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115th Congress } { Rept. 115-469
HOUSE OF REPRESENTATIVES
1st Session } { Part 1
======================================================================
STEVE GLEASON ENDURING VOICES ACT OF 2017
_______
December 18, 2017.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Walden, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 2465]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 2465) to amend title XVIII of the Social
Security Act to make permanent the removal of the rental cap
for durable medical equipment under the Medicare program with
respect to speech generating devices, having considered the
same, report favorably thereon without amendment and recommend
that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Committee Action................................................. 2
Committee Votes.................................................. 3
Oversight Findings and Recommendations........................... 3
New Budget Authority, Entitlement Authority, and Tax Expenditures 3
Congressional Budget Office Estimate............................. 3
Federal Mandates Statement....................................... 5
Statement of General Performance Goals and Objectives............ 5
Duplication of Federal Programs.................................. 5
Committee Cost Estimate.......................................... 5
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 6
Disclosure of Directed Rule Makings.............................. 6
Advisory Committee Statement..................................... 6
Applicability to Legislative Branch.............................. 6
Section-by-Section Analysis of the Legislation................... 6
Changes in Existing Law Made by the Bill, as Reported............ 6
Exchange of Letters with Additional Committees of Referral....... 66
Purpose and Summary
H.R. 2465 was introduced on May 16, 2017, by Rep. Cathy
McMorris Rodgers (R-WA). H.R. 2465 would make coverage of
speech generating devices under ``routinely purchased durable
medical equipment'' permanent under the Medicare program.
Background and Need for Legislation
Previously, Medicare considered speech generating devices,
which are electronic alternative communication systems that
allow those who have lost the ability to speak through
disability or illness to communicate, as routinely purchased
durable medical equipment. Under rules issued from the Centers
for Medicare and Medicaid Services (CMS), speech generating
devices, which are uniquely configured for each eligible
beneficiary, were categorized and covered under a capped rental
payment. However, if the beneficiary entered a nursing home,
hospital, or hospice, payment ended, and the device was taken
away from the beneficiary unless they could afford the device
on their own, which limited access to the device. Congress
responded in 2015 by passing the Steve Gleason Act, which
removed speech generating devices from the capped rental
categorization. The bill would remove the 2018 sunset and make
this payment category change permanent.
Committee Action
On July 20, 2017, the Subcommittee on Health held a hearing
on H.R. 2465. The hearing was entitled ``Examining Bipartisan
Legislation to Improve the Medicare Program.'' The Subcommittee
received testimony from:
Christel Aprigliano, CEO, Diabetes Patient
Advocacy Coalition;
Lisa Bardach, Speech-Language Pathologist,
ALS of Michigan;
K. Eric De Jonge, President-Elect, American
Academy of Home Care Medicine (AAHCM);
Cletis Earle, Chairman-Elect, CHIME Board of
Trustees;
Mary Grealy, President, Healthcare
Leadership Council;
Deepak A. Kapoor, Chairman and CEO,
Integrated Medical Professionals;
Brett Kissela, Chair, Department of
Neurology and Rehabilitation Medicine, University of
Cincinnati Gardner Neuroscience Institute, on behalf of
American Academy of Neurology;
Justin Moore, CEO, American Physical Therapy
Association;
Alan E. Morrison, Chair, Diagnostic Services
Committee, National Association for the Support of Long
Term Care (NASL);
Varner Richards, Board Chair, National Home
Infusion Association; and
Stacy Sanders, Federal Policy Director,
Medicare Rights Center.
On September 13, 2017, the Subcommittee on Health met in
open markup session and forwarded H.R. 2465, without amendment,
to the full Committee by a voice vote. On October 4, 2017, the
full Committee on Energy and Commerce met in open markup
session and ordered H.R. 2465, without amendment, favorably
reported to the House by a voice vote.
Committee Votes
Clause 3(b) of rule XIII requires the Committee to list the
record votes on the motion to report legislation and amendments
thereto. There were no record votes taken in connection with
ordering H.R. 2465 reported.
Oversight Findings and Recommendations
Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII, the Committee held a hearing and made findings that
are reflected in this report.
New Budget Authority, Entitlement Authority, and Tax Expenditures
Pursuant to clause 3(c)(2) of rule XIII, the Committee
finds that H.R. 2465 would result in no new or increased budget
authority, entitlement authority, or tax expenditures or
revenues.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII, at the time this
report was filed, the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974 was not available.
U.S. Congress,
Congressional Budget Office,
Washington, DC, December 15, 2017.
Hon. Greg Walden,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2465, the Steve
Gleason Enduring Voices Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Lara
Robillard.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 2465--Steve Gleason Enduring Voices Act of 2017
Summary: H.R. 2465 would modify Medicare coverage and
payment rules for speech-generating devices (SGDs). CBO
estimates that enacting H.R. 2465 would increase direct
spending by $12 million over the 2018-2027 period.
Pay-as-you-go procedures apply because enacting the
legislation would affect direct spending. The legislation would
not affect revenues.
CBO estimates that enacting H.R. 2465 would not increase
net direct spending or on-budget deficits by more than $2.5
billion in any of the four consecutive 10-year periods
beginning in 2028.
H.R. 2465 contains no intergovernmental or private sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary effect of H.R. 2465 is shown in the following table.
The costs of this legislation fall within budget function 570
(Medicare).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018-2022 2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES IN DIRECT SPENDING
Estimated Budget Authority........................ 0 1 1 1 1 1 1 2 2 2 4 12
Estimated Outlays................................. 0 1 1 1 1 1 1 2 2 2 4 12
--------------------------------------------------------------------------------------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes that H.R.
2465 will be enacted late in calendar year 2017.
SGDs assist individuals who have lost the ability to speak
because of diseases like amyotrophic lateral sclerosis (ALS)
and Parkinson's disease. Under current law, the Medicare
program covers certain SGDs through the durable medical
equipment (DME) benefit. In general, Medicare pays for DME like
SGDs on a capped-rental basis; that is, Medicare makes a
monthly payment for a set period (13 months). At the end of the
capped rental period, the beneficiary may choose to own the
item or return it. If the beneficiary enters institutional care
during the rental period, Medicare does not make a payment,
because the facility is responsible for all items and services
needed for beneficiary care.
Since enactment of the Steve Gleason Act of 2015 (Public
Law 114-40), Medicare beneficiaries who need SGDs have had the
option of purchasing them immediately, rather than assuming
ownership at the end of the rental period. That legislation
made the purchase option available from October 1, 2015,
through September 30, 2018. H.R. 2465 would make the purchase
option permanent.
CBO estimates that about 5,000 beneficiaries annually could
need an SGD and expects many beneficiaries would choose
immediate purchase, rather than opting for rental, to ensure
continuous access to the device. Although the total rental cost
of 13 monthly payments (about $9,800 in 2017) exceeds the up-
front purchase price (about $7,500 in 2017) for SGDs, many
beneficiaries do not use the device for the full 13 months. CBO
estimates that, on average, Medicare makes rental payments for
SGD for about eight months. Thus average payments for SGDs
under the capped-rental approach are lower than under the
purchase option. On that basis, CBO estimates that Medicare's
payments for SGDs would be higher on average under H.R. 2465,
raising federal spending over the 2018-2027 period.
In its analysis of the 2015 legislation, CBO estimated that
the bill would increase spending after 2018, even with a
temporary change in the statute, because the Centers for
Medicare and Medicaid Services (CMS), which administers the
Medicare program, might continue to allow direct purchase after
2018--instead of reverting to capped rental. Thus, CBO's
baseline projections reflect the possibility that the direct-
purchase option for SGDs will continue beyond 2018.
Accordingly, this estimate includes only the incremental costs
beyond those already included in CBO's baseline projections.
CBO estimates that by providing a permanent option to purchase
SGDs, H.R. 2465 would increase federal spending by $12 million
over the 2018-2027 period, less than half of the amount in
baseline.\1\
---------------------------------------------------------------------------
\1\For more information on CBO's prior estimate, see Congressional
Budget Office, Cost Estimate for S. 984, June 22, 2015, www.cbo.gov/
publication/50340.
---------------------------------------------------------------------------
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 2465, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON ENERGY AND COMMERCE ON OCTOBER 4, 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018-2022 2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN THE [ON-BUDGET] DEFICIT
Statutory Pay-As-You-Go Impact.................... 0 1 1 1 1 1 1 2 2 2 4 12
--------------------------------------------------------------------------------------------------------------------------------------------------------
Increase in long-term direct spending and deficits: CBO
estimates that enacting the legislation would not increase net
direct spending or on-budget deficits by more than $2.5 billion
in any of the four consecutive 10-year periods beginning in
2028.
Intergovernmental and private-sector impact: H.R. 2465
contains no intergovernmental or private-sector mandates as
defined in UMRA.
Estimate prepared by: Federal costs: Lara Robillard;
Mandates: Amy Petz.
Estimate approved by: Theresa Gullo, Assistant Director for
Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII, the general
performance goal or objective of this legislation is to make
coverage of speech generating devices under ``routinely
purchased durable medical equipment'' permanent under the
Medicare program.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII, no provision of
H.R. 2465 is known to be duplicative of another Federal
program, including any program that was included in a report to
Congress pursuant to section 21 of Public Law 111-139 or the
most recent Catalog of Federal Domestic Assistance.
Committee Cost Estimate
Pursuant to clause 3(d)(1) of rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974. At the time this report was
filed, the estimate was not available.
Earmark, Limited Tax Benefits, and Limited Tariff Benefits
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the
Committee finds that H.R. 2465 contains no earmarks, limited
tax benefits, or limited tariff benefits.
Disclosure of Directed Rule Makings
Pursuant to section 3(i) of H. Res. 5, the Committee finds
that H.R. 2465 contains no directed rule makings.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 provides that the Act may be cited as the ``Steve
Gleason Enduring Voices Act of 2017.''
Section 2. Making permanent the removal cap for durable medical
equipment under medicare with respect to speech generating
devices
Section 2 strikes the October 1, 2018 sunset of speech
generating devices being excluded from Medicare's capped rental
categorization. This change will allow Medicare to continue to
treat speech generating devices as routinely purchased durable
medical equipment.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets and
existing law in which no change is proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part B--Supplementary Medical Insurance Benefits for the Aged and
Disabled
* * * * * * *
SPECIAL PAYMENT RULES FOR PARTICULAR ITEMS AND SERVICES
Sec. 1834. (a) Payment for Durable Medical Equipment.--
(1) General rule for payment.--
(A) In general.--With respect to a covered
item (as defined in paragraph (13)) for which
payment is determined under this subsection,
payment shall be made in the frequency
specified in paragraphs (2) through (7) and in
an amount equal to 80 percent of the payment
basis described in subparagraph (B).
(B) Payment basis.--Subject to subparagraph
(F)(i), the payment basis described in this
subparagraph is the lesser of--
(i) the actual charge for the item,
or
(ii) the payment amount recognized
under paragraphs (2) through (7) of
this subsection for the item;
except that clause (i) shall not apply if the
covered item is furnished by a public home
health agency (or by another home health agency
which demonstrates to the satisfaction of the
Secretary that a significant portion of its
patients are low income) free of charge or at
nominal charges to the public.
(C) Exclusive payment rule.--Subject to
subparagraph (F)(ii), this subsection shall
constitute the exclusive provision of this
title for payment for covered items under this
part or under part A to a home health agency.
(D) Reduction in fee schedules for certain
items.--With respect to a seat-lift chair or
transcutaneous electrical nerve stimulator
furnished on or after April 1, 1990, the
Secretary shall reduce the payment amount
applied under subparagraph (B)(ii) for such an
item by 15 percent, and, in the case of a
transcutaneous electrical nerve stimulator
furnished on or after January 1, 1991, the
Secretary shall further reduce such payment
amount (as previously reduced) by 45 percent.
(E) Clinical conditions for coverage.--
(i) In general.--The Secretary shall
establish standards for clinical
conditions for payment for covered
items under this subsection.
(ii) Requirements.--The standards
established under clause (i) shall
include the specification of types or
classes of covered items that require,
as a condition of payment under this
subsection, a face-to-face examination
of the individual by a physician (as
defined in section 1861(r)), a
physician assistant, nurse
practitioner, or a clinical nurse
specialist (as those terms are defined
in section 1861(aa)(5)) and a
prescription for the item.
(iii) Priority of establishment of
standards.--In establishing the
standards under this subparagraph, the
Secretary shall first establish
standards for those covered items for
which the Secretary determines there
has been a proliferation of use,
consistent findings of charges for
covered items that are not delivered,
or consistent findings of falsification
of documentation to provide for payment
of such covered items under this part.
(iv) Standards for power
wheelchairs.--Effective on the date of
the enactment of this subparagraph, in
the case of a covered item consisting
of a motorized or power wheelchair for
an individual, payment may not be made
for such covered item unless a
physician (as defined in section
1861(r)(1)), a physician assistant,
nurse practitioner, or a clinical nurse
specialist (as those terms are defined
in section 1861(aa)(5)) has conducted a
face-to-face examination of the
individual and written a prescription
for the item.
(v) Limitation on payment for covered
items.--Payment may not be made for a
covered item under this subsection
unless the item meets any standards
established under this subparagraph for
clinical condition of coverage.
(F) Application of competitive acquisition;
limitation of inherent reasonableness
authority.--In the case of covered items
furnished on or after January 1, 2011, subject
to subparagraphs (G) and (H), that are included
in a competitive acquisition program in a
competitive acquisition area under section
1847(a)--
(i) the payment basis under this
subsection for such items and services
furnished in such area shall be the
payment basis determined under such
competitive acquisition program;
(ii) the Secretary may (and, in the
case of covered items furnished on or
after January 1, 2016, subject to
clause (iii), shall) use information on
the payment determined under such
competitive acquisition programs to
adjust the payment amount otherwise
recognized under subparagraph (B)(ii)
for an area that is not a competitive
acquisition area under section 1847 and
in the case of such adjustment,
paragraph (10)(B) shall not be applied;
and
(iii) in the case of covered items
furnished on or after January 1, 2016,
the Secretary shall continue to make
such adjustments described in clause
(ii) as, under such competitive
acquisition programs, additional
covered items are phased in or
information is updated as contracts
under section 1847 are recompeted in
accordance with section 1847(b)(3)(B).
(G) Use of information on competitive bid
rates.--The Secretary shall specify by
regulation the methodology to be used in
applying the provisions of subparagraph (F)(ii)
and subsection (h)(1)(H)(ii). In promulgating
such regulation, the Secretary shall consider
the costs of items and services in areas in
which such provisions would be applied compared
to the payment rates for such items and
services in competitive acquisition areas.In
the case of items and services furnished on or
after January 1, 2019, in making any
adjustments under clause (ii) or (iii) of
subparagraph (F), under subsection
(h)(1)(H)(ii), or under section 1842(s)(3)(B),
the Secretary shall--
(i) solicit and take into account
stakeholder input; and
(ii) take into account the highest
amount bid by a winning supplier in a
competitive acquisition area and a
comparison of each of the following
with respect to non-competitive
acquisition areas and competitive
acquisition areas:
(I) The average travel
distance and cost associated
with furnishing items and
services in the area.
(II) The average volume of
items and services furnished by
suppliers in the area.
(III) The number of suppliers
in the area.
(H) Diabetic supplies.--
(i) In general.--On or after the date
described in clause (ii), the payment
amount under this part for diabetic
supplies, including testing strips,
that are non-mail order items (as
defined by the Secretary) shall be
equal to the single payment amounts
established under the national mail
order competition for diabetic supplies
under section 1847.
(ii) Date described.--The date
described in this clause is the date of
the implementation of the single
payment amounts under the national mail
order competition for diabetic supplies
under section 1847.
(I) Treatment of vacuum erection systems.--
Effective for items and services furnished on
and after July 1, 2015, vacuum erection systems
described as prosthetic devices described in
section 1861(s)(8) shall be treated in the same
manner as erectile dysfunction drugs are
treated for purposes of section 1860D-
2(e)(2)(A).
(2) Payment for inexpensive and other routinely
purchased durable medical equipment.--
(A) In general.--Payment for an item of
durable medical equipment (as defined in
paragraph (13))--
(i) the purchase price of which does
not exceed $150,
(ii) which the Secretary determines
is acquired at least 75 percent of the
time by purchase,
(iii) which is an accessory used in
conjunction with a nebulizer,
aspirator, or a ventilator excluded
under paragraph (3)(A), or
(iv) in the case of devices furnished
on or after October 1, 2015, [and
before October 1, 2018,] which serves
as a speech generating device or which
is an accessory that is needed for the
individual to effectively utilize such
a device,
shall be made on a rental basis or in a lump-
sum amount for the purchase of the item. The
payment amount recognized for purchase or
rental of such equipment is the amount
specified in subparagraph (B) for purchase or
rental, except that the total amount of
payments with respect to an item may not exceed
the payment amount specified in subparagraph
(B) with respect to the purchase of the item.
