[House Report 116-327]
[From the U.S. Government Publishing Office]
116th Congress } { Rept. 116-327
HOUSE OF REPRESENTATIVES
1st Session } { Part 1
_______________________________________________________________________
MEDICARE VISION ACT OF 2019
----------
R E P O R T
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
on
H.R. 4665
together with
ADDITIONAL VIEWS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
December 6, 2019.--Ordered to be printed
116th Congress } { Rept. 116-327
HOUSE OF REPRESENTATIVES
1st Session } { Part 1
_______________________________________________________________________
MEDICARE VISION ACT OF 2019
__________
R E P O R T
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
on
H.R. 4665
together with
ADDITIONAL VIEWS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
December 6, 2019.--Ordered to be printed
________
U.S. GOVERNMENT PUBLISHING OFFICE
38-527 WASHINGTON : 2019
C O N T E N T S
----------
Page
I. SUMMARY AND BACKGROUND...........................................3
A. Purpose and Summary................................. 3
B. Background and Need for Legislation................. 3
C. Legislative History................................. 4
II. EXPLANATION OF THE BILL..........................................5
A. The Medicare Vision Act of 2019..................... 5
III. VOTES OF THE COMMITTEE...........................................7
IV. BUDGET EFFECTS OF THE BILL.......................................8
A. Committee Estimate of Budgetary Effects............. 8
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 8
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 8
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......8
A. Committee Oversight Findings and Recommendations.... 8
B. Statement of General Performance Goals and
Objectives......................................... 8
C. Information Relating to Unfunded Mandates........... 9
D. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 9
E. Duplication of Federal Programs..................... 9
F. Hearings............................................ 9
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............9
VII. ADDITIONAL VIEWS...............................................337
116th Congress } { Rept. 116-327
HOUSE OF REPRESENTATIVES
1st Session } { Part 1
======================================================================
MEDICARE VISION ACT OF 2019
_______
December 6, 2019.--Ordered to be printed
_______
Mr. Neal, from the Committee on Ways and Means, submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 4665]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 4665) to amend title XVIII of the Social Security
Act to provide coverage for certain vision items and services
under part B of the Medicare program, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medicare Vision Act of 2019''.
SEC. 2. PROVIDING COVERAGE FOR VISION CARE UNDER THE MEDICARE PROGRAM.
(a) Coverage.--Section 1861(s)(2) of the Social Security Act (42
U.S.C. 1395x(s)(2)) is amended--
(1) in subparagraph (GG), by striking ``and'' after the
semicolon at the end;
(2) in subparagraph (HH), by striking the period at the end
and adding ``; and''; and
(3) by adding at the end the following new subparagraph:
``(II) vision services (as defined in subsection (kkk));''.
(b) Vision Services Defined.--Section 1861 of the Social Security Act
(42 U.S.C. 1395x) is amended by adding at the end the following new
subsection:
``(kkk) Vision Services.--The term `vision services' means--
``(1) routine eye examinations to determine the refractive
state of the eyes, including procedures performed during the
course of such examination; and
``(2) contact lens fitting services;
furnished on or after January 1, 2022, by or under the direct
supervision of an optometrist or ophthalmologist who is legally
authorized to furnish such examinations, procedures, or fitting
services (as applicable) under State law (or the State regulatory
mechanism provided by State law) of the State in which the
examinations, procedures, or fitting services are furnished.''.
(c) Payment; Coinsurance; and Limitations.--
(1) In general.--Section 1833(a)(1) of the Social Security
Act (42 U.S.C. 1395l(a)(1)) is amended--
(A) by striking ``and'' before ``(CC)''; and
(B) by inserting before the semicolon at the end the
following: ``, and (DD) with respect to vision services
(as defined in section 1861(kkk)), the amount paid
shall be equal to 80 percent of the lesser of the
actual charge or the amount determined under the
payment basis determined under section 1848''.
(2) Limits specified.--Section 1834 of the Social Security
Act (42 U.S.C. 1395m) is amended by adding at the end the
following new subsection:
``(x) Limitation for Vision Services.--With respect to vision
services (as defined in section 1861(kkk)) and an individual, payment
may be made under this part for only 1 routine eye examination
described in paragraph (1) of such section and 1 contact lens fitting
service described in paragraph (2) of such section during a 2-year
period.''.
(d) Payment Under Physician Fee Schedule.--
(1) In general.--Section 1848(j)(3) of the Social Security
Act (42 U.S.C. 1395w-4(j)(3)) is amended by inserting
``(2)(II),'' before ``(3)''.
(2) Budget neutrality.--Section 1848(c)(2)(B)(iv) of the
Social Security Act (42 U.S.C. 1395-w(c)(2)(B)(iv)) is
amended--
(A) in subclause (III), by striking ``and'' at the
end;
(B) in subclause (IV), by striking the period at the
end and inserting ``; and''; and
(C) by adding at the end the following new subclause:
``(V) the amendment made by section
2(d)(1) of the Medicare Vision Act of
2019 shall not be taken into account in
applying clause (ii)(II) for 2022 and
2023.''.
