42 U.S.C. § 1395yy — Payment to skilled nursing facilities for

Page 3938 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy maintain an adequate number of physicians for the hospital or facility on account of the reim- bursement limits established under this sub- section, grant exceptions to such reimbursement limits as may be necessary to allow such pro- vider to provide a compensation level sufficient to provide adequate physician services in such hospital or facility. (b) Prohibition of recognition of payments under certain percentage agreements (1) Except as provided in paragraph (2), in the case of a provider of services which is paid under this subchapter on a reasonable cost basis, or other basis related to costs that are reasonable, and which has entered into a contract for the purpose of having services furnished for or on behalf of it, the Secretary may not include any cost incurred by the provider under the contract if the amount payable under the contract by the provider for that cost is determined on the basis of a percentage (or other proportion) of the pro- vider’s charges, revenues, or claim for reim- bursement. (2) Paragraph (1) shall not apply— (A) to services furnished by a physician and described in subsection (a)(1)(B) and covered by regulations in effect under subsection (a), and (B) under regulations established by the Sec- retary, where the amount involved under the percentage contract is reasonable and the con- tract— (i) is a customary commercial business practice, or (ii) provides incentives for the efficient and economical operation of the provider of services. (Aug. 14, 1935, ch. 531, title XVIII, § 1887, as added and amended Pub. L. 97–248, title I, §§ 108(a)[(1)], 109(a), Sept. 3, 1982, 96 Stat. 337, 338; Pub. L. 98–21, title VI, § 602(j), Apr. 20, 1983, 97 Stat. 165.) Editorial Notes AMENDMENTS 1983—Subsec. (a)(1)(B). Pub. L. 98–21 inserted ‘‘or on the bases described in section 1395ww of this title’’. 1982—Subsec. (b). Pub. L. 97–248, § 109(a)(2), added sub- sec. (b). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1983 AMENDMENT Amendment by Pub. L. 98–21 applicable to items and services furnished by or under arrangement with a hos- pital beginning with its first cost reporting period that begins on or after Oct. 1, 1983, any change in a hos- pital’s cost reporting period made after November 1982 to be recognized for such purposes only if the Secretary finds good cause therefor, see section 604(a)(1) of Pub. L. 98–21, set out as a note under section 1395ww of this title. EFFECTIVE DATE OF 1982 AMENDMENT Pub. L. 97–248, title I, § 109(c)(1), (2), Sept. 3, 1982, 96 Stat. 339, provided that: ‘‘(1) The amendments made by this section [amending this section and section 1395x of this title] shall become effective on the date of the enactment of this Act [Sept. 3, 1982], except that section 1887(b)(1) of the So- cial Security Act [42 U.S.C. 1395xx(b)(1)] shall not apply before October 1, 1982, to services furnished by a physi- cian and described in section 1887(a)(1)(B) of such Act [42 U.S.C. 1395xx(a)(1)(B)]. ‘‘(2) In the case of a contract with a provider of serv- ices entered into prior to the date of the enactment of this Act [Sept. 3, 1982], the amendment made by sub- section (a) [amending this section] shall apply to pay- ments under such contract (A) 30 days after the first date (after such date of enactment) the provider of services may unilaterally terminate the contract, or (B) one year after the date of the enactment of this Act, whichever is earlier.’’ EFFECTIVE DATE OF REGULATIONS Pub. L. 97–248, title I, § 108(b), formerly § 108(c), Sept. 3, 1982, 96 Stat. 338, as redesignated by Pub. L. 97–448, title III, § 309(a)(3), Jan. 12, 1983, 96 Stat. 2408, provided that: ‘‘The Secretary of Health and Human Services shall first promulgate regulations to carry out section 1887(a) of the Social Security Act [42 U.S.C. 1395xx(a)] not later than October 1, 1982. Such regulations shall become effective on October 1, 1982, and shall be effec- tive with respect to cost reporting periods ending after September 30, 1982, but in the case of any cost reporting period beginning before October 1, 1982, any reduction in payments under title XVIII of the Social Security Act [42 U.S.C. 1395 et seq.] to a hospital or skilled nurs- ing facility resulting from such regulations shall be im- posed only in proportion to the part of the period which occurs after September 30, 1982.’’ § 1395yy. Payment to skilled nursing facilities for routine service costs (a) Per diem limitations The Secretary, in determining the amount of the payments which may be made under this subchapter with respect to routine service costs of extended care services shall not recognize as reasonable (in the efficient delivery of health services) per diem costs of such services to the extent that such per diem costs exceed the fol- lowing per diem limits, except as otherwise pro- vided in this section: (1) With respect to freestanding skilled nurs- ing facilities located in urban areas, the limit shall be equal to 112 percent of the mean per diem routine service costs for freestanding skilled nursing facilities located in urban areas. (2) With respect to freestanding skilled nurs- ing facilities located in rural areas, the limit shall be equal to 112 percent of the mean per diem routine service costs for freestanding skilled nursing facilities located in rural areas. (3) With respect to hospital-based skilled nursing facilities located in urban areas, the limit shall be equal to the sum of the limit for freestanding skilled nursing facilities located in urban areas, plus 50 percent of the amount by which 112 percent of the mean per diem routine service costs for hospital-based skilled nursing facilities located in urban areas ex- ceeds the limit for freestanding skilled nurs- ing facilities located in urban areas. (4) With respect to hospital-based skilled nursing facilities located in rural areas, the limit shall be equal to the sum of the limit for freestanding skilled nursing facilities located in rural areas, plus 50 percent of the amount by which 112 percent of the mean per diem routine service costs for hospital-based skilled nursing facilities located in rural areas ex- ceeds the limit for freestanding skilled nurs- ing facilities located in rural areas. Page 3939 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy In applying this subsection the Secretary shall make appropriate adjustments to the labor re- lated portion of the costs based upon an appro- priate wage index, and shall, for cost reporting periods beginning on or after October 1, 1992, on or after October 1, 1995, and every 2 years there- after, provide for an update to the per diem cost limits described in this subsection, except that the limits effective for cost reporting periods be- ginning on or after October 1, 1997, shall be based on the limits effective for cost reporting periods beginning on or after October 1, 1996. (b) Excess overhead allocations for hospital- based facilities With respect to a hospital-based skilled nurs- ing facility, the Secretary may not recognize as reasonable the portion of the cost differences be- tween hospital-based and freestanding skilled nursing facilities attributable to excess over- head allocations. (c) Adjustments in limitations; publication of data The Secretary may make adjustments in the limits set forth in subsection (a) with respect to any skilled nursing facility to the extent the Secretary deems appropriate, based upon case mix or circumstances beyond the control of the facility. The Secretary shall publish the data and criteria to be used for purposes of this sub- section on an annual basis. (d) Access to skilled nursing facilities (1) Subject to subsection (e), any skilled nurs- ing facility may choose to be paid under this subsection on the basis of a prospective payment for all routine service costs (including the costs of services required to attain or maintain the highest practicable physical, mental, and psy- chosocial well-being of each resident eligible for benefits under this subchapter) and capital-re- lated costs of extended care services provided in a cost reporting period if such facility had, in the preceding cost reporting period, fewer than 1,500 patient days with respect to which pay- ments were made under this subchapter. Such prospective payment shall be in lieu of pay- ments which would otherwise be made for rou- tine service costs pursuant to section 1395x(v) of this title and subsections (a) through (c) of this section and capital-related costs pursuant to section 1395x(v) of this title. This subsection shall not apply to a facility for any cost report- ing period immediately following a cost report- ing period in which such facility had 1,500 or more patient days with respect to which pay- ments were made under this subchapter, without regard to whether payments were made under this subsection during such preceding cost re- porting period. (2)(A) The amount of the payment under this section shall be determined on a per diem basis. (B) Subject to the limitations of subparagraph (C), for skilled nursing facilities located— (i) in an urban area, the amount shall be equal to 105 percent of the mean of the per diem reasonable routine service and capital- related costs of extended care services for skilled nursing facilities in urban areas within the same region, determined without regard to the limitations of subsection (a) and adjusted for different area wage levels, and (ii) in a rural area the amount shall be equal to 105 percent of the mean of the per diem rea- sonable routine service and capital-related costs of extended care services for skilled nursing facilities in rural areas within the same region, determined without regard to the limitations of subsection (a) and adjusted for different area wage levels. (C) The per diem amounts determined under subparagraph (B) shall not exceed the limit on routine service costs determined under sub- section (a) with respect to the facility, adjusted to take into account average capital-related costs with respect to the type and location of the facility. (3) For purposes of this subsection, urban and rural areas shall be determined in the same manner as for purposes of subsection (a), and the term ‘‘region’’ shall have the same meaning as under section 1395ww(d)(2)(D) of this title. (4) The Secretary shall establish the prospec- tive payment amounts for cost reporting periods beginning in a fiscal year at least 90 days prior to the beginning of such fiscal year, on the basis of the most recent data available for a 12-month period. A skilled nursing facility must notify the Secretary of its intention to be paid pursu- ant to this subsection for a cost reporting period no later than 30 days before the beginning of that period. (5) The Secretary shall provide for a simplified cost report to be filed by facilities being paid pursuant to this subsection, which shall require only the cost information necessary for deter- mining prospective payment amounts pursuant to paragraph (2) and reasonable costs of ancil- lary services. (6) In lieu of payment on a cost basis for ancil- lary services provided by a facility which is