Medicare Amendments of 1987

Medicare Amendments of 1987 - Title I: Benefits and Cost Sharing - Amends part B (Supplementary Medical Insurance) of title XVIII (Medicare) of the Social Security Act to require that the part B deductible be adjusted annually to reflect changes in an index of appropriate health care costs. Alters the formula for determining part B premiums so that individuals whose premiums are not paid under the Medicaid program (title XIX of the Social Security Act) or a group health plan are charged lower premiums than those who have such coverage.

Makes Medicare penalty provisions inapplicable when hospitals discount the Medicare part A (Hospital Insurance) deductible charged patients whom the hospital expects to be classified under a particular diagnosis-related group, provided the hospital notifies the organization through which it receives Medicare payments regarding such discount.

Includes group health plans of employers employing at least 20 employees within the prohibition on taking an individual's status as a disabled Medicare beneficiary into account in providing coverage. Makes such plans the primary payer for such beneficiaries. Amends the Internal Revenue Code to impose an excise tax equal to 25 percent of group health plan expenses if such a plan restricts its coverage of such beneficiaries. (Currently, the preceding provisions apply only to group health plans of employers employing at least 100 employees.)

Amends the Medicare program to eliminate the separate outpatient occupational therapy benefit.

Restricts covered optometrist services to services related to the condition of aphakia.

Title II: Eligibility - Adds one month to the age which individuals must attain to be eligible for benefits under part A of the Medicare program on the basis of age.

Allows certain aliens who are lawfully admitted for permanent residence or otherwise permanently residing in the United States under color of law to enroll under parts A and B of the Medicare program within the period beginning with the second month after this Act's enactment and ending seven months later. Imposes a part B premium equal to twice the highest part B premium charged enrollees age 65 and older on aliens who are enrolled under part B but have not become entitled to part A benefits or resided in the United States continuously for five years and been lawfully admitted for permanent residence.

Amends the Internal Revenue Code to provide Medicare coverage of all State and local government employees.

Title III: Reimbursement - Amends the Medicare program to require the Secretary to determine the percentage change in hospital prospective payment rates after FY 1987.

Removes the word "graduate" from references to covered medical education costs. Requires that hospitals be reimbursed for approved medical residency training programs on the basis of the Secretary's determination of the average reasonable cost per resident during the hospital's first cost reporting period after June 1985, adjusted to reflect subsequent changes in the cost of living. Eliminates certain obsolete transitional provisions which affected the computation of covered medical education costs.

Makes the formula for determining a hospital's indirect costs of medical education which was to be applicable beginning in FY 1990 applicable beginning in FY 1988.

Sets forth special payment provisions for certain capital-related costs which the Secretary elects to include in the operating costs of inpatient hospital services.

Alters the methodology for determining the reasonable cost of routine services furnished as part of covered extended care services by hospitals authorized to provide extended care services.

Repeals the authority of States to continue to provide Medicare coverage of hospitals under State hospital reimbursement systems approved as specified demonstration projects. Repeals the Secretary's authority to make payments to hospitals to promote the closing or conversion of underutilized hospital facilities.

Prohibits the retroactive revision of payments for inpatient hospital services unless the payment determination was unreasonable in light of information and judicial interpretations of the law available at the time of the determination.

Prohibits specific recognition of a return on equity capital in determinations of the covered reasonable costs incurred by proprietary facilities in furnishing extended care services.

Directs the Secretary to determine the amounts to be paid under part B of the Medicare program for radiology, anesthesiology, and pathology physicians' services furnished to hospital inpatients. Directs the Secretary to require coinsurance equal to 25 percent of the Medicare payment amount or require no coinsurance at all. Requires that the part B premium be increased to cover 20 percent of the Medicare payments for such services if the Secretary elects to require no coinsurance. Authorizes the Secretary to limit the amount nonparticipating physicians may charge part B enrollees for such services.

Authorizes the Secretary, in determining the reasonable cost for medical services, to treat otherwise similar services as dissimilar if furnished by providers whose credentials differ.

Increases the Secretary's flexibility in determining reasonable charges for physicians' services. Authorizes the Secretary to take into account regional differences in fees in determining whether a physician's charge is reasonable.

