Omnibus Budget Reconciliation Act of 1989, Public Law 101-239.

Omnibus Budget Reconciliation Act of 1989, Public Law 101-239

Title VI

Commission Study of Physician Fees Under

Medicaid (Section 6102 (e)(8))

Current law: The Physician Payment Review Commission was created by the Consolidated Omnibus Budget Reconciliation Act of 1985 and consists of 11 individuals appointed by the Director of the Congressional Office of Technology Assessment. The Commission makes recommendations to the Congress regarding Medicare physician payment issues such as adjustments to reasonable charge levels for physicians' services and changes in the Medicare physician payment mechanism.

Provision: Requires the Physician Payment Review Commission to conduct a study on physician fees under State Medicaid programs. Requires the commission to examine the adequacy of physician reimbursement, physician participation, and access to care by Medicaid beneficiaries. The report is due by July 1, 1991.

Amendments Relating to the United States 

Bipartisan Commission on Comprehensive

Health Care (Section 6220)

Current law: The United States Bipartisan Commission on Comprehensive Health Care was created by the Medicare Catastrophic Coverage Act of 1988, to examine shortcomings in health care delivery and financing mechanisms that limit or prevent access to comprehensive health care. Members are appointed by the President, President Pro Tempore of the Senate, and Speaker of the House.

Reports are due to Congress to later than: January 1, 1989, for the Report on Comprehensive Long-Term Care Services for the Elderly and Disabled; and July 1, 1989, for the Report on Comprehensive Health Care Services.

Provision: Names the Commission the "Pepper Commission" and creates four Vice Chairmen. Extends the deadline for both reports to November 9, 1989 (Note: The conference report says March 1, 1990).

National Commission on Children

(Section 6221)

Current law: Section 9136 of the Omnibus Budget Reconciliation Act of 1987 established the National Commission on Children (NCC) "... to serve as a forum on behalf of the children of the Nation and to conduct the studies and issue a report ...." The NCC was scheduled to expire on March 31, 1990.

Provision: Extends the Commission's expiration date to March 31, 1991. Authorized the Commission to accept donations of money, property, or personal services; to consider money and other property accepted as a gift or bequest; and to administer expenditures of funds according to its own rules and regulations, not Federal procurement requirements. Authorizes the Commission to conduct public surveys in support of its review of issues affecting children.

Mandatory Coverage of Certain Low-Income

Pregnant Women and Children (Section 6401)

Current law: Section 1902(1) provides for coverage of pregnant women and infants, and, optionally, children up to 8 years of age up to 75 percent of the Federal poverty level (FPL). 100 percent of FPL would have been effective July 1, 1990.

Provision: Requires States to extend Medicaid coverage to all pregnant women and children up to age 6 with family incomes up to 133 percent of the FPL (or greater up to 185 percent if already adopted by a State). At a State's option, also included are children born after September 30, 1983, who have attained 6 years of age but have not attained 7 or 8 years of age (as selected by the State).

Effective date: Effective for quarters beginning on or after April 1, 1990, with respect to eligibility and payment, whether or not final regulations have been promulgated. If a State requires legislation (other than appropriations) for the State plan to comply with these additional requirements, the State plan will not be considered out of compliance before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of enactment. (In the case of a State with a 2-year session, each year will be deemed a separate regular session.) (Note: this will be referred to as the "standard extension.")

Payment for Obstetrical and Pediatric Services

(Section 6402)

Current law: Section 1902(a)(30)(A) provides that States establish their own payment levels for Medicaid services consistent with economy, efficiency, and quality of care.

Provision: Requires that payments must be sufficient to enlist enough providers to service Medicaid beneficiaries at least to the extent services are available to the general population in the geographic area.

Requires States to amend their plans specifying payment rates by procedure for obstetrical or pediatric services by April 1 of each year, beginning in 1990. States must include data on how rates were established for health maintenance organizations and data to allow the Secretary to evaluate each State's compliance with the requirement.

Defines "obstetrical services" as services provided by an obstetrician, ob-gyn, family practitioner, certified nurse midwife, or certified family nurse practitioner and does not include inpatient or outpatient hospital care or other institutional services.

Defines" pediatric services" as services delivered to children under 18 years of age by a pediatrician, family practitioner or certified pediatric nurse practitioner, and does not include inpatient or outpatient hospital care or other institutional services.

Requires (for State plans submitted in 1992 and thereafter) data to include, for the second previous year (e.g. 1993 plans to include 1991 data), at least the statewide average Medicaid payment rates for obsttrical and pediatric services by procedure, separately for each metropolitan statistical area (MSA). States may establish higher payment levels in rural areas than in MSAs. (Note: This section also provides payment for ambulatory services to a pregnant woman or individual under 18 years of age in a health center receiving funds under the Public Health Service Act. Section 6404 duplicates this by providing coverage of services offered in federally qualified health centers. Congress did not intend this duplication, and will notify the agency of its preference for the latter, section 6404.)

Effective date: On enactment.

Early and Periodic Screening, Diagnostic, and

Treatment Services Defined (Section 6403)

Current law: States are required to cover early and periodic screening, diagnostic, and treatment (EPSDT) services for Medicaid beneficiaries under 21 years of age. By regulation, States must screen participating childen for health problems. In addition, States must provide dental care, necessary immunizations, and vision and hearing treatment. States must establish a periodicity schedule for screening, and have the option to provide services that may not otherwise be available under the State plan.

Provision: Defines the term "EPSDT" to include, at intervals that meet reasonable practice standards and medical necessity, the following services:

* Screening services that include at a minimum: a comprehensive health and developmental assessment (both physical and mental); comprehensive unclothed physical exam; appropriate immunizations; and lab tests and health education.

* Vision services including eyeglasses.

* Dental care.

* Hearing services including hearing aids.

* Such other services to correct or ameliorate defects and physical and mental illnesses and conditions discovered by the screening services.

Requires States to provide any service covered with Federal matching funds to treat a condition identified during screening, whether or not the service is included in the State's plan. Clarifies that providers of EPSDT services need not be limited to those who are qualified to provide all of the items and services.

