Omnibus Budget Reconciliation Act of 1989

Omnibus Budget Reconciliation Act of 1989 - (Titles I-III: Reserved) - Title IV: Committee on Energy and Commerce - Subtitle A: Medicare - Part A: Provisions Relating to Part B of Medicare - Subpart 1: Payment for Physicians' Services and Related Professional Services - Amends part B (Supplementary Medical Insurance) of title XVIII (Medicare) of the Social Security Act to phase-in, from 1990 to 1993, Medicare payment for physician services pursuant to a fee schedule which is based upon the relative value of the resources devoted to each physician service. Directs the Secretary of Health and Human Services to adjust fee schedule amounts to take into account geographical variations in resource values and to make the transition to such payment methodology budget neutral.

Prohibits the Secretary, after 1990, from making variations in the relative value of a physician service turn on whether the physician is a specialist or such service is his or her specialty.

Requires that, after 1991, classification and coding of physician services: (1) be uniform for the same physician service in all fee schedule areas; (2) include pre-operative and post-operative physician services with related surgical procedures; and (3) differentiate evaluation and management services (primary care) on the basis of the time spent in providing different primary care services.

Directs the Secretary to report to the Congress, by July 1, 1991, on whether geographical variations in fee schedules should be based on variations in resource values among States or between urban and rural areas.

Factors malpractice expenses into the relative value of a physician service.

Phases-in, from 1991 to 1993, the limitation of a nonparticipating physician's actual charge for a service to 120 percent of the fee schedule amount for such service.

Provides for no increase in the Medicare economic index for physician services in 1990.

Makes resource-based geographical variations in Medicare payments for physician services applicable to radiology services.

Prohibits the rounding of fractional time units in calculating Medicare payments for anesthesia services. Establishes separate uniform national fee schedule conversion factors for nurse anesthetist services furnished under the direction of a physician and for other nurse anesthetist services. Prohibits Medicare payments for a suregon's direction of a nurse anesthetist. Amends the Omnibus Budget Reconciliation Act of 1986 to expand and extend a program reimbursing certain rural hospitals for the costs of nurse anesthetists, rather than reimbursing nurse anesthetists directly.

Amends part B of the Medicare program to make payments for physician pathology services pursuant to a fee schedule and geographical area adjustments comparable to such adjustments made for other physician services.

Prohibits Medicare carriers from recovering certain part B overpayments made between July 1, 1985, and March 31, 1986.

Subpart 2: Payments for Other Services - Accelerates the use of regional rates in calculating Medicare payments for durable medical equipment. Narrows the range of acceptable purchase prices for such equipment. Covers parenteral and enteral nutrition equipment as durable medical equipment. Reduces Medicare payments for seat-lift chairs, power-operated vehicles, and transcutaneous electrical nerve stimulators. Treats: (1) power-driven wheelchairs as routinely purchased durable medical equipment; and (2) ostomy supplies as home health services which home health agencies must provide to beneficiaries who need them.

Lowers the payment ceiling for a clinical laboratory test to 95 percent of the median of all fee schedules established for that test for that setting. Allows Medicare payments for such tests to be made to the referring laboratory only if it is located in, or is part of, a rural hospital or submits payment requests for tests of which no more than 30 percent in any year are performed by another laboratory. Eliminates the requirement that a fee schedule for clinical diagnostic laboratory tests be established on a nationwide basis. Repeals the requirement that physician office laboratories performing over 5,000 tests a year be treated as independent laboratories that must meet State and local license requirements.

Reduces capital payments for outpatient hospital services provided during FY 1990.

Provides Medicare cost-based reimbursement to health centers which: (1) provide the services rural health clinics are authorized to provide; and (2) meet the requirements for receiving a grant under the Public Health Service Act or were treated, under part B, as comprehensive federally funded health centers as of January 1, 1989.

Raises the ceiling on payments for physical and occupational therapy services. Directs the Comptroller General to conduct a study and report to specified congressional committees on the provision of such services under the Medicare program.

Directs the Secretary to conduct a study and report to the Congress on the adequacy and appropriateness of Medicare payments for ambulance services.

Requires the Physician Payment Review Commission to conduct a study and report to the Congress on the adequacy and appropriateness of Medicare payments for assistants at surgery.

Directs the Secretary to evaluate and report to specified congressional committees on the effect the part B methodology for reimbursing for blood clotting factor for hemophilia patients has on the accessibility and affordability of such factor to beneficiaries.

