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 STATES114th 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 Childrens Health Insurance Program, and for other purposes.
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:
1
2
3
4

Strike section 202 and insert the following:

SEC. ll. MEDICARE PAYMENT FOR THERAPY SERVICES.

(a) REPEAL
SION OF

OF

THERAPY CAP

THRESHOLD

FOR

AND

1-YEAR EXTEN-

MANUAL MEDICAL REVIEW.

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

6 1395l(g)) is amended
7

(1) in paragraph (4)

(A) by striking This subsection and in-

serting Except as provided in paragraph

10

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

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1

(B) by inserting the following before the

period at the end: or with respect to services

furnished on or after the date of enactment of

subsection (aa); and

(2) in paragraph (5)

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

tence, by striking March 31, 2015 and in-

serting the date of enactment of the Medicare

Access and CHIP Reauthorization Act of

10
11
12
13

2015; and
(B) in subparagraph (C), by adding at the
end the following new clause:
(iii) Beginning on the date of enactment of sub-

14 section (aa) and ending on the day before the date of the
15 implementation of such subsection, the manual medical re16 view process described in clause (i), subject to subpara17 graph (E), shall apply with respect to expenses incurred
18 in a year for services described in paragraphs (1) and (3)
19 (including services described in subsection (a)(8)(B)) that
20 exceed the threshold described in clause (ii) for the year.;
21 and
22

(3) in paragraph (6)(A)

23

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

24

serting the date of enactment of the Medicare

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1

Access and CHIP Reauthorization Act of

2015; and

(B) by striking the first three months of

2015 and inserting the period beginning on

January 1, 2015, and ending on such date of

enactment.

(b) TARGETED REVIEWS UNDER MANUAL MEDICAL

8 REVIEW PROCESS
9
10

FOR

OUTPATIENT THERAPY SERV-

ICES.

(1) IN

GENERAL.Section

1833(g)(5) of the

11

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

12

amended

13

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

14

subject to subparagraph (E), after manual

15

medical review process that; and

16
17
18

(B) by adding at the end the following new

subparagraph:
(E)(i) In place of the manual medical review process

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

20 a process for medical review under this subparagraph
21 under which the Secretary shall identify and conduct med22 ical review for services described in subparagraph (C)(i)
23 furnished by a provider of services or supplier (in this sub24 paragraph referred to as a therapy provider) using such
25 factors as the Secretary determines to be appropriate.

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1

(ii) Such factors may include the following:

(I) The therapy provider has had a high

claims denial percentage for therapy services under

this part or is less compliant with applicable require-

ments under this title.

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

ing for therapy services under this part that is aber-

rant compared to peers or otherwise has question-

able billing practices for such services, such as bill-

10

ing medically unlikely units of services in a day.

11

(III) The therapy provider is newly enrolled

12

under this title or has not previously furnished ther-

13

apy services under this part.

14
15

(IV) The services are furnished to treat a type

of medical condition.

16

(V) The therapy provider is part of a group

17

that includes another therapy provider identified

18

using the factors determined under this subpara-

19

graph.

20

(iii) For purposes of carrying out this subparagraph,

21 the Secretary shall provide for the transfer, from the Fed22 eral Supplementary Medical Insurance Trust Fund under
23 section 1841, of $5,000,000 to the Centers for Medicare
24 & Medicaid Services Program Management Account for
25 fiscal years 2015 and 2016, to remain available until ex-

KEL15159

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5
1 pended. Such funds may not be used by a contractor under
2 section 1893(h) for medical reviews under this subpara3 graph..
4

(2) EFFECTIVE

DATE.The

amendments made

by this subsection shall apply with respect to re-

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

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

with respect to which the Secretary of Health and

Human Services has not conducted medical review

10

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

11

after the date of the enactment of this Act) specified

12

by the Secretary.

