Division B — Medicare and Other Health Provisions
B Medicare and Other Health Provisions
Sec. 1002 Findings; purpose statement
In order to support the provision of quality care for our nation’s seniors, Congress finds it appropriate to reform physician reimbursements under the Medicare program. SGR reform legislation provides such an opportunity, but not until next year. In order to facilitate such reform, Congress finds that the Centers for Medicare & Medicaid Services should continue to focus its efforts on the following areas:
Simplify and Reduce Administrative Burden on Physicians— The application and assessment of measures and other activities under SGR reform should be facilitated by the Centers for Medicare and Medicaid Services (CMS) in a way that accounts for the administrative burden such measurement places on physicians. Therefore, the Congress encourages CMS to identify and implement, to the extent practicable, mechanisms to ensure that the application and assessment of measures be coordinated across programs.
Timely Feedback for Physicians— In order for measure and assessment programs to encourage the highest quality care for Medicare seniors, the Congress finds it critical that CMS provide physicians with feedback on performance in as close to real time as possible. Such timely feedback will ensure that physicians can excel under a system of meaningful measurement.
Encourage Development of New Models— There is great need to test alternatives to Fee-For-Service reimbursement in the Medicare program. One option is the promotion and adoption of new models of care for physicians. To date, there has been significant development and testing of models for primary care. Congress supports these efforts and encourages them to continue in the future. Congress also encourages the development and testing of models of specialty care.
I Medicare Extenders
Sec. 1101 Physician payment update
Section 1848(d) of the Social Security Act (42 U.S.C. 10 1395w–4(d)) is amended by adding at the end the following new paragraph:
“(15) Update for January through March of 2014
“(A) In general—Subject to paragraphs (7)(B), (8)(B), (9)(B), (10)(B), (11)(B), (12)(B), (13)(B), and (14)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2014 for the period beginning on January 1, 2014, and ending on March 31, 2014, the update to the single conversion factor shall be 0.5 percent.
“(B) No effect on computation of conversion factor for remaining portion of 2014 and subsequent years—The conversion factor under this subsection shall be computed under paragraph (1)(A) for the period beginning on April 1, 2014, and ending on December 31, 2014, and for 2015 and subsequent years as if subparagraph (A) had never applied.”
Sec. 1102 Extension of work GPCI floor
Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w–4(e)(1)(E)) is amended by striking “January 1, 2014” and inserting “April 1, 2014”.
Sec. 1103 Extension of therapy cap exceptions process
Section 1833(g) of the Social Security Act (42 U.S.C. 1395l(g)) is amended—
in paragraph (5)(A), in the first sentence, by striking “December 31, 2013” and inserting “March 31, 2014”; and
in paragraph (6)(A)—
by striking “December 31, 2013” and inserting “March 31, 2014”; and
by striking “or 2013” and inserting “, 2013, or the first three months of 2014”.
Sec. 1104 Extension of ambulance add-ons
Ground Ambulance— Section 1834(l)(13)(A) of the Social Security Act (42 U.S.C. 1395m(l)(13)(A)) is amended—
in the matter preceding clause (i), by striking “January 1, 2014” and inserting “April 1, 2014”; and
in each of clauses (i) and (ii), by striking “January 1, 2014” and inserting “April 1, 2014” each place it appears.
Super rural ground ambulance— Section 1834(l)(12)(A) of the Social Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended by striking “January 1, 2014” and inserting “April 1, 2014”.
Sec. 1105 Medicare inpatient hospital payment adjustment for low-volume hospitals
Section 1886(d)(12) of the Social Security Act (42 U.S.C. 1395ww(d)(12)) is amended—
in subparagraph (B), in the matter preceding clause (i), by striking “fiscal year 2014 and subsequent fiscal years” and inserting “the portion of fiscal year 2014 beginning on April 1, 2014, fiscal year 2015, and subsequent fiscal years”;
in subparagraph (C)(i)—
by inserting “and the portion of fiscal year 2014 before April 1, 2014,” after “and 2013,” each place it appears; and
by inserting “or portion of fiscal year” after “during the fiscal year”; and
in subparagraph (D)—
by inserting “and the portion of fiscal year 2014 before April 1, 2014,” after “and 2013,”; and
by inserting “or the portion of fiscal year” after “in the fiscal year”.
