Medicare Catastrophic Coverage Act of 1988

(Conference report filed in House, H. Rept. 100-661)

Medicare Catastrophic Coverage Act of 1988 - Title I: Provisions Relating to Part A of Medicare Program and Supplemental Medicare Premium - Subtitle A: Expansion of Medicare Part A Benefits - Amends part A (Hospital Insurance) of title XVIII (Medicare) of the Social Security Act to require that an inpatient hospital deductible be paid only for the first period of continuous hospitalization in a calendar year. (Currently, such deductible must be paid for each "spell of illness" requiring inpatient hospital services.) Removes durational limitations on the coverage of inpatient hospital services, except with respect to inpatient psychiatric hospital services. Eliminates the coinsurance requirement for inpatient hospital services.

Establishes the monthly part A premium, required of individuals who wish to buy into the Hospital Insurance program, at the monthly actuarial value of part A services provided to beneficiaries age 65 and over. Imposes a coinsurance rate, equal to 20 percent of the average per diem reasonable cost of post-hospital extended care services, for the first eight days of an individual's receipt of such services in a calendar year.

Provides coverage for post-hospital extended care services for 150 days in each calendar year. (Currently, such coverage is limited to 100 days for each "spell of illness.") Drops restrictions on the coverage of extended care services which are not post-hospital extended care services. Creates an extension period of hospice care for terminally ill beneficiaries which is to follow the two 90-day periods and the subsequent 30-day period of hospice care coverage currently provided in an individual's lifetime. Reduces the deductible imposed under part A on the first three pints of blood furnished to an individual during a calendar year to the extent such blood is replaced or a blood deductible has been imposed on the individual under part B (Supplementary Medical Insurance) of the Medicare program within such year.

Subtitle B: Supplemental Medicare Premium - Amends the Internal Revenue Code to impose an annual supplemental Medicare premium on individuals who are eligible for benefits under part A of the Medicare program for more than six full months in a taxable year and whose tax liability equals or exceeds $150. Specifies premium rates through 1993, with rate adjustments thereafter reflecting program costs and revenues. Multiplies the premium rates by each $150 of tax liability an individual incurs to determine the premium due. Sets an annual cap on such premium. Makes special premium calculation rules applicable to couples filing joint returns and government retirees.

Establishes the Federal Hospital Insurance Catastrophic Coverage Reserve Fund into which shall be transferred amounts equivalent to outlays for part A catastrophic coverage, excluding outpatient drug benefits.

Directs the Secretary of the Treasury to conduct a study and report to the Congress by November 30, 1988, on Federal tax policies to promote private financing of long-term care.

Title II: Provisions Relating to Part B of the Medicare Program and to Medicare Supplemental Health Insurance - Subtitle A: Expansion of Medicare Part B Benefits - Amends part B (Supplementary Medical Insurance) of the Medicare program to cover all of the reasonable out-of-pocket part B expenses a beneficiary incurs in excess of $1,370 in 1990, adjusting such ceiling annually thereafter so as to maintain the percentage of Medicare enrollees exceeding such cap at seven percent per year. Requires Medicare carriers to provide individuals who have reached the out-of-pocket expense limit with notice that they have reached such limit.

Provides coverage, beginning in 1991, of the catastrophic expenses for outpatient prescription drugs and insulin (outpatient drugs) and beginning in 1990, for immunosuppressive drugs furnished for the second year and beyond after organ transplant surgery. Sets the annual deductible for such coverage at: (1) $550 in 1990, with Medicare paying 50 percent of the costs in excess of such amount; (2) $600 in 1991, with Medicare paying 50 percent of the costs in excess of such amount; (3) $652 in 1992, with Medicare paying 60 percent of the costs in excess of such amount; and (4) an amount set thereafter so that 16.8 percent of Medicare beneficiaries will exceed such amount, with Medicare paying 80 percent of the costs in excess of such amount. Sets payment limits for outpatient drugs, differentiating drugs for which generics are available from those for which they are not available.

Continues current Medicare payments for 80 percent of the costs of immunosuppressive drugs used during the first year after a Medicare covered transplant. Pays, beginning in 1990, 80 percent of the costs of intravenous drugs provided in the home as well as all of the costs for home health aides and equipment to administer the drugs. Excludes beneficiary cost-sharing for intravenous drugs which are provided as part of a continuous therapy initiated at a hospital and first year immunosuppressive drugs from the calculation of the deductibles listed above.

