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 100 STAT. 1982

42 USC 1395e note.

42 USC 1395c. 42 USC 1395e note.

PUBLIC LAW 99-509—OCT. 21, 1986

"(B) to the coinsurance amounts under subsection (a) for inpatient hospital services and post-hospital extended care services furnished in that year.". (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to inpatient hospital services and post-hospital extended care services furnished on or after January 1, 1987, and to the monthly premium (under part A of title XVIII of the Social Security Act) for months beginning with January 1987. (c) PROMULGATION OF NEW DEDUCTIBLE.—The Secretary of Health

and Human Services shall provide, within 30 days after the date of the enactment of this Act, for the publication of the inpatient hospital deductible, the coinsurance amounts for inpatient hospital services and post-hospital extended care services and the monthly part A premiums for 1987, as modified under the amendment made by subsection (a). SEC. 9302. APPLICABLE PERCENTAGE INCREASE IN PAYMENTS FOR INPATIENT HOSPITAL SERVICES. (a) APPLICABLE PERCENTAGE INCREASE.—

i

.

(1) IN GENERAL.—Subclause (II) of section 1886a))(3)(B)(i) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(i)) is amended to read as follows: "(II) for fiscal year 1987,1.15 percent, and for fiscal year 1988, the market basket percentage increase (as defined in clause (ii)) minus 2.0 percentage points, and". (2) CONFORMING AMENDMENTS.—(A) Section 1886(d)(3)(A) of Ante, p. 15A; post, p. 1983.

42 USC 1395WW note.

such Act is amended by striking "and 1986" and inserting ", 1986, 1987, and 1988". (B) Section 1886(e)(4) of such Act is amended by striking "determine for each fiscal year (beginning with tiscal year c 1987)" and inserting "recommend for fiscal year 1988 an appropriate change factor for inpatient hospital services for discharges in that fiscal year and shall determine for each subsequent fiscal year". ,, (C) Section 1866(e)(5) of such Act is amended by inserting '' "recommendation or" before "determination" each place it ,^, appears. (3) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to cost reporting periods beginning on or after October 1, 1986 and, for purposes of section 1886(d) of the Social (b) SEPARATE HOSPITALS.—
 * ^ Security Act, for cost reporting periods beginning and discharges occurring on or after October 1, 1986.

42 USC 1395WW note. 42 USC 1395WW note.

OUTUER

OFFSETS

FOR URBAN

AND RURAL

(1) IN GENERAL.—Section 1886(d)(3)(B) of such Act is amended— ,;, (A) by inserting "for hospitals located in an urban area and for hospitals located in a rural area" after "subpara.j^ graph (A)", and ^^.;, (B) by inserting before the period the following: "for hospitals located in such respective area". (2) EFFECTIVE DATE.—The amendments made by paragraph (1) shall apply to discharges occurring on or after October 1, 1986. (3) MAINTAINING CURRENT OUTLIER POLICY IN FISCAL YEAR

,,

1987.—For payments made under section 1886(d) of the Social Security Act for discharges occurring in fiscal year 1987—

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 >^

PUBLIC LAW 99-509—OCT. 21, 1986 I-. * "

'

100 STAT. 1983

(A) the proportions under paragraph (3)(B) for hospitals located in urban and rural areas shall be established at such levels as produce the same total dollar reduction under such paragraph as if this section had not been enacted; and (B) the thresholds and standards used for making additional payments under paragraph (5) of such section shall be the same as those in effect as of October 1, 1986.

^liiti

(c) COMPUTING URBAN AND RURAL AVERAGES.—Section 42 USC I395ww 1886(d)(3)(A) of such Act is amended by adding at the end the p..^,.,^.. following: "With respect to discharges occurring on or after Octo"^ "^'^ "' " ber 1, 1987, the Secretary shall compute urban and rural averages on the basis of discharge weighting rather than hospital weighting, -,,,. ^.j making appropriate adjustments to ensure that computation on such basis does not result in total payments under this section that are greater or less than the total payments that would have been made under this section but for this sentence, and making appropriate changes in the manner of determining the reductions under subparagraph (C)(ii),". (d) REGIONAL REFERRAL CENTERS.— (1) CRITERIA.—

(A) IN GENERAL.—Section 1886(d)(5)(C)(i) of such Act is \.,. amended— (i) by inserting "(I)" after "(C)(i)", and (ii) by adding at the end the following new subclause: "(II) The Secretary shall provide, under subclause (I), for the classification of a rural hospital as a regional referral center if the hospital has a case mix equal to or greater than the median case mix for hospitals (other than hospitals with approved teaching,, j.- ? programs) located in an urban area in the same region (as defined in paragraph (2)(D)), has at least 5,000 discharges a year or, if less, the median number of discharges in urban hospitals in the region in which the hospital is located (or, in the case of a rural osteopathic >y'>M hospital, meets the criterion established by the Secretary under subclause (I) with respect to the annual number of discharges for such hospitals), and meets any other criteria established by the Secretary under subclause (I).". -. * (B) EFFECTIVE DATE.—(i) Subject to clause (ii), the amend- 42 USC 1395WW ments made by subparagraph (A) shall apply to payments note. '11 for discharges occurring on or after October 1, 1986. (ii) An appeal for classification of a rural hospital as a regional referral center, pursuant to the amendments made by subparagraph (A), which is filed before January 1, 1987, and which is approved shall be effective with respect to discharges occurring on or after October 1, 1986. '[

(2) EXTENSION OF REGIONAL REFERRAL CENTER CLASSIFICA- 42 USC 1395WW TiON.—Any hospital that is classified as a regional referral note.

center under section 1886(d)(5)(C)(i) of the Social Security Act on the date of the enactment of this Act shall continue to be classified as a regional referral center for cost reporting periods beginning on or after October 1, 1986, and before October 1, 1989. f

(3) BUDGET-NEUTRAL IMPLEMENTATION.—Paragraph (2) and

the 42 USC 1395WW in note.

amendment made by paragraph (I)(A) shall be implemented a manner that ensures that total payments under section 1886 of the Social Security Act are not increased or decreased by

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 100 STAT. 1984

PUBLIC LAW 99-509—OCT. 21, 1986 reason of the classifications required by such paragraph or amendment. (4) RURAL SECONDARY SPECIALTY DEMONSTRATION PROJECT.—

Minnesota.

42 USC 1395. 42 USC 1395c.

42 USC 1395WW.

Puerto Rico.

(A) ESTABLISHMENT.—The Secretary of Health and Human Services (in this paragraph referred to as the "Secretary") shall enter into an agreement with Lake Region tK, Hospital and Nursing Home at Fergus Falls, Minnesota, for the purpose of conducting a rural secondary specialty center demonstration project (in this paragraph referred to as the "project") under title XVIII of the Social Security Act. (B) PURPOSE.—The purpose of this project shall be to determine the effect that a modified system of making payments under part A of such title to rural secondary specialty centers would have on— (i) total expenditures under such part, and (ii) the access of medicare beneficiaries located in ' ^ rural areas to quality health care. (C) PAYMENTS.—During the period of the demonstration project, payments under part A of such title shall be made under the project on the basis of average standardized ^ amounts computed for urban areas in the region in which the project is conducted, as adjusted by a rural wage index. (D) DURATION.—The project shall be of a maximum duration of three years. (E) REPORTS.—The Secretary shall submit a final report to the Congress on the project not later than six months after the completion of the project. (e) MISCELLANEOUS PROVISIONS.— (1) ANNUAL ADJUSTMENT.—Section 1886(d)(4)(C) of such Act is

amended by striking "in fiscal year 1986 and at least every four fiscal years" and inserting "in fiscal year 1988 and at least annually". (2) CLARIFYING AUTHORITY TO VARY RATES.—Section 1886(e)(4) of such Act is amended by adding at the end the following new sentence: "The percentage change shall be the same for all subsection (d) hospitals and subsection (d) Puerto Rico hospitals, but may be different from that for other hospitals (and units not i " included as such hospitals) and may vary among such other hospitals and units.". (3) NOTICE OF EARLIER PROMULGATION OF PERCENTAGE IN-

Reports.

<: CREASE.—Section 1886(e)(3) of such Act is amended— (A) by inserting "(A)" after "(3)", and (B) by adding at the end the following new subparagraph: "(B) The Secretary, not later than April 1, 1987, for fiscal year 1988 and not later than March 1 before the beginning of each fiscal year (beginning with fiscal year 1989), shall report to the Congress the Secretary's initial estimate of the percentage change that the Secretary will recommend or determine under paragraph (4) with respect to that fiscal year.". (4) EXTENSION OF SOLE COMMUNITY PROVIDER PROVISION.—Sec-

tion 1886(d)(5)(C)(ii) of such Act is amended by striking "1986" and inserting "1988". 42 USC 1395WW note.

(f) PROMULGATION OF N E W RATE.—The Secretary of Health and

Human Services shall provide, within 30 days after the date of the enactment of this Act, for the publication of the payments rates that will apply under section 1886 of the Social Security Act, for dis-

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1985

charges occurring on or after October 1, 1986, taking into account the amendments made by this section, without regard to the provisions of chapter 5 of title 5, United States Code. 5 USC 500 et seq. SEC. 9303. PAYMENTS FOR HOSPITAL CAPITAL-RELATED COSTS.

(a) IN GENERAL.—Section 1886(g) of the Social Security Act (42 U.S.C. 1395ww(g)) is amended by adding at the end the following new paragraph: "(3)(A) Except as provided in subparagraph (B), in determining the amount of the payments that may be made under this title with respect to all the capital-related costs of inpatient hospital services of a subsection (d) hospital, the Secretary shall reduce the amounts of such payments otherwise established under this title by— "(i) 3.5 percent for payments attributable to portions of cost reporting periods occurring during fiscal year 1987, "(ii) 7 percent for payments attributable to portions of cost reporting periods or discharges (as the case may be) occurring during fiscal year 1988, and "(iii) 10 percent for payments attributable to portions of cost reporting periods or discharges (as the case may be) occurring during fiscal year 1989. "(B) Subparagraph (A) shall not apply to payments with respect to the capital-related costs of any hospital that is a sole community hospital (as defined in subsection (d)(5)(C)(ii)). "(C) If the Secretary provides, under subsection (a)(4), for the inclusion of other capital-related costs in operating costs of inpatient hospital services, the Secretary shall provide— "(i) notwithstanding any other provision of this title, for the continuation of payment under the reasonable cost methodology described in section 1861(v)(l) with respect to capital-related 42 USC 1395x. costs of any hospital that is such a sole community hospital for cost reporting periods beginning before October 1, 1990, and "(ii) in the design of such payment system that the aggregate payment amounts under this title for such other capital-related costs for payments attributable to portions of cost reporting periods occurring during fiscal year 1988 and fiscal year 1989 shall approximate the aggregate payment amount under this title that would have been made (taking into account the provisions of subparagraphs (A) and (B)) during that fiscal year but for the inclusion of such costs by the Secretary.". (b) ADDITION OF PUERTO RICO HOSPITALS.—Effective for cost reporting periods beginning and discharges occurring (as the case may be) on or after October 1, 1987, section 1886(g)(3)(A) of the Social Security Act (as amended by subsection (a)) is amended by inserting "and a subsection (d) Puerto Rico hospital" after "subsection (d) hospital". (c) CLARIFICATION OF SECRETARIAL AUTHORITY TO INCORPORATE PAYMENT FOR OTHER CAPITAL-RELATED COSTS UNDER THE PROSPECTIVE PAYMENT SYSTEM.—Section 1886(a)(4) of such Act is amended

by striking "October 1, 1987" and inserting "October 1 of 1987 (or of such later year as the Secretary may, in his discretion, select)". SEC. 9304. COVERAGE OF HOSPITALS IN PUERTO RICO UNDER A DRG PROSPECTIVE PAYMENT SYSTEM.

