SECTION 1. SHORT TITLE; REFERENCES IN ACT.

    (a) Short Title.--This Act may be cited as the ``Medicare Mental 
Health Improvement Act''.
    (b) References to Social Security Act.--Whenever in this Act an 
amendment is expressed in terms of an amendment to or repeal of a 
section or other provision, the reference shall be considered to be 
made to that section or other provision of the Social Security Act.

SEC. 2. INPATIENT PSYCHIATRIC HOSPITAL SERVICES.

    (a) Services Covered.--Section 1812(a) (42 U.S.C. 1395d(a)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(5) inpatient hospital services furnished primarily for 
        the diagnosis or treatment of mental illness or substance abuse 
        for up to 60 days during a year.''.
    (b) Limitation on Coverage.--Section 1812(b)(3) (42 U.S.C. 
1395d(b)) is amended to read as follows:
            ``(3) inpatient hospital services furnished primarily for 
        the diagnosis or treatment of mental illness or substance abuse 
        that are furnished to the individual during a year after such 
        services have been furnished to the individual for a total of 
        60 days during the year.''.
    (c) Conforming Amendments.--(1) Section 1812(a)(1) (42 U.S.C. 
1395d(a)(1)) is amended by inserting ``(other than services described 
in paragraph (5))'' after ``inpatient hospital services'' the first 
place it appears.
    (2) Section 1812(b)(1) (42 U.S.C. 1395d(b)(1)) is amended by 
inserting ``(other than services described in paragraph (3))'' after 
``inpatient hospital services'' the first place it appears.
    (3) Section 1812 (42 U.S.C. 1395d) is amended by striking 
subsection (c).
    (4) Section 1814(a) (42 U.S.C. 1395f(a)) is amended--
            (A) in paragraph (2), by striking subparagraph (A);
            (B) in paragraph (3), by striking ``(other than inpatient 
        psychiatric hospital services)''; and
            (C) by striking paragraph (4).
    (5) Section 1861 (42 U.S.C. 1395x) is amended by striking 
subsection (c).
    (d) Effective Date; Transition.--The amendments made by this 
section shall take effect January 1, 1996, except that--
            (1) an individual who at any time prior to such date has 
        been furnished inpatient psychiatric hospital services (as 
        defined for purposes of title XVIII of the Social Security Act 
        as of the date of the enactment of this Act) for 190 
        consecutive days is not entitled to any services under section 
        1812(a)(5) (as added by subsection (a)(3)); and
            (2) in the case of an individual who is not described in 
        paragraph (1) and is receiving inpatient psychiatric hospital 
        services (as defined for purposes of title XVIII of the Social 
        Security Act as of the date of the enactment of this Act) on 
        December 31, 1995, for which payment may be made under section 
        1812 of such Act, the number of days of services for which the 
        individual is entitled under section 1812(a)(5) (and the number 
        of days applicable under section 1812(b)(3)) shall be equal to 
        the greater of 60 or the difference between 190 days and the 
        number of days of such inpatient psychiatric hospital services 
        furnished to the individual prior to January 1, 1996.

SEC. 3. INTENSIVE RESIDENTIAL SERVICES.

    (a) Coverage Under Part A.--Section 1812(a) (42 U.S.C. 1395d(a)), 
as amended by section 2(a), is amended--
            (1) by striking ``and'' at the end of paragraph (4);
            (2) by striking the period at the end of paragraph (5) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(6) intensive residential services (as described in 
        section 1861(qq)) furnished to an individual for up to 120 days 
        during any calendar year, except that such services may be 
        furnished to the individual for additional days during the year 
        if necessary for the individual to complete a course of 
        treatment to the extent that the number of days of inpatient 
        hospital services described in paragraph (5) that may be 
        furnished to the individual during the year (as reduced under 
        such paragraph) is not less than 15.''.
            (2) Services described.--Section 1861 (42 U.S.C. 1395x), as 
        amended by section 146(a) of the Social Security Act Amendments 
        of 1994, is amended by adding at the end the following new 
        subsection:

