H.R. 3299 (101^st): Omnibus Budget Reconciliation Act of 1989

Subpart A: General Provisions - Continues payment reductions under part A (Hospital Insurance) of title XVIII (Medicare) of the Social Security Act made pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) through 1989. Increases such payments for the remainder of FY 1990. Amends the Medicare Program to reduce payments for the capital-related costs of inpatient hospital services for the final three quarter of FY 1990 by 15 percent. Increases Medicare payments for the operating costs of inpatient hospital services in FY 1990 by the market basket percentage increase in such costs: (1) plus 4.22 percent for rural hospitals; (2) plus .12 percent for hospitals in large urban areas; and (3) minus .53 percent for hospitals located in other urban areas. Requires the reduction of diagnosis-related group weighting factors by 1.22 percent for FY 1990 and their annual recalibration in a budget-neutral manner. Increases payments to hospitals serving a disproportionate share of low-income patients. Continues the classification of certain hospitals as rural referral centers through FY 1992. Alters the formula for determining the amount of payments to be made to sole community hospitals. Provides a payment adjustment to sole community hospitals and Medicare dependent, small rural hospitals which experience a decrease of more than five percent of their inpatient cases due to circumstances beyond their control so as to cover fixed costs. Redefines a sole community hospital as a hospital located more than 35 road miles from another hospital or serving as the sole source of inpatient hospital services reasonably available to part A Medicare beneficiaries in a geographical area. Maintains the sole community hospital designation of current sole community hospitals which do not satisfy the new definition of such hospitals. Establishes a demonstration program under which the Secretary of Health and Human Services makes grants to no more than seven States for use in: (1) planning and implementing a rural health care plan and rural health networks; (2) designating hospitals or facilities as essential access community hospitals or rural primary care hospitals; and (3) developing and supporting communication and emergency transportation systems. Authorizes hospitals and facilities in grant States to apply, subject to the State's approval, to the Secretary for a grant to finance the costs it incurs in converting itself to a primary care hospital or in becoming part of a rural health network in the State in which it is located. Requires that hospitals designated as essential access community hospitals be isolated rural hospitals that have at least 75 inpatient beds and provide emergency and medical backup services to rural primary care hospitals in their rural health network and throughout their service area. Requires that rural primary care hospitals provide 24-hour emergency care and no more than 72 hours of inpatient care for no more than six inpatients. Requires States, in designating facilities as rural primary care hospitals, to give preference to facilities participating in the rural health network. Defines a "rural health network" as an organization consisting of at least one essential access community hospital, rural referral center, or urban regional referral center and at least one rural primary care hospital which cooperate in the deliverance of health care. Authorizes appropriations for FY 1990 through 1992 for such demonstration program. Amends the Omnibus Budget Reconciliation Act of 1987 to extend the Rural Health Care Transition Grant Program through FY 1992, and permit hospitals to use grants received under such Program to provide instruction and consultation via telecommunications to physicians in rural health manpower shortage areas, to develop a plan for converting to rural primary care hospitals or to develop a rural health network, if located in a State participating in the preceding demonstration program. Amends the Medicare program to treat essential access community hospitals as sole community hospitals. Covers inpatient rural primary care hospital services. Establishes the Medicare Geographical Classification Review Board which shall consider hospital requests for changes in their geographical classification pursuant to guidelines to be issued by the Secretary. Directs the Secretary to fashion a legislative proposal eliminating the system of determining separate average standardized payment amounts for hospitals located in large urban, other urban, or rural areas. Requires the Prospective Payment Assessment Commission to conduct a study regarding Medicare reimbursement of small rural hospitals and rural sole community hospitals. Exempts hospitals involved extensively in cancer treatment or cancer research from the prospective payment system (PPS). Sets forth a formula for establishing the target amount to be used in determining the amount of payments to be made to such hospitals. Increases medicare payment rates for hospice care. Requires a hospice care beneficiary to be certified as terminally ill no later than two days or eight days, if verbal certification is obtained within two days, after the initiation of such care. Subpart B: Technical and Miscellaneous Provisions - Requires that Medicare payments for blood clotting factors administered to inpatient hemophiliacs be made on the basis of a predetermined price per unit consumed. Allows individuals under age 65 whose entitlement to OASDI disability benefits ended due to their employment earnings to enroll in part A (Hospital Insurance) of the Medicare program. Requires the Secretary, at the request of a State, to permit qualified Medicare beneficiaries in the State (enrolled under part B of the Medicare program) to enroll in the Hospital Insurance program. Requires studies into the appropriateness of an adjustment to the methodology of determining payment amounts for hospitals serving a disproportionate share of Medicare beneficiaries and on methods of compensating hospices for high-cost care. Authorizes the Secretary to assign a new base period to a hospital in determining Medicare hospital payment amounts when such hospital's costs are skewed by events beyond the hospital's control or by extraordinary circumstances. Imposes obligations on hospitals regarding the treatment of emergency medical conditions and indigent care. Provides for the release of hospital accreditation surveys to the Secretary and the Secretary's release of survey information which relates to an enforcement action. Permits the Secretary to withdraw a hospital's Medicare-approved status on the basis of information other than accreditation surveys. Establishes intermediate sanctions for psychiatric hospitals. Permits certain merged or consolidated hospitals to receive Medicare periodic interim payments. Alters the basis for judging the effectiveness of a waiver of Medicare hospital reimbursement mechanisms in favor of a State hospital reimbursement control system. Prohibits the Secretary from requiring a hospital to change its bad debt recognition policy approved as of August 1, 1987. Requires the Secretary to determine a nursing facility's routine service costs using data collected no earlier than October 1985. Permits dentists to serve as hospital medical directors. Directs the Comptroller General to conduct a study of the differences in costs and case-mix between hospital-based and freestanding skilled nursing facilities. Prohibits the Secretary from collecting overpayments from hospitals in Massachusetts prior to May 1990 occurring during a specified statewide hospital reimbursement demonstration project. Permits nurse practitioners and clinical nurse specialists to certify an individual's need for Medicare extended care and hospice services.

