Sec. 611. Payments to institutional providers based on global budgets
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Not later than the beginning of each fiscal quarter during which an institutional provider of care (including hospitals, skilled nursing facilities, Federally qualified health centers, home health agencies, and independent dialysis facilities) is to furnish items and services under this Act, the Secretary shall pay to such institutional provider a lump sum in accordance with the succeeding provisions of this subsection and consistent with the following: Such payment shall be considered as payment in full for all operating expenses for items and services furnished under this Act, whether inpatient or outpatient, by such provider for such quarter, including outpatient or any other care provided by the institutional provider or provided by any health care provider who provided items and services pursuant to an agreement paid through the global budget as described in paragraph (3).
The regional director, on a quarterly basis, shall review whether requirements of the institutional provider’s participation agreement and negotiated global budget have been performed and shall determine whether adjustments to such institutional provider’s payment are warranted. This review shall include consideration for additional funding necessary for unanticipated items and services for individuals with complex medical needs or market-shift adjustments related to patient value.
The review shall also include an assessment of any adjustments made to ensure that accuracy and need for adjustment was appropriate. Certain group practices and other health care providers, as determined by the Secretary, with agreements to provide items and services at a specified institutional provider paid a global budget under this subsection may elect to be paid through such institutional provider’s global budget in lieu of payment under section 612 of this title. Any— individual health care professional of such group practice or other provider receiving payment through an institutional provider’s global budget shall be paid on a salaried basis that is equivalent to salaries or other compensation rates negotiated for individual health care professionals of such institutional provider; and any group practice or other health care provider that receives payment through an institutional provider global budget under this paragraph shall be subject to the same reporting and disclosure requirements of the institutional provider.
The amount of each payment to a provider described in subsection
(a)shall be determined before the start of each fiscal year through negotiations between the provider and the regional director with jurisdiction over such provider. Such amount shall be based on factors specified in paragraph (2). Payments negotiated pursuant to paragraph
(1)shall take into account, with respect to a provider— the historical volume of services provided for each item and services in the previous 3-year period; the actual expenditures of such provider in such provider’s most recent cost report under title XVIII of the Social Security Act for each item and service compared to— such expenditures for other institutional providers in the director’s jurisdiction; and normative payment rates established under comparative payment rate systems, including any adjustments, for such items and services; projected changes in the volume and type of items and services to be furnished; wages for employees, including any necessary increases mandatory minimum safe registered nurse-to-patient ratios and optimal staffing levels for physicians and other health care workers; the provider’s maximum capacity to provide items and services; education and prevention programs; permissible adjustment to the provider’s operating budget due to factors such as— an increase in primary or specialty care access; efforts to decrease health care disparities in rural or medically underserved areas; a response to emergent epidemic conditions; and proposed new and innovative patient care programs at the institutional level; and any other factor determined appropriate by the Secretary. Payment amounts negotiated pursuant to paragraph
(1)may not— take into account capital expenditures of the provider or any other expenditure not directly associated with the provision of items and services by the provider to an individual; be used by a provider for capital expenditures or such other expenditures; exceed the provider’s capacity to provide care under this Act; or be used to pay or otherwise compensate any board member, executive, or administrator of the institutional provider who has any interest or relationship prohibited under section 301(b)(2) of this Act or disclosed under section 301 of this Act. For purposes of this subsection, operating expenses of a provider include the following: The cost of all items and services associated with the provision of inpatient care and outpatient care, including the following: Wages and salary costs for physicians, nurses, and other health care practitioners employed by an institutional provider, including mandatory minimum safe registered nurse-to-patient staffing ratios and optimal staffing levels for physicians and other healthcare workers. Wages and salary costs for all ancillary staff and services. Costs of all pharmaceutical products administered by health care clinicians at the institutional provider’s facilities or through services provided in accordance with State licensing laws or regulations under which the institutional provider operates. Purchasing and maintenance of medical devices, supplies, and other health care technologies, including diagnostic testing equipment. Costs of all incidental services necessary for safe patient care and handling. Costs of patient care, education, and prevention programs, including occupational health and safety programs, public health programs, and necessary staff to implement such programs, for the continued education and health and safety of clinicians and other individuals employed by the institutional provider. Administrative costs for the institutional provider. Compensation costs for any employee or any contractor or any subcontractor employee of an institutional provider receiving global budgets under this section shall meet the compensation cap established in section 702 of the Bipartisan Budget Act of 2013 ( 41 U.S.C. 4304(a)(16) ) and implementing regulations. Subject to section 614, a regional director may negotiate changes to an institutional provider’s global budget, including any adjustments to address unforeseen market-shifts related to patient volume. The Secretary shall use existing prospective payment systems under title XVIII of the Social Security Act to serve as the comparative payment rate system in global budget negotiations described in subsection (b). The Secretary shall update such comparative payment rate systems annually. In developing the comparative payment rate system, the Secretary shall use only the operating base payment rates under each such prospective payment systems with applicable adjustments. The comparative rate system established under this subsection shall not include the value-based payment adjustments and the capital expenses base payment rates that may be included in such a prospective payment system. In the first year that global budget payments under this Act are available to institutional providers and for purposes of selecting a comparative payment rate system used during initial global budget negotiations for each institutional provider, the Secretary shall take into account the appropriate prospective payment system from the most recent year under title XVIII of the Social Security Act to determine what operating base payment the institutional provider would have been paid for covered items and services furnished the preceding year with applicable adjustments, excluding value-based payment adjustments, based on such prospective payment system.
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Sec. 611
Payments to institutional providers based on global budgets
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