SEC. 1833.
[42 U.S.C. 1395l] (a)
Except as provided in section 1876, and subject
to the succeeding provisions of this section, there shall be paid
from the Federal Supplementary Medical Insurance Trust Fund, in
the case of each individual who is covered under the insurance
program established by this part and incurs expenses for services
with respect to which benefits are payable under this part, amounts
equal to—
-
(1) in the case of services described in section 1832(a)(1)—80
percent of the reasonable charges for the services; except that
(A) an organization which provides medical and other health services
(or arranges for their availability) on a prepayment basis (and
either is sponsored by a union or employer, or does not provide,
or arrange for the provision of, any inpatient hospital services)
may elect to be paid 80 percent of the reasonable cost of services
for which payment may be made under this part on behalf of individuals
enrolled in such organization in lieu of 80 percent of the reasonable charges
for such services if the organization undertakes to charge such
individuals no more than 20 percent of such reasonable cost plus
any amounts payable by them as a result of subsection (b), (B)
with respect to items and services described in section 1861(s)(10)(A),
the amounts paid shall be 100 percent of the reasonable charges
for such items and services, (C) with respect to expenses incurred
for those physicians' services for which payment may be made under
this part that are described in section 1862(a)(4), the prosthetic
devices and orthotics and prosthetics (as defined in section 1834(h)(4)),
the amounts paid shall be the amounts described in section 1834(h)(1),
the amounts paid shall be subject to such limitations as may be
prescribed by regulations, (D) with respect to clinical diagnostic laboratory
tests for which payment is made under this part (i) on the basis of
a fee schedule under subsection (h)(1) or section 1834(d)(1), the
amount paid shall be equal to 80 percent (or 100 percent, in the
case of such tests for which payment is made on an assignment-related
basis) of the lesser of the amount determined under such fee schedule,
the limitation amount for that test determined under subsection
(h)(4)(B), or the amount of the charges billed for the tests, or
(ii) on the basis of a negotiated rate established under subsection
(h)(6), the amount paid shall be equal to 100 percent of such negotiated
rate, (E) with respect to services furnished to individuals who
have been determined to have end stage renal disease, the amounts
paid shall be determined subject to the provisions of section 1881, (F)
with respect to clinical social worker services under section 1861(s)(2)(N),
the amounts paid shall be 80 percent of the lesser of (i) the actual
charge for the services or (ii) 75 percent of the amount determined for
payment of a psychologist under clause (L), (G)[102] with respect
to facility services furnished in connection with a surgical procedure
specified pursuant to subsection (i)(1)(A) and furnished to an individual
in an ambulatory surgical center described in such subsection, for
services furnished beginning with the implementation date of a revised
payment system for such services in such facilities specified in
subsection (i)(2)(D), the amounts paid shall be 80 percent of the
lesser of the actual charge for the services or the amount determined
by the Secretary under such revised payment system, (H) with respect
to services of a certified registered nurse anesthetist under section 1861(s)(11), the amounts paid shall be 80 percent of the least
of the actual charge, the prevailing charge that would be recognized
(or, for services furnished on or after January 1, 1992, the fee
schedule amount provided under section 1848) if the services had
been performed by an anesthesiologist, or the fee schedule for
such services established by the Secretary in accordance with subsection
(1), (I) with respect to covered items (described in section 1834(a)(13)),
the amounts paid shall be the amounts described in section 1834(a)(1),
and (J) with respect to expenses incurred for radiologist services
(as defined in section 1834(b)(6)), subject to section 1848, the
amounts paid shall be 80 percent of the lesser of the actual charge
for the services or the amount provided under the fee schedule
established under section 1834(b), (K) with respect to certified
nurse-midwife services under section 1861(s)(2)(L), the amounts
paid shall be 80 percent of the lesser of the actual charge for
the services or the amount determined by a fee schedule established
by the Secretary for the purposes of this subparagraph (but in
no event shall such fee schedule exceed 65 percent of the prevailing
charge that would be allowed for the same service performed by
a physician, or, for services furnished on or after January 1,
1992, 65 percent of the fee schedule amount provided under section 1848 for the same service performed by a physician), (L) with respect
to qualified psychologist services under section 1861(s)(2)(M),
the amounts paid shall be 80 percent of the lesser of the actual
charge for the services or the amount determined by a fee schedule established
by the Secretary for the purposes of this subparagraph, (M) with
respect to prosthetic devices and orthotics and (N) with respect
to expenses incurred for physicians' services (as defined in section 1848(j)(3)),
the amounts paid shall be 80 percent of the payment basis determined
under section 1848(a)(1), (O) with respect to services described
in section 1861(s)(2)(K) (relating to services furnished by physicians
assistants, nurse practitioners, or clinical nurse specialists),
the amounts paid shall be equal to 80 percent of (i) the lesser
of the actual charge or 85 percent of the fee schedule amount provided
under section 1848, or (ii) in the case of services as an assistant
at surgery, the lesser of the actual charge or 85 percent of the
amount that would otherwise be recognized if performed by a physician
who is serving as an assistant at surgery, (P) with respect to
surgical dressings, the amounts paid shall be the amounts determined
under section 1834(i), (Q) with respect to items or services for
which fee schedules are established pursuant to section 1842(s),
the amounts paid shall be 80 percent of the lesser of the actual
charge or the fee schedule established in such section, (R) with
respect to ambulance services, (i) the amounts paid shall be 80
percent of the lesser of the actual charge for the services or
the amount determined by a fee schedule established by the Secretary
under section 1834(l) and (ii) with respect to ambulance services
described in section 1834(l)(8), the amounts paid shall be the
amounts determined under section 1834(g) for outpatient critical
access hospital services , (S) with respect to drugs and biologicals
(including intravenous immune globulin (as defined in section 1861(zz)))[103]
not paid on a cost or prospective payment basis as otherwise
provided in this part (other than items and services described
in subparagraph (B)), the amounts paid shall be 80 percent of the
lesser of the actual charge or the payment amount established in
section 1842(o) (or, if applicable, under section 1847, 1847A, or
1847B)[104], (T) with respect to medical nutrition therapy services
(as defined in section 1861(vv)), the amount paid shall be 80 percent
of the lesser of the actual charge for the services or 85 percent
of the amount determined under the fee schedule established under
section 1848(b) for the same services if furnished by a physician,
(U)[105] with respect to facility fees described in section 1834(m)(2)(B),
the amounts paid shall be 80 percent of the lesser of the actual
charge or the amounts specified in such section, and (V) notwithstanding
subparagraphs (I) (relating to durable medical equipment), (M) (relating
to prosthetic devices and orthotics and prosthetics), and (Q) (relating
to 1842(s) items), with respect to competitively priced items and
services (described in section 1847(a)(2)) that are furnished in
a competitive area, the amounts paid shall be the amounts described
in section 1847(b)(5)[106];
-
(2) in the case of services described in section 1832(a)(2)
(except those services described in subparagraphs (C), (D), (E),
(F), (G), (H), and (I) of such section and unless otherwise specified
in section 1881)—
-
(A) with respect to home health services (other than a covered
osteoporosis drug) (as defined in section 1861(kk)), the amount
determined under the prospective payment system under section 1895;
-
(B) with respect to other items and services (except those
described in subparagraph (C), (D), or (E) of this paragraph and
except as may be provided in section 1886 or section 1888(e)(9))—
-
(i) furnished before January 1, 1999, the lesser of—
-
(I) the reasonable cost of such services, as determined under
section 1861(v), or
-
(II) the customary charges with respect to such services,
-
less the amount a provider may charge as described in clause
(ii) of section 1866(a)(2)(A), but in no case may the payment
for such other services exceed 80 percent of such reasonable cost,
or
-
(ii) if such services are furnished before January 1, 1999,
by a public provider of services, or by another provider which
demonstrates to the satisfaction of the Secretary that a significant
portion of its patients are low-income (and requests that payment
be made under this clause), free of charge or at nominal charges
to the public, 80 percent of the amount determined in accordance
with section 1814(b)(2), or
-
(iii) if such services are furnished on or after January 1,
1999, the amount determined under subsection (t), or
-
(iv) if (and for so long as) the conditions described in section 1814(b)(3) are met, the amounts determined under the reimbursement
system described in such section;
-
(C) with respect to services described in the second sentence
of section 1861(p), 80 percent of the reasonable charges for such
services;
-
(D) with respect to clinical diagnostic laboratory tests for
which payment is made under this part (i) on the basis of a fee
schedule determined under subsection (h)(1) or section 1834(d)(1),
the amount paid shall be equal to 80 percent (or 100 percent, in
the case of such tests for which payment is made on an assignment-related
basis or to a provider having an agreement under section 1866 of
the lesser of the amount determined under such fee schedule, the
limitation amount for that test determined under subsection (h)(4)(B),
or the amount of the charges billed for the tests, (ii)[107] on
the basis of a negotiated rate established under subsection (h)(6),
the amount paid shall be equal to 100 percent of such negotiated
rate for such tests; or (iii) on the basis of a rate established
under a demonstration project under section 1847(e), the amount paid
shall be equal to 100 percent of such rate,[108]
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(E) with respect to—
-
(i) outpatient hospital radiology services (including diagnostic
and therapeutic radiology, nuclear medicine and CAT scan procedures,
magnetic resonance imaging, and ultrasound and other imaging services,
but excluding screening mammography and, for services furnished
on or after January 1, 2005, diagnostic mammography[109]), and
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(ii) effective for procedures performed on or after October
1, 1989, diagnostic procedures (as defined by the Secretary) described
in section 1861(s)(3) (other than diagnostic x-ray tests and diagnostic
laboratory tests),
-
the amount determined under subsection (n) or, for services
or procedures performed on or after January 1, 1999, subsection
(t);
-
(F) with respect to a covered osteoporosis drug (as defined
in section 1861(kk)) furnished by a home health agency, 80 percent
of the reasonable cost of such service, as determined under section 1861(v); and
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(G) with respect to items and services described in section 1861(s)(10)(A), the lesser of—
-
(i) the reasonable cost of such services, as determined under
section 1861(v), or
-
(ii) the customary charges with respect to such services,
-
or, if such services are furnished by a public provider of
services, or by another provider which demonstrates to the satisfaction
of the Secretary that a significant portion of its patients are
low-income (and requests that payment be made under this
provision), free of charge or at nominal charges to the public,
the amount determined in accordance with section 1814(b)(2);
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(3)[110] in the case of services described in section 1832(a)(2)(D),
the costs which are reasonable and related to the cost of furnishing
such services or which are based on such other tests of reasonableness
as the Secretary may prescribe in regulations, including those
authorized under section 1861(v)(1)(A), less the amount a provider
may charge as described in clause (ii) of section 1866(a)(2)(A),
but in no case may the payment for such services (other than for
items and services described in section 1861(s)(10)(A)) exceed
80 percent of such costs;
-
(4) in the case of facility services described in section 1832(a)(2)(F),
and outpatient hospital facility services furnished in connection
with surgical procedures specified by the Secretary pursuant to
section 1833(i)(1)(A), the applicable amount as determined under
paragraph (2) or (3) of subsection (i) or subsection (t);
-
(5) in the case of covered items (described in section 1834(a)(13))
the amounts described in section 1834(a)(1);
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(6) in the case of outpatient critical access hospital services,
the amounts described in section 1834(g);
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(7) in the case of prosthetic devices and orthotics and prosthetics
(as described in section 1834(h)(4)), the amounts described in
section 1834(h);
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(8) in the case of—
-
(A) outpatient physical therapy services (which includes outpatient speech-language
pathology services) and outpatient occupational therapy services
furnished—
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(i) by a rehabilitation agency, public health agency, clinic,
comprehensive outpatient rehabilitation facility, or skilled nursing facility,
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(ii) by a home health agency to an individual who is not homebound,
or
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(iii) by another entity under an arrangement with an entity
described in clause (i) or (ii); and
-
(B) outpatient physical therapy services (which includes outpatient speech-language
pathology services) and outpatient occupational therapy services
furnished—
-
(i) by a hospital to an outpatient or to a hospital inpatient
who is entitled to benefits under part A but has exhausted benefits
for inpatient hospital services during a spell of illness or is
not so entitled to benefits under part A, or
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(ii) by another entity under an arrangement with a hospital
described in clause (i), the amounts described in section 1834(k); and
-
(9) in the case of services described in section 1832(a)(2)(E)
that are not described in paragraph (8), the amounts described
in section 1834(k).