Directs the Secretary to establish a program to identify and to educate physicians and pharmacies concerning: (1) instances and patterns of unnecessary or inappropriate prescribing or dispensing practices; (2) instances or patterns of substandard care; and (3) potential adverse drug reactions. Requires the Secretary to develop, and update annually, an information guide concerning the comparative average wholesale prices of at least 500 of the most commonly prescribed outpatient drugs and mail such guide to Medicare hospitals, physicians, social security offices, senior citizen centers, and other appropriate places by January of each year. Sets forth outpatient drug cost reporting and control provisions.

Authorizes a pharmacy to enter into an agreement with the Secretary to accept payment under part B of the Medicare program on an assigned basis for outpatient drugs furnished to part B enrollees. Sets forth the obligations of participating pharmacies, including the requirements that they: (1) charge Medicare beneficiaries no more for drugs than they charge the general public; (2) keep patient records for all outpatient drugs dispensed to such beneficiaries; and (3) offer to counsel each of their beneficiaries on the appropriate use of such drugs and the availability of therapeutically equivalent outpatient drugs. Requires the Secretary to provide each participating pharmacy with: (1) a distinctive emblem indicating its status as such; and (2) the equipment and assistance necessary for it to submit claims electronically. Requires the Secretary to establish, by January 1, 1991, a point-of-sale electronics system for use by carriers and participating pharmacies in submitting information respecting outpatient drugs dispensed to Medicare beneficiaries. Prohibits part B coverage of an outpatient drug which is dispensed in a quantity exceeding a 30-day supply or such longer supply, not exceeding 90 days, as the Secretary authorizes.

Waives the requirement that a Medicare carrier be an insurer of health care services, authorizing the Secretary to contract with other entities for implementation and operation of the electronic point-of-sale claims processing system and for related functions. Requires Medicare carriers which make determinations or payments with respect to outpatient drugs to offer to receive requests from participating pharmacies for payments for such drugs through electronic communications and respond to requests by such pharmacies as to whether or not an individual has paid the deductible for such drugs.

Requires the Director of the Office of Technology Assessment to appoint individuals with expertise in the provision and financing of covered outpatient drugs to a Prescription Drug Payment Review Commission which shall make recommendations to the Congress by May 1 of each year concerning methods of paying for covered outpatient drugs under part B of the Medicare program.

Sets forth miscellaneous outpatient drug study and reporting requirements.

Provides Medicare coverage for a mammogram: (1) every other year for women aged 65 or older and for women aged 40 to 49 who are not at a high risk of developing breast cancer; (2) once a year for women aged 50 to 64 or women aged 40 to 49 who are at a high risk of developing breast cancer; and (3) once between a women's 35th and 40th birthdays. Authorizes the Secretary to revise such frequencies after 1991. Sets forth study and reporting requirements.

Covers in-home care furnished, under the supervision of a registered professional nurse, by a home health agency or by others under arrangements with such agency to an individual who has incurred expenses equal to the part B cost-sharing limit or the outpatient drug deductible for the year and, for the preceding three months, has been unable to perform at least two specified daily living activities without the assistance of an uncompensated primary caregiver with whom he or she resides. Limits such coverage to 80 hours per year. Directs the Secretary to report to the Congress, within 18 months of this Act's enactment, on the advisability of providing out-of-home services as alternative services to in-home care.

Covers nursing care and home health aide services as home health services if such services are needed less than seven days each week or are needed for an initial period of up to 38 consecutive days and for a subsequent period on a physician's certification of exceptional circumstances.

Requires the Secretary to provide for research on issues relating to the delivery and financing of Medicare long-term care services. Authorizes appropriations for FY 1988 through 1993 for such research. Sets forth reporting requirements.

Directs the Secretary to conduct a survey of adult day care services and report to the Congress within one year of this Act's enactment regarding such services, and standards which may be applied in providing Medicare coverage for such services.

Subtitle B: Medicare Part B Monthly Premium Financing - Increases the part B premium by the sum of a catastrophic coverage monthly premium and a prescription drug monthly premium. Specifies the rates of the latter two premiums through 1993, with rate adjustments thereafter reflecting program costs and revenues. Establishes the Federal Catastrophic Drug Insurance Trust Fund into which part A and B premiums attributable to outpatient drug coverage are to be transferred. Creates the Medicare Catastrophic Coverage Account from which catastrophic (non-drug) outlays are to be debited and to which catastrophic coverage premiums are to be credited, though no funds are actually transferred into or paid out of the account.