Subpart A: General Provisions - Continues payment reductions under part B (Supplementary Medical Insurance) of the Medicare program made pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985 through the first half of FY 1990. Provides for the gradual transition, from 1992 through 1995, to the determination of Medicare payments for physician services pursuant to a fee schedule which takes into account the relative value of the work, practice expenses, and malpractice risks associated with each physician services. Allows for geographic variations in resource values and fee schedule adjustments which take into account inflation, changes in demand for and the technology of a physician service, and inadequate access to such service. Sets Medicare payments for nonparticipating physicians' services at 95 percent of the fee schedule amount. Prohibits payments for the same physician service from varying on the basis of whether or not the physician is a specialist. Sets forth sumptuary provisions. Limits nonparticipating physicians' actual charges for unassigned claims. Requires that payments for physician services to Medicaid-eligible Medicare beneficiaries be made on an assignment-related basis. Increases the incentive payment for physicians' services furnished in manpower shortage areas from five to ten percent of the payment for such services. Sets forth miscellaneous study and reporting requirements. Amends the Public Health Service Act to create a new title to establish, within the Public Health Service, the Agency for Health Care Research and Policy (Agency) to enhance the quality, appropriateness, and effectiveness of health care services, and access to such services, through the establishment of a broad base of scientific research, and improvements in clinical practice and in the organization, financing, and delivery of health care services. Requires that the agency be headed by an Administrator for Health Care Research and Policy, to be appointed by the President. Directs the Secretary of Health and Human Services, through the Administrator, to carry out the new title. Sets forth the general authorities and duties of the Administrator, including conducting and supporting research, demonstration projects, evaluations, training, and the dissemination of information. Prohibits the Administrator from restricting the publication of data or results from projects conducted or supported under the new title, but prohibits disclosure of identifying data without consent. Directs the Administrator and the Director of the National Library of Medicine (the Library) to enter into an agreement for indexing, abstracting, translating, publishing, and other services leading to a more effective and timely dissemination of information on research, demonstration projects, and evaluations. Directs the Administrator to promote the development and application of appropriate health care technology assessments. Establishes at the Library an information center on health care technologies and health care technology assessment. Directs the Administrator and the Director of the Library to enter into an agreement providing for the information center the Administrator to make recommendations to the Secretary with respect to whether specific health care technologies should be reimbursable under federally financed health programs. Establishes within the Agency the Office of the Forum for Quality and Effectiveness in Health Care, to be headed by a director to be appointed by the Administrator. Directs the Administrator, through the Director, to establish the Forum for Quality and Effectiveness in Health Care to develop, review, and update: (1) clinically relevant diagnosis and treatment guidelines for physicians and health care practitioners; and (2) standards of quality, performance measures, and medical review criteria. Requires the Director to contract with public or private nonprofit entities and convene panels of qualified experts, practicing physicians, and health care consumers for the development of such guidelines and standards. Amends part A (General Provisions) of title XI of the Social Security Act to direct the Secretary, through the Administrator for Health Care Research and Policy, to: (1) conduct and support research with respect to the outcomes of health care services and procedures to identify how diseases and disorders can most effectively and appropriately be prevented, diagnosed, treated, and managed clinically; and (2) assure that Medicare needs and priorities are reflected in treatment-specific or condition-specific practice guidelines. Directs the Secretary to establish priorities with respect to the diseases and disorders for which outcome evaluations are to be conducted. Imposes additional duties on the Secretary concerning the administration of outcomes research and information dissemination. Authorizes appropriations for outcomes research for FY 1990 through 1994. Amends the Public Health Service Act to establish the National Advisory Council for Health Care Policy, Research, and Evaluation to advise the Secretary and the Administrator with respect to activities of the Agency for Health Care Research and Policy. Requires that technical and scientific peer review be conducted on each application for a grant, cooperative agreement, or contract under the new title of the Public Health Service Act added by this Act. Prohibits application approval by the administrator unless the application has been recommended for approval by a peer review group. Directs the Administrator to: (1) establish guidelines for uniform methods of developing and collecting data under the title added by this Act; (2) assure that statistics developed under that title are of high quality, timely, comprehensive, specific, standardized, and adequately analyzed and indexed; and (3) disseminate the statistics and widely as possible. Authorizes appropriations for FY 1990 through 1992 to carry out the title added by this Act. Requires, in addition, that a portion of amounts available under specified existing provisions of the Public Health Service Act relating to evaluations of programs be made available for evaluations under the title added by this Act. Removes from the Public Health Service Act provisions establishing the National Center for Health Services Research and provisions providing for grants for a council on health care