A bill to amend the Social Security Act to improve the survey and certification process, rate-setting and fiscal audit methods, and general regulation of nursing homes and intermediate care facilities under the medicaid program, and to provide for medical, psychological, and social assessment of long-term care patients under both the medicare and medicaid programs.

Title I: Survey and Certification, Rate-Setting and Audit, and General Regulation of Long Term Care Facilities Under Medicaid Programs - Directs that State plans under Title XIX (Medicaid) of the Social Security Act must provide that no skilled nursing facility may receive payments under such plan unless and until it is approved to receive payments under Title XVIII (Medicare) of the Social Security Act.

Requires the State plan to give the State agency the power to terminate reimbursement to a skilled nursing or intermediate care facility which such agency has found has violated its provider agreement.

States that payment of the skilled nursing facility and intermediate care facility services shall be based upon a prospective cost based method of computation in which the audited costs of rendering service in such facilities in a prior year is updated through the use of economic indices to the year in which payment is made.

Requires that any skilled nursing facility or intermediate care facility receiving payments under such plan be required to maintain with the State agency a bond in such amount, under such terms, and in such form as the State agency may direct.

Title II: Medical, Psychological, and Social Assessment of Patients In Need of Long Term Care under Medicare and Medicaid Programs - Directs that payments for services furnished an individual may be made only to eligible providers of services and only if a physician certifies that such services are necessary, based on such patient assessment criteria as the Secretary may require.