PROSPECTIVE PAYMENT FOR HOME HEALTH SERVICES.

SEC. 4603. PROSPECTIVE PAYMENT FOR HOME HEALTH SERVICES. (a) In General.—Title XVIII (42 U.S.C. 1395 et seq.) amended by section 4801) is amended by adding at the end following: “prospective payment for home health services “Sec. 1895. (a) In General.—Notwithstanding section 1861(v), the Secretary shall provide, for cost reporting periods beginning on or after October 1, 1999, for payments for home health services in accordance with a prospective payment system established by the Secretary under this section.111 STAT. 468 “(b) System of Prospective Payment for Home Health Services.— “(1) In general.—The Secretary shall establish under this subsection a prospective payment system for payment for all costs of home health services. Under the system under this subsection all services covered and paid on a reasonable cost basis under the medicare home health benefit as of the date of the enactment of the this section, including medical supplies, shall be paid for on the basis of a prospective payment amount determined under this subsection and applicable to the services involved. In implementing the system, the Secretary may provide for a transition (of not longer than 4 years) during which a portion of such payment is based on agency-specific costs, but only if such transition does not result in aggregate payments under this title that exceed the aggregate payments that would be made if such a transition did not occur. “(2) Unit of payment.—In defining a prospective payment amount under the system under this subsection, the Secretary shall consider an appropriate unit of service and the number, type, and duration of visits provided within that unit, potential changes in the mix of services provided within that unit and their cost, and a general system design that provides for continued access to quality services. “(3) Payment basis.— “(A) Initial basis.— “(i) In general.—Under such system the Secretary shall provide for computation of a standard prospective payment amount (or amounts). Such amount (or amounts) shall initially be based on the most current audited cost report data available to the Secretary and shall be computed in a manner so that the total amounts payable under the system for fiscal year 2000 shall be equal to the total amount that would have been made if the system had not been in effect but if the reduction in limits described in clause (ii) had been in effect. Such amount shall be standardized in a manner that eliminates the effect of variations in relative case mix and wage levels among different home health agencies in a budget neutral manner consistent with the case mix and wage level adjustments provided under paragraph (4)(A). Under the system, the Secretary may recognize regional differences or differences based upon whether or not the services or agency are in an urbanized area. “(ii) Reduction.—The reduction described in this clause is a reduction by 15 percent in the cost limits and per beneficiary limits described in section 1861(v)(1)(L), as those limits are in effect on September 30, 1999. “(B) Annual update.— “(i) In general.—The standard prospective payment amount (or amounts) shall be adjusted for each fiscal year (beginning with fiscal year 2001) in a prospective manner specified by the Secretary by the home health market basket percentage increase applicable to the fiscal year involved.111 STAT. 469 “(ii) Home health market basket percentage increase.—For purposes of this subsection, the term ‘home health market basket percentage increase’ means, with respect to a fiscal year, a percentage (estimated by the Secretary before the beginning of the fiscal year) determined and applied with respect to the mix of goods and services included in home health services in the same manner as the market basket percentage increase under section 1886(b)(3)(B)(iii) is determined and applied to the mix of goods and services comprising inpatient hospital services for the fiscal year. “(C) Adjustment for outliers.—The Secretary shall reduce the standard prospective payment amount (or amounts) under this paragraph applicable to home health services furnished during a period by such proportion as will result in an aggregate reduction in payments for the period equal to the aggregate increase in payments resulting from the application of paragraph (5) (relating to outliers). “(4) Payment computation.— “(A) In general.—The payment amount for a unit of home health services shall be the applicable standard prospective payment amount adjusted as follows: “(i) Case mix adjustment.—The amount shall be adjusted by an appropriate case mix adjustment factor (established under subparagraph (B)). “(ii) Area wage adjustment.—The portion of such amount that the Secretary estimates to be attributable to wages and wage-related costs shall be adjusted for geographic differences in such costs by an area wage adjustment factor (established under subparagraph (C)) for the area in which the services are furnished or such other area as the Secretary may specify. “(B) Establishment of case mix adjustment factors.—The Secretary shall establish appropriate case mix adjustment factors for home health services in a manner that explains a significant amount of the variation in cost among different units of services. “(C) Establishment of area wage adjustment factors.—The Secretary shall establish area wage adjustment factors that reflect the relative level of wages and wage-related costs applicable to the furnishing of home health services in a geographic area compared to the national average applicable level. Such factors may be the factors used by the Secretary for purposes of section 1886(d)(3)(E). “(5) Outliers.