technology. Directs the Secretary to request the Institute of Medicine of the National Academy of Sciences to enter into a contract to: (1) recommend priorities for the assessment of specific health care technologies; and (2) assist in the establishment of the information center. Authorizes appropriations for FY 1990 for carrying out such contract. Provides for the transfer of information and materials developed by the council on health care technology to the Secretary in establishing the information center on health care technologies and health care technology assessment. Amends part B (Supplementary Medical Insurance) of the Medicare program to reduce Medicare payments for a specified list of physicians' services furnished during the last three quarters of 1990. Reduces payments for radiology services (other than portable X-ray services). Requires the Secretary to establish a relative value guide for use in all carrier localities in making payment for physician anesthesia services. Prohibits the rounding of fractional time units in calculating Medicare payments for anesthesia services. Delays the Medicare economic index adjustment to payments for physicians' services from January 1, 1990, to April 1, 1990. Extends Medicare physician and supplier participation agreements for which a termination is not requested before December 31, 1989, through March 31, 1990. Limits increases in the Medicare economic index for the final three quarters of 1990 to: (1) zero percent for radiology services, anesthesia services and other physicians' services on a specified list; and (2) two percent for other physicians' services, excepting primary care services. Requires the Secretary to set the customary charge for new physicians' services for the last three quarters of 1990 at 85 percent of the prevailing charge for such services. Limits payment for physician services furnished by more than one specialty. Prohibits Medicare carriers from recovering certain part B overpayments made between July 1, 1985, and March 31, 1986. Reduces payments for the capital-related costs of outpatient hospitals services for FY 1990 by 15 percent, except when the hospital is a sole community hospital. Eliminates the requirement that a fee schedule for clinical diagnostic laboratory tests be established on a nationwide basis. Lowers the payment ceiling for a clinical laboratory test to 93 percent of the median of all fee schedules established for that test for that setting. Allows medicare payments for such tests to be made to the referring laboratory only if: (1) it is located in, or is part of, a rural hospital; (2) it submits payment requests for tests of which no more than 30 percent in any year are performed by another laboratory; or (3) it is involved in a common ownership relationship with the laboratory performing the test. Delays current cost-of-living updates of payments for durable medical equipment until 1991. Establishes a 15-month cap on rental payments for an enteral or parenteral pump. Requires the payment of reasonable pump maintenance and servicing fees after the expiration of such period. Reduces payments for seat-lift chairs and transcutaneous electrical nerve stimulators furnished on or after April 1, 1990, by 15 percent. Treats power driven wheelchairs as routinely purchased durable medical equipment for Medicare payment purposes. Requires the Secretary to specify criteria to be used by carriers in deciding on a case-by-case basis whether to classify power-driven wheelchairs as customized items for payment purposes. Treats ostomy supplies as home health services which home health agencies must provide to beneficiaries who need them. Eliminates the restriction of covered psychologist services to services furnished at community mental health centers. Covers clinical social worker services pertaining to the diagnosis and treatment of mental illnesses. Directs the Secretary to develop criteria requiring covered psychologists to consult with their patients' physicians within a reasonable time after initiating treatment so as to consider physical conditions that may be contributing to their patients' symptoms. Eliminates the dollar limitation on part B coverage of mental health services. Covers the services of nurse practitioners working in collaboration with a physician in a nursing facility. Makes Medicare payments for such services to the nurse practitioner's employer. Requires Medicare carriers to permit routine part B payments for up to 1.5 monthly visits per resident of a nursing facility by a member of a team which includes a physician and physician assistant and/or nurse practitioner. Directs the Secretary to establish at least one demonstration project applying such limitation on visits on an average basis over the aggregate total of nursing facility residents served by team members. Covers a screening pap smear for women who have not undergone such a test during the preceding three years or for a shorter period set by the Secretary for women at higher risk of developing cervical cancer. Covers outpatient rural primary care hospital services. Directs the Secretary to develop and implement a prospective payment system for determining payments for such services by January 1, 1993. Subpart B: Technical and Miscellaneous Provisions - Permits the coverage of additional inserts for therapeutic shoes for individuals with severe diabetic foot disease and the substitution of shoe modifications for inserts. Extends indefinitely the coverage of certified registered nurse anesthetist services as inpatient hospital services when furnished at rural hospitals with 500 or fewer surgical procedures requiring anesthesia services per year. Increases the payment limit for physical and occupational therapy services. Requires studies into payments for portable X-ray services, ambulance services, hospital outpatient services, assistants at surgery, blood clotting factor for hemophilia patients, and standards for the use of and payment for durable medical equipment. Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to terminate four specified municipal health service demonstration projects by January 1, 1994. Amends the Medicare program to narrow the range of acceptable purchase prices for durable medical equipment. Covers diagnostic tests performed in physician office labs which meet specified certification requirements.

