Amount for first cost reporting period.--
For the first cost reporting period of the
hospital beginning on or after July 1, 1985,
the approved FTE resident amount for the
hospital is equal to the amount determined
under subparagraph (B) increased by 1 percent.
(D) Amount for subsequent cost reporting
periods.--
(i) In general.--Except as provided
in a subsequent clause, for each
subsequent cost reporting period, the
approved FTE resident amount for the
hospital is equal to the approved FTE
resident amount determined under this
paragraph for the previous cost
reporting period updated, through the
midpoint of the period, by projecting
the estimated percentage change in the
consumer price index during the 12-
month period ending at that midpoint,
with appropriate adjustments to reflect
previous under-or over-estimations
under this subparagraph in the
projected percentage change in the
consumer price index.
(ii) Freeze in update for fiscal
years 1994 and 1995.--For cost
reporting periods beginning during
fiscal year 1994 or fiscal year 1995,
the approved FTE resident amount for a
hospital shall not be updated under
clause (i) for a resident who is not a
primary care resident (as defined in
paragraph (5)(H)) or a resident
enrolled in an approved medical
residency training program in
obstetrics and gynecology.
(iii) Floor for locality adjusted
national average per resident amount.--
The approved FTE resident amount for a
hospital for the cost reporting period
beginning during fiscal year 2001 shall
not be less than 70 percent, and for
the cost reporting period beginning
during fiscal year 2002 shall not be
less than 85 percent, of the locality
adjusted national average per resident
amount computed under subparagraph (E)
for the hospital and period.
(iv) Adjustment in rate of increase
for hospitals with fte approved amount
above 140 percent of locality adjusted
national average per resident amount.--
(I) Freeze for fiscal years
2001 and 2002 and 2004 through
2013.--For a cost reporting
period beginning during fiscal
year 2001 or fiscal year 2002
or during the period beginning
with fiscal year 2004 and
ending with fiscal year 2013,
if the approved FTE resident
amount for a hospital for the
preceding cost reporting period
exceeds 140 percent of the
locality adjusted national
average per resident amount
computed under subparagraph (E)
for that hospital and period,
subject to subclause (III), the
approved FTE resident amount
for the period involved shall
be the same as the approved FTE
resident amount for the
hospital for such preceding
cost reporting period.
(II) 2 percent decrease in
update for fiscal years 2003,
2004, and 2005.--For the cost
reporting period beginning
during fiscal year 2003, if the
approved FTE resident amount
for a hospital for the
preceding cost reporting period
exceeds 140 percent of the
locality adjusted national
average per resident amount
computed under subparagraph (E)
for that hospital and preceding
period, the approved FTE
resident amount for the period
involved shall be updated in
the manner described in
subparagraph (D)(i) except
that, subject to subclause
(III), the consumer price index
applied for a 12-month period
shall be reduced (but not below
zero) by 2 percentage points.
(III) No adjustment below 140
percent.--In no case shall
subclause (I) or (II) reduce an
approved FTE resident amount
for a hospital for a cost
reporting period below 140
percent of the locality
adjusted national average per
resident amount computed under
subparagraph (E) for such
hospital and period.
(E) Determination of locality adjusted
national average per resident amount.--The
Secretary shall determine a locality adjusted
national average per resident amount with
respect to a cost reporting period of a
hospital beginning during a fiscal year as
follows:
(i) Determining hospital single per
resident amount.--The Secretary shall
compute for each hospital operating an
approved graduate medical education
program a single per resident amount
equal to the average (weighted by
number of full-time equivalent
residents, as determined under
paragraph (4)) of the primary care per
resident amount and the non-primary
care per resident amount computed under
paragraph (2) for cost reporting
periods ending during fiscal year 1997.
(ii) Standardizing per resident
amounts.--The Secretary shall compute a
standardized per resident amount for
each such hospital by dividing the
single per resident amount computed
under clause (i) by an average of the 3
geographic index values (weighted by
the national average weight for each of
the work, practice expense, and
malpractice components) as applied
under section 1848(e) for 1999 for the
fee schedule area in which the hospital
is located.
(iii) Computing of weighted
average.--The Secretary shall compute
the average of the standardized per
resident amounts computed under clause
(ii) for such hospitals, with the
amount for each hospital weighted by
the average number of full-time
equivalent residents at such hospital
(as determined under paragraph (4)).
(iv) Computing national average per
resident amount.--The Secretary shall
compute the national average per
resident amount, for a hospital's cost
reporting period that begins during
fiscal year 2001, equal to the weighted
average computed under clause (iii)
increased by the estimated percentage
increase in the consumer price index
for all urban consumers during the
period beginning with the month that
represents the midpoint of the cost
reporting periods described in clause
(i) and ending with the midpoint of the
hospital's cost reporting period that
begins during fiscal year 2001.
(v) Adjusting for locality.--The
Secretary shall compute the product
of--
(I) the national average per
resident amount computed under
clause (iv) for the hospital,
and
(II) the geographic index
value average (described and
applied under clause (ii)) for
the fee schedule area in which
the hospital is located.
(vi) Computing locality adjusted
amount.--The locality adjusted national
per resident amount for a hospital
for--
(I) the cost reporting period
beginning during fiscal year
2001 is the product computed
under clause (v); or
(II) each subsequent cost
reporting period is equal to
the locality adjusted national
per resident amount for the
hospital for the previous cost
reporting period (as determined
under this clause) updated,
through the midpoint of the
period, by projecting the
estimated percentage change in
the consumer price index for
all urban consumers during the
12-month period ending at that
midpoint.
(F) Treatment of certain hospitals.--In the
case of a hospital that did not have an
approved medical residency training program or
was not participating in the program under this
title for a cost reporting period beginning
during fiscal year 1984, the Secretary shall,
for the first such period for which it has such
a residency training program and is
participating under this title, provide for
such approved FTE resident amount as the
Secretary determines to be appropriate, based
on approved FTE resident amounts for comparable
programs.
(3) Hospital payment amount per resident.--
(A) In general.--The payment amount, for a
hospital cost reporting period beginning on or
after July 1, 1985, is equal to the product
of--
(i) the aggregate approved amount (as
defined in subparagraph (B)) for that
period, and
(ii) the hospital's medicare patient
load (as defined in subparagraph (C))
for that period.
(B) Aggregate approved amount.--As used in
subparagraph (A), the term ``aggregate approved
amount'' means, for a hospital cost reporting
period, the product of--
(i) the hospital's approved FTE
resident amount (determined under
paragraph (2)) for that period, and
(ii) the weighted average number of
full-time-equivalent residents (as
determined under paragraph (4)) in the
hospital's approved medical residency
training programs in that period.
The Secretary shall reduce the aggregate approved
amount to the extent payment is made under subsection
(k) for residents included in the hospital's count of
full-time equivalent residents.
(C) Medicare patient load.--As used in
subparagraph (A), the term ``medicare patient
load'' means, with respect to a hospital's cost
reporting period, the fraction of the total
number of inpatient-bed-days (as established by
the Secretary) during the period which are
attributable to patients with respect to whom
payment may be made under part A.
(D) Payment for managed care enrollees.--
(i) In general.--For portions of cost
reporting periods occurring on or after
January 1, 1998, the Secretary shall
provide for an additional payment
amount under this subsection for
services furnished to individuals who
are enrolled under a risk-sharing
contract with an eligible organization
under section 1876 and who are entitled
to part A or with a Medicare+Choice
organization under part C. The amount
of such a payment shall equal, subject
to clause (iii), the applicable
percentage of the product of--
(I) the aggregate approved
amount (as defined in
subparagraph (B)) for that
period; and
(II) the fraction of the
total number of inpatient-bed
days (as established by the
Secretary) during the period
which are attributable to such
enrolled individuals.
(ii) Applicable percentage.--For
purposes of clause (i), the applicable
percentage is--
(I) 20 percent in 1998,
(II) 40 percent in 1999,
(III) 60 percent in 2000,
(IV) 80 percent in 2001, and
(V) 100 percent in 2002 and
subsequent years.
(iii) Proportional reduction for
nursing and allied health education.--
The Secretary shall estimate a
proportional adjustment in payments to
all hospitals determined under clauses
(i) and (ii) for portions of cost
reporting periods beginning in a year
(beginning with 2000) such that the
proportional adjustment reduces
payments in an amount for such year
equal to the total additional payment
amounts for nursing and allied health
education determined under subsection
(l) for portions of cost reporting
periods occurring in that year.
(iv) Special rule for hospitals under
reimbursement system.--The Secretary
shall establish rules for the
application of this subparagraph to a
hospital reimbursed under a
reimbursement system authorized under
section 1814(b)(3) in the same manner
as it would apply to the hospital if it
were not reimbursed under such section.
(4) Determination of full-time-equivalent
residents.--
(A) Rules.--The Secretary shall establish
rules consistent with this paragraph for the
computation of the number of full-time-
equivalent residents in an approved medical
residency training program.
(B) Adjustment for part-year or part-time
residents.--Such rules shall take into account
individuals who serve as residents for only a
portion of a period with a hospital or
simultaneously with more than one hospital.
(C) Weighting factors for certain
residents.--Subject to subparagraph (D), such
rules shall provide, in calculating the number
of full-time-equivalent residents in an
approved residency program--
(i) before July 1, 1986, for each
resident the weighting factor is 1.00,
(ii) on or after July 1, 1986, for a
resident who is in the resident's
initial residency period (as defined in
paragraph (5)(F)), the weighting factor
is 1.00,
(iii) on or after July 1, 1986, and
before July 1, 1987, for a resident who
is not in the resident's initial
residency period (as defined in
paragraph (5)(F)), the weighting factor
is .75, and
(iv) on or after July 1, 1987, for a
resident who is not in the resident's
initial residency period (as defined in
paragraph (5)(F)), the weighting factor
is .50.
(D) Foreign medical graduates required to
pass fmgems examination.--
(i) In general.--Except as provided
in clause (ii), such rules shall
provide that, in the case of an
individual who is a foreign medical
graduate (as defined in paragraph
(5)(D)), the individual shall not be
counted as a resident on or after July
1, 1986, unless--
(I) the individual has passed
the FMGEMS examination (as
defined in paragraph (5)(E)),
or
(II) the individual has
previously received
certification from, or has
previously passed the
examination of, the Educational
Commission for Foreign Medical
Graduates.
(ii) Transition for current fmgs.--On
or after July 1, 1986, but before July
1, 1987, in the case of a foreign
medical graduate who--
(I) has served as a resident
before July 1, 1986, and is
serving as a resident after
that date, but
(II) has not passed the
FMGEMS examination or a
previous examination of the
Educational Commission for
Foreign Medical Graduates
before July 1, 1986,
the individual shall be counted as a
resident at a rate equal to one-half of
the rate at which the individual would
otherwise be counted.
(E) Counting time spent in outpatient
settings.--Subject to subparagraphs (J) and
(K), such rules shall provide that only time
spent in activities relating to patient care
shall be counted and that--
(i) effective for cost reporting
periods beginning before July 1, 2010,
all the time;
(ii) effective for cost reporting
periods beginning on or after July 1,
2010, all the time so spent by a
resident shall be counted towards the
determination of full-time equivalency,
without regard to the setting in which
the activities are performed, if a
hospital incurs the costs of the
stipends and fringe benefits of the
resident during the time the resident
spends in that setting. If more than
one hospital incurs these costs, either
directly or through a third party, such
hospitals shall count a proportional
share of the time, as determined by
written agreement between the
hospitals, that a resident spends
training in that setting.
so spent by a resident under an approved
medical residency training program shall be
counted towards the determination of full-time
equivalency, without regard to the setting in
which the activities are performed, if the
hospital incurs all, or substantially all, of
the costs for the training program in that
setting.
Any hospital claiming under this subparagraph
for time spent in a nonprovider setting shall
maintain and make available to the Secretary
records regarding the amount of such time and
such amount in comparison with amounts of such
time in such base year as the Secretary shall
specify.
(F) Limitation on number of residents in
allopathic and osteopathic medicine.--
(i) In general.--Such rules shall
provide that for purposes of a cost
reporting period beginning on or after
October 1, 1997, subject to paragraphs
(7) and (8), the total number of full-
time equivalent residents before
application of weighting factors (as
determined under this paragraph) with
respect to a hospital's approved
medical residency training program in
the fields of allopathic medicine and
osteopathic medicine may not exceed the
number (or, 130 percent of such number
in the case of a hospital located in a
rural area) of such full-time
equivalent residents for the hospital's
most recent cost reporting period
ending on or before December 31, 1996.
(ii) Counting primary care residents
on certain approved leaves of absence
in base year fte count.--
(I) In general.--In
determining the number of such
full-time equivalent residents
for a hospital's most recent
cost reporting period ending on
or before December 31, 1996,
for purposes of clause (i), the
Secretary shall count an
individual to the extent that
the individual would have been
counted as a primary care
resident for such period but
for the fact that the
individual, as determined by
the Secretary, was on maternity
or disability leave or a
similar approved leave of
absence.
(II) Limitation to 3 fte
residents for any hospital.--
The total number of individuals
counted under subclause (I) for
a hospital may not exceed 3
full-time equivalent residents.
(G) Counting interns and residents for fy
1998 and subsequent years.--
(i) In general.--For cost reporting
periods beginning during fiscal years
beginning on or after October 1, 1997,
subject to the limit described in
subparagraph (F), the total number of
full-time equivalent residents for
determining a hospital's graduate
medical education payment shall equal
the average of the actual full-time
equivalent resident counts for the cost
reporting period and the preceding two
cost reporting periods.
(ii) Adjustment for short periods.--
If any cost reporting period beginning
on or after October 1, 1997, is not
equal to twelve months, the Secretary
shall make appropriate modifications to
ensure that the average full-time
equivalent resident counts pursuant to
clause (i) are based on the equivalent
of full twelve-month cost reporting
periods.
(iii) Transition rule for 1998.--In
the case of a hospital's first cost
reporting period beginning on or after
October 1, 1997, clause (i) shall be
applied by using the average for such
period and the preceding cost reporting
period.
(H) Special rules for application of
subparagraphs (f) and (g).--
(i) New facilities.--The Secretary
shall, consistent with the principles
of subparagraphs (F) and (G) and
subject to paragraphs (7) and (8),
prescribe rules for the application of
such subparagraphs in the case of
medical residency training programs
established on or after January 1,
1995. In promulgating such rules for
purposes of subparagraph (F), the
Secretary shall give special
consideration to facilities that meet
the needs of underserved rural areas.
(ii) Aggregation.--The Secretary may
prescribe rules which allow
institutions which are members of the
same affiliated group (as defined by
the Secretary) to elect to apply the
limitation of subparagraph (F) on an
aggregate basis.
(iii) Data collection.--The Secretary
may require any entity that operates a
medical residency training program and
to which subparagraphs (F) and (G)
apply to submit to the Secretary such
additional information as the Secretary
considers necessary to carry out such
subparagraphs.
(iv) Nonrural hospitals operating
training programs in rural areas.--In
the case of a hospital that is not
located in a rural area but establishes
separately accredited approved medical
residency training programs (or rural
tracks) in an rural area or has an
accredited training program with an
integrated rural track, the Secretary
shall adjust the limitation under
subparagraph (F) in an appropriate
manner insofar as it applies to such
programs in such rural areas in order
to encourage the training of physicians
in rural areas.
(v) Special provider agreement.--If
an entity enters into a provider
agreement pursuant to section 1866(a)
to provide hospital services on the
same physical site previously used by
Medicare Provider No. 05-0578--
(I) the limitation on the
number of total full time
equivalent residents under
subparagraph (F) and clauses
(v) and (vi)(I) of subsection
(d)(5)(B) applicable to such
provider shall be equal to the
limitation applicable under
such provisions to Provider No.
05-0578 for its cost reporting
period ending on June 30, 2006;
and
(II) the provisions of
subparagraph (G) and subsection
(d)(5)(B)(vi)(II) shall not be
applicable to such provider for
the first three cost reporting
years in which such provider
trains residents under any
approved medical residency
training program.
(vi) Redistribution of residency
slots after a hospital closes.--
(I) In general.--Subject to
the succeeding provisions of
this clause, the Secretary
shall, by regulation, establish
a process under which, in the
case where a hospital (other
than a hospital described in
clause (v)) with an approved
medical residency program
closes on or after a date that
is 2 years before the date of
enactment of this clause, the
Secretary shall increase the
otherwise applicable resident
limit under this paragraph for
other hospitals in accordance
with this clause.
(II) Priority for hospitals
in certain areas.--Subject to
the succeeding provisions of
this clause, in determining for
which hospitals the increase in
the otherwise applicable
resident limit is provided
under such process, the
Secretary shall distribute the
increase to hospitals in the
following priority order (with
preference given within each
category to hospitals that are
members of the same affiliated
group (as defined by the
Secretary under clause (ii)) as
the closed hospital):
(aa) First, to
hospitals located in
the same core-based
statistical area as, or
a core-based
statistical area
contiguous to, the
hospital that closed.
(bb) Second, to
hospitals located in
the same State as the
hospital that closed.
(cc) Third, to
hospitals located in
the same region of the
country as the hospital
that closed.
(dd) Fourth, only if
the Secretary is not
able to distribute the
increase to hospitals
described in item (cc),
to qualifying hospitals
in accordance with the
provisions of paragraph
(8).
(III) Requirement hospital
likely to fill position within
certain time period.--The
Secretary may only increase the
otherwise applicable resident
limit of a hospital under such
process if the Secretary
determines the hospital has
demonstrated a likelihood of
filling the positions made
available under this clause
within 3 years.
(IV) Limitation.--The
aggregate number of increases
in the otherwise applicable
resident limits for hospitals
under this clause shall be
equal to the number of resident
positions in the approved
medical residency programs that
closed on or after the date
described in subclause (I).
(V) Administration.--Chapter
35 of title 44, United States
Code, shall not apply to the
implementation of this clause.
(J) Treatment of certain nonprovider and
didactic activities.--Such rules shall provide
that all time spent by an intern or resident in
an approved medical residency training program
in a nonprovider setting that is primarily
engaged in furnishing patient care (as defined
in paragraph (5)(K)) in non-patient care
activities, such as didactic conferences and
seminars, but not including research not
associated with the treatment or diagnosis of a
particular patient, as such time and activities
are defined by the Secretary, shall be counted
toward the determination of full-time
equivalency.
(K) Treatment of certain other activities.--
In determining the hospital's number of full-
time equivalent residents for purposes of this
subsection, all the time that is spent by an
intern or resident in an approved medical
residency training program on vacation, sick
leave, or other approved leave, as such time is
defined by the Secretary, and that does not
prolong the total time the resident is
participating in the approved program beyond
the normal duration of the program shall be
counted toward the determination of full-time
equivalency.
(5) Definitions and special rules.--As used in this
subsection:
(A) Approved medical residency training
program.--The term ``approved medical residency
training program'' means a residency or other
postgraduate medical training program
participation in which may be counted toward
certification in a specialty or subspecialty
and includes formal postgraduate training
programs in geriatric medicine approved by the
Secretary.
(B) Consumer price index.--The term
``consumer price index'' refers to the Consumer
Price Index for All Urban Consumers (United
States city average), as published by the
Secretary of Commerce.
(C) Direct graduate medical education
costs.--The term ``direct graduate medical
education costs'' means direct costs of
approved educational activities for approved
medical residency training programs.
(D) Foreign medical graduate.--The term
``foreign medical graduate'' means a resident
who is not a graduate of--
(i) a school of medicine accredited
by the Liaison Committee on Medical
Education of the American Medical
Association and the Association of
American Medical Colleges (or approved
by such Committee as meeting the
standards necessary for such
accreditation),
(ii) a school of osteopathy
accredited by the American Osteopathic
Association, or approved by such
Association as meeting the standards
necessary for such accreditation, or
(iii) a school of dentistry or
podiatry which is accredited (or meets
the standards for accreditation) by an
organization recognized by the
Secretary for such purpose.
(E) FMGEMS examination.--The term ``FMGEMS
examination'' means parts I and II of the
Foreign Medical Graduate Examination in the
Medical Sciences or any successor examination
recognized by the Secretary for this purpose.
(F) Initial residency period.--The term
``initial residency period'' means the period
of board eligibility, except that--
(i) except as provided in clause
(ii), in no case shall the initial
period of residency exceed an aggregate
period of formal training of more than
five years for any individual, and
(ii) a period, of not more than two
years, during which an individual is in
a geriatric residency or fellowship
program or a preventive medicine
residency or fellowship program which
meets such criteria as the Secretary
may establish, shall be treated as part
of the initial residency period, but
shall not be counted against any
limitation on the initial residency
period.
Subject to subparagraph (G)(v), the initial
residency period shall be determined, with
respect to a resident, as of the time the
resident enters the residency training program.
(G) Period of board eligibility.--
(i) General rule.--Subject to clauses
(ii), (iii), (iv), and (v), the term
``period of board eligibility'' means,
for a resident, the minimum number of
years of formal training necessary to
satisfy the requirements for initial
board eligibility in the particular
specialty for which the resident is
training.
(ii) Application of 1985-1986
directory.--Except as provided in
clause (iii), the period of board
eligibility shall be such period
specified in the 1985-1986 Directory of
Residency Training Programs published
by the Accreditation Council on
Graduate Medical Education.
(iii) Changes in period of board
eligibility.--On or after July 1, 1989,
if the Accreditation Council on
Graduate Medical Education, in its
Directory of Residency Training
Programs--
(I) increases the minimum
number of years of formal
training necessary to satisfy
the requirements for a
specialty, above the period
specified in its 1985-1986
Directory, the Secretary may
increase the period of board
eligibility for that specialty,
but not to exceed the period of
board eligibility specified in
that later Directory, or
(II) decreases the minimum
number of years of formal
training necessary to satisfy
the requirements for a
specialty, below the period
specified in its 1985-1986
Directory, the Secretary may
decrease the period of board
eligibility for that specialty,
but not below the period of
board eligibility specified in
that later Directory.
(iv) Special rule for certain primary
care combined residency programs.--(I)
In the case of a resident enrolled in a
combined medical residency training
program in which all of the individual
programs (that are combined) are for
training a primary care resident (as
defined in subparagraph (H)), the
period of board eligibility shall be
the minimum number of years of formal
training required to satisfy the
requirements for initial board
eligibility in the longest of the
individual programs plus one additional
year.
(II) A resident enrolled in a
combined medical residency training
program that includes an obstetrics and
gynecology program shall qualify for
the period of board eligibility under
subclause (I) if the other programs
such resident combines with such
obstetrics and gynecology program are
for training a primary care resident.
(v) Child neurology training
programs.--In the case of a resident
enrolled in a child neurology residency
training program, the period of board
eligibility and the initial residency
period shall be the period of board
eligibility for pediatrics plus 2
years.
(H) Primary care resident.--The term
``primary care resident'' means a resident
enrolled in an approved medical residency
training program in family medicine, general
internal medicine, general pediatrics,
preventive medicine, geriatric medicine, or
osteopathic general practice.
(I) Resident.--The term ``resident'' includes
an intern or other participant in an approved
medical residency training program.
(J) Adjustments for certain family practice
residency programs.--
(i) In general.--In the case of an
approved medical residency training
program (meeting the requirements of
clause (ii)) of a hospital which
received funds from the United States,
a State, or a political subdivision of
a State or an instrumentality of such a
State or political subdivision (other
than payments under this title or a
State plan under title XIX) for the
program during the cost reporting
period that began during fiscal year
1984, the Secretary shall--
(I) provide for an average
amount under paragraph (2)(A)
that takes into account the
Secretary's estimate of the
amount that would have been
recognized as reasonable under
this title if the hospital had
not received such funds, and
(II) reduce the payment
amount otherwise provided under
this subsection in an amount
equal to the proportion of such
program funds received during
the cost reporting period
involved that is allocable to
this title.
(ii) Additional requirements.--A
hospital's approved medical residency
program meets the requirements of this
clause if--
(I) the program is limited to
training for family and
community medicine;
(II) the program is the only
approved medical residency
program of the hospital; and
(III) the average amount
determined under paragraph
(2)(A) for the hospital (as
determined without regard to
the increase in such amount
described in clause (i)(I))
does not exceed $10,000.
(K) Nonprovider setting that is primarily
engaged in furnishing patient care.--The term
``nonprovider setting that is primarily engaged
in furnishing patient care'' means a
nonprovider setting in which the primary
activity is the care and treatment of patients,
as defined by the Secretary.
(6) Incentive payment under plans for voluntary
reduction in number of residents.--
(A) In general.--In the case of a voluntary
residency reduction plan for which an
application is approved under subparagraph (B),
subject to subparagraph (F), each hospital
which is part of the qualifying entity
submitting the plan shall be paid an applicable
hold harmless percentage (as specified in
subparagraph (E)) of the sum of--
(i) the amount (if any) by which--
(I) the amount of payment
which would have been made
under this subsection if there
had been a 5-percent reduction
in the number of full-time
equivalent residents in the
approved medical education
training programs of the
hospital as of June 30, 1997,
exceeds
(II) the amount of payment
which is made under this
subsection, taking into account
the reduction in such number
effected under the reduction
plan; and
(ii) the amount of the reduction in
payment under subsection (d)(5)(B) for
the hospital that is attributable to
the reduction in number of residents
effected under the plan below 95
percent of the number of full-time
equivalent residents in such programs
of the hospital as of June 30, 1997.
The determination of the amounts under clauses
(i) and (ii) for any year shall be made on the
basis of the provisions of this title in effect
on the application deadline date for the first
calendar year to which the reduction plan
applies.
(B) Approval of plan applications.--The
Secretary may not approve the application of an
qualifying entity unless--
(i) the application is submitted in a
form and manner specified by the
Secretary and by not later than
November 1, 1999,
(ii) the application provides for the
operation of a plan for the reduction
in the number of full-time equivalent
residents in the approved medical
residency training programs of the
entity consistent with the requirements
of subparagraph (D);
(iii) the entity elects in the
application the period of residency
training years (not greater than 5)
over which the reduction will occur;
(iv) the entity will not reduce the
proportion of its residents in primary
care (to the total number of residents)
below such proportion as in effect as
of the applicable time described in
subparagraph (D)(v); and
(v) the Secretary determines that the
application and the entity and such
plan meet such other requirements as
the Secretary specifies in regulations.
(C) Qualifying entity.--For purposes of this
paragraph, any of the following may be a
qualifying entity:
(i) Individual hospitals operating
one or more approved medical residency
training programs.
(ii) Two or more hospitals that
operate such programs and apply for
treatment under this paragraph as a
single qualifying entity.
(iii) A qualifying consortium (as
described in section 4628 of the
Balanced Budget Act of 1997).
(D) Residency reduction requirements.--
(i) Individual hospital applicants.--
In the case of a qualifying entity
described in subparagraph (C)(i), the
number of full-time equivalent
residents in all the approved medical
residency training programs operated by
or through the entity shall be reduced
as follows:
(I) If the base number of
residents exceeds 750
residents, by a number equal to
at least 20 percent of such
base number.
(II) Subject to subclause
(IV), if the base number of
residents exceeds 600 but is
less than 750 residents, by 150
residents.
(III) Subject to subclause
(IV), if the base number of
residents does not exceed 600
residents, by a number equal to
at least 25 percent of such
base number.
(IV) In the case of a
qualifying entity which is
described in clause (v) and
which elects treatment under
this subclause, by a number
equal to at least 20 percent of
the base number.
(ii) Joint applicants.--In the case
of a qualifying entity described in
subparagraph (C)(ii), the number of
full-time equivalent residents in the
aggregate for all the approved medical
residency training programs operated by
or through the entity shall be reduced
as follows:
(I) Subject to subclause
(II), by a number equal to at
least 25 percent of the base
number.
(II) In the case of such a
qualifying entity which is
described in clause (v) and
which elects treatment under
this subclause, by a number
equal to at least 20 percent of
the base number.
(iii) Consortia.--In the case of a
qualifying entity described in
subparagraph (C)(iii), the number of
full-time equivalent residents in the
aggregate for all the approved medical
residency training programs operated by
or through the entity shall be reduced
by a number equal to at least 20
percent of the base number.
(iv) Manner of reduction.--The
reductions specified under the
preceding provisions of this
subparagraph for a qualifying entity
shall be below the base number of
residents for that entity and shall be
fully effective not later than the 5th
residency training year in which the
application under subparagraph (B) is
effective.
(v) Entities providing assurance of
increase in primary care residents.--An
entity is described in this clause if--
(I) the base number of
residents for the entity is
less than 750 or the entity is
described in subparagraph
(C)(ii); and
(II) the entity represents in
its application under
subparagraph (B) that it will
increase the number of full-
time equivalent residents in
primary care by at least 20
percent (from such number
included in the base number of
residents) by not later than
the 5th residency training year
in which the application under
subparagraph (B) is effective.
If a qualifying entity fails to comply
with the representation described in
subclause (II) by the end of such 5th
residency training year, the entity
shall be subject to repayment of all
amounts paid under this paragraph, in
accordance with procedures established
to carry out subparagraph (F).
(vi) Base number of residents
defined.--For purposes of this
paragraph, the term ``base number of
residents'' means, with respect to a
qualifying entity (or its participating
hospitals) operating approved medical
residency training programs, the number
of full-time equivalent residents in
such programs (before application of
weighting factors) of the entity as of
the most recent residency training year
ending before June 30, 1997, or, if
less, for any subsequent residency
training year that ends before the date
the entity makes application under this
paragraph.
(E) Applicable hold harmless percentage.--For
purposes of subparagraph (A), the ``applicable
hold harmless percentage'' for the--
(i) first and second residency
training years in which the reduction
plan is in effect, 100 percent,
(ii) third such year, 75 percent,
(iii) fourth such year, 50 percent,
and
(iv) fifth such year, 25 percent.
(F) Penalty for noncompliance.--
(i) In general.--No payment may be
made under this paragraph to a hospital
for a residency training year if the
hospital has failed to reduce the
number of full-time equivalent
residents (in the manner required under
subparagraph (D)) to the number agreed
to by the Secretary and the qualifying
entity in approving the application
under this paragraph with respect to
such year.
(ii) Increase in number of residents
in subsequent years.--If payments are
made under this paragraph to a
hospital, and if the hospital increases
the number of full-time equivalent
residents above the number of such
residents permitted under the reduction
plan as of the completion of the plan,
then, as specified by the Secretary,
the entity is liable for repayment to
the Secretary of the total amounts paid
under this paragraph to the entity.
(G) Treatment of rotating residents.--In
applying this paragraph, the Secretary shall
establish rules regarding the counting of
residents who are assigned to institutions the
medical residency training programs in which
are not covered under approved applications
under this paragraph.
(7) Redistribution of unused resident positions.--
(A) Reduction in limit based on unused
positions.--
(i) Programs subject to reduction.--
(I) In general.--Except as
provided in subclause (II), if
a hospital's reference resident
level (specified in clause
(ii)) is less than the
otherwise applicable resident
limit (as defined in
subparagraph (C)(ii)),
effective for portions of cost
reporting periods occurring on
or after July 1, 2005, the
otherwise applicable resident
limit shall be reduced by 75
percent of the difference
between such otherwise
applicable resident limit and
such reference resident level.
(II) Exception for small
rural hospitals.--This
subparagraph shall not apply to
a hospital located in a rural
area (as defined in subsection
(d)(2)(D)(ii)) with fewer than
250 acute care inpatient beds.
(ii) Reference resident level.--
(I) In general.--Except as
otherwise provided in
subclauses (II) and (III), the
reference resident level
specified in this clause for a
hospital is the resident level
for the most recent cost
reporting period of the
hospital ending on or before
September 30, 2002, for which a
cost report has been settled
(or, if not, submitted (subject
to audit)), as determined by
the Secretary.
(II) Use of most recent
accounting period to recognize
expansion of existing
programs.--If a hospital
submits a timely request to
increase its resident level due
to an expansion of an existing
residency training program that
is not reflected on the most
recent settled cost report,
after audit and subject to the
discretion of the Secretary,
the reference resident level
for such hospital is the
resident level for the cost
reporting period that includes
July 1, 2003, as determined by
the Secretary.
(III) Expansions under newly
approved programs.--Upon the
timely request of a hospital,
the Secretary shall adjust the
reference resident level
specified under subclause (I)
or (II) to include the number
of medical residents that were
approved in an application for
a medical residency training
program that was approved by an
appropriate accrediting
organization (as determined by
the Secretary) before January
1, 2002, but which was not in
operation during the cost
reporting period used under
subclause (I) or (II), as the
case may be, as determined by
the Secretary.
(iii) Affiliation.--The provisions of
clause (i) shall be applied to
hospitals which are members of the same
affiliated group (as defined by the
Secretary under paragraph (4)(H)(ii))
as of July 1, 2003.
(B) Redistribution.--
(i) In general.--The Secretary is
authorized to increase the otherwise
applicable resident limit for each
qualifying hospital that submits a
timely application under this
subparagraph by such number as the
Secretary may approve for portions of
cost reporting periods occurring on or
after July 1, 2005. The aggregate
number of increases in the otherwise
applicable resident limits under this
subparagraph may not exceed the
Secretary's estimate of the aggregate
reduction in such limits attributable
to subparagraph (A).
(ii) Considerations in
redistribution.--In determining for
which hospitals the increase in the
otherwise applicable resident limit is
provided under clause (i), the
Secretary shall take into account the
demonstrated likelihood of the hospital
filling the positions within the first
3 cost reporting periods beginning on
or after July 1, 2005, made available
under this subparagraph, as determined
by the Secretary.
(iii) Priority for rural and small
urban areas.--In determining for which
hospitals and residency training
programs an increase in the otherwise
applicable resident limit is provided
under clause (i), the Secretary shall
distribute the increase to programs of
hospitals located in the following
priority order:
(I) First, to hospitals
located in rural areas (as
defined in subsection
(d)(2)(D)(ii)).
(II) Second, to hospitals
located in urban areas that are
not large urban areas (as
defined for purposes of
subsection (d)).
(III) Third, to other
hospitals in a State if the
residency training program
involved is in a specialty for
which there are not other
residency training programs in
the State.
Increases of residency limits within
the same priority category under this
clause shall be determined by the
Secretary.
(iv) Limitation.--In no case shall
more than 25 full-time equivalent
additional residency positions be made
available under this subparagraph with
respect to any hospital.
(v) Application of locality adjusted
national average per resident amount.--
With respect to additional residency
positions in a hospital attributable to
the increase provided under this
subparagraph, notwithstanding any other
provision of this subsection, the
approved FTE resident amount is deemed
to be equal to the locality adjusted
national average per resident amount
computed under paragraph (4)(E) for
that hospital.
(vi) Construction.--Nothing in this
subparagraph shall be construed as
permitting the redistribution of
reductions in residency positions
attributable to voluntary reduction
programs under paragraph (6), under a
demonstration project approved as of
October 31, 2003, under the authority
of section 402 of Public Law 90-248, or
as affecting the ability of a hospital
to establish new medical residency
training programs under paragraph
(4)(H).
(C) Resident level and limit defined.--In
this paragraph:
(i) Resident level.--The term
``resident level'' means, with respect
to a hospital, the total number of
full-time equivalent residents, before
the application of weighting factors
(as determined under paragraph (4)), in
the fields of allopathic and
osteopathic medicine for the hospital.
(ii) Otherwise applicable resident
limit.--The term ``otherwise applicable
resident limit'' means, with respect to
a hospital, the limit otherwise
applicable under subparagraphs (F)(i)
and (H) of paragraph (4) on the
resident level for the hospital
determined without regard to this
paragraph.
(D) Adjustment based on settled cost
report.--In the case of a hospital with a dual
accredited osteopathic and allopathic family
practice program for which--
(i) the otherwise applicable resident
limit was reduced under subparagraph
(A)(i)(I); and
(ii) such reduction was based on a
reference resident level that was
determined using a cost report and
where a revised or corrected notice of
program reimbursement was issued for
such cost report between September 1,
2006 and September 15, 2006, whether as
a result of an appeal or otherwise, and
the reference resident level under such
settled cost report is higher than the
level used for the reduction under
subparagraph (A)(i)(I);
the Secretary shall apply subparagraph
(A)(i)(I) using the higher resident reference
level and make any necessary adjustments to
such reduction. Any such necessary adjustments
shall be effective for portions of cost
reporting periods occurring on or after July 1,
2005.
(E) Judicial review.--There shall be no
administrative or judicial review under section
1869, 1878, or otherwise, with respect to
determinations made under this this paragraph,
paragraph (8), or paragraph (4)(H)(vi).
(8) Distribution of additional residency positions.--
(A) Reductions in limit based on unused
positions.--
(i) In general.--Except as provided
in clause (ii), if a hospital's
reference resident level (as defined in
subparagraph (H)(i)) is less than the
otherwise applicable resident limit (as
defined in subparagraph (H)(iii)),
effective for portions of cost
reporting periods occurring on or after
July 1, 2011, the otherwise applicable
resident limit shall be reduced by 65
percent of the difference between such
otherwise applicable resident limit and
such reference resident level.
(ii) Exceptions.--This subparagraph
shall not apply to--
(I) a hospital located in a
rural area (as defined in
subsection (d)(2)(D)(ii)) with
fewer than 250 acute care
inpatient beds;
(II) a hospital that was part
of a qualifying entity which
had a voluntary residency
reduction plan approved under
paragraph (6)(B) or under the
authority of section 402 of
Public Law 90-248, if the
hospital demonstrates to the
Secretary that it has a
specified plan in place for
filling the unused positions by
not later than 2 years after
the date of enactment of this
paragraph; or
(III) a hospital described in
paragraph (4)(H)(v).
(B) Distribution.--
(i) In general.--The Secretary shall
increase the otherwise applicable
resident limit for each qualifying
hospital that submits an application
under this subparagraph by such number
as the Secretary may approve for
portions of cost reporting periods
occurring on or after July 1, 2011. The
aggregate number of increases in the
otherwise applicable resident limit
under this subparagraph shall be equal
to the aggregate reduction in such
limits attributable to subparagraph (A)
(as estimated by the Secretary).
(ii) Requirements.--Subject to clause
(iii), a hospital that receives an
increase in the otherwise applicable
resident limit under this subparagraph
shall ensure, during the 5-year period
beginning on the date of such increase,
that--
(I) the number of full-time
equivalent primary care
residents, as defined in
paragraph (5)(H) (as determined
by the Secretary), excluding
any additional positions under
subclause (II), is not less
than the average number of
full-time equivalent primary
care residents (as so
determined) during the 3 most
recent cost reporting periods
ending prior to the date of
enactment of this paragraph;
and
(II) not less than 75 percent
of the positions attributable
to such increase are in a
primary care or general surgery
residency (as determined by the
Secretary).
The Secretary may determine whether a
hospital has met the requirements under
this clause during such 5-year period
in such manner and at such time as the
Secretary determines appropriate,
including at the end of such 5-year
period.
(iii) Redistribution of positions if
hospital no longer meets certain
requirements.--In the case where the
Secretary determines that a hospital
described in clause (ii) does not meet
either of the requirements under
subclause (I) or (II) of such clause,
the Secretary shall--
(I) reduce the otherwise
applicable resident limit of
the hospital by the amount by
which such limit was increased
under this paragraph; and
(II) provide for the
distribution of positions
attributable to such reduction
in accordance with the
requirements of this paragraph.
(C) Considerations in redistribution.--In
determining for which hospitals the increase in
the otherwise applicable resident limit is
provided under subparagraph (B), the Secretary
shall take into account--
(i) the demonstration likelihood of
the hospital filling the positions made
available under this paragraph within
the first 3 cost reporting periods
beginning on or after July 1, 2011, as
determined by the Secretary; and
(ii) whether the hospital has an
accredited rural training track (as
described in paragraph (4)(H)(iv)).
(D) Priority for certain areas.--In
determining for which hospitals the increase in
the otherwise applicable resident limit is
provided under subparagraph (B), subject to
subparagraph (E), the Secretary shall
distribute the increase to hospitals based on
the following factors:
(i) Whether the hospital is located
in a State with a resident-to-
population ratio in the lowest quartile
(as determined by the Secretary).
(ii) Whether the hospital is located
in a State, a territory of the United
States, or the District of Columbia
that is among the top 10 States,
territories, or Districts in terms of
the ratio of--
(I) the total population of
the State, territory, or
District living in an area
designated (under such section
332(a)(1)(A)) as a health
professional shortage area (as
of the date of enactment of
this paragraph); to
(II) the total population of
the State, territory, or
District (as determined by the
Secretary based on the most
recent available population
data published by the Bureau of
the Census).
(iii) Whether the hospital is located
in a rural area (as defined in
subsection (d)(2)(D)(ii)).
(E) Reservation of positions for certain
hospitals.--
(i) In general.--Subject to clause
(ii), the Secretary shall reserve the
positions available for distribution
under this paragraph as follows:
(I) 70 percent of such
positions for distribution to
hospitals described in clause
(i) of subparagraph (D).
(II) 30 percent of such
positions for distribution to
hospitals described in clause
(ii) and (iii) of such
subparagraph.
(ii) Exception if positions not
redistributed by july 1, 2011.--In the
case where the Secretary does not
distribute positions to hospitals in
accordance with clause (i) by July 1,
2011, the Secretary shall distribute
such positions to other hospitals in
accordance with the considerations
described in subparagraph (C) and the
priority described in subparagraph (D).
(F) Limitation.--A hospital may not receive
more than 75 full-time equivalent additional
residency positions under this paragraph.
(G) Application of per resident amounts for
primary care and nonprimary care.--With respect
to additional residency positions in a hospital
attributable to the increase provided under
this paragraph, the approved FTE per resident
amounts are deemed to be equal to the hospital
per resident amounts for primary care and
nonprimary care computed under paragraph (2)(D)
for that hospital.
(H) Definitions.--In this paragraph:
(i) Reference resident level.--The
term ``reference resident level''
means, with respect to a hospital, the
highest resident level for any of the 3
most recent cost reporting periods
(ending before the date of the
enactment of this paragraph) of the
hospital for which a cost report has
been settled (or, if not, submitted
(subject to audit)), as determined by
the Secretary.
(ii) Resident level.--The term
``resident level'' has the meaning
given such term in paragraph (7)(C)(i).
(iii) Otherwise applicable resident
limit.--The term ``otherwise applicable
resident limit'' means, with respect to
a hospital, the limit otherwise
applicable under subparagraphs (F)(i)
and (H) of paragraph (4) on the
resident level for the hospital
determined without regard to this
paragraph but taking into account
paragraph (7)(A).
(I) Affiliation.--The provisions of this
paragraph shall be applied to hospitals which
are members of the same affiliated group (as
defined by the Secretary under paragraph
(4)(H)(ii)) and the reference resident level
for each such hospital shall be the reference
resident level with respect to the cost
reporting period that results in the smallest
difference between the reference resident level
and the otherwise applicable resident limit.
(i) Avoiding Duplicative Payments to Hospitals Participating
in Rural Demonstration Programs.--The Secretary shall reduce
any payment amounts otherwise determined under this section to
the extent necessary to avoid duplication of any payment made
under section 4005(e) of the Omnibus Budget Reconciliation Act
of 1987.
(j) Prospective Payment for Inpatient Rehabilitation
Services.--
(1) Payment during transition period.--
(A) In general.--Notwithstanding section
1814(b), but subject to the provisions of
section 1813, the amount of the payment with
respect to the operating and capital costs of
inpatient hospital services of a rehabilitation
hospital or a rehabilitation unit (in this
subsection referred to as a ``rehabilitation
facility''), other than a facility making an
election under subparagraph (F) in a cost
reporting period beginning on or after October
1, 2000, and before October 1, 2002, is equal
to the sum of--
(i) the TEFRA percentage (as defined
in subparagraph (C)) of the amount that
would have been paid under part A with
respect to such costs if this
subsection did not apply, and
(ii) the prospective payment
percentage (as defined in subparagraph
(C)) of the product of (I) the per unit
payment rate established under this
subsection for the fiscal year in which
the payment unit of service occurs, and
(II) the number of such payment units
occurring in the cost reporting period.
(B) Fully implemented system.--
Notwithstanding section 1814(b), but subject to
the provisions of section 1813, the amount of
the payment with respect to the operating and
capital costs of inpatient hospital services of
a rehabilitation facility for a payment unit in
a cost reporting period beginning on or after
October 1, 2002, or, in the case of a facility
making an election under subparagraph (F), for
any cost reporting period described in such
subparagraph, is equal to the per unit payment
rate established under this subsection for the
fiscal year in which the payment unit of
service occurs.
(C) TEFRA and prospective payment percentages
specified.--For purposes of subparagraph (A),
for a cost reporting period beginning--
(i) on or after October 1, 2000, and
before October 1, 2001, the ``TEFRA
percentage'' is 66\2/3\ percent and the
``prospective payment percentage'' is
33\1/3\ percent; and
(ii) on or after October 1, 2001, and
before October 1, 2002, the ``TEFRA
percentage'' is 33\1/3\ percent and the
``prospective payment percentage'' is
66\2/3\ percent.
(D) Payment unit.--For purposes of this
subsection, the term ``payment unit'' means a
discharge.
(E) Construction relating to transfer
authority.--Nothing in this subsection shall be
construed as preventing the Secretary from
providing for an adjustment to payments to take
into account the early transfer of a patient
from a rehabilitation facility to another site
of care.
(F) Election to apply full prospective
payment system.--A rehabilitation facility may
elect, not later than 30 days before its first
cost reporting period for which the payment
methodology under this subsection applies to
the facility, to have payment made to the
facility under this subsection under the
provisions of subparagraph (B) (rather than
subparagraph (A)) for each cost reporting
period to which such payment methodology
applies.
(2) Patient case mix groups.--
(A) Establishment.--The Secretary shall
establish--
(i) classes of patient discharges of
rehabilitation facilities by
functional-related groups (each in this
subsection referred to as a ``case mix
group''), based on impairment, age,
comorbidities, 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
(ii) a method of classifying specific
patients in rehabilitation facilities
within these groups.
(B) Weighting factors.--For each case mix
group the Secretary shall assign an appropriate
weighting which reflects the relative facility
resources used with respect to patients
classified within that group compared to
patients classified within other groups.
(C) Adjustments for case mix.--
(i) In general.--The Secretary shall
from time to time adjust the
classifications and weighting factors
established under this paragraph as
appropriate to reflect changes in
treatment patterns, technology, case
mix, number of payment units for which
payment is made under this title, and
other factors which may affect the
relative use of resources. Such
adjustments shall be made in a manner
so that changes in aggregate payments
under the classification system are a
result of real changes and are not a
result of changes in coding that are
unrelated to real changes in case mix.
(ii) Adjustment.--Insofar as the
Secretary determines that such
adjustments for a previous fiscal year
(or estimates that such adjustments for
a future fiscal year) did (or are
likely to) result in a change in
aggregate payments under the
classification system during the fiscal
year that are a result of changes in
the coding or classification of
patients that do not reflect real
changes in case mix, the Secretary
shall adjust the per payment unit
payment rate for subsequent years so as
to eliminate the effect of such coding
or classification changes.
(D) Data collection.--The Secretary is
authorized to require rehabilitation facilities
that provide inpatient hospital services to
submit such data as the Secretary deems
necessary to establish and administer the
prospective payment system under this
subsection.
(3) Payment rate.--
(A) In general.--The Secretary shall
determine a prospective payment rate for each
payment unit for which such rehabilitation
facility is entitled to receive payment under
this title. Subject to subparagraph (B), such
rate for payment units occurring during a
fiscal year shall be based on the average
payment per payment unit under this title for
inpatient operating and capital costs of
rehabilitation facilities using the most recent
data available (as estimated by the Secretary
as of the date of establishment of the system)
adjusted--
(i) by updating such per-payment-unit
amount to the fiscal year involved by
the weighted average of the applicable
percentage increases provided under
subsection (b)(3)(B)(ii) (for cost
reporting periods beginning during the
fiscal year) covering the period from
the midpoint of the period for such
data through the midpoint of fiscal
year 2000 and by an increase factor
(described in subparagraph (C))
specified by the Secretary for
subsequent fiscal years up to the
fiscal year involved;
(ii) by reducing such rates by a
factor equal to the proportion of
payments under this subsection (as
estimated by the Secretary) based on
prospective payment amounts which are
additional payments described in
paragraph (4) (relating to outlier and
related payments);
(iii) for variations among
rehabilitation facilities by area under
paragraph (6);
(iv) by the weighting factors
established under paragraph (2)(B); and
(v) by such other factors as the
Secretary determines are necessary to
properly reflect variations in
necessary costs of treatment among
rehabilitation facilities.
