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regarding minimum compensation for community care providers. The committee stresses that payment rates must be adequate to assure that the individuals who are provide hands-on community care are competent to perform the tasks expected of them under the ICCP and are willing to deliver such services for a reasonable period of time before moving on to other employment.

Under the committee bill, Federal Medicaid matching funds would not be available for the costs of a civil money penalty imposed by the State or the Secretary for noncompliance with the requirements of this bill or Medicaid program integrity provisions. Federal Medicaid matching funds would also be denied for legal expenses incurred by a provider in defending an action for a civil money penalty or exclusion from the program if there is no reasonable legal ground for the provider's case. In the committee's view, Federal Medicaid funds should not be used to subsidize litigation which does not raise reasonable objections but is primarily designed to delay the imposition of remedies so that the provider can continue receiving Medicaid payments.

To ensure that Federal Medicaid matching funds do not pay for substandard quality care, the committee bill would prohibit Federal financial participation in the following circumstances. First, payment could not be made for community care that does not meet the minimum requirements developed by the Secretary, including protections from neglect, physical and sexual abuse, financial exploitation, inappropriate involuntary restraint, and incompetent provid

ers.

Second, payment could not be made for community care that is provided in community care settings that (1) are found by a survey to be substandard or (2) do not meet one or more of the minimum requirements developed by the Secretary. The residents of a community care setting found to be substandard or out of compliance with the minimum requirements would be allowed to continue receiving Medicaid coverage for community care for up to 3 months while the setting eliminates its deficiencies. This opportunity to correct would apply only once with respect to each setting. Thereafter, payments for community care would not be made on behalf of residents in these settings from the day the settings are found to be substandard or not to comply with the minimum requirements.

Under the committee bill, Federal Medicaid matching funds would not be available for community care provided to a functionally disabled elderly individual by a member of the individual's family. In the committee's view, it would great difficulty in monitoring and assuring the quality of services in circumstances where the community care provider is a relative of the beneficiary.

(h) Effective Dates. The community care option would be effective on the later of (1) July 1, 1990, or (2) 30 days after the publication of interim regulations by the Secretary setting forth minimum requirements for community care providers and community care settings. The Secretary would be required to issue final regulations implementing the requirements for providers and community care settings by October 1, 1991. To expedite the publication of these interim and final regulations, the committee bill would waive application of the Paperwork Reduction Act and Executive Order 12291. Effective upon their publication, the Secretary's interim and final

requirements would apply to community care provided to the elderly by Arizona and any other State operating under a waiver granted by the Secretary under section 1115 of the Social Security Act.

PART E-HOSPICE COVERAGE

Sec. 4261-Mandating Hospice Coverage

(a) In General. Under current law, States may, at their option, offer hospice care to terminally ill individuals who elect these services in lieu of hospital, nursing facility, or other services. Hospices provide palliative treatment (i.e., care intended to comfort, not cure) to terminally ill patients, generally in their own homes. Hospice services include physicians' services, nursing care, medical social services under the direction of a physician, home health aide and homemaker services, medical supplies, bereavement counseling, and short-term inpatient care for pain control and symptom management. Except in the case of patients with AIDS, payment for short-term inpatient services is subject to an aggregate limit. To participate, hospice programs must make services available on a 24-hour basis and meet other Medicare standards. According to the National Governors' Association, as of March, 1989, 20 States offered hospice coverage under their Medicaid programs: Arizona, California, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Kentucky, Massachusetts, Michigan, Minnesota, Nebraska, New York, North Carolina, North Dakota, Rhode Island, Texas, Vermont, Wisconsin.

The committee notes that hospice care is a benefit available to all terminally ill Medicare beneficiaries, regardless of the State in which they reside. In the view of the committee, the hospice care benefit should also be available to low-income, terminally ill individuals who are not elderly or disabled Medicare beneficiaries, regardless of the State in which they reside. The committee recognizes that hospice services may frequently be sought by low-income persons with AIDS, few of whom are eligible for Medicare. The committee bill would therefore require all States to offer hospice coverage under their Medicaid programs. The requirement would take effect July 1, 1990, without regard to whether final implementing regulations have been issued.