(b)
Before applying subsection (a) with respect
to expenses incurred by an individual during any calendar year,
the total amount of the expenses incurred by such individual during
such year (which would, except for this subsection, constitute
incurred expenses from which benefits payable under subsection
(a) are determinable) shall be reduced by a deductible of $75 for
calendar years before 1991, $100 for 1991 through 2004, $110 for
2005, and for a subsequent year the amount of such deductible for
the previous year increased by the annual percentage increase in
the monthly actuarial rate under section 1839(a)(1) ending with
such subsequent year (rounded to the nearest $1)[111]; except that
(1) such total amount shall not include expenses incurred for items and
services described in section 1861(s)(10)(A), (2) such deductible
shall not apply with respect to home health services (other than
a covered osteoporosis drug (as defined in section 1861(kk)), (3)
such deductible shall not apply with respect to clinical diagnostic
laboratory tests for which payment is made under this part (A)
under subsection (a)(1)(D)(i) or (a)(2)(D)(i) on an assignment-related
basis, or to a provider having an agreement under section 1866,
or (B) on the basis of a negotiated rate determined under subsection
(h)(6), (4) such deductible shall not apply to Federally qualified
health center services. The total amount of the expenses incurred
by an individual as determined under the preceding sentence shall,
after the reduction specified in such sentence, be further reduced
by an amount equal to the expenses incurred for the first three pints
of whole blood (or equivalent quantities of packed red blood cells,
as defined under regulations) furnished to the individual during
the calendar year, except that such deductible for such blood shall
in accordance with regulations be appropriately reduced to the
extent that there has been a replacement of such blood (or equivalent
quantities of packed red blood cells, as so defined); and for such
purposes blood (or equivalent quantities of packed red blood cells,
as so defined) furnished such individual shall be deemed replaced
when the institution or other person furnishing such blood (or
such equivalent quantities of packed red blood cells, as so defined)
is given one pint of blood for each pint of blood (or equivalent
quantities of packed red blood cells, as so defined) furnished
such individual with respect to which a deduction is made under
this sentence. The deductible under the previous sentence for blood
or blood cells furnished an individual in a year shall be reduced
to the extent that a deductible has been imposed under section 1813(a)(2) to blood or blood cells furnished the individual in
the year, (5) such deductible shall not apply with respect to screening
mammography (as described in section 1861(jj)), and (6) such deductible
shall not apply with respect to screening pap smear and screening pelvic
exam (as described invsection 1861(nn)).
(c)
Notwithstanding any other provision of this
part, with respect to expenses incurred in any calendar year in
connection with the treatment of mental, psychoneurotic, and personality
disorders of an individual who is not an inpatient of a hospital
at the time such expenses are incurred, there shall be considered
as incurred expenses for purposes of subsections (a) and (b) only
62 1/2 percent of such expenses.
For purposes of this subsection, the term “treatment” does
not include brief office visits (as defined by the Secretary) for
the sole purpose of monitoring or changing drug prescriptions used
in the treatment of such disorders or partial hospitalization services
that are not directly provided by a physician.
(d)
No payment may be made under this part with
respect to any services furnished an individual to the extent that
such individual is entitled (or would be entitled except for section 1813) to have payment made with respect to such services under
part A.
(e)
No payment shall be made to any provider
of services or other person under this part unless there has been
furnished such information as may be necessary in order to determine
the amounts due such provider or other person under this part for
the period with respect to which the amounts are being paid or
for any prior period.
(f)
In establishing limits under subsection (a)
on payment for rural health clinic services provided by rural health
clinics (other than such clinics in hospitals with less than 50
beds), the Secretary shall establish such limit, for services
provided—
-
(1) in 1988, after March 31, at $46 per visit, and
-
(2) in a subsequent year, at the limit established under this
subsection for the previous year increased by the percentage increase
in the MEI (as defined in section 1842(i)(3)) applicable to primary
care services (as defined in section 1842(i)(4)) furnished as of
the first day of that year.
(g)(1)[112]
Subject to paragraph 4, in the case
of physical therapy services of the type described in section 1861(p),
but not described in section 1833(a)(8)(B), and physical therapy
services of such type which are furnished by a physician or as
incident to physicians' services, with respect to expenses incurred
in any calendar year, no more than the amount specified in paragraph
(2) for the year shall be considered as incurred expenses for purposes
of subsections (a) and (b).
-
(2) The amount specified in this paragraph—
-
(A) for 1999, 2000, and 2001, is $1,500, and
-
(B) for a subsequent year is the amount specified in this paragraph for
the preceding year increased by the percentage increase in the
MEI (as defined in section 1842(i)(3)) for such subsequent year;
except that if an increase under subparagraph (B) for a year
is not a multiple of $10, it shall be rounded to the nearest multiple
of $10.
-
(3) Subject to paragraph 4, in the case of occupational therapy
services (of the type that are described in section 1861(p) (but
not described in section 1833(a)(8)(B)) through the operation of
section 1861(g) and of such type which are furnished by a physician
or as incident to physicians' services), with respect to expenses
incurred in any calendar year, no more than the amount specified
in paragraph (2) for the year shall be considered as incurred expenses
for purposes of subsections (a) and (b).
-
(4) This subsection shall not apply to expenses incurred with
respect to services furnished during 2000, 2001, 2002, 2004, and
2005[113].
(h)(1)(A)
Subject to section 1834(d)(1), the
Secretary shall establish fee schedules for clinical diagnostic
laboratory tests (including prostate cancer screening tests under
section 1861(oo) consisting of prostate-specific antigen blood
tests) for which payment is made under this part, other than such
tests performed by a provider of services for an inpatient of such
provider.
(B) In the case of clinical diagnostic laboratory tests performed
by a physician or by a laboratory (other than tests performed by
a qualified hospital laboratory (as defined in subparagraph (D))
for outpatients of such hospital), the fee schedules established
under subparagraph (A) shall be established on a regional, statewide,
or carrier service area basis (as the Secretary may determine to
be appropriate) for tests furnished on or after July 1, 1984.
(C) In the case of clinical diagnostic laboratory tests performed
by a qualified hospital laboratory (as defined in subparagraph
(D)) for outpatients of such hospital, the fee schedules established
under subparagraph (A) shall be established on a regional, statewide,
or carrier service area basis (as the Secretary may determine to
be appropriate) for tests furnished on or after July 1, 1984.
(D) In this subsection, the term “qualified hospital
laboratory” means a hospital laboratory, in a sole community
hospital (as defined in section 1886(d)(5)(D)(iii)), which provides
some clinical diagnostic laboratory tests 24 hours a day in order
to serve a hospital emergency room which is available to provide
services 24 hours a day and 7 days a week.
(2)(A)(i) Except as provided in paragraph (4), the Secretary
shall set the fee schedules at 60 percent (or, in the case of a
test performed by a qualified hospital laboratory (as defined in
paragraph (1)(D)) for outpatients of such hospital, 62 percent)
of the prevailing charge level determined pursuant to the third
and fourth sentences of section 1842(b)(3) for similar clinical
diagnostic laboratory tests for the applicable region, State, or
area for the 12-month period beginning July 1, 1984, adjusted
annually (to become effective on January 1 of each year) by a percentage
increase or decrease equal to the percentage increase or decrease
in the Consumer Price Index for All Urban Consumers (United States
city average), and subject to such other adjustments as the Secretary
determines are justified by technological changes.
(ii) Notwithstanding clause (i)—
-
(I) any change in the fee schedules which would have become
effective under this subsection for tests furnished on or after
January 1, 1988, shall not be effective for tests furnished during
the 3-month period beginning on January 1, 1988,
-
(II) the Secretary shall not adjust the fee schedules under
clause (i) to take into account any increase in the consumer price
index for 1988,
-
(III) the annual adjustment in the fee schedules determined
under clause (i) for each of the years 1991, 1992, and 1993 shall
be 2 percent, and
-
(IV) the annual adjustment in the fee schedules determined under
clause (i) for each of the years 1994 and 1995, 1998 through 2002,
and 2004 through 2008[114] shall be 0 percent.
(iii) In establishing fee schedules under clause (i) with respect
to automated tests and tests (other than cytopathology tests) which
before July 1, 1984, the Secretary made subject to a limit based
on lowest charge levels under the sixth sentence of section 1842(b)(3)
performed after March 31, 1988, the Secretary shall reduce by 8.3
percent the fee schedules otherwise established for 1988, and such
reduced fee schedules shall serve as the base for 1989 and subsequent years.
(B) The Secretary may make further adjustments or exceptions
to the fee schedules to assure adequate reimbursement of (i) emergency
laboratory tests needed for the provision of bona fide emergency
services, and (ii) certain low volume high-cost tests where highly
sophisticated equipment or extremely skilled personnel are necessary
to assure quality.
(3) In addition to the amounts provided under the fee schedules,
the Secretary shall provide for and establish (A) a nominal fee
to cover the appropriate costs in collecting the sample on which
a clinical diagnostic laboratory test was performed and for which
payment is made under this part, except that not more than one
such fee may be provided under this paragraph with respect to samples
collected in the same encounter, and (B) a fee to cover the transportation
and personnel expenses for trained personnel to travel to the location
of an individual to collect the sample, except that such a fee
may be provided only with respect to an individual who is homebound
or an inpatient in an inpatient facility (other than a hospital).
In establishing a fee to cover the transportation and personnel
expenses for trained personnel to travel to the location of an
individual to collect a sample, the Secretary shall provide a method
for computing the fee based on the number of miles traveled and
the personnel costs associated with the collection of each individual
sample, but the Secretary shall only be required to apply such
method in the case of tests furnished during the period beginning
on April 1, 1989, and ending on December 31, 1990, by a laboratory
that establishes to the satisfaction of the Secretary (based on
data for the 12-month period ending June 30, 1988) that (i) the
laboratory is dependent upon payments under this title for at least
80 percent of its collected revenues for clinical diagnostic laboratory
tests, (ii) at least 85 percent of its gross revenues for such
tests are attributable to tests performed with respect to individuals
who are homebound or who are residents in a nursing facility, and
(iii) the laboratory provided such tests for residents in nursing
facilities representing at least 20 percent of the number of such
facilities in the State in which the laboratory is located.
(4)(A) In establishing any fee schedule under this subsection,
the Secretary may provide for an adjustment to take into account,
with respect to the portion of the expenses of clinical diagnostic
laboratory tests attributable to wages, the relative difference
between a region's or local area's wage rates and the wage rate
presumed in the data on which the schedule is based.
(B) For purposes of subsections (a)(1)(D)(i) and (a)(2)(D)(i),
the limitation amount for a clinical diagnostic laboratory test
performed—
-
(i) on or after July 1, 1986, and before April 1, 1988, is equal
to 115 percent of the median of all the fee schedules established
for that test for that laboratory setting under paragraph (1),
-
(ii) after March 31, 1988, and before January 1, 1990, is equal
to the median of all the fee schedules established for that test
for that laboratory setting under paragraph (1),
-
(iii) after December 31, 1989, and before January 1, 1991, is
equal to 93 percent of the median of all the fee schedules established
for that test for that laboratory setting under paragraph (1),
-
(iv) after December 31, 1990, and before January 1, 1994, is
equal to 88 percent of such median,
-
(v) after December 31, 1993, and before January 1, 1995, is
equal to 84 percent of such median,
-
(vi) after December 31, 1994, and before January 1, 1996, is
equal to 80 percent of such median,
-
(vii) after December 31, 1995, and before January 1, 1998, is
equal to 76 percent of such median, and
-
(viii) after December 31, 1997, is equal to 74 percent of such
median (or 100 percent of such median in the case of a clinical
diagnostic laboratory test performed on or after January 1, 2001,
that the Secretary determines is a new test for which no limitation
amount has previously been established under this subparagraph).
(5)(A) In the case of a bill or request for payment for a clinical
diagnostic laboratory test for which payment may otherwise be made
under this part on an assignment-related basis or under a provider
agreement under section 1866, payment may be made only to the person
or entity which performed or supervised the performance of such
test; except that—
-
(i) if a physician performed or supervised the performance of
such test, payment may be made to another physician with whom he
shares his practice,
-
(ii) in the case of a test performed at the request of a laboratory
by another laboratory, payment may be made to the referring laboratory
but only if—
-
(I) the referring laboratory is located in, or is part of, a
rural hospital,
-
(II) the referring laboratory is wholly owned by the entity
performing such test, the referring laboratory wholly owns the
entity performing such test, or both the referring laboratory
and the entity performing such test are wholly-owned by a third
entity, or
-
(III) not more than 30 percent of the clinical diagnostic laboratory tests
for which such referring laboratory (but not including a laboratory described
in subclause (II)), receives requests for testing during the year
in which the test is performed are performed by another laboratory,
and
-
(iii) in the case of a clinical diagnostic laboratory test
provided under an arrangement (as defined in section 1861(w)(1))
made by a hospital, critical access hospital or skilled nursing
facility, payment shall be made to the hospital or skilled nursing
facility.