(a) IN GENERAL.—Section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d)) is amended by adding at the end the following new paragraph:

Ante, p. 749.

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 100 STAT. 1986 42 USC 1395f. 42 USC 1395e.

Rural areas.

Rural areas. Urban areas.

PUBLIC LAW 99-509-OCT. 21, 1986

"(9)(A) Notwithstanding section 1814(b) but subject to the provisions of section 1813, the amount of the payment with respect to the operating costs of inpatient hospital services of a subsection (d) Puerto Rico hospital for inpatient hospital discharges in a fiscal year beginning on or after October 1, 1987, is equal to the sum of— "(i) 75 percent of the Puerto Rico adjusted DRG prospective payment rate (determined under subparagraph (B) or (C)) for such discharges, and "(ii) 25 percent of the discharge-weighted average of— "(I) the national adjusted DRG prospective payment rate (determined under paragraph (3)(D)) for hospitals located in h • an urban area, and "(II) such rate for hospitals located in a rural area, for such discharges, adjusted in the manner provided in paragraph (3)(E) for different area wage levels. As used in this section, the term 'subsection (d) Puerto Rico hospital' means a hospital that is located in Puerto Rico and that would be a subsection (d) hospital (as defined in paragraph (1)(B)) if it were located in one of the fifty States. a "(B) The Secretary shall determine a Puerto Rico adjusted DRG prospective payment rate, for each inpatient hospital discharge in fiscal year 1988 involving inpatient hospital services of a subsection (d) Puerto Rico hospital for which payment may be made under part A of this title. Such rate shall be js'.; determined for such hospitals located in urban or rural areas «I. within Puerto Rico, as follows: "(i) The Secretary shall determine the target amount (as 3 f defined in subsection (b)(3)(A)) for the hospital for the cost reporting period beginning in fiscal year 1987 and increase such amount by prorating the applicable percentage increase (as defined in subsection (b)(3)(B)) to update the amount to the midpoint in fiscal year 1988. "(ii) The Secretary shall standardize the amount determined under clause (i) for each hospital by— "(I) excluding an estimate of indirect medical education costs, "(II) adjusting for variations among hospitals by area in the average hospital wage level, "(III) adjusting for variations in case mix among hospitals, and "(IV) excluding an estimate of the additional payments to certain subsection (d) Puerto Rico hospitals to be made under subparagraph (D)(v) (relating to disproportionate share payments). "(iii) The Secretary shall compute a discharge weighted average of the standardized amounts determined under clause (ii) for all hospitals located in an urban area and for all hospitals located in a rural area (as such terms are defined in paragraph (2)(D)). "(iv) The Secretary shall reduce the average standardized amount by a proportion equal to the proportion (estimated by ^' the Secretary) of the amount of payments under this paragraph which are additional payments described in subparagraph (D)(i) (relating to outlier payments). "(v) For each discharge classified within a diagnosis-related group for hospitals located in an urban or rural area, respec-

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1987

tively, the Secretary shall establish a Puerto Rico DRG prospective payment rate equal to the product of— "(I) the average standardized amount (computed under clause (iii) and reduced under clause (iv)) for hospitals i located in an urban or rural area, respectively, and .ij "(II) the weighting factor (determined under paragraph (4)(B)) for that diagnosis-related group. "(vi) The Secretary shall adjust the proportion (as estimated by the Secretary from time to time) of hospitals' costs which are attributable to wages and wage-related costs, of the Puerto Rico DRG prospective payment rate computed under clause (v) for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the Puerto Rican average hospital wage level. "(C) The Secretary shall determine a Puerto Rico adjusted DRG Urban areas, prospective payment rate, for each inpatient hospital discharge Rural areas, after fiscal year 1988 involving inpatient hospital services of a subsection (d) Puerto Rico hospital for which payment may be made under part A of this title. Such rate shall be determined for hos- 42 USC 1395c. pitals located in urban or rural areas within Puerto Rico as follows: "(i) The Secretary shall compute an average standardized amount for hospitals located in an urban area and for hospitals located in a rural area equal to the respective average standardized amount computed for the previous fiscal year under subparagraph (B)(iii) or under this clause, increased for fiscal year 1989 by the applicable percentage increase under subsection (b)(3)(B), and adjusted for subsequent fiscal years in accordance with the final determination of the Secretary under subsection (e)(4), and adjusted to reflect the most recent casemix data available. "(ii) The Secretary shall reduce each of the average standardized amounts by a proportion equal to the proportion (estimated by the Secretary) of the amount of payments under this paragraph which are additional payments described in subparagraph (D)(i) (relating to outlier payments). "(iii) For each discharge classified within a diagnosis-related group for hospitals located in an urban or rural area, respectively, the Secretary shall establish a Puerto Rico DRG prospective payment rate equal to the product of— ?.", "(I) the average standardized amount (computed under clause (i) and reduced under clause (ii)) for hospitals located in an urban or rural area, respectively, and "(II) the weighting factor (determined under paragraph (4)(B)) for that diagnosis-related group. "(iv) The Secretary shall adjust the proportion (as estimated by the Secretary from time to time) of hospitals' costs which are attributable to wages and wage-related costs, of the Puerto Rico DRG prospective payment rate computed under clause (iii) for area differences in hospital wage levels by a factor (established / by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the Puerto Rico average hospital wage level. "(D) The following provisions of paragraph (5) shall apply to subsection (d) Puerto Rico hospitals receiving payment under this paragraph in the same manner and to the extent as they apply to subsection (d) hospitals receiving payment under this subsection:

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Page:United States Statutes at Large Volume 100 Part 3.djvu/180

 100 STAT. 1988

PUBLIC LAW 99-509—OCT. 21, 1986

"(i) Subparagraph (A) (relating to outlier payments). "(ii) Subparagraph (B) (relating to payments for indirect medical education costs), except that for this purpose the sum of the amount determined under subparagraph (A) of this paragraph and the amount paid to the hospital under clause (i) of this subparagraph shall be substituted for the sum referred to in paragraph (5)(B)(i)(I). "(iii) Subparagraph (C)(iii) (relating to exceptions and adjustments). "(iv) Subparagraph (E) (relating to payments for costs of certified registered nurse anesthetists). "(v) Subparagraph (F) (relating to disproportionate share payments), except that for this purpose the sum described in clause (ii) of this subparagraph shall be substituted for the sum referred to in paragraph (5)(F)(ii)(I).". (b) CONFORMING AMENDMENTS.—(1) The first sentence of subclause (I) of section 1886(d)(5)(C)(i)(I) of such Act, as redesignated by section 42 USC I395ww. 9302(d), is amended by inserting "(other than under paragraph (9))" after "established under this subsection". (2) The second and third sentences of section 1886(d)(5)(C)(ii) of such Act are each amended by inserting "(other than under paragraph (9))" after "payment amounts under this subsection". (c) BUDGET NEUTRALITY.—Section 1886(e)(1) of the Social Security Act is amended by adding at the end the following new subparagraph: "(C) For discharges occurring in fiscal year 1988, the Secretary shall provide for such equal proportional adjustment in each of the average standardized amounts otherwise computed under subsection (d)(3) for that fiscal year as may be necessary to assure that— "(i) the aggregate payment amounts otherwise provided under subsections (d)(l)(A)(iii), (d)(5), and (d)(9) for that fiscal year for operating costs of inpatient hospital services of subsection (d) hospitals and subsection (d) Puerto Rico hospitals, are not greater or less than— "(ii) the payment amounts that would have been payable for such services for those same hospitals for that fiscal year but for the enactment of the amendments made by section 9304 of the Omnibus Budget Reconciliation Act of 1986.". 42 USC I395ww (d) EFFECTIVE DATE.—The amendments made by this section shall note. apply to discharges occurring on or after October 1, 1987, SEC. 9305. IMPROVING QUALITY OF CARE WITH RESPECT TO PART A SERVICES. (a) REFINEMENT OF PROSPECTIVE PAYMENT SYSTEM.— (1) DEVELOPMENT OF LEGISLATIVE PROPOSAL.—The Secretary of

Ante, p. 1985.