(e) Coverage of Conventional Eyeglasses and Contact Lenses.--Section
1861(s)(8) of the Social Security Act (42 U.S.C. 1395x(s)(8)) is
amended by striking ``, and including one pair of conventional
eyeglasses or contact lenses furnished subsequent to each cataract
surgery with insertion of an intraocular lens'' and inserting ``,
including one pair of conventional eyeglasses or contact lenses
furnished subsequent to each cataract surgery with insertion of an
intraocular lens, if furnished before January 1, 2022, and including
conventional eyeglasses or contact lenses, whether or not furnished
subsequent to such a surgery, if furnished on or after January 1,
2022''.
(f) Special Payment Rules for Eyeglasses and Contact Lenses.--
(1) Limitations.--Section 1834(h) of the Social Security Act
(42 U.S.C. 1395m(h)) is amended by adding at the end the
following new paragraph:
``(6) Payment limitations for eyeglasses and contact
lenses.--
``(A) In general.--With respect to eyeglasses and
contact lenses furnished to an individual on or after
January 1, 2022, subject to subparagraph (B), payment
may be made under this part only--
``(i) during a 2-year period, for either 1
pair of eyeglasses (including lenses and
frames) or a 2-year supply that is provided in
not more than 180-day increments of contact
lenses;
``(ii) with respect to amounts attributable
to the frames of such a pair of eyeglasses and
amounts attributable to contact lenses
furnished during a year, in an amount not
greater than--
``(I) for 2022, $100; and
``(II) for a subsequent year, the
amount specified under this
subparagraph for the previous year,
increased by the percentage change in
the consumer price index for all urban
consumers during such previous year;
``(iii) for types of eyeglass lenses, and for
types of contact lenses, as determined
appropriate by the Secretary;
``(iv) if furnished pursuant to a written
order of a physician described in section
1861(kkk); and
``(v) if during the 2-year period described
in clause (i), the individual did not already
receive (as described in subparagraph (B)) one
pair of conventional eyeglasses or contact
lenses subsequent to a cataract surgery with
insertion of an intraocular lens furnished
during such period.
``(B) Exception.--With respect to a 2-year period
described in subparagraph (A)(i), in the case of an
individual who receives cataract surgery with insertion
of an intraocular lens, notwithstanding subparagraph
(A), payment may be made under this part for one pair
of conventional eyeglasses or contact lenses furnished
subsequent to such cataract surgery during such
period.''.
(2) Application of competitive acquisition.--
(A) In general.--Section 1834(h)(1)(H) of the Social
Security Act (42 U.S.C. 1395m(h)(1)(H)) is amended--
(i) in the header by inserting ``,
eyeglasses, and contact lenses'' after
``orthotics'';
(ii) by inserting ``and of eyeglasses and
contact lenses described in paragraph (2)(D) of
such section,'' after ``2009,'' ; and
(iii) in clause (i), by inserting ``or such
eyeglasses and contact lenses'' after
``orthotics''.
(B) Conforming amendment.--
(i) In general.--Section 1847(a)(2) of the
Social Security Act (42 U.S.C. 1395w-3(a)(2))
is amended by adding at the end the following
new subparagraph:
``(D) Eyeglasses and contact lenses.--Eyeglasses and
contact lenses for which payment would otherwise be
made under section 1834(h).''.
(ii) Exemption of certain items from
competitive acquisition.--Section 1847(a)(7) of
the Social Security Act (42 U.S.C. 1395w-
3(a)(7)) is amended by adding at the end the
following new subparagraph:
``(C) Certain eyeglasses and contact lenses.--Those
items and services described in paragraph (2)(D) if
furnished by a physician or other practitioner (as
defined by the Secretary) to the physician's or
practitioner's own patients as part of the physician's
or practitioner's professional service.''.
(g) Exclusion Modifications.--Section 1862(a) of the Social Security
Act (42 U.S.C. 1395y(a)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (O), by striking ``and'' at the
end;
(B) in subparagraph (P), by striking the semicolon at
the end and inserting ``, and''; and
(C) by adding at the end the following new
subparagraph:
``(Q) in the case of vision services (as defined in section
1861(kkk)) that are routine eye examinations and contact lens
fitting services (as described in paragraph (1) or (2),
respectively, of such section), which are furnished more
frequently than once during a 2-year period;''; and
(2) in paragraph (7)--
(A) by inserting ``(other than such an examination
that is a vision service that is covered under section
1861(s)(2)(II))'' after ``eye examinations''; and
(B) by inserting ``(other than such a procedure that
is a vision service that is covered under section
1861(s)(2)(II))'' after ``refractive state of the
eyes''.
SEC. 3. IMPLEMENTATION FUNDING.
The Secretary of Health and Human Services shall provide for the
transfer from the Federal Supplementary Medical Insurance Trust Fund
under section 1841 of the Social Security Act (42 U.S.C. 1395t) to the
Centers for Medicare & Medicaid Services Program Management Account for
the period of 2020 through 2024 of such sums as may be necessary for
purposes of implementing the amendments made by section 2.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 4665, the Medicare Vision Act of 2019, as
ordered reported by the Committee on Ways and Means on October
22, 2019, amends Title XVIII of the Social Security Act in
order to add benefits for vision services in Medicare
B. Background and Need for Legislation
Since 1965, Medicare has excluded coverage for most vision
services. This is a coverage gap that leaves Medicare
beneficiaries at risk for preventable vision health issues that
can result in unnecessary emergency department (ED) visits,
longer term health issues, and higher Medicare spending.\1\ The
addition of new vision benefits to Medicare would bridge a
notable gap in Medicare coverage and help millions of
beneficiaries to avoid more severe health outcomes that are
associated with deficits in this area.