Subpart A: General Provisions - Continues health maintenance organization (HMO) payment reductions made pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985 through 1989. Increases such payments for the remainder of FY 1990. Amends the Internal Revenue Code to provide for the disclosure of taxpayer identification information regarding a Medicare beneficiary for the determination of the extent to which such beneficiary is covered under a group health plan. Amends the Medicare program to require employers to disclose information concerning the status and nature of a beneficiary's coverage under a group health plan of the employer. Prohibits group health plans of employers of 20 or more employees from discriminating in the provision of benefits against individuals who are entitled to Medicare benefits by reason of their eligibility for old-age insurance benefits under the OASDI program. Prohibits large group health plans from discriminating against individuals who are entitled to Medicare benefits by reason of their eligibility for disability or disability-based insurance benefits under the OASDI program. Prohibits group health plans, for 12 months, from discriminating in the provision of benefits against individuals who are entitled to Medicare benefits by reason of their affliction with end stage renal disease. Makes such group health plans primary payers against whom the Federal government may bring action to recover Medicare payments. Establishes a private cause of action against primary payers who fail to pay. Amends the Internal Revenue Code to impose a penalty excise tax against nonconforming group health plans. Repeals the denial of a tax deduction to nonconforming group health plans. Amends the Omnibus Budget Reconciliation Act of 1986 to maintain the current base rate for routine dialysis treatment through FY 1990. Requires that subsequent changes in such rate be subject to Medicare notice and comment requirements. Amends the Medicare program to prohibit payments for dialysis services which are determined under any method other than a method based on a single composite weighted formula from exceeding payments that would have been made under such formula for hospital-based facilities. Requires suppliers of home dialysis supplies and equipment to a patient whose self-care home dialysis is not under the direct supervision of an approved provider to work under a written agreement under which it: (1) is the sole supplier to the patient; (2) agrees to receive payment only on an assignment-related basis; and (3) certifies that it has entered into a written agreement with an approved renal dialysis provider or facility under which such provider or facility agrees to furnish such patient with all self-care home dialysis support services and all other necessary dialysis services and supplies. Prohibits a physician from referring a patient to an entity for the provision of Medicare clinical laboratory services or an entity from presenting a claim pursuant to such referral if the physician has a financial interest in, or receives compensation from, such entity. Makes exceptions to such prohibition. Sets forth entity investment and ownership disclosure requirements. Imposes sanctions against persons who present claims for services prohibited by this Act and against physicians or entities that enter into arrangements for the purpose of prohibited referrals or violate disclosure requirements. Directs the Comptroller General to conduct a study and report to the Congress by February 1, 1991, on the ownership of hospitals by referring physicians and joint ventures between hospitals and referring physicians. Requires the Secretary to submit quarterly reports to the Congress and the Comptroller General comparing Medicare beneficiaries' utilization of entities in which the referring physician has a financial interest and their utilization of entities in which the referring physician has no such interest. Allows a hospital to be reimbursed on a reasonable cost basis for the costs of a hospital-based nursing school if it incurs at least 50 percent of the costs of training students at such school, the school and hospital share some board members, and all instruction is provided on the hospital grounds. Prohibits the Secretary from recovering, prior to October 1, 1990, alleged Medicare overpayments attributable to nursing and allied health education. Directs the Secretary to issue regulations before July 1, 1990, regarding Medicare payment of costs for such education. Requires the Secretary to give health maintenance organizations (HMOs) annual notice of proposed changes in the methodology used or assumptions made in calculating payment rates for each class of HMO enrollee. Modifies the requirement that HMOs in an area have a coordinated annual open enrollment period to require such coordination only if the Medicare contract of one HMO in the area is not renewed or is terminated, or reduces its service area in a way which discontinues coverage for Medicare enrollees in part of the area. Amends the Omnibus Budget Reconciliation Act of 1986 to delay, from April 1, 1990, to April 1, 1991, the effective date of the provision subjecting an HMO to civil penalties if it makes a payment to a physician to reduce or limit services provided to Medicare or Medicaid beneficiaries. Amends the Omnibus Budget Reconciliation Act of 1987 to extend the prohibition on the Secretary's issuing cost-saving policies before the beginning of a fiscal year through October 15, 1990. Subpart B: Technical and Miscellaneous Provisions - Sets forth hospital responsibilities with respect to the treatment or transfer of individuals having emergency medical conditions. Imposes penalties against physicians who engage in specified acts related to the examination, treatment, or transfer of individuals with emergency medical conditions. Amends the Omnibus Budget Reconciliation Act of 1986 to extend, through 1993, the application of a waiver of the Medicare requirement that HMOs must have an enrolled population of which not more than 50 percent are Medicare or Medicaid (title XIX of the Social Security Act) beneficiaries to HMOs which had a pre-existing waiver of such requirement and received specified grants in FY 1987. Amends the Medicare program to limit physician charges for emergency services or out-of-area coverage provided to an HMO enrollee by a person who is not under contract with such HMO. Amends the Deficit Reduction Act of 1984 to make the authority for HMO benefit stabilization funds permanent. Amends the Medicare program to require rural health clinics to have a nurse practitioner, physician assistant, or certified nurse-midwife available to furnish patient care at least 50 percent of the time the clinic operates. Covers social worker services furnished to outpatients of rural health clinics. Expands the area within which rural health clinics may be located. Requires the dissemination of rural health clinic application information and materials. Prohibits the Secretary from denying the certification of a facility as a rural health clinic if such facility is located on an island and would meet certification requirements but for the requirement that physician assistant or nurse practitioner services be provided in the facility. Expands the functions of the Office of Rural Health Policy. Alters the home health claims denial process. Extends the Secretary's authority to contract with fiscal intermediaries and carriers on other than a cost basis. Amends of the Omnibus Budget Reconciliation Act of 1987 to expand a rural health medical education demonstration project. Establishes a triage demonstration project in a public hospital located in a large urban area. Directs the Comptroller General to conduct a study of the administrative burden of Medicare regulations and program requirements on providers, fiscal intermediaries, and carriers. Gives the Secretary guidelines to consider in distributing remaining payment amounts to end stage renal disease network organizations after covering their administrative costs. Makes liability limitations and information disclosure prohibitions established under part B (Peer Review) of title IX of the Social Security Act applicable to network organizations. Directs the Secretary to report to the Congress, by April 1, 1990, on the methodology and rationale used to establish a Medicare payment rate for the drug erythropoietin. Amends the Medicare Catastrophic Coverage Act of 1988 and part A (General Provisions) of title XI of the Social Security Act to make miscellaneous amendments affecting the United States Bipartisan Commission on Comprehensive Health Care and the National Commission on Children. Continues the use of the home health wage index in effect prior to July 1, 1989, until July 1, 1990. Directs the Secretary to conduct a study regarding staffing at the Health Care Financing Administration. Amends part B (Peer Review) of title XI of the Social Security Act to require Peer Review Organizations (PROs) which review of non-physician services to include practitioners of such services within their review body. Requires PROs to give providers whose services are denied Medicare coverage an opportunity for reconsideration of the determination before patients or organizations responsible for paying claims are notified of such determination.