Health and Human Services shall develop and submit to Congress a specific legislative proposal to improve the classification and payment system under section 1886(d) of the Social Security Act (and, as appropriate, the system for payment of outliers under section 1886(d)(5)(A) of such Act) in order to assure that the amount of payment per discharge approximates the cost of medically necessary care provided in an efficient manner for individual patients or classes of patients with similar conditions. (2) ACCOUNTING FOR SEVERITY OF ILLNESS.—In developing the proposal, the Secretary shall account for variations in severity

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 PUBLIC LAW 99-509—OCT. 21, 1986

'

100 STAT. 1989

of illness and case complexity which are not adequately accounted for by the current classification and payment system. (3) DEADLINE.—The proposal shall be submitted to Congress by not later than 2 years after the date of the enactment of this Act. (b) REQUIRING NOTICE OF HOSPITAL DISCHARGE RIGHTS.— (1) REQUIREMENT FOR HOSPITALS TO PROVIDE STATEMENT.—Sec-

tion 1866(a)(1) of the Social Security Act (42 U.S.C. 1395cc(a)(l)), as amended by section 1895(b) of the Tax Reform Act of 1986 and by section 233 of the Veterans' Benefits Improvement and Health-Care Authorization Act of 1986, is amended— (A) by striking "and" at the end of the subparagraph (K), (B) by striking the period at the end of subparagraph (L) and inserting ", and", and (C) by inserting after subparagraph (L) the following new subparagraph: "(M) in the case of hospitals, to provide to each individual who is entitled to benefits under part A (or to a person acting on the individual's behalf), at or about the time of the individual's admission as an inpatient to the hospital, a written statement (containing such language as the Secretary prescribes consistent with this paragraph) which explains— "(i) the individual's rights to benefits for inpatient hospital services and for post-hospital services under this title, "(ii) the circumstances under which such an individual will and will not be liable for charges for continued stay in the hospital, "(iii) the individual's right to appeal denials of benefits for continued inpatient hospital services, including the practical steps to initiate such an appeal, and "(iv) the individual's liability for payment for services if such a denial of benefits is upheld on appeal, and which provides such additional information as the Secretary may specify." (2) EFFECTIVE DATE.—The Secretary of Health and Human Services shall first prescribe the language required under section 1866(a)(l)(M) of the Social Security Act not later than six months after the date of the enactment of this Act. The requirement of such section shall apply to admissions to hospitals occurring on such date (not later than 60 days after the date such language is first prescribed) as the Secretary shall provide. (c) REQUIRING HOSPITALS TO PROVIDE DISCHARGE PLANNING PROCESS.— (1) REQUIREMENT AS CONDITION OF PARTICIPATION.—Section

Post, p. 2025. Post, p. 2931.

42 USC I395cc "o*®-

r

1861(e)(6) of the Social Security Act (42 U.S.C. 1395x(e)(6)) is amended— (A) by inserting "(A)" after "(6)", and (B) by inserting before the semicolon at the end the following: "and (B) has in place a discharge planning process that meets the requirements of subsection (ee)". (2) DISCHARGE PLANNING PROCESS DEFINED.—Section 1861

of

such Act is further amended by adding at the end the following new subsection:

i'

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 100 STAT. 1990

PUBLIC LAW 99-509—OCT. 21, 1986 DISCHARGE PLANNING PROCESS

"(eeXD A discharge planning process of a hospital shall be considered sufficient if it is applicable to services furnished by the hospital to individuals entitled to benefits under this title and if it meets the guidelines and standards established by the Secretary under paragraph (2). "(2) The Secretary shall develop guidelines and standards for the discharge planning process in order to ensure a timely and smooth transition to the most appropriate type of and setting for posthospital or rehabilitative care. The guidelines and standards shall include the following: "(A) The hospital must identify, at an early stage of hospitalization, those patients who are likely to suffer adverse health consequences upon discharge in the absence of adequate "(B) Hospitals must provide a discharge planning evaluation ' for patients identified under subparagraph (A) and for other patients upon the request of the patient, patient's representative, or patient's physician. "(C) Any discharge planning evaluation must be made on a timely basis to ensure that appropriate arrangements for posthospital care will be made before discharge and to avoid unnecessary delays in discharge. "(D) A discharge planning evaluation must include an evaluation of a patient's likely need for appropriate post-hospital services and the availability of those services. "(E) The discharge planning evaluation must be included in the patient's medical record for use in establishing an appropriate discharge plan and the results of the evaluation must be discussed with the patient (or the patient's representative). "(F) Upon the request of a patient s physician, the hospital must arrange for the development and initial implementation of a discharge plan for the patient. "(G) Any discharge planning evaluation or discharge plan required under this paragraph must be developed by, or under the supervision of, a registered professional nurse, social ' worker, or other appropriately qualified personnel." (3) EFFECT OF ACCREDITATION.—The second sentence of section
 * discharge planning.

42 USC 1395x note.

1865(a) of such Act (42 U.S.C. 1395bb(a)) is amended— (A) by inserting ", requires a discharge planning process (or imposes another requirement which serves substantially the same purpose)," after "the same purpose)", and (B) by inserting "clause (A) or (B) o f after "comply also with". (4) EFFECTIVE DATE.—The amendments made by this subsection shall apply to hospitals as of one year after the date of the enactment of this Act. (d) REVIEW OF STANDARDS FOR MEDICARE CONDITIONS OF PARTICIPATION FOR ASSURING QUALITY OF INPATIENT HOSPITAL SERVICES,—The
 * >- Ft

42 USC 1395. Reports.

Secretary of Health and Human Services shall arrange for a study of the adequacy of the standards used for hospitals, for purposes of meeting the conditions of participation under title XVIII of the Social Security Act, in assuring the quality of services furnished in hospitals. The Secretary shall report to Congress on the results of the study by not later than 2 years after the date of the enactment of this Act.

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 PUBLIC LAW 99-509-OCT. 21, 1986

100 STAT. 1991

(e) STUDY OF PAYMENT FOR ADMINISTRATIVELY NECESSARY DAYS.—

(1) IN GENERAL.—The Secretary of Health and Human Services shall conduct a study to determine whether a payment should be made (in a budget-neutral manner under title XVIII of such Act to hospitals receiving payments under section 1886(d) of such Act) to a hospital for administratively necessary days, separate from the per-discharge and outlier payments made under such section. (2) ADMINISTRATIVELY NECESSARY DAYS DEFINED.—In this subsection, an "administratively necessary day" is a day of continued inpatient hospital stay, for an individual entitled to benefits under part A of title XVIII of the Social Security Act, necessitated by a delay in obtaining placement for the individual in a skilled nursing facility. (3) CONSIDERATIONS IN CONDUCTING STUDY.—In conducting the study, the Secretary shall consider— (A) the need for such a payment in order to minimize— (i) the disproportionate financial impact of current
 * law on certain hospitals (or hospitals in certain locations) due to difficulties in arranging for appropriate

post-hospital care, such as difficulties resulting from a shortage of beds in skilled nursing facilities where those hospitals are located and from the source of payment for such care, and /•' ' (ii) the risk of inappropriate discharge to a nonf• institutional or inappropriate institutional setting of individuals who need post-hospital services in a skilled nursing facility, and (B) the administrative mechanisms that can be used to prevent inappropriate payments for administratively necessary days. (4) REPORT ON STUDY.—The Secretary shall report to Congress on the results of the study not later than January 1, 1989. (f) EXTENDING WAIVER OF LIABILITY PROVISIONS TO HOSPICE PROGRAMS.—

Health care facilities. 42 USC 1395.

42 USC 1935c

42 USC 1395y note.

(1) IN GENERAL.—The Secretary of Health and Human Services shall, for purposes of determining whether payments to a hospice program should be denied pursuant to section 1862(a)(1)(C) of the Social Security Act, apply (under section 42 USC 1395y. 1879(a) of such Act) a presumption of compliance of 2.5 percent Infra. (based on the number of days of hospice care billed) in a manner substantially similar to that provided to home health agencies under policies in effect as of July 1, 1985. (2) EFFECTIVE DATE.—Paragraph (1) shall apply to hospice care furnished on or after the first day of the first month that begins at least 6 months after the date of the enactment of this Act and before November 1, 1988. (g) EXTENSION OF WAIVER OF LIABILITY PROVISIONS TO CERTAIN COVERAGE DENIALS FOR HOME HEALTH SERVICES.—

c )1 lii

(1) IN GENERAL.—Section 1879 of the Social Security Act (42 U.S.C. 1395pp) is amended— (A) in subsection (a)(D, by inserting "or by reason of a coverage denial described in subsection (g)" after "section 1862(a)(l) or (9)"; (B) in the first sentence of subsection (a), by inserting "and as though the coverage denial described in subsection (g) had not occurred" before the period at the end;

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 100 STAT. 1992

42 USC 1395y.

qj

42 USC 1395h. 42 USC I395f. 42 USC I395n.

42 USC I395pp note. 42 USC 1395. Ante, p. 1991.

PUBLIC LAW 99-509—OCT. 21, 1986

(C) in the third sentence of subsection (a), by inserting "or by reason of a coverage denial described in subsection (g)" after "section 1862(a)(1) or (9)"; (D) in subsection (c), by inserting "or by reason of a coverage denial described in subsection (g)" after "section 1862(a)(1) or (9)"; and (E) by adding at the end the following new subsections: "(f)(1) A home health agency which meets the applicable requirements of paragraphs (3) and (4) shall be presumed to meet the requirement of subsection (a)(2) with respect to any coverage denial described in subsection (g). "(2) The presumption of paragraph (1) with respect to specific services may be rebutted by actual or imputed knowledge of the facts described in subsection (a)(2), including any of the following: "(A) Notice by the fiscal intermediary of the fact that payment may not be made under this title with respect to the services. "(B) It is clear and obvious that the provider should have known at the time the services were furnished that they were excluded from coverage. "(3) The requirements of this paragraph are as follows: "(A) The agency complies with requirements of the Secretary under this title respecting timely submittal of bills for payment and medical documentation. "(B) The agency program has reasonable procedures to notify promptly each patient (and the patient's physician) where it is determined that a patient is being or will be furnished items or services which are excluded from coverage under this title. "(4) The requirement of this paragraph is that, on the basis of bills submitted by a home health agency during the previous quarter, the rate of denial of bills for the agency by reeison of a coverage denial described in subsection (g) does not exceed 2.5 percent, computed based on visits for home health services billed. "(5) In this subsection, the term 'fiscal intermediary' means, with respect to a home health agency, an agency or organization with an agreement under section 1816 with respect to the agency. "(g) The coverage denial described in this subsection is, with respect to the provision of home health services to an individual, a failure to meet the requirements of section 1814(a)(2)(C) or section 1835(a)(2)(A) in that the individual— "(1) is or was not confined to his home, or "(2) does or did not need skilled nursing care on an intermittent basis." (2) REPORTS.—The Secretary of Health and Human Services shall report to Congress annually in March of 1987 and 1988— (A) information on the frequency and distribution (by type of provider) of denials of bills for payment under title ' XVIII of the Social Security Act for extended care services, home health services, and hospice care, by reason of section 1862(a)(1) or (9) of such Act and coverage denials described in section 1879(g) of such Act, including— i (i) the reasons for such denials, (ii) the extent to which payments were nonetheless made because of section 1879 of such Act, and (iii) the rate of reversals of such denials, and (B) such other information as may be appropriate to evaluate the appropriateness of any percentage standards

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100 STAT. 1993

established for the granting of favorable presumptions with respect to such denials. (3) EFFECTIVE DATE.—The amendments made by paragraph (1) 42 USC 1395pp shall apply to coverage denials occurring on or after July 1, note. 1987, and before October 1, 1989. (h) DEVELOPMENT OF UNIFORM NEEDS ASSESSMENT INSTRUMENT.— 42 USC 1395x

(1) DEVELOPMENT.—The Secretary of Health and Human Serv- note. ices shall develop a uniform needs assessment instrument that— (A) evaluates— (i) the functional capacity of an individual, (ii) the nursing and other care requirements of the individual to meet health care needs and to assist with functional incapacities, and (iii) the social and familial resources available to the individual to meet those requirements; and (B) can be used by discharge planners, hospitals, nursing facilities, other health care providers, and fiscal intermediaries in evaluating an individual's need for posthospital extended care services, home health services, and long-term care services of a health-related or supportive nature. The Secretary may develop more than one such instrument for use in different situations. (2) ADVISORY PANEL.—The Secretary shall develop any instrument in consultation with an advisory panel, appointed by the Secretary, that includes experts in the delivery of posthospital extended care services, home health services, and longterm care services and includes representatives of hospitals, of physicians, of skilled nursing facilities, of home health agencies, of long-term care providers, of fiscal intermediaries, and of medicare beneficiaries. (3) REPORT ON INSTRUMENT.—The Secretary shall report to Congress, not later than January 1, 1989, on the instrument or instruments developed under this section. The report shall recommendations for the appropriate use of such instrument or instruments.