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\1\Willink, A, Schoen, C, and Davis, K (2017). Consideration of
Dental, Vision, and Hearing Services to be Covered Under Medicare.
JAMA, 318(7).
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The inclusion of vision benefits within the Medicare
program has the potential to not only improve daily quality of
life for Medicare beneficiaries but also reduce the risk of
more serious long-term health issues.\2\ An estimated 20.5
million Medicare beneficiaries have vision problems, yet only
57 percent said they had received an eye examination during the
previous year, according to one survey.\3\ Medicare
beneficiaries who had received vision services in the previous
year spent on average $715 annually, 60 percent of which was
paid out-of-pocket.\4\
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\2\Making Eye Health a Population Health Imperative: Vision for
Tomorrow. National Academy of Sciences. 2016. Available at https://
www.nap.edu/catalog/23471/making-eye-health-a-population-health-
imperative-vision-for-tomorrow.
\3\Willink, A, Schoen, C, and Davis, K (2017). Consideration of
Dental, Vision, and Hearing Services to be Covered Under Medicare.
JAMA, 318(7).
\4\Willink, A, Schoen, C, and Davis, K. (2018). How Medicare Could
Provide Dental, Vision, and Hearing Care for Beneficiaries. The
Commonwealth Fund. Available at https://www.commonwealthfund.org/
publications/issue-briefs/2018/jan/how-medicare-could-provide-dental-
vision-and-hearing-care.
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C. Legislative History
Background
H.R. 4665 was introduced on October 11, 2019 and was
referred to the Committee on Energy and Commerce and
additionally, to the Committee on Ways and Means.
Committee hearings
On October 17, 2019, the Committee on Ways and Means held a
full committee hearing entitled, ``Investing in the U.S. Health
System by Lowering Drug Prices, Reducing Out-of-Pocket Costs,
and Improving Medicare Benefits,'' to discuss how H.R. 3, the
Lower Drug Costs Now Act, will lower prescription drug prices
in Medicare and the commercial market, improve affordability of
medicine, and reduce costs for patients and taxpayers. The
committee also discussed ways savings from H.R. 3 can be
reinvested to improve care and lower costs for seniors and
people with disabilities enrolled in Medicare, including the
addition of vision services.
On June 4, 2019, the Committee on Ways and Means held a
full committee Member Day hearing to discuss the range of
issues and proposals among on-committee and off-committee
member, which included specific discussions around beneficiary
improvements in Medicare.
Committee action
The Committee on Ways and Means marked up H.R. 4665, the
Medicare Vision Act of 2019, on October 22, 2019, and ordered
the bill, as amended, favorably reported by voice vote (with a
quorum being present).
II. EXPLANATION OF THE BILL
A. The Medicare Vision Act of 2019
CURRENT LAW
Several criteria must be met in order for Medicare to pay
for an item or service. It must be eligible for one of the
defined Medicare benefit categories (e.g., hospital care,
physician's services, durable medical equipment, prosthetics
and orthotics, etc.); it must not be an item that is
specifically, statutorily excluded from coverage (e.g., hearing
aids, dentures, and, in general, eyeglasses); and as specified
at Social Security Act (SSA) section 1862(a)(1)(A), and it must
be ``reasonable and necessary for the diagnosis or treatment of
illness or injury, or to improve the functioning of a malformed
body member.'' Alternatively, an item or service may be
specified in statute as being covered by Medicare even if it
would not otherwise meet the above criteria (e.g., preventive
services).
In general, Medicare Part A\5\ covers inpatient hospital
stays, among other items and services, and Medicare Part B\6\
covers physician services and certain prosthetic devices that
are devices that replace all or part of an internal body organ.
Medicare-covered prosthetics may include such items as
prosthetic limbs, breasts, ostomy bags, and certain related
supplies, as well as certain surgically implanted devices.
Specifically, with respect to vision care, Medicare covers
intraocular lenses, hospital facility and physician charges,
and one pair of eyeglasses or contact lenses as part of a
Medicare-covered cataract surgery. Medicare also covers eye
prostheses for patients with absence or shrinkage of the eye
due to birth defect, trauma, or surgical removal. Medicare also
covers certain physician service and tests associated with
vision care such as glaucoma screenings for beneficiaries at
high risk of glaucoma, eye exams to evaluate eye disease in
patients with diabetes and certain tests and treatments
associated with macular degeneration. However, eye glasses
(other than as part of cataract surgery) and routine eye
examinations for the purpose of prescribing, fitting, or
changing eyeglasses or contact lenses are statutorily excluded
from Medicare coverage.
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\5\Section 1812 of the Social Security Act (42 U.S.C. Sec. 1395d).
\6\Section 1832 of the Social Security Act (42 U.S.C. Sec. 1395k).