(B) Budget neutral rates.--The Secretary
shall establish the prospective payment amounts
under this subsection for payment units during
fiscal years 2001 and 2002 at levels such that,
in the Secretary's estimation, the amount of
total payments under this subsection for such
fiscal years (including any payment adjustments
pursuant to paragraphs (4) and (6) but not
taking into account any payment adjustment
resulting from an election permitted under
paragraph (1)(F)) shall be equal to 98 percent
for fiscal year 2001 and 100 percent for fiscal
year 2002 of the amount of payments that would
have been made under this title during the
fiscal years for operating and capital costs of
rehabilitation facilities had this subsection
not been enacted. In establishing such payment
amounts, the Secretary shall consider the
effects of the prospective payment system
established under this subsection on the total
number of payment units from rehabilitation
facilities and other factors described in
subparagraph (A).
(C) Increase factor.--
(i) In general.--For purposes of this
subsection for payment units in each
fiscal year (beginning with fiscal year
2001), the Secretary shall establish an
increase factor subject to clauses (ii)
and (iii). Such factor shall be based
on an appropriate percentage increase
in a market basket of goods and
services comprising services for which
payment is made under this subsection,
which may be the market basket
percentage increase described in
subsection (b)(3)(B)(iii). The increase
factor to be applied under this
subparagraph for each of fiscal years
2008 and 2009 shall be 0 percent.
(ii) Productivity and other
adjustment.--Subject to clause (iii),
after establishing the increase factor
described in clause (i) for a fiscal
year, the Secretary shall reduce such
increase factor--
(I) for fiscal year 2012 and
each subsequent fiscal year, by
the productivity adjustment
described in section
1886(b)(3)(B)(xi)(II); and
(II) for each of fiscal years
2010 through 2019, by the other
adjustment described in
subparagraph (D).
The application of this clause may
result in the increase factor under
this subparagraph being less than 0.0
for a fiscal year, and may result in
payment rates under this subsection for
a fiscal year being less than such
payment rates for the preceding fiscal
year.
(iii) Special rule for fiscal year
2018.--The increase factor to be
applied under this subparagraph for
fiscal year 2018, after the application
of clause (ii), shall be 1 percent.
(D) Other adjustment.--For purposes of
subparagraph (C)(ii)(II), the other adjustment
described in this subparagraph is--
(i) for each of fiscal years 2010 and
2011, 0.25 percentage point;
(ii) for each of fiscal years 2012
and 2013, 0.1 percentage point;
(iii) for fiscal year 2014, 0.3
percentage point;
(iv) for each of fiscal years 2015
and 2016, 0.2 percentage point; and
(v) for each of fiscal years 2017,
2018, and 2019, 0.75 percentage point.
(4) Outlier and special payments.--
(A) Outliers.--
(i) In general.--The Secretary may
provide for an additional payment to a
rehabilitation facility for patients in
a case mix group, based upon the
patient being classified as an outlier
based on an unusual length of stay,
costs, or other factors specified by
the Secretary.
(ii) Payment based on marginal cost
of care.--The amount of such additional
payment under clause (i) shall be
determined by the Secretary and shall
approximate the marginal cost of care
beyond the cutoff point applicable
under clause (i).
(iii) Total payments.--The total
amount of the additional payments made
under this subparagraph for payment
units in a fiscal year may not exceed 5
percent of the total payments projected
or estimated to be made based on
prospective payment rates for payment
units in that year.
(B) Adjustment.--The Secretary may provide
for such adjustments to the payment amounts
under this subsection as the Secretary deems
appropriate to take into account the unique
circumstances of rehabilitation facilities
located in Alaska and Hawaii.
(5) Publication.--The Secretary shall provide for
publication in the Federal Register, on or before
August 1 before each fiscal year (beginning with fiscal
year 2001), of the classification and weighting factors
for case mix groups under paragraph (2) for such fiscal
year and a description of the methodology and data used
in computing the prospective payment rates under this
subsection for that fiscal year.
(6) Area wage adjustment.--The Secretary shall adjust
the proportion (as estimated by the Secretary from time
to time) of rehabilitation facilities' costs which are
attributable to wages and wage-related costs, of the
prospective payment rates computed under paragraph (3)
for area differences in wage levels by a factor
(established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the
rehabilitation facility compared to the national
average wage level for such facilities. Not later than
October 1, 2001 (and at least every 36 months
thereafter), the Secretary shall update the factor
under the preceding sentence on the basis of
information available to the Secretary (and updated as
appropriate) of the wages and wage-related costs
incurred in furnishing rehabilitation services. Any
adjustments or updates made under this paragraph for a
fiscal year shall be made in a manner that assures that
the aggregated payments under this subsection in the
fiscal year are not greater or less than those that
would have been made in the year without such
adjustment.
(7) Quality reporting.--
(A) Reduction in update for failure to
report.--
(i) In general.--For purposes of
fiscal year 2014 and each subsequent
fiscal year, in the case of a
rehabilitation facility that does not
submit data to the Secretary in
accordance with subparagraphs (C) and
(F) with respect to such a fiscal year,
after determining the increase factor
described in paragraph (3)(C), and
after application of subparagraphs
(C)(iii) and (D) of paragraph (3), the
Secretary shall reduce such increase
factor for payments for discharges
occurring during such fiscal year by 2
percentage points.
(ii) Special rule.--The application
of this subparagraph may result in the
increase factor described in paragraph
(3)(C) being less than 0.0 for a fiscal
year, and may result in payment rates
under this subsection for a fiscal year
being less than such payment rates for
the preceding fiscal year.
(B) Noncumulative application.--Any reduction
under subparagraph (A) shall apply only with
respect to the fiscal year involved and the
Secretary shall not take into account such
reduction in computing the payment amount under
this subsection for a subsequent fiscal year.
(C) Submission of quality data.--Subject to
subparagraph (G), for fiscal year 2014 and each
subsequent fiscal year, each rehabilitation
facility shall submit to the Secretary data on
quality measures specified under subparagraph
(D). Such data shall be submitted in a form and
manner, and at a time, specified by the
Secretary for purposes of this subparagraph.
(D) Quality measures.--
(i) In general.--Subject to clause
(ii), any measure specified by the
Secretary under this subparagraph must
have been endorsed by the entity with a
contract under section 1890(a).
(ii) Exception.--In the case of a
specified area or medical topic
determined appropriate by the Secretary
for which a feasible and practical
measure has not been endorsed by the
entity with a contract under section
1890(a), the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary.
(iii) Time frame.--Not later than
October 1, 2012, the Secretary shall
publish the measures selected under
this subparagraph that will be
applicable with respect to fiscal year
2014.
(E) Public availability of data submitted.--
The Secretary shall establish procedures for
making data submitted under subparagraph (C)
and subparagraph (F)(i) available to the
public. Such procedures shall ensure that a
rehabilitation facility has the opportunity to
review the data that is to be made public with
respect to the facility prior to such data
being made public. The Secretary shall report
quality measures that relate to services
furnished in inpatient settings in
rehabilitation facilities on the Internet
website of the Centers for Medicare & Medicaid
Services.
(F) Submission of additional data.--
(i) In general.--For the fiscal year
beginning on the specified application
date (as defined in subsection
(a)(2)(E) of section 1899B), as
applicable with respect to inpatient
rehabilitation facilities and quality
measures under subsection (c)(1) of
such section and measures under
subsection (d)(1) of such section, and
each subsequent fiscal year, in
addition to such data on the quality
measures described in subparagraph (C),
each rehabilitation facility shall
submit to the Secretary data on the
quality measures under such subsection
(c)(1) and any necessary data specified
by the Secretary under such subsection
(d)(1).
(ii) Standardized patient assessment
data.--For fiscal year 2019 and each
subsequent fiscal year, in addition to
such data described in clause (i), each
rehabilitation facility shall submit to
the Secretary standardized patient
assessment data required under
subsection (b)(1) of section 1899B.
(iii) Submission.--Such data shall be
submitted in the form and manner, and
at the time, specified by the Secretary
for purposes of this subparagraph.
(G) Non-duplication.--To the extent data
submitted under subparagraph (F) duplicates
other data required to be submitted under
subparagraph (C), the submission of such data
under subparagraph (F) shall be in lieu of the
submission of such data under subparagraph (C).
The previous sentence shall not apply insofar
as the Secretary determines it is necessary to
avoid a delay in the implementation of section
1899B, taking into account the different
specified application dates under subsection
(a)(2)(E) of such section.
(8) Limitation on review.--There shall be no
administrative or judicial review under section 1869,
1878, or otherwise of the establishment of--
(A) case mix groups, of the methodology for
the classification of patients within such
groups, and of the appropriate weighting
factors thereof under paragraph (2),
(B) the prospective payment rates under
paragraph (3),
(C) outlier and special payments under
paragraph (4), and
(D) area wage adjustments under paragraph
(6).
(k) Payment to Nonhospital Providers.--
(1) In general.--For cost reporting periods beginning
on or after October 1, 1997, the Secretary may
establish rules for payment to qualified nonhospital
providers for their direct costs of medical education,
if those costs are incurred in the operation of an
approved medical residency training program described
in subsection (h). Such rules shall specify the
amounts, form, and manner in which such payments will
be made and the portion of such payments that will be
made from each of the trust funds under this title.
(2) Qualified nonhospital providers.--For purposes of
this subsection, the term ``qualified nonhospital
providers'' means--
(A) a Federally qualified health center, as
defined in section 1861(aa)(4);
(B) a rural health clinic, as defined in
section 1861(aa)(2);
(C) Medicare+Choice organizations; and
(D) such other providers (other than
hospitals) as the Secretary determines to be
appropriate.
(l) Payment for Nursing and Allied Health Education for
Managed Care Enrollees.--
(1) In general.--For portions of cost reporting
periods occurring in a year (beginning with 2000), the
Secretary shall provide for an additional payment
amount for any hospital that receives payments for the
costs of approved educational activities for nurse and
allied health professional training under section
1861(v)(1).
(2) Payment amount.--The additional payment amount
under this subsection for each hospital for portions of
cost reporting periods occurring in a year shall be an
amount specified by the Secretary in a manner
consistent with the following:
(A) Determination of managed care enrollee
payment ratio for graduate medical education
payments.--The Secretary shall estimate the
ratio of payments for all hospitals for
portions of cost reporting periods occurring in
the year under subsection (h)(3)(D) to total
direct graduate medical education payments
estimated for such portions of periods under
subsection (h)(3).
(B) Application to fee-for-service nursing
and allied health education payments.--Such
ratio shall be applied to the Secretary's
estimate of total payments for nursing and
allied health education determined under
section 1861(v) for portions of cost reporting
periods occurring in the year to determine a
total amount of additional payments for nursing
and allied health education to be distributed
to hospitals under this subsection for portions
of cost reporting periods occurring in the
year; except that in no case shall such total
amount exceed $60,000,000 in any year.
(C) Application to hospital.--The amount of
payment under this subsection to a hospital for
portions of cost reporting periods occurring in
a year is equal to the total amount of payments
determined under subparagraph (B) for the year
multiplied by the ratio of--
(i) the product of (I) the
Secretary's estimate of the ratio of
the amount of payments made under
section 1861(v) to the hospital for
nursing and allied health education
activities for the hospital's cost
reporting period ending in the second
preceding fiscal year, to the
hospital's total inpatient days for
such period, and (II) the total number
of inpatient days (as established by
the Secretary) for such period which
are attributable to services furnished
to individuals who are enrolled under a
risk sharing contract with an eligible
organization under section 1876 and who
are entitled to benefits under part A
or who are enrolled with a
Medicare+Choice organization under part
C; to
(ii) the sum of the products
determined under clause (i) for such
cost reporting periods.
(m) Prospective Payment for Long-Term Care Hospitals.--
(1) Reference to establishment and implementation of
system.--For provisions related to the establishment
and implementation of a prospective payment system for
payments under this title for inpatient hospital
services furnished by a long-term care hospital
described in subsection (d)(1)(B)(iv), see section 123
of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 and section 307(b) of the
Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000.
(2) Update for rate year 2008.--In implementing the
system described in paragraph (1) for discharges
occurring during the rate year ending in 2008 for a
hospital, the base rate for such discharges for the
hospital shall be the same as the base rate for
discharges for the hospital occurring during the rate
year ending in 2007.
(3) Implementation for rate year 2010 and subsequent
years.--
(A) In general.--Subject to subparagraph (C),
in implementing the system described in
paragraph (1) for rate year 2010 and each
subsequent rate year, any annual update to a
standard Federal rate for discharges for the
hospital during the rate year, shall be
reduced--
(i) for rate year 2012 and each
subsequent rate year, by the
productivity adjustment described in
section 1886(b)(3)(B)(xi)(II); and
(ii) for each of rate years 2010
through 2019, by the other adjustment
described in paragraph (4).
(B) Special rule.--The application of this
paragraph may result in such annual update
being less than 0.0 for a rate year, and may
result in payment rates under the system
described in paragraph (1) for a rate year
being less than such payment rates for the
preceding rate year.
(C) Additional special rule.--For fiscal year
2018, the annual update under subparagraph (A)
for the fiscal year, after application of
clauses (i) and (ii) of subparagraph (A), shall
be 1 percent.
(4) Other adjustment.--For purposes of paragraph
(3)(A)(ii), the other adjustment described in this
paragraph is--
(A) for rate year 2010, 0.25 percentage
point;
(B) for rate year 2011, 0.50 percentage
point;
(C) for each of the rate years beginning in
2012 and 2013, 0.1 percentage point;
(D) for rate year 2014, 0.3 percentage point;
(E) for each of rate years 2015 and 2016, 0.2
percentage point; and
(F) for each of rate years 2017, 2018, and
2019, 0.75 percentage point.
(5) Quality reporting.--
(A) Reduction in update for failure to
report.--
(i) In general.--Under the system
described in paragraph (1), for rate
year 2014 and each subsequent rate
year, in the case of a long-term care
hospital that does not submit data to
the Secretary in accordance with
subparagraphs (C) and (F) with respect
to such a rate year, any annual update
to a standard Federal rate for
discharges for the hospital during the
rate year, and after application of
paragraph (3), shall be reduced by 2
percentage points.
(ii) Special rule.--The application
of this subparagraph may result in such
annual update being less than 0.0 for a
rate year, and may result in payment
rates under the system described in
paragraph (1) for a rate year being
less than such payment rates for the
preceding rate year.
(B) Noncumulative application.--Any reduction
under subparagraph (A) shall apply only with
respect to the rate year involved and the
Secretary shall not take into account such
reduction in computing the payment amount under
the system described in paragraph (1) for a
subsequent rate year.
(C) Submission of quality data.--Subject to
subparagraph (G), for rate year 2014 and each
subsequent rate year, each long-term care
hospital shall submit to the Secretary data on
quality measures specified under subparagraph
(D). Such data shall be submitted in a form and
manner, and at a time, specified by the
Secretary for purposes of this subparagraph.
(D) Quality measures.--
(i) In general.--Subject to clause
(ii), any measure specified by the
Secretary under this subparagraph must
have been endorsed by the entity with a
contract under section 1890(a).
(ii) Exception.--In the case of a
specified area or medical topic
determined appropriate by the Secretary
for which a feasible and practical
measure has not been endorsed by the
entity with a contract under section
1890(a), the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary.
(iii) Time frame.--Not later than
October 1, 2012, the Secretary shall
publish the measures selected under
this subparagraph that will be
applicable with respect to rate year
2014.
(iv) Additional quality measures.--
Not later than October 1, 2015, the
Secretary shall establish a functional
status quality measure for change in
mobility among inpatients requiring
ventilator support.
(E) Public availability of data submitted.--
The Secretary shall establish procedures for
making data submitted under subparagraph (C)
and subparagraph (F)(i) available to the
public. Such procedures shall ensure that a
long-term care hospital has the opportunity to
review the data that is to be made public with
respect to the hospital prior to such data
being made public. The Secretary shall report
quality measures that relate to services
furnished in inpatient settings in long-term
care hospitals on the Internet website of the
Centers for Medicare & Medicaid Services.
(F) Submission of additional data.--
(i) In general.--For the rate year
beginning on the specified application
date (as defined in subsection
(a)(2)(E) of section 1899B), as
applicable with respect to long-term
care hospitals and quality measures
under subsection (c)(1) of such section
and measures under subsection (d)(1) of
such section, and each subsequent rate
year, in addition to the data on the
quality measures described in
subparagraph (C), each long-term care
hospital (other than a hospital
classified under subsection
[(d)(1)(B)(iv)(II)] (d)(1)(B)(vi))
shall submit to the Secretary data on
the quality measures under such
subsection (c)(1) and any necessary
data specified by the Secretary under
such subsection (d)(1).
(ii) Standardized patient assessment
data.--For rate year 2019 and each
subsequent rate year, in addition to
such data described in clause (i), each
long-term care hospital (other than a
hospital classified under subsection
[(d)(1)(B)(iv)(II)] (d)(1)(B)(vi))
shall submit to the Secretary
standardized patient assessment data
required under subsection (b)(1) of
section 1899B.
(iii) Submission.--Such data shall be
submitted in the form and manner, and
at the time, specified by the Secretary
for purposes of this subparagraph.
(G) Non-duplication.--To the extent data
submitted under subparagraph (F) duplicates
other data required to be submitted under
subparagraph (C), the submission of such data
under subparagraph (F) shall be in lieu of the
submission of such data under subparagraph (C).
The previous sentence shall not apply insofar
as the Secretary determines it is necessary to
avoid a delay in the implementation of section
1899B, taking into account the different
specified application dates under subsection
(a)(2)(E) of such section.
(6) Application of site neutral ipps payment rate in
certain cases.--
(A) General application of site neutral ipps
payment amount for discharges failing to meet
applicable criteria.--
(i) In general.--For a discharge in
cost reporting periods beginning on or
after October 1, 2015, except as
provided in clause (ii) and
subparagraphs (C) [and (E)], (E), (F),
and (G), payment under this title to a
long-term care hospital for inpatient
hospital services shall be made at the
applicable site neutral payment rate
(as defined in subparagraph (B)).
(ii) Exception for certain discharges
meeting criteria.--Clause (i) shall not
apply (and payment shall be made to a
long-term care hospital without regard
to this paragraph) for a discharge if--
(I) the discharge meets the
ICU criterion under clause
(iii) or the ventilator
criterion under clause (iv);
and
(II) the discharge does not
have a principal diagnosis
relating to a psychiatric
diagnosis or to rehabilitation.
(iii) Intensive care unit (icu)
criterion.--
(I) In general.--The
criterion specified in this
clause (in this paragraph
referred to as the ``ICU
criterion''), for a discharge
from a long-term care hospital,
is that the stay in the long-
term care hospital ending with
such discharge was immediately
preceded by a discharge from a
stay in a subsection (d)
hospital that included at least
3 days in an intensive care
unit (ICU), as determined by
the Secretary.
(II) Determining icu days.--
In determining intensive care
unit days under subclause (I),
the Secretary shall use data
from revenue center codes 020x
or 021x (or such successor
codes as the Secretary may
establish).
(iv) Ventilator criterion.--The
criterion specified in this clause (in
this paragraph referred to as the
``ventilator criterion''), for a
discharge from a long-term care
hospital, is that--
(I) the stay in the long-term
care hospital ending with such
discharge was immediately
preceded by a discharge from a
stay in a subsection (d)
hospital; and
(II) the individual
discharged was assigned to a
Medicare-Severity-Long-Term-
Care-Diagnosis-Related-Group
(MS-LTC-DRG) based on the
receipt of ventilator services
of at least 96 hours.
(B) Applicable site neutral payment rate
defined.--
(i) In general.--In this paragraph,
the term ``applicable site neutral
payment rate'' means--
(I) for discharges in cost
reporting periods beginning
during fiscal year 2016 or
fiscal year 2017, the blended
payment rate specified in
clause (iii); and
(II) for discharges in cost
reporting periods beginning
during fiscal year 2018 or a
subsequent fiscal year, the
site neutral payment rate (as
defined in clause (ii)).
(ii) Site neutral payment rate
defined.--In this paragraph, the term
``site neutral payment rate'' means the
lower of--
(I) the IPPS comparable per
diem amount determined under
paragraph (d)(4) of section
412.529 of title 42, Code of
Federal Regulations, including
any applicable outlier payments
under section 412.525 of such
title; or
(II) 100 percent of the
estimated cost for the services
involved.
(iii) Blended payment rate.--The
blended payment rate specified in this
clause, for a long-term care hospital
for inpatient hospital services for a
discharge, is comprised of--
(I) half of the site neutral
payment rate (as defined in
clause (ii)) for the discharge;
and
(II) half of the payment rate
that would otherwise be
applicable to such discharge
without regard to this
paragraph, as determined by the
Secretary.
(C) Limiting payment for all hospital
discharges to site neutral payment rate for
hospitals failing to meet applicable ltch
discharge thresholds.--
(i) Notice of ltch discharge payment
percentage.--For cost reporting periods
beginning during or after fiscal year
2016, the Secretary shall inform each
long-term care hospital of its LTCH
discharge payment percentage (as
defined in clause (iv)) for such
period.
(ii) Limitation.--For cost reporting
periods beginning during or after
fiscal year 2020, if the Secretary
determines for a long-term care
hospital that its LTCH discharge
payment percentage for the period is
not at least 50 percent--
(I) the Secretary shall
inform the hospital of such
fact; and
(II) subject to clause (iii),
for all discharges in the
hospital in each succeeding
cost reporting period, the
payment amount under this
subsection shall be the payment
amount that would apply under
subsection (d) for the
discharge if the hospital were
a subsection (d) hospital.
(iii) Process for reinstatement.--The
Secretary shall establish a process
whereby a long-term care hospital may
seek to and have the provisions of
subclause (II) of clause (ii)
discontinued with respect to that
hospital.
(iv) LTCH discharge payment
percentage.--In this subparagraph, the
term ``LTCH discharge payment
percentage'' means, with respect to a
long-term care hospital for a cost
reporting period beginning during or
after fiscal year 2020, the ratio
(expressed as a percentage) of--
(I) the number of Medicare
fee-for-service discharges for
such hospital and period for
which payment is not made at
the site neutral payment rate,
to
(II) the total number of
Medicare fee-for-service
discharges for such hospital
and period.
(D) Inclusion of subsection (d) puerto rico
hospitals.--In this paragraph, any reference in
this paragraph to a subsection (d) hospital
shall be deemed to include a reference to a
subsection (d) Puerto Rico hospital.
(E) Temporary exception for certain severe
wound discharges from certain long-term care
hospitals.--
(i) In general.--In the case of a
discharge occurring prior to January 1,
2017, subparagraph (A)(i) shall not
apply (and payment shall be made to a
long-term care hospital without regard
to this paragraph) if such discharge--
(I) is from a long-term care
hospital that is--
(aa) identified by
[the amendment made by
section 4417(a) of the
Balanced Budget Act of
1997 (42 U.S.C. 1395ww
note, Public Law 105-
33)] the last sentence
of subsection
(d)(1)(B); and
(bb) located in a
rural area (as defined
in subsection
(d)(2)(D)) or treated
as being so located
pursuant to subsection
(d)(8)(E); and
(II) the individual
discharged has a severe wound.
(ii) Severe wound defined.--In this
subparagraph, the term ``severe wound''
means a stage 3 wound, stage 4 wound,
unstageable wound, non-healing surgical
wound, infected wound, fistula,
osteomyelitis, or wound with morbid
obesity, as identified in the claim
from the long-term care hospital.
(F) Temporary exception for certain spinal
cord specialty hospitals.--For discharges in
cost reporting periods beginning during fiscal
years 2018 and 2019, subparagraph (A)(i) shall
not apply (and payment shall be made to a long-
term care hospital without regard to this
paragraph) if such discharge is from a long-
term care hospital that meets each of the
following requirements:
(i) Not-for-profit.--The long-term
care hospital was a not-for-profit
long-term care hospital on June 1,
2014, as determined by cost report
data.
(ii) Primarily providing treatment
for catastrophic spinal cord or
acquired brain injuries or other
paralyzing neuromuscular conditions.--
Of the discharges in calendar year 2013
from the long-term care hospital for
which payment was made under this
section, at least 50 percent were
classified under MS-LTCH-DRGs 28, 29,
52, 57, 551, 573, and 963.
(iii) Significant out-of-state
admissions.--
(I) In general.--The long-
term care hospital discharged
inpatients (including both
individuals entitled to, or
enrolled for, benefits under
this title and individuals not
so entitled or enrolled) during
fiscal year 2014 who had been
admitted from at least 20 of
the 50 States, determined by
the States of residency of such
inpatients and based on such
data submitted by the hospital
to the Secretary as the
Secretary may require.
(II) Implementation.--
Notwithstanding any other
provision of law, the Secretary
may implement subclause (I) by
program instruction or
otherwise.
(III) Non-application of
paperwork reduction act.--
Chapter 35 of title 44, United
States Code, shall not apply to
data collected under this
clause.
(G) Additional temporary exception for
certain severe wound discharges from certain
long-term care hospitals.--
(i) In general.--For a discharge
occurring in a cost reporting period
beginning during fiscal year 2018,
subparagraph (A)(i) shall not apply
(and payment shall be made to a long-
term care hospital without regard to
this paragraph) if such discharge--
(I) is from a long-term care
hospital identified by the last
sentence of subsection
(d)(1)(B);
(II) is classified under MS-
LTCH-DRG 602, 603, 539, or 540;
and
(III) is with respect to an
individual treated by a long-
term care hospital for a severe
wound.
(ii) Severe wound defined.--In this
subparagraph, the term ``severe wound''
means a wound which is a stage 3 wound,
stage 4 wound, unstageable wound, non-
healing surgical wound, or fistula as
identified in the claim from the long-
term care hospital.
(iii) Wound defined.--In this
subparagraph, the term ``wound'' means
an injury involving division of tissue
or rupture of the integument or mucous
membrane with exposure to the external
environment.
(n) Incentives for Adoption and Meaningful Use of Certified
EHR Technology.--
(1) In general.--Subject to the succeeding provisions
of this subsection, with respect to inpatient hospital
services furnished by an eligible hospital during a
payment year (as defined in paragraph (2)(G)), if the
eligible hospital is a meaningful EHR user (as
determined under paragraph (3)) for the EHR reporting
period with respect to such year, in addition to the
amount otherwise paid under this section, there also
shall be paid to the eligible hospital, from the
Federal Hospital Insurance Trust Fund established under
section 1817, an amount equal to the applicable amount
specified in paragraph (2)(A) for the hospital for such
payment year.
(2) Payment amount.--
(A) In general.--Subject to the succeeding
subparagraphs of this paragraph, the applicable
amount specified in this subparagraph for an
eligible hospital for a payment year is equal
to the product of the following:
(i) Initial amount.--The sum of--
(I) the base amount specified
in subparagraph (B); plus
(II) the discharge related
amount specified in
subparagraph (C) for a 12-month
period selected by the
Secretary with respect to such
payment year.
(ii) Medicare share.--The Medicare
share as specified in subparagraph (D)
for the eligible hospital for a period
selected by the Secretary with respect
to such payment year.
(iii) Transition factor.--The
transition factor specified in
subparagraph (E) for the eligible
hospital for the payment year.
(B) Base amount.--The base amount specified
in this subparagraph is $2,000,000.
(C) Discharge related amount.--The discharge
related amount specified in this subparagraph
for a 12-month period selected by the Secretary
shall be determined as the sum of the amount,
estimated based upon total discharges for the
eligible hospital (regardless of any source of
payment) for the period, for each discharge up
to the 23,000th discharge as follows:
(i) For the first through 1,149th
discharge, $0.
(ii) For the 1,150th through the
23,000th discharge, $200.
(iii) For any discharge greater than
the 23,000th, $0.
(D) Medicare share.--The Medicare share
specified under this subparagraph for an
eligible hospital for a period selected by the
Secretary for a payment year is equal to the
fraction--
(i) the numerator of which is the sum
(for such period and with respect to
the eligible hospital) of--
(I) the estimated number of
inpatient-bed-days (as
established by the Secretary)
which are attributable to
individuals with respect to
whom payment may be made under
part A; and
(II) the estimated number of
inpatient-bed-days (as so
established) which are
attributable to individuals who
are enrolled with a Medicare
Advantage organization under
part C; and
(ii) the denominator of which is the
product of--
(I) the estimated total
number of inpatient-bed-days
with respect to the eligible
hospital during such period;
and
(II) the estimated total
amount of the eligible
hospital's charges during such
period, not including any
charges that are attributable
to charity care (as such term
is used for purposes of
hospital cost reporting under
this title), divided by the
estimated total amount of the
hospital's charges during such
period.
Insofar as the Secretary determines that data
are not available on charity care necessary to
calculate the portion of the formula specified
in clause (ii)(II), the Secretary shall use
data on uncompensated care and may adjust such
data so as to be an appropriate proxy for
charity care including a downward adjustment to
eliminate bad debt data from uncompensated care
data. In the absence of the data necessary,
with respect to a hospital, for the Secretary
to compute the amount described in clause
(ii)(II), the amount under such clause shall be
deemed to be 1. In the absence of data, with
respect to a hospital, necessary to compute the
amount described in clause (i)(II), the amount
under such clause shall be deemed to be 0.
(E) Transition factor specified.--
(i) In general.--Subject to clause
(ii), the transition factor specified
in this subparagraph for an eligible
hospital for a payment year is as
follows:
(I) For the first payment
year for such hospital, 1.
(II) For the second payment
year for such hospital, \3/4\.
(III) For the third payment
year for such hospital, \1/2\.
(IV) For the fourth payment
year for such hospital, \1/4\.
(V) For any succeeding
payment year for such hospital,
0.
(ii) Phase down for eligible
hospitals first adopting ehr after
2013.--If the first payment year for an
eligible hospital is after 2013, then
the transition factor specified in this
subparagraph for a payment year for
such hospital is the same as the amount
specified in clause (i) for such
payment year for an eligible hospital
for which the first payment year is
2013. If the first payment year for an
eligible hospital is after 2015 then
the transition factor specified in this
subparagraph for such hospital and for
such year and any subsequent year shall
be 0.
(F) Form of payment.--The payment under this
subsection for a payment year may be in the
form of a single consolidated payment or in the
form of such periodic installments as the
Secretary may specify.
(G) Payment year defined.--
(i) In general.--For purposes of this
subsection, the term ``payment year''
means a fiscal year beginning with
fiscal year 2011.
(ii) First, second, etc. payment
year.--The term ``first payment year''
means, with respect to inpatient
hospital services furnished by an
eligible hospital, the first fiscal
year for which an incentive payment is
made for such services under this
subsection. The terms ``second payment
year'', ``third payment year'', and
``fourth payment year'' mean, with
respect to an eligible hospital, each
successive year immediately following
the first payment year for that
hospital.
(3) Meaningful ehr user.--
(A) In general.--For purposes of paragraph
(1), an eligible hospital shall be treated as a
meaningful EHR user for an EHR reporting period
for a payment year (or, for purposes of
subsection (b)(3)(B)(ix), for an EHR reporting
period under such subsection for a fiscal year)
if each of the following requirements are met:
(i) Meaningful use of certified ehr
technology.--The eligible hospital
demonstrates to the satisfaction of the
Secretary, in accordance with
subparagraph (C)(i), that during such
period the hospital is using certified
EHR technology in a meaningful manner.
(ii) Information exchange.--The
eligible hospital demonstrates to the
satisfaction of the Secretary, in
accordance with subparagraph (C)(i),
that during such period such certified
EHR technology is connected in a manner
that provides, in accordance with law
and standards applicable to the
exchange of information, for the
electronic exchange of health
information to improve the quality of
health care, such as promoting care
coordination, and the hospital
demonstrates (through a process
specified by the Secretary, such as the
use of an attestation) that the
hospital has not knowingly and
willfully taken action (such as to
disable functionality) to limit or
restrict the compatibility or
interoperability of the certified EHR
technology.
(iii) Reporting on measures using
ehr.--Subject to subparagraph (B)(ii)
and using such certified EHR
technology, the eligible hospital
submits information for such period, in
a form and manner specified by the
Secretary, on such clinical quality
measures and such other measures as
selected by the Secretary under
subparagraph (B)(i).
The Secretary shall seek to improve the use of
electronic health records and health care
quality over time by requiring more stringent
measures of meaningful use selected under this
paragraph.
(B) Reporting on measures.--
(i) Selection.--The Secretary shall
select measures for purposes of
subparagraph (A)(iii) but only
consistent with the following:
(I) The Secretary shall
provide preference to clinical
quality measures that have been
selected for purposes of
applying subsection
(b)(3)(B)(viii) or that have
been endorsed by the entity
with a contract with the
Secretary under section
1890(a).
(II) Prior to any measure
(other than a clinical quality
measure that has been selected
for purposes of applying
subsection (b)(3)(B)(viii))
being selected under this
subparagraph, the Secretary
shall publish in the Federal
Register such measure and
provide for a period of public
comment on such measure.
(ii) Limitations.--The Secretary may
not require the electronic reporting of
information on clinical quality
measures under subparagraph (A)(iii)
unless the Secretary has the capacity
to accept the information
electronically, which may be on a pilot
basis.
(iii) Coordination of reporting of
information.--In selecting such
measures, and in establishing the form
and manner for reporting measures under
subparagraph (A)(iii), the Secretary
shall seek to avoid redundant or
duplicative reporting with reporting
otherwise required, including reporting
under subsection (b)(3)(B)(viii).
(C) Demonstration of meaningful use of
certified ehr technology and information
exchange.--
(i) In general.--An eligible hospital
may satisfy the demonstration
requirement of clauses (i) and (ii) of
subparagraph (A) through means
specified by the Secretary, which may
include--
(I) an attestation;
(II) the submission of claims
with appropriate coding (such
as a code indicating that
inpatient care was documented
using certified EHR
technology);
(III) a survey response;
(IV) reporting under
subparagraph (A)(iii); and
(V) other means specified by
the Secretary.
(ii) Use of part d data.--
Notwithstanding sections 1860D-
15(d)(2)(B) and 1860D-15(f)(2), the
Secretary may use data regarding drug
claims submitted for purposes of
section 1860D-15 that are necessary for
purposes of subparagraph (A).
(4) Application.--
(A) Limitations on review.--There shall be no
administrative or judicial review under section
1869, section 1878, or otherwise, of--
(i) the methodology and standards for
determining payment amounts under this
subsection and payment adjustments
under subsection (b)(3)(B)(ix),
including selection of periods under
paragraph (2) for determining, and
making estimates or using proxies of,
discharges under paragraph (2)(C) and
inpatient-bed-days, hospital charges,
charity charges, and Medicare share
under paragraph (2)(D);
(ii) the methodology and standards
for determining a meaningful EHR user
under paragraph (3), including
selection of measures under paragraph
(3)(B), specification of the means of
demonstrating meaningful EHR use under
paragraph (3)(C), and the hardship
exception under subsection
(b)(3)(B)(ix)(II); and
(iii) the specification of EHR
reporting periods under paragraph
(6)(B) and the selection of the form of
payment under paragraph (2)(F).
(B) Posting on website.--The Secretary shall
post on the Internet website of the Centers for
Medicare & Medicaid Services, in an easily
understandable format, a list of the names of
the eligible hospitals that are meaningful EHR
users under this subsection or subsection
(b)(3)(B)(ix) (and a list of the names of
critical access hospitals to which paragraph
(3) or (4) of section 1814(l) applies), and
other relevant data as determined appropriate
by the Secretary. The Secretary shall ensure
that an eligible hospital (or critical access
hospital) has the opportunity to review the
other relevant data that are to be made public
with respect to the hospital (or critical
access hospital) prior to such data being made
public.
(5) Certified ehr technology defined.--The term
``certified EHR technology'' has the meaning given such
term in section 1848(o)(4).
(6) Definitions.--For purposes of this subsection:
(A) EHR reporting period.--The term ``EHR
reporting period'' means, with respect to a
payment year, any period (or periods) as
specified by the Secretary.
(B) Eligible hospital.--The term ``eligible
hospital'' means a hospital that is a
subsection (d) hospital or a subsection (d)
Puerto Rico hospital.
(o) Hospital Value-Based Purchasing Program.--
(1) Establishment.--
(A) In general.--Subject to the succeeding
provisions of this subsection, the Secretary
shall establish a hospital value-based
purchasing program (in this subsection referred
to as the ``Program'') under which value-based
incentive payments are made in a fiscal year to
hospitals that meet the performance standards
under paragraph (3) for the performance period
for such fiscal year (as established under
paragraph (4)).
(B) Program to begin in fiscal year 2013.--
The Program shall apply to payments for
discharges occurring on or after October 1,
2012.
(C) Applicability of program to hospitals.--
(i) In general.--For purposes of this
subsection, subject to clause (ii), the
term ``hospital'' means a subsection
(d) hospital (as defined in subsection
(d)(1)(B)).
(ii) Exclusions.--The term
``hospital'' shall not include, with
respect to a fiscal year, a hospital--
(I) that is subject to the
payment reduction under
subsection (b)(3)(B)(viii)(I)
for such fiscal year;
(II) for which, during the
performance period for such
fiscal year, the Secretary has
cited deficiencies that pose
immediate jeopardy to the
health or safety of patients;
(III) for which there are not
a minimum number (as determined
by the Secretary) of measures
that apply to the hospital for
the performance period for such
fiscal year; or
(IV) for which there are not
a minimum number (as determined
by the Secretary) of cases for
the measures that apply to the
hospital for the performance
period for such fiscal year.
(iii) Independent analysis.--For
purposes of determining the minimum
numbers under subclauses (III) and (IV)
of clause (ii), the Secretary shall
have conducted an independent analysis
of what numbers are appropriate.
(iv) Exemption.--In the case of a
hospital that is paid under section
1814(b)(3), the Secretary may exempt
such hospital from the application of
this subsection if the State which is
paid under such section submits an
annual report to the Secretary
describing how a similar program in the
State for a participating hospital or
hospitals achieves or surpasses the
measured results in terms of patient
health outcomes and cost savings
established under this subsection.
(2) Measures.--
(A) In general.--The Secretary shall select
measures, other than measures of readmissions,
for purposes of the Program. Such measures
shall be selected from the measures specified
under subsection (b)(3)(B)(viii).
(B) Requirements.--
(i) For fiscal year 2013.--For value-
based incentive payments made with
respect to discharges occurring during
fiscal year 2013, the Secretary shall
ensure the following:
(I) Conditions or
procedures.--Measures are
selected under subparagraph (A)
that cover at least the
following 5 specific conditions
or procedures:
(aa) Acute myocardial
infarction (AMI).
(bb) Heart failure.
(cc) Pneumonia.
(dd) Surgeries, as
measured by the
Surgical Care
Improvement Project
(formerly referred to
as ``Surgical Infection
Prevention'' for
discharges occurring
before July 2006).
(ee) Healthcare-
associated infections,
as measured by the
prevention metrics and
targets established in
the HHS Action Plan to
Prevent Healthcare-
Associated Infections
(or any successor plan)
of the Department of
Health and Human
Services.
(II) HCAHPS.--Measures
selected under subparagraph (A)
shall be related to the
Hospital Consumer Assessment of
Healthcare Providers and
Systems survey (HCAHPS).
(ii) Inclusion of efficiency
measures.--For value-based incentive
payments made with respect to
discharges occurring during fiscal year
2014 or a subsequent fiscal year, the
Secretary shall ensure that measures
selected under subparagraph (A) include
efficiency measures, including measures
of ``Medicare spending per
beneficiary''. Such measures shall be
adjusted for factors such as age, sex,
race, severity of illness, and other
factors that the Secretary determines
appropriate.
(C) Limitations.--
(i) Time requirement for prior
reporting and notice.--The Secretary
may not select a measure under
subparagraph (A) for use under the
Program with respect to a performance
period for a fiscal year (as
established under paragraph (4)) unless
such measure has been specified under
subsection (b)(3)(B)(viii) and included
on the Hospital Compare Internet
website for at least 1 year prior to
the beginning of such performance
period.
(ii) Measure not applicable unless
hospital furnishes services appropriate
to the measure.--A measure selected
under subparagraph (A) shall not apply
to a hospital if such hospital does not
furnish services appropriate to such
measure.
(D) Replacing measures.--Subclause (VI) of
subsection (b)(3)(B)(viii) shall apply to
measures selected under subparagraph (A) in the
same manner as such subclause applies to
measures selected under such subsection.
(3) Performance standards.--
(A) Establishment.--The Secretary shall
establish performance standards with respect to
measures selected under paragraph (2) for a
performance period for a fiscal year (as
established under paragraph (4)).
(B) Achievement and improvement.--The
performance standards established under
subparagraph (A) shall include levels of
achievement and improvement.
(C) Timing.--The Secretary shall establish
and announce the performance standards under
subparagraph (A) not later than 60 days prior
to the beginning of the performance period for
the fiscal year involved.
(D) Considerations in establishing
standards.--In establishing performance
standards with respect to measures under this
paragraph, the Secretary shall take into
account appropriate factors, such as--
(i) practical experience with the
measures involved, including whether a
significant proportion of hospitals
failed to meet the performance standard
during previous performance periods;
(ii) historical performance
standards;
(iii) improvement rates; and
(iv) the opportunity for continued
improvement.
(4) Performance period.--For purposes of the Program,
the Secretary shall establish the performance period
for a fiscal year. Such performance period shall begin
and end prior to the beginning of such fiscal year.
(5) Hospital performance score.--
(A) In general.--Subject to subparagraph (B),
the Secretary shall develop a methodology for
assessing the total performance of each
hospital based on performance standards with
respect to the measures selected under
paragraph (2) for a performance period (as
established under paragraph (4)). Using such
methodology, the Secretary shall provide for an
assessment (in this subsection referred to as
the ``hospital performance score'') for each
hospital for each performance period.
(B) Application.--
(i) Appropriate distribution.--The
Secretary shall ensure that the
application of the methodology
developed under subparagraph (A)
results in an appropriate distribution
of value-based incentive payments under
paragraph (6) among hospitals achieving
different levels of hospital
performance scores, with hospitals
achieving the highest hospital
performance scores receiving the
largest value-based incentive payments.
(ii) Higher of achievement or
improvement.--The methodology developed
under subparagraph (A) shall provide
that the hospital performance score is
determined using the higher of its
achievement or improvement score for
each measure.
(iii) Weights.--The methodology
developed under subparagraph (A) shall
provide for the assignment of weights
for categories of measures as the
Secretary determines appropriate.
(iv) No minimum performance
standard.--The Secretary shall not set
a minimum performance standard in
determining the hospital performance
score for any hospital.
(v) Reflection of measures applicable
to the hospital.--The hospital
performance score for a hospital shall
reflect the measures that apply to the
hospital.
(6) Calculation of value-based incentive payments.--
(A) In general.--In the case of a hospital
that the Secretary determines meets (or
exceeds) the performance standards under
paragraph (3) for the performance period for a
fiscal year (as established under paragraph
(4)), the Secretary shall increase the base
operating DRG payment amount (as defined in
paragraph (7)(D)), as determined after
application of paragraph (7)(B)(i), for a
hospital for each discharge occurring in such
fiscal year by the value-based incentive
payment amount.
(B) Value-based incentive payment amount.--
The value-based incentive payment amount for
each discharge of a hospital in a fiscal year
shall be equal to the product of--
(i) the base operating DRG payment
amount (as defined in paragraph (7)(D))
for the discharge for the hospital for
such fiscal year; and
(ii) the value-based incentive
payment percentage specified under
subparagraph (C) for the hospital for
such fiscal year.
(C) Value-based incentive payment
percentage.--
(i) In general.--The Secretary shall
specify a value-based incentive payment
percentage for a hospital for a fiscal
year.
(ii) Requirements.--In specifying the
value-based incentive payment
percentage for each hospital for a
fiscal year under clause (i), the
Secretary shall ensure that--
(I) such percentage is based
on the hospital performance
score of the hospital under
paragraph (5); and
(II) the total amount of
value-based incentive payments
under this paragraph to all
hospitals in such fiscal year
is equal to the total amount
available for value-based
incentive payments for such
fiscal year under paragraph
(7)(A), as estimated by the
Secretary.
(7) Funding for value-based incentive payments.--
(A) Amount.--The total amount available for
value-based incentive payments under paragraph
(6) for all hospitals for a fiscal year shall
be equal to the total amount of reduced
payments for all hospitals under subparagraph
(B) for such fiscal year, as estimated by the
Secretary.
(B) Adjustment to payments.--
(i) In general.--The Secretary shall
reduce the base operating DRG payment
amount (as defined in subparagraph (D))
for a hospital for each discharge in a
fiscal year (beginning with fiscal year
2013) by an amount equal to the
applicable percent (as defined in
subparagraph (C)) of the base operating
DRG payment amount for the discharge
for the hospital for such fiscal year.
The Secretary shall make such
reductions for all hospitals in the
fiscal year involved, regardless of
whether or not the hospital has been
determined by the Secretary to have
earned a value-based incentive payment
under paragraph (6) for such fiscal
year.
(ii) No effect on other payments.--
Payments described in items (aa) and
(bb) of subparagraph (D)(i)(II) for a
hospital shall be determined as if this
subsection had not been enacted.
(C) Applicable percent defined.--For purposes
of subparagraph (B), the term ``applicable
percent'' means--
(i) with respect to fiscal year 2013,
1.0 percent;
(ii) with respect to fiscal year
2014, 1.25 percent;
(iii) with respect to fiscal year
2015, 1.5 percent;
(iv) with respect to fiscal year
2016, 1.75 percent; and
(v) with respect to fiscal year 2017
and succeeding fiscal years, 2 percent.
(D) Base operating drg payment amount
defined.--
(i) In general.--Except as provided
in clause (ii), in this subsection, the
term ``base operating DRG payment
amount'' means, with respect to a
hospital for a fiscal year--
(I) the payment amount that
would otherwise be made under
subsection (d) (determined
without regard to subsection
(q)) for a discharge if this
subsection did not apply;
reduced by
(II) any portion of such
payment amount that is
attributable to--
(aa) payments under
paragraphs (5)(A),
(5)(B), (5)(F), and
(12) of subsection (d);
and
(bb) such other
payments under
subsection (d)
determined appropriate
by the Secretary.
(ii) Special rules for certain
hospitals.--
(I) Sole community hospitals
and medicare-dependent, small
rural hospitals.--In the case
of a medicare-dependent, small
rural hospital (with respect to
discharges occurring during
fiscal year 2012 and 2013) or a
sole community hospital, in
applying subparagraph (A)(i),
the payment amount that would
otherwise be made under
subsection (d) shall be
determined without regard to
subparagraphs (I) and (L) of
subsection (b)(3) and
subparagraphs (D) and (G) of
subsection (d)(5).
(II) Hospitals paid under
section 1814.--In the case of a
hospital that is paid under
section 1814(b)(3), the term
``base operating DRG payment
amount'' means the payment
amount under such section.
(8) Announcement of net result of adjustments.--Under
the Program, the Secretary shall, not later than 60
days prior to the fiscal year involved, inform each
hospital of the adjustments to payments to the hospital
for discharges occurring in such fiscal year under
paragraphs (6) and (7)(B)(i).
(9) No effect in subsequent fiscal years.--The value-
based incentive payment under paragraph (6) and the
payment reduction under paragraph (7)(B)(i) shall each
apply only with respect to the fiscal year involved,
and the Secretary shall not take into account such
value-based incentive payment or payment reduction in
making payments to a hospital under this section in a
subsequent fiscal year.
(10) Public reporting.--
(A) Hospital specific information.--
(i) In general.--The Secretary shall
make information available to the
public regarding the performance of
individual hospitals under the Program,
including--
(I) the performance of the
hospital with respect to each
measure that applies to the
hospital;
(II) the performance of the
hospital with respect to each
condition or procedure; and
(III) the hospital
performance score assessing the
total performance of the
hospital.