(B) Payment amount.--For purposes of
subparagraph (A), the amount specified in this
subparagraph, with respect to the purchase or
rental of an item furnished in a carrier
service area--
(i) in 1989 and in 1990 is the
average reasonable charge in the area
for the purchase or rental,
respectively, of the item for the 12-
month period ending on June 30, 1987,
increased by the percentage increase in
the consumer price index for all urban
consumers (U.S. city average) for the
6-month period ending with December
1987;
(ii) in 1991 is the sum of (I) 67
percent of the local payment amount for
the item or device computed under
subparagraph (C)(i)(I) for 1991, and
(II) 33 percent of the national limited
payment amount for the item or device
computed under subparagraph (C)(ii) for
1991;
(iii) in 1992 is the sum of (I) 33
percent of the local payment amount for
the item or device computed under
subparagraph (C)(i)(II) for 1992, and
(II) 67 percent of the national limited
payment amount for the item or device
computed under subparagraph (C)(ii) for
1992; and
(iv) in 1993 and each subsequent year
is the national limited payment amount
for the item or device computed under
subparagraph (C)(ii) for that year
(reduced by 10 percent, in the case of
a blood glucose testing strip furnished
after 1997 for an individual with
diabetes).
(C) Computation of local payment amount and
national limited payment amount.--For purposes
of subparagraph (B)--
(i) the local payment amount for an
item or device for a year is equal to--
(I) for 1991, the amount
specified in subparagraph
(B)(i) for 1990 increased by
the covered item update for
1991, and
(II) for 1992, 1993, and 1994
the amount determined under
this clause for the preceding
year increased by the covered
item update for the year; and
(ii) the national limited payment
amount for an item or device for a year
is equal to--
(I) for 1991, the local
payment amount determined under
clause (i) for such item or
device for that year, except
that the national limited
payment amount may not exceed
100 percent of the weighted
average of all local payment
amounts determined under such
clause for such item for that
year and may not be less than
85 percent of the weighted
average of all local payment
amounts determined under such
clause for such item,
(II) for 1992 and 1993, the
amount determined under this
clause for the preceding year
increased by the covered item
update for such subsequent
year,
(III) for 1994, the local
payment amount determined under
clause (i) for such item or
device for that year, except
that the national limited
payment amount may not exceed
100 percent of the median of
all local payment amounts
determined under such clause
for such item for that year and
may not be less than 85 percent
of the median of all local
payment amounts determined
under such clause for such item
or device for that year, and
(IV) for each subsequent
year, the amount determined
under this clause for the
preceding year increased by the
covered item update for such
subsequent year.
(3) Payment for items requiring frequent and
substantial servicing.--
(A) In general.--Payment for a covered item
(such as IPPB machines and ventilators,
excluding ventilators that are either
continuous airway pressure devices or
intermittent assist devices with continuous
airway pressure devices) for which there must
be frequent and substantial servicing in order
to avoid risk to the patient's health shall be
made on a monthly basis for the rental of the
item and the amount recognized is the amount
specified in subparagraph (B).
(B) Payment amount.--For purposes of
subparagraph (A), the amount specified in this
subparagraph, with respect to an item or device
furnished in a carrier service area--
(i) in 1989 and in 1990 is the
average reasonable charge in the area
for the rental of the item or device
for the 12-month period ending with
June 1987, increased by the percentage
increase in the consumer price index
for all urban consumers (U.S. city
average) for the 6-month period ending
with December 1987;
(ii) in 1991 is the sum of (I) 67
percent of the local payment amount for
the item or device computed under
subparagraph (C)(i)(I) for 1991, and
(II) 33 percent of the national limited
payment amount for the item or device
computed under subparagraph (C)(ii) for
1991;
(iii) in 1992 is the sum of (I) 33
percent of the local payment amount for
the item or device computed under
subparagraph (C)(i)(II) for 1992, and
(II) 67 percent of the national limited
payment amount for the item or device
computed under subparagraph (C)(ii) for
1992; and
(iv) in 1993 and each subsequent year
is the national limited payment amount
for the item or device computed under
subparagraph (C)(ii) for that year.
(C) Computation of local payment amount and
national limited payment amount.--For purposes
of subparagraph (B)--
(i) the local payment amount for an
item or device for a year is equal to--
(I) for 1991, the amount
specified in subparagraph
(B)(i) for 1990 increased by
the covered item update for
1991, and
(II) for 1992, 1993, and 1994
the amount determined under
this clause for the preceding
year increased by the covered
item update for the year; and
(ii) the national limited payment
amount for an item or device for a year
is equal to--
(I) for 1991, the local
payment amount determined under
clause (i) for such item or
device for that year, except
that the national limited
payment amount may not exceed
100 percent of the weighted
average of all local payment
amounts determined under such
clause for such item for that
year and may not be less than
85 percent of the weighted
average of all local payment
amounts determined under such
clause for such item,
(II) for 1992 and 1993, the
amount determined under this
clause for the preceding year
increased by the covered item
update for such subsequent
year,
(III) for 1994, the local
payment amount determined under
clause (i) for such item or
device for that year, except
that the national limited
payment amount may not exceed
100 percent of the median of
all local payment amounts
determined under such clause
for such item for that year and
may not be less than 85 percent
of the median of all local
payment amounts determined
under such clause for such item
or device for that year, and
(IV) for each subsequent
year, the amount determined
under this clause for the
preceding year increased by the
covered item update for such
subsequent year.
(4) Payment for certain customized items.--Payment
with respect to a covered item that is uniquely
constructed or substantially modified to meet the
specific needs of an individual patient, and for that
reason cannot be grouped with similar items for
purposes of payment under this title, shall be made in
a lump-sum amount (A) for the purchase of the item in a
payment amount based upon the carrier's individual
consideration for that item, and (B) for the reasonable
and necessary maintenance and servicing for parts and
labor not covered by the supplier's or manufacturer's
warranty, when necessary during the period of medical
need, and the amount recognized for such maintenance
and servicing shall be paid on a lump-sum, as needed
basis based upon the carrier's individual consideration
for that item. In the case of a wheelchair furnished on
or after January 1, 1992, the wheelchair shall be
treated as a customized item for purposes of this
paragraph if the wheelchair has been measured, fitted,
or adapted in consideration of the patient's body size,
disability, period of need, or intended use, and has
been assembled by a supplier or ordered from a
manufacturer who makes available customized features,
modifications, or components for wheelchairs that are
intended for an individual patient's use in accordance
with instructions from the patient's physician.
(5) Payment for oxygen and oxygen equipment.--
(A) In general.--Payment for oxygen and
oxygen equipment shall be made on a monthly
basis in the monthly payment amount recognized
under paragraph (9) for oxygen and oxygen
equipment (other than portable oxygen
equipment), subject to subparagraphs (B), (C),
(E), and (F).
(B) Add-on for portable oxygen equipment.--
When portable oxygen equipment is used, but
subject to subparagraph (D), the payment amount
recognized under subparagraph (A) shall be
increased by the monthly payment amount
recognized under paragraph (9) for portable
oxygen equipment.
(C) Volume adjustment.--When the attending
physician prescribes an oxygen flow rate--
(i) exceeding 4 liters per minute,
the payment amount recognized under
subparagraph (A), subject to
subparagraph (D), shall be increased by
50 percent, or
(ii) of less than 1 liter per minute,
the payment amount recognized under
subparagraph (A) shall be decreased by
50 percent.
(D) Limit on adjustment.--When portable
oxygen equipment is used and the attending
physician prescribes an oxygen flow rate
exceeding 4 liters per minute, there shall only
be an increase under either subparagraph (B) or
(C), whichever increase is larger, and not
under both such subparagraphs.
(E) Recertification for patients receiving
home oxygen therapy.--In the case of a patient
receiving home oxygen therapy services who, at
the time such services are initiated, has an
initial arterial blood gas value at or above a
partial pressure of 56 or an arterial oxygen
saturation at or above 89 percent (or such
other values, pressures, or criteria as the
Secretary may specify) no payment may be made
under this part for such services after the
expiration of the 90-day period that begins on
the date the patient first receives such
services unless the patient's attending
physician certifies that, on the basis of a
follow-up test of the patient's arterial blood
gas value or arterial oxygen saturation
conducted during the final 30 days of such 90-
day period, there is a medical need for the
patient to continue to receive such services.
(F) Rental Cap.--
(i) In general.--Payment for oxygen
equipment (including portable oxygen
equipment) under this paragraph may not
extend over a period of continuous use
(as determined by the Secretary) of
longer than 36 months.
(ii) Payments and rules after rental
cap.--After the 36th continuous month
during which payment is made for the
equipment under this paragraph--
(I) the supplier furnishing
such equipment under this
subsection shall continue to
furnish the equipment during
any period of medical need for
the remainder of the reasonable
useful lifetime of the
equipment, as determined by the
Secretary;
(II) payments for oxygen
shall continue to be made in
the amount recognized for
oxygen under paragraph (9) for
the period of medical need; and
(III) maintenance and
servicing payments shall, if
the Secretary determines such
payments are reasonable and
necessary, be made (for parts
and labor not covered by the
supplier's or manufacturer's
warranty, as determined by the
Secretary to be appropriate for
the equipment), and such
payments shall be in an amount
determined to be appropriate by
the Secretary.
(6) Payment for other covered items (other than
durable medical equipment).--Payment for other covered
items (other than durable medical equipment and other
covered items described in paragraph (3), (4), or (5))
shall be made in a lump-sum amount for the purchase of
the item in the amount of the purchase price recognized
under paragraph (8).
(7) Payment for other items of durable medical
equipment.--
(A) Payment.--In the case of an item of
durable medical equipment not described in
paragraphs (2) through (6), the following rules
shall apply:
(i) Rental.--
(I) In general.--Except as
provided in clause (iii),
payment for the item shall be
made on a monthly basis for the
rental of the item during the
period of medical need (but
payments under this clause may
not extend over a period of
continuous use (as determined
by the Secretary) of longer
than 13 months).
(II) Payment amount.--Subject
to subclause (III) and
subparagraph (B), the amount
recognized for the item, for
each of the first 3 months of
such period, is 10 percent of
the purchase price recognized
under paragraph (8) with
respect to the item, and, for
each of the remaining months of
such period, is 7.5 percent of
such purchase price.
(III) Special rule for power-
driven wheelchairs.--For
purposes of payment for power-
driven wheelchairs, subclause
(II) shall be applied by
substituting ``15 percent'' and
``6 percent'' for ``10
percent'' and ``7.5 percent'',
respectively.
(ii) Ownership after rental.--On the
first day that begins after the 13th
continuous month during which payment
is made for the rental of an item under
clause (i), the supplier of the item
shall transfer title to the item to the
individual.
(iii) Purchase agreement option for
complex, rehabilitative power-driven
wheelchairs.--In the case of a complex,
rehabilitative power-driven wheelchair,
at the time the supplier furnishes the
item, the supplier shall offer the
individual the option to purchase the
item, and payment for such item shall
be made on a lump-sum basis if the
individual exercises such option.
(iv) Maintenance and servicing.--
After the supplier transfers title to
the item under clause (ii) or in the
case of a power-driven wheelchair for
which a purchase agreement has been
entered into under clause (iii),
maintenance and servicing payments
shall, if the Secretary determines such
payments are reasonable and necessary,
be made (for parts and labor not
covered by the supplier's or
manufacturer's warranty, as determined
by the Secretary to be appropriate for
the particular type of durable medical
equipment), and such payments shall be
in an amount determined to be
appropriate by the Secretary.
(B) Range for rental amounts.--
(i) For 1989.--For items furnished
during 1989, the payment amount
recognized under subparagraph (A)(i)
shall not be more than 115 percent, and
shall not be less than 85 percent, of
the prevailing charge established for
rental of the item in January 1987,
increased by the percentage increase in
the consumer price index for all urban
consumers (U.S. city average) for the
6-month period ending with December
1987.
(ii) For 1990.--For items furnished
during 1990, clause (i) shall apply in
the same manner as it applies to items
furnished during 1989.
(C) Replacement of items.--
(i) Establishment of reasonable
useful lifetime.--In accordance with
clause (iii), the Secretary shall
determine and establish a reasonable
useful lifetime for items of durable
medical equipment for which payment may
be made under this paragraph.
(ii) Payment for replacement items.--
If the reasonable lifetime of such an
item, as so established, has been
reached during a continuous period of
medical need, or the carrier determines
that the item is lost or irreparably
damaged, the patient may elect to have
payment for an item serving as a
replacement for such item made--
(I) on a monthly basis for
the rental of the replacement
item in accordance with
subparagraph (A); or
(II) in the case of an item
for which a purchase agreement
has been entered into under
subparagraph (A)(iii), in a
lump-sum amount for the
purchase of the item.
(iii) Length of reasonable useful
lifetime.--The reasonable useful
lifetime of an item of durable medical
equipment under this subparagraph shall
be equal to 5 years, except that, if
the Secretary determines that, on the
basis of prior experience in making
payments for such an item under this
title, a reasonable useful lifetime of
5 years is not appropriate with respect
to a particular item, the Secretary
shall establish an alternative
reasonable lifetime for such item.
(8) Purchase price recognized for miscellaneous
devices and items.--For purposes of paragraphs (6) and
(7), the amount that is recognized under this paragraph
as the purchase price for a covered item is the amount
described in subparagraph (C) of this paragraph,
determined as follows:
(A) Computation of local purchase price.--
Each carrier under section 1842 shall compute a
base local purchase price for the item as
follows:
(i) The carrier shall compute a base
local purchase price, for each item
described--
(I) in paragraph (6) equal to
the average reasonable charge
in the locality for the
purchase of the item for the
12-month period ending with
June 1987, or
(II) in paragraph (7) equal
to the average of the purchase
prices on the claims submitted
on an assignment-related basis
for the unused item supplied
during the 6-month period
ending with December 1986.
(ii) The carrier shall compute a
local purchase price, with respect to
the furnishing of each particular
item--
(I) in 1989 and 1990, equal
to the base local purchase
price computed under clause (i)
increased by the percentage
increase in the consumer price
index for all urban consumers
(U.S. city average) for the 6-
month period ending with
December 1987,
(II) in 1991, equal to the
local purchase price computed
under this clause for the
previous year, increased by the
covered item update for 1991,
and decreased by the percentage
by which the average of the
reasonable charges for claims
paid for all items described in
paragraph (7) is lower than the
average of the purchase prices
submitted for such items during
the final 9 months of 1988; or
(III) in 1992, 1993, and 1994
equal to the local purchase
price computed under this
clause for the previous year
increased by the covered item
update for the year.
(B) Computation of national limited purchase
price.--With respect to the furnishing of a
particular item in a year, the Secretary shall
compute a national limited purchase price--
(i) for 1991, equal to the local
purchase price computed under
subparagraph (A)(ii) for the item for
the year, except that such national
limited purchase price may not exceed
100 percent of the weighted average of
all local purchase prices for the item
computed under such subparagraph for
the year, and may not be less than 85
percent of the weighted average of all
local purchase prices for the item
computed under such subparagraph for
the year;
(ii) for 1992 and 1993, the amount
determined under this subparagraph for
the preceding year increased by the
covered item update for such subsequent
year;
(iii) for 1994, the local purchase
price computed under subparagraph
(A)(ii) for the item for the year,
except that such national limited
purchase price may not exceed 100
percent of the median of all local
purchase prices computed for the item
under such subparagraph for the year
and may not be less than 85 percent of
the median of all local purchase prices
computed under such subparagraph for
the item for the year; and
(iv) for each subsequent year, equal
to the amount determined under this
subparagraph for the preceding year
increased by the covered item update
for such subsequent year.
(C) Purchase price recognized.--For purposes
of paragraphs (6) and (7), the amount that is
recognized under this paragraph as the purchase
price for each item furnished--
(i) in 1989 or 1990, is 100 percent
of the local purchase price computed
under subparagraph (A)(ii)(I);
(ii) in 1991, is the sum of (I) 67
percent of the local purchase price
computed under subparagraph (A)(ii)(II)
for 1991, and (II) 33 percent of the
national limited purchase price
computed under subparagraph (B) for
1991;
(iii) in 1992, is the sum of (I) 33
percent of the local purchase price
computed under subparagraph
(A)(ii)(III) for 1992, and (II) 67
percent of the national limited
purchase price computed under
subparagraph (B) for 1992; and
(iv) in 1993 or a subsequent year, is
the national limited purchase price
computed under subparagraph (B) for
that year.
(9) Monthly payment amount recognized with respect to
oxygen and oxygen equipment.--For purposes of paragraph
(5), the amount that is recognized under this paragraph
for payment for oxygen and oxygen equipment is the
monthly payment amount described in subparagraph (C) of
this paragraph. Such amount shall be computed
separately (i) for all items of oxygen and oxygen
equipment (other than portable oxygen equipment) and
(ii) for portable oxygen equipment (each such group
referred to in this paragraph as an ``item'').
(A) Computation of local monthly payment
rate.--Each carrier under this section shall
compute a base local payment rate for each item
as follows:
(i) The carrier shall compute a base
local average monthly payment rate per
beneficiary as an amount equal to (I)
the total reasonable charges for the
item during the 12-month period ending
with December 1986, divided by (II) the
total number of months for all
beneficiaries receiving the item in the
area during the 12-month period for
which the carrier made payment for the
item under this title.
(ii) The carrier shall compute a
local average monthly payment rate for
the item applicable--
(I) to 1989 and 1990, equal
to 95 percent of the base local
average monthly payment rate
computed under clause (i) for
the item increased by the
percentage increase in the
consumer price index for all
urban consumers (U.S. city
average) for the 6-month period
ending with December 1987, or
(II) to 1991, 1992, 1993, and
1994 equal to the local average
monthly payment rate computed
under this clause for the item
for the previous year increased
by the covered item increase
for the year.
