KEL15159 S.L.C.

AMENDMENT NO.llll Calendar No.lll

Purpose: To repeal the therapy cap and provide for medical

review of outpatient therapy services.

IN THE SENATE OF THE UNITED STATES—114th Cong., 1st Sess.

H. R. 2

To amend title XVIII of the Social Security Act to repeal

the Medicare sustainable growth rate and strengthen

Medicare access by improving physician payments and

making other improvements, to reauthorize the Chil-

dren’s Health Insurance Program, and for other pur-

poses.

Referred to the Committee on llllllllll and

ordered to be printed

Ordered to lie on the table and to be printed

AMENDMENT intended to be proposed by lllllll

Viz:

Strike section 202 and insert the following: 1

SEC. ll. MEDICARE PAYMENT FOR THERAPY SERVICES. 2

(a) REPEAL OF THERAPY CAP AND 1-YEAR EXTEN-3

SION OF THRESHOLD FOR MANUAL MEDICAL REVIEW.— 4

Section 1833(g) of the Social Security Act (42 U.S.C. 5

1395l(g)) is amended— 6

(1) in paragraph (4)— 7

(A) by striking ‘‘This subsection’’ and in-8

serting ‘‘Except as provided in paragraph 9

(5)(C)(iii), this subsection’’; and 10

2

KEL15159 S.L.C.

(B) by inserting the following before the 1

period at the end: ‘‘or with respect to services 2

furnished on or after the date of enactment of 3

subsection (aa)’’; and 4

(2) in paragraph (5)— 5

(A) in subparagraph (A), in the first sen-6

tence, by striking ‘‘March 31, 2015’’ and in-7

serting ‘‘the date of enactment of the Medicare 8

Access and CHIP Reauthorization Act of 9

2015’’; and 10

(B) in subparagraph (C), by adding at the 11

end the following new clause: 12

‘‘(iii) Beginning on the date of enactment of sub-13

section (aa) and ending on the day before the date of the 14

implementation of such subsection, the manual medical re-15

view process described in clause (i), subject to subpara-16

graph (E), shall apply with respect to expenses incurred 17

in a year for services described in paragraphs (1) and (3) 18

(including services described in subsection (a)(8)(B)) that 19

exceed the threshold described in clause (ii) for the year.’’; 20

and 21

(3) in paragraph (6)(A)— 22

(A) by striking ‘‘March 31, 2015’’ and in-23

serting ‘‘the date of enactment of the Medicare 24

3

KEL15159 S.L.C.

Access and CHIP Reauthorization Act of 1

2015’’; and 2

(B) by striking ‘‘the first three months of 3

2015’’ and inserting ‘‘the period beginning on 4

January 1, 2015, and ending on such date of 5

enactment’’. 6

(b) TARGETED REVIEWS UNDER MANUAL MEDICAL 7

REVIEW PROCESS FOR OUTPATIENT THERAPY SERV-8

ICES.— 9

(1) IN GENERAL.—Section 1833(g)(5) of the 10

Social Security Act (42 U.S.C. 1395l(g)(5)) is 11

amended— 12

(A) in subparagraph (C)(i), by inserting ‘‘, 13

subject to subparagraph (E),’’ after ‘‘manual 14

medical review process that’’; and 15

(B) by adding at the end the following new 16

subparagraph: 17

‘‘(E)(i) In place of the manual medical review process 18

under subparagraph (C)(i), the Secretary shall implement 19

a process for medical review under this subparagraph 20

under which the Secretary shall identify and conduct med-21

ical review for services described in subparagraph (C)(i) 22

furnished by a provider of services or supplier (in this sub-23

paragraph referred to as a ‘therapy provider’) using such 24

factors as the Secretary determines to be appropriate. 25

4

KEL15159 S.L.C.

