Social Security Act Amendments of 1994 - Public Law 103-432

Health Care Financing Review, Winter, 1994

Title I--Medicare

Subtitle A--Provisions Relating to Part A

Section 101. Provisions Relating to Adjustments to Standardized Amounts for Wages and Wage-Related Costs: Under prior law, the Medicare Geographic Classification Review Board (MGCRB) guidelines were based on a reclassification system using metropolitan statistical areas as the definition of labor market areas. This amendment allows the Secretary to change the guidelines for the MGCRB if the hospital wage index is changed so that metropolitan statistical areas are no longer the basis for the labor market areas. Effective upon enactment. The section also makes other minor technical changes.

Section 102. Essential Access Community Hospital (EACH) Amendments: Under prior law, grants were provided to facilities in seven States to design networks around the concept of a limited service hospital. These small facilities, rural primary care hospitals (RPCHs), are linked in referral networks with the larger referral EACH hospitals. Both of these facility types, once certified, become part of the operating program under Medicare. This amendment (beyond making minor technical corrections):

(a) Reauthorizes EACH/RPCH program appropriations through FY 1997 at the current annual level of $25 million.

(b) Changes the 72-hour limit on inpatient admissions to an average of 72 hours.

(c) Qualifies urban hospitals as EACHs, although these providers will not receive a change in Medicare payment as a result of this new designation.

(d) Authorizes a RPCH that had a swing-bed agreement (at the time that it applies to be a RPCH) to retain all of its licensed beds for extended care services in addition to the 6-12 beds it is allowed under the RPCH program.

(e) Prohibits RPCHs from providing surgery or other services that require general anesthesia, unless the attending physician certifies that the risk of transfer to another facility outweighs the benefits.

(f) Changes the date for implementation of inpatient and outpatient RPCH prospective payment from January 1, 1993 to January 1, 1996. This section is effective upon enactment.

Section 103. Provisions Relating to Rural Health Transition Grant Program: This provision extends the Rural Health Transition Grant Program through FY 1997 and authorizes $30 million annually. It also changes the reporting frequency from 6 months to once a year. RPCHs would be eligible to receive grants. Effective upon enactment.

Section 104. Psychology Services in Hospitals: This amendment allows clinical psychologists to supervise the care of Medicare patients in a hospital if they are authorized to do so under State law. Effective upon enactment.

Section 105. Medicare-Dependent, Small Rural Hospitals and Sole Community Hospitals: This provision makes minor technical amendments to the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993), effective upon enactment.

Section 106. Skilled Nursing Facilities:

(a) Construction of Wage Index--This amendment requires the Secretary to begin to collect skilled nursing facility (SNF) wage data within 1 year of date of enactment for the purposes of constructing a SNF wage index.

(b) Clarification of Repeal of Utilization Review Requirements--OBRA 1987 amendments created confusion about whether or not a utilization review plan is required for SNFs and other providers of extended care services. Section 1819 enumerates quality assurance and other requirements for SNFs, but does not explicitly require utilization review activities. However, other sections of the Act (sections 1866(d) and 1814 (a) (5)) do make reference to SNFs and extended care services in the context of utilization review requirements. This amendment eliminates all references to SNFs and post-hospital extended care services in sections 1866(d) and 1814 (a) (5), and thereby clarifies that utilization review plans and activities for SNFs and extended care services are permitted, but not required. The effective date is as if included in the enactment of OBRA 1987.

(c) Conforming Amendments to Nursing Home Reform.

* Under prior law, the Secretary could prohibit approval of a nurse aide training program offered by a SNF if, within the previous 2 years, the SNF had been subject to an extended recertification survey. This section clarifies that such a prohibition is not authorized if the extended survey shows that the SNF is in compliance with the Medicare participation requirements of section 1819. This amendment also makes other technical and conforming amendments to correspond to Medicaid Nursing Home Reform.

* This section also increases the minimum amount required for separate deposit of personal funds from $50 to $100.

* This section also clarifies that a State shall not include, in a nurse aide registry, allegations of resident abuse or neglect or misappropriation of resident property unless such allegations are specifically documented by the State.

Section 107. Notification of Availability of Hospice Benefit: This provision requires hospitals to notify beneficiaries, as part of the discharge planning process, of the availability of hospice services. The effective date is the first day of the first month beginning more than 1 year after date of enactment.