(B) In the case of such a bill or request for payment for a
clinical diagnostic laboratory test for which payment may otherwise
be made under this part, and which is not described in subparagraph
(A), payment may be made to the beneficiary only on the basis of
the itemized bill of the person or entity which performed or supervised
the performance of the test.
(C) Payment for a clinical diagnostic laboratory test, including
a test performed in a physician's office but excluding a test
performed by a rural health clinic may only be made on an assignment-related
basis or to a provider of services with an agreement in effect
under section 1866.
(D) A person may not bill for a clinical diagnostic laboratory
test, including a test performed in a physician's office but excluding
a test performed by a rural health clinic,[115] other than on an
assignment-related basis. If a person knowingly and willfully and
on a repeated basis bills for a clinical diagnostic laboratory test
in violation of the previous sentence, the Secretary may apply
sanctions against the person in the same manner as the Secretary
may apply sanctions against a physician in accordance with paragraph
(2) of section 1842(j) in the same manner such paragraphs apply
with respect to a physician. Paragraph (4) of such section shall
apply in this subparagraph in the same manner as such paragraph
applies to such section.
(6) In the case of any diagnostic laboratory test payment for
which is not made on the basis of a fee schedule under paragraph
(1), the Secretary may establish a payment rate which is acceptable
to the person or entity performing the test and which would be
considered the full charge for such tests. Such negotiated rate
shall be limited to an amount not in excess of the total payment that
would have been made for the services in the absence of such rate.
(7) Notwithstanding paragraphs (1) and (4), the Secretary shall
establish a national minimum payment amount under this subsection
for a diagnostic or screening pap smear laboratory test (including
all cervical cancer screening technologies that have been approved
by the Food and Drug Administration as a primary screening method
for detection of cervical cancer) equal to $14.60 for tests furnished
in 2000. For such tests furnished in subsequent years, such national
minimum payment amount shall be adjusted annually as provided in paragraph
(2).[116]
(8)[117](A) The Secretary shall establish by regulation procedures
for determining the basis for, and amount of, payment under this
subsection for any clinical diagnostic laboratory test with respect
to which a new or substantially revised HCPCS code is assigned on
or after January 1, 2005 (in this paragraph referred to as “new
tests”).
(B) Determinations under subparagraph (A) shall be made only
after the Secretary—
-
(i) makes available to the public (through an Internet website
and other appropriate mechanisms) a list that includes any such
test for which establishment of a payment amount under this subsection
is being considered for a year;
-
(ii) on the same day such list is made available, causes to
have published in the Federal Register notice of a meeting to receive
comments and recommendations (and data on which recommendations
are based) from the public on the appropriate basis under this subsection
for establishing payment amounts for the tests on such list;
-
(iii) not less than 30 days after publication of such notice
convenes a meeting, that includes representatives of officials of
the Centers for Medicare and Medicaid Services involved in determining
payment amounts, to receive such comments and recommendations (and
data on which the recommendations are based);
-
(iv) taking into account the comments and recommendations (and
accompanying data) received at such meeting, develops and makes
available to the public (through an Internet website and other appropriate
mechanisms) a list of proposed determinations with respect to the
appropriate basis for establishing a payment amount under this subsection
for each such code, together with an explanation of the reasons
for each such determination, the data on which the determinations
are based, and a request for public written comments on the proposed
determination; and
-
(v) taking into account the comments received during the public
comment period, develops and makes available to the public (through
an Internet website and other appropriate mechanisms) a list of
final determinations of the payment amounts for such tests under
this subsection, together with the rationale for each such determination,
the data on which the determinations are based, and responses to
comments and suggestions received from the public.
(C) Under the procedures established pursuant to subparagraph
(A), the Secretary shall—
-
(i) set forth the criteria for making determinations under subparagraph (A);
and
-
(ii) make available to the public the data (other than proprietary
data) considered in making such determinations.
(D) The Secretary may convene such further public meetings to
receive public comments on payment amounts for new tests under this
subsection as the Secretary deems appropriate.
(E) For purposes of this paragraph:
-
(i) The term “HCPCS” refers to the Health
Care Procedure Coding System.
-
(ii) A code shall be considered to be “substantially
revised” if there is a substantive change to the definition
of the test or procedure to which the code applies (such as a new
analyte or a new methodology for measuring an existing analyte-specific
test).
(i)(1)
The Secretary shall, in consultation with
appropriate medical organizations—
-
(A) specify those surgical procedures which are appropriately
(when considered in terms of the proper utilization of hospital
inpatient facilities) performed on an inpatient basis in a hospital
but which also can be performed safely on an ambulatory basis in
an ambulatory surgical center (meeting the standards specified
under section 1832(a)(2)(F)(i)), critical access hospital, or hospital
outpatient department, and
-
(B) specify those surgical procedures which are appropriately
(when considered in terms of the proper utilization of hospital
inpatient facilities) performed on an inpatient basis in a hospital
but which also can be performed safely on an ambulatory basis in
a physician's office.
The lists of procedures established under subparagraphs (A)
and (B) shall be reviewed and updated not less often than every
2 years.
(2)(A) For services furnished prior to the implementation of
the system described in subparagraph (D), the[118] amount of payment
to be made for facility services furnished in connection with a
surgical procedure specified pursuant to paragraph (1)(A) and furnished
to an individual in an ambulatory surgical center described in
such paragraph shall be equal to 80 percent of a standard overhead
amount established by the Secretary (with respect to each such
procedure) on the basis of the Secretary's estimate of a fair fee
which—
-
(i) takes into account the costs incurred by such centers, or
classes of centers, generally in providing services furnished in
connection with the performance of such procedure as determined
in accordance with a survey (based upon a representative sample
of procedures and facilities) [119] of the actual audited costs
incurred by such centers in providing such services,
-
(ii) takes such costs into account in such a manner as will
assure that the performance of the procedure in such a center
will result in substantially less amounts paid under this title
than would have been paid if the procedure had been performed on
an inpatient basis in a hospital, and
-
(iii) in the case of insertion of an intraocular lens during
or subsequent to cataract surgery includes payment which is reasonable
and related to the cost of acquiring the class of lens involved.[120]
Each amount so established shall be reviewed and updated not
later than July 1, 1987, and annually thereafter to take account
of varying conditions in different areas.
(B) The amount of payment to be made under this part for facility
services furnished, in connection with a surgical procedure specified
pursuant to paragraph (1)(B), in a physician's office shall be
equal to 80 percent of a standard overhead amount established by
the Secretary (with respect to each such procedure) on the basis
of the Secretary's estimate of a fair fee which—
-
(i) takes into account additional costs, not usually included
in the professional fee, incurred by physicians in securing, maintaining,
and staffing the facilities and ancillary services appropriate
for the performance of such procedure in the physician's office,
and
-
(ii) takes such items into account in such a manner which will
assure that the performance of such procedure in the physician's
office will result in substantially less amounts paid under this
title than would have been paid if the services had been furnished
on an inpatient basis in a hospital.
Each amount so established shall be reviewed and updated not
later than July 1, 1987, and annually thereafter and may be adjusted
by the Secretary, when appropriate, to take account of varying
conditions in different areas.[121]
(C)[122](i) Notwithstanding the second sentence of each of subparagraphs
(A) and (B), except as otherwise specified in clauses (ii), (iii),
and (iv), if the Secretary has not updated amounts established under
such subparagraphs or under subparagraph (D), with respect to facility
services furnished during a fiscal year (beginning with fiscal year
1986 or a calendar year (beginning with 2006)), such amounts shall
be increased by the percentage increase in the Consumer Price Index
for all urban consumers (U.S. city average) as estimated by the
Secretary for the 12-month period ending with the midpoint of the
year involved.
(ii) In each of the fiscal years 1998 through 2002, the increase
under this subparagraph shall be reduced (but not below zero) by
2.0 percentage points.
(iii) In fiscal year 2004, beginning with April 1, 2004, the
increase under this subparagraph shall be the Consumer Price Index
for all urban consumers (U.S. city average) as estimated by the
Secretary for the 12-month period ending with March 31, 2003, minus
3.0 percentage points.
(iv) In fiscal year 2005, the last quarter of calendar year 2005,
and each of calendar years 2006 through 2009, the increase under
this subparagraph shall be 0 percent.
(D)[123](i) Taking into account the recommendations in the report
under section 626(d) of Medicare Prescription Drug, Improvement,
and Modernization Act of 2003, the Secretary shall implement a revised
payment system for payment of surgical services furnished in ambulatory
surgical centers.
(ii) In the year the system described in clause (i) is implemented,
such system shall be designed to result in the same aggregate amount
of expenditures for such services as would be made if this subparagraph
did not apply, as estimated by the Secretary.
(iii) The Secretary shall implement the system described in clause
(i) for periods in a manner so that it is first effective beginning
on or after January 1, 2006, and not later than January 1, 2008.
(iv) There shall be no administrative or judicial review under
section 1869, 1878, or otherwise, of the classification system,
the relative weights, payment amounts, and the geographic adjustment
factor, if any, under this subparagraph.
(3)(A) The aggregate amount of the payments to be made under
this part for outpatient hospital facility services or critical
access hospital services furnished before January 1, 1999, in
connection with surgical procedures specified under paragraph (1)(A)
shall be equal to the lesser of—
-
(i) the amount determined with respect to such services under
subsection (a)(2)(B); or
-
(ii) the blend amount (described in subparagraph (B)).
(B)(i) The blend amount for a cost reporting period is the sum
of—
-
(I) the cost proportion (as defined in clause (ii)(I)) of the
amount described in subparagraph (A)(i), and
-
(II) the ASC proportion (as defined in clause (ii)(II)) of the
standard overhead amount payable with respect to the same surgical
procedure as if it were provided in an ambulatory surgical center
in the same area, as determined under paragraph (2)(A), less the
amount a provider may charge as described in clause (ii) of section 1866(a)(2)(A).
(ii) Subject to paragraph (4), in this paragraph:
-
(I) The term “cost proportion” means 75 percent
for cost reporting periods beginning in fiscal year 1988, 50 percent
for portions of cost reporting periods beginning on or after October
1, 1988, and ending on or before December 31, 1990, and 42 percent
for portions of cost reporting periods beginning on or after January
1, 1991.
-
(II) The term “ASC proportion” means 25 percent
for cost reporting periods beginning in fiscal year 1988, 50 percent
for portions of cost reporting periods beginning on or after October
1, 1988, and ending on or before December 31, 1990, and 58 percent
for portions of cost reporting periods beginning on or after January
1, 1991.
(4)(A) In the case of a hospital that—
-
(i) makes application to the Secretary and demonstrates that
it specializes in eye services or eye and ear services (as determined
by the Secretary),
-
(ii) receives more than 30 percent of its total revenues from
outpatient services, and
-
(iii) on October 1, 1987—
-
(I) was an eye specialty hospital or an eye and ear specialty
hospital, or
-
(II) was operated as an eye or eye and ear unit (as defined
in subparagraph (B)) of a general acute care hospital which, on
the date of the application described in clause (i), operates less
than 20 percent of the beds that the hospital operated on October
1, 1987, and has sold or otherwise disposed of a substantial portion
of the hospital's other acute care operations,
the cost proportion and ASC proportion in effect under subclauses
(I) and (II) of paragraph (3)(B)(ii) for cost reporting periods
beginning in fiscal year 1988 shall remain in effect for cost reporting
periods beginning on or after October 1, 1988, and before January
1, 1995.
(B) For purposes of this subparagraph (A)(iii)(II), the term
“eye or eye and ear unit” means a physically
separate or distinct unit containing separate surgical suites
devoted solely to eye or eye and ear services.
(5)(A) The Secretary is authorized to provide by regulations
that in the case of a surgical procedure, specified by the Secretary
pursuant to paragraph (1)(A), performed in an ambulatory surgical
center described in such paragraph, there shall be paid (in lieu
of any amounts otherwise payable under this part) with respect
to the facility services furnished by such center and with respect
to all related services (including physicians' services, laboratory,
X-ray, and diagnostic services) a single all-inclusive fee established
pursuant to subparagraph (B), if all parties furnishing all such
services agree to accept such fee (to be divided among the parties
involved in such manner as they shall have previously agreed upon)
as full payment for the services furnished.