Subtitle C: Miscellaneous Provisions - Gives Medicare supplemental health insurance policy holders 30 days after being issued a policy to return such policy for a full refund of any premiums paid. Requires State Medicare supplemental health insurance policy certification programs to monitor the ratio of benefits provided to premiums collected under such policies. Directs the Secretary to: (1) inform Medicare beneficiaries about supplemental health insurance marketing and sales abuses which warrant criminal penalties and the manner in which they may report such abuses to appropriate officials; (2) publish a toll-free number for beneficiaries to report such abuses; and (3) inform Medicare beneficiaries of the addresses and telephone numbers of State and Federal agencies and offices that provide information and assistance regarding the selection of Medicare supplemental policies.

Requires that State regulatory standards for Medicare supplemental health insurance policies be at least as stringent as the National Association of Insurance Commissioners (NAIC) Model Standards, amended within 90 days of this Act's enactment to reflect changes made by this Act. Provides that if the NAIC Model Standards are not amended, Federal model standards shall be established and serve as the standards for evaluating State regulatory standards for Medicare supplemental health insurance policies. Directs the Secretary to report to the Congress in March 1989 and July 1990 on actions States have taken in adopting standards at least as stringent as the NAIC Model Standards.

Requires a Medicare supplemental policy to submit a copy of each of its advertisements to the State Commissioner of Insurance for his or her review or approval to the extent it may be required under State law.

Provides that the Secretary, rather than the President, shall appoint Supplemental Health Insurance Panel members.

Directs the Secretary to: (1) take this Act's amendments into account in determining the payments to be made to health maintenance organizations; and (2) require such organizations to adjust their agreements with Medicare beneficiaries in consideration of such amendments.

Requires the Secretary to mail a notice annually to Medicare beneficiaries, and upon their entitlement or enrollment, of the extent to which Medicare coverage and payment is provided for health care services and Medicare and Medicaid (title XIX of the Act) coverage is provided for long-term care services. Requires that a notice be mailed annually to beneficiaries which contains: (1) a description of Medicare's participating physician program; (2) explanations of the advantages of obtaining services from participating physicians or suppliers and the assistance offered by carriers in obtaining their names; and (3) the local carrier's toll-free number for program inquiries and requests for free copies of appropriate directories. Revises the notice provided to beneficiaries in conjunction with the payment of non-assigned claims to require the inclusion of: (1) a clear statement of amounts charged in excess of Medicare-recognized amounts; and (2) an offer of assistance in obtaining the names of participating physicians and suppliers.

Revises the penalties applicable against health maintenance organizations which charge enrollees excess premiums, or expel or refuse to reenroll a beneficiary on the basis of his or her health status.

Title III: Provisions Relating to the Medicaid Program - Amends the Medicaid program to phase-in, by 1992, the requirement that States provide Medicaid coverage of Medicare premiums, deductibles, and coinsurance payments for which Medicare-eligible individuals whose income does not exceed the Federal poverty level would otherwise be accountable. Prohibits States from setting the resource eligibility limit for such coverage at more than twice the resource limit for eligibility under the Supplemental Security Income Program (title XVI of the Act). Gives U.S. Commonwealths and Territories the option of providing such coverage.

Phases-in, by July 1, 1990, the requirement that States extend Medicaid coverage to pregnant women and infants up to age one with incomes below the Federal poverty level but too high, under current requirements, to qualify for Medicaid. Gives U.S. Commonwealths and territories the option of providing such coverage.

Sets forth rules regarding the attribution of income and resources to institutionalized and community spouses. Provides that for the initial determination of an institutionalized spouse's medicaid eligibility all the resources held by either the institutionalized or community spouse shall be considered available to the institutionalized spouse except for an amount which equals the community spouse resource allowance determined without subtracting from such allowance resources otherwise available to the community spouse. Sets forth the formula for determining the community spouse resource allowance which provides the community spouse with at least $12,000 annually, with annual adjustments to such formula reflecting changes in the cost-of-living. Excludes, from the determination of the institutionalized spouse's eligibility, support which the community spouse owes to the institutionalized spouse if the latter assigns his or her support rights to the State.

Provides that after the initial eligibility determination: (1) no resources of the community spouse will be considered available to the institutionalized spouse; and (2) the income of the institutionalized spouse will not be considered to include a specified personal needs allowance, community spouse monthly income allowance, family allowance, and incurred expenses for medical or remedial care for the institutionalized spouse that are not covered by a legally liable third party. Sets forth the formulas for determining such allowances. Provides the community spouse with a minimum monthly maintenance needs allowance determined pursuant to a specified formula and capped at $1,500, with subsequent adjustments for inflation. Gives the institutionalized and the community spouse the right to a hearing to establish that: (1) the minimum monthly maintenance needs allowance is inadequate, due to exceptional circumstances, to protect the community spouse from significant financial duress; or (2) the resource allowance, when combined with the income allowance, is not adequate to raise the community spouse's income to the minimum monthly maintenance needs allowance. Requires the substitution of an adequate allowance for an allowance found to be inadequate. Prohibits the income allowance from being less than court-ordered support payments.

