[Senate Report 110-474]
[From the U.S. Government Publishing Office]
Calendar No. 1035
110th Congress Report
SENATE
2d Session 110-474
======================================================================
PATIENT SAFETY AND ABUSE PREVENTION ACT
_______
September 22 (legislative day, September 17), 2008.--Ordered to be
printed
_______
Mr. Baucus, from the Committee on Finance, submitted the following
R E P O R T
[To accompany S. 1577]
[Including cost estimate of the Congressional Budget Office]
The Committee on Finance, to which was referred the bill
(S. 1577) to amend titles XVIII and XIX of the Social Security
Act to require screening, including national criminal history
background checks, of direct patient access employees of
skilled nursing facilities, nursing facilities, and other long-
term care facilities and providers, and to provide for
nationwide expansion of the pilot program for national and
State background checks on direct patient access employees of
long-term care facilities or providers, reports favorably
thereon with an amendment in the nature of a substitute and
recommends the bill, as amended, do pass.
I. BACKGROUND
Background checks\1\ for job applicants have long been used
as an important tool to help reduce the rates of abuse among
vulnerable populations. During the 1990s, the National Child
Protection Act was enacted to allow states to conduct
background checks and suitability reviews of employees or
volunteers of entities that provide services to children, the
elderly and disabled persons. At the State level, many states
routinely require individuals seeking to work with children to
undergo background checks as part of the pre-employment
process.
---------------------------------------------------------------------------
\1\In this report, the term ``background check'' refers to
comprehensive pre-employment screening of long-term care workers using
a combination of State-based registries, state-based criminal history
checks (name-based, fingerprint-based, or both), and FBI criminal
history checks (fingerprint-based).
---------------------------------------------------------------------------
MILLIONS OF ELDERLY AND DISABLED INDIVIDUALS ARE NOT ADEQUATELY
PROTECTED
Although national surveys often exclude institutional
settings such as nursing homes and adult day care centers,
evidence shows that abuse in institutions is ``extensive and
alarming.''\2\ A recent analysis of Medicaid Fraud Control Unit
cases of elder abuse concluded that among 801 cases of nursing
home abuse analyzed, about two-thirds were due to physical
abuse.\3\ Elder abuse can take the form of physical abuse
(battery, assault and rape), neglect (withholding or failure to
provide adequate food, shelter and health care) and financial
exploitation (theft, predatory lending and other illegal misuse
or taking of funds, property or assets).
---------------------------------------------------------------------------
\2\Payne, Brian and Gainey, Randy. ``The Criminal Justice Response
to Elder Abuse in Nursing Homes: A Routine Activities Perspective.''
Western Criminology Review. 7(3). 67-81 (2006).
\3\Ibid.
---------------------------------------------------------------------------
In addition, because the demand for home-based care is
expected to grow rapidly in the coming decades, policy to
prevent and address elder abuse in home-based care settings is
needed.\4\ A recent investigation published in the Wall Street
Journal examined cases of abuse and neglect by home health
aides, noting that ``in tiny Lake County, California
[population <66,000 in 2006], 80 percent of the 74 prosecutions
of elder abuse in the past year involved home health
aides.''\5\
---------------------------------------------------------------------------
\4\Goldberg, Lee. ``Everything You Wanted to Know About Long Term
Care . . . But Were Afraid to Ask.'' Presentation to the National
Academy of Social Insurance. July 22, 2008.
\5\Shishkin, Philip. ``Cases of Abuse by Home Aides Draw
Scrutiny.'' The Wall Street Journal. 15 July 2008.
---------------------------------------------------------------------------
Most States now have significant gaps and loopholes in the
procedures they use to check applicants. For example,
registries and databases established for different sectors of
the workforce are often poorly coordinated, causing lengthy
clearance times. While nursing homes are required under Federal
law to conduct registry checks on all Certified Nurse Aides
(CNAs), they may not conduct State and Federal criminal history
checks on all employees who have direct access to residents.
And in many states, requirements for pre-employment checks do
not extend to workers in other long-term care settings. This
allows individuals with a history of substantiated abuse or a
serious criminal history to avoid detection, frequently by
crossing State lines.
A 2002 Government Accountability Office (GAO) report
requested by members of the Senate Special Committee on Aging
(Committee) recommended that individuals applying to work in
all long-term care settings also undergo background checks
because the elderly, like children, are a highly vulnerable
population.\6\ The Department of Health and Human Services
Office of Inspector General has made similar recommendations in
several reports.
---------------------------------------------------------------------------
\6\U.S. Government Accountability Office, ``Nursing Homes: More Can
Be Done to Protect Residents from Abuse.'' GAO-02-312. March 2002.
---------------------------------------------------------------------------
To date, without broad-based Federal requirements and
funding, only a few States have moved to incorporate these
efficiency-improving system changes. Instead, many states
continue to use slower, less accurate paper-based systems that
can result in long processing times for providers. In turn,
slow processing times increase the risk of abuse by allowing
employees with disqualifying crimes to work for several months
before background checks are completed. In turn, this
contributes to a practice of ``job-hopping,'' in which workers
switch jobs frequently, before their criminal history checks
can be processed.