Sec. 1106 Medicare-dependent hospital (MDH) program
In general— Section 1886(d)(5)(G) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amended—
in clause (i), by striking “October 1, 2013” and inserting “April 1, 2014”; and
in clause (ii)(II), by striking “October 1, 2013” and inserting “April 1, 2014”.
Conforming amendments—
Extension of target amount— Section 1886(b)(3)(D) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is amended—
in the matter preceding clause (i), by striking “October 1, 2013” and inserting “April 1, 2014”; and
in clause (iv), by inserting “and the portion of fiscal year 2014 before April 1, 2014” after “through fiscal year 2013”.
Permitting hospitals to decline reclassification— Section 13501(e)(2) of the Omnibus Budget Reconciliation Act of 1993 (42 U.S.C. 1395ww note) is amended by striking “through fiscal year 2013” and inserting “through the first 2 quarters of fiscal year 2014”.
Sec. 1107 1-year extension of authorization for special needs plans
Section 1859(f)(1) of the Social Security Act (42 U.S.C. 1395w–28(f)(1)) is amended by striking “2015” and inserting “2016” .
Sec. 1108 1-year extension of Medicare reasonable cost contracts
Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(ii)) is amended, in the matter preceding subclause (I), by striking “January 1, 2014” and inserting “January 1, 2015”.
Sec. 1109 Extension of existing funding for contract with consensus-based entity
Section 1890(d) of the Social Security Act (42 U.S.C. 1395aaa(d)) is amended by adding at the end the following new sentence: “Amounts transferred under the preceding sentence shall remain available until expended.”.
Sec. 1110 Extension of funding outreach and assistance for low-income programs
Additional funding for state health insurance programs— Subsection (a)(1)(B) of section 119 of the Medicare Improvements for Patients and Providers Act of 2008 (42 U.S.C. 1395b–3 note), as amended by section 3306 of the Patient Protection and Affordable Care Act Public Law 111–148) and section 610 of the American Taxpayer Relief Act of 2012 (Public Law 112–240), is amended—
in clause (ii), by striking “and” at the end;
in clause (iii), by striking the period at the end and inserting “; and”; and
by inserting after clause (iii) the following new clause:
“(iv) for the portion of fiscal year 2014 before April 1, 2014, of $3,750,000.”
Additional funding for area agencies on aging— Subsection (b)(1)(B) of such section 119, as so amended, is amended—
in clause (ii), by striking “and” at the end;
in clause (iii), by striking the period at the end and inserting “; and”; and
by inserting after clause (iii) the following new clause:
“(iv) for the portion of fiscal year 2014 before April 1, 2014, of $3,750,000.”
Additional funding for aging and disability resource centers— Subsection (c)(1)(B) of such section 119, as so amended, is amended—
in clause (ii), by striking “and” at the end;
in clause (iii), by striking the period at the end and inserting “; and”; and
by inserting after clause (iii) the following new clause:
“(iv) for the portion of fiscal year 2014 before April 1, 2014, of $2,500,000.”
Additional funding for contract with the national center for benefits and outreach enrollment— Subsection (d)(2) of such section 119, as so amended, is amended—
in clause (ii), by striking “and” at the end;
in clause (iii), by striking the period at the end and inserting “; and”; and
by inserting after clause (iii) the following new clause:
“(iv) for the portion of fiscal year 2014 before April 1, 2014, of $2,500,000.”
II Other Health Provisions
Sec. 1201 Extension of the qualifying individual (QI) program
Extension— Section 1902(a)(10)(E)(iv) of the Social Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by striking “December 2013” and inserting “March 2014”.
Extending total amount available for allocation— Section 1933(g) of the Social Security Act (42 U.S.C. 1396u–3(g)) is amended—
in paragraph (2)—
in subparagraph (S), by striking “and” after the semicolon;
in subparagraph (T), by striking the period at the end and inserting “; and”; and
by adding at the end the following new subparagraph:
“(U) for the period that begins on January 1, 2014, and ends on March 31, 2014, the total allocation amount is $200,000,000.”