(B) In implementing this paragraph, the Secretary shall establish
with respect to each surgical procedure specified pursuant to paragraph
(1)(A) the amount of the all-inclusive fee for such procedure,
taking into account such factors as may be appropriate. The amount
so established with respect to any surgical procedure shall be
reviewed periodically and may be adjusted by the Secretary, when
appropriate, to take account of varying conditions in different
areas.
(6) Any person, including a facility having an agreement under
section 1832(a)(2)(F)(i), who knowingly and willfully presents,
or causes to be presented, a bill or request for payment, for an
intraocular lens inserted during or subsequent to cataract surgery
for which payment may be made under paragraph (2)(A)(iii), is subject
to a civil money penalty of not to exceed $2,000. The provisions
of section 1128A (other than subsections (a) and (b)) shall apply
to a civil money penalty under the previous sentence in the same
manner as such provisions apply to a penalty or proceeding under
section 1128A(a).
(j)
Whenever a final determination is made that
the amount of payment made under this part either to a provider
of services or to another person pursuant to an assignment under
section 1842(b)(3)(B)(ii) was in excess of or less than the amount
of payment that is due, and payment of such excess or deficit is
not made (or effected by offset) within 30 days of the date of
the determination, interest shall accrue on the balance of such
excess or deficit not paid or offset (to the extent that the balance
is owed by or owing to the provider) at a rate determined in accordance
with the regulations of the Secretary of the Treasury applicable
to charges for late payments.
(k)
With respect to services described in section 1861(s)(10)(B), the Secretary may provide, instead of the amount
of payment otherwise provided under this part, for payment of such
an amount or amounts as reasonably reflects the general cost of
efficiently providing such services.
(l)(1)(A)
The Secretary shall establish a fee
schedule for services of certified registered nurse anesthetists
under section 1861(s)(11).
(B) In establishing the fee schedule under this paragraph the
Secretary may utilize a system of time units, a system of base
and time units, or any appropriate methodology.
(C) The provisions of this subsection shall not apply to certain
services furnished in certain hospitals in rural areas under the
provisions of section 9320(k) of the Omnibus Budget Reconciliation
Act of 1986[124], as amended by section 6132 of the Omnibus Budget
Reconciliation Act of 1989.[125]
(2) Except as provided in paragraph (3), the fee schedule established
under paragraph (1) shall be initially based on audited data from
cost reporting periods ending in fiscal year 1985 and such other
data as the Secretary determines necessary.
(3)(A) In establishing the initial fee schedule for those services,
the Secretary shall adjust the fee schedule to the extent necessary
to ensure that the estimated total amount which will be paid under
this title for those services plus applicable coinsurance in 1989
will equal the estimated total amount which would be paid under
this title for those services in 1989 if the services were included
as inpatient hospital services and payment for such services was
made under part A in the same manner as payment was made in fiscal
year 1987, adjusted to take into account changes in prices and
technology relating to the administration of anesthesia.
(B) The Secretary shall also reduce the prevailing charge of
physicians for medical direction of a certified registered nurse
anesthetist, or the fee schedule for services of certified registered
nurse anesthetists, or both, to the extent necessary to ensure
that the estimated total amount which will be paid under this title
plus applicable coinsurance for such medical direction and such
services in 1989 and 1990 will not exceed the estimated total amount
which would have been paid plus applicable coinsurance but for
the enactment of the amendments made by section 9320 of the Omnibus
Budget Reconciliation Act of 1986[126]. A reduced prevailing charge
under this subparagraph shall become the prevailing charge but
for subsequent years for purposes of applying the economic index under
the fourth sentence of section 1842(b)(3).
(4)(A) Except as provided in subparagraphs (C) and (D), in determining
the amount paid under the fee schedule under this subsection for
services furnished on or after January 1, 1991, by a certified
registered nurse anesthetist who is not medically directed—
-
(i) the conversion factor shall be—
-
(I) for services furnished in 1991, $15.50,
-
(II) for services furnished in 1992, $15.75,
-
(III) for services furnished in 1993, $16.00,
-
(IV) for services furnished in 1994, $16.25,
-
(V) for services furnished in 1995, $16.50,
-
(VI) for services furnished in 1996, $16.75, and
-
(VII) for services furnished in calendar years after 1996, the
previous year's conversion factor increased by the update determined
under section 1848(d) for physician anesthesia services for that
year;
-
(ii) the payment areas to be used shall be the fee schedule
areas used under section 1848 (or, in the case of services furnished
during 1991, the localities used under section 1842(b)) for purposes
of computing payments for physicians' services that are anesthesia
services;
-
(iii) the geographic adjustment factors to be applied to the
conversion factor under clause (i) for services in a fee schedule
area or locality is—
-
(I) in the case of services furnished in 1991, the geographic
work index value and the geographic practice cost index value
specified in section 1842(q)(1)(B) for physicians' services that
are anesthesia services furnished in the area or locality, and
-
(II) in the case of services furnished after 1991, the geographic
work index value, the geographic practice cost index value, and
the geographic malpractice index value used for determining payments
for physicians' services that are anesthesia services under section 1848,
-
with 70 percent of the conversion factor treated as attributable
to work and 30 percent as attributable to overhead for services
furnished in 1991 (and the portions attributable to work, practice
expenses, and malpractice expenses in 1992 and thereafter being
the same as is applied under section 1848).
(B)(i) Except as provided in clause (ii) and subparagraph (D),
in determining the amount paid under the fee schedule under this
subsection for services furnished on or after January 1, 1991,
and before January 1, 1994, by a certified registered nurse anesthetist
who is medically directed, the Secretary shall apply the same methodology
specified in subparagraph (A).
(ii) The conversion factor used under clause (i) shall be—
-
(I) for services furnished in 1991, $10.50,
-
(II) for services furnished in 1992, $10.75, and
-
(III) for services furnished in 1993, $11.00.
(iii) In the case of services of a certified registered nurse
anesthetist who is medically directed or medically supervised by
a physician which are furnished on or after January 1, 1994, the
fee schedule amount shall be one-half of the amount described in
section 1848(a)(5)(B) with respect to the physician.
(C) Notwithstanding subclauses (I) through (V) of subparagraph
(A)(i)—
-
(i) in the case of a 1990 conversion factor that is greater
than $16.50, the conversion factor for a calendar year after 1990
and before 1996 shall be the 1990 conversion factor reduced by
the product of the last digit of the calendar year and one-fifth
of the amount by which the 1990 conversion factor exceeds $16.50;
and
-
(ii) in the case of a 1990 conversion factor that is greater
than $15.49 but less than $16.51, the conversion factor for a
calendar year after 1990 and before 1996 shall be the greater of—
-
(I) the 1990 conversion factor, or
-
(II) the conversion factor specified in subparagraph (A)(i)
for the year involved.
(D) Notwithstanding subparagraph (C), in no case may the conversion
factor used to determine payment for services in a fee schedule
area or locality under this subsection, as adjusted by the adjustment
factors specified in subparagraphs[127] (A)(iii), exceed the conversion
factor used to determine the amount paid for physicians' services
that are anesthesia services in the area or locality.
(5)(A) Payment for the services of a certified registered nurse
anesthetist (for which payment may otherwise be made under this
part) may be made on the basis of a claim or request for payment
presented by the certified registered nurse anesthetist furnishing
such services, or by a hospital, critical access hospital, physician,
group practice, or ambulatory surgical center with which the certified
registered nurse anesthetist furnishing such services has an employment
or contractual relationship that provides for payment to be made
under this part for such services to such hospital, critical access
hospital, physician, group practice, or ambulatory surgical center.
(B) No hospital or critical access hospital that presents a
claim or request for payment for services of a certified nurse
anesthetist under this part may treat any uncollected coinsurance
amount imposed under this part with respect to such services as
a bad debt of such hospital or critical access hospital for purposes
of this title.
(6) If an adjustment under paragraph (3)(B) results in a reduction
in the reasonable charge for a physicians' service and a nonparticipating
physician furnishes the service to an individual entitled to benefits
under this part after the effective date of the reduction, the
physician's actual charge is subject to a limit under section 1842(j)(1)(D).
(m)(1)[128]
In the case of physicians' services
furnished in a year[129] to an individual, who is covered under
the insurance program established by this part and who incurs expenses
for such services, in an area that is designated (under section
332(a)(1)(A) of the Public Health Service Act) as a health professional shortage
area as identified by the Secretary prior to the beginning of such
year[130], in addition to the amount otherwise paid under this
part, there also shall be paid to the physician (or to an employer
or facility in the cases described in clause (A) of section 1842(b)(6))
(on a monthly or quarterly basis) from the Federal Supplementary
Medical Insurance Trust Fund an amount equal to 10 percent of
the payment amount for the service under this part.
(2)[131] For each health professional shortage area identified
in paragraph (1) that consists of an entire county, the Secretary
shall provide for the additional payment under paragraph (1) without
any requirement on the physician to identify the health professional
shortage area involved. The Secretary may implement the previous
sentence using the method specified in subsection (u)(4)(C).
(3)[132] The Secretary shall post on the Internet website of
the Centers for Medicare and Medicaid Services a list of the health
professional shortage areas identified in paragraph (1) that consist
of a partial county to facilitate the additional payment under paragraph
(1) in such areas.
(4)[133] There shall be no administrative or judicial review
under section 1869, section 1878, or otherwise, respecting—
-
(A) the identification of a county or area;
-
(B) the assignment of a specialty of any physician under this
paragraph;
-
(C) the assignment of a physician to a county under this subsection;
or
-
(D) the assignment of a postal ZIP Code to a county or other
area under this subsection.
(n)(1)(A)
The aggregate amount of the payments
to be made for all or part of a cost reporting period for services
described in subsection (a)(2)(E)(i) furnished under this part
on or after October 1, 1988, and before January 1, 1999, and for
services described in subsection (a)(2)(E)(ii) furnished under
this part on or after October 1, 1989, and before January 1, 1999,
shall be equal to the lesser of—
-
(i) the amount determined with respect to such services under
subsection (a)(2)(B), or
-
(ii) the blend amount for radiology services and diagnostic
procedures determined in accordance with subparagraph (B).
(B)(i) The blend amount for radiology services and diagnostic
procedures for a cost reporting period is the sum of—
-
(I) the cost proportion (as defined in clause (ii)) of the
amount described in subparagraph (A)(i); and
-
(II) the charge proportion (as defined in clause (ii)(II)) of
62 percent (for services described in subsection (a)(2)(E)(i)),
or (for procedures described in subsection (a)(2)(E)(ii)), 42
percent or such other percent established by the Secretary (or
carriers acting pursuant to guidelines issued by the Secretary)
based on prevailing charges established with actual charge data,
of the prevailing charge or (for services described in subsection
(a)(2)(E)(i) furnished on or after April 1, 1989 and for services
described in subsection (a)(2)(E)(ii) furnished on or after January
1, 1992) the fee schedule amount established for participating
physicians for the same services as if they were furnished in a
physician's office in the same locality as determined under section 1842(b) (or, in the case of services furnished on or after January
1, 1992, under section 1848), less the amount a provider may charge
as described in clause (ii) of section 1866(a)(2)(A).
(ii) In this subparagraph:
-
(I) The term “cost proportion” means 50 percent,
except that such term means 65 percent in the case of outpatient
radiology services for portions of cost reporting periods which
occur in fiscal year 1989 and in the case of diagnostic procedures
described in subsection (a)(2)(E)(ii) for portions of cost reporting
periods which occur in fiscal year 1990, and such term means 42
percent in the case of outpatient radiology services for portions of
cost reporting periods beginning on or after January 1, 1991.
-
(II) The term “charge proportion” means 100
percent minus the cost proportion.
(o)(1)
In the case of shoes described in section 1861(s)(12)—
-
(A) no payment may be made under this part, with respect to
any individual for any year, for the furnishing of—
-
(i) more than one pair of custom molded shoes (including inserts
provided with such shoes) and 2 additional pairs of inserts for
such shoes, or
-
(ii) more than one pair of extra-depth shoes (not including
inserts provided with such shoes) and 3 pairs of inserts for such
shoes, and
-
(B) with respect to expenses incurred in any calendar year,
no more than the amount of payment applicable under paragraph (2)[134] shall
be considered as incurred expenses for purposes of subsections
(a) and (b).