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Medicare payments for prosthetic devices are determined by
a variety of methods (fee schedules, adjustments to fee
schedules, and competitive bidding). Except in competitive
bidding areas (CBAs, described below), Medicare pays for
prosthetic devices based on statutorily specified formulas or
fee schedules. Medicare pays 80 percent of the lower of a
supplier's charge for the item or the fee schedule amount. The
beneficiary is responsible for the remaining 20 percent. In
general, fee schedule amounts are updated each year by (1)
measure of price inflation, and (2) a measure of economy-wide
productivity. Since 2016, the fee schedule rates that applied
outside of competitive bidding areas for certain items have
been reduced based on price information from the competitive
bidding program.
The Department of Health and Human Services (HHS) Secretary
(Secretary) established a Competitive Acquisition Program for
certain durable medical equipment, prosthetics, orthotics, and
supplies (DMEPOS) in specified areas. Instead of paying for
equipment based on a fee schedule established by law, payment
for items in competitive bidding areas was based on supplier
bids. The program started in nine metropolitan areas in January
2011 and had expanded to 130 competitive bidding areas in 2018.
As of January 1, 2019, the program was suspended to establish a
new bidding methodology; the final rule for the new methodology
was published November 14, 2018. The program is expected to
resume in 2021, with payments for included DMEPOS based on bids
submitted by suppliers by September 2019. Before it was
suspended, certain equipment was exempted from the program when
provided by a physician or other practitioner to his/her own
patients as part of his/her professional services.
Under Part B, Medicare payments for services of physicians
and certain non-physician practitioners are made on the basis
of a fee schedule. There is a list of over 7,000 tasks and
services that physicians bill Medicare for. The fee schedule
assigns relative values to each service code that reflect
physician work (based on time, skill, and intensity involved),
practice expenses (e.g., overhead and non-physician labor), and
malpractice expenses. The relative values are adjusted for
geographic variations in the cost of the inputs required to
furnish the service. These geographically adjusted relative
values are converted into a dollar payment amount by a national
conversion factor.
The Centers for Medicare & Medicaid Services (CMS) is
responsible for maintaining and updating the fee schedule at
least every five years, including the modification and
refinement of the methodology for establishing relative value
units. The Patient Protection and Affordable Care Act\7\ gave
the HHS Secretary additional authority to periodically identify
physician services as being potentially misvalued, and to make
appropriate adjustments to the relative values of such services
under the Medicare physician fee schedule. These adjustments
are to be made in a budget-neutral manner.
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\7\P.L. 111-148, ACA, as amended.
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Medicare benefits are financed through two trust funds
maintained by the Department of the Treasury--the Hospital
Insurance (HI) trust fund for Medicare Part A and the
Supplementary Medical Insurance (SMI) trust fund for Medicare
Parts B and D. In addition, some amounts are transferred from
the trust funds to the CMS Program Management account each year
to support costs of administering the Medicare program. This
cross-cutting account supports CMS program operations (e.g.,
claims processing, information technology investments, provider
and beneficiary outreach and education, and program
implementation), in addition to federal administration, other
activities related to the administration of Medicare, and other
programs.
REASONS FOR CHANGE
To modernize and improve Part B coverage by adding long-
needed benefits for vision services to determine the refractive
state of the eye and coverage for conventional eyeglasses or
contact lenses, which are currently not a covered benefit under
Medicare Part B.
EXPLANATION OF PROVISIONS
Section 1. Short title
The short title for the bill is the ``Medicare Vision Act
of 2019.''
Section 2. Providing coverage for vision care under the Medicare
program
This section adds to Medicare Part B coverage for routine
eye examinations to determine the refractive state of the eyes
(including procedures performed during the exam) and contact
lens fitting services. Beginning on January 1, 2022, Medicare
will begin reimbursing ophthalmologists and optometrists for
one routine eye examination and one session of contact lens
fitting services every two years. Payment to providers will be
made under the Physician Fee Schedule with beneficiaries
responsible for 20 percent of the cost-sharing.
The section waives budget neutrality requirements for
payment for dental services under the physician fee schedule
for 2022 and 2023.
The section clarifies that individuals who have had
cataract surgery with insertion of intraocular lens still have
access to coverage of glasses or contact lenses post-surgery if
they have already received glasses or contact lenses through
the new vision benefit.
The new benefit will also cover either one pair of
eyeglasses during a two-year period or a two-year supply of
contact lenses provided in 180-day increments if furnished with
a written physician order. Medicare will pay up to $100 in 2022
(increasing each year by the percentage change in the Consumer
Price Index for All Urban Consumers) toward the cost of either
the eyeglass frames or contact lenses, the appropriate types of
which will be determined by the Secretary. Payment will be made
for one pair of eyeglasses or contacts lenses for individuals
who have cataract surgery with insertion of intraocular lens
and subsequently have a routine eye examination during the two-
year period.
Payment for eyeglasses and contact lenses will be made
through Medicare's competitive bidding program for orthotics
and prosthetics. Eyeglasses or contact lenses furnished by a
physician or other practitioner as part of the physician's or
practitioner's professional service will be excluded from
competitive bidding.
Section 3. Implementation funding
This section provides implementation funding as necessary
from the Federal Supplementary Medical Insurance Trust Fund to
the Secretary of the Department of Health and Human Services
for 2020-2024.