(i) INCLUDING IN ANNUAL REPORTS ON PROSPECTIVE PAYMENT SYSTEM INFORMATION ON QUALITY OF POST-HOSPITAL CARE.—

(1) IN GENERAL.—Section 603(a)(2) of the Social Security Amendments of 1983 is amended— (A) by striking "1987" in subparagraph (A) and inserting "1989", and (B) by adding at the end the following new subparagraph: "(E) In each annual report to Congress under subparagraph (A), the Secretary shall include— "(i) an evaluation of the adequacy of the procedures for assuring quality of post-hospital services furnished under title XVIII of the Social Security Act, "(ii) an assessment of problems that have prevented groups of medicare beneficiaries (including those eligible for medical assistance under title XIX of such Act) from receiving appropriate post-hospital services covered under such title, and "(iii) information on reconsiderations and appeals taken under title XVIII of such Act with respect to payment for posthospital services.".

42 USC 1395WW note.

42 USC 1395.

42 USC 1396

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 100 STAT. 1994 42 USC 1395WW note. 42 USC 1395x note. Health care facilities.

42 USC 1395c, 1395J. Health care facilities. Health care professionals.

42 USC 1395.

-> Grants. Contracts. 42 USC 13951.

42 USC 1395.

PUBLIC LAW 99-509—OCT. 21, 1986 (2) EFFECTIVE DATE.—The amendment made by paragraph (1)(B) shall apply to reports for years beginning with 1986.

(k) PRIOR PROJECT.—

AND CONCURRENT

AUTHORIZATION

DEMONSTRATION

(1) IN GENERAL.—The Secretary of Health and Human Serv:TV ices shall conduct a demonstration program concerning prior and concurrent authorization for post-hospital extended care services and home health services furnished under part A or part B of title XVIII of the Social Security Act. (2) SCOPE.—The program shall include at least four projects and shall be initiated by not later than January 1, 1987. (3) CONSULTATION AND MONITORING.—The program shall be ' developed in consultation with an advisory panel that includes experts in the delivery of post-hospital extended care services, ^ '• home health services, and long-term care services and includes representatives of hospitals, of physicians, of skilled nursing facilities, of home health agencies, of long-term care providers, '' of fiscal intermediaries, and of medicare beneficiaries. The Sec•' retary shall monitor the acceptance of individuals entitled to benefits under title XVIII of the Social Security Act by providers to ensure that the placement of such individuals is not , delayed until the results of prior and concurrent review are known. (4) EVALUATION AND REPORT.—The Secretary shall evaluate the demonstration program conducted under this subsection and shall report to Congress on such evaluation no later than February 1, 1989. Such evaluation and report shall address— (A) the administrative and program costs for prior and concurrent authorization across demonstration projects and in comparison to administrative and program costs under the current system of retroactive review, including costs for uncovered services paid under the waiver of liability which would not be incurred under prior or concurrent authorization; (B) impact of prior or concurrent authorization on access to and availability of extended care services and home . health services in comparison to the current system (including costs to providers) and on timely discharge of hospital inpatients; and (C) accuracy and associated cost savings of payment determinations and rates of claim reversals under prior or concurrent authorization versus the current system. (5) FUNDING.—Expenditures made for the demonstration program shall be made from the Federal Hospital Insurance Trust Fund under section 1817 of the Social Security Act. Grants and payments under contracts may be made either in advance or by I • way of reimbursement, as may be determined by the Secretary, and shall be made in such installments and on such conditions as the Secretary finds necessary to carry out the purpose of this subsection. i 4 (6) WAIVER OF MEDICARE REQUIREMENTS.—The Secretary shall waive compliance with such requirements of title XVIII of the Social Security Act to the extent and for the period the Secretary finds necessary for the conduct of the demonstration program.

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100 STAT. 1995

SEC. 9306. PAYMENTS TO LARGE RURAL HOSPITALS SERVING A DISPROPORTIONATE SHARE OF LOW-INCOME PATIENTS.

(a) QUALIFYING HOSPITALS.—Section 1886(d)(5)(F)(v) of the Social

Security Act (42 U.S.C. 1395ww(d)(5)(F)(v)) is amended by adding at the end the following new sentence: "A hospital located in a rural area and with 500 or more beds also 'serves a significantly disproportionate number of low income patients' for a cost reporting period if the hospital has a disproportionate patient percentage (as defined in clause (vi)) for that period which equals or exceeds a percentage specified by the Secretary.". (b) PAYMENT AMOUNT.—Section 1886(d)(5)(F)(iv) of such Act is amended— (1) in subclause (I), by inserting "or is described in the second sentence of subclause (III)" after "100 or more beds", and (2) in subclause (III), by inserting "and is not described in the second sentence of clause (v)" after "rural area". (c) EXTENSION OF DISPROPORTIONATE SHARE PROVISION.—Section

1886(d) of such Act is further amended, in paragraphs (2)(C)(iv), (3)(C)(ii), (5)(B)(ii), and (5)(F)(i), by striking "1988" each place it appears and inserting "1989". 35 W (d) EFFECTIVE DATE.—The amendments made by subsections (a) 42 USC 1 9 W and (b) shall apply to discharges occurring on or after October 1, note. 1986. SEC. 9307. TECHNICAL AMENDMENTS AND MISCELLANEOUS PROVISIONS RELATING TO PART A. (a) TEMPORARY WAIVER OF INPATIENT LIMITATIONS FOR THE CONNECTICUT HOSPICE, INC.—With respect to the Connecticut Hos-

pice, Inc., for hospice care provided before October 1, 1988, the reference in section 1861(dd)(2)(A)(iii) of the Social Security Act (42 U.S.C. 1395x(dd)(2)(A)(iii)) to "20 percent" is deemed a reference to "50 percent". (b)

MASSACHUSETTS MEDICARE REPAYMENT.—The Secretary

of

Health and Human Services shall not, on or after the date of the enactment of this section and before January 1, 1988, recoup from, or otherwise reduce payments to, hospitals in the State of Massachusetts because of alleged overpayments to such hospitals under part A of title XVIII of the Social Security Act which occurred during the period of the State-wide hospital reimbursement demonstration project conducted in that State, between October 1, 1982, and June 30, 1986, under section 402 of the Social Security Amendments of 1967 and section 222 of the Social Security Amendments of 1972. (c) PART A COBRA TECHNICAL CORRECTIONS.—(1) Effective as if included in the enactment of the Tax Reform Act of 1986, if House Concurrent Resolution 395 (99th Congress, 2d Session) has not been adopted, section 1895(b) of the Tax Refprm Act of 1986 is amended— (A) by striking paragraph (1), and (B) by striking subparagraphs (A) and (B) of paragraph (2). (2) Effective as if included in the enactment of the Tax Reform Act of 1986— (A) section 1895(b) of such Act is amended, in subparagraph (A)(ii) of the paragraph relating to "PHYSICIAN PAYMENT", by inserting before the period the following: "the first place it appears", and (B) section 1895(d)(5)(A) of such Act is amended by striking "162(k)(2)" and inserting "162(k)(5)".

42 USC 1395c.

42 USC 1395b-l, 1395//. 86 Stat. 1390. 42 USC 1395WW. Post, p. 2095; 42 use 1395u.

42 USC 162.

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 100 STAT. 1996

42 USC 1395ww.

42 USC 1395dd. Ante, p. 164. Effective date. 42 USC 1395ww note. 42 USC 1395WW note.

PUBLIC LAW 99-509—OCT. 21, 1986

(3) If House Concurrent Resolution 395 (99th Congress, 2d Session) has been adopted, effective for discharges occurring on or after May 1, 1986, section 1886(d)(5)(F)(vi)(I) of the Social Security Act is amended— (A) by striking "supplementary" and inserting "supple-U mental", and (B) by striking "fiscal year" and inserting "period", (4) Paragraphs (2) and (3) of section 1867(b) of the Social Security Act are amended by striking "legally responsible". (d) MISCELLANEOUS ACCOUNTING PROVISION.—Effective on the date of the enactment of Public Law 99-107, in applying section 5(a) of such Act, a cost reporting period beginning on September 28, 29, or 30 is deemed to begin on October 1 and any reference to September 30 is deemed also to be a reference to September 27.

PART 2—PROVISIONS RELATING TO PARTS A

^

SEC. 9311. PERIODIC INTERIM PAYMENT SYSTEM HOSPITALS AND PROMPT PAYMENT PROVIDERS.

(PIP) FOR DRG FOR MEDICARE

(a) PERIODIC INTERIM PAYMENTS.—

Puerto Rico. 42 USC 1395ww.

42USei895h. "j• ' "

.. ', _ jr ^ ' 'i

[

.