Requires States to report the following, by age group and basis of eligibility, by not later than April 1 after the end of each fiscal year, beginning with fiscal year 1990; the number of children provided child health screening services; the number of children referred for corrective treatment; the number of children receiving dental services; and the State's results in attaining participation goals.

Requires the Secretary, by no later than July 1, 1990, and every 12 months thereafter, to develop and set annual goals for each State for participation of individuals in EPSDT.

Effective date: April 1, 1990, whether or not final regulations have been promulgated.

Payment for Federally Qualified Health Center 

Services (Section 6404)

Current law: States are permitted to cover services in community health centers, migrant health centers, and programs of health care to the homeless receiving Federal grants under the Public Health Service Act. States that cover such services establish their own reimbursement methodologies.

Provision: Requires States to include in their Medicaid benefit package federally qualified health center services and any ambulatory services offered by a federally qualified health center and otherwise covered in the State plan.

Defines "federally qualified health center services" the same as rural health clinic services that are provided on an outpatient basis under Medicare.

Defines "federally qualified health centers" as community health centers, migrant health centers, or programs of health care to the homeless, as well as clinics which meet the standards of those programs but are not actually receiving grant funds. Deems references to a rural health clinic or to a physician at the clinic as references to a federally qualified health center or to a physician at the center, respectively.

Requires States to pay 100 percent of reasonable costs for rural health clinic and federally qualified health center services.

Effective date: Applies to Medicaid payments for calendar quarters beginning on or after April 1, 1990, whether or not final regulations have been promulgated. States requiring legislation are given the standard extension.

Required Coverage of Nurse Practitioner

Services (Section 6405)

Current law: At State option, State Medicaid programs may cover medical care furnished by nurse practitioners certified and practicing under State law.

Provision: Requires States to include in their Medicaid benefit package services provided by a certified pediatric nurse practitioner or certified family nurse practitioner practicing within the scope of State law, regardless of whether they are under the supervision of, or associated with, a physician or other health care provider.

Effective date: Effective for services provided on or after July 1, 1990.

Required Medicaid Notice and Coordination

with Special Supplemental Food Program for

Women, infants and Children (WIC)

(Section 6406)

Current law: Section 1902 (a)(11) requires State medical assistance programs to enter into cooperative arrangements with State agencies administering maternal and child health (MCH) and other health programs, and with vocational rehabilitation programs to maximize the use of those services; and to reimburse MCH programs for provision of their services which are also included under the State Medicair plan and for which payment would otherwise be made to the State Medicaid agency. The Omnibus Budget Reconciliation Act of 1987 amended the Child Nutrition Act to mandate women, infants, and children (WIC) cooridination with Medicaid in addition to MCH.

Provision: Requires State Medicaid plans to provide for coordination between WIC and Medicaid. Requires States to notify all Medicaid-eligible pregnant, breastfeeding, or postpartum women, or children below the age of 5, of WIC benefits. Also, requires referrals to the responsible State administering agency.

Effective date: July 1, 1990, whether or not regulations have been promulgated.

Demonstration Projects to Study the Effect of

Allowing States to Extend Medicaid to

Pregnant Women and Children Not Otherwise

Qualified to Receive Medicaid Benefits

(Section 6407)

Current law: No provision.

Provision: Authorizes demonstrations for up to 3 years to allow several States to extend health insurance coverage to pregnant women and children under 20 years of age in families with incomes below 185 percent of the Federal poverty level (FPL) who lack insurance, and to encourage workers to obtain health insurance for themselves and their children.

The projects involve studying the effect on access to health care, private insurance coverage, and costs of health care when States are allowed to extend Medicaid benefits.

Benefits may consist of Medicaid services as provided to Medicaid-eligible persons in the State or, at State option, Medicaid-subsidized enrollment in alternative plans such as those authorized for employed families receiving a second 6-month period of extended Medicaid assistance after loss of Aid to Families with Department Children (AFDC), e.g., enrollment in a medical plan offered by an employer.

Eligibility for benefits under the projects appears to be limited to those who otherwise would not qualify under the alternative assistance option available during the second 6-month Medicaid extension provided to AFDC families terminated because of employment.

If one or more demonstrations utilize employer coverage, that project shall require an employer contribution.

No premium may be charged in the case of pregnant women and children whose income levels are below 100 percent of FPL. In the case of pregnant women and children between 100 and 185 percent of FPL, a premium not to exceed 3 percent of the family's average gross monthly earnings will be charged.

The Secretary may waive statewideness. The Federal share of benefits paid and expenses incurred for these demonstrations is limited to $10 million for each of fiscal years 1990, 1991, and 1992.

Each project must be evaluated, and the Secretary must submit an interim Report to Congress summarizing the evaluations by no later than January 1, 1992, with a final report due no later than January 1, 1994.

Institutions for Mental Disease

(Section 6408(a))

Current law: The Social Security Amendments of 1972 permitted States to provide Medicaid benefits for persons 65 years of age or older in institutions for mental diseases (IMDS); other residents of IMDs are ineligible for Medicaid. States may also cover services in inpatient psychiatric hospitals for persons under 21 years of age. The Medicare Catastrophic Coverage Act defined an IMD as an institutional setting of more than 16 beds that is primarily engaged in diagnosing, treating, or caring for persons with mental diseases.

Provision: The Secretary of Health and Human Services (HHS) is directed to conduct a study of the implementation of current law and regulation of the exclusion from coverage of certain individuals residing in IMDs, and a study of the costs and benefits of using Medicaid funds to provide services in public subacute psychiatric facilities that serve patients who would otherwise be hospitalized.

Requires the Secretary of HHS to submit to Congress a report on the study by no later than October 1, 1990. The report shall recommend modifications to current law and policy, if necessary, to accomodate changes that have occurred since 1972 in the delivery of inpatient psychiatric and other mental health services; and include recommendations on the continued coverage of Medicaid for services in subacute psychiatric facilities.

Until 180 days after the receipt by Congress of the above report, the Secretary is precluded from determining that Kent Community Hospital Complex and Saginaw Community Hospital (both in Michigan) are IMDs.