‘‘(ii) Such factors may include the following: 1

‘‘(I) The therapy provider has had a high 2

claims denial percentage for therapy services under 3

this part or is less compliant with applicable require-4

ments under this title. 5

‘‘(II) The therapy provider has a pattern of bill-6

ing for therapy services under this part that is aber-7

rant compared to peers or otherwise has question-8

able billing practices for such services, such as bill-9

ing medically unlikely units of services in a day. 10

‘‘(III) The therapy provider is newly enrolled 11

under this title or has not previously furnished ther-12

apy services under this part. 13

‘‘(IV) The services are furnished to treat a type 14

of medical condition. 15

‘‘(V) The therapy provider is part of a group 16

that includes another therapy provider identified 17

using the factors determined under this subpara-18

graph. 19

‘‘(iii) For purposes of carrying out this subparagraph, 20

the Secretary shall provide for the transfer, from the Fed-21

eral Supplementary Medical Insurance Trust Fund under 22

section 1841, of $5,000,000 to the Centers for Medicare 23

& Medicaid Services Program Management Account for 24

fiscal years 2015 and 2016, to remain available until ex-25

5

KEL15159 S.L.C.

pended. Such funds may not be used by a contractor under 1

section 1893(h) for medical reviews under this subpara-2

graph.’’. 3

(2) EFFECTIVE DATE.—The amendments made 4

by this subsection shall apply with respect to re-5

quests described in section 1833(g)(5)(C)(i) of the 6

Social Security Act (42 U.S.C. 1395l(g)(5)(C)(i)) 7

with respect to which the Secretary of Health and 8

Human Services has not conducted medical review 9

under such section by a date (not later than 90 days 10

after the date of the enactment of this Act) specified 11

by the Secretary. 12

(c) MEDICAL REVIEW OF OUTPATIENT THERAPY 13

SERVICES.— 14

(1) MEDICAL REVIEW OF OUTPATIENT THER-15

APY SERVICES.—Section 1833 of the Social Security 16

Act (42 U.S.C. 1395l) is amended by adding at the 17

end the following new subsection: 18

‘‘(aa) MEDICAL REVIEW OF OUTPATIENT THERAPY 19

SERVICES.— 20

‘‘(1) IN GENERAL.— 21

‘‘(A) PROCESS FOR MEDICAL REVIEW.— 22

The Secretary shall implement a process for the 23

medical review (as described in paragraph (2)) 24

of outpatient therapy services (as defined in 25

6

KEL15159 S.L.C.

paragraph (10)) and, subject to paragraph 1

(12), apply such process to such services fur-2

nished on or after the date that is 12 months 3

after the date of enactment of this subsection, 4

focusing on services identified under subpara-5

graph (B). 6

‘‘(B) IDENTIFICATION OF SERVICES FOR 7

REVIEW.—Under the process, the Secretary 8

shall identify services for medical review, using 9

such factors as the Secretary determines appro-10

priate, which may include the following: 11

‘‘(i) Services furnished by a therapy 12

provider (as defined in paragraph (10)) 13

who, in a prior period, has had a high 14

claims denial percentage or is less compli-15

ant with other applicable requirements 16

under this title. 17

‘‘(ii) Services furnished by a therapy 18

provider whose pattern of billing is aber-19

rant compared to peers or otherwise has 20

questionable billing practices, such as bill-21

ing medically unlikely units of services in 22

a day. 23

‘‘(iii) Services furnished by a therapy 24

provider that is newly enrolled under this 25

7

KEL15159 S.L.C.

title or has not previously furnished ther-1

apy services under this part. 2

‘‘(iv) Services furnished to treat a 3

type of medical condition. 4

‘‘(v) Services identified by use of the 5

standardized data elements required to be 6

reported under section 1834(r). 7

‘‘(vi) Services furnished by a therapy 8

provider who is part of a group that in-9

cludes a therapy provider identified by fac-10

tors described in this subparagraph. 11

‘‘(vii) Other services as determined 12

appropriate by the Secretary. 13

‘‘(2) MEDICAL REVIEW.— 14

‘‘(A) PRIOR AUTHORIZATION MEDICAL RE-15

VIEW.— 16

‘‘(i) IN GENERAL.—Subject to the 17

succeeding provisions of this subparagraph, 18

the Secretary shall use prior authorization 19

medical review for outpatient therapy serv-20

ices furnished to an individual above one 21

or more thresholds established by the Sec-22

retary, such as a dollar threshold or a 23

threshold based on other factors. 24

8

KEL15159 S.L.C.