(B) Computation of national limited monthly
payment rate.--With respect to the furnishing
of an item in a year, the Secretary shall
compute a national limited monthly payment rate
equal to--
(i) for 1991, the local monthly
payment rate computed under
subparagraph (A)(ii)(II) for the item
for the year, except that such national
limited monthly payment rate may not
exceed 100 percent of the weighted
average of all local monthly payment
rates computed for the item under such
subparagraph for the year, and may not
be less than 85 percent of the weighted
average of all local monthly payment
rates computed for the item under such
subparagraph for the year;
(ii) for 1992 and 1993, the amount
determined under this subparagraph for
the preceding year increased by the
covered item update for such subsequent
year;
(iii) for 1994, the local monthly
payment rate computed under
subparagraph (A)(ii) for the item for
the year, except that such national
limited monthly payment rate may not
exceed 100 percent of the median of all
local monthly payment rates computed
for the item under such subparagraph
for the year and may not be less than
85 percent of the median of all local
monthly payment rates computed for the
item under such subparagraph for the
year;
(iv) for 1995, 1996, and 1997, equal
to the amount determined under this
subparagraph for the preceding year
increased by the covered item update
for such subsequent year;
(v) for 1998, 75 percent of the
amount determined under this
subparagraph for 1997; and
(vi) for 1999 and each subsequent
year, 70 percent of the amount
determined under this subparagraph for
1997.
(C) Monthly payment amount recognized.--For
purposes of paragraph (5), the amount that is
recognized under this paragraph as the base
monthly payment amount for each item
furnished--
(i) in 1989 and in 1990, is 100
percent of the local average monthly
payment rate computed under
subparagraph (A)(ii) for the item;
(ii) in 1991, is the sum of (I) 67
percent of the local average monthly
payment rate computed under
subparagraph (A)(ii)(II) for the item
for 1991, and (II) 33 percent of the
national limited monthly payment rate
computed under subparagraph (B)(i) for
the item for 1991;
(iii) in 1992, is the sum of (I) 33
percent of the local average monthly
payment rate computed under
subparagraph (A)(ii)(II) for the item
for 1992, and (II) 67 percent of the
national limited monthly payment rate
computed under subparagraph (B)(ii) for
the item for 1992; and
(iv) in a subsequent year, is the
national limited monthly payment rate
computed under subparagraph (B) for the
item for that year.
(10) Exceptions and adjustments.--
(A) Areas outside continental united
states.--Exceptions to the amounts recognized
under the previous provisions of this
subsection shall be made to take into account
the unique circumstances of covered items
furnished in Alaska, Hawaii, or Puerto Rico.
(B) Adjustment for inherent reasonableness.--
The Secretary is authorized to apply the
provisions of paragraphs (8) and (9) of section
1842(b) to covered items and suppliers of such
items and payments under this subsection in an
area and with respect to covered items and
services for which the Secretary does not make
a payment amount adjustment under paragraph
(1)(F).
(C) Transcutaneous electrical nerve
stimulator (tens).--In order to permit an
attending physician time to determine whether
the purchase of a transcutaneous electrical
nerve stimulator is medically appropriate for a
particular patient, the Secretary may determine
an appropriate payment amount for the initial
rental of such item for a period of not more
than 2 months. If such item is subsequently
purchased, the payment amount with respect to
such purchase is the payment amount determined
under paragraph (2).
(11) Improper billing and requirement of physician
order.--
(A) Improper billing for certain rental
items.--Notwithstanding any other provision of
this title, a supplier of a covered item for
which payment is made under this subsection and
which is furnished on a rental basis shall
continue to supply the item without charge
(other than a charge provided under this
subsection for the maintenance and servicing of
the item) after rental payments may no longer
be made under this subsection. If a supplier
knowingly and willfully violates the previous
sentence, the Secretary may apply sanctions
against the supplier under section 1842(j)(2)
in the same manner such sanctions may apply
with respect to a physician.
(B) Requirement of physician order.--
(i) In general.--The Secretary is
authorized to require, for specified
covered items, that payment may be made
under this subsection with respect to
the item only if a physician enrolled
under section 1866(j) or an eligible
professional under section
1848(k)(3)(B) that is enrolled under
section 1866(j) has communicated to the
supplier, before delivery of the item,
a written order for the item.
(ii) Requirement for face to face
encounter.--The Secretary shall require
that such an order be written pursuant
to a physician, a physician assistant,
a nurse practitioner, or a clinical
nurse specialist (as those terms are
defined in section 1861(aa)(5))
documenting such physician, physician
assistant, practitioner, or specialist
has had a face-to-face encounter
(including through use of telehealth
under subsection (m) and other than
with respect to encounters that are
incident to services involved) with the
individual involved during the 6-month
period preceding such written order, or
other reasonable timeframe as
determined by the Secretary.
(12) Regional carriers.--The Secretary may designate,
by regulation under section 1842, one carrier for one
or more entire regions to process all claims within the
region for covered items under this section.
(13) Covered item.--In this subsection, the term
``covered item'' means durable medical equipment (as
defined in section 1861(n)), including such equipment
described in section 1861(m)(5), but not including
implantable items for which payment may be made under
section 1833(t).
(14) Covered item update.--In this subsection, the
term ``covered item update'' means, with respect to a
year--
(A) for 1991 and 1992, the percentage
increase in the consumer price index for all
urban consumers (U.S. city average) for the 12-
month period ending with June of the previous
year reduced by 1 percentage point;
(B) for 1993, 1994, 1995, 1996, and 1997, the
percentage increase in the consumer price index
for all urban consumers (U.S. city average) for
the 12-month period ending with June of the
previous year;
(C) for each of the years 1998 through 2000,
0 percentage points;
(D) for 2001, the percentage increase in the
consumer price index for all urban consumers
(U.S. city average) for the 12-month period
ending with June 2000;
(E) for 2002, 0 percentage points;
(F) for 2003, the percentage increase in the
consumer price index for all urban consumers
(U.S. urban average) for the 12-month period
ending with June of 2002;
(G) for 2004 through 2006--
(i) subject to clause (ii), in the
case of class III medical devices
described in section 513(a)(1)(C) of
the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360(c)(1)(C)), the
percentage increase described in
subparagraph (B) for the year involved;
and
(ii) in the case of covered items not
described in clause (i), 0 percentage
points;
(H) for 2007--
(i) subject to clause (ii), in the
case of class III medical devices
described in section 513(a)(1)(C) of
the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360(c)(1)(C)), the
percentage change determined by the
Secretary to be appropriate taking into
account recommendations contained in
the report of the Comptroller General
of the United States under section
302(c)(1)(B) of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003; and
(ii) in the case of covered items not
described in clause (i), 0 percentage
points;
(I) for 2008--
(i) subject to clause (ii), in the
case of class III medical devices
described in section 513(a)(1)(C) of
the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360(c)(1)(C)), the
percentage increase described in
subparagraph (B) (as applied to the
payment amount for 2007 determined
after the application of the percentage
change under subparagraph (H)(i)); and
(ii) in the case of covered items not
described in clause (i), 0 percentage
points;
(J) for 2009--
(i) in the case of items and services
furnished in any geographic area, if
such items or services were selected
for competitive acquisition in any area
under the competitive acquisition
program under section
1847(a)(1)(B)(i)(I) before July 1,
2008, including related accessories but
only if furnished with such items and
services selected for such competition
and diabetic supplies but only if
furnished through mail order, - 9.5
percent; or
(ii) in the case of other items and
services, the percentage increase in
the consumer price index for all urban
consumers (U.S. urban average) for the
12-month period ending with June 2008;
(K) for 2010, the percentage increase in the
consumer price index for all urban consumers
(U.S. urban average) for the 12-month period
ending with June of the previous year; and
(L) for 2011 and each subsequent year--
(i) the percentage increase in the
consumer price index for all urban
consumers (United States city average)
for the 12-month period ending with
June of the previous year, reduced by--
(ii) the productivity adjustment
described in section
1886(b)(3)(B)(xi)(II).
The application of subparagraph (L)(ii) may result in
the covered item update under this paragraph being less
than 0.0 for a year, and may result in payment rates
under this subsection for a year being less than such
payment rates for the preceding year.
(15) Advance determinations of coverage for certain
items.--
(A) Development of lists of items by
secretary.--The Secretary may develop and
periodically update a list of items for which
payment may be made under this subsection that
the Secretary determines, on the basis of prior
payment experience, are frequently subject to
unnecessary utilization throughout a carrier's
entire service area or a portion of such area.
(B) Development of lists of suppliers by
secretary.--The Secretary may develop and
periodically update a list of suppliers of
items for which payment may be made under this
subsection with respect to whom--
(i) the Secretary has found that a
substantial number of claims for
payment under this part for items
furnished by the supplier have been
denied on the basis of the application
of section 1862(a)(1); or
(ii) the Secretary has identified a
pattern of overutilization resulting
from the business practice of the
supplier.
(C) Determinations of coverage in advance.--A
carrier shall determine in advance of delivery
of an item whether payment for the item may not
be made because the item is not covered or
because of the application of section
1862(a)(1) if--
(i) the item is included on the list
developed by the Secretary under
subparagraph (A);
(ii) the item is furnished by a
supplier included on the list developed
by the Secretary under subparagraph
(B); or
(iii) the item is a customized item
(other than inexpensive items specified
by the Secretary) and the patient to
whom the item is to be furnished or the
supplier requests that such advance
determination be made.
(16) Disclosure of information and surety bond.--The
Secretary shall not provide for the issuance (or
renewal) of a provider number for a supplier of durable
medical equipment, for purposes of payment under this
part for durable medical equipment furnished by the
supplier, unless the supplier provides the Secretary on
a continuing basis--
(A) with--
(i) full and complete information as
to the identity of each person with an
ownership or control interest (as
defined in section 1124(a)(3)) in the
supplier or in any subcontractor (as
defined by the Secretary in
regulations) in which the supplier
directly or indirectly has a 5 percent
or more ownership interest; and
(ii) to the extent determined to be
feasible under regulations of the
Secretary, the name of any disclosing
entity (as defined in section
1124(a)(2)) with respect to which a
person with such an ownership or
control interest in the supplier is a
person with such an ownership or
control interest in the disclosing
entity; and
(B) with a surety bond in a form specified by
the Secretary and in an amount that is not less
than $50,000 that the Secretary determines is
commensurate with the volume of the billing of
the supplier.
The Secretary may waive the requirement of a bond under
subparagraph (B) in the case of a supplier that
provides a comparable surety bond under State law. The
Secretary, at the Secretary's discretion, may impose
the requirements of the first sentence with respect to
some or all providers of items or services under part A
or some or all suppliers or other persons (other than
physicians or other practitioners, as defined in
section 1842(b)(18)(C)) who furnish items or services
under this part.
(17) Prohibition against unsolicited telephone
contacts by suppliers.--
(A) In general.--A supplier of a covered item
under this subsection may not contact an
individual enrolled under this part by
telephone regarding the furnishing of a covered
item to the individual unless 1 of the
following applies:
(i) The individual has given written
permission to the supplier to make
contact by telephone regarding the
furnishing of a covered item.
(ii) The supplier has furnished a
covered item to the individual and the
supplier is contacting the individual
only regarding the furnishing of such
covered item.
(iii) If the contact is regarding the
furnishing of a covered item other than
a covered item already furnished to the
individual, the supplier has furnished
at least 1 covered item to the
individual during the 15-month period
preceding the date on which the
supplier makes such contact.
(B) Prohibiting payment for items furnished
subsequent to unsolicited contacts.--If a
supplier knowingly contacts an individual in
violation of subparagraph (A), no payment may
be made under this part for any item
subsequently furnished to the individual by the
supplier.
(C) Exclusion from program for suppliers
engaging in pattern of unsolicited contacts.--
If a supplier knowingly contacts individuals in
violation of subparagraph (A) to such an extent
that the supplier's conduct establishes a
pattern of contacts in violation of such
subparagraph, the Secretary shall exclude the
supplier from participation in the programs
under this Act, in accordance with the
procedures set forth in subsections (c), (f),
and (g) of section 1128.
(18) Refund of amounts collected for certain
disallowed items.--
(A) In general.--If a nonparticipating
supplier furnishes to an individual enrolled
under this part a covered item for which no
payment may be made under this part by reason
of paragraph (17)(B), the supplier shall refund
on a timely basis to the patient (and shall be
liable to the patient for) any amounts
collected from the patient for the item,
unless--
(i) the supplier establishes that the
supplier did not know and could not
reasonably have been expected to know
that payment may not be made for the
item by reason of paragraph (17)(B), or
(ii) before the item was furnished,
the patient was informed that payment
under this part may not be made for
that item and the patient has agreed to
pay for that item.
(B) Sanctions.--If a supplier knowingly and
willfully fails to make refunds in violation of
subparagraph (A), the Secretary may apply
sanctions against the supplier in accordance
with section 1842(j)(2).
(C) Notice.--Each carrier with a contract in
effect under this part with respect to
suppliers of covered items shall send any
notice of denial of payment for covered items
by reason of paragraph (17)(B) and for which
payment is not requested on an assignment-
related basis to the supplier and the patient
involved.
(D) Timely basis defined.--A refund under
subparagraph (A) is considered to be on a
timely basis only if--
(i) in the case of a supplier who
does not request reconsideration or
seek appeal on a timely basis, the
refund is made within 30 days after the
date the supplier receives a denial
notice under subparagraph (C), or
(ii) in the case in which such a
reconsideration or appeal is taken, the
refund is made within 15 days after the
date the supplier receives notice of an
adverse determination on
reconsideration or appeal.
(19) Certain upgraded items.--
(A) Individual's right to choose upgraded
item.--Notwithstanding any other provision of
this title, the Secretary may issue regulations
under which an individual may purchase or rent
from a supplier an item of upgraded durable
medical equipment for which payment would be
made under this subsection if the item were a
standard item.
(B) Payments to supplier.--In the case of the
purchase or rental of an upgraded item under
subparagraph (A)--
(i) the supplier shall receive
payment under this subsection with
respect to such item as if such item
were a standard item; and
(ii) the individual purchasing or
renting the item shall pay the supplier
an amount equal to the difference
between the supplier's charge and the
amount under clause (i).
In no event may the supplier's charge for an
upgraded item exceed the applicable fee
schedule amount (if any) for such item.
(C) Consumer protection safeguards.--Any
regulations under subparagraph (A) shall
provide for consumer protection standards with
respect to the furnishing of upgraded equipment
under subparagraph (A). Such regulations shall
provide for--
(i) determination of fair market
prices with respect to an upgraded
item;
(ii) full disclosure of the
availability and price of standard
items and proof of receipt of such
disclosure information by the
beneficiary before the furnishing of
the upgraded item;
(iii) conditions of participation for
suppliers in the billing arrangement;
(iv) sanctions of suppliers who are
determined to engage in coercive or
abusive practices, including exclusion;
and
(v) such other safeguards as the
Secretary determines are necessary.
(20) Identification of quality standards.--
(A) In general.--Subject to subparagraph (C),
the Secretary shall establish and implement
quality standards for suppliers of items and
services described in subparagraph (D) to be
applied by recognized independent accreditation
organizations (as designated under subparagraph
(B)) and with which such suppliers shall be
required to comply in order to--
(i) furnish any such item or service
for which payment is made under this
part; and
(ii) receive or retain a provider or
supplier number used to submit claims
for reimbursement for any such item or
service for which payment may be made
under this title.
(B) Designation of independent accreditation
organizations.--Not later than the date that is
1 year after the date on which the Secretary
implements the quality standards under
subparagraph (A), notwithstanding section
1865(a), the Secretary shall designate and
approve one or more independent accreditation
organizations for purposes of such
subparagraph.
(C) Quality standards.--The quality standards
described in subparagraph (A) may not be less
stringent than the quality standards that would
otherwise apply if this paragraph did not apply
and shall include consumer services standards.
(D) Items and services described.--The items
and services described in this subparagraph are
the following items and services, as the
Secretary determines appropriate:
(i) Covered items (as defined in
paragraph (13)) for which payment may
otherwise be made under this
subsection.
(ii) Prosthetic devices and orthotics
and prosthetics described in section
1834(h)(4).
(iii) Items and services described in
section 1842(s)(2).
(E) Implementation.--The Secretary may
establish by program instruction or otherwise
the quality standards under this paragraph,
including subparagraph (F), after consultation
with representatives of relevant parties. Such
standards shall be applied prospectively and
shall be published on the Internet website of
the Centers for Medicare & Medicaid Services.
(F) Application of accreditation
requirement.--In implementing quality standards
under this paragraph--
(i) subject to clause (ii) and
subparagraph (G), the Secretary shall
require suppliers furnishing items and
services described in subparagraph (D)
on or after October 1, 2009, directly
or as a subcontractor for another
entity, to have submitted to the
Secretary evidence of accreditation by
an accreditation organization
designated under subparagraph (B) as
meeting applicable quality standards,
except that the Secretary shall not
require under this clause pharmacies to
obtain such accreditation before
January 1, 2010, except that the
Secretary shall not require a pharmacy
to have submitted to the Secretary such
evidence of accreditation prior to
January 1, 2011; and
(ii) in applying such standards and
the accreditation requirement of clause
(i) with respect to eligible
professionals (as defined in section
1848(k)(3)(B)), and including such
other persons, such as orthotists and
prosthetists, as specified by the
Secretary, furnishing such items and
services--
(I) such standards and
accreditation requirement shall
not apply to such professionals
and persons unless the
Secretary determines that the
standards being applied are
designed specifically to be
applied to such professionals
and persons; and
(II) the Secretary may exempt
such professionals and persons
from such standards and
requirement if the Secretary
determines that licensing,
accreditation, or other
mandatory quality requirements
apply to such professionals and
persons with respect to the
furnishing of such items and
services.
