text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Preserve Access to Care in the Home 
  (PATCH) Act of 1999''.
  
  SEC. 2. FINDINGS AND PURPOSES.
  
      (a) Findings.--Congress finds the following:
              (1) Home health services are a vital component of the 
          benefits that are provided to beneficiaries under the medicare 
          program under title XVIII of the Social Security Act.
              (2) Home health services under the medicare program enable 
          homebound individuals who are at great risk for costly 
          institutionalized care to stay in their own homes and 
          communities.
              (3) Implementation of the home health interim payment 
          system under the medicare program has inadvertently exacerbated 
          payment disparities for home health services between regions, 
          penalizing efficient, low-cost home health agencies in rural 
          areas and providing insufficient compensation for the care of 
          higher acuity, medically complex patients.
              (4) The frequency and volume of prepayment medical reviews, 
          including requests for medical records, and other 
          administrative changes imposed upon home health agencies, 
          particularly those agencies that are located in rural areas, 
          has had a devastating effect on smaller care agencies.
              (5) The combination of insufficient payments and new 
          administrative changes has precipitated the closure of nearly 
          2,000 home health agencies and branch offices and has forced 
          many surviving agencies to shrink their service areas or limit 
          the types of patients they may serve, resulting in restricted 
          access to home health services in many areas.
              (6) The scheduled additional 15 percent across the board 
          reduction in home health payments under the medicare program 
          will severely compromise existing access to home health 
          services, particularly in low-cost rural areas.
      (b) Purposes.--The purposes of this Act are as follows:
              (1) To ensure access to care for patients with high medical 
          needs by establishing a process for home health agencies to 
          exclude high acuity, medically complex patients from the per-
          beneficiary limits under the interim payment system for home 
          health services and instead receive cost-based reimbursement 
          for services provided such patients.
              (2) To eliminate the 15 percent across the board reduction 
          in home health payments under the medicare program.
              (3) To bring relief from certain administrative 
          requirements to home health agencies with--
                      (A) strong, established compliance records; and
                      (B) a history of claim denial rates of less than 5 
                  percent.
  
  SEC. 3. ELIMINATION OF AUTOMATIC 15 PERCENT REDUCTION IN HOME HEALTH 
                PAYMENTS.
  
      (a) Contingency Reduction.--Section 4603 of the Balanced Budget Act 
  of 1997 (42 U.S.C. 1395fff note) (as amended by section 5101(c)(3) of 
  the Tax and Trade Relief Extension Act of 1998 (contained in division J 
  of Public Law 105-277)) is amended by striking subsection (e).
      (b) Prospective Payment System.--Section 1895(b)(3)(A) of the 
  Social Security Act (42 U.S.C. 1395fff(b)(3)(A)) is amended--
              (1) by striking ``Initial basis.--'' and all that follows 
          through ``Under such system'', and inserting ``Initial basis.--
          Under such system'';
              (2) in the matter preceding clause (ii), by striking ``but 
          if the reduction in limits described in clause (ii) had been in 
          effect''; and
              (3) by striking clause (ii).
  
  SEC. 4. OUTLIER PAYMENTS FOR HOME HEALTH SERVICES.
  
      (a) Waiver of Applicable Home Health Payment Limits for Outliers.--
              (1) In general.--Section 1861(v)(1)(L) of the Social 
          Security Act (42 U.S.C. 1395x(v)(1)(L)) (as amended by section 
          5101 of the Tax and Trade Relief Extension Act of 1998 
          (contained in Division J of Public Law 105-277) is amended--
                      (A) by redesignating clause (ix) as clause (x); and
                      (B) by inserting after clause (viii) the following:
      ``(ix)(I) Notwithstanding the applicable limit under this 
  subparagraph, in the case of a provider that demonstrates to the 
  Secretary that with respect to an individual to whom the provider 
  furnished home health services appropriate to the individual's 
  condition (as determined by the Secretary) at a reasonable cost (as 
  determined by the Secretary), and that such reasonable cost 
  significantly exceeded such applicable limit because of unusual 
  variations in the type or amount of medically necessary care required 
  to treat the individual, the Secretary, upon application by the 
  provider, shall pay to such provider for such individual such 
  reasonable cost.
      ``(II) The Secretary shall establish such criteria as is required 
  for payment under this clause, including a description of the type of 
  patient, patient condition, unusual variations, and home health service 
  that qualifies for such payment.
      ``(III) In making determinations under subclause (I), the Secretary 
  shall use data from the cost report, or from other data collected by 
  the Secretary, of the provider for such year.
      ``(IV) A provider may make an application for payment under this 
  clause for a fiscal year no earlier than the end of the cost reporting 
  period beginning in such fiscal year.
      ``(V) In the case of an application for payment under this clause 
  that is approved by the Secretary, a home health agency may elect to 
  receive payment on a quarterly basis.''.
      (b) Effective Date.--The amendment made by subsection (a) shall 
  take effect on September 30, 1999, and apply with respect to each 
  application for payment of reasonable costs for outliers submitted by 
  any home health agency for cost reporting periods ending on or after 
  such date.
  
  SEC. 5. CLARIFICATION OF THE DEFINITION OF HOMEBOUND.
  