‘‘(ii) ENDING APPLICATION OF PRIOR 1

AUTHORIZATION FOR A THERAPY PRO-2

VIDER.—The Secretary shall end the appli-3

cation of prior authorization medical re-4

view to outpatient therapy services fur-5

nished by a therapy provider if the Sec-6

retary determines that the provider has a 7

low denial rate under such prior authoriza-8

tion. The Secretary may subsequently re-9

apply prior authorization medical review to 10

such therapy provider if the Secretary de-11

termines it to be appropriate. 12

‘‘(iii) PRIOR AUTHORIZATION OF MUL-13

TIPLE SERVICES.—The Secretary shall, 14

where practicable, provide for prior author-15

ization medical review for multiple services 16

at a single time, such as services in a ther-17

apy plan of care described in section 18

1861(p)(2). 19

‘‘(B) OTHER TYPES OF MEDICAL RE-20

VIEW.—The Secretary may use pre-payment re-21

view or post-payment review for services identi-22

fied under paragraph (1)(B) that are not sub-23

ject to prior authorization medical review under 24

subparagraph (A). 25

9

KEL15159 S.L.C.

‘‘(C) RELATIONSHIP TO LAW ENFORCE-1

MENT ACTIVITIES.—The Secretary may deter-2

mine that medical review under this subsection 3

does not apply in the case where potential fraud 4

may be involved. 5

‘‘(3) REVIEW CONTRACTORS.—The Secretary 6

shall conduct prior authorization medical review of 7

outpatient therapy services under this subsection 8

using medicare administrative contractors (as de-9

scribed in section 1874A) or other review contrac-10

tors (other than contractors under section 1893(h) 11

or other contractors paid on a contingent basis). 12

‘‘(4) NO PAYMENT WITHOUT PRIOR AUTHORIZA-13

TION.—With respect to an outpatient therapy service 14

for which prior authorization medical review under 15

this subsection applies, the following shall apply: 16

‘‘(A) PRIOR AUTHORIZATION DETERMINA-17

TION.—The Secretary shall make a determina-18

tion, prior to the service being furnished, of 19

whether the service would or would not meet 20

the applicable requirements of section 21

1862(a)(1)(A). 22

‘‘(B) DENIAL OF PAYMENT.—Subject to 23

paragraph (6), no payment shall be made under 24

this part for the service unless the Secretary 25

10

KEL15159 S.L.C.

determines pursuant to subparagraph (A) that 1

the service would meet the applicable require-2

ments of such section. 3

‘‘(5) SUBMISSION OF INFORMATION.—A ther-4

apy provider may submit the information necessary 5

for medical review by fax, by mail, or by electronic 6

means. The Secretary shall make available the elec-7

tronic means described in the preceding sentence as 8

soon as practicable, but not later than 24 months 9

after the date of enactment of this subsection. 10

‘‘(6) TIMELINESS.—If the Secretary does not 11

make a prior authorization determination under 12

paragraph (4)(A) within 10 business days of the 13

date of the Secretary’s receipt of medical docu-14

mentation needed to make such determination, para-15

graph (4)(B) shall not apply. 16

‘‘(7) CONSTRUCTION.—With respect to an out-17

patient therapy service that has been affirmed by 18

medical review under this subsection, nothing in this 19

subsection shall be construed to preclude the subse-20

quent denial of a claim for such service that does 21

not meet other applicable requirements under this 22

Act or any other provision of law. 23

‘‘(8) BENEFICIARY PROTECTIONS.—In the case 24

where payment may not be made as a result of ap-25

11

KEL15159 S.L.C.