(G) Application of accreditation requirement
to certain pharmacies.--
(i) In general.--With respect to
items and services furnished on or
after January 1, 2011, in implementing
quality standards under this
paragraph--
(I) subject to subclause
(II), in applying such
standards and the accreditation
requirement of subparagraph
(F)(i) with respect to
pharmacies described in clause
(ii) furnishing such items and
services, such standards and
accreditation requirement shall
not apply to such pharmacies;
and
(II) the Secretary may apply
to such pharmacies an
alternative accreditation
requirement established by the
Secretary if the Secretary
determines such alternative
accreditation requirement is
more appropriate for such
pharmacies.
(ii) Pharmacies described.--A
pharmacy described in this clause is a
pharmacy that meets each of the
following criteria:
(I) The total billings by the
pharmacy for such items and
services under this title are
less than 5 percent of total
pharmacy sales, as determined
based on the average total
pharmacy sales for the previous
3 calendar years, 3 fiscal
years, or other yearly period
specified by the Secretary.
(II) The pharmacy has been
enrolled under section 1866(j)
as a supplier of durable
medical equipment, prosthetics,
orthotics, and supplies, has
been issued (which may include
the renewal of) a provider
number for at least 5 years,
and for which a final adverse
action (as defined in section
424.57(a) of title 42, Code of
Federal Regulations) has not
been imposed in the past 5
years.
(III) The pharmacy submits to
the Secretary an attestation,
in a form and manner, and at a
time, specified by the
Secretary, that the pharmacy
meets the criteria described in
subclauses (I) and (II). Such
attestation shall be subject to
section 1001 of title 18,
United States Code.
(IV) The pharmacy agrees to
submit materials as requested
by the Secretary, or during the
course of an audit conducted on
a random sample of pharmacies
selected annually, to verify
that the pharmacy meets the
criteria described in
subclauses (I) and (II).
Materials submitted under the
preceding sentence shall
include a certification by an
accountant on behalf of the
pharmacy or the submission of
tax returns filed by the
pharmacy during the relevant
periods, as requested by the
Secretary.
(21) Special payment rule for specified items and
supplies.--
(A) In general.--Notwithstanding the
preceding provisions of this subsection, for
specified items and supplies (described in
subparagraph (B)) furnished during 2005, the
payment amount otherwise determined under this
subsection for such specified items and
supplies shall be reduced by the percentage
difference between--
(i) the amount of payment otherwise
determined for the specified item or
supply under this subsection for 2002,
and
(ii) the amount of payment for the
specified item or supply under chapter
89 of title 5, United States Code, as
identified in the column entitled
``Median FEHP Price'' in the table
entitled ``SUMMARY OF MEDICARE PRICES
COMPARED TO VA, MEDICAID, RETAIL, AND
FEHP PRICES FOR 16 ITEMS'' included in
the Testimony of the Inspector General
before the Senate Committee on
Appropriations, June 12, 2002, or any
subsequent report by the Inspector
General.
(B) Specified item or supply described.--For
purposes of subparagraph (A), a specified item
or supply means oxygen and oxygen equipment,
standard wheelchairs (including standard power
wheelchairs), nebulizers, diabetic supplies
consisting of lancets and testing strips,
hospital beds, and air mattresses, but only if
the HCPCS code for the item or supply is
identified in a table referred to in
subparagraph (A)(ii).
(C) Application of update to special payment
amount.--The covered item update under
paragraph (14) for specified items and supplies
for 2006 and each subsequent year shall be
applied to the payment amount under
subparagraph (A) unless payment is made for
such items and supplies under section 1847.
(22) Special payment rule for diabetic supplies.--
Notwithstanding the preceding provisions of this
subsection, for purposes of determining the payment
amount under this subsection for diabetic supplies
furnished on or after the first day of the calendar
quarter during 2013 that is at least 30 days after the
date of the enactment of this paragraph and before the
date described in paragraph (1)(H)(ii), the Secretary
shall recalculate and apply the covered item update
under paragraph (14) as if subparagraph (J)(i) of such
paragraph was amended by striking ``but only if
furnished through mail order''.
(b) Fee Schedules for Radiologist Services.--
(1) Development.--The Secretary shall develop--
(A) a relative value scale to serve as the
basis for the payment for radiologist services
under this part, and
(B) using such scale and appropriate
conversion factors and subject to subsection
(c)(1)(A), fee schedules (on a regional,
statewide, locality, or carrier service area
basis) for payment for radiologist services
under this part, to be implemented for such
services furnished during 1989.
(2) Consultation.--In carrying out paragraph (1), the
Secretary shall regularly consult closely with the
Physician Payment Review Commission, the American
College of Radiology, and other organizations
representing physicians or suppliers who furnish
radiologist services and shall share with them the data
and data analysis being used to make the determinations
under paragraph (1), including data on variations in
current medicare payments by geographic area, and by
service and physician specialty.
(3) Considerations.--In developing the relative value
scale and fee schedules under paragraph (1), the
Secretary--
(A) shall take into consideration variations
in the cost of furnishing such services among
geographic areas and among different sites
where services are furnished, and
(B) may also take into consideration such
other factors respecting the manner in which
physicians in different specialties furnish
such services as may be appropriate to assure
that payment amounts are equitable and designed
to promote effective and efficient provision of
radiologist services by physicians in the
different specialties.
(4) Savings.--
(A) Budget neutral fee schedules.--The
Secretary shall develop preliminary fee
schedules for 1989, which are designed to
result in the same amount of aggregate payments
(net of any coinsurance and deductibles under
sections 1833(a)(1)(J) and 1833(b)) for
radiologist services furnished in 1989 as would
have been made if this subsection had not been
enacted.
(B) Initial savings.--The fee schedules
established for payment purposes under this
subsection for services furnished in 1989 shall
be 97 percent of the amounts permitted under
these preliminary fee schedules developed under
subparagraph (A).
(C) 1990 fee schedules.--For radiologist
services (other than portable X-ray services)
furnished under this part during 1990, after
March 31 of such year, the conversion factors
used under this subsection shall be 96 percent
of the conversion factors that applied under
this subsection as of December 31, 1989.
(D) 1991 fee schedules.--For radiologist
services (other than portable X-ray services)
furnished under this part during 1991, the
conversion factors used in a locality under
this subsection shall, subject to clause (vii),
be reduced to the adjusted conversion factor
for the locality determined as follows:
(i) National weighted average
conversion factor.--The Secretary shall
estimate the national weighted average
of the conversion factors used under
this subsection for services furnished
during 1990 beginning on April 1, using
the best available data.
(ii) Reduced national weighted
average.--The national weighted average
estimated under clause (i) shall be
reduced by 13 percent.
(iii) Computation of 1990 locality
index relative to national average.--
The Secretary shall establish an index
which reflects, for each locality, the
ratio of the conversion factor used in
the locality under this subsection to
the national weighted average estimated
under clause (i).
(iv) Adjusted conversion factor.--The
adjusted conversion factor for the
professional or technical component of
a service in a locality is the sum of
\1/2\ of the locally-adjusted amount
determined under clause (v) and \1/2\
of the GPCI-adjusted amount determined
under clause (vi).
(v) Locally-adjusted amount.--For
purposes of clause (iv), the locally
adjusted amount determined under this
clause is the product of (I) the
national weighted average conversion
factor computed under clause (ii), and
(II) the index value established under
clause (iii) for the locality.
(vi) GPCI-adjusted amount.--For
purposes of clause (iv), the GPCI-
adjusted amount determined under this
clause is the sum of--
(I) the product of (a) the
portion of the reduced national
weighted average conversion
factor computed under clause
(ii) which is attributable to
physician work and (b) the
geographic work index value for
the locality (specified in
Addendum C to the Model Fee
Schedule for Physician Services
(published on September 4,
1990, 55 Federal Register pp.
36238-36243)); and
(II) the product of (a) the
remaining portion of the
reduced national weighted
average conversion factor
computed under clause (ii), and
(b) the geographic practice
cost index value specified in
section 1842(b)(14)(C)(iv) for
the locality.
In applying this clause with respect to
the professional component of a
service, 80 percent of the conversion
factor shall be considered to be
attributable to physician work and with
respect to the technical component of
the service, 0 percent shall be
considered to be attributable to
physician work.
(vii) Limits on conversion factor.--
The conversion factor to be applied to
a locality to the professional or
technical component of a service shall
not be reduced under this subparagraph
by more than 9.5 percent below the
conversion factor applied in the
locality under subparagraph (C) to such
component, but in no case shall the
conversion factor be less than 60
percent of the national weighted
average of the conversion factors
(computed under clause (i)).
(E) Rule for certain scanning services.--In
the case of the technical components of
magnetic resonance imaging (MRI) services and
computer assisted tomography (CAT) services
furnished after December 31, 1990, the amount
otherwise payable shall be reduced by 10
percent.
(F) Subsequent updating.--For radiologist
services furnished in subsequent years, the fee
schedules shall be the schedules for the
previous year updated by the percentage
increase in the MEI (as defined in section
1842(i)(3)) for the year.
(G) Nonparticipating physicians and
suppliers.--Each fee schedule so established
shall provide that the payment rate recognized
for nonparticipating physicians and suppliers
is equal to the appropriate percent (as defined
in section 1842(b)(4)(A)(iv)) of the payment
rate recognized for participating physicians
and suppliers.
(5) Limiting charges of nonparticipating physicians
and suppliers.--
(A) In general.--In the case of radiologist
services furnished after January 1, 1989, for
which payment is made under a fee schedule
under this subsection, if a nonparticipating
physician or supplier furnishes the service to
an individual entitled to benefits under this
part, the physician or supplier may not charge
the individual more than the limiting charge
(as defined in subparagraph (B)).
(B) Limiting charge defined.--In subparagraph
(A), the term ``limiting charge'' means, with
respect to a service furnished--
(i) in 1989, 125 percent of the
amount specified for the service in the
appropriate fee schedule established
under paragraph (1),
(ii) in 1990, 120 percent of the
amount specified for the service in the
appropriate fee schedule established
under paragraph (1), and
(iii) after 1990, 115 percent of the
amount specified for the service in the
appropriate fee schedule established
under paragraph (1).
(C) Enforcement.--If a physician or supplier
knowingly and willfully bills in violation of
subparagraph (A), the Secretary may apply
sanctions against such physician or supplier in
accordance with section 1842(j)(2) in the same
manner as such sanctions may apply to a
physician.
(6) Radiologist services defined.--For the purposes
of this subsection and section 1833(a)(1)(J), the term
``radiologist services'' only includes radiology
services performed by, or under the direction or
supervision of, a physician--
(A) who is certified, or eligible to be
certified, by the American Board of Radiology,
or
(B) for whom radiology services account for
at least 50 percent of the total amount of
charges made under this part.
(c) Payment and Standards for Screening Mammography.--
(1) In general.--With respect to expenses incurred
for screening mammography (as defined in section
1861(jj)), payment may be made only--
(A) for screening mammography conducted
consistent with the frequency permitted under
paragraph (2); and
(B) if the screening mammography is conducted
by a facility that has a certificate (or
provisional certificate) issued under section
354 of the Public Health Service Act.
(2) Frequency covered.--
(A) In general.--Subject to revision by the
Secretary under subparagraph (B)--
(i) no payment may be made under this
part for screening mammography
performed on a woman under 35 years of
age;
(ii) payment may be made under this
part for only one screening mammography
performed on a woman over 34 years of
age, but under 40 years of age; and
(iii) in the case of a woman over 39
years of age, payment may not be made
under this part for screening
mammography performed within 11 months
following the month in which a previous
screening mammography was performed.
(B) Revision of frequency.--
(i) Review.--The Secretary, in
consultation with the Director of the
National Cancer Institute, shall review
periodically the appropriate frequency
for performing screening mammography,
based on age and such other factors as
the Secretary believes to be pertinent.
(ii) Revision of frequency.--The
Secretary, taking into consideration
the review made under clause (i), may
revise from time to time the frequency
with which screening mammography may be
paid for under this subsection.
(d) Frequency Limits and Payment for Colorectal Cancer
Screening Tests.--
(1) Screening fecal-occult blood tests.--
(A) Payment amount.--The payment amount for
colorectal cancer screening tests consisting of
screening fecal-occult blood tests is equal to
the payment amount established for diagnostic
fecal-occult blood tests under section 1833(h).
(B) Frequency limit.--No payment may be made
under this part for a colorectal cancer
screening test consisting of a screening fecal-
occult blood test--
(i) if the individual is under 50
years of age; or
(ii) if the test is performed within
the 11 months after a previous
screening fecal-occult blood test.
(2) Screening flexible sigmoidoscopies.--
(A) Fee schedule.--With respect to colorectal
cancer screening tests consisting of screening
flexible sigmoidoscopies, payment under section
1848 shall be consistent with payment under
such section for similar or related services.
(B) Payment limit.--In the case of screening
flexible sigmoidoscopy services, payment under
this part shall not exceed such amount as the
Secretary specifies, based upon the rates
recognized for diagnostic flexible
sigmoidoscopy services.
(C) Facility payment limit.--
(i) In general.--Notwithstanding
subsections (i)(2)(A) and (t) of
section 1833, in the case of screening
flexible sigmoidoscopy services
furnished on or after January 1, 1999,
that--
(I) in accordance with
regulations, may be performed
in an ambulatory surgical
center and for which the
Secretary permits ambulatory
surgical center payments under
this part, and
(II) are performed in an
ambulatory surgical center or
hospital outpatient department,
payment under this part shall be based
on the lesser of the amount under the
fee schedule that would apply to such
services if they were performed in a
hospital outpatient department in an
area or the amount under the fee
schedule that would apply to such
services if they were performed in an
ambulatory surgical center in the same
area.
(ii) Limitation on coinsurance.--
Notwithstanding any other provision of
this title, in the case of a
beneficiary who receives the services
described in clause (i)--
(I) in computing the amount
of any applicable copayment,
the computation of such
coinsurance shall be based upon
the fee schedule under which
payment is made for the
services, and
(II) the amount of such
coinsurance is equal to 25
percent of the payment amount
under the fee schedule
described in subclause (I).
(D) Special rule for detected lesions.--If
during the course of such screening flexible
sigmoidoscopy, a lesion or growth is detected
which results in a biopsy or removal of the
lesion or growth, payment under this part shall
not be made for the screening flexible
sigmoidoscopy but shall be made for the
procedure classified as a flexible
sigmoidoscopy with such biopsy or removal.
(E) Frequency limit.--No payment may be made
under this part for a colorectal cancer
screening test consisting of a screening
flexible sigmoidoscopy--
(i) if the individual is under 50
years of age; or
(ii) if the procedure is performed
within the 47 months after a previous
screening flexible sigmoidoscopy or, in
the case of an individual who is not at
high risk for colorectal cancer, if the
procedure is performed within the 119
months after a previous screening
colonoscopy.
(3) Screening colonoscopy.--
(A) Fee schedule.--With respect to colorectal
cancer screening test consisting of a screening
colonoscopy, payment under section 1848 shall
be consistent with payment amounts under such
section for similar or related services.
(B) Payment limit.--In the case of screening
colonoscopy services, payment under this part
shall not exceed such amount as the Secretary
specifies, based upon the rates recognized for
diagnostic colonoscopy services.
(C) Facility payment limit.--
(i) In general.--Notwithstanding
subsections (i)(2)(A) and (t) of
section 1833, in the case of screening
colonoscopy services furnished on or
after January 1, 1999, that are
performed in an ambulatory surgical
center or a hospital outpatient
department, payment under this part
shall be based on the lesser of the
amount under the fee schedule that
would apply to such services if they
were performed in a hospital outpatient
department in an area or the amount
under the fee schedule that would apply
to such services if they were performed
in an ambulatory surgical center in the
same area.
(ii) Limitation on coinsurance.--
Notwithstanding any other provision of
this title, in the case of a
beneficiary who receives the services
described in clause (i)--
(I) in computing the amount
of any applicable coinsurance,
the computation of such
coinsurance shall be based upon
the fee schedule under which
payment is made for the
services, and
(II) the amount of such
coinsurance is equal to 25
percent of the payment amount
under the fee schedule
described in subclause (I).
(D) Special rule for detected lesions.--If
during the course of such screening
colonoscopy, a lesion or growth is detected
which results in a biopsy or removal of the
lesion or growth, payment under this part shall
not be made for the screening colonoscopy but
shall be made for the procedure classified as a
colonoscopy with such biopsy or removal.
(E) Frequency limit.--No payment may be made
under this part for a colorectal cancer
screening test consisting of a screening
colonoscopy for individuals at high risk for
colorectal cancer if the procedure is performed
within the 23 months after a previous screening
colonoscopy or for other individuals if the
procedure is performed within the 119 months
after a previous screening colonoscopy or
within 47 months after a previous screening
flexible sigmoidoscopy.
(e) Accreditation Requirement for Advanced Diagnostic Imaging
Services.--
(1) In general.--
(A) In general.--Beginning with January 1,
2012, with respect to the technical component
of advanced diagnostic imaging services for
which payment is made under the fee schedule
established under section 1848(b) and that are
furnished by a supplier, payment may only be
made if such supplier is accredited by an
accreditation organization designated by the
Secretary under paragraph (2)(B)(i).
