Balanced Budget Act — Health Hippo

Health Hippo: Balanced Budget Act of 1997

Medicare+Choice Program ~ Prevention Initiatives ~ Rural Initiatives ~ Fraud and Abuse Provisions ~ Provisions Relating to Part A Only ~ Provisions Relating to Part B Only ~ Provisions Relating to Parts A and B ~ Medicaid ~ Programs of All-Inclusive Care for the Elderly ~ State Children’s Health Insurance Program

An Act

To provide for reconciliation pursuant to subsections (b)(1) and
(c) of section 105 of the concurrent resolution on the budget for
fiscal year 1998. This Act may be cited as the Balanced Budget Act of
1997.

TITLE IV–MEDICARE, MEDICAID, AND CHILDREN’S HEALTH PROVISIONS

SEC. 4000. AMENDMENTS TO SOCIAL SECURITY ACT AND REFERENCES TO OBRA; TABLE OF CONTENTS OF TITLE.

(a) Amendments to Social Security Act.–Except as otherwise specifically provided, whenever in this title an amendment is expressed in terms of an amendment to or repeal of a section or other provision, the reference shall be considered to be made to that section or other provision of the Social Security Act.

(b) References to OBRA.–In this title, the terms OBRA-1986”, OBRA-1987”, OBRA-1989”, OBRA-1990”, and OBRA-1993” refer to the Omnibus Budget Reconciliation Act of 1986 (Public Law 99-509), the Omnibus Budget Reconciliation Act of 1987 (Public Law 100-203), the Omnibus Budget Reconciliation Act of 1989 (Public Law 101-239), the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508), and the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66), respectively.

(c) Table of Contents of Title.–The table of contents of this title is as follows:

Subtitle A: Medicare+Choice Program

Chapter 1–Medicare+Choice Program
SUBCHAPTER A–MEDICARE+CHOICE PROGRAM
- Sec. 4001 Establishment of
  Medicare+Choice program.
  - Part C–Medicare+Choice Program
    - Sec. 1851
      Eligibility, election, and enrollment.
    - Sec. 1852 Benefits
      and beneficiary protections.
    - Sec. 1853 Payments
      to Medicare+Choice organizations.
    - Sec. 1854
      Premiums.
    - Sec. 1855
      Organizational and financial requirements for
      Medicare+Choice organizations; provider-sponsored
      organizations.
    - Sec. 1856
      Establishment of standards.
    - Sec. 1857 Contracts
      with Medicare+Choice organizations.
    - Sec. 1859
      Definitions; miscellaneous provisions.
- Sec. 4002 Transitional
  rules for current medicare HMO program.
- Sec. 4003 Conforming
  changes in medigap program.
SUBCHAPTER B–SPECIAL RULES FOR MEDICARE+CHOICE MEDICAL
SAVINGS ACCOUNTS
- Sec. 4006
  Medicare+Choice MSA.
Chapter 2–Demonstrations
SUBCHAPTER A–MEDICARE+CHOICE COMPETITIVE PRICING
DEMONSTRATION PROJECT
- Sec. 4011 Medicare
  prepaid competitive pricing demonstration project.
- Sec. 4012
  Administration through the Office of Competition; advisory
  committee.
- Sec. 4013 Project design based on FEHBP competitive
  bidding model.
SUBCHAPTER B–SOCIAL HEALTH MAINTENANCE ORGANIZATIONS
- Sec. 4014 Social health
  maintenance organizations (SHMOs).
SUBCHAPTER C–MEDICARE SUBVENTION DEMONSTRATION PROJECT FOR
MILITARY RETIREES
- Sec. 4015 Medicare
  subvention demonstration project for military retirees.
SUBCHAPTER D–OTHER PROJECTS
- Sec. 4016 Medicare
  coordinated care demonstration project.
- Sec. 4017 Orderly
  transition of municipal health service demonstration
  projects.
- Sec. 4018 Medicare
  enrollment demonstration project.
- Sec. 4019 Extension of
  certain medicare community nursing organization demonstration
  projects.
Chapter 3–Commissions
- Sec. 4021 National
  Bipartisan Commission on the Future of Medicare.
- Sec. 4022 Medicare
  Payment Advisory Commission.
Chapter 4–Medigap Protections
- Sec. 4031 Medigap
  protections.
- Sec. 4032 Addition of
  high deductible medigap policies.
Chapter 5–Tax Treatment of Hospitals Participating in
Provider- Sponsored Organizations
- Sec. 4041 Tax treatment
  of hospitals which participate in provider- sponsored
  organizations.

