
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document affected by Public Law 106-554 Section 1(a)(6)]
[Document affected by Public Law 106-554 Section 1(a)(6)[501(a)]]
[Document affected by Public Law 106-554 Section 1(a)(6)[504]]
[Document affected by Public Law 106-554 Section 1(a)(6)[501(b)]]
[Document affected by Public Law 106-554 Section 1(a)(6)]
[Document affected by Public Law 106-554 Section 1(a)(6)[502(b)]]
[Document affected by Public Law 106-554 Section 1(a)(6)[503]]
[Document affected by Public Law 106-554 Section 1(a)(6)[508]]
[Document affected by Public Law 106-554 Section 1(a)(6)[547(c)]]
[CITE: 42USC1395fff]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
        SUBCHAPTER XVIII--HEALTH INSURANCE FOR AGED AND DISABLED
 
                    Part D--Miscellaneous Provisions
 
Sec. 1395fff. Prospective payment for home health services


(a) In general

    Notwithstanding section 1395x(v) of this title, the Secretary shall 
provide, for portions of cost reporting periods occurring on or after 
October 1, 2000, for payments for home health services in accordance 
with a prospective payment system established by the Secretary under 
this section.

(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 August 5, 1997, 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 
    subchapter 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) as follows:
                    (I) 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 the 12-month period beginning on the date the 
                Secretary implements the system shall be equal to the 
                total amount that would have been made if the system had 
                not been in effect and if section 1395x(v)(1)(L)(ix) of 
                this title had not been enacted.
                    (II) For periods beginning after the period 
                described in subclause (I), such amount (or amounts) 
                shall be equal to the amount (or amounts) that would 
                have been determined under subclause (I) that would have 
                been made for fiscal year 2001 if the system had not 
                been in effect and if section 1395x(v)(1)(L)(ix) of this 
                title had not been enacted but if the reduction in 
                limits described in clause (ii) had been in effect, 
                updated under subparagraph (B).

          Each such amount shall be standardized in a manner that 
            eliminates the effect of variations in relative case mix and 
            area wage adjustments 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 1395x(v)(1)(L) of this title, as those 
            limits are in effect on September 30, 2000.

        (B) Annual update

            (i) In general

                The standard prospective payment amount (or amounts) 
            shall be adjusted for each fiscal year (beginning with 
            fiscal year 2002) in a prospective manner specified by the 
            Secretary by the home health applicable increase percentage 
            (as defined in clause (ii)) applicable to the fiscal year 
            involved.
            (ii) Home health applicable increase percentage

                For purposes of this subparagraph, the term ``home 
            health applicable increase percentage'' means, with respect 
            to--
                    (I) each of fiscal years 2002 and 2003, the home 
                health market basket percentage increase (as defined in 
                clause (iii)) minus 1.1 percentage points; or
                    (II) any subsequent fiscal year, the home health 
                market basket percentage increase.
            (iii) 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 1395ww(b)(3)(B)(iii) of 
            this title 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 1395ww(d)(3)(E) of this title.

                            (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, another 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 subchapter 
unless--
        (1) the claim has the unique identifier (provided under section 
    1395u(r) of this title) for the physician who prescribed the 
    services or made the certification described in section 1395f(a)(2) 
    or 1395n(a)(2)(A) of this title; and
        (2) in the case of a service visit described in paragraph (1), 
    (2), (3), or (4) of section 1395x(m) of this title, 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 
1395ff of this title, 1395oo of this title, or otherwise of--
        (1) the establishment of a transition period under subsection 
    (b)(1) of this section;
        (2) the definition and application of payment units under 
    subsection (b)(2) of this section;
        (3) the computation of initial standard prospective payment 
    amounts under subsection (b)(3)(A) of this section (including the 
    reduction described in clause (ii) of such subsection);
        (4) the establishment of the adjustment for outliers under 
    subsection (b)(3)(C) of this section;
        (5) the establishment of case mix and area wage adjustments 
    under subsection (b)(4) of this section; and
        (6) the establishment of any adjustments for outliers under 
    subsection (b)(5) of this section.

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1895, as added Pub. L. 105-
33, title IV, Sec. 4603(a), Aug. 5, 1997, 111 Stat. 467; amended Pub. L. 
105-277, div. J, title V, Sec. 5101(c)(1), (d)(2), Oct. 21, 1998, 112 
Stat. 2681-914; Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, 
Secs. 302(b), 303(b), 306, 321(k)(19)], Nov. 29, 1999, 113 Stat. 1536, 
1501A-359, 1501A-361, 1501A-362, 1501A-368.)


