
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document affected by Public Law 106-554 Section 1(a)(6)[203(b)]]
[Document affected by Public Law 106-554 Section 1(a)(6)[203(c)]]
[CITE: 42USC1395tt]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
        SUBCHAPTER XVIII--HEALTH INSURANCE FOR AGED AND DISABLED
 
                    Part D--Miscellaneous Provisions
 
Sec. 1395tt. Hospital providers of extended care services


(a) Hospital facility agreements; reasonable costs of services

    (1) Any hospital which has an agreement under section 1395cc of this 
title may (subject to subsection (b) of this section) enter into an 
agreement with the Secretary under which its inpatient hospital 
facilities may be used for the furnishing of services of the type which, 
if furnished by a skilled nursing facility, would constitute extended 
care services.
    (2)(A) Notwithstanding any other provision of this subchapter, 
payment to any hospital for services furnished under an agreement 
entered into under this section shall be based upon the reasonable cost 
of the services as determined under subparagraph (B).
    (B)(i) The reasonable cost of the services consists of the 
reasonable cost of routine services (determined under clause (ii)) and 
the reasonable cost of ancillary services (determined under clause 
(iii)).
    (ii) The reasonable cost of routine services furnished during any 
calendar year by a hospital under an agreement under this section is 
equal to the product of--
        (I) the number of patient-days during the year for which the 
    services were furnished, and
        (II) the average reasonable cost per patient-day, such average 
    reasonable cost per patient-day being the average rate per patient-
    day paid for routine services during the most recent year for which 
    cost reporting data are available with respect to such services 
    (increased in a compounded manner by the applicable increase for 
    payments for routine service costs of skilled nursing facilities 
    under subsections (a) through (d) of section 1395yy of this title 
    for subsequent cost reporting periods and up to and including such 
    calendar year) under this subchapter to freestanding skilled nursing 
    facilities in the region (as defined in section 1395ww(d)(2)(D) of 
    this title) in which the facility is located.

    (iii) The reasonable cost of ancillary services shall be determined 
in the same manner as the reasonable cost of ancillary services provided 
for inpatient hospital services.

(b) Eligible facilities

    The Secretary may not enter into an agreement under this section 
with any hospital unless, except as provided under subsection (g) of 
this section, the hospital is located in a rural area and has less than 
100 beds.

(c) Terms and conditions of facility agreements

    An agreement with a hospital under this section shall, except as 
otherwise provided under regulations of the Secretary, be of the same 
duration and subject to termination on the same conditions as are 
agreements with skilled nursing facilities under section 1395cc of this 
title and shall, where not inconsistent with any provision of this 
section, impose the same duties, responsibilities, conditions, and 
limitations, as those imposed under such agreements entered into under 
section 1395cc of this title; except that no such agreement with any 
hospital shall be in effect for any period during which the hospital 
does not have in effect an agreement under section 1395cc of this title. 
A hospital with respect to which an agreement under this section has 
been terminated shall not be eligible to enter into a new agreement 
until a two-year period has elapsed from the termination date.

(d) Post-hospital extended care services

    Any agreement with a hospital under this section shall provide that 
payment for services will be made only for services for which payment 
would be made as post-hospital extended care services if those services 
had been furnished by a skilled nursing facility under an agreement 
entered into under section 1395cc of this title; and any individual who 
is furnished services, for which payment may be made under an agreement 
under this section, shall, for purposes of this subchapter (other than 
this section), be deemed to have received post-hospital extended care 
services in like manner and to the same extent as if the services 
furnished to him had been post-hospital extended care services furnished 
by a skilled nursing facility under an agreement under section 1395cc of 
this title.

(e) Reimbursement for routine hospital services

    During a period for which a hospital has in effect an agreement 
under this section, in order to allocate routine costs between hospital 
and long-term care services for purposes of determining payment for 
inpatient hospital services, the total reimbursement due for routine 
services from all classes of long-term care patients (including this 
subchapter, subchapter XIX of this chapter, and private pay patients) 
shall be subtracted from the hospital's total routine costs before 
calculations are made to determine this subchapter reimbursement for 
routine hospital services.