                    ``Intensive Residential Services

    ``(mm)(1) Subject to paragraph (2), the term `intensive residential 
services' means inpatient services provided in any of the following 
facilities:
            ``(A) Residential detoxification centers.
            ``(B) Crisis residential programs or mental illness 
        residential treatment programs.
            ``(C) Therapeutic family or group treatment homes.
            ``(D) Residential centers for substance abuse treatment.
    ``(2) No service may be treated as an intensive residential service 
under paragraph (1) unless the facility at which the service is 
provided--
            ``(A) is legally authorized to provide such service under 
        the law of the State (or under a State regulatory mechanism 
        provided by State law) in which the facility is located or is 
        certified to provide such service by an appropriate 
        accreditation entity approved by the State in consultation with 
        the Secretary; and
            ``(B) meets such other requirements as the Secretary may 
        impose to assure the quality of the intensive residential 
        services provided.
    ``(3) No service may be treated as an intensive residential service 
under paragraph (1) unless the service is furnished in accordance with 
standards established by the Secretary for the management of such 
services.''.
            (3) Reduction in days of coverage for inpatient services.--
        Section 1812(a)(5) and section 1812(b)(3), as amended by 
        section 2, are each amended by striking the period at the end 
        and inserting the following: ``, reduced by a number of days 
        determined by the Secretary so that the actuarial value of 
        providing such number of days of services under this paragraph 
        to the individual is equal to the actuarial value of the days 
        of inpatient residential services furnished to the individual 
        under paragraph (6) during the year after such services have 
        been furnished to the individual for 120 days during the year 
        (rounded to the nearest day).''.
            (4) Amount of payment.--Section 1814 (42 U.S.C. 1395f) is 
        amended--
                    (A) in subsection (b) in the matter preceding 
                paragraph (1), by inserting ``other than intensive 
                residential services,'' after ``hospice care,''; and
                    (B) by adding at the end the following new 
                subsection:

              ``Payment for Intensive Residential Services

    ``(m) The amount of payment under this part for intensive 
residential services under section 1812(a)(6) shall be equal to--
            ``(1) the lesser of--
                    ``(A) the reasonable cost of such services, as 
                determined under section 1861(v), or
                    ``(B) the customary charges with respect to such 
                services,
        less the amount a provider may charge as described in clause 
        (ii) of section 1866(a)(2)(A):
            ``(2) if such services are furnished by a public provider 
        of services or by another provider which demonstrates to the 
        satisfaction of the Secretary that a significant portion of its 
        patients are low-income (and requests that payment be made 
        under this clause), free of charge or at nominal charges to the 
        public, the amount determined in accordance with subsection 
        (b)(2); and
            ``(3) if (and for so long as) the conditions described in 
        subsection (b)(3) are met, the amounts determined under the 
        reimbursement system described in such section.''.

SEC. 4. LOWERING COINSURANCE FOR CERTAIN OUTPATIENT MENTAL HEALTH AND 
              SUBSTANCE ABUSE SERVICES.

    (a) In General.--Section 1833(c) (42 U.S.C. 1395l(c)) is amended by 
striking ``mental, psychoneurotic, and personality disorders'' and all 
that follows through ``are incurred'' and inserting the following: 
``mental illness or substance abuse of an individual who, at the time 
such expenses are incurred, is over 18 years of age, is not an 
inpatient of a hospital, and has received 5 or more sessions of such 
treatment during the calendar year,''.
    (b) Requiring Services To Be Furnished in Accordance With 
Management Standards.--Section 1862(a) (42 U.S.C. 1395y(a)), as amended 
by section 156(a)(2)(D) of the Social Security Act Amendments of 1994, 
is amended--
            (1) by striking ``or'' at the end of paragraph (14);
            (2) by striking the period at the end of paragraph (15) and 
        inserting ``; or''; and
            (3) by inserting after paragraph (15) the following new 
        paragraph:
            ``(16) in the case of any items or services furnished under 
        part B for the treatment of mental illness or emotional 
        disturbance (including substance abuse), if the services are 
        not furnished in accordance with standards established by the 
        Secretary for the management of such services.''.

SEC. 5. INTENSIVE COMMUNITY-BASED SERVICES.