Extension of Texas Personal Care Services

Waiver (Section 6408(b))

Current law: Section 1115 of the Social Security Act gives the Secretary general authority to conduct experiments and demonstrations under various Social Security Act titles, including Medicaid, and to waive compliance with certain program requirements in carrying out these demonstrations. Under this authority, the Secretary approved a Medicaid waiver for the project, "Modifications of the Texas System of Care for the Elderly: Alternatives to the Institutionalized Aged," beginning in January, 1980. The waiver remains in effect until January 1, 1990, unless the Secretary finds that the applicant no longer complies with terms and conditions applied as of December 31, 1985.

Provision: Extends the period that the waiver may remain in effect to July 1, 1990.

Hospice Payment for Room and Board

(Section 6408(c))

Current law: Medicaid law requires States covering hospice care to pay for hospice care in the same amounts, and according to the same prospective payment methodology, as under Medicare. For Medicaid-eligible residents of nursing facilities (NFs) and intermediate care facilities for the mentally retarded (ICFs/MR), Medicaid law also permits a separate rate to be paid to the hospice program to take into account the room and board furnished by the facility, including performance of personal care services.

Provision: Requires States to pay for hospice care in amounts no lower than the amounts paid under Medicare, and to use the same methodology used under Medicare. Requires States to pay an amount for room and board (in addition to the hospice rate paid) for terminally ill residents of a NF or ICF/MR who elect hospice care. This additional amount must be at least 95 percent of the NF or ICF/MR per diem rate that would have been paid under the State plan for facility services in that facility for that individual.

Effective date: Applies to services provided on or after April 1, 1990, whether or not final regulations have been promulgated.

Medicare Buy-in for Premiums of Certain

Working Disabled (Section 6408(d))

Current law: No provision.

Provision: Requires States to cover the cost of Medicare Part A premiums and cost-sharing for certain working disabled persons who are eligible for Medicare benefits as a result of the new Section 1818A of the Act. These are individuals who: have not attained age 65; have been entitled to title II disability benefits but are no longer entitled because of earnings in excess of the substantial gainful activity level; continue to have the same disabling physical or mental condition that served as the basis for the determination of disability for entitlement to benefits; and are not otherwise eligible for Medicaid benefits.

Such individuals cannot have income greater than 200 percent of the Federal poverty level (FPL) or resources greater than twice the level permissible under the Supplemental Security Income program.

States are permitted to charge a premium for these benefits for individuals with income between 150 and 200 percent of the FPL. Such premiums will equal to 0 to 100 percent of the Medicare Part A premiums, increasing in reasonable increments as income increases between 150 and 200 percent of the FPL.

Effective date: For payments for calendar quarters beginning on or after July 1, 1990, except in cases where a change in State law is required. In these instances, the standard extension will apply.

Technical Correction to Medicare Buy-in for

the Elderly (Section 6411(a))

Current law: The Medicare Catastrophic Coverage Act (MCCA) requires States to pay for Medicare cost-sharing for "qualified Medicare beneficiaries," those individuals whose income does not exceed 100 percent of the poverty line and whose resources do not exceed twice the amount permissible under the SSI program. States have the option to provide full Medicaid benefits to all aged, blind, and disabled persons meeting these same income and resources limits. 209(b) States may use eligibility standards that are more restrictive than Supplemental Security Income (SSI) standards.

Provision: Makes a technical change to clarify that 209(b) States are prohibited from using more restrictive methods of determining eligibility of "qualified Medicare beneficiaries" and poverty level aged, blind, and disabled groups. States are required instead to employ the methods of the SSI program.

Effective date: As if in MCCA.

Extension of Delay in Issuance of Certain Final

Regulations (Section 6411(b))

Current law: The Secretary is prohibited from issuing final regulations prior to May 1, 1989, that would place additional restrictions on the use of voluntary contribution or provider-paid taxes by States to receive Federal matching funds under Medicaid.

Provision: The Secretary is prohibited from issuing any such regulation prior to December 31, 1990.

Effective date: Upon enactment.

Disproportionate Share Hospitals

(Section 6411(c))

Current law: State Medicaid reimbursement methods and standards for hospital services just take into account the situation of hospitals that serve a disproportionate number of low-income patients with special needs.

Medicaid State plans must define hospitals serving a disproportionate number of low-income patients and provide for an increase in the rate or amount of payment for inpatient services provided by such hospitals.

Formulae have been established for identifying disproportionate-share hospitals and adjusting the Medicaid reimbursement rates of such hospitals within strictly limited State choices.

Provision: Exempts New Jersey's payment plan for disproportionate-share hospitals, which was in effect as of January 1, 1987, from the requirements of current law. Requires that the State's aggregate disproportionate-share payment adjustments be at least equal to those that would have been made if the State complied with the requirements in current law.

Deems Missouri to have met the requirements of current law for the period July 1, 1988 through June 30, 1990, if the total amount of disproportionate-share adjustment payments to hospitals is not less than the amount required by law.

Effective date: For the New Jersey exemption, as if enacted in the Omnibus Budget Reconciliation Act of 1987. For the Missouri transition rule, upon enactment.

Fraud and Abuse Technical Amendments

(Section 6411(d))

Current law: The secretary may exclude from Medicare and Medicaid a provider whose licensehas been revoked, suspended, or otherwise lost for reasons related to competence, performance, or financial integrity. Providers excluded from Medicare and/or Medicaid can be paid for emergency services provided to beneficiaries.

Provision: Permits exclusion of a provider who has lost the right to apply for or renew a license on the same grounds. Clarifies that the exception permitting payment for emergency services provided by excluded providers does not apply to services furnished in a hospital emergency room.

Clarifies that health maintenance organizations (HMOs) with Medicare risk-sharing contracts or Medicaid prepaid plans may not empoy or contract with: individuals or entities excluded from participation in Medicare or Medicaid for the provision of health care, utilization review, medical social work, or administrative services; or with any entity for the provision (directly or indirectly) through such an excluded individual or entity of such services.

Effective dates: For exclusion for the loss of right to apply or renew, and for no payment for emergency room services provisions, upon enactment. For the HMO provision, 90 days after enactment.