Sec. 1202 Temporary extension of transitional medical assistance (TMA)
Sections 1902(e)(1)(B) and 1925(f) of the Social Security Act (42 U.S.C. 1396a(e)(1)(B), 1396r–6(f)) are each amended by striking “December 31, 2013” and inserting “March 31, 2014”.
Sec. 1203 Extension of funding for family-to-family health information centers
Section 501(c)(1)(A) of the Social Security Act (42 U.S.C. 701(c)(1)(A)) is amended—
in clause (ii), by striking at the end “and”;
in clause (iii), by striking the period at the end and inserting “; and”; and
by adding at the end the following new clause:
“(iv) $2,500,000 for the portion of fiscal year 2014 before April 1, 2014.”
Sec. 1204 Delay of reductions to Medicaid DSH allotments
in paragraph (7)(A)—
in clause (i), by striking “2014” and inserting “2016”; and
in clause (ii)—
by striking subclauses (I) and (II);
by redesignating subclauses (III) through (VII) as subclauses (I) through (V), respectively; and
in subclause (I) (as redesignated by clause (ii)), by striking “$600,000,000” and inserting “$1,200,000,000”; and
in paragraph (8)—
by redesignating subparagraph (C) as subparagraph (D);
by inserting after subparagraph (B) the following new subparagraph:
“(C) Fiscal year 2023—Only with respect to fiscal year 2023, the DSH allotment for a State, in lieu of the amount determined under paragraph (3) for the State for that year, shall be equal to the DSH allotment for the State for fiscal year 2022, as determined under subparagraph (B), increased, subject to subparagraphs (B) and (C) of paragraph (3), and paragraph (5), by the percentage change in the consumer price index for all urban consumers (all items; U.S. city average), for fiscal year 2022.”
in subparagraph (D) (as redesignated by subparagraph (A)), by striking “fiscal year 2022” and inserting “fiscal year 2023”.
Effective date— The amendments made by subsection (a) shall be effective as of October 1, 2013.
Sec. 1205 Realignment of the Medicare sequester for fiscal year 2023
Paragraph (6) (relating to implementing direct spending reductions, as redesignated by section 101(d)(2)(C), and as amended by section 101(c), of the Bipartisan Budget Act of 2013) of section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901a) is amended by adding at the end the following new subparagraph:
“(C) Notwithstanding the 2 percent limit specified in subparagraph (A) for payments for the Medicare programs specified in section 256(d), the sequestration order of the President under such subparagraph for fiscal year 2023 shall be applied to such payments so that—
“(i) with respect to the first 6 months in which such order is effective for such fiscal year, the payment reduction shall be 2.90 percent; and
“(ii) with respect to the second 6 months in which such order is so effective for such fiscal year, the payment reduction shall be 1.11 percent.”
Sec. 1206 Payment for inpatient services in long-term care hospitals (LTCHs)
Establishment of criteria for application of site neutral payment—
In general— Section 1886(m) of the Social Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the following:
“(6) Application of site neutral IPPS payment rate in certain cases
“(A) General application of site neutral IPPS payment amount for discharges failing to meet applicable criteria
“(i) In general—For a discharge in cost reporting periods beginning on or after October 1, 2015, except as provided in clause (ii) and subparagraph (C), payment under this title to a long-term care hospital for inpatient hospital services shall be made at the applicable site neutral payment rate (as defined in subparagraph (B)).
“(ii) Exception for certain discharges meeting criteria—Clause (i) shall not apply (and payment shall be made to a long-term care hospital without regard to this paragraph) for a discharge if—
“(I) the discharge meets the ICU criterion under clause (iii) or the ventilator criterion under clause (iv); and
“(II) the discharge does not have a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation.
“(iii) Intensive care unit (ICU) criterion
“(I) In general—The criterion specified in this clause (in this paragraph referred to as the “ICU criterion”), for a discharge from a long-term care hospital, is that the stay in the long-term care hospital ending with such discharge was immediately preceded by a discharge from a stay in a subsection (d) hospital that included at least 3 days in an intensive care unit (ICU), as determined by the Secretary.