Subpart 3: Changes in Coverage and Miscellaneous - Eliminates the limitation of covered psychologist services to services furnished at community mental health centers. Covers services performed by a clinical social worker for the diagnosis and treatment of mental illnesses. Requires such psychologist or clinical social worker to document in the patient record that: (1) the patient has been informed of the desirability of conferring with his or her physician; and (2) the patient's physician has been notified that services are being provided to the patient or has been directly consulted concerning medical conditions that may be contributing to the patients' condition. Eliminates the dollar limitation on covered mental health services. Covers the services of a nurse practitioner working in collaboration with a physician. Makes Medicare payments for such services to the nurse practitioner's employer.

Requires Medicare carriers to permit routine part B payments for up to 1.5 monthly visits per resident of a nursing facility by a member of a team which includes a physician and physician assistant and/or nurse practitioner. Directs the Secretary to establish at least one demonstration project applying such limitation on visits on an average basis over the aggregate total of nursing facility residents served by team members.

Covers a screening pap smear for women who have not undergone such a test during the preceding three years or for a shorter period set by the Secretary for Women at higher risk of developing cervical cancer.

Requires rural health clinics to have a nurse practitioner, physician assistant, or certified nurse-midwife available to furnish patient care services at least 50 percent of the time the clinic operates. Covers social worker services furnished to outpatients of rural health clinics. Expands the area within which rural health clinics may be located. Directs the Secretary to provide health care facilities and the chief executive officer, chief health officer, and chief human services officer of each State with applications and information enabling such facilities to apply for rural health clinic designation under the Medicare or Medicaid (title XIX of the Act) program. Prohibits the Secretary from denying the certification of a facility as a rural health clinic if such facility is located on an island and would meet certification requirements but for the requirement that physician assistant or nurse practitioner services be provided in the facility.

Requires that Medicare payments for physician services furnished to Medicaid beneficiaries be made only on an assignment-related basis.

Directs the Physician Payment Review Commission to review the adequacy and appropriateness of Medicaid payments for physician services.

Part B: Provisions Relating to Parts A and B of Medicare - Amends the Omnibus Budget Reconciliation Act of 1986 to extend, through 1993, the application of a waiver of the Medicare requirement that health maintenance organizations (HMOs) must have an enrolled population of which not more than 50 percent are Medicare or Medicaid beneficiaries to HMOs which had a pre-existing waiver of such requirement and received specified grants in FY 1987. Amends the Medicare program to limit physician charges for emergency services or out-of-area coverage provided to an HMO enrollee by a person who is not under contract with such HMO. Requires the Secretary to give HMOs annual notice of proposed changes in the methodology used or assumptions made in calculating payment rates for each class of HMO enrollee. Eliminates HMOs from the prohibition against making payments to physicians as an inducement to reduce or limit services provided to Medicare beneficiaries. Makes the per capita rate of payment for each class of HMO enrollee equal to the adjusted average per capita cost for that class, rather than 95 percent of such cost.

Amends part B (Peer Review) of title XI of the Act to require peer review organizations (PROs) to give providers whose services are denied Medicare coverage an opportunity for reconsideration of the determination before patients and organizations responsible for paying claims are notified of such determination. Gives Medicare providers an opportunity, if appropriate, to pursue a recommended course of remedial education before PROs recommend their exclusion from such program by reason of their failure to comply with program requirements. Raises the threshold below which a county's population must fall for a provider located in such county to be entitled to a pre-exclusion hearing before an administrative law judge. Sets the civil monetary penalty for a provider's failure to comply with Medicare requirements at $2,500, rather than the cost of improperly provided services.

Amends the Omnibus Budget Reconciliation Act of 1986 to maintain the current base Medicare payment rate for kidney dialysis treatment through September 1989. Requires that subsequent changes in such rate be subject to Medicare notice and comment requirements. Amends the Medicare program to prohibit payments for dialysis services from exceeding payments for such services determined pursuant to a method based on a single composite weighted formula.

Increases the weighting factors, used in determining Medicare payments to hospitals for graduate medical education costs, for initial residencies in family medicine, internal medicine, and pediatrics. Offsets such increase by establishing a national payment limit for graduate medical education costs.

Directs the Secretary of Health and Human Services to develop and distribute to Medicare beneficiaries a summary of recommended preventive health care practices and a form for use in recording information which might assist physicians in providing appropriate care.

Part C: Other Provisions Relating to Medicare and Health-Related Programs - Amends part A (General Provisions) of title XI of the Act to provide that when a matter under part B (Peer Review) of such title or under the Medicare or Medicaid program is to be heard by an administrative law judge such judge must have been appointed by the Secretary exclusively for hearings on such matters.

Amends the Medicare Catastrophic Coverage Act of 1988 to make miscellaneous amendments affecting the United States Bipartisan Commission on Comprehensive Health Care, including the requirement that the Commission also be known as the Claude Pepper Commission and that it submit its two reports to the Congress concurrently by November 9, 1989.