—The Secretary may provide for an addition or adjustment to the payment amount otherwise made in the case of outliers because of unusual variations in the type or amount of medically necessary care. The total amount of the additional payments or payment adjustments made under this paragraph with respect to a fiscal year may not exceed 5 percent of the total payments projected or estimated to be made based on the prospective payment system under this subsection in that year. “(6) Proration of prospective payment amounts.—If a beneficiary elects to transfer to, or receive services from, 111 STAT. 470another home health agency within the period covered by the prospective payment amount, the payment shall be prorated between the home health agencies involved. “(c) Requirements for Payment Information.—With respect to home health services furnished on or after October 1, 1998, no claim for such a service may be paid under this title unless— “(1) the claim has the unique identifier (provided under section 1842(r)) for the physician who prescribed the services or made the certification described in section 1814(a)(2) or 1835(a)(2)(A); and “(2) in the case of a service visit described in paragraph (1), (2), (3), or (4) of section 186 l(m), the claim contains a code (or codes) specified by the Secretary that identifies the length of time of the service visit, as measured in 15 minute increments. “(d) Limitation on Review.—There shall be no administrative or judicial review under section 1869, 1878, or otherwise of— “(1) the establishment of a transition period under subsection (b)(1); “(2) the definition and application of payment units under subsection (b)(2); “(3) the computation of initial standard prospective payment amounts under subsection (b)(3)(A) (including the reduction described in clause (ii) of such subsection); “(4) the establishment of the adjustment for outliers under subsection (b)(3)(C); “(5) the establishment of case mix and area wage adjustments under subsection (b)(4); and “(6) the establishment of any adjustments for outliers under subsection (b)(5).”. (b) Elimination of Periodic Interim Payments for Home Health Agencies.—Section 1815(e)(2) (42 U.S.C. 1395g(e)(2)) is amended— (1) by inserting “and” at the end of subparagraph (C), (2) by striking subparagraph (D), and (3) by redesignating subparagraph (E) as subparagraph (D). (c) Conforming Amendments.— (1) Payments under part a.—Section 1814(b) (42 U.S.C. 13951(b)) is amended in the matter preceding paragraph (1) by striking “and 1886” and inserting “1886, and 1895”. (2) Treatment of items and services paid under part b.— (A) Payments under part b.—Section 1833(a)(2) (42 U.S.C. 13951(a)(2)) is amended— (i) by amending subparagraph (A) to read as follows: “(A) with respect to home health services (other than a covered osteoporosis drug) (as defined in section 1861(kk)), the amount determined under the prospective payment system under section 1895;”; (ii) by striking “and” at the end of subparagraph (E); (iii) by adding “and” at the end of subparagraph (F); and (iv) by adding at the end the following new subparagraph:111 STAT. 471 “(G) with respect to items and services described in section 1861(s)(10)(A), the lesser of— “(i) the reasonable cost of such services, as determined under section 1861(v), or “(ii) the customary charges with respect to such services, or, 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 provision), free of charge or at nominal charges to the public, the amount determined in accordance with section 1814(b)(2);”. (B) Requiring payment for all items and services to be made to agency.— (i) In general.—The first sentence of section 1842(b)(6) (42 U.S.C. 1395u(b)(6)) (as amended by section 4432(b)(2)) is amended— (I) by striking “and (E)” and inserting “(E)”; and (II) by striking the period at the end and inserting the following: “, and (F) in the case of home health services furnished to an individual who (at the time the item or service is furnished) is under a plan of care of a home health agency, payment shall be made to the agency (without regard to whether or not the item or service was furnished by the agency, by others under arrangement with them made by the agency, or when any other contracting or consulting arrangement, or otherwise).”. (ii) Conforming amendment.—Section 1832(a)(1) (42 U.S.C. 1395k(a)(1)) (as amended by section 4432(b)(5)(B)) is amended by striking “section 1842(b)(6)(E);” and inserting “subparagraphs (E) and (F) of section 1842(b)(6);”. (C) Exclusions from coverage.—Section 1862(a) (42 U.S.C. 1395y(a)) (as amended by sections 4319(b), 4432(b), 4507(a)(2)(B) and 4541(b)) is amended— (i) by striking “or” at the end of paragraph (19); (ii) by striking the period at the end of paragraph (20) and inserting “; or”; and (iii) by inserting after paragraph (20) the following: “(21) where such expenses are for home health services furnished to an individual who is under a plan of care of the home health agency if the claim for payment for such services is not submitted by the agency.”. (d) Effective Date.—Except as otherwise provided, the amendments made by this section shall apply to cost reporting periods beginning on or after October 1, 1999. (e) Contingency.—If the Secretary of Health and Human Services for any reason does not establish and implement the prospective payment system for home health services described in section 1895(b) of the Social Security Act (as added by subsection (a)) for cost reporting periods described in subsection (d), for such cost reporting periods the Secretary shall provide for a reduction by 15 percent in the cost limits and per beneficiary limits described 111 STAT. 472in section 1861(v)(1)(L) of such Act, as those limits would otherwise be in effect on September 30, 1999.