Sec. 114. LONG-TERM CARE HOSPITALS

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## SEC. 114 LONG-TERM CARE HOSPITALS ###

(a)* * * ###

(b)Study and Report on Long-Term Care Hospital Facility and Patient Criteria ####

(1)In general The Secretary of Health and Human Services (in this section referred to as the “Secretary”) shall conduct a study on the establishment of national long-term care hospital facility and patient criteria for purposes of determining medical necessity, appropriateness of admission, and continued stay at, and discharge from, long-term care hospitals. ####

(2)Report Not later than 18 months after the date of the enactment of this Act, the Secretary shall submit to Congress a report on the study conducted under paragraph (1), together with recommendations for such legislation and administrative actions, including timelines for implementation of patient criteria or other actions, as the Secretary determines appropriate. ####

(3)Considerations In conducting the study and preparing the report under this subsection, the Secretary shall consider— #####

(A)recommendations contained in a report to Congress by the Medicare Payment Advisory Commission in June 2004 for long-term care hospital-specific facility and patient criteria to ensure that patients admitted to long-term care hospitals are medically complex and appropriate to receive long-term care hospital services; and #####

(B)ongoing work by the Secretary to evaluate and determine the feasibility of such recommendations. ###

(c)Payment for Long-Term Care Hospital Services **[**[42 U.S.C. 1395ww note](/us/usc/t42/s1395ww)**]** ####

(1)Delay in application of 25 percent patient threshold payment adjustment The Secretary shall not apply, for cost reporting periods beginning on or after July 1, 2007,—1 1The comma followed by the em dash, in the matter preceding subparagraph (A), is so in law. See amendment made by section 1206(b)(1)(B)(i) of division B of Public Law 113–67. #####

(A)through June 30, 2016, and for discharges occurring on or after October 1, 2016, and before October 1, 2017, section 412.536 of title 42, Code of Federal Regulations, or any similar provision, to freestanding long-term care hospitals or to a long-termcare hospital, or satellite facility, that as of December29, 2007, was co-located with an entity that is a provider-based, off-campus location of a subsection

(d)hospital whichdid not provide services payable under section 1886(d) ofthe Social Security Act at the off-campus location; and #####

(B)such section or section 412.534 of title 42, Code of Federal Regulations, or any similar provisions, to a long-term care hospital identified by the amendment made by section 4417(a) of the Balanced Budget Act of 1997 (Public Law 105–33). ####

(2)Payment for hospitals-within-hospitals #####

(A)In general Payment to an applicable long-term care hospital or satellite facility which is located in a rural area or which is co-located with an urban single or MSA dominant hospital under paragraphs (d)(1), (e)(1), and (e)(4) of section 412.534 of title 42, Code of Federal Regulations, or any similar provision, shall not be subject to any payment adjustment under such section if no more than 75 percent of the hospital's Medicare discharges (other than discharges described in paragraph (d)(2) or (e)(3) of such section) are admitted from a co-located hospital. #####

(B)Co-located long-term care hospitals and satellite facilities ######

(i)In general Payment to an applicable long-term care hospital or satellite facility which is co-located with another hospital shall not be subject to any payment adjustment under section 412.534 of title 42, Code of Federal Regulations, or any similar provision, if no more than 50 percent of the hospital's Medicare discharges (other than discharges described in paragraph (c)(3) of such section) are admitted from a co-located hospital. ######

(ii)Applicable long-term care hospital or satellite facility defined In this paragraph, the term “**applicable long-term care hospital or satellite facility**” means a hospital or satellite facility that is subject to the transition rules under section 412.534(g) of title 42, Code of Federal Regulations, or any similar provision, or that is described in section 412.22(h)(3)(i) of such title. #####

(C)Effective date Subparagraphs

(A)and

(B)shall apply to cost reporting periods beginning on or after October 1, 2007 (or July 1, 2007, in the case of a satellite facility described in section 412.22(h)(3)(i) of title 42, Code of Federal Regulations) through June 30, 2016, and for discharges occurring on or after October 1, 2016, and before October 1, 2017. ####

(3)No application of very short-stay outlier policy The Secretary shall not apply, for the 5-year period beginning on the date of the enactment of this Act, the amendments finalized on May 11, 2007 (72 Federal Register 26904, 26992) made to the short-stay outlier payment provision for long-term care hospitals contained in section 412.529(c)(3)(i) of title 42, Code of Federal Regulations, or any similar provision. ####

(4)No application of one-time adjustment to standard amount The Secretary shall not, for the 5-year period beginning on the date of the enactment of this Act, make the one-time prospective adjustment to long-term care hospital prospective payment rates provided for in section 412.523(d)(3) of title 42, Code of Federal Regulations, or any similar provision. ###

(d)Moratorium on the Establishment of Long-Term Care Hospitals, Long-Term Care Satellite Facilities and on the Increase of Long-Term Care Hospital Beds in Existing Long-Term Care Hospitals or Satellite Facilities **[**[42 U.S.C. 1395ww note](/us/usc/t42/s1395ww)**]** ####

(1)In general During the 5-year period (and for the period beginning on the date of the enactment of paragraph

(7)of this subsection and ending September 30, 2017) beginning on the date of the enactment of this Act, the Secretary shall impose a moratorium for purposes of the Medicare program under title XVIII of the Social Security Act— #####

(A)subject to paragraph (2), on the establishment and classification of a long-term care hospital or satellite facility, other than an existing long-term care hospital or facility; and #####

(B)subject to paragraph (3), on an increase of long-term care hospital beds in existing long-term care hospitals or satellite facilities. ####

(2)Exception for certain long-term care hospitals The moratorium under paragraph (1)(A) shall not apply to a long-term care hospital that as of the date of the enactment of this Act— #####

