Notwithstanding section 1395x(v) of this title, the Secretary shall provide, for portions of cost reporting periods occurring on or after October 1, 2000, for payments for home health services in accordance with a prospective payment system established by the Secretary under this section.
The Secretary shall establish under this subsection a prospective payment system for payment for all costs of home health services. Under the system under this subsection all services covered and paid on a reasonable cost basis under the medicare home health benefit as of August 5, 1997, including medical supplies, shall be paid for on the basis of a prospective payment amount determined under this subsection and applicable to the services involved. In implementing the system, the Secretary may provide for a transition (of not longer than 4 years) during which a portion of such payment is based on agency-specific costs, but only if such transition does not result in aggregate payments under this subchapter that exceed the aggregate payments that would be made if such a transition did not occur.
In defining a prospective payment amount under the system under this subsection, the Secretary shall consider an appropriate unit of service and the number, type, and duration of visits provided within that unit, potential changes in the mix of services provided within that unit and their cost, and a general system design that provides for continued access to quality services.
Under such system the Secretary shall provide for computation of a standard prospective payment amount (or amounts) as follows:
(I) Such amount (or amounts) shall initially be based on the most current audited cost report data available to the Secretary and shall be computed in a manner so that the total amounts payable under the system for the 12-month period beginning on the date the Secretary implements the system shall be equal to the total amount that would have been made if the system had not been in effect and if section 1395x(v)(1)(L)(ix) of this title had not been enacted.
(II) For the 12-month period beginning after the period described in subclause (I), such amount (or amounts) shall be equal to the amount (or amounts) determined under subclause (I), updated under subparagraph (B).
(III) For periods beginning after the period described in subclause (II), such amount (or amounts) shall be equal to the amount (or amounts) that would have been determined under subclause (I) that would have been made for fiscal year 2001 if the system had not been in effect and if section 1395x(v)(1)(L)(ix) of this title had not been enacted but if the reduction in limits described in clause (ii) had been in effect, updated under subparagraph (B).
Each such amount shall be standardized in a manner that eliminates the effect of variations in relative case mix and area wage adjustments among different home health agencies in a budget neutral manner consistent with the case mix and wage level adjustments provided under paragraph (4)(A). Under the system, the Secretary may recognize regional differences or differences based upon whether or not the services or agency are in an urbanized area.
The reduction described in this clause is a reduction by 15 percent in the cost limits and per beneficiary limits described in section 1395x(v)(1)(L) of this title, as those limits are in effect on September 30, 2000.
The standard prospective payment amount (or amounts) shall be adjusted for fiscal year 2002 and for fiscal year 2003 and for each subsequent year (beginning with 2004) in a prospective manner specified by the Secretary by the home health applicable increase percentage (as defined in clause (ii)) applicable to the fiscal year or year involved.
For purposes of this subparagraph, the term “home health applicable increase percentage” means, with respect to—
(I) each of fiscal years 2002 and 2003, the home health market basket percentage increase (as defined in clause (iii)) minus 1.1 percentage points;
(II) for 1 the last calendar quarter of 2003 and the first calendar quarter of 2004, the home health market basket percentage increase;
(III) the last 3 calendar quarters of 2004, and all of 2005 2 the home health market basket percentage increase minus 0.8 percentage points;
(IV) 2006, 0 percent; and
(V) any subsequent year, subject to clause (v), the home health market basket percentage increase.
For purposes of this subsection, the term “home health market basket percentage increase” means, with respect to a fiscal year or year, a percentage (estimated by the Secretary before the beginning of the fiscal year or year) determined and applied with respect to the mix of goods and services included in home health services in the same manner as the market basket percentage increase under section 1395ww(b)(3)(B)(iii) of this title is determined and applied to the mix of goods and services comprising inpatient hospital services for the fiscal year or year.
Insofar as the Secretary determines that the adjustments under paragraph (4)(A)(i) for a previous fiscal year or year (or estimates that such adjustments for a future fiscal year or year) did (or are likely to) result in a change in aggregate payments under this subsection during the fiscal year or year that are a result of changes in the coding or classification of different units of services that do not reflect real changes in case mix, the Secretary may adjust the standard prospective payment amount (or amounts) under paragraph (3) for subsequent fiscal years or years so as to eliminate the effect of such coding or classification changes.