13

(c) MEDICAL REVIEW

OF

OUTPATIENT THERAPY

14 SERVICES.
15

(1) MEDICAL

REVIEW OF OUTPATIENT THER-

16

APY SERVICES.Section

17

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

18

end the following new subsection:

19

(aa) MEDICAL REVIEW

1833 of the Social Security

OF

OUTPATIENT THERAPY

20 SERVICES.
21
22

(1) IN

GENERAL.

(A) PROCESS

FOR MEDICAL REVIEW.

23

The Secretary shall implement a process for the

24

medical review (as described in paragraph (2))

25

of outpatient therapy services (as defined in

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1

paragraph (10)) and, subject to paragraph

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

nished on or after the date that is 12 months

after the date of enactment of this subsection,

focusing on services identified under subpara-

graph (B).

(B) IDENTIFICATION

OF SERVICES FOR

REVIEW.Under

shall identify services for medical review, using

10

such factors as the Secretary determines appro-

11

priate, which may include the following:

the process, the Secretary

12

(i) Services furnished by a therapy

13

provider (as defined in paragraph (10))

14

who, in a prior period, has had a high

15

claims denial percentage or is less compli-

16

ant with other applicable requirements

17

under this title.

18

(ii) Services furnished by a therapy

19

provider whose pattern of billing is aber-

20

rant compared to peers or otherwise has

21

questionable billing practices, such as bill-

22

ing medically unlikely units of services in

23

a day.

24

(iii) Services furnished by a therapy

25

provider that is newly enrolled under this

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1

title or has not previously furnished ther-

apy services under this part.

3
4

(iv) Services furnished to treat a

type of medical condition.

(v) Services identified by use of the

standardized data elements required to be

reported under section 1834(r).

(vi) Services furnished by a therapy

provider who is part of a group that in-

10

cludes a therapy provider identified by fac-

11

tors described in this subparagraph.

12
13
14
15
16
17

(vii) Other services as determined

appropriate by the Secretary.
(2) MEDICAL

REVIEW.

(A) PRIOR

AUTHORIZATION MEDICAL RE-

VIEW.

(i) IN

GENERAL.Subject

to the

18

succeeding provisions of this subparagraph,

19

the Secretary shall use prior authorization

20

medical review for outpatient therapy serv-

21

ices furnished to an individual above one

22

or more thresholds established by the Sec-

23

retary, such as a dollar threshold or a

24

threshold based on other factors.

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(ii) ENDING

APPLICATION OF PRIOR

AUTHORIZATION

VIDER.The

cation of prior authorization medical re-

view to outpatient therapy services fur-

nished by a therapy provider if the Sec-

retary determines that the provider has a

low denial rate under such prior authoriza-

tion. The Secretary may subsequently re-

10

apply prior authorization medical review to

11

such therapy provider if the Secretary de-

12

termines it to be appropriate.

13

FOR

THERAPY

PRO-

Secretary shall end the appli-

(iii) PRIOR

AUTHORIZATION OF MUL-

14

TIPLE

15

where practicable, provide for prior author-

16

ization medical review for multiple services

17

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

18

apy plan of care described in section

19

1861(p)(2).

20

(B) OTHER

SERVICES.The

TYPES

Secretary shall,

OF

MEDICAL

RE-

21

VIEW.The

22

view or post-payment review for services identi-

23

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

24

ject to prior authorization medical review under

25

subparagraph (A).

Secretary may use pre-payment re-

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1

(C) RELATIONSHIP

TO LAW ENFORCE-

MENT ACTIVITIES.The

mine that medical review under this subsection

does not apply in the case where potential fraud

may be involved.

(3) REVIEW

Secretary may deter-

CONTRACTORS.The

Secretary

shall conduct prior authorization medical review of

outpatient therapy services under this subsection

using medicare administrative contractors (as de-

10

scribed in section 1874A) or other review contrac-

11

tors (other than contractors under section 1893(h)

12

or other contractors paid on a contingent basis).