SCREENING OF LONG-TERM CARE WORKFORCE INVOLVES MULTIPLE TYPES OF CHECKS
Three different types of databases are typically used to
conduct background checks:
Registry checks cross-reference an
individual's name with public databases, such as the
National Sex Offender Registry, or with lists of
workers found to have a record of substantiated abuse
in a particular field, such as the state CNA
registries;
State name-based and fingerprint criminal
checks are searches of state police records using a
person's name and other identifying information, or
their fingerprints;
Federal criminal history checks are
conducted by the FBI through its all-state biometric
repository, the Integrated Automated Fingerprint
Identification System (IAFIS), which uses fingerprints
to identify whether an individual has been arrested or
convicted.
Because no single database is complete, a comprehensive
background check process that uses many different databases
promises to be most effective.
Recent technological improvements are helping to streamline
the different types and levels of background check processes.
For example, ``Livescan'' fingerprint technology, which records
an electronic copy of a fingerprint, is less prone to error and
is faster to process than paper-based inked fingerprints.
Another innovation is the ``rap-back'' system, which ensures
that any new disqualifying crimes an individual commits after
an initial clearance are flagged in a state's database and can
be reported back to the current employer--so that the
individual can be terminated. The FBI is now working to create
a parallel federal rap-back capability as part of the agency's
``Next Generation Identification'' (NGI) System initiative.\7\
Rap-back systems also have the potential to reduce costs by
avoiding the need for duplicative checks.
---------------------------------------------------------------------------
\7\U.S. Department of Justice. ``The Attorney General's Report on
Criminal History Background Checks.'' June 2006.
---------------------------------------------------------------------------
Absent focused state initiatives to refine, improve and
expand existing background check procedures and implementation
of other innovations, such as abuse prevention training and
related measures to prevent and detect elder abuse, experts
warn that mistreatment and exploitation of frail elders will
rise further during the first half of the 21st century as the
number of older adults grows. Today, conservative estimates are
that elder abuse affects hundreds of thousands of seniors each
year.\8\
---------------------------------------------------------------------------
\8\Colello, Kirsten. ``Background on Elder Abuse Legislation and
Issues.'' Congressional Research Service. 25 January 2007.
---------------------------------------------------------------------------
To address this, for States electing to participate, the
Patient Safety and Abuse Prevention Act will:
Provide the opportunity to improve their existing
background check infrastructure for employees who work one-on-
one with frail elders and individuals with disabilities in
long-term care facilities and other settings. To accomplish
this, the bill makes available up to $3 million in grant
funding to each participating state, provided over three years,
contingent on a 25 percent state match.
Enable recipient states to create a comprehensive
background check system for long-term care job applicants by
making needed investments in their databases, creating
workforce background check units, updating applicable laws and
regulations, and offering additional training to long-term care
providers.
Establish mechanisms for workers who are denied
employment to dispute the results through an independent
external process, and develop procedures aimed at reducing
unnecessary repeat fingerprint checks for workers who change
jobs frequently.
Significantly improve the ability of states across
the country to design cost-effective and efficient background
check systems that would reduce the risk of elder abuse in the
thousands of facilities and other settings where many of the
frailest Americans receive health and long-term care.
II. LEGISLATIVE HISTORY
One of the first major congressional actions taken to
combat elder abuse was the creation of the Long-Term Care
Ombudsman Program (LTCOP) in order to investigate and resolve
complaints in nursing homes and other residential care
settings. This program was created in 1972 as a Public Health
Service demonstration project in five states. As a result of
the pilot program's success, the LTCOP was expanded to all
states and included as an amendment to the Older Americans Act
(OAA) in 1978.\9\ In 1992, the program become incorporated into
a new title VII of the OAA that authorized elder rights
protection activities and required the Administration on Aging
(AoA) to create a permanent National Ombudsman Resource Center.
---------------------------------------------------------------------------
\9\P.L. 95-478.
---------------------------------------------------------------------------
Other federal resources aimed at preventing elder abuse
include the Social Services Block Grant (SSBG) program
authorized by title XX of the Social Security Act, which
includes Adult Protective Services (APS), and some programs of
the Violence Against Women Act.
Although Congress has passed several laws that address
child abuse and domestic violence, less attention has been paid
to combating elder abuse at the Federal level. However, in
addition to the Elder Justice Act, there have been several
legislative proposals introduced in the Senate during the last
several Congresses to combat elder abuse.
During the 105th Congress, Senator Herb Kohl (D-WI)
introduced the Patient Abuse Prevention Act, S. 1122, on July
31, 1997, and the Long-Term Care Patient Protection Act of
1998, S. 2570, on October 7, 1998. Both bills were referred to
the Senate Finance Committee.
Senator Kohl introduced the Patient Abuse Prevention Act,
S. 1445, again on July 27, 1999, in the 106th Congress, and the
bill was referred to the Senate Finance Committee.
Also during the 106th Congress, Senator Charles E. Grassley
(R-IA) introduced the Home Health Integrity Preservation Act,
S. 255, on January 20, 1999, and Senator John Ashcroft (R-MO)
introduced the Senior Care Safety Act of 2000, S. 3066, on
September 19, 2000. Both bills were referred to the Senate
Finance Committee.