For purposes of clause (ii)(V), for 2007 and each subsequent year, in the case of a home health agency that does not submit data to the Secretary in accordance with subclause (II) with respect to such a year, the home health market basket percentage increase applicable under such clause for such year shall be reduced by 2 percentage points. Such reduction shall apply only with respect to the year involved, and the Secretary shall not take into account such reduction in computing the prospective payment amount under this section for a subsequent year, and the Medicare Payment Advisory Commission shall carry out the requirements under section 5201(d) of the Deficit Reduction Act of 2005.
For 2007 and each subsequent year, each home health agency shall submit to the Secretary such data that the Secretary determines are appropriate for the measurement of health care quality. Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this clause.
The Secretary shall establish procedures for making data submitted under subclause (II) available to the public. Such procedures shall ensure that a home health agency has the opportunity to review the data that is to be made public with respect to the agency prior to such data being made public.
The Secretary shall reduce the standard prospective payment amount (or amounts) under this paragraph applicable to home health services furnished during a period by such proportion as will result in an aggregate reduction in payments for the period equal to the aggregate increase in payments resulting from the application of paragraph (5) (relating to outliers).
The payment amount for a unit of home health services shall be the applicable standard prospective payment amount adjusted as follows:
The amount shall be adjusted by an appropriate case mix adjustment factor (established under subparagraph (B)).
The portion of such amount that the Secretary estimates to be attributable to wages and wage-related costs shall be adjusted for geographic differences in such costs by an area wage adjustment factor (established under subparagraph (C)) for the area in which the services are furnished or such other area as the Secretary may specify.
The Secretary shall establish appropriate case mix adjustment factors for home health services in a manner that explains a significant amount of the variation in cost among different units of services.
The Secretary shall establish area wage adjustment factors that reflect the relative level of wages and wage-related costs applicable to the furnishing of home health services in a geographic area compared to the national average applicable level. Such factors may be the factors used by the Secretary for purposes of section 1395ww(d)(3)(E) of this title.
The Secretary may provide for an addition or adjustment to the payment amount otherwise made in the case of outliers because of unusual variations in the type or amount of medically necessary care. The total amount of the additional payments or payment adjustments made under this paragraph with respect to a fiscal year or year may not exceed 5 percent of the total payments projected or estimated to be made based on the prospective payment system under this subsection in that year.
If a beneficiary elects to transfer to, or receive services from, another home health agency within the period covered by the prospective payment amount, the payment shall be prorated between the home health agencies involved.
With respect to home health services furnished on or after October 1, 1998, no claim for such a service may be paid under this subchapter unless—
(1) the claim has the unique identifier (provided under section 1395u(r) of this title) for the physician who prescribed the services or made the certification described in section 1395f(a)(2) or 1395n(a)(2)(A) of this title; and
(2) in the case of a service visit described in paragraph (1), (2), (3), or (4) of section 1395x(m) of this title, the claim contains a code (or codes) specified by the Secretary that identifies the length of time of the service visit, as measured in 15 minute increments.
There shall be no administrative or judicial review under section 1395ff of this title, 1395oo of this title, or otherwise of—
(1) the establishment of a transition period under subsection (b)(1) of this section;
(2) the definition and application of payment units under subsection (b)(2) of this section;
(3) the computation of initial standard prospective payment amounts under subsection (b)(3)(A) of this section (including the reduction described in clause (ii) of such subsection);
(4) the establishment of the adjustment for outliers under subsection (b)(3)(C) of this section;
(5) the establishment of case mix and area wage adjustments under subsection (b)(4) of this section; and
(6) the establishment of any adjustments for outliers under subsection (b)(5) of this section.
Nothing in this section shall be construed as preventing a home health agency furnishing a home health unit of service for which payment is made under the prospective payment system established by this section for such units of service from furnishing services via a telecommunication system if such services—
(A) do not substitute for in-person home health services ordered as part of a plan of care certified by a physician pursuant to section 1395f(a)(2)(C) or 1395n(a)(2)(A) of this title; and
(B) are not considered a home health visit for purposes of eligibility or payment under this subchapter.