Amends part B (Supplementary Medical Insurance) of the Medicare program to extend the basic part B premium through 1990.

Amends title XIX (Medicaid) of the Social Security Act to require States to provide Medicaid coverage of children between the ages of one and five, inclusive, whose family income does not exceed 133 percent of the Federal poverty level. Gives States the option of extending such coverage to children who are age seven or eight. Requires that States submit to the Secretary, by April 1 of each year, proposed Medicaid payment rates for obstetrical and pediatric services and such other data as will assist the Secretary in determining whether such rates are sufficient to ensure that obstetrical and pediatric services will be at least as available to Medicaid beneficiaries as they are to the general population. Requires States to immediately revise rates determined to be insufficient. Requires States to cover ambulatory services offered to pregnant women or children by certain federally-funded health centers. Sets forth the required components of Medicaid early and periodic screening, diagnostic, and treatment services. Requires Medicaid coverage of the measures which need to be taken to correct or ameliorate defects or conditions discovered by the screening services. Requires States to report annually to the Secretary concerning the number of children receiving such services. Directs the Secretary to establish annual participation goals for each State to increase participation in Medicaid early and periodic screening and diagnostic services. Requires States to provide Medicaid coverage of the services provided by health centers which provide the services rural health clinics are authorized to provide and meet the requirements for receiving a grant under the Public Health Service Act. Requires States to provide Medicaid coverage of services furnished by certified pediatric or family nurse practitioners. Requires States to: (1) coordinate Medicaid services with the special supplemental food program for women, infants, and children (WIC) under the Child Nutrition Act of 1966; and (2) notify Medicaid - eligible pregnant, breastfeeding, or postpartum women and children under age five of WIC program benefits. Directs the Secretary to conduct three-year demonstration projects in several States to study the effect on access to health care, private insurance coverage, and health care costs of allowing States to extend Medicaid benefits to pregnant women and children under age 20 who are not eligible for Medicaid benefits but whose income does not exceed 185 percent of the Federal poverty level. Imposes premiums on project beneficiaries whose family income exceeds the Federal poverty level. Caps project expenditures. Sets forth reporting requirements. Requires the Secretary to report to the Congress by October 1, 1990, on modifications in Medicaid coverage of mental health services that may be appropriate to accommodate to any changes which may have occurred in the delivery of inpatient mental health services since 1972 and on the continued Medicaid coverage of subacute psychiatric facility services. Places a moratorium on the consideration of two specified hospitals in Michigan as mental institutions for Medicaid purposes until 180 days after the submission of such report. Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to extend from January 1, 1990, to July 1, 1990, waivers for the demonstration project, "Modification of the Texas System of Care for the Elderly: Alternatives to the Institutionalized Aged." Sets a floor on Medicaid payments for hospice care. Covers Medicare cost-sharing amounts for disabled individuals who are entitled to enroll for Medicare hospital insurance benefits and whose income and resources do not exceed 200 percent of the Federal poverty level and twice the SSI resource eligibility limit, respectively. Permits States to impose a Medicaid premium on such individuals pursuant to a sliding scale which increases from 1 to 100 percent of the cost-sharing amounts as incomes move from 150 to 200 percent of the Federal poverty level.