EFFECTIVE DATE
Section 2: Effective beginning on or after January 1, 2022.
III. VOTES OF THE COMMITTEE
Pursuant to clause 3(b) of rule XIII of the Rules of the
House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means during
the markup consideration of H.R. 4665, the Medicare Vision Act
of 2019 on October 22, 2019.
The Chairman's amendment in the nature of a substitute was
agreed to by voice vote (with a quorum being present).
H.R. 4665 as amended was ordered favorably reported to the
House of Representatives by voice vote (with a quorum being
present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
Clause 3(d)(1) of the Rules of the House of Representatives
requires an estimate and a comparison of costs that would be
incurred in carrying out H.R. 4665. The Committee traditionally
adopts as its own the cost estimate prepared by the Director of
the Congressional Budget Office (CBO) pursuant to section 402
of the Congressional Budget Act of 1974. The Committee reports
that because this cost estimate was not timely submitted to the
Committee before the filing of this report, the Committee is
not in a position to make a cost estimate for H.R. 4665, as
amended.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives, the Committee states that the bill
involves no new or increased budget authority. The Committee
further states that the bill involves no new tax expenditure.
C. Cost Estimate Prepared by the Congressional Budget Office
With respect to the requirements of clause 3(c)(3) of rule
XIII of the Rules of the House of Representatives, the
Committee has requested but not received a cost estimate for
the bill from the Director of the Congressional Budget Office.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee made findings and recommendations that are
reflected in this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
E. Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
to Congress pursuant to section 21 of Public Law 111-139; or
(3) a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance, published
pursuant section 6104 of title 31, United States Code.
F. Hearings
In compliance with Sec. 103(i) of H. Res. 6 (116th
Congress) (1) the following hearing was used to develop or
consider H.R. 4665:
On October 17, 2019, the Committee on Ways and Means held a
full committee hearing entitled, ``Investing in the U.S. Health
System By Lowering Drug Prices, Reducing Out-of-Pocket Costs
and Improving Medicare Benefits,'' to discuss how H.R. 4665,
the Medicare Vision Act of 2019, will lower prescription drug
prices in Medicare and the commercial market, improve
affordability of medicine, and reduce costs for patients and
taxpayers. In addition, the Committee received testimony on how
savings from H.R. 4665 can be reinvested to improve care and
lower costs for seniors and people with disabilities enrolled
in Medicare, including the addition of vision services.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in
which no change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part B--Supplementary Medical Insurance Benefits for the Aged and
Disabled
* * * * * * *
PAYMENT OF BENEFITS
Sec. 1833. (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 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)(I) on the basis of a fee
schedule under subsection (h)(1) (for tests furnished before
January 1, 2017) 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) undersection 1834A (for tests furnished on or after
January1, 2017), the amount paid shall be equal to 80
percent(or 100 percent, in the case of such tests for
whichpayment is made on an assignment-related basis) ofthe
lesser of the amount determined under such sectionor the amount
of the charges billed for the tests, or (ii) for tests
furnished before January 1, 2017,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) 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 (l), (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 (or 100 percent for
services furnished on or after January 1, 2011) 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 prosthetics (as defined in section
1834(h)(4)), the amounts paid shall be the amounts
described in section 1834(h)(1), (N) with respect to
expenses incurred for physicians' services (as defined
in section 1848(j)(3)) other than personalized
prevention plan services (as defined in section
1861(hhh)(1)), 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
physician assistants, nurse practitioners, or clinic
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))) 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), (T) with respect to medical nutrition
therapy services (as defined in section 1861(vv)), the
amount paid shall be 80 percent (or 100 percent if such
services are recommended with a grade of A or B by the
United States Preventive Services Task Force for any
indication or population and are appropriate for the
individual) 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) 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, (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), (W) with respect to additional preventive
services (as defined in section 1861(ddd)(1)), the
amount paid shall be (i) in the case of such services
which are clinical diagnostic laboratory tests, the
amount determined under subparagraph (D) (if such
subparagraph were applied, by substituting ``100
percent'' for ``80 percent''), and (ii) in the case of
all other such services, 100 percent of the lesser of
the actual charge for the service or the amount
determined under a fee schedule established by the
Secretary for purposes of this subparagraph, (X) with
respect to personalized prevention plan services (as
defined in section 1861(hhh)(1)), the amount paid shall
be 100 percent of the lesser of the actual charge for
the services or the amount determined under the payment
basis determined under section 1848, (Y) with respect
to preventive services described in subparagraphs (A)
and (B) of section 1861(ddd)(3) that are appropriate
for the individual and, in the case of such services
described in subparagraph (A), are recommended with a
grade of A or B by the United States Preventive
Services Task Force for any indication or population,
the amount paid shall be 100 percent of (i) except as
provided in clause (ii), the lesser of the actual
charge for the services or the amount determined under
the fee schedule that applies to such services under
this part, and (ii) in the case of such services that
are covered OPD services (as defined in subsection
(t)(1)(B)), the amount determined under subsection (t),
(Z) with respect to Federally qualified health center
services for which payment is made under section
1834(o), the amounts paid shall be 80 percent of the