Nothing in this section shall be construed as waiving the requirement for a physician certification under section 1395f(a)(2)(C) or 1395n(a)(2)(A) of this title for the payment for home health services, whether or not furnished via a telecommunications system.
(Aug. 14, 1935, ch. 531, title XVIII, §1895, as added Pub. L. 105–33, title IV, §4603(a), Aug. 5, 1997, 111 Stat. 467; amended Pub. L. 105–277, div. J, title V, §5101(c)(1), (d)(2), Oct. 21, 1998, 112 Stat. 2681–914; Pub. L. 106–113, div. B, §1000(a)(6) [title III, §§302(b), 303(b), 306, 321(k)(19)], Nov. 29, 1999, 113 Stat. 1536, 1501A–359, 1501A–361, 1501A–362, 1501A–368; Pub. L. 106–554, §1(a)(6) [title V, §§501(a), (c)(1), 504], Dec. 21, 2000, 114 Stat. 2763, 2763A–529, 2763A–531; Pub. L. 108–173, title VII, §701, Dec. 8, 2003, 117 Stat. 2334; Pub. L. 109–171, title V, §5201(a), (c), Feb. 8, 2006, 120 Stat. 46.)
Section 5201(d) of the Deficit Reduction Act of 2005, referred to in subsec. (b)(3)(B)(v)(I), is section 5201(d) of title V of Pub. L. 109–171, Feb. 8, 2006, 120 Stat. 47, which is not classified to the Code.
2006—Subsec. (b)(3)(B)(ii)(III). Pub. L. 109–171, §5201(a)(1), substituted “all of 2005” for “each of 2005 and 2006”.
Subsec. (b)(3)(B)(ii)(IV). Pub. L. 109–171, §5201(a)(2), (4), added subcl. (IV). Former subcl. (IV) redesignated (V).
Pub. L. 109–171, §5201(a)(3), struck out “2007 and” before “any subsequent year”.
Subsec. (b)(3)(B)(ii)(V). Pub. L. 109–171, §5201(a)(3), (c)(1), redesignated subcl. (IV) as (V) and inserted “subject to clause (v),” after “subsequent year,”.
Subsec. (b)(3)(B)(v). Pub. L. 109–171, §5201(c)(2), added cl. (v).
2003—Subsec. (b)(3)(B)(i). Pub. L. 108–173, §701(a)(1), substituted “fiscal year 2002 and for fiscal year 2003 and for each subsequent year (beginning with 2004)” for “each fiscal year (beginning with fiscal year 2002)” and inserted “or year” after “the fiscal year”.
Subsec. (b)(3)(B)(ii)(I). Pub. L. 108–173, §701(a)(2)(A), struck out “or” at end.
Subsec. (b)(3)(B)(ii)(II). Pub. L. 108–173, §701(b)(1), struck out “or” at end.
Pub. L. 108–173, §701(a)(2)(D), added subcl. (II). Former subcl. (II) redesignated (III).
Subsec. (b)(3)(B)(ii)(III). Pub. L. 108–173, §701(b)(4), added subcl. (III). Former subcl. (III) redesignated (IV).
Pub. L. 108–173, §701(a)(2)(B), (C), redesignated subcl. (II) as (III) and substituted “2004 and any subsequent year” for “any subsequent fiscal year”.
Subsec. (b)(3)(B)(ii)(IV). Pub. L. 108–173, §701(b)(2), (3), redesignated subcl. (III) as (IV) and substituted “2007” for “2004”.
Subsec. (b)(3)(B)(iii). Pub. L. 108–173, §701(a)(3), inserted “or year” after “fiscal year” wherever appearing.
Subsec. (b)(3)(B)(iv). Pub. L. 108–173, §701(a)(4), inserted “or year” after “fiscal year” wherever appearing and “or years” after “fiscal years”.
Subsec. (b)(5). Pub. L. 108–173, §701(a)(5), inserted “or year” after “fiscal year”.
2000—Subsec. (b)(3)(A)(i)(II). Pub. L. 106–554, §1(a)(6) [title V, §501(a)(3)], added subcl. (II). Former subcl. (II) redesignated (III).