Amends title VII (Administration) of the Act to place the Office of Rural Health Policy under the direction of a Deputy Under Secretary for Rural Health responsible for reporting directly to the Secretary and Deputy Under Secretary of Health and Human Services. Makes such Office independent of other offices, services, and components of the Department of Health and Human Services. Elaborates upon the duties of the Office of Rural Health Policy.

Expresses the sense of the Congress that legislation should be enacted in 1989 making receipt of the additional Medicare coverage provided by the Medicare Catastrophic Act of 1988 voluntary and imposing the additional premiums financing such coverage only on those who elect to receive such coverage.

Expresses the sense of the House of Representatives that the Committees on Energy and Commerce and on Ways and Means review and hold hearings on the Medicare Catastrophic Coverage Act of 1988.

Subtitle B: Health Care Research and Policy - Part A: Agency for Health Care Research and Policy - Amends the Public Health Service Act to create a new title to establish, within the Public Health Service, the Agency for Health Care Research and Policy (Agency) to enhance the quality, appropriateness, and effectiveness of health care services, and access to such services, through the establishment of a broad base of scientific research, and improvements in clinical practice and in the organization, financing, and delivery of health care services. Requires that the agency be headed by an Administrator for Health Care Research and Policy, to be appointed by the President, by and with the advice and consent of the Senate. Directs the Secretary of Health and Human Services, through the Administrator, to carry out the new title.

Sets forth the general authorities and duties of the Administrator, including conducting and supporting research, demonstration projects, evaluations, training, and the dissemination of information. Prohibits the Administrator from restricting the publication of data or results from projects conducted or supported under the new title, but prohibits disclosure of identifying data without consent.

Directs the Administrator and the Director of the National Library of Medicine (the Library) to enter into an agreement for indexing, abstracting, translating, publishing, and other services leading to a more effective and timely dissemination of information on research, demonstration projects, and evaluations.

Directs the Administrator to promote the development and application of appropriate health care technology assessments. Establishes at the Library an information center on health care technologies and health care technology assessment. Directs the Administrator and the Director of the Library to enter into an agreement providing for the information center. Directs the Administrator to make recommendations to the Secretary and to the Administrator of the Health Care Financing Administration with respect to whether specific health care technologies should be reimbursable under federally financed health programs.

Establishes within the Agency the Office of the Forum for Quality and Effectiveness in Health Care, to be headed by a director to be appointed by the Administrator. Directs the Administrator, through the Director, to establish the Forum for Quality and Effectiveness in Health Care to develop, review, and update: (1) clinically relevant diagnosis and treatment guidelines for physicians and health care practitioners; and (2) standards of quality, performance measures, and medical review criteria. Authorizes the Director, in establishing and carrying out the Forum, to enter into contracts with public or nonprofit private entities. Requires the Director to convene panels of qualified experts, practicing physicians, and health care consumers to carry out the development, review, and updating. Authorizes the Director to convene panels of the same composition to develop the standards and criteria and to provide advice to the Administrator.

Part B: Outcomes of Health Care Services and Procedures - Amends part A (General Provisions) of title XI of the Social Security Act to direct the Secretary of Health and Human Services, through the Administrator for Health Care Research and Policy, to conduct and support research with respect to the outcomes of health care services and procedures to identify how diseases and disorders can most effectively and appropriately be diagnosed and treated. Directs the Administrator to establish priorities with respect to the diseases and disorders for which outcome evaluations are to be conducted. Directs the Administrator to conduct and support: (1) research on improvement of the methodologies and criteria utilized in the outcome research; and (2) evaluations of methodologies that utilize large data bases, including claims data and clinical data, in conducting outcome research.

Directs the Administrator to: (1) develop and promote uniform standards and formats for information on outcomes; (2) provide for dissemination of research findings and education of providers; and (3) conduct and support evaluations of outcome research activities.

Authorizes the Administrator to conduct or support research on improving methods of disseminating information on the effectiveness and appropriateness of health care services and procedures.

Declares that the authorities and duties of the Administrator under specified portions of the new title of the Public Health Service Act added by this Act apply with respect to activities carried out under these provisions (relating to outcomes research) as such authorities and duties apply under the new title.

Authorizes appropriations for the outcomes research for FY 1990 through 1992. Authorizes, in addition to appropriations, transfers from the Federal Supplementary Medical Insurance Trust Fund in specified amounts for FY 1990 through 1992.

Part C: Additional Authorities and Duties with Respect to Agency for Health Care Research and Policy - Amends the Public Health Service Act to establish the National Advisory Council for Health Care Research, Evaluation, and Policy to advise the Secretary and the Administrator with respect to activities of the Agency for Health Care Research and Policy (Agency). Declares that the Council shall, notwithstanding the Federal Advisory Committee Act, continue in existence until otherwise provided by law.