(B) Advanced diagnostic imaging services
defined.--In this subsection, the term
``advanced diagnostic imaging services''
includes--
(i) diagnostic magnetic resonance
imaging, computed tomography, and
nuclear medicine (including positron
emission tomography); and
(ii) such other diagnostic imaging
services, including services described
in section 1848(b)(4)(B) (excluding X-
ray, ultrasound, and fluoroscopy), as
specified by the Secretary in
consultation with physician specialty
organizations and other stakeholders.
(C) Supplier defined.--In this subsection,
the term ``supplier'' has the meaning given
such term in section 1861(d).
(2) Accreditation organizations.--
(A) Factors for designation of accreditation
organizations.--The Secretary shall consider
the following factors in designating
accreditation organizations under subparagraph
(B)(i) and in reviewing and modifying the list
of accreditation organizations designated
pursuant to subparagraph (C):
(i) The ability of the organization
to conduct timely reviews of
accreditation applications.
(ii) Whether the organization has
established a process for the timely
integration of new advanced diagnostic
imaging services into the
organization's accreditation program.
(iii) Whether the organization uses
random site visits, site audits, or
other strategies for ensuring
accredited suppliers maintain adherence
to the criteria described in paragraph
(3).
(iv) The ability of the organization
to take into account the capacities of
suppliers located in a rural area (as
defined in section 1886(d)(2)(D)).
(v) Whether the organization has
established reasonable fees to be
charged to suppliers applying for
accreditation.
(vi) Such other factors as the
Secretary determines appropriate.
(B) Designation.--Not later than January 1,
2010, the Secretary shall designate
organizations to accredit suppliers furnishing
the technical component of advanced diagnostic
imaging services. The list of accreditation
organizations so designated may be modified
pursuant to subparagraph (C).
(C) Review and modification of list of
accreditation organizations.--
(i) In general.--The Secretary shall
review the list of accreditation
organizations designated under
subparagraph (B) taking into account
the factors under subparagraph (A).
Taking into account the results of such
review, the Secretary may, by
regulation, modify the list of
accreditation organizations designated
under subparagraph (B).
(ii) Special rule for accreditations
done prior to removal from list of
designated accreditation
organizations.--In the case where the
Secretary removes an organization from
the list of accreditation organizations
designated under subparagraph (B), any
supplier that is accredited by the
organization during the period
beginning on the date on which the
organization is designated as an
accreditation organization under
subparagraph (B) and ending on the date
on which the organization is removed
from such list shall be considered to
have been accredited by an organization
designated by the Secretary under
subparagraph (B) for the remaining
period such accreditation is in effect.
(3) Criteria for accreditation.--The Secretary shall
establish procedures to ensure that the criteria used
by an accreditation organization designated under
paragraph (2)(B) to evaluate a supplier that furnishes
the technical component of advanced diagnostic imaging
services for the purpose of accreditation of such
supplier is specific to each imaging modality. Such
criteria shall include--
(A) standards for qualifications of medical
personnel who are not physicians and who
furnish the technical component of advanced
diagnostic imaging services;
(B) standards for qualifications and
responsibilities of medical directors and
supervising physicians, including standards
that recognize the considerations described in
paragraph (4);
(C) procedures to ensure that equipment used
in furnishing the technical component of
advanced diagnostic imaging services meets
performance specifications;
(D) standards that require the supplier have
procedures in place to ensure the safety of
persons who furnish the technical component of
advanced diagnostic imaging services and
individuals to whom such services are
furnished;
(E) standards that require the establishment
and maintenance of a quality assurance and
quality control program by the supplier that is
adequate and appropriate to ensure the
reliability, clarity, and accuracy of the
technical quality of diagnostic images produced
by such supplier; and
(F) any other standards or procedures the
Secretary determines appropriate.
(4) Recognition in standards for the evaluation of
medical directors and supervising physicians.--The
standards described in paragraph (3)(B) shall recognize
whether a medical director or supervising physician--
(A) in a particular specialty receives
training in advanced diagnostic imaging
services in a residency program;
(B) has attained, through experience, the
necessary expertise to be a medical director or
a supervising physician;
(C) has completed any continuing medical
education courses relating to such services; or
(D) has met such other standards as the
Secretary determines appropriate.
(5) Rule for accreditations made prior to
designation.--In the case of a supplier that is
accredited before January 1, 2010, by an accreditation
organization designated by the Secretary under
paragraph (2)(B) as of January 1, 2010, such supplier
shall be considered to have been accredited by an
organization designated by the Secretary under such
paragraph as of January 1, 2012, for the remaining
period such accreditation is in effect.
(f) Reduction in Payments for Physician Pathology Services
During 1991.--
(1) In general.--For physician pathology services
furnished under this part during 1991, the prevailing
charges used in a locality under this part shall be 7
percent below the prevailing charges used in the
locality under this part in 1990 after March 31.
(2) Limitation.--The prevailing charge for the
technical and professional components of an physician
pathology service furnished by a physician through an
independent laboratory shall not be reduced pursuant to
paragraph (1) to the extent that such reduction would
reduce such prevailing charge below 115 percent of the
prevailing charge for the professional component of
such service when furnished by a hospital-based
physician in the same locality. For purposes of the
preceding sentence, an independent laboratory is a
laboratory that is independent of a hospital and
separate from the attending or consulting physicians'
office.
(g) Payment for Outpatient Critical Access Hospital
Services.--
(1) In general.--The amount of payment for outpatient
critical access hospital services of a critical access
hospital is equal to 101 percent of the reasonable
costs of the hospital in providing such services,
unless the hospital makes the election under paragraph
(2).
(2) Election of cost-based hospital outpatient
service payment plus fee schedule for professional
services.--A critical access hospital may elect to be
paid for outpatient critical access hospital services
amounts equal to the sum of the following, less the
amount that such hospital may charge as described in
section 1866(a)(2)(A):
(A) Facility fee.--With respect to facility
services, not including any services for which
payment may be made under subparagraph (B), 101
percent of the reasonable costs of the critical
access hospital in providing such services.
(B) Fee schedule for professional services.--
With respect to professional services otherwise
included within outpatient critical access
hospital services, 115 percent of such amounts
as would otherwise be paid under this part if
such services were not included in outpatient
critical access hospital services. Subsections
(x) and (y) of section 1833 shall not be taken
into account in determining the amounts that
would otherwise be paid pursuant to the
preceding sentence.
The Secretary may not require, as a condition for
applying subparagraph (B) with respect to a critical
access hospital, that each physician or other
practitioner providing professional services in the
hospital must assign billing rights with respect to
such services, except that such subparagraph shall not
apply to those physicians and practitioners who have
not assigned such billing rights.
(3) Disregarding charges.--The payment amounts under
this subsection shall be determined without regard to
the amount of the customary or other charge.
(4) Treatment of clinical diagnostic laboratory
services.--No coinsurance, deductible, copayment, or
other cost-sharing otherwise applicable under this part
shall apply with respect to clinical diagnostic
laboratory services furnished as an outpatient critical
access hospital service. Nothing in this title shall be
construed as providing for payment for clinical
diagnostic laboratory services furnished as part of
outpatient critical access hospital services, other
than on the basis described in this subsection. For
purposes of the preceding sentence and section
1861(mm)(3), clinical diagnostic laboratory services
furnished by a critical access hospital shall be
treated as being furnished as part of outpatient
critical access services without regard to whether the
individual with respect to whom such services are
furnished is physically present in the critical access
hospital, or in a skilled nursing facility or a clinic
(including a rural health clinic) that is operated by a
critical access hospital, at the time the specimen is
collected.
(5) Coverage of costs for certain emergency room on-
call providers.--In determining the reasonable costs of
outpatient critical access hospital services under
paragraphs (1) and (2)(A), the Secretary shall
recognize as allowable costs, amounts (as defined by
the Secretary) for reasonable compensation and related
costs for physicians, physician assistants, nurse
practitioners, and clinical nurse specialists who are
on-call (as defined by the Secretary) to provide
emergency services but who are not present on the
premises of the critical access hospital involved, and
are not otherwise furnishing services covered under
this title and are not on-call at any other provider or
facility.
(h) Payment for Prosthetic Devices and Orthotics and
Prosthetics.--
(1) General rule for payment.--
(A) In general.--Payment under this
subsection for prosthetic devices and orthotics
and prosthetics shall be made in a lump-sum
amount for the purchase of the item in an
amount equal to 80 percent of the payment basis
described in subparagraph (B).
(B) Payment basis.--Except as provided in
subparagraphs (C), (E), and (H)(i), the payment
basis described in this subparagraph is the
lesser of--
(i) the actual charge for the item;
or
(ii) the amount recognized under
paragraph (2) as the purchase price for
the item.
(C) Exception for certain public home health
agencies.--Subparagraph (B)(i) shall not apply
to an item furnished by a public home health
agency (or by another home health agency which
demonstrates to the satisfaction of the
Secretary that a significant portion of its
patients are low income) free of charge or at
nominal charges to the public.
(D) Exclusive payment rule.--Subject to
subparagraph (H)(ii), this subsection shall
constitute the exclusive provision of this
title for payment for prosthetic devices,
orthotics, and prosthetics under this part or
under part A to a home health agency.
(E) Exception for certain items.--Payment for
ostomy supplies, tracheostomy supplies, and
urologicals shall be made in accordance with
subparagraphs (B) and (C) of section
1834(a)(2).
(F) Special payment rules for certain
prosthetics and custom-fabricated orthotics.--
(i) In general.--No payment shall be
made under this subsection for an item
of custom-fabricated orthotics
described in clause (ii) or for an item
of prosthetics unless such item is--
(I) furnished by a qualified
practitioner; and
(II) fabricated by a
qualified practitioner or a
qualified supplier at a
facility that meets such
criteria as the Secretary
determines appropriate.
(ii) Description of custom-fabricated
item.--
(I) In general.--An item
described in this clause is an
item of custom-fabricated
orthotics that requires
education, training, and
experience to custom-fabricate
and that is included in a list
established by the Secretary in
subclause (II). Such an item
does not include shoes and shoe
inserts.
(II) List of items.--The
Secretary, in consultation with
appropriate experts in
orthotics (including national
organizations representing
manufacturers of orthotics),
shall establish and update as
appropriate a list of items to
which this subparagraph
applies. No item may be
included in such list unless
the item is individually
fabricated for the patient over
a positive model of the
patient.
(iii) Qualified practitioner
defined.--In this subparagraph, the
term ``qualified practitioner'' means a
physician or other individual who--
(I) is a qualified physical
therapist or a qualified
occupational therapist;
(II) in the case of a State
that provides for the licensing
of orthotics and prosthetics,
is licensed in orthotics or
prosthetics by the State in
which the item is supplied; or
(III) in the case of a State
that does not provide for the
licensing of orthotics and
prosthetics, is specifically
trained and educated to provide
or manage the provision of
prosthetics and custom-designed
or -fabricated orthotics, and
is certified by the American
Board for Certification in
Orthotics and Prosthetics, Inc.
or by the Board for Orthotist/
Prosthetist Certification, or
is credentialed and approved by
a program that the Secretary
determines, in consultation
with appropriate experts in
orthotics and prosthetics, has
training and education
standards that are necessary to
provide such prosthetics and
orthotics.
(iv) Qualified supplier defined.--In
this subparagraph, the term ``qualified
supplier'' means any entity that is
accredited by the American Board for
Certification in Orthotics and
Prosthetics, Inc. or by the Board for
Orthotist/Prosthetist Certification, or
accredited and approved by a program
that the Secretary determines has
accreditation and approval standards
that are essentially equivalent to
those of such Board.
(G) Replacement of prosthetic devices and
parts.--
(i) In general.--Payment shall be
made for the replacement of prosthetic
devices which are artificial limbs, or
for the replacement of any part of such
devices, without regard to continuous
use or useful lifetime restrictions if
an ordering physician determines that
the provision of a replacement device,
or a replacement part of such a device,
is necessary because of any of the
following:
(I) A change in the
physiological condition of the
patient.
(II) An irreparable change in
the condition of the device, or
in a part of the device.
(III) The condition of the
device, or the part of the
device, requires repairs and
the cost of such repairs would
be more than 60 percent of the
cost of a replacement device,
or, as the case may be, of the
part being replaced.
(ii) Confirmation may be required if
device or part being replaced is less
than 3 years old.--If a physician
determines that a replacement device,
or a replacement part, is necessary
pursuant to clause (i)--
(I) such determination shall
be controlling; and
(II) such replacement device
or part shall be deemed to be
reasonable and necessary for
purposes of section
1862(a)(1)(A);
except that if the device, or part,
being replaced is less than 3 years old
(calculated from the date on which the
beneficiary began to use the device or
part), the Secretary may also require
confirmation of necessity of the
replacement device or replacement part,
as the case may be.
(H) Application of competitive acquisition to
orthotics; limitation of inherent
reasonableness authority.--In the case of
orthotics described in paragraph (2)(C) of
section 1847(a) furnished on or after January
1, 2009, subject to subsection (a)(1)(G), that
are included in a competitive acquisition
program in a competitive acquisition area under
such section--
(i) the payment basis under this
subsection for such orthotics furnished
in such area shall be the payment basis
determined under such competitive
acquisition program; and
(ii) subject to subsection (a)(1)(G),
the Secretary may use information on
the payment determined under such
competitive acquisition programs to
adjust the payment amount otherwise
recognized under subparagraph (B)(ii)
for an area that is not a competitive
acquisition area under section 1847,
and in the case of such adjustment,
paragraphs (8) and (9) of section
1842(b) shall not be applied.
(2) Purchase price recognized.--For purposes of
paragraph (1), the amount that is recognized under this
paragraph as the purchase price for prosthetic devices,
orthotics, and prosthetics is the amount described in
subparagraph (C) of this paragraph, determined as
follows:
(A) Computation of local purchase price.--
Each carrier under section 1842 shall compute a
base local purchase price for the item as
follows:
(i) The carrier shall compute a base
local purchase price for each item
equal to the average reasonable charge
in the locality for the purchase of the
item for the 12-month period ending
with June 1987.
(ii) The carrier shall compute a
local purchase price, with respect to
the furnishing of each particular
item--
(I) in 1989 and 1990, equal
to the base local purchase
price computed under clause (i)
increased by the percentage
increase in the consumer price
index for all urban consumers
(United States city average)
for the 6-month period ending
with December 1987, or
(II) in 1991, 1992 or 1993,
equal to the local purchase
price computed under this
clause for the previous year
increased by the applicable
percentage increase for the
year.
(B) Computation of regional purchase price.--
With respect to the furnishing of a particular
item in each region (as defined by the
Secretary), the Secretary shall compute a
regional purchase price--
(i) for 1992, equal to the average
(weighted by relative volume of all
claims among carriers) of the local
purchase prices for the carriers in the
region computed under subparagraph
(A)(ii)(II) for the year, and
(ii) for each subsequent year, equal
to the regional purchase price computed
under this subparagraph for the
previous year increased by the
applicable percentage increase for the
year.
(C) Purchase price recognized.--For purposes
of paragraph (1) and subject to subparagraph
(D), the amount that is recognized under this
paragraph as the purchase price for each item
furnished--
(i) in 1989, 1990, or 1991, is 100
percent of the local purchase price
computed under subparagraph (A)(ii);
(ii) in 1992, is the sum of (I) 75
percent of the local purchase price
computed under subparagraph (A)(ii)(II)
for 1992, and (II) 25 percent of the
regional purchase price computed under
subparagraph (B) for 1992;
(iii) in 1993, is the sum of (I) 50
percent of the local purchase price
computed under subparagraph (A)(ii)(II)
for 1993, and (II) 50 percent of the
regional purchase price computed under
subparagraph (B) for 1993; and
(iv) in 1994 or a subsequent year, is
the regional purchase price computed
under subparagraph (B) for that year.
(D) Range on amount recognized.--The amount
that is recognized under subparagraph (C) as
the purchase price for an item furnished--
(i) in 1992, may not exceed 125
percent, and may not be lower than 85
percent, of the average of the purchase
prices recognized under such
subparagraph for all the carrier
service areas in the United States in
that year; and
(ii) in a subsequent year, may not
exceed 120 percent, and may not be
lower than 90 percent, of the average
of the purchase prices recognized under
such subparagraph for all the carrier
service areas in the United States in
that year.
(3) Applicability of certain provisions relating to
durable medical equipment.--Paragraphs (12) and (17)
and subparagraphs (A) and (B) of paragraph (10) and
paragraph (11) of subsection (a) shall apply to
prosthetic devices, orthotics, and prosthetics in the
same manner as such provisions apply to covered items
under such subsection.