Subsec. (b)(3)(A)(i)(III). Pub. L. 106–554, §1(a)(6) [title V, §501(a)(1), (2)], redesignated subcl. (II) as (III) and substituted “described in subclause (II)” for “described in subclause (I)”.
Subsec. (b)(3)(B)(iv). Pub. L. 106–554, §1(a)(6) [title V, §501(c)(1)], added cl. (iv).
Subsec. (e). Pub. L. 106–554, §1(a)(6) [title V, §504], added subsec. (e).
1999—Subsec. (b)(1). Pub. L. 106–113, §1000(a)(6) [title III, §321(k)(19)], made technical amendment to reference in original act which appears in text as reference to August 5, 1997.
Subsec. (b)(3)(A)(i). Pub. L. 106–113, §1000(a)(6) [title III, §302(b)], amended heading and text of cl. (i) generally. Prior to amendment, text read as follows: “Under such system the Secretary shall provide for computation of a standard prospective payment amount (or amounts). Such amount (or amounts) shall initially be based on the most current audited cost report data available to the Secretary and shall be computed in a manner so that the total amounts payable under the system for fiscal year 2001 shall be equal to the total amount that would have been made if the system had not been in effect but if the reduction in limits described in clause (ii) had been in effect. Such amount shall be standardized in a manner that eliminates the effect of variations in relative case mix and wage levels among different home health agencies in a budget neutral manner consistent with the case mix and wage level adjustments provided under paragraph (4)(A). Under the system, the Secretary may recognize regional differences or differences based upon whether or not the services or agency are in an urbanized area.”
Subsec. (b)(3)(A)(i)(I). Pub. L. 106–113, §1000(a)(6) [title III, §303(b)(1)], which directed that the second sentence of cl. (i) be amended in subcl. (I) by the insertion of “and if section 1395x(v)(1)(L)(ix) of this title had not been enacted” before semicolon, was executed by making the insertion before the period at end of subcl. (I) to reflect the probable intent of Congress.
Subsec. (b)(3)(A)(i)(II). Pub. L. 106–113, §1000(a)(6) [title III, §303(b)(2)], inserted “and if section 1395x(v)(1)(L)(ix) of this title had not been enacted” after “if the system had not been in effect”.
Subsec. (b)(3)(B)(ii)(I). Pub. L. 106–113, §1000(a)(6) [title III, §306], substituted “each of fiscal years 2002 and 2003” for “fiscal year 2002 or 2003”.
1998—Subsec. (a). Pub. L. 105–277, §5101(c)(1)(A), substituted “for portions of cost reporting periods occurring on or after October 1, 2000” for “for cost reporting periods beginning on or after October 1, 1999”.
Subsec. (b)(3)(A)(i). Pub. L. 105–277, §5101(c)(1)(B)(i), substituted “fiscal year 2001” for “fiscal year 2000”.
Subsec. (b)(3)(A)(ii). Pub. L. 105–277, §5101(c)(1)(B)(ii), substituted “September 30, 2000” for “September 30, 1999”.
Subsec. (b)(3)(B)(i). Pub. L. 105–277, §5101(d)(2)(A), substituted “home health applicable increase percentage (as defined in clause (ii))” for “home health market basket percentage increase”.
Pub. L. 105–277, §5101(c)(1)(B)(iii), substituted “fiscal year 2002” for “fiscal year 2001”.
Subsec. (b)(3)(B)(ii), (iii). Pub. L. 105–277, §5101(d)(2)(B), (C), added cl. (ii) and redesignated former cl. (ii) as (iii).
Pub. L. 106–554, §1(a)(6) [title V, §501(c)(2)], Dec. 21, 2000, 114 Stat. 2763, 2763A–529, provided that: “The amendment made by paragraph (1) [amending this section] shall apply to episodes concluding on or after October 1, 2001.”
Amendment by section 1000(a)(6) [title III, §303(b)] of Pub. L.106–113 applicable to services furnished by home health agencies for cost reporting periods beginning on or after Oct. 1, 1999, see section 1000(a)(6) [title III, §303(c)] of Pub. L. 106–113, set out as a note under section 1395x of this title.