    (a) Coverage.--
            (1) In general.--Section 1832(a)(2)(J) (42 U.S.C. 
        1395k(a)(2)(J)) is amended to read as follows:
                    ``(J) intensive community-based services (as 
                described in section 1861(ff))--
                            ``(i) for an unlimited number of days 
                        during any calendar year, in the case of 
                        services described in section 1861(ff)(2)(E) 
                        that are furnished to an individual who is a 
                        seriously mentally ill adult, a seriously 
                        emotionally disturbed child, or an adult or 
                        child with serious substance abuse disorder (as 
                        determined in accordance with criteria 
                        established by the Secretary),
                            ``(ii) in the case of day treatment 
                        services for an individual under 19 years of 
                        age described in section 1861(ff)(2)(C), for up 
                        to 180 days during any calendar year, except 
                        that such services may be furnished to the 
                        individual for a number of additional days 
                        during the year equal to the difference between 
                        the total number of days of intensive 
                        residential services which the individual may 
                        receive during the year under part A (as 
                        determined under section 1812(a)(6)) and the 
                        number of days of such services which the 
                        individual has received during the year, or
                            ``(iii) in the case of any other such 
                        services, for up to 90 days during any calendar 
                        year, except that such services may be 
                        furnished to the individual for the number of 
                        additional days during the year described in 
                        clause (ii).''.
            (2) Reduction in number of days of intensive residential 
        services.--Section 1812(a)(6) (42 U.S.C. 1395d(a)(6)), as added 
        by section 3(a), is amended--
                    (A) by inserting ``(A)'' before ``such services''; 
                and
                    (B) by striking the period at the end and inserting 
                the following: ``, and (B) reduced by a number of days 
                determined by the Secretary so that the actuarial value 
                of providing such number of days of services under this 
                paragraph to the individual is equal to the actuarial 
                value of the days of intensive community-based services 
                furnished to the individual under section 1832(a)(2)(J) 
                during the year after such services have been furnished 
                to the individual for 90 days (or, in the case of 
                services described in section 1832(a)(2)(J)(ii), for 
                180 days) during the year (rounded to the nearest 
                day).''.
    (b) Services Described.--Section 1861(ff)(2) (42 U.S.C. 
1395x(ff)(2)) is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``are--'' and inserting ``are as follows:'';
            (2) in subparagraph (C)--
                    (A) by inserting ``behavioral aide services,'' 
                after ``nurses'', and
                    (B) by adding at the end the following: ``(to the 
                extent authorized under State law)'';
            (3) by adding ``and'' at the end of subparagraph (G);
            (4) in subparagraph (H), by striking ``, and'' and 
        inserting a period;
            (5) by redesignating subparagraphs (A) through (H) as 
        clauses (i) through (viii) and moving such subparagraphs 2 ems 
        to the right;
            (6) by inserting before clause (i) (as so redesignated) the 
        following:
                    ``(A) Partial hospitalization services consisting 
                of--'';
            (7) by inserting after clause (viii) (as so redesignated) 
        the following new subparagraphs:
            ``(B) Psychiatric rehabilitation services.
            ``(C) Day treatment services for substance abuse treatment 
        for individuals of any age and for other mental health services 
        for individuals under 19 years of age.
            ``(D) In-home services.
            ``(E) Case management services, including collateral 
        services designated as such case management services by the 
        Secretary.
            ``(F) Ambulatory detoxification services.''; and
            (8) in subparagraph (I)--
                    (A) by striking ``such'' and inserting ``Such'', 
                and
                    (B) by redesignating such subparagraph as 
                subparagraph (G).
    (c) Permitting Non-Physician Providers To Supervise Individual 
Program of Treatment.--Section 1861(ff)(1) (42 U.S.C. 1395x(ff)(1)) is 
amended by inserting after ``supervision of a physician'' the 
following: ``(or, to the extent permitted under the law of the State in 
which the services are furnished, a non-physician mental health or 
substance abuse treatment professional)''.
    (d) Requiring Services To Meet Management Standards.--Section 
1861(ff)(1) (42 U.S.C. 1395x(ff)(1)) is amended by striking the period 
at the end and inserting the following: ``, but does not include any 
item or service that is not furnished in accordance with standards 
established by the Secretary for the management of such services.''.
    (e) Programs Eligible To Provide Services.--Section 1861(ff)(3) (42 
U.S.C. 1395x(ff)(3)) is amended to read as follows:
    ``(3) A program described in this paragraph is a program (whether 
facility-based or freestanding) which is furnished by an entity--
            ``(A) legally authorized to furnish such a program under 
        State law (or the State regulatory mechanism provided by State 
        law) or certified to furnish such a program by an appropriate 
        accreditation entity approved by the State in consultation with 
        the Secretary; and
            ``(B) meeting such other requirements as the Secretary may 
        impose to assure the quality of the intensive community-based 
        services provided.''.
    (f) Waiver of Copayment for Case Management Services Furnished to 
Certain Individuals.--Section 1833(a)(2) (42 U.S.C. 1395l(a)(2)), as 
amended by section 147(f)(6)(C) of the Social Security Act Amendments 
of 1994, is amended--
            (1) in subparagraph (B), by striking ``or (E)'' and 
        inserting ``(E), or (F)'';
            (2) by striking ``and'' at the end of subparagraph (E);
            (3) by adding ``and'' at the end of subparagraph (F); and
            (4) by adding at the end the following new subparagraph:
                    ``(G) with respect to services described in section 
                1832(a)(2)(J)(i), the amount determined under 
                subparagraph (B), except that `100 percent' shall be 
                substituted for any reference in such subparagraph to 
                `80 percent';''.
    (g) Conforming Amendments.--(1) Section 1835(a)(2)(F) (42 U.S.C. 
1395n(a)(2)(F)) is amended--
            (A) by striking ``partial hospitalization'' and inserting 
        ``intensive community-based''; and
            (B) in clause (ii), by striking ``physician'' and inserting 
        ``physician (or, to the extent permitted under the law of the 
        State in which the services are furnished, a non-physician 
        mental health professional)''.
    (2) Section 1861(s)(2)(B) (42 U.S.C. 1395x(s)(2)(B)) is amended by 
striking ``partial hospitalization'' and inserting ``intensive 
community-based''.
    (3) Section 1861(ff) (42 U.S.C. 1395x(ff)) is amended--
            (A) in the heading, by striking ``Partial Hospitalization'' 
        and inserting ``Intensive Community-Based''; and
            (B) in paragraph (1), by striking ``partial 
        hospitalization'' and inserting ``intensive community-based''.
    (4) Section 1866(e)(2) (42 U.S.C. 1395cc(e)(2)) is amended by 
striking ``partial hospitalization'' and inserting ``intensive 
community-based''.