Spousal Impoverishment (Section 6411(e))

Current law: States are required to deny Medicaid coverage for long-term institutional care and certain other services for institutionalized persons who dispose of assets for less than their fair market value 30 months prior to entering an institution or applying for Medicaid. This requirement does not extend to situations in which a noninstitutionalized spouse disposes of assets without fair compensation.

Provision: Requires that the same restrictions on Medicaid coverage apply when the noninstitutionalized spouse transfers or disposes of an asset for less than fair market value; clarifies existing law by mandating that all provisions affecting treatment of income and resources for certain institutionalized spouses apply to 209(b) States; and clarifies that rules for treating a couple's income when one spouse is institutionalized, apply at initial determinations and subsequent redeterminations of Medicaid eligibility.

Effective dates: For spousal transfers, upon enactment. For other provisions, as if included in the Medicare Catastrophic Coverage Act.

Health Insuring Organizations

(Section 6411(f))

Current law: The Tennessee Primary Care Network, a health insuring organization (HIO) until 1987, had been operating under a Medicaid Freedom of Choice (FOC) waiver under Section 2175 of the Omnibus Budget Reconciliation Act of 1981. The original FOC waivers exempted HIOs from the 75 percent/25 percent enrollment composition requirement in Section 1903(m) of the Social Security Act. In 1986, the Consolidated Omnibus Budget Reconciliation Act subjected HIOs to the health maintenance organization (HMO) requirements but allowed a temporary continuation of contracts with HIOs that were under development or operational on January 1, 1986, and for which the Secretary had granted section 2175 waivers. In 1987, the Tennessee Primary Care Network was classified as an HMO. As a new HMO, it was exempt from the 1903(m) enrollment composition requirement for 3 years. As of June, 1990, the Tennessee Primary Care Network will have to meet section 1903(m) requirements.

Provision: Requires the Secretary to continue the waiver allowing the Tennessee Primary Care Network, Inc. to remain exempt from the 75 pecent/25 percent requirement through June 30, 1992.

Day Habilitation and Related Services

(Section 6411(g))

Current law: States may cover clinic and rehabilitation services under their Medicaid State plans. (Note: Some States have used one or the other of these options to provide day habilitation services to mentally retarded beneficiaries in the community not otherwise covered by a section 1915(c) home and community-based services waiver.)

Provision: Prohibits the Secretary from denying Federal funding for day habilitation and related services if the services were an approved part of the State's Medicaid plan on or before June 30, 1989.

Prohibits withdrawal of Federal approval of such a State plan provision unless regulations are promulgated, with at least 60-day public comment period, specifying the types of day habilitation and related services a State may cover and any requirements applicable to those services.

Provides that if a regulation is promulgated, the Secretary may find a State out of compliance; however, the determination would only apply to services furnished on or after the first day of the first quarter following the notice of the State including the basis for the finding of noncompliance.

Effective date: Upon enactment.

Medically Needy Income Levels

(Section 6411(h))

Current law: States are permitted to extend Medicaid coverage to the medically needy, individuals who meet the categorical requirements for Aid to Families with Dependent Children (AFDC) or Supplemental Security Income but whose income exceeds the usual eligibility thresholds. To be eligible for Medicaid as medically needy, the family income, after deducting medical expenses, cannot exceed 133 1/3 percent of the maximum AFDC cash payment amount for a family of the same size. Proposed regulations published September 26, 1989, would require States to base medically needy levels for one-person households on actual AFDC payments for one person where the State's AFDC program provides such a payment.

Provision: Prohibits the Secretary from issuing final regulations that may affect medically needy income levels for households of one person until December 31, 1990.

Technical Correction Concerning Transitional

Coverage (Section 6411(i))

Current law: The Family Support Act requires States to extend Medicaid coverage for 6 months to Aid to Families with Dependent Children (AFDC) families who lose cash benefits because of increased earnings or hours of work (effective April 1, 1990, until September 30, 1998). Also requires States to offer coverage for an additional 6 months. During this period, the State may require families to pay premiums for continued Medicaid coverage, offer reduced benefits, or select alternative coverage options. Also, early termination may occur if the family ceases to include a child who meets the AFDC definition of dependency.

The Family Support Act suspended a provision that had required States to offer 9 months of Medicaid coverage with an option for 6 additional months of coverage. Such a suspension was necessary to assure that families losing AFDC between April 1, 1990, and September 30, 1990, who would otherwise have been eligible for 15 months of transitional coverage would receive 12 months of coverage. (Eligibility for extended coverage is based on receipt of AFDC in 3 of the 6 months preceding termination).

Provision: Clarifies that coverage is subject to early termination only if the family ceases to include at least one child, whether or not that child meets the AFDC definition of dependency.

Clarifies that the 9-month/6-month extension of coverage for working, former AFDC families continues to apply to families who lose AFDC before April 1, 1990.

Effective date: As if included in the Family Support Act.

Minnesota Prepaid Medicaid Demonstration

Project Extension (Section 6411(j))

Current law: The State of Minnesota had a section 1115(a) waiver to demonstrate the feasibility of health maintenance organizations for Medicaid beneficiaries in three locations in Minnesota. The Waiver, due to expire on December 31, 1988, was extended to June 30, 1990, under Section 507 of the Family Support Act of 1988.

Provision: The Secretary is directed to extend Minnesota's waiver until June 30, 1991.

Maternal and Child Health Block Grant

Program

Section 6501. Beginning in fiscal year 1990, the Omnibus Budget Reconciliation Act increases funds available to the Maternal and Child Health (MCH) Block Grant Program to enable each State to provide broader access to qualify maternal care and child health services; reduce infant mortality; and provide rehabilitation, family-centered and community-based services for children with special health needs; and enable the Secretary to develop and expand projects designed to increase the participation of obstetricians and pediatricians under MCH programs and under Medicaid State plans.

Section 6503. Applications for block grants must contain a statewide needs assessment (to be done every 5 years) that identifies preventive and primary care services for pregnant women, mothers, and infants up to 1 year of age, and preventive and primary care services for children with special health care needs. Plans to meet those needs must include assurances that at least 30 percent will be spent on preventive and primary care, and at least 30 percent on services for children with special health needs.

States are required to establish a toll-free telephone number for the use of parents to access information about health care providers and practitioners who provide Medicaid services.