(ii) Opportunity to review and submit
corrections.--The Secretary shall
ensure that a hospital has the
opportunity to review, and submit
corrections for, the information to be
made public with respect to the
hospital under clause (i) prior to such
information being made public.
(iii) Website.--Such information
shall be posted on the Hospital Compare
Internet website in an easily
understandable format.
(B) Aggregate information.--The Secretary
shall periodically post on the Hospital Compare
Internet website aggregate information on the
Program, including--
(i) the number of hospitals receiving
value-based incentive payments under
paragraph (6) and the range and total
amount of such value-based incentive
payments; and
(ii) the number of hospitals
receiving less than the maximum value-
based incentive payment available to
the hospital for the fiscal year
involved and the range and amount of
such payments.
(11) Implementation.--
(A) Appeals.--The Secretary shall establish a
process by which hospitals may appeal the
calculation of a hospital's performance
assessment with respect to the performance
standards established under paragraph (3)(A)
and the hospital performance score under
paragraph (5). The Secretary shall ensure that
such process provides for resolution of such
appeals in a timely manner.
(B) Limitation on review.--Except as provided
in subparagraph (A), there shall be no
administrative or judicial review under section
1869, section 1878, or otherwise of the
following:
(i) The methodology used to determine
the amount of the value-based incentive
payment under paragraph (6) and the
determination of such amount.
(ii) The determination of the amount
of funding available for such value-
based incentive payments under
paragraph (7)(A) and the payment
reduction under paragraph (7)(B)(i).
(iii) The establishment of the
performance standards under paragraph
(3) and the performance period under
paragraph (4).
(iv) The measures specified under
subsection (b)(3)(B)(viii) and the
measures selected under paragraph (2).
(v) The methodology developed under
paragraph (5) that is used to calculate
hospital performance scores and the
calculation of such scores.
(vi) The validation methodology
specified in subsection
(b)(3)(B)(viii)(XI).
(C) Consultation with small hospitals.--The
Secretary shall consult with small rural and
urban hospitals on the application of the
Program to such hospitals.
(12) Promulgation of regulations.--The Secretary
shall promulgate regulations to carry out the Program,
including the selection of measures under paragraph
(2), the methodology developed under paragraph (5) that
is used to calculate hospital performance scores, and
the methodology used to determine the amount of value-
based incentive payments under paragraph (6).
(p) Adjustment to Hospital Payments for Hospital Acquired
Conditions.--
(1) In general.--In order to provide an incentive for
applicable hospitals to reduce hospital acquired
conditions under this title, with respect to discharges
from an applicable hospital occurring during fiscal
year 2015 or a subsequent fiscal year, the amount of
payment under this section or section 1814(b)(3), as
applicable, for such discharges during the fiscal year
shall be equal to 99 percent of the amount of payment
that would otherwise apply to such discharges under
this section or section 1814(b)(3) (determined after
the application of subsections (o) and (q) and section
1814(l)(4) but without regard to this subsection).
(2) Applicable hospitals.--
(A) In general.--For purposes of this
subsection, the term ``applicable hospital''
means a subsection (d) hospital that meets the
criteria described in subparagraph (B).
(B) Criteria described.--
(i) In general.--The criteria
described in this subparagraph, with
respect to a subsection (d) hospital,
is that the subsection (d) hospital is
in the top quartile of all subsection
(d) hospitals, relative to the national
average, of hospital acquired
conditions during the applicable
period, as determined by the Secretary.
(ii) Risk adjustment.--In carrying
out clause (i), the Secretary shall
establish and apply an appropriate risk
adjustment methodology.
(C) Exemption.--In the case of a hospital
that is paid under section 1814(b)(3), the
Secretary may exempt such hospital from the
application of this subsection if the State
which is paid under such section submits an
annual report to the Secretary describing how a
similar program in the State for a
participating hospital or hospitals achieves or
surpasses the measured results in terms of
patient health outcomes and cost savings
established under this subsection.
(3) Hospital acquired conditions.--For purposes of
this subsection, the term ``hospital acquired
condition'' means a condition identified for purposes
of subsection (d)(4)(D)(iv) and any other condition
determined appropriate by the Secretary that an
individual acquires during a stay in an applicable
hospital, as determined by the Secretary.
(4) Applicable period.--In this subsection, the term
``applicable period'' means, with respect to a fiscal
year, a period specified by the Secretary.
(5) Reporting to hospitals.--Prior to fiscal year
2015 and each subsequent fiscal year, the Secretary
shall provide confidential reports to applicable
hospitals with respect to hospital acquired conditions
of the applicable hospital during the applicable
period.
(6) Reporting hospital specific information.--
(A) In general.--The Secretary shall make
information available to the public regarding
hospital acquired conditions of each applicable
hospital.
(B) Opportunity to review and submit
corrections.--The Secretary shall ensure that
an applicable hospital has the opportunity to
review, and submit corrections for, the
information to be made public with respect to
the hospital under subparagraph (A) prior to
such information being made public.
(C) Website.--Such information shall be
posted on the Hospital Compare Internet website
in an easily understandable format.
(7) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of the following:
(A) The criteria described in paragraph
(2)(A).
(B) The specification of hospital acquired
conditions under paragraph (3).
(C) The specification of the applicable
period under paragraph (4).
(D) The provision of reports to applicable
hospitals under paragraph (5) and the
information made available to the public under
paragraph (6).
(q) Hospital Readmissions Reduction Program.--
(1) In general.--With respect to payment for
discharges from an applicable hospital (as defined in
paragraph (5)(C)) occurring during a fiscal year
beginning on or after October 1, 2012, in order to
account for excess readmissions in the hospital, the
Secretary shall make payments (in addition to the
payments described in paragraph (2)(A)(ii)) for such a
discharge to such hospital under subsection (d) (or
section 1814(b)(3), as the case may be) in an amount
equal to the product of--
(A) the base operating DRG payment amount (as
defined in paragraph (2)) for the discharge;
and
(B) the adjustment factor (described in
paragraph (3)(A)) for the hospital for the
fiscal year.
(2) Base operating drg payment amount defined.--
(A) In general.--Except as provided in
subparagraph (B), in this subsection, the term
``base operating DRG payment amount'' means,
with respect to a hospital for a fiscal year--
(i) the payment amount that would
otherwise be made under subsection (d)
(determined without regard to
subsection (o)) for a discharge if this
subsection did not apply; reduced by
(ii) any portion of such payment
amount that is attributable to payments
under paragraphs (5)(A), (5)(B),
(5)(F), and (12) of subsection (d).
(B) Special rules for certain hospitals.--
(i) Sole community hospitals and
medicare-dependent, small rural
hospitals.--In the case of a medicare-
dependent, small rural hospital (with
respect to discharges occurring during
fiscal years 2012 and 2013) or a sole
community hospital, in applying
subparagraph (A)(i), the payment amount
that would otherwise be made under
subsection (d) shall be determined
without regard to subparagraphs (I) and
(L) of subsection (b)(3) and
subparagraphs (D) and (G) of subsection
(d)(5).
(ii) Hospitals paid under section
1814.--In the case of a hospital that
is paid under section 1814(b)(3), the
Secretary may exempt such hospitals
provided that States paid under such
section submit an annual report to the
Secretary describing how a similar
program in the State for a
participating hospital or hospitals
achieves or surpasses the measured
results in terms of patient health
outcomes and cost savings established
herein with respect to this section.
(3) Adjustment factor.--
(A) In general.--For purposes of paragraph
(1), the adjustment factor under this paragraph
for an applicable hospital for a fiscal year is
equal to the greater of--
(i) the ratio described in
subparagraph (B) for the hospital for
the applicable period (as defined in
paragraph (5)(D)) for such fiscal year;
or
(ii) the floor adjustment factor
specified in subparagraph (C).
(B) Ratio.--The ratio described in this
subparagraph for a hospital for an applicable
period is equal to 1 minus the ratio of--
(i) the aggregate payments for excess
readmissions (as defined in paragraph
(4)(A)) with respect to an applicable
hospital for the applicable period; and
(ii) the aggregate payments for all
discharges (as defined in paragraph
(4)(B)) with respect to such applicable
hospital for such applicable period.
(C) Floor adjustment factor.--For purposes of
subparagraph (A), the floor adjustment factor
specified in this subparagraph for--
(i) fiscal year 2013 is 0.99;
(ii) fiscal year 2014 is 0.98; or
(iii) fiscal year 2015 and subsequent
fiscal years is 0.97.
(4) Aggregate payments, excess readmission ratio
defined.--For purposes of this subsection:
(A) Aggregate payments for excess
readmissions.--The term ``aggregate payments
for excess readmissions'' means, for a hospital
for an applicable period, the sum, for
applicable conditions (as defined in paragraph
(5)(A)), of the product, for each applicable
condition, of--
(i) the base operating DRG payment
amount for such hospital for such
applicable period for such condition;
(ii) the number of admissions for
such condition for such hospital for
such applicable period; and
(iii) the excess readmissions ratio
(as defined in subparagraph (C)) for
such hospital for such applicable
period minus 1.
(B) Aggregate payments for all discharges.--
The term ``aggregate payments for all
discharges'' means, for a hospital for an
applicable period, the sum of the base
operating DRG payment amounts for all
discharges for all conditions from such
hospital for such applicable period.
(C) Excess readmission ratio.--
(i) In general.--Subject to clause
(ii), the term ``excess readmissions
ratio'' means, with respect to an
applicable condition for a hospital for
an applicable period, the ratio (but
not less than 1.0) of--
(I) the risk adjusted
readmissions based on actual
readmissions, as determined
consistent with a readmission
measure methodology that has
been endorsed under paragraph
(5)(A)(ii)(I), for an
applicable hospital for such
condition with respect to such
applicable period; to
(II) the risk adjusted
expected readmissions (as
determined consistent with such
a methodology) for such
hospital for such condition
with respect to such applicable
period.
(ii) Exclusion of certain
readmissions.--For purposes of clause
(i), with respect to a hospital, excess
readmissions shall not include
readmissions for an applicable
condition for which there are fewer
than a minimum number (as determined by
the Secretary) of discharges for such
applicable condition for the applicable
period and such hospital.
(5) Definitions.--For purposes of this subsection:
(A) Applicable condition.--The term
``applicable condition'' means, subject to
subparagraph (B), a condition or procedure
selected by the Secretary among conditions and
procedures for which--
(i) readmissions (as defined in
subparagraph (E)) that represent
conditions or procedures that are high
volume or high expenditures under this
title (or other criteria specified by
the Secretary); and
(ii) measures of such readmissions--
(I) have been endorsed by the
entity with a contract under
section 1890(a); and
(II) such endorsed measures
have exclusions for
readmissions that are unrelated
to the prior discharge (such as
a planned readmission or
transfer to another applicable
hospital).
(B) Expansion of applicable conditions.--
Beginning with fiscal year 2015, the Secretary
shall, to the extent practicable, expand the
applicable conditions beyond the 3 conditions
for which measures have been endorsed as
described in subparagraph (A)(ii)(I) as of the
date of the enactment of this subsection to the
additional 4 conditions that have been
identified by the Medicare Payment Advisory
Commission in its report to Congress in June
2007 and to other conditions and procedures as
determined appropriate by the Secretary. In
expanding such applicable conditions, the
Secretary shall seek the endorsement described
in subparagraph (A)(ii)(I) but may apply such
measures without such an endorsement in the
case of a specified area or medical topic
determined appropriate by the Secretary for
which a feasible and practical measure has not
been endorsed by the entity with a contract
under section 1890(a) as long as due
consideration is given to measures that have
been endorsed or adopted by a consensus
organization identified by the Secretary.
(C) Applicable hospital.--The term
``applicable hospital'' means a subsection (d)
hospital or a hospital that is paid under
section 1814(b)(3), as the case may be.
(D) Applicable period.--The term ``applicable
period'' means, with respect to a fiscal year,
such period as the Secretary shall specify.
(E) Readmission.--The term ``readmission''
means, in the case of an individual who is
discharged from an applicable hospital, the
admission of the individual to the same or
another applicable hospital within a time
period specified by the Secretary from the date
of such discharge. Insofar as the discharge
relates to an applicable condition for which
there is an endorsed measure described in
subparagraph (A)(ii)(I), such time period (such
as 30 days) shall be consistent with the time
period specified for such measure.
(6) Reporting hospital specific information.--
(A) In general.--The Secretary shall make
information available to the public regarding
readmission rates of each subsection (d)
hospital under the program.
(B) Opportunity to review and submit
corrections.--The Secretary shall ensure that a
subsection (d) hospital has the opportunity to
review, and submit corrections for, the
information to be made public with respect to
the hospital under subparagraph (A) prior to
such information being made public.
(C) Website.--Such information shall be
posted on the Hospital Compare Internet website
in an easily understandable format.
(7) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of the following:
(A) The determination of base operating DRG
payment amounts.
(B) The methodology for determining the
adjustment factor under paragraph (3),
including excess readmissions ratio under
paragraph (4)(C), aggregate payments for excess
readmissions under paragraph (4)(A), and
aggregate payments for all discharges under
paragraph (4)(B), and applicable periods and
applicable conditions under paragraph (5).
(C) The measures of readmissions as described
in paragraph (5)(A)(ii).
(8) Readmission rates for all patients.--
(A) Calculation of readmission.--The
Secretary shall calculate readmission rates for
all patients (as defined in subparagraph (D))
for a specified hospital (as defined in
subparagraph (D)(ii)) for an applicable
condition (as defined in paragraph (5)(B)) and
other conditions deemed appropriate by the
Secretary for an applicable period (as defined
in paragraph (5)(D)) in the same manner as used
to calculate such readmission rates for
hospitals with respect to this title and posted
on the CMS Hospital Compare website.
(B) Posting of hospital specific all patient
readmission rates.--The Secretary shall make
information on all patient readmission rates
calculated under subparagraph (A) available on
the CMS Hospital Compare website in a form and
manner determined appropriate by the Secretary.
The Secretary may also make other information
determined appropriate by the Secretary
available on such website.
(C) Hospital submission of all patient
data.--
(i) Except as provided for in clause
(ii), each specified hospital (as
defined in subparagraph (D)(ii)) shall
submit to the Secretary, in a form,
manner and time specified by the
Secretary, data and information
determined necessary by the Secretary
for the Secretary to calculate the all
patient readmission rates described in
subparagraph (A).
(ii) Instead of a specified hospital
submitting to the Secretary the data
and information described in clause
(i), such data and information may be
submitted to the Secretary, on behalf
of such a specified hospital, by a
state or an entity determined
appropriate by the Secretary.
(D) Definitions.--For purposes of this
paragraph:
(i) The term ``all patients'' means
patients who are treated on an
inpatient basis and discharged from a
specified hospital (as defined in
clause (ii)).
(ii) The term ``specified hospital''
means a subsection (d) hospital,
hospitals described in clauses (i)
through (v) of subsection (d)(1)(B)
and, as determined feasible and
appropriate by the Secretary, other
hospitals not otherwise described in
this subparagraph.
(r) Adjustments to Medicare DSH Payments.--
(1) Empirically justified dsh payments.--For fiscal
year 2014 and each subsequent fiscal year, instead of
the amount of disproportionate share hospital payment
that would otherwise be made under subsection (d)(5)(F)
to a subsection (d) hospital for the fiscal year, the
Secretary shall pay to the subsection (d) hospital 25
percent of such amount (which represents the
empirically justified amount for such payment, as
determined by the Medicare Payment Advisory Commission
in its March 2007 Report to the Congress).
(2) Additional payment.--In addition to the payment
made to a subsection (d) hospital under paragraph (1),
for fiscal year 2014 and each subsequent fiscal year,
the Secretary shall pay to such subsection (d)
hospitals an additional amount equal to the product of
the following factors:
(A) Factor one.--A factor equal to the
difference between--
(i) the aggregate amount of payments
that would be made to subsection (d)
hospitals under subsection (d)(5)(F) if
this subsection did not apply for such
fiscal year (as estimated by the
Secretary); and
(ii) the aggregate amount of payments
that are made to subsection (d)
hospitals under paragraph (1) for such
fiscal year (as so estimated).
(B) Factor two.--
(i) Fiscal years 2014, 2015, 2016,
and 2017.--For each of fiscal years
2014, 2015, 2016, and 2017, a factor
equal to 1 minus the percent change in
the percent of individuals under the
age of 65 who are uninsured, as
determined by comparing the percent of
such individuals--
(I) who are uninsured in
2013, the last year before
coverage expansion under the
Patient Protection and
Affordable Care Act (as
calculated by the Secretary
based on the most recent
estimates available from the
Director of the Congressional
Budget Office before a vote in
either House on the Health Care
and Education Reconciliation
Act of 2010 that, if determined
in the affirmative, would clear
such Act for enrollment); and
(II) who are uninsured in the
most recent period for which
data is available (as so
calculated),
minus 0.1 percentage points for fiscal
year 2014 and minus 0.2 percentage
points for each of fiscal years 2015,
2016, and 2017.
(ii) 2018 and subsequent years.--For
fiscal year 2018 and each subsequent
fiscal year, a factor equal to 1 minus
the percent change in the percent of
individuals who are uninsured, as
determined by comparing the percent of
individuals--
(I) who are uninsured in 2013
(as estimated by the Secretary,
based on data from the Census
Bureau or other sources the
Secretary determines
appropriate, and certified by
the Chief Actuary of the
Centers for Medicare & Medicaid
Services); and
(II) who are uninsured in the
most recent period for which
data is available (as so
estimated and certified),
minus 0.2 percentage points for each of
fiscal years 2018 and 2019.
(C) Factor three.--A factor equal to the
percent, for each subsection (d) hospital, that
represents the quotient of--
(i) the amount of uncompensated care
for such hospital for a period selected
by the Secretary (as estimated by the
Secretary, based on appropriate data
(including, in the case where the
Secretary determines that alternative
data is available which is a better
proxy for the costs of subsection (d)
hospitals for treating the uninsured,
the use of such alternative data)); and
(ii) the aggregate amount of
uncompensated care for all subsection
(d) hospitals that receive a payment
under this subsection for such period
(as so estimated, based on such data).
(3) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of the following:
(A) Any estimate of the Secretary for
purposes of determining the factors described
in paragraph (2).
(B) Any period selected by the Secretary for
such purposes.
(s) Prospective Payment for Psychiatric Hospitals.--
(1) Reference to establishment and implementation of
system.--For provisions related to the establishment
and implementation of a prospective payment system for
payments under this title for inpatient hospital
services furnished by psychiatric hospitals (as
described in clause (i) of subsection (d)(1)(B)) and
psychiatric units (as described in the matter following
clause (v) of such subsection), see section 124 of the
Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999.
(2) Implementation for rate year beginning in 2010
and subsequent rate years.--
(A) In general.--In implementing the system
described in paragraph (1) for the rate year
beginning in 2010 and any subsequent rate year,
any update to a base rate for days during the
rate year for a psychiatric hospital or unit,
respectively, shall be reduced--
(i) for the rate year beginning in
2012 and each subsequent rate year, by
the productivity adjustment described
in section 1886(b)(3)(B)(xi)(II); and
(ii) for each of the rate years
beginning in 2010 through 2019, by the
other adjustment described in paragraph
(3).
(B) Special rule.--The application of this
paragraph may result in such update being less
than 0.0 for a rate year, and may result in
payment rates under the system described in
paragraph (1) for a rate year being less than
such payment rates for the preceding rate year.
(3) Other adjustment.--For purposes of paragraph
(2)(A)(ii), the other adjustment described in this
paragraph is--
(A) for each of the rate years beginning in
2010 and 2011, 0.25 percentage point;
(B) for each of the rate years beginning in
2012 and 2013, 0.1 percentage point;
(C) for the rate year beginning in 2014, 0.3
percentage point;
(D) for each of the rate years beginning in
2015 and 2016, 0.2 percentage point; and
(E) for each of the rate years beginning in
2017, 2018, and 2019, 0.75 percentage point.
(4) Quality reporting.--
(A) Reduction in update for failure to
report.--
(i) In general.--Under the system
described in paragraph (1), for rate
year 2014 and each subsequent rate
year, in the case of a psychiatric
hospital or psychiatric unit that does
not submit data to the Secretary in
accordance with subparagraph (C) with
respect to such a rate year, any annual
update to a standard Federal rate for
discharges for the hospital during the
rate year, and after application of
paragraph (2), shall be reduced by 2
percentage points.
(ii) Special rule.--The application
of this subparagraph may result in such
annual update being less than 0.0 for a
rate year, and may result in payment
rates under the system described in
paragraph (1) for a rate year being
less than such payment rates for the
preceding rate year.
(B) Noncumulative application.--Any reduction
under subparagraph (A) shall apply only with
respect to the rate year involved and the
Secretary shall not take into account such
reduction in computing the payment amount under
the system described in paragraph (1) for a
subsequent rate year.
(C) Submission of quality data.--For rate
year 2014 and each subsequent rate year, each
psychiatric hospital and psychiatric unit shall
submit to the Secretary data on quality
measures specified under subparagraph (D). Such
data shall be submitted in a form and manner,
and at a time, specified by the Secretary for
purposes of this subparagraph.
(D) Quality measures.--
(i) In general.--Subject to clause
(ii), any measure specified by the
Secretary under this subparagraph must
have been endorsed by the entity with a
contract under section 1890(a).
(ii) Exception.--In the case of a
specified area or medical topic
determined appropriate by the Secretary
for which a feasible and practical
measure has not been endorsed by the
entity with a contract under section
1890(a), the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary.
(iii) Time frame.--Not later than
October 1, 2012, the Secretary shall
publish the measures selected under
this subparagraph that will be
applicable with respect to rate year
2014.
(E) Public availability of data submitted.--
The Secretary shall establish procedures for
making data submitted under subparagraph (C)
available to the public. Such procedures shall
ensure that a psychiatric hospital and a
psychiatric unit has the opportunity to review
the data that is to be made public with respect
to the hospital or unit prior to such data
being made public. The Secretary shall report
quality measures that relate to services
furnished in inpatient settings in psychiatric
hospitals and psychiatric units on the Internet
website of the Centers for Medicare & Medicaid
Services.
* * * * * * *
SEC. 1899B. STANDARDIZED POST-ACUTE CARE (PAC) ASSESSMENT DATA FOR
QUALITY, PAYMENT, AND DISCHARGE PLANNING.
(a) Requirement for Standardized Assessment Data.--
(1) In general.--The Secretary shall--
(A) require under the applicable reporting
provisions post-acute care providers (as
defined in paragraph (2)(A)) to report--
(i) standardized patient assessment
data in accordance with subsection (b);
(ii) data on quality measures under
subsection (c)(1); and
(iii) data on resource use and other
measures under subsection (d)(1);
(B) require data described in subparagraph
(A) to be standardized and interoperable so as
to allow for the exchange of such data among
such post-acute care providers and other
providers and the use by such providers of such
data that has been so exchanged, including by
using common standards and definitions, in
order to provide access to longitudinal
information for such providers to facilitate
coordinated care and improved Medicare
beneficiary outcomes; and
(C) in accordance with subsections (b)(1) and
(c)(2), modify PAC assessment instruments (as
defined in paragraph (2)(B)) applicable to
post-acute care providers to--
(i) provide for the submission of
standardized patient assessment data
under this title with respect to such
providers; and
(ii) enable comparison of such
assessment data across all such
providers to whom such data are
applicable.
(2) Definitions.--For purposes of this section:
(A) Post-acute care (pac) provider.--The
terms ``post-acute care provider'' and ``PAC
provider'' mean--
(i) a home health agency;
(ii) a skilled nursing facility;
(iii) an inpatient rehabilitation
facility; and
(iv) a long-term care hospital (other
than a hospital classified under
section [1886(d)(1)(B)(iv)(II)]
1886(d)(1)(B)(vi)).
(B) PAC assessment instrument.--The term
``PAC assessment instrument'' means--
(i) in the case of home health
agencies, the instrument used for
purposes of reporting and assessment
with respect to the Outcome and
Assessment Information Set (OASIS), as
described in sections 484.55 and
484.250 of title 42, the Code of
Federal Regulations, or any successor
regulation, or any other instrument
used with respect to home health
agencies for such purposes;
(ii) in the case of skilled nursing
facilities, the resident's assessment
under section 1819(b)(3);
(iii) in the case of inpatient
rehabilitation facilities, any Medicare
beneficiary assessment instrument
established by the Secretary for
purposes of section 1886(j); and
(iv) in the case of long-term care
hospitals, the Medicare beneficiary
assessment instrument used with respect
to such hospitals for the collection of
data elements necessary to calculate
quality measures as described in the
August 18, 2011, Federal Register (76
Fed. Reg. 51754-51755), including for
purposes of section 1886(m)(5)(C), or
any other instrument used with respect
to such hospitals for assessment
purposes.
(C) Applicable reporting provision.--The term
``applicable reporting provision'' means--
(i) for home health agencies, section
1895(b)(3)(B)(v);
(ii) for skilled nursing facilities,
section 1888(e)(6);
(iii) for inpatient rehabilitation
facilities, section 1886(j)(7); and
(iv) for long-term care hospitals,
section 1886(m)(5).
(D) PAC payment system.--The term ``PAC
payment system'' means--
(i) with respect to a home health
agency, the prospective payment system
under section 1895;
(ii) with respect to a skilled
nursing facility, the prospective
payment system under section 1888(e);
(iii) with respect to an inpatient
rehabilitation facility, the
prospective payment system under
section 1886(j); and
(iv) with respect to a long-term care
hospital, the prospective payment
system under section 1886(m).
(E) Specified application date.--The term
``specified application date'' means the
following:
(i) Quality measures.--In the case of
quality measures under subsection
(c)(1)--
(I) with respect to the
domain described in subsection
(c)(1)(A) (relating to
functional status, cognitive
function, and changes in
function and cognitive
function)--
(aa) for PAC
providers described in
clauses (ii) and (iii)
of paragraph (2)(A),
October 1, 2016;
(bb) for PAC
providers described in
clause (iv) of such
paragraph, October 1,
2018; and
(cc) for PAC
providers described in
clause (i) of such
paragraph, January 1,
2019;
(II) with respect to the
domain described in subsection
(c)(1)(B) (relating to skin
integrity and changes in skin
integrity)--
(aa) for PAC
providers described in
clauses (ii), (iii),
and (iv) of paragraph
(2)(A), October 1,
2016; and
(bb) for PAC
providers described in
clause (i) of such
paragraph, January 1,
2017;
(III) with respect to the
domain described in subsection
(c)(1)(C) (relating to
medication reconciliation)--
(aa) for PAC
providers described in
clause (i) of such
paragraph, January 1,
2017; and
(bb) for PAC
providers described in
clauses (ii), (iii),
and (iv) of such
paragraph, October 1,
2018;
(IV) with respect to the
domain described in subsection
(c)(1)(D) (relating to
incidence of major falls)--
(aa) for PAC
providers described in
clauses (ii), (iii),
and (iv) of paragraph
(2)(A), October 1,
2016; and
(bb) for PAC
providers described in
clause (i) of such
paragraph, January 1,
2019; and
(V) with respect to the
domain described in subsection
(c)(1)(E) (relating to
accurately communicating the
existence of and providing for
the transfer of health
information and care
preferences)--
(aa) for PAC
providers described in
clauses (ii), (iii),
and (iv) of paragraph
(2)(A), October 1,
2018; and
(bb) for PAC
providers described in
clause (i) of such
paragraph, January 1,
2019.
(ii) Resource use and other
measures.--In the case of resource use
and other measures under subsection
(d)(1)--
(I) for PAC providers
described in clauses (ii),
(iii), and (iv) of paragraph
(2)(A), October 1, 2016; and
(II) for PAC providers
described in clause (i) of such
paragraph, January 1, 2017.
(F) Medicare beneficiary.--The term
``Medicare beneficiary'' means an individual
entitled to benefits under part A or, as
appropriate, enrolled for benefits under part
B.
(b) Standardized Patient Assessment Data.--
(1) Requirement for reporting assessment data.--
(A) In general.--Beginning not later than
October 1, 2018, for PAC providers described in
clauses (ii), (iii), and (iv) of subsection
(a)(2)(A) and January 1, 2019, for PAC
providers described in clause (i) of such
subsection, the Secretary shall require PAC
providers to submit to the Secretary, under the
applicable reporting provisions and through the
use of PAC assessment instruments, the
standardized patient assessment data described
in subparagraph (B). The Secretary shall
require such data be submitted with respect to
admission and discharge of an individual (and
may be submitted more frequently as the
Secretary deems appropriate).
(B) Standardized patient assessment data
described.--For purposes of subparagraph (A),
the standardized patient assessment data
described in this subparagraph is data required
for at least the quality measures described in
subsection (c)(1) and that is with respect to
the following categories:
(i) Functional status, such as
mobility and self care at admission to
a PAC provider and before discharge
from a PAC provider.
(ii) Cognitive function, such as
ability to express ideas and to
understand, and mental status, such as
depression and dementia.
(iii) Special services, treatments,
and interventions, such as need for
ventilator use, dialysis, chemotherapy,
central line placement, and total
parenteral nutrition.
(iv) Medical conditions and co-
morbidities, such as diabetes,
congestive heart failure, and pressure
ulcers.
(v) Impairments, such as incontinence
and an impaired ability to hear, see,
or swallow.
(vi) Other categories deemed
necessary and appropriate by the
Secretary.
(2) Alignment of claims data with standardized
patient assessment data.--To the extent practicable,
not later than October 1, 2018, for PAC providers
described in clauses (ii), (iii), and (iv) of
subsection (a)(2)(A), and January 1, 2019, for PAC
providers described in clause (i) of such subsection,
the Secretary shall match claims data with assessment
data pursuant to this section for purposes of assessing
prior service use and concurrent service use, such as
antecedent hospital or PAC provider use, and may use
such matched data for such other uses as the Secretary
determines appropriate.
(3) Replacement of certain existing data.--In the
case of patient assessment data being used with respect
to a PAC assessment instrument that duplicates or
overlaps with standardized patient assessment data
within a category described in paragraph (1), the
Secretary shall, as soon as practicable, revise or
replace such existing data with the standardized data.
(4) Clarification.--Standardized patient assessment
data submitted pursuant to this subsection shall not be
used to require individuals to be provided post-acute
care by a specific type of PAC provider in order for
such care to be eligible for payment under this title.
(c) Quality Measures.--
(1) Requirement for reporting quality measures.--Not
later than the specified application date, as
applicable to measures and PAC providers, the Secretary
shall specify quality measures on which PAC providers
are required under the applicable reporting provisions
to submit standardized patient assessment data
described in subsection (b)(1) and other necessary data
specified by the Secretary. Such measures shall be with
respect to at least the following domains:
(A) Functional status, cognitive function,
and changes in function and cognitive function.
(B) Skin integrity and changes in skin
integrity.
(C) Medication reconciliation.
(D) Incidence of major falls.
(E) Accurately communicating the existence of
and providing for the transfer of health
information and care preferences of an
individual to the individual, family caregiver
of the individual, and providers of services
furnishing items and services to the
individual, when the individual transitions--
(i) from a hospital or critical
access hospital to another applicable
setting, including a PAC provider or
the home of the individual; or
(ii) from a PAC provider to another
applicable setting, including a
different PAC provider, a hospital, a
critical access hospital, or the home
of the individual.
(2) Reporting through pac assessment instruments.--
(A) In general.--To the extent possible, the
Secretary shall require such reporting by a PAC
provider of quality measures under paragraph
(1) through the use of a PAC assessment
instrument and shall modify such PAC assessment
instrument as necessary to enable the use of
such instrument with respect to such quality
measures.
(B) Limitation.--The Secretary may not make
significant modifications to a PAC assessment
instrument more than once per calendar year or
fiscal year, as applicable, unless the
Secretary publishes in the Federal Register a
justification for such significant
modification.
(3) Adjustments.--
(A) In general.--The Secretary shall consider
applying adjustments to the quality measures
under this subsection taking into consideration
the studies under section 2(d) of the IMPACT
Act of 2014.
(B) Risk adjustment.--Such quality measures
shall be risk adjusted, as determined
appropriate by the Secretary.
(d) Resource Use and Other Measures.--
(1) Requirement for resource use and other
measures.--Not later than the specified application
date, as applicable to measures and PAC providers, the
Secretary shall specify resource use and other measures
on which PAC providers are required under the
applicable reporting provisions to submit any necessary
data specified by the Secretary, which may include
standardized assessment data in addition to claims
data. Such measures shall be with respect to at least
the following domains:
(A) Resource use measures, including total
estimated Medicare spending per beneficiary.
(B) Discharge to community.
(C) Measures to reflect all-condition risk-
adjusted potentially preventable hospital
readmission rates.
(2) Aligning methodology adjustments for resource use
measures.--
(A) Period of time.--With respect to the
period of time used for calculating measures
under paragraph (1)(A), the Secretary shall, to
the extent the Secretary determines
appropriate, align resource use with the
methodology used for purposes of section
1886(o)(2)(B)(ii).
(B) Geographic and other adjustments.--The
Secretary shall standardize measures with
respect to the domain described in paragraph
(1)(A) for geographic payment rate differences
and payment differentials (and other
adjustments, as applicable) consistent with the
methodology published in the Federal Register
on August 18, 2011 (76 Fed. Reg. 51624 through
51626), or any subsequent modifications made to
the methodology.
(C) Medicare spending per beneficiary.--The
Secretary shall adjust, as appropriate,
measures with respect to the domain described
in paragraph (1)(A) for the factors applied
under section 1886(o)(2)(B)(ii).
(3) Adjustments.--
(A) In general.--The Secretary shall consider
applying adjustments to the resource use and
other measures specified under this subsection
with respect to the domain described in
paragraph (1)(A), taking into consideration the
studies under section 2(d) of the IMPACT Act of
2014.
(B) Risk adjustment.--Such resource use and
other measures shall be risk adjusted, as
determined appropriate by the Secretary.
(e) Measurement Implementation Phases; Selection of Quality
Measures and Resource Use and Other Measures.--
(1) Measurement implementation phases.--In the case
of quality measures specified under subsection (c)(1)
and resource use and other measures specified under
subsection (d)(1), the provisions of this section shall
be implemented in accordance with the following phases:
(A) Initial implementation phase.--The
initial implementation phase, with respect to
such a measure, shall, in accordance with
subsections (c) and (d), as applicable, consist
of--
(i) measure specification, including
informing the public of the measure's
numerator, denominator, exclusions, and
any other aspects the Secretary
determines necessary;
(ii) data collection, including, in
the case of quality measures, requiring
PAC providers to report data elements
needed to calculate such a measure; and
(iii) data analysis, including, in
the case of resource use and other
measures, the use of claims data to
calculate such a measure.
(B) Second implementation phase.--The second
implementation phase, with respect to such a
measure, shall consist of the provision of
feedback reports to PAC providers, in
accordance with subsection (f).
(C) Third implementation phase.--The third
implementation phase, with respect to such a
measure, shall consist of public reporting of
PAC providers' performance on such measure in
accordance with subsection (g).
(2) Consensus-based entity.--
(A) In general.--Subject to subparagraph (B),
each measure specified by the Secretary under
this section shall be endorsed by the entity
with a contract under section 1890(a).
(B) Exception.--In the case of a specified
area or medical topic determined appropriate by
the Secretary for which a feasible and
practical measure has not been endorsed by the
entity with a contract under section 1890(a),
the Secretary may specify a measure that is not
so endorsed as long as due consideration is
given to measures that have been endorsed or
adopted by a consensus organization identified
by the Secretary.
(3) Treatment of application of pre-rulemaking
process (measure applications partnership process).--
(A) In general.--Subject to subparagraph (B),
the provisions of section 1890A shall apply in
the case of a quality measure specified under
subsection (c) or a resource use or other
measure specified under subsection (d).
(B) Exceptions.--
(i) Expedited procedures.--For
purposes of satisfying subparagraph
(A), the Secretary may use expedited
procedures, such as ad-hoc reviews, as
necessary, in the case of a quality
measure specified under subsection (c)
or a resource use or other measure
specified in subsection (d) required
with respect to data submissions under
the applicable reporting provisions
during the 1-year period before the
specified application date applicable
to such a measure and provider
involved.
(ii) Option to waive provisions.--The
Secretary may waive the application of
the provisions of section 1890A in the
case of a quality measure or resource
use or other measure described in
clause (i), if the application of such
provisions (including through the use
of an expedited procedure described in
such clause) would result in the
inability of the Secretary to satisfy
any deadline specified in this section
with respect to such measure.
(f) Feedback Reports to PAC Providers.--
(1) In general.--Beginning one year after the
specified application date, as applicable to PAC
providers and quality measures and resource use and
other measures under this section, the Secretary shall
provide confidential feedback reports to such PAC
providers on the performance of such providers with
respect to such measures required under the applicable
provisions.
(2) Frequency.--To the extent feasible, the Secretary
shall provide feedback reports described in paragraph
(1) not less frequently than on a quarterly basis.
Notwithstanding the previous sentence, with respect to
measures described in such paragraph that are reported
on an annual basis, the Secretary may provide such
feedback reports on an annual basis.
(g) Public Reporting of PAC Provider Performance.--
(1) In general.--Subject to the succeeding paragraphs
of this subsection, the Secretary shall provide for
public reporting of PAC provider performance on quality
measures under subsection (c)(1) and the resource use
and other measures under subsection (d)(1), including
by establishing procedures for making available to the
public information regarding the performance of
individual PAC providers with respect to such measures.
(2) Opportunity to review.--The procedures under
paragraph (1) shall ensure, including through a process
consistent with the process applied under section
1886(b)(3)(B)(viii)(VII) for similar purposes, that a
PAC provider has the opportunity to review and submit
corrections to the data and information that is to be
made public with respect to the provider prior to such
data being made public.
(3) Timing.--Such procedures shall provide that the
data and information described in paragraph (1), with
respect to a measure and PAC provider, is made publicly
available beginning not later than two years after the
specified application date applicable to such a measure
and provider.
(4) Coordination with existing programs.--Such
procedures shall provide that data and information
described in paragraph (1) with respect to quality
measures and resource use and other measures under
subsections (c)(1) and (d)(1) shall be made publicly
available consistent with the following provisions:
(A) In the case of home health agencies,
section 1895(b)(3)(B)(v)(III).
(B) In the case of skilled nursing
facilities, sections 1819(i) and 1919(i).
(C) In the case of inpatient rehabilitation
facilities, section 1886(j)(7)(E).
(D) In the case of long-term care hospitals,
section 1886(m)(5)(E).
(h) Removing, Suspending, or Adding Measures.--
(1) In general.--The Secretary may remove, suspend,
or add a quality measure or resource use or other
measure described in subsection (c)(1) or (d)(1), so
long as, subject to paragraph (2), the Secretary
publishes in the Federal Register (with a notice and
comment period) a justification for such removal,
suspension, or addition.
(2) Exception.--In the case of such a quality measure
or resource use or other measure for which there is a
reason to believe that the continued collection of such
measure raises potential safety concerns or would cause
other unintended consequences, the Secretary may
promptly suspend or remove such measure and satisfy
paragraph (1) by publishing in the Federal Register a
justification for such suspension or removal in the
next rulemaking cycle following such suspension or
removal.
(i) Use of Standardized Assessment Data, Quality Measures,
and Resource Use and Other Measures to Inform Discharge
Planning and Incorporate Patient Preference.--
(1) In general.--Not later than January 1, 2016, and
periodically thereafter (but not less frequently than
once every 5 years), the Secretary shall promulgate
regulations to modify conditions of participation and
subsequent interpretive guidance applicable to PAC
providers, hospitals, and critical access hospitals.
Such regulations and interpretive guidance shall
require such providers to take into account quality,
resource use, and other measures under the applicable
reporting provisions (which, as available, shall
include measures specified under subsections (c) and
(d), and other relevant measures) in the discharge
planning process. Specifically, such regulations and
interpretive guidance shall address the settings to
which a patient may be discharged in order to assist
subsection (d) hospitals, critical access hospitals,
hospitals described in section 1886(d)(1)(B)(v), PAC
providers, patients, and families of such patients with
discharge planning from inpatient settings, including
such hospitals, and from PAC provider settings. In
addition, such regulations and interpretive guidance
shall include procedures to address--
(A) treatment preferences of patients; and
(B) goals of care of patients.
(2) Discharge planning.--All requirements applied
pursuant to paragraph (1) shall be used to help inform
and mandate the discharge planning process.
(3) Clarification.--Such regulations shall not
require an individual to be provided post-acute care by
a specific type of PAC provider in order for such care
to be eligible for payment under this title.
(j) Stakeholder Input.--Before the initial rulemaking process
to implement this section, the Secretary shall allow for
stakeholder input, such as through town halls, open door
forums, and mail-box submissions.
(k) Funding.--For purposes of carrying out this section, the
Secretary shall provide for the transfer to the Centers for
Medicare & Medicaid Services Program Management Account, from
the Federal Hospital Insurance Trust Fund under section 1817
and the Federal Supplementary Medical Insurance Trust Fund
under section 1841, in such proportion as the Secretary
determines appropriate, of $130,000,000. Fifty percent of such
amount shall be available on the date of the enactment of this
section and fifty percent of such amount shall be equally
proportioned for each of fiscal years 2015 through 2019. Such
sums shall remain available until expended.
(l) Limitation.--There shall be no administrative or judicial
review under sections 1869 and 1878 or otherwise of the
specification of standardized patient assessment data required,
the determination of measures, and the systems to report such
standardized data under this section.
(m) Non-application of Paperwork Reduction Act.--Chapter 35
of title 44, United States Code (commonly referred to as the
``Paperwork Reduction Act of 1995'') shall not apply to this
section and the sections referenced in subsection (a)(2)(B)
that require modification in order to achieve the
standardization of patient assessment data.
TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS
* * * * * * *
STATE PLANS FOR MEDICAL ASSISTANCE
Sec. 1902. (a) A State plan for medical assistance must--
(1) provide that it shall be in effect in all
political subdivisions of the State, and, if
administered by them, be mandatory upon them;
(2) provide for financial participation by the State
equal to not less than 40 per centum of the non-Federal
share of the expenditures under the plan with respect
to which payments under section 1903 are authorized by
this title; and, effective July 1, 1969, provide for
financial participation by the State equal to all of
such non-Federal share or provide for distribution of
funds from Federal or State sources, for carrying out
the State plan, on an equalization or other basis which
will assure that the lack of adequate funds from local
sources will not result in lowering the amount,
duration, scope, or quality of care and services
available under the plan;
(3) provide for granting an opportunity for a fair
hearing before the State agency to any individual whose
claim for medical assistance under the plan is denied
or is not acted upon with reasonable promptness;
(4) provide (A) such methods of administration
(including methods relating to the establishment and
maintenance of personnel standards on a merit basis,
except that the Secretary shall exercise no authority
with respect to the selection, tenure of office, and
compensation of any individual employed in accordance
with such methods, and including provision for
utilization of professional medical personnel in the
administration and, where administered locally,
supervision of administration of the plan) as are found
by the Secretary to be necessary for the proper and
efficient operation of the plan, (B) for the training
and effective use of paid subprofessional staff, with
particular emphasis on the full-time or part-time
employment of recipients and other persons of low
income, as community service aides, in the
administration of the plan and for the use of nonpaid
or partially paid volunteers in a social service
volunteer program in providing services to applicants
and recipients and in assisting any advisory committees
established by the State agency, (C) that each State or
local officer, employee, or independent contractor who
is responsible for the expenditure of substantial
amounts of funds under the State plan, each individual
who formerly was such an officer, employee, or
contractor, and each partner of such an officer,
employee, or contractor shall be prohibited from
committing any act, in relation to any activity under
the plan, the commission of which, in connection with
any activity concerning the United States Government,
by an officer or employee of the United States
Government, an individual who was such an officer or
employee, or a partner of such an officer or employee
is prohibited by section 207 or 208 of title 18, United
States Code, and (D) that each State or local officer,
employee, or independent contractor who is responsible
for selecting, awarding, or otherwise obtaining items
and services under the State plan shall be subject to
safeguards against conflicts of interest that are at
least as stringent as the safeguards that apply under
section 27 of the Office of Federal Procurement Policy
Act (41 U.S.C. 423) to persons described in subsection
(a)(2) of such section of that Act;
(5) either provide for the establishment or
designation of a single State agency to administer or
to supervise the administration of the plan; or provide
for the establishment or designation of a single State
agency to administer or to supervise the administration
of the plan, except that the determination of
eligibility for medical assistance under the plan shall
be made by the State or local agency administering the
State plan approved under title I or XVI (insofar as it
relates to the aged) if the State is eligible to
participate in the State plan program established under
title XVI, or by the agency or agencies administering
the supplemental security income program established
under title XVI or the State plan approved under part A
of title IV if the State is not eligible to participate
in the State plan program established under title XVI;
(6) provide that the State agency will make such
reports, in such form and containing such information,
as the Secretary may from time to time require, and
comply with such provisions as the Secretary may from
time to time find necessary to assure the correctness
and verification of such reports;
(7) provide--
(A) safeguards which restrict the use or
disclosure of information concerning applicants
and recipients to purposes directly connected
with--
(i) the administration of the plan;
and
(ii) the exchange of information
necessary to certify or verify the
certification of eligibility of
children for free or reduced price
breakfasts under the Child Nutrition
Act of 1966 and free or reduced price
lunches under the Richard B. Russell
National School Lunch Act, in
accordance with section 9(b) of that
Act, using data standards and formats
established by the State agency; and
(B) that, notwithstanding the Express Lane
option under subsection (e)(13), the State may
enter into an agreement with the State agency
administering the school lunch program
established under the Richard B. Russell
National School Lunch Act under which the State
shall establish procedures to ensure that--
(i) a child receiving medical
assistance under the State plan under
this title whose family income does not
exceed 133 percent of the poverty line
(as defined in section 673(2) of the
Community Services Block Grant Act,
including any revision required by such
section), as determined without regard
to any expense, block, or other income
disregard, applicable to a family of
the size involved, may be certified as
eligible for free lunches under the
Richard B. Russell National School
Lunch Act and free breakfasts under the
Child Nutrition Act of 1966 without
further application; and
(ii) the State agencies responsible
for administering the State plan under
this title, and for carrying out the
school lunch program established under
the Richard B. Russell National School
Lunch Act (42 U.S.C. 1751 et seq.) or
the school breakfast program
established by section 4 of the Child
Nutrition Act of 1966 (42 U.S.C. 1773),
cooperate in carrying out paragraphs
(3)(F) and (15) of section 9(b) of that
Act;
(8) provide that all individuals wishing to make
application for medical assistance under the plan shall
have opportunity to do so, and that such assistance
shall be furnished with reasonable promptness to all
eligible individuals;
(9) provide--
(A) that the State health agency, or other
appropriate State medical agency (whichever is
utilized by the Secretary for the purpose
specified in the first sentence of section
1864(a)), shall be responsible for establishing
and maintaining health standards for private or
public institutions in which recipients of
medical assistance under the plan may receive
care or services,
(B) for the establishment or designation of a
State authority or authorities which shall be
responsible for establishing and maintaining
standards, other than those relating to health,
for such institutions,
(C) that any laboratory services paid for
under such plan must be provided by a
laboratory which meets the applicable
requirements of section 1861(e)(9) or
paragraphs (16) and (17) of section 1861(s),
or, in the case of a laboratory which is in a
rural health clinic, of section 1861(aa)(2)(G),
and
(D) that the State maintain a consumer-
oriented website providing useful information
to consumers regarding all skilled nursing
facilities and all nursing facilities in the
State, including for each facility, Form 2567
State inspection reports (or a successor form),
complaint investigation reports, the facility's
plan of correction, and such other information
that the State or the Secretary considers
useful in assisting the public to assess the
quality of long term care options and the
quality of care provided by individual
facilities;
(10) provide--
(A) for making medical assistance available,
including at least the care and services listed
in paragraphs (1) through (5), (17), (21), and
(28) of section 1905(a), to--
(i) all individuals--
(I) who are receiving aid or
assistance under any plan of
the State approved under title
I, X, XIV, or XVI, or part A or
part E of title IV (including
individuals eligible under this
title by reason of section
402(a)(37), 406(h), or 473(b),
or considered by the State to
be receiving such aid as
authorized under section
482(e)(6)),
(II)(aa) with respect to whom
supplemental security income
benefits are being paid under
title XVI (or were being paid
as of the date of the enactment
of section 211(a) of the
Personal Responsibility and
Work Opportunity Reconciliation
Act of 1996 (P.L. 104-193) and
would continue to be paid but
for the enactment of that
section), (bb) who are
qualified severely impaired
individuals (as defined in
section 1905(q)), or (cc) who
are under 21 years of age and
with respect to whom
supplemental security income
benefits would be paid under
title XVI if subparagraphs (A)
and (B) of section 1611(c)(7)
were applied without regard to
the phrase ``the first day of
the month following'',
(III) who are qualified
pregnant women or children as
defined in section 1905(n),
(IV) who are described in
subparagraph (A) or (B) of
subsection (l)(1) and whose
family income does not exceed
the minimum income level the
State is required to establish
under subsection (l)(2)(A) for
such a family;
(V) who are qualified family
members as defined in section
1905(m)(1),
(VI) who are described in
subparagraph (C) of subsection
(l)(1) and whose family income
does not exceed the income
level the State is required to
establish under subsection
(l)(2)(B) for such a family,
(VII) who are described in
subparagraph (D) of subsection
(l)(1) and whose family income
does not exceed the income
level the State is required to
establish under subsection
(l)(2)(C) for such a family;
(VIII) beginning January 1,
2014, who are under 65 years of
age, not pregnant, not entitled
to, or enrolled for, benefits
under part A of title XVIII, or
enrolled for benefits under
part B of title XVIII, and are
not described in a previous
subclause of this clause, and
whose income (as determined
under subsection (e)(14)) does
not exceed 133 percent of the
poverty line (as defined in
section 2110(c)(5)) applicable
to a family of the size
involved, subject to subsection
(k); or
(IX) who--
(aa) are under 26
years of age;
(bb) are not
described in or
enrolled under any of
subclauses (I) through
(VII) of this clause or
are described in any of
such subclauses but
have income that
exceeds the level of
income applicable under
the State plan for
eligibility to enroll
for medical assistance
under such subclause;
(cc) were in foster
care under the
responsibility of the
State on the date of
attaining 18 years of
age or such higher age
as the State has
elected under section
475(8)(B)(iii); and
(dd) were enrolled in
the State plan under
this title or under a
waiver of the plan
while in such foster
care;
(ii) at the option of the State, to
any group or groups of individuals
described in section 1905(a) (or, in
the case of individuals described in
section 1905(a)(i), to any reasonable
categories of such individuals) who are
not individuals described in clause (i)
of this subparagraph but--
(I) who meet the income and
resources requirements of the
appropriate State plan
described in clause (i) or the
supplemental security income
program (as the case may be),
(II) who would meet the
income and resources
requirements of the appropriate
State plan described in clause
(i) if their work-related child
care costs were paid from their
earnings rather than by a State
agency as a service
expenditure,
(III) who would be eligible
to receive aid under the
appropriate State plan
described in clause (i) if
coverage under such plan was as
broad as allowed under Federal
law,
(IV) with respect to whom
there is being paid, or who are
eligible, or would be eligible
if they were not in a medical
institution, to have paid with
respect to them, aid or
assistance under the
appropriate State plan
described in clause (i),
supplemental security income
benefits under title XVI, or a
State supplementary payment;
(V) who are in a medical
institution for a period of not
less than 30 consecutive days
(with eligibility by reason of
this subclause beginning on the
first day of such period), who
meet the resource requirements
of the appropriate State plan
described in clause (i) or the
supplemental security income
program, and whose income does
not exceed a separate income
standard established by the
State which is consistent with
the limit established under
section 1903(f)(4)(C),
(VI) who would be eligible
under the State plan under this
title if they were in a medical
institution, with respect to
whom there has been a
determination that but for the
provision of home or community-
based services described in
subsection (c), (d), or (e) of
section 1915 they would require
the level of care provided in a
hospital, nursing facility or
intermediate care facility for
the mentally retarded the cost
of which could be reimbursed
under the State plan, and who
will receive home or community-
based services pursuant to a
waiver granted by the Secretary
under subsection (c), (d), or
(e) of section 1915,
(VII) who would be eligible
under the State plan under this
title if they were in a medical
institution, who are terminally
ill, and who will receive
hospice care pursuant to a
voluntary election described in
section 1905(o);
(VIII) who is a child
described in section
1905(a)(i)--
(aa) for whom there
is in effect an
adoption assistance
agreement (other than
an agreement under part
E of title IV) between
the State and an
adoptive parent or
parents,
(bb) who the State
agency responsible for
adoption assistance has
determined cannot be
placed with adoptive
parents without medical
assistance because such
child has special needs
for medical or
rehabilitative care,
and
(cc) who was eligible
for medical assistance
under the State plan
prior to the adoption
assistance agreement
being entered into, or
who would have been
eligible for medical
assistance at such time
if the eligibility
standards and
methodologies of the
State's foster care
program under part E of
title IV were applied
rather than the
eligibility standards
and methodologies of
the State's aid to
families with dependent
children program under
part A of title IV;
(IX) who are described in
subsection (l)(1) and are not
described in clause (i)(IV),
clause (i)(VI), or clause
(i)(VII);
(X) who are described in
subsection (m)(1);
(XI) who receive only an
optional State supplementary
payment based on need and paid
on a regular basis, equal to
the difference between the
individual's countable income
and the income standard used to
determine eligibility for such
supplementary payment (with
countable income being the
income remaining after
deductions as established by
the State pursuant to standards
that may be more restrictive
than the standards for
supplementary security income
benefits under title XVI),
which are available to all
individuals in the State (but
which may be based on different
income standards by political
subdivision according to cost
of living differences), and
which are paid by a State that
does not have an agreement with
the Commissioner of Social
Security under section 1616 or
1634;
(XII) who are described in
subsection (z)(1) (relating to
certain TB-infected
individuals);
(XIII) who are in families
whose income is less than 250
percent of the income official
poverty line (as defined by the
Office of Management and
Budget, and revised annually in
accordance with section 673(2)
of the Omnibus Budget
Reconciliation Act of 1981)
applicable to a family of the
size involved, and who but for
earnings in excess of the limit
established under section
1905(q)(2)(B), would be
considered to be receiving
supplemental security income
(subject, notwithstanding
section 1916, to payment of
premiums or other cost-sharing
charges (set on a sliding scale
based on income) that the State
may determine);
(XIV) who are optional
targeted low-income children
described in section
1905(u)(2)(B);
(XV) who, but for earnings in
excess of the limit established
under section 1905(q)(2)(B),
would be considered to be
receiving supplemental security
income, who is at least 16, but
less than 65, years of age, and
whose assets, resources, and
earned or unearned income (or
both) do not exceed such
limitations (if any) as the
State may establish;
(XVI) who are employed
individuals with a medically
improved disability described
in section 1905(v)(1) and whose
assets, resources, and earned
or unearned income (or both) do
not exceed such limitations (if
any) as the State may
establish, but only if the
State provides medical
assistance to individuals
described in subclause (XV);
(XVII) who are independent
foster care adolescents (as
defined in section 1905(w)(1)),
or who are within any
reasonable categories of such
adolescents specified by the
State;
(XVIII) who are described in
subsection (aa) (relating to
certain breast or cervical
cancer patients);
(XIX) who are disabled
children described in
subsection (cc)(1);
(XX) beginning January 1,
2014, who are under 65 years of
age and are not described in or
enrolled under a previous
subclause of this clause, and
whose income (as determined
under subsection (e)(14))
exceeds 133 percent of the
poverty line (as defined in
section 2110(c)(5)) applicable
to a family of the size
involved but does not exceed
the highest income eligibility
level established under the
State plan or under a waiver of
the plan, subject to subsection
(hh);
(XXI) who are described in
subsection (ii) (relating to
individuals who meet certain
income standards); or
(XXII) who are eligible for
home and community-based
services under needs-based
criteria established under
paragraph (1)(A) of section
1915(i), or who are eligible
for home and community-based
services under paragraph (6) of
such section, and who will
receive home and community-
based services pursuant to a
State plan amendment under such
subsection;
(B) that the medical assistance made
available to any individual described in
subparagraph (A)--
(i) shall not be less in amount,
duration, or scope than the medical
assistance made available to any other
such individual, and
(ii) shall not be less in amount,
duration, or scope than the medical
assistance made available to
individuals not described in
subparagraph (A);
(C) that if medical assistance is included
for any group of individuals described in
section 1905(a) who are not described in
subparagraph (A) or (E), then--
(i) the plan must include a
description of (I) the criteria for
determining eligibility of individuals
in the group for such medical
assistance, (II) the amount, duration,
and scope of medical assistance made
available to individuals in the group,
and (III) the single standard to be
employed in determining income and
resource eligibility for all such
groups, and the methodology to be
employed in determining such
eligibility, which shall be no more
restrictive than the methodology which
would be employed under the
supplemental security income program in
the case of groups consisting of aged,
blind, or disabled individuals in a
State in which such program is in
effect, and which shall be no more
restrictive than the methodology which
would be employed under the appropriate
State plan (described in subparagraph
(A)(i)) to which such group is most
closely categorically related in the
case of other groups;
(ii) the plan must make available
medical assistance--
(I) to individuals under the
age of 18 who (but for income
and resources) would be
eligible for medical assistance
as an individual described in
subparagraph (A)(i), and
(II) to pregnant women,
during the course of their
pregnancy, who (but for income
and resources) would be
eligible for medical assistance
as an individual described in
subparagraph (A);
(iii) such medical assistance must
include (I) with respect to children
under 18 and individuals entitled to
institutional services, ambulatory
services, and (II) with respect to
pregnant women, prenatal care and
delivery services; and
(iv) if such medical assistance
includes services in institutions for
mental diseases or in an intermediate
care facility for the mentally retarded
(or both) for any such group, it also
must include for all groups covered at
least the care and services listed in
paragraphs (1) through (5) and (17) of
section 1905(a) or the care and
services listed in any 7 of the
paragraphs numbered (1) through (24) of
such section;
(D) for the inclusion of home health services
for any individual who, under the State plan,
is entitled to nursing facility services;
(E)(i) for making medical assistance
available for medicare cost-sharing (as defined
in section 1905(p)(3)) for qualified medicare
beneficiaries described in section 1905(p)(1);
(ii) for making medical assistance available
for payment of medicare cost-sharing described
in section 1905(p)(3)(A)(i) for qualified
disabled and working individuals described in
section 1905(s);
(iii) for making medical assistance available
for medicare cost sharing described in section
1905(p)(3)(A)(ii) subject to section
1905(p)(4), for individuals who would be
qualified medicare beneficiaries described in
section 1905(p)(1) but for the fact that their
income exceeds the income level established by
the State under section 1905(p)(2) but is less
than 110 percent in 1993 and 1994, and 120
percent in 1995 and years thereafter of the
official poverty line (referred to in such
section) for a family of the size involved; and
(iv) subject to sections 1933 and 1905(p)(4),
for making medical assistance available for
medicare cost-sharing described in section
1905(p)(3)(A)(ii) for individuals who would be
qualified medicare beneficiaries described in
section 1905(p)(1) but for the fact that their
income exceeds the income level established by
the State under section 1905(p)(2) and is at
least 120 percent, but less than 135 percent,
of the official poverty line (referred to in
such section) for a family of the size involved
and who are not otherwise eligible for medical
assistance under the State plan;
(F) at the option of a State, for making
medical assistance available for COBRA premiums
(as defined in subsection (u)(2)) for qualified
COBRA continuation beneficiaries described in
section 1902(u)(1); and
(G) that, in applying eligibility criteria of
the supplemental security income program under
title XVI for purposes of determining
eligibility for medical assistance under the
State plan of an individual who is not
receiving supplemental security income, the
State will disregard the provisions of
subsections (c) and (e) of section 1613;
except that (I) the making available of the services
described in paragraph (4), (14), or (16) of section
1905(a) to individuals meeting the age requirements
prescribed therein shall not, by reason of this
paragraph (10), require the making available of any
such services, or the making available of such services
of the same amount, duration, and scope, to individuals
of any other ages, (II) the making available of
supplementary medical insurance benefits under part B
of title XVIII to individuals eligible therefor (either
pursuant to an agreement entered into under section
1843 or by reason of the payment of premiums under such
title by the State agency on behalf of such
individuals), or provision for meeting part or all of
the cost of deductibles, cost sharing, or similar
charges under part B of title XVIII for individuals
eligible for benefits under such part, shall not, by
reason of this paragraph (10), require the making
available of any such benefits, or the making available
of services of the same amount, duration, and scope, to
any other individuals, (III) the making available of
medical assistance equal in amount, duration, and scope
to the medical assistance made available to individuals
described in clause (A) to any classification of
individuals approved by the Secretary with respect to
whom there is being paid, or who are eligible, or would
be eligible if they were not in a medical institution,
to have paid with respect to them, a State
supplementary payment shall not, by reason of this
paragraph (10), require the making available of any
such assistance, or the making available of such
assistance of the same amount, duration, and scope, to
any other individuals not described in clause (A), (IV)
the imposition of a deductible, cost sharing, or
similar charge for any item or service furnished to an
individual not eligible for the exemption under section
1916(a)(2) or (b)(2) shall not require the imposition
of a deductible, cost sharing, or similar charge for
the same item or service furnished to an individual who
is eligible for such exemption, (V) the making
available to pregnant women covered under the plan of
services relating to pregnancy (including prenatal,
delivery, and postpartum services) or to any other
condition which may complicate pregnancy shall not, by
reason of this paragraph (10), require the making
available of such services, or the making available of
such services of the same amount, duration, and scope,
to any other individuals, provided such services are
made available (in the same amount, duration, and
scope) to all pregnant women covered under the State
plan, (VI) with respect to the making available of
medical assistance for hospice care to terminally ill
individuals who have made a voluntary election
described in section 1905(o) to receive hospice care
instead of medical assistance for certain other
services, such assistance may not be made available in
an amount, duration, or scope less than that provided
under title XVIII, and the making available of such
assistance shall not, by reason of this paragraph (10),
require the making available of medical assistance for
hospice care to other individuals or the making
available of medical assistance for services waived by
such terminally ill individuals, (VII) the medical
assistance made available to an individual described in
subsection (l)(1)(A) who is eligible for medical
assistance only because of subparagraph (A)(i)(IV) or
(A)(ii)(IX) shall be limited to medical assistance for
services related to pregnancy (including prenatal,
delivery, postpartum, and family planning services) and
to other conditions which may complicate pregnancy,
(VIII) the medical assistance made available to a
qualified medicare beneficiary described in section
1905(p)(1) who is only entitled to medical assistance
because the individual is such a beneficiary shall be
limited to medical assistance for medicare cost-sharing
(described in section 1905(p)(3)), subject to the
provisions of subsection (n) and section 1916(b), (IX)
the making available of respiratory care services in
accordance with subsection (e)(9) shall not, by reason
of this paragraph (10), require the making available of
such services, or the making available of such services
of the same amount, duration, and scope, to any
individuals not included under subsection (e)(9)(A),
provided such services are made available (in the same
amount, duration, and scope) to all individuals
described in such subsection, (X) if the plan provides
for any fixed durational limit on medical assistance
for inpatient hospital services (whether or not such a
limit varies by medical condition or diagnosis), the
plan must establish exceptions to such a limit for
medically necessary inpatient hospital services
furnished with respect to individuals under one year of
age in a hospital defined under the State plan,
pursuant to section 1923(a)(1)(A), as a
disproportionate share hospital and subparagraph (B)
(relating to comparability) shall not be construed as
requiring such an exception for other individuals,
services, or hospitals, (XI) the making available of
medical assistance to cover the costs of premiums,
deductibles, coinsurance, and other cost-sharing
obligations for certain individuals for private health
coverage as described in section 1906 shall not, by
reason of paragraph (10), require the making available
of any such benefits or the making available of
services of the same amount, duration, and scope of
such private coverage to any other individuals, (XII)
the medical assistance made available to an individual
described in subsection (u)(1) who is eligible for
medical assistance only because of subparagraph (F)
shall be limited to medical assistance for COBRA
continuation premiums (as defined in subsection
(u)(2)), (XIII) the medical assistance made available
to an individual described in subsection (z)(1) who is
eligible for medical assistance only because of
subparagraph (A)(ii)(XII) shall be limited to medical
assistance for TB-related services (described in
subsection (z)(2)), (XIV) the medical assistance made
available to an individual described in subsection (aa)
who is eligible for medical assistance only because of
subparagraph (A)(10)(ii)(XVIII) shall be limited to
medical assistance provided during the period in which
such an individual requires treatment for breast or
cervical cancer (XV) the medical assistance made
available to an individual described in subparagraph
(A)(i)(VIII) shall be limited to medical assistance
described in subsection (k)(1), (XVI) the medical
assistance made available to an individual described in
subsection (ii) shall be limited to family planning
services and supplies described in section
1905(a)(4)(C) including medical diagnosis and treatment
services that are provided pursuant to a family
planning service in a family planning setting and
(XVII) if an individual is described in subclause (IX)
of subparagraph (A)(i) and is also described in
subclause (VIII) of that subparagraph, the medical
assistance shall be made available to the individual
through subclause (IX) instead of through subclause
(VIII);
(11)(A) provide for entering into cooperative
arrangements with the State agencies responsible for
administering or supervising the administration of
health services and vocational rehabilitation services
in the State looking toward maximum utilization of such
services in the provision of medical assistance under
the plan, (B) provide, to the extent prescribed by the
Secretary, for entering into agreements, with any
agency, institution, or organization receiving payments
under (or through an allotment under) title V, (i)
providing for utilizing such agency, institution, or
organization in furnishing care and services which are
available under such title or allotment and which are
included in the State plan approved under this section
(ii) making such provision as may be appropriate for
reimbursing such agency, institution, or organization
for the cost of any such care and services furnished
any individual for which payment would otherwise be
made to the State with respect to the individual under
section 1903, and (iii) providing for coordination of
information and education on pediatric vaccinations and
delivery of immunization services, and (C) provide for
coordination of the operations under this title,
including the provision of information and education on
pediatric vaccinations and the delivery of immunization
services, with the State's operations under the special
supplemental nutrition program for women, infants, and
children under section 17 of the Child Nutrition Act of
1966;
(12) provide that, in determining whether an
individual is blind, there shall be an examination by a
physician skilled in the diseases of the eye or by an
optometrist, whichever the individual may select;
(13) provide--
(A) for a public process for determination of
rates of payment under the plan for hospital
services, nursing facility services, and
services of intermediate care facilities for
the mentally retarded under which--
(i) proposed rates, the methodologies
underlying the establishment of such
rates, and justifications for the
proposed rates are published,
(ii) providers, beneficiaries and
their representatives, and other
concerned State residents are given a
reasonable opportunity for review and
comment on the proposed rates,
methodologies, and justifications,
(iii) final rates, the methodologies
underlying the establishment of such
rates, and justifications for such
final rates are published, and
(iv) in the case of hospitals, such
rates take into account (in a manner
consistent with section 1923) the
situation of hospitals which serve a
disproportionate number of low-income
patients with special needs;
(B) for payment for hospice care in amounts
no lower than the amounts, using the same
methodology, used under part A of title XVIII
and for payment of amounts under section
1905(o)(3); except that in the case of hospice
care which is furnished to an individual who is
a resident of a nursing facility or
intermediate care facility for the mentally
retarded, and who would be eligible under the
plan for nursing facility services or services
in an intermediate care facility for the
mentally retarded if he had not elected to
receive hospice care, there shall be paid an
additional amount, to take into account the
room and board furnished by the facility, equal
to at least 95 percent of the rate that would
have been paid by the State under the plan for
facility services in that facility for that
individual; and
(C) payment for primary care services (as
defined in subsection (jj)) furnished in 2013
and 2014 by a physician with a primary
specialty designation of family medicine,
general internal medicine, or pediatric
medicine at a rate not less than 100 percent of
the payment rate that applies to such services
and physician under part B of title XVIII (or,
if greater, the payment rate that would be
applicable under such part if the conversion
factor under section 1848(d) for the year
involved were the conversion factor under such
section for 2009);
(14) provide that enrollment fees, premiums, or
similar charges, and deductions, cost sharing, or
similar charges, may be imposed only as provided in
section 1916;
(15) provide for payment for services described in
clause (B) or (C) of section 1905(a)(2) under the plan
in accordance with subsection (bb);
(16) provide for inclusion, to the extent required by
regulations prescribed by the Secretary, of provisions
(conforming to such regulations) with respect to the
furnishing of medical assistance under the plan to
individuals who are residents of the State but are
absent therefrom;
(17) except as provided in subsections (e)(14),
(e)(14), (l)(3), (m)(3), and (m)(4), include reasonable
standards (which shall be comparable for all groups and
may, in accordance with standards prescribed by the
Secretary, differ with respect to income levels, but
only in the case of applicants or recipients of
assistance under the plan who are not receiving aid or
assistance under any plan of the State approved under
title I, X, XIV, or XVI, or part A of title IV, and
with respect to whom supplemental security income
benefits are not being paid under title XVI, based on
the variations between shelter costs in urban areas and
in rural areas) for determining eligibility for and the
extent of medical assistance under the plan which (A)
are consistent with the objectives of this title, (B)
provide for taking into account only such income and
resources as are, as determined in accordance with
standards prescribed by the Secretary, available to the
applicant or recipient and (in the case of any
applicant or recipient who would, except for income and
resources, be eligible for aid or assistance in the
form of money payments under any plan of the State
approved under title I, X, XIV, or XVI, or part A of
title IV, or to have paid with respect to him
supplemental security income benefits under title XVI)
as would not be disregarded (or set aside for future
needs) in determining his eligibility for such aid,
assistance, or benefits, (C) provide for reasonable
evaluation of any such income or resources, and (D) do
not take into account the financial responsibility of
any individual for any applicant or recipient of
assistance under the plan unless such applicant or
recipient is such individual's spouse or such
individual's child who is under age 21 or (with respect
to States eligible to participate in the State program
established under title XVI), is blind or permanently
and totally disabled, or is blind or disabled as
defined in section 1614 (with respect to States which
are not eligible to participate in such program); and
provide for flexibility in the application of such
standards with respect to income by taking into
account, except to the extent prescribed by the
Secretary, the costs (whether in the form of insurance
premiums, payments made to the State under section
1903(f)(2)(B), or otherwise and regardless of whether
such costs are reimbursed under another public program
of the State or political subdivision thereof) incurred
for medical care or for any other type of remedial care
recognized under State law;
(18) comply with the provisions of section 1917 with
respect to liens, adjustments and recoveries of medical
assistance correctly paid, transfers of assets, and
treatment of certain trusts;
(19) provide such safeguards as may be necessary to
assure that eligibility for care and services under the
plan will be determined, and such care and services
will be provided, in a manner consistent with
simplicity of administration and the best interests of
the recipients;
(20) if the State plan includes medical assistance in
behalf of individuals 65 years of age or older who are
patients in institutions for mental diseases--
(A) provide for having in effect such
agreements or other arrangements with State
authorities concerned with mental diseases,
and, where appropriate, with such institutions,
as may be necessary for carrying out the State
plan, including arrangements for joint planning
and for development of alternate methods of
care, arrangements providing assurance of
immediate readmittance to institutions where
needed for individuals under alternate plans of
care, and arrangements providing for access to
patients and facilities, for furnishing
information, and for making reports;
(B) provide for an individual plan for each
such patient to assure that the institutional
care provided to him is in his best interests,
including, to that end, assurances that there
will be initial and periodic review of his
medical and other needs, that he will be given
appropriate medical treatment within the
institution, and that there will be a periodic
determination of his need for continued
treatment in the institution; and
(C) provide for the development of alternate
plans of care, making maximum utilization of
available resources, for recipients 65 years of
age or older who would otherwise need care in
such institutions, including appropriate
medical treatment and other aid or assistance;
for services referred to in section
3(a)(4)(A)(i) and (ii) or section
1603(a)(4)(A)(i) and (ii) which are appropriate
for such recipients and for such patients; and
for methods of administration necessary to
assure that the responsibilities of the State
agency under the State plan with respect to
such recipients and such patients will be
effectively carried out;
(21) if the State plan includes medical assistance in
behalf of individuals 65 years of age or older who are
patients in public institutions for mental diseases,
show that the State is making satisfactory progress
toward developing and implementing a comprehensive
mental health program, including provision for
utilization of community mental health centers, nursing
facilities, and other alternatives to care in public
institutions for mental diseases;
(22) include descriptions of (A) the kinds and
numbers of professional medical personnel and
supporting staff that will be used in the
administration of the plan and of the responsibilities
they will have, (B) the standards, for private or
public institutions in which recipients of medical
assistance under the plan may receive care or services,
that will be utilized by the State authority or
authorities responsible for establishing and
maintaining such standards, (C) the cooperative
arrangements with State health agencies and State
vocational rehabilitation agencies entered into with a
view to maximum utilization of and coordination of the
provision of medical assistance with the services
administered or supervised by such agencies, and (D)
other standards and methods that the State will use to
assure that medical or remedial care and services
provided to recipients of medical assistance are of
high quality;
(23) provide that (A) any individual eligible for
medical assistance (including drugs) may obtain such
assistance from any institution, agency, community
pharmacy, or person, qualified to perform the service
or services required (including an organization which
provides such services, or arranges for their
availability, on a prepayment basis), who undertakes to
provide him such services, and (B) an enrollment of an
individual eligible for medical assistance in a primary
care case-management system (described in section
1915(b)(1)), a medicaid managed care organization, or a
similar entity shall not restrict the choice of the
qualified person from whom the individual may receive
services under section 1905(a)(4)(C), except as
provided in subsection (g) and in section 1915, except
that this paragraph shall not apply in the case of
Puerto Rico, the Virgin Islands, and Guam, and except
that nothing in this paragraph shall be construed as
requiring a State to provide medical assistance for
such services furnished by a person or entity convicted
of a felony under Federal or State law for an offense
which the State agency determines is inconsistent with
the best interests of beneficiaries under the State
plan or by a provider or supplier to which a moratorium
under subsection (kk)(4) is applied during the period
of such moratorium';
(24) effective July 1, 1969, provide for consultative
services by health agencies and other appropriate
agencies of the State to hospitals, nursing facilities,
home health agencies, clinics, laboratories, and such
other institutions as the Secretary may specify in
order to assist them (A) to qualify for payments under
this Act, (B) to establish and maintain such fiscal
records as may be necessary for the proper and
efficient administration of this Act, and (C) to
provide information needed to determine payments due
under this Act on account of care and services
furnished to individuals;
(25) provide--
(A) that the State or local agency
administering such plan will take all
reasonable measures to ascertain the legal
liability of third parties (including health
insurers, self-insured plans, group health
plans (as defined in section 607(1) of the
Employee Retirement Income Security Act of
1974), service benefit plans, managed care
organizations, pharmacy benefit managers, or
other parties that are, by statute, contract,
or agreement, legally responsible for payment
of a claim for a health care item or service)
to pay for care and services available under
the plan, including--
(i) the collection of sufficient
information (as specified by the
Secretary in regulations) to enable the
State to pursue claims against such
third parties, with such information
being collected at the time of any
determination or redetermination of
eligibility for medical assistance, and
(ii) the submission to the Secretary
of a plan (subject to approval by the
Secretary) for pursuing claims against
such third parties, which plan shall be
integrated with, and be monitored as a
part of the Secretary's review of, the
State's mechanized claims processing
and information retrieval systems
required under section 1903(r);
(B) that in any case where such a legal
liability is found to exist after medical
assistance has been made available on behalf of
the individual and where the amount of
reimbursement the State can reasonably expect
to recover exceeds the costs of such recovery,
the State or local agency will seek
reimbursement for such assistance to the extent
of such legal liability;
(C) that in the case of an individual who is
entitled to medical assistance under the State
plan with respect to a service for which a
third party is liable for payment, the person
furnishing the service may not seek to collect
from the individual (or any financially
responsible relative or representative of that
individual) payment of an amount for that
service (i) if the total of the amount of the
liabilities of third parties for that service
is at least equal to the amount payable for
that service under the plan (disregarding
section 1916), or (ii) in an amount which
exceeds the lesser of (I) the amount which may
be collected under section 1916, or (II) the
amount by which the amount payable for that
service under the plan (disregarding section
1916) exceeds the total of the amount of the
liabilities of third parties for that service;
(D) that a person who furnishes services and
is participating under the plan may not refuse
to furnish services to an individual (who is
entitled to have payment made under the plan
for the services the person furnishes) because
of a third party's potential liability for
payment for the service;
(E) that in the case of prenatal or
preventive pediatric care (including early and
periodic screening and diagnosis services under
section 1905(a)(4)(B)) covered under the State
plan, the State shall--
(i) make payment for such service in
accordance with the usual payment
schedule under such plan for such
services without regard to the
liability of a third party for payment
for such services; and
(ii) seek reimbursement from such
third party in accordance with
subparagraph (B);
(F) that in the case of any services covered
under such plan which are provided to an
individual on whose behalf child support
enforcement is being carried out by the State
agency under part D of title IV of this Act,
the State shall--
(i) make payment for such service in
accordance with the usual payment
schedule under such plan for such
services without regard to any third-
party liability for payment for such
services, if such third-party liability
is derived (through insurance or
otherwise) from the parent whose
obligation to pay support is being
enforced by such agency, if payment has
not been made by such third party
within 30 days after such services are
furnished;
(ii) seek reimbursement from such
third party in accordance with
subparagraph (B);
(G) that the State prohibits any health
insurer (including a group health plan, as
defined in section 607(1) of the Employee
Retirement Income Security Act of 1974, a self-
insured plan, a service benefit plan, a managed
care organization, a pharmacy benefit manager,
or other party that is, by statute, contract,
or agreement, legally responsible for payment
of a claim for a health care item or service),
in enrolling an individual or in making any
payments for benefits to the individual or on
the individual's behalf, from taking into
account that the individual is eligible for or
is provided medical assistance under a plan
under this title for such State, or any other
State;
(H) that to the extent that payment has been
made under the State plan for medical
assistance in any case where a third party has
a legal liability to make payment for such
assistance, the State has in effect laws under
which, to the extent that payment has been made
under the State plan for medical assistance for
health care items or services furnished to an
individual, the State is considered to have
acquired the rights of such individual to
payment by any other party for such health care
items or services; and
(I) that the State shall provide assurances
satisfactory to the Secretary that the State
has in effect laws requiring health insurers,
including self-insured plans, group health
plans (as defined in section 607(1) of the
Employee Retirement Income Security Act of
1974), service benefit plans, managed care
organizations, pharmacy benefit managers, or
other parties that are, by statute, contract,
or agreement, legally responsible for payment
of a claim for a health care item or service,
as a condition of doing business in the State,
to--
(i) provide, with respect to
individuals who are eligible (and, at
State option, individuals who apply or
whose eligibility for medical
assistance is being evaluated in
accordance with section 1902(e)(13)(D))
for, or are provided, medical
assistance under the State plan under
this title (and, at State option, child
health assistance under title XXI),
upon the request of the State,
information to determine during what
period the individual or their spouses
or their dependents may be (or may have
been) covered by a health insurer and
the nature of the coverage that is or
was provided by the health insurer
(including the name, address, and
identifying number of the plan) in a
manner prescribed by the Secretary;
(ii) accept the State's right of
recovery and the assignment to the
State of any right of an individual or
other entity to payment from the party
for an item or service for which
payment has been made under the State
plan;
(iii) respond to any inquiry by the
State regarding a claim for payment for
any health care item or service that is
submitted not later than 3 years after
the date of the provision of such
health care item or service; and
(iv) agree not to deny a claim
submitted by the State solely on the
basis of the date of submission of the
claim, the type or format of the claim
form, or a failure to present proper
documentation at the point-of-sale that
is the basis of the claim, if--
(I) the claim is submitted by
the State within the 3-year
period beginning on the date on
which the item or service was
furnished; and
(II) any action by the State
to enforce its rights with
respect to such claim is
commenced within 6 years of the
State's submission of such
claim;
(26) if the State plan includes medical assistance
for inpatient mental hospital services, provide, with
respect to each patient receiving such services, for a
regular program of medical review (including medical
evaluation) of his need for such services, and for a
written plan of care;
(27) provide for agreements with every person or
institution providing services under the State plan
under which such person or institution agrees (A) to
keep such records as are necessary fully to disclose
the extent of the services provided to individuals
receiving assistance under the State plan, and (B) to
furnish the State agency or the Secretary with such
information, regarding any payments claimed by such
person or institution for providing services under the
State plan, as the State agency or the Secretary may
from time to time request;
(28) provide--
(A) that any nursing facility receiving
payments under such plan must satisfy all the
requirements of subsections (b) through (d) of
section 1919 as they apply to such facilities;
(B) for including in ``nursing facility
services'' at least the items and services
specified (or deemed to be specified) by the
Secretary under section 1919(f)(7) and making
available upon request a description of the
items and services so included;
(C) for procedures to make available to the
public the data and methodology used in
establishing payment rates for nursing
facilities under this title; and
(D) for compliance (by the date specified in
the respective sections) with the requirements
of--
(i) section 1919(e);
(ii) section 1919(g) (relating to
responsibility for survey and
certification of nursing facilities);
and
(iii) sections 1919(h)(2)(B) and
1919(h)(2)(D) (relating to
establishment and application of
remedies);
(29) include a State program which meets the
requirements set forth in section 1908, for the
licensing of administrators of nursing homes;
(30)(A) provide such methods and procedures relating
to the utilization of, and the payment for, care and
services available under the plan (including but not
limited to utilization review plans as provided for in
section 1903(i)(4)) as may be necessary to safeguard
against unnecessary utilization of such care and
services and to assure that payments are consistent
with efficiency, economy, and quality of care and are
sufficient to enlist enough providers so that care and
services are available under the plan at least to the
extent that such care and services are available to the
general population in the geographic area; and
(B) provide, under the program described in
subparagraph (A), that--
(i) each admission to a hospital,
intermediate care facility for the mentally
retarded, or hospital for mental diseases is
reviewed or screened in accordance with
criteria established by medical and other
professional personnel who are not themselves
directly responsible for the care of the
patient involved, and who do not have a
significant financial interest in any such
institution and are not, except in the case of
a hospital, employed by the institution
providing the care involved, and
(ii) the information developed from such
review or screening, along with the data
obtained from prior reviews of the necessity
for admission and continued stay of patients by
such professional personnel, shall be used as
the basis for establishing the size and
composition of the sample of admissions to be
subject to review and evaluation by such
personnel, and any such sample may be of any
size up to 100 percent of all admissions and
must be of sufficient size to serve the purpose
of (I) identifying the patterns of care being
provided and the changes occurring over time in
such patterns so that the need for modification
may be ascertained, and (II) subjecting
admissions to early or more extensive review
where information indicates that such
consideration is warranted to a hospital,
intermediate care facility for the mentally
retarded, or hospital for mental diseases;
(31) with respect to services in an intermediate care
facility for the mentally retarded (where the State
plan includes medical assistance for such services)
provide, with respect to each patient receiving such
services, for a written plan of care, prior to
admission to or authorization of benefits in such
facility, in accordance with regulations of the
Secretary, and for a regular program of independent
professional review (including medical evaluation)
which shall periodically review his need for such
services;
(32) provide that no payment under the plan for any
care or service provided to an individual shall be made
to anyone other than such individual or the person or
institution providing such care or service, under an
assignment or power of attorney or otherwise; except
that--
(A) in the case of any care or service
provided by a physician, dentist, or other
individual practitioner, such payment may be
made (i) to the employer of such physician,
dentist, or other practitioner if such
physician, dentist, or practitioner is required
as a condition of his employment to turn over
his fee for such care or service to his
employer, or (ii) (where the care or service
was provided in a hospital, clinic, or other
facility) to the facility in which the care or
service was provided if there is a contractual
arrangement between such physician, dentist, or
practitioner and such facility under which such
facility submits the bill for such care or
service;
(B) nothing in this paragraph shall be
construed (i) to prevent the making of such a
payment in accordance with an assignment from
the person or institution providing the care or
service involved if such assignment is made to
a governmental agency or entity or is
established by or pursuant to the order of a
court of competent jurisdiction, or (ii) to
preclude an agent of such person or institution
from receiving any such payment if (but only
if) such agent does so pursuant to an agency
agreement under which the compensation to be
paid to the agent for his services for or in
connection with the billing or collection of
payments due such person or institution under
the plan is unrelated (directly or indirectly)
to the amount of such payments or the billings
therefor, and is not dependent upon the actual
collection of any such payment;
(C) in the case of services furnished (during
a period that does not exceed 14 continuous
days in the case of an informal reciprocal
arrangement or 90 continuous days (or such
longer period as the Secretary may provide) in
the case of an arrangement involving per diem
or other fee-for-time compensation) by, or
incident to the services of, one physician to
the patients of another physician who submits
the claim for such services, payment shall be
made to the physician submitting the claim (as
if the services were furnished by, or incident
to, the physician's services), but only if the
claim identifies (in a manner specified by the
Secretary) the physician who furnished the
services; and
(D) in the case of payment for a childhood
vaccine administered before October 1, 1994, to
individuals entitled to medical assistance
under the State plan, the State plan may make
payment directly to the manufacturer of the
vaccine under a voluntary replacement program
agreed to by the State pursuant to which the
manufacturer (i) supplies doses of the vaccine
to providers administering the vaccine, (ii)
periodically replaces the supply of the
vaccine, and (iii) charges the State the
manufacturer's price to the Centers for Disease
Control and Prevention for the vaccine so
administered (which price includes a reasonable
amount to cover shipping and the handling of
returns);
(33) provide--
(A) that the State health agency, or other
appropriate State medical agency, shall be
responsible for establishing a plan, consistent
with regulations prescribed by the Secretary,
for the review by appropriate professional
health personnel of the appropriateness and
quality of care and services furnished to
recipients of medical assistance under the plan
in order to provide guidance with respect
thereto in the administration of the plan to
the State agency established or designated
pursuant to paragraph (5) and, where
applicable, to the State agency described in
the second sentence of this subsection; and
(B) that, except as provided in section
1919(g), the State or local agency utilized by
the Secretary for the purpose specified in the
first sentence of section 1864(a), or, if such
agency is not the State agency which is
responsible for licensing health institutions,
the State agency responsible for such
licensing, will perform for the State agency
administering or supervising the administration
of the plan approved under this title the
function of determining whether institutions
and agencies meet the requirements for
participation in the program under such plan,
except that, if the Secretary has cause to
question the adequacy of such determinations,
the Secretary is authorized to validate State
determinations and, on that basis, make
independent and binding determinations
concerning the extent to which individual
institutions and agencies meet the requirements
for participation;
(34) provide that in the case of any individual who
has been determined to be eligible for medical
assistance under the plan, such assistance will be made
available to him for care and services included under
the plan and furnished in or after the third month
before the month in which he made application (or
application was made on his behalf in the case of a
deceased individual) for such assistance if such
individual was (or upon application would have been)
eligible for such assistance at the time such care and
services were furnished;
(35) provide that any disclosing entity (as defined
in section 1124(a)(2)) receiving payments under such
plan complies with the requirements of section 1124;
(36) provide that within 90 days following the
completion of each survey of any health care facility,
laboratory, agency, clinic, or organization, by the
appropriate State agency described in paragraph (9),
such agency shall (in accordance with regulations of
the Secretary) make public in readily available form
and place the pertinent findings of each such survey
relating to the compliance of each such health care
facility, laboratory, clinic, agency, or organization
with (A) the statutory conditions of participation
imposed under this title, and (B) the major additional
conditions which the Secretary finds necessary in the
interest of health and safety of individuals who are
furnished care or services by any such facility,
laboratory, clinic, agency, or organization;
(37) provide for claims payment procedures which (A)
ensure that 90 per centum of claims for payment (for
which no further written information or substantiation
is required in order to make payment) made for services
covered under the plan and furnished by health care
practitioners through individual or group practices or
through shared health facilities are paid within 30
days of the date of receipt of such claims and that 99
per centum of such claims are paid within 90 days of
the date of receipt of such claims, and (B) provide for
procedures of prepayment and postpayment claims review,
including review of appropriate data with respect to
the recipient and provider of a service and the nature
of the service for which payment is claimed, to ensure
the proper and efficient payment of claims and
management of the program;
(38) require that an entity (other than an individual
practitioner or a group of practitioners) that
furnishes, or arranges for the furnishing of, items or
services under the plan, shall supply (within such
period as may be specified in regulations by the
Secretary or by the single State agency which
administers or supervises the administration of the
plan) upon request specifically addressed to such
entity by the Secretary or such State agency, the
information described in section 1128(b)(9);
(39) provide that the State agency shall exclude any
specified individual or entity from participation in
the program under the State plan for the period
specified by the Secretary, when required by him to do
so pursuant to section 1128 or section 1128A, terminate
the participation of any individual or entity in such
program if (subject to such exceptions as are permitted
with respect to exclusion under sections 1128(c)(3)(B)
and 1128(d)(3)(B)) participation of such individual or
entity is terminated under title XVIII or any other
State plan under this title, and provide that no
payment may be made under the plan with respect to any
item or service furnished by such individual or entity
during such period;
(40) require each health services facility or
organization which receives payments under the plan and
of a type for which a uniform reporting system has been
established under section 1121(a) to make reports to
the Secretary of information described in such section
in accordance with the uniform reporting system
(established under such section) for that type of
facility or organization;
(41) provide that whenever a provider of services or
any other person is terminated, suspended, or otherwise
sanctioned or prohibited from participating under the
State plan, the State agency shall promptly notify the
Secretary and, in the case of a physician and
notwithstanding paragraph (7), the State medical
licensing board of such action;
(42) provide that--
(A) the records of any entity participating
in the plan and providing services reimbursable
on a cost-related basis will be audited as the
Secretary determines to be necessary to insure
that proper payments are made under the plan;
and
(B) not later than December 31, 2010, the
State shall--
(i) establish a program under which
the State contracts (consistent with
State law and in the same manner as the
Secretary enters into contracts with
recovery audit contractors under
section 1893(h), subject to such
exceptions or requirements as the
Secretary may require for purposes of
this title or a particular State) with
1 or more recovery audit contractors
for the purpose of identifying
underpayments and overpayments and
recouping overpayments under the State
plan and under any waiver of the State
plan with respect to all services for
which payment is made to any entity
under such plan or waiver; and
(ii) provide assurances satisfactory
to the Secretary that--
(I) under such contracts,
payment shall be made to such a
contractor only from amounts
recovered;
(II) from such amounts
recovered, payment--
(aa) shall be made on
a contingent basis for
collecting
overpayments; and
(bb) may be made in
such amounts as the
State may specify for
identifying
underpayments;
(III) the State has an
adequate process for entities
to appeal any adverse
determination made by such
contractors; and
(IV) such program is carried
out in accordance with such
requirements as the Secretary
shall specify, including--
(aa) for purposes of
section 1903(a)(7),
that amounts expended
by the State to carry
out the program shall
be considered amounts
expended as necessary
for the proper and
efficient
administration of the
State plan or a waiver
of the plan;
(bb) that section
1903(d) shall apply to
amounts recovered under
the program; and
(cc) that the State
and any such
contractors under
contract with the State
shall coordinate such
recovery audit efforts
with other contractors
or entities performing
audits of entities
receiving payments
under the State plan or
waiver in the State,
including efforts with
Federal and State law
enforcement with
respect to the
Department of Justice,
including the Federal
Bureau of
Investigations, the
Inspector General of
the Department of
Health and Human
Services, and the State
medicaid fraud control
unit; and
(43) provide for--
(A) informing all persons in the State who
are under the age of 21 and who have been
determined to be eligible for medical
assistance including services described in
section 1905(a)(4)(B), of the availability of
early and periodic screening, diagnostic, and
treatment services as described in section
1905(r) and the need for age-appropriate
immunizations against vaccine-preventable
diseases,
(B) providing or arranging for the provision
of such screening services in all cases where
they are requested,
(C) arranging for (directly or through
referral to appropriate agencies,
organizations, or individuals) corrective
treatment the need for which is disclosed by
such child health screening services, and
(D) reporting to the Secretary (in a uniform
form and manner established by the Secretary,
by age group and by basis of eligibility for
medical assistance, and by not later than April
1 after the end of each fiscal year, beginning
with fiscal year 1990) the following
information relating to early and periodic
screening, diagnostic, and treatment services
provided under the plan during each fiscal
year:
(i) the number of children provided
child health screening services,
(ii) the number of children referred
for corrective treatment (the need for
which is disclosed by such child health
screening services),
(iii) the number of children
receiving dental services, and other
information relating to the provision
of dental services to such children
described in section 2108(e) and
(iv) the State's results in attaining
the participation goals set for the
State under section 1905(r);
(44) in each case for which payment for inpatient
hospital services, services in an intermediate care
facility for the mentally retarded, or inpatient mental
hospital services is made under the State plan--
(A) a physician (or, in the case of skilled
nursing facility services or intermediate care
facility services, a physician, or a nurse
practitioner or clinical nurse specialist who
is not an employee of the facility but is
working in collaboration with a physician)
certifies at the time of admission, or, if
later, the time the individual applies for
medical assistance under the State plan (and a
physician, a physician assistant under the
supervision of a physician, or, in the case of
skilled nursing facility services or
intermediate care facility services, a
physician, or a nurse practitioner or clinical
nurse specialist who is not an employee of the
facility but is working in collaboration with a
physician, recertifies, where such services are
furnished over a period of time, in such cases,
at least as often as required under section
1903(g)(6) (or, in the case of services that
are services provided in an intermediate care
facility for the mentally retarded, every
year), and accompanied by such supporting
material, appropriate to the case involved, as
may be provided in regulations of the
Secretary), that such services are or were
required to be given on an inpatient basis
because the individual needs or needed such
services, and
(B) such services were furnished under a plan
established and periodically reviewed and
evaluated by a physician, or, in the case of
skilled nursing facility services or
intermediate care facility services, a
physician, or a nurse practitioner or clinical
nurse specialist who is not an employee of the
facility but is working in collaboration with a
physician;
(45) provide for mandatory assignment of rights of
payment for medical support and other medical care owed
to recipients, in accordance with section 1912;
(46)(A) provide that information is requested and
exchanged for purposes of income and eligibility
verification in accordance with a State system which
meets the requirements of section 1137 of this Act; and
(B) provide, with respect to an individual declaring
to be a citizen or national of the United States for
purposes of establishing eligibility under this title,
that the State shall satisfy the requirements of--
(i) section 1903(x); or
(ii) subsection (ee);
(47) provide--
(A) at the option of the State, for making
ambulatory prenatal care available to pregnant
women during a presumptive eligibility period
in accordance with section 1920 and provide for
making medical assistance for items and
services described in subsection (a) of section
1920A available to children during a
presumptive eligibility period in accordance
with such section and provide for making
medical assistance available to individuals
described in subsection (a) of section 1920B
during a presumptive eligibility period in
accordance with such section and provide for
making medical assistance available to
individuals described in subsection (a) of
section 1920C during a presumptive eligibility
period in accordance with such section; and
(B) that any hospital that is a participating
provider under the State plan may elect to be a
qualified entity for purposes of determining,
on the basis of preliminary information,
whether any individual is eligible for medical
assistance under the State plan or under a
waiver of the plan for purposes of providing
the individual with medical assistance during a
presumptive eligibility period, in the same
manner, and subject to the same requirements,
as apply to the State options with respect to
populations described in section 1920, 1920A,
1920B, or 1920C (but without regard to whether
the State has elected to provide for a
presumptive eligibility period under any such
sections), subject to such guidance as the
Secretary shall establish;
(48) provide a method of making cards evidencing
eligibility for medical assistance available to an
eligible individual who does not reside in a permanent
dwelling or does not have a fixed home or mailing
address;
(49) provide that the State will provide information
and access to certain information respecting sanctions
taken against health care practitioners and providers
by State licensing authorities in accordance with
section 1921;
(50) provide, in accordance with subsection (q), for
a monthly personal needs allowance for certain
institutionalized individuals and couples;
(51) meet the requirements of section 1924 (relating
to protection of community spouses);
(52) meet the requirements of section 1925 (relating
to extension of eligibility for medical assistance);
(53) provide--
(A) for notifying in a timely manner all
individuals in the State who are determined to
be eligible for medical assistance and who are
pregnant women, breastfeeding or postpartum
women (as defined in section 17 of the Child
Nutrition Act of 1966), or children below the
age of 5, of the availability of benefits
furnished by the special supplemental nutrition
program under such section, and
(B) for referring any such individual to the
State agency responsible for administering such
program;
(54) in the case of a State plan that provides
medical assistance for covered outpatient drugs (as
defined in section 1927(k)), comply with the applicable
requirements of section 1927;
(55) provide for receipt and initial processing of
applications of individuals for medical assistance
under subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI),
(a)(10)(A)(i)(VII), or (a)(10)(A)(ii)(IX)--
(A) at locations which are other than those
used for the receipt and processing of
applications for aid under part A of title IV
and which include facilities defined as
disproportionate share hospitals under section
1923(a)(1)(A) and Federally-qualified health
centers described in section 1905(1)(2)(B), and
(B) using applications which are other than
those used for applications for aid under such
part;
(56) provide, in accordance with subsection (s), for
adjusted payments for certain inpatient hospital
services;
(57) provide that each hospital, nursing facility,
provider of home health care or personal care services,
hospice program, or medicaid managed care organization
(as defined in section 1903(m)(1)(A)) receiving funds
under the plan shall comply with the requirements of
subsection (w);
(58) provide that the State, acting through a State
agency, association, or other private nonprofit entity,
develop a written description of the law of the State
(whether statutory or as recognized by the courts of
the State) concerning advance directives that would be
distributed by providers or organizations under the
requirements of subsection (w);
(59) maintain a list (updated not less often than
monthly, and containing each physician's unique
identifier provided under the system established under
subsection (x)) of all physicians who are certified to
participate under the State plan;
(60) provide that the State agency shall provide
assurances satisfactory to the Secretary that the State
has in effect the laws relating to medical child
support required under section 1908A;
(61) provide that the State must demonstrate that it
operates a medicaid fraud and abuse control unit
described in section 1903(q) that effectively carries
out the functions and requirements described in such
section, as determined in accordance with standards
established by the Secretary, unless the State
demonstrates to the satisfaction of the Secretary that
the effective operation of such a unit in the State
would not be cost-effective because minimal fraud
exists in connection with the provision of covered
services to eligible individuals under the State plan,
and that beneficiaries under the plan will be protected
from abuse and neglect in connection with the provision
of medical assistance under the plan without the
existence of such a unit;
(62) provide for a program for the distribution of
pediatric vaccines to program-registered providers for
the immunization of vaccine-eligible children in
accordance with section 1928;
(63) provide for administration and determinations of
eligibility with respect to individuals who are (or
seek to be) eligible for medical assistance based on
the application of section 1931;
(64) provide, not later than 1 year after the date of
the enactment of this paragraph, a mechanism to receive
reports from beneficiaries and others and compile data
concerning alleged instances of waste, fraud, and abuse
relating to the operation of this title;
(65) provide that the State shall issue provider
numbers for all suppliers of medical assistance
consisting of durable medical equipment, as defined in
section 1861(n), and the State shall not issue or renew
such a supplier number for any such supplier unless--
(A)(i) full and complete information as to
the identity of each person with an ownership
or control interest (as defined in section
1124(a)(3)) in the supplier or in any
subcontractor (as defined by the Secretary in
regulations) in which the supplier directly or
indirectly has a 5 percent or more ownership
interest; and
(ii) to the extent determined to be feasible
under regulations of the Secretary, the name of
any disclosing entity (as defined in section
1124(a)(2)) with respect to which a person with
such an ownership or control interest in the
supplier is a person with such an ownership or
control interest in the disclosing entity; and
(B) a surety bond in a form specified by the
Secretary under section 1834(a)(16)(B) and in
an amount that is not less than $50,000 or such
comparable surety bond as the Secretary may
permit under the second sentence of such
section;
(66) provide for making eligibility determinations
under section 1935(a);
(67) provide, with respect to services covered under
the State plan (but not under title XVIII) that are
furnished to a PACE program eligible individual
enrolled with a PACE provider by a provider
participating under the State plan that does not have a
contract or other agreement with the PACE provider that
establishes payment amounts for such services, that
such participating provider may not require the PACE
provider to pay the participating provider an amount
greater than the amount that would otherwise be payable
for the service to the participating provider under the
State plan for the State where the PACE provider is
located (in accordance with regulations issued by the
Secretary);
(68) provide that any entity that receives or makes
annual payments under the State plan of at least
$5,000,000, as a condition of receiving such payments,
shall--
(A) establish written policies for all
employees of the entity (including management),
and of any contractor or agent of the entity,
that provide detailed information about the
False Claims Act established under sections
3729 through 3733 of title 31, United States
Code, administrative remedies for false claims
and statements established under chapter 38 of
title 31, United States Code, any State laws
pertaining to civil or criminal penalties for
false claims and statements, and whistleblower
protections under such laws, with respect to
the role of such laws in preventing and
detecting fraud, waste, and abuse in Federal
health care programs (as defined in section
1128B(f));
(B) include as part of such written policies,
detailed provisions regarding the entity's
policies and procedures for detecting and
preventing fraud, waste, and abuse; and
(C) include in any employee handbook for the
entity, a specific discussion of the laws
described in subparagraph (A), the rights of
employees to be protected as whistleblowers,
and the entity's policies and procedures for
detecting and preventing fraud, waste, and
abuse;
(69) provide that the State must comply with any
requirements determined by the Secretary to be
necessary for carrying out the Medicaid Integrity
Program established under section 1936;
(70) at the option of the State and notwithstanding
paragraphs (1), (10)(B), and (23), provide for the
establishment of a non-emergency medical transportation
brokerage program in order to more cost-effectively
provide transportation for individuals eligible for
medical assistance under the State plan who need access
to medical care or services and have no other means of
transportation which--
(A) may include a wheelchair van, taxi,
stretcher car, bus passes and tickets, secured
transportation, and such other transportation
as the Secretary determines appropriate; and
(B) may be conducted under contract with a
broker who--
(i) is selected through a competitive
bidding process based on the State's
evaluation of the broker's experience,
performance, references, resources,
qualifications, and costs;
(ii) has oversight procedures to
monitor beneficiary access and
complaints and ensure that transport
personnel are licensed, qualified,
competent, and courteous;
(iii) is subject to regular auditing
and oversight by the State in order to
ensure the quality of the
transportation services provided and
the adequacy of beneficiary access to
medical care and services; and
(iv) complies with such requirements
related to prohibitions on referrals
and conflict of interest as the
Secretary shall establish (based on the
prohibitions on physician referrals
under section 1877 and such other
prohibitions and requirements as the
Secretary determines to be
appropriate);
(71) provide that the State will implement an asset
verification program as required under section 1940;
(72) provide that the State will not prevent a
Federally-qualified health center from entering into
contractual relationships with private practice dental
providers in the provision of Federally-qualified
health center services;
(73) in the case of any State in which 1 or more
Indian Health Programs or Urban Indian Organizations
furnishes health care services, provide for a process
under which the State seeks advice on a regular,
ongoing basis from designees of such Indian Health
Programs and Urban Indian Organizations on matters
relating to the application of this title that are
likely to have a direct effect on such Indian Health
Programs and Urban Indian Organizations and that--
(A) shall include solicitation of advice
prior to submission of any plan amendments,
waiver requests, and proposals for
demonstration projects likely to have a direct
effect on Indians, Indian Health Programs, or
Urban Indian Organizations; and
(B) may include appointment of an advisory
committee and of a designee of such Indian
Health Programs and Urban Indian Organizations
to the medical care advisory committee advising
the State on its State plan under this title;
(74) provide for maintenance of effort under the
State plan or under any waiver of the plan in
accordance with subsection (gg); and
(75) provide that, beginning January 2015, and
annually thereafter, the State shall submit a report to
the Secretary that contains--
(A) the total number of enrolled and newly
enrolled individuals in the State plan or under
a waiver of the plan for the fiscal year ending
on September 30 of the preceding calendar year,
disaggregated by population, including
children, parents, nonpregnant childless
adults, disabled individuals, elderly
individuals, and such other categories or sub-
categories of individuals eligible for medical
assistance under the State plan or under a
waiver of the plan as the Secretary may
require;
(B) a description, which may be specified by
population, of the outreach and enrollment
processes used by the State during such fiscal
year; and
(C) any other data reporting determined
necessary by the Secretary to monitor
enrollment and retention of individuals
eligible for medical assistance under the State
plan or under a waiver of the plan;
(76) provide that any data collected under the State
plan meets the requirements of section 3101 of the
Public Health Service Act;
(77) provide that the State shall comply with
provider and supplier screening, oversight, and
reporting requirements in accordance with subsection
(kk);
(79) provide that any agent, clearinghouse, or other
alternate payee (as defined by the Secretary) that
submits claims on behalf of a health care provider must
register with the State and the Secretary in a form and
manner specified by the Secretary;
(80) provide that the State shall not provide any
payments for items or services provided under the State
plan or under a waiver to any financial institution or
entity located outside of the United States; and
(81) provide for implementation of the payment models
specified by the Secretary under section 1115A(c) for
implementation on a nationwide basis unless the State
demonstrates to the satisfaction of the Secretary that
implementation would not be administratively feasible
or appropriate to the health care delivery system of
the State.