Senator Kohl introduced the Patient Abuse Prevention Act,
S. 3091, again on October 10, 2002, in the 107th Congress, and
the bill was referred to the Senate Finance Committee.
The Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, H.R. 1, was introduced by
Representative Dennis Hastert (R-IL) on June 25, 2003, during
the 108th Congress. The bill became Public Law 108-173 on
December 8, 2003. This law established a pilot program for
national and state background checks on direct patient access
employees of long-term care (LTC) facilities and providers. The
Secretary of Health and Human Services, in consultation with
the Attorney General, was required to establish the pilot
program in no more than 10 states. The purpose of the pilot
program was to identify efficient, effective, and economical
procedures for these background checks.
Also in the 108th Congress, on April 30, 2003, Senator Kohl
introduced the Patient Abuse Prevention Act, S. 958, and the
bill was referred to the Senate Finance Committee.
During the 110th Congress, Senator Kohl introduced the
Patient Safety and Abuse Prevention Act of 2007, S. 1577, on
June 7, 2007, and the bill was referred to the Senate Finance
Committee. Under the leadership of Chairman Max Baucus (D-MT),
the Senate Finance Committee considered the bill in Executive
Session on September 10, 2008, after postponement of an
Executive Session scheduled for August 1, 2008. On September
10, 2008, the Senate Finance Committee unanimously reported the
bill as an amendment in the nature of a substitute.
III. SECTION-BY-SECTION ANALYSIS
SHORT TITLE (SECTION 1 OF THE COMMITTEE BILL)
Present law
No provision.
Committee bill
The Committee Bill sets forth the title of the Act as the
Patient Safety and Abuse Prevention Act of 2008.
FINDINGS (SECTION 2(A) OF THE COMMITTEE BILL)
Present law
No provision.
Committee bill
The Committee Bill describes the following findings of
Congress:
(1) Frail elders are a highly vulnerable population who
often lack the ability to give consent or defend themselves.
Since the best predictor of future behavior is past behavior,
individuals with histories of abuse pose a definite risk to
patients and residents of long-term care facilities.
(2) Every month, there are stories in the media of health
care employees who commit criminal misconduct on the job and
are later found, through a background check conducted after the
fact, to have a history of convictions for similar crimes.
(3) A 2006 study conducted by the Department of Health and
Human Services determined that--
(A) criminal background checks are a valuable tool
for employers during the hiring process;
(B) the use of criminal background checks during the
hiring process does not limit the pool of potential job
applicants;
(C) ``a correlation exists between criminal history
and incidences of abuse''; and
(D) the long-term care industry supports the practice
of conducting background checks on potential employees
in order to reduce the likelihood of hiring someone who
has potential to harm residents.
(4) In 2004, the staffs of State Adult Protective Services
agencies received more than 500,000 reports of elder and
vulnerable adult abuse, and an ombudsman report concluded that
more than 15,000 nursing home complaints involved abuse,
including nearly 4,000 complaints of physical abuse, more than
800 complaints of sexual abuse, and nearly 1,000 complaints of
financial exploitation.
(5) The Department of Health and Human Services has
determined that while 41 States now require criminal background
checks on certified nurse aides prior to employment, only half
of those (22) require criminal background checks at the Federal
level.
PURPOSES (SECTION 2(B) OF THE COMMITTEE BILL)
Present law
No provision.
Committee bill
The Committee Bill defines the purposes of the Patient
Safety and Abuse Prevention Act, as follows:
(1) to lay the foundation for a coordinated,
nationwide system of State criminal background checks
that would greatly enhance the chances of identifying
individuals with problematic backgrounds who move
across State lines;
(2) to stop individuals who have a record of
substantiated abuse, or a serious criminal record, from
preying on helpless elders and individuals with
disabilities; and
(3) to provide assurance to long-term care employers
and the residents they care for that potentially
abusive workers will not be hired into positions of
providing services to the extremely vulnerable
residents of our Nation's long-term care facilities.
NATIONWIDE PROGRAM FOR NATIONAL AND STATE BACKGROUND CHECKS ON DIRECT
PATIENT ACCESS EMPLOYEES OF LONG-TERM CARE FACILITIES AND PROVIDERS
(SECTION 3 OF THE COMMITTEE BILL)
Present law
Background Checks of FBI Records for Nursing Homes and Home
Health Agencies. The Omnibus Consolidated and Emergency
Supplemental Appropriations Act of 1999 (P.L. 105-277) allowed
nursing homes and home health agencies to request, through
their State agencies, that the Federal Bureau of Investigation
(FBI) search its all-state national data bank of arrests and
convictions for the criminal histories of job applicants who
would provide direct patient care, as long as states establish
mechanisms for processing these requests. Most states have
enacted laws that require or allow nursing homes and home
health agencies to conduct these criminal background checks for
certain categories of potential employees. The Attorney General
may charge nursing homes and home health agencies fees no
greater than $50 per request.
