S. 3458Senate115th Congress (2017-2019)In Committee

A bill to amend title XVIII of the Social Security Act to improve home health payment reforms under the Medicare program.

Introduced September 18, 2018

AI-Generated Summary

Updated April 15, 2026 at 11:42 PM UTC

This bill changes how Medicare calculates home health payment updates. It shifts the basis from projected assumptions to actual, recent data on costs and patient care, and it requires the Health Secretary to publicly explain the data used. It also adds a rule that limits how quickly large payment changes can be applied, to protect patients and providers from sudden shifts.

Key Provisions

  • Alters the budget‑neutrality language so the Secretary cannot make certain adjustments that were previously required.
  • Replaces reliance on assumed cost changes with reliance on "observed evidence"—statistically valid data from the latest cost reports and claims after Jan. 1, 2020.
  • Requires the Secretary to publish the payment‑update determination and a description of the observed evidence in a notice‑and‑comment rulemaking.
  • Defines "observed evidence" to include data on patient mix, care patterns, service costs, and claim coding that reflect behavioral changes from earlier reforms.
  • Adds a safeguard for temporary payment changes: if a change is 2% or less in a year, the full change is applied the next year; if it exceeds 2%, the change must be phased in or out in increments no larger than 2% per year.
  • Sets the effective date to coincide with the related amendment in the Bipartisan Budget Act of 2018.

Legislative Activity

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1 earlier action
SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

September 18, 2018

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SenateIntro Referral

Introduced in Senate

September 18, 2018

SenateIntro Referral

Read twice and referred to the Committee on Finance.

September 18, 2018

Bill Text

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Introduced in SenateIssued September 18, 2018

II

115th CONGRESS

2d Session

S. 3458

IN THE SENATE OF THE UNITED STATES

September 18, 2018

Mr. Kennedy (for himself and Mr. Cassidy) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend title XVIII of the Social Security Act to improve home health payment reforms under the Medicare program.

1.

Improvements to home health payment reforms under Medicare

(a)

Application of budget neutrality

Section 1895(b)(3) of the Social Security Act (42 U.S.C. 1395fff(b)(3)), as amended by section 51001(a)(2) of the Bipartisan Budget Act of 2018 (Public Law 115–123), is amended—

(1)

in subparagraph (A)(iv), in the fourth sentence—

(A)

by striking shall make and inserting shall not make; and

(B)

by striking and shall provide a description and all that follows through the period and inserting a period; and

(2)

in subparagraph (D)—

(A)

in the subparagraph heading, by striking assumptions and inserting observed evidence;

(B)

in clause (i)—

(i)

by striking differences between assumed and all that follows through and actual;

(ii)

by inserting attributable to the implementation of paragraphs (2)(B) and (4)(B) after behavior changes; and

(iii)

by adding at the end the following: The Secretary shall publish the determination under this clause with respect to an applicable year, including a description of the observed evidence used to make such determination, in the notice and comment rulemaking to update the prospective payment system under this subsection for such year. For purposes of the preceding sentence, the term observed evidence means statistically valid data from the most recent cost report and claims regarding changes in the nature of home health agency patients, patterns of care, service costs, and claims coding after January 1, 2020, reflecting behavioral changes relating to implementation of the provisions of and amendments made by section 51001 of the Bipartisan Budget Act of 2018 (Public Law 115–123).;

(C)

in clause (ii), by inserting attributable to the implementation of paragraphs (2)(B) and (4)(B) after expenditures; and

(D)

in clause (iii)—

(i)

by adding attributable to the implementation of paragraphs (2)(B) and (4)(B) after expenditures; and

(ii)

by adding at the end the following: If such a temporary increase or decrease does not exceed 2.00 percent in any given year, the Secretary shall apply the entire increase or decrease in the next calendar year payment update; however, if such a temporary increase or decrease exceeds 2.00, to provide for minimal disruption to patients and providers, the Secretary shall phase in the temporary increase or decrease in equal amounts not to exceed 2.00 percent in any given year through the respective calendar year payment updates..

(b)

Effective date

The amendments made by this section shall take effect as if included in the enactment of such section 51001(a)(2).