lesser of the actual charge or the amount determined
under such section, (AA) with respect to an applicable
disposable device (as defined in paragraph (2) of
section 1834(s)) furnished to an individual pursuant to
paragraph (1) of such section, the amount paid shall be
equal to 80 percent of the lesser of the actual charge
or the amount determined under paragraph (3) of such
section, (BB) with respect to home infusion therapy,
the amount paid shall be an amount equal to 80 percent
of the lesser of the actual charge for the services or
the amount determined under section 1834(u), [and] (CC)
with respect to opioid use disorder treatment services
furnished during an episode of care, the amount paid
shall be equal to the amount payable under section
1834(w) less any copayment required as specified by the
Secretary, and (DD) with respect to vision services (as
defined in section 1861(kkk)), the amount paid shall be
equal to 80 percent of the lesser of the actual charge
or the amount determined under the payment basis
determined under section 1848;
(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)(I)on the basis of a fee
schedule determined under subsection(h)(1) (for
tests furnished before January 1, 2017) 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, or
(II) under section 1834A (for tests furnished
on or after January 1, 2017), 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 section or the amount of the charges
billed for the tests, or (ii) for tests
furnished before January 1, 2017, 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;
(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), and
(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);
(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; and
(H) with respect to personalized prevention
plan services (as defined in section
1861(hhh)(1)) furnished by an outpatient
department of a hospital, the amount determined
under paragraph (1)(X),
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);
(3) in the case of services described in section
1832(a)(2)(D)--
(A) except as provided in subparagraph (B),
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; or
(B) with respect to the services described in
clause (ii) of section 1832(a)(2)(D) that are
furnished to an individual enrolled with a MA
plan under part C pursuant to a written
agreement described in section 1853(a)(4), the
amount (if any) by which--
(i) the amount of payment that would
have otherwise been provided (I) under
subparagraph (A) (calculated as if
``100 percent'' were substituted for
``80 percent'' in such subparagraph)
for such services if the individual had
not been so enrolled, or (II) in the
case of such services furnished on or
after the implementation date of the
prospective payment system under
section 1834(o), under such section
(calculated as if ``100 percent'' were
substituted for ``80 percent'' in such
section) for such services if the
individual had not been so enrolled;
exceeds
(ii) the amount of the payments
received under such written agreement
for such services (not including any
financial incentives provided for in
such agreement such as risk pool
payments, bonuses, or withholds),
less the amount the federally qualified health
center may charge as described in section
1857(e)(3)(B);
(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);
(6) in the case of outpatient critical access
hospital services, the amounts described in section
1834(g);
(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);
(8) in the case of--
(A) outpatient physical therapy services,
outpatient speech-language pathology services,
and outpatient occupational therapy services
furnished--
(i) by a rehabilitation agency,
public health agency, clinic,
comprehensive outpatient rehabilitation
facility, or skilled nursing facility,
(ii) by a home health agency to an
individual who is not homebound, or
(iii) by another entity under an
arrangement with an entity described in
clause (i) or (ii); and
(B) outpatient physical therapy services,
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
(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).
Paragraph (3)(A) shall not apply to Federally
qualified health center services furnished on or after
the implementation date of the prospective payment
system under section 1834(0).
(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); except that (1) such total amount shall not
include expenses incurred for preventive services described in
subparagraph (A) of section 1861(ddd)(3) that are recommended
with a grade of A or B by the United States Preventive Services
Task Force for any indication or population and are appropriate
for the individual., (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) for tests furnished before January 1,
2017,on the basis of a negotiated rate determined under
subsection (h)(6), (4) such deductible shall not apply to
Federally qualified health center services, (5) such deductible
shall not apply with respect to screening mammography (as
described in section 1861(jj)), (6) such deductible shall not
apply with respect to screening pap smear and screening pelvic
exam (as described in section 1861(nn)), (7) such deductible
shall not apply with respect to ultrasound screening for
abdominal aortic aneurysm (as defined in section 1861(bbb)),
(8) such deductible shall not apply with respect to colorectal
cancer screening tests (as described in section 1861(pp)(1)),
(9) such deductible shall not apply with respect to an initial
preventive physical examination (as defined in section
1861(ww)), and (10) such deductible shall not apply with
respect to personalized prevention plan services (as defined in
section 1861(hhh)(1)). 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. Paragraph (1) of the first sentence of
this subsection shall apply with respect to a colorectal cancer
screening test regardless of the code that is billed for the
establishment of a diagnosis as a result of the test, or for
the removal of tissue or other matter or other procedure that
is furnished in connection with, as a result of, and in the
same clinical encounter as the screening test.
(c)(1) Notwithstanding any other provision of this part, with
respect to expenses incurred in a 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)--
(A) for expenses incurred in years prior to 2010,
only 62\1/2\ percent of such expenses;
(B) for expenses incurred in 2010 or 2011, only 68\3/
4\ percent of such expenses;
(C) for expenses incurred in 2012, only 75 percent of
such expenses;
(D) for expenses incurred in 2013, only 81\1/4\
percent of such expenses; and
(E) for expenses incurred in 2014 or any subsequent
calendar year, 100 percent of such expenses.