(b) Payment. Under current law, States that elect to offer coverage for hospice care must pay for such services in the same amounts, and with the same methodology, as used under Medicare Part A. In the case of a terminally ill Medicaid-eligible beneficiary whose home is a nursing facility or intermediate care facility for the mentally retarded, the State may pay a separate rate to the hospice program in order to take into account the room and board furnished by the facility. The Medicaid statute defines room and board for this purpose to include the performance of personal care services, such as assistance in activities of daily living, in socializing activities, administration of medication, maintaining the cleanliness of a resident's room, and supervising and assisting in the use of durable medical equipment and prescribed therapies.

It is has come to the attention of the committee that the Medicare hospice care rates may not adequately reflect the costs of caring for some classes of terminally ill patients, such as AIDS pa

tients. The committee bill would therefore allow States, at their option, to set their hospice payment rates in amounts higher than the Medicare rates. As under current law, States would not be allowed to set rates lower than the Medicare rates, and would be required to use the Medicare methodology in establishing rates.

The committee is also informed that a number of States pay hospices substantially less for room and board than they pay to nursing facilities in which the hospice patients live. Once a resident of a nursing facility has elected hospice care, the State may no longer pay the nursing facility. Instead, the State pays the hospice, and the hospice enters into a written agreement with the facility, under which the hospice takes responsibility for the professional management of the patient and the facility provides room and board. The facility receives payment for room and board from the hospice. If the amount paid by the State to the hospice for room and board is lower than the facility's room and board rates, the hospice must make up the difference. If the room and board payment to the hospice is 30 or 40 percent lower than the nursing facility rate, as has been reported to the committee, it is obviously very difficult for a hospice to accept a nursing facility resident as a patient. In order to eliminate any financial disincentive hospices might face to accept Medicaid patients living in nursing facilities, the committee bill would require that States, in these circumstances, pay the hospice an additional amount equal to at least 95 percent of the rate that would have been paid by the State to that facility for the Medicaid beneficiary.

(c) Clarifying Effect of Hospice Election. Under current law, terminally ill Medicaid beneficiaries who elect hospice care must waive payment for services, such as hospital and nursing facility services, that are defined by the Secretary under Medicare as related to the treatment of the individual's condition with respect to which a diagnosis of terminal illness has been made or that are duplicative of hospice care. Medicare, under its hospice benefit, does not cover many of the non-skilled services that States cover under Medicaid, including personal care services. This attendant care and other personal care is essential to enabling terminally ill Medicaid beneficiaries who have no family or friends to remain at home. The committee is concerned that, if the current statutory language is interpreted to require a beneficiary to waive payment for personal care services, the practical effect will be to deny them access to hospice benefits at home, since the hospice rate under Medicare does not include a component for the cost of personal care services. The committee bill would therefore clarify that, in electing hospice care, a Medicaid beneficiary waives payment for services determined by the Secretary for which payment may otherwise be made under Medicare. Thus, a beneficiary would not be required to waive payment for personal care services, attendant care, and other services covered under the State's Medicaid program but not under Medicare.

PART F-MISCELLANEOUS

Sec. 4271-Amendments Relating to Nursing Home Reform

(a) Moratorium on Implementation of February 2, 1989 Regulation. On February 2, 1989, HCFA issued final regulations with a comment period which specified new and revised requirements long-term facilities must meet in order to receive Federal funds for the services they provide to their residents (54 Fed. Reg. 5316). Such facilities include skilled nursing facilities (SNF's) under Medicare, and SNF's, and intermediate care facilities [ICF's] and effective October 1, 1990, nursing facilities under Medicaid. The February 2nd final regulations followed the publication of a notice for proposed rule making (NPRM) for conditions of participation for Medicare and Medicaid long-term care facilities on October 16, 1987 (52 Fed. Reg. 38582). That NPRM was released prior to the passage of the nursing home reform legislation authorized by this committee and included in the Omnibus Reconciliation Act of 1987 (OBRA '87) (Public Law 100-203).

Despite the intervening enactment of OBRA '87, HCFA has not published a new NPRM on participation requirements for Medicare and Medicaid long-term care facilities. It has chosen instead to issue the February 1989 final regulations. According to the agency, such regulations are designed to implement the provisions of the October 1987 NPRM as well as those sections of the OBRA '87 legislation that HCFA has determined to be "self-executing".