Notwithstanding paragraph (5), if on January 1, 1965, and on
the date on which a State submits its plan for approval under
this title, the State agency which administered or supervised
the administration of the plan of such State approved under
title X (or title XVI, insofar as it relates to the blind) was
different from the State agency which administered or
supervised the administration of the State plan approved under
title I (or title XVI, insofar as it relates to the aged), the
State agency which administered or supervised the
administration of such plan approved under title X (or title
XVI, insofar as it relates to the blind) may be designated to
administer or supervise the administration of the portion of
the State plan for medical assistance which relates to blind
individuals and a different State agency may be established or
designated to administer or supervise the administration of the
rest of the State plan for medical assistance; and in such case
the part of the plan which each such agency administers, or the
administration of which each such agency supervises, shall be
regarded as a separate plan for purposes of this title (except
for purposes of paragraph (10)). The provisions of paragraphs
(9)(A), (31), and (33) and of section 1903(i)(4) shall not
apply to a religious nonmedical health care institution (as
defined in section 1861(ss)(1)).
For purposes of paragraph (10) any individual who, for the
month of August 1972, was eligible for or receiving aid or
assistance under a State plan approved under title I, X, XIV,
or XVI, or part A of title IV and who for such month was
entitled to monthly insurance benefits under title II shall for
purposes of this title only be deemed to be eligible for
financial aid or assistance for any month thereafter if such
individual would have been eligible for financial aid or
assistance for such month had the increase in monthly insurance
benefits under title II resulting from enactment of Public Law
92-336 not been applicable to such individual.
The requirement of clause (A) of paragraph (37) with respect
to a State plan may be waived by the Secretary if he finds that
the State has exercised good faith in trying to meet such
requirement. For purposes of this title, any child who meets
the requirements of paragraph (1) or (2) of section 473(b)
shall be deemed to be a dependent child as defined in section
406 and shall be deemed to be a recipient of aid to families
with dependent children under part A of title IV in the State
where such child resides. Notwithstanding paragraph (10)(B) or
any other provision of this subsection, a State plan shall
provide medical assistance with respect to an alien who is not
lawfully admitted for permanent residence or otherwise
permanently residing in the United States under color of law
only in accordance with section 1903(v).
(b) The Secretary shall approve any plan which fulfills the
conditions specified in subsection (a) of this section, except
that he shall not approve any plan which imposes, as a
condition of eligibility for medical assistance under the
plan--
(1) an age requirement of more than 65 years; or
(2) any residence requirement which excludes any
individual who resides in the State, regardless of
whether or not the residence is maintained permanently
or at a fixed address; or
(3) any citizenship requirement which excludes any
citizen of the United States.
(c) Notwithstanding subsection (b), the Secretary shall not
approve any State plan for medical assistance if the State
requires individuals described in subsection (l)(1) to apply
for assistance under the State program funded under part A of
title IV as a condition of applying for or receiving medical
assistance under this title.
(d) If a State contracts with an entity which meets the
requirements of section 1152, as determined by the Secretary,
or a utilization and quality control peer review organization
having a contract with the Secretary under part B of title XI
for the performance of medical or utilization review functions
(including quality review functions described in subsection
(a)(30)(C)) required under this title of a State plan with
respect to specific services or providers (or services or
providers in a geographic area of the State), such requirements
shall be deemed to be met for those services or providers (or
services or providers in that area) by delegation to such an
entity or organization under the contract of the State's
authority to conduct such review activities if the contract
provides for the performance of activities not inconsistent
with part B of title XI and provides for such assurances of
satisfactory performance by such an entity or organization as
the Secretary may prescribe.
(e)(1) Beginning April 1, 1990, for provisions relating to
the extension of eligibility for medical assistance for certain
families who have received aid pursuant to a State plan
approved under part A of title IV and have earned income, see
section 1925.
(2)(A) In the case of an individual who is enrolled with a
medicaid managed care organization (as defined in section
1903(m)(1)(A)), with a primary care case manager (as defined in
section 1905(t)), or with an eligible organization with a
contract under section 1876 and who would (but for this
paragraph) lose eligibility for benefits under this title
before the end of the minimum enrollment period (defined in
subparagraph (B)), the State plan may provide, notwithstanding
any other provision of this title, that the individual shall be
deemed to continue to be eligible for such benefits until the
end of such minimum period, but, except for benefits furnished
under section 1905(a)(4)(C), only with respect to such benefits
provided to the individual as an enrollee of such organization
or entity or by or through the case manager.
(B) For purposes of subparagraph (A), the term ``minimum
enrollment period'' means, with respect to an individual's
enrollment with an organization or entity under a State plan, a
period, established by the State, of not more than six months
beginning on the date the individual's enrollment with the
organization or entity becomes effective.
(3) At the option of the State, any individual who--
(A) is 18 years of age or younger and qualifies as a
disabled individual under section 1614(a);
(B) with respect to whom there has been a
determination by the State that--
(i) the individual requires a level of care
provided in a hospital, nursing facility, or
intermediate care facility for the mentally
retarded,
(ii) it is appropriate to provide such care
for the individual outside such an institution,
and
(iii) the estimated amount which would be
expended for medical assistance for the
individual for such care outside an institution
is not greater than the estimated amount which
would otherwise be expended for medical
assistance for the individual within an
appropriate institution; and
(C) if the individual were in a medical institution,
would be eligible for medical assistance under the
State plan under this title,
shall be deemed, for purposes of this title only, to be
an individual with respect to whom a supplemental
security income payment, or State supplemental payment,
respectively, is being paid under title XVI.
(4) A child born to a woman eligible for and receiving
medical assistance under a State plan on the date of the
child's birth shall be deemed to have applied for medical
assistance and to have been found eligible for such assistance
under such plan on the date of such birth and to remain
eligible for such assistance for a period of one year. During
the period in which a child is deemed under the preceding
sentence to be eligible for medical assistance, the medical
assistance eligibility identification number of the mother
shall also serve as the identification number of the child, and
all claims shall be submitted and paid under such number
(unless the State issues a separate identification number for
the child before such period expires). Notwithstanding the
preceding sentence, in the case of a child who is born in the
United States to an alien mother for whom medical assistance
for the delivery of the child is made available pursuant to
section 1903(v), the State immediately shall issue a separate
identification number for the child upon notification by the
facility at which such delivery occurred of the child's birth.
(5) A woman who, while pregnant, is eligible for, has applied
for, and has received medical assistance under the State plan,
shall continue to be eligible under the plan, as though she
were pregnant, for all pregnancy-related and postpartum medical
assistance under the plan, through the end of the month in
which the 60-day period (beginning on the last day of her
pregnancy) ends.
(6) In the case of a pregnant woman described in subsection
(a)(10) who, because of a change in income of the family of
which she is a member, would not otherwise continue to be
described in such subsection, the woman shall be deemed to
continue to be an individual described in subsection
(a)(10)(A)(i)(IV) and subsection (l)(1)(A) without regard to
such change of income through the end of the month in which the
60-day period (beginning on the last day of her pregnancy)
ends. The preceding sentence shall not apply in the case of a
woman who has been provided ambulatory prenatal care pursuant
to section 1920 during a presumptive eligibility period and is
then, in accordance with such section, determined to be
ineligible for medical assistance under the State plan.
(7) In the case of an infant or child described in
subparagraph (B), (C), or (D) of subsection (l)(1) or paragraph
(2) of section 1905(n)--
(A) who is receiving inpatient services for which
medical assistance is provided on the date the infant
or child attains the maximum age with respect to which
coverage is provided under the State plan for such
individuals, and
(B) who, but for attaining such age, would remain
eligible for medical assistance under such subsection,
the infant or child shall continue to be treated as an
individual described in such respective provision until the end
of the stay for which the inpatient services are furnished.
(8) If an individual is determined to be a qualified medicare
beneficiary (as defined in section 1905(p)(1)), such
determination shall apply to services furnished after the end
of the month in which the determination first occurs. For
purposes of payment to a State under section 1903(a), such
determination shall be considered to be valid for an individual
for a period of 12 months, except that a State may provide for
such determinations more frequently, but not more frequently
than once every 6 months for an individual.
(9)(A) At the option of the State, the plan may include as
medical assistance respiratory care services for any individual
who--
(i) is medically dependent on a ventilator for life
support at least six hours per day;
(ii) has been so dependent for at least 30
consecutive days (or the maximum number of days
authorized under the State plan, whichever is less) as
an inpatient;
(iii) but for the availability of respiratory care
services, would require respiratory care as an
inpatient in a hospital, nursing facility, or
intermediate care facility for the mentally retarded
and would be eligible to have payment made for such
inpatient care under the State plan;
(iv) has adequate social support services to be cared
for at home; and
(v) wishes to be cared for at home.
(B) The requirements of subparagraph (A)(ii) may be satisfied
by a continuous stay in one or more hospitals, nursing
facilities, or intermediate care facilities for the mentally
retarded.
(C) For purposes of this paragraph, respiratory care services
means services provided on a part-time basis in the home of the
individual by a respiratory therapist or other health care
professional trained in respiratory therapy (as determined by
the State), payment for which is not otherwise included within
other items and services furnished to such individual as
medical assistance under the plan.
(10)(A) The fact that an individual, child, or pregnant woman
may be denied aid under part A of title IV pursuant to section
402(a)(43) shall not be construed as denying (or permitting a
State to deny) medical assistance under this title to such
individual, child, or woman who is eligible for assistance
under this title on a basis other than the receipt of aid under
such part.
(B) If an individual, child, or pregnant woman is receiving
aid under part A of title IV and such aid is terminated
pursuant to section 402(a)(43), the State may not discontinue
medical assistance under this title for the individual, child,
or woman until the State has determined that the individual,
child, or woman is not eligible for assistance under this title
on a basis other than the receipt of aid under such part.
(11)(A) In the case of an individual who is enrolled with a
group health plan under section 1906 and who would (but for
this paragraph) lose eligibility for benefits under this title
before the end of the minimum enrollment period (defined in
subparagraph (B)), the State plan may provide, notwithstanding
any other provision of this title, that the individual shall be
deemed to continue to be eligible for such benefits until the
end of such minimum period, but only with respect to such
benefits provided to the individual as an enrollee of such
plan.
(B) For purposes of subparagraph (A), the term ``minimum
enrollment period'' means, with respect to an individual's
enrollment with a group health plan, a period established by
the State, of not more than 6 months beginning on the date the
individual's enrollment under the plan becomes effective.
(12) At the option of the State, the plan may provide that an
individual who is under an age specified by the State (not to
exceed 19 years of age) and who is determined to be eligible
for benefits under a State plan approved under this title under
subsection (a)(10)(A) shall remain eligible for those benefits
until the earlier of--
(A) the end of a period (not to exceed 12 months)
following the determination; or
(B) the time that the individual exceeds that age.
(13) Express Lane Option.--
(A) In general.--
(i) Option to use a finding from an express
lane agency.--At the option of the State, the
State plan may provide that in determining
eligibility under this title for a child (as
defined in subparagraph (G)), the State may
rely on a finding made within a reasonable
period (as determined by the State) from an
Express Lane agency (as defined in subparagraph
(F)) when it determines whether a child
satisfies one or more components of eligibility
for medical assistance under this title. The
State may rely on a finding from an Express
Lane agency notwithstanding sections
1902(a)(46)(B) and 1137(d) or any differences
in budget unit, disregard, deeming or other
methodology, if the following requirements are
met:
(I) Prohibition on determining
children ineligible for coverage.--If a
finding from an Express Lane agency
would result in a determination that a
child does not satisfy an eligibility
requirement for medical assistance
under this title and for child health
assistance under title XXI, the State
shall determine eligibility for
assistance using its regular
procedures.
(II) Notice requirement.--For any
child who is found eligible for medical
assistance under the State plan under
this title or child health assistance
under title XXI and who is subject to
premiums based on an Express Lane
agency's finding of such child's income
level, the State shall provide notice
that the child may qualify for lower
premium payments if evaluated by the
State using its regular policies and of
the procedures for requesting such an
evaluation.
(III) Compliance with screen and
enroll requirement.--The State shall
satisfy the requirements under
subparagraphs (A) and (B) of section
2102(b)(3) (relating to screen and
enroll) before enrolling a child in
child health assistance under title
XXI. At its option, the State may
fulfill such requirements in accordance
with either option provided under
subparagraph (C) of this paragraph.
(IV) Verification of citizenship or
nationality status.--The State shall
satisfy the requirements of section
1902(a)(46)(B) or 2105(c)(9), as
applicable for verifications of
citizenship or nationality status.
(V) Coding.--The State meets the
requirements of subparagraph (E).
(ii) Option to apply to renewals and
redeterminations.--The State may apply the
provisions of this paragraph when conducting
initial determinations of eligibility,
redeterminations of eligibility, or both, as
described in the State plan.
(B) Rules of construction.--Nothing in this paragraph
shall be construed--
(i) to limit or prohibit a State from taking
any actions otherwise permitted under this
title or title XXI in determining eligibility
for or enrolling children into medical
assistance under this title or child health
assistance under title XXI; or
(ii) to modify the limitations in section
1902(a)(5) concerning the agencies that may
make a determination of eligibility for medical
assistance under this title.
(C) Options for satisfying the screen and enroll
requirement.--
(i) In general.--With respect to a child
whose eligibility for medical assistance under
this title or for child health assistance under
title XXI has been evaluated by a State agency
using an income finding from an Express Lane
agency, a State may carry out its duties under
subparagraphs (A) and (B) of section 2102(b)(3)
(relating to screen and enroll) in accordance
with either clause (ii) or clause (iii).
(ii) Establishing a screening threshold.--
(I) In general.--Under this clause,
the State establishes a screening
threshold set as a percentage of the
Federal poverty level that exceeds the
highest income threshold applicable
under this title to the child by a
minimum of 30 percentage points or, at
State option, a higher number of
percentage points that reflects the
value (as determined by the State and
described in the State plan) of any
differences between income
methodologies used by the program
administered by the Express Lane agency
and the methodologies used by the State
in determining eligibility for medical
assistance under this title.
(II) Children with income not above
threshold.--If the income of a child
does not exceed the screening
threshold, the child is deemed to
satisfy the income eligibility criteria
for medical assistance under this title
regardless of whether such child would
otherwise satisfy such criteria.
(III) Children with income above
threshold.--If the income of a child
exceeds the screening threshold, the
child shall be considered to have an
income above the Medicaid applicable
income level described in section
2110(b)(4) and to satisfy the
requirement under section 2110(b)(1)(C)
(relating to the requirement that CHIP
matching funds be used only for
children not eligible for Medicaid). If
such a child is enrolled in child
health assistance under title XXI, the
State shall provide the parent,
guardian, or custodial relative with
the following:
(aa) Notice that the child
may be eligible to receive
medical assistance under the
State plan under this title if
evaluated for such assistance
under the State's regular
procedures and notice of the
process through which a parent,
guardian, or custodial relative
can request that the State
evaluate the child's
eligibility for medical
assistance under this title
using such regular procedures.
(bb) A description of
differences between the medical
assistance provided under this
title and child health
assistance under title XXI,
including differences in cost-
sharing requirements and
covered benefits.
(iii) Temporary enrollment in chip pending
screen and enroll.--
(I) In general.--Under this clause, a
State enrolls a child in child health
assistance under title XXI for a
temporary period if the child appears
eligible for such assistance based on
an income finding by an Express Lane
agency.
(II) Determination of eligibility.--
During such temporary enrollment
period, the State shall determine the
child's eligibility for child health
assistance under title XXI or for
medical assistance under this title in
accordance with this clause.
(III) Prompt follow up.--In making
such a determination, the State shall
take prompt action to determine whether
the child should be enrolled in medical
assistance under this title or child
health assistance under title XXI
pursuant to subparagraphs (A) and (B)
of section 2102(b)(3) (relating to
screen and enroll).
(IV) Requirement for simplified
determination.--In making such a
determination, the State shall use
procedures that, to the maximum
feasible extent, reduce the burden
imposed on the individual of such
determination. Such procedures may not
require the child's parent, guardian,
or custodial relative to provide or
verify information that already has
been provided to the State agency by an
Express Lane agency or another source
of information unless the State agency
has reason to believe the information
is erroneous.
(V) Availability of chip matching
funds during temporary enrollment
period.--Medical assistance for items
and services that are provided to a
child enrolled in title XXI during a
temporary enrollment period under this
clause shall be treated as child health
assistance under such title.
(D) Option for automatic enrollment.--
(i) In general.--The State may initiate and
determine eligibility for medical assistance
under the State Medicaid plan or for child
health assistance under the State CHIP plan
without a program application from, or on
behalf of, the child based on data obtained
from sources other than the child (or the
child's family), but a child can only be
automatically enrolled in the State Medicaid
plan or the State CHIP plan if the child or the
family affirmatively consents to being enrolled
through affirmation in writing, by telephone,
orally, through electronic signature, or
through any other means specified by the
Secretary or by signature on an Express Lane
agency application, if the requirement of
clause (ii) is met.
(ii) Information requirement.--The
requirement of this clause is that the State
informs the parent, guardian, or custodial
relative of the child of the services that will
be covered, appropriate methods for using such
services, premium or other cost sharing charges
(if any) that apply, medical support
obligations (under section 1912(a)) created by
enrollment (if applicable), and the actions the
parent, guardian, or relative must take to
maintain enrollment and renew coverage.
(E) Coding; application to enrollment error rates.--
(i) In general.--For purposes of subparagraph
(A)(iv), the requirement of this subparagraph
for a State is that the State agrees to--
(I) assign such codes as the
Secretary shall require to the children
who are enrolled in the State Medicaid
plan or the State CHIP plan through
reliance on a finding made by an
Express Lane agency for the duration of
the State's election under this
paragraph;
(II) annually provide the Secretary
with a statistically valid sample (that
is approved by Secretary) of the
children enrolled in such plans through
reliance on such a finding by
conducting a full Medicaid eligibility
review of the children identified for
such sample for purposes of determining
an eligibility error rate (as described
in clause (iv)) with respect to the
enrollment of such children (and shall
not include such children in any data
or samples used for purposes of
complying with a Medicaid Eligibility
Quality Control (MEQC) review or a
payment error rate measurement (PERM)
requirement);
(III) submit the error rate
determined under subclause (II) to the
Secretary;
(IV) if such error rate exceeds 3
percent for either of the first 2
fiscal years in which the State elects
to apply this paragraph, demonstrate to
the satisfaction of the Secretary the
specific corrective actions implemented
by the State to improve upon such error
rate; and
(V) if such error rate exceeds 3
percent for any fiscal year in which
the State elects to apply this
paragraph, a reduction in the amount
otherwise payable to the State under
section 1903(a) for quarters for that
fiscal year, equal to the total amount
of erroneous excess payments determined
for the fiscal year only with respect
to the children included in the sample
for the fiscal year that are in excess
of a 3 percent error rate with respect
to such children.
(ii) No punitive action based on error
rate.--The Secretary shall not apply the error
rate derived from the sample under clause (i)
to the entire population of children enrolled
in the State Medicaid plan or the State CHIP
plan through reliance on a finding made by an
Express Lane agency, or to the population of
children enrolled in such plans on the basis of
the State's regular procedures for determining
eligibility, or penalize the State on the basis
of such error rate in any manner other than the
reduction of payments provided for under clause
(i)(V).
(iii) Rule of construction.--Nothing in this
paragraph shall be construed as relieving a
State that elects to apply this paragraph from
being subject to a penalty under section
1903(u), for payments made under the State
Medicaid plan with respect to ineligible
individuals and families that are determined to
exceed the error rate permitted under that
section (as determined without regard to the
error rate determined under clause (i)(II)).
(iv) Error rate defined.--In this
subparagraph, the term ``error rate'' means the
rate of erroneous excess payments for medical
assistance (as defined in section
1903(u)(1)(D)) for the period involved, except
that such payments shall be limited to
individuals for which eligibility
determinations are made under this paragraph
and except that in applying this paragraph
under title XXI, there shall be substituted for
references to provisions of this title
corresponding provisions within title XXI.
(F) Express lane agency.--
(i) In general.--In this paragraph, the term
``Express Lane agency'' means a public agency
that--
(I) is determined by the State
Medicaid agency or the State CHIP
agency (as applicable) to be capable of
making the determinations of one or
more eligibility requirements described
in subparagraph (A)(i);
(II) is identified in the State
Medicaid plan or the State CHIP plan;
and
(III) notifies the child's family--
(aa) of the information which
shall be disclosed in
accordance with this paragraph;
(bb) that the information
disclosed will be used solely
for purposes of determining
eligibility for medical
assistance under the State
Medicaid plan or for child
health assistance under the
State CHIP plan; and
(cc) that the family may
elect to not have the
information disclosed for such
purposes; and
(IV) enters into, or is subject to,
an interagency agreement to limit the
disclosure and use of the information
disclosed.
(ii) Inclusion of specific public agencies
and indian tribes and tribal organizations.--
Such term includes the following:
(I) A public agency that determines
eligibility for assistance under any of
the following:
(aa) The temporary assistance
for needy families program
funded under part A of title
IV.
(bb) A State program funded
under part D of title IV.
(cc) The State Medicaid plan.
(dd) The State CHIP plan.
(ee) The Food and Nutrition
Act of 2008 (7 U.S.C. 2011 et
seq.).
(ff) The Head Start Act (42
U.S.C. 9801 et seq.).
(gg) The Richard B. Russell
National School Lunch Act (42
U.S.C. 1751 et seq.).
(hh) The Child Nutrition Act
of 1966 (42 U.S.C. 1771 et
seq.).
(ii) The Child Care and
Development Block Grant Act of
1990 (42 U.S.C. 9858 et seq.).
(jj) The Stewart B. McKinney
Homeless Assistance Act (42
U.S.C. 11301 et seq.).
(kk) The United States
Housing Act of 1937 (42 U.S.C.
1437 et seq.).
(ll) The Native American
Housing Assistance and Self-
Determination Act of 1996 (25
U.S.C. 4101 et seq.).
(II) A State-specified governmental
agency that has fiscal liability or
legal responsibility for the accuracy
of the eligibility determination
findings relied on by the State.
(III) A public agency that is subject
to an interagency agreement limiting
the disclosure and use of the
information disclosed for purposes of
determining eligibility under the State
Medicaid plan or the State CHIP plan.
(IV) The Indian Health Service, an
Indian Tribe, Tribal Organization, or
Urban Indian Organization (as defined
in section 1139(c)).
(iii) Exclusions.--Such term does not include
an agency that determines eligibility for a
program established under the Social Services
Block Grant established under title XX or a
private, for-profit organization.
(iv) Rules of construction.--Nothing in this
paragraph shall be construed as--
(I) exempting a State Medicaid agency
from complying with the requirements of
section 1902(a)(4) relating to merit-
based personnel standards for employees
of the State Medicaid agency and
safeguards against conflicts of
interest); or
(II) authorizing a State Medicaid
agency that elects to use Express Lane
agencies under this subparagraph to use
the Express Lane option to avoid
complying with such requirements for
purposes of making eligibility
determinations under the State Medicaid
plan.
(v) Additional definitions.--In this
paragraph:
(I) State.--The term ``State'' means
1 of the 50 States or the District of
Columbia.
(II) State chip agency.--The term
``State CHIP agency'' means the State
agency responsible for administering
the State CHIP plan.
(III) State chip plan.--The term
``State CHIP plan'' means the State
child health plan established under
title XXI and includes any waiver of
such plan.
(IV) State medicaid agency.--The term
``State Medicaid agency'' means the
State agency responsible for
administering the State Medicaid plan.
(V) State medicaid plan.--The term
``State Medicaid plan'' means the State
plan established under title XIX and
includes any waiver of such plan.
(G) Child defined.--For purposes of this paragraph,
the term ``child'' means an individual under 19 years
of age, or, at the option of a State, such higher age,
not to exceed 21 years of age, as the State may elect.
(H) State option to rely on state income tax data or
return.--At the option of the State, a finding from an
Express Lane agency may include gross income or
adjusted gross income shown by State income tax records
or returns.
(I) Application.--This paragraph shall not apply with
respect to eligibility determinations made after
September 30, 2017.
(14) Income determined using modified adjusted gross
income.--
(A) In general.--Notwithstanding subsection
(r) or any other provision of this title,
except as provided in subparagraph (D), for
purposes of determining income eligibility for
medical assistance under the State plan or
under any waiver of such plan and for any other
purpose applicable under the plan or waiver for
which a determination of income is required,
including with respect to the imposition of
premiums and cost-sharing, a State shall use
the modified adjusted gross income of an
individual and, in the case of an individual in
a family greater than 1, the household income
of such family. A State shall establish income
eligibility thresholds for populations to be
eligible for medical assistance under the State
plan or a waiver of the plan using modified
adjusted gross income and household income that
are not less than the effective income
eligibility levels that applied under the State
plan or waiver on the date of enactment of the
Patient Protection and Affordable Care Act. For
purposes of complying with the maintenance of
effort requirements under subsection (gg)
during the transition to modified adjusted
gross income and household income, a State
shall, working with the Secretary, establish an
equivalent income test that ensures individuals
eligible for medical assistance under the State
plan or under a waiver of the plan on the date
of enactment of the Patient Protection and
Affordable Care Act, do not lose coverage under
the State plan or under a waiver of the plan.
The Secretary may waive such provisions of this
title and title XXI as are necessary to ensure
that States establish income and eligibility
determination systems that protect
beneficiaries.
(B) No income or expense disregards.--Subject
to subparagraph (I), no type of expense, block,
or other income disregard shall be applied by a
State to determine income eligibility for
medical assistance under the State plan or
under any waiver of such plan or for any other
purpose applicable under the plan or waiver for
which a determination of income is required.
(C) No assets test.--A State shall not apply
any assets or resources test for purposes of
determining eligibility for medical assistance
under the State plan or under a waiver of the
plan.
(D) Exceptions.--
(i) Individuals eligible because of
other aid or assistance, elderly
individuals, medically needy
individuals, and individuals eligible
for medicare cost-sharing.--
Subparagraphs (A), (B), and (C) shall
not apply to the determination of
eligibility under the State plan or
under a waiver for medical assistance
for the following:
(I) Individuals who are
eligible for medical assistance
under the State plan or under a
waiver of the plan on a basis
that does not require a
determination of income by the
State agency administering the
State plan or waiver, including
as a result of eligibility for,
or receipt of, other Federal or
State aid or assistance,
individuals who are eligible on
the basis of receiving (or
being treated as if receiving)
supplemental security income
benefits under title XVI, and
individuals who are eligible as
a result of being or being
deemed to be a child in foster
care under the responsibility
of the State.
(II) Individuals who have
attained age 65.
(III) Individuals who qualify
for medical assistance under
the State plan or under any
waiver of such plan on the
basis of being blind or
disabled (or being treated as
being blind or disabled)
without regard to whether the
individual is eligible for
supplemental security income
benefits under title XVI on the
basis of being blind or
disabled and including an
individual who is eligible for
medical assistance on the basis
of section 1902(e)(3).
(IV) Individuals described in
subsection (a)(10)(C).
(V) Individuals described in
any clause of subsection
(a)(10)(E).
(ii) Express lane agency findings.--
In the case of a State that elects the
Express Lane option under paragraph
(13), notwithstanding subparagraphs
(A), (B), and (C), the State may rely
on a finding made by an Express Lane
agency in accordance with that
paragraph relating to the income of an
individual for purposes of determining
the individual's eligibility for
medical assistance under the State plan
or under a waiver of the plan.
(iii) Medicare prescription drug
subsidies determinations.--
Subparagraphs (A), (B), and (C) shall
not apply to any determinations of
eligibility for premium and cost-
sharing subsidies under and in
accordance with section 1860D-14 made
by the State pursuant to section
1935(a)(2).
(iv) Long-term care.--Subparagraphs
(A), (B), and (C) shall not apply to
any determinations of eligibility of
individuals for purposes of medical
assistance for nursing facility
services, a level of care in any
institution equivalent to that of
nursing facility services, home or
community-based services furnished
under a waiver or State plan amendment
under section 1915 or a waiver under
section 1115, and services described in
section 1917(c)(1)(C)(ii).
(v) Grandfather of current enrollees
until date of next regular
redetermination.--An individual who, on
January 1, 2014, is enrolled in the
State plan or under a waiver of the
plan and who would be determined
ineligible for medical assistance
solely because of the application of
the modified adjusted gross income or
household income standard described in
subparagraph (A), shall remain eligible
for medical assistance under the State
plan or waiver (and subject to the same
premiums and cost-sharing as applied to
the individual on that date) through
March 31, 2014, or the date on which
the individual's next regularly
scheduled redetermination of
eligibility is to occur, whichever is
later.
(E) Transition planning and oversight.--Each
State shall submit to the Secretary for the
Secretary's approval the income eligibility
thresholds proposed to be established using
modified adjusted gross income and household
income, the methodologies and procedures to be
used to determine income eligibility using
modified adjusted gross income and household
income and, if applicable, a State plan
amendment establishing an optional eligibility
category under subsection (a)(10)(A)(ii)(XX).
To the extent practicable, the State shall use
the same methodologies and procedures for
purposes of making such determinations as the
State used on the date of enactment of the
Patient Protection and Affordable Care Act. The
Secretary shall ensure that the income
eligibility thresholds proposed to be
established using modified adjusted gross
income and household income, including under
the eligibility category established under
subsection (a)(10)(A)(ii)(XX), and the
methodologies and procedures proposed to be
used to determine income eligibility, will not
result in children who would have been eligible
for medical assistance under the State plan or
under a waiver of the plan on the date of
enactment of the Patient Protection and
Affordable Care Act no longer being eligible
for such assistance.
(F) Limitation on secretarial authority.--The
Secretary shall not waive compliance with the
requirements of this paragraph except to the
extent necessary to permit a State to
coordinate eligibility requirements for dual
eligible individuals (as defined in section
1915(h)(2)(B)) under the State plan or under a
waiver of the plan and under title XVIII and
individuals who require the level of care
provided in a hospital, a nursing facility, or
an intermediate care facility for the mentally
retarded.
(G) Definitions of modified adjusted gross
income and household income.--In this
paragraph, the terms ``modified adjusted gross
income'' and ``household income'' have the
meanings given such terms in section 36B(d)(2)
of the Internal Revenue Code of 1986.
(H) Continued application of medicaid rules
regarding point-in-time income and sources of
income.--The requirement under this paragraph
for States to use modified adjusted gross
income and household income to determine income
eligibility for medical assistance under the
State plan or under any waiver of such plan and
for any other purpose applicable under the plan
or waiver for which a determination of income
is required shall not be construed as affecting
or limiting the application of--
(i) the requirement under this title
and under the State plan or a waiver of
the plan to determine an individual's
income as of the point in time at which
an application for medical assistance
under the State plan or a waiver of the
plan is processed; or
(ii) any rules established under this
title or under the State plan or a
waiver of the plan regarding sources of
countable income.
(I) Treatment of portion of modified adjusted
gross income.--For purposes of determining the
income eligibility of an individual for medical
assistance whose eligibility is determined
based on the application of modified adjusted
gross income under subparagraph (A), the State
shall--
(i) determine the dollar equivalent
of the difference between the upper
income limit on eligibility for such an
individual (expressed as a percentage
of the poverty line) and such upper
income limit increased by 5 percentage
points; and
(ii) notwithstanding the requirement
in subparagraph (A) with respect to use
of modified adjusted gross income,
utilize as the applicable income of
such individual, in determining such
income eligibility, an amount equal to
the modified adjusted gross income
applicable to such individual reduced
by such dollar equivalent amount.
(14) Exclusion of compensation for participation in a
clinical trial for testing of treatments for a rare
disease or condition.--The first $2,000 received by an
individual (who has attained 19 years of age) as
compensation for participation in a clinical trial
meeting the requirements of section 1612(b)(26) shall
be disregarded for purposes of determining the income
eligibility of such individual for medical assistance
under the State plan or any waiver of such plan.
(f) Notwithstanding any other provision of this title, except
as provided in subsection (e) and section 1619(b)(3) and
section 1924, except with respect to qualified disabled and
working individuals (described in section 1905(s)), and except
with respect to qualified medicare beneficiaries, qualified
severely impaired individuals, and individuals described in
subsection (m)(1), no State not eligible to participate in the
State plan program established under title XVI shall be
required to provide medical assistance to any aged, blind, or
disabled individual (within the meaning of title XVI) for any
month unless such State would be (or would have been) required
to provide medical assistance to such individual for such month
had its plan for medical assistance approved under this title
and in effect on January 1, 1972, been in effect in such month,
except that for this purpose any such individual shall be
deemed eligible for medical assistance under such State plan if
(in addition to meeting such other requirements as are or may
be imposed under the State plan) the income of any such
individual as determined in accordance with section 1903(f)
(after deducting any supplemental security income payment and
State supplementary payment made with respect to such
individual, and incurred expenses for medical care as
recognized under State law regardless of whether such expenses
are reimbursed under another public program of the State or
political subdivision thereof) is not in excess of the standard
for medical assistance established under the State plan as in
effect on January 1, 1972. In States which provide medical
assistance to individuals pursuant to paragraph (10)(C) of
subsection (a) of this section, an individual who is eligible
for medical assistance by reason of the requirements of this
section concerning the deduction of incurred medical expenses
from income shall be considered an individual eligible for
medical assistance under paragraph (10)(A) of that subsection
if that individual is, or is eligible to be (1) an individual
with respect to whom there is payable a State supplementary
payment on the basis of which similarly situated individuals
are eligible to receive medical assistance equal in amount,
duration, and scope to that provided to individuals eligible
under paragraph (10)(A), or (2) an eligible individual or
eligible spouse, as defined in title XVI, with respect to whom
supplemental security income benefits are payable; otherwise
that individual shall be considered to be an individual
eligible for medical assistance under paragraph (10)(C) of that
subsection. In States which do not provide medical assistance
to individuals pursuant to paragraph (10)(C) of that
subsection, an individual who is eligible for medical
assistance by reason of the requirements of this section
concerning the deduction of incurred medical expenses from
income shall be considered an individual eligible for medical
assistance under paragraph (10)(A) of that subsection.
(g) In addition to any other sanction available to a State, a
State may provide for a reduction of any payment amount
otherwise due with respect to a person who furnishes services
under the plan in an amount equal to up to three times the
amount of any payment sought to be collected by that person in
violation of subsection (a)(25)(C).
(h) Nothing in this title (including subsections (a)(13) and
(a)(30) of this section) shall be construed as authorizing the
Secretary to limit the amount of payment that may be made under
a plan under this title for home and community care.
(i)(1) In addition to any other authority under State law,
where a State determines that a intermediate care facility for
the mentally retarded which is certified for participation
under its plan no longer substantially meets the requirements
for such a facility under this title and further determines
that the facility's deficiencies--
(A) immediately jeopardize the health and safety of
its patients, the State shall provide for the
termination of the facility's certification for
participation under the plan and may provide, or
(B) do not immediately jeopardize the health and
safety of its patients, the State may, in lieu of
providing for terminating the facility's certification
for participation under the plan, establish alternative
remedies if the State demonstrates to the Secretary's
satisfaction that the alternative remedies are
effective in deterring noncompliance and correcting
deficiencies, and may provide
that no payment will be made under the State plan with respect
to any individual admitted to such facility after a date
specified by the State.
(2) The State shall not make such a decision with respect to
a facility until the facility has had a reasonable opportunity,
following the initial determination that it no longer
substantially meets the requirements for such a facility under
this title, to correct its deficiencies, and, following this
period, has been given reasonable notice and opportunity for a
hearing.
(3) The State's decision to deny payment may be made
effective only after such notice to the public and to the
facility as may be provided for by the State, and its
effectiveness shall terminate (A) when the State finds that the
facility is in substantial compliance (or is making good faith
efforts to achieve substantial compliance) with the
requirements for such a facility under this title, or (B) in
the case described in paragraph (1)(B), with the end of the
eleventh month following the month such decision is made
effective, whichever occurs first. If a facility to which
clause (B) of the previous sentence applies still fails to
substantially meet the provisions of the respective section on
the date specified in such clause, the State shall terminate
such facility's certification for participation under the plan
effective with the first day of the first month following the
month specified in such clause.
(j) Notwithstanding any other requirement of this title, the
Secretary may waive or modify any requirement of this title
with respect to the medical assistance program in American
Samoa and the Northern Mariana Islands, other than a waiver of
the Federal medical assistance percentage, the limitation in
section 1108(f), or the requirement that payment may be made
for medical assistance only with respect to amounts expended by
American Samoa or the Northern Mariana Islands for care and
services described in a numbered paragraph of section 1905(a).
(k)(1) The medical assistance provided to an individual
described in subclause (VIII) of subsection (a)(10)(A)(i) shall
consist of benchmark coverage described in section 1937(b)(1)
or benchmark equivalent coverage described in section
1937(b)(2). Such medical assistance shall be provided subject
to the requirements of section 1937, without regard to whether
a State otherwise has elected the option to provide medical
assistance through coverage under that section, unless an
individual described in subclause (VIII) of subsection
(a)(10)(A)(i) is also an individual for whom, under
subparagraph (B) of section 1937(a)(2), the State may not
require enrollment in benchmark coverage described in
subsection (b)(1) of section 1937 or benchmark equivalent
coverage described in subsection (b)(2) of that section.
(2) Beginning with the first day of any fiscal year quarter
that begins on or after April 1, 2010, and before January 1,
2014, a State may elect through a State plan amendment to
provide medical assistance to individuals who would be
described in subclause (VIII) of subsection (a)(10)(A)(i) if
that subclause were effective before January 1, 2014. A State
may elect to phase-in the extension of eligibility for medical
assistance to such individuals based on income, so long as the
State does not extend such eligibility to individuals described
in such subclause with higher income before making individuals
described in such subclause with lower income eligible for
medical assistance.
(3) If an individual described in subclause (VIII) of
subsection (a)(10)(A)(i) is the parent of a child who is under
19 years of age (or such higher age as the State may have
elected) who is eligible for medical assistance under the State
plan or under a waiver of such plan (under that subclause or
under a State plan amendment under paragraph (2), the
individual may not be enrolled under the State plan unless the
individual's child is enrolled under the State plan or under a
waiver of the plan or is enrolled in other health insurance
coverage. For purposes of the preceding sentence, the term
``parent'' includes an individual treated as a caretaker
relative for purposes of carrying out section 1931.