13

(4) NO

PAYMENT WITHOUT PRIOR AUTHORIZA-

14

TION.With

respect to an outpatient therapy service

15

for which prior authorization medical review under

16

this subsection applies, the following shall apply:

17

(A) PRIOR

AUTHORIZATION DETERMINA-

18

TION.The

19

tion, prior to the service being furnished, of

20

whether the service would or would not meet

21

the

22

1862(a)(1)(A).

23

Secretary shall make a determina-

applicable

(B) DENIAL

requirements

of

section

OF PAYMENT.Subject

to

24

paragraph (6), no payment shall be made under

25

this part for the service unless the Secretary

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1

determines pursuant to subparagraph (A) that

the service would meet the applicable require-

ments of such section.

(5) SUBMISSION

OF INFORMATION.A

ther-

apy provider may submit the information necessary

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

means. The Secretary shall make available the elec-

tronic means described in the preceding sentence as

soon as practicable, but not later than 24 months

10

after the date of enactment of this subsection.

11

(6) TIMELINESS.If the Secretary does not

12

make a prior authorization determination under

13

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

14

date of the Secretarys receipt of medical docu-

15

mentation needed to make such determination, para-

16

graph (4)(B) shall not apply.

17

(7) CONSTRUCTION.With respect to an out-

18

patient therapy service that has been affirmed by

19

medical review under this subsection, nothing in this

20

subsection shall be construed to preclude the subse-

21

quent denial of a claim for such service that does

22

not meet other applicable requirements under this

23

Act or any other provision of law.

24
25

(8) BENEFICIARY

PROTECTIONS.In

the case

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

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1

plication of medical review under this subsection,

section 1879 shall apply in the same manner as such

section applies to a denial that is made by reason of

section 1862(a)(1).

(9) IMPLEMENTATION.

(A) AUTHORITY.The Secretary may im-

plement the provisions of this subsection by in-

terim final rule with comment period.

(B) ADMINISTRATION.Chapter 35 of

10

title 44, United States Code, shall not apply to

11

medical review under this subsection.

12

(C) LIMITATION.There shall be no ad-

13

ministrative or judicial review under section

14

1869, section 1878, or otherwise of the identi-

15

fication of services for medical review or the

16

process for medical review under this sub-

17

section.

18

(10) DEFINITIONS.For purposes of this sub-

19
20

section:
(A) OUTPATIENT

THERAPY SERVICES.

21

The term outpatient therapy services means

22

the following services for which payment is

23

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

24

(i) Physical therapy services of the

25

type described in section 1861(p).

KEL15159

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1

(ii) Speech-language pathology serv-

ices of the type described in such section

though

1861(ll)(2).

the

application

of

section

(iii) Occupational therapy services of

the type described in section 1861(p)

through the operation of section 1861(g).

(B)

THERAPY

PROVIDER.The

term

therapy provider means a provider of services

10

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

11

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

12

for outpatient therapy services.

13

(11)

FUNDING.For

purposes

of

imple-

14

menting this subsection, the Secretary shall provide

15

for the transfer, from the Federal Supplementary

16

Medical Insurance Trust Fund under section 1841,

17

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

18

icaid Services Program Management Account for

19

each fiscal year (beginning with fiscal year 2015).

20

Amounts transferred under this paragraph shall re-

21

main available until expended.

22
23

(12) SCALING

BACK.

(A) PERIODIC

DETERMINATIONS.Begin-

24

ning with 2019, and every two years thereafter,

25

the Secretary shall

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1

(i) make a determination of the im-

proper payment rate for outpatient therapy

services for a 12-month period; and

(ii) make such determination publicly

available.

(B) SCALING

BACK.If

the improper

payment rate for outpatient therapy services de-

termined for a 12-month period under subpara-

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

10

fee-for-service improper payment rate for such

11

period, the Secretary shall

12

(i) reduce the amount and extent of

13

medical review conducted for a prospective

14

year under the process established in this

15

subsection; and

16

(ii) return an appropriate portion of

17

the funding provided for such year under

18

paragraph (11)..