(f) Conditions applicable to skilled nursing facilities

    A hospital which enters into an agreement with the Secretary under 
this section shall be required to meet those conditions applicable to 
skilled nursing facilities relating to discharge planning and the social 
services function (and staffing requirements to satisfy it) which are 
promulgated by the Secretary under section 1395i-3 of this title. 
Services furnished by such a hospital which would otherwise constitute 
post-hospital extended care services if furnished by a skilled nursing 
facility shall be subject to the same requirements applicable to such 
services when furnished by a skilled nursing facility except for those 
requirements the Secretary determines are inappropriate in the case of 
these services being furnished by a hospital under this section.

(g) Agreements on demonstration basis

    The Secretary may enter into an agreement under this section on a 
demonstration basis with any hospital which does not meet the 
requirement of subsection (b)(1) of this section, if the hospital 
otherwise meets the requirements of this section.

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1883, as added Pub. L. 96-
499, title IX, Sec. 904(a)(1), Dec. 5, 1980, 94 Stat. 2615; amended Pub. 
L. 100-203, title IV, Secs. 4005(b)(1), (2), 4201(d)(3), Dec. 22, 1987, 
101 Stat. 1330-48, as amended Pub. L. 100-360, title IV, 
Sec. 411(l)(1)(C), July 1, 1988, as added Pub. L. 100-485, title VI, 
Sec. 608(d)(27)(B), Oct. 13, 1988, 102 Stat. 2422; Pub. L. 100-360, 
title I, Sec. 104(d)(6), title IV, Sec. 411(b)(4)(D), July 1, 1988, 102 
Stat. 689, 770; Pub. L. 101-234, title I, Sec. 101(a), Dec. 13, 1989, 
103 Stat. 1979; Pub. L. 101-508, title IV, Sec. 4008(j)(1), Nov. 5, 
1990, 104 Stat. 1388-51; Pub. L. 105-33, title IV, Sec. 4432(b)(5)(G), 
Aug. 5, 1997, 111 Stat. 422; Pub. L. 106-113, div. B, Sec. 1000(a)(6) 
[title IV, Secs. 403(f), 408(a), (b)], Nov. 29, 1999, 113 Stat. 1536, 
1501A-371, 1501A-375.)