(4) Definitions.--In this subsection--
(A) the term ``applicable percentage
increase'' means--
(i) for 1991, 0 percent;
(ii) for 1992 and 1993, the
percentage increase in the consumer
price index for all urban consumers
(United States city average) for the
12-month period ending with June of the
previous year;
(iii) for 1994 and 1995, 0 percent;
(iv) for 1996 and 1997, the
percentage increase in the consumer
price index for all urban consumers
(United States city average) for the
12-month period ending with June of the
previous year;
(v) for each of the years 1998
through 2000, 1 percent;
(vi) for 2001, the percentage
increase in the consumer price index
for all urban consumers (U.S. city
average) for the 12-month period ending
with June 2000;
(vii) for 2002, 1 percent;
(viii) for 2003, the percentage
increase in the consumer price index
for all urban consumers (United States
city average) for the 12-month period
ending with June of the previous year;
(ix) for 2004, 2005, and 2006, 0
percent;
(x) for for each of 2007 through
2010, the percentage increase in the
consumer price index for all urban
consumers (United States city average)
for the 12-month period ending with
June of the previous year; and
(xi) for 2011 and each subsequent
year--
(I) the percentage increase
in the consumer price index for
all urban consumers (United
States city average) for the
12-month period ending with
June of the previous year,
reduced by--
(II) the productivity
adjustment described in section
1886(b)(3)(B)(xi)(II).
(B) the term ``prosthetic devices'' has the
meaning given such term in section 1861(s)(8),
except that such term does not include
parenteral and enteral nutrition nutrients,
supplies, and equipment and does not include an
implantable item for which payment may be made
under section 1833(t); and
(C) the term ``orthotics and prosthetics''
has the meaning given such term in section
1861(s)(9) (and includes shoes described in
section 1861(s)(12)), but does not include
intraocular lenses or medical supplies
(including catheters, catheter supplies, ostomy
bags, and supplies related to ostomy care)
furnished by a home health agency under section
1861(m)(5).
The application of subparagraph (A)(xi)(II) may result
in the applicable percentage increase under
subparagraph (A) being less than 0.0 for a year, and
may result in payment rates under this subsection for a
year being less than such payment rates for the
preceding year.
(i) Payment for Surgical Dressings.--
(1) In general.--Payment under this subsection for
surgical dressings (described in section 1861(s)(5))
shall be made in a lump sum amount for the purchase of
the item in an amount equal to 80 percent of the lesser
of--
(A) the actual charge for the item; or
(B) a payment amount determined in accordance
with the methodology described in subparagraphs
(B) and (C) of subsection (a)(2) (except that
in applying such methodology, the national
limited payment amount referred to in such
subparagraphs shall be initially computed based
on local payment amounts using average
reasonable charges for the 12-month period
ending December 31, 1992, increased by the
covered item updates described in such
subsection for 1993 and 1994).
(2) Exceptions.--Paragraph (1) shall not apply to
surgical dressings that are--
(A) furnished as an incident to a physician's
professional service; or
(B) furnished by a home health agency.
(j) Requirements for Suppliers of Medical Equipment and
Supplies.--
(1) Issuance and renewal of supplier number.--
(A) Payment.--Except as provided in
subparagraph (C), no payment may be made under
this part after the date of the enactment of
the Social Security Act Amendments of 1994 for
items furnished by a supplier of medical
equipment and supplies unless such supplier
obtains (and renews at such intervals as the
Secretary may require) a supplier number.
(B) Standards for possessing a supplier
number.--A supplier may not obtain a supplier
number unless--
(i) for medical equipment and
supplies furnished on or after the date
of the enactment of the Social Security
Act Amendments of 1994 and before
January 1, 1996, the supplier meets
standards prescribed by the Secretary
in regulations issued on June 18, 1992;
and
(ii) for medical equipment and
supplies furnished on or after January
1, 1996, the supplier meets revised
standards prescribed by the Secretary
(in consultation with representatives
of suppliers of medical equipment and
supplies, carriers, and consumers) that
shall include requirements that the
supplier--
(I) comply with all
applicable State and Federal
licensure and regulatory
requirements;
(II) maintain a physical
facility on an appropriate
site;
(III) have proof of
appropriate liability
insurance; and
(IV) meet such other
requirements as the Secretary
may specify.
(C) Exception for items furnished as incident
to a physician's service.--Subparagraph (A)
shall not apply with respect to medical
equipment and supplies furnished incident to a
physician's service.
(D) Prohibition against multiple supplier
numbers.--The Secretary may not issue more than
one supplier number to any supplier of medical
equipment and supplies unless the issuance of
more than one number is appropriate to identify
subsidiary or regional entities under the
supplier's ownership or control.
(E) Prohibition against delegation of
supplier determinations.--The Secretary may not
delegate (other than by contract under section
1842) the responsibility to determine whether
suppliers meet the standards necessary to
obtain a supplier number.
(2) Certificates of medical necessity.--
(A) Limitation on information provided by
suppliers on certificates of medical
necessity.--
(i) In general.--Effective 60 days
after the date of the enactment of the
Social Security Act Amendments of 1994,
a supplier of medical equipment and
supplies may distribute to physicians,
or to individuals entitled to benefits
under this part, a certificate of
medical necessity for commercial
purposes which contains no more than
the following information completed by
the supplier:
(I) An identification of the
supplier and the beneficiary to
whom such medical equipment and
supplies are furnished.
(II) A description of such
medical equipment and supplies.
(III) Any product code
identifying such medical
equipment and supplies.
(IV) Any other administrative
information (other than
information relating to the
beneficiary's medical
condition) identified by the
Secretary.
(ii) Information on payment amount
and charges.--If a supplier distributes
a certificate of medical necessity
containing any of the information
permitted to be supplied under clause
(i), the supplier shall also list on
the certificate of medical necessity
the fee schedule amount and the
supplier's charge for the medical
equipment or supplies being furnished
prior to distribution of such
certificate to the physician.
(iii) Penalty.--Any supplier of
medical equipment and supplies who
knowingly and willfully distributes a
certificate of medical necessity in
violation of clause (i) or fails to
provide the information required under
clause (ii) is subject to a civil money
penalty in an amount not to exceed
$1,000 for each such certificate of
medical necessity so distributed. The
provisions of section 1128A (other than
subsections (a) and (b)) shall apply to
civil money penalties under this
subparagraph in the same manner as they
apply to a penalty or proceeding under
section 1128A(a).
(B) Definition.--For purposes of this
paragraph, the term ``certificate of medical
necessity'' means a form or other document
containing information required by the carrier
to be submitted to show that an item is
reasonable and necessary for the diagnosis or
treatment of illness or injury or to improve
the functioning of a malformed body member.
(3) Coverage and review criteria.--The Secretary
shall annually review the coverage and utilization of
items of medical equipment and supplies to determine
whether such items should be made subject to coverage
and utilization review criteria, and if appropriate,
shall develop and apply such criteria to such items.
(4) Limitation on patient liability.--If a supplier
of medical equipment and supplies (as defined in
paragraph (5))--
(A) furnishes an item or service to a
beneficiary for which no payment may be made by
reason of paragraph (1);
(B) furnishes an item or service to a
beneficiary for which payment is denied in
advance under subsection (a)(15); or
(C) furnishes an item or service to a
beneficiary for which payment is denied under
section 1862(a)(1);
any expenses incurred for items and services furnished
to an individual by such a supplier not on an assigned
basis shall be the responsibility of such supplier. The
individual shall have no financial responsibility for
such expenses and the supplier shall refund on a timely
basis to the individual (and shall be liable to the
individual for) any amounts collected from the
individual for such items or services. The provisions
of subsection (a)(18) shall apply to refunds required
under the previous sentence in the same manner as such
provisions apply to refunds under such subsection.
(5) Definition.--The term ``medical equipment and
supplies'' means--
(A) durable medical equipment (as defined in
section 1861(n));
(B) prosthetic devices (as described in
section 1861(s)(8));
(C) orthotics and prosthetics (as described
in section 1861(s)(9));
(D) surgical dressings (as described in
section 1861(s)(5));
(E) such other items as the Secretary may
determine; and
(F) for purposes of paragraphs (1) and (3)--
(i) home dialysis supplies and
equipment (as described in section
1861(s)(2)(F)),
(ii) immunosuppressive drugs (as
described in section 1861(s)(2)(J)),
(iii) therapeutic shoes for diabetics
(as described in section 1861(s)(12)),
(iv) oral drugs prescribed for use as
an anticancer therapeutic agent (as
described in section 1861(s)(2)(Q)),
and
(v) self-administered erythropoetin
(as described in section
1861(s)(2)(P)).
(k) Payment for Outpatient Therapy Services and Comprehensive
Outpatient Rehabilitation Services.--
(1) In general.--With respect to services described
in section 1833(a)(8) or 1833(a)(9) for which payment
is determined under this subsection, the payment basis
shall be--
(A) for services furnished during 1998, the
amount determined under paragraph (2); or
(B) for services furnished during a
subsequent year, 80 percent of the lesser of--
(i) the actual charge for the
services, or
(ii) the applicable fee schedule
amount (as defined in paragraph (3))
for the services.
(2) Payment in 1998 based upon adjusted reasonable
costs.--The amount under this paragraph for services is
the lesser of--
(A) the charges imposed for the services, or
(B) the adjusted reasonable costs (as defined
in paragraph (4)) for the services,
less 20 percent of the amount of the charges imposed
for such services.
(3) Applicable fee schedule amount.--In this
subsection, the term ``applicable fee schedule amount''
means, with respect to services furnished in a year,
the amount determined under the fee schedule
established under section 1848 for such services
furnished during the year or, if there is no such fee
schedule established for such services, the amount
determined under the fee schedule established for such
comparable services as the Secretary specifies.
(4) Adjusted reasonable costs.--In paragraph (2), the
term ``adjusted reasonable costs'' means, with respect
to any services, reasonable costs determined for such
services, reduced by 10 percent. The 10-percent
reduction shall not apply to services described in
section 1833(a)(8)(B) (relating to services provided by
hospitals).
(5) Uniform coding.--For claims for services
submitted on or after April 1, 1998, for which the
amount of payment is determined under this subsection,
the claim shall include a code (or codes) under a
uniform coding system specified by the Secretary that
identifies the services furnished.
(6) Restraint on billing.--The provisions of
subparagraphs (A) and (B) of section 1842(b)(18) shall
apply to therapy services for which payment is made
under this subsection in the same manner as they apply
to services provided by a practitioner described in
section 1842(b)(18)(C).
(7) Adjustment in discount for certain multiple
therapy services.--In the case of therapy services
furnished on or after April 1, 2013, and for which
payment is made under this subsection pursuant to the
applicable fee schedule amount (as defined in paragraph
(3)), instead of the 25 percent multiple procedure
payment reduction specified in the final rule published
by the Secretary in the Federal Register on November
29, 2010, the reduction percentage shall be 50 percent.
(l) Establishment of Fee Schedule for Ambulance Services.--
(1) In general.--The Secretary shall establish a fee
schedule for payment for ambulance services whether
provided directly by a supplier or provider or under
arrangement with a provider under this part through a
negotiated rulemaking process described in title 5,
United States Code, and in accordance with the
requirements of this subsection.
(2) Considerations.--In establishing such fee
schedule, the Secretary shall--
(A) establish mechanisms to control increases
in expenditures for ambulance services under
this part;
(B) establish definitions for ambulance
services which link payments to the type of
services provided;
(C) consider appropriate regional and
operational differences;
(D) consider adjustments to payment rates to
account for inflation and other relevant
factors; and
(E) phase in the application of the payment
rates under the fee schedule in an efficient
and fair manner consistent with paragraph (11),
except that such phase-in shall provide for
full payment of any national mileage rate for
ambulance services provided by suppliers that
are paid by carriers in any of the 50 States
where payment by a carrier for such services
for all such suppliers in such State did not,
prior to the implementation of the fee
schedule, include a separate amount for all
mileage within the county from which the
beneficiary is transported.
(3) Savings.--In establishing such fee schedule, the
Secretary shall--
(A) ensure that the aggregate amount of
payments made for ambulance services under this
part during 2000 does not exceed the aggregate
amount of payments which would have been made
for such services under this part during such
year if the amendments made by section 4531(a)
of the Balanced Budget Act of 1997 continued in
effect, except that in making such
determination the Secretary shall assume an
update in such payments for 2002 equal to
percentage increase in the consumer price index
for all urban consumers (U.S. city average) for
the 12-month period ending with June of the
previous year reduced in the case of 2002 by
1.0 percentage points;
(B) set the payment amounts provided under
the fee schedule for services furnished in 2001
and each subsequent year at amounts equal to
the payment amounts under the fee schedule for
services furnished during the previous year,
increased, subject to subparagraph (C) and the
succeeding sentence of this paragraph, by the
percentage increase in the consumer price index
for all urban consumers (U.S. city average) for
the 12-month period ending with June of the
previous year reduced in the case of 2002 by
1.0 percentage points; and
(C) for 2011 and each subsequent year, after
determining the percentage increase under
subparagraph (B) for the year, reduce such
percentage increase by the productivity
adjustment described in section
1886(b)(3)(B)(xi)(II).
The application of subparagraph (C) may result in the
percentage increase under subparagraph (B) being less
than 0.0 for a year, and may result in payment rates
under the fee schedule under this subsection for a year
being less than such payment rates for the preceding
year.
(4) Consultation.--In establishing the fee schedule
for ambulance services under this subsection, the
Secretary shall consult with various national
organizations representing individuals and entities who
furnish and regulate ambulance services and share with
such organizations relevant data in establishing such
schedule.
(5) Limitation on review.--There shall be no
administrative or judicial review under section 1869 or
otherwise of the amounts established under the fee
schedule for ambulance services under this subsection,
including matters described in paragraph (2).
(6) Restraint on billing.--The provisions of
subparagraphs (A) and (B) of section 1842(b)(18) shall
apply to ambulance services for which payment is made
under this subsection in the same manner as they apply
to services provided by a practitioner described in
section 1842(b)(18)(C).
(7) Coding system.--The Secretary may require the
claim for any services for which the amount of payment
is determined under this subsection to include a code
(or codes) under a uniform coding system specified by
the Secretary that identifies the services furnished.
(8) Services furnished by critical access
hospitals.--Notwithstanding any other provision of this
subsection, the Secretary shall pay 101 percent of the
reasonable costs incurred in furnishing ambulance
services if such services are furnished--
(A) by a critical access hospital (as defined
in section 1861(mm)(1)), or
(B) by an entity that is owned and operated
by a critical access hospital,
but only if the critical access hospital or entity is
the only provider or supplier of ambulance services
that is located within a 35-mile drive of such critical
access hospital.
(9) Transitional assistance for rural providers.--In
the case of ground ambulance services furnished on or
after July 1, 2001, and before January 1, 2004, for
which the transportation originates in a rural area (as
defined in section 1886(d)(2)(D)) or in a rural census
tract of a metropolitan statistical area (as determined
under the most recent modification of the Goldsmith
Modification, originally published in the Federal
Register on February 27, 1992 (57 Fed. Reg. 6725)), the
fee schedule established under this subsection shall
provide that, with respect to the payment rate for
mileage for a trip above 17 miles, and up to 50 miles,
the rate otherwise established shall be increased by
not less than \1/2\ of the additional payment per mile
established for the first 17 miles of such a trip
originating in a rural area.
(10) Phase-in providing floor using blend of fee
schedule and regional fee schedules.--In carrying out
the phase-in under paragraph (2)(E) for each level of
ground service furnished in a year, the portion of the
payment amount that is based on the fee schedule shall
be the greater of the amount determined under such fee
schedule (without regard to this paragraph) or the
following blended rate of the fee schedule under
paragraph (1) and of a regional fee schedule for the
region involved:
(A) For 2004 (for services furnished on or
after July 1, 2004), the blended rate shall be
based 20 percent on the fee schedule under
paragraph (1) and 80 percent on the regional
fee schedule.
(B) For 2005, the blended rate shall be based
40 percent on the fee schedule under paragraph
(1) and 60 percent on the regional fee
schedule.
(C) For 2006, the blended rate shall be based
60 percent on the fee schedule under paragraph
(1) and 40 percent on the regional fee
schedule.
(D) For 2007, 2008, and 2009, the blended
rate shall be based 80 percent on the fee
schedule under paragraph (1) and 20 percent on
the regional fee schedule.
(E) For 2010 and each succeeding year, the
blended rate shall be based 100 percent on the
fee schedule under paragraph (1).
For purposes of this paragraph, the Secretary shall
establish a regional fee schedule for each of the nine
census divisions (referred to in section 1886(d)(2))
using the methodology (used in establishing the fee
schedule under paragraph (1)) to calculate a regional
conversion factor and a regional mileage payment rate
and using the same payment adjustments and the same
relative value units as used in the fee schedule under
such paragraph.
(11) Adjustment in payment for certain long trips.--
In the case of ground ambulance services furnished on
or after July 1, 2004, and before January 1, 2009,
regardless of where the transportation originates, the
fee schedule established under this subsection shall
provide that, with respect to the payment rate for
mileage for a trip above 50 miles the per mile rate
otherwise established shall be increased by \1/4\ of
the payment per mile otherwise applicable to miles in
excess of 50 miles in such trip.
(12) Assistance for rural providers furnishing
services in low population density areas.--
(A) In general.--In the case of ground
ambulance services furnished on or after July
1, 2004, and before January 1, 2018, for which
the transportation originates in a qualified
rural area (identified under subparagraph
(B)(iii)), the Secretary shall provide for a
percent increase in the base rate of the fee
schedule for a trip established under this
subsection. In establishing such percent
increase, the Secretary shall estimate the
average cost per trip for such services (not
taking into account mileage) in the lowest
quartile as compared to the average cost per
trip for such services (not taking into account
mileage) in the highest quartile of all rural
county populations.
(B) Identification of qualified rural
areas.--
(i) Determination of population
density in area.--Based upon data from
the United States decennial census for
the year 2000, the Secretary shall
determine, for each rural area, the
population density for that area.