(l)(1) Individuals described in this paragraph are--
(A) women during pregnancy (and during the 60-day
period beginning on the last day of the pregnancy),
(B) infants under one year of age,
(C) children who have attained one year of age but
have not attained 6 years of age, and
(D) children born after September 30, 1983 (or, at
the option of a State, after any earlier date), who
have attained 6 years of age but have not attained 19
years of age,
who are not described in any of subclauses (I) through (III) of
subsection (a)(10)(A)(i) and whose family income does not
exceed the income level established by the State under
paragraph (2) for a family size equal to the size of the
family, including the woman, infant, or child.
(2)(A)(i) For purposes of paragraph (1) with respect to
individuals described in subparagraph (A) or (B) of that
paragraph, the State shall establish an income level which is a
percentage (not less than the percentage provided under clause
(ii) and not more than 185 percent) of the income official
poverty line (as defined by the Office of Management and
Budget, and revised annually in accordance with section 673(2)
of the Omnibus Budget Reconciliation Act of 1981) applicable to
a family of the size involved.
(ii) The percentage provided under this clause, with respect
to eligibility for medical assistance on or after--
(I) July 1, 1989, is 75 percent, or, if greater, the
percentage provided under clause (iii), and
(II) April 1, 1990, 133 percent, or, if greater, the
percentage provided under clause (iv).
(iii) In the case of a State which, as of the date of the
enactment of this clause, has elected to provide, and provides,
medical assistance to individuals described in this subsection
or has enacted legislation authorizing, or appropriating funds,
to provide such assistance to such individuals before July 1,
1989, the percentage provided under clause (ii)(I) shall not be
less than--
(I) the percentage specified by the State in an
amendment to its State plan (whether approved or not)
as of the date of the enactment of this clause, or
(II) if no such percentage is specified as of the
date of the enactment of this clause, the percentage
established under the State's authorizing legislation
or provided for under the State's appropriations;
but in no case shall this clause require the percentage
provided under clause (ii)(I) to exceed 100 percent.
(iv) In the case of a State which, as of the date of the
enactment of this clause, has established under clause (i), or
has enacted legislation authorizing, or appropriating funds, to
provide for, a percentage (of the income official poverty line)
that is greater than 133 percent, the percentage provided under
clause (ii) for medical assistance on or after April 1, 1990,
shall not be less than--
(I) the percentage specified by the State in an
amendment to its State plan (whether approved or not)
as of the date of the enactment of this clause, or
(II) if no such percentage is specified as of the
date of the enactment of this clause, the percentage
established under the State's authorizing legislation
or provided for under the State's appropriations.
(B) For purposes of paragraph (1) with respect to individuals
described in subparagraph (C) of such paragraph, the State
shall establish an income level which is equal to 133 percent
of the income official poverty line described in subparagraph
(A) applicable to a family of the size involved.
(C) For purposes of paragraph (1) with respect to individuals
described in subparagraph (D) of that paragraph, the State
shall establish an income level which is equal to 100 percent
(or, beginning January 1, 2014, 133 percent) of the income
official poverty line described in subparagraph (A) applicable
to a family of the size involved.
(3) Notwithstanding subsection (a)(17), for individuals who
are eligible for medical assistance because of subsection
(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or
(a)(10)(A)(ii)(IX)--
(A) application of a resource standard shall be at
the option of the State;
(B) any resource standard or methodology that is
applied with respect to an individual described in
subparagraph (A) of paragraph (1) may not be more
restrictive than the resource standard or methodology
that is applied under title XVI;
(C) any resource standard or methodology that is
applied with respect to an individual described in
subparagraph (B), (C), or (D) of paragraph (1) may not
be more restrictive than the corresponding methodology
that is applied under the State plan under part A of
title IV;
(D) the income standard to be applied is the
appropriate income standard established under paragraph
(2); and
(E) family income shall be determined in accordance
with the methodology employed under the State plan
under part A or E of title IV (except to the extent
such methodology is inconsistent with clause (D) of
subsection (a)(17)), and costs incurred for medical
care or for any other type of remedial care shall not
be taken into account.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(17), require
or permit such treatment for other individuals.
(4)(A) In the case of any State which is providing medical
assistance to its residents under a waiver granted under
section 1115, the Secretary shall require the State to provide
medical assistance for pregnant women and infants under age 1
described in subsection (a)(10)(A)(i)(IV) and for children
described in subsection (a)(10)(A)(i)(VI) or subsection
(a)(10)(A)(i)(VII) in the same manner as the State would be
required to provide such assistance for such individuals if the
State had in effect a plan approved under this title.
(B) In the case of a State which is not one of the 50 States
or the District of Columbia, the State need not meet the
requirement of subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI),
or (a)(10)(A)(i)(VII) and, for purposes of paragraph (2)(A),
the State may substitute for the percentage provided under
clause (ii) of such paragraph any percentage.
(m)(1) Individuals described in this paragraph are
individuals--
(A) who are 65 years of age or older or are disabled
individuals (as determined under section 1614(a)(3)),
(B) whose income (as determined under section 1612
for purposes of the supplemental security income
program, except as provided in paragraph (2)(C)) does
not exceed an income level established by the State
consistent with paragraph (2)(A), and
(C) whose resources (as determined under section 1613
for purposes of the supplemental security income
program) do not exceed (except as provided in paragraph
(2)(B)) the maximum amount of resources that an
individual may have and obtain benefits under that
program.
(2)(A) The income level established under paragraph (1)(B)
may not exceed a percentage (not more than 100 percent) of the
official poverty line (as defined by the Office of Management
and Budget, and revised annually in accordance with section
673(2) of the Omnibus Budget Reconciliation Act of 1981)
applicable to a family of the size involved.
(B) In the case of a State that provides medical assistance
to individuals not described in subsection (a)(10)(A) and at
the State's option, the State may use under paragraph (1)(C)
such resource level (which is higher than the level described
in that paragraph) as may be applicable with respect to
individuals described in paragraph (1)(A) who are not described
in subsection (a)(10)(A).
(C) The provisions of section 1905(p)(2)(D) shall apply to
determinations of income under this subsection in the same
manner as they apply to determinations of income under section
1905(p).
(3) Notwithstanding subsection (a)(17), for individuals
described in paragraph (1) who are covered under the State plan
by virtue of subsection (a)(10)(A)(ii)(X)--
(A) the income standard to be applied is the income
standard described in paragraph (1)(B), and
(B) except as provided in section 1612(b)(4)(B)(ii),
costs incurred for medical care or for any other type
of remedial care shall not be taken into account in
determining income.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(17), require
or permit such treatment for other individuals.
(4) Notwithstanding subsection (a)(17), for qualified
medicare beneficiaries described in section 1905(p)(1)--
(A) the income standard to be applied is the income
standard described in section 1905(p)(1)(B), and
(B) except as provided in section 1612(b)(4)(B)(ii),
costs incurred for medical care or for any other type
of remedial care shall not be taken into account in
determining income.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(17), require
or permit such treatment for other individuals.
(n)(1) In the case of medical assistance furnished under this
title for medicare cost-sharing respecting the furnishing of a
service or item to a qualified medicare beneficiary, the State
plan may provide payment in an amount with respect to the
service or item that results in the sum of such payment amount
and any amount of payment made under title XVIII with respect
to the service or item exceeding the amount that is otherwise
payable under the State plan for the item or service for
eligible individuals who are not qualified medicare
beneficiaries.
(2) In carrying out paragraph (1), a State is not required to
provide any payment for any expenses incurred relating to
payment for deductibles, coinsurance, or copayments for
medicare cost-sharing to the extent that payment under title
XVIII for the service would exceed the payment amount that
otherwise would be made under the State plan under this title
for such service if provided to an eligible recipient other
than a medicare beneficiary.
(3) In the case in which a State's payment for medicare cost-
sharing for a qualified medicare beneficiary with respect to an
item or service is reduced or eliminated through the
application of paragraph (2)--
(A) for purposes of applying any limitation under
title XVIII on the amount that the beneficiary may be
billed or charged for the service, the amount of
payment made under title XVIII plus the amount of
payment (if any) under the State plan shall be
considered to be payment in full for the service;
(B) the beneficiary shall not have any legal
liability to make payment to a provider or to an
organization described in section 1903(m)(1)(A) for the
service; and
(C) any lawful sanction that may be imposed upon a
provider or such an organization for excess charges
under this title or title XVIII shall apply to the
imposition of any charge imposed upon the individual in
such case.
This paragraph shall not be construed as preventing payment of
any medicare cost-sharing by a medicare supplemental policy or
an employer retiree health plan on behalf of an individual.
(o) Notwithstanding any provision of subsection (a) to the
contrary, a State plan under this title shall provide that any
supplemental security income benefits paid by reason of
subparagraph (E) or (G) of section 1611(e)(1) to an individual
who--
(1) is eligible for medical assistance under the
plan, and
(2) is in a hospital, skilled nursing facility, or
intermediate care facility at the time such benefits
are paid,
will be disregarded for purposes of determining the amount of
any post-eligibility contribution by the individual to the cost
of the care and services provided by the hospital, skilled
nursing facility, or intermediate care facility.
(p)(1) In addition to any other authority, a State may
exclude any individual or entity for purposes of participating
under the State plan under this title for any reason for which
the Secretary could exclude the individual or entity from
participation in a program under title XVIII under section
1128, 1128A, or 1866(b)(2).
(2) In order for a State to receive payments for medical
assistance under section 1903(a), with respect to payments the
State makes to a medicaid managed care organization (as defined
in section 1903(m)) or to an entity furnishing services under a
waiver approved under section 1915(b)(1), the State must
provide that it will exclude from participation, as such an
organization or entity, any organization or entity that--
(A) could be excluded under section 1128(b)(8)
(relating to owners and managing employees who have
been convicted of certain crimes or received other
sanctions),
(B) has, directly or indirectly, a substantial
contractual relationship (as defined by the Secretary)
with an individual or entity that is described in
section 1128(b)(8)(B), or
(C) employs or contracts with any individual or
entity that is excluded from participation under this
title under section 1128 or 1128A for the provision of
health care, utilization review, medical social work,
or administrative services or employs or contracts with
any entity for the provision (directly or indirectly)
through such an excluded individual or entity of such
services.
(3) As used in this subsection, the term ``exclude'' includes
the refusal to enter into or renew a participation agreement or
the termination of such an agreement.
(q)(1)(A) In order to meet the requirement of subsection
(a)(50), the State plan must provide that, in the case of an
institutionalized individual or couple described in
subparagraph (B), in determining the amount of the individual's
or couple's income to be applied monthly to payment for the
cost of care in an institution, there shall be deducted from
the monthly income (in addition to other allowances otherwise
provided under the State plan) a monthly personal needs
allowance--
(i) which is reasonable in amount for clothing and
other personal needs of the individual (or couple)
while in an institution, and
(ii) which is not less (and may be greater) than the
minimum monthly personal needs allowance described in
paragraph (2).
(B) In this subsection, the term ``institutionalized
individual or couple'' means an individual or married couple--
(i) who is an inpatient (or who are inpatients) in a
medical institution or nursing facility for which
payments are made under this title throughout a month,
and
(ii) who is or are determined to be eligible for
medical assistance under the State plan.
(2) The minimum monthly personal needs allowance described in
this paragraph is $30 for an institutionalized individual and
$60 for an institutionalized couple (if both are aged, blind,
or disabled, and their incomes are considered available to each
other in determining eligibility).
(r)(1)(A) For purposes of sections 1902(a)(17) and
1924(d)(1)(D) and for purposes of a waiver under section 1915,
with respect to the post-eligibility treatment of income of
individuals who are institutionalized or receiving home or
community-based services under such a waiver, the treatment
described in subparagraph (B) shall apply, there shall be
disregarded reparation payments made by the Federal Republic of
Germany, and there shall be taken into account amounts for
incurred expenses for medical or remedial care that are not
subject to payment by a third party, including--
(i) medicare and other health insurance premiums,
deductibles, or coinsurance, and
(ii) necessary medical or remedial care recognized
under State law but not covered under the State plan
under this title, subject to reasonable limits the
State may establish on the amount of these expenses.
(B)(i) In the case of a veteran who does not have a spouse or
a child, if the veteran--
(I) receives, after the veteran has been determined
to be eligible for medical assistance under the State
plan under this title, a veteran's pension in excess of
$90 per month, and
(II) resides in a State veterans home with respect to
which the Secretary of Veterans Affairs makes per diem
payments for nursing home care pursuant to section
1741(a) of title 38, United States Code,
any such pension payment, including any payment made due to the
need for aid and attendance, or for unreimbursed medical
expenses, that is in excess of $90 per month shall be counted
as income only for the purpose of applying such excess payment
to the State veterans home's cost of providing nursing home
care to the veteran.
(ii) The provisions of clause (i) shall apply with respect to
a surviving spouse of a veteran who does not have a child in
the same manner as they apply to a veteran described in such
clause.
(2)(A) The methodology to be employed in determining income
and resource eligibility for individuals under subsection
(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI),
(a)(10)(A)(i)(VII), (a)(10)(A)(ii), (a)(10)(C)(i)(III), or (f)
or under section 1905(p) may be less restrictive, and shall be
no more restrictive, than the methodology--
(i) in the case of groups consisting of aged, blind,
or disabled individuals, under the supplemental
security income program under title XVI, or
(ii) in the case of other groups, under the State
plan most closely categorically related.
(B) For purposes of this subsection and subsection (a)(10),
methodology is considered to be ``no more restrictive'' if,
using the methodology, additional individuals may be eligible
for medical assistance and no individuals who are otherwise
eligible are made ineligible for such assistance.
(s) In order to meet the requirements of subsection (a)(55),
the State plan must provide that payments to hospitals under
the plan for inpatient hospital services furnished to infants
who have not attained the age of 1 year, and to children who
have not attained the age of 6 years and who receive such
services in a disproportionate share hospital described in
section 1923(b)(1), shall--
(1) if made on a prospective basis (whether per diem,
per case, or otherwise) provide for an outlier
adjustment in payment amounts for medically necessary
inpatient hospital services involving exceptionally
high costs or exceptionally long lengths of stay,
(2) not be limited by the imposition of day limits
with respect to the delivery of such services to such
individuals, and
(3) not be limited by the imposition of dollar limits
(other than such limits resulting from prospective
payments as adjusted pursuant to paragraph (1)) with
respect to the delivery of such services to any such
individual who has not attained their first birthday
(or in the case of such an individual who is an
inpatient on his first birthday until such individual
is discharged).
(t) Nothing in this title (including sections 1903(a) and
1905(a)) shall be construed as authorizing the Secretary to
deny or limit payments to a State for expenditures, for medical
assistance for items or services, attributable to taxes of
general applicability imposed with respect to the provision of
such items or services.
(u)(1) Individuals described in this paragraph are
individuals--
(A) who are entitled to elect COBRA continuation
coverage (as defined in paragraph (3)),
(B) whose income (as determined under section 1612
for purposes of the supplemental security income
program) does not exceed 100 percent of the official
poverty line (as defined by the Office of Management
and Budget, and revised annually in accordance with
section 673(2) of the Omnibus Budget Reconciliation Act
of 1981) applicable to a family of the size involved,
(C) whose resources (as determined under section 1613
for purposes of the supplemental security income
program) do not exceed twice the maximum amount of
resources that an individual may have and obtain
benefits under that program, and
(D) with respect to whose enrollment for COBRA
continuation coverage the State has determined that the
savings in expenditures under this title resulting from
such enrollment is likely to exceed the amount of
payments for COBRA premiums made.
(2) For purposes of subsection (a)(10)(F) and this
subsection, the term ``COBRA premiums'' means the applicable
premium imposed with respect to COBRA continuation coverage.
(3) In this subsection, the term ``COBRA continuation
coverage'' means coverage under a group health plan provided by
an employer with 75 or more employees provided pursuant to
title XXII of the Public Health Service Act, section 4980B of
the Internal Revenue Code of 1986, or title VI of the Employee
Retirement Income Security Act of 1974.
(4) Notwithstanding subsection (a)(17), for individuals
described in paragraph (1) who are covered under the State plan
by virtue of subsection (a)(10)(A)(ii)(XI)--
(A) the income standard to be applied is the income
standard described in paragraph (1)(B), and
(B) except as provided in section 1612(b)(4)(B)(ii),
costs incurred for medical care or for any other type
of remedial care shall not be taken into account in
determining income.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(10)(B) or
(a)(17), require or permit such treatment for other
individuals.
(v) A State plan may provide for the making of determinations
of disability or blindness for the purpose of determining
eligibility for medical assistance under the State plan by the
single State agency or its designee, and make medical
assistance available to individuals whom it finds to be blind
or disabled and who are determined otherwise eligible for such
assistance during the period of time prior to which a final
determination of disability or blindness is made by the Social
Security Administration with respect to such an individual. In
making such determinations, the State must apply the
definitions of disability and blindness found in section
1614(a) of the Social Security Act.
(w)(1) For purposes of subsection (a)(57) and sections
1903(m)(1)(A) and 1919(c)(2)(E), the requirement of this
subsection is that a provider or organization (as the case may
be) maintain written policies and procedures with respect to
all adult individuals receiving medical care by or through the
provider or organization--
(A) to provide written information to each such
individual concerning--
(i) an individual's rights under State law
(whether statutory or as recognized by the
courts of the State) to make decisions
concerning such medical care, including the
right to accept or refuse medical or surgical
treatment and the right to formulate advance
directives (as defined in paragraph (3)), and
(ii) the provider's or organization's written
policies respecting the implementation of such
rights;
(B) to document in the individual's medical record
whether or not the individual has executed an advance
directive;
(C) not to condition the provision of care or
otherwise discriminate against an individual based on
whether or not the individual has executed an advance
directive;
(D) to ensure compliance with requirements of State
law (whether statutory or as recognized by the courts
of the State) respecting advance directives; and
(E) to provide (individually or with others) for
education for staff and the community on issues
concerning advance directives.
Subparagraph (C) shall not be construed as requiring the
provision of care which conflicts with an advance directive.
(2) The written information described in paragraph (1)(A)
shall be provided to an adult individual--
(A) in the case of a hospital, at the time of the
individual's admission as an inpatient,
(B) in the case of a nursing facility, at the time of
the individual's admission as a resident,
(C) in the case of a provider of home health care or
personal care services, in advance of the individual
coming under the care of the provider,
(D) in the case of a hospice program, at the time of
initial receipt of hospice care by the individual from
the program, and
(E) in the case of a medicaid managed care
organization, at the time of enrollment of the
individual with the organization.
(3) Nothing in this section shall be construed to prohibit
the application of a State law which allows for an objection on
the basis of conscience for any health care provider or any
agent of such provider which as a matter of conscience cannot
implement an advance directive.
(4) In this subsection, the term ``advance directive'' means
a written instruction, such as a living will or durable power
of attorney for health care, recognized under State law
(whether statutory or as recognized by the courts of the State)
and relating to the provision of such care when the individual
is incapacitated.
(5) For construction relating to this subsection, see section
7 of the Assisted Suicide Funding Restriction Act of 1997
(relating to clarification respecting assisted suicide,
euthanasia, and mercy killing).
(x) The Secretary shall establish a system, for
implementation by not later than July 1, 1991, which provides
for a unique identifier for each physician who furnishes
services for which payment may be made under a State plan
approved under this title.
(y)(1) In addition to any other authority under State law,
where a State determines that a psychiatric hospital which is
certified for participation under its plan no longer meets the
requirements for a psychiatric hospital (referred to in section
1905(h)) and further finds that the hospital's deficiencies--
(A) immediately jeopardize the health and safety of
its patients, the State shall terminate the hospital's
participation under the State plan; or
(B) do not immediately jeopardize the health and
safety of its patients, the State may terminate the
hospital's participation under the State plan, or
provide that no payment will be made under the State
plan with respect to any individual admitted to such
hospital after the effective date of the finding, or
both.
(2) Except as provided in paragraph (3), if a psychiatric
hospital described in paragraph (1)(B) has not complied with
the requirements for a psychiatric hospital under this title--
(A) within 3 months after the date the hospital is
found to be out of compliance with such requirements,
the State shall provide that no payment will be made
under the State plan with respect to any individual
admitted to such hospital after the end of such 3-month
period, or
(B) within 6 months after the date the hospital is
found to be out of compliance with such requirements,
no Federal financial participation shall be provided
under section 1903(a) with respect to further services
provided in the hospital until the State finds that the
hospital is in compliance with the requirements of this
title.
(3) The Secretary may continue payments, over a period of not
longer than 6 months from the date the hospital is found to be
out of compliance with such requirements, if--
(A) the State finds that it is more appropriate to
take alternative action to assure compliance of the
hospital with the requirements than to terminate the
certification of the hospital,
(B) the State has submitted a plan and timetable for
corrective action to the Secretary for approval and the
Secretary approves the plan of corrective action, and
(C) the State agrees to repay to the Federal
Government payments received under this paragraph if
the corrective action is not taken in accordance with
the approved plan and timetable.
(z)(1) Individuals described in this paragraph are
individuals not described in subsection (a)(10)(A)(i)--
(A) who are infected with tuberculosis;
(B) whose income (as determined under the State plan
under this title with respect to disabled individuals)
does not exceed the maximum amount of income a disabled
individual described in subsection (a)(10)(A)(i) may
have and obtain medical assistance under the plan; and
(C) whose resources (as determined under the State
plan under this title with respect to disabled
individuals) do not exceed the maximum amount of
resources a disabled individual described in subsection
(a)(10)(A)(i) may have and obtain medical assistance
under the plan.
(2) For purposes of subsection (a)(10), the term ``TB-related
services'' means each of the following services relating to
treatment of infection with tuberculosis:
(A) Prescribed drugs.
(B) Physicians' services and services described in
section 1905(a)(2).
(C) Laboratory and X-ray services (including services
to confirm the presence of infection).
(D) Clinic services and Federally-qualified health
center services.
(E) Case management services (as defined in section
1915(g)(2)).
(F) Services (other than room and board) designed to
encourage completion of regimens of prescribed drugs by
outpatients, including services to observe directly the
intake of prescribed drugs.
(aa) Individuals described in this subsection are individuals
who--
(1) are not described in subsection (a)(10)(A)(i);
(2) have not attained age 65;
(3) have been screened for breast and cervical cancer
under the Centers for Disease Control and Prevention
breast and cervical cancer early detection program
established under title XV of the Public Health Service
Act (42 U.S.C. 300k et seq.) in accordance with the
requirements of section 1504 of that Act (42 U.S.C.
300n) and need treatment for breast or cervical cancer;
and
(4) are not otherwise covered under creditable
coverage, as defined in section 2701(c) of the Public
Health Service Act (42 U.S.C. 300gg(c)), but applied
without regard to paragraph (1)(F) of such section.
(bb) Payment for Services Provided by Federally-Qualified
Health Centers and Rural Health Clinics.--
(1) In general.--Beginning with fiscal year 2001 with
respect to services furnished on or after January 1,
2001, and each succeeding fiscal year, the State plan
shall provide for payment for services described in
section 1905(a)(2)(C) furnished by a Federally-
qualified health center and services described in
section 1905(a)(2)(B) furnished by a rural health
clinic in accordance with the provisions of this
subsection.
(2) Fiscal year 2001.--Subject to paragraph (4), for
services furnished on and after January 1, 2001, during
fiscal year 2001, the State plan shall provide for
payment for such services in an amount (calculated on a
per visit basis) that is equal to 100 percent of the
average of the costs of the center or clinic of
furnishing such services during fiscal years 1999 and
2000 which are reasonable and related to the cost of
furnishing such services, or based on such other tests
of reasonableness as the Secretary prescribes in
regulations under section 1833(a)(3), or, in the case
of services to which such regulations do not apply, the
same methodology used under section 1833(a)(3),
adjusted to take into account any increase or decrease
in the scope of such services furnished by the center
or clinic during fiscal year 2001.
(3) Fiscal year 2002 and succeeding fiscal years.--
Subject to paragraph (4), for services furnished during
fiscal year 2002 or a succeeding fiscal year, the State
plan shall provide for payment for such services in an
amount (calculated on a per visit basis) that is equal
to the amount calculated for such services under this
subsection for the preceding fiscal year--
(A) increased by the percentage increase in
the MEI (as defined in section 1842(i)(3))
applicable to primary care services (as defined
in section 1842(i)(4)) for that fiscal year;
and
(B) adjusted to take into account any
increase or decrease in the scope of such
services furnished by the center or clinic
during that fiscal year.
(4) Establishment of initial year payment amount for
new centers or clinics.--In any case in which an entity
first qualifies as a Federally-qualified health center
or rural health clinic after fiscal year 2000, the
State plan shall provide for payment for services
described in section 1905(a)(2)(C) furnished by the
center or services described in section 1905(a)(2)(B)
furnished by the clinic in the first fiscal year in
which the center or clinic so qualifies in an amount
(calculated on a per visit basis) that is equal to 100
percent of the costs of furnishing such services during
such fiscal year based on the rates established under
this subsection for the fiscal year for other such
centers or clinics located in the same or adjacent area
with a similar case load or, in the absence of such a
center or clinic, in accordance with the regulations
and methodology referred to in paragraph (2) or based
on such other tests of reasonableness as the Secretary
may specify. For each fiscal year following the fiscal
year in which the entity first qualifies as a
Federally-qualified health center or rural health
clinic, the State plan shall provide for the payment
amount to be calculated in accordance with paragraph
(3).
(5) Administration in the case of managed care.--
(A) In general.--In the case of services
furnished by a Federally-qualified health
center or rural health clinic pursuant to a
contract between the center or clinic and a
managed care entity (as defined in section
1932(a)(1)(B)), the State plan shall provide
for payment to the center or clinic by the
State of a supplemental payment equal to the
amount (if any) by which the amount determined
under paragraphs (2), (3), and (4) of this
subsection exceeds the amount of the payments
provided under the contract.
(B) Payment schedule.--The supplemental
payment required under subparagraph (A) shall
be made pursuant to a payment schedule agreed
to by the State and the Federally-qualified
health center or rural health clinic, but in no
case less frequently than every 4 months.
(6) Alternative payment methodologies.--
Notwithstanding any other provision of this section,
the State plan may provide for payment in any fiscal
year to a Federally-qualified health center for
services described in section 1905(a)(2)(C) or to a
rural health clinic for services described in section
1905(a)(2)(B) in an amount which is determined under an
alternative payment methodology that--
(A) is agreed to by the State and the center
or clinic; and
(B) results in payment to the center or
clinic of an amount which is at least equal to
the amount otherwise required to be paid to the
center or clinic under this section.
(cc)(1) Individuals described in this paragraph are
individuals--
(A) who are children who have not attained 19 years
of age and are born--
(i) on or after January 1, 2001 (or, at the
option of a State, on or after an earlier
date), in the case of the second, third, and
fourth quarters of fiscal year 2007;
(ii) on or after October 1, 1995 (or, at the
option of a State, on or after an earlier
date), in the case of each quarter of fiscal
year 2008; and
(iii) after October 1, 1989, in the case of
each quarter of fiscal year 2009 and each
quarter of any fiscal year thereafter;
(B) who would be considered disabled under section
1614(a)(3)(C) (as determined under title XVI for
children but without regard to any income or asset
eligibility requirements that apply under such title
with respect to children); and
(C) whose family income does not exceed such income
level as the State establishes and does not exceed--
(i) 300 percent of the poverty line (as
defined in section 2110(c)(5)) applicable to a
family of the size involved; or
(ii) such higher percent of such poverty line
as a State may establish, except that--
(I) any medical assistance provided
to an individual whose family income
exceeds 300 percent of such poverty
line may only be provided with State
funds; and
(II) no Federal financial
participation shall be provided under
section 1903(a) for any medical
assistance provided to such an
individual.
(2)(A) If an employer of a parent of an individual described
in paragraph (1) offers family coverage under a group health
plan (as defined in section 2791(a) of the Public Health
Service Act), the State shall--
(i) notwithstanding section 1906, require such parent
to apply for, enroll in, and pay premiums for such
coverage as a condition of such parent's child being or
remaining eligible for medical assistance under
subsection (a)(10)(A)(ii)(XIX) if the parent is
determined eligible for such coverage and the employer
contributes at least 50 percent of the total cost of
annual premiums for such coverage; and
(ii) if such coverage is obtained--
(I) subject to paragraph (2) of section
1916(h), reduce the premium imposed by the
State under that section in an amount that
reasonably reflects the premium contribution
made by the parent for private coverage on
behalf of a child with a disability; and
(II) treat such coverage as a third party
liability under subsection (a)(25).
(B) In the case of a parent to which subparagraph (A)
applies, a State, notwithstanding section 1906 but subject to
paragraph (1)(C)(ii), may provide for payment of any portion of
the annual premium for such family coverage that the parent is
required to pay. Any payments made by the State under this
subparagraph shall be considered, for purposes of section
1903(a), to be payments for medical assistance.
(dd) Electronic Transmission of Information.--If the State
agency determining eligibility for medical assistance under
this title or child health assistance under title XXI verifies
an element of eligibility based on information from an Express
Lane Agency (as defined in subsection (e)(13)(F)), or from
another public agency, then the applicant's signature under
penalty of perjury shall not be required as to such element.
Any signature requirement for an application for medical
assistance may be satisfied through an electronic signature, as
defined in section 1710(1) of the Government Paperwork
Elimination Act (44 U.S.C. 3504 note). The requirements of
subparagraphs (A) and (B) of section 1137(d)(2) may be met
through evidence in digital or electronic form.
(ee)(1) For purposes of subsection (a)(46)(B)(ii), the
requirements of this subsection with respect to an individual
declaring to be a citizen or national of the United States for
purposes of establishing eligibility under this title, are, in
lieu of requiring the individual to present satisfactory
documentary evidence of citizenship or nationality under
section 1903(x) (if the individual is not described in
paragraph (2) of that section), as follows:
(A) The State submits the name and social security
number of the individual to the Commissioner of Social
Security as part of the program established under
paragraph (2).
(B) If the State receives notice from the
Commissioner of Social Security that the name or social
security number, or the declaration of citizenship or
nationality, of the individual is inconsistent with
information in the records maintained by the
Commissioner--
(i) the State makes a reasonable effort to
identify and address the causes of such
inconsistency, including through typographical
or other clerical errors, by contacting the
individual to confirm the accuracy of the name
or social security number submitted or
declaration of citizenship or nationality and
by taking such additional actions as the
Secretary, through regulation or other
guidance, or the State may identify, and
continues to provide the individual with
medical assistance while making such effort;
and
(ii) in the case such inconsistency is not
resolved under clause (i), the State--
(I) notifies the individual of such
fact;
(II) provides the individual with a
period of 90 days from the date on
which the notice required under
subclause (I) is received by the
individual to either present
satisfactory documentary evidence of
citizenship or nationality (as defined
in section 1903(x)(3)) or resolve the
inconsistency with the Commissioner of
Social Security (and continues to
provide the individual with medical
assistance during such 90-day period);
and
(III) disenrolls the individual from
the State plan under this title within
30 days after the end of such 90-day
period if no such documentary evidence
is presented or if such inconsistency
is not resolved.
(2)(A) Each State electing to satisfy the requirements of
this subsection for purposes of section 1902(a)(46)(B) shall
establish a program under which the State submits at least
monthly to the Commissioner of Social Security for comparison
of the name and social security number, of each individual
newly enrolled in the State plan under this title that month
who is not described in section 1903(x)(2) and who declares to
be a United States citizen or national, with information in
records maintained by the Commissioner.
(B) In establishing the State program under this paragraph,
the State may enter into an agreement with the Commissioner of
Social Security--
(i) to provide, through an on-line system or
otherwise, for the electronic submission of, and
response to, the information submitted under
subparagraph (A) for an individual enrolled in the
State plan under this title who declares to be citizen
or national on at least a monthly basis; or
(ii) to provide for a determination of the
consistency of the information submitted with the
information maintained in the records of the
Commissioner through such other method as agreed to by
the State and the Commissioner and approved by the
Secretary, provided that such method is no more
burdensome for individuals to comply with than any
burdens that may apply under a method described in
clause (i).
(C) The program established under this paragraph shall
provide that, in the case of any individual who is required to
submit a social security number to the State under subparagraph
(A) and who is unable to provide the State with such number,
shall be provided with at least the reasonable opportunity to
present satisfactory documentary evidence of citizenship or
nationality (as defined in section 1903(x)(3)) as is provided
under clauses (i) and (ii) of section 1137(d)(4)(A) to an
individual for the submittal to the State of evidence
indicating a satisfactory immigration status.
(3)(A) The State agency implementing the plan approved under
this title shall, at such times and in such form as the
Secretary may specify, provide information on the percentage
each month that the inconsistent submissions bears to the total
submissions made for comparison for such month. For purposes of
this subparagraph, a name, social security number, or
declaration of citizenship or nationality of an individual
shall be treated as inconsistent and included in the
determination of such percentage only if--
(i) the information submitted by the individual is
not consistent with information in records maintained
by the Commissioner of Social Security;
(ii) the inconsistency is not resolved by the State;
(iii) the individual was provided with a reasonable
period of time to resolve the inconsistency with the
Commissioner of Social Security or provide satisfactory
documentation of citizenship status and did not
successfully resolve such inconsistency; and
(iv) payment has been made for an item or service
furnished to the individual under this title.
(B) If, for any fiscal year, the average monthly percentage
determined under subparagraph (A) is greater than 3 percent--
(i) the State shall develop and adopt a corrective
plan to review its procedures for verifying the
identities of individuals seeking to enroll in the
State plan under this title and to identify and
implement changes in such procedures to improve their
accuracy; and
(ii) pay to the Secretary an amount equal to the
amount which bears the same ratio to the total payments
under the State plan for the fiscal year for providing
medical assistance to individuals who provided
inconsistent information as the number of individuals
with inconsistent information in excess of 3 percent of
such total submitted bears to the total number of
individuals with inconsistent information.
(C) The Secretary may waive, in certain limited cases, all or
part of the payment under subparagraph (B)(ii) if the State is
unable to reach the allowable error rate despite a good faith
effort by such State.
(D) Subparagraphs (A) and (B) shall not apply to a State for
a fiscal year if there is an agreement described in paragraph
(2)(B) in effect as of the close of the fiscal year that
provides for the submission on a real-time basis of the
information described in such paragraph.
(4) Nothing in this subsection shall affect the rights of any
individual under this title to appeal any disenrollment from a
State plan.
(ff) Notwithstanding any other requirement of this title or
any other provision of Federal or State law, a State shall
disregard the following property from resources for purposes of
determining the eligibility of an individual who is an Indian
for medical assistance under this title:
(1) Property, including real property and
improvements, that is held in trust, subject to Federal
restrictions, or otherwise under the supervision of the
Secretary of the Interior, located on a reservation,
including any federally recognized Indian Tribe's
reservation, pueblo, or colony, including former
reservations in Oklahoma, Alaska Native regions
established by the Alaska Native Claims Settlement Act,
and Indian allotments on or near a reservation as
designated and approved by the Bureau of Indian Affairs
of the Department of the Interior.
(2) For any federally recognized Tribe not described
in paragraph (1), property located within the most
recent boundaries of a prior Federal reservation.
(3) Ownership interests in rents, leases, royalties,
or usage rights related to natural resources (including
extraction of natural resources or harvesting of
timber, other plants and plant products, animals, fish,
and shellfish) resulting from the exercise of federally
protected rights.
(4) Ownership interests in or usage rights to items
not covered by paragraphs (1) through (3) that have
unique religious, spiritual, traditional, or cultural
significance or rights that support subsistence or a
traditional lifestyle according to applicable tribal
law or custom.
(gg) Maintenance of Effort.--
(1) General requirement to maintain eligibility
standards until state exchange is fully operational.--
Subject to the succeeding paragraphs of this
subsection, during the period that begins on the date
of enactment of the Patient Protection and Affordable
Care Act and ends on the date on which the Secretary
determines that an Exchange established by the State
under section 1311 of the Patient Protection and
Affordable Care Act is fully operational, as a
condition for receiving any Federal payments under
section 1903(a) for calendar quarters occurring during
such period, a State shall not have in effect
eligibility standards, methodologies, or procedures
under the State plan under this title or under any
waiver of such plan that is in effect during that
period, that are more restrictive than the eligibility
standards, methodologies, or procedures, respectively,
under the plan or waiver that are in effect on the date
of enactment of the Patient Protection and Affordable
Care Act.
(2) Continuation of eligibility standards for
children until october 1, 2019.--The requirement under
paragraph (1) shall continue to apply to a State
through September 30, 2019, with respect to the
eligibility standards, methodologies, and procedures
under the State plan under this title or under any
waiver of such plan that are applicable to determining
the eligibility for medical assistance of any child who
is under 19 years of age (or such higher age as the
State may have elected).
(3) Nonapplication.--During the period that begins on
January 1, 2011, and ends on December 31, 2013, the
requirement under paragraph (1) shall not apply to a
State with respect to nonpregnant, nondisabled adults
who are eligible for medical assistance under the State
plan or under a waiver of the plan at the option of the
State and whose income exceeds 133 percent of the
poverty line (as defined in section 2110(c)(5))
applicable to a family of the size involved if, on or
after December 31, 2010, the State certifies to the
Secretary that, with respect to the State fiscal year
during which the certification is made, the State has a
budget deficit, or with respect to the succeeding State
fiscal year, the State is projected to have a budget
deficit. Upon submission of such a certification to the
Secretary, the requirement under paragraph (1) shall
not apply to the State with respect to any remaining
portion of the period described in the preceding
sentence.
(4) Determination of compliance.--
(A) States shall apply modified adjusted
gross income.--A State's determination of
income in accordance with subsection (e)(14)
shall not be considered to be eligibility
standards, methodologies, or procedures that
are more restrictive than the standards,
methodologies, or procedures in effect under
the State plan or under a waiver of the plan on
the date of enactment of the Patient Protection
and Affordable Care Act for purposes of
determining compliance with the requirements of
paragraph (1), (2), or (3).
(B) States may expand eligibility or move
waivered populations into coverage under the
state plan.--With respect to any period
applicable under paragraph (1), (2), or (3), a
State that applies eligibility standards,
methodologies, or procedures under the State
plan under this title or under any waiver of
the plan that are less restrictive than the
eligibility standards, methodologies, or
procedures, applied under the State plan or
under a waiver of the plan on the date of
enactment of the Patient Protection and
Affordable Care Act, or that makes individuals
who, on such date of enactment, are eligible
for medical assistance under a waiver of the
State plan, after such date of enactment
eligible for medical assistance through a State
plan amendment with an income eligibility level
that is not less than the income eligibility
level that applied under the waiver, or as a
result of the application of subclause (VIII)
of section 1902(a)(10)(A)(i), shall not be
considered to have in effect eligibility
standards, methodologies, or procedures that
are more restrictive than the standards,
methodologies, or procedures in effect under
the State plan or under a waiver of the plan on
the date of enactment of the Patient Protection
and Affordable Care Act for purposes of
determining compliance with the requirements of
paragraph (1), (2), or (3).
(hh)(1) A State may elect to phase-in the extension of
eligibility for medical assistance to individuals described in
subclause (XX) of subsection (a)(10)(A)(ii) based on the
categorical group (including nonpregnant childless adults) or
income, so long as the State does not extend such eligibility
to individuals described in such subclause with higher income
before making individuals described in such subclause with
lower income eligible for medical assistance.
(2) If an individual described in subclause (XX) of
subsection (a)(10)(A)(ii) is the parent of a child who is under
19 years of age (or such higher age as the State may have
elected) who is eligible for medical assistance under the State
plan or under a waiver of such plan, the individual may not be
enrolled under the State plan unless the individual's child is
enrolled under the State plan or under a waiver of the plan or
is enrolled in other health insurance coverage. For purposes of
the preceding sentence, the term ``parent'' includes an
individual treated as a caretaker relative for purposes of
carrying out section 1931.
(ii)(1) Individuals described in this subsection are
individuals--
(A) whose income does not exceed an income
eligibility level established by the State that
does not exceed the highest income eligibility
level established under the State plan under
this title (or under its State child health
plan under title XXI) for pregnant women; and
(B) who are not pregnant.
(2) At the option of a State, individuals described
in this subsection may include individuals who, had
individuals applied on or before January 1, 2007, would
have been made eligible pursuant to the standards and
processes imposed by that State for benefits described
in clause (XVI) of the matter following subparagraph
(G) of section subsection (a)(10) pursuant to a waiver
granted under section 1115.
(3) At the option of a State, for purposes of
subsection (a)(17)(B), in determining eligibility for
services under this subsection, the State may consider
only the income of the applicant or recipient.
(jj) Primary Care Services Defined.--For purposes of
subsection (a)(13)(C), the term ``primary care services''
means--
(1) evaluation and management services that are
procedure codes (for services covered under title
XVIII) for services in the category designated
Evaluation and Management in the Healthcare Common
Procedure Coding System (established by the Secretary
under section 1848(c)(5) as of December 31, 2009, and
as subsequently modified); and
(2) services related to immunization administration
for vaccines and toxoids for which CPT codes 90465,
90466, 90467, 90468, 90471, 90472, 90473, or 90474 (as
subsequently modified) apply under such System.
(kk) Provider and Supplier Screening, Oversight, and
Reporting Requirements.--For purposes of subsection (a)(77),
the requirements of this subsection are the following:
(1) Screening.--The State complies with the process
for screening providers and suppliers under this title,
as established by the Secretary under [section
1886(j)(2)] section 1866(j)(2).
(2) Provisional period of enhanced oversight for new
providers and suppliers.--The State complies with
procedures to provide for a provisional period of
enhanced oversight for new providers and suppliers
under this title, as established by the Secretary under
[section 1886(j)(3)] section 1866(j)(3).
(3) Disclosure requirements.--The State requires
providers and suppliers under the State plan or under a
waiver of the plan to comply with the disclosure
requirements established by the Secretary under
[section 1886(j)(4)] section 1866(j)(5).
(4) Temporary moratorium on enrollment of new
providers or suppliers.--
(A) Temporary moratorium imposed by the
secretary.--
(i) In general.--Subject to clause
(ii), the State complies with any
temporary moratorium on the enrollment
of new providers or suppliers imposed
by the Secretary under [section
1886(j)(6)] section 1866(j)(7).
[(ii) Exception.--A State shall not
be required to comply with a temporary
moratorium described in clause (i) if
the State determines that the
imposition of such temporary moratorium
would adversely impact beneficiaries'
access to medical assistance.]
(ii) Exceptions.--
(I) Compliance with
moratorium.--A State shall not
be required to comply with a
temporary moratorium described
in clause (i) if the State
determines that the imposition
of such temporary moratorium
would adversely impact
beneficiaries' access to
medical assistance.
(II) FFP available.--
Notwithstanding section
1903(i)(2)(D), payment may be
made to a State under this
title with respect to amounts
expended for items and services
described in such section if
the Secretary, in consultation
with the State agency
administering the State plan
under this title (or a waiver
of the plan), determines that
denying payment to the State
pursuant to such section would
adversely impact beneficiaries'
access to medical assistance.
(iii) Limitation on charges to
beneficiaries.--With respect to any
amount expended for items or services
furnished during calendar quarters
beginning on or after October 1, 2017,
the State prohibits, during the period
of a temporary moratorium described in
clause (i), a provider meeting the
requirements specified in subparagraph
(C)(iii) of section 1866(j)(7) from
charging an individual or other person
eligible to receive medical assistance
under the State plan under this title
(or a waiver of the plan) for an item
or service described in section
1903(i)(2)(D) furnished to such an
individual.
(B) Moratorium on enrollment of providers and
suppliers.--At the option of the State, the
State imposes, for purposes of entering into
participation agreements with providers or
suppliers under the State plan or under a
waiver of the plan, periods of enrollment
moratoria, or numerical caps or other limits,
for providers or suppliers identified by the
Secretary as being at high-risk for fraud,
waste, or abuse as necessary to combat fraud,
waste, or abuse, but only if the State
determines that the imposition of any such
period, cap, or other limits would not
adversely impact beneficiaries' access to
medical assistance.
(5) Compliance programs.--The State requires
providers and suppliers under the State plan or under a
waiver of the plan to establish, in accordance with the
requirements of section 1866(j)(7), a compliance
program that contains the core elements established
under subparagraph (B) of that section 1866(j)(7) for
providers or suppliers within a particular industry or
category.
(6) Reporting of adverse provider actions.--The State
complies with the national system for reporting
criminal and civil convictions, sanctions, negative
licensure actions, and other adverse provider actions
to the Secretary, through the Administrator of the
Centers for Medicare & Medicaid Services, in accordance
with regulations of the Secretary.
(7) Enrollment and npi of ordering or referring
providers.--The State requires--
(A) all ordering or referring physicians or
other professionals to be enrolled under the
State plan or under a waiver of the plan as a
participating provider; and
(B) the national provider identifier of any
ordering or referring physician or other
professional to be specified on any claim for
payment that is based on an order or referral
of the physician or other professional.
(8) Other state oversight.--Nothing in this
subsection shall be interpreted to preclude or limit
the ability of a State to engage in provider and
supplier screening or enhanced provider and supplier
oversight activities beyond those required by the
Secretary.