                               Amendments

    1999--Subsec. (a)(1). Pub. L. 106-113, Sec. 1000(a)(6) [title IV, 
Sec. 403(f)(1)], struck out ``(other than a hospital which has in effect 
a waiver under subparagraph (A) of the last sentence of section 1395x(e) 
of this title)'' after ``Any hospital''.
    Subsec. (b). Pub. L. 106-113, Sec. 1000(a)(6) [title IV, 
Sec. 408(a)], amended subsec. (b) generally. Prior to amendment, subsec. 
(b) read as follows: ``The Secretary may not enter into an agreement 
under this section with any hospital unless--
        ``(1) except as provided under subsection (g) of this section, 
    the hospital is located in a rural area and has less than 100 beds, 
    and
        ``(2) the hospital has been granted a certificate of need for 
    the provision of long-term care services from the State health 
    planning and development agency (designated under section 300m of 
    this title) for the State in which the hospital is located.''
    Subsec. (c). Pub. L. 106-113, Sec. 1000(a)(6) [title IV, 
Sec. 403(f)(2)], struck out ``, or during which there is in effect for 
the hospital a waiver under subparagraph (A) of the last sentence of 
section 1395x(e) of this title'' before the period at end of first 
sentence.
    Subsec. (d). Pub. L. 106-113, Sec. 1000(a)(6) [title IV, 
Sec. 408(b)], struck out ``(1)'' before ``Any agreement with a 
hospital'' and struck out pars. (2) and (3), which related to limiting 
payments under extended care service agreements pursuant to this section 
to hospitals with more than 49 beds where skilled nursing facilities 
were available or where such payments exceeded a designated maximum.
    1997--Subsec. (a)(2)(B)(ii)(II). Pub. L. 105-33 inserted 
``subsections (a) through (d) of'' before ``section 1395yy''.
    1990--Subsec. (a)(2)(B)(ii)(II). Pub. L. 101-508 substituted ``the 
most recent year for which cost reporting data are available with 
respect to such services (increased in a compounded manner by the 
applicable increase for payments for routine service costs of skilled 
nursing facilities under section 1395yy of this title for subsequent 
cost reporting periods and up to and including such calendar year) under 
this subchapter to freestanding skilled nursing facilities in the region 
(as defined in section 1395ww(d)(2)(D) of this title) in which the 
facility is located.'' for ``the previous calendar year'' and all that 
follows through the period, which was executed by making the 
substitution for ``the previous calendar year under the State plan (of 
the State in which the hospital is located) under subchapter XIX of this 
chapter to skilled nursing facilities located in the State and which 
meet the requirements specified in section 1396a(a)(28) of this title, 
or, in the case of a hospital located in a State which does not have 
such a State plan, the average rate per patient-day paid for routine 
services during the previous calendar year under this subchapter to 
skilled nursing facilities in such State.''
    1989--Subsecs. (d)(1), (f). Pub. L. 101-234 repealed Pub. L. 100-
360, Sec. 104(d)(6), and provided that the provisions of law amended or 
repealed by such section are restored or revived as if such section had 
not been enacted, see 1988 Amendment notes below.
    1988--Subsec. (d)(1). Pub. L. 100-360, Sec. 104(d)(6), struck out 
``post-hospital'' before ``extended care services'' wherever appearing.
    Subsec. (d)(3). Pub. L. 100-360, Sec. 411(b)(4)(D), inserted before 
period at end ``, except that such payment shall continue to be made in 
the period for those patients who are receiving extended care services 
at the time the hospital reaches the limit specified in this 
paragraph''.
    Subsec. (f). Pub. L. 100-360, Sec. 411(l)(1)(C), as added by Pub. L. 
100-485, Sec. 608(d)(27)(B), added Pub. L. 100-203, Sec. 4201(d)(3), see 
1987 Amendment note below.
    Pub. L. 100-360, Sec. 104(d)(6), struck out ``post-hospital'' before 
``extended care services''.
    1987--Subsec. (b)(1). Pub. L. 100-203, Sec. 4005(b)(1), substituted 
``100'' for ``50''.
    Subsec. (d). Pub. L. 100-203, Sec. 4005(b)(2), designated existing 
provisions as par. (1) and added pars. (2) and (3).
    Subsec. (f). Pub. L. 100-203, Sec. 4201(d)(3), as added by Pub. L. 
100-360, Sec. 411(l)(1)(C), and Pub. L. 100-485, Sec. 608(d)(27)(B), 
substituted ``section 1395i-3'' for ``section 1395x(j)(15)''.


                    Effective Date of 1999 Amendment

    Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title IV, Sec. 408(c)], 
Nov. 29, 1999, 113 Stat. 1536, 1501A-375, provided that: ``The 
amendments made by this section [amending this section] take effect on 
the date that is the first day after the expiration of the transition 
period under section 1888(e)(2)(E) of the Social Security Act (42 U.S.C. 
1395yy(e)(2)(E)) for payments for covered skilled nursing facility 
services under the medicare program.''


                    Effective Date of 1997 Amendment

    Amendment by Pub. L. 105-33 applicable to items and services 
furnished on or after July 1, 1998, see section 4432(d) of Pub. L. 105-
33, set out as a note under section 1395i-3 of this title.


                    Effective Date of 1990 Amendment

    Section 4008(j)(4) of Pub. L. 101-508 provided that: ``The amendment 
made by paragraph (1) [amending this section] shall apply to services 
furnished on or after October 1, 1990.''


                    Effective Date of 1989 Amendment

    Amendment by Pub. L. 101-234 effective Jan. 1, 1990, see section 
101(d) of Pub. L. 101-234, set out as a note under section 1395c of this 
title.


                    Effective Date of 1988 Amendments

    Amendment by Pub. L. 100-485 effective as if included in the 
enactment of the Medicare Catastrophic Coverage Act of 1988, Pub. L. 
100-360, see section 608(g)(1) of Pub. L. 100-485, set out as a note 
under section 704 of this title.
    Amendment by section 104(d)(6) of Pub. L. 100-360 effective Jan. 1, 
1989, except as otherwise provided, and applicable to inpatient hospital 
deductible for 1989 and succeeding years, to care and services furnished 
on or after Jan. 1, 1989, to premiums for January 1989 and succeeding 
months, and to blood or blood cells furnished on or after Jan. 1, 1989, 
see section 104(a) of Pub. L. 100-360, set out as a note under section 
1395d of this title.
    Except as specifically provided in section 411 of Pub. L. 100-360, 
amendment by section 411(b)(4)(D), (l)(1)(C) of Pub. L. 100-360, as it 
relates to a provision in the Omnibus Budget Reconciliation Act of 1987, 
Pub. L. 100-203, effective as if included in the enactment of that 
provision in Pub. L. 100-203, see section 411(a) of Pub. L. 100-360, set 
out as a Reference to OBRA; Effective Date note under section 106 of 
Title 1, General Provisions.