Subtitle B: Prevention Initiatives

Sec. 4101 Screening
mammography.
Sec. 4102 Screening pap
smear and pelvic exams.
Sec. 4103 Prostate cancer
screening tests.
Sec. 4104 Coverage of
colorectal screening.
Sec. 4105 Diabetes
self-management benefits.
Sec. 4106 Standardization of
medicare coverage of bone mass measurements.
Sec. 4107 Vaccines outreach
expansion.
Sec. 4108 Study on
preventive and enhanced benefits.

Subtitle C: Rural Initiatives

Sec. 4201 Medicare rural
hospital flexibility program.
Sec. 4202 Prohibiting denial
of request by rural referral centers for reclassification on basis
of comparability of wages.
Sec. 4203 Hospital
geographic reclassification permitted for purposes of
disproportionate share payment adjustments.
Sec. 4204
Medicare-dependent, small rural hospital payment extension.
Sec. 4205 Rural health
clinic services.
Sec. 4206 Medicare
reimbursement for telehealth services.
Sec. 4207 Informatics,
telemedicine, and education demonstration project.

Subtitle D: Anti-Fraud and Abuse Provisions and Improvements in Protecting Program Integrity

Chapter 1–Revisions To Sanctions for Fraud and Abuse
- Sec. 4301 Permanent
  exclusion for those convicted of 3 health care related
  crimes.
- Sec. 4302 Authority to
  refuse to enter into medicare agreements with individuals or
  entities convicted of felonies.
- Sec. 4303 Exclusion of
  entity controlled by family member of a sanctioned
  individual.
- Sec. 4304 Imposition of
  civil money penalties.
Chapter 2–Improvements In Protecting Program Integrity
- Sec. 4311 Improving
  information to medicare beneficiaries.
- Sec. 4312 Disclosure of
  information and surety bonds.
- Sec. 4313 Provision of
  certain identification numbers.
- Sec. 4314 Advisory
  opinions regarding certain physician self-referral
  provisions.
- Sec. 4315 Replacement of
  reasonable charge methodology by fee schedules.
- Sec. 4316 Application of
  inherent reasonableness to all part B services other than
  physicians’ services.
- Sec. 4317 Requirement to
  furnish diagnostic information.
- Sec. 4318 Report by GAO
  on operation of fraud and abuse control program.
- Sec. 4319 Competitive
  bidding demonstration projects.
- Sec. 4320 Prohibiting
  unnecessary and wasteful medicare payments for certain
  items.
- Sec. 4321
  Nondiscrimination in post-hospital referral to home health
  agencies and other entities.
Chapter 3–Clarifications And Technical Changes
- Sec. 4331 Other fraud
  and abuse related provisions.