State agencies must provide for services to identify pregnant and postpartum women, and infants under 1 year of age who are eligible for Medicaid, and once identified, assist them in applying for Medicaid.

Section 6504. Beginning in fiscal year 1991, States are required to include extensive information in their annual reports, including the number of deliveries and infants covered by Medicaid. The Secretary is required to transmit annually to the Congress a report that includes this information and an assessment of the progress being made to meet the health status goals and objectives for mothers and children.

Section 6506. No later than 1 year after enactment, the Secretary is required to develop and disseminate a model application form for simultaneous application for a pregnant woman or a child less than 6 years of age for benefits under the following maternal and child assistance programs: the MCH block grant program; migrant and community health centers programs; homeless primary care program; Women, Infants and Children; Medicaid; and Head Start.

No later than 1 year after enactment, the Secretary must develop and disseminate a model application form for use in applying for Medicaid benefits for noninstitutionalized individuals who are not receiving cash assistance under Title IV-A of the Social Security Act. The Secretary may not require States to adopt the form as part of their State Medicaid plan.

SEction 6507. The Secretary is required to develop a national data system for linking, for any infant up to 1 year of age: the infant's birth record, any death record for the infant, and information on any claims submitted under Medicaid for health care furnished to the infant or with respect to the birth of the infant.

Section 6508. The Secretary may conduct four demonstration projects to provide health insurance coverage under an eligible plan for medically uninsurable children under 19 years of age. Coverage will be made available for at least 2 years and is guaranteed by the Secretary for that period of time. The plan may not restrict coverage on the basis of a child's medical condition or impose waiting periods or exclusions for pre-existing conditions. Premiums shall be disclosed in advance of enrollment and will vary by individuals' incomes. The Secretary shall provide for an evaluation of the demonstration's effects on access, availability of coverage, demographic characteristics and health status, and families' out-of-pocket costs.

Vaccine Injury Compensation Technicals

(Section 6601(1) (4))

Current law: Individuals who suffer injury or death associated with the administration of a vaccine may be compensated by payment from the Vaccine Injury Compensation Trust Fund. Payment of compensation cannot be made for items or services covered by insurance policies, health benefit plan, or other compensation programs. The Trust Fund is a secondary payer to these programs.

Provision: Amends the Public Health Service Act to clarify that while compensation paid by the vaccine injury compensation program is secondary to Federal or State health benefits or services programs, this does not include the Medicaid program.

Extension, Under Internal Revenue Code,

Under Public Health Service Act, and Under

ERISA, of Coverage from 18 to 29 Months for

Those with a Disability at Time of Termination

of Employment (Sections, 6701, 6702, 6703)

Current la: Employers, group health plans, and State and local government group health plans (all with 20 or more employees) are required to provide certain employees and their family members with the option of purchasing continued health insurance coverage in the case of certain events (qualifying events). These events include: termination or reduction in hours of employment, death, divorce or legal separation, eligibility for Medicare, or the end of a child's dependency under a parent's health insurance policy. The individual must provide notice of a qualifying event to the plan adminstrator within 30 days, and must elect continuation coverage within 60 days.

Continuation coverage must be identical to the previous coverage and be offered at the group rate. The premium for continuation coverage cannot exceed 102 percent of the plan premium.

The maxiumum period of continuation coverage that may be elected is 36 months from the date of the qualifying event, except in the case of termination of employment or reduction of hours, for which the maximum period is u8 months. Continuation coverage may be terminated earlier than the maximum 18 or 36 months in the case of certain events. These events include: the end of all plan coverage to any employee, failure of the beneficiary to pay the plan premium, remarriage of the divorced spouse, or the beneficiary becoming covered under another group health plan or entitled to Medicare.

Provision: Extends the maximum required period of continuation coverage under termination or reduction in hours of employment from 18 to 29 months for those with a disability (determined under title II or XVI). Permits a premium increase up to 150 percent of the plan premium after the eighteenth month of continuation coverage.

Effective date: Applies to plan years beginning on or after the date of enactment of this Act, regardless of when termination occurred.

Amendments to the Public Health

Service Act (Section 6801(b)(2)(A)(ii)),

Internal Revenue Code and ERISA

(Section 7862(c)(3)(A)(ii) and (B)(ii))

Current law: State and local government group health plans (with 20 or more employees) are required to provide employees and their family members with the option of purchasing continued health insurance coverage in the case of certain events (qualifying events). These events include termination or reduction in hours of employment. The maximum period of continuation coverage that may be elected is 18 months in the case of termination or reduction in hours of employment. Continuation coverage may be terminated earlier than the maximum 18 months in the case of certain events. These events include beneficiaries being re-employed and covered under another group health plan.

Provision: Amends the Public Health Service Act, the Internal Revenue Code, and the Employee Retirement Income Security Act to clarify that continuation coverage cannot terminate because of re-employment if the employee's new group health plan contains any exclusions or limitation for pre-existing conditions.

Effective date: Applies to re-employment after December 31, 1989.

Moratorium on Implementation of

February 2, 1989 Regulations

(Section 6901(a))

Current law: On February 2, 1989, the Health Care Financing Administration (HCFA) published final regulations that revise and consolidate requirements that nursing homes must meet in order to participate in Medicare and/or Medicaid. As published in February, most of the provisions of the final regulations would have become effective August 1, 1989, although the Omnibus Budget Reconciliation Act of 1987 specified an effective date of October 1, 1990, for similar provisions. In July, HCFA issued notice in the Federal Register that it would delay implementation of the February regulatiosn to January 1, 1990.

Provision: Requires that HCFA's February 2 regulations on requirements for long-term care facilities participating in Medicare and/or Medicaid not be effective before October 1, 1990.

Nurse Aide Training (Section 6901(b))

Current law: Effective January 1, 1990, skilled nursing facilities (SNFs) or nursing facilities (NFs) participating in Medicare/Medicaid are prohibited from using a person as a nurse aide, for more than 4 months, unless the individual has completed a State-approved training and/or a competency evaluation program, and is competent to provide nursing or nursing-related services.

SNFs and NFs are required to provide, for nurse aides hired prior to July 1, 1989, a State-approved competency evaluation program and preparation necessary to complete such a program by January 1, 1990.

