Medicare and Medicaid Budget Reconciliation Amendments of 1986

Medicare and Medicaid Budget Reconciliation Amendments of 1986 - Title I: Medicare - Part 1: Provisions Relating to Parts A and B - Amends title XVIII (Medicare) of the Social Security Act to count, for the purpose of reimbursing hospitals for direct costs of medical education, all the time a resident spends in patient care activities regardless of the setting of those activities, provided the hospital is incurring costs for such training. Reduces the weighting factor used to compute the costs of training fifth-year residents.

Requires that limitations on Medicare payments for home health services be applied on an aggregate rather than a discipline-specific basis for home health agencies. Requires the Secretary of Health and Human Services, in establishing such limitations, to take into account: (1) recent cost data; and (2) changes in costs resulting from changes in billing and verification procedure requirements.

Directs the Secretary to establish a program providing for research regarding outcomes of selected medical treatments and surgical procedures so as to assess their appropriateness, necessity, and effectiveness. Places a priority on the selection of procedures and treatments with significant costs, risks, hospitalization periods, and utilization patterns.

Authorizes appropriations from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund for FY 1987 through 1989 to carry out such research. Requires that at least 90 percent of the funds available in any fiscal year be used to fund grants to, and cooperative agreements with, non-Federal research entities.

Directs that the program be administered by the National Center for Health Services Research and Health Care Technology (Center). Requires the Center to: (1) report its findings to the Congress within 18 months of enactment of this Act and annually thereafter; and (2) disseminate its findings as widely as possible.

Amends title XIX (Medicaid) of the Act and the Medicare program to exempt amounts paid by vendors of goods and services to authorized purchasing agents for entities reimbursed under either program from the Act's kickback prohibitions if the purchasing agent: (1) has a written contract with each vendor and each Medicare or Medicaid-reimbursed client specifying the amount or percentage to be paid to the vendor; and (2) discloses the amount it received from the vendor.

Amends part A (General Provisions) of title XI of the Act to expand the doctrine of collateral estoppel to make it applicable when an individual has entered a plea of nolo contendere in a Federal criminal prosecution and attempts to relitigate the essential elements of the offense in civil monetary penalty proceedings charging such individual with presenting false or improper claims under the Medicare, Medicaid, or Maternal and Child Health Services (title V of the Act) programs. Authorizes officials conducting such civil monetary penalty proceedings to impose limited sanctions on any party or attorney for failing to comply with orders, failing to defend an action, or other misconduct interfering with the speedy, orderly, or fair conduct of the hearing. Defines the term "convicted," for the purposes of excluding providers convicted of Medicare or Medicaid-related crimes from participating in such programs, to include: (1) convictions entered in a local, State, or Federal court, regardless of whether an appeal is pending or the conviction has been expunged from an individual's criminal record; (2) findings of guilt by a Federal, State, or local court; (3) a plea of guilty or nolo contendere accepted by a Federal, State, or local court; and (4) convictions withheld by reason of such individual's participation in a first offender or similar program.

Provides coverage under part B (Supplementary Medical Insurance) of the Medicare program for anesthesia services and related care provided by a registered nurse anesthetist. Requires the Secretary to adjust the reasonable charge for anesthesia services when necessary to maintain total payments at the level they would be at if such services were still reimbursed as inpatient hospital services under part A (Hospital Insurance) of the Medicare program.

Requires hospitals to establish protocols for encouraging organ and tissue donation by identifying and assisting potential donors in a manner considerate of such donors' families. Precludes Medicare or Medicaid payments for organ procurement, if the organ procurement agency fails to meet specified standards.

Makes technical corrections in the Consolidated Omnibus Budget Reconciliation Act of 1985.

Authorizes the Secretary to waive the requirement that health maintenance organizations (HMOs) or competitive medical plans (CMPs) have at least 50 percent non-Medicare or non-Medicaid enrollees only to the extent that more than 50 percent of the population in the area served by the organization consists of Medicare and Medicaid-eligible persons. Authorizes the Secretary to suspend Medicare payments for new enrollees if the 50 percent enrollment rule is violated. (Currently, the Secretary's sanction authority is limited to terminating the risk-sharing contract with the HMO or CMP.)

Part 2: Provisions Relating to Part B - Amends the Medicare program to extend coverage to include the items and services which an optometrist is legally authorized to provide.

Provides coverage, under part B (Supplementary Medical Insurance) of the Medicare program, for outpatient occupational therapy services in the same manner in which outpatient physical therapy services are covered.

Provides part B coverage of physician-supervised services performed by a physician's assistant in a hospital, skilled nursing facility, or as an assistant at surgery.

Requires the Secretary to treat the one percent increase, permitted on May 1, 1986, in the prevailing charges of participating physicians as having been justified by economic changes. Prohibits the Secretary from making a specified adjustment in the Medical Economic Index. Limits the increase in the prevailing and actual charges for the unassigned claims of nonparticipating physicians to one percent for 1987.