(2) For purposes of subparagraphs (A) through (D) of
paragraph (1), 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)(A) Subject to paragraphs (4) and (5), in the case of
physical therapy services of the type described in section
1861(p) and speech-language pathology services of the type
described in such section through the application of section
1861(ll)(2), but (except as provided in paragraph (6)) not
described in subsection (a)(8)(B), and physical therapy
services and speech-language pathology 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). The preceding sentence
shall not apply to expenses incurred with respect to services
furnished after December 31, 2017.
(B) With respect to services furnished during 2018 or a
subsequent year, in the case of physical therapy services of
the type described in section 1861(p), speech-language
pathology services of the type described in such section
through the application of section 1861(ll)(2), and physical
therapy services and speech-language pathology 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, any amount that is more than the amount
specified in paragraph (2) for the year shall not be considered
as incurred expenses for purposes of subsections (a) and (b)
unless the applicable requirements of paragraph (7) are met.
(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)(A) Subject to paragraphs (4) and (5), in the case of
occupational therapy services (of the type that are described
in section 1861(p) (but (except as provided in paragraph (6))
not described in subsection (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). The preceding sentence shall not apply to expenses
incurred with respect to services furnished after December 31,
2017.
(B) With respect to services furnished during 2018 or a
subsequent year, in the case of occupational therapy services
(of the type that are described in section 1861(p) 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, any amount that is more than the amount specified in
paragraph (2) for the year shall not be considered as incurred
expenses for purposes of subsections (a) and (b) unless the
applicable requirements of paragraph (7) are met.
(4) This subsection shall not apply to expenses incurred with
respect to services furnished during 2000, 2001, 2002, 2004,
and 2005.
(5)(A) With respect to expenses incurred during the period
beginning on January 1, 2006, and ending on December 31, 2017,
for services, the Secretary shall implement a process under
which an individual enrolled under this part may, upon request
of the individual or a person on behalf of the individual,
obtain an exception from the uniform dollar limitation
specified in paragraph (2), for services described in
paragraphs (1) and (3) if the provision of such services is
determined to be medically necessary and if the requirement of
subparagraph (B) is met. Under such process, if the Secretary
does not make a decision on such a request for an exception
within 10 business days of the date of the Secretary's receipt
of the request made in accordance with such requirement, the
Secretary shall be deemed to have found the services to be
medically necessary.
(B) In the case of outpatient therapy services for which an
exception is requested under the first sentence of subparagraph
(A), the claim for such services shall contain an appropriate
modifier (such as the KX modifier used as of the date of the
enactment of this subparagraph) indicating that such services
are medically necessary as justified by appropriate
documentation in the medical record involved.
(C)(i) In applying this paragraph with respect to a request
for an exception with respect to expenses that would be
incurred for outpatient therapy services (including services
described in subsection (a)(8)(B)) that would exceed the
threshold described in clause (ii) for a year, the request for
such an exception, for services furnished on or after October
1, 2012, shall be subject to a manual medical review process
that, subject to subparagraph (E), is similar to the manual
medical review process used for certain exceptions under this
paragraph in 2006.
(ii) The threshold under this clause for a year is $3,700.
Such threshold shall be applied separately--
(I) for physical therapy services and speech-language
pathology services; and
(II) for occupational therapy services.
(E)(i) In place of the manual medical review process under
subparagraph (C)(i), the Secretary shall implement a process
for medical review under this subparagraph under which the
Secretary shall identify and conduct medical review for
services described in subparagraph (C)(i) furnished by a
provider of services or supplier (in this subparagraph referred
to as a ``therapy provider'') using such factors as the
Secretary determines to be appropriate.
(ii) Such factors may include the following:
(I) The therapy provider has had a high claims denial
percentage for therapy services under this part or is
less compliant with applicable requirements under this
title.
(II) The therapy provider has a pattern of billing
for therapy services under this part that is aberrant
compared to peers or otherwise has questionable billing
practices for such services, such as billing medically
unlikely units of services in a day.
(III) The therapy provider is newly enrolled under
this title or has not previously furnished therapy
services under this part.
(IV) The services are furnished to treat a type of
medical condition.
(V) The therapy provider is part of group that
includes another therapy provider identified using the
factors determined under this subparagraph.
(iii) For purposes of carrying out this subparagraph, the
Secretary shall provide for the transfer, from the Federal
Supplementary Medical Insurance Trust Fund under section 1841,
of $5,000,000 to the Centers for Medicare & Medicaid Services
Program Management Account for fiscal years 2015 and 2016, to
remain available until expended. Such funds may not be used by
a contractor under section 1893(h) for medical reviews under
this subparagraph.
(iv) The targeted review process under this subparagraph
shall not apply to services for which expenses are incurred
beyond the period for which the exceptions process under
subparagraph (A) is implemented, except as such process is
applied under paragraph (7)(B).
(6)(A) In applying paragraphs (1) and (3) to services
furnished during the period beginning not later than October 1,
2012, and ending on December 31, 2017, the exclusion of
services described in subsection (a)(8)(B) from the uniform
dollar limitation specified in paragraph (2) shall not apply to
such services furnished during 2012 through 2017.