Payment for shoes (or inserts) under this part shall be considered
to include payment for any expenses for the fitting of such shoes
(or inserts).
(2)[135](A) Except as provided by the Secretary under subparagraphs
(B) and (C), the amount of payment under this paragraph for custom
molded shoes, extra-depth shoes, and inserts shall be the amount
determined for such items by the Secretary under section 1834(h).
(B) The Secretary may establish payment amounts for shoes and
inserts that are lower than the amount established under section 1834(h) if the Secretary finds that shoes and inserts of an appropriate
quality are readily available at or below the amount established
under such section.
(C) In accordance with procedures established by the Secretary,
an individual entitled to benefits with respect to shoes described
in section 1861(s)(12) may substitute modification of such shoes
instead of obtaining one (or more, as specified by the Secretary)
pair of inserts (other than the original pair of inserts with respect
to such shoes). In such case, the Secretary shall substitute, for
the payment amount established under section 1834(h), a payment
amount that the Secretary estimates will assure that there is no
net increase in expenditures under this subsection as a result of
this subparagraph.
(3) In this title, the term “shoes” includes,
except for purposes of subparagraphs (A)(ii) and (B) of paragraph
(2), inserts for extra-depth shoes.
[(p) Stricken.[136]]
(q)(1)
Each request for payment, or bill submitted,
for an item or service furnished by an entity for which payment
may be made under this part and for which the entity knows or has
reason to believe there has been a referral by a referring physician
(within the meaning of section 1877) shall include the name and
unique physician identification number for the referring physician.
(2)(A) In the case of a request for payment for an item or service
furnished by an entity under this part on an assignment-related
basis and for which information is required to be provided under
paragraph (1) but not included, payment may be denied under this
part.
(B) In the case of a request for payment for an item or service
furnished by an entity under this part not submitted on an assignment-related
basis and for which information is required to be provided under
paragraph (1) but not included—
-
(i) if the entity knowingly and willfully fails to provide such
information promptly upon request of the Secretary or a carrier,
the entity may be subject to a civil money penalty in an amount
not to exceed $2,000, and
-
(ii) if the entity knowingly, willfully, and in repeated cases
fails, after being notified by the Secretary of the obligations
and requirements of this subsection to provide the information
required under paragraph (1), the entity may be subject to exclusion
from participation in the programs under this Act for a period
not to exceed 5 years, in accordance with the procedures of subsections
(c), (f), and (g) of section 1128.
The provisions of section 1128A (other than subsections (a)
and (b)) shall apply to civil money penalties under clause (i)
in the same manner as they apply to a penalty or proceeding under
section 1128A(a).
(r)(1)
With respect to services described in
section 1861(s)(2)(K)(ii) (relating to nurse practitioner or clinical
nurse specialist services), payment may be made on the basis of
a claim or request for payment presented by the nurse practitioner
or clinical nurse specialist furnishing such services, or by a
hospital, critical access hospital, skilled nursing facility or
nursing facility (as defined in section 1919(a)), physician, group
practice or ambulatory surgical center with which the nurse practitioner
or clinical nurse specialist has an employment or contractual relationship
that provides for payment to be made under this part for such services
to such hospital, physician, group practice, or ambulatory surgical
center.
(2) No hospital or critical access hospital that presents a
claim or request for payment under this part for services described
in section 1861(s)(2)(K)(ii) may treat any uncollected coinsurance
amount imposed under this part with respect to such services as
a bad debt of such hospital for purposes of this title.
(s)
The Secretary may not provide for payment
under subsection (a)(1)(A) with respect to an organization unless
the organization provides assurances satisfactory to the Secretary
that the organization meets the requirement of section 1866(f)
(relating to maintaining written policies and procedures respecting advance
directives).
(t)[137]
PROSPECTIVE PAYMENT SYSTEM
FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES.—
-
(1) AMOUNT OF PAYMENT.—
-
(A) IN GENERAL.—With respect to covered
OPD services (as defined in subparagraph (B)) furnished during
a year beginning with 1999, the amount of payment under this part
shall be determined under a prospective payment system established
by the Secretary in accordance with this subsection.
-
(B) DEFINITION OF COVERED OPD SERVICES.—For
purposes of this subsection, the term “covered OPD services”—
-
(i) means hospital outpatient services designated by the Secretary;
-
(ii) subject to clause (iv), includes inpatient hospital services
designated by the Secretary that are covered under this part and
furnished to a hospital inpatient who (I) is entitled to benefits
under part A but has exhausted benefits for inpatient hospital
services during a spell of illness, or (II) is not so entitled;
-
(iii) includes implantable items described in paragraph (3),
(6), or (8) of section 1861(s); but
-
(iv) does not include any therapy services described in subsection
(a)(8) or ambulance services, for which payment is made under a
fee schedule described in section 1834(k) or section 1834(l) and
does not include screening mammography (as defined in section 1861(jj))
and diagnostic mammography[138].
-
(2) SYSTEM REQUIREMENTS.—Under the
payment system—
-
(A) the Secretary shall develop a classification system for
covered OPD services;
-
(B) the Secretary may establish groups of covered OPD services,
within the classification system described in subparagraph (A),
so that services classified within each group are comparable clinically
and with respect to the use of resources and so that an implantable
item is classified to the group that includes the service to which
the item relates;
-
(C) the Secretary shall, using data on claims from 1996 and
using data from the most recent available cost reports, establish
relative payment weights for covered OPD services (and any groups
of such services described in subparagraph (B)) based on median
(or, at the election of the Secretary, mean) hospital costs and
shall determine projections of the frequency of utilization of
each such service (or group of services) in 1999;
-
(D) the Secretary shall determine a wage adjustment factor to
adjust the portion of payment and coinsurance attributable to
labor-related costs for relative differences in labor and
labor-related costs across geographic regions in a budget
neutral manner;
-
(E) the Secretary shall establish, in a budget neutral manner,
outlier adjustments under paragraph (5) and transitional pass-through
payments under paragraph (6) and other adjustments as determined
to be necessary to ensure equitable payments, such as adjustments
for certain classes of hospitals;
-
(F) the Secretary shall develop a method for controlling unnecessary increases
in the volume of covered OPD services; [139]
-
(G) the Secretary shall create additional groups of covered
OPD services that classify separately those procedures that utilize
contrast agents from those that do not; and[140]
-
(H)[141] with respect to devices of brachytherapy consisting
of a seed or seeds (or radioactive source), the Secretary shall
create additional groups of covered OPD services that classify such
devices separately from the other services (or group of services)
paid for under this subsection in a manner reflecting the number,
isotope, and radioactive intensity of such devices furnished, including
separate groups for palladium-103 and iodine-125 devices.
For purposes of subparagraph (B), items and services within
a group shall not be treated as “comparable with respect
to the use of resources” if the highest median cost (or
mean cost, if elected by the Secretary under subparagraph (C)) for
an item or service within the group is more than 2 times greater
than the lowest median cost (or mean cost, if so elected) for an
item or service within the group; except that the Secretary may
make exceptions in unusual cases, such as low volume items and
services, but may not make such an exception in the case of a
drug or biological that has been designated as an orphan drug under
section 526 of the Federal Food, Drug and Cosmetic Act.
-
(3) CALCULATION OF BASE AMOUNTS.—
-
(A) AGGREGATE AMOUNTS THAT WOULD BE PAYABLE IF
DEDUCTIBLES WERE DISREGARDED.—The Secretary shall
estimate the sum of—
-
(i) the total amounts that would be payable from the Trust Fund
under this part for covered OPD services in 1999, determined without
regard to this subsection, as though the deductible under section 1833(b) did not apply, and
-
(ii) the total amounts of copayments estimated to be paid under
this subsection by beneficiaries to hospitals for covered OPD
services in 1999, as though the deductible under section 1833(b)
did not apply.
-
(B) UNADJUSTED COPAYMENT AMOUNT.—
-
-
(i) IN GENERAL.—For purposes of this
subsection, subject to clause (ii), the “unadjusted copayment
amount” applicable to a covered OPD service (or group
of such services) is 20 percent of the national median of the charges
for the service (or services within the group) furnished during
1996, updated to 1999 using the Secretary's estimate of charge
growth during the period.
-
(ii) ADJUSTED TO BE 20 PERCENT WHEN FULLY PHASED
IN.—If the pre-deductible payment percentage
for a covered OPD service (or group of such services) furnished
in a year would be equal to or exceed 80 percent, then the unadjusted
copayment amount shall be 20 percent of amount determined under
subparagraph (D).
-
(iii) RULES FOR NEW SERVICES.—The Secretary
shall establish rules for establishment of an unadjusted copayment
amount for a covered OPD service not furnished during 1996, based
upon its classification within a group of such services.
-
(C) CALCULATION OF CONVERSION FACTORS.—
-
(i) FOR 1999.—
-
(I) IN GENERAL.—The Secretary shall
establish a 1999 conversion factor for determining the medicare
OPD fee schedule amounts for each covered OPD service (or group
of such services) furnished in 1999. Such conversion factor shall
be established on the basis of the weights and frequencies described
in paragraph (2)(C) and in such a manner that the sum for all services
and groups of the products (described in subclause (II) for each
such service or group) equals the total projected amount described
in subparagraph (A).
-
(II) PRODUCT DESCRIBED.—The Secretary
shall determine for each service or group the product of the medicare
OPD fee schedule amounts (taking into account appropriate adjustments
described in paragraphs (2)(D) and (2)(E)) and the estimated frequencies
for such service or group.
-
(ii) SUBSEQUENT YEARS.—Subject to paragraph
(8)(B), the Secretary shall establish a conversion factor for
covered OPD services furnished in subsequent years in an amount
equal to the conversion factor established under this subparagraph
and applicable to such services furnished in the previous year
increased by the OPD fee schedule increase factor specified under
clause (iv)[142] for the year involved.
-
(iii) ADJUSTMENT FOR SERVICE MIX CHANGES.—Insofar
as the Secretary determines that the adjustments for service mix
under paragraph (2) for a previous year (or estimates that such
adjustments for a future year) did (or are likely to) result in
a change in aggregate payments under this subsection during the
year that are a result of changes in the coding or classification
of covered OPD services that do not reflect real changes in service
mix, the Secretary may adjust the conversion factor computed under
this subparagraph for subsequent years so as to eliminate the effect
of such coding or classification changes.
-
(iv) OPD FEE SCHEDULE INCREASE FACTOR.—For
purposes of this subparagraph, the “OPD fee schedule increase
factor” for services furnished in a year is equal to the
market basket percentage increase applicable under section 1886(b)(3)(B)(iii)
to hospital discharges occurring during the fiscal year ending
in such year, reduced by 1 percentage point for such factor for
services furnished in each of 2000 and 2002. In applying the previous
sentence for years beginning with 2000, the Secretary may substitute
for the market basket percentage increase an annual percentage
increase that is computed and applied with respect to covered OPD
services furnished in a year in the same manner as the market basket
percentage increase is determined and applied to inpatient hospital services
for discharges occurring in a fiscal year.
-
(D) CALCULATION OF MEDICARE OPD FEE SCHEDULE AMOUNTS.—The
Secretary shall compute a medicare OPD fee schedule amount for each
covered OPD service (or group of such services) furnished in a year,
in an amount equal to the product of—
-
(i) the conversion factor computed under subparagraph (C) for
the year, and
-
(ii) the relative payment weight (determined under paragraph
(2)(C)) for the service or group.
-
(E) PRE-DEDUCTIBLE PAYMENT PERCENTAGE.—The
pre-deductible payment percentage for a covered OPD service
(or group of such services) furnished in a year is equal to the
ratio of—
-
(i) the medicare OPD fee schedule amount established under subparagraph
(D) for the year, minus the unadjusted copayment amount determined
under subparagraph (B) for the service or group, to
-
(ii) the medicare OPD fee schedule amount determined under subparagraph
(D) for the year for such service or group.
-
(4) MEDICARE PAYMENT AMOUNT.—The amount
of payment made from the Trust Fund under this part for a covered
OPD service (and such services classified within a group) furnished
in a year is determined, subject to paragraph (7) as follows:
-
(A) FEE SCHEDULE ADJUSTMENTS.—The medicare
OPD fee schedule amount (computed under paragraph (3)(D)) for
the service or group and year is adjusted for relative differences
in the cost of labor and other factors determined by the Secretary,
as computed under paragraphs (2)(D) and (2)(E).