PAYMENT TO STATES
Sec. 1903. (a) From the sums appropriated therefor, the
Secretary (except as otherwise provided in this section) shall
pay to each State which has a plan approved under this title,
for each quarter, beginning with the quarter commencing January
1, 1966--
(1) an amount equal to the Federal medical assistance
percentage (as defined in section 1905(b), subject to
subsections (g) and (j) of this section and subsection
1923(f)) of the total amount expended during such
quarter as medical assistance under the State plan;
plus
(2)(A) an amount equal to 75 per centum of so much of
the sums expended during such quarter (as found
necessary by the Secretary for the proper and efficient
administration of the State plan) as are attributable
to compensation or training of skilled professional
medical personnel, and staff directly supporting such
personnel, of the State agency or any other public
agency; plus
(B) notwithstanding paragraph (1) or subparagraph
(A), with respect to amounts expended for nursing aide
training and competency evaluation programs, and
competency evaluation programs, described in section
1919(e)(1) (including the costs for nurse aides to
complete such competency evaluation programs),
regardless of whether the programs are provided in or
outside nursing facilities or of the skill of the
personnel involved in such programs, an amount equal to
50 percent (or, for calendar quarters beginning on or
after July 1, 1988, and before October 1, 1990, the
lesser of 90 percent or the Federal medical assistance
percentage plus 25 percentage points) of so much of the
sums expended during such quarter (as found necessary
by the Secretary for the proper and efficient
administration of the State plan) as are attributable
to such programs; plus
(C) an amount equal to 75 percent of so much of the
sums expended during such quarter (as found necessary
by the Secretary for the proper and efficient
administration of the State plan) as are attributable
to preadmission screening and resident review
activities conducted by the State under section
1919(e)(7); plus
(D) for each calendar quarter during--
(i) fiscal year 1991, an amount equal to 90
percent,
(ii) fiscal year 1992, an amount equal to 85
percent,
(iii) fiscal year 1993, an amount equal to 80
percent, and
(iv) fiscal year 1994 and thereafter, an
amount equal to 75 percent,
of so much of the sums expended during such quarter (as
found necessary by the Secretary for the proper and
efficient administration of the State plan) as are
attributable to State activities under section 1919(g);
plus
(E) an amount equal to 75 percent of so much of the
sums expended during such quarter (as found necessary
by the Secretary for the proper and efficient
administration of the State plan) as are attributable
to translation or interpretation services in connection
with the enrollment of, retention of, and use of
services under this title by, children of families for
whom English is not the primary language; plus
(3) an amount equal to--
(A)(i) 90 per centum of so much of the sums
expended during such quarter as are
attributable to the design, development, or
installation of such mechanized claims
processing and information retrieval systems as
the Secretary determines are likely to provide
more efficient, economical, and effective
administration of the plan and to be compatible
with the claims processing and information
retrieval systems utilized in the
administration of title XVIII, including the
State's share of the cost of installing such a
system to be used jointly in the administration
of such State's plan and the plan of any other
State approved under this title,
(ii) 90 per centum of so much of the sums
expended during any such quarter in the fiscal
year ending June 30, 1972, or the fiscal year
ending June 30, 1973, as are attributable to
the design, development, or installation of
cost determination systems for State-owned
general hospitals (except that the total amount
paid to all States under this clause for either
such fiscal year shall not exceed $150,000),
and
(iii) an amount equal to the Federal medical
assistance percentage (as defined in section
1905(b)) of so much of the sums expended during
such quarter (as found necessary by the
Secretary for the proper and efficient
administration of the State plan) as are
attributable to such developments or
modifications of systems of the type described
in clause (i) as are necessary for the
efficient collection and reporting on child
health measures; and
(B) 75 per centum of so much of the sums
expended during such quarter as are
attributable to the operation of systems
(whether such systems are operated directly by
the State or by another person under a contract
with the State) of the type described in
subparagraph (A)(i) (whether or not designed,
developed, or installed with assistance under
such subparagraph) which are approved by the
Secretary and which include provision for
prompt written notice to each individual who is
furnished services covered by the plan, or to
each individual in a sample group of
individuals who are furnished such services, of
the specific services (other than confidential
services) so covered, the name of the person or
persons furnishing the services, the date or
dates on which the services were furnished, and
the amount of the payment or payments made
under the plan on account of the services; and
(C)(i) 75 per centum of the sums expended
with respect to costs incurred during such
quarter (as found necessary by the Secretary
for the proper and efficient administration of
the State plan) as are attributable to the
performance of medical and utilization review
by a utilization and quality control peer
review organization or by an entity which meets
the requirements of section 1152, as determined
by the Secretary, under a contract entered into
under section 1902(d); and
(ii) 75 percent of the sums expended with
respect to costs incurred during such quarter
(as found necessary by the Secretary for the
proper and efficient administration of the
State plan) as are attributable to the
performance of independent external reviews
conducted under section 1932(c)(2); and
(D) 75 percent of so much of the sums
expended by the State plan during a quarter in
1991, 1992, or 1993, as the Secretary
determines is attributable to the statewide
adoption of a drug use review program which
conforms to the requirements of section
1927(g);
(E) 50 percent of the sums expended with
respect to costs incurred during such quarter
as are attributable to providing--
(i) services to identify and educate
individuals who are likely to be
eligible for medical assistance under
this title and who have Sickle Cell
Disease or who are carriers of the
sickle cell gene, including education
regarding how to identify such
individuals; or
(ii) education regarding the risks of
stroke and other complications, as well
as the prevention of stroke and other
complications, in individuals who are
likely to be eligible for medical
assistance under this title and who
have Sickle Cell Disease; and
(F)(i) 100 percent of so much of the sums
expended during such quarter as are
attributable to payments to Medicaid providers
described in subsection (t)(1) to encourage the
adoption and use of certified EHR technology;
and
(ii) 90 percent of so much of the sums
expended during such quarter as are
attributable to payments for reasonable
administrative expenses related to the
administration of payments described in clause
(i) if the State meets the condition described
in subsection (t)(9); plus
(H)(i) 90 percent of the sums expended during
the quarter as are attributable to the design,
development, or installation of such mechanized
verification and information retrieval systems
as the Secretary determines are necessary to
implement section 1902(ee) (including a system
described in paragraph (2)(B) thereof), and
(ii) 75 percent of the sums expended during
the quarter as are attributable to the
operation of systems to which clause (i)
applies, plus
(4) an amount equal to 100 percent of the sums
expended during the quarter which are attributable to
the costs of the implementation and operation of the
immigration status verification system described in
section 1137(d); plus
(5) an amount equal to 90 per centum of the sums
expended during such quarter which are attributable to
the offering, arranging, and furnishing (directly or on
a contract basis) of family planning services and
supplies;
(6) subject to subsection (b)(3), an amount equal
to--
(A) 90 per centum of the sums expended during
such a quarter within the twelve-quarter period
beginning with the first quarter in which a
payment is made to the State pursuant to this
paragraph, and
(B) 75 per centum of the sums expended during
each succeeding calendar quarter,
with respect to costs incurred during such quarter (as
found necessary by the Secretary for the elimination of
fraud in the provision and administration of medical
assistance provided under the State plan) which are
attributable to the establishment and operation of
(including the training of personnel employed by) a
State medicaid fraud control unit (described in
subsection (q)); plus
(7) subject to section 1919(g)(3)(B), an amount equal
to 50 per centum of the remainder of the amounts
expended during such quarter as found necessary by the
Secretary for the proper and efficient administration
of the State plan.
(b)(1) Notwithstanding the preceding provisions of this
section, the amount determined under subsection (a)(1) for any
State for any quarter beginning after December 31, 1969, shall
not take into account any amounts expended as medical
assistance with respect to individuals aged 65 or over and
disabled individuals entitled to hospital insurance benefits
under title XVIII which would not have been so expended if the
individuals involved had been enrolled in the insurance program
established by part B of title XVIII, other than amounts
expended under provisions of the plan of such State required by
section 1902(a)(34).
(2) For limitation on Federal participation for capital
expenditures which are out of conformity with a comprehensive
plan of a State or areawide planning agency, see section 1122.
(3) The amount of funds which the Secretary is otherwise
obligated to pay a State during a quarter under subsection
(a)(6) may not exceed the higher of--
(A) $125,000, or
(B) one-quarter of 1 per centum of the sums expended
by the Federal, State, and local governments during the
previous quarter in carrying out the State's plan under
this title.
(4) Amounts expended by a State for the use of an enrollment
broker in marketing medicaid managed care organizations and
other managed care entities to eligible individuals under this
title shall be considered, for purposes of subsection (a)(7),
to be necessary for the proper and efficient administration of
the State plan but only if the following conditions are met
with respect to the broker:
(A) The broker is independent of any such entity and
of any health care providers (whether or not any such
provider participates in the State plan under this
title) that provide coverage of services in the same
State in which the broker is conducting enrollment
activities.
(B) No person who is an owner, employee, consultant,
or has a contract with the broker either has any direct
or indirect financial interest with such an entity or
health care provider or has been excluded from
participation in the program under this title or title
XVIII or debarred by any Federal agency, or subject to
a civil money penalty under this Act.
(5) Notwithstanding the preceding provisions of this section,
the amount determined under subsection (a)(1) for any State
shall be decreased in a quarter by the amount of any health
care related taxes (described in section 1902(w)(3)(A)) that
are imposed on a hospital described in subsection (w)(3)(F) in
that quarter.
(c) Nothing in this title shall be construed as prohibiting
or restricting, or authorizing the Secretary to prohibit or
restrict, payment under subsection (a) for medical assistance
for covered services furnished to a child with a disability
because such services are included in the child's
individualized education program established pursuant to part B
of the Individuals with Disabilities Education Act or furnished
to an infant or toddler with a disability because such services
are included in the child's individualized family service plan
adopted pursuant to part C of such Act.
(d)(1) Prior to the beginning of each quarter, the Secretary
shall estimate the amount to which a State will be entitled
under subsections (a) and (b) for such quarter, such estimates
to be based on (A) a report filed by the State containing its
estimate of the total sum to be expended in such quarter in
accordance with the provisions of such subsections, and stating
the amount appropriated or made available by the State and its
political subdivisions for such expenditures in such quarter,
and if such amount is less than the State's proportionate share
of the total sum of such estimated expenditures, the source or
sources from which the difference is expected to be derived,
and (B) such other investigation as the Secretary may find
necessary.
(2)(A) The Secretary shall then pay to the State, in such
installments as he may determine, the amount so estimated,
reduced or increased to the extent of any overpayment or
underpayment which the Secretary determines was made under this
section to such State for any prior quarter and with respect to
which adjustment has not already been made under this
subsection.
(B) Expenditures for which payments were made to the State
under subsection (a) shall be treated as an overpayment to the
extent that the State or local agency administering such plan
has been reimbursed for such expenditures by a third party
pursuant to the provisions of its plan in compliance with
section 1902(a)(25).
(C) For purposes of this subsection, when an overpayment is
discovered, which was made by a State to a person or other
entity, the State shall have a period of 1 year in which to
recover or attempt to recover such overpayment before
adjustment is made in the Federal payment to such State on
account of such overpayment. Except as otherwise provided in
subparagraph (D), the adjustment in the Federal payment shall
be made at the end of the 1-year period, whether or not
recovery was made.
(D)(i) In any case where the State is unable to recover a
debt which represents an overpayment (or any portion thereof)
made to a person or other entity on account of such debt having
been discharged in bankruptcy or otherwise being uncollectable,
no adjustment shall be made in the Federal payment to such
State on account of such overpayment (or portion thereof).
(ii) In any case where the State is unable to recover a debt
which represents an overpayment (or any portion thereof) made
to a person or other entity due to fraud within 1 year of
discovery because there is not a final determination of the
amount of the overpayment under an administrative or judicial
process (as applicable), including as a result of a judgment
being under appeal, no adjustment shall be made in the Federal
payment to such State on account of such overpayment (or
portion thereof) before the date that is 30 days after the date
on which a final judgment (including, if applicable, a final
determination on an appeal) is made.
(3)(A) The pro rata share to which the United States is
equitably entitled, as determined by the Secretary, of the net
amount recovered during any quarter by the State or any
political subdivision thereof with respect to medical
assistance furnished under the State plan shall be considered
an overpayment to be adjusted under this subsection.
(B)(i) Subparagraph (A) and paragraph (2)(B) shall not apply
to any amount recovered or paid to a State as part of the
comprehensive settlement of November 1998 between manufacturers
of tobacco products, as defined in section 5702(d) of the
Internal Revenue Code of 1986, and State Attorneys General, or
as part of any individual State settlement or judgment reached
in litigation initiated or pursued by a State against one or
more such manufacturers.
(ii) Except as provided in subsection (i)(19), a State may
use amounts recovered or paid to the State as part of a
comprehensive or individual settlement, or a judgment,
described in clause (i) for any expenditures determined
appropriate by the State.
(4) Upon the making of any estimate by the Secretary under
this subsection, any appropriations available for payments
under this section shall be deemed obligated.
(5) In any case in which the Secretary estimates that there
has been an overpayment under this section to a State on the
basis of a claim by such State that has been disallowed by the
Secretary under section 1116(d), and such State disputes such
disallowance, the amount of the Federal payment in controversy
shall, at the option of the State, be retained by such State or
recovered by the Secretary pending a final determination with
respect to such payment amount. If such final determination is
to the effect that any amount was properly disallowed, and the
State chose to retain payment of the amount in controversy, the
Secretary shall offset, from any subsequent payments made to
such State under this title, an amount equal to the proper
amount of the disallowance plus interest on such amount
disallowed for the period beginning on the date such amount was
disallowed and ending on the date of such final determination
at a rate (determined by the Secretary) based on the average of
the bond equivalent of the weekly 90-day treasury bill auction
rates during such period.
(6)(A) Each State (as defined in subsection (w)(7)(D)) shall
include, in the first report submitted under paragraph (1)
after the end of each fiscal year, information related to--
(i) provider-related donations made to the State or
units of local government during such fiscal year, and
(ii) health care related taxes collected by the State
or such units during such fiscal year.
(B) Each State shall include, in the first report submitted
under paragraph (1) after the end of each fiscal year,
information related to the total amount of payment adjustments
made, and the amount of payment adjustments made to individual
providers (by provider), under section 1923(c) during such
fiscal year.
(e) A State plan approved under this title may include, as a
cost with respect to hospital services under the plan under
this title, periodic expenditures made to reflect transitional
allowances established with respect to a hospital closure or
conversion under section 1884.
(f)(1)(A) Except as provided in paragraph (4), payment under
the preceding provisions of this section shall not be made with
respect to any amount expended as medical assistance in a
calendar quarter, in any State, for any member of a family the
annual income of which exceeds the applicable income limitation
determined under this paragraph.
(B)(i) Except as provided in clause (ii) of this
subparagraph, the applicable income limitation with respect to
any family is the amount determined, in accordance with
standards prescribed by the Secretary, to be equivalent to
133\1/3\ percent of the highest amount which would ordinarily
be paid to a family of the same size without any income or
resources, in the form of money payments, under the plan of the
State approved under part A of title IV of this Act.
(ii) If the Secretary finds that the operation of a uniform
maximum limits payments to families of more than one size, he
may adjust the amount otherwise determined under clause (i) to
take account of families of different sizes.
(C) The total amount of any applicable income limitation
determined under subparagraph (B) shall, if it is not a
multiple of $100 or such other amount as the Secretary may
prescribe, be rounded to the next higher multiple of $100 or
such other amount, as the case may be.
(2)(A) In computing a family's income for purposes of
paragraph (1), there shall be excluded any costs (whether in
the form of insurance premiums or otherwise and regardless of
whether such costs are reimbursed under another public program
of the State or political subdivision thereof) incurred by such
family for medical care or for any other type of remedial care
recognized under State law or, (B) notwithstanding section 1916
at State option, an amount paid by such family, at the family's
option, to the State, provided that the amount, when combined
with costs incurred in prior months, is sufficient when
excluded from the family's income to reduce such family's
income below the applicable income limitation described in
paragraph (1). The amount of State expenditures for which
medical assistance is available under subsection (a)(1) will be
reduced by amounts paid to the State pursuant to this
subparagraph.
(3) For purposes of paragraph (1)(B), in the case of a family
consisting of only one individual, the ``highest amount which
would ordinarily be paid'' to such family under the State's
plan approved under part A of title IV of this Act shall be the
amount determined by the State agency (on the basis of
reasonable relationship to the amounts payable under such plan
to families consisting of two or more persons) to be the amount
of the aid which would ordinarily be payable under such plan to
a family (without any income or resources) consisting of one
person if such plan provided for aid to such a family.
(4) The limitations on payment imposed by the preceding
provisions of this subsection shall not apply with respect to
any amount expended by a State as medical assistance for any
individual described in section 1902(a)(10)(A)(i)(III),
1902(a)(10)(A)(i)(IV), 1902(a)(10)(A)(i)(V),
1902(a)(10)(A)(i)(VI), 1902(a)(10)(A)(i)(VII),
1902(a)(10)(A)(i)(VIII),1902(a)(10)(A)(i)(IX),
1902(a)(10)(A)(ii)(IX), 1902(a)(10)(A)(ii)(X),
1902(a)(10)(A)(ii)(XIII), 1902(a)(10)(A)(ii)(XIV), or
1902(a)(10)(A)(ii)(XV), 1902(a)(10)(A)(ii)(XVI),
1902(a)(10)(A)(ii)(XVII), 1902(a)(10)(A)(ii)(XVIII),
1902(a)(10)(A)(ii)(XIX), 1902(a)(10)(A)(ii)(XX),
1902(a)(10)(A)(ii)(XXI), 1902(a)(10)(A)(ii)(XXII), 1905(p)(1)
or for any individual--
(A) who is receiving aid or assistance under any plan
of the State approved under title I, X, XIV or XVI, or
part A of title IV, or with respect to whom
supplemental security income benefits are being paid
under title XVI, or
(B) who is not receiving such aid or assistance, and
with respect to whom such benefits are not being paid,
but (i) is eligible to receive such aid or assistance,
or to have such benefits paid with respect to him, or
(ii) would be eligible to receive such aid or
assistance, or to have such benefits paid with respect
to him if he were not in a medical institution, or
(C) with respect to whom there is being paid, or who
is eligible, or would be eligible if he were not in a
medical institution, to have paid with respect to him,
a State supplementary payment and is eligible for
medical assistance equal in amount, duration, and scope
to the medical assistance made available to individuals
described in section 1902(a)(10)(A), or who is a PACE
program eligible individual enrolled in a PACE program
under section 1934, but only if the income of such
individual (as determined under section 1612, but
without regard to subsection (b) thereof) does not
exceed 300 percent of the supplemental security income
benefit rate established by section 1611(b)(1),
at the time of the provision of the medical assistance giving
rise to such expenditure.
(g)(1) Subject to paragraph (3), with respect to amounts paid
for the following services furnished under the State plan after
June 30, 1973 (other than services furnished pursuant to a
contract with a health maintenance organization as defined in
section 1876 or which is a qualified health maintenance
organization (as defined in section 1310(d) of the Public
Health Service Act)), the Federal medical assistance percentage
shall be decreased as follows: After an individual has received
inpatient hospital services or services in an intermediate care
facility for the mentally retarded for 60 days or inpatient
mental hospital services for 90 days (whether or not such days
are consecutive), during any fiscal year, the Federal medical
assistance percentage with respect to amounts paid for any such
care furnished thereafter to such individual shall be decreased
by a per centum thereof (determined under paragraph (5)) unless
the State agency responsible for the administration of the plan
makes a showing satisfactory to the Secretary that, with
respect to each calendar quarter for which the State submits a
request for payment at the full Federal medical assistance
percentage for amounts paid for inpatient hospital services or
services in an intermediate care facility for the mentally
retarded furnished beyond 60 days (or inpatient mental hospital
services furnished beyond 90 days), such State has an effective
program of medical review of the care of patients in mental
hospitals and intermediate care facilities for the mentally
retarded pursuant to paragraphs (26) and (31) of section
1902(a) whereby the professional management of each case is
reviewed and evaluated at least annually by independent
professional review teams. In determining the number of days on
which an individual has received services described in this
subsection, there shall not be counted any days with respect to
which such individual is entitled to have payments made (in
whole or in part) on his behalf under section 1812.
(2) The Secretary shall, as part of his validation procedures
under this subsection, conduct timely sample onsite surveys of
private and public institutions in which recipients of medical
assistance may receive care and services under a State plan
approved under this title, and his findings with respect to
such surveys (as well as the showings of the State agency
required under this subsection) shall be made available for
public inspection.
(3)(A) No reduction in the Federal medical assistance
percentage of a State otherwise required to be imposed under
this subsection shall take effect--
(i) if such reduction is due to the State's
unsatisfactory or invalid showing made with respect to
a calendar quarter beginning before January 1, 1977;
(ii) before January 1, 1978;
(iii) unless a notice of such reduction has been
provided to the State at least 30 days before the date
such reduction takes effect; or
(iv) due to the State's unsatisfactory or invalid
showing made with respect to a calendar quarter
beginning after September 30, 1977, unless notice of
such reduction has been provided to the State no later
than the first day of the fourth calendar quarter
following the calendar quarter with respect to which
such showing was made.
(B) The Secretary shall waive application of any reduction in
the Federal medical assistance percentage of a State otherwise
required to be imposed under paragraph (1) because a showing by
the State, made under such paragraph with respect to a calendar
quarter ending after January 1, 1977, and before January 1,
1978, is determined to be either unsatisfactory under such
paragraph or invalid under paragraph (2), if the Secretary
determines that the State's showing made under paragraph (1)
with respect to any calendar quarter ending on or before
December 31, 1978, is satisfactory under such paragraph and is
valid under paragraph (2).
(4)(A) The Secretary may not find the showing of a State,
with respect to a calendar quarter under paragraph (1), to be
satisfactory if the showing is submitted to the Secretary later
than the 30th day after the last day of the calendar quarter,
unless the State demonstrates to the satisfaction of the
Secretary good cause for not meeting such deadline.
(B) The Secretary shall find a showing of a State, with
respect to a calendar quarter under paragraph (1), to be
satisfactory under such paragraph with respect to the
requirement that the State conduct annual onsite inspections in
mental hospitals and intermediate care facilities for the
mentally retarded under paragraphs (26) and (31) of section
1902(a), if the showing demonstrates that the State has
conducted such an onsite inspection during the 12-month period
ending on the last date of the calendar quarter--
(i) in each of not less than 98 per centum of the
number of such hospitals and facilities requiring such
inspection, and
(ii) in every such hospital or facility which has 200
or more beds,
and that, with respect to such hospitals and facilities not
inspected within such period, the State has exercised good
faith and due diligence in attempting to conduct such
inspection, or if the State demonstrates to the satisfaction of
the Secretary that it would have made such a showing but for
failings of a technical nature only.
(5) In the case of a State's unsatisfactory or invalid
showing made with respect to a type of facility or
institutional services in a calendar quarter, the per centum
amount of the reduction of the State's Federal medical
assistance percentage for that type of services under paragraph
(1) is equal to 33\1/3\ per centum multiplied by a fraction,
the denominator of which is equal to the total number of
patients receiving that type of services in that quarter under
the State plan in facilities or institutions for which a
showing was required to be made under this subsection, and the
numerator of which is equal to the number of such patients
receiving such type of services in that quarter in those
facilities or institutions for which a satisfactory and valid
showing was not made for that calendar quarter.
(6)(A) Recertifications required under section 1902(a)(44)
shall be conducted at least every 60 days in the case of
inpatient hospital services.
(B) Such recertifications in the case of services in an
intermediate care facility for the mentally retarded shall be
conducted at least--
(i) 60 days after the date of the initial
certification,
(ii) 180 days after the date of the initial
certification,
(iii) 12 months after the date of the initial
certification,
(iv) 18 months after the date of the initial
certification,
(v) 24 months after the date of the initial
certification, and
(vi) every 12 months thereafter.
(C) For purposes of determining compliance with the schedule
established by this paragraph, a recertification shall be
considered to have been done on a timely basis if it was
performed not later than 10 days after the date the
recertification was otherwise required and the State
establishes good cause why the physician or other person making
such recertification did not meet such schedule.
(i) Payment under the preceding provisions of this section
shall not be made--
(1) for organ transplant procedures unless the State
plan provides for written standards respecting the
coverage of such procedures and unless such standards
provide that--
(A) similarly situated individuals are
treated alike; and
(B) any restriction, on the facilities or
practitioners which may provide such
procedures, is consistent with the
accessibility of high quality care to
individuals eligible for the procedures under
the State plan; or
(2) with respect to any amount expended for an item
or service (other than an emergency item or service,
not including items or services furnished in an
emergency room of a hospital) furnished--
(A) under the plan by any individual or
entity during any period when the individual or
entity is excluded from participation under
title V, XVIII, or XX or under this title
pursuant to section 1128, 1128A, 1156, or
1842(j)(2)[,];
(B) at the medical direction or on the
prescription of a physician, during the period
when such physician is excluded from
participation under title V, XVIII, or XX or
under this title pursuant to section 1128,
1128A, 1156, or 1842(j)(2) and when the person
furnishing such item or service knew or had
reason to know of the exclusion (after a
reasonable time period after reasonable notice
has been furnished to the person); [or]
(C) by any individual or entity to whom the
State has failed to suspend payments under the
plan during any period when there is pending an
investigation of a credible allegation of fraud
against the individual or entity, as determined
by the State in accordance with regulations
promulgated by the Secretary for purposes of
section 1862(o) and this subparagraph, unless
the State determines in accordance with such
regulations there is good cause not to suspend
such payments; or
(D) with respect to any amount expended for
such an item or service furnished during
calendar quarters beginning on or after October
1, 2017, subject to section
1902(kk)(4)(A)(ii)(II), within a geographic
area that is subject to a moratorium imposed
under section 1866(j)(7) by a provider or
supplier that meets the requirements specified
in subparagraph (C)(iii) of such section,
during the period of such moratorium; or
(3) with respect to any amount expended for inpatient
hospital services furnished under the plan (other than
amounts attributable to the special situation of a
hospital which serves a disproportionate number of low
income patients with special needs) to the extent that
such amount exceeds the hospital's customary charges
with respect to such services or (if such services are
furnished under the plan by a public institution free
of charge or at nominal charges to the public) exceeds
an amount determined on the basis of those items
(specified in regulations prescribed by the Secretary)
included in the determination of such payment which the
Secretary finds will provide fair compensation to such
institution for such services; or
(4) with respect to any amount expended for care or
services furnished under the plan by a hospital unless
such hospital has in effect a utilization review plan
which meets the requirements imposed by section 1861(k)
for purposes of title XVIII; and if such hospital has
in effect such a utilization review plan for purposes
of title XVIII, such plan shall serve as the plan
required by this subsection (with the same standards
and procedures and the same review committee or group)
as a condition of payment under this title; the
Secretary is authorized to waive the requirements of
this paragraph if the State agency demonstrates to his
satisfaction that it has in operation utilization
review procedures which are superior in their
effectiveness to the procedures required under section
1861(k); or
(5) with respect to any amount expended for any drug
product for which payment may not be made under part B
of title XVIII because of section 1862(c); or
(6) with respect to any amount expended for inpatient
hospital tests (other than in emergency situations) not
specifically ordered by the attending physician or
other responsible practitioner; or
(7) with respect to any amount expended for clinical
diagnostic laboratory tests performed by a physician,
independent laboratory, or hospital, to the extent such
amount exceeds the amount that would be recognized
under section 1833(h) for such tests performed for an
individual enrolled under part B of title XVIII; or
(8) with respect to any amount expended for medical
assistance (A) for nursing facility services to
reimburse (or otherwise compensate) a nursing facility
for payment of a civil money penalty imposed under
section 1919(h) or (B) for home and community care to
reimburse (or otherwise compensate) a provider of such
care for payment of a civil money penalty imposed under
this title or title XI or for legal expenses in defense
of an exclusion or civil money penalty under this title
or title XI if there is no reasonable legal ground for
the provider's case; or
(10)(A) with respect to covered outpatient drugs
unless there is a rebate agreement in effect under
section 1927 with respect to such drugs or unless
section 1927(a)(3) applies,
(B) with respect to any amount expended for an
innovator multiple source drug (as defined in section
1927(k)) dispensed on or after July 1, 1991, if, under
applicable State law, a less expensive multiple source
drug could have been dispensed, but only to the extent
that such amount exceeds the upper payment limit for
such multiple source drug;
(C) with respect to covered outpatient drugs
described in section 1927(a)(7), unless
information respecting utilization data and
coding on such drugs that is required to be
submitted under such section is submitted in
accordance with such section, and
(D) with respect to any amount expended for
reimbursement to a pharmacy under this title for the
ingredient cost of a covered outpatient drug for which
the pharmacy has already received payment under this
title (other than with respect to a reasonable
restocking fee for such drug); or
(11) with respect to any amount expended for
physicians' services furnished on or after the first
day of the first quarter beginning more than 60 days
after the date of establishment of the physician
identifier system under section 1902(x), unless the
claim for the services includes the unique physician
identifier provided under such system; or
(13) with respect to any amount expended to reimburse
(or otherwise compensate) a nursing facility for
payment of legal expenses associated with any action
initiated by the facility that is dismissed on the
basis that no reasonable legal ground existed for the
institution of such action; or
(14) with respect to any amount expended on
administrative costs to carry out the program under
section 1928; or
(15) with respect to any amount expended for a
single-antigen vaccine and its administration in any
case in which the administration of a combined-antigen
vaccine was medically appropriate (as determined by the
Secretary); or
(16) with respect to any amount expended for which
funds may not be used under the Assisted Suicide
Funding Restriction Act of 1997; or
(17) with respect to any amount expended for roads,
bridges, stadiums, or any other item or service not
covered under a State plan under this title; or
(18) with respect to any amount expended for home
health care services provided by an agency or
organization unless the agency or organization provides
the State agency on a continuing basis a surety bond in
a form specified by the Secretary under paragraph (7)
of section 1861(o) and in an amount that is not less
than $50,000 or such comparable surety bond as the
Secretary may permit under the last sentence of such
section; or
(19) with respect to any amount expended on
administrative costs to initiate or pursue litigation
described in subsection (d)(3)(B);
(20) with respect to amounts expended for medical
assistance provided to an individual described in
subclause (XV) or (XVI) of section 1902(a)(10)(A)(ii)
for a fiscal year unless the State demonstrates to the
satisfaction of the Secretary that the level of State
funds expended for such fiscal year for programs to
enable working individuals with disabilities to work
(other than for such medical assistance) is not less
than the level expended for such programs during the
most recent State fiscal year ending before the date of
the enactment of this paragraph;
(21) with respect to amounts expended for covered
outpatient drugs described in section 1927(d)(2)(K)
(relating to drugs when used for treatment of sexual or
erectile dysfunction);
(22) with respect to amounts expended for medical
assistance for an individual who declares under section
1137(d)(1)(A) to be a citizen or national of the United
States for purposes of establishing eligibility for
benefits under this title, unless the requirement of
section 1902(a)(46)(B) is met;
(23) with respect to amounts expended for medical
assistance for covered outpatient drugs (as defined in
section 1927(k)(2)) for which the prescription was
executed in written (and non-electronic) form unless
the prescription was executed on a tamper-resistant
pad;
(24) if a State is required to implement an asset
verification program under section 1940 and fails to
implement such program in accordance with such section,
with respect to amounts expended by such State for
medical assistance for individuals subject to asset
verification under such section, unless--
(A) the State demonstrates to the Secretary's
satisfaction that the State made a good faith
effort to comply;
(B) not later than 60 days after the date of
a finding that the State is in noncompliance,
the State submits to the Secretary (and the
Secretary approves) a corrective action plan to
remedy such noncompliance; and
(C) not later than 12 months after the date
of such submission (and approval), the State
fulfills the terms of such corrective action
plan;
(25) with respect to any amounts expended for medical
assistance for individuals for whom the State does not
report enrollee encounter data (as defined by the
Secretary) to the Medicaid Statistical Information
System (MSIS) in a timely manner (as determined by the
Secretary);
(26) with respect to any amounts expended for medical
assistance for individuals described in subclause
(VIII) of subsection (a)(10)(A)(i) other than medical
assistance provided through benchmark coverage
described in section 1937(b)(1) or benchmark equivalent
coverage described in section 1937(b)(2); or
(27) with respect to any amounts expended by the
State on the basis of a fee schedule for items
described in section 1861(n) and furnished on or after
January 1, 2019, as determined in the aggregate with
respect to each class of such items as defined by the
Secretary, in excess of the aggregate amount, if any,
that would be paid for such items within such class on
a fee-for-service basis under the program under part B
of title XVIII, including, as applicable, under a
competitive acquisition program under section 1847 in
an area of the State.
Nothing in paragraph (1) shall be construed as permitting a
State to provide services under its plan under this title that
are not reasonable in amount, duration, and scope to achieve
their purpose. Paragraphs (1), (2), (16), (17), and (18) shall
apply with respect to items or services furnished and amounts
expended by or through a managed care entity (as defined in
section 1932(a)(1)(B)) in the same manner as such paragraphs
apply to items or services furnished and amounts expended
directly by the State.
(j) Notwithstanding the preceding provisions of this section,
the amount determined under subsection (a)(1) for any State for
any quarter shall be adjusted in accordance with section 1914.
(k) The Secretary is authorized to provide at the request of
any State (and without cost to such State) such technical and
actuarial assistance as may be necessary to assist such State
to contract with any medicaid managed care organization which
meets the requirements of subsection (m) of this section for
the purpose of providing medical care and services to
individuals who are entitled to medical assistance under this
title.
(m)(1)(A) The term ``medicaid managed care organization''
means a health maintenance organization, an eligible
organization with a contract under section 1876 or a
Medicare+Choice organization with a contract under part C of
title XVIII, a provider sponsored organization, or any other
public or private organization, which meets the requirement of
section 1902(w) and--
(i) makes services it provides to individuals
eligible for benefits under this title accessible to
such individuals, within the area served by the
organization, to the same extent as such services are
made accessible to individuals (eligible for medical
assistance under the State plan) not enrolled with the
organization, and
(ii) has made adequate provision against the risk of
insolvency, which provision is satisfactory to the
State, meets the requirements of subparagraph (C)(i)
(if applicable), and which assures that individuals
eligible for benefits under this title are in no case
held liable for debts of the organization in case of
the organization's insolvency.
An organization that is a qualified health maintenance
organization (as defined in section 1310(d) of the Public
Health Service Act) is deemed to meet the requirements of
clauses (i) and (ii).
(B) The duties and functions of the Secretary, insofar as
they involve making determinations as to whether an
organization is a medicaid managed care organization within the
meaning of subparagraph (A), shall be integrated with the
administration of section 1312 (a) and (b) of the Public Health
Service Act.
(C)(i) Subject to clause (ii), a provision meets the
requirements of this subparagraph for an organization if the
organization meets solvency standards established by the State
for private health maintenance organizations or is licensed or
certified by the State as a risk-bearing entity.
(ii) Clause (i) shall not apply to an organization if--
(I) the organization is not responsible for the
provision (directly or through arrangements with
providers of services) of inpatient hospital services
and physicians' services;
(II) the organization is a public entity;
(III) the solvency of the organization is guaranteed
by the State; or
(IV) the organization is (or is controlled by) one or
more Federally-qualified health centers and meets
solvency standards established by the State for such an
organization.
For purposes of subclause (IV), the term ``control'' means the
possession, whether direct or indirect, of the power to direct
or cause the direction of the management and policies of the
organization through membership, board representation, or an
ownership interest equal to or greater than 50.1 percent.
(2)(A) Except as provided in subparagraphs (B), (C), and (G),
no payment shall be made under this title to a State with
respect to expenditures incurred by it for payment (determined
under a prepaid capitation basis or under any other risk basis)
for services provided by any entity (including a health
insuring organization) which is responsible for the provision
(directly or through arrangements with providers of services)
of inpatient hospital services and any other service described
in paragraph (2), (3), (4), (5), or (7) of section 1905(a) or
for the provision of any three or more of the services
described in such paragraphs unless--
(i) the Secretary has determined that the entity is a
medicaid managed care organization organization as
defined in paragraph (1);
(iii) such services are provided for the benefit of
individuals eligible for benefits under this title in
accordance with a contract between the State and the
entity under which prepaid payments to the entity are
made on an actuarially sound basis and under which the
Secretary must provide prior approval for contracts
providing for expenditures in excess of $1,000,000 for
1998 and, for a subsequent year, the amount established
under this clause for the previous year increased by
the percentage increase in the consumer price index for
all urban consumers over the previous year;
(iv) such contract provides that the Secretary and
the State (or any person or organization designated by
either) shall have the right to audit and inspect any
books and records of the entity (and of any
subcontractor) that pertain (I) to the ability of the
entity to bear the risk of potential financial losses,
or (II) to services performed or determinations of
amounts payable under the contract;
(v) such contract provides that in the entity's
enrollment, reenrollment, or disenrollment of
individuals who are eligible for benefits under this
title and eligible to enroll, reenroll, or disenroll
with the entity pursuant to the contract, the entity
will not discriminate among such individuals on the
basis of their health status or requirements for health
care services;
(vi) such contract (I) permits individuals who have
elected under the plan to enroll with the entity for
provision of such benefits to terminate such enrollment
in accordance with section 1932(a)(4), and (II)
provides for notification in accordance with such
section of each such individual, at the time of the
individual's enrollment, of such right to terminate
such enrollment;
(vii) such contract provides that, in the case of
medically necessary services which were provided (I) to
an individual enrolled with the entity under the
contract and entitled to benefits with respect to such
services under the State's plan and (II) other than
through the organization because the services were
immediately required due to an unforeseen illness,
injury, or condition, either the entity or the State
provides for reimbursement with respect to those
services,
(viii) such contract provides for disclosure of
information in accordance with section 1124 and
paragraph (4) of this subsection;
(ix) such contract provides, in the case of an entity
that has entered into a contract for the provision of
services with a Federally-qualified health center or a
rural health clinic, that the entity shall provide
payment that is not less than the level and amount of
payment which the entity would make for the services if
the services were furnished by a provider which is not
a Federally-qualified health center or a rural health
clinic;
(x) any physician incentive plan that it operates
meets the requirements described in section 1876(i)(8);
(xi) such contract provides for maintenance of
sufficient patient encounter data to identify the
physician who delivers services to patients and for the
provision of such data to the State at a frequency and
level of detail to be specified by the Secretary;
(xii) such contract, and the entity complies with the
applicable requirements of section 1932; and
(xiii) such contract provides that (I)
covered outpatient drugs dispensed to
individuals eligible for medical assistance who
are enrolled with the entity shall be subject
to the same rebate required by the agreement
entered into under section 1927 as the State is
subject to and that the State shall collect
such rebates from manufacturers, (II)
capitation rates paid to the entity shall be
based on actual cost experience related to
rebates and subject to the Federal regulations
requiring actuarially sound rates, and (III)
the entity shall report to the State, on such
timely and periodic basis as specified by the
Secretary in order to include in the
information submitted by the State to a
manufacturer and the Secretary under section
1927(b)(2)(A), information on the total number
of units of each dosage form and strength and
package size by National Drug Code of each
covered outpatient drug dispensed to
individuals eligible for medical assistance who
are enrolled with the entity and for which the
entity is responsible for coverage of such drug
under this subsection (other than covered
outpatient drugs that under subsection (j)(1)
of section 1927 are not subject to the
requirements of that section) and such other
data as the Secretary determines necessary to
carry out this subsection.
(B) Subparagraph (A) except with respect to clause (ix) of
subparagraph (A), does not apply with respect to payments under
this title to a State with respect to expenditures incurred by
it for payment for services provided by an entity which--
(i)(I) received a grant of at least $100,000 in the
fiscal year ending June 30, 1976, under section
329(d)(1)(A) or 330(d)(1) of the Public Health Service
Act, and for the period beginning July 1, 1976, and
ending on the expiration of the period for which
payments are to be made under this title has been the
recipient of a grant under either such section; and
(II) provides to its enrollees, on a prepaid
capitation risk basis or on any other risk basis, all
of the services and benefits described in paragraphs
(1), (2), (3), (4)(C), and (5) of section 1905(a) and,
to the extent required by section 1902(a)(10)(D) to be
provided under a State plan for medical assistance, the
services and benefits described in paragraph (7) of
section 1905(a); or
(ii) is a nonprofit primary health care entity
located in a rural area (as defined by the Appalachian
Regional Commission)--
(I) which received in the fiscal year ending
June 30, 1976, at least $100,000 (by grant,
subgrant, or subcontract) under the Appalachian
Regional Development Act of 1965, and
(II) for the period beginning July 1, 1976,
and ending on the expiration of the period for
which payments are to be made under this title
either has been the recipient of a grant,
subgrant, or subcontract under such Act or has
provided services under a contract (initially
entered into during a year in which the entity
was the recipient of such a grant, subgrant, or
subcontract) with a State agency under this
title on a prepaid capitation risk basis or on
any other risk basis; or
(iii) which has contracted with the single State
agency for the provision of services (but not including
inpatient hospital services) to persons eligible under
this title on a prepaid risk basis prior to 1970.
(G) In the case of an entity which is receiving (and has
received during the previous two years) a grant of at least
$100,000 under section 329(d)(1)(A) or 330(d)(1) of the Public
Health Service Act or is receiving (and has received during the
previous two years) at least $100,000 (by grant, subgrant, or
subcontract) under the Appalachian Regional Development Act of
1965, clause (i) of subparagraph (A) shall not apply.
(H) In the case of an individual who--
(i) in a month is eligible for benefits under this
title and enrolled with a medicaid managed care
organization with a contract under this paragraph or
with a primary care case manager with a contract
described in section 1905(t)(3),
(ii) in the next month (or in the next 2 months) is
not eligible for such benefits, but
(iii) in the succeeding month is again eligible for
such benefits,
the State plan, subject to subparagraph (A)(vi), may enroll the
individual for that succeeding month with the organization
described in clause (i) if the organization continues to have a
contract under this paragraph with the State or with the
manager described in such clause if the manager continues to
have a contract described in section 1905(t)(3) with the State.
(4)(A) Each medicaid managed care organization which is not a
qualified health maintenance organization (as defined in
section 1310(d) of the Public Health Service Act) must report
to the State and, upon request, to the Secretary, the Inspector
General of the Department of Health and Human Services, and the
Comptroller General a description of transactions between the
organization and a party in interest (as defined in section
1318(b) of such Act), including the following transactions:
(i) Any sale or exchange, or leasing of any property
between the organization and such a party.
(ii) Any furnishing for consideration of goods,
services (including management services), or facilities
between the organization and such a party, but not
including salaries paid to employees for services
provided in the normal course of their employment.
(iii) Any lending of money or other extension of
credit between the organization and such a party.
The State or Secretary may require that information reported
respecting an organization which controls, or is controlled by,
or is under common control with, another entity be in the form
of a consolidated financial statement for the organization and
such entity.
(B) Each organization shall make the information reported
pursuant to subparagraph (A) available to its enrollees upon
reasonable request.
(5)(A) If the Secretary determines that an entity with a
contract under this subsection--
(i) fails substantially to provide medically
necessary items and services that are required (under
law or under the contract) to be provided to an
individual covered under the contract, if the failure
has adversely affected (or has substantial likelihood
of adversely affecting) the individual;
(ii) imposes premiums on individuals enrolled under
this subsection in excess of the premiums permitted
under this title;
(iii) acts to discriminate among individuals in
violation of the provision of paragraph (2)(A)(v),
including expulsion or refusal to re-enroll an
individual or engaging in any practice that would
reasonably be expected to have the effect of denying or
discouraging enrollment (except as permitted by this
subsection) by eligible individuals with the
organization whose medical condition or history
indicates a need for substantial future medical
services;
(iv) misrepresents or falsifies information that is
furnished--
(I) to the Secretary or the State under this
subsection, or
(II) to an individual or to any other entity
under this subsection, or
(v) fails to comply with the requirements of section
1876(i)(8),
the Secretary may provide, in addition to any other remedies
available under law, for any of the remedies described in
subparagraph (B).
(B) The remedies described in this subparagraph are--
(i) civil money penalties of not more than $25,000
for each determination under subparagraph (A), or, with
respect to a determination under clause (iii) or
(iv)(I) of such subparagraph, of not more than $100,000
for each such determination, plus, with respect to a
determination under subparagraph (A)(ii), double the
excess amount charged in violation of such subparagraph
(and the excess amount charged shall be deducted from
the penalty and returned to the individual concerned),
and plus, with respect to a determination under
subparagraph (A)(iii), $15,000 for each individual not
enrolled as a result of a practice described in such
subparagraph, or
(ii) denial of payment to the State for medical
assistance furnished under the contract under this
subsection for individuals enrolled after the date the
Secretary notifies the organization of a determination
under subparagraph (A) and until the Secretary is
satisfied that the basis for such determination has
been corrected and is not likely to recur.
The provisions of section 1128A (other than subsections (a) and
(b)) shall apply to a civil money penalty under clause (i) in
the same manner as such provisions apply to a penalty or
proceeding under section 1128A(a).
(6)(A) For purposes of this subsection and section
1902(e)(2)(A), in the case of the State of New Jersey, the term
``contract'' shall be deemed to include an undertaking by the
State agency, in the State plan under this title, to operate a
program meeting all requirements of this subsection.
(B) The undertaking described in subparagraph (A) must
provide--
(i) for the establishment of a separate entity
responsible for the operation of a program meeting the
requirements of this subsection, which entity may be a
subdivision of the State agency administering the State
plan under this title;
(ii) for separate accounting for the funds used to
operate such program; and
(iii) for setting the capitation rates and any other
payment rates for services provided in accordance with
this subsection using a methodology satisfactory to the
Secretary designed to ensure that total Federal
matching payments under this title for such services
will be lower than the matching payments that would be
made for the same services, if provided under the State
plan on a fee for service basis to an actuarially
equivalent population.
(C) The undertaking described in subparagraph (A) shall be
subject to approval (and annual re-approval) by the Secretary
in the same manner as a contract under this subsection.
(D) The undertaking described in subparagraph (A) shall not
be eligible for a waiver under section 1915(b).
(o) Notwithstanding the preceding provisions of this section,
no payment shall be made to a State under the preceding
provisions of this section for expenditures for medical
assistance provided for an individual under its State plan
approved under this title to the extent that a private insurer
(as defined by the Secretary by regulation and including a
group health plan (as defined in section 607(1) of the Employee
Retirement Income Security Act of 1974), a service benefit
plan, and a health maintenance organization) would have been
obligated to provide such assistance but for a provision of its
insurance contract which has the effect of limiting or
excluding such obligation because the individual is eligible
for or is provided medical assistance under the plan.
(p)(1) When a political subdivision of a State makes, for the
State of which it is a political subdivision, or one State
makes, for another State, the enforcement and collection of
rights of support or payment assigned under section 1912,
pursuant to a cooperative arrangement under such section
(either within or outside of such State), there shall be paid
to such political subdivision or such other State from amounts
which would otherwise represent the Federal share of payments
for medical assistance provided to the eligible individuals on
whose behalf such enforcement and collection was made, an
amount equal to 15 percent of any amount collected which is
attributable to such rights of support or payment.
(2) Where more than one jurisdiction is involved in such
enforcement or collection, the amount of the incentive payment
determined under paragraph (1) shall be allocated among the
jurisdictions in a manner to be prescribed by the Secretary.
(q) For the purposes of this section, the term ``State
medicaid fraud control unit'' means a single identifiable
entity of the State government which the Secretary certifies
(and annually recertifies) as meeting the following
requirements:
(1) The entity (A) is a unit of the office of the
State Attorney General or of another department of
State government which possesses statewide authority to
prosecute individuals for criminal violations, (B) is
in a State the constitution of which does not provide
for the criminal prosecution of individuals by a
statewide authority and has formal procedures, approved
by the Secretary, that (i) assure its referral of
suspected criminal violations relating to the program
under this title to the appropriate authority or
authorities in the State for prosecution and (ii)
assure its assistance of, and coordination with, such
authority or authorities in such prosecutions, or (C)
has a formal working relationship with the office of
the State Attorney General and has formal procedures
(including procedures for its referral of suspected
criminal violations to such office) which are approved
by the Secretary and which provide effective
coordination of activities between the entity and such
office with respect to the detection, investigation,
and prosecution of suspected criminal violations
relating to the program under this title.
(2) The entity is separate and distinct from the
single State agency that administers or supervises the
administration of the State plan under this title.
(3) The entity's function is conducting a statewide
program for the investigation and prosecution of
violations of all applicable State laws regarding any
and all aspects of fraud in connection with (A) any
aspect of the provision of medical assistance and the
activities of providers of such assistance under the
State plan under this title; and (B) upon the approval
of the Inspector General of the relevant Federal
agency, any aspect of the provision of health care
services and activities of providers of such services
under any Federal health care program (as defined in
section 1128B(f)(1)), if the suspected fraud or
violation of law in such case or investigation is
primarily related to the State plan under this title.
(4)(A) The entity has--
(i) procedures for reviewing complaints of
abuse or neglect of patients in health care
facilities which receive payments under the
State plan under this title;
(ii) at the option of the entity, procedures
for reviewing complaints of abuse or neglect of
patients residing in board and care facilities;
and
(iii) procedures for acting upon such
complaints under the criminal laws of the State
or for referring such complaints to other State
agencies for action.
(B) For purposes of this paragraph, the term ``board
and care facility'' means a residential setting which
receives payment (regardless of whether such payment is
made under the State plan under this title) from or on
behalf of two or more unrelated adults who reside in
such facility, and for whom one or both of the
following is provided:
(i) Nursing care services provided by, or
under the supervision of, a registered nurse,
licensed practical nurse, or licensed nursing
assistant.
(ii) A substantial amount of personal care
services that assist residents with the
activities of daily living, including personal
hygiene, dressing, bathing, eating, toileting,
ambulation, transfer, positioning, self-
medication, body care, travel to medical
services, essential shopping, meal preparation,
laundry, and housework.
(5) The entity provides for the collection, or
referral for collection to a single State agency, of
overpayments that are made under the State plan or
under any Federal health care program (as so defined)
to health care facilities and that are discovered by
the entity in carrying out its activities. All funds
collected in accordance with this paragraph shall be
credited exclusively to, and available for expenditure
under, the Federal health care program (including the
State plan under this title) that was subject to the
activity that was the basis for the collection.
(6) The entity employs such auditors, attorneys,
investigators, and other necessary personnel and is
organized in such a manner as is necessary to promote
the effective and efficient conduct of the entity's
activities.
(7) The entity submits to the Secretary an
application and annual reports containing such
information as the Secretary determines, by regulation,
to be necessary to determine whether the entity meets
the other requirements of this subsection.