19

(2) GAO

STUDY AND REPORT.

20

(A) STUDY.The Comptroller General of

21

the United States shall conduct a study on the

22

effectiveness of medical review of outpatient

23

therapy services under section 1833(aa) of the

24

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

25

Such study shall include an analysis of

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1

(i) aggregate data on

(I) the number of individuals,

therapy providers, and claims subject

to such review; and

(II) the number of reviews con-

ducted under such section; and

(ii) the outcomes of such reviews.

(B) REPORT.Not later than 3 years after

the date of enactment of this Act, the Comp-

10

troller General shall submit to Congress a re-

11

port containing the results of the study under

12

subparagraph (A), together with recommenda-

13

tions for such legislation and administrative ac-

14

tion as the Comptroller General determines ap-

15

propriate.

16
17
18

(d) COLLECTION
MENTS FOR

STANDARDIZED DATA ELE-

OF

OUTPATIENT THERAPY SERVICES.

(1) COLLECTION

OF STANDARDIZED DATA ELE-

19

MENTS FOR OUTPATIENT THERAPY SERVICES.Sec-

20

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

21

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

22

lowing new subsection:

23

(r) COLLECTION

24
25

MENTS FOR

OF

STANDARDIZED DATA ELE-

OUTPATIENT THERAPY SERVICES.

(1) STANDARDIZED

DATA ELEMENTS.

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1

(A) IN

GENERAL.Not

later than 6

months after the date of enactment of this sub-

section, the Secretary shall post on the Internet

website of the Centers for Medicare & Medicaid

Services a draft list of standardized data ele-

ments for individuals receiving outpatient ther-

apy services.

(B) CATEGORIES.

(i) IN

GENERAL.Such

standardized

10

data elements shall include information

11

with respect to the following categories, as

12

determined appropriate by the Secretary:

13

(I) Functional status.

14

(II) Demographic information.

15

(III) Diagnosis.

16

(IV) Severity.

17

(V) Affected body structures

18

and functions.

19

(VI) Limitations with activities

20

of daily living and participation.

21

(VII) Other categories deter-

22

mined to be appropriate by the Sec-

23

retary.

24

(ii) ALIGNMENT

25

FOR

REPORTING

OF

WITH CATEGORIES
ASSESSMENT

DATA

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1

UNDER IMPACT.The

appropriate, align the functional status

category under subclause (I) of clause (i)

and the other categories under subclauses

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

categories described in clauses (i) through

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

(C) SOLICITATION

Secretary shall, as

OF INPUT.The

Sec-

retary shall accept input from stakeholders

10

through the date that is 60 days after the date

11

the Secretary posts the draft list of standard-

12

ized data elements pursuant to subparagraph

13

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

14

use one or more mechanisms to solicit input

15

from stakeholders that may include use of open

16

door forums, town hall meetings, requests for

17

information, or other mechanisms determined

18

appropriate by the Secretary.

19

(D) OPERATIONAL

20

IZED DATA ELEMENTS.Not

21

days after the end of the period for accepting

22

input described in subparagraph (C), the Sec-

23

retary, taking into account such input, shall

24

post on the Internet website of the Centers for

LIST OF STANDARD-

later than 120

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1

Medicare & Medicaid Services an operational

list of standardized data elements.

(E)

SUBSEQUENT

REVISIONS.Subse-

quent revisions to the operational list of stand-

ardized data elements shall be made through

rulemaking. Such revisions may be based on ex-

perience and input from stakeholders.

(2) SYSTEM

9
10

TO REPORT STANDARDIZED DATA

ELEMENTS.

(A) IN

GENERAL.Not

later than 18

11

months after the date the Secretary posts the

12

operational list of standardized data elements

13

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

14

shall develop and implement an electronic sys-

15

tem (which may be a web portal) for therapy

16

providers to report the standardized data ele-

17

ments for individuals with respect to outpatient

18

therapy services.