being paid pursuant to this subsection, the Sec- retary may pay for such ancillary services on a reasonable charge basis if the Secretary deter- mines that such payment basis will provide an equitable level of reimbursement and will ease the reporting burden of the facility. (7) In computing the rates of payment to be made under this subsection, there shall be taken into account the costs described in the last sen- tence of section 1395x(v)(1)(E) of this title (relat- ing to compliance with nursing facility require- ments and of conducting nurse aide training and competency evaluation programs and com- petency evaluation programs). (e) Prospective payment (1) Payment provision Notwithstanding any other provision of this subchapter, subject to paragraphs (7), (11), and (12), the amount of the payment for all costs (as defined in paragraph (2)(B)) of covered skilled nursing facility services (as defined in paragraph (2)(A)) for each day of such services furnished— (A) in a cost reporting period during the transition period (as defined in paragraph (2)(E)), is equal to the sum of— (i) the non-Federal percentage of the fa- cility-specific per diem rate (computed under paragraph (3)), and (ii) the Federal percentage of the ad- justed Federal per diem rate (determined Page 3940 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy under paragraph (4)) applicable to the fa- cility; and (B) after the transition period is equal to the adjusted Federal per diem rate applica- ble to the facility. (2) Definitions For purposes of this subsection: (A) Covered skilled nursing facility services (i) In general The term ‘‘covered skilled nursing facil- ity services’’— (I) means post-hospital extended care services as defined in section 1395x(i) of this title for which benefits are provided under part A; and (II) includes all items and services (other than items and services described in clauses (ii), (iii), and (iv)) for which payment may be made under part B and which are furnished to an individual who is a resident of a skilled nursing facility during the period in which the individual is provided covered post-hospital ex- tended care services. (ii) Services excluded Services described in this clause are phy- sicians’ services, services described by clauses (i) and (ii) of section 1395x(s)(2)(K) of this title, certified nurse-midwife serv- ices, qualified psychologist services, mar- riage and family therapist services (as de- fined in section 1395x(lll)(1) of this title), mental health counselor services (as de- fined in section 1395x(lll)(3) of this title), services of a certified registered nurse an- esthetist, items and services described in subparagraphs (F) and (O) of section 1395x(s)(2) of this title, telehealth services furnished under section 1395m(m)(4)(C)(ii)(VII) of this title, and, only with respect to services furnished during 1998, the transportation costs of electrocardiogram equipment for electro- cardiogram test services (HCPCS Code R0076). Services described in this clause do not include any physical, occupational, or speech-language therapy services regard- less of whether or not the services are fur- nished by, or under the supervision of, a physician or other health care profes- sional. (iii) Exclusion of certain additional items and services Items and services described in this clause are the following: (I) Ambulance services furnished to an individual in conjunction with renal di- alysis services described in section 1395x(s)(2)(F) of this title. (II) Chemotherapy items (identified as of July 1, 1999, by HCPCS codes J9000–J9020; J9040–J9151; J9170–J9185; J9200–J9201; J9206–J9208; J9211; J9230–J9245; and J9265–J9600 (and as sub- sequently modified by the Secretary)) and any additional chemotherapy items identified by the Secretary. (III) Chemotherapy administration services (identified as of July 1, 1999, by HCPCS codes 36260–36262; 36489; 36530–36535; 36640; 36823; and 96405–96542 (and as subsequently modified by the Secretary)) and any additional chemo- therapy administration services identi- fied by the Secretary. (IV) Radioisotope services (identified as of July 1, 1999, by HCPCS codes 79030–79440 (and as subsequently modified by the Secretary)) and any additional ra- dioisotope services identified by the Sec- retary. (V) Customized prosthetic devices (commonly known as artificial limbs or components of artificial limbs) under the following HCPCS codes (as of July 1, 1999 (and as subsequently modified by the Secretary)), and any additional cus- tomized prosthetic devices identified by the Secretary, if delivered to an inpa- tient for use during the stay in the skilled nursing facility and intended to be used by the individual after discharge from the facility: L5050–L5340; L5500–L5611; L5613–L5986; L5988; L6050–L6370; L6400–L6880; L6920–L7274; and L7362–7366. (VI) Blood clotting factors indicated for the treatment of patients with hemo- philia and other bleeding disorders (iden- tified as of July 1, 2020, by HCPCS codes J7170, J7175, J7177–J7183, J7185–J7190, J7192–J7195, J7198–J7203, J7205, J7207–J7211, and as subsequently modi- fied by the Secretary) and items and services related to the furnishing of such factors under section 1395u(o)(5)(C) of this title, and any additional blood clot- ting factors identified by the Secretary and items and services related to the fur- nishing of such factors under such sec- tion. (iv) Exclusion of certain rural health clinic and federally qualified health center services Services described in this clause are— (I) rural health clinic services (as de- fined in paragraph (1) of section 1395x(aa) of this title); and (II) federally qualified health center services (as defined in paragraph (3) of such section); that would be described in clause (ii) if such services were furnished by an indi- vidual not affiliated with a rural health clinic or a federally qualified health cen- ter. (B) All costs The term ‘‘all costs’’ means routine serv- ice costs, ancillary costs, and capital-related costs of covered skilled nursing facility serv- ices, but does not include costs associated with approved educational activities. (C) Non-Federal percentage; Federal percent- age For— (i) the first cost reporting period (as de- fined in subparagraph (D)) of a facility, the ‘‘non-Federal percentage’’ is 75 percent Page 3941 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy and the ‘‘Federal percentage’’ is 25 per- cent; (ii) the next cost reporting period of such facility, the ‘‘non-Federal percentage’’ is 50 percent and the ‘‘Federal percentage’’ is 50 percent; and (iii) the subsequent cost reporting period of such facility, the ‘‘non-Federal percent- age’’ is 25 percent and the ‘‘Federal per- centage’’ is 75 percent. (D) First cost reporting period The term ‘‘first cost reporting period’’ means, with respect to a skilled nursing fa- cility, the first cost reporting period of the facility beginning on or after July 1, 1998. (E) Transition period (i) In general The term ‘‘transition period’’ means, with respect to a skilled nursing facility, the 3 cost reporting periods of the facility beginning with the first cost reporting pe- riod. (ii) Treatment of new skilled nursing facili- ties In the case of a skilled nursing facility that first received payment for services under this subchapter on or after October 1, 1995, payment for such services shall be made under this subsection as if all serv- ices were furnished after the transition pe- riod. (3) Determination of facility specific per diem rates The Secretary shall determine a facility-spe- cific per diem rate for each skilled nursing fa- cility not described in paragraph (2)(E)(ii) for a cost reporting period as follows: (A) Determining base payments The Secretary shall determine, on a per diem basis, the total of— (i) the allowable costs of extended care services for the facility for cost reporting periods beginning in fiscal year 1995, in- cluding costs associated with facilities de- scribed in subsection (d), with appropriate adjustments (as determined by the Sec- retary) to non-settled cost reports or, in the case of a facility participating in the Nursing Home Case-Mix and Quality Dem- onstration (RUGS–III), the RUGS–III rate received by the facility during the cost re- porting period beginning in 1997, and (ii) an estimate of the amounts that would be payable under part B (dis- regarding any applicable deductibles, coin- surance, and copayments) for covered skilled nursing facility services described in paragraph (2)(A)(i)(II) furnished during the applicable cost reporting period de- scribed in clause (i) to an individual who is a resident of the facility, regardless of whether or not the payment was made to the facility or to another entity. In making appropriate adjustments under clause (i), the Secretary shall take into ac- count exceptions and shall take into account exemptions but, with respect to exemptions, only to the extent that routine costs do not exceed 150 percent of the routine cost limits otherwise applicable but for the exemption. (B) Update to first cost reporting period The Secretary shall update the amount de- termined under subparagraph (A), for each cost reporting period after the applicable cost reporting period described in subpara- graph (A)(i) and up to the first cost report- ing period by a factor equal to the skilled nursing facility market basket percentage increase minus 1.0 percentage point. (C) Updating to applicable cost reporting pe- riod The Secretary shall update the amount de- termined under subparagraph (B) for each cost reporting period beginning with the first cost reporting period and up to and in- cluding the cost reporting period involved by a factor equal to the facility-specific update factor. (D) Facility-specific update factor For purposes of this paragraph, the ‘‘facil- ity-specific update factor’’ for cost reporting periods beginning during— (i) during each of fiscal years 1998 and 1999, is equal to the skilled nursing facility market basket percentage increase for such fiscal year minus 1 percentage point, and (ii) during each subsequent fiscal year is equal to the skilled nursing facility mar- ket basket percentage increase for such fiscal year. (4) Federal per diem rate (A) Determination of historical per diem for facilities For each skilled nursing facility that re- ceived payments for post-hospital extended care services during a cost reporting period beginning in fiscal year 1995 and that was subject to (and not exempted from) the per diem limits referred to in paragraph (1) or (2) of subsection (a) (and facilities described in subsection (d)), the Secretary shall estimate, on a per diem basis for such cost reporting period, the total of— (i) the allowable costs of extended care services (excluding exceptions payments) for the facility for cost reporting periods beginning in 1995 with appropriate adjust- ments (as determined by the Secretary) to non-settled cost reports, and (ii) an estimate of the amounts that would be payable under part B (dis- regarding any applicable deductibles, coin- surance, and copayments) for covered skilled nursing facility services described in paragraph (2)(A)(i)(II) furnished during such period to an individual who is a