                    Effective Date of 1987 Amendment

    Section 4005(b)(4) of Pub. L. 100-203 provided that: ``The 
amendments made by paragraphs (1) and (2) [amending this section] shall 
apply to agreements under section 1883 of the Social Security Act [this 
section] entered into after March 31, 1988.''
    Amendment by section 4201(d)(3) of Pub. L. 100-203 applicable to 
services furnished on or after Oct. 1, 1990, without regard to whether 
regulations to implement such amendment are promulgated by such date, 
except as otherwise specifically provided in section 1395i-3 of this 
title, see section 4204(a) of Pub. L. 100-203, as amended, set out as an 
Effective Date note under section 1395i-3 of this title.


                             Effective Date

    Section 904(d) of Pub. L. 96-499 provided that: ``The amendments 
made by this section [enacting this section and section 1396l of this 
title] shall become effective on the date on which final regulations, 
promulgated by the Secretary to implement such amendments, are first 
issued; and those regulations shall be issued not later than the first 
day of the sixth month following the month in which this Act is enacted 
[December 1980].''


             Hold Harmless for Amendment by Pub. L. 101-508

    Section 4008(j)(2) of Pub. L. 101-508 provided that: ``If, as a 
result of the amendment made by paragraph (1) [amending this section], 
the reasonable cost of routine services furnished by a hospital during a 
calendar year (as determined under section 1883 of the Social Security 
Act [this section]) is less than the reasonable cost of such services 
determined under such section for the previous calendar year, the 
reasonable cost of such services furnished by the hospital during the 
calendar year under such section shall be equal to the reasonable cost 
determined under such section for the previous calendar year.''


                Swing Beds Certified Prior to May 1, 1987

    Section 4008(j)(3) of Pub. L. 101-508 provided that: 
``Notwithstanding the requirement of section 1883(b)(1) of the Social 
Security Act [subsec. (b)(1) of this section] that the Secretary may not 
enter into an agreement under such section with a hospital that is not 
located in a rural area, any agreement entered into under such section 
on or before May 1, 1987, between the Secretary of Health and Human 
Services and a hospital located in an urban area shall remain in 
effect.''


        Report of Hospital Admissions for Extended Care Services

    Section 4005(b)(3) of Pub. L. 100-203, as amended by Pub. L. 100-
360, title IV, Sec. 411(b)(4)(E), as added by Pub. L. 100-485, title VI, 
Sec. 608(d)(18)(C), Oct. 13, 1988, 102 Stat. 2419, directed Secretary of 
Health and Human Services to report to Congress, not later than Feb. 1, 
1989, concerning the proportion of admissions to hospitals for extended 
care services under this section which are denied or approved by a peer 
review organization, and recommendations for methods of encouraging 
hospitals that have a low occupancy rate, are eligible to enter (but 
have not entered) into an agreement under this section, and are located 
in areas with a need for additional providers of extended care services, 
to enter into such agreements.


  Report on Hospital Providers of Extended Care, Skilled Nursing, and 
                       Intermediate Care Services

    Section 904(c) of Pub. L. 96-499 directed Secretary of Health and 
Human Services, within three years after Dec. 5, 1980, to submit to 
Congress a report evaluating programs established by the amendments made 
by this section (enacting this section and section 1396l of this title), 
including in such report an analysis of the extent and effect of the 
agreements under such programs on availability and effective and 
economical provision of long-term care services, whether such programs 
should be continued, the results of any demonstration projects conducted 
under such programs, and whether eligibility to participate in such 
programs should be extended to other hospitals, regardless of bed size 
or geographic location, where there is a shortage of long-term care 
beds.

                  Section Referred to in Other Sections

    This section is referred to in sections 1395i-4, 1395yy, 1396l of 
this title.