-
(B) SUBTRACT APPLICABLE DEDUCTIBLE.—Reduce
the adjusted amount determined under subparagraph (A) by the amount
of the deductible under section 1833(b), to the extent applicable.
-
(C) APPLY PAYMENT PROPORTION TO REMAINDER.—The
amount of payment is the amount so determined under subparagraph
(B) multiplied by the pre-deductible payment percentage
(as determined under paragraph (3)(E)) for the service or group
and year involved, plus the amount of any reduction in the copayment
amount attributable to paragraph (8)(C).
-
(5) OUTLIER ADJUSTMENT.—
-
(A) IN GENERAL.—Subject to subparagraph
(D), the Secretary shall provide for an additional payment for
each covered OPD service (or group of services) for which a hospital's
charges, adjusted to cost, exceed—
-
(i) a fixed multiple of the sum of—
-
(I) the applicable medicare OPD fee schedule amount determined
under paragraph (3)(D), as adjusted under paragraph (4)(A) (other
than for adjustments under this paragraph or paragraph (6)); and
-
(II) any transitional pass-through payment under paragraph
(6); and
-
(ii) at the option of the Secretary, such fixed dollar amount
as the Secretary may establish.
-
(B) AMOUNT OF ADJUSTMENT.—The amount
of the additional payment under subparagraph (A) shall be determined
by the Secretary and shall approximate the marginal cost of care
beyond the applicable cutoff point under such subparagraph.
-
(C) LIMIT ON AGGREGATE OUTLIER ADJUSTMENTS.—
-
(i) IN GENERAL.—The total of the additional
payments made under this paragraph for covered OPD services furnished
in a year (as estimated by the Secretary before the beginning of
the year) may not exceed the applicable percentage (specified in
clause (ii)) of the total program payments estimated to be made
under this subsection for all covered OPD services furnished in
that year. If this paragraph is first applied to less than a full
year, the previous sentence shall apply only to the portion of
such year.
-
(ii) APPLICABLE PERCENTAGE.—For purposes
of clause (i), the term “applicable percentage” means
a percentage specified by the Secretary up to (but not to exceed)—
-
(I) for a year (or portion of a year) before 2004, 2.5 percent;
and
-
(II) for 2004 and thereafter, 3.0 percent.
-
(D) TRANSITIONAL AUTHORITY.—In applying
subparagraph (A) for covered OPD services furnished before January
1, 2002, the Secretary may—
-
(i) apply such subparagraph to a bill for such services related
to an outpatient encounter (rather than for a specific service
or group of services) using OPD fee schedule amounts and transitional pass-through
payments covered under the bill; and
-
(ii) use an appropriate cost-to-charge ratio
for the hospital involved (as determined by the Secretary), rather
than for specific departments within the hospital.
-
(E)[143] EXCLUSION OF SEPARATE DRUG AND BIOLOGICAL
APCS FROM OUTLIER PAYMENTS.—No additional payment shall
be made under subparagraph (A) in the case of ambulatory payment
classification groups established separately for drugs or biologicals.
-
(6) TRANSITIONAL PASS-THROUGH FOR ADDITIONAL
COSTS OF INNOVATIVE MEDICAL DEVICES, DRUGS, AND BIOLOGICALS.—
-
(A) IN GENERAL.—The Secretary shall
provide for an additional payment under this paragraph for any
of the following that are provided as part of a covered OPD service
(or group of services):
-
(i) CURRENT ORPHAN DRUGS.—A drug or
biological that is used for a rare disease or condition with respect
to which the drug or biological has been designated as an orphan
drug under section 526 of the Federal Food, Drug and Cosmetic Act
if payment for the drug or biological as an outpatient hospital
service under this part was being made on the first date that the
system under this subsection is implemented.
-
(ii) CURRENT CANCER THERAPY DRUGS AND BIOLOGICALS
AND BRACHYTHERAPY.—A drug or biological that is used
in cancer therapy, including (but not limited to) a chemotherapeutic
agent, an antiemetic, a hematopoietic growth factor, a colony stimulating factor,
a biological response modifier, a bisphosphonate, and a device
of brachytherapy or temperature monitored cryoablation, if payment
for such drug, biological, or device as an outpatient hospital
service under this part was being made on such first date.
-
(iii) CURRENT RADIOPHARMACEUTICAL DRUGS AND BIOLOGICAL
PRODUCTS.—A radiopharmaceutical drug or biological
product used in diagnostic, monitoring, and therapeutic nuclear
medicine procedures if payment for the drug or biological as an
outpatient hospital service under this part was being made on
such first date.
-
(iv) NEW MEDICAL DEVICES, DRUGS, AND BIOLOGICALS.—A medical
device, drug, or biological not described in clause (i), (ii), or
(iii) if—
-
(I) payment for the device, drug, or biological as an outpatient
hospital service under this part was not being made as of December
31, 1996; and
-
(II) the cost of the drug or biological or the average cost
of the category of devices is not insignificant in relation to
the OPD fee schedule amount (as calculated under paragraph (3)(D))
payable for the service (or group of services) involved.
-
(B) USE OF CATEGORIES IN DETERMINING ELIGIBILITY
OF A DEVICE FOR PASS-THROUGH PAYMENTS[144].—The
following provisions apply for purposes of determining whether
a medical device qualifies for additional payments under clause
(ii) or (iv) of subparagraph (A):
-
(i) ESTABLISHMENT OF INITIAL CATEGORIES.—
-
(I) IN GENERAL.—The Secretary shall
initially establish under this clause categories of medical devices
based on type of device by April 1, 2001. Such categories shall
be established in a manner such that each medical device that meets
the requirements of clause (ii) or (iv) of subparagraph (A) as
of January 1, 2001, is included in such a category and no such device
is included in more than one category. For purposes of the preceding
sentence, whether a medical device meets such requirements as of
such date shall be determined on the basis of the program memoranda
issued before such date.
-
(II) AUTHORIZATION OF IMPLEMENTATION OTHER THAN
THROUGH REGULATIONS.—The categories may be established
under this clause by program memorandum or otherwise, after consultation
with groups representing hospitals, manufacturers of medical devices,
and other affected parties.
-
(ii) ESTABLISHING CRITERIA FOR ADDITIONAL CATEGORIES.—
-
(I) IN GENERAL.—The Secretary shall
establish criteria that will be used for creation of additional
categories (other than those established under clause (i)) through
rulemaking (which may include use of an interim final rule with
comment period).
-
(II) STANDARD.—Such categories shall
be established under this clause in a manner such that no medical
device is described by more than one category. Such criteria shall include
a test of whether the average cost of devices that would be included
in a category and are in use at the time the category is established
is not insignificant, as described in subparagraph (A)(iv)(II).
-
(III) DEADLINE.—Criteria shall first
be established under this clause by July 1, 2001. The Secretary
may establish in compelling circumstances categories under this
clause before the date such criteria are established.
-
(IV) ADDING CATEGORIES.—The Secretary
shall promptly establish a new category of medical devices under
this clause for any medical device that meets the requirements
of subparagraph (A)(iv) and for which none of the categories in
effect (or that were previously in effect) is appropriate.
-
(iii) PERIOD FOR WHICH CATEGORY IS IN EFFECT.—A
category of medical devices established under clause (i) or (ii)
shall be in effect for a period of at least 2 years, but not more
than 3 years, that begins—
-
(I) in the case of a category established under clause (i),
on the first date on which payment was made under this paragraph
for any device described by such category (including payments made
during the period before April 1, 2001); and
-
(II) in the case of any other category, on the first date on
which payment is made under this paragraph for any medical device
that is described by such category.
-
(iv) REQUIREMENTS TREATED AS MET.—A
medical device shall be treated as meeting the requirements of
subparagraph (A)(iv), regardless of whether the device meets the
requirement of subclause (I) of such subparagraph, if—
-
(I) the device is described by a category established and in
effect under clause (i); or
-
(II) the device is described by a category established and in
effect under clause (ii) and an application under section 515 of
the Federal Food, Drug, and Cosmetic Act has been approved with
respect to the device, or the device has been cleared for market
under section 510(k) of such Act, or the device is exempt from
the requirements of section 510(k) of such Act pursuant to subsection
(l) or (m) of section 510 of such Act or section 520(g) of such
Act.
Nothing in this clause shall be construed as requiring an application
or prior approval (other than that described in subclause (II))
in order for a covered device described by a category to qualify
for payment under this paragraph.
-
-
(C) LIMITED PERIOD OF PAYMENT.—
-
(i) DRUGS AND BIOLOGICALS.—The payment
under this paragraph with respect to a drug or biological shall
only apply during a period of at least 2 years, but not more than
3 years, that begins—
-
(I) on the first date this subsection is implemented in the
case of a drug or biological described in clause (i), (ii), or
(iii) of subparagraph (A) and in the case of a drug or biological
described in subparagraph (A)(iv) and for which payment under
this part is made as an outpatient hospital service before such
first date; or
-
(II) in the case of a drug or biological described in subparagraph
(A)(iv) not described in subclause (I), on the first date on which
payment is made under this part for the drug or biological as an
outpatient hospital service.
-
(ii) MEDICAL DEVICES.—Payment shall
be made under this paragraph with respect to a medical device only
if such device—
-
(I) is described by a category of medical devices established
and in effect under subparagraph (B); and
-
(II) is provided as part of a service (or group of services)
paid for under this subsection and provided during the period
for which such category is in effect under such subparagraph.
-
(D) AMOUNT OF ADDITIONAL PAYMENT.—Subject
to subparagraph (E)(iii), the amount of the payment under this
paragraph with respect to a device, drug, or biological provided
as part of a covered OPD service is—
-
(i) in the case of a drug or biological, the amount by which
the amount determined under section 1842(o) (or if the drug or
biological is covered under a competitive acquisition contract under section 1847B, an amount determined by the Secretary equal to the average
price for the drug or biological for all competitive acquisition
areas and year established under such section as calculated and adjusted
by the Secretary for purposes of this paragraph)[145] for the drug
or biological exceeds the portion of the otherwise applicable medicare
OPD fee schedule that the Secretary determines is associated with
the drug or biological; or
-
(ii) in the case of a medical device, the amount by which the
hospital's charges for the device, adjusted to cost, exceeds the
portion of the otherwise applicable medicare OPD fee schedule
that the Secretary determines is associated with the device.
-
(E) LIMIT ON AGGREGATE ANNUAL ADJUSTMENT.—
-
(i) IN GENERAL.—The total of the additional
payments made under this paragraph for covered OPD services furnished
in a year (as estimated by the Secretary before the beginning of
the year) may not exceed the applicable percentage (specified in
clause (ii)) of the total program payments estimated to be made
under this subsection for all covered OPD services furnished in
that year. If this paragraph is first applied to less than a full
year, the previous sentence shall apply only to the portion of
such year.
-
(ii) APPLICABLE PERCENTAGE.—For purposes
of clause (i), the term “applicable percentage”
means—
-
(I) for a year (or portion of a year) before 2004, 2.5 percent;
and
-
(II) for 2004 and thereafter, a percentage specified by the
Secretary up to (but not to exceed) 2.0 percent.
-
(iii) UNIFORM PROSPECTIVE REDUCTION IF AGGREGATE
LIMIT PROJECTED TO BE EXCEEDED.—If the Secretary estimates
before the beginning of a year that the amount of the additional
payments under this paragraph for the year (or portion thereof)
as determined under clause (i) without regard to this clause will
exceed the limit established under such clause, the Secretary shall
reduce pro rata the amount of each of the additional payments under
this paragraph for that year (or portion thereof) in order to ensure
that the aggregate additional payments under this paragraph (as
so estimated) do not exceed such limit.
-
(F)[146] LIMITATION OF APPLICATION OF FUNCTIONAL
EQUIVALENCE STANDARD.—
-
(i) IN GENERAL.—The Secretary may not
publish regulations that apply a functional equivalence standard
to a drug or biological under this paragraph.
-
(ii) APPLICATION.—Clause (i) shall
apply to the application of a functional equivalence standard to
a drug or biological on or after the date of enactment of the Medicare
Prescription Drug, Improvement, and Modernization
Act of 2003 unless—
-
(I) such application was being made to such drug or biological
prior to such date of enactment; and
-
(II) the Secretary applies such standard to such drug or biological
only for the purpose of determining eligibility of such drug or
biological for additional payments under this paragraph and not
for the purpose of any other payments under this title.