To conduct a criminal background check of FBI records,
nursing homes and home health agencies must provide a copy of
applicants' fingerprints, a statement signed by the applicant
authorizing the search, and other information to the
appropriate state agency. Such information must be provided no
later than 7 days after its acquisition by the nursing home or
home health agency. Nursing facilities or home health care
agencies that deny employment based on reasonable reliance on
information from the Attorney General are exempt from liability
for any action brought by the applicant. The information
received from either the state or Attorney General may be used
only for the purpose of determining the suitability of the
applicant for employment by the agency in a position involved
in direct patient care.
Healthcare Integrity and Protection Data Bank/Health Care
Fraud and Abuse Data Collection Program. The U.S. Department of
Health and Human Services (HHS) maintains a national health
care fraud and abuse data base, the Healthcare Integrity and
Protection Data Bank (HIPDB), for the reporting of final
adverse actions, including health care related civil judgments
and criminal convictions of health care practitioners,
providers and suppliers. This information is currently
available for self-query by government agencies, health plans,
health care providers, suppliers and practitioners. All states
also maintain their own registries of persons who have
completed nurse aide training and competency evaluation
programs and other persons whom the state determines meet the
requirements to work as a nurse aide. Included in these
registries are data describing state findings of resident
neglect, abuse and/or the misappropriation of resident
property.
Long-Term Care Background Check Pilot Program. The Medicare
Modernization Act of 2003 (MMA, P.L. 108-173) established a
pilot program for national and state background checks on
direct patient access employees of long-term care (LTC)
facilities and providers. Specifically, the Secretary of HHS,
in consultation with the Attorney General, was required to
establish the pilot program in no more than 10 states.
The purpose of the pilot program was to identify efficient,
effective, and economical procedures for these background
checks. LTC facilities or providers are defined as certain
facilities or providers that receive Medicare and/or Medicaid
payment, including nursing homes, home health agencies,
hospices, LTC hospitals, providers of personal care services,
certain residential care providers, and intermediate care
facilities for the mentally retarded (ICF/MRs). States in the
pilot project may choose to require other LTC providers to also
conduct background checks; however, providers paid through
self-directed arrangements, or in arrangements in which
patients employ the provider of services directly, are not
included.
States that agreed to participate in the pilot project were
responsible for (1) monitoring compliance, (2) establishing
procedures for workers to appeal or dispute the findings of the
background checks, (3) agreeing to review the results of State
or national criminal background checks to determine whether the
employee was convicted of a relevant crime, (4) reporting the
results of the review to the provider, and (5) reporting any
employees with relevant convictions to the HIPDB database. The
Secretary established criteria for selecting those states
seeking to participate to ensure geographic diversity, the
inclusion of a variety of LTC providers, the evaluation of a
variety of payment mechanisms, and the evaluation of
enforcement penalties. In addition, the Secretary was required
to select at least one state that permits providers to hire
provisional employees; at least one state that does not permit
hiring of provisional employees; at least one state that
establishes procedures for contracting with an employment
agency to conduct background checks; and at least one state
that includes training for managers and employees to prevent
patient abuse.
Procedures established in the participating states were
designed to: (1) give notice to prospective employees about the
background check requirement, (2) require the employee to
produce a written statement disclosing any conviction for a
relevant crime or finding of patient or resident abuse, (3)
require the employee to authorize a criminal background check
in writing, (4) require the employee to provide the facility
with a rolled set of finger prints, (5) require any other
information specified by the state, (6) require the provider to
conduct checks of available registries that would be likely to
contain disqualifying information about convictions for
relevant crimes or findings of abuse, and (7) permit the
provider to obtain criminal histories on prospective employees
using a 10-fingerprint check from state criminal records and
the Integrated Automated Fingerprint Identification system of
the Federal Bureau of Investigation. Disqualifying information
for employment included any federal or state conviction for
program-related crimes (those related to the delivery of an
item or service under Medicare or under any other state health
care program), a Federal or State conviction for patient or
resident abuse, a federal or state felony conviction related to
health care fraud or a controlled substance, or an act of
patient or resident abuse or neglect or misappropriation of
patient or resident property, or other acts specified by
states.
Under this pilot program, states were permitted to
establish procedures for facilitating background checks through
employment agencies. States could also impose penalties to
enforce the requirements of the pilot program conducted in that
state.
LTC providers were not permitted to knowingly employ any
direct patient access employee who has any disqualifying
information; however, participating states could permit
providers to provisionally employ workers pending completion of
the national and state criminal history background checks
subject to supervisory requirements established by the state.
These supervisory requirements were designed to take into
account the cost or other burdens associated with small rural
providers as well as the nature of care delivered by home
health or hospice providers. Further, the information obtained
from the check could only be used for the purpose of
determining the suitability of the applicant for employment.
States were required to ensure that providers were protected
from liability for denying employment based on reasonable
reliance on information from the background checks.
The Secretary, in consultation with the Attorney General,
was required to conduct an evaluation of this pilot program.
The evaluation should (1) review and identify those state
procedures that are most efficient, effective, and economical;
(2) assess the costs of conducting the checks; (3) consider the
benefits and problems associated with requiring employees or
provider to pay the costs of conducting background checks; (4)
consider whether the costs should be allocated between the
Medicare and Medicaid programs and how to do so; (5) determine
the extent to which the background checks may lead to
unintended consequences, including a reduction in the available
workforce; (6) review forms used by participating States to
conduct a model form for background checks; (7) determine the
effectiveness of background checks conducted by employment
agencies; and (8) recommend appropriate procedures and payment
mechanisms for implementing a national criminal background
check program.
