Medicare Catastrophic Loss Prevention Act of 1987

(Measure indefinitely postponed in Senate, H.R. 2470 passed in lieu)

Medicare Catastrophic Loss Prevention Act of 1987 - Amends part A (Hospital Insurance) of title XVIII (Medicare of the Social Security Act to remove durational limitations on Medicare coverage of inpatient hospital services, and cover 150 days of post-hospital extended care services per year, for an individual covered under parts A and B (Supplementary Medical Insurance) of the Medicare program. (Individuals covered only under part A would be subject to current durational limitations on such services.)

Provides that an individual covered under parts A and B of the Medicare program shall not be required to pay more than one deductible for inpatient hospital services and one deductible for blood furnished in connection with such services per year. (Currently such deductibles are imposed for each "spell of illness.") Eliminates the coinsurance requirement imposed on such individuals for extended hospital stays. Imposes a coinsurance rate, equal to 15 percent of the average per diem cost of post-hospital extended care services, for the first ten days of a part A and B beneficiary's receipt of such services per year. (Currently, the coinsurance requirement applies to days 21 through 100 of a "spell of illness" requiring such services.)

Amends part B of the Medicare program to cover all of the out-of-pocket Medicare expenses which a part B beneficiary incurs in excess of $1,850 in 1988, and $2,030 in 1989, adjusted annually thereafter to reflect changes in the cost-of-living. Provides for the adjustment of Medicare payments to organizations providing health care on a prepaid basis so as to reimburse them for such excess out-of-pocket costs incurred on behalf of enrollees. Includes as out-of-pocket costs: (1) beneficiary cost sharing expenses; and (2) amounts expended for specified preventive health services.

Imposes a monthly catastrophic coverage premium of $4.00 for 1988 on an individual covered under parts A and B of the Medicare program, with annual adjustments to such premium thereafter reflecting changes in the amount of catastrophic benefits paid and the need to establish and maintain a contingency or reserve Fund. Imposes a smaller monthly catastrophic coverage premium on individuals who are only covered under part B of the Medicare program. Establishes a monthly catastrophic drug benefit premium for part B beneficiaries. Imposes a supplemental part B premium of $13.08 per year, adjusted annually to reflect changes in the cost of catastrophic benefits, for each $150 of income tax due in excess of $150. Sets an annual cap on the supplemental premium.

Establishes the Federal Catastrophic Drug Insurance Trust Fund into which catastrophic drug benefit premiums shall be paid and the Federal Catastrophic Health Insurance Trust Fund into which the other catastrophic benefit premiums shall be paid.

Covers, as home health services, daily nursing care and home health aide services furnished for up to 21 days with a physician's certification of the need for such daily care. Covers such services on a daily basis for 45 days when provided to a part B beneficiary within 30 days of his or her hospital discharge. (Currently such care must be provided on a part-time or intermittent basis.) Covers home intravenous drug therapy furnished by or under arrangements with a qualified provider in accordance with a plan established and periodically reviewed by a physician. Defines as "homebound" (a prerequisite of eligibility for Medicare home health services) any person who has a condition which restricts his or her ability to leave the home without support or for whom leaving the home is medically contraindicated.

Directs the Secretary of Health and Human Services to notify Medicare beneficiaries, when they apply for benefits under part A or enroll under part B, and in November 1987 and annually thereafter, regarding the extent of and limitations on Medicare coverage, including the ways in which coverage differs between those who are and those who are not covered under part B. Authorizes the Secretary to: (1) enter into agreements with private or public nonprofit organizations to 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. Requires the Secretary to take into account the costs incurred by organizations providing health care on a prepaid basis as a result of this Act's amendments in modifying contracts with such organizations. Requires such organizations to adjust their agreements with Medicare beneficiaries in consideration of such amendments.

Requires a health maintenance organization (HMO) to notify individuals who are enrolled or eligible to enroll with such organization that the organization can terminate or refuse to renew its contract with the Secretary and that this may result in the termination of an individual's enrollment with the organization.

Imposes civil monetary penalties and intermediate sanctions on HMOs which willfully: (1) fail substantially to provide medically necessary items and services if the failure adversely affects the enrollee; (2) charge an individual a greater premium than is permitted; (3) act to expel or refuse to re-enroll an individual for medical reasons; (4) engage in any practice that denies or discourages enrollment by individuals whose medical condition or history indicates a need for substantial future medical services; or (5) misrepresent or falsify enrollment information, or enroll an individual without the individual's knowledge or consent or after making a material inducement to the individual.

Provides coverage of the catastrophic expenses for outpatient prescription drugs (outpatient drugs) under part B of the Medicare program. Includes immunosuppressive drugs within such coverage if furnished to individuals within one year after their receipt of a covered organ transplant. Sets the annual deductible for such coverage at $600 for 1990, with subsequent annual adjustments of such deductible reflecting changes in the cost of outpatient drugs. Covers 80 percent of the costs in excess of such deductible provided the cost for each drug does not exceed payment limits based on the average cost for each drug. Authorizes the Secretary to deny payment for outpatient drugs which are prescribed or dispensed with excessive frequency or in excessive quantities. Directs the Secretary to: (1) establish a utilization review program for outpatient drugs to identify instances of unnecessary or inappropriate prescribing or dispensing practices and identify patterns of substandard care; and (2) 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 and physicians by January 1 of each year.

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; (3) assist beneficiaries in determining whether or not their expenses have exceeded the annual deductible; and (4) offer to counsel each of their beneficiaries on the appropriate use of such drugs and the availability of therapeutically equivalent outpatient drugs; and (5) submit requests for payment to carriers electronically by 1991, except where such requirement would impose undue hardship on a pharmacy. Requires the Secretary to provide each participating pharmacy with: (1) a distinctive emblem indicating its status as such; and (2) information on the payment limits established for outpatient drugs. Prohibits part B coverage of an outpatient drug which is dispensed in a quantity exceeding a 90-day supply for an individual receiving chronic maintenance drug therapy, or a 60-day supply for any other individual.