(ii) Ranking of areas.--The Secretary
shall rank each such area based on such
population density.
(iii) Identification of qualified
rural areas.--The Secretary shall
identify those areas (in subparagraph
(A) referred to as ``qualified rural
areas'') with the lowest population
densities that represent, if each such
area were weighted by the population of
such area (as used in computing such
population densities), an aggregate
total of 25 percent of the total of the
population of all such areas.
(iv) Rural area.--For purposes of
this paragraph, the term ``rural area''
has the meaning given such term in
section 1886(d)(2)(D). If feasible, the
Secretary shall treat a rural census
tract of a metropolitan statistical
area (as determined under the most
recent modification of the Goldsmith
Modification, originally published in
the Federal Register on February 27,
1992 (57 Fed. Reg. 6725) as a rural
area for purposes of this paragraph.
(v) Judicial review.--There shall be
no administrative or judicial review
under section 1869, 1878, or otherwise,
respecting the identification of an
area under this subparagraph.
(13) Temporary increase for ground ambulance
services.--
(A) In general.--After computing the rates
with respect to ground ambulance services under
the other applicable provisions of this
subsection, in the case of such services
furnished on or after July 1, 2004, and before
January 1, 2007, and for such services
furnished on or after July 1, 2008, and before
January 1, 2018, for which the transportation
originates in--
(i) a rural area described in
paragraph (9) or in a rural census
tract described in such paragraph, the
fee schedule established under this
section shall provide that the rate for
the service otherwise established,
after the application of any increase
under paragraphs (11) and (12), shall
be increased by 2 percent (or 3 percent
if such service is furnished on or
after July 1, 2008, and before January
1, 2018); and
(ii) an area not described in clause
(i), the fee schedule established under
this subsection shall provide that the
rate for the service otherwise
established, after the application of
any increase under paragraph (11),
shall be increased by 1 percent (or 2
percent if such service is furnished on
or after July 1, 2008, and before
January 1, 2018).
(B) Application of increased payments after
applicable period.--The increased payments
under subparagraph (A) shall not be taken into
account in calculating payments for services
furnished after the applicable period specified
in such subparagraph.
(14) Providing appropriate coverage of rural air
ambulance services.--
(A) In general.--The regulations described in
section 1861(s)(7) shall provide, to the extent
that any ambulance services (whether ground or
air) may be covered under such section, that a
rural air ambulance service (as defined in
subparagraph (C)) is reimbursed under this
subsection at the air ambulance rate if the air
ambulance service--
(i) is reasonable and necessary based
on the health condition of the
individual being transported at or
immediately prior to the time of the
transport; and
(ii) complies with equipment and crew
requirements established by the
Secretary.
(B) Satisfaction of requirement of medically
necessary.--The requirement of subparagraph
(A)(i) is deemed to be met for a rural air
ambulance service if--
(i) subject to subparagraph (D), such
service is requested by a physician or
other qualified medical personnel (as
specified by the Secretary) who
certifies or reasonably determines that
the individual's condition is such that
the time needed to transport the
individual by land or the instability
of transportation by land poses a
threat to the individual's survival or
seriously endangers the individual's
health; or
(ii) such service is furnished
pursuant to a protocol that is
established by a State or regional
emergency medical service (EMS) agency
and recognized or approved by the
Secretary under which the use of an air
ambulance is recommended, if such
agency does not have an ownership
interest in the entity furnishing such
service.
(C) Rural air ambulance service defined.--For
purposes of this paragraph, the term ``rural
air ambulance service'' means fixed wing and
rotary wing air ambulance service in which the
point of pick up of the individual occurs in a
rural area (as defined in section
1886(d)(2)(D)) or in a rural census tract of a
metropolitan statistical area (as determined
under the most recent modification of the
Goldsmith Modification, originally published in
the Federal Register on February 27, 1992 (57
Fed. Reg. 6725)).
(D) Limitation.--
(i) In general.--Subparagraph (B)(i)
shall not apply if there is a financial
or employment relationship between the
person requesting the rural air
ambulance service and the entity
furnishing the ambulance service, or an
entity under common ownership with the
entity furnishing the air ambulance
service, or a financial relationship
between an immediate family member of
such requester and such an entity.
(ii) Exception.--Where a hospital and
the entity furnishing rural air
ambulance services are under common
ownership, clause (i) shall not apply
to remuneration (through employment or
other relationship) by the hospital of
the requester or immediate family
member if the remuneration is for
provider-based physician services
furnished in a hospital (as described
in section 1887) which are reimbursed
under part A and the amount of the
remuneration is unrelated directly or
indirectly to the provision of rural
air ambulance services.
(15) Payment adjustment for non-emergency ambulance
transports for esrd beneficiaries.--The fee schedule
amount otherwise applicable under the preceding
provisions of this subsection shall be reduced by 10
percent for ambulance services furnished on or after
October 1, 2013, consisting of non-emergency basic life
support services involving transport of an individual
with end-stage renal disease for renal dialysis
services (as described in section 1881(b)(14)(B))
furnished other than on an emergency basis by a
provider of services or a renal dialysis facility.
(16) Prior authorization for repetitive scheduled
non-emergent ambulance transports.--
(A) In general.--Beginning January 1, 2017,
if the expansion to all States of the model of
prior authorization described in paragraph (2)
of section 515(a) of the Medicare Access and
CHIP Reauthorization Act of 2015 meets the
requirements described in paragraphs (1)
through (3) of section 1115A(c), then the
Secretary shall expand such model to all
States.
(B) Funding.--The Secretary shall use funds
made available under section 1893(h)(10) to
carry out this paragraph.
(C) Clarification regarding budget
neutrality.--Nothing in this paragraph may be
construed to limit or modify the application of
section 1115A(b)(3)(B) to models described in
such section, including with respect to the
model described in subparagraph (A) and
expanded beginning on January 1, 2017, under
such subparagraph.
(m) Payment for Telehealth Services.--
(1) In general.--The Secretary shall pay for
telehealth services that are furnished via a
telecommunications system by a physician (as defined in
section 1861(r)) or a practitioner (described in
section 1842(b)(18)(C)) to an eligible telehealth
individual enrolled under this part notwithstanding
that the individual physician or practitioner providing
the telehealth service is not at the same location as
the beneficiary. For purposes of the preceding
sentence, in the case of any Federal telemedicine
demonstration program conducted in Alaska or Hawaii,
the term ``telecommunications system'' includes store-
and-forward technologies that provide for the
asynchronous transmission of health care information in
single or multimedia formats.
(2) Payment amount.--
(A) Distant site.--The Secretary shall pay to
a physician or practitioner located at a
distant site that furnishes a telehealth
service to an eligible telehealth individual an
amount equal to the amount that such physician
or practitioner would have been paid under this
title had such service been furnished without
the use of a telecommunications system.
(B) Facility fee for originating site.--With
respect to a telehealth service, subject to
section 1833(a)(1)(U), there shall be paid to
the originating site a facility fee equal to--
(i) for the period beginning on
October 1, 2001, and ending on December
31, 2001, and for 2002, $20; and
(ii) for a subsequent year, the
facility fee specified in clause (i) or
this clause for the preceding year
increased by the percentage increase in
the MEI (as defined in section
1842(i)(3)) for such subsequent year.
(C) Telepresenter not required.--Nothing in
this subsection shall be construed as requiring
an eligible telehealth individual to be
presented by a physician or practitioner at the
originating site for the furnishing of a
service via a telecommunications system, unless
it is medically necessary (as determined by the
physician or practitioner at the distant site).
(3) Limitation on beneficiary charges.--
(A) Physician and practitioner.--The
provisions of section 1848(g) and subparagraphs
(A) and (B) of section 1842(b)(18) shall apply
to a physician or practitioner receiving
payment under this subsection in the same
manner as they apply to physicians or
practitioners under such sections.
(B) Originating site.--The provisions of
section 1842(b)(18) shall apply to originating
sites receiving a facility fee in the same
manner as they apply to practitioners under
such section.
(4) Definitions.--For purposes of this subsection:
(A) Distant site.--The term ``distant site''
means the site at which the physician or
practitioner is located at the time the service
is provided via a telecommunications system.
(B) Eligible telehealth individual.--The term
``eligible telehealth individual'' means an
individual enrolled under this part who
receives a telehealth service furnished at an
originating site.
(C) Originating site.--
(i) In general.--The term
``originating site'' means only those
sites described in clause (ii) at which
the eligible telehealth individual is
located at the time the service is
furnished via a telecommunications
system and only if such site is
located--
(I) in an area that is
designated as a rural health
professional shortage area
under section 332(a)(1)(A) of
the Public Health Service Act
(42 U.S.C. 254e(a)(1)(A));
(II) in a county that is not
included in a Metropolitan
Statistical Area; or
(III) from an entity that
participates in a Federal
telemedicine demonstration
project that has been approved
by (or receives funding from)
the Secretary of Health and
Human Services as of December
31, 2000.
(ii) Sites described.--The sites
referred to in clause (i) are the
following sites:
(I) The office of a physician
or practitioner.
(II) A critical access
hospital (as defined in section
1861(mm)(1)).
(III) A rural health clinic
(as defined in section
1861(aa)(2)).
(IV) A Federally qualified
health center (as defined in
section 1861(aa)(4)).
(V) A hospital (as defined in
section 1861(e)).
(VI) A hospital-based or
critical access hospital-based
renal dialysis center
(including satellites).
(VII) A skilled nursing
facility (as defined in section
1819(a)).
(VIII) A community mental
health center (as defined in
section 1861(ff)(3)(B)).
(D) Physician.--The term ``physician'' has
the meaning given that term in section 1861(r).
(E) Practitioner.--The term ``practitioner''
has the meaning given that term in section
1842(b)(18)(C).
(F) Telehealth service.--
(i) In general.--The term
``telehealth service'' means
professional consultations, office
visits, and office psychiatry services
(identified as of July 1, 2000, by
HCPCS codes 99241-99275, 99201-99215,
90804-90809, and 90862 (and as
subsequently modified by the
Secretary)), and any additional service
specified by the Secretary.
(ii) Yearly update.--The Secretary
shall establish a process that
provides, on an annual basis, for the
addition or deletion of services (and
HCPCS codes), as appropriate, to those
specified in clause (i) for authorized
payment under paragraph (1).
(n) Authority To Modify or Eliminate Coverage of Certain
Preventive Services.--Notwithstanding any other provision of
this title, effective beginning on January 1, 2010, if the
Secretary determines appropriate, the Secretary may--
(1) modify--
(A) the coverage of any preventive service
described in subparagraph (A) of section
1861(ddd)(3) to the extent that such
modification is consistent with the
recommendations of the United States Preventive
Services Task Force; and
(B) the services included in the initial
preventive physical examination described in
subparagraph (B) of such section; and
(2) provide that no payment shall be made under this
title for a preventive service described in
subparagraph (A) of such section that has not received
a grade of A, B, C, or I by such Task Force.
(o) Development and Implementation of Prospective Payment
System.--
(1) Development.--
(A) In general.--The Secretary shall develop
a prospective payment system for payment for
Federally qualified health center services
furnished by Federally qualified health centers
under this title. Such system shall include a
process for appropriately describing the
services furnished by Federally qualified
health centers and shall establish payment
rates for specific payment codes based on such
appropriate descriptions of services. Such
system shall be established to take into
account the type, intensity, and duration of
services furnished by Federally qualified
health centers. Such system may include
adjustments, including geographic adjustments,
determined appropriate by the Secretary.
(B) Collection of data and evaluation.--By
not later than January 1, 2011, the Secretary
shall require Federally qualified health
centers to submit to the Secretary such
information as the Secretary may require in
order to develop and implement the prospective
payment system under this subsection, including
the reporting of services using HCPCS codes.
(2) Implementation.--
(A) In general.--Notwithstanding section
1833(a)(3)(A), the Secretary shall provide, for
cost reporting periods beginning on or after
October 1, 2014, for payments of prospective
payment rates for Federally qualified health
center services furnished by Federally
qualified health centers under this title in
accordance with the prospective payment system
developed by the Secretary under paragraph (1).
(B) Payments.--
(i) Initial payments.--The Secretary
shall implement such prospective
payment system so that the estimated
aggregate amount of prospective payment
rates (determined prior to the
application of section 1833(a)(1)(Z))
under this title for Federally
qualified health center services in the
first year that such system is
implemented is equal to 100 percent of
the estimated amount of reasonable
costs (determined without the
application of a per visit payment
limit or productivity screen and prior
to the application of section
1866(a)(2)(A)(ii)) that would have
occurred for such services under this
title in such year if the system had
not been implemented.
(ii) Payments in subsequent years.--
Payment rates in years after the year
of implementation of such system shall
be the payment rates in the previous
year increased--
(I) in the first year after
implementation of such system,
by the percentage increase in
the MEI (as defined in section
1842(i)(3)) for the year
involved; and
(II) in subsequent years, by
the percentage increase in a
market basket of Federally
qualified health center goods
and services as promulgated
through regulations, or if such
an index is not available, by
the percentage increase in the
MEI (as defined in section
1842(i)(3)) for the year
involved.
(C) Preparation for pps implementation.--
Notwithstanding any other provision of law, the
Secretary may establish and implement by
program instruction or otherwise the payment
codes to be used under the prospective payment
system under this section.
(p) Quality Incentives To Promote Patient Safety and Public
Health in Computed Tomography.--
(1) Quality incentives.--In the case of an applicable
computed tomography service (as defined in paragraph
(2)) for which payment is made under an applicable
payment system (as defined in paragraph (3)) and that
is furnished on or after January 1, 2016, using
equipment that is not consistent with the CT equipment
standard (described in paragraph (4)), the payment
amount for such service shall be reduced by the
applicable percentage (as defined in paragraph (5)).
(2) Applicable computed tomography services
defined.--In this subsection, the term ``applicable
computed tomography service'' means a service billed
using diagnostic radiological imaging codes for
computed tomography (identified as of January 1, 2014,
by HCPCS codes 70450-70498, 71250-71275, 72125-72133,
72191-72194, 73200-73206, 73700-73706, 74150-74178,
74261-74263, and 75571-75574 (and any succeeding
codes).
(3) Applicable payment system defined.--In this
subsection, the term ``applicable payment system''
means the following:
(A) The technical component and the technical
component of the global fee under the fee
schedule established under section 1848(b).
(B) The prospective payment system for
hospital outpatient department services under
section 1833(t).
(4) Consistency with ct equipment standard.--In this
subsection, the term ``not consistent with the CT
equipment standard'' means, with respect to an
applicable computed tomography service, that the
service was furnished using equipment that does not
meet each of the attributes of the National Electrical
Manufacturers Association (NEMA) Standard XR-29-2013,
entitled ``Standard Attributes on CT Equipment Related
to Dose Optimization and Management''. Through
rulemaking, the Secretary may apply successor
standards.
(5) Applicable percentage defined.--In this
subsection, the term ``applicable percentage'' means--
(A) for 2016, 5 percent; and
(B) for 2017 and subsequent years, 15
percent.
(6) Implementation.--
(A) Information.--The Secretary shall require
that information be provided and attested to by
a supplier and a hospital outpatient department
that indicates whether an applicable computed
tomography service was furnished that was not
consistent with the CT equipment standard
(described in paragraph (4)). Such information
may be included on a claim and may be a
modifier. Such information shall be verified,
as appropriate, as part of the periodic
accreditation of suppliers under section
1834(e) and hospitals under section 1865(a).
(B) Administration.--Chapter 35 of title 44,
United States Code, shall not apply to
information described in subparagraph (A).
(q) Recognizing Appropriate Use Criteria for Certain Imaging
Services.--
(1) Program established.--
(A) In general.--The Secretary shall
establish a program to promote the use of
appropriate use criteria (as defined in
subparagraph (B)) for applicable imaging
services (as defined in subparagraph (C))
furnished in an applicable setting (as defined
in subparagraph (D)) by ordering professionals
and furnishing professionals (as defined in
subparagraphs (E) and (F), respectively).
(B) Appropriate use criteria defined.--In
this subsection, the term ``appropriate use
criteria'' means criteria, only developed or
endorsed by national professional medical
specialty societies or other provider-led
entities, to assist ordering professionals and
furnishing professionals in making the most
appropriate treatment decision for a specific
clinical condition for an individual. To the
extent feasible, such criteria shall be
evidence-based.
(C) Applicable imaging service defined.--In
this subsection, the term ``applicable imaging
service'' means an advanced diagnostic imaging
service (as defined in subsection (e)(1)(B))
for which the Secretary determines--
(i) one or more applicable
appropriate use criteria specified
under paragraph (2) apply;
(ii) there are one or more qualified
clinical decision support mechanisms
listed under paragraph (3)(C); and
(iii) one or more of such mechanisms
is available free of charge.
(D) Applicable setting defined.--In this
subsection, the term ``applicable setting''
means a physician's office, a hospital
outpatient department (including an emergency
department), an ambulatory surgical center, and
any other provider-led outpatient setting
determined appropriate by the Secretary.
(E) Ordering professional defined.--In this
subsection, the term ``ordering professional''
means a physician (as defined in section
1861(r)) or a practitioner described in section
1842(b)(18)(C) who orders an applicable imaging
service.
(F) Furnishing professional defined.--In this
subsection, the term ``furnishing
professional'' means a physician (as defined in
section 1861(r)) or a practitioner described in
section 1842(b)(18)(C) who furnishes an
applicable imaging service.