The Secretary was required to pay participating states out
of funds in the Treasury for the costs of conducting the pilot
program (reserving 4 percent of the payments for the program's
evaluation). For fiscal years 2004 through 2007, $25 million
was appropriated from funds not otherwise appropriated.
Seven states were selected by the Secretary to participate
in the pilot. They are Alaska, Idaho, Illinois, Michigan,
Nevada, New Mexico and Wisconsin. All but Illinois and
Wisconsin extended the program Statewide. Pilots in each of
these states concluded on September 30, 2007. The final
evaluation of a three-year pilot has not yet been released by
CMS.
Committee bill
The Secretary would be required to expand the pilot program
authorized under Section 307 of MMA. The program prohibited
providers from knowingly employing any direct patient access
employees with any disqualifying information as revealed by the
background checks, and authorized participating states to
impose penalties, as they deemed appropriate, to enforce the
program's requirements.
State Agreements with the Secretary. States that are not
already in the pilot would have the option to enter into
agreements with the Secretary of Health and Human Services
(HHS) to conduct background checks under the program on a
statewide basis and to submit an application to the Secretary
according to the Secretary's guidelines.
The Secretary would be required to enter into agreements
with each state that participated in the pilot program that:
(1) did not conduct background checks on a statewide basis; (2)
agrees to conduct background checks under the new terms of the
program on a statewide basis; and (3) submits an application to
the Secretary containing such information and at such time as
the Secretary may specify.
Section 307 of the MMA is modified per the following:
Required Fingerprint Check. Prior to employing a direct
patient access employee that is first hired on or after the
commencement date of the nationwide program, providers (or
their designated agents) would be required to obtain state and
national criminal history background checks on prospective
employees using a search of state-based abuse and neglect
registries and databases. These searches would include state-
based abuse and neglect registries and databases of states in
which a prospective employee previously resided; state criminal
history records; records of proceedings in the state that might
contain disqualifying information (such as those of
professional licensing and disciplinary boards and Medicaid
Fraud Control Units); and Federal criminal history records,
including fingerprint checks using the FBI's Integrated
Automated Fingerprint Identification System.
Additionally, a ``rap back'' capability by the State would
also be required to be developed such that, if a direct patient
access employee is convicted of a crime after the initial
background check is conducted and the employee's fingerprints
match the prints on file with the state law enforcement
department, the department would immediately inform the state
and the state would immediately inform the provider of the
conviction.
State Requirements. States participating in the program
would be required to monitor compliance with the requirements
of the nationwide program and have procedures to: (1) conduct
screening and criminal history background checks under the
nationwide program; (2) monitor the compliance of LTC
facilities and providers; (3) provide, as appropriate, for a
provisional period (not to exceed 30 days) of employment of a
direct patient access employee--pending completion of the
required criminal background checks, or completion of an
employee's appeal process regarding the results of the
background check--during which the employee will be directly
supervised on-site according to procedures established by the
state; and (4) provide an independent appeals process by which
provisional or other employees may dispute the accuracy of the
information obtained in the background check, including
specified criteria (which would be required to include
consideration of the passage of time, extenuating
circumstances, demonstration of rehabilitation, and relevancy
of the particular disqualifying information with respect to the
current employment of the individual) for appeals by employees
found to have disqualifying information.
Further, states would be required to have procedures in
place to designate a single state agency responsible for: (1)
overseeing the coordination of state and national criminal
history background checks requested by LTC facilities or
providers (or their designated agents) using a search of state
and federal criminal history records, including a fingerprint
check of such records; (2) overseeing the design of privacy and
security safeguards for use in the review of background check
results regarding a prospective direct patient access employee
to determine whether the employee has any conviction for a
relevant crime; (3) immediately reporting the results of the
background check reviews to the LTC facility or provider; and
(4) reporting the existence of an employee's conviction for a
relevant crime to the Health Care Fraud and Abuse Data
Collection Program.
States would also need written procedures for determining
which individuals are direct patient access employees;
specifying offenses, including convictions for violent crimes,
for purposes of the nationwide program; and developing and
implementing the above-defined ``rap back'' capability such
that the state agency will immediately inform the facility or
provider when an employee is found to have a criminal
conviction, and will provide, or require the provider to
supply, the employee with a copy of the results of the criminal
history background check at no charge should the employee
request such a copy.
Payments. As a condition of receiving the Federal matching
payment, newly participating states and previously
participating states would be required to guarantee, as part of
their application, that the state would make available
(directly or through donations from public or private entities)
a particular amount of non-Federal contributions for costs
incurred by the state in carrying out the nationwide program.
The Secretary would agree to provide Federal matching payments
for newly participating states that would be three times the
guaranteed state amount, not to exceed $3 million to each
state. In addition, the Secretary would agree to provide
Federal matching payments for previously participating states
that would be three times the guaranteed state amount, not to
exceed $1.5 million to each state.