SEC. 6. EFFECTIVE DATE.

    The amendments made by this Act shall apply to items and services 
furnished on or after January 1, 1996.
Medicare Mental Health Improvement Act - Amends title XVIII (Medicare) of the Social Security Act to:  (1) include under Medicare coverage inpatient hospital services for up to 60 days during a year when furnished primarily for the diagnosis or treatment of mental illness or substance abuse; (2) require patient payment for services rendered beyond such limit; and (3) make such changes effective on January 1, 1996 (with exceptions and transition provisions). 
(Sec. 3) Includes under Medicare coverage the following "intensive residential services" for up to 120 days in a year:  (1) residential detoxification centers; (2) crisis or mental illness residential treatment programs; (3) therapeutic family or group treatment homes; and (4) residential centers for substance abuse treatment.  Requires facilities providing such services to be authorized to do so and to meet quality standards imposed by the Secretary of Health and Human Services.  Allows additional days to be taken for intensive residential services from the 60 days permitted for inpatient hospital services (with an actuarial cost limit), requiring at least 15 days to be retained yearly for the latter services.  Provides for the determination of payment amounts for intensive residential services. 
(Sec. 4) Subjects inpatient hospitalization and intensive residential services to the same deductibles and copayment as inpatient hospital services for physical disorders. 
(Sec. 5) Makes mental health case management services available with no copayment and for an unlimited duration for an adult with serious mental illness, a child with a serious emotional disturbance, or an adult or child with a serious substance abuse disorder.  Makes day treatment available for up to 180 days annually for children under 19.  Allows additional days for day treatment services for such children to be taken from intensive residential services (with an actuarial cost limit). Authorizes coverage for up to 90 days annually, with a 20 percent copayment requirement, for:  (1) partial hospitalization; (2) psychiatric rehabilitation; (3) day treatment for substance abuse and for children under age 19; (4) in-home services; (5) case management; and (6) ambulatory detoxification.  Permits non-physician mental health or substance abuse professionals to supervise an individual plan of treatment to the extent permitted under State law.  Requires any program furnishing mental health or substance abuse services to be legally authorized under State law or accredited by an organization approved by the Secretary in consultation with the State.  Requires such programs to meet standards established by the Secretary for the management of such services.
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