Lists tests and comparisons which may be made, and effects which must be considered before the Secretary adjusts the reasonable charge for a physician's service on the grounds that it is not inherently reasonable. Requires consultation with the Physician Payment Review Commission and public notice and comment before such an adjustment is made. Prohibits nonparticipating physicians from charging Medicare beneficiaries more than 125 percent of the adjusted prevailing charge for a service when the Secretary has reduced the reasonable charge for such service.

Limits the prevailing charge for cataract surgery with intraocular lens implantation to 110 percent of the prevailing charge for such surgery without lens implantation. Limits the number of base units which may be used in computing the payment for anesthesia services during cataract surgery. Prohibits nonparticipating physicians from charging Medicare beneficiaries at more than 125 percent of the adjusted prevailing charge resulting from such limitations.

Eliminates the expiration date on fee schedules for clinical laboratory tests performed by hospital laboratories. Eliminates the payment differential between independent laboratory tests and hospital laboratory tests on outpatients. Removes the deadline for the establishment of a national fee schedule. Requires the Secretary to report to the Congress by April 1, 1988, on the advisability and feasibility of establishing national fee schedules for such tests. Authorizes payments for transportation and personnel expenses incurred in collecting laboratory samples from certain immobile beneficiaries. Allows laboratories to qualify for Mediciare reimbursement if they satisfy State standards regarding the qualifications of the laboratory's director.

Directs the Secretary to pay for parenteral and enteral nutrition supplies at the lowest charge levels at which such supplies are widely and consistently available in a locality.

Requires the Secretary to establish monthly capitation fee schedules on a regional, Statewide, or carrier service area basis for Medicare oxygen therapy services. Requires payments to be made on the basis of the number of units of oxygen prescribed for a patient per month. Prohibits payments for oxygen therapy services prescribed by a physician who has a significant ownership in, or a significant financial or contractual relationship with, the entity furnishing oxygen therapy services, unless such entity is the sole supplier of such services in a community. Requires the Secretary to pay, or notify the entity providing such services of a defect in a payment claim within 22 days of its receipt. Imposes interest penalties on late payments.

Bases the oxygen therapy fee schedules on the reasonable charge level for oxygen therapy services determined for the 12-month period ending June 30, 1986. Provides Medicare coverage for 80 percent of the fee schedule amount. Directs the Secretary to provide a minimum monthly amount to assure the availability of oxygen therapy services for individuals requiring only small amounts of oxygen.

Requires the Secretary to report to the Congress on the implementation and effects of these provisions by July 1, 1988.

Authorizes the Secretary to adjust the composite rates used to determine Medicare payments for renal dialysis services, but prohibits reductions, for free-standing and hospital-based facilities, below specified base rates. Requires that facility requests for exceptions from such rates be disapproved within 45 days of their receipt or otherwise be deemed to have been approved. Directs the Secretary to adjust the formula for determining payment rates to physicians for services furnished to renal disease patients so that the average monthly capitation rate equals $180. Requires the Secretary to provide for a study and report to the Congress by 1988 on the effect reductions in facility and physician payment rates have on the care provided to renal disease patients. Covers immuno- suppressive drugs furnished within one year of an individual's Medicare-covered organ transplant.

Directs the Secretary to consolidate existing renal disease network areas into no fewer than 17 areas, giving existing network organizations the first opportunity to perform network functions in a newly designated area. Requires that the network council and medical review board established by each network organization have at least one patient representative. Expands the list of network organization responsibilities to include the: (1) encouragement of patient and provider participation in vocational rehabilitation programs; (2) implementation of a procedure for evaluating and resolving patient grievances; (3) necessary on-site review of facility and provider compliance with standards of care; and (4) collection of data for specified reports.

Requires the Secretary to establish a national end-stage renal disease registry for the purpose of collecting uniform and comprehensive data on all dialysis and transplant patients.

Alters the methods of funding network organization by requiring the Secretary to supply such organizations with 50 cents from each payment otherwise made to a dialysis facility for dialysis services. (Currently, organization funds are provided from the Medicare trust funds.)

Requires the Secretary to: (1) establish conditions on the reuse of dialyzer filters by facilities and providers which voluntarily reuse such filters; and (2) consider establishing standards for the reuse of other dialysis supplies.

Provides for the appointment of two additional members to the Physician Payment Review Commission. (Currently, there are 11 Commission members.)

Establishes an appeals procedure for part B claim denials which provides for: (1) review by an administrative law judge if the amount in controversy equals or exceeds $500; and (2) judicial review if the amount in controversy equals or exceeds $1000.

Directs the Secretary to conduct at least five demonstration projects to determine the feasibility and effectiveness of providing comprehensive services to Medicare beneficiaries who are victims of Alzheimer's disease or related disorders. Sets forth reporting requirements.

Title II: Medicaid and Maternal and Child Health - Part 1: Coverage of Individuals - Amends title XIX (Medicaid) of the Act to give States the option of extending coverage to women in need of pregnancy-related medical services and infants up to age one whose family income exceeds current income eligibility thresholds, but does not exceed a State maximum income level to be established at or below the Federal poverty level. Allows States to continue such coverage for women until 60 days after pregnancy without regard to any change in her family income.