Subtitle E: Provisions Relating to Part A Only

Chapter 1–Payment of PPS Hospitals
- Sec. 4401 PPS hospital
  payment update.
- Sec. 4402 Maintaining
  savings from temporary reduction in capital payments for PPS
  hospitals.
- Sec. 4403
  Disproportionate share.
- Sec. 4404 Medicare
  capital asset sales price equal to book value.
- Sec. 4405 Elimination of
  IME and DSH payments attributable to outlier payments.
- Sec. 4406 Increase base
  payment rate to Puerto Rico hospitals.
- Sec. 4407 Certain
  hospital discharges to post acute care.
- Sec. 4408
  Reclassification of certain counties as large urban areas under
  medicare program.
- Sec. 4409 Geographic
  reclassification for certain disproportionately large
  hospitals.
- Sec. 4410 Floor on area
  wage index.
Chapter 2–Payment of PPS-Exempt Hospitals
SUBCHAPTER A–GENERAL PAYMENT PROVISIONS
- Sec. 4411 Payment
  update.
- Sec. 4412 Reductions to
  capital payments for certain PPS-exempt hospitals and
  units.
- Sec. 4413 Rebasing.
- Sec. 4414 Cap on TEFRA
  limits.
- Sec. 4415 Bonus and
  relief payments.
- Sec. 4416 Change in
  payment and target amount for new providers.
- Sec. 4417 Treatment of
  certain long-term care hospitals.
- Sec. 4418 Treatment of
  certain cancer hospitals.
- Sec. 4419 Elimination of
  exemptions for certain hospitals.
SUBCHAPTER B–PROSPECTIVE PAYMENT SYSTEM FOR PPS-EXEMPT
HOSPITALS
- Sec. 4421 Prospective
  payment for inpatient rehabilitation hospital services.
- Sec. 4422 Development of
  proposal on payments for long-term care hospitals.
Chapter 3–Payment for Skilled Nursing Facilities
- Sec. 4431 Extension of
  cost limits.
- Sec. 4432 Prospective
  payment for skilled nursing facility services.
Chapter 4–Provisions Related to Hospice Services
- Sec. 4441 Payments for
  hospice services.
- Sec. 4442 Payment for
  home hospice care based on location where care is
  furnished.
- Sec. 4443 Hospice care
  benefits periods.
- Sec. 4444 Other items
  and services included in hospice care.
- Sec. 4445 Contracting
  with independent physicians or physician groups for hospice
  care services permitted.
- Sec. 4446 Waiver of
  certain staffing requirements for hospice care programs in
  nonurbanized areas.
- Sec. 4447 Limitation on
  liability of beneficiaries for certain hospice coverage
  denials.
- Sec. 4448 Extending the
  period for physician certification of an individual’s terminal
  illness.
- Sec. 4449 Effective
  date.
Chapter 5–Other Payment Provisions
- Sec. 4451 Reductions in
  payments for enrollee bad debt.
- Sec. 4452 Permanent
  extension of hemophilia pass-through payment.
- Sec. 4453 Reduction in
  part A medicare premium for certain public retirees.
- Sec. 4454 Coverage of
  services in religious nonmedical health care institutions under
  the medicare and medicaid programs.

Subtitle F: Provisions Relating to Part B Only

Chapter 1–Services of Health Professionals
SUBCHAPTER A–PHYSICIANS’ SERVICES
- Sec. 4501 Establishment
  of single conversion factor for 1998.
- Sec. 4502 Establishing
  update to conversion factor to match spending under sustainable
  growth rate.
- Sec. 4503 Replacement of
  volume performance standard with sustainable growth rate.
- Sec. 4504 Payment rules
  for anesthesia services.
- Sec. 4505 Implementation
  of resource-based methodologies.
- Sec. 4506 Dissemination
  of information on high per discharge relative values for
  in-hospital physicians’ services.
- Sec. 4507 Use of private
  contracts by medicare beneficiaries.
SUBCHAPTER B–OTHER HEALTH CARE PROFESSIONALS
- Sec. 4511 Increased
  medicare reimbursement for nurse practitioners and clinical
  nurse specialists.
- Sec. 4512 Increased
  medicare reimbursement for physician assistants.
- Sec. 4513 No x-ray
  required for chiropractic services.
Chapter 2–Payment For Hospital Outpatient Department Services
- Sec. 4521 Elimination of
  formula-driven overpayments (FDO) for certain outpatient
  hospital services.
- Sec. 4522 Extension of
  reductions in payments for costs of hospital outpatient
  services.
- Sec. 4523 Prospective
  payment system for hospital outpatient department services.
Chapter 3–Ambulance Services
- Sec. 4531 Payments for
  ambulance services.
- Sec. 4532 Demonstration
  of coverage of ambulance services under medicare through
  contracts with units of local government.
Chapter 4–Prospective Payment for Outpatient Rehabilitation
Services
- Sec. 4541 Prospective
  payment for outpatient rehabilitation services.
Chapter 5–Other Payment Provisions
- Sec. 4551 Payments for
  durable medical equipment.
- Sec. 4552 Oxygen and
  oxygen equipment.
- Sec. 4553 Reduction in
  updates to payment amounts for clinical diagnostic laboratory
  tests; study on laboratory tests.
- Sec. 4554 Improvements
  in administration of laboratory tests benefit.
- Sec. 4555 Updates for
  ambulatory surgical services.
- Sec. 4556 Reimbursement
  for drugs and biologicals.
- Sec. 4557 Coverage of
  oral anti-nausea drugs under chemotherapeutic regimen.
- Sec. 4558 Renal
  dialysis-related services.
- Sec. 4559 Temporary
  coverage restoration for portable electrocardiogram
  transportation.
Chapter 6–Part B Premium and Related Provisions
SUBCHAPTER A–DETERMINATION OF PART B PREMIUM AMOUNT
- Sec. 4571 Part B
  premium.
SUBCHAPTER B–OTHER PROVISIONS RELATED TO PART B PREMIUM
- Sec. 4581 Protections
  under the medicare program for disabled workers who lose
  benefits under a group health plan.
- Sec. 4582 Governmental
  entities eligible to elect to pay part B premiums for eligible
  individuals.