Requires that the prevailing charge levels for items or services within an area be set so that locality changes which affect the area will not affect the aggregate payments made for such items or services within such area.

Reduces the prevailing charge for cataract surgery by 15 percent in 1988.

Directs the Secretary to set customary charges for new physicians at no more than 80 percent of the prevailing charge for physicians' services.

Eliminates the floor on prevailing charges for physicians' services which is set at prevailing charge levels for the fiscal year ending June 30, 1975.

Requires the Secretary to pay for physicians' services furnished to individuals who have end stage renal disease on a comprehensive monthly fee or other basis for an aggregate of dialysis-related services provided over a period of time rather than making such payments on a reasonable charge basis.

Amends the Omnibus Budget Reconciliation Act of 1986 to repeal the base rate for end stage renal disease facility payments for routine dialysis treatment in FY 1988.

Amends the Medicare program to eliminate the provision of separate part B payments for the services of physician assistants.

Requires that durable medical equipment, other than inexpensive equipment or equipment deemed eligible for long-term rental, furnished by a Medicare provider be purchased on a lump sum or lease-purchase basis. Allows the lump sum purchase of such equipment only where the expected duration of the medical need for such equipment warrants the assumption that a lump sum purchase would be less costly than a lease-purchase. Covers 80 percent of the reasonable charge for durable medical equipment bought on a lump sum basis.

Title IV: Administrative Provisions - Prohibits Medicare periodic interim payments for hospitals that have a disproportionate share of low-income patients.

Increases the Secretary's flexibility in entering into and terminating agreements with intermediaries for Medicare claims processing by: (1) eliminating the role associations of Medicare providers play in nominating the intermediary from which they are to receive payments; (2) allowing such agreements to be entered into without regard to laws requiring competition; and (3) eliminating the requirement that the Secretary make specified findings regarding an intermediary's unsuitability before terminating the agreement with such intermediary. Requires intermediaries to transmit payment for at least 95 percent of all Medicare clean claims within 30 days of their submittal. Imposes interest penalties for late claims payments.

Amends part A (General Provisions) of title XI of the Act to repeal the Secretary's authority to conduct a specified program testing the proficiency of health care personnel.

Amends the Medicare program to eliminate the requirement that the Railroad Retirement Board enter into contracts with carriers covering or transmitting payments for certain health services provided to railroad retirement beneficiaries.

Prohibits Medicare payments for end stage renal disease services when payments can reasonably be expected to be made under a group health plan.

Requires that Medicare payments for home dialysis supplies and equipment be made only to providers of services and renal dialysis facilities.

Limits the minimum utilization rate required of providers and renal disease facilities furnishing end-stage renal disease services to transplantations.

Requires that members of the Supplemental Health Insurance Panel be selected by the Secretary rather than the President.

Provides that upon the determination that there has been an underpayment or overpayment of Medicare benefits the accrual of interest on the excess or deficit not paid shall begin. (Currently, a final determination is required before interest accrues.)

Prohibits judicial review or Provider Reimbursement Review Board review of payments under a State hospital reimbursement control system. Prohibits any administrative or judicial review of assignments of inpatient hospital discharges to diagnosis-related groups.

Provides that after a finding by a utilization review committee that further inpatient hospital services or post-hospital extended care services are not medically necessary payment for such services may be made for two more days of such services. (Currently, three additional days are covered.)

Eliminates specified reporting requirements regarding: (1) the validation of a hospital accreditation process; (2) home dialysis and transplantations; and (3) the end-stage renal disease program.

Requires covered hospitals to have all patients under the care of a physician or a nurse-midwife. (Currently, all patients must be under a physician's care.)

Amends part A (General Provisions) of title XI of the Act to repeal the authorization of Federal funding for a program under which State planning authorities submit findings and recommendations to the Secretary for capital expenditures on health facilities. Eliminates the requirement that a hospital receive a certificate of need from the State health planning and development agency before providing extended care services.

Eliminates the requirement that certain Medicare providers develop capital expenditure plans for at least a three-year period.

Sets forth technical amendments affecting the Medicare program.