Section 3131

SEC. 3131. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

[a] Rebasing Home Health Prospective Payment Amount-

[1] IN GENERAL- Section 1895[b][3][A] of the Social Security Act [42 U.S.C. 1395fff[b][3][A]] is amended--

[A] in clause [i][III], by striking 'For periods' and inserting 'Subject to clause [iii], for periods'; and

[B] by adding at the end the following new clause:

'[iii] ADJUSTMENT FOR 2013 AND SUBSEQUENT YEARS-

'[I] IN GENERAL- Subject to subclause [II], for 2013 and subsequent years, the amount [or amounts] that would otherwise be applicable under clause [i][III] shall be adjusted by a percentage determined appropriate by the Secretary to reflect such factors as changes in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode, and other factors that the Secretary considers to be relevant. In conducting the analysis under the preceding sentence, the Secretary may consider differences between hospital-based and freestanding agencies, between for-profit and nonprofit agencies, and between the resource costs of urban and rural agencies. Such adjustment shall be made before the update under subparagraph [B] is applied for the year.

'[II] TRANSITION- The Secretary shall provide for a 4-year phase-in [in equal increments] of the adjustment under subclause [I], with such adjustment being fully implemented for 2016. During each year of such phase-in, the amount of any adjustment under subclause [I] for the year may not exceed 3.5 percent of the amount [or amounts] applicable under clause [i][III] as of the date of enactment of the Patient Protection and Affordable Care Act.'.

[2] MEDPAC STUDY AND REPORT-

[A] STUDY- The Medicare Payment Advisory Commission shall conduct a study on the implementation of the amendments made by paragraph [1]. Such study shall include an analysis of the impact of such amendments on--

[i] access to care;

[ii] quality outcomes;

[iii] the number of home health agencies; and

[iv] rural agencies, urban agencies, for-profit agencies, and nonprofit agencies.

[B] REPORT- Not later than January 1, 2015, the Medicare Payment Advisory Commission shall submit to Congress a report on the study conducted under subparagraph [A], together with recommendations for such legislation and administrative action as the Commission determines appropriate.

[b] Program-specific Outlier Cap- Section 1895[b] of the Social Security Act [42 U.S.C. 1395fff[b]] is amended--

[1] in paragraph [3][C], by striking 'the aggregate' and all that follows through the period at the end and inserting '5 percent of the total payments estimated to be made based on the prospective payment system under this subsection for the period.'; and

[2] in paragraph [5]--

[A] by striking 'OUTLIERS- The Secretary' and inserting the following: 'OUTLIERS-

'[A] IN GENERAL- Subject to subparagraph [B], the Secretary';

[B] in subparagraph [A], as added by subparagraph [A], by striking '5 percent' and inserting '2.5 percent'; and

[C] by adding at the end the following new subparagraph:

'[B] PROGRAM SPECIFIC OUTLIER CAP- The estimated total amount of additional payments or payment adjustments made under subparagraph [A] with respect to a home health agency for a year [beginning with 2011] may not exceed an amount equal to 10 percent of the estimated total amount of payments made under this section [without regard to this paragraph] with respect to the home health agency for the year.'.

[c] Application of the Medicare Rural Home Health Add-on Policy- Section 421 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 [Public Law 108-173; 117 Stat. 2283], as amended by section 5201[b] of the Deficit Reduction Act of 2005 [Public Law 109-171; 120 Stat. 46], is amended--

[1] in the section heading, by striking 'one-year' and inserting 'temporary'; and

[2] in subsection [a]--

[A] by striking ', and episodes' and inserting ', episodes';

[B] by inserting 'and episodes and visits ending on or after April 1, 2010, and before January 1, 2016,' after 'January 1, 2007,'; and

[C] by inserting '[or, in the case of episodes and visits ending on or after April 1, 2010, and before January 1, 2016, 3 percent]' before the period at the end.

[d] Study and Report on the Development of Home Health Payment Reforms in Order To Ensure Access to Care and Quality Services-

[1] IN GENERAL- The Secretary of Health and Human Services [in this section referred to as the 'Secretary'] shall conduct a study to evaluate the costs and quality of care among efficient home health agencies relative to other such agencies in providing ongoing access to care and in treating Medicare beneficiaries with varying severity levels of illness. Such study shall include an analysis of the following:

[A] Methods to revise the home health prospective payment system under section 1895 of the Social Security Act [42 U.S.C. 1395fff] to more accurately account for the costs related to patient severity of illness or to improving beneficiary access to care, including--

[i] payment adjustments for services that may be under- or over-valued;

[ii] necessary changes to reflect the resource use relative to providing home health services to low-income Medicare beneficiaries or Medicare beneficiaries living in medically underserved areas;

[iii] ways the outlier payment may be improved to more accurately reflect the cost of treating Medicare beneficiaries with high severity levels of illness;

[iv] the role of quality of care incentives and penalties in driving provider and patient behavior;

[v] improvements in the application of a wage index; and

[vi] other areas determined appropriate by the Secretary.

[B] The validity and reliability of responses on the OASIS instrument with particular emphasis on questions that relate to higher payment under the home health prospective payment system and higher outcome scores under Home Care Compare.

[C] Additional research or payment revisions under the home health prospective payment system that may be necessary to set the payment rates for home health services based on costs of high-quality and efficient home health agencies or to improve Medicare beneficiary access to care.

[D] A timetable for implementation of any appropriate changes based on the analysis of the matters described in subparagraphs [A], [B], and [C].

[E] Other areas determined appropriate by the Secretary.

[2] CONSIDERATIONS- In conducting the study under paragraph [1], the Secretary shall consider whether certain factors should be used to measure patient severity of illness and access to care, such as--

[A] population density and relative patient access to care;

[B] variations in service costs for providing care to individuals who are dually eligible under the Medicare and Medicaid programs;

[C] the presence of severe or chronic diseases, as evidenced by multiple, discontinuous home health episodes;

[D] poverty status, as evidenced by the receipt of Supplemental Security Income under title XVI of the Social Security Act;

[E] the absence of caregivers;

[F] language barriers;

[G] atypical transportation costs;

[H] security costs; and

[I] other factors determined appropriate by the Secretary.

[3] REPORT- Not later than March 1, 2011, the Secretary shall submit to Congress a report on the study conducted under paragraph [1], together with recommendations for such legislation and administrative action as the Secretary determines appropriate.

[4] CONSULTATIONS- In conducting the study under paragraph [1] and preparing the report under paragraph [3], the Secretary shall consult with--

[A] stakeholders representing home health agencies;

[B] groups representing Medicare beneficiaries;

[C] the Medicare Payment Advisory Commission;

[D] the Inspector General of the Department of Health and Human Services; and

[E] the Comptroller General of the United States.