Rural areas. t

(1) IN GENERAL.—Section 1815 of the Social Security Act (42 U.S.C. 1395g) is amended by adding at the end the following new subsection: "(e)(1) The Secretary shall provide payment under this part for inpatient hospital services furnished by a subsection (d) hospital (as defined in section 1886(d)(1)(B), and including a distinct psychiatric or rehabilitation unit of such a hospital) and a subsection (d) Puerto Rico hospital (as defined in section 1886(d)(9)(A)) on a periodic interim payment basis (rather than on the basis of bills actually submitted) in the following cases: "(A) Upon the request of a hospital which is paid through an • • agency or organization with an agreement with the Secretary V under section 1816, if the agency or organization, for three consecutive calendar months, fails to meet the requirements of subsection (c)(2) of such section and if the hospital meets the requirements (in effect as of October 1, 1986) applicable to payment on such a basis, until such time as the agency or organization meets such requirements for three consecutive calendar months. "(B) In the case of hospital that— "(i) has a disproportionate share adjustment percentage (as established in clause (iv) of such section) of at least 5.1 v percent (as computed for purposes of establishing the aver~ age standardized amounts for discharges occurring during fiscal year 1987), and "(ii) requests payment on such basis, but only if the hospital was being paid for inpatient hospital services on such a periodic interim payment basis as of June 30, 1987, and continues to meet the requirements (in effect as of • October 1, 1986) applicable to payment on such a basis. "(C) In the case of a hospital that— "(i) is located in a rural area, • "(ii) has 100 or fewer beds, and "(iii) requests payment on such basis,

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100 STAT. 1997

but only if the hospital was being paid for inpatient hospital services on such a periodic interim payment basis as of June 30, 1987, and continues to meet the requirements (in effect as of October 1, 1986) applicable to payment on such a basis. "(2) The Secretary shall provide (or continue to provide) for payment on a periodic interim payment basis (under the standards established under section 405.454(j) of title 42, Code of Federal Regulations, as in effect on October 1, 1986) with respect to— "(A) inpatient hospital services of a hospital that is not a subsection (d) hospital (as defined in section 1886(d)(1)(B)); "(B) a hospital which is receiving payment under a State hospital reimbursement system under section 1814(b)(3) or 1886(c), if payment on a periodic interim payment basis is an integral part of such reimbursement system; "(C) extended care services; "(D) home health services; and "(E) hospice care; if the provider of such services elects to receive, and qualifies for, such payments. "(3) In the case of a subsection (d) hospital or a subsection (d) Puerto Rico hospital (as defined for purposes of section 1886) which has significant cash flow problems resulting from operations of its intermediary or from unusual circumstances of the hospital's operation, the Secretary may make available appropriate accelerated payments.". (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to claims received on or after July 1, 1987. (3) TRANSITION.—Upon the request of a hospital which— J (A) as of June 30, 1987, is receiving payments under part A of title XVIII of such Act for inpatient hospital services I: on a periodic interim payment basis, (B) requests continuation of payment on such basis, and (C) is paid through an agency or organization with an agreement under section 1816 of such Act, the Secretary of Health and Human Services shall continue I payment on such a basis until not earlier than the end of the first period of three consecutive calendar months (beginning no earlier than April 1987) during all of which the agency or organization has met the requirements of section 1816(c)(2) of such Act (relating to prompt payment of claims). (b) PROMPT PAYMENT OF CLAIMS UNDER PART A.—Section 1816(c) of the Social Security Act (42 U.S.C. 1395h(c)) is amended— (1) by inserting "(1)" after "(c)", and (2) by adding at the end the following new paragraph: "(2)(A) Each agreement under this section shall provide that payment shall be issued, mailed, or otherwise transmitted with respect to not less than 95 percent of all claims submitted under this title— - . "(i) which are clean claims, and "(ii) for which payment is not made on a periodic interim payment basis, within the applicable number of calendar days after the date on which the claim is received. "(B) In this paragraph: J. "(i) The term 'clean claim' means a claim that has no defect or impropriety (including any lack of any required substantiat^ ing documentation) or particular circumstance requiring special

42 USC 1395WW. State and local governments. 42 USC 1395f.

Puerto Rico.

Claims. 42 USC 1395g note. 42 USC 1395g note. 42 USC 1395c. Claims. 42 USC 1395h.

Claims.

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 100 STAT. 1998

vw<,^! Claims.

 * s

PUBLIC LAW 99-509—OCT. 21, 1986

• s.; t r e a t m e n t that prevents timely payment from being m a d e on ,[•'' the claim under this title. Ui "(ii) The term 'applicable n u m b e r of calendar days' means— "(I) with respect to claims received in the 12-month 1 period beginning October 1, 1986, 30 calendar days, r "(II) with respect to claims received in the 12-month period beginning October 1, 1987, 26 calendar days, "(III) with respect to claims received in the 12-month . ' I •< period beginning October 1, 1988, 25 calendar days, and ,, "(IV) with respect to claims received in the 12-month period beginning October 1, 1989, and claims received in any succeeding 12-month period, 24 calendar days. "(C) If payment is not issued, mailed, or otherwise t r a n s m i t t e d

within the applicable number of calendar days (as defined in clause (ii) of subparagraph (B)) after a clean claim (as defined in clause (i) of such subparagraph) is received from a hospital, skilled nursing facility, home health agency, or hospice program that is not receiving payments on a periodic interim payment basis with respect to such services, interest shall be paid at the rate used for purposes of o.MQi-muH section 3902(a) of title 31, United States Code (relating to interest penalties for failure to make prompt payments) for the period beginning on the day after the required payment date and ending on the date on which payment is made.". (c) PROMPT PAYMENT OF CLAIMS UNDER PART B.—Section 1842(c) of

the Social Security Act (42 U.S.C. 1395u(c)) is amended— (1) by inserting "(1)" after "(c)", and (2) by adding at the end the following new paragraph: Contracts. "(2)(A) Each contract under this section which provides for the Claims. disbursement of funds, as described in subsection (a)(1)(B), shall provide that payment shall be issued, mailed, or otherwise transmitted with respect to not less than 95 percent of all claims submitted under this part— r,.?. "(i) which are clean claims, and .; ic-'' "(ii) for which payment is not made on a periodic interim payment basis, within the applicable number of calendar days after the date on which the claim is received. "(B) In this paragraph: "(i) The term 'clean claim' means a claim that has no defect or impropriety (including any lack of any required substantiatr/jci ing documentation) or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this part. "(ii) The term 'applicable number of calendar days' means— ^,, ,, "(I) with respect to claims received in the 12-month period beginning October 1, 1986, 30 calendar days, "(II) with respect to claims received in the 12-month period beginning October 1, 1987, 26 calendar days (or 19 calendar days with respect to claims submitted by partici; • pating physicians), "(III) with respect to claims received in the 12-month .t,. * period beginning October 1, 1988, 25 calendar days (or 18 calendar days with respect to cleiims submitted by participating physicians), and
 * . "(IV) with respect to claims received in the 12-month

^-pv.-i'. period beginning October 1, 1989, and claims received in ,, H. any succeeding 12-month period, 24 calendar days (or 17

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100 STAT. 1999

calendar days with respect to claims submitted by participating physicians), "(C) If payment is not issued, mailed, or otherwise transmitted Claims. within the applicable number of calendar days (as defined in clause (ii) of subparagraph (B)) after a clean claim (as defined in clause (i) of such subparagraph) is received, interest shall be paid at the rate used for purposes of section 3902(a) of title 31, United States Code (relating to interest penalties for failure to make prompt payments) for the period beginning on the day after the required payment date and ending on the date on which payment is made.". (d) EFFECTIVE DATES.—

' '^

^

42 USC 1395h note. Claims.

(1) Except as provided in paragraph (2), the amendments made by subsections (b) and (c) shall apply to claims received on or after November 1, 1986. (2) Sections 1816(c)(2)(C)) and 1842(c)(2)(C) of the Social Secu- Ante, pp. 1997, rity Act, as added by such amendments, shall apply to claims 1998. Claims. received on or after April 1, 1987. (3) The Secretary of Health and Human Services shall provide Contracts. for such timely amendments to agreements under section 1816 of the Social Security Act and contracts under section 1842 of such Act, and regulations, to such extent as may be necessary to implement the provisions of this Act on a timely basis.

SEC. 9312. HEALTH MAINTENANCE ORGANIZATIONS AND COMPETITIVE MEDICAL PLANS. (a) REPEAL OF "2 FOR 1" CONVERSION REQUIREMENT FOR CERTAIN

HEALTH MAINTENANCE ORGANIZATIONS.—Section 114(c)(2) of the Tax

42 USC 1395mm note.

Equity and Fiscal Responsibility Act of 1982 is amended by adding at the end the following new subparagraph: "(E) The preceding provisions of this paragraph shall not to apply to payments made for current, nonrisk medicare enrollees for months beginning with April 1987.". (b) REQUIRING THE PROVISION OF AN EXPLANATION OF ENROLLEE RIGHTS.—

(1) IN GENERAL.—Subsection (c)(3) of section 1876 of the Social J Security Act (42 U.S.C. 1395mm) is amended by adding at the ^ end the following new subparagraph: "(E) Each eligible organization shall provide each enrollee, at the time of enrollment and not less frequently than annually thereafter, an explanation of the enrollee's rights under this section, including an explanation of— "(i) the enrollee's rights to benefits from the organization, f "(ii) the restrictions on payments under this title for services ii furnished other than by or through the organization, t "(iii) out-of-area coverage provided by the organization, J "(iv) the organization's coverage of emergency services and urgently needed care, and "(v) appeal rights of enrollees.". ':• (2) EFFECTIVE DATE.—The amendment made by paragraph (1) 42 USC 1395mm •; shall take effect on January 1, 1987, and shall apply to enroll- note. ments effected on or after such date. (c) RESTRICTING WAIVER OF REQUIREMENT OF 50 PERCENT NONMEDICARE ENROLLMENT.—

-/

(1) RESTRICTION ON NEW WAIVERS.—Paragraph (2) of subsec-

tion (f) of such section is amended by striking all that follows "only" and inserting a dash and the following:

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 100 STAT. 2000

42 USC 1396. Contracts. State and local governments.

PUBLIC LAW 99-509—OCT. 21, 1986 "(A) to the extent that more than 50 percent of the population of the area served by the organization consists of individuals who are entitled to benefits under this title or under a State plan approved under title XIX, or "(B) in the case of an eligible organization that is owned and operated by a governmental entity, only with respect to a period of three years beginning on the date the organization first enters into a contract under this section, and only if the organization has taken and is making reasonable efforts to enroll individuals who are not entitled to benefits under this title or under a State plan approved under title XIX.". (2) SANCTIONS FOR NONCOMPLIANCE.— (A) SUSPENSION OF ENROLLMENT OR PAYMENT FOR NEW

ENROLLEES.—Such subsection is further amended by adding at the end the following new paragraph: "(3) If the Secretary determines that an eligible organization has failed to comply with the requirements of this subsection, the Secretary may provide for the suspension of enrollment of individuals under this section or of payment to the organization under this section for individuals newly enrolled with the organization, after the date the Secretary notifies the organization of such noncompliance.". (B) TERMINATION OF CONTRACT.—Subsection (i)(l)(C) of

such section is amended by striking "and (e)" and insert "(e), and (f)". 42 USC 1395mm note.