-
(iii) RULE OF CONSTRUCTION.—Nothing
in this subparagraph shall be construed to effect the Secretary's
authority to deem a particular drug to be identical to another drug
if the 2 products are pharmaceutically equivalent and bioequivalent,
as determined by the Commissioner of Food and Drugs.
-
(7) TRANSITIONAL ADJUSTMENT TO LIMIT DECLINE IN
PAYMENT.—
-
(A) BEFORE 2002.—Subject to subparagraph
(D), for covered OPD services furnished before January 1, 2002,
for which the PPS amount (as defined in subparagraph (E)) is—
-
(i) at least 90 percent, but less than 100 percent, of the
pre-BBA amount (as defined in subparagraph (F)), the amount
of payment under this subsection shall be increased by 80 percent
of the amount of such difference;
-
(ii) at least 80 percent, but less than 90 percent, of the
pre-BBA amount, the amount of payment under this subsection
shall be increased by the amount by which (I) the product of 0.71
and the pre-BBA amount, exceeds (II) the product of 0.70
and the PPS amount;
-
(iii) at least 70 percent, but less than 80 percent, of the
pre-BBA amount, the amount of payment under this subsection
shall be increased by the amount by which (I) the product of 0.63
and the pre-BBA amount, exceeds (II) the product of 0.60
and the PPS amount; or
-
(iv) less than 70 percent of the pre-BBA amount, the
amount of payment under this subsection shall be increased by 21
percent of the pre-BBA amount.
-
(B) 2002.—Subject to subparagraph (D),
for covered OPD services furnished during 2002, for which the PPS
amount is—
-
(i) at least 90 percent, but less than 100 percent, of the
pre-BBA amount, the amount of payment under this subsection shall
be increased by 70 percent of the amount of such difference;
-
(ii) at least 80 percent, but less than 90 percent, of the
pre-BBA amount, the amount of payment under this subsection
shall be increased by the amount by which (I) the product of 0.61
and the pre-BBA amount, exceeds (II) the product of 0.60
and the PPS amount; or
-
(iii) less than 80 percent of the pre-BBA amount, the
amount of payment under this subsection shall be increased by 13
percent of the pre-BBA amount.
-
(C) 2003.—Subject to subparagraph (D),
for covered OPD services furnished during 2003, for which the PPS
amount is—
-
(i) at least 90 percent, but less than 100 percent, of the
pre-BBA amount, the amount of payment under this subsection
shall be increased by 60 percent of the amount of such difference;
or
-
(ii) less than 90 percent of the pre-BBA amount, the
amount of payment under this subsection shall be increased by 6
percent of the pre-BBA amount.
-
(D) HOLD HARMLESS PROVISIONS.—
-
(i) TEMPORARY TREATMENT FOR CERTAIN[147] RURAL
HOSPITALS.—In the case of a hospital located in a
rural area and that has not more than 100 beds or a sole community
hospital (as defined in section 1886(d)(5)(D)(iii)) located in a
rural area[148], for covered OPD services furnished before January
1, 2006[149], for which the PPS amount is less than the pre-BBA
amount, the amount of payment under this subsection shall be increased
by the amount of such difference.
-
(ii) PERMANENT TREATMENT FOR CANCER HOSPITALS AND
CHILDREN'S HOSPITALS.—In the case of a hospital
described in section clause (iii) or (v) of 1886(d)(1)(B), for
covered OPD services for which the PPS amount is less than the
pre-BBA amount, the amount of payment under this subsection
shall be increased by the amount of such difference.
-
(E) PPS amount defined.—In this paragraph, the term
“PPS amount” means, with respect to covered OPD
services, the amount payable under this title for such services
(determined without regard to this paragraph), including amounts
payable as copayment under paragraph (8), coinsurance under section 1866(a)(2)(A)(ii), and the deductible under section 1833(b).
-
(F) PRE-BBA AMOUNT DEFINED.—
-
(i) IN GENERAL.—In this paragraph,
the “pre-BBA amount” means, with respect
to covered OPD services furnished by a hospital in a year, an
amount equal to the product of the reasonable cost of the hospital
for such services for the portions of the hospital's cost reporting
period (or periods) occurring in the year and the base OPD payment-to-cost
ratio for the hospital (as defined in clause (ii)).
-
(ii) BASE PAYMENT-TO-COST-RATIO
DEFINED.—For purposes of this subparagraph, the “base
payment-to-cost ratio” for a hospital
means the ratio of—
-
(I) the hospital's reimbursement under this part for covered OPD
services furnished during the cost reporting period ending in
1996 (or in the case of a hospital that did not submit a cost report
for such period, during the first subsequent cost reporting period
ending before 2001 for which the hospital submitted a cost report)
, including any reimbursement for such services through cost-sharing
described in subparagraph (E), to (II) the reasonable cost of such
services for such period.
The Secretary shall determine such ratios as if the amendments
made by section 4521 of the Balanced Budget Act of 1997 were in
effect in 1996.
-
-
(G) INTERIM PAYMENTS.—The Secretary
shall make payments under this paragraph to hospitals on an interim
basis, subject to retrospective adjustments based on settled cost
reports.
-
(H) NO EFFECT ON COPAYMENTS.—Nothing
in this paragraph shall be construed to affect the unadjusted copayment
amount described in paragraph (3)(B) or the copayment amount under
paragraph (8).
-
(I) APPLICATION WITHOUT REGARD TO BUDGET NEUTRALITY.—The additional
payments made under this paragraph—
-
(i) shall not be considered an adjustment under paragraph (2)(E); and
-
(ii) shall not be implemented in a budget neutral manner.
-
(8) COPAYMENT AMOUNT[150].—
-
(A) IN GENERAL.—Except as provided
in subparagraphs (B) and (C), the copayment amount under this
subsection is the amount by which the amount described in paragraph
(4)(B) exceeds the amount of payment determined under paragraph
(4)(C).
-
(B) ELECTION TO OFFER REDUCED COPAYMENT AMOUNT.—The
Secretary shall establish a procedure under which a hospital, before
the beginning of a year (beginning with 1999), may elect to reduce
the copayment amount otherwise established under subparagraph (A)
for some or all covered OPD services to an amount that is not less
than 20 percent of the medicare OPD fee schedule amount (computed
under paragraph (3)(D)) for the service involved. Under such procedures, such
reduced copayment amount may not be further reduced or increased
during the year involved and the hospital may disseminate information
on the reduction of copayment amount effected under this subparagraph.
-
(C) LIMITATION ON COPAYMENT AMOUNT.—
-
(i) TO INPATIENT HOSPITAL DEDUCTIBLE AMOUNT.—In
no case shall the copayment amount for a procedure performed in
a year exceed the amount of the inpatient hospital deductible established under
section 1813(b) for that year.
-
(ii) TO SPECIFIED PERCENTAGE.—The Secretary
shall reduce the national unadjusted copayment amount for a covered
OPD service (or group of such services) furnished in a year in
a manner so that the effective copayment rate (determined on a
national unadjusted basis) for that service in the year does not
exceed the following percentage:
-
(I) For procedures performed in 2001, on or after April 1, 2001,
57 percent.
-
(II) For procedures performed in 2002 or 2003, 55 percent.
-
(III) For procedures performed in 2004, 50 percent.
-
(IV) For procedures performed in 2005, 45 percent.
-
(V) For procedures performed in 2006 and thereafter, 40 percent.
-
(D) NO IMPACT ON DEDUCTIBLES.—Nothing
in this paragraph shall be construed as affecting a hospital's
authority to waive the charging of a deductible under section 1833(b).
-
(D) COMPUTATION IGNORING OUTLIER AND PASS-THROUGH
ADJUSTMENTS.—The copayment amount shall be computed
under subparagraph (A) as if the adjustments under paragraphs (5)
and (6) (and any adjustment made under paragraph (2)(E) in relation
to such adjustments) had not occurred.
-
(9) PERIODIC REVIEW AND ADJUSTMENTS COMPONENTS OF
PROSPECTIVE PAYMENT SYSTEM.—
-
(A) PERIODIC REVIEW.—The Secretary
shall review not less often than annually and revise the groups,
the relative payment weights, and the wage and other adjustments
described in paragraph (2) to take into account changes in medical
practice, changes in technology, the addition of new services,
new cost data, and other relevant information and factors. The
Secretary shall consult with an expert outside advisory panel composed
of an appropriate selection of representatives of providers to
review (and advise the Secretary concerning) the clinical integrity
of the groups and weights. Such panel may use data collected or
developed by entities and organizations (other than the Department of
Health and Human Services) in conducting such review.
-
(B) BUDGET NEUTRALITY ADJUSTMENT.—If
the Secretary makes adjustments under subparagraph (A), then the
adjustments for a year may not cause the estimated amount of expenditures
under this part for the year to increase or decrease from the estimated
amount of expenditures under this part that would have been made
if the adjustments had not been made. In determining adjustments
under the preceding sentence for 2004 and 2005, the Secretary shall
not take into account under this subparagraph or paragraph (2)(E)
any expenditures that would not have been made but for the application
of paragraph (14).[151]
-
(C) UPDATE FACTOR.—If the Secretary
determines under methodologies described in paragraph (2)(F) that
the volume of services paid for under this subsection increased
beyond amounts established through those methodologies, the Secretary
may appropriately adjust the update to the conversion factor otherwise
applicable in a subsequent year.
-
(10) SPECIAL RULE FOR AMBULANCE SERVICES.—The
Secretary shall pay for hospital outpatient services that are ambulance
services on the basis described in section 1861(v)(1)(U), or, if
applicable, the fee schedule established under section 1834(l).
-
(11) SPECIAL RULES FOR CERTAIN HOSPITALS.—In
the case of hospitals described in clause (iii) or (v) of section 1886(d)(1)(B)—
-
(A) the system under this subsection shall not apply to covered
OPD services furnished before January 1, 2000; and
-
(B) the Secretary may establish a separate conversion factor
for such services in a manner that specifically takes into account
the unique costs incurred by such hospitals by virtue of their
patient population and service intensity.
-
(12) LIMITATION ON REVIEW.—There shall
be no administrative or judicial review under section 1869, 1878,
or otherwise of—
-
(A) the development of the classification system under paragraph
(2), including the establishment of groups and relative payment
weights for covered OPD services, of wage adjustment factors,
other adjustments, and methods described in paragraph (2)(F);
-
(B) the calculation of base amounts under paragraph (3);
-
(C) periodic adjustments made under paragraph (6);
-
(D) the establishment of a separate conversion factor under
paragraph (8)(B); and
-
(E) the determination of the fixed multiple, or a fixed dollar
cutoff amount, the marginal cost of care, or applicable percentage
under paragraph (5) or the determination of insignificance of cost,
the duration of the additional payments, the determination and
deletion of initial and new categories (consistent with subparagraphs
(B) and (C) of paragraph (6)), the portion of the medicare OPD
fee schedule amount associated with particular devices, drugs,
or biologicals, and the application of any pro rata reduction under
paragraph (6).
-
(13)[152] AUTHORIZATION OF ADJUSTMENT FOR RURAL
HOSPITALS.—
-
(A) STUDY.—The Secretary shall conduct
a study to determine if, under the system under this subsection,
costs incurred by hospitals located in rural areas by ambulatory
payment classification groups (APCs) exceed those costs incurred
by hospitals located in urban areas.
-
(B) AUTHORIZATION OF ADJUSTMENT.—Insofar
as the Secretary determines under subparagraph (A) that costs incurred
by hospitals located in rural areas exceed those costs incurred
by hospitals located in urban areas, the Secretary shall provide
for an appropriate adjustment under paragraph (2)(E) to reflect
those higher costs by January 1, 2006.
-
(14)[153] DRUG APC PAYMENT RATES.—
-
(A) IN GENERAL.—The amount of payment
under this subsection for a specified covered outpatient drug (defined
in subparagraph (B)) that is furnished as part of a covered OPD
service (or group of services)—
-
(i) in 2004, in the case of—
-
(I) a sole source drug shall in no case be less than 88 percent, or
exceed 95 percent, of the reference average wholesale price for
the drug;
-
(II) an innovator multiple source drug shall in no case exceed 68
percent of the reference average wholesale price for the drug; or
-
(III) a noninnovator multiple source drug shall in no case exceed
46 percent of the reference average wholesale price for the drug;
-
(ii) in 2005, in the case of—
-
(I) a sole source drug shall in no case be less than 83 percent, or
exceed 95 percent, of the reference average wholesale price for
the drug;
-
(II) an innovator multiple source drug shall in no case exceed 68
percent of the reference average wholesale price for the drug; or
-
(III) a noninnovator multiple source drug shall in no case exceed
46 percent of the reference average wholesale price for the drug;
or
-
(iii) in a subsequent year, shall be equal, subject to subparagraph (E)—
-
(I) to the average acquisition cost for the drug for that year (which,
at the option of the Secretary, may vary by hospital group (as defined
by the Secretary based on volume of covered OPD services or other
relevant characteristics)), as determined by the Secretary taking
into account the hospital acquisition cost survey data under subparagraph
(D); or
-
(II) if hospital acquisition cost data are not available, the average
price for the drug in the year established under section 1842(o),
section 1847A, or section 1847B, as the case may be, as calculated
and adjusted by the Secretary as necessary for purposes of this
paragraph.