(A)began its qualifying period for payment as a long-term care hospital under section 412.23(e) of title 42, Code of Federal Regulations, on or before the date of the enactment of this Act; #####

(B)has a binding written agreement with an outside, unrelated party for the actual construction, renovation, lease, or demolition for a long-term care hospital, and has expended, before the date of the enactment of this Act, at least 10 percent of the estimated cost of the project (or, if less, $2,500,000); or #####

(C)has obtained an approved certificate of need in a State where one is required on or before the date of the enactment of this Act. ####

(3)Exception for bed increases during moratorium #####

(A)In general Subject to subparagraph (B), the moratorium under paragraph (1)(B) shall not apply to an increase in beds in an existing hospital or satellite facility if the hospital or facility obtained a certificate of need for an increase in beds that is in a State for which such certificate of need is required and that was issued on or after April 1, 2005, and before December 29, 2007, or if the hospital or facility— ######

(i)is located in a State where there is only one other long-term care hospital; and ######

(ii)requests an increase in beds following the closure or the decrease in the number of beds of another long-term care hospital in the State. #####

(B)No effect on certain limitation The exception under subparagraph

(A)shall not effect the limitation on increasing beds under sections 412.22(h)(3) and 412.22(f) of title 42, Code of Federal Regulations. ####

(4)Existing hospital or satellite facility defined For purposes of this subsection, the term “**existing**” means, with respect to a hospital or satellite facility, a hospital or satellite facility that received payment under the provisions of subpart O of part 412 of title 42, Code of Federal Regulations, as of the date of the enactment of this Act. ####

(5)Judicial review There shall be no administrative or judicial review under section 1869 of the Social Security Act (42 U.S.C. 1395ff), section 1878 of such Act (42 U.S.C. 1395oo), or otherwise, of the application of this subsection by the Secretary. ####

(6)Limitation on application of exceptions Paragraphs

(2)and

(3)shall not apply during the period beginning on the date of the enactment of paragraph

(7)of this subsection and ending September 30, 2017. ####

(7)Additional exception for certain long-term care hospitals Any moratorium under paragraph

(1)shall not apply to a long-term care hospital that— #####

(A)began its qualifying period for payment as a long-term care hospital under section 412.23(e) of title 42, Code of Federal Regulations, on or before the date of enactment of this paragraph; #####

(B)has a binding written agreement as of the date of the enactment of this paragraph with an outside, unrelated party for the actual construction, renovation, lease, or demolition for a long-term care hospital, and has expended, before such date of enactment, at least 10 percent of the estimated cost of the project (or, if less, $2,500,000); or #####

(C)has obtained an approved certificate of need in a State where one is required on or before such date of enactment. ###

(e)Long-Term Care Hospital Payment Update ####

(1)* * * ####

(2)Delayed effective date **[**[42 U.S.C. 1395ww note](/us/usc/t42/s1395ww)**]** Subsection (m)(2) of section 1886 of the Social Security Act, as added by paragraph (1), shall not apply to discharges occurring on or after July 1, 2007, and before April 1, 2008. ###

(f)Expanded Review of Medical Necessity **[**[42 U.S.C. 1395ww note](/us/usc/t42/s1395ww)**]** ####

(1)In general The Secretary of Health and Human Services shall provide, under contracts with one or more appropriate fiscal intermediaries or medicare administrative contractors under section 1874A(a)(4)(G) of the Social Security Act (42 U.S.C. 1395kk–1(a)(4)(G)), for reviews of the medical necessity of admissions to long-term care hospitals (described in section 1886(d)(1)(B)(iv) of such Act) and continued stay at such hospitals, of individuals entitled to, or enrolled for, benefits under part A of title XVIII of such Act consistent with this subsection. Such reviews shall be made for discharges occurring on or after October 1, 2007. ####

(2)Review methodology The medical necessity reviews under paragraph

(1)shall be conducted on an annual basis in accordance with rules specified by the Secretary. Such reviews shall— #####

(A)provide for a statistically valid and representative sample of admissions of such individuals sufficient to provide results at a 95 percent confidence interval; and #####

(B)guarantee that at least 75 percent of overpayments received by long-term care hospitals for medically unnecessary admissions and continued stays of individuals in long-term care hospitals will be identified and recovered and that related days of care will not be counted toward the length of stay requirement contained in section 1886(d)(1)(B)(iv) of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iv)). ####

(3)Continuation of reviews Under contracts under this subsection, the Secretary shall establish an error rate with respect to such reviews that could require further review of the medical necessity of admissions and continued stay in the hospital involved and other actions as determined by the Secretary. ####

(4)Termination of required reviews #####

(A)In general Subject to subparagraph (B), the previous provisions of this subsection shall cease to apply for discharges occurring on or after October 1, 2010. #####

(B)Continuation As of the date specified in subparagraph (A), the Secretary shall determine whether to continue to guarantee, through continued medical review and sampling under this paragraph, recovery of at least 75 percent of overpayments received by long-term care hospitals due to medically unnecessary admissions and continued stays. ####

(5)Funding The costs to fiscal intermediaries or medicare administrative contractors conducting the medical necessity reviews under paragraph

(1)shall be funded from the aggregate overpayments recouped by the Secretary of Health and Human Services from long-term care hospitals due to medically unnecessary admissions and continued stays. The Secretary may use an amount not in excess of 40 percent of the overpayments recouped under this paragraph to compensate the fiscal intermediaries or Medicare administrative contractors for the costs of services performed. ###

(g)Implementation For purposes of carrying out the provisions of, and amendments made by, this title, in addition to any amounts otherwise provided in this title, there are appropriated to the Centers for Medicare & Medicaid Services Program Management Account, out of any money in the Treasury not otherwise appropriated, $35,000,000 for the period of fiscal years 2008 and 2009. * * * * * * *

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