(2) Establishment of applicable appropriate use
criteria.--
(A) In general.--Not later than November 15,
2015, the Secretary shall through rulemaking,
and in consultation with physicians,
practitioners, and other stakeholders, specify
applicable appropriate use criteria for
applicable imaging services only from among
appropriate use criteria developed or endorsed
by national professional medical specialty
societies or other provider-led entities.
(B) Considerations.--In specifying applicable
appropriate use criteria under subparagraph
(A), the Secretary shall take into account
whether the criteria--
(i) have stakeholder consensus;
(ii) are scientifically valid and
evidence based; and
(iii) are based on studies that are
published and reviewable by
stakeholders.
(C) Revisions.--The Secretary shall review,
on an annual basis, the specified applicable
appropriate use criteria to determine if there
is a need to update or revise (as appropriate)
such specification of applicable appropriate
use criteria and make such updates or revisions
through rulemaking.
(D) Treatment of multiple applicable
appropriate use criteria.--In the case where
the Secretary determines that more than one
appropriate use criterion applies with respect
to an applicable imaging service, the Secretary
shall apply one or more applicable appropriate
use criteria under this paragraph for the
service.
(3) Mechanisms for consultation with applicable
appropriate use criteria.--
(A) Identification of mechanisms to consult
with applicable appropriate use criteria.--
(i) In general.--The Secretary shall
specify qualified clinical decision
support mechanisms that could be used
by ordering professionals to consult
with applicable appropriate use
criteria for applicable imaging
services.
(ii) Consultation.--The Secretary
shall consult with physicians,
practitioners, health care technology
experts, and other stakeholders in
specifying mechanisms under this
paragraph.
(iii) Inclusion of certain
mechanisms.--Mechanisms specified under
this paragraph may include any or all
of the following that meet the
requirements described in subparagraph
(B)(ii):
(I) Use of clinical decision
support modules in certified
EHR technology (as defined in
section 1848(o)(4)).
(II) Use of private sector
clinical decision support
mechanisms that are independent
from certified EHR technology,
which may include use of
clinical decision support
mechanisms available from
medical specialty
organizations.
(III) Use of a clinical
decision support mechanism
established by the Secretary.
(B) Qualified clinical decision support
mechanisms.--
(i) In general.--For purposes of this
subsection, a qualified clinical
decision support mechanism is a
mechanism that the Secretary determines
meets the requirements described in
clause (ii).
(ii) Requirements.--The requirements
described in this clause are the
following:
(I) The mechanism makes
available to the ordering
professional applicable
appropriate use criteria
specified under paragraph (2)
and the supporting
documentation for the
applicable imaging service
ordered.
(II) In the case where there
is more than one applicable
appropriate use criterion
specified under such paragraph
for an applicable imaging
service, the mechanism
indicates the criteria that it
uses for the service.
(III) The mechanism
determines the extent to which
an applicable imaging service
ordered is consistent with the
applicable appropriate use
criteria so specified.
(IV) The mechanism generates
and provides to the ordering
professional a certification or
documentation that documents
that the qualified clinical
decision support mechanism was
consulted by the ordering
professional.
(V) The mechanism is updated
on a timely basis to reflect
revisions to the specification
of applicable appropriate use
criteria under such paragraph.
(VI) The mechanism meets
privacy and security standards
under applicable provisions of
law.
(VII) The mechanism performs
such other functions as
specified by the Secretary,
which may include a requirement
to provide aggregate feedback
to the ordering professional.
(C) List of mechanisms for consultation with
applicable appropriate use criteria.--
(i) Initial list.--Not later than
April 1, 2016, the Secretary shall
publish a list of mechanisms specified
under this paragraph.
(ii) Periodic updating of list.--The
Secretary shall identify on an annual
basis the list of qualified clinical
decision support mechanisms specified
under this paragraph.
(4) Consultation with applicable appropriate use
criteria.--
(A) Consultation by ordering professional.--
Beginning with January 1, 2017, subject to
subparagraph (C), with respect to an applicable
imaging service ordered by an ordering
professional that would be furnished in an
applicable setting and paid for under an
applicable payment system (as defined in
subparagraph (D)), an ordering professional
shall--
(i) consult with a qualified decision
support mechanism listed under
paragraph (3)(C); and
(ii) provide to the furnishing
professional the information described
in clauses (i) through (iii) of
subparagraph (B).
(B) Reporting by furnishing professional.--
Beginning with January 1, 2017, subject to
subparagraph (C), with respect to an applicable
imaging service furnished in an applicable
setting and paid for under an applicable
payment system (as defined in subparagraph
(D)), payment for such service may only be made
if the claim for the service includes the
following:
(i) Information about which qualified
clinical decision support mechanism was
consulted by the ordering professional
for the service.
(ii) Information regarding--
(I) whether the service
ordered would adhere to the
applicable appropriate use
criteria specified under
paragraph (2);
(II) whether the service
ordered would not adhere to
such criteria; or
(III) whether such criteria
was not applicable to the
service ordered.
(iii) The national provider
identifier of the ordering professional
(if different from the furnishing
professional).
(C) Exceptions.--The provisions of
subparagraphs (A) and (B) and paragraph (6)(A)
shall not apply to the following:
(i) Emergency services.--An
applicable imaging service ordered for
an individual with an emergency medical
condition (as defined in section
1867(e)(1)).
(ii) Inpatient services.--An
applicable imaging service ordered for
an inpatient and for which payment is
made under part A.
(iii) Significant hardship.--An
applicable imaging service ordered by
an ordering professional who the
Secretary may, on a case-by-case basis,
exempt from the application of such
provisions if the Secretary determines,
subject to annual renewal, that
consultation with applicable
appropriate use criteria would result
in a significant hardship, such as in
the case of a professional who
practices in a rural area without
sufficient Internet access.
(D) Applicable payment system defined.--In
this subsection, the term ``applicable payment
system'' means the following:
(i) The physician fee schedule
established under section 1848(b).
(ii) The prospective payment system
for hospital outpatient department
services under section 1833(t).
(iii) The ambulatory surgical center
payment systems under section 1833(i).
(5) Identification of outlier ordering
professionals.--
(A) In general.--With respect to applicable
imaging services furnished beginning with 2017,
the Secretary shall determine, on an annual
basis, no more than five percent of the total
number of ordering professionals who are
outlier ordering professionals.
(B) Outlier ordering professionals.--The
determination of an outlier ordering
professional shall--
(i) be based on low adherence to
applicable appropriate use criteria
specified under paragraph (2), which
may be based on comparison to other
ordering professionals; and
(ii) include data for ordering
professionals for whom prior
authorization under paragraph (6)(A)
applies.
(C) Use of two years of data.--The Secretary
shall use two years of data to identify outlier
ordering professionals under this paragraph.
(D) Process.--The Secretary shall establish a
process for determining when an outlier
ordering professional is no longer an outlier
ordering professional.
(E) Consultation with stakeholders.--The
Secretary shall consult with physicians,
practitioners and other stakeholders in
developing methods to identify outlier ordering
professionals under this paragraph.
(6) Prior authorization for ordering professionals
who are outliers.--
(A) In general.--Beginning January 1, 2020,
subject to paragraph (4)(C), with respect to
services furnished during a year, the Secretary
shall, for a period determined appropriate by
the Secretary, apply prior authorization for
applicable imaging services that are ordered by
an outlier ordering professional identified
under paragraph (5).
(B) Appropriate use criteria in prior
authorization.--In applying prior authorization
under subparagraph (A), the Secretary shall
utilize only the applicable appropriate use
criteria specified under this subsection.
(C) Funding.--For purposes of carrying out
this paragraph, the Secretary shall provide for
the transfer, from the Federal Supplementary
Medical Insurance Trust Fund under section
1841, of $5,000,000 to the Centers for Medicare
& Medicaid Services Program Management Account
for each of fiscal years 2019 through 2021.
Amounts transferred under the preceding
sentence shall remain available until expended.
(7) Construction.--Nothing in this subsection shall
be construed as granting the Secretary the authority to
develop or initiate the development of clinical
practice guidelines or appropriate use criteria.
(r) Payment for Renal Dialysis Services for Individuals With
Acute Kidney Injury.--
(1) Payment rate.--In the case of renal dialysis
services (as defined in subparagraph (B) of section
1881(b)(14)) furnished under this part by a renal
dialysis facility or provider of services paid under
such section during a year (beginning with 2017) to an
individual with acute kidney injury (as defined in
paragraph (2)), the amount of payment under this part
for such services shall be the base rate for renal
dialysis services determined for such year under such
section, as adjusted by any applicable geographic
adjustment factor applied under subparagraph
(D)(iv)(II) of such section and may be adjusted by the
Secretary (on a budget neutral basis for payments under
this paragraph) by any other adjustment factor under
subparagraph (D) of such section.
(2) Individual with acute kidney injury defined.--In
this subsection, the term ``individual with acute
kidney injury'' means an individual who has acute loss
of renal function and does not receive renal dialysis
services for which payment is made under section
1881(b)(14).
(s) Payment for Applicable Disposable Devices.--
(1) Separate payment.--The Secretary shall make a
payment (separate from the payments otherwise made
under section 1895) in the amount established under
paragraph (3) to a home health agency for an applicable
disposable device (as defined in paragraph (2)) when
furnished on or after January 1, 2017, to an individual
who receives home health services for which payment is
made under section 1895(b).
(2) Applicable disposable device.--In this
subsection, the term applicable disposable device means
a disposable device that, as determined by the
Secretary, is--
(A) a disposable negative pressure wound
therapy device that is an integrated system
comprised of a non-manual vacuum pump, a
receptacle for collecting exudate, and
dressings for the purposes of wound therapy;
and
(B) a substitute for, and used in lieu of, a
negative pressure wound therapy durable medical
equipment item that is an integrated system of
a negative pressure vacuum pump, a separate
exudate collection canister, and dressings that
would otherwise be covered for individuals for
such wound therapy.
(3) Payment amount.--The separate payment amount
established under this paragraph for an applicable
disposable device for a year shall be equal to the
amount of the payment that would be made under section
1833(t) (relating to payment for covered OPD services)
for the year for the Level I Healthcare Common
Procedure Coding System (HCPCS) code for which the
description for a professional service includes the
furnishing of such device.
(t) Site-of-Service Price Transparency.--
(1) In general.--In order to facilitate price
transparency with respect to items and services for
which payment may be made either to a hospital
outpatient department or to an ambulatory surgical
center under this title, the Secretary shall, for 2018
and each year thereafter, make available to the public
via a searchable Internet website, with respect to an
appropriate number of such items and services--
(A) the estimated payment amount for the item
or service under the outpatient department fee
schedule under subsection (t) of section 1833
and the ambulatory surgical center payment
system under subsection (i) of such section;
and
(B) the estimated amount of beneficiary
liability applicable to the item or service.
(2) Calculation of estimated beneficiary liability.--
For purposes of paragraph (1)(B), the estimated amount
of beneficiary liability, with respect to an item or
service, is the amount for such item or service for
which an individual who does not have coverage under a
Medicare supplemental policy certified under section
1882 or any other supplemental insurance coverage is
responsible.
(3) Implementation.--In carrying out this subsection,
the Secretary--
(A) shall include in the notice described in
section 1804(a) a notification of the
availability of the estimated amounts made
available under paragraph (1); and
(B) may utilize mechanisms in existence on
the date of enactment of this subsection, such
as the portion of the Internet website of the
Centers for Medicare & Medicaid Services on
which information comparing physician
performance is posted (commonly referred to as
the Physician Compare Internet website), to
make available such estimated amounts under
such paragraph.
(4) Funding.--For purposes of implementing this
subsection, the Secretary shall provide for the
transfer, from the Federal Supplementary Medical
Insurance Trust Fund under section 1841 to the Centers
for Medicare & Medicaid Services Program Management
Account, of $6,000,000 for fiscal year 2017, to remain
available until expended.
(u) Payment and Related Requirements for Home Infusion
Therapy.--
(1) Payment.--
(A) Single payment.--
(i) In general.--Subject to clause
(iii) and subparagraphs (B) and (C),
the Secretary shall implement a payment
system under which a single payment is
made under this title to a qualified
home infusion therapy supplier for
items and services described in
subparagraphs (A) and (B) of section
1861(iii)(2)) furnished by a qualified
home infusion therapy supplier (as
defined in section 1861(iii)(3)(D)) in
coordination with the furnishing of
home infusion drugs (as defined in
section 1861(iii)(3)(C)) under this
part.
(ii) Unit of single payment.--A unit
of single payment under the payment
system implemented under this
subparagraph is for each infusion drug
administration calendar day in the
individual's home. The Secretary shall,
as appropriate, establish single
payment amounts for types of infusion
therapy, including to take into account
variation in utilization of nursing
services by therapy type.
(iii) Limitation.--The single payment
amount determined under this
subparagraph after application of
subparagraph (B) and paragraph (3)
shall not exceed the amount determined
under the fee schedule under section
1848 for infusion therapy services
furnished in a calendar day if
furnished in a physician office
setting, except such single payment
shall not reflect more than 5 hours of
infusion for a particular therapy in a
calendar day.
(B) Required adjustments.--The Secretary
shall adjust the single payment amount
determined under subparagraph (A) for home
infusion therapy services under section
1861(iii)(1) to reflect other factors such as--
(i) a geographic wage index and other
costs that may vary by region; and
(ii) patient acuity and complexity of
drug administration.
(C) Discretionary adjustments.--
(i) In general.--Subject to clause
(ii), the Secretary may adjust the
single payment amount determined under
subparagraph (A) (after application of
subparagraph (B)) to reflect outlier
situations and other factors as the
Secretary determines appropriate.
(ii) Requirement of budget
neutrality.--Any adjustment under this
subparagraph shall be made in a budget
neutral manner.
(2) Considerations.--In developing the payment system
under this subsection, the Secretary may consider the
costs of furnishing infusion therapy in the home,
consult with home infusion therapy suppliers, consider
payment amounts for similar items and services under
this part and part A, and consider payment amounts
established by Medicare Advantage plans under part C
and in the private insurance market for home infusion
therapy (including average per treatment day payment
amounts by type of home infusion therapy).
(3) Annual updates.--
(A) In general.--Subject to subparagraph (B),
the Secretary shall update the single payment
amount under this subsection from year to year
beginning in 2022 by increasing the single
payment amount from the prior year by the
percentage increase in the Consumer Price Index
for all urban consumers (United States city
average) for the 12-month period ending with
June of the preceding year.
(B) Adjustment.--For each year, the Secretary
shall reduce the percentage increase described
in subparagraph (A) by the productivity
adjustment described in section
1886(b)(3)(B)(xi)(II). The application of the
preceding sentence may result in a percentage
being less than 0.0 for a year, and may result
in payment being less than such payment rates
for the preceding year.
(4) Authority to apply prior authorization.--The
Secretary may, as determined appropriate by the
Secretary, apply prior authorization for home infusion
therapy services under section 1861(iii)(1).
(5) Accreditation of qualified home infusion therapy
suppliers.--
(A) Factors for designation of accreditation
organizations.--The Secretary shall consider
the following factors in designating
accreditation organizations under subparagraph
(B) and in reviewing and modifying the list of
accreditation organizations designated pursuant
to subparagraph (C):
(i) The ability of the organization
to conduct timely reviews of
accreditation applications.
(ii) The ability of the organization
to take into account the capacities of
suppliers located in a rural area (as
defined in section 1886(d)(2)(D)).
(iii) Whether the organization has
established reasonable fees to be
charged to suppliers applying for
accreditation.
(iv) Such other factors as the
Secretary determines appropriate.
(B) Designation.--Not later than January 1,
2021, the Secretary shall designate
organizations to accredit suppliers furnishing
home infusion therapy. The list of
accreditation organizations so designated may
be modified pursuant to subparagraph (C).
(C) Review and modification of list of
accreditation organizations.--
(i) In general.--The Secretary shall
review the list of accreditation
organizations designated under
subparagraph (B) taking into account
the factors under subparagraph (A).
Taking into account the results of such
review, the Secretary may, by
regulation, modify the list of
accreditation organizations designated
under subparagraph (B).
(ii) Special rule for accreditations
done prior to removal from list of
designated accreditation
organizations.--In the case where the
Secretary removes an organization from
the list of accreditation organizations
designated under subparagraph (B), any
supplier that is accredited by the
organization during the period
beginning on the date on which the
organization is designated as an
accreditation organization under
subparagraph (B) and ending on the date
on which the organization is removed
from such list shall be considered to
have been accredited by an organization
designated by the Secretary under
subparagraph (B) for the remaining
period such accreditation is in effect.
(D) Rule for accreditations made prior to
designation.--In the case of a supplier that is
accredited before January 1, 2021, by an
accreditation organization designated by the
Secretary under subparagraph (B) as of January
1, 2019, such supplier shall be considered to
have been accredited by an organization
designated by the Secretary under such
paragraph as of January 1, 2023, for the
remaining period such accreditation is in
effect.
(6) Notification of infusion therapy options
available prior to furnishing home infusion therapy.--
Prior to the furnishing of home infusion therapy to an
individual, the physician who establishes the plan
described in section 1861(iii)(1) for the individual
shall provide notification (in a form, manner, and
frequency determined appropriate by the Secretary) of
the options available (such as home, physician's
office, hospital outpatient department) for the
furnishing of infusion therapy under this part.
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