The Secretary must establish requirements for State approval of nurse aide training and/or competency evaluation programs by September 1, 1988, and specify in these requirements, areas to be covered in programs. In the case of nurse aide training and competency evaluation programs, specify the content of curriculum, minimum hours of initial (75 hours) and ongoing training and retraining, qualifications of instructors, and procedures for derermining competency. Allows deeming for certain individuals who completed training before January 1, 1989.

Federal matching payments are authorized for State activities required in connection with the review and approval of nurse aide training and competency evaluation programs, and nurse aide competency evaluation programs, whether the programs are conducted in or outside nursing facilities or regardless of the skill of the personnel involved in the programs. for the eight calendar quarter beginning July 1, 1988, enhanced Federal matching payments are authorized for these activities (the Federal matching rate for a State plus 25 percent, not to exceed 90 percent). In subsequent years, the rate becomes 50 percent.

Provisions:

Delay in Requirements--Required Training of Nurse Aides: As of October 1, 1990, as SNF or NF can no longer use a nurse aide for more than 4 months unless he or she has completed a State-approved training and competency evaluation program, or a competency evaluation program, and is competent to provide nursing or nursing-related services.

Offering Competency Evaluation Programs for Current Employees: A SNF or NF is required to provide a State-approved competency evaluation program and any necessary preparation for individuals used as nurse aides as of January 1, 1990, and the individuals are required to complete such competency evaluation probram by October 1, 1990.

Publication of Proposed Regulations--requires publication of proposed regulations or requirements for nurse aide training and competency evaluation programs and for nurse aide competency evaluation programs 90 days after the date of enactment.

Requirements for Training and Evaluation Programs--Adds to requirements that the Secretary must establish for approval of nurse aide training and competency evaluation programs, a requirement that programs cover the care of cognitively impaired residents; and amends the specifications for nurse aide competency evaluation programs to require such programs to cover recognition of mental health and social service needs, and care of cognitively impaired residents. Provides that nurse aides may establish competency through procedures or methods other than the passing of a written examination and at the NF at which the aide is (or will be) employed, unless the facility is out of compliance with requirements for participation within the previous 2 years. Prohibits the imposition on nurse aides of any charges (including any charges for textbooks and other required course materials) for either the nurse aide training and competency evaluation programs or for the nurse aide competency evaluation programs.

Delay and Transition in 75-Hour Training Program Requirement--Delays effective date for States to deem individuals who completed a nurse aide training and competency evaluation program to July 1, 1989. A nurse aide will be considered to have met the nurse aide training and competency evaluation requirements if the nurse aide: participated in a program that offered a minimum of 60 hours of nurse aide training to nurse aides before July 1, 1989, and if such aides received before July 1, 1989, up to 15 hours in supervised practical nurse aide training or in regular in-service nurse aide education (initial training must be at least 75 hours); completed a course of at least 100 hours of nurse aide training and was found competent (whether or not by the State) before July 1, 1989; or, has served as nurse aide at one or more facilities of the same employer in the State for at leas 24 consecutive months before the date of enactment.

Clarification of Matching -- Enhanced Federal matching payments include the cost of nurse aides to complete competency evaluation programs. For the period July 1, 1988 to July 1, 1990, the Federal medical assistance percentage is increased 25 percent up to 90 percent, for costs of State review and approval of nurse aide training and competency evaluation programs and nurse aide competency evaluation programs. The Secretary is prohibited from allocating programs. The aide training and competency evaluation programs, and competency evaluation programs, conducted before October 1, 1990, based on the proportion of residents of nursing facilities entitled to benefit under Medicare or Medicaid.

Effective dates: As if included in the Omnibus Budget Reconciliation Act of u987 except for amendments that will apply to Requirements for Training and Evaluation Programs offered on or after the end of the 90-day period beginning on the date of enactment. It will not affect competency evaluations conducted under programs offered before the end of the period.

Publication of Proposed Regulations Respecting

Preadmission Screeni ng and Annual Resident

Review (Section 6901(c))

Current law: The Secretary is required to issue, by not later than October 1, 1988, minimum criteria for States to use in making Preadmission Screening and Annual Resident Review (PASARR) determinations for a mentally ill or mentally retarded individual. In May 1989, the Health Care Financing Administration issued State Medicaid Manual Instructions.

Provision: Requires the Secretary to issue proposed regulations within 90 days of enactment to establish the criteria for States to use in making PASARR determinations.

Other Amendments (Section 6901(d))

Clarification of Applicability of Enforcement Rules to

Dually-Certified Facilities(1)

Current law: For skilled nursing facilities (SNFs) and nursing facilities (NFs) found out of compliance with requirements for participation, there are enforcement procedures to be applied to SNFs participating in Medicare nad NFs participating in Medicaid. The Omnibus Budget Reconciliation Act (OBRA 87) of 1987 did not specifically address how enforcement actions are to be taken against NFs that are certified to participate in both Medicare and Medicaid.

Provision: Provides that the enforcement rules for NFs participating in Medicaid also apply to those NFs, or portions of NFs, participating in Medicare.

Clarification of Federal Matching Rate for Survey

and Certification Activities

Current law: The Medicaid program authorizes a 75-percent Federal matching rate to States for costs attributable to compensation or training of skilled professional medical personnel and staff supporting such personnel. Beginning in fiscal year 1991, enhanced Federal matching payments are authorized for State survey and certification activities. These will be at the rate of 90 percent for fiscal year 1991, 85 percent in fiscal year 1992, 80 percent in fiscal year 1993, and 75 percent in fiscal year 1994 and thereafter.

Provision: Clarifies that during the period before October 1, 1990, the Federal matching rate for State survey and certification of Medicaid SNF's and intermediate care facilities (ICFs) is current 75 percent.

Medicare Waiver Authority for Certain

Demonstration Projects

Current law: The Secretary is prohibited from entering into an agreement with any State for the purpose of determining whether a Medicare SNF meets requirements unless the State uses the standard, federally prescribed survey and certification process.