Requires Medicare carriers which make determinations or payments with respect to outpatient drugs to: (1) offer to receive requests for payments for such drugs through electronic communications; (2) respond to requests by participating pharmacies as to whether or not an individual has paid the deductible for such drugs; and (3) make payments for an outpatient drug claim from within 30 to 45 days of the receipt of such claim.

Directs the Secretary to: (1) conduct a survey of expenses for covered outpatient drugs to provide information on the distribution of such expenses among Medicare beneficiaries; and (2) report to the Congress regarding such survey by January 19, 1989. Requires that, within two months of the Secretary's survey report: (1) the Congressional Budget Office transmit its estimate of future Medicare expenditures for outpatient drugs to the Congress; and (2) the General Accounting Office report to the Congress on the validity of the Secretary's survey, the extent to which pharmacies accept assignment, and the barriers to such acceptance.

Requires the Office of Technology Assessment and the Institute of Medicine to report to the Congress and the Secretary within one year of this Act's enactment regarding the inclusion of additional or alternative drugs as covered outpatient drugs. Directs the Secretary to conduct additional studies regarding outpatient drug coverage and submit a final report to the Congress regarding such studies by January 1, 1991. Requires the Secretary and the General Accounting Office to each: (1) conduct and periodically update a study comparing published average wholesale prices and actual pharmacy acquisition costs by pharmacy type; and (2) submit reports to the Congress on the results of each such study and update.

Directs the Secretary to: (1) enter into an agreement with two or more private entities to conduct demonstration projects testing the use of magnetic cards, electronic billing, and other technological devices in the administration of benefits with respect to covered outpatient drugs; and (2) report to the Congress on the results of a project within six months of such project's completion. Requires the Secretary to develop a standard receipt to be used by Medicare beneficiaries in making purchases from participating pharmacies and distribute copies of such receipt to participating pharmacies by January 1, 1990.

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.

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) establish 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.

Requires that States use savings accrued under Medicaid from catastrophic Medicare coverage to expand Medicaid (title XIX of the Act) coverage of the low-income elderly and community spouses of institutionalized individuals. Requires States which provide Medicaid coverage to all qualified Medicare beneficiaries whose income does not exceed the Federal poverty level and which provide a monthly Medicaid maintenance needs allowance for community spouses of institutionalized individuals of at least $550 to increase opportunities for the elderly to participate in adult day health care and other community-based services. Requires that States use savings accrued under Medicaid from Medicare coverage of home intravenous drug therapy and catastrophic expenses for outpatient drugs to provide Medicaid coverage of the costs the low-income elderly incur for Medicare coverage of outpatient drugs.

Amends the Medicaid program to authorize States to provide Medicaid coverage of a qualified Medicare beneficiary's prescribed drugs to the same extent that coverage is provided to the categorically needy instead of providing Medicaid coverage of the deductible for Medicare coverage of outpatient drugs. Authorizes States which provide Medicaid coverage of Medicare beneficiary expenses for Medicare outpatient drug coverage to include beneficiaries whose income exceeds the Federal poverty level if such beneficiaries contribute to the cost of 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. Gives the institutionalized and the community spouse the right to a hearing to establish that the community spouse monthly income allowance or resource allowance is not adequate to support the community spouse without financial duress so that an adequate amount of support will be substituted for the allowance. Prohibits such 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 26 months prior to applying for Medicaid benefits. Sets forth situations in which a delay shall not be applied.

Directs the Secretary to report to the Congress by December 31, 1988, regarding means for recovering amounts from deceased Medicaid beneficiaries' estates to pay for Medicaid skilled nursing facility or intermediate care facility services furnished to such beneficiaries.

Directs the Secretary to report to the Congress by October 1, 1989, on a study to be conducted by the Institute of Medicine into private and public funding options for long-term care. Directs the Secretary of the Treasury to conduct a study and report to the Congress by April 1, 1988, on Federal tax policies to promote private financing of long-term care.

Requires the Secretary to establish, within one year of this Act's enactment, no less than six one-year projects evaluating the feasibility of providing case management services to Medicare beneficiaries with catastrophic illnesses. Requires that project services be provided through peer review organizations. Sets forth reporting requirements.

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 require the Trustees of the Hospital Insurance and Supplementary Medical Insurance trust funds to comment in their annual report to the Congress on the extent to which the catastrophic coverage premium and the supplemental part B premium cover the cost of catastrophic coverage benefits and related administrative expenses.

Sets forth technical amendments relating to waivers for home and community-based services and a New Jersey respite care pilot project.

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 conduct a survey and report to the Congress within one year of this Act's enactment on adult day care services.

Amends the Medicaid program to authorize a State agency of New Jersey to operate a health maintenance organization.

Amends the Omnibus Budget Reconciliation Act of 1986 to delay, from November 21, 1987, to December 31, 1988, the application of certain standards for organ procurement agencies.

Amends part B of the Medicare program to set forth transitional provisions regarding the monthly catastrophic drug benefit premium. Authorizes the Secretary to reduce the deductible for covered outpatient drugs in 1991, 1992, and 1993 when sufficient revenue exists to pay for such coverage and provide an adequate contingency margin.

Expresses the sense of the Senate regarding the need for effective cost controls on, and the minimization of beneficiary costs for, new catastrophic benefits.

Establishes the United States Bipartisan Commission on Comprehensive Health Care which shall: (1) examine shortcomings in the current health care delivery and financing 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 Commission.