                               Amendments

    1999--Subsec. (b)(1). Pub. L. 106-113, Sec. 1000(a)(6) [title III, 
Sec. 321(k)(19)], made technical amendment to reference in original act 
which appears in text as reference to August 5, 1997.
    Subsec. (b)(3)(A)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title III, 
Sec. 302(b)], amended heading and text of cl. (i) generally. Prior to 
amendment, text read as follows: ``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 2001 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.''
    Subsec. (b)(3)(A)(i)(I). Pub. L. 106-113, Sec. 1000(a)(6) [title 
III, Sec. 303(b)(1)], which directed that the second sentence of cl. (i) 
be amended in subcl. (I) by the insertion of ``and if section 
1395x(v)(1)(L)(ix) of this title had not been enacted'' before 
semicolon, was executed by making the insertion before the period at end 
of subcl. (I) to reflect the probable intent of Congress.
    Subsec. (b)(3)(A)(i)(II). Pub. L. 106-113, Sec. 1000(a)(6) [title 
III, Sec. 303(b)(2)], inserted ``and if section 1395x(v)(1)(L)(ix) of 
this title had not been enacted'' after ``if the system had not been in 
effect''.
    Subsec. (b)(3)(B)(ii)(I). Pub. L. 106-113, Sec. 1000(a)(6) [title 
III, Sec. 306], substituted ``each of fiscal years 2002 and 2003'' for 
``fiscal year 2002 or 2003''.
    1998--Subsec. (a). Pub. L. 105-277, Sec. 5101(c)(1)(A), substituted 
``for portions of cost reporting periods occurring on or after October 
1, 2000'' for ``for cost reporting periods beginning on or after October 
1, 1999''.
    Subsec. (b)(3)(A)(i). Pub. L. 105-277, Sec. 5101(c)(1)(B)(i), 
substituted ``fiscal year 2001'' for ``fiscal year 2000''.
    Subsec. (b)(3)(A)(ii). Pub. L. 105-277, Sec. 5101(c)(1)(B)(ii), 
substituted ``September 30, 2000'' for ``September 30, 1999''.
    Subsec. (b)(3)(B)(i). Pub. L. 105-277, Sec. 5101(d)(2)(A), 
substituted ``home health applicable increase percentage (as defined in 
clause (ii))'' for ``home health market basket percentage increase''.
    Pub. L. 105-277, Sec. 5101(c)(1)(B)(iii), substituted ``fiscal year 
2002'' for ``fiscal year 2001''.
    Subsec. (b)(3)(B)(ii), (iii). Pub. L. 105-277, Sec. 5101(d)(2)(B), 
(C), added cl. (ii) and redesignated former cl. (ii) as (iii).


                    Effective Date of 1999 Amendment

    Amendment by section 1000(a)(6) [title III, Sec. 303(b)] of Pub. 
L.106-113 applicable to services furnished by home health agencies for 
cost reporting periods beginning on or after Oct. 1, 1999, see section 
1000(a)(6) [title III, Sec. 303(c)] of Pub. L. 106-113, set out as a 
note under section 1395x of this title.
    Amendment by section 1000(a)(6) [title III, Sec. 321(k)(19)] of Pub. 
L. 106-113 effective as if included in the enactment of the Balanced 
Budget Act of 1997, Pub. L. 105-33, except as otherwise provided, see 
section 1000(a)(6) [title III, Sec. 321(m)] of Pub. L. 106-113, set out 
as a note under section 1395d of this title.


                             Effective Date

    Pub. L. 105-33, title IV, Sec. 4603(d), Aug. 5, 1997, 111 Stat. 471, 
as amended by Pub. L. 105-277, div. J, title V, Sec. 5101(c)(2), Oct. 
21, 1998, 112 Stat. 2681-914, provided that: ``Except as otherwise 
provided, the amendments made by this section [enacting this section and 
amending sections 1395f, 1395g, 1395k, 1395l, 1395u, and 1395y of this 
title] shall apply to portions of cost reporting periods occurring on or 
after October 1, 2000.''


