Health Care Management Act

Health Care Management Act - Defines the terms used in this Act.

Title I: Prospective Payments to Hospitals - Directs the Secretary of Health, Education, and Welfare to develop and make available to hospitals one or more methods of obtaining payment on a prospective basis for services provided under titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act. States that hospitals will have the option of electing either one of such prospective payment methods, or as an alternative, the retrospective cost method of payment for services defined in the Social Security Act.

Provides that prospective payment methods authorized under this title shall include in their design provisions: (1) for financial incentives for efficiency and effectiveness of hospital operations; (2) which provide for equity between various payor groups; (3) to assure the substantial participation by hospitals in such prospective payment methods; (4) to assure the availability of hospital services of high quality to beneficiaries and recipients under titles XVIII and XIX of the Social Security Act; and (5) for maintaining independent management discretion and responsibility in such hospitals.

Requires the Secretary to submit to the Congress annually a full report on the impact of prospective payment methods on the efficiency and effectiveness of hospital operations.

Title II: Quality Management Payments - Provides that the Secretary shall award on an annual basis quality management payments to any hospital under titles XVIII and XIX of the Social Security Act, which does not elect to participate under title I of this Act, whenever either the percentage amount or the dollar amount of increase in the hospital's actual operating cost on a unit basis, as defined by Secretary, for a fiscal year is less than the average annual increase in such percentage or amount for the three previous fiscal years for all hospitals in the same class.

States that to serve as an incentive for hospitals to contain the level of increase in prospective rates or amounts, the Secretary shall establish a quality management payment system to apply to hospitals electing to participate in prospective rate programs under title I of this Act.