(r)(1) In order to receive payments under subsection (a) for
use of automated data systems in administration of the State
plan under this title, a State must, in addition to meeting the
requirements of paragraph (3), have in operation mechanized
claims processing and information retrieval systems that meet
the requirements of this subsection and that the Secretary has
found--
(A) are adequate to provide efficient, economical,
and effective administration of such State plan;
(B) are compatible with the claims processing and
information retrieval systems used in the
administration of title XVIII, and for this purpose--
(i) have a uniform identification coding
system for providers, other payees, and
beneficiaries under this title or title XVIII;
(ii) provide liaison between States and
carriers and intermediaries with agreements
under title XVIII to facilitate timely exchange
of appropriate data;
(iii) provide for exchange of data between
the States and the Secretary with respect to
persons sanctioned under this title or title
XVIII; and
(iv) effective for claims filed on or after
October 1, 2010, incorporate compatible
methodologies of the National Correct Coding
Initiative administered by the Secretary (or
any successor initiative to promote correct
coding and to control improper coding leading
to inappropriate payment) and such other
methodologies of that Initiative (or such other
national correct coding methodologies) as the
Secretary identifies in accordance with
paragraph (4);
(C) are capable of providing accurate and timely
data;
(D) are complying with the applicable provisions of
part C of title XI;
(E) are designed to receive provider claims in
standard formats to the extent specified by the
Secretary; and
(F) effective for claims filed on or after January 1,
1999, provide for electronic transmission of claims
data in the format specified by the Secretary and
consistent with the Medicaid Statistical Information
System (MSIS) (including detailed individual enrollee
encounter data and other information that the Secretary
may find necessary and including, for data submitted to
the Secretary on or after January 1, 2010, data
elements from the automated data system that the
Secretary determines to be necessary for program
integrity, program oversight, and administration, at
such frequency as the Secretary shall determine).
(2) In order to meet the requirements of this paragraph,
mechanized claims processing and information retrieval systems
must meet the following requirements:
(A) The systems must be capable of developing
provider, physician, and patient profiles which are
sufficient to provide specific information as to the
use of covered types of services and items, including
prescribed drugs.
(B) The State must provide that information on
probable fraud or abuse which is obtained from, or
developed by, the systems, is made available to the
State's medicaid fraud control unit (if any) certified
under subsection (q) of this section.
(C) The systems must meet all performance standards
and other requirements for initial approval developed
by the Secretary.
(3) In order to meet the requirements of this paragraph, a
State must have in operation an eligibility determination
system which provides for data matching through the Public
Assistance Reporting Information System (PARIS) facilitated by
the Secretary (or any successor system), including matching
with medical assistance programs operated by other States.
(4) For purposes of paragraph (1)(B)(iv), the Secretary shall
do the following:
(A) Not later than September 1, 2010:
(i) Identify those methodologies of the
National Correct Coding Initiative administered
by the Secretary (or any successor initiative
to promote correct coding and to control
improper coding leading to inappropriate
payment) which are compatible to claims filed
under this title.
(ii) Identify those methodologies of such
Initiative (or such other national correct
coding methodologies) that should be
incorporated into claims filed under this title
with respect to items or services for which
States provide medical assistance under this
title and no national correct coding
methodologies have been established under such
Initiative with respect to title XVIII.
(iii) Notify States of--
(I) the methodologies identified
under subparagraphs (A) and (B) (and of
any other national correct coding
methodologies identified under
subparagraph (B)); and
(II) how States are to incorporate
such methodologies into claims filed
under this title.
(B) Not later than March 1, 2011, submit a report to
Congress that includes the notice to States under
clause (iii) of subparagraph (A) and an analysis
supporting the identification of the methodologies made
under clauses (i) and (ii) of subparagraph (A).
(s) Notwithstanding the preceding provisions of this section,
no payment shall be made to a State under this section for
expenditures for medical assistance under the State plan
consisting of a designated health service (as defined in
subsection (h)(6) of section 1877) furnished to an individual
on the basis of a referral that would result in the denial of
payment for the service under title XVIII if such title
provided for coverage of such service to the same extent and
under the same terms and conditions as under the State plan,
and subsections (f) and (g)(5) of such section shall apply to a
provider of such a designated health service for which payment
may be made under this title in the same manner as such
subsections apply to a provider of such a service for which
payment may be made under such title.
(t)(1) For purposes of subsection (a)(3)(F), the payments
described in this paragraph to encourage the adoption and use
of certified EHR technology are payments made by the State in
accordance with this subsection --
(A) to Medicaid providers described in paragraph
(2)(A) not in excess of 85 percent of net average
allowable costs (as defined in paragraph (3)(E)) for
certified EHR technology (and support services
including maintenance and training that is for, or is
necessary for the adoption and operation of, such
technology) with respect to such providers; and
(B) to Medicaid providers described in paragraph
(2)(B) not in excess of the maximum amount permitted
under paragraph (5) for the provider involved.
(2) In this subsection and subsection (a)(3)(F), the term
``Medicaid provider'' means--
(A) an eligible professional (as defined in paragraph
(3)(B))--
(i) who is not hospital-based and has at
least 30 percent of the professional's patient
volume (as estimated in accordance with a
methodology established by the Secretary)
attributable to individuals who are receiving
medical assistance under this title;
(ii) who is not described in clause (i), who
is a pediatrician, who is not hospital-based,
and who has at least 20 percent of the
professional's patient volume (as estimated in
accordance with a methodology established by
the Secretary) attributable to individuals who
are receiving medical assistance under this
title; and
(iii) who practices predominantly in a
Federally qualified health center or rural
health clinic and has at least 30 percent of
the professional's patient volume (as estimated
in accordance with a methodology established by
the Secretary) attributable to needy
individuals (as defined in paragraph (3)(F));
and
(B)(i) a children's hospital, or
(ii) an acute-care hospital that is not described in
clause (i) and that has at least 10 percent of the
hospital's patient volume (as estimated in accordance
with a methodology established by the Secretary)
attributable to individuals who are receiving medical
assistance under this title.
An eligible professional shall not qualify as a Medicaid
provider under this subsection unless any right to payment
under sections 1848(o) and 1853(l) with respect to the eligible
professional has been waived in a manner specified by the
Secretary. For purposes of calculating patient volume under
subparagraph (A)(iii), insofar as it is related to
uncompensated care, the Secretary may require the adjustment of
such uncompensated care data so that it would be an appropriate
proxy for charity care, including a downward adjustment to
eliminate bad debt data from uncompensated care. In applying
subparagraphs (A) and (B)(ii), the methodology established by
the Secretary for patient volume shall include individuals
enrolled in a Medicaid managed care plan (under section 1903(m)
or section 1932).
(3) In this subsection and subsection (a)(3)(F):
(A) The term ``certified EHR technology'' means a
qualified electronic health record (as defined in
3000(13) of the Public Health Service Act) that is
certified pursuant to section 3001(c)(5) of such Act as
meeting standards adopted under section 3004 of such
Act that are applicable to the type of record involved
(as determined by the Secretary, such as an ambulatory
electronic health record for office-based physicians or
an inpatient hospital electronic health record for
hospitals).
(B) The term ``eligible professional'' means a--
(i) physician;
(ii) dentist;
(iii) certified nurse mid-wife;
(iv) nurse practitioner; and
(v) physician assistant insofar as the
assistant is practicing in a rural health
clinic that is led by a physician assistant or
is practicing in a Federally qualified health
center that is so led.
(C) The term ``average allowable costs'' means, with
respect to certified EHR technology of Medicaid
providers described in paragraph (2)(A) for--
(i) the first year of payment with respect to
such a provider, the average costs for the
purchase and initial implementation or upgrade
of such technology (and support services
including training that is for, or is necessary
for the adoption and initial operation of, such
technology) for such providers, as determined
by the Secretary based upon studies conducted
under paragraph (4)(C); and
(ii) a subsequent year of payment with
respect to such a provider, the average costs
not described in clause (i) relating to the
operation, maintenance, and use of such
technology for such providers, as determined by
the Secretary based upon studies conducted
under paragraph (4)(C).
(D) The term ``hospital-based'' means, with respect
to an eligible professional, a professional (such as a
pathologist, anesthesiologist, or emergency physician)
who furnishes substantially all of the individual's
professional services in a hospital inpatient or
emergency room setting and through the use of the
facilities and equipment, including qualified
electronic health records, of the hospital. The
determination of whether an eligible professional is a
hospital-based eligible professional shall be made on
the basis of the site of service (as defined by the
Secretary) and without regard to any employment or
billing arrangement between the eligible professional
and any other provider.
(E) The term ``net average allowable costs'' means,
with respect to a Medicaid provider described in
paragraph (2)(A), average allowable costs reduced by
the average payment the Secretary estimates will be
made to such Medicaid providers (determined on a
percentage or other basis for such classes or types of
providers as the Secretary may specify) from other
sources (other than under this subsection, or by the
Federal government or a State or local government) that
is directly attributable to payment for certified EHR
technology or support services described in
subparagraph (C).
(F) The term ``needy individual'' means, with respect
to a Medicaid provider, an individual--
(i) who is receiving assistance under this
title;
(ii) who is receiving assistance under title
XXI;
(iii) who is furnished uncompensated care by
the provider; or
(iv) for whom charges are reduced by the
provider on a sliding scale basis based on an
individual's ability to pay.
(4)(A) With respect to a Medicaid provider described in
paragraph (2)(A), subject to subparagraph (B), in no case
shall--
(i) the net average allowable costs under
this subsection for the first year of payment
(which may not be later than 2016), which is
intended to cover the costs described in
paragraph (3)(C)(i), exceed $25,000 (or such
lesser amount as the Secretary determines based
on studies conducted under subparagraph (C));
(ii) the net average allowable costs under
this subsection for a subsequent year of
payment, which is intended to cover costs
described in paragraph (3)(C)(ii), exceed
$10,000; and
(iii) payments be made for costs described in
clause (ii) after 2021 or over a period of
longer than 5 years.
(B) In the case of Medicaid provider described in paragraph
(2)(A)(ii), the dollar amounts specified in subparagraph (A)
shall be \2/3\ of the dollar amounts otherwise specified.
(C) For the purposes of determining average allowable costs
under this subsection, the Secretary shall study the average
costs to Medicaid providers described in paragraph (2)(A) of
purchase and initial implementation and upgrade of certified
EHR technology described in paragraph (3)(C)(i) and the average
costs to such providers of operations, maintenance, and use of
such technology described in paragraph (3)(C)(ii). In
determining such costs for such providers, the Secretary may
utilize studies of such amounts submitted by States.
(5)(A) In no case shall the payments described in paragraph
(1)(B) with respect to a Medicaid provider described in
paragraph (2)(B) exceed--
(i) in the aggregate the product of--
(I) the overall hospital EHR amount
for the provider computed under
subparagraph (B); and
(II) the Medicaid share for such
provider computed under subparagraph
(C);
(ii) in any year 50 percent of the product described
in clause (i); and
(iii) in any 2-year period 90 percent of such
product.
(B) For purposes of this paragraph, the overall hospital EHR
amount, with respect to a Medicaid provider, is the sum of the
applicable amounts specified in section 1886(n)(2)(A) for such
provider for the first 4 payment years (as estimated by the
Secretary) determined as if the Medicare share specified in
clause (ii) of such section were 1. The Secretary shall
establish, in consultation with the State, the overall hospital
EHR amount for each such Medicaid provider eligible for
payments under paragraph (1)(B). For purposes of this
subparagraph in computing the amounts under section
1886(n)(2)(C) for payment years after the first payment year,
the Secretary shall assume that in subsequent payment years
discharges increase at the average annual rate of growth of the
most recent 3 years for which discharge data are available per
year.
(C) The Medicaid share computed under this subparagraph, for
a Medicaid provider for a period specified by the Secretary,
shall be calculated in the same manner as the Medicare share
under section 1886(n)(2)(D) for such a hospital and period,
except that there shall be substituted for the numerator under
clause (i) of such section the amount that is equal to the
number of inpatient-bed-days (as established by the Secretary)
which are attributable to individuals who are receiving medical
assistance under this title and who are not described in
section 1886(n)(2)(D)(i). In computing inpatient-bed-days under
the previous sentence, the Secretary shall take into account
inpatient-bed-days attributable to inpatient-bed-days that are
paid for individuals enrolled in a Medicaid managed care plan
(under section 1903(m) or section 1932).
(D) In no case may the payments described in paragraph (1)(B)
with respect to a Medicaid provider described in paragraph
(2)(B) be paid--
(i) for any year beginning after 2016 unless the
provider has been provided payment under paragraph
(1)(B) for the previous year; and
(ii) over a period of more than 6 years of payment.
(6) Payments described in paragraph (1) are not in accordance
with this subsection unless the following requirements are met:
(A)(i) The State provides assurances satisfactory to
the Secretary that amounts received under subsection
(a)(3)(F) with respect to payments to a Medicaid
provider are paid, subject to clause (ii), directly to
such provider (or to an employer or facility to which
such provider has assigned payments) without any
deduction or rebate.
(ii) Amounts described in clause (i) may also be paid
to an entity promoting the adoption of certified EHR
technology, as designated by the State, if
participation in such a payment arrangement is
voluntary for the eligible professional involved and if
such entity does not retain more than 5 percent of such
payments for costs not related to certified EHR
technology (and support services including maintenance
and training) that is for, or is necessary for the
operation of, such technology.
(B) A Medicaid provider described in paragraph (2)(A)
is responsible for payment of the remaining 15 percent
of the net average allowable cost and shall be
determined to have met such responsibility to the
extent that the payment to the Medicaid provider is not
in excess of 85 percent of the net average allowable
cost.
(C)(i) Subject to clause (ii), with respect to
payments to a Medicaid provider--
(I) for the first year of payment to the
Medicaid provider under this subsection, the
Medicaid provider demonstrates that it is
engaged in efforts to adopt, implement, or
upgrade certified EHR technology; and
(II) for a year of payment, other than the
first year of payment to the Medicaid provider
under this subsection, the Medicaid provider
demonstrates meaningful use of certified EHR
technology through a means that is approved by
the State and acceptable to the Secretary, and
that may be based upon the methodologies
applied under section 1848(o) or 1886(n).
(ii) In the case of a Medicaid provider who has
completed adopting, implementing, or upgrading such
technology prior to the first year of payment to the
Medicaid provider under this subsection, clause (i)(I)
shall not apply and clause (i)(II) shall apply to each
year of payment to the Medicaid provider under this
subsection, including the first year of payment.
(D) To the extent specified by the Secretary, the
certified EHR technology is compatible with State or
Federal administrative management systems.
For purposes of subparagraph (B), a Medicaid provider described
in paragraph (2)(A) may accept payments for the costs described
in such subparagraph from a State or local government. For
purposes of subparagraph (C), in establishing the means
described in such subparagraph, which may include clinical
quality reporting to the State, the State shall ensure that
populations with unique needs, such as children, are
appropriately addressed.
(7) With respect to Medicaid providers described in paragraph
(2)(A), the Secretary shall ensure coordination of payment with
respect to such providers under sections 1848(o) and 1853(l)
and under this subsection to assure no duplication of funding.
Such coordination shall include, to the extent practicable, a
data matching process between State Medicaid agencies and the
Centers for Medicare & Medicaid Services using national
provider identifiers. For such purposes, the Secretary may
require the submission of such data relating to payments to
such Medicaid providers as the Secretary may specify.
(8) In carrying out paragraph (6)(C), the State and Secretary
shall seek, to the maximum extent practicable, to avoid
duplicative requirements from Federal and State governments to
demonstrate meaningful use of certified EHR technology under
this title and title XVIII. In doing so, the Secretary may deem
satisfaction of requirements for such meaningful use for a
payment year under title XVIII to be sufficient to qualify as
meaningful use under this subsection. The Secretary may also
specify the reporting periods under this subsection in order to
carry out this paragraph.
(9) In order to be provided Federal financial participation
under subsection (a)(3)(F)(ii), a State must demonstrate to the
satisfaction of the Secretary, that the State--
(A) is using the funds provided for the purposes of
administering payments under this subsection, including
tracking of meaningful use by Medicaid providers;
(B) is conducting adequate oversight of the program
under this subsection, including routine tracking of
meaningful use attestations and reporting mechanisms;
and
(C) is pursuing initiatives to encourage the adoption
of certified EHR technology to promote health care
quality and the exchange of health care information
under this title, subject to applicable laws and
regulations governing such exchange.
(10) The Secretary shall periodically submit reports to the
Committee on Energy and Commerce of the House of
Representatives and the Committee on Finance of the Senate on
status, progress, and oversight of payments described in
paragraph (1), including steps taken to carry out paragraph
(7). Such reports shall also describe the extent of adoption of
certified EHR technology among Medicaid providers resulting
from the provisions of this subsection and any improvements in
health outcomes, clinical quality, or efficiency resulting from
such adoption.
(u)(1)(A) Notwithstanding subsection (a)(1), if the ratio of
a State's erroneous excess payments for medical assistance (as
defined in subparagraph (D)) to its total expenditures for
medical assistance under the State plan approved under this
title exceeds 0.03, for the period consisting of the third and
fourth quarters of fiscal year 1983, or for any full fiscal
year thereafter, then the Secretary shall make no payment for
such period or fiscal year with respect to so much of such
erroneous excess payments as exceeds such allowable error rate
of 0.03.
(B) The Secretary may waive, in certain limited cases, all or
part of the reduction required under subparagraph (A) with
respect to any State if such State is unable to reach the
allowable error rate for a period or fiscal year despite a good
faith effort by such State.
(C) In estimating the amount to be paid to a State under
subsection (d), the Secretary shall take into consideration the
limitation on Federal financial participation imposed by
subparagraph (A) and shall reduce the estimate he makes under
subsection (d)(1), for purposes of payment to the State under
subsection (d)(3), in light of any expected erroneous excess
payments for medical assistance (estimated in accordance with
such criteria, including sampling procedures, as he may
prescribe and subject to subsequent adjustment, if necessary,
under subsection (d)(2)).
(D)(i) For purposes of this subsection, the term ``erroneous
excess payments for medical assistance'' means the total of--
(I) payments under the State plan with respect to
ineligible individuals and families, and
(II) overpayments on behalf of eligible individuals
and families by reason of error in determining the
amount of expenditures for medical care required of an
individual or family as a condition of eligibility.
(ii) In determining the amount of erroneous excess payments
for medical assistance to an ineligible individual or family
under clause (i)(I), if such ineligibility is the result of an
error in determining the amount of the resources of such
individual or family, the amount of the erroneous excess
payment shall be the smaller of (I) the amount of the payment
with respect to such individual or family, or (II) the
difference between the actual amount of such resources and the
allowable resource level established under the State plan.
(iii) In determining the amount of erroneous excess payments
for medical assistance to an individual or family under clause
(i)(II), the amount of the erroneous excess payment shall be
the smaller of (I) the amount of the payment on behalf of the
individual or family, or (II) the difference between the actual
amount incurred for medical care by the individual or family
and the amount which should have been incurred in order to
establish eligibility for medical assistance.
(iv) In determining the amount of erroneous excess payments,
there shall not be included any error resulting from a failure
of an individual to cooperate or give correct information with
respect to third-party liability as required under section
1912(a)(1)(C) or 402(a)(26)(C) or with respect to payments made
in violation of section 1906.
(v) In determining the amount of erroneous excess payments,
there shall not be included any erroneous payments made for
ambulatory prenatal care provided during a presumptive
eligibility period (as defined in section 1920(b)(1)), for
items and services described in subsection (a) of section 1920A
provided to a child during a presumptive eligibility period
under such section, for medical assistance provided to an
individual described in subsection (a) of section 1920B during
a presumptive eligibility period under such section, or for
medical assistance provided to an individual during a
presumptive eligibility period resulting from a determination
of presumptive eligibility made by a hospital that elects under
section 1902(a)(47)(B) to be a qualified entity for such
purpose.
(E) For purposes of subparagraph (D), there shall be
excluded, in determining both erroneous excess payments for
medical assistance and total expenditures for medical
assistance--
(i) payments with respect to any individual whose
eligibility therefor was determined exclusively by the
Secretary under an agreement pursuant to section 1634
and such other classes of individuals as the Secretary
may by regulation prescribe whose eligibility was
determined in part under such an agreement; and
(ii) payments made as the result of a technical
error.
(2) The State agency administering the plan approved under
this title shall, at such times and in such form as the
Secretary may specify, provide information on the rates of
erroneous excess payments made (or expected, with respect to
future periods specified by the Secretary) in connection with
its administration of such plan, together with any other data
he requests that are reasonably necessary for him to carry out
the provisions of this subsection.
(3)(A) If a State fails to cooperate with the Secretary in
providing information necessary to carry out this subsection,
the Secretary, directly or through contractual or such other
arrangements as he may find appropriate, shall establish the
error rates for that State on the basis of the best data
reasonably available to him and in accordance with such
techniques for sampling and estimating as he finds appropriate.
(B) In any case in which it is necessary for the Secretary to
exercise his authority under subparagraph (A) to determine a
State's error rates for a fiscal year, the amount that would
otherwise be payable to such State under this title for
quarters in such year shall be reduced by the costs incurred by
the Secretary in making (directly or otherwise) such
determination.
(4) This subsection shall not apply with respect to Puerto
Rico, Guam, the Virgin Islands, the Northern Mariana Islands,
or American Samoa.
(v)(1) Notwithstanding the preceding provisions of this
section, except as provided in paragraphs (2) and (4), no
payment may be made to a State under this section for medical
assistance furnished to an alien who is not lawfully admitted
for permanent residence or otherwise permanently residing in
the United States under color of law.
(2) Payment shall be made under this section for care and
services that are furnished to an alien described in paragraph
(1) only if--
(A) such care and services are necessary for the
treatment of an emergency medical condition of the
alien,
(B) such alien otherwise meets the eligibility
requirements for medical assistance under the State
plan approved under this title (other than the
requirement of the receipt of aid or assistance under
title IV, supplemental security income benefits under
title XVI, or a State supplementary payment), and
(C) such care and services are not related to an
organ transplant procedure.
(3) For purposes of this subsection, the term ``emergency
medical condition'' means a medical condition (including
emergency labor and delivery) manifesting itself by acute
symptoms of sufficient severity (including severe pain) such
that the absence of immediate medical attention could
reasonably be expected to result in--
(A) placing the patient's health in serious jeopardy,
(B) serious impairment to bodily functions, or
(C) serious dysfunction of any bodily organ or part.
(4)(A) A State may elect (in a plan amendment under this
title) to provide medical assistance under this title,
notwithstanding sections 401(a), 402(b), 403, and 421 of the
Personal Responsibility and Work Opportunity Reconciliation Act
of 1996, to children and pregnant women who are lawfully
residing in the United States (including battered individuals
described in section 431(c) of such Act) and who are otherwise
eligible for such assistance, within either or both of the
following eligibility categories:
(i) Pregnant women.--Women during pregnancy (and
during the 60-day period beginning on the last day of
the pregnancy).
(ii) Children.--Individuals under 21 years of age,
including optional targeted low-income children
described in section 1905(u)(2)(B).
(B) In the case of a State that has elected to provide
medical assistance to a category of aliens under subparagraph
(A), no debt shall accrue under an affidavit of support against
any sponsor of such an alien on the basis of provision of
assistance to such category and the cost of such assistance
shall not be considered as an unreimbursed cost.
(C) As part of the State's ongoing eligibility
redetermination requirements and procedures for an individual
provided medical assistance as a result of an election by the
State under subparagraph (A), a State shall verify that the
individual continues to lawfully reside in the United States
using the documentation presented to the State by the
individual on initial enrollment. If the State cannot
successfully verify that the individual is lawfully residing in
the United States in this manner, it shall require that the
individual provide the State with further documentation or
other evidence to verify that the individual is lawfully
residing in the United States.
(w)(1)(A) Notwithstanding the previous provisions of this
section, for purposes of determining the amount to be paid to a
State (as defined in paragraph (7)(D)) under subsection (a)(1)
for quarters in any fiscal year, the total amount expended
during such fiscal year as medical assistance under the State
plan (as determined without regard to this subsection) shall be
reduced by the sum of any revenues received by the State (or by
a unit of local government in the State) during the fiscal
year--
(i) from provider-related donations (as defined in
paragraph (2)(A)), other than--
(I) bona fide provider-related donations (as
defined in paragraph (2)(B)), and
(II) donations described in paragraph (2)(C);
(ii) from health care related taxes (as defined in
paragraph (3)(A)), other than broad-based health care
related taxes (as defined in paragraph (3)(B));
(iii) from a broad-based health care related tax, if
there is in effect a hold harmless provision (described
in paragraph (4)) with respect to the tax; or
(iv) only with respect to State fiscal years (or
portions thereof) occurring on or after January 1,
1992, and before October 1, 1995, from broad-based
health care related taxes to the extent the amount of
such taxes collected exceeds the limit established
under paragraph (5).
(B) Notwithstanding the previous provisions of this section,
for purposes of determining the amount to be paid to a State
under subsection (a)(7) for all quarters in a Federal fiscal
year (beginning with fiscal year 1993), the total amount
expended during the fiscal year for administrative expenditures
under the State plan (as determined without regard to this
subsection) shall be reduced by the sum of any revenues
received by the State (or by a unit of local government in the
State) during such quarters from donations described in
paragraph (2)(C), to the extent the amount of such donations
exceeds 10 percent of the amounts expended under the State plan
under this title during the fiscal year for purposes described
in paragraphs (2), (3), (4), (6), and (7) of subsection (a).
(C)(i) Except as otherwise provided in clause (ii),
subparagraph (A)(i) shall apply to donations received on or
after January 1, 1992.
(ii) Subject to the limits described in clause (iii) and
subparagraph (E), subparagraph (A)(i) shall not apply to
donations received before the effective date specified in
subparagraph (F) if such donations are received under programs
in effect or as described in State plan amendments or related
documents submitted to the Secretary by September 30, 1991, and
applicable to State fiscal year 1992, as demonstrated by State
plan amendments, written agreements, State budget
documentation, or other documentary evidence in existence on
that date.
(iii) In applying clause (ii) in the case of donations
received in State fiscal year 1993, the maximum amount of such
donations to which such clause may be applied may not exceed
the total amount of such donations received in the
corresponding period in State fiscal year 1992 (or not later
than 5 days after the last day of the corresponding period).
(D)(i) Except as otherwise provided in clause (ii),
subparagraphs (A)(ii) and (A)(iii) shall apply to taxes
received on or after January 1, 1992.
(ii) Subparagraphs (A)(ii) and (A)(iii) shall not apply to
impermissible taxes (as defined in clause (iii)) received
before the effective date specified in subparagraph (F) to the
extent the taxes (including the tax rate or base) were in
effect, or the legislation or regulations imposing such taxes
were enacted or adopted, as of November 22, 1991.
(iii) In this subparagraph and subparagraph (E), the term
``impermissible tax'' means a health care related tax for which
a reduction may be made under clause (ii) or (iii) of
subparagraph (A).
(E)(i) In no case may the total amount of donations and taxes
permitted under the exception provided in subparagraphs (C)(ii)
and (D)(ii) for the portion of State fiscal year 1992 occurring
during calendar year 1992 exceed the limit under paragraph (5)
minus the total amount of broad-based health care related taxes
received in the portion of that fiscal year.
(ii) In no case may the total amount of donations and taxes
permitted under the exception provided in subparagraphs (C)(ii)
and (D)(ii) for State fiscal year 1993 exceed the limit under
paragraph (5) minus the total amount of broad-based health care
related taxes received in that fiscal year.
(F) In this paragraph in the case of a State--
(i) except as provided in clause (iii), with a State
fiscal year beginning on or before July 1, the
effective date is October 1, 1992,
(ii) except as provided in clause (iii), with a State
fiscal year that begins after July 1, the effective
date is January 1, 1993, or
(iii) with a State legislature which is not scheduled
to have a regular legislative session in 1992, with a
State legislature which is not scheduled to have a
regular legislative session in 1993, or with a
provider-specific tax enacted on November 4, 1991, the
effective date is July 1, 1993.
(2)(A) In this subsection (except as provided in paragraph
(6)), the term ``provider-related donation'' means any donation
or other voluntary payment (whether in cash or in kind) made
(directly or indirectly) to a State or unit of local government
by--
(i) a health care provider (as defined in paragraph
(7)(B)),
(ii) an entity related to a health care provider (as
defined in paragraph (7)(C)), or
(iii) an entity providing goods or services under the
State plan for which payment is made to the State under
paragraph (2), (3), (4), (6), or (7) of subsection (a).
(B) For purposes of paragraph (1)(A)(i)(I), the term ``bona
fide provider-related donation'' means a provider-related
donation that has no direct or indirect relationship (as
determined by the Secretary) to payments made under this title
to that provider, to providers furnishing the same class of
items and services as that provider, or to any related entity,
as established by the State to the satisfaction of the
Secretary. The Secretary may by regulation specify types of
provider-related donations described in the previous sentence
that will be considered to be bona fide provider-related
donations.
(C) For purposes of paragraph (1)(A)(i)(II), donations
described in this subparagraph are funds expended by a
hospital, clinic, or similar entity for the direct cost
(including costs of training and of preparing and distributing
outreach materials) of State or local agency personnel who are
stationed at the hospital, clinic, or entity to determine the
eligibility of individuals for medical assistance under this
title and to provide outreach services to eligible or
potentially eligible individuals.
(3)(A) In this subsection (except as provided in paragraph
(6)), the term ``health care related tax'' means a tax (as
defined in paragraph (7)(F)) that--
(i) is related to health care items or services, or
to the provision of, the authority to provide, or
payment for, such items or services, or
(ii) is not limited to such items or services but
provides for treatment of individuals or entities that
are providing or paying for such items or services that
is different from the treatment provided to other
individuals or entities.
In applying clause (i), a tax is considered to relate to health
care items or services if at least 85 percent of the burden of
such tax falls on health care providers.
(B) In this subsection, the term ``broad-based health care
related tax'' means a health care related tax which is imposed
with respect to a class of health care items or services (as
described in paragraph (7)(A)) or with respect to providers of
such items or services and which, except as provided in
subparagraphs (D), (E), and (F)--
(i) is imposed at least with respect to all items or
services in the class furnished by all non-Federal,
nonpublic providers in the State (or, in the case of a
tax imposed by a unit of local government, the area
over which the unit has jurisdiction) or is imposed
with respect to all non-Federal, nonpublic providers in
the class; and
(ii) is imposed uniformly (in accordance with
subparagraph (C)).
(C)(i) Subject to clause (ii), for purposes of subparagraph
(B)(ii), a tax is considered to be imposed uniformly if--
(I) in the case of a tax consisting of a licensing
fee or similar tax on a class of health care items or
services (or providers of such items or services), the
amount of the tax imposed is the same for every
provider providing items or services within the class;
(II) in the case of a tax consisting of a licensing
fee or similar tax imposed on a class of health care
items or services (or providers of such services) on
the basis of the number of beds (licensed or otherwise)
of the provider, the amount of the tax is the same for
each bed of each provider of such items or services in
the class;
(III) in the case of a tax based on revenues or
receipts with respect to a class of items or services
(or providers of items or services) the tax is imposed
at a uniform rate for all items and services (or
providers of such items of services) in the class on
all the gross revenues or receipts, or net operating
revenues, relating to the provision of all such items
or services (or all such providers) in the State (or,
in the case of a tax imposed by a unit of local
government within the State, in the area over which the
unit has jurisdiction); or
(IV) in the case of any other tax, the State
establishes to the satisfaction of the Secretary that
the tax is imposed uniformly.
(ii) Subject to subparagraphs (D) and (E), a tax imposed with
respect to a class of health care items and services is not
considered to be imposed uniformly if the tax provides for any
credits, exclusions, or deductions which have as their purpose
or effect the return to providers of all or a portion of the
tax paid in a manner that is inconsistent with subclauses (I)
and (II) of subparagraph (E)(ii) or provides for a hold
harmless provision described in paragraph (4).
(D) A tax imposed with respect to a class of health care
items and services is considered to be imposed uniformly--
(i) notwithstanding that the tax is not imposed with
respect to items or services (or the providers thereof)
for which payment is made under a State plan under this
title or title XVIII, or
(ii) in the case of a tax described in subparagraph
(C)(i)(III), notwithstanding that the tax provides for
exclusion (in whole or in part) of revenues or receipts
from a State plan under this title or title XVIII.
(E)(i) A State may submit an application to the Secretary
requesting that the Secretary treat a tax as a broad-based
health care related tax, notwithstanding that the tax does not
apply to all health care items or services in class (or all
providers of such items and services), provides for a credit,
deduction, or exclusion, is not applied uniformly, or otherwise
does not meet the requirements of subparagraph (B) or (C).
Permissible waivers may include exemptions for rural or sole-
community providers.
(ii) The Secretary shall approve such an application if the
State establishes to the satisfaction of the Secretary that--
(I) the net impact of the tax and associated
expenditures under this title as proposed by the State
is generally redistributive in nature, and
(II) the amount of the tax is not directly correlated
to payments under this title for items or services with
respect to which the tax is imposed.
The Secretary shall by regulation specify types of credits,
exclusions, and deductions that will be considered to meet the
requirements of this subparagraph.
(F) In no case shall a tax not qualify as a broad-based
health care related tax under this paragraph because it does
not apply to a hospital that is described in section 501(c)(3)
of the Internal Revenue Code of 1986 and exempt from taxation
under section 501(a) of such Code and that does not accept
payment under the State plan under this title or under title
XVIII.
(4) For purposes of paragraph (1)(A)(iii), there is in effect
a hold harmless provision with respect to a broad-based health
care related tax imposed with respect to a class of items or
services if the Secretary determines that any of the following
applies:
(A) The State or other unit of government imposing
the tax provides (directly or indirectly) for a payment
(other than under this title) to taxpayers and the
amount of such payment is positively correlated either
to the amount of such tax or to the difference between
the amount of the tax and the amount of payment under
the State plan.
(B) All or any portion of the payment made under this
title to the taxpayer varies based only upon the amount
of the total tax paid.
(C)(i) The State or other unit of government imposing
the tax provides (directly or indirectly) for any
payment, offset, or waiver that guarantees to hold
taxpayers harmless for any portion of the costs of the
tax.
(ii) For purposes of clause (i), a determination of
the existence of an indirect guarantee shall be made
under paragraph (3)(i) of section 433.68(f) of title
42, Code of Federal Regulations, as in effect on
November 1, 2006, except that for portions of fiscal
years beginning on or after January 1, 2008, and before
October 1, 2011, ``5.5 percent'' shall be substituted
for ``6 percent'' each place it appears.
The provisions of this paragraph shall not prevent use of the
tax to reimburse health care providers in a class for
expenditures under this title nor preclude States from relying
on such reimbursement to justify or explain the tax in the
legislative process.
(5)(A) For purposes of this subsection, the limit under this
subparagraph with respect to a State is an amount equal to 25
percent (or, if greater, the State base percentage, as defined
in subparagraph (B)) of the non-Federal share of the total
amount expended under the State plan during a State fiscal year
(or portion thereof), as it would be determined pursuant to
paragraph (1)(A) without regard to paragraph (1)(A)(iv).
(B)(i) In subparagraph (A), the term ``State base
percentage'' means, with respect to a State, an amount
(expressed as a percentage) equal to--
(I) the total of the amount of health care related
taxes (whether or not broad-based) and the amount of
provider-related donations (whether or not bona fide)
projected to be collected (in accordance with clause
(ii)) during State fiscal year 1992, divided by
(II) the non-Federal share of the total amount
estimated to be expended under the State plan during
such State fiscal year.
(ii) For purposes of clause (i)(I), in the case of a tax that
is not in effect throughout State fiscal year 1992 or the rate
(or base) of which is increased during such fiscal year, the
Secretary shall project the amount to be collected during such
fiscal year as if the tax (or increase) were in effect during
the entire State fiscal year.
(C)(i) The total amount of health care related taxes under
subparagraph (B)(i)(I) shall be determined by the Secretary
based on only those taxes (including the tax rate or base)
which were in effect, or for which legislation or regulations
imposing such taxes were enacted or adopted, as of November 22,
1991.
(ii) The amount of provider-related donations under
subparagraph (B)(i)(I) shall be determined by the Secretary
based on programs in effect on September 30, 1991, and
applicable to State fiscal year 1992, as demonstrated by State
plan amendments, written agreements, State budget
documentation, or other documentary evidence in existence on
that date.
(iii) The amount of expenditures described in subparagraph
(B)(i)(II) shall be determined by the Secretary based on the
best data available as of the date of the enactment of this
subsection.
(6)(A) Notwithstanding the provisions of this subsection, the
Secretary may not restrict States' use of funds where such
funds are derived from State or local taxes (or funds
appropriated to State university teaching hospitals)
transferred from or certified by units of government within a
State as the non-Federal share of expenditures under this
title, regardless of whether the unit of government is also a
health care provider, except as provided in section 1902(a)(2),
unless the transferred funds are derived by the unit of
government from donations or taxes that would not otherwise be
recognized as the non-Federal share under this section.
(B) For purposes of this subsection, funds the use of which
the Secretary may not restrict under subparagraph (A) shall not
be considered to be a provider-related donation or a health
care related tax.
(7) For purposes of this subsection:
(A) Each of the following shall be considered a
separate class of health care items and services:
(i) Inpatient hospital services.
(ii) Outpatient hospital services.
(iii) Nursing facility services (other than
services of intermediate care facilities for
the mentally retarded).
(iv) Services of intermediate care facilities
for the mentally retarded.
(v) Physicians' services.
(vi) Home health care services.
(vii) Outpatient prescription drugs.
(viii) Services of managed care organizations
(including health maintenance organizations,
preferred provider organizations, and such
other similar organizations as the Secretary
may specify by regulation).
(ix) Such other classification of health care
items and services consistent with this
subparagraph as the Secretary may establish by
regulation.
(B) The term ``health care provider'' means an
individual or person that receives payments for the
provision of health care items or services.
(C) An entity is considered to be ``related'' to a
health care provider if the entity--
(i) is an organization, association,
corporation or partnership formed by or on
behalf of health care providers;
(ii) is a person with an ownership or control
interest (as defined in section 1124(a)(3)) in
the provider;
(iii) is the employee, spouse, parent, child,
or sibling of the provider (or of a person
described in clause (ii)); or
(iv) has a similar, close relationship (as
defined in regulations) to the provider.
(D) The term ``State'' means only the 50 States and
the District of Columbia but does not include any State
whose entire program under this title is operated under
a waiver granted under section 1115.
(E) The ``State fiscal year'' means, with respect to
a specified year, a State fiscal year ending in that
specified year.
(F) The term ``tax'' includes any licensing fee,
assessment, or other mandatory payment, but does not
include payment of a criminal or civil fine or penalty
(other than a fine or penalty imposed in lieu of or
instead of a fee, assessment, or other mandatory
payment).
(G) The term ``unit of local government'' means, with
respect to a State, a city, county, special purpose
district, or other governmental unit in the State.
(x)(1) For purposes of section 1902(a)(46)(B)(i), the
requirement of this subsection is, with respect to an
individual declaring to be a citizen or national of the United
States, that, subject to paragraph (2), there is presented
satisfactory documentary evidence of citizenship or nationality
(as defined in paragraph (3)) of the individual.
(2) The requirement of paragraph (1) shall not apply to an
individual declaring to be a citizen or national of the United
States who is eligible for medical assistance under this
title--
(A) and is entitled to or enrolled for benefits under
any part of title XVIII;
(B) and is receiving--
(i) disability insurance benefits under
section 223 or monthly insurance benefits under
section 202 based on such individual's
disability (as defined in section 223(d)); or
(ii) supplemental security income benefits
under title XVI;
(C) and with respect to whom--
(i) child welfare services are made available
under part B of title IV on the basis of being
a child in foster care; or
(ii) adoption or foster care assistance is
made available under part E of title IV;
(D) pursuant to the application of section 1902(e)(4)
(and, in the case of an individual who is eligible for
medical assistance on such basis, the individual shall
be deemed to have provided satisfactory documentary
evidence of citizenship or nationality and shall not be
required to provide further documentary evidence on any
date that occurs during or after the period in which
the individual is eligible for medical assistance on
such basis); or
(E) on such basis as the Secretary may specify under
which satisfactory documentary evidence of citizenship
or nationality has been previously presented.
(3)(A) For purposes of this subsection, the term
``satisfactory documentary evidence of citizenship or
nationality'' means--
(i) any document described in subparagraph (B); or
(ii) a document described in subparagraph (C) and a
document described in subparagraph (D).
(B) The following are documents described in this
subparagraph:
(i) A United States passport.
(ii) Form N-550 or N-570 (Certificate of
Naturalization).
(iii) Form N-560 or N-561 (Certificate of United
States Citizenship).
(iv) A valid State-issued driver's license or other
identity document described in section 274A(b)(1)(D) of
the Immigration and Nationality Act, but only if the
State issuing the license or such document requires
proof of United States citizenship before issuance of
such license or document or obtains a social security
number from the applicant and verifies before
certification that such number is valid and assigned to
the applicant who is a citizen.
(v)(I) Except as provided in subclause (II), a
document issued by a federally recognized Indian tribe
evidencing membership or enrollment in, or affiliation
with, such tribe (such as a tribal enrollment card or
certificate of degree of Indian blood).
(II) With respect to those federally recognized
Indian tribes located within States having an
international border whose membership includes
individuals who are not citizens of the United States,
the Secretary shall, after consulting with such tribes,
issue regulations authorizing the presentation of such
other forms of documentation (including tribal
documentation, if appropriate) that the Secretary
determines to be satisfactory documentary evidence of
citizenship or nationality for purposes of satisfying
the requirement of this subsection.
(vi) Such other document as the Secretary may
specify, by regulation, that provides proof of United
States citizenship or nationality and that provides a
reliable means of documentation of personal identity.
(C) The following are documents described in this
subparagraph:
(i) A certificate of birth in the United States.
(ii) Form FS-545 or Form DS-1350 (Certification of
Birth Abroad).
(iii) Form I-197 (United States Citizen
Identification Card).
(iv) Form FS-240 (Report of Birth Abroad of a Citizen
of the United States).
(v) Such other document (not described in
subparagraph (B)(iv)) as the Secretary may specify that
provides proof of United States citizenship or
nationality.
(D) The following are documents described in this
subparagraph:
(i) Any identity document described in section
274A(b)(1)(D) of the Immigration and Nationality Act.
(ii) Any other documentation of personal identity of
such other type as the Secretary finds, by regulation,
provides a reliable means of identification.
(E) A reference in this paragraph to a form includes a
reference to any successor form.
(4) In the case of an individual declaring to be a citizen or
national of the United States with respect to whom a State
requires the presentation of satisfactory documentary evidence
of citizenship or nationality under section 1902(a)(46)(B)(i),
the individual shall be provided at least the reasonable
opportunity to present satisfactory documentary evidence of
citizenship or nationality under this subsection as is provided
under clauses (i) and (ii) of section 1137(d)(4)(A) to an
individual for the submittal to the State of evidence
indicating a satisfactory immigration status.
(5) Nothing in subparagraph (A) or (B) of section
1902(a)(46), the preceding paragraphs of this subsection, or
the Deficit Reduction Act of 2005, including section 6036 of
such Act, shall be construed as changing the requirement of
section 1902(e)(4) that a child born in the United States to an
alien mother for whom medical assistance for the delivery of
such child is available as treatment of an emergency medical
condition pursuant to subsection (v) shall be deemed eligible
for medical assistance during the first year of such child's
life.
(y) Payments for Establishment of Alternate Non-Emergency
Services Providers.--
(1) Payments.--In addition to the payments otherwise
provided under subsection (a), subject to paragraph
(2), the Secretary shall provide for payments to States
under such subsection for the establishment of
alternate non-emergency service providers (as defined
in section 1916A(e)(5)(B)), or networks of such
providers.
(2) Limitation.--The total amount of payments under
this subsection shall not exceed $50,000,000 during the
4-year period beginning with 2006. This subsection
constitutes budget authority in advance of
appropriations Acts and represents the obligation of
the Secretary to provide for the payment of amounts
provided under this subsection.
(3) Preference.--In providing for payments to States
under this subsection, the Secretary shall provide
preference to States that establish, or provide for,
alternate non-emergency services providers or networks
of such providers that--
(A) serve rural or underserved areas where
beneficiaries under this title may not have
regular access to providers of primary care
services; or
(B) are in partnership with local community
hospitals.
(4) Form and manner of payment.--Payment to a State
under this subsection shall be made only upon the
filing of such application in such form and in such
manner as the Secretary shall specify. Payment to a
State under this subsection shall be made in the same
manner as other payments under section 1903(a).
(z) Medicaid Transformation Payments.--
(1) In general.--In addition to the payments provided
under subsection (a), subject to paragraph (4), the
Secretary shall provide for payments to States for the
adoption of innovative methods to improve the
effectiveness and efficiency in providing medical
assistance under this title.
(2) Permissible uses of funds.--The following are
examples of innovative methods for which funds provided
under this subsection may be used:
(A) Methods for reducing patient error rates
through the implementation and use of
electronic health records, electronic clinical
decision support tools, or e-prescribing
programs.
(B) Methods for improving rates of collection
from estates of amounts owed under this title.
(C) Methods for reducing waste, fraud, and
abuse under the program under this title, such
as reducing improper payment rates as measured
by annual payment error rate measurement (PERM)
project rates.
(D) Implementation of a medication risk
management program as part of a drug use review
program under section 1927(g).
(E) Methods in reducing, in clinically
appropriate ways, expenditures under this title
for covered outpatient drugs, particularly in
the categories of greatest drug utilization, by
increasing the utilization of generic drugs
through the use of education programs and other
incentives to promote greater use of generic
drugs.
(F) Methods for improving access to primary
and specialty physician care for the uninsured
using integrated university-based hospital and
clinic systems.
(3) Application; terms and conditions.--
(A) In general.--No payments shall be made to
a State under this subsection unless the State
applies to the Secretary for such payments in a
form, manner, and time specified by the
Secretary.
(B) Terms and conditions.--Such payments are
made under such terms and conditions consistent
with this subsection as the Secretary
prescribes.
(C) Annual report.--Payment to a State under
this subsection is conditioned on the State
submitting to the Secretary an annual report on
the programs supported by such payment. Such
report shall include information on--
(i) the specific uses of such
payment;
(ii) an assessment of quality
improvements and clinical outcomes
under such programs; and
(iii) estimates of cost savings
resulting from such programs.
(4) Funding.--
(A) Limitation on funds.--The total amount of
payments under this subsection shall be equal
to, and shall not exceed--
(i) $75,000,000 for fiscal year 2007;
and
(ii) $75,000,000 for fiscal year
2008.
This subsection constitutes budget authority in
advance of appropriations Acts and represents
the obligation of the Secretary to provide for
the payment of amounts provided under this
subsection.
(B) Allocation of funds.--The Secretary shall
specify a method for allocating the funds made
available under this subsection among States.
Such method shall provide preference for States
that design programs that target health
providers that treat significant numbers of
Medicaid beneficiaries. Such method shall
provide that not less than 25 percent of such
funds shall be allocated among States the
population of which (as determined according to
data collected by the United States Census
Bureau) as of July 1, 2004, was more than 105
percent of the population of the respective
State (as so determined) as of April 1, 2000.
(C) Form and manner of payment.--Payment to a
State under this subsection shall be made in
the same manner as other payments under section
1903(a). There is no requirement for State
matching funds to receive payments under this
subsection.
(5) Medication risk management program.--
(A) In general.--For purposes of this
subsection, the term ``medication risk
management program'' means a program for
targeted beneficiaries that ensures that
covered outpatient drugs are appropriately used
to optimize therapeutic outcomes through
improved medication use and to reduce the risk
of adverse events.
(B) Elements.--Such program may include the
following elements:
(i) The use of established principles
and standards for drug utilization
review and best practices to analyze
prescription drug claims of targeted
beneficiaries and identify outlier
physicians.
(ii) On an ongoing basis provide
outlier physicians--
(I) a comprehensive pharmacy
claims history for each
targeted beneficiary under
their care;
(II) information regarding
the frequency and cost of
relapses and hospitalizations
of targeted beneficiaries under
the physician's care; and
(III) applicable best
practice guidelines and
empirical references.
(iii) Monitor outlier physician's
prescribing, such as failure to refill,
dosage strengths, and provide
incentives and information to encourage
the adoption of best clinical
practices.
(C) Targeted beneficiaries.--For purposes of
this paragraph, the term ``targeted
beneficiaries'' means Medicaid eligible
beneficiaries who are identified as having high
prescription drug costs and medical costs, such
as individuals with behavioral disorders or
multiple chronic diseases who are taking
multiple medications.
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