 Adjustment To Reflect Administrative Costs Not Included in the Interim 
   Payment System; GAO Report on Costs of Compliance With Oasis Data 
                         Collection Requirements

    Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec. 301], Nov. 
29, 1999, 113 Stat. 1536, 1501A-358, provided that:
    ``(a) Adjustment To Reflect Administrative Costs
        ``(1) In general.--In the case of a home health agency that 
    furnishes home health services to a medicare beneficiary, for each 
    such beneficiary to whom the agency furnished such services during 
    the agency's cost reporting period beginning in fiscal year 2000, 
    the Secretary of Health and Human Services shall pay the agency, in 
    addition to any amount of payment made under section 1861(v)(1)(L) 
    of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)) for the 
    beneficiary and only for such cost reporting period, an aggregate 
    amount of $10 to defray costs incurred by the agency attributable to 
    data collection and reporting requirements under the Outcome and 
    Assessment Information Set (OASIS) required by reason of section 
    4602(e) of BBA [the Balanced Budget Act of 1997, Pub. L. 105-33] (42 
    U.S.C. 1395fff note).
        ``(2) Payment schedule
            ``(A) Midyear payment.--Not later than April 1, 2000, the 
        Secretary shall pay to a home health agency an amount that the 
        Secretary estimates to be 50 percent of the aggregate amount 
        payable to the agency by reason of this subsection.
            ``(B) Upon settled cost report.--The Secretary shall pay the 
        balance of amounts payable to an agency under this subsection on 
        the date that the cost report submitted by the agency for the 
        cost reporting period beginning in fiscal year 2000 is settled.
        ``(3) Payment from trust funds.--Payments under this subsection 
    shall be made, in appropriate part as specified by the Secretary, 
    from the Federal Hospital Insurance Trust Fund and from the Federal 
    Supplementary Medical Insurance Trust Fund.
        ``(4) Definitions.--In this subsection:
            ``(A) Home health agency.--The term `home health agency' has 
        the meaning given that term under section 1861(o) of the Social 
        Security Act (42 U.S.C. 1395x(o)).
            ``(B) Home health services.--The term `home health services' 
        has the meaning given that term under section 1861(m) of such 
        Act (42 U.S.C. 1395x(m)).
            ``(C) Medicare beneficiary.--The term `medicare beneficiary' 
        means a beneficiary described in section 1861(v)(1)(L)(vi)(II) 
        of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(vi)(II)).
    ``(b) GAO Report on Costs of Compliance With OASIS Data Collection 
Requirements.--
        ``(1) Report to congress.--
            ``(A) In general.--Not later than 180 days after the date of 
        the enactment of this Act [Nov. 29, 1999], the Comptroller 
        General of the United States shall submit to Congress a report 
        on the matters described in subparagraph (B) with respect to the 
        data collection requirement of patients of such agencies under 
        the Outcome and Assessment Information Set (OASIS) standard as 
        part of the comprehensive assessment of patients.
            ``(B) Matters studied.--For purposes of subparagraph (A), 
        the matters described in this subparagraph include the 
        following:
                ``(i) An assessment of the costs incurred by medicare 
            home health agencies in complying with such data collection 
            requirement.
                ``(ii) An analysis of the effect of such data collection 
            requirement on the privacy interests of patients from whom 
            data is collected.
            ``(C) Audit.--The Comptroller General shall conduct an 
        independent audit of the costs described in subparagraph (B)(i). 
        Not later than 180 days after receipt of the report under 
        subparagraph (A), the Comptroller General shall submit to 
        Congress a report describing the Comptroller General's findings 
        with respect to such audit, and shall include comments on the 
        report submitted to Congress by the Secretary of Health and 
        Human Services under subparagraph (A).
        ``(2) Definitions.--In this subsection:
            ``(A) Comprehensive assessment of patients.--The term 
        `comprehensive assessment of patients' means the rule published 
        by the Health Care Financing Administration that requires, as a 
        condition of participation in the medicare program, a home 
        health agency to provide a patient-specific comprehensive 
        assessment that accurately reflects the patient's current status 
        and that incorporates the Outcome and Assessment Information Set 
        (OASIS).
            ``(B) Outcome and assessment information set.--The term 
        `Outcome and Assessment Information Set' means the standard 
        provided under the rule relating to data items that must be used 
        in conducting a comprehensive assessment of patients.''