resi- dent of the facility, regardless of whether or not the payment was made to the facil- ity or to another entity. (B) Update to first fiscal year The Secretary shall update the amount de- termined under subparagraph (A), for each cost reporting period after the cost report- Page 3942 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy ing period described in subparagraph (A)(i) and up to the first cost reporting period by a factor equal to the skilled nursing facility market basket percentage increase reduced (on an annualized basis) by 1 percentage point. (C) Computation of standardized per diem rate The Secretary shall standardize the amount updated under subparagraph (B) for each facility by— (i) adjusting for variations among facili- ties by area in the average facility wage level per diem, and (ii) adjusting for variations in case mix per diem among facilities. (D) Computation of weighted average per diem rates (i) All facilities The Secretary shall compute a weighted average per diem rate for all facilities by computing an average of the standardized amounts computed under subparagraph (C), weighted for each facility by the num- ber of days of extended care services fur- nished during the cost reporting period re- ferred to in subparagraph (A). (ii) Freestanding facilities The Secretary shall compute a weighted average per diem rate for freestanding fa- cilities by computing an average of the standardized amounts computed under subparagraph (C) only for such facilities, weighted for each facility by the number of days of extended care services furnished during the cost reporting period referred to in subparagraph (A). (iii) Separate computation The Secretary may compute and apply such averages separately for facilities lo- cated in urban and rural areas (as defined in section 1395ww(d)(2)(D) of this title). (E) Updating (i) Initial period For the initial period beginning on July 1, 1998, and ending on September 30, 1999, the Secretary shall compute for skilled nursing facilities an unadjusted Federal per diem rate equal to the average of the weighted average per diem rates computed under clauses (i) and (ii) of subparagraph (D), increased by skilled nursing facility market basket percentage change for such period minus 1 percentage point. (ii) Subsequent fiscal years The Secretary shall compute an unadjusted Federal per diem rate equal to the Federal per diem rate computed under this subparagraph— (I) for fiscal year 2000, the rate com- puted for the initial period described in clause (i), increased by the skilled nurs- ing facility market basket percentage change for the initial period minus 1 per- centage point; (II) for fiscal year 2001, the rate com- puted for the previous fiscal year in- creased by the skilled nursing facility market basket percentage change for the fiscal year; (III) for each of fiscal years 2002 and 2003, the rate computed for the previous fiscal year increased by the skilled nurs- ing facility market basket percentage change for the fiscal year involved minus 0.5 percentage points; and (IV) for each subsequent fiscal year, the rate computed for the previous fiscal year increased by the skilled nursing fa- cility market basket percentage change for the fiscal year involved. (F) Adjustment for case mix creep Insofar as the Secretary determines that the adjustments under subparagraph (G)(i) for a previous fiscal year (or estimates that such adjustments for a future fiscal year) did (or are likely to) result in a change in aggregate payments under this subsection during the fiscal year that are a result of changes in the coding or classification of residents that do not reflect real changes in case mix, the Secretary may adjust unadjusted Federal per diem rates for subse- quent fiscal years so as to eliminate the ef- fect of such coding or classification changes. (G) Determination of Federal rate The Secretary shall compute for each skilled nursing facility for each fiscal year (beginning with the initial period described in subparagraph (E)(i)) an adjusted Federal per diem rate equal to the unadjusted Fed- eral per diem rate determined under sub- paragraph (E), as adjusted under subpara- graph (F), and as further adjusted as follows: (i) Adjustment for case mix The Secretary shall provide for an appro- priate adjustment to account for case mix. Such adjustment shall be based on a resi- dent classification system, established by the Secretary, that accounts for the rel- ative resource utilization of different pa- tient types. The case mix adjustment shall be based on resident assessment data and other data that the Secretary considers appropriate. (ii) Adjustment for geographic variations in labor costs The Secretary shall adjust the portion of such per diem rate attributable to wages and wage-related costs for the area in which the facility is located compared to the national average of such costs using an appropriate wage index as determined by the Secretary. Such adjustment shall be done in a manner that does not result in aggregate payments under this subsection that are greater or less than those that would otherwise be made if such adjust- ment had not been made. (iii) Adjustment for exclusion of certain ad- ditional items and services The Secretary shall provide for an appro- priate proportional reduction in payments so that beginning with fiscal year 2001, the aggregate amount of such reductions is Page 3943 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy equal to the aggregate increase in pay- ments attributable to the exclusion ef- fected under clause (iii) of paragraph (2)(A). (H) Publication of information on per diem rates The Secretary shall provide for publica- tion in the Federal Register, before May 1, 1998 (with respect to fiscal period described in subparagraph (E)(i)) and before the Au- gust 1 preceding each succeeding fiscal year (with respect to that succeeding fiscal year), of— (i) the unadjusted Federal per diem rates to be applied to days of covered skilled nursing facility services furnished during the fiscal year, (ii) the case mix classification system to be applied under subparagraph (G)(i) with respect to such services during the fiscal year, and (iii) the factors to be applied in making the area wage adjustment under subpara- graph (G)(ii) with respect to such services. (5) Skilled nursing facility market basket index and percentage For purposes of this subsection: (A) Skilled nursing facility market basket index The Secretary shall establish a skilled nursing facility market basket index that reflects changes over time in the prices of an appropriate mix of goods and services in- cluded in covered skilled nursing facility services. (B) Skilled nursing facility market basket percentage (i) In general Subject to clauses (ii), (iii), and (iv), the term ‘‘skilled nursing facility market bas- ket percentage’’ means, for a fiscal year or other annual period and as calculated by the Secretary, the percentage change in the skilled nursing facility market basket index (established under subparagraph (A)) from the midpoint of the prior fiscal year (or period) to the midpoint of the fiscal year (or other period) involved. (ii) Adjustment For fiscal year 2012 and each subsequent fiscal year, subject to clauses (iii) and (iv), after determining the percentage described in clause (i), the Secretary shall reduce such percentage by the productivity ad- justment described in section 1395ww(b)(3)(B)(xi)(II) of this title. The ap- plication of the preceding sentence may result in such percentage being less than 0.0 for a fiscal year, and may result in pay- ment rates under this subsection for a fis- cal year being less than such payment rates for the preceding fiscal year. (iii) Special rule for fiscal year 2018 For fiscal year 2018 (or other similar an- nual period specified in clause (i)), the skilled nursing facility market basket per- centage, after application of clause (ii), is equal to 1 percent. (iv) Special rule for fiscal year 2019 For fiscal year 2019 (or other similar an- nual period specified in clause (i)), the skilled nursing facility market basket per- centage, after application of clause (ii), is equal to 2.4 percent. (6) Reporting of assessment and quality data (A) Reduction in update for failure to report (i) In general For fiscal years beginning with fiscal year 2018, in the case of a skilled nursing facility that does not submit data, as ap- plicable, in accordance with subclauses (II) and (III) of subparagraph (B)(i) with re- spect to such a fiscal year, after deter- mining the percentage described in para- graph (5)(B)(i), and after application of clauses (ii) and (iii) of paragraph (5)(B), the Secretary shall reduce such percentage for payment rates during such fiscal year by 2 percentage points. (ii) Special rule The application of this subparagraph may result in the percentage described in paragraph (5)(B)(i), after application of clauses (ii) and (iii) of paragraph (5)(B), being less than 0.0 for a fiscal year, and may result in payment rates under this subsection for a fiscal year being less than such payment rates for the preceding fis- cal year. (iii) Noncumulative application Any reduction under clause (i) shall apply only with respect to the fiscal year involved and the Secretary shall not take into account such reduction in computing the payment amount under this subsection for a subsequent fiscal year. (B) Assessment and measure data (i) In general A skilled nursing facility, or a facility (other than a critical access hospital) de- scribed in paragraph (7)(B), shall submit to the Secretary, in a manner and within the timeframes prescribed by the Secretary— (I) subject to clause (iii), the resident assessment data necessary to develop and implement the rates under this sub- section; (II) for fiscal years beginning on or after the specified application date (as defined in subsection (a)(2)(E) of section 1395lll of this title), as applicable with re- spect to skilled nursing facilities and quality measures under subsection (c)(1) of such section and measures under sub- section (d)(1) of such section, data on such quality measures under such sub- section (c)(1) and any necessary data specified by the Secretary under such subsection (d)(1); and (III) for fiscal years beginning on or after October 1, 2018, standardized pa- tient assessment data required under subsection (b)(1) of section 1395lll of this title. (ii) Use of standard instrument For purposes of meeting the requirement under clause (i), a skilled nursing facility, Page 3944 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy or a facility (other than a critical access hospital) described in paragraph (7)(B), may submit the resident assessment data required under section 1395i–3(b)(3) of this title, using the standard instrument des- ignated by the State under section 1395i–3(e)(5) of this title. (iii) Non-duplication To the extent data submitted under sub- clause (II) or (III) of clause (i) duplicates other data required to be submitted under clause (i)(I), the submission of such data under such a subclause shall be in lieu of the submission of such data under clause (i)(I). The previous sentence shall not apply insofar as the Secretary determines