plication of medical review under this subsection, 1

section 1879 shall apply in the same manner as such 2

section applies to a denial that is made by reason of 3

section 1862(a)(1). 4

‘‘(9) IMPLEMENTATION.— 5

‘‘(A) AUTHORITY.—The Secretary may im-6

plement the provisions of this subsection by in-7

terim final rule with comment period. 8

‘‘(B) ADMINISTRATION.—Chapter 35 of 9

title 44, United States Code, shall not apply to 10

medical review under this subsection. 11

‘‘(C) LIMITATION.—There shall be no ad-12

ministrative or judicial review under section 13

1869, section 1878, or otherwise of the identi-14

fication of services for medical review or the 15

process for medical review under this sub-16

section. 17

‘‘(10) DEFINITIONS.—For purposes of this sub-18

section: 19

‘‘(A) OUTPATIENT THERAPY SERVICES.— 20

The term ‘outpatient therapy services’ means 21

the following services for which payment is 22

made under section 1848, 1834(g), or 1834(k): 23

‘‘(i) Physical therapy services of the 24

type described in section 1861(p). 25

12

KEL15159 S.L.C.

‘‘(ii) Speech-language pathology serv-1

ices of the type described in such section 2

though the application of section 3

1861(ll)(2). 4

‘‘(iii) Occupational therapy services of 5

the type described in section 1861(p) 6

through the operation of section 1861(g). 7

‘‘(B) THERAPY PROVIDER.—The term 8

‘therapy provider’ means a provider of services 9

(as defined in section 1861(u)) or a supplier (as 10

defined in section 1861(d)) who submits a claim 11

for outpatient therapy services. 12

‘‘(11) FUNDING.—For purposes of imple-13

menting this subsection, the Secretary shall provide 14

for the transfer, from the Federal Supplementary 15

Medical Insurance Trust Fund under section 1841, 16

of $35,000,000 to the Centers for Medicare & Med-17

icaid Services Program Management Account for 18

each fiscal year (beginning with fiscal year 2015). 19

Amounts transferred under this paragraph shall re-20

main available until expended. 21

‘‘(12) SCALING BACK.— 22

‘‘(A) PERIODIC DETERMINATIONS.—Begin-23

ning with 2019, and every two years thereafter, 24

the Secretary shall— 25

13

KEL15159 S.L.C.

‘‘(i) make a determination of the im-1

proper payment rate for outpatient therapy 2

services for a 12-month period; and 3

‘‘(ii) make such determination publicly 4

available. 5

‘‘(B) SCALING BACK.—If the improper 6

payment rate for outpatient therapy services de-7

termined for a 12-month period under subpara-8

graph (A) is 50 percent or less of the Medicare 9

fee-for-service improper payment rate for such 10

period, the Secretary shall— 11

‘‘(i) reduce the amount and extent of 12

medical review conducted for a prospective 13

year under the process established in this 14

subsection; and 15

‘‘(ii) return an appropriate portion of 16

the funding provided for such year under 17

paragraph (11).’’. 18

(2) GAO STUDY AND REPORT.— 19

(A) STUDY.—The Comptroller General of 20

the United States shall conduct a study on the 21

effectiveness of medical review of outpatient 22

therapy services under section 1833(aa) of the 23

Social Security Act, as added by paragraph (1). 24

Such study shall include an analysis of— 25

14

KEL15159 S.L.C.

(i) aggregate data on— 1

(I) the number of individuals, 2

therapy providers, and claims subject 3

to such review; and 4

(II) the number of reviews con-5

ducted under such section; and 6

(ii) the outcomes of such reviews. 7

(B) REPORT.—Not later than 3 years after 8

the date of enactment of this Act, the Comp-9

troller General shall submit to Congress a re-10

port containing the results of the study under 11

subparagraph (A), together with recommenda-12

tions for such legislation and administrative ac-13

tion as the Comptroller General determines ap-14

propriate. 15

(d) COLLECTION OF STANDARDIZED DATA ELE-16

MENTS FOR OUTPATIENT THERAPY SERVICES.— 17

(1) COLLECTION OF STANDARDIZED DATA ELE-18

MENTS FOR OUTPATIENT THERAPY SERVICES.—Sec-19

tion 1834 of the Social Security Act (42 U.S.C. 20

1395m) is amended by adding at the end the fol-21

lowing new subsection: 22

‘‘(r) COLLECTION OF STANDARDIZED DATA ELE-23

MENTS FOR OUTPATIENT THERAPY SERVICES.— 24

‘‘(1) STANDARDIZED DATA ELEMENTS.— 25

15

KEL15159 S.L.C.