Among the OBRA '87 requirements that are addressed in the February 2nd regulations are those relating to residents' rights; admission, transfer, and discharge rights; resident behavior and facility practices; quality of life; resident assessments; services for residents; infection control; physical environment; and administration. Under OBRA '87, these requirements are to take affect on October 1, 1990. The February 1989 final regulations mandate, however, that many of these requirements become effective August 1, 1989, 16 months prior to the deadline set in OBRA '87. A HCFA rule published on July 14, 1989, delays the final regulations' effective date until January 1, 1990 (54 Fed. Reg. 29717). Nonetheless, as currently structured, the February 2nd final regulations will be put into place with no opportunity for public comment or for agency adjustments-well before the law's October 1, 1990, effective date.

In the view of the committee, the implementation of these regulations is premature and should be postponed. Indeed, even HCFA acknowledges that a delay "would be beneficial to all affected parties" (54 Fed. Reg. 29718). Thus, the committee bill postpones until October 1, 1990, the implementation of HCFA's February 2, 1989 final regulations. During the interim period, the committee would encourage HCFA to review these regulations and, where appropriate, to revise and reissue them with an opportunity for public comment, in accordance with both OBRA '87 and with the comments that HCFA has already received since the regulations' publication last February.

With respect to the content of the February 2, 1989 final regulations, the committee takes issue with HCFA's claim in the preamble that "OBRA '87 was written with both the recommendations of

the IoM and our [October 16, 1987] NPRM as a model" (emphasis supplied). For the record, the committee wishes to inform the agency that the only blueprint for congressional action on nursing home reform legislation in 1987 was the congressionally mandated Institute of Medicine study, Improving the Quality of Care in Nursing Homes. (Note that legislation on Medicaid nursing home reform was first introduced on May 5, 1987 [H.R. 2270], some 5 months prior to the publication of the October 1987 NPRM. Similar legislation relating to Medicare nursing home reform was introduced on June 24, 1987 [H.R. 2770], 4 months ahead of the NPRM). Thus, the committee never intended-and does not intend now-that HCFA use its October 1987 NPRM as the basis for developing and implementing OBRA '87.

(b) Nurse Aide Training. Under current law, effective January 1, 1990, all nurse aides used by nursing facilities participating in Medicaid must (i) have completed, within 4 months, a training and competency evaluation program approved by the State; and (ii) be competent to provide nursing-related services.

OBRA '87 required the Secretary to establish requirements for State nurse aide training and competency evaluation programs and State nurse aide competency evaluation programs by September 1, 1988. Pending the publication of regulations establishing such requirements, HCFA has issued a guidance document, effective May 12, 1989 (HCFA Transmittal No. 62, Sections 2504-2512 (April 1989), which sets out approval criteria for the States. This delay has resulted, in some instances, in States postponing either the development of appropriate training and evaluation programs or the approval of qualified training and evaluation programs that are already in operation. It has resulted, too, in confusion among the States, nurse aides, and the nursing home industry.

In response to these concerns, the committee bill contains a number of provisions designed to clarify the structure and operation of the OBRA '87 nurse aide training and competency evaluation requirements.

(1) Delay in Requirement. In order to ensure that State nurse aide training and competency evaluation programs and State nurse aide competency evaluation programs are effectively qualified, approved, and put into place, the committee bill delays from January 1, 1990, until October 1, 1990, the date by which nurse aides must complete a competency evaluation program and be determined to be competent to provide nursing-related services.

The committee notes, however, that a number of States have already begun to implement the nurse aide training and competency evaluation provisions of OBRA '87 and would encourage such States to continue those activities. It would also encourage all other States to begin implementation of these requirements as soon as possible. The committee further notes that the enhanced Medicaid matching rate for nurse aide training and competency evaluation programs provided for under OBRA '87 continues through the third quarter of fiscal year 1990, or until July 1, 1990. The October 1, 1990 delay for which the committee bill provides does not change the conditions for, or the expiration date of, this enhanced matching rate.

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