Requires that technical and scientific peer review be conducted on each application for a grant, cooperative agreement, or contract under the new title of the Public Health Service Act added by this Act. Prohibits application approval by the Administrator unless the application has been recommended for approval by a peer review group. Allows adjusted peer review procedures for applications involving a direct cost under a specified amount. Directs the Administrator to establish such technical and scientific peer review groups as may be necessary. Requires that they continue in existence, notwithstanding the Federal Advisory Committee Act, until otherwise provided by law. Requires that the reviews of applications be conducted by different peer review groups than those that conduct review of applications involving dissemination activities or the development of research agendas.

Directs the Administrator to: (1) establish guidelines for uniform methods of developing and collecting data under the title added by this Act; (2) assure that statistics developed under that title are of high quality, timely, comprehensive, specific, standardized, and adequately analyzed and indexed; and (3) disseminate the statistics as widely as possible.

Authorizes the Secretary to provide supplies and services in lieu of funds. Declares that contracts may be entered into without regard to specified provisions of Federal law relating to advances and to advertising for Government contracts.

Authorizes the Administrator to appoint a deputy administrator for the Agency. Sets forth other administrative authorities.

Authorizes the Administrator to make grants, cooperative agreements, and contracts to carry out the title added by this Act.

Authorizes the Secretary to secure the services of experts and consultants, subject to specified Federal law. Exempts not more than 50 experts or consultants from limitations, set forth in the same Federal provisions, relating to duration of service. Allows payment of travel expenses for the exempted experts or consultants if certain requirements are met.

Authorizes appropriations for FY 1990 through 1992 to carry out the title added by this Act. Requires, in addition, that a portion of amounts available under specified existing provisions of the Public Health Service Act relating to evaluations of programs be made available for evaluations under the title added by this Act.

Part D: General Provisions - Removes from the Public Health Service Act provisions establishing the National Center for Health Services Research and provisions providing for grants for a council on health care technology.

Directs the Secretary to request the Institute of Medicine of the National Academy of Sciences to enter into a contract to: (1) recommend priorities for the assessment of specific health care technologies; and (2) assist in the establishment of the information center. Authorizes appropriations for FY 1990 for carrying out such contract.

Provides for the transfer of information and materials developed by the council on health care technology to the Secretary in establishing the information center on health care technologies and health care technology assessment.

Makes technical and conforming amendments to the Public Health Service Act.

Subtitle C: Medicaid - Part A: Infant Mortality Provisions - Amends title XIX (Medicaid) of the Social Security Act to phase-in mandatory State coverage of pregnant women and infants whose family income is below 185 percent of the Federal poverty level. Deducts child and medical care costs from the income eligibility test. Directs the Secretary of Health and Human Services to report to the Congress by July 1, 1990, on State error rates in determining the Medicaid eligibility of pregnant women and infants. Suspends error rate penalties attributable to such eligibility determinations made from July 1, 1989, until one year after the Secretary's report.

Requires that States make ambulatory prenatal care available to a pregnant woman during a presumptive eligibility period which ends when she is determined to be ineligible for Medicaid benefits or after the month following the month during which she is determined to be eligible, if she fails to apply.

Allows States to cover prenatal home visitation services for high-risk pregnant women and postpartum home visitation services for high-risk infants.

Requires that States submit to the Secretary, by April 1 of each year, proposed Medicaid payment rates for obstetrical and pediatric services and such other data as will assist the Secretary in determining whether such rates are sufficient to ensure that obstetrical and pediatric services will be at least as available to Medicaid beneficiaries as they are to the general population. Requires States to immediately revise rates determined to be insufficient.

Requires States to cover ambulatory services offered to pregnant women or children by certain federally-funded health centers.

Excepts Medicaid-eligible pregnant women from required cooperation with States in establishing the paternity of children born out of wedlock.

Requires States to: (1) coordinate Medicaid services with the special supplemental food program for women, infants, and children (WIC) under the Child Nutrition Act of 1966; and (2) notify Medicaid-eligible pregnant, breastfeeding, or postpartum women and children under age five of WIC program benefits.

Part B: Child Health Amendments - Requires States to: (1) provide Medicaid coverage to children born after September 30, 1983, whose family income is below the Federal poverty level; and (2) receive the Medicaid applications of pregnant women, infants, and children at locations which include locations other than those used under part A (Aid to Families with Dependent Children) (AFDC) of title IV of the Act.

Allows States to offer an additional nine-, 12-, 15-, or 18-month period of Medicaid eligibility, rather than the additional six-month period, to families who lose AFDC eligibility because of increased earnings or employment hours, or a loss of earning exclusions and receive the initial six months of extended Medicaid coverage.