Subtitle G: Provisions Relating to Parts A and B

Chapter 1–Home Health Services and Benefits
SUBCHAPTER A–PAYMENTS FOR HOME HEALTH SERVICES
- Sec. 4601 Recapturing
  savings resulting from temporary freeze on payment increases
  for home health services.
- Sec. 4602 Interim
  payments for home health services.
- Sec. 4603 Prospective
  payment for home health services.
- Sec. 4604 Payment based
  on location where home health service is furnished.
SUBCHAPTER B–HOME HEALTH BENEFITS
- Sec. 4611 Modification of
  part A home health benefit for individuals enrolled under part
  B.
- Sec. 4612 Clarification
  of part-time or intermittent nursing care.
- Sec. 4613 Study on
  definition of homebound.
- Sec. 4614 Normative
  standards for home health claims denials.
- Sec. 4615 No home health
  benefits based solely on drawing blood.
- Sec. 4616 Reports to
  Congress regarding home health cost containment.
Chapter 2–Graduate Medical Education
SUBCHAPTER A–INDIRECT MEDICAL EDUCATION
- Sec. 4621 Indirect
  graduate medical education payments.
- Sec. 4622 Payment to
  hospitals of indirect medical education costs for
  Medicare+Choice enrollees.
SUBCHAPTER B–DIRECT GRADUATE MEDICAL EDUCATION
- Sec. 4623 Limitation on
  number of residents and rolling average FTE count.
- Sec. 4624 Payments to
  hospitals for direct costs of graduate medical education of
  Medicare+Choice enrollees.
- Sec. 4625 Permitting
  payment to nonhospital providers.
- Sec. 4626 Incentive
  payments under plans for voluntary reduction in number of
  residents.
- Sec. 4627 Medicare
  special reimbursement rule for primary care combined residency
  programs.
- Sec. 4628 Demonstration
  project on use of consortia.
- Sec. 4629
  Recommendations on long-term policies regarding teaching
  hospitals and graduate medical education.
- Sec. 4630 Study of
  hospital overhead and supervisory physician components of
  direct medical education costs.
Chapter 3–Provisions Relating to Medicare Secondary Payer
- Sec. 4631 Permanent
  extension and revision of certain secondary payer
  provisions.
- Sec. 4632 Clarification
  of time and filing limitations.
- Sec. 4633 Permitting
  recovery against third party administrators.
Chapter 4–Other Provisions
- Sec. 4641 Placement of
  advance directive in medical record.
- Sec. 4642 Increased
  certification period for certain organ procurement
  organizations.
- Sec. 4643 Office of the
  Chief Actuary in the Health Care Financing Administration.
- Sec. 4644 Conforming
  amendments to comply with congressional review of agency
  rulemaking.