it is necessary to avoid a delay in the im- plementation of section 1395lll of this title, taking into account the different specified application dates under subsection (a)(2)(E) of such section. (7) Treatment of medicare swing bed hospitals (A) Transition Subject to subparagraph (C), the Secretary shall determine an appropriate manner in which to apply this subsection to the facili- ties described in subparagraph (B) (other than critical access hospitals), taking into account the purposes of this subsection, and shall provide that at the end of the transi- tion period (as defined in paragraph (2)(E)) such facilities shall be paid only under this subsection. Payment shall not be made under this subsection to such facilities for cost reporting periods beginning before such date (not earlier than July 1, 1999) as the Secretary specifies. (B) Facilities described The facilities described in this subpara- graph are facilities that have in effect an agreement described in section 1395tt of this title. (C) Exemption from PPS of swing-bed serv- ices furnished in critical access hospitals The prospective payment system estab- lished under this subsection shall not apply to services furnished by a critical access hospital pursuant to an agreement under section 1395tt of this title. (8) Limitation on review There shall be no administrative or judicial review under section 1395ff of this title, 1395oo of this title, or otherwise of— (A) the establishment of Federal per diem rates under paragraph (4), including the computation of the standardized per diem rates under paragraph (4)(C), adjustments and corrections for case mix under para- graphs (4)(F) and (4)(G)(i), adjustments for variations in labor-related costs under para- graph (4)(G)(ii), and adjustments under para- graph (4)(G)(iii); (B) the establishment of facility specific rates before July 1, 1999 (except any deter- mination of costs paid under part A of this subchapter); and (C) the establishment of transitional amounts under paragraph (7). (9) Payment for certain services In the case of an item or service furnished to a resident of a skilled nursing facility or a part of a facility that includes a skilled nurs- ing facility (as determined under regulations) for which payment would (but for this para- graph) be made under part B in an amount de- termined in accordance with section 1395l(a)(2)(B) of this title, the amount of the payment under such part shall be the amount provided under the fee schedule for such item or service. In the case of an item or service de- scribed in clause (iii) of paragraph (2)(A) that would be payable under part A but for the ex- clusion of such item or service under such clause, payment shall be made for the item or service, in an amount otherwise determined under part B of this subchapter for such item or service, from the Federal Hospital Insur- ance Trust Fund under section 1395i of this title (rather than from the Federal Supple- mentary Medical Insurance Trust Fund under section 1395t of this title). (10) Required coding No payment may be made under part B for items and services (other than services de- scribed in paragraph (2)(A)(ii)) furnished to an individual who is a resident of a skilled nurs- ing facility or of a part of a facility that in- cludes a skilled nursing facility (as deter- mined under regulations), unless the claim for such payment includes a code (or codes) under a uniform coding system specified by the Sec- retary that identifies the items or services furnished. (11) Permitting facilities to waive 3-year tran- sition Notwithstanding paragraph (1)(A), a facility may elect to have the amount of the payment for all costs of covered skilled nursing facility services for each day of such services fur- nished in cost reporting periods beginning no earlier than 30 days before the date of such election determined pursuant to paragraph (1)(B). (12) Adjustment for residents with AIDS (A) In general Subject to subparagraph (B), in the case of a resident of a skilled nursing facility who is afflicted with acquired immune deficiency syndrome (AIDS), the per diem amount of payment otherwise applicable (determined without regard to any increase under section 101 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, or under section 314(a) of Medicare, Medicaid, and SCHIP Benefits Improvement and Pro- tection Act of 2000), shall be increased by 128 percent to reflect increased costs associated with such residents. (B) Sunset Subparagraph (A) shall not apply on and after such date as the Secretary certifies that there is an appropriate adjustment in the case mix under paragraph (4)(G)(i) to compensate for the increased costs associ- ated with residents described in such sub- paragraph. Page 3945 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy (f) Reporting of direct care expenditures (1) In general For cost reports submitted under this sub- chapter for cost reporting periods beginning on or after the date that is 2 years after March 23, 2010, skilled nursing facilities shall sepa- rately report expenditures for wages and bene- fits for direct care staff (breaking out (at a minimum) registered nurses, licensed profes- sional nurses, certified nurse assistants, and other medical and therapy staff). (2) Modification of form The Secretary, in consultation with private sector accountants experienced with Medicare and Medicaid nursing facility home cost re- ports, shall redesign such reports to meet the requirement of paragraph (1) not later than 1 year after March 23, 2010. (3) Categorization by functional accounts Not later than 30 months after March 23, 2010, the Secretary, working in consultation with the Medicare Payment Advisory Commis- sion, the Medicaid and CHIP Payment and Ac- cess Commission, the Inspector General of the Department of Health and Human Services, and other expert parties the Secretary deter- mines appropriate, shall take the expenditures listed on cost reports, as modified under para- graph (1), submitted by skilled nursing facili- ties and categorize such expenditures, regard- less of any source of payment for such expend- itures, for each skilled nursing facility into the following functional accounts on an an- nual basis: (A) Spending on direct care services (in- cluding nursing, therapy, and medical serv- ices). (B) Spending on indirect care (including housekeeping and dietary services). (C) Capital assets (including building and land costs). (D) Administrative services costs. (4) Availability of information submitted The Secretary shall establish procedures to make information on expenditures submitted under this subsection readily available to in- terested parties upon request, subject to such requirements as the Secretary may specify under the procedures established under this paragraph. (g) Skilled nursing facility readmission measure (1) Readmission measure Not later than October 1, 2015, the Secretary shall specify a skilled nursing facility all- cause all-condition hospital readmission meas- ure (or any successor to such a measure). (2) Resource use measure Not later than October 1, 2016, the Secretary shall specify a measure to reflect an all-condi- tion risk-adjusted potentially preventable hos- pital readmission rate for skilled nursing fa- cilities. (3) Measure adjustments When specifying the measures under para- graphs (1) and (2), the Secretary shall devise a methodology to achieve a high level of reli- ability and validity, especially for skilled nursing facilities with a low volume of re- admissions. (4) Pre-rulemaking process (measure applica- tion partnership process) The application of the provisions of section 1395aaa–1 of this title shall be optional in the case of a measure specified under paragraph (1) and a measure specified under paragraph (2). (5) Feedback reports to skilled nursing facili- ties Beginning October 1, 2016, and every quarter thereafter, the Secretary shall provide con- fidential feedback reports to skilled nursing facilities on the performance of such facilities with respect to a measure specified under paragraph (1) or (2). (6) Public reporting of skilled nursing facilities (A) In general Subject to subparagraphs (B) and (C), the Secretary shall establish procedures for making available to the public by posting on the Nursing Home Compare Medicare website (or a successor website) described in section 1395i–3(i) of this title information on the performance of skilled nursing facilities with respect to a measure specified under paragraph (1) and a measure specified under paragraph (2). (B) Opportunity to review The procedures under subparagraph (A) shall ensure that a skilled nursing facility has the opportunity to review and submit corrections to the information that is to be made public with respect to the facility prior to such information being made public. (C) Timing Such procedures shall provide that the in- formation described in subparagraph (A) is made publicly available beginning not later than October 1, 2017. (7) Non-application of Paperwork Reduction Act Chapter 35 of title 44 (commonly referred to as the ‘‘Paperwork Reduction Act of 1995’’) shall not apply to this subsection. (h) Skilled nursing facility value-based pur- chasing program (1) Establishment (A) In general Subject to the succeeding provisions of this subsection, the Secretary shall estab- lish a skilled nursing facility value-based purchasing program (in this subsection re- ferred to as the ‘‘SNF VBP Program’’) under which value-based incentive payments are made in a fiscal year to skilled nursing fa- cilities. (B) Program to begin in fiscal year 2019 The SNF VBP Program shall apply to pay- ments for services furnished on or after Oc- tober 1, 2018. (C) Exclusions With respect to payments for services fur- nished on or after October 1, 2022, this sub- Page 3946 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy 1 So in original. Probably should be preceded by ‘‘subsection’’. section shall not apply to a facility for which there are not a minimum number (as determined by the Secretary) of— (i) cases for the measures that apply to the facility for the performance period for the applicable fiscal year; or (ii) measures that apply to the facility for the performance period for the applica- ble fiscal year. (2) Application of measures (A) In general The Secretary— (i) shall apply the measure specified under subsection (g)(1) for purposes of the SNF VBP Program; and (ii) may, with respect to payments for services furnished on or after October 1, 2023, apply additional measures deter- mined appropriate by the Secretary, which may include measures of functional status, patient safety, care coordination, or pa- tient experience. Subject to the succeeding sentence, in the case that the Secretary applies additional measures under clause (ii), the Secretary shall consider and apply, as appropriate, quality measures specified under section 1395lll(c)(1) of this title. In no case may the Secretary apply more than 10 measures under this subparagraph. (B) Replacement For purposes of the SNF VBP Program, the Secretary shall apply the measure speci- fied under (g)(2) 1 instead of the measure specified under (g)(1) 1 as soon as practicable. (3) Performance standards (A) Establishment The Secretary shall establish performance standards with respect to the measures ap- plied under paragraph (2) for a performance period for a fiscal year. (B) Higher of achievement and improvement The performance standards established under subparagraph (A) shall include levels of achievement and improvement. In calcu- lating the SNF performance score under paragraph (4), the Secretary shall use the higher of either improvement or achieve- ment. (C) Timing The Secretary shall establish and an- nounce the performance standards estab- lished under subparagraph (A) not later than 60 days prior to the beginning of the per- formance period for the fiscal year involved. (4) SNF performance score (A) In general The Secretary shall develop a method- ology for assessing the total performance of each skilled nursing facility based on per- formance standards established under para- graph (3) with respect to the measures ap- plied under paragraph (2). Using such meth- odology, the Secretary shall provide for an assessment (in this subsection referred to as the ‘‘SNF performance score’’) for each skilled nursing facility for each such per- formance period. (B) Ranking of SNF performance scores The Secretary shall, for the performance period for each fiscal year, rank the SNF performance scores determined under sub- paragraph (A) from low to high. (5) Calculation of value-based incentive pay- ments (A) In general With respect to a skilled nursing facility, based on the ranking under paragraph (4)(B) for a performance period for a fiscal year, the Secretary shall increase the adjusted Federal per diem rate determined under sub- section (e)(4)(G) otherwise applicable to such skilled nursing facility (and after applica- tion of paragraph (6)) for services furnished by such facility during such fiscal year by the value-based incentive payment amount under subparagraph (B). (B) Value-based incentive payment amount The value-based incentive payment amount for services furnished by a skilled nursing facility in a fiscal year shall be equal to the product of— (i) the adjusted Federal per diem rate de- termined under subsection (e)(4)(G) other- wise applicable to such skilled nursing fa- cility for such services furnished by the skilled nursing facility during such fiscal year; and (ii) the value-based incentive payment percentage specified under subparagraph (C) for the skilled nursing facility for such fiscal year. (C) Value-based incentive payment percent- age (i) In general The Secretary shall specify a value- based incentive payment percentage for a skilled nursing facility for a fiscal year which may include a zero percentage. (ii) Requirements In specifying the value-based incentive payment percentage for each skilled nurs- ing facility for a fiscal year under clause (i), the Secretary shall ensure that— (I) such percentage is based on the SNF performance score of the skilled nursing facility provided under paragraph (4) for the performance period for such fiscal year; (II) the application of all such percent- ages in such fiscal year results in an ap- propriate distribution of value-based in- centive payments under subparagraph (B) such that— (aa) skilled nursing facilities with the highest rankings under paragraph (4)(B) receive the highest value-based incentive payment amounts under sub- paragraph (B); (bb) skilled nursing facilities with the lowest rankings under paragraph Page 3947 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy (4)(B) receive the lowest value-based incentive payment amounts under sub- paragraph (B); and (cc) in the case of skilled nursing fa- cilities in the lowest 40 percent of the ranking under paragraph (4)(B), the payment rate under subparagraph (A) for services furnished by such facility during such fiscal year shall be less than the payment rate for such serv- ices for such fiscal year that would otherwise apply under subsection (e)(4)(G) without application of this subsection; and (III) the total amount of value-based incentive payments under this paragraph for all skilled nursing facilities in such fiscal year shall be greater than or equal to 50 percent, but not greater than 70 percent, of the total amount of the re- ductions to payments for such fiscal year under paragraph (6), as estimated by the Secretary. (6) Funding for value-based incentive pay- ments (A) In general The Secretary shall reduce the adjusted Federal per diem rate determined under sub- section (e)(4)(G) otherwise applicable to a skilled nursing facility for services furnished by such facility during a fiscal year (begin- ning with fiscal year 2019) by the applicable percent (as defined in subparagraph (B)). The Secretary shall make such reductions for all skilled nursing facilities in the fiscal year involved, regardless of whether or not the skilled nursing facility has been determined by the Secretary to have earned a value- based incentive payment under paragraph (5) for such fiscal year. (B) Applicable percent For purposes of subparagraph (A), the term ‘‘applicable percent’’ means, with respect to fiscal year 2019 and succeeding fiscal years, 2 percent. (7) Announcement of net result of adjustments Under the SNF VBP Program, the Secretary shall, not later than 60 days prior to the fiscal year involved, inform each skilled nursing fa- cility of the adjustments to payments to the skilled nursing facility for services furnished by such facility during the fiscal year under paragraphs (5) and (6). (8) No effect in subsequent fiscal years The value-based incentive payment under paragraph (5) and the payment reduction under paragraph (6) shall each apply only with respect to the fiscal year involved, and the Secretary shall not take into account such value-based incentive payment or payment re- duction in making payments to a skilled nurs- ing facility under this section in a subsequent fiscal year. (9) Public reporting (A) SNF specific information The Secretary shall make available to the public, by posting on the Nursing Home Compare Medicare website (or a successor website) described in section 1395i–3(i) of this title in an easily understandable format, in- formation regarding the performance of indi- vidual skilled nursing facilities under the SNF VBP Program, with respect to a fiscal year, including— (i) the SNF performance score of the skilled nursing facility for such fiscal year; and (ii) the ranking of the skilled nursing fa- cility under paragraph (4)(B) for the per- formance period for such fiscal year. (B) Aggregate information The Secretary shall periodically post on the Nursing Home Compare Medicare website (or a successor website) described in section 1395i–3(i) of this title aggregate in- formation on the SNF VBP Program, includ- ing— (i) the range of SNF performance scores provided under paragraph (4)(A); and (ii) the number of skilled nursing facili- ties receiving value-based incentive pay- ments under paragraph (5) and the range and total amount of such value-based in- centive payments. (10) Limitation on review There shall be no administrative or judicial review under section 1395ff of this title, sec- tion 1395oo of this title, or otherwise of the fol- lowing: (A) The methodology used to determine the value-based incentive payment percent- age and the amount of the value-based in- centive payment under paragraph (5). (B) The determination of the amount of funding available for such value-based incen- tive payments under paragraph (5)(C)(ii)(III) and the payment reduction under paragraph (6). (C) The establishment of the performance standards under paragraph (3) and the per- formance period. (D) The methodology developed under paragraph (4) that is used to calculate SNF performance scores and the calculation of such scores. (E) The ranking determinations under paragraph (4)(B). (11) Funding for program management The Secretary shall provide for the one time transfer from the Federal Hospital Insurance Trust Fund established under section 1395i of this title to the Centers for Medicare & Med- icaid Services Program Management Account of— (A) for purposes of subsection (g)(2), $2,000,000; and (B) for purposes of implementing this sub- section, $10,000,000. Such funds shall remain available until ex- pended. (12) Validation (A) In general The Secretary shall apply to the measures applied under this subsection and the data submitted under subsection (e)(6) a process Page 3948 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy to validate such measures and data, as ap- propriate, which may be similar to the proc- ess specified in section 1395ww(b)(3)(B)(viii)(XI) of this title for vali- dating inpatient hospital measures. (B) Funding For purposes of carrying out this para- graph, the Secretary shall provide for the transfer, from the Federal Hospital Insur- ance Trust Fund established under section 1395i of this title, of $5,000,000 to the Centers for Medicare & Medicaid Services Program Management Account for each of fiscal years 2023 through 2025, to remain available until expended. (Aug. 14, 1935, ch. 531, title XVIII, § 1888, as added Pub. L. 98–369, div. B, title III, § 2319(b), July 18, 1984, 98 Stat. 1082; amended Pub. L. 99–272, title IX, §§ 9126(a), (b), 9219(b)(1)(C), Apr. 7, 1986, 100 Stat. 168, 170, 182; Pub. L. 99–514, title XVIII, § 1895(b)(7)(A), (B), Oct. 22, 1986, 100 Stat. 2933; Pub. L. 100–203, title IV, § 4201(b)(2), Dec. 22, 1987, 101 Stat. 1330–174; Pub. L. 101–508, title IV, § 4008(e)(2), (h)(2)(A)(ii), Nov. 5, 1990, 104 Stat. 1388–45, 1388–48; Pub. L. 103–66, title XIII, § 13503(a)(2), (3)(A), Aug. 10, 1993, 107 Stat. 578; Pub. L. 105–33, title IV, §§ 4431, 4432(a), (b)(3), (5)(H), 4511(a)(2)(E), Aug. 5, 1997, 111 Stat. 414, 421, 422, 442; Pub. L. 106–113, div. B, § 1000(a)(6) [title I, §§ 102(a), 103(a), (b), 104(a), 105(a), title III, § 321(g)(1), (k)(18)], Nov. 29, 1999, 113 Stat. 1536, 1501A–325 to 1501A–327, 1501A–366, 1501A–368; Pub. L. 106–554, § 1(a)(6) [title II, § 203(a), title III, § 311(a)], Dec. 21, 2000, 114 Stat. 2763, 2763A–481, 2763A–497; Pub. L. 108–173, title IV, § 410(a), title V, § 511(a), Dec. 8, 2003, 117 Stat. 2271, 2298; Pub. L. 110–275, title I, § 149(b), July 15, 2008, 122 Stat. 2549; Pub. L. 111–148, title III, § 3401(b), title VI, § 6104, Mar. 23, 2010, 124 Stat. 481, 711; Pub. L. 113–93, title II, § 215(a), (b), Apr. 1, 2014, 128 Stat. 1048, 1049; Pub. L. 113–185, § 2(c)(4)(A), Oct. 6, 2014, 128 Stat. 1965; Pub. L. 114–10, title IV, § 411(a), Apr. 16, 2015, 129 Stat. 161; Pub. L. 115–123, div. E, title XII, § 53111, Feb. 9, 2018, 132 Stat. 304; Pub. L. 116–260, div. CC, title I, §§ 111(a), 134(a), Dec. 27, 2020, 134 Stat. 2944, 2977; Pub. L. 117–328, div. FF, title IV, § 4121(a)(4), Dec. 29, 2022, 136 Stat. 5903.) Editorial Notes REFERENCES IN TEXT Section 101 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, referred to in subsec. (e)(12)(A), is section 1000(a)(6) [title I, § 101] of Pub. L. 106–113, div. B, Nov. 29, 1999, 113 Stat. 1536, 1501A–324, which is not classified to the Code. Section 314(a) of Medicare, Medicaid, and SCHIP Ben- efits Improvement and Protection Act of 2000, referred to in subsec. (e)(12)(A), is section 1(a)(6) [title III, § 314(a)] of Pub. L. 106–554, Dec. 21, 2000, 114 Stat. 2763, 2763A–499, which is not classified to the Code. AMENDMENTS 2022—Subsec. (e)(2)(A)(ii). Pub. L. 117–328 inserted ‘‘marriage and family therapist services (as defined in section 1395x(lll)(1) of this title), mental health coun- selor services (as defined in section 1395x(lll)(3) of this title),’’ after ‘‘qualified psychologist services,’’. 