‘‘(A) IN GENERAL.—Not later than 6 1

months after the date of enactment of this sub-2

section, the Secretary shall post on the Internet 3

website of the Centers for Medicare & Medicaid 4

Services a draft list of standardized data ele-5

ments for individuals receiving outpatient ther-6

apy services. 7

‘‘(B) CATEGORIES.— 8

‘‘(i) IN GENERAL.—Such standardized 9

data elements shall include information 10

with respect to the following categories, as 11

determined appropriate by the Secretary: 12

‘‘(I) Functional status. 13

‘‘(II) Demographic information. 14

‘‘(III) Diagnosis. 15

‘‘(IV) Severity. 16

‘‘(V) Affected body structures 17

and functions. 18

‘‘(VI) Limitations with activities 19

of daily living and participation. 20

‘‘(VII) Other categories deter-21

mined to be appropriate by the Sec-22

retary. 23

‘‘(ii) ALIGNMENT WITH CATEGORIES 24

FOR REPORTING OF ASSESSMENT DATA 25

16

KEL15159 S.L.C.

UNDER IMPACT.—The Secretary shall, as 1

appropriate, align the functional status 2

category under subclause (I) of clause (i) 3

and the other categories under subclauses 4

(II) through (VII) of such clause with the 5

categories described in clauses (i) through 6

(vi) of section 1899B(b)(1)(B). 7

‘‘(C) SOLICITATION OF INPUT.—The Sec-8

retary shall accept input from stakeholders 9

through the date that is 60 days after the date 10

the Secretary posts the draft list of standard-11

ized data elements pursuant to subparagraph 12

(A). In seeking such input, the Secretary shall 13

use one or more mechanisms to solicit input 14

from stakeholders that may include use of open 15

door forums, town hall meetings, requests for 16

information, or other mechanisms determined 17

appropriate by the Secretary. 18

‘‘(D) OPERATIONAL LIST OF STANDARD-19

IZED DATA ELEMENTS.—Not later than 120 20

days after the end of the period for accepting 21

input described in subparagraph (C), the Sec-22

retary, taking into account such input, shall 23

post on the Internet website of the Centers for 24

17

KEL15159 S.L.C.

Medicare & Medicaid Services an operational 1

list of standardized data elements. 2

‘‘(E) SUBSEQUENT REVISIONS.—Subse-3

quent revisions to the operational list of stand-4

ardized data elements shall be made through 5

rulemaking. Such revisions may be based on ex-6

perience and input from stakeholders. 7

‘‘(2) SYSTEM TO REPORT STANDARDIZED DATA 8

ELEMENTS.— 9

‘‘(A) IN GENERAL.—Not later than 18 10

months after the date the Secretary posts the 11

operational list of standardized data elements 12

pursuant to paragraph (1)(D), the Secretary 13

shall develop and implement an electronic sys-14

tem (which may be a web portal) for therapy 15

providers to report the standardized data ele-16

ments for individuals with respect to outpatient 17

therapy services. 18

‘‘(B) STAKEHOLDER INPUT.—The Sec-19

retary shall seek input from stakeholders re-20

garding the best way to report the standardized 21

data elements under this subsection. 22

‘‘(3) REPORTING.— 23

‘‘(A) FREQUENCY OF REPORTING.— 24

18

KEL15159 S.L.C.