Makes miscellaneous technical amendments to the Medicaid program.

Amends the Internal Revenue Code with respect to excise taxes on group health plans to require that continuation of coverage under a plan be offered to a disabled beneficiary of a qualified pension plan at the time of termination of employment. Amends the Public Health Service Act to extend the maximum required period of continuation coverage of group health plans from 18 months to 29 months for an individual determined, under title II (Old Age, Survivors and Disability Insurance) or title XVI (Supplemental Security Income) of the Social Security Act, to have been disabled at the time of termination or reduction in hours. Makes the extension contingent on the beneficiary's notifying the plan administrator of the determination. Terminates extended coverage in the month following a final determination that the beneficiary is no longer disabled. Allows increased premiums, to a specified limit, during the period of extended coverage. Requires a recipient who is determined to have been disabled at the time of termination or reduction in hours to notify the plan administrator: (1) within 60 days of that determination; and (2) within 30 days of any final determination that the beneficiary is no longer disabled. Amends the Employee Retirement Income Security Act of 1974 to extend from 18 to 29 months the continuation of certain health insurance coverage to be offered to those with a disability at the time of termination of employment, if they notify the plan administrator of such disability determination before the end of the 18-month period. Allows increased premiums, to a specified limit, during the period of extended coverage.

Amends the Public Health Service Act to remove provisions specifying which rules apply, with regard to continuation coverage, to State and local governmental group health plans. Provides that continuation coverage for qualified beneficiaries other than the covered employee shall not terminate before 36 months after the covered employee becomes entitled to benefits under title XVIII (Medicare) of the Social Security Act. Specifies that "continuation coverage" means coverage in which, in addition to other requirements, becoming covered under any other group health plan terminates coverage only if the new coverage does not contain any preexisting condition exclusion or limitation. (Current law makes no reference to preexisting conditions.) Prohibits a plan from requiring premium payment before 45 days after the initial election for continuation coverage. (Current law requires a plan to permit payment within 45 days of the date of the election.) Modifies the definition of "covered employee" to mean a person, including a self-employed individual, covered under a plan because of the performance of services for one or more persons maintaining the plan.

Provides limitations on partial exclusion of interest on loans used to acquire employer securities. Requires that employer security loans be held only by qualified lenders. Requires employee stock ownership plans to file certain information reports. Places limitations on deductions for dividends paid on employer securities. Requires a three-year holding period before nonrecognition of gain is applicable on the sale of stock to employee stock ownership plans or certain cooperatives. Repeals: (1) the estate tax deduction relating to the sale of employer securities to employee stock ownership plans or worker-owned corporations; and (2) the liability for payment of estate tax in the case of transfer of employer securities. Revises limitations on employee stock ownership plans as they affect allocations to highly compensated employees. Repeals special rules relating to net operating losses as they affect employee stock ownership plans.

Limits contributions to retirement plans for medical benefits.

Sets forth limitations on the nonrecognition of gain or loss on the exchange of property with respect special rules for exchanges between related persons, where there is substantial diminution of risk, and for foreign real property.

Removes the book limitations applicable to depreciation of property placed in service after 1989 when determining alternative minimum taxable income. Makes modifications to: (1) the corporate minimum tax credit; (2) the orphan drug credit; (3) certain home construction contracts; (4) certain research and experimental expenditures; and (5) the 90-percent limitation on foreign tax credit. Directs the Secretary of the Treasury to study the proper class life for cars and light trucks.