Amendment by section 1000(a)(6) [title III, §321(k)(19)] of Pub. L. 106–113 effective as if included in the enactment of the Balanced Budget Act of 1997, Pub. L. 105–33, except as otherwise provided, see section 1000(a)(6) [title III, §321(m)] of Pub. L. 106–113, set out as a note under section 1395d of this title.
Pub. L. 105–33, title IV, §4603(d), Aug. 5, 1997, 111 Stat. 471, as amended by Pub. L. 105–277, div. J, title V, §5101(c)(2), Oct. 21, 1998, 112 Stat. 2681–914, provided that: “Except as otherwise provided, the amendments made by this section [enacting this section and amending sections 1395f, 1395g, 1395k, 1395l, 1395u, and 1395y of this title] shall apply to portions of cost reporting periods occurring on or after October 1, 2000.”
Pub. L. 108–173, title IV, §421, Dec. 8, 2003, 117 Stat. 2283, as amended by Pub. L. 109–171, title V, §5201(b), Feb. 8, 2006, 120 Stat. 46, provided that:
“(a)
“(b)
“(c)
“(1) shall not apply to episodes and visits ending after such period; and
“(2) shall not be taken into account in calculating the payment amounts applicable for episodes and visits occurring after such period.”
Pub. L. 108–173, title VII, §703, Dec. 8, 2003, 117 Stat. 2336, provided that:
“(a)
“(b)
“(1)
“(2)
“(c)
“(d)
“(e)
“(f)
“(g)
“(h)
“(1) An analysis of the patient outcomes and costs of furnishing care to the medicare beneficiaries participating in the project as compared to such outcomes and costs to beneficiaries receiving only home health services for the same health conditions.
“(2) Such recommendations regarding the extension, expansion, or termination of the project as the Secretary determines appropriate.
“(i)
“(1)
“(2)
“(A) has been licensed or certified by a State to furnish medical adult day-care services in the State for a continuous 2-year period;
“(B) is engaged in providing skilled nursing services and other therapeutic services directly or under arrangement with a home health agency;
“(C) is licensed and certified by the State in which it operates or meets such standards established by the Secretary to assure quality of care and such other requirements as the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services in the facility; and
“(D) provides medical adult day-care services.
“(3)
“(A) home health service items and services described in paragraphs (1) through (7) of section 1861(m) [probably means section 1861(m) of the Social Security Act which is classified to section 1395x(m) of this title] furnished in a medical adult day-care facility;
“(B) a program of supervised activities furnished in a group setting in the facility that—
“(i) meet such criteria as the Secretary determines appropriate; and
“(ii) is designed to promote physical and mental health of the individuals; and
“(C) such other services as the Secretary may specify.
“(4)
Pub. L. 108–173, title VII, §704, Dec. 8, 2003, 117 Stat. 2338, provided that:
“(a)
“(b)
“(1) begins on the date of the enactment of this Act [Dec. 8, 2003]; and
“(2) ends on the last day of the second month beginning after the date as of which the Secretary has published final regulations regarding the collection and use by the Centers for Medicare & Medicaid Services of non-medicare/medicaid OASIS information following the submission of the report required under subsection (c).
“(c)
“(1)
“(A) whether there are unique benefits from the analysis of such information that cannot be derived from other information available to, or collected by, such agencies; and
“(B) the value of collecting such information by small home health agencies compared to the administrative burden related to such collection.
In conducting the study the Secretary shall obtain recommendations from quality assessment experts in the use of such information and the necessity of small, as well as large, home health agencies collecting such information.
“(2)
“(d)
Pub. L. 108–173, title VII, §705, Dec. 8, 2003, 117 Stat. 2339, provided that:
“(a)
“(b)
Pub. L. 106–554, §1(a)(6) [title V, §502(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–530, provided that:
“(1)
“(A) with respect to episodes and visits ending on or after October 1, 2000, and before April 1, 2001, use the final standardized and budget neutral prospective payment amounts for 60-day episodes and standardized average per visit amounts for fiscal year 2001 as published by the Secretary in the Federal Register on July 3, 2000 (65 Fed. Reg. 41128–41214); and
“(B) with respect to episodes and visits ending on or after April 1, 2001, and before October 1, 2001, use such amounts increased by 2.2 percent.