Sets forth the required components of Medicaid early and periodic screening, diagnostic, and treatment services. Requires States to report annually to the Secretary concerning the number of children receiving such services.

Directs States to adjust Medicaid payments to disproportionate share hospitals to take into account exceptionally costly and lengthly inpatient hospital services for children.

Requires States to provide Medicaid coverage to all children who are eligible for title XVI (Supplemental Security Income) (SSI) benefits.

Prohibits States from discontinuing a child's Medicaid coverage until such child is determined not to be eligible for such coverage on any basis.

Authorizes States to provide Medicaid coverage for foster care children whose incomes do not exceed the Federal poverty level.

Part C: Community and Facility Habilitation Services Amendments - Medicaid Community and Facility Habilitation Services Amendments of 1989 - Subpart 1: Community Habilitation and Supportive Services - Amends title XIX (Medicaid) of the Social Security Act to authorize States to cover community habilitation and supportive services for individuals with mental retardation or related conditions without regard to whether or not such individuals have been discharged from a nursing or habilitation facility. Defines community habilitation and supportive services as services which assist individuals in developing and maintaining the skills necessary to function successfully in a home or community-based setting.

Requires that community habilitation and supportive services be provided to each client in accordance with an individual habilitation plan prepared and periodically reviewed and revised by an interdisciplinary team on the basis of a comprehensive functional assessment of a client's needs conducted before his or her receipt of services and at least annually thereafter. Requires that such services meet minimum requirements, to be developed by the Secretary of Health and Human Services, regarding client rights and service quality. Makes the requirements imposed on habilitation facilities (under this Act) regarding patient's rights and facility safety and sanitation applicable to residential settings in which community habilitation and supportive services are provided. Requires that residential settings: (1) disclose persons having an ownership or control interest in the setting; and (2) exclude a person from such interest if he or she has been excluded from the Medicaid program or had an interest in a residential setting repeatedly found to have provided substandard care. Requires a habilitation facility which converts to a residential setting to continue to provide continuous active treatment to residents who required such treatment at the time of conversion. Requires a residential setting to document a client's receipt of medical services. Excludes settings in which fewer than three unrelated adults reside from the definition of a "residential setting."

Makes the: (1) Secretary responsible for certifying that State providers of community habilitation and supportive services and residential settings in which such services are provided comply with Medicaid requirements; and (2) States responsible for certifying that other providers of and residential settings for such services comply with Medicaid requirements. Requires each State to: (1) conduct periodic educational programs for the staff and clients in residential settings for community habilitation and supportive services regarding requirements imposed on such setting; and (2) provide, through the State agency responsible for the certification of such providers and residential settings, for the receipt, review, and investigation of allegations of client neglect and abuse and of misappropriation of client property by providers. Requires that such providers and settings be certified annually. Provides States with no Federal Medicaid coverage for the costs of carrying out such quality assurance activities. Authorizes States to reward providers of community habilitation and supportive services who provide the highest quality of care. Bases residential setting certification on an annual, unannounced survey. Directs the Secretary to: (1) develop a protocol for conducting surveys; and (2) conduct sample surveys of residential settings, within two months of State surveys, to test the adequacy of State surveys. Authorizes the Secretary to conduct a special survey of a setting or a review of the provider when there is reason to question its compliance with this Act. Prohibits the use of surveyors who have an interest in the provider or setting being surveyed or have not completed a training and testing program approved by the Secretary.

Requires States and the Secretary to investigate complaints against providers or settings concerning violations of this Act's requirements.

Requires that: (1) certain information regarding providers and settings and their compliance with this Act's requirements be made available to the public; and (2) the State agency responsible for the protection and advocacy system for the developmentally disabled and the guardians of clients be notified of a provider's or setting's noncompliance with this Act's requirements. Gives State Medicaid fraud and abuse control units access to provider or setting survey and certification information.

Requires that when the Secretary or State determines that a provider's or setting's deficiencies immediately jeopardize the client's health and safety, immediate action be taken to remove the jeopardy and correct the deficiencies or the provider's or setting's participation in Medicaid be terminated. Directs the Secretary and States to apply certain other remedies where the health and safety of clients are not immediately jeopardized. Requires the imposition of civil money penalties against providers and settings which are, or are found to have been, out of compliance with any of this Act's requirements.

Sets forth the Secretary's responsibilities relating to community habilitation and supportive service requirements.

Eliminates the restriction of the Medicaid waiver for community habilitation services to individuals who have been discharged from a skilled nursing or intermediate care facility.

Directs the Secretary to report to the Congress: (1) annually, on the extent to which providers and residential settings are complying with this Act's requirements and the number and type of enforcement actions taken by the Secretary and the States; and (2) by January 1, 1992, on the effectiveness of existing outcome-oriented instruments and methods in evaluating and assuring the quality of community habilitation and supportive services.