(3) EFFECTIVE DATES.—

(A) NEW RESTRICTION.—The amendment made by paragraph (1) shall apply to modifications and waivers granted ' ' after the date of the enactment of this Act. ,, (B) SANCTIONS FOR NONCOMPLIANCE.—The amendments ^, made by paragraph (2) shall take effect on the date of the enactment of this Act. (C) TREATMENT OF CURRENT WAIVERS.—In the case of an eligible organization (or successor organization) that— (i) as of the date of the enactment of this Act, has been granted, under paragraph (2) of section 1876(f) of the Social Security Act, a modification or waiver of the 42 USC 1395mm. requirement imposed by paragraph (1) of that section, ,r{ ' ' but (ii) does not meet the requirement for such modification or waiver under the amendment made by paragraph (1) of this subsection, the organization shall make, and continue to make, reasonable efforts to meet scheduled enrollment goals, consistent with a schedule of compliance approved by the Secretary of Health and Human Services. If the Secretary determines • • • that the organization has complied, or made significant progress towards compliance, with such schedule of compliance, the Secretary may extend such waiver. If the Sec• retary determines that the organization has not complied with such schedule, the Secretary may provide for a sanction described in section 1876(f)(3) of the Social Security Act (as amended by this section) effective with respect to individuals enrolling with the organization after the date the Secretary notifies the organization of such noncompliance. (d) REQUIRING PROMPT PAYMENT OF CLAIMS.—

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100 STAT. 2001

(1) IN GENERAL.—Subsection (g) of such section is amended by adding at the end the following new paragraph: "(6)(A) A risk-sharing contract under this section shall require the eligible organization to provide prompt payment (consistent with the provisions of sections 1816(c)(2) and 1842(c)(2)) of claims submitted for services and supplies furnished to individuals pursuant to such contract, if the services or supplies are not furnished under a contract between the organization and the provider or supplier. "(B) In the case of an eligible organization which the Secretary determines, after notice and opportunity for a hearing, has failed to make payments of amounts in compliance with subparagraph (A), the Secretary may provide for direct payment of the amounts owed to providers and suppliers for such covered services furnished to individuals enrolled under this section under the contract. If the Secretary provides for such direct payments, the Secretary shall provide for an appropriate reduction in the amount of payments otherwise made to the organization under this section to reflect the amount of the Secretary's payments (and costs incurred by the Secretary in making such payments).". (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to risk-sharing contracts under section 1876 of the Social Security Act with respect to services furnished on or after January 1, 1987.

Contracts. Ante, pp. 1997, 1998.

Contracts. 42 USC 1395mm note.

(e) REQUIRING ACCESS TO FINANCIAL RECORDS AND DISCLOSURE OF INTERNAL LOANS.—

'

(1) IN GENERAL.—Subsection (i)(3)(C) of such section is amended— (A) by striking "and" at the end, (B) by inserting "(i)" after "(C)", and ^ (C) by adding at the end the following new clauses: "(ii) shall require the organization to provide and supply information (described in section 1866(b)(2)(C)(ii)) in the manner such information is required to be provided or supplied under that section; "(iii) shall require the organization to notify the Secretary of loans and other special financial arrangements which are made between the organization and subcontractors, affiliates, and related parties; and". (2) EFFECTIVE DATE.—The amendments made by paragraph (1) shall apply to contracts as of January 1, 1987. (f) AUTHORITY TO IMPOSE CIVIL MONEY PENALTIES.—Subsection (i)

42 USC 1395CC.

Loans.

Contracts. 42 USC 1395mm note.

of such section is amended by adding at the end the following new paragraph: "(6)(A) Any eligible organization with a risk-sharing contract Contracts. under this section that fails substantially to provide medically necessary items and services that are required (under law or such contract) to be provided to individuals covered under such contract, if the failure has adversely affected (or has a substantial likelihood of adversely affecting) these individuals, is subject to a civil money penalty of not more than $10,000 for each such failure. "(B) The provisions of section 1128A (other than subsection (a)) Post, pp. 2003, shall apply to a civil money penalty under subparagraph (A) in the 2008. same manner as they apply to a civil money penalty under that S6ct^ion

(g) STUDY OF A A P C C AND ACR.—The Secretary of Health and

Human Services shall provide, through contract with an appropriate organization, for a study of the methods by which—

Contracts. 42 USC 1395 mm note.

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100 STAT. 2002 '

42 USC 1395mm.

42 USC 1395mm note.

(1) the adjusted average per capita cost ("AAPCC", as defined in section 1876(a)(4) of the Social Security Act) can be refined to more accurately reflect the average cost of providing care to different classes of patients, and (2) the adjusted community rate ("ACR", as defined in section 1876(e)(3) of such Act) can be refined. The Secretary shall submit to Congress, by not later than January 1, 1988, specific legislative recommendations concerning methods by which the calculation of the AAPCC and the ACR can be refined, (h) ALLOWING MEDICARE BENEFICIARIES TO DISENROLL AT A LOCAL SOCIAL SECURITY OFFICE.—The Secretary of Health and Human

Services shall provide that individuals enrolled with an eligible organization under section 1876 of the Social Security Act may disenroll, on and after June 1, 1987, at any local office of the Social Security Administration. 42 USC 1395mm note.

99 Stat. 1037.

(i) USE OF RESERVE FUNDS.—Notwithstanding any provision of

section 1876(g)(5) of the Social Security Act (42 U.S.C. 1395mm(g)(5)) to the contrary, funds reserved by an eligible organization under such section before the date of the enactment of this Act may be applied, at the organization's option, to offset the amount of any reduction in payment amounts to the organization effected under Public Law 99-177 during fiscal year 1986. SEC. 9313. PROVISIONS RELATING TO IMPROVEMENT OF QUALITY OF CARE. (a) PERMITTING PROVIDER REPRESENTATION OF BENEFICIARIES.—

42 USC 406, 1302, 1395hh.

42 USC 1395pp.

(1) IN GENERAL.—Section 1869(b)(1) of the Social Security Act (42 U.S.C. 1395ff(b)(l)) is amended by adding at the end the following new sentence: "Sections 206(a), 1102, and 1871 shall '[•' not be construed as authorizing the Secretary to prohibit an individual from being represented under this subsection by a person that furnishes or supplies the individual, directly or indirectly, with services or items solely on the basis that the person furnishes or supplies the individual with such a service " or item. Any person that furnishes services or items to an ' ' • individual may not represent an individual under this subsection with respect to the issue described in section 1879(a)(2) unless the person has waived any rights for payment from the beneficiary with respect to the services or items involved in the appeal. If a person furnishes services or items to an individual WiSf and represents the individual under this subsection, the person may not impose any financial liability on such individual in f, connection with such representation.". (2) TREATMENT OF COSTS OF UNSUCCESSFUL APPEAL.—Section

42 USC 1395x note.

1861(v)(l) of such Act (42 U.S.C. 1395x(v)(l)) is amended by adding at the end the following new subparagraph: "(R) In determining such reasonable cost, costs incurred by a provider of services representing a beneficiary in an unsuccessful appeal of a determination described in section 1869(b) shall not be allowable as reasonable costs.". (3) EFFECTIVE DATE.—The amendments made by this paragraph take effect on the date of the enactment of this Act. (b) PERMITTING REVIEW OF TECHNICAL DENIALS.—

(1) IN GENERAL.—Section 1869 of such Act is amended—

further

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(A) in subsection (a), by inserting before "shall" the following: "and any other determination with respect to a claim for benefits under part A", and (B) in subsection (b)(1)— (i) by striking "or" at the end of subparagraph (B), (ii) by inserting ", or" at the end of subparagraph (C), and (iii) by inserting after subparagraph (C) the following new subparagraph: "(D) any other denial (other than under part B of title XI) of a claim for benefits under part A or a claim for benefits with respect to home health services under part B,". (2) EFFECTIVE DATE.—The amendments made by this subsection take effect on the date of the enactment of this Act.

42 USC 1320c.

42 USC 1395ff note.

(c) PROHIBITION OF CERTAIN PHYSICIAN INCENTIVE PLANS.— (1) M A K I N G CERTAIN PLANS SUBJECT TO CIVIL MONETARY PEN-

ALTIES.—Section 1128A of the Social Security Act (42 U.S.C. 1320a-7a) is amended— • ' (A) by striking "subsection (a)" each place it a p p e a r s and inserting "subsection (a) or (b)", vs>^: (B) in subsection (a)(1), by striking "(h)(1)" and "(h)(2)" and inserting "(i)(l)" and "(i)(2)", respectively, fc'i • (C) in subsection (f), by striking "subsection (d)" and inserting "subsection (e)", -• (D) by redesignating subsections (b) through (h) as subsections (c) through (i), respectively, and (E) by inserting after subsection (a) the following n e w subsection: "(b)(1) If a hospital, a n eligible organization with a risk-sharing contract under section 1876, or a n e n t i t y with a contract under section 1903(m) knowingly m a k e s a payment, directly or indirectly, to a physician a s a n i n d u c e m e n t to reduce or limit services provided with respect to individuals who— "(A) a r e entitled to benefits under part A or part B of title XVII or to medical assistance under a State plan approved under title XIX, "(B) in the case of a n eligible organization or a n entity, a r e enrolled with the organization or entity, and "(C) a r e under the direct care of the physician, the hospital or organization shall be subject, in addition to any other penalties that may be prescribed by law, to a civil money penalty of not more than $2,000 for each such individual with respect to whom the payment is m a d e. "(2) Any physician w h o knowingly accepts receipt of a payment described in paragraph (1) shall be subject, in addition to any other penalties that may be prescribed by law, to a civil money p e n a l t y of not more than $2,000 for individual described in such paragraph with respect to whom the payment is m a d e. " (2) EFFECTIVE DATE.—The amendments made by paragraph (1) shall apply to— V (A) payments by hospitals occurring more than 6 months after the date of the enactment of this Act, and (B) payments by eligible organizations or entities occurring on or after April 1, 1989. v3) STUDY.—The Secretary of Health and Human Services shall report to Congress, not later than January 1, 1988, concerning incentive arrangements offered by health mainte-

Post, p. 2008.

contracts. Ante, p. 1999. 42 USC 1396b.

State and local governments. 42 USC 300u. 42 USC 1396.

42 USC 1320a-7a note.

Reports. Health care professionals. 42 USC 1320a-7a note.