19

(B) STAKEHOLDER

INPUT.The

Sec-

20

retary shall seek input from stakeholders re-

21

garding the best way to report the standardized

22

data elements under this subsection.

23

(3) REPORTING.

24

(A) FREQUENCY

OF REPORTING.

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1

(i) IN

GENERAL.Subject

to clauses

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

frequency of reporting standardized data

elements under this subsection.

(ii)

STAKEHOLDER

INPUT.The

Secretary shall seek input from stake-

holders regarding the frequency of the re-

porting of such data elements.

(iii) ALIGNMENT

WITH FREQUENCY

10

FOR

11

UNDER IMPACT.The

12

appropriate, align the frequency of the re-

13

porting of such data elements with respect

14

to an individual under this subsection with

15

the frequency in which data is required to

16

be submitted with respect to an individual

17

under the second sentence of section

18

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

19

(B) REPORTING

REPORTING

OF

ASSESSMENT

DATA

Secretary shall, as

REQUIREMENT.Begin-

20

ning on the date the system to report standard-

21

ized data elements under this subsection is

22

operational, no payment shall be made under

23

this part for outpatient therapy services fur-

24

nished to an individual unless a therapy pro-

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1

vider reports the standardized data elements for

such individual.

(4) REPORT

4
5

ON NEW PAYMENT SYSTEM FOR

OUTPATIENT THERAPY SERVICES.

(A) IN

GENERAL.Not

later than 24

months after the date described in paragraph

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

a report on the design of a new payment system

for outpatient therapy services. The report shall

10

include an analysis of the standardized data ele-

11

ments collected and other appropriate data and

12

information.

13
14
15
16
17
18
19

(B) FEATURES.Such report shall consider

(i) appropriate adjustments to payment (such as case mix and outliers);
(ii) payments on an episode of care
basis; and
(iii) reduced payment for multiple

20

episodes.

21

(C) CONSULTATION.The Secretary shall

22

consult with stakeholders regarding the design

23

of such a new payment system.

24

(5) IMPLEMENTATION.

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1

(A) FUNDING.For purposes of imple-

menting this subsection, the Secretary shall

provide for the transfer, from the Federal Sup-

plementary Medical Insurance Trust Fund

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

ters for Medicare & Medicaid Services Program

Management Account for each of fiscal years

2015 through 2019. Amounts transferred under

this subparagraph shall remain available until

10

expended.

11

(B) ADMINISTRATION.Chapter 35 of

12

title 44, United States Code, shall not apply to

13

specification of the standardized data elements

14

and implementation of the system to report

15

such standardized data elements under this

16

subsection.

17

(C) LIMITATION.There shall be no ad-

18

ministrative or judicial review under section

19

1869, section 1878, or otherwise of the speci-

20

fication of standardized data elements required

21

under this subsection or the system to report

22

such standardized data elements.

23

(D) DEFINITION

OF OUTPATIENT THER-

24

APY SERVICES AND THERAPY PROVIDER.In

25

this subsection, the terms outpatient therapy

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1

services and therapy provider have the mean-

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

(2) SUNSET

OF CURRENT CLAIMS-BASED COL-

LECTION OF THERAPY DATA.Section

the Middle Class Tax Extension and Job Creation

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

the first sentence, by inserting and ending on the

date the system to report standardized data ele-

ments under section 1834(r) of the Social Security

10

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

11

January 1, 2013,.

12

(e) REPORTING OF CERTAIN INFORMATION.Section

3005(g)(1) of

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

14 is amended by adding at the end the following new para15 graph:
16

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

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

18 for an outpatient therapy service (as defined in such sec19 tion) furnished by a therapy assistant on or after January
20 1, 2017, shall include (in a form and manner specified
21 by the Secretary) an indication that the service was fur22 nished by a therapy assistant..