Subpart 2: Quality Assurance for Habilitation Facility Services - Defines a "habilitation facility" as an institution primarily engaged in providing health or habilitation services to individuals with mental retardation or related conditions and not primarily for the care and treatment of mental diseases. Sets forth requirements for habilitation facilities, including requirements that such facilities: (1) promote maintenance or enhancement of the quality of life, independence, productivity, and integration into the community of each client; (2) provide continuous active treatment which is coordinated and monitored by a qualified mental retardation professional; (3) provide such treatment in accordance with an individual program plan prepared and periodically reviewed and revised by an interdisciplinary team of professionals on the basis of an assessment of a client's developmental and behavioral management needs conducted upon the client's admission and at least annually thereafter; (4) not admit any new client with mental retardation or a related condition on or after January 1, 1991, unless the State mental retardation or developmental disability authority has determined on the basis of an evaluation performed independently of the facility that the individual requires habilitation facility services; (5) provide physician services 24 hours a day, annual physical examinations, licensed nursing services, comprehensive dental diagnostic and treatment services, routine and emergency drugs and biologicals, professional program services to implement each client's active treatment plan, and meal services; (6) require a physician's supervision of each patient's care, have a physician available to furnish emergency medical care, and maintain clinical records on all clients; (7) protect specified client rights, including the right to appeal a transfer or discharge and receive post-discharge preparation and planning services; (8) provide applicants and residents with information regarding the Medicaid program and not require applicants to waive their rights to such benefits or have a third party guarantee payment to the facility as a condition of their admission; (9) protect a client's personal funds upon the client's authorization and teach clients to manage their funds to the extent of their capabilities; (10) adopt certain measures to preserve facility safety and sanitation; and (11) meet such other conditions which the Secretary of Health and Human Services deems necessary for client health and safety. Sets forth the Secretary's responsibilities relating to habilitation facility requirements.

Makes the Secretary responsible for certifying that State habilitation facilities comply, and States responsible for certifying that other habilitation facilities comply, with Medicaid habilitation facility requirements. Requires each State to: (1) conduct periodic educational programs for habilitation facility staff and clients regarding the requirements imposed on such facilities; and (2) provide, through the State agency responsible for the certification of habilitation facilities, for the receipt, review, and investigation of allegations of client neglect and abuse and of misappropriation of client property by facility staff. Bases habilitation facility certification on an annual, unannounced survey. Directs the Secretary to: (1) develop and test a protocol for conducting surveys; (2) establish minimum qualifications for surveyors and train them in survey and certification techniques; and (3) conduct sample surveys of habilitation facilities, within two months of State surveys, to test the adequacy of State surveys, and reduce Federal payments for State Medicaid administrative costs if such State surveys prove inadequate. Authorizes the Secretary to conduct a special survey of a facility when there is reason to question its compliance with this Act.

Requires States and the Secretary to investigate complaints against a facility and monitor the compliance of a facility with this Act's requirements if the facility was previously found out of compliance or the State or Secretary has reason to question its compliance.

Requires that: (1) certain information regarding habilitation facilities and their compliance with this Act's requirements be made available to the public; (2) the State agency responsible for the protection and advocacy system for the developmentally disabled and the guardians of facility clients be notified of a facility's noncompliance with this Act's requirements; and (3) mail survey results to the parents or legal representative of each client and make such results available to the public upon request. Gives State Medicaid fraud and abuse control units access to facility survey and certification information.

Requires that when the Secretary or a State determines that a habilitation facility's deficiencies immediately jeopardize residents' health and safety, immediate action be taken to remove the jeopardy and correct the deficiencies or such facility's participation in Medicaid be terminated. Directs the Secretary and States to apply certain other remedies where the health and safety of facility residents are not immediately jeopardized. Authorizes the imposition of civil money penalties against facilities found to be in compliance with this Act's requirements but to have been out of compliance previously. Provides that if a facility is out of compliance with any of this Act's requirements three months after having been found out of compliance with such requirements or on three consecutive annual surveys, Medicaid payments for newly admitted residents shall be denied, civil monetary penalties assessed and collected, and, in the latter case, on-site monitoring of the facility's compliance shall be established. Allows States to establish a program rewarding habilitation facilities that provide the highest quality of care to Medicaid-eligible clients.

Provides that when a facility is found to have deficiencies relating to the facility's physical plant that do not immediately jeopardize the health or safety of its clients, the State may submit to the Secretary a written plan for permanently reducing the number of certified beds in such facility within 36 months of such finding and providing services, including community habilitation and supportive services, to clients who thereby cease to receive facility services. Requires that Medicaid-eligible clients be given the option of retaining facility services.