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Post, pp. 2003, ^^^^-

42 USC 1395// ^°^-

nance organizations and competitive medical plans to physicians. The report shall— (A) review the type of incentive arrangements in common use, (B) evaluate their potential to pressure improperly physicians to reduce or limit services in a medically inappropriate manner, and (C) make recommendations concerning providing for an exception, to the prohibition contained in section 1128A(b) > of the Social Security Act, for incentive arrangements that may be used by such organizations and plans to encourage efficiency in the utilization of medical and other services but that do not have a substantial potential for adverse effect on quality. (d) STUDY TO DEVELOP A STRATEGY FOR QUALITY REVIEW AND ASSURANCE.—

42 USC 1395.

?' Research and development.

,t

v i

PUBLIC LAW 99-509—OCT. 21, 1986

(1) IN GENERAL.—The Secretary of Health and Human Services shall arrange for a study to design a strategy for reviewing and assuring the quality of care for which payment may be made under title XVIII of the Social Security Act. (2) ITEMS INCLUDED IN STUDY.—Among other items, the study shall— (A) identify the appropriate considerations which should be used in defining "quality of care"; (B) evaluate the relative roles of structure, process, and outcome standards in assuring quality of care; (C) develop prototype criteria and standards for defining and measuring quality of care; (D) evaluate the adequacy and focus of the current methods for measuring, reviewing, and assuring quality of care; (E) evaluate the current research on methodologies for measuring quality of care, and suggest areas of research needed for further progress; (F) evaluate the adequacy and range of methods available to correct or prevent identified problems with quality of care; V > (G) review mechanisms available for promoting, coordinating, and supervising at the national level quality review and assurance activities; and « • (H) develop general criteria which may be used in establishing priorities in the allocation of funds and personnel in reviewing and assuring quality of care. (3) REPORT.—The Secretary shall submit to Congress, not later than 2 years after the date of the enactment of this Act, a report on the study. Such report shall address the items described in paragraph (2) and shall include recommendations with respect to strengthening quality assurance and review activities for services furnished under the medicare program. (4) ARRANGEMENTS FOR STUDY.—(A) The Secretary shall request the National Academy of Sciences, acting through appropriate units, to submit an application to conduct the study described in this subsection. If the Academy submits an acceptable application, the Secretary shall enter into an appropriate arrangement with the Academy for the conduct of the study. If the Academy does not submit an acceptable application to conduct the study, the Secretary may request one or more appropriate nonprofit private entities to submit an application

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f

I

^

100 STAT. 2005

to conduct the study and may enter into an appropriate arrangement for the conduct of the study by the entity which submits the best acceptable application. (B) In developing plans for the conduct of the study, the Secretary shall assure that consumer and provider groups, peer review organizations, the Joint Commission on Accreditation of Hospitals, professional societies, and private purchasers of care with experience and expertise in the monitoring of the quality of care are consulted. (5) COORDINATION.—The Secretary shall designate an office with responsibilities for coordinating studies, under this subsection and other authority, relating to the quality of services furnished to medicare and medicaid beneficiaries, in particular studies relating to the evaluation of the prospective payment system on the quality of health care provided to medicare beneficiaries. These responsibilities shall include assessing the feasibility and costs of alternative studies in relation to their importance, overseeing and coordinating access to needed data, and maintaining a clearinghouse for both public and private sector studies.

SEC. 9314. DIRECT COSTS OF GRADUATE MEDICAL EDUCATION. (a) CLARIFYING COUNTING OF TIME SPENT IN OUTPATIENT SET-

TINGS.—Section 1886(h)(4) of such Act, as amended by section 1895(b) 42 USC 1395WW. of the Tax Reform Act of 1986, is amended by adding at the end the Post, p. 2095. following new subparagraph: "(E)

COUNTING TIME SPENT IN OUTPATIENT SETTINGS.—

Health care facilities.

Such rules shall provide that only time spent in activities relating to patient care shall be counted and that all the ^ time so spent by a resident under an approved medical residency training program shall be counted towards the determination of full-time equivalency, without regard to ! the setting in which the activities are performed, if the hospital incurs all, or substantially all, of the costs for the training program in that setting.". (b) EFFECTIVE DATE.—The amendments made by subsection (a) 42 USC 1395WW shall apply to payments for approved residency training programs note. asof July 1, 1987. SEC. 9315. PAYMENTS FOR HOME HEALTH SERVICES. (a) LIMITATIONS ON PAYMENT FOR HOME HEALTH SERVICES.—Sec-

tion 1861(v)(l)(L) of the Social Security Act (42 U.S.C. 1395x(v)(l)(L)) is amended— . (1) by inserting "(i)" after "(L)", and (2) by striking "the 75th percentile" and all that follows through "as the Secretary may determine." and inserting in lieu thereof "for cost reporting periods beginning on or after— "(I) July 1, 1985, and before July 1, 1986, 120 percent, "(II) July 1, 1986, and before July 1, 1987, 115 percent, or .> •^• "(III) July 1, 1987,112 percent, of the mean of the labor-related and nonlabor per visit costs for free standing home health agencies. "(ii) Effective for cost reporting periods beginning on or after Effective date. July 1, 1986, such limitations shall be applied on an aggregate basis for the agency, rather than on a discipline specific basis, with appropriate adjustment for administrative and general costs of hospital-based agencies.". -

71-194 0 - 89 - 8: (X. 3 Part3

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 100 STAT. 2006 42 USC 1395x note.

42 USC 1395x note.

PUBLIC LAW 99-509—OCT. 21, 1986

(b) CONSIDERATIONS IN ESTABLISHING LIMITS.—In establishing limitations under section 1861(v)(l)(L) of the Social Security Act on payment for home health services for cost reporting periods beginning on or after July 1, 1986, the Secretary of Health and Human Services shall— (1) base such limitations on the most recent data available, which data may be for cost reporting periods beginning no t - " earlier than October 1, 1983; and (2) take into account the changes in costs of home health agencies for billing and verification procedures that result from the Secretary's changing the requirements for such procedures, to the extent the changes in costs are not reflected in such data. Paragraph (2) shall apply to changes in requirements effected before, on, or after July 1, 1986. (c) GAO REPORT.—The Comptroller General shall study and report to Congress, not later than February 1, 1988, on— (1) the appropriateness and impact on medicare beneficiaries of applying the per visit cost limits for home health services under section 1861(v)(l)(L) of the Social Security Act on a discipline-specific basis, rather than on an aggregate basis, for all home health services furnished by an agency, and (2) the appropriateness of the percentage limits established under such section. SEC. 9316. ESTABLISHMENT OF PATIENT OUTCOME ASSESSMENT RESEARCH PROGRAM.

^;j SI-

Health care professionals, contracts. 42 USC 1320c.

mvni^

(a) IN GENERAL,—Section 1875 of the Social Security Act (42 U.S.C. 139511) is amended by adding at the end the following new subsection: "(c)(1) The Secretary shall establish a patient outcome assessment research program (in this subsection referred to as the 'research program') to promote research with respect to patient outcomes of selected medical treatments and surgical procedures for the purpose of assessing their appropriateness, necessity, and effectiveness. The research program shall include— "(A) reorganization of data relating to claims under parts A respect to patient outcomes, "(B) assessments of the appropriateness of admissions and ,,^; discharges, "(C) assessments of the extent of professional uncertainty tlJ regarding efficacy, "(D) development of improved methods for measuring patient outcomes, «W' "(E) evaluations of patient outcomes, and "(F) evaluation of the effects on physicians' practice patterns of the dissemination to physicians and peer review organizations with contracts under part B of title XI of the findings of the research conducted under subparagraphs (B), (C), (D), ».. and (E). "(2) In selecting treatments and procedures to be studied, the Secretary shall give priority to those medical and surgical treatments and procedures— "(A) for which data indicate a highly (or potentially highly) variable pattern of utilization among beneficiaries under this XG title in different geographic areas, and
 * ' * and B of this title in a manner that facilitates research with

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100 STAT. 2007

"(B) which are significant (or potentially significant) for purposes of this title in terms of utilization by beneficiaries, length of hospitalization associated with the treatment or procedure, costs to the research program, and risk involved to the beneficiary. "(3) For purposes of carrying out the research program, there are authorized to be appropriated— "(A) from the Federal Hospital Insurance Trust Fund $4,000,000 for fiscal year 1987 and $5,000,000 for each of fiscal years 1988 and 1989, and "(B) from the Federal Supplementary Medical Insurance Trust Fund $2,000,000 for fiscal years 1987 and $2,500,000 for each of fiscal years 1988 and 1989. "(4) Not less than 90 percent of the amount appropriated for any fiscal year to carry out the research program shall be used to fund grants to, and cooperative agreements with, non-Federal entities to conduct research described in paragraph (1). The remainder may be used by the Secretary to provide such research by Federal entities and for administrative costs. "(5) The research program shall be administered by the National Center for Health Services Research and Health Care Technology established under section 305 of the Public Health Service Act (in this subsection referred to as the 'Center'). The Center shall establish application procedures for grants and cooperative agreements, and shall establish peer review panels to review all such applications and all research findings. The Center shall consult with the council on health care technology (established under a grant under section 309 of the Public Health Service Act) in establishing the scope and priorities for the research program and shall report periodically to any such council on the status of the program. "(6) The Secretary shall make available data derived from the programs under this title and other programs administered by the Secretary for use in the research program. "(7) The Center shall report to the Committees on Finance and Appropriations of the Senate and the Committees on Ways and Means, Energy and Commerce, and Appropriations of the House of Representatives not later than 18 months after the date of the enactment of this Act, and annually thereafter, with respect to the findings under the research program. In cooperation with appropriate medical specialty groups, the Center shall disseminate such findings as widely as possible, including disseminating such findings to each peer review organization which has a contract under part B of title XL"

Appropriation authorization.

Grants. Contracts. 42 USC 242c.

Reports. 42 USC 242n.

Reports. Contracts.

42 USC 1320c.

(b) PERMITTING SERVICES TO B E PROVIDED UNDER RESEARCH PRO-

GRAM.—Section 1862(a)(1) of such Act (42 U.S.C. 1395y(a)(l)) is amended— (1) by striking "and" at the end of subparagraph (C), ,«jr*c (2) by striking the semicolon at the end of subparagraph (D) and inserting ", and", and (3) by adding at the end the following new subparagraph: "(E) in the case of research conducted pursuant to section 1875(c), which is not reasonable and necessary to carry out the purposes of that section;". •^f

Ante, p. 2006.

