Medicare Continuing Care, Equity, and Quality Assurance Act of 1986

Medicare Continuing Care, Equity, and Quality Assurance Act of 1986 - Title I: Continuing Care Reforms - Amends part A (General Provisions) of title XI of the Social Security Act to direct the Secretary of Health and Human Services to establish a Continuing Care Policy Council composed of members with expertise in geriatrics or rehabilitative practices. Requires the Council to make recommendations to the Secretary concerning the administration of continuing care services under titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act and as such services are affected by title I of this Act.

Amends part A (Hospital Insurance) of the Medicare program to require the Secretary to establish medical claims standards which are to be applied uniformly and take into account a patient's medical profile, condition, and other practical considerations in determining the medical reasonableness and necessity of claims for continuing care services (defined to include extended care and home health services). Requires the Secretary to annually review and, if necessary, revise the standards.

Authorizes a fiscal intermediary which has initially determined that some or all of a continuing care services claim may be denied, but has not yet officially denied the claim, to consult with the service provider, patient, and patient's physician to review the determination and approve a modified claim if the services are appropriate and the patient concurs in the modification.

Directs the Secretary, in determining whether payments to home health agencies and skilled nursing facilities should be denied, to continue certain presumptions of compliance with reasonable and necessary services requirements until a system providing for case-by-case determinations of authorizations for continuing care services is implemented. Requires system implementation within 30 months of enactment of this Act.

Requires a fiscal intermediary to reimburse a provider of continuing care for services provided to an individual for whom there was reasonable evidence of entitlement if the provider makes a timely request that the intermediary determine whether the individual is entitled to such services.

Sets forth deadlines by which fiscal intermediaries must respond to provider inquiries concerning the medical necessity of continuing care services. Requires intermediaries to reimburse providers for medically unnecessary services provided over periods during which the intermediary's response is past due.

Indemnifies beneficiaries who pay providers for continuing care services without knowing that they are unqualified for such services or that such services are medically unnecessary. Requires the Secretary to investigate allegations that a skilled nursing facility or home health agency has delayed or restricted acceptance of an individual until its receipt of the intermediary's response to its entitlement or medical necessity inquiries.

Entitles individuals whose claim for continuing care services has been denied to a hearing by the Secretary and judicial review of the Secretary's final decision. Authorizes provider appeals on behalf of beneficiaries. Provides that, when a fiscal intermediary denies payment for continuing care services or a provider first furnishes such services, such organizations must inform beneficiaries regarding the individual's rights under this Act to appeal payment determinations.

Amends part B (Peer Review) of title XI of the Act to require peer review organizations, in certain situations to be determined by the Secretary, to perform independent medical reviews of fiscal intermediary denials of payment for continuing care services. Requires each peer review organization to annually report to the Secretary regarding such reviews. Directs peer review organizations to authorize payment for services which would not otherwise meet payment conditions where such organization certifies that exceptional circumstances exist to justify the cost-effective provision of the services.

Amends part A (Hospital Insurance) of the Medicare program to establish a special benefit consisting of payments to hospitals which retain patients who require only the level of care provided in a skilled nursing facility, but cannot transfer to such a facility due to the unavailability of space in such facilities.

Requires the Secretary to establish performance standards for fiscal intermediary medical claims review which: (1) weigh the accuracy and timeliness of such review commensurately with cost savings from such review; (2) specify the qualifications required of review personnel; and (3) require an intensive level of review for new providers and providers with poor performance records. Requires the Secretary to annually inform the Continuing Care Policy Council regarding the intermediaries' performance under these standards.

Directs the Secretary to establish a Medicare benefits management demonstration program, including projects which: (1) substitute, for the process of submitting separate claims by providers for an individual beneficiary, a single benefits manager that would identify and track the benefits most appropriate to the beneficiary; and (2) provide additional benefits to Medicare beneficiaries, including noncovered benefits if no additional costs are thereby imposed on beneficiaries or Medicare.

Title II: Quality Assurance Reforms - Amends part B (Peer Review) of title XI of the Act to establish a National Council on Quality Assurance. Directs the Director of the Congressional Office of Technology Assessment to provide for the appointment of members of the Council. States that the general functions of the Council shall be to: (1) provide oversight on the operations of the quality assurance system under the Medicare program; and (2) make recommendations annually to the Secretary of Health and Human Services and the Congress for improvements in the system. Sets forth the Council's functions more specifically. Requires the Council to report annually to the Congress on the functioning and progress of the Council. Authorizes appropriations.

Requires contracts with peer review organizations to provide that: (1) at least one-half of the organizations' efforts must be on quality assurance activities; (2) quality assurance activities shall be conducted with respect to all the different types of items and services covered by Medicare; and (3) the level of activity for each of the different types of services and items shall reasonably reflect the proportion of Medicare payments made for that type of service or item.

Adds to the definition of the term "peer review organization" so as to require such an entity to: (1) include in its composition representatives of other individuals responsible for the provision of services and items for which the organization is responsible for conducting quality assurance activities; and (2) have a consumer advisory board. Defines a "consumer advisory board."

Requires any peer review organization to: (1) educate Medicare beneficiaries; (2) provide for a toll-free 24 hour telephone number, which shall be provided to Medicare beneficiaries for the purpose of receiving questions and complaints from Medicare beneficiaries; (3) assist in resolving any such complaints that are legitimate; (4) make available to its consumer advisory boards appropriate information received from the telephone service; and (5) train members of its consumer advisory board.

Appropriates funds, in addition to any other amounts appropriated to carry out part B of title XI, from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund for distribution to peer review organizations.

Amends part B (Supplementary Medical Insurance) of the Medicare program to require hospitals to implement a discharge planning process which meets guidelines and standards to be established by the Secretary, in conjunction with the Continuing Care Policy Council and Council on Quality Assurance, to: (1) protect against inappropriate early hospital discharges; (2) ensure a timely and smooth transition to the most appropriate type of and setting for post-hospital care; and (3) permit early initiation of the authorization process for continuing care services. Requires peer review organizations to monitor hospitals' compliance with discharge planning process requirements.

Sets forth study and reporting requirements.