Requires the Secretary to report to the Congress annually on the extent to which habilitation facilities are complying with this Act's requirements and the number and type of enforcement actions taken by States and the Secretary.

Subpart 3: Appropriate Placement for Individuals with Mental Retardation or a Related Condition - Requires that State mental retardation or developmental disability authorities conduct preadmission and annual reviews of habilitation facility applicants and residents with mental retardation or related conditions to determine whether they require facility services or community habilitation and supportive services. Directs that such preadmission and annual reviews be conducted in accordance with criteria to be developed by the Secretary by July 1, 1990. Requires States to provide community habilitation and supportive services for facility clients who need such services but no longer need habilitation facility services. Requires States to establish an appeals procedure for individuals adversely affected by such preadmission and annual reviews.

Eliminates existing utilization review and penalty provisions directed at the provision of services in an intermediate care facility for the mentally retarded.

Subpart 4: Payment for Community Habilitation and Supportive Services and Habilitation Facility Services - Covers the reasonable and adequate costs of community habilitation and supportive services and habilitation facility services, without distinguishing, in payment amounts, between State-operated providers and other providers. Prohibits Medicaid reimbursement of providers or facilities for civil monetary penalties imposed pursuant to this Act.

Subpart 5: Employee Protections and Miscellaneous - Provides employment protections for employees affected by habilitation facility closures or capacity reductions occurring after this Act's enactment.

Authorizes States to assign specific management functions relating to the provision of Medicaid services to individuals with mental retardation or related conditions to State agencies responsible for developmentally disabled individuals.

Part D: Frail Elderly Community Care Amendments - Permits States to provide Medicaid coverage of community care for functionally disabled elderly individuals. Defines a functional disability as Alzheimer's disease or the inability, due to physical or cognitive impairment, to perform at least two daily living activities. Defines a covered community care setting as a nonresidential setting or a residential setting in which more than two unrelated adults reside and personal services are provided.

Requires that community care be provided to each client in accordance with an individual community care plan (ICCP) prepared and periodically reviewed and revised by a community care case manager on the basis of the case manager's face-to-face consultation with the client and a comprehensive functional assessment of a client's needs conducted by an interdisciplinary team before his or her receipt of care and at least annually thereafter. Requires case managers to visit their clients in their clients' residences at least once every 90 days.

Sets a ceiling on Medicaid payments to States for community care. Reduces Federal Medicaid payments to States that reduce their Medicaid community care expenditures below their FY 1989 expenditures for such care.

Requires that such care meet minimum requirements, to be developed by the Secretary, regarding client rights and the quality of such care. Makes the requirements imposed on nursing facilities regarding patient's rights and facility safety and sanitation applicable to settings in which community care is provided. Requires that community care settings: (1) disclose persons having an ownership or control interest in the setting; and (2) exclude a person from such interest if he or she has been excluded from the Medicaid program or had an interest in a community care setting repeatedly found to have provided substandard care.

Makes the: (1) Secretary responsible for certifying that State community care providers and settings comply with Medicaid requirements; and (2) States responsible for certifying that other community care providers and settings comply with Medicaid requirements. Requires that providers and settings be certified annually. Bases community care setting certification on an annual, unannounced survey. Directs the Secretary to: (1) develop a protocol for conducting surveys; and (2) conduct sample surveys of community care settings, within two months of State surveys, to test the adequacy of State surveys. Authorizes the Secretary to conduct a special survey of a setting or a review of a provider when there is reason to question its compliance with this Act. Prohibits the use of surveyors who have an interest in the provider or setting being surveyed.

Requires States and the Secretary to investigate complaints against providers or settings concerning violations of this Act's requirements. Requires each State to provide, through the State agency responsible for the certification of such providers and settings, for the receipt, review, and investigation of allegations of client neglect and abuse, and of misappropriation of client property by providers.

Requires that: (1) certain information regarding providers and settings and their compliance with this Act's requirements be made available to the public; and (2) State Medicaid fraud and abuse control units be given access to provider or setting survey and certification information.

Authorizes the Secretary or States to terminate a community care provider's participation in the Medicaid program and to impose a civil monetary penalty for failure to meet this Act's requirements. Gives substandard community care settings three months to rectify matters before their Medicare participation may be terminated permanently.

Sets forth the Secretary's responsibilities relating to community care requirements.

Requires that State Medicaid payment rates for community care be reasonable and adequate to meet the costs of providing such care efficiently, economically, and in accordance with applicable laws, regulations, and standards.

Prohibits the coverage of substandard community care, penalties imposed for such care, and community care furnished by family members.