Subtitle H: Medicaid

Chapter 1–Managed Care
- Sec. 4701 State option of
  using managed care; change in terminology.
- Sec. 4702 Primary care
  case management services as State option without need for
  waiver.
- Sec. 4703 Elimination of
  75:25 restriction on risk contracts.
- Sec. 4704 Increased
  beneficiary protections.
- Sec. 4705 Quality
  assurance standards.
- Sec. 4706 Solvency
  standards.
- Sec. 4707 Protections
  against fraud and abuse.
- Sec. 4708 Improved
  administration.
- Sec. 4709 6-month
  guaranteed eligibility for all individuals enrolled in managed
  care.
- Sec. 4710 Effective
  dates.
Chapter 2–Flexibility In Payment of Providers
- Sec. 4711 Flexibility in
  payment methods for hospital, nursing facility, ICF/MR, and
  home health services.
- Sec. 4712 Payment for
  center and clinic services.
- Sec. 4713 Elimination of
  obstetrical and pediatric payment rate requirements.
- Sec. 4714 Medicaid
  payment rates for certain medicare cost-sharing.
- Sec. 4715 Treatment of
  veterans’ pensions under Medicaid.
Chapter 3–Federal Payments to States
- Sec. 4721 Reforming
  disproportionate share payments under State medicaid
  programs.
- Sec. 4722 Treatment of
  State taxes imposed on certain hospitals.
- Sec. 4723 Additional
  funding for State emergency health services furnished to
  undocumented aliens.
- Sec. 4724 Elimination of
  waste, fraud, and abuse.
- Sec. 4725 Increased
  FMAPs.
- Sec. 4726 Increase in
  payment limitation for territories.
Chapter 4–Eligibility
- Sec. 4731 State option
  of continuous eligibility for 12 months; clarification of State
  option to cover children.
- Sec. 4732 Payment of
  part B premiums.
- Sec. 4733 State option
  to permit workers with disabilities to buy into medicaid.
- Sec. 4734 Penalty for
  fraudulent eligibility.
- Sec. 4735 Treatment of
  certain settlement payments.
Chapter 5–Benefits
- Sec. 4741 Elimination of
  requirement to pay for private insurance.
- Sec. 4742 Physician
  qualification requirements.
- Sec. 4743 Elimination of
  requirement of prior institutionalization with respect to
  habilitation services furnished under a waiver for home or
  community-based services.
- Sec. 4744 Study and
  report on EPSDT benefit.
Chapter 6–Administration and Miscellaneous
- Sec. 4751 Elimination of
  duplicative inspection of care requirements for ICFS/MR and
  mental hospitals.
- Sec. 4752 Alternative
  sanctions for noncompliant ICFS/MR.
- Sec. 4753 Modification
  of MMIS requirements.
- Sec. 4754 Facilitating
  imposition of State alternative remedies on noncompliant
  nursing facilities.
- Sec. 4755 Removal of
  name from nurse aide registry.
- Sec. 4756 Medically
  accepted indication.
- Sec. 4757 Continuation
  of State-wide section 1115 medicaid waivers.
- Sec. 4758 Extension of
  moratorium.
- Sec. 4759 Extension of
  effective date for State law amendment.

Subtitle I: Programs of All-Inclusive Care for the Elderly (PACE)

Sec. 4801 Coverage of PACE
under the medicare program.
Sec. 4802 Establishment of
PACE program as medicaid State option.
Sec. 4803 Effective date;
transition.
Sec. 4804 Study and
reports.

Subtitle J: State Children’s Health Insurance Program

Chapter 1–State Children’s Health Insurance Program
- Sec. 4901 Establishment
  of program.
  - TITLE XXI–STATE CHILDREN’S HEALTH INSURANCE PROGRAM
  - Sec. 2101 Purpose;
    State child health plans.
  - Sec. 2102 General
    contents of State child health plan; eligibility;
    outreach.
  - Sec. 2103 Coverage
    requirements for children’s health insurance.
  - Sec. 2104
    Allotments.
  - Sec. 2105 Payments to
    States.
  - Sec. 2106 Process for
    submission, approval, and amendment of State child health
    plans.
  - Sec. 2107 Strategic
    objectives and performance goals; plan administration.
  - Sec. 2108 Annual
    reports; evaluations.
  - Sec. 2109
    Miscellaneous provisions.
  - Sec. 2110
    Definitions.
Chapter 2–Expanded Coverage of Children Under Medicaid
- Sec. 4911 Optional use
  of State child health assistance funds for enhanced medicaid
  match for expanded medicaid eligibility.
- Sec. 4912 Medicaid
  presumptive eligibility for low-income children.
- Sec. 4913 Continuation
  of medicaid eligibility for disabled children who lose SSI
  benefits.
Chapter 3–Diabetes Grant Programs
- Sec. 4921 Special
  diabetes programs for children with Type I diabetes.
- Sec. 4922 Special
  diabetes programs for Indians.
- Sec. 4923 Report on
  diabetes grant programs.