-
(B) Specified covered outpatient drug defined.—
-
(i) IN GENERAL.—In this paragraph,
the term “specified covered outpatient drug” means,
subject to clause (ii), a covered outpatient drug (as defined in
section 1927(k)(2)) for which a separate ambulatory payment classification
group (APC) has been established and that is—
-
(I) a radiopharmaceutical; or
-
(II) a drug or biological for which payment was made under paragraph
(6) (relating to pass-through payments) on or before December 31,
2002.
-
(ii) EXCEPTION.—Such term does not
include—
-
(I) a drug or biological for which payment is first made on
or after January 1, 2003, under paragraph (6);
-
(II) a drug or biological for which a temporary HCPCS code has
not been assigned; or
-
(III) during 2004 and 2005, an orphan drug (as designated by the
Secretary).
-
(C) PAYMENT FOR DESIGNATED ORPHAN DRUGS DURING 2004 AND
2005.—The amount of payment under
this subsection for an orphan drug designated by the Secretary under
subparagraph (B)(ii)(III) that is furnished as part of a covered
OPD service (or group of services) during 2004 and 2005 shall equal
such amount as the Secretary may specify.
-
(D) Acquisition cost survey for hospital outpatient drugs.—
-
(i) Annual gao surveys in 2004 and 2005.—
-
(I) IN GENERAL.—The Comptroller General
of the United States shall conduct a survey in each of 2004 and
2005 to determine the hospital acquisition cost for each specified
covered outpatient drug. Not later than April 1, 2005, the Comptroller General
shall furnish data from such surveys to the Secretary for use in
setting the payment rates under subparagraph (A) for 2006.
-
(II) RECOMMENDATIONS.—Upon the completion
of such surveys, the Comptroller General shall recommend to the
Secretary the frequency and methodology of subsequent surveys to be
conducted by the Secretary under clause (ii).
-
(ii) SUBSEQUENT SECRETARIAL SURVEYS.—The
Secretary, taking into account such recommendations, shall conduct
periodic subsequent surveys to determine the hospital acquisition
cost for each specified covered outpatient drug for use in setting
the payment rates under subparagraph (A).
-
(iii) SURVEY REQUIREMENTS.—The surveys
conducted under clauses (i) and (ii) shall have a large sample of
hospitals that is sufficient to generate a statistically significant
estimate of the average hospital acquisition cost for each specified
covered outpatient drug. With respect to the surveys conducted under
clause (i), the Comptroller General shall report to Congress on
the justification for the size of the sample used in order to assure
the validity of such estimates.
-
(iv) DIFFERENTIATION IN COST.—In conducting
surveys under clause (i), the Comptroller General shall determine
and report to Congress if there is (and the extent of any) variation
in hospital acquisition costs for drugs among hospitals based on
the volume of covered OPD services performed by such hospitals or
other relevant characteristics of such hospitals (as defined by
the Comptroller General).
-
(v) COMMENT ON PROPOSED RATES.—Not
later than 30 days after the date the Secretary promulgated proposed
rules setting forth the payment rates under subparagraph (A) for
2006, the Comptroller General shall evaluate such proposed rates
and submit to Congress a report regarding the appropriateness of
such rates based on the surveys the Comptroller General has conducted
under clause (i).
-
(E) ADJUSTMENT IN PAYMENT RATES FOR OVERHEAD COSTS.—
-
(i) MEDPAC REPORT ON DRUG APC DESIGN.—The
Medicare Payment Advisory Commission shall submit to the Secretary,
not later than July 1, 2005, a report on adjustment of payment for ambulatory
payment classifications for specified covered outpatient drugs to
take into account overhead and related expenses, such as pharmacy
services and handling costs. Such report shall include—
-
(I) a description and analysis of the data available with regard to
such expenses;
-
(II) a recommendation as to whether such a payment adjustment
should be made; and
-
(III) if such adjustment should be made, a recommendation regarding
the methodology for making such an adjustment.
-
(ii) ADJUSTMENT AUTHORIZED.—The Secretary
may adjust the weights for ambulatory payment classifications for
specified covered outpatient drugs to take into account the recommendations contained
in the report submitted under clause (i).
-
(F) CLASSES OF DRUGS.—For purposes
of this paragraph:
-
(i) SOLE SOURCE DRUGS.—The term “sole
source drug” means—
-
(I) a biological product (as defined under section 1861(t)(1)); or
-
(II) a single source drug (as defined in section 1927(k)(7)(A)(iv)).
-
(ii) INNOVATOR MULTIPLE SOURCE DRUGS.—The
term “innovator multiple source drug” has the
meaning given such term in section 1927(k)(7)(A)(ii).
-
(iii) NONINNOVATOR MULTIPLE SOURCE DRUGS.—The
term “noninnovator multiple source drug” has the
meaning given such term in section 1927(k)(7)(A)(iii).
-
(G) REFERENCE AVERAGE WHOLESALE PRICE.—The
term “reference average wholesale price” means,
with respect to a specified covered outpatient drug, the average
wholesale price for the drug as determined under section 1842(o)
as of May 1, 2003.
-
(H) INAPPLICABILITY OF EXPENDITURES IN DETERMINING
CONVERSION, WEIGHTING, AND OTHER ADJUSTMENT FACTORS.—Additional expenditures
resulting from this paragraph shall not be taken into account in
establishing the conversion, weighting, and other adjustment factors
for 2004 and 2005 under paragraph (9), but shall be taken into account
for subsequent years.
-
(15)[154] PAYMENT FOR NEW DRUGS AND BIOLOGICALS
UNTIL HCPCS CODE ASSIGNED.—With respect to payment
under this part for an outpatient drug or biological that is covered
under this part and is furnished as part of covered OPD services
for which a HCPCS code has not been assigned, the amount provided
for payment for such drug or biological under this part shall be
equal to 95 percent of the average wholesale price for the drug
or biological.
-
(16)[155] MISCELLANEOUS PROVISIONS.—
-
(A) APPLICATION OF RECLASSIFICATION OF CERTAIN
HOSPITALS.—If a hospital is being treated as being
located in a rural area under section 1886(d)(8)(E), that hospital
shall be treated under this subsection as being located in that
rural area.
-
(B)[156] THRESHOLD FOR ESTABLISHMENT OF SEPARATE
APCS FOR DRUGS.—The Secretary shall reduce the threshold
for the establishment of separate ambulatory payment classification
groups (APCs) with respect to drugs or biologicals to $50 per administration
for drugs and biologicals furnished in 2005 and 2006.
-
(C)[157] PAYMENT FOR DEVICES OF BRACHYTHERAPY AT
CHARGES ADJUSTED TO COST.—Notwithstanding the preceding
provisions of this subsection, for a device of brachytherapy consisting
of a seed or seeds (or radioactive source) furnished on or after
January 1, 2004, and before January 1, 2007, the payment basis for
the device under this subsection shall be equal to the hospital's
charges for each device furnished, adjusted to cost. Charges for
such devices shall not be included in determining any outlier payment
under this subsection.
(u)[158]
INCENTIVE PAYMENTS FOR PHYSICIAN
SCARCITY AREAS.—
-
(1) IN GENERAL.—In the case of physicians'
services furnished on or after January 1, 2005, and before January
1, 2008—
-
(A) by a primary care physician in a primary care scarcity county (identified
under paragraph (4)); or
-
(B) by a physician who is not a primary care physician in a
specialist care scarcity county (as so identified),
-
in addition to the amount of payment that would otherwise be
made for such services under this part, there also shall be paid
an amount equal to 5 percent of the payment amount for the service
under this part.
-
(2) DETERMINATION OF RATIOS OF PHYSICIANS TO MEDICARE
BENEFICIARIES IN AREA.—Based upon available data, the
Secretary shall establish for each county or equivalent area in
the United States, the following:
-
(A) NUMBER OF PHYSICIANS PRACTICING IN THE AREA.—The number
of physicians who furnish physicians' services in the active practice
of medicine or osteopathy in that county or area, other than physicians
whose practice is exclusively for the Federal Government, physicians
who are retired, or physicians who only provide administrative services.
Of such number, the number of such physicians who are—
-
(i) primary care physicians; or
-
(ii) physicians who are not primary care physicians.
-
(B) NUMBER OF MEDICARE BENEFICIARIES RESIDING IN
THE AREA.—The number of individuals who are residing
in the county and are entitled to benefits under part A or enrolled
under this part, or both (in this subsection referred to as “individuals”).
-
(C) DETERMINATION OF RATIOS.—
-
(i) PRIMARY CARE RATIO.—The ratio (in
this paragraph referred to as the “primary care ratio”)
of the number of primary care physicians (determined under subparagraph
(A)(i)), to the number of individuals determined under subparagraph
(B).
-
(ii) SPECIALIST CARE RATIO.—The ratio
(in this paragraph referred to as the “specialist care
ratio”) of the number of other physicians (determined under
subparagraph (A)(ii)), to the number of individuals determined under
subparagraph (B).
-
(3) RANKING OF COUNTIES.—The Secretary
shall rank each such county or area based separately on its primary
care ratio and its specialist care ratio.
-
(4) IDENTIFICATION OF COUNTIES.—
-
(A) IN GENERAL.—The Secretary shall
identify—
-
(i) those counties and areas (in this paragraph referred to
as “primary care scarcity counties”) with the
lowest primary care ratios that represent, if each such county or
area were weighted by the number of individuals determined under
paragraph (2)(B), an aggregate total of 20 percent of the total
of the individuals determined under such paragraph; and
-
(ii) those counties and areas (in this subsection referred to
as “specialist care scarcity counties”) with the
lowest specialist care ratios that represent, if each such county
or area were weighted by the number of individuals determined under
paragraph (2)(B), an aggregate total of 20 percent of the total
of the individuals determined under such paragraph.
-
(B) PERIODIC REVISIONS.—The Secretary
shall periodically revise the counties or areas identified in subparagraph
(A) (but not less often than once every three years) unless the
Secretary determines that there is no new data available on the
number of physicians practicing in the county or area or the number
of individuals residing in the county or area, as identified in
paragraph (2).
-
(C) IDENTIFICATION OF COUNTIES WHERE SERVICE IS
FURNISHED.—For purposes of paying the additional amount
specified in paragraph (1), if the Secretary uses the 5-digit postal
ZIP Code where the service is furnished, the dominant county of
the postal ZIP Code (as determined by the United States Postal Service,
or otherwise) shall be used to determine whether the postal ZIP
Code is in a scarcity county identified in subparagraph (A) or revised
in subparagraph (B).
-
(D) JUDICIAL REVIEW.—There shall be
no administrative or judicial review under section 1869, 1878, or
otherwise, respecting—
-
(i) the identification of a county or area;
-
(ii) the assignment of a specialty of any physician under this
paragraph;
-
(iii) the assignment of a physician to a county under paragraph (2);
or
-
(iv) the assignment of a postal ZIP Code to a county or other
area under this subsection.
-
(5) RURAL CENSUS TRACTS.—To the extent
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 an equivalent
area for purposes of qualifying as a primary care scarcity county
or specialist care scarcity county under this subsection.
-
(6) PHYSICIAN DEFINED.—For purposes
of this paragraph, the term “physician” means
a physician described in section 1861(r)(1) and the term “primary
care physician” means a physician who is identified in
the available data as a general practitioner, family practice practitioner,
general internist, or obstetrician or gynecologist.
-
(7) PUBLICATION OF LIST OF COUNTIES; POSTING ON
WEBSITE.—With respect to a year for which a county
or area is identified or revised under paragraph (4), the Secretary
shall identify such counties or areas as part of the proposed and
final rule to implement the physician fee schedule under section 1848 for the applicable year. The Secretary shall post the list
of counties identified or revised under paragraph (4) on the Internet
website of the Centers for Medicare and Medicaid Services.