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PUBLIC LAW 99-509—OCT. 21, 1986

SEC. 9317. IMPROVEMENTS IN CIVIL MONETARY PENALTY AND EXCLUSION PROVISIONS. (a) COLLATERAL ESTOPPEL EFFECT OF PRIOR FEDERAL CRIMINAL

CONVICTIONS.—Section 1128A(c) of the Social Security Act (42 U.S.C. 1320a-7a(c)), as redesignated by section 9313(c), is amended by adding at the end the following new paragraph: "(3) In a proceeding under subsection (a) or (b) which— "(A) is against a person who has been convicted (whether upon a verdict after trial or upon a plea of guilty or nolo contendere) of a Federal crime charging fraud or false statements, and "(B) involves the same transaction as in the criminal action, the person is estopped from denying the essential elements of the criminal offense.". (b) AUTHORITY OF HEARING OFFICER TO SANCTION MISCONDUCT.—

Such section is further amended by adding at the end the following new paragraph: "(4) The official conducting a hearing under this section may sanction a person, including any party or attorney, for failing to comply with an order or procedure, failing to defend an action, or other misconduct as would interfere with the speedy, orderly, or fair conduct of the hearing. Such sanction shall reasonably relate to the severity and nature of the failure or misconduct. Such sanction may include— "(A) in the case of refusal to provide or permit discovery, drawing negative factual inferences or treating such refusal as an admission by deeming the matter, or certain facts, to be established, "(B) prohibiting a party from introducing certain evidence or otherwise supporting a particular claim or defense, "(C) striking pleadings, in whole or in part, 41 "(D) staying the proceedings, . ' "(E) dismissal of the action, "(F) entering a default judgment, Dui "(G) ordering the party or attorney to pay attorneys' fees and other costs caiised by the failure or misconduct, and "(H) refusing to consider any motion or other action which is not filed in a timely manner.". (c) CLARIFICATION OF EXCLUSION AUTHORITY FOR CERTAIN OFFEND-

Health care professionals. State and local governments.

ERS.—Section 1128 of such Act (42 U.S.C. 1320a-7) is amended by adding at the end the following new subsection: "(f) For purposes of subsection (a), a physician or other individual is considered to have been 'convicted' of a criminal offense— "(1) when a judgment of conviction has been entered against the physician or individual by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged; ^' "(2) when there has been a finding of guilt against the physician or individual by a Federal, State, or local court; "(3) when a plea of guilty or nolo contendere by the physician or individual has been accepted by a Federal, State, or local > "(4) when the physician or individual has entered into participation in a first offender or other program where judgment of conviction has been withheld.".
 * 1 court; or

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100 STAT. 2009

(d) EFFECTIVE DATES.—(1) The amendment made by subsection (a) shall take effect on the date of the enactment of this Act, without regard to when the criminal conviction was obtained, but shall only apply to a conviction upon a plea of nolo contendere tendered after the date of the enactment of this Act. (2) The amendment made by subsection (b) shall apply to failures or misconduct occurring on or after the date of the enactment of this Act. (3) The provisions— (A) of paragraphs (1), (2), and (3) of section 1128(f) of the Social Security Act (as added by the amendment made by subsection (c)) shall apply to judgments entered, findings made, and pleas entered, before, on, or after the date of the enactment of this Act, and (B) of paragraph (4) of such section shall apply to participation in a program entered into on or after the date of the enactment of this Act.

42 USC 1320a-7a note.

42 USC 1320a-7 note. Ante, p. 2008.

SEC. 9318. HOSPITAL PROTOCOLS FOR ORGAN PROCUREMENT AND STANDARDS FOR ORGAN PROCUREMENT AGENCIES.

(a) IN GENERAL.—Title XI of the Social Security Act is amended by inserting after section 1137 the following new section:

iii,;

^^'

HOSPITAL PROTOCOLS FOR ORGAN PROCUREMENT AND STANDARDS FOR ORGAN PROCUREMENT AGENCIES

"SEC. 1138. (a)(1) The Secretary shall provide that a hospital meeting the requirements of title XVIII or XIX may participate in the program established under such title only if— "(A) the hospital establishes written protocols for the identification of potential organ donors that— "(i) assure that families of potential organ donors are •;;,,, made aware of the option of organ or tissue donation and their option to decline, '^ "(ii) encourage discretion and sensitivity with respect to the circumstances, views, and beliefs of such families, and "(iii) require that an organ procurement agency designated by the Secretary pursuant to subsection (b)(l)(F) be '^ notified of potential organ donors; and "(B) In the case of a hospital in which organ transplants are , performed, the hospital is a member of, and abides by the rules and requirements of, the Organ Procurement and Transplantation Network established pursuant to section 372 of the Public r Health Service Act (in this section referred to as the 'Network'). r "(2) For purposes of this subsection, the term 'organ' means a human kidney, liver, heart, lung, pancreas, and any other human organ or tissue specified by the Secretary for purposes of this subsection. "(b)(1) The Secretary shall provide that payment may be made under title XVIII or XIX with respect to organ procurement costs attributable to payments made to an organ procurement agency only if the agency— "(A)(i) is a qualified organ procurement organization (as de? scribed in section 371(b) of the Public Health Service Act) that is J operating under a grant made under section 371(a) of such Act, or (ii) has been certified or recertified by the Secretary within

42 USC 1320b42 USC 1395, 1396.

,, •/-,

^.

42 USC 274.

42 USC 273.

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PUBLIC LAW 99-509—OCT. 21, 1986

^*

the previous two years as meeting the standards to be a qualifjgd organ procurement organization (as so described); "(B) meets the requirements that are applicable under such title for organ procurement agencies; "(C) meets performance-related standards prescribed by the «6T Secretary; <:iri "(D) is a member of, and abides by the rules and requirements of, the Network; "(E) allocates organs, within its service area and nationally, ?r mo s^ ' i. •- in accordance with medical criteria and the policies of the Network; and "(F) is designated by the Secretary as an organ procurement procurement costs for purposes of reimbursement under such title. "(2) The Secretary may not designate more than one organ procurement organization for each service area (described in section 371(b)(1)(E) of the Public Health Service Act) under paragraph 42 USC 273. (IXF).". 42 USC 1320b-8 (b) EFFECTIVE DATES.—(1) Section 1138(a) of the Social Security note. Act shall apply to hospitals participating in the programs under 42 USC 1395, titles XVIII and XIX of such Act as of October 1, 1987. 1396. (2) Section 1138(b) of such Act shall apply to costs of organs procured on or after October 1, 1987. SEC. 9319. MEDICARE AS SECONDARY PAYER; COVERAGE REQUIREMENTS FOR CERTAIN OTHER PAYERS. (a) MEDICARE SECONDARY FOR DISABLED EMPLOYEES OF CERTAIN LARGE EMPLOYERS.—Section 1862(b) of the Social Security Act (42
 * . organization payments to which may be treated as organ

U.S.C. 1395y(b)) is amended by adding at the end the following new paragraph: "(4)(A)(i) A large group health plan may not take into account that an active individual is eligible for or receives benefits under this title under section 226(b), other than an individual who is, or would 42 USC 426. 42 USC 426upon application be, entitled to benefits under section 226A. "(ii) Payment may not be made under this title, except as provided in clause (iii), with respect to any item or service to the extent that payment has been made, or can reasonably be expected to be made, with respect to the item or service as required under clause (i). "(iii) Any payment under this title with respect to any item or Claims. service to which clause (i) applies shall be conditioned on reimbursement to the appropriate Trust Fund established by this title. In order to recover payment made under this title for the item or service, the United States may bring an action against any entity jfT: O ' ^ l; •?!which is required under this subsection (a) to pay with respect to the item or service (and may, in accordance with paragraph (5), collect double damages against that entity), or against any other entity that has received payment from that entity with respect to the item or service, and may join or intervene in any action related to the events that gave rise to the need for the item or service. The United States shall be subrogated (to the extent of payment made under this title for an item or service) to any right under clause (i) of an individual or any other entity to payment with respect to the item or service. The Secretary may waive (in whole or in part) the .CT5'. Qb i Si- provisions of this clause in the case of an individual claim if the Secretary determines that the waiver is in the best interests of the program established under this title.

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100 STAT. 2011

^ "(B) In this paragraph: "(i) The term 'large group health plan' has the meaning given such term in section 5000(b) of the Internal Revenue Code of 1986. "(ii) The term 'active individual' means an employee (as may be defined in regulations), the employer, an individual associ1 ated with the employer in a business relationship, or a member of the family of any of those persons. "(C) The provisions of subparagraph (B) of paragraph (3) shall apply to coordination of payment under this paragraph in the case of large group health plans in the same manner as they apply to coordination of payment under paragraph (3) in the case of group health plans. "(D) The preceding provisions of this paragraph shall only apply to items and services furnished on or after January 1, 1987, and before January 1, 1992.".

Post, p. 2095. ,;; j u

mA

 * '.>'A

(b) ESTABLISHMENT OF PRIVATE CAUSE OF ACTION WHERE MEDICARE

SECONDARY.—Such section is further amended by adding at the end the following new paragraph: "(5) There is hereby created a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a workmen's compensation law or plan, automobile or liability insurance policy or plan or no fault insurance plan, group health plan, or large group health plan which is made a primary payer under paragraph (1), (2), (3), or (4), respectively, and which fails to provide for primary payment (or appropriate reimbursement) in accordance with such respective paragraphs."

Insurance. U8^

(c) SPECIAL ENROLLMENT PERIODS.—

^ ^ f '^ !^' ^ '' ^ " ^

^ ^

(1) Section 1837(i)(l) of such Act (42 U.S.C. 1395p(i)(l)) is amended by adding at the end the following: "In the case of an individual who has not attained the age of 65, at the time the individual first satisfies paragraph (1) of section 1836, is en- 42 USC 1395o. rolled in a large group health plan as an active individual (as those terms are defined in section 1862(b)(4)(B)), and has elected 42 USC 1395y. not to enroll (or to be deemed enrolled) under this section during the individual's initial enrollment period, there shall be a special enrollment period described in paragraph (3)(B).". (2) Section 1837(i)(2) of such Act (42 U.S.C. 1395p(i)(2)) is amended by adding at the end the following: "In the case of an individual who has not attained the age of 65, has enrolled (or has been deemed to have enrolled) in the medical insurance program established under this part during the individual's initial enrollment period, or is an individual described in the vsesi t^c' second sentence of paragraph (1), has enrolled in such program during any subsequent special enrollment period under this subsection during which the individual was not enrolled in a large group health plan as an active individual (as those terms are defined in section 1862(b)(4)(B)), and has not terminated enrollment under this section at any time at which the individual is not enrolled in such a large group health plan as an active individual, there shall be a special enrollment period described, • in paragraph (3)(B).". (3) Section 1837(i)(3) of such Act (42 U.S.C. 1395p(i)(3)) is Ante, p. 171. amended— (A) by inserting "(A)" after "(3)", (B) by inserting "the first sentences o f after "referred to in, (C) by adding at the end the following new subparagraph:

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