      (a) In General.--The last sentence of sections 1814(a) and 1835(a) 
  of the Social Security Act (42 U.S.C. 1395f(a); 1395n(a)) are each 
  amended--
              (1) by striking ``leave home,'' and inserting ``leave home 
          and''; and
              (2) by striking ``, and that absences'' and all that 
          follows before the period.
      (b) Effective Date.--The amendments made by subsection (a) shall 
  apply to items and services provided on or after the date of enactment 
  of this Act.
  
  SEC. 6. REVIEW OF CLAIMS SUBMITTED BY HOME HEALTH AGENCIES.
  
      (a) In General.--Section 1816(c)(2) of the Social Security Act (42 
  U.S.C. 1395h(c)(2)) is amended by adding at the end the following:
      ``(D)(i) Each agreement under this section shall provide that if 
  the average finalized denial rate of claims submitted by a home health 
  agency (determined for the 3 most recent cost reporting periods ending 
  before the date of such determination) is less than 5 percent--
              ``(I) no prepayment medical review, including requests for 
          medical records and focused medical reviews, may be conducted 
          with respect to a claim submitted by such agency (absent 
          probable cause that the particular claim is invalid) during the 
          agency's next succeeding cost reporting period; and
              ``(II) post-payment review of claims submitted by the 
          agency during the agency's next succeeding cost reporting 
          period shall not exceed 10 percent of the dollar value of all 
          of the services provided by the agency for which a claim for 
          reimbursement is filed under this title during such period.
      ``(ii) For purposes of clause (i), the finalized denial rate of 
  claims submitted by a home health agency for any cost reporting period 
  is equal to the percentage determined by dividing--
              ``(I) the dollar value of all of the services provided by 
          the agency for which--
                      ``(aa) a claim for reimbursement is filed under 
                  this title during such period; and
                      ``(bb) a denial for such claim has become final 
                  after all rights to request reconsideration or to 
                  appeal have been exhausted, by
              ``(II) the dollar value of all of the services provided by 
          the agency for which a claim for reimbursement is--
                      ``(aa) filed under this title during such period; 
                  and
                      ``(bb) reviewed by the Secretary or an agency or 
                  organization with an agreement under this section.''.
      (b) Effective Date.--The amendment made by subsection (a) shall 
  take effect on the date of enactment of this Act and shall apply to 
  agreements entered into or renewed on or after such date.
  
  SEC. 7. RESTORATION OF PERIODIC INTERIM PAYMENTS FOR HOME HEALTH 
                AGENCIES.
  
      Section 4603(b) of Public Law 105-33 is repealed.
  
  SEC. 8. SENSE OF THE CONGRESS REGARDING THE IMPLEMENTATION OF PPS FOR 
                HOME HEALTH SERVICES.
  
      It is the sense of the Congress that the Secretary of Health and 
  Human Services should--
              (1) ensure that the prospective payment system for home 
          health services under section 1895 of the Social Security Act 
          (42 U.S.C. 1395fff) provides for appropriate payment of 
          services that are provided to beneficiaries;
              (2) ensure that reimbursement rates under such system--
                      (A) include incentives to provide services 
                  efficiently to all beneficiaries; and
                      (B) do not create unintentional incentives to 
                  discriminate against beneficiaries with medically 
                  complex conditions;
              (3) ensure that the establishment of the case mix 
          adjustment for such services under subsection (b)(4) of such 
          section--
                      (A) does not penalize agencies that serve 
                  beneficiaries with medically complex conditions;
                      (B) provides some predictive value and accounts for 
                  a fair portion of the variation in costs associated 
                  with providing services to beneficiaries; and
                      (C) takes into account such variables as the health 
                  status, age, and socioeconomic status of beneficiaries;
              (4) establish a nationally uniform process to ensure that 
          fiscal intermediaries have the training and ability to provide 
          timely and accurate coverage and payment information to home 
          health agencies under the medicare program under title XVIII of 
          such Act (42 U.S.C. 1395 et seq.);
              (5) assess the costs to home health agencies of 
          implementing new regulations and interpretations associated 
          with the prospective payment system for home health services 
          and consider the impact of such costs on the ability of such 
          agencies to provide home health services to beneficiaries; and
              (6) provide periodic updates to Congress and home health 
          agencies regarding the progress by the Secretary of 
          implementing the prospective payment system for home health 
          services.
target: Amends SSA title XVIII to: (1) create outlier provisions for home health services; (2) revise the definition of homebound; and (3) restructure the review process for claims submitted by home health agencies.
  Amends BBA '97 for the stated purpose of restoring periodic interim payments for home health agencies.
  Expresses the sense of the Senate that the Secretary of Health and Human Services should: (1) ensure that the prospective payment system (PPS) for home health services provides for appropriate payment of services provided to beneficiaries at rates that include incentives to provide services efficiently to all beneficiaries and do not create unintentional incentives to discriminate against beneficiaries with complex medical conditions; (2) ensure that the establishment of the case mix adjustment for such services does not penalize agencies that serve such beneficiaries, provides some predictive value, and accounts for appropriate variables, such as age and health status; (3) establish a nationally uniform process to ensure that fiscal intermediaries have the training and ability to provide timely and accurate coverage and payment information to Medicare home health agencies; (4) assess home health agency regulatory costs associated with the PPS for home health services and consider the cost impact on the agency's ability to provide such services; and (5) provide periodic updates to Congress and home health agencies on the Secretary's progress in implementing such PPS.
feat_title: Preserve Access to Care in the Home (PATCH) Act of 1999