“(2)
Pub. L. 106–554, §1(a)(6) [title V, §503], Dec. 21, 2000, 114 Stat. 2763, 2763A–530, provided that:
“(a)
“(b)
“(1) notifies the Secretary that such agency does not want to receive such payment;
“(2) is not receiving payments pursuant to section 405.371 of title 42, Code of Federal Regulations;
“(3) is excluded from the medicare program under title XI of the Social Security Act [subchapter XI of this chapter];
“(4) no longer has a provider agreement under section 1866 of such Act (42 U.S.C. 1395cc);
“(5) is no longer in business; or
“(6) is subject to a court order providing for the withholding of medicare payments under title XVIII of such Act [this subchapter].”
Pub. L. 106–554, §1(a)(6) [title V, §508], Dec. 21, 2000, 114 Stat. 2763, 2763A–533, provided that:
“(a) 24
“(b)
Pub. L. 106–554, §1(a)(6) [title V, §547(c)], Dec. 21, 2000, 114 Stat. 2763, 2763A–553, provided that:
“(1)
“(2)
Pub. L. 106–113, div. B, §1000(a)(6) [title III, §301], Nov. 29, 1999, 113 Stat. 1536, 1501A–358, provided that:
“(a)
“(1)
“(2)
“(A)
“(B)
“(3)
“(4)
“(A)
“(B)
“(C)
“(b)
“(1)
“(A)
“(B)
“(i) An assessment of the costs incurred by medicare home health agencies in complying with such data collection requirement.
“(ii) An analysis of the effect of such data collection requirement on the privacy interests of patients from whom data is collected.
“(C)
“(2)
“(A)
“(B)
Pub. L. 106–113, div. B, §1000(a)(6) [title III, §302(c)], Nov. 29, 1999, 113 Stat. 1536, 1501A–360, as amended by Pub. L. 106–554, §1(a)(6) [title V, §501(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–529, provided that: “Not later than April 1, 2002, the Comptroller General of the United States shall submit to Congress a report analyzing the need for the 15 percent reduction under subsection (b)(3)(A)(ii) of such section [subsec. (b)(3)(A)(ii) of this section], or for any reduction, in the computation of the base payment amounts under the prospective payment system for home health services established under such section.”
Pub. L. 106–113, div. B, §1000(a)(6) [title III, §307], Nov. 29, 1999, 113 Stat. 1536, 1501A–362, provided that:
“(a)
“(b)
Section 4602(d) of Pub. L. 105–33 provided that: “The Secretary of Health and Human Services shall expand research on a prospective payment system for home health agencies under the medicare program that ties prospective payments to a unit of service, including an intensive effort to develop a reliable case mix adjuster that explains a significant amount of the variances in costs.”
Section 4602(e) of Pub. L. 105–33 provided that: “Effective for cost reporting periods beginning on or after October 1, 1997, the Secretary of Health and Human Services may require all home health agencies to submit additional information that the Secretary considers necessary for the development of a reliable case mix system.”
Pub. L. 105–33, title IV, §4603(e), Aug. 5, 1997, 111 Stat. 471, as amended by Pub. L. 105–277, div. J, title V, §5101(c)(3), Oct. 21, 1998, 112 Stat. 2681–914, provided that if the Secretary of Health and Human Services did not establish and implement the prospective payment system for home health services described in subsec. (b) of this section for portions of cost reporting periods described in section 4603(d) of Pub. L. 105–33 (set out as a note above), for such portions the Secretary was to provide for a reduction by 15 percent in the cost limits and per beneficiary limits described in section 1395x(v)(1)(L) of this title, as those limits would otherwise have been in effect on Sept. 30, 2000, prior to repeal by Pub. L. 106–113, div. B, §1000(a)(6) [title III, §302(a)], Nov. 29, 1999, 113 Stat. 1536, 1501A–359.
Section 4616 of Pub. L. 105–33 provided that:
“(a)
“(b)
1 So in original. The word “for” probably should not appear.