‘‘(i) IN GENERAL.—Subject to clauses 1

(ii) and (iii), the Secretary shall specify the 2

frequency of reporting standardized data 3

elements under this subsection. 4

‘‘(ii) STAKEHOLDER INPUT.—The 5

Secretary shall seek input from stake-6

holders regarding the frequency of the re-7

porting of such data elements. 8

‘‘(iii) ALIGNMENT WITH FREQUENCY 9

FOR REPORTING OF ASSESSMENT DATA 10

UNDER IMPACT.—The Secretary shall, as 11

appropriate, align the frequency of the re-12

porting of such data elements with respect 13

to an individual under this subsection with 14

the frequency in which data is required to 15

be submitted with respect to an individual 16

under the second sentence of section 17

1899B(b)(1)(A). 18

‘‘(B) REPORTING REQUIREMENT.—Begin-19

ning on the date the system to report standard-20

ized data elements under this subsection is 21

operational, no payment shall be made under 22

this part for outpatient therapy services fur-23

nished to an individual unless a therapy pro-24

19

KEL15159 S.L.C.

vider reports the standardized data elements for 1

such individual. 2

‘‘(4) REPORT ON NEW PAYMENT SYSTEM FOR 3

OUTPATIENT THERAPY SERVICES.— 4

‘‘(A) IN GENERAL.—Not later than 24 5

months after the date described in paragraph 6

(3)(B), the Secretary shall submit to Congress 7

a report on the design of a new payment system 8

for outpatient therapy services. The report shall 9

include an analysis of the standardized data ele-10

ments collected and other appropriate data and 11

information. 12

‘‘(B) FEATURES.—Such report shall con-13

sider— 14

‘‘(i) appropriate adjustments to pay-15

ment (such as case mix and outliers); 16

‘‘(ii) payments on an episode of care 17

basis; and 18

‘‘(iii) reduced payment for multiple 19

episodes. 20

‘‘(C) CONSULTATION.—The Secretary shall 21

consult with stakeholders regarding the design 22

of such a new payment system. 23

‘‘(5) IMPLEMENTATION.— 24

20

KEL15159 S.L.C.

‘‘(A) FUNDING.—For purposes of imple-1

menting this subsection, the Secretary shall 2

provide for the transfer, from the Federal Sup-3

plementary Medical Insurance Trust Fund 4

under section 1841, of $7,000,000 to the Cen-5

ters for Medicare & Medicaid Services Program 6

Management Account for each of fiscal years 7

2015 through 2019. Amounts transferred under 8

this subparagraph shall remain available until 9

expended. 10

‘‘(B) ADMINISTRATION.—Chapter 35 of 11

title 44, United States Code, shall not apply to 12

specification of the standardized data elements 13

and implementation of the system to report 14

such standardized data elements under this 15

subsection. 16

‘‘(C) LIMITATION.—There shall be no ad-17

ministrative or judicial review under section 18

1869, section 1878, or otherwise of the speci-19

fication of standardized data elements required 20

under this subsection or the system to report 21

such standardized data elements. 22

‘‘(D) DEFINITION OF OUTPATIENT THER-23

APY SERVICES AND THERAPY PROVIDER.—In 24

this subsection, the terms ‘outpatient therapy 25

21

KEL15159 S.L.C.

services’ and ‘therapy provider’ have the mean-1

ing given those term in section 1833(aa).’’. 2

(2) SUNSET OF CURRENT CLAIMS-BASED COL-3

LECTION OF THERAPY DATA.—Section 3005(g)(1) of 4

the Middle Class Tax Extension and Job Creation 5

Act of 2012 (42 U.S.C. 1395l note) is amended, in 6

the first sentence, by inserting ‘‘and ending on the 7

date the system to report standardized data ele-8

ments under section 1834(r) of the Social Security 9

Act (42 U.S.C. 1395m(r)) is implemented,’’ after 10

‘‘January 1, 2013,’’. 11

(e) REPORTING OF CERTAIN INFORMATION.—Section 12

1842(t) of the Social Security Act (42 U.S.C. 1395u(t)) 13

is amended by adding at the end the following new para-14

graph: 15

‘‘(3) Each request for payment, or bill submitted, by 16

a therapy provider (as defined in section 1833(aa)(10)) 17

for an outpatient therapy service (as defined in such sec-18

tion) furnished by a therapy assistant on or after January 19

1, 2017, shall include (in a form and manner specified 20

by the Secretary) an indication that the service was fur-21

nished by a therapy assistant.’’. 22