Provision: Allows the Secretary to waive the Medicare survey and certification requirements to carry out a demonstration project in New York to test an approved alternative survey and certification process. Applies during the period beginning November 1, 1988 and ending on October 31, 1991.

Allows the Secretary to waive the Medicare survey and certification requirements to carry out a pilot demonstration project in Wisconsin to test an approved alternative survey and certification process. Such waiver shall apply only during the 1-year period beginning on the date of implementation of the project.

Miscellaneous Technical Corrections

Minor technical corrections are made to various provisions of the Social Security Act.

Additional Miscellaneous Technical Corrections

Minor technical corrections are made to various provisions of the Social Security Act.

Effective date

As if included in the enactment of ObRA 87, except for (2) "Clarification of Federal Matching Rate for Survey and Certification Activities," which is upon enactment.

Title VIII

Medicaid Transition in Child Support Cases

(Section 8003)

Current law: States are required to extend Medicaid coverage for 4 months to families who lose Aid to Families with Dependent Children benefits due to the collection of child support. This provision expires October 1, 1989.

Provision: Permanently extends coverage offered under current law.

Effective date: October 1, 1989.

Case Plans to Include Health and Education

Records and to Be Reviewed and Updated at

the Time of Each Placement (Section 8007)

Current law: The State is required to maintain a case plan for each child receiving maintenance payments under title IV-E foster care. The case plan must include a description of the home or institution in which the child is to be placed, a discussion of the appropriateness of the placement, and assurances that the child will receive needed services.

Provision: Adds a requirement that the case plan must include the health and education record for each child. The health record must state all known health problems of the child and the name of health care providers. The record must be furnished to the foster care provider and updated with each foster care placement.

Effective date: April 1, 1990.

Establishment and Conduct of SSI Outreach

Program for Children (Section 8008)

Current law: No provision.

Provision: Requires the establishment of a Supplemental Security Income (SSI) outreach program for disabled and blind children. Requires the Secretary of Health and Human Services to work cooperatively with organizations and agencies with knowledge of potential SSI recipients.

Effective date: 3 months following enatcment (March 19, 1990).

SSI Rule for Deeming to Children the Income

and Resources of Their Parents Waived for

Certain Disabled Children (Section 8010)

Current law: The Supplemental Security Income (SSI) program requires that the income and resources of a disabled child's parents are deemed to the child when he or she lives in the household with the parents. Deeming does not apply if the child is in an institution (hospital, nursing home) for 30 days or more. States are authorized to offer "home care" plans whereby a disabled child can be cared for at home, and for purposes of Medicaid eligibility, deeming rules may, at the State's option, not apply.

Provision: Waives the SSI deeming rules in cases where a child under 18 years of age is being cared for at home under a "home care" plan -- established either under a 1915(c) waiver or a 1902(e)(3) State plan option -- and was receiving SSI benefits while institutionalized. Payment of SSI benefits will be the same as if the child were still institutionalized ($30 per month personal needs allowance).

Effective date: The first day of the sixth calendar month after enactment (June 1, 1990).

SSI Exclusion from Income of a Domestic

Commercial Transportation Ticket Received

as a Gift (Section 8011)

Current law: The fair market value of a domestic commercial transportation ticket received as a gift is considered unearned income unless it cannot be converted to cash. This could result in the loss of Supplemental Security Income (SSI) and Medicaid for the calendar quarter during which the gift is received.

Provision: A gift of a domestic commercial transportation ticket received by an SSI recipient or eligible spouse will no longer be considred unearned income if used by the eligible individual or spouse.

Effective date: The first day of the third calendar month beginning after the date of enactment (March 1, 1991).

Reduction of Time During which Income and

Resources of Separated Couples Must be

Treated as Jointly Available for SSI Puproses

(Section 8012)

Current law: Disabled, blind, or aged couples in which both spouses are aged, blind, or disabled, cannot be considered as individuals for purposes of eligibility and benefit amounts under the Supplemental Security Income (SSI) program until after they have been living apart for more than 6 months. This could also affect the date on which the separated spouse becomes eligible for Medicaid.

Provision: Couples who separate can be considered as individuals for purposes of eligibility and benefit amounts under SSI in the first full month following the separation.

Effective date: October 1, 1990.

SSI Exclusion of Accrued Income with Respect

to Purchase of Certain Burial Spaces

(Section 8013)

Current law: The value of a burial fund, including interest accruals up to $1,500, can be excluded as a resource for purposes of determining Supplemental Security Income (SSI) (title XIX) eligibility. The value of a burial space may also be excluded, but interest accruals on the space are treated as unearned income.

Provision: Interest accruals on burial spaces will be excluded from income for purposes of determining SSI eligibility.

Effective date: The first day of the fourth calendar month following the date of enactment (April 1, 1990).

SSI Exclusion from Resources of All Income-Producing

Property (Section 8014)

Current law: Income-producing property that is essential to an individual's self-support may be excluded, subject to limits the Secretary may impose, in determining Supplemental Security Income eligibility and benefits.

Provision: Prohibits the Secretary from imposing limits on property used in a trade or business or by the individual as an employee.

Effective date: The first day of the fifth calendar month following the date of enactment (May 1, 1990).

Demonstration of Effectiveness of Minnesota

Family Investment Plan (Section 8015)

Current law: The State of Minnesota has passed legislation permitting field tests of the Minnesota Family Investment Plan (MFIP) as an alternative to the State's Aid to Families with Dependent Children (AFDC) program. The MFIP is designed to simplify the State's current welfare program and provide additional work incentives. The MFIP calls for an agreement between the State and the Federal government and requires authorizing legislation.

Provision: Permits the State of Minnesota to conduct a demonstration of the MFIP in two field locations, one urban and one rural, for up to 6,000 families. This demonstration is subject to the approval of the Secretary of Health and Human Services.

For purposes of Medicaid eligibility, project participants will be deemd to be AFDC recipients, and eligibility extensions on the basis on increased income due to employment or receipt of child support will apply. Federal financial participation for medical assistance and administrative costs for participants will be the same as for nonparticipants and aggregate amounts limited to what would have been paid in the absence of the project.

The project may run for 5 years but can be terminated by the Secretary with 6 months notice for failure to comply with this provision. An evaluation plan is to be developed, and the State will issue interim and final reports. Within 3 months of the final report, the Secretary will make a report to the Congress.

