article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Medicare Home Health Equity Act of 1998''. SEC. 2. REVISION OF HOME HEALTH INTERIM PAYMENT FORMULA. (a) Restoration of Cost Limits.--Section 1861(v)(1)(L)(i)(IV) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(i)(IV)) (as added by section 4602 of the Balanced Budget Act of 1997) is amended-- (1) by striking ``105 percent'' and inserting ``112 percent''; and (2) by striking ``median'' and inserting ``mean''. (b) Change in Additions to Cost Limits.--Section 1861(v)(1)(L)(v) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(v)) (as added by section 4602 of the Balanced Budget Act of 1997) is amended to read as follows: ``(v)(I) For services furnished by home health agencies for cost reporting periods beginning on or after October 1, 1997, the Secretary shall provide for an interim system of limits. Payment shall not exceed the costs determined under the preceding provisions of this subparagraph or, if lower, the product of-- ``(aa) an agency-specific per beneficiary annual limitation calculated based 75 percent on the reasonable costs (including nonroutine medical supplies) of the standardized national average cost per patient in calendar year 1994, or best estimate thereof, (as published in the Health Care Financing Review Medicare and Medicaid 1997 Statistical Supplement) and based 25 percent on the reasonable costs (including nonroutine medical supplies) of the standardized regional average cost per patient for the agency's census division in calendar year 1995 (as so published), such national and regional costs updated by the home health market basket index and adjusted pursuant to clause (II); and ``(bb) the agency's unduplicated census count of patients (entitled to benefits under this title) for the cost reporting period subject to the limitation. ``(II) The labor-related portion of the updated national and regional costs described in subclause (I)(aa) shall be adjusted by the area wage index applicable under section 1886(d)(3)(E) for the area in which the agency is located (as determined without regard to any reclassification of the area under section 1886(d)(8)(B) or a decision of the Medicare Geographic Classification Review Board or the Secretary under section 1886(d)(10) for cost reporting periods beginning after October 1, 1995).''. (c) Conforming Amendments.-- (1) Section 1861(v)(1)(L)(vi) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(vi)) (as added by section 4602 of the Balanced Budget Act of 1997) is amended to read as follows: ``(vi) In any case in which the Secretary determines that beneficiaries use services furnished by more than 1 home health agency for purposes of circumventing the per beneficiary annual limitation in clause (v), the per beneficiary limitations shall be prorated among the agencies.''. (2) Section 1861(v)(1)(L)(vii)(I) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(vii)(I)) (as added by section 4602 of the Balanced Budget Act of 1997) is amended by striking ``clause (v)(I)'' and inserting ``clause (v)(I)(aa)''. (d) Effective Date.--The amendments made by this section shall apply as if included in the enactment of the Balanced Budget Act of 1997. SEC. 3. CBO ESTIMATE OF HOME HEALTH PAYMENT SAVINGS. (a) Estimate.--Not later than 60 days after the date of enactment of this Act, and annually thereafter until the prospective payment system for home health agencies established by section 1895 of the Social Security Act (42 U.S.C. 1395fff) is in effect, the Director of the Congressional Budget Office (referred to in this section as the ``Director'') shall estimate the amount of savings to the Medicare program under title XVIII of such Act (42 U.S.C. 1395 et seq.) resulting from the interim payment system for home health services established by the amendments to section 1861 of such Act (42 U.S.C. 1395x) made by section 4602 of the Balanced Budget Act of 1997. (b) Certification.--If the Director determines that the amount estimated under subsection (a) exceeds the amount of savings to the Medicare program that the Director estimated immediately prior to the enactment of the Balanced Budget Act of 1997 by reason of such interim payment system, then the Director shall certify such excess to the Secretary of Health and Human Services (referred to in this subsection as the ``Secretary''). (c) Adjustment.-- (1) In general.--If the Director certifies an amount to the Secretary pursuant to subsection (b), the Secretary shall prescribe rules under which appropriate adjustments are made to the amount of payments to home health agencies otherwise made under subparagraph (L) of section 1861(v)(1) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)) (as amended by section 4602 of the Balanced Budget Act of 1997) in the case of outliers-- (A) where events beyond the home health agency's control or extraordinary circumstances, including the case mix of such agency, create reasonable costs for a payment year which exceed the applicable payment limits; or (B) in any case not described in subparagraph (A) where the Secretary deems such an adjustment appropriate. (2) Amount.--The total amount of adjustments made under paragraph (2) for a year may not exceed the amount certified to the Secretary pursuant to subsection (b) for such year. To the extent that such adjustments in a year would otherwise exceed the amount certified to the Secretary pursuant to subsection (b) for such year, the Secretary shall reduce the payments to home health agencies in a pro rata manner so that the adjustments do not exceed such amount.
summary: Medicare Home Health Equity Act of 1998 - Amends title XVIII (Medicare) of the Social Security Act, as amended by the Balanced Budget Act of 1997 (BBA), to: (1) restore the per visit cost limit to 112 percent of the mean (currently, 105 percent of the median) with regard to payments to home health agencies under Medicare; and (2) revise the interim payment system (IPS) for home health agency services. Directs the Director of the Congressional Budget Office to estimate annually the amount of savings to the Medicare program resulting from the IPS for home health agency services that was established by the BBA. Provides that, if the Director determines that the estimated amount exceeds the amount of savings to the Medicare program that the Director estimated immediately prior to enactment of the BBA by reason of such IPS, then the Director shall certify such excess to the Secretary of Health and Human Services. Requires the Secretary, in turn, when an excess is certified, to prescribe rules under which appropriate adjustments are made to the amount of payments to home health agencies in the case of outliers: (1) where events beyond the home health agency's control or extraordinary circumstances, including the agency's case mix, create reasonable costs for a payment year which exceed the applicable payment limits; or (2) in any other case where the Secretary deems such an adjustment appropriate.