Part E: Hospice Coverage - Requires States to provide Medicaid coverage of hospice care. Sets a floor on Medicaid payments for such care.

Part F: Miscellaneous - Makes miscellaneous amendments to Medicaid requirements imposed on nursing facilities by the Omnibus Budget Reconciliation Act of 1987.

Requires States to provide Medicaid coverage of the Medicare premiums of individuals who are entitled to enroll for benefits under part A (Hospital Insurance) of the Medicare program, are not eligible for Medicaid, and whose income does not exceed 200 percent of the Federal poverty level. Permits States to cover less than 100 percent of such premium when an individual's income is between 150 and 200 percent of the Federal poverty level.

Prohibits: (1) aggregate donations by hospitals to State Medicaid matching payments from exceeding ten percent of non-Federal Medicaid expenditures; or (2) the donations of any particular hospital to State Medicaid matching payments from exceeding ten percent of the hospital's non-Federal revenues. Prohibits the Secretary from limiting Medicaid payments to States which raise Medicaid revenues by imposing taxes on the provision of covered items or services.

Considers every day spent in a hospital by a Medicaid patient to be an "inpatient day" in determining whether such hospital serves a disproportionate share of low-income patients. Includes pass-through payments for capital costs in the prohibition against the Secretary limiting the amount of payment adjustments to disproportionate share hospitals. Exempts a State Medicaid plan which as of January 1, 1987, provided payment adjustments on the basis of a statewide pooling arrangement involving all acute care hospitals and reimbursing the total amount of each participating hospital's uncompensated care from existing Medicaid arrangements for disproportionate share hospitals.

Provides that if the Secretary approves a Minnesota demonstration project relating to the State family investment plan the Secretary must require that Minnesota treat project families as: (1) Medicaid-eligible individuals; (2) ineligible for aid under part A (Aid to Families with Dependent Children) (AFDC) of title IV of the Social Security Act if they lose project eligibility due to increased project income; and (3) AFDC recipients for Medicaid purposes for one year after they lose project eligibility due to increased collection of child support under part D (Child Support and Establishment of Paternity) of title IV of the Act.

Sets forth other miscellaneous, technical, and conforming amendments.

Subtitle D: Maternal and Child Health Program - Amends title V (Maternal and Child Health Services) of the Social Security Act to increase authorized appropriations under such title. Adds the promotion and provision of family-centered, community-based, coordinated care for children with special health care needs to the purposes to which title V block grants to States shall be devoted. Increases amounts set aside from the block grant program to enable the Secretary of Health and Human Services to develop and expand: (1) maternal and infant health home visiting programs; (2) integrated maternal and child health service delivery systems; (3) maternal and child health centers; (4) projects designed to increase the participation of obstetricians and pediatricians under title V and the Medicaid program; and (5) maternal and child health projects serving rural populations.

Authorizes States to use block grant funds to pay the salaries of National Health Service Corps personnel. Prohibits States from using more than ten percent of block grant funds for administering such funds. Requires States to use at least: (1) 30 percent of block grant funds for preventive and primary care for pregnant women, mothers, and infants; (2) 30 percent of such funds for preventive and primary care for children; and (3) 30 percent of such funds on children with special health care needs. Permits a waiver of such requirement if a State demonstrates an extraordinary unmet need for one of the activities. Requires State agencies administering a State's title V program to assist individuals who are eligible for assistance under title XIX (Medicaid) of the Social Security Act in applying for Medicaid benefits. Requires title V providers to provide Medicaid services.

Imposes maternal and child health reporting requirements on States and the Secretary of Health and Human Services.

Provides States with Federal technical assistance in developing consistent and accurate maternal and child health data collection mechanisms.

Directs the Secretary to develop: (1) a model application form for use in applying, simultaneously, for assistance for a pregnant woman or a child under age six under specified maternal and child assistance programs; and (2) a national system for linking an infant's birth record, such infant's death record, and information on Medicaid claims submitted with respect to such infant or his or her birth.

Subtitle E: Miscellaneous Health-Related Provisions - Amends the Federal Food, Drug, and Cosmetic Act to give the Congress access to trade secret information acquired under the authority of such Act.

Amends title XXI (Vaccines) of the Public Health Service Act to make miscellaneous changes affecting the procedures to be followed and compensation available under the National Vaccine Injury Compensation Program. Authorizes appropriations for the administration of such Program for FY 1990 and 1991. Requires that the legal representatives of children receiving vaccines be provided with a summary of relevant Federal recommendations concerning a complete schedule of childhood immunizations and the availability of the Compensation Program. Directs the Secretary to conduct a study and report to the Congress by January 1, 1992, concerning such Program.

Requires the Comptroller General to conduct a study regarding the loss by retirees of health benefits due to the liquidation of their employer in bankruptcy.