                Report to Congress on Need for Reductions

    Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec. 302(c)], 
Nov. 29, 1999, 113 Stat. 1536, 1501A-360, provided that: ``Not later 
than the date that is six months after the date the Secretary of Health 
and Human Services implements the prospective payment system for home 
health services under section 1895 of the Social Security Act (42 U.S.C. 
1395fff), the Secretary shall submit to Congress a report analyzing the 
need for the 15 percent reduction under subsection (b)(3)(A)(ii) of such 
section, or for any reduction, in the computation of the base payment 
amounts under the prospective payment system for home health services 
established under such section.''


 Study and Report to Congress Regarding Exemption of Rural Agencies and 
  Populations From Inclusion in Home Health Prospective Payment System

    Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec. 307], Nov. 
29, 1999, 113 Stat. 1536, 1501A-362, provided that:
    ``(a) Study.--The Medicare Payment Advisory Commission (referred to 
in this section as `MedPAC') shall conduct a study to determine the 
feasibility and advisability of exempting home health services provided 
by a home health agency (or by others under arrangements with such 
agency) located in a rural area, or to an individual residing in a rural 
area, from payment under the prospective payment system for such 
services established by the Secretary of Health and Human Services in 
accordance with section 1895 of the Social Security Act (42 U.S.C. 
1395fff).
    ``(b) Report.--Not later than 2 years after the date of the 
enactment of this Act [Nov. 29, 1999], MedPAC shall submit a report to 
Congress on the study conducted under subsection (a), together with any 
recommendations for legislation that MedPAC determines to be appropriate 
as a result of such study.''


                       Case Mix System Development

    Section 4602(d) of Pub. L. 105-33 provided that: ``The Secretary of 
Health and Human Services shall expand research on a prospective payment 
system for home health agencies under the medicare program that ties 
prospective payments to a unit of service, including an intensive effort 
to develop a reliable case mix adjuster that explains a significant 
amount of the variances in costs.''


                   Case Mix System; Submission of Data

    Section 4602(e) of Pub. L. 105-33 provided that: ``Effective for 
cost reporting periods beginning on or after October 1, 1997, the 
Secretary of Health and Human Services may require all home health 
agencies to submit additional information that the Secretary considers 
necessary for the development of a reliable case mix system.''


                 Prospective Payment System Contingency

    Pub. L. 105-33, title IV, Sec. 4603(e), Aug. 5, 1997, 111 Stat. 471, 
as amended by Pub. L. 105-277, div. J, title V, Sec. 5101(c)(3), Oct. 
21, 1998, 112 Stat. 2681-914, provided that if the Secretary of Health 
and Human Services did not establish and implement the prospective 
payment system for home health services described in subsec. (b) of this 
section for portions of cost reporting periods described in section 
4603(d) of Pub. L. 105-33 (set out as a note above), for such portions 
the Secretary was to provide for a reduction by 15 percent in the cost 
limits and per beneficiary limits described in section 1395x(v)(1)(L) of 
this title, as those limits would otherwise have been in effect on Sept. 
30, 2000, prior to repeal by Pub. L. 106-113, div. B, Sec. 1000(a)(6) 
[title III, Sec. 302(a)], Nov. 29, 1999, 113 Stat. 1536, 1501A-359.


       Reports to Congress Regarding Home Health Cost Containment

    Section 4616 of Pub. L. 105-33 provided that:
    ``(a) Estimate.--Not later than October 1, 1997, the Secretary of 
Health and Human Services shall submit to the Committees on Commerce and 
Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate a report that includes an estimate of the outlays 
that will be made under parts A and B of title XVIII of the Social 
Security Act [parts A and B of this subchapter] for the provision of 
home health services during each of fiscal years 1998 through 2002.
    ``(b) Annual Report.--Not later than the end of each of years 1999 
through 2002, the Secretary shall submit to such Committees a report 
that compares the actual outlays under such parts for such services 
during the fiscal year ending in the year, to the outlays estimated 
under subsection (a) for such fiscal year. If the Secretary finds that 
such actual outlays were greater than such estimated outlays for the 
fiscal year, the Secretary shall include in the report recommendations 
regarding beneficiary copayments for home health services provided under 
the medicare program or such other methods as will reduce the growth in 
outlays for home health services under the medicare program.''

                  Section Referred to in Other Sections

    This section is referred to in sections 1395f, 1395l, 1395r of this 
title.