Delays the Medicaid eligibility of institutionalized individuals who disposed of their resources at less than fair market value within 30 months prior to applying for Medicaid benefits. Sets forth situations in which a delay shall not be applied.

Prohibits Missouri from including any aged, blind, or disabled individual's home as a resource in determining his or her Medicaid eligibility.

Title IV: United States Bipartisan Commission on Comprehensive Health Care, OBRA Technical Corrections, and Miscellaneous Provisions - Subtitle A: United States Bipartisan Commission on Comprehensive Health Care - Establishes the United States Bipartisan Commission on Comprehensive Health Care which shall: (1) examine shortcomings in the current health care delivery and financial mechanisms that limit or prevent access of individuals to comprehensive health care; and (2) make recommendations to the Congress respecting Federal programs, policies, and financing needed to assure the availability of comprehensive long-term care for everyone. Directs the Commission to report to the Congress on its findings and recommendations regarding comprehensive long-term care for: (1) the elderly and disabled, within six months of this Act's enactment; and (2) everyone, within one year of this Act's enactment. Terminates the Commission 30 days after submission of the latter report. Authorizes appropriations for the implementation of this title.

Subtitle B: OBRA Technical Corrections - Makes technical corrections to certain health care provisions in the Omnibus Budget Reconciliation Act of 1987.

Subtitle C: Miscellaneous Provisions - Requires employers which provide their employees or retired former employees with health care benefits that are duplicative of this Act's benefits to provide additional benefits that are at least equal in value to the duplicative benefits or refund the value of such benefits to employees or retired former employees.

Directs the Office of Personnel Management to reduce the rates charged Medicare eligible individuals participating in the Federal Employees Health Benefits (FEHB) program to compensate for the cost of medical services and supplies which, but for this Act's catastrophic coverage benefits, would have been incurred by such program. Requires the Director of the Office of Personnel Management to submit reports to the Congress by April 1, 1989, regarding: (1) changes to the FEHB program that may be required to incorporate FEHB plans designed for Medicare eligible individuals and to improve the efficiency and effectiveness of the program; and (2) the feasibility of adopting NAIC Model Standards for Medicare supplemental policies when providing Medicare supplemental plans as a type of FEHB plan.

Directs the Secretary to establish a demonstration project by entering into an agreement with a private or public nonprofit organization to: (1) provide training and technical assistance to prepare volunteers to counsel elderly Medicare or Medicaid beneficiaries regarding their eligibility for such benefits and assist such beneficiaries in applying for those benefits; and (2) reimburse volunteers for expenses incurred in receiving such training or providing such services. Authorizes appropriations from FY 1989 through 1991 for such projects.

Requires the Secretary to establish, within one year of this Act's enactment, four two-year demonstration projects under which an entity agrees to provide case management services to Medicare beneficiaries with selected high cost catastrophic illnesses so that the Secretary and the Congress can evaluate the appropriateness and determine the most effective approach to providing case management services to such beneficiaries. Requires that one such project be conducted by a peer review organization. Authorizes appropriations for such projects.

Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 and the Omnibus Budget Reconciliation Acts of 1986 and 1987 to extend: (1) certain waiver of liability provisions applicable to hospitals, skilled nursing facilities, and home health agencies; and (2) the prohibition on new Medicare cost-saving regulations.

Directs the Administrator of the Health Care Financing Administration to establish, within 90 days of this Act's enactment, an Advisory Committee on Medicare Home Health Claims which shall conduct a study and report to the Congress, within one year of this Act's enactment, on the reasons for the increase in the denial of claims for home health services during 1986 and 1987, the ramifications of such increase, and the need to reform the process involved in such denials. Authorizes appropriations for such Committee.

Amends part A (General Provisions) of title XI of the Social Security Act to prohibit the use of the words "Social Security," "Medicare," or other words, letters, symbols, or emblems, in a communication or production in a manner which the user knows or should know would convey a false impression of connection with, or authorization from, the Social Security Administration, the Health Care Financing Administration, or the Department of Health and Human Services. Authorizes the Secretary to impose civil monetary penalties for violations of such prohibition. Authorizes civil monetary penalties, where only criminal penalties currently apply, for deceptive selling practices relating to Medicare supplemental health insurance policies.

Requires the Secretary to establish up to five demonstration projects, for up to three years each, to review the appropriateness of classifying chronic ventilator-dependent units in hospitals as rehabilitation units for Medicare reimbursement purposes.