“(II) Determining ICU days—In determining intensive care unit days under subclause (I), the Secretary shall use data from revenue center codes 020x or 021x (or such successor codes as the Secretary may establish).
“(iv) Ventilator criterion—The criterion specified in this clause (in this paragraph referred to as the “ventilator criterion”), for a discharge from a long-term care hospital, is that—
“(I) the stay in the long-term care hospital ending with such discharge was immediately preceded by a discharge from a stay in a subsection (d) hospital; and
“(II) the individual discharged was assigned to a Medicare-Severity-Long-Term-Care-Diagnosis-Related-Group (MS–LTC–DRG) based on the receipt of ventilator services of at least 96 hours.
“(B) Applicable site neutral payment rate defined
“(i) In general—In this paragraph, the term “applicable site neutral payment rate” means—
“(I) for discharges in cost reporting periods beginning during fiscal year 2016 or fiscal year 2017, the blended payment rate specified in clause (iii); and
“(II) for discharges in cost reporting periods beginning during fiscal year 2018 or a subsequent fiscal year, the site neutral payment rate (as defined in clause (ii)).
“(ii) Site neutral payment rate defined—In this paragraph, the term “site neutral payment rate” means the lower of—
“(I) the IPPS comparable per diem amount determined under paragraph (d)(4) of section 412.529 of title 42, Code of Federal Regulations, including any applicable outlier payments under section 412.525 of such title; or
“(II) 100 percent of the estimated cost for the services involved.
“(iii) Blended payment rate—The blended payment rate specified in this clause, for a long-term care hospital for inpatient hospital services for a discharge, is comprised of—
“(I) half of the site neutral payment rate (as defined in clause (ii)) for the discharge; and
“(II) half of the payment rate that would otherwise be applicable to such discharge without regard to this paragraph, as determined by the Secretary.
“(C) Limiting payment for all hospital discharges to site neutral payment rate for hospitals failing to meet applicable LTCH discharge thresholds
“(i) Notice of LTCH discharge payment percentage—For cost reporting periods beginning during or after fiscal year 2016, the Secretary shall inform each long-term care hospital of its LTCH discharge payment percentage (as defined in clause (iv)) for such period.
“(ii) Limitation—For cost reporting periods beginning during or after fiscal year 2020, if the Secretary determines for a long-term care hospital that its LTCH discharge payment percentage for the period is not at least 50 percent—
“(I) the Secretary shall inform the hospital of such fact; and
“(II) subject to clause (iii), for all discharges in the hospital in each succeeding cost reporting period, the payment amount under this subsection shall be the payment amount that would apply under subsection (d) for the discharge if the hospital were a subsection (d) hospital.
“(iii) Process for reinstatement—The Secretary shall establish a process whereby a long-term care hospital may seek to and have the provisions of subclause (II) of clause (ii) discontinued with respect to that hospital.
“(iv) LTCH discharge payment percentage—In this subparagraph, the term “LTCH discharge payment percentage” means, with respect to a long-term care hospital for a cost reporting period beginning during or after fiscal year 2020, the ratio (expressed as a percentage) of—
“(I) the number of discharges for such hospital and period for which payment is not made at the site neutral payment rate, to
“(II) the total number of discharges for such hospital and period.
“(D) Inclusion of subsection (d) Puerto Rico hospitals—In this paragraph, any reference in this paragraph to a subsection (d) hospital shall be deemed to include a reference to a subsection (d) Puerto Rico hospital.”
MedPac study and report on impact of changes—
Study— The Medicare Payment Assessment Commission shall examine the effect of applying section 1886(m)(6) of the Social Security Act, as added by the amendment made by paragraph (1), on—
the quality of patient care in long-term care hospitals;
the use of hospice care and post-acute care settings;
different types of long-term care hospitals; and
the growth in Medicare spending for services in such hospitals.
Report— Not later than June 30, 2019, the Commission shall submit to Congress a report on such study. The Commission shall include in such report such recommendations for changes in the application of such section as the Commission deems appropriate as well as the impact of the application of such section on the need to continue applying the 25 percent rule described under sections 412.534 and 412.536 of title 42, Code of Federal Regulations.