2020—Subsec. (e)(2)(A)(iii)(VI). Pub. L. 116–260, § 134(a), added subcl. (VI). Subsec. (h)(1)(C). Pub. L. 116–260, § 111(a)(1), added sub- par. (C). Subsec. (h)(2)(A). Pub. L. 116–260, § 111(a)(2), inserted dash after ‘‘The Secretary’’ and cl. (i) designation be- fore ‘‘shall apply’’, substituted ‘‘Program; and’’ for ‘‘Program.’’, added cl. (ii), and inserted concluding pro- visions. Subsec. (h)(3)(A), (4)(A). Pub. L. 116–260, § 111(a)(3), substituted ‘‘measures’’ for ‘‘measure’’. Subsec. (h)(12). Pub. L. 116–260, § 111(a)(4), added par. (12). 2018—Subsec. (e)(5)(B)(i). Pub. L. 115–123, § 53111(1), substituted ‘‘, (iii), and (iv)’’ for ‘‘and (iii)’’. Subsec. (e)(5)(B)(ii). Pub. L. 115–123, § 53111(2), sub- stituted ‘‘clauses (iii) and (iv)’’ for ‘‘clause (iii)’’. Subsec. (e)(5)(B)(iv). Pub. L. 115–123, § 53111(3), added cl. (iv). 2015—Subsec. (e)(5)(B)(i). Pub. L. 114–10, § 411(a)(1)(A), substituted ‘‘clauses (ii) and (iii)’’ for ‘‘clause (ii)’’. Subsec. (e)(5)(B)(ii). Pub. L. 114–10, § 411(a)(1)(B), in- serted ‘‘subject to clause (iii),’’ after ‘‘each subsequent fiscal year,’’. Subsec. (e)(5)(B)(iii). Pub. L. 114–10, § 411(a)(1)(C), added cl. (iii). Subsec. (e)(6)(A)(i), (ii). Pub. L. 114–10, § 411(a)(2), sub- stituted ‘‘clauses (ii) and (iii) of paragraph (5)(B)’’ for ‘‘paragraph (5)(B)(ii)’’. 2014—Subsec. (e)(6). Pub. L. 113–185 amended par. (6) generally. Prior to amendment, text read as follows: ‘‘A skilled nursing facility, or a facility described in para- graph (7)(B), shall provide the Secretary, in a manner and within the timeframes prescribed by the Secretary, the resident assessment data necessary to develop and implement the rates under this subsection. For pur- poses of meeting such requirement, a skilled nursing facility, or a facility described in paragraph (7), may submit the resident assessment data required under section 1395i–3(b)(3) of this title, using the standard in- strument designated by the State under section 1395i–3(e)(5) of this title.’’ Subsec. (g). Pub. L. 113–93, § 215(a), added subsec. (g). Subsec. (h). Pub. L. 113–93, § 215(b), added subsec. (h). 2010—Subsec. (e)(5)(B). Pub. L. 111–148, § 3401(b), des- ignated existing provisions as cl. (i), inserted heading, substituted ‘‘Subject to clause (ii), the term’’ for ‘‘The term’’, and added cl. (ii). Subsec. (f). Pub. L. 111–148, § 6104, added subsec. (f). 2008—Subsec. (e)(2)(A)(ii). Pub. L. 110–275 inserted ‘‘telehealth services furnished under section 1395m(m)(4)(C)(ii)(VII) of this title,’’ after ‘‘section 1395x(s)(2) of this title,’’. 2003—Subsec. (e)(2)(A)(i)(II). Pub. L. 108–173, § 410(a)(1), substituted ‘‘clauses (ii), (iii), and (iv)’’ for ‘‘clauses (ii) and (iii)’’. Subsec. (e)(2)(A)(iv). Pub. L. 108–173, § 410(a)(2), added cl. (iv). Subsec. (e)(12). Pub. L. 108–173, § 511(a), amended head- ing and text of par. (12) generally, substituting provi- sions relating to upward adjustment of per diem pay- ment for residents of a skilled nursing facility with AIDS for provisions relating to per diem payment rule for certain qualified acute skilled nursing facilities. 2000—Subsec. (e)(4)(E)(ii)(II). Pub. L. 106–554, § 1(a)(6) [title III, § 311(a)(3)], added subcl. (II). Former subcl. (II) redesignated (III). Subsec. (e)(4)(E)(ii)(III). Pub. L. 106–554, § 1(a)(6) [title III, § 311(a)(1), (2)], redesignated subcl. (II) as (III) and substituted ‘‘each of fiscal years 2002 and 2003’’ for ‘‘each of fiscal years 2001 and 2002’’ and ‘‘minus 0.5 per- centage points’’ for ‘‘minus 1 percentage point’’. Former subcl. (III) redesignated (IV). Subsec. (e)(4)(E)(ii)(IV). Pub. L. 106–554, § 1(a)(6) [title III, § 311(a)(1)], redesignated subcl. (III) as (IV). Subsec. (e)(7). Pub. L. 106–554, § 1(a)(6) [title II, § 203(a)(1)], substituted ‘‘Treatment of’’ for ‘‘Transition for’’ in heading. Subsec. (e)(7)(A). Pub. L. 106–554, § 1(a)(6) [title II, § 203(a)(2), (3)], in heading substituted ‘‘Transition’’ for ‘‘In general’’ and in text substituted ‘‘Subject to sub- paragraph (C), the’’ for ‘‘The’’ and inserted ‘‘(other than critical access hospitals)’’ after ‘‘facilities de- scribed in subparagraph (B)’’. Page 3949 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy Subsec. (e)(7)(B). Pub. L. 106–554, § 1(a)(6) [title II, § 203(a)(4)], struck out ‘‘, for which payment is made for the furnishing of extended care services on a reasonable cost basis under section 1395f(l) of this title (as in effect on and after such date)’’ before period at end. Subsec. (e)(7)(C). Pub. L. 106–554, § 1(a)(6) [title II, § 203(a)(5)], added subpar. (C). 1999—Subsec. (e)(1). Pub. L. 106–113, § 1000(a)(6) [title I, § 105(a)(1)], substituted ‘‘subject to paragraphs (7), (11), and (12)’’ for ‘‘subject to paragraphs (7) and (11)’’ in in- troductory provisions. Pub. L. 106–113, § 1000(a)(6) [title I, § 102(a)(1)], sub- stituted ‘‘paragraphs (7) and (11)’’ for ‘‘paragraph (7)’’ in introductory provisions. Subsec. (e)(2)(A)(i)(II). Pub. L. 106–113, § 1000(a)(6) [title I, § 103(a)(1)], substituted ‘‘items and services de- scribed in clauses (ii) and (iii)’’ for ‘‘services described in clause (ii)’’. Subsec. (e)(2)(A)(iii). Pub. L. 106–113, § 1000(a)(6) [title I, § 103(a)(2)], added cl. (iii). Subsec. (e)(3)(A)(i). Pub. L. 106–113, § 1000(a)(6) [title I, § 104(a)(1)(A)], inserted ‘‘or, in the case of a facility par- ticipating in the Nursing Home Case-Mix and Quality Demonstration (RUGS–III), the RUGS–III rate received by the facility during the cost reporting period begin- ning in 1997’’ after ‘‘to non-settled cost reports’’. Subsec. (e)(3)(A)(ii). Pub. L. 106–113, § 1000(a)(6) [title I, § 104(a)(1)(B)], substituted ‘‘furnished during the ap- plicable cost reporting period described in clause (i)’’ for ‘‘furnished during such period’’. Subsec. (e)(3)(B). Pub. L. 106–113, § 1000(a)(6) [title I, § 104(a)(2)], added subpar. (B) and struck out heading and text of former subpar. (B). Text read as follows: ‘‘(i) IN GENERAL.—Subject to clause (ii), the Secretary shall update the amount determined under subpara- graph (A), for each cost reporting period after the cost reporting period described in subparagraph (A)(i) and up to the first cost reporting period by a factor equal to the skilled nursing facility market basket percent- age increase minus 1 percentage point. ‘‘(ii) CERTAIN DEMONSTRATION PROJECTS.—In the case of a facility participating in the Nursing Home Case- Mix and Quality Demonstration (RUGS–III), there shall be substituted for the amount described in clause (i) the RUGS–III rate received by the facility for 1997.’’ Subsec. (e)(4)(E)(i). Pub. L. 106–113, § 1000(a)(6) [title III, § 321(k)(18)(A)], substituted ‘‘Federal’’ for ‘‘federal’’. Subsec. (e)(4)(E)(ii). Pub. L. 106–113, § 1000(a)(6) [title III, § 321(k)(18)(B)], substituted ‘‘Federal’’ for ‘‘federal’’ in two places in introductory provisions. Subsec. (e)(4)(G)(iii). Pub. L. 106–113, § 1000(a)(6) [title I, § 103(b)(1)], added cl. (iii). Subsec. (e)(8)(A). Pub. L. 106–113, § 1000(a)(6) [title I, § 103(b)(2)], substituted ‘‘adjustments for variations in labor-related costs under paragraph (4)(G)(ii), and ad- justments under paragraph (4)(G)(iii)’’ for ‘‘and adjust- ments for variations in labor-related costs under para- graph (4)(G)(ii)’’. Subsec. (e)(8)(B). Pub. L. 106–113, § 1000(a)(6) [title III, § 321(g)(1)], substituted ‘‘July 1, 1999’’ for ‘‘January 1, 1999,’’. Subsec. (e)(9). Pub. L. 106–113, § 1000(a)(6) [title I, § 103(a)(3)], inserted at end ‘‘In the case of an item or service described in clause (iii) of paragraph (2)(A) that would be payable under part A but for the exclusion of such item or service under such clause, payment shall be made for the item or service, in an amount other- wise determined under part B of this subchapter for such item or service, from the Federal Hospital Insur- ance Trust Fund under section 1395i of this title (rather than from the Federal Supplementary Medical Insur- ance Trust Fund under section 1395t of this title).’’ Subsec. (e)(11). Pub. L. 106–113, § 1000(a)(6) [title I, § 102(a)(2)], added par. (11). Subsec. (e)(12). Pub. L. 106–113, § 1000(a)(6) [title I, § 105(a)(2), (b)], temporarily added par. (12). 1997—Subsec. (a). Pub. L. 105–33, § 4431, substituted ‘‘described in this subsection, except that the limits ef- fective for cost reporting periods beginning on or after October 1, 1997, shall be based on the limits effective for cost reporting periods beginning on or after October 1, 1996.’’ for ‘‘described in this subsection’’ at end. Subsec. (d)(1). Pub. L. 105–33, § 4432(b)(5)(H), sub- stituted ‘‘Subject to subsection (e), any skilled nursing facility’’ for ‘‘Any skilled nursing facility’’. Subsec. (e). Pub. L. 105–33, § 4432(a), added subsec. (e). Subsec. (e)(2)(A)(ii). Pub. L. 105–33, § 4511(a)(2)(E), sub- stituted ‘‘and (ii)’’ for ‘‘through (iii)’’. Subsec. (e)(9), (10). Pub. L. 105–33, § 4432(b)(3), added pars. (9) and (10). 1993—Subsec. (a). Pub. L. 103–66, § 13503(a)(2), inserted ‘‘, on or after October 1, 1995,’’ after ‘‘October 1, 1992’’ in concluding provisions. Subsec. (b). Pub. L. 103–66, § 13503(a)(3)(A), substituted ‘‘Secretary may not recognize’’ for ‘‘Secretary shall recognize’’ and a period for ‘‘(as determined by the Sec- retary) resulting from the reimbursement principles under this subchapter, notwithstanding the limits set forth in paragraph (3) or (4) of subsection (a) of this sec- tion.’’ 1990—Subsec. (a). Pub. L. 101–508, § 4008(e)(2), struck out period at end and inserted ‘‘, and shall, for cost re- porting periods beginning on or after October 1, 1992 and every 2 years thereafter, provide for an update to the per diem cost limits described in this subsection’’. Subsec. (d)(1). Pub. L. 101–508, § 4008(h)(2)(A)(ii), sub- stituted ‘‘(including the costs of services required to at- tain or maintain the highest practicable physical, men- tal, and psychosocial well-being of each resident eligi- ble for benefits under this subchapter) and capital-re- lated costs’’ for ‘‘(and capital-related costs)’’. 1987—Subsec. (d)(7). Pub. L. 100–203 added par. (7). 1986—Subsec. (b). Pub. L. 99–272, § 9219(b)(1)(C), sub- stituted ‘‘notwithstanding’’ for ‘‘nothwithstanding’’. Subsec. (c). Pub. L. 99–272, § 9126(b), inserted provision requiring the Secretary to publish data and criteria to be used for purposes of this subsection on an annual basis. Subsec. (d). Pub. L. 99–272, § 9126(a), added subsec. (d). Subsec. (d)(1). Pub. L. 99–514, § 1895(b)(7)(A), sub- stituted ‘‘cost reporting period’’ for ‘‘fiscal year’’ in five places. Subsec. (d)(4). Pub. L. 99–514, § 1895(b)(7)(B), sub- stituted ‘‘cost reporting periods beginning in a fiscal year’’ for ‘‘each fiscal year’’ and ‘‘cost reporting period no later than 30 days before the beginning of that pe- riod’’ for ‘‘fiscal year within 60 days after the Secretary establishes the final prospective payment amounts for such fiscal year’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2022 AMENDMENT Amendment by Pub. L. 117–328 applicable with re- spect to services furnished on or after Jan. 1, 2024, see section 4121(c) of Pub. L. 117–328, set out as a note under section 1395l of this title. EFFECTIVE DATE OF 2020 AMENDMENT Pub. L. 116–260, div. CC, title I, § 134(b), Dec. 27, 2020, 134 Stat. 2977, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply to items and services furnished on or after October 1, 2021.’’ EFFECTIVE DATE OF 2008 AMENDMENT Amendment by Pub. L. 110–275 applicable to services furnished on or after Jan. 1, 2009, see section 149(c) of Pub. L. 110–275, set out as a note under section 1395m of this title. EFFECTIVE DATE OF 2003 AMENDMENT Pub. L. 108–173, title IV, § 410(b), Dec. 8, 2003, 117 Stat. 2271, provided that: ‘‘The amendments made by sub- section (a) [amending this section] shall apply to serv- ices furnished on or after January 1, 2005.’’ Pub. L. 108–173, title V, § 511(b), Dec. 8, 2003, 117 Stat. 2299, provided that: ‘‘The amendment made by para- graph (1) [probably should be ‘‘subsection (a)’’, amend- Page 3950 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy ing this section] shall apply to services furnished on or after October 1, 2004.’’ EFFECTIVE DATE OF 2000 AMENDMENT Amendment by section 1(a)(6) [title II, § 203(a)] of Pub. L. 106–554 applicable to cost reporting periods be- ginning on or after Dec. 21, 2001, see section 1(a)(6) [title IV, § 203(c)] of Pub. L. 106–554, set out as a note under section 1395tt of this title. EFFECTIVE DATE OF 1999 AMENDMENT Pub. L. 106–113, div. B, § 1000(a)(6) [title I, § 102(b)], Nov. 29, 1999, 113 Stat. 1536, 1501A–325, provided that: ‘‘The amendments made by subsection (a) [amending this section] shall apply to elections made on or after December 15, 1999, except that no election shall be ef- fective under such amendments for a cost reporting pe- riod beginning before January 1, 2000.’’ Pub. L. 106–113, div. B, § 1000(a)(6) [title I, § 103(c)], Nov. 29, 1999, 113 Stat. 1536, 1501A–326, provided that: ‘‘The amendments made by subsection (a) [amending this section] shall apply to payments made for items and services furnished on or after April 1, 2000.’’ Pub. L. 106–113, div. B, § 1000(a)(6) [title I, § 104(b)], Nov. 29, 1999, 113 Stat. 1536, 1501A–327, provided that: ‘‘The amendments made by subsection (a) [amending this section] shall be effective as if included in the en- actment of section 4432(a) of BBA [the Balanced Budget Act of 1997, Pub. L. 105–33]. Pub. L. 106–113, div. B, § 1000(a)(6) [title I, § 105(b)], Nov. 29, 1999, 113 Stat. 1536, 1501A–328, provided that: ‘‘The amendments made by subsection (a) [amending this section] shall apply for the period beginning on the date on which the first cost reporting period of the fa- cility begins after the date of the enactment of this Act [Nov. 29, 1999] and ending on September 30, 2001, and ap- plies to skilled nursing facilities furnishing covered skilled nursing facility services on the date of the en- actment of this Act for which payment is made under title XVIII of the Social Security Act [42 U.S.C. 1395 et seq.].’’ Amendment by section 1000(a)(6) [title III, § 321(g)(1), (k)(18)] of Pub. L. 106–113 effective as if included in the enactment of the Balanced Budget Act of 1997, Pub. L. 105–33, except as otherwise provided, see section 1000(a)(6) [title III, § 321(m)] of Pub. L. 106–113, set out as a note under section 1395d of this title. EFFECTIVE DATE OF 1997 AMENDMENT Amendment by section 4432(a), (b)(3), (5)(H) of Pub. L. 105–33 effective for cost reporting periods beginning on or after July 1, 1998, except that amendment by section 4432(b) applicable to items and services furnished on or after July 1, 1998, see section 4432(d) of Pub. L. 105–33, set out as a note under section 1395i–3 of this title. Amendment by section 4511(a)(2)(E) of Pub. L. 105–33 applicable with respect to services furnished and sup- plies provided on and after Jan. 1, 1998, see section 4511(e) of Pub. L. 105–33, set out as a note under section 1395k of this title. EFFECTIVE DATE OF 1993 AMENDMENT Pub. L. 103–66, title XIII, § 13503(a)(3)(B), Aug. 10, 1993, 107 Stat. 578, provided that: ‘‘The amendments made by subparagraph (A) [amending this section] shall apply to cost reporting periods beginning on or after October 1, 1993.’’ EFFECTIVE DATE OF 1990 AMENDMENT Pub. L. 101–508, title IV, § 4008(e)(3), Nov. 5, 1990, 104 Stat. 1388–45, provided that: ‘‘The amendments made by paragraphs (1) and (2) [amending this section and provi- sions set out as a note below] shall take effect as if in- cluded in the enactment of the Omnibus Budget Rec- onciliation Act of 1989 [Pub. L. 101–239].’’ Amendment by section 4008(h)(2)(A)(ii) of Pub. L. 101–508 effective as if included in the enactment of the Omnibus Budget Reconciliation Act of 1987, Pub. L. 100–203, see section 4008(h)(2)(P) of Pub. L. 101–508, set out as a note under section 1395i–3 of this title. EFFECTIVE DATE OF 1987 AMENDMENT Amendment by Pub. L. 100–203 applicable to services furnished on or after Oct. 1, 1990, without regard to whether regulations implementing such amendment are promulgated by such date, except as otherwise spe- cifically provided in section 1395i–3 of this title, see sec- tion 4204(a) of Pub. L. 100–203, as amended, set out as an Effective Date note under section 1395i–3 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Pub. L. 99–514, title XVIII, § 1895(b)(7)(D), Oct. 22, 1986, 100 Stat. 2933, provided that: ‘‘The amendments made by subparagraphs (A) and (B) [amending this section] apply to cost reporting periods beginning on or after October 1, 1986.’’ Amendment by section 9219(b)(1)(C) of Pub. L. 99–272 effective as if originally included in the Deficit Reduc- tion Act of 1984, Pub. L. 98–369, see section 9219(b)(1)(D) of Pub. L. 99–272, set out as a note under section 1395u of this title. Pub. L. 99–272, title IX, § 9126(d), Apr. 7, 1986, 100 Stat. 170, as amended by Pub. L. 99–514, title XVIII, § 1895(b)(7)(C), Oct. 22, 1986, 100 Stat. 2933, provided that: ‘‘(1) The amendment made by subsection (a) [amend- ing this section] shall apply to cost reporting periods beginning on or after October 1, 1986. ‘‘(2) The amendment made by subsection (b) [amend- ing this section] shall become effective on the date of the enactment of this Act [Apr. 7, 1986].’’ EFFECTIVE DATE Pub. L. 98–369, div. B, title III, § 2319(c), July 18, 1984, 98 Stat. 1083, provided that: ‘‘The amendments made by subsections (a) [amending section 1395x of this title] and (b) [enacting this section] shall apply to cost re- porting periods beginning on or after July 1, 1984.’’ STUDY ON PORTABLE DIAGNOSTIC ULTRASOUND SERV- ICES FOR BENEFICIARIES IN SKILLED NURSING FACILI- TIES Pub. L. 108–173, title V, § 513, Dec. 8, 2003, 117 Stat. 2300, directed the Comptroller General of the United States to conduct a study of portable diagnostic ultrasound services furnished to medicare beneficiaries in skilled nursing facilities and to submit to Congress a report on the study not later than 2 years after Dec. 8, 2003. SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR 2001 Pub. L. 106–554, § 1(a)(6) [title III, § 311(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–497, provided that: ‘‘Notwith- standing the amendments made by subsection (a) [amending this section], for purposes of making pay- ments for covered skilled nursing facility services under section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)) for fiscal year 2001, the Federal per diem rate referred to in paragraph (4)(E)(ii) of such sec- tion— ‘‘(1) for the period beginning on October 1, 2000, and ending on March 31, 2001, shall be the rate determined in accordance with the law as in effect on the day be- fore the date of the enactment of this Act [Dec. 21, 2000]; and ‘‘(2) for the period beginning on April 1, 2001, and ending on September 30, 2001, shall be the rate that would have been determined under such section if ‘plus 1 percentage point’ had been substituted for ‘minus 1 percentage point’ under subclause (II) of such paragraph (as in effect on the day before the date of the enactment of this Act).’’ Pub. L. 106–554, § 1(a)(6) [title V, § 547(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–553, provided that: ‘‘The payment increase provided under section 311(b)(2) [set out as a note above] (relating to covered skilled nursing facility services) shall not apply to services furnished after fis- cal year 2001 and shall not be taken into account in cal- culating the payment amounts applicable for services furnished after such fiscal year.’’ Page 3951 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395yy GAO REPORT ON ADEQUACY OF SNF PAYMENT RATES Pub. L. 106–554, § 1(a)(6) [title III, § 311(d)], Dec. 21, 2000, 114 Stat. 2763, 2763A–498, provided that: ‘‘Not later than July 1, 2002, the Comptroller General of the United States shall submit to Congress a report on the ade- quacy of medicare payment rates to skilled nursing fa- cilities and the extent to which medicare contributes to the financial viability of such facilities. Such report shall take into account the role of private payors, med- icaid, and case mix on the financial performance of these facilities, and shall include an analysis (by spe- cific RUG classification) of the number and character- istics of such facilities.’’ HCFA STUDY OF CLASSIFICATION SYSTEMS FOR SNF RESIDENTS Pub. L. 106–554, § 1(a)(6) [title III, § 311(e)], Dec. 21, 2000, 114 Stat. 2763, 2763A–498, provided that: ‘‘(1) STUDY.—The Secretary of Health and Human Services shall conduct a study of the different systems for categorizing patients in medicare skilled nursing facilities in a manner that accounts for the relative re- source utilization of different patient types. ‘‘(2) REPORT.—Not later than January 1, 2005, the Sec- retary shall submit to Congress a report on the study conducted under subsection (a). Such report shall in- clude such recommendations regarding changes in law as may be appropriate.’’ GAO AUDIT OF NURSING STAFF RATIOS Pub. L. 106–554, § 1(a)(6) [title III, § 312(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–498, provided that: ‘‘(1) AUDIT.—The Comptroller General of the United States shall conduct an audit of nursing staffing ratios in a representative sample of medicare skilled nursing facilities. Such sample shall cover selected States and shall include broad representation with respect to size, ownership, location, and medicare volume. Such audit shall include an examination of payroll records and medicaid cost reports of individual facilities. ‘‘(2) REPORT.—Not later than August 1, 2002, the Comptroller General shall submit to Congress a report on the audits conducted under paragraph (1). Such re- port shall include an assessment of the impact of the increased payments under this subtitle [subtitle B, §§ 311–315, of title III of § 1(a)(6) of Pub. L. 106–554, amending this section and sections 1395u, 1395y, and 1395cc of this title and enacting provisions set out as notes under this section and section 1395u of this title] on increased nursing staff ratios and shall make rec- ommendations as to whether increased payments under subsection (a) [114 Stat. 2763A–498] should be contin- ued.’’ OVERSIGHT Pub. L. 106–554, § 1(a)(6) [title III, § 313(d)], Dec. 21, 2000, 114 Stat. 2763, 2763A–499, provided that: ‘‘The Sec- retary of Health and Human Services, through the Of- fice of the Inspector General in the Department of Health and Human Services or otherwise, shall monitor payments made under part B of the title XVIII of the Social Security Act [42 U.S.C. 1395j et seq.] for items and services furnished to residents of skilled nursing facilities during a time in which the residents are not being provided medicare covered post-hospital extended care services to ensure that there is not duplicate bill- ing for services or excessive services provided.’’ ESTABLISHMENT OF PROCESS FOR GEOGRAPHIC RECLASSIFICATION Pub. L. 106–554, § 1(a)(6) [title III, § 315], Dec. 21, 2000, 114 Stat. 2763, 2763A–500, provided that: ‘‘(a) IN GENERAL.—The Secretary of Health and Human Services may establish a procedure for the geo- graphic reclassification of a skilled nursing facility for purposes of payment for covered skilled nursing facil- ity services under the prospective payment system es- tablished under section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)). Such procedure may be based upon the method for geographic reclassifications for in- patient hospitals established under section 1886(d)(10) of the Social Security Act (42 U.S.C. 1395ww(d)(10)). ‘‘(b) REQUIREMENT FOR SKILLED NURSING FACILITY WAGE DATA.—In no case may the Secretary implement the procedure under subsection (a) before such time as the Secretary has collected data necessary to establish an area wage index for skilled nursing facilities based on wage data from such facilities.’’ REPORT TO CONGRESS Pub. L. 106–113, div. B, § 1000(a)(6) [title I, § 105(c)], Nov. 29, 1999, 113 Stat. 1536, 1501A–328, provided that: ‘‘Not later than March 1, 2001, the Secretary of Health and Human Services shall assess the resource use of pa- tients of skilled nursing facilities furnishing services under the medicare program who are immuno-com- promised secondary to an infectious disease, with spe- cific diagnoses as specified by the Secretary (under paragraph (12)(C), as added by subsection (a), of section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e))) to determine whether any permanent adjustments are needed to the RUGs to take into account the resource uses and costs of these patients.’’ MEDICAL REVIEW PROCESS Pub. L. 105–33, title IV, § 4432(c), Aug. 5, 1997, 111 Stat. 422, provided that: ‘‘In order to ensure that medicare beneficiaries are furnished appropriate services in skilled nursing facilities, the Secretary of Health and Human Services shall establish and implement a thor- ough medical review process to examine the effects of the amendments made by this section [amending this section and sections 1395i–3, 1395k, 1395l, 1395u, 1395x, 1395y, 1395cc, and 1395tt of this title] on the quality of covered skilled nursing facility services furnished to medicare beneficiaries. In developing such a medical review process, the Secretary shall place a particular emphasis on the quality of non-routine covered services and physicians’ services for which payment is made under title XVIII of the Social Security Act [42 U.S.C. 1395 et seq.].’’ CONSTRUCTION OF WAGE INDEX FOR SKILLED NURSING FACILITIES Pub. L. 103–432, title I, § 106(a), Oct. 31, 1994, 108 Stat. 4405, provided that: ‘‘Not later than 1 year after the date of the enactment of this Act [Oct. 31, 1994], the Secretary of Health and Human Services shall begin to collect data on employee compensation and paid hours of employment in skilled nursing facilities for the pur- pose of constructing a skilled nursing facility wage index adjustment to the routine service cost limits re- quired under section 1888(a)(4) of the Social Security Act [42 U.S.C. 1395yy(a)(4)].’’ NO CHANGE IN LIMITS ON PER DIEM SERVICE COSTS FOR EXTENDED CARE SERVICES FOR FISCAL YEARS 1994 AND 1995 Pub. L. 103–66, title XIII, § 13503(a)(1), Aug. 10, 1993, 107 Stat. 578, provided that: ‘‘The Secretary of Health and Human Services may not provide for any change in the limits on per diem routine service costs for extended care services under section 1888 of the Social Security Act [42 U.S.C. 1395yy] for cost reporting periods begin- ning during fiscal years 1994 and 1995, except as may be necessary to take into account the amendments made by paragraph (3)(A) [amending this section]. The effect of the preceding sentence shall not be considered by the Secretary in making adjustments pursuant to section 1888(c) of such Act to the payment limits for such serv- ices during such fiscal years.’’ NO CHANGE IN PROSPECTIVE PAYMENTS FOR SERVICES FURNISHED DURING FISCAL YEARS 1994 AND 1995 Pub. L. 103–66, title XIII, § 13503(b), Aug. 10, 1993, 107 Stat. 578, provided that: ‘‘The Secretary of Health and Human Services may not change the amount of any Page 3952 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1395zz prospective payment paid to a skilled nursing facility under section 1888(d) of the Social Security Act [42 U.S.C. 1395yy(d)] for services furnished during cost re- porting periods beginning during fiscal years 1994 and 1995, except as may be necessary to take into account the amendment made by subsection (c)(1)(A) [amending section 1395x of this title].’’ PROSPECTIVE PAYMENT SYSTEM FOR SKILLED NURSING FACILITY SERVICES Pub. L. 101–508, title IV, § 4008(k), Nov. 5, 1990, 104 Stat. 1388–52, provided that: ‘‘(1) DEVELOPMENT OF PROPOSAL.—The Secretary of Health and Human Services shall develop a proposal to modify the current system under which skilled nursing facilities receive payment for extended care services under part A [42 U.S.C. 1395c et seq.] of the medicare program or a proposal to replace such system with a system under which such payments would be made on the basis of prospectively determined rates. In devel- oping any proposal under this paragraph to replace the current system with a prospective payment system, the Secretary shall— ‘‘(A) take into consideration the need to provide for appropriate limits on increases in expenditures under the medicare program without jeopardizing access to extended care services for individuals unable to care for themselves; ‘‘(B) provide for adjustments to prospectively deter- mined rates to account for changes in a facility’s case mix, volume of cases, and the development of new technologies and standards of medical practice; ‘‘(C) take into consideration the need to increase the payment otherwise made under such system in the case of services provided to patients whose length of stay or costs of treatment greatly exceed the length of stay or cost of treatment provided for under the applicable prospectively determined payment rate; ‘‘(D) take into consideration the need to adjust pay- ments under the system to take into account factors such as a disproportionate share of low-income pa- tients, differences in wages and wage-related costs among facilities located in various geographic areas, and other factors the Secretary considers appro- priate; and ‘‘(E) take into consideration the appropriateness of classifying patients and payments upon functional disability, cognitive impairment, and other patient characteristics. ‘‘(2) REPORTS.—(A) By not later than April 1, 1991, the Secretary (acting through the Administrator of the Health Care Financing Administration) shall submit any research studies to be used in developing the pro- posal under paragraph (1) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives. ‘‘(B) By not later than September 1, 1991, the Sec- retary shall submit the proposal developed under para- graph (1) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives. ‘‘(C) By not later than March 1, 1992, the Prospective Payment Assessment Commission shall submit an anal- ysis of and comments on the proposal developed under paragraph (1) to the Committee on Finance of the Sen- ate and the Committee on Ways and Means of the House of Representatives.’’ USE OF MORE RECENT DATA REGARDING ROUTINE SERVICE COSTS OF SKILLED NURSING FACILITIES Pub. L. 101–239, title VI, § 6024, Dec. 19, 1989, 103 Stat. 2167, as amended by Pub. L. 101–508, title IV, § 4008(e)(1), Nov. 5, 1990, 104 Stat. 1388–45, provided that: ‘‘The Sec- retary of Health and Human Services shall determine mean per diem routine service costs for freestanding and hospital based skilled nursing facilities under sec- tion 1888(a) of the Social Security Act [42 U.S.C. 1395yy(a)] for cost reporting periods beginning on or after October 1, 1989, in accordance with regulations published by the Secretary that require the use of cost reports submitted by skilled nursing facilities for cost reporting periods beginning not earlier than October 1, 1985. The Secretary shall update such costs under such section for cost reporting periods beginning on or after October 1, 1989, by using cost reports submitted by skilled nursing facilities for cost reporting periods end- ing not earlier than January 31, 1988, and not later than December 31, 1988.’’ § 1395zz. Provider education and technical assist- ance (a) Coordination of education funding The Secretary shall coordinate the edu- cational activities provided through medicare contractors (as defined in subsection (g), includ- ing under section 1395ddd of this title) in order to maximize the effectiveness of Federal edu- cation efforts for providers of services and sup- pliers. (b) Enhanced education and training (1) Additional resources There are authorized to be appropriated to the Secretary (in appropriate part from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund) such sums as may be necessary for fiscal years beginning with fiscal year 2005. (2) Use The funds made available under paragraph (1) shall be used to increase the conduct by medicare contractors of education and train- ing of providers of services and suppliers re- garding billing, coding, and other appropriate items and may also be used to improve the ac- curacy, consistency, and timeliness of con- tractor responses. (c) Tailoring education and training activities for small providers or suppliers (1) In general Insofar as a medicare contractor conducts education and training activities, it shall tai- lor such activities to meet the special needs of small providers of services or suppliers (as de- fined in paragraph (2)). Such education and training activities for small providers of serv- ices and suppliers may include the provision of technical assistance (such as review of billing systems and internal controls to determine program compliance and to suggest more effi- cient and effective means of achieving such compliance). (2) Small provider of services or supplier In this subsection, the term ‘‘small provider of services or supplier’’ means— (A) a provider of services with fewer than 25 full-time-equivalent employees; or (B) a supplier with fewer than 10 full-time- equivalent employees. (d) Internet websites; FAQs The Secretary, and each medicare contractor insofar as it provides services (including claims processing) for providers of services or suppliers, shall maintain an Internet website which— (1) provides answers in an easily accessible format to frequently asked questions, and