Effective date: Upon enactment.

Title X

Demonstration Project (Section 10404)

Current law: No provision.

Provision: Appropriates $1 million for each of fiscal years 1990 and 1991 and $2 million for each of fiscal years 1992, 1993, and 1994 for demonstrations in up to 10 communities to determine whether costs of care can be reduced by volunteer senior aides providing basic medical assistance to families with disabled or chronically ill children.

Agent Orange Settlement Payments

(Section 10405)

Current law: Under Supplemental Security Income (SSI) and other means-tested programs, all forms of income generally count against eligibility for benefits unless there is a statutory provision under which the income must be disregarded.

Court-awarded settlement payments received by disabled veterans who were exposed to the toxic herbicide Agent Orange are counted as income and may result in the denial or loss of benefits for the veterans under Federal or federally assisted programs.

Provision: Payments made from the Agent Orange settlement fund, or any other fund established to award the benefits, will be excluded from income and resources in determining eligibility for SSI, Aid to Families with Dependent Children, Medicaid, the Social Services Block Grant, and several other means-tested Federal assistance programs.

Effective date: January 1, 1989.

Reports to Congress

Administratively Necessary Days

The following summary is of a report from the Secretary of Health and Human services released to Congress on May 9, 1990.

Legislative mandate

Section 9305(e) of Public Law 99-509, the Omnibus Budget Reconciliation Act of 1986, mandates the Secretary of Health and Human Services to conduct:

"...a study to determine whether a payment should be made (in a budget-neutral manner under title XVIII of ...(the Social Security) Act to hospitals receiving payments under section 1886(d) of such Act) to a hospital for administratively necessary days, separate from the per-discharge and outliner payments made under such section."

For purposes of this study, the legislation defines an administratively necessary day (AND) as "day of continued inpatient hospital stay, for an individual entitled to benefits under Part A of title XVIII of the Social Security Act, necessitated by a delay in obtaining placement for the individual in a skilled nursing facility."

Overview

The research studies on which this report is based indicate that hospitals with limited access to the nursing home market generally have difficulty in discharging patients. The financial effect of ANDs is relatively small and primarily impacts a subgroup of hospitals, but the effect may constitute a burden for a limited number of hospitals.

In this report, it is acknowledged that discharge delays do occur in hospitals subject to Medicare's prospective payment system (PPS) and result in hospitals' experiencing ANDs. Discharge delays can be attributed to insufficient accessibility of nursing home beds because of:

* Area nursing home bed shortages.

* Low proportions of area nursing home beds certified to provide skilled nursing care.

* Stringency of Medicaid nursing home reimbursement.

* Marginal cost of Medicare patients exceeding the average facility cost and the Medicare payment ceiling in some areas.

It should be noted that, when originally calculated, the PPS rates incorporated the costs of hospital discharge delays; i.e., ANDs. AND costs, therefore, were averaged across all hospitals. As such, hospitals have always been paid for ANDs, but not according to their specific experience.

The issue of ANds is complex. A recommendation of a definitive solution or policy is hampered by the fact that proxies were used to measure ANDs since no direct measurement instrument was available. It is clear, however, that merely establishing a separate payment for ANDs will not resolve the issue, and it is difficult to design a system that will be equitable to all parties. The solution must account for the impact of other Medicare programmatic components that are also likely to influence the effect of ANDs on hospitals.

Program contact

For further information: Mr. Victor G. McVicker Office of Research and Demonstrations Health Care Financing Administration Room 2-F-2 Oak Meadows Building 6325 Security Boulevard Baltimore, Maryland 21207 Telephone [phone]

Rural Health Care Transition Grant

Program

The following summary is of a report from the Secretary of Health and Human Services released to Congress on June 7, 1990.

Legislative mandate

Section 4005(e) of the Omnibus Budget Reconciliation Act of 1987 states, in part:

"(1) The Administrator of the Health Care Financing Administration, in consultation with the Assistant Secretary of Health (or a designee), shall establish a program of grants to assist eligible small rural hospitals and their communities in the planning and implementation of projects to modify the type and extent of services such hospitals provide ...."

(8) The Administrator shall report to Congress at least once every 6 months on the program of grants established under this subsection."

Overview

This report was prepared by the evaluation contractor, Mathematica Policy Research, Inc. As the first report on the Rural Health Care Transition Grant Program, this report provides:

* An introduction and background of the grant program.

* A description of the grantee selection process.

* A description of the eligible applicant and grantee hospitals.

* A description of the projects.

* A discussion of the monitoring process and future reports.

In January 1989, the Health Care Financing Administration (HCFA) solicited applications from over 2,500 small rural hospitals located in 46 States and the Commonwealth of Puerto Rico (Connecticut, Delaware, Rhode Island, and New Jersey do not contain eligible rural hospitals).

HCFA received applications for 529 projects from 677 hospitals, some of which submitted multiple applications. Some applications were from consortia of up to 15 hospitals. The 529 proposals were reviewed and scored by independent technical reviewers. Awards were made on September 15, 1989. Grant awards were based on consideration of technical scores and with the goal of achieving geographic dispersion of the available grant funds. A total of 184 grant awards were made to 181 hospitals, representing 155 different projects. Each State (and the Commonwealth of Puerto Rico) with eligible hospitals that applied, received at least one award.

A report on the progress of the grantees will be prepared every 6 months of the program. Progress will be monitored through hospital reports that will be submitted every 6 months and visits to a sample of grantees. A final Report to Congress will be prepared evaluating the impact of the program. Also, the findings will be incorporated into a practical guide for rural hospitals.

Program contact

For further information: Ms. Kathleen M. Farrell Office of Research and Demonstrations Health Care Financing Administration Room 2-F-1 Oak Meadows Building 6325 Security Boulevard Baltimore, Maryland 21207 Telephone [phone]

(1) Language is from OBRA 89 conference report. Amendment was intended to require the application of Medicaid enforcement procedures in SNFs that are dually certified. However, this provision does not appear to accomplish that outcome. A technical amendment may not be necessary in view of the Secretary's enforcement authority in SNFs.