Requires that the percentage of completion method be used in determining the taxable income under any long-term contract. Limits the deductibility of contingent payments in transfers of franchises, trademarks, and trade names.

Requires income tax withholding for certain agricultural employees. Specifies the schedule and minimum amounts for the deposit of social security taxes and withheld income taxes.

Limits the tax exclusion for compensation for personal injuries or sickness to cases involving physical injury or physical sickness. Requires the recognition of gain or loss by any partner that contributes property to a partnership if the property is distributed by the partnership to other than the contributing partner. Allows a depreciation deduction for the business use of cellular telephones or other similar telecommunications equipment. Eliminates the retroactive certification of employees for the work incentive jobs credit. Disallows a depreciation deduction for any term interest in property for any period during which the remainder interest in such property is held by a related person. Requires a trade or business to report the amount of points received on mortgage loans and whether such points were paid by the borrower. Modifies the computational rules with respect to life insurance contracts with more than one insured.

Subjects to arbitrage rebate requirements certain tax-exempt bonds (hedge bonds) when certain percentages of the net proceeds are not spent by the end of each of five years from the date of issuance. Provides exceptions from such requirements.

Revises penalty provisions in connection with tax return administration. Imposes a uniform penalty of $50 per offense to a maximum of $250,000 per year on any person who fails to: (1) file timely and correct information returns; (2) furnish correct payee statements; or (3) comply with other information reporting requirements. Reduces penalties if corrections are made within a specified time period. Allows exceptions for de minimus failures. Lowers the limitations for persons with gross receipts of less than $5,000,000. Increases penalties and removes the annual penalty ceiling in cases of intentional disregard of filing requirements. Revises requirements governing regulations prescribed by the Secretary of the Treasury in connection with returns that must be filed on magnetic media or in other machine-readable form. Directs the Comptroller General to study and report to specified congressional committees concerning: (1) ways to resolve discrepancies between taxpayer identity information shown on information returns and that in Internal Revenue Service (IRS) records; and (2) whether persons in the business of transmitting information returns and other documents to the IRS on behalf of others should be subject to registration.

Replaces current law governing additions to tax and other additional amounts with respect to tax administration violations with provisions that impose a 20 percent penalty in the form of additional tax in connection with underpayments attributable to at least one of the following: (1) negligence or disregard of relevant rules; (2) any substantial understatement of income tax; (3) any substantial valuation overstatement in connection with income tax; (4) any substantial overstatement of pension liabilities; or (5) any substantial estate or gift tax valuation understatement. Increases the penalty to 40 percent in cases of gross valuation misstatements. Imposes: (1) a 75 percent penalty in the form of additional tax with respect to any underpayment attributable to fraud; and (2) a 50 percent penalty in connection with underpayments of or failure to pay any stamp tax.

Revises provisions governing damages assessable for offenses related to Tax Court litigation to: (1) grant the Tax Court discretion in requiring a taxpayer to pay the United States a penalty (current law requires the penalty); (2) increase the amount of the permissible penalty from a $5,000 to a $25,000 maximum; (3) authorize the Tax Court to impose a penalty upon any attorney who unreasonably multiplies the proceedings in question. Authorizes similar sanctions in cases brought before other courts. Modifies penalty provisions associated with understatements of taxpayer liability by income tax return preparers to: (1) increase penalty amounts; and (2) institute penalties for understatements due to unrealistic positions or reckless or intentional disregard of tax laws. Increases from $25 to $50 (to an annual maximum of $25,000) the penalty imposed on income tax return preparers who fail to furnish copies to taxpayers, sign returns, or furnish identifying numbers. Modifies penalties imposed on tax preparers who fail to file correct information returns. Increases the possible penalty imposed on persons who promote abusive tax shelters. Broadens the scope of persons subject to penalties for aiding and abetting understatements of tax liability. Increases from $500 to $1,000 the penalty for filing a frivolous income tax return. Repeals a provision prohibiting injunctions against any income tax return preparer who files a surety bond. Requires that regulations governing disclosure or use of information by tax return preparers permit disclosures for quality or peer reviews.

Increases penalties imposed on persons whose failure to file any return is fraudulent or intentional. Revises penalty provisions in connection with failures to make deposits of taxes, varying the penalty rate as a function of the time involved in the deposit delay. Declares that a taxpayer who belatedly pays a tax that should have been deducted and withheld is still liable for interest or applicable penalties or additions.

Makes technical corrections with respect to: (1) corporate tax; (2) minimum tax; (3) accounting methods; (4) foreign tax; (5) estate and gift tax; (6) generation-skipping transfer tax; (7) estimated taxes of trusts and estates; (8) insurance; (9) pensions; (10) excise tax on undenatured distilled spirits; (11) tax-exempt bonds; (12) research tax credit; and (13) low-income housing tax credit.