Evaluation and Report. The Inspector General of the
Department of Health and Human Services (HHS) would be required
to conduct an evaluation and/or audit of the nationwide program
and to submit a report to Congress with results of the
evaluation and/or audit no later than 180 days after completion
of the nationwide program.
Funding. The Secretary of HHS would be required to notify
the Secretary of the Treasury of the amount necessary to carry
out the nationwide program for fiscal years (FYs) 2009 through
2011, except that in no case would such amount exceed $160
million. Out of any Treasury funds not otherwise appropriated,
the Secretary of the Treasury would be required to provide for
the transfer to the Secretary of the amount specified as
necessary to carry out the nationwide program.
MANDATORY STATE USE OF NATIONAL CORRECT CODING INITIATIVE (SECTION 4 OF
THE COMMITTEE BILL)
Present law
The Federal Government pays a share of every State's
spending on Medicaid services and program administration. The
federal match for administrative expenditures does not vary by
state and is generally 50 percent, but certain functions
receive a higher amount. Section 1903(a)(3) of the Social
Security Act authorizes a 90 percent match for expenditures
attributable to the design, development, or installation of
mechanized claims processing and information retrieval
systems--referred to as Medicaid Management Information Systems
(MMISs)--and a 75 percent match for the operation of MMISs that
are approved by the Secretary of Health and Human Services
(HHS). A 50 percent match is available for non-approved MMISs
under section 1903(a)(7). In order to receive payments under
section 1903(a) for the use of automated data systems in the
administration of their Medicaid programs, states are required
under section 1903(r) to have an MMIS that meets specified
requirements and that the Secretary has found (among other
things) is compatible with the claims processing and
information retrieval systems used in the administration of the
Medicare program.
The National Correct Coding Initiative (NCCI) is an editing
system developed for the Medicare program by the Centers for
Medicare and Medicaid Services within HHS to promote national
correct coding methodologies and to prevent improper payment
when incorrect code combinations are reported in Medicare Part
B claims. It is based on coding conventions defined in the
American Medical Association's CPT manual, national and local
policies and edits, coding guidelines developed by national
societies, analysis of standard medical and surgical practices,
and a review of current coding practices. Although the use of
NCCI edits is mandatory in Medicare, state Medicaid agencies
are not required to use these edits in processing their claims.
In 2004, the HHS Office of Inspector General released a report
indicating that most states do not use the Medicare NCCI edits
and that 39 states paid $54 million in 2001 for services that
would have been denied based on those edits.
Committee bill
The Committee Bill would amend section 1903(r) of the
Social Security Act to require states to have an MMIS that,
effective for claims filed on or after October 1, 2009,
incorporates compatible elements of the NCCI (or any successor
initiative) and such other elements of that Initiative (or such
other national correct coding methodologies) as the Secretary
identifies in accordance with specified requirements. Not later
than September 1, 2009, the Secretary would be required to:
--identify those methodologies of the NCCI (or any
successor initiative to promote correct coding and to
control improper coding leading to inappropriate
payment) which are compatible to claims filed under
Medicaid;
--identify those methodologies of such Initiative (or
such other national correct coding methodologies) that
should be incorporated into claims filed under Medicaid
with respect to items and services for which no
national correct coding methodologies have been
established under such Initiative with respect to
Medicare;
--notify States of the elements identified (and of
any other national correct coding methodologies
identified) and how states are to incorporate such
elements (and methodologies) into claims filed under
Medicaid;
--submit a report to Congress that includes the
notice to states and an analysis supporting the
identification of the elements (or methodologies).
If the Secretary determines that state legislation is
required in order for a Medicaid state plan to meet the
additional requirements imposed by the provision, the state
plan would not be regarded as failing to comply 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
that has a 2-year legislative session, each year of the session
would be considered a separate regular session of the state
legislature.
FUNDING FOR THE MEDICARE IMPROVEMENT FUND (SECTION 5 OF THE COMMITTEE
BILL)
Present law
The Secretary will establish a Medicare Improvement Fund
that will be available to the Secretary to make improvements
under the original fee-for-service program under parts A and B
for Medicare beneficiaries. The Medicare Improvements for
Patients and Providers Act of 2008 (P.L. 110-275, MIPPA),
together with a provision in the Supplemental Appropriations
Act, 2008 (P.L. 110-252), makes $2.22 billion from the part A
and B Trust Funds available for services furnished during
FY2014 and an additional $19.9 billion available for fiscal
years 2014 through 2017.
For purposes of carrying out the provisions of, and
amendments made by MIPPA in addition to any other amounts
provided in such provisions and amendments, additional funds
will be made available to CMS. For fiscal years 2009 through
2013, the Secretary of Health and Human Services will transfer
$140 million from the Federal Hospital Insurance Trust Fund and
the Federal Supplementary Medical Insurance Trust Fund to the
CMS Program Management Account. The amounts drawn from the
funds will be in the same proportion as for Medicare managed
care payments (Medicare Advantage), that is, in a proportion
that reflects the relative weight that benefits under part A
and under part B represent of the actuarial value of the total
benefits.