Requires the State maximum income level for eligibility under this program to be no less than the payment level applicable to a family with no income under part A (Aid to Families with Dependent Children) of title IV of the Act. Prohibits States which provide coverage pursuant to this Act from reducing AFDC payment levels.

Gives States the option of extending Medicaid coverage to elderly and disabled individuals whose income is too high for them to qualify for Medicaid under current income tests, but does not exceed a State maximum income level to be established at or below the Federal poverty level. Requires States providing such coverage to provide Medicaid coverage to pregnant women and infants whose income does not exceed the State maximum income level.

Authorizes the States to provide Medicaid coverage for Medicare premiums, deductibles, and coinsurance payments for which Medicare-eligible individuals whose income does not exceed the State maximum income level would otherwise be accountable.

Provides Medicaid coverage to "qualified severely impaired individuals", defined as individuals under age 65 who received benefits under title XVI (Supplemental Security Income) (SSI) of the Act and who: (1) continue to be blind or have a disabling physical or mental impairment; (2) except for earnings, continue to meet all other SSI eligibility requirements; (3) without Medicaid coverage, would be seriously inhibited from continuing or obtaining employment; and (4) have earnings which are insufficient to provide a reasonable equivalent of the Medicaid, SSI, and attendant care benefits (under title XX of the Act) which would be available in the absence of such earnings.

Prohibits otherwise eligible individuals from being denied Medicaid benefits by reason of their failure to maintain a fixed address.

Excludes, in determining an institutionalized individual's Medicaid eligibility, the income or resources which a court order requires to be used for the support of such individual's spouse or children.

Prohibits Federal Medicaid participation payments for State expenditures on aliens who are not lawfully admitted for permanent residence or permanently residing in the United States under color of law.

Part 2: Provision of Services Under Waiver Authority - Permits States to provide home and community-based Medicaid services to: (1) individals diagnosed as having acquired immune deficiency syndrome (AIDS) or AIDS-related conditions; and (2) Medicaid- eligible individuals with chronic mental illness who would otherwise continue to require inpatient hospital or nursing facility services. Authorizes States to limit their provision of Medicaid case management services to individuals with AIDS or AIDS-related conditions, or to individuals with chronic mental illness.

Waives certain Medicaid requirements to authorize the establishment of demonstration programs receiving specified private and public funding and providing a wide range of services to chronically mentally ill Medicaid beneficiaries. Limits such programs to a three-year term with a possible two-year extension. Requires the Secretary to report to the Congress by 1993 on the services provided by such programs.

Continues, through June 30, 1989, the waiver of certain Medicare and Medicaid requirements for a Massachusetts demonstration project providing alternatives to hospital care for Medicaid-eligible nursing home patients.

Part 3: Payments - Amends the Consolidated Budget Reconciliation Act of 1985 to hold a State harmless in FY 1987 against changes that Act effected in the annual calculation of the Federal medical assistance percentage under the Medicaid program if such changes would cause a reduction of Medicaid payments to the State in FY 1987.

Part 4: Other Quality and Efficiency Measures - Requires States to provide for independent, external reviews by peer review organizations (under part B of title XI) or private accreditation bodies, of the quality of services provided by health maintenance organization (HMOs).

Makes it clear that the Secretary has no authority to require States to operate second surgical opinion programs or inpatient hospital preadmission review programs. Directs the Secretary to report, by 1992, on: (1) surgical procedure utilization patterns; (2) surgical procedures for which second opinion programs may be appropriate; and (3) the number of physicians willing and qualified to perform second opinions.

Makes it clear that the Secretary has no authority to limit the payments which may be made with respect to inpatient hospital services, or skilled nursing or intermediate care facility services under a State plan.

Requires nonqualified HMOs to disclose to the State all transactions between the organization and a party in interest. Subjects all contracts with HMOs under which total Federal and State expenditures will exceed $100,000 to the prior approval of the Secretary. Directs the Secretary to delegate administrative responsibilities over State Medicaid Fraud Control Units to the Inspector General of the Department of Health and Human Services.

Makes technical corrections to, and clarifications of, the Consolidated Omnibus Budget Reconciliation Act of 1985.

Authorizes New York to pay the inpatient rate for hospital patients receiving services at an inappropriate level of care if the Secretary determines that enough hospital beds in the State have been decertified so as to reduce Medicaid payments to hospitals by an amount equal to or greater than any increase in such payments occasioned by reimbursements for inappropriate levels of care.

Part 5: Maternal and Child Health - Amends title V (Maternal and Infant Welfare) of the Act to increase the authorization level for the Maternal and Child Health Block Grant for FY's 1987, 1988, and 1989. Sets aside a specified amount in each such fiscal year for screening newborns for sickle-cell anemia and other genetic disorders.

Directs the Secretary to establish a National Adoption Information Clearinghouse which collects, maintains, and disseminates information on various aspects of adoption.