Revises: (1) accounting provisions concerning installment sales, the election of taxable years other than required taxable year, corporate earnings and profit adjustments, and treatment of foreign insurance; (2) provisions relating to excise taxes on diesel fuel and aviation fuel; and (3) enforcement authority in the case of flagrant political expenditures.

Revises provisions with respect to: (1) modification of the accelerated cost recovery system; (2) low-income housing credit; (3) capitalization and inclusion in inventory costs of certain expenses; and (4) transitional rules on the application of future legislation to transitioned bonds.

Makes technical amendments to provisions related to transfers incident to divorce or separation and to the special rules for simplified employee pensions.

Revises certain pension and employee benefit provisions of, or relating to, the Tax Reform Act of 1986 (Reform Act), the Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code (IRC), the Technical and Miscellaneous Revenue Act of 1988, the Omnibus Budget Reconciliation Act of 1986, the Omnibus Budget Reconciliation Act of 1987, including the Pension Protection Act, the Single-Employer Pension Plan Amendments Act of 1986, and the Retirement Equity Act of 1984. Subpart A: Amendments Related to Tax Reform Act of 1986 - Amends the Reform Act, ERISA, and the IRC (as amended by the Technical and Miscellaneous Revenue Act of 1988) to revise pension-related provisions. Revises minimum vesting requirements to provide a special vesting rule by which the repeal of class-year vesting does not adversely affect the vesting status of certain plan participants. Applies such exemption rule to any employee for whom such a plan amendment eliminating class-year vesting would reduce a nonforfeitable right and who has an hour of service: (1) before the adoption of such plan amendment; and (2) on or after the first day of the first plan year for which the repeal of class-year vesting would be applicable. Limits such exemption rule to those employees who have not incurred a five-year break in service immediately before the hour of service after the plan amendment is applicable. Provides that compliance with this special vesting rule shall not be considered a violation of the minimum participation rule. Allows the assets of a qualified pension plan in excess of its liabilities to be transferred to a welfare benefit plan upon the pension plan's termination if such assets are to be used to provide retiree benefits, and if: (1) both such plans are jointly administered pursuant to a collective bargaining agreement; (2) the welfare benefit plan provides retiree health benefits; and (3) the pension plan has assets in excess of liabilities (determined on a termination basis) and the welfare benefit plan has assets which are less than the value of the benefits to be provided under the plan (determined as of the time of termination of the pension plan). Treats any such transfer of assets, for IRC purposes, as a reversion of assets to the employer maintaining the plan, which is includible in gross income and subject to specified provisions. Amends the Retirement Equity Act of 1984 (as well as the Reform Act and ERISA) to revise plan amendment deadlines. Amends ERISA, the IRC, the Reform Act, and the Technical and Miscellaneous Revenue Act of 1988 to revise continuation coverage requirements for group health plans. Provides that if a covered employee has a qualifying event that results in 18 months of continuation coverage and such covered employee becomes entitled to Medicare before the 18 months expires, then a qualified beneficiary other than the covered employee is entitled to continuation coverage for a total of 36 months after the original qualifying event. Provides for termination of continuation coverage in the case of preexisting condition. Subpart B: Amendments Related to the Omnibus Budget Reconciliation Act of 1986 - Amends IRC and ERISA, as if such amendments were included under the Omnibus Budget Reconciliation Act of 1986, to revise the definition of normal retirement age for purposes of minimum vesting standards for plans. Makes technical amendments to the IRC and ERISA, including a repeal of the 133-1/3 percent rule relating to accrued benefit requirements applied to defined benefit pension plans. Subpart C: Amendments Related to Pension Protection Act - Amends ERISA, IRC, and the Pension Protection Act (which is included under the Omnibus Budget Reconciliation Act of 1987) to revise provisions relating to: (1) the full limitation for multiemployer pension plans; (2) modification of the minimum funding standard for pension plans, including a special transition rule with respect to steel employees; (3) the time for making plan contributions; (4) funding waivers; (5) the interest rate to be used in connection with various plan funding rules; (6) plan terminations; and (7) reporting requirements. Provides that a specified change in the amortization period for experience gains and losses applies to gains and losses beginning after December 31, 1987. Sets forth a special transition rule for any experience gain or loss determined by a valuation occurring as of January 1, 1988. Subpart D: Additional Pension Provisions - Makes various technical amendments to ERISA, the Reform Act, the IRC, and the Technical and Miscellaneous Revenue Act of 1988. Provides for alternative means of compliance with specified requirements for notification of multiemployer plans by employers. Provides for optional extensions of required periods of continuation coverage by group health plans. Makes other technical amendments to ERISA as if they were included the Single-Employer Pension Plan Amendments Act of 1986 or the Multiemployer Pension Plan Amendments Act of 1980.