Committee bill
The Committee Bill would continue to make $2.22 billion
available to the Fund for expenditures from the Fund for
services furnished during FY 2014, but would increase the
amount of funds available for FYs 2014 through 2017 by $300
million, from $19.9 billion to $20.2 billion. The $300 million
is unspent savings from the offset identified in section 4 of
the Committee Bill.
IV. REGULATORY IMPACT AND OTHER MATTERS
A. REGULATORY IMPACT
Pursuant to paragraph 11(b) of rule XXVI of the Standing
Rules of the Senate, the Committee makes the following
statement concerning the regulatory impact that might be
incurred in carrying out the provisions of the bill as amended.
Impact on individuals and businesses
The provisions of the bill are not expected to impose
additional administrative requirements or regulatory burdens on
individuals or businesses.
Impact on personal privacy and paperwork
The provisions of the bill do not reduce personal privacy.
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (P.L. 104-4).
The Committee has determined that the provisions of the
bill contain no Federal private sector mandates.
The Committee has determined that the provisions of the
bill do not impose a Federal intergovernmental mandate on
State, local, or tribal governments.
V. COST ESTIMATE
September 17, 2008.
Hon. Max Baucus,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1577, the Patient
Safety and Abuse Prevention Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mindy Cohen.
Sincerely,
Peter R. Orszag.
Enclosure.
S. 1577--Patient Safety and Abuse Prevention Act
Summary: S. 1577 would direct the Secretary of Health and
Human Services (HHS) to provide funding to States that
participate in a program to enforce a requirement that long-
term care facilities and providers conduct criminal background
checks on employees who have direct access to patients. The
bill also would require that state Medicaid programs adopt
systems to identify, and deny payment for, claims for
inappropriate services and claims that are incorrectly coded.
In addition, S. 1577 would provide funding for the Secretary to
make improvements in Medicare part A and part B benefits during
fiscal years 2014 through 2017.
In total, CBO estimates that the net impact on direct
spending of enacting S. 1577 would be negligible over both the
2009-2013 and 2009-2018 periods. Enacting the bill would not
affect federal revenues or spending subject to appropriation.
S. 1577 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
The bill would place new requirements on state Medicaid
programs that would reduce state spending for the program by
about $80 million over the 2009-2013 period.
The estimated budgetary impact of S. 1577 is shown in the
following table. The costs of this legislation fall within
budget functions 550 (health) and 570 (Medicare).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Outlays, by fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009-2013 2009-2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Background Checks on Employees of Long-Term Care
Facilities:
Estimated Budget Authority.................... 0 50 45 5 0 0 0 0 0 0 100 100
Estimated Outlays............................. 0 50 45 5 0 0 0 0 0 0 100 100
National Correct Coding Initiative:
Estimated Budget Authority.................... 0 -10 -20 -30 -40 -50 -60 -75 -85 -90 -100 -460
Estimated Outlays............................. 0 -10 -20 -30 -40 -50 -60 -75 -85 -90 -100 -460
Medicare Improvement Fund:
Estimated Budget Authority.................... 0 0 0 0 0 90 90 90 90 0 0 360
Estimated Outlays............................. 0 0 0 0 0 90 90 90 90 0 0 360
Total Changes:
Estimated Budget Authority.................... 0 40 25 -25 -40 40 30 15 5 -90 0 0
Estimated Outlays............................. 0 40 25 -25 -40 40 30 15 5 -90 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Basis of estimate: The bill contains provisions that would
both increase and decrease direct spending. CBO estimates the
net budgetary impact of the legislation would be negligible
over both the 2009-2013 and 2009-2018 periods.
Background checks on employees of long-term care facilities
S. 1577 would expand a pilot program created by the
Medicare Prescription Drug, Improvement and Modernization Act
of 2003 (Public Law 108-173) for background checks on certain
employees of long-term care facilities or providers. The
expanded pilot program would be available to any state that did
not implement a Statewide program under the previous authority.
In the states that decide to participate under the expanded
pilot program, long-term care providers that participate in
Medicare or Medicaid would be required to obtain state and
national criminal histories on all prospective employees.
Participating states also would be required to monitor
compliance with these requirements. Newly participating states
would be eligible to receive up to $3 million for these
activities; previously participating states would be eligible
to receive $1.5 million. S. 1577 would appropriate the amount
necessary to operate this program during fiscal years 2009
through 2011, up to a limit of $160 million over those three
years. Based on spending under the original pilot program, CBO
estimates that provision would increase direct spending by $100
million over the 2009-2013 and 2009-2018 periods.
National Correct Coding Initiative
The National Correct Coding Initiative (NCCI) consists of
automated procedures to identify Medicare claims that are
inaccurately coded or seek payment for inappropriate services.
Although the use of NCCI procedures to check claims is
mandatory in the Medicare program, State Medicaid agencies are
not required to use those edits in processing Medicaid claims.
S. 1577 would require that state Medicaid programs adopt
certain NCCI procedures by October 1, 2009. CBO estimates that
use of the NCCI checks would lead to the denial of certain
Medicaid claims and therefore save Medicaid $100 million over
the 2009-2013 period and $460 million over the 2009-2018
period.