Calculation of length of stay excluding cases paid on a site neutral basis—
In general— For discharges occurring in cost reporting periods beginning on or after October 1, 2015, subject to subparagraph (B), in calculating the length of stay requirement applicable to a long-term care hospital or satellite facility under section 1886(d)(1)(B)(iv)(I) of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iv)(I)) and section 1861(ccc)(2) of such Act (42 U.S.C. 1395x(ccc)(2)), the Secretary of Health and Human Services shall exclude the following:
Site neutral payment— Any patient for whom payment is made at the site neutral payment rate (as defined in section 1886(m)(6)(B)(ii)) of such Act, as added by paragraph (1)).
Medicare Advantage— Any patient for whom payment is made under a Medicare Advantage plan under part C of title XVIII of such Act.
Limitation on converting subsection (d) hospitals— Subparagraph (A) shall not apply to a hospital that is classified as of December 10, 2013, as a subsection (d) hospital (as defined in section 1886(d)(1)(B) of the Social Security Act, 42 U.S.C. 1395ww(d)(1)(B)) for purposes of determining whether the requirements of section 1886(d)(1)(B)(iv)(I) or 1861(ccc)(2) of such Act (42 U.S.C. 1395ww(d)(1)(B)(iv)(I), 1395x(ccc)(2)) are met.
Extension of certain LTCH payment rules and moratorium on the establishment of certain hospitals and facilities—
Extension of certain payment rules—
Payment for hospitals-within-hospitals— Paragraph (2)(C) of section 114(c) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), as amended by sections 3106(a) and 10312(a) of Public Law 111–148, is amended by striking “5-year period” and inserting “9-year period”.
25 percent patient threshold payment adjustment; making the grandfathered exemption for long-term care hospitals permanent— Section 114(c)(1) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), as amended by sections 3106(a) and 10312(a) of Public Law 111–148, is amended—
in the matter preceding subparagraph (A), by striking “for a 5-year period”; and
in subparagraph (A), by inserting “for a 9-year period,” before “section 412.536”.
Report assessing continued suspension of 25 percent rule— Not later than 1 year before the end of the 9-year period referred to in section 114(c)(1) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), as amended by subparagraph (B), the Secretary of Health and Human Services shall submit to Congress a report on the need for any further extensions (or modifications of the extensions) of the 25 percent rule described in sections 412.534 and 412.536 of title 42, Code of Federal Regulations, particularly taking into account the application of section 1886(m)(6) of the Social Security Act, as added by subsection (a)(1).
Extension of moratorium on establishment of and increase in beds for LTCHs— Section 114(d) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), as amended by sections 3106(b) and 10312(b) of Public Law 111–148, is amended—
in paragraph (1), in the matter preceding subparagraph (A), by inserting after “5-year period” the following: “(and for the period beginning January 1, 2015, and ending September 30, 2017)”; and
by adding at the end the following new paragraph:
“(6) Limitation on application of exceptions—Paragraphs (2) and (3) shall not apply during the period beginning January 1, 2015, and ending September 30, 2017.”
Additional quality measure— Section 1886(m)(5)(D) of the Social Security Act (42 U.S.C. 1395ww(m)(5)(D)) is amended by adding at the end the following new clause:
“(iv) Additional quality measures—Not later than October 1, 2015, the Secretary shall establish a functional status quality measure for change in mobility among inpatients requiring ventilator support.”
Review of treatment of certain LTCHs—
Evaluation— As part of the annual rulemaking for fiscal year 2015 or fiscal year 2016 to carry out the payment rates under subsection (d) of section 1886 of the Social Security Act (42 U.S.C. 1395ww), the Secretary shall evaluate both the payment rates and regulations governing hospitals which are classified under subclause (II) of subsection (d)(1)(B)(iv) of such section.
Adjustment authority— Based upon such evaluation, the Secretary may adjust payment rates under subsection (b)(3) of section 1886 of the Social Security Act (42 U.S.C. 1395ww) for a hospital so classified (such as payment based upon the TEFRA-payment model) and may adjust the regulations governing such hospitals, including applying the regulations governing hospitals which are classified under clause (I) of subsection (d)(1)(B) of such section.