Medicare Improvement Fund
The Medicare Improvement Fund was created by the Medicare
Improvements for Patients and Providers Act of 2008 (Public Law
110-275). The fund is available to the Secretary of HHS to make
improvements in Part A and Part B benefits. S. 1577 would
increase the amounts available in the fund for the 2014-2017
period. CBO estimates that those changes in funding would
increase outlays by $360 million over that period.
Estimated impact on state, local, and tribal governments:
S. 1577 contains no intergovernmental mandates as defined in
UMRA. To reduce inappropriate payments in the Medicaid program,
the bill would require states to incorporate the National
Correct Coding Initiative when processing provider claims. The
requirement to comply with the initiative, however, would not
impose an intergovernmental mandate as defined in UMRA because
the Medicaid program provides states with significant
flexibility to make programmatic adjustments to accommodate the
changes. Incorporating the initiative would ultimately reduce
state spending in the program by about $80 million over the
2009-2013 period. States also would benefit from funding
provided by the bill for background checks of prospective
employees of long-term care facilities or providers. Any costs
states incur, including matching funds, would be incurred
voluntarily.
Estimated impact on the private sector: S. 1577 contains no
private-sector mandates as defined in UMRA.
Estimate prepared by: Federal Costs: Mindy Cohen and Rob
Stewart; Impact on State, Local and Tribal Governments: Lisa
Ramirez-Branum; Impact on the Private Sector: Patrick
Bernhardt.
Estimate approved by: Keith J. Fontenot, Deputy Assistant
Director for Health and Human Resources, Budget Analysis
Division.
VI. VOTE OF THE COMMITTEE
In compliance with paragraph 7(b) of rule XXVI of the
Standing Rules of the Senate, the following statements are made
concerning the vote in the Committee's consideration of the
bill.
Motion to report the bill
The bill was ordered favorably reported by a unanimous
voice vote on September 10, 2008. A quorum was present. No
amendments were voted upon.
VII. CHANGES IN EXISTING LAW
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
PART E--MISCELLANEOUS PROVISIONS
* * * * * * *
MEDICARE IMPROVEMENT FUND
Sec. 1898. (a) Establishment.--The Secretary shall
establish under this title a Medicare Improvement Fund (in this
section referred to as the ``Fund'') which shall be available
to the Secretary to make improvements under the original fee-
for-service program under parts A and B for individuals
entitled to, or enrolled for, benefits under part A or enrolled
under part B.
(b) Funding.--
[(1) In general.--There shall be available to the
Fund, for expenditures from the Fund for services
furnished during fiscal year 2014, $2,220,000,000 and,
in addition for services furnished during fiscal years
2014 through 2017, $19,900,000,000.]
(1) In general.--There shall be available to the
Fund, for expenditures from the Fund for services
furnished during--
(A) fiscal year 2014, $2,220,000,000; and
(B) fiscal years 2014 through 2017,
$20,200,000,000.
* * * * * * *
TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS
* * * * * * *
PAYMENT TO STATES
Sec. 1903. (a) From the sums appropriated therefor, the
Secretary (except as otherwise provided in this section) shall
pay to each State which has a plan approved under this title,
for each quarter, beginning with the quarter commencing January
1, 1966--
* * * * * * *
(r)(1) In order to receive payments under subsection (a)
for use of automated data systems in administration of the
State plan under this title, a State must have in operation
mechanized claims processing and information retrieval systems
that meet the requirements of this subsection and that the
Secretary has found--
(A) are adequate to provide efficient, economical,
and effective administration of such State plan;
(B) are compatible with the claims processing and
information retrieval systems used in the
administration of title XVIII, and for this purpose--
(i) have a uniform identification coding
system for providers, other payees, and
beneficiaries under this title or title XVIII;
(ii) provide liaison between States and
carriers and intermediaries with agreements
under title XVIII to facilitate timely exchange
of appropriate data; [and]
(iii) provide for exchange of data between
the States and the Secretary with respect to
persons sanctioned under this title or title
XVIII; and
(iv) effective for claims filed on or after
October 1, 2009, incorporate compatible
methodologies of the National Correct Coding
Initiative administered by the Secretary (or
any successor initiative to promote correct
coding and to control improper coding leading
to inappropriate payment) and such other
methodologies of that Initiative (or such other
national correct coding methodologies) as the
Secretary identifies in accordance with
paragraph (3);
* * * * * * *
(3) Not later than September 1, 2009, the Secretary shall
do the following:
(A) Identify those methodologies of the National
Correct Coding Initiative administered by the Secretary
(or any successor initiative to promote correct coding
and to control improper coding leading to inappropriate
payment) which are compatible to claims filed under
this title.
(B) Identify those methodologies of such Initiative
(or such other national correct coding methodologies)
that should be incorporated into claims filed under
this title with respect to items or services for which
States provide medical assistance under this title and
no national correct coding methodologies have been
established under such Initiative with respect to title
XVIII.
(C) Notify States of--
(i) the methodologies identified under
subparagraphs (A) and (B) (and of any other
national correct coding methodologies
identified under subparagraph (B)); and
(ii) how States are to incorporate such
methodologies into claims filed under this
title.
(D) Submit a report to Congress that includes the
notice to States under subparagraph (C) and an analysis
supporting the identification of the methodologies made
under subparagraphs (A) and (B).
* * * * * * *