(B)(i) With respect to outpatient therapy services furnished
beginning on or after January 1, 2013, and before January 1,
2014, for which payment is made under section 1834(g), the
Secretary shall count toward the uniform dollar limitations
described in paragraphs (1) and (3) and the threshold described
in paragraph (5)(C) the amount that would be payable under this
part if such services were paid under section 1834(k)(1)(B)
instead of being paid under section 1834(g).
(ii) Nothing in clause (i) shall be construed as changing the
method of payment for outpatient therapy services under section
1834(g).
(7) For purposes of paragraphs (1)(B) and (3)(B), with
respect to services described in such paragraphs, the
requirements described in this paragraph are as follows:
(A) Inclusion of appropriate modifier.--The claim for
such services contains an appropriate modifier (such as
the KX modifier described in paragraph (5)(B))
indicating that such services are medically necessary
as justified by appropriate documentation in the
medical record involved.
(B) Targeted medical review for certain services
above threshold.--
(i) In general.--In the case where expenses
that would be incurred for such services would
exceed the threshold described in clause (ii)
for the year, such services shall be subject to
the process for medical review implemented
under paragraph (5)(E).
(ii) Threshold.--The threshold under this
clause for--
(I) a year before 2028, is $3,000;
(II) 2028, is the amount specified in
subclause (I) increased by the
percentage increase in the MEI (as
defined in section 1842(i)(3)) for
2028; and
(III) a subsequent year, is the
amount specified in this clause for the
preceding year increased by the
percentage increase in the MEI (as
defined in section 1842(i)(3)) for such
subsequent year;
except that if an increase under subclause (II)
or (III) for a year is not a multiple of $10,
it shall be rounded to the nearest multiple of
$10.
(iii) Application.--The threshold under
clause (ii) shall be applied separately--
(I) for physical therapy services and
speech-language pathology services; and
(II) for occupational therapy
services.
(iv) Funding.--For purposes of carrying out
this subparagraph, the Secretary shall provide
for the transfer, from the Federal
Supplementary Medical Insurance Trust Fund
under section 1841 to the Centers for Medicare
& Medicaid Services Program Management Account,
of $5,000,000 for each fiscal year beginning
with fiscal year 2018, to remain available
until expended. Such funds may not be used by a
contractor under section 1893(h) for medical
reviews under this subparagraph.
(8) With respect to services furnished on or after January 1,
2013, where payment may not be made as a result of application
of paragraphs (1) and (3), section 1879 shall apply in the same
manner as such section applies to a denial that is made by
reason of section 1862(a)(1).
(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 clause (v), subparagraph (B),
and 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, subject to
clause (iv), 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) minus, for
each of the years 2009 and 2010, 0.5 percentage points, and,
for tests furnished before the dateof enactment of section
1834A, 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
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.
(iv) After determining the adjustment to the fee schedules
under clause (i), the Secretary shall reduce such adjustment--
(I) for 2011 and each subsequent year, by the
productivity adjustment described in section
1886(b)(3)(B)(xi)(II); and
(II) for each of 2011 through 2015, by 1.75
percentage points.
Subclause (I) shall not apply in a year where the adjustment to
the fee schedules determined under clause (i) is 0.0 or a
percentage decrease for a year. The application of the
productivity adjustment under subclause (I) shall not result in
an adjustment to the fee schedules under clause (i) being less
than 0.0 for a year. The application of subclause (II) may
result in an adjustment to the fee schedules under clause (i)
being less than 0.0 for a year, and may result in payment rates
for a year being less than such payment rates for the preceding
year.
(v) The Secretary shall reduce by 2 percent the fee schedules
otherwise determined under clause (i) for 2013, and such
reduced fee schedules shall serve as the base for 2014 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 (for tests furnished before January 1, 2017)or under
section 1834A (for tests furnished on or afterJanuary 1, 2017),
subject to subsection (b)(5) of such section, 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,
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) For tests furnished before January 1, 2017, inthe 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)and section 1834A,
the Secretary shall establish a national minimum payment amount
under this part 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).
(8)(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 & 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).
(9) Notwithstanding any other provision in this part, in the
case of any diagnostic laboratory test for HbA1c that is
labeled by the Food and Drug Administration for home use and is
furnished on or after April 1, 2008, the payment rate for such
test shall be the payment rate established under this part for
a glycated hemoglobin test (identified as of October 1, 2007,
by HCPCS code 83036 (and any succeeding codes)).
(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, in consultation with appropriate trade and professional
organizations.
(2)(A) For services furnished prior to the implementation of
the system described in subparagraph (D), subject to
subparagraph (E), the 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) 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.
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 to take
account of varying conditions in different areas.
(C)(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)(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 and taking into account reduced expenditures
that would apply if subparagraph (E) were to continue to 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) The Secretary may implement such system in a manner so
as to provide for a reduction in any annual update for failure
to report on quality measures in accordance with paragraph (7).
(v) In implementing the system described in clause
(i) for 2011 and each subsequent year, any annual
update under such system for the year, after
application of clause (iv), shall be reduced by the
productivity adjustment described in section
1886(b)(3)(B)(xi)(II). The application of the preceding
sentence may result in such update being less than 0.0
for a year, and may result in payment rates under the
system described in clause (i) for a year being less
than such payment rates for the preceding year.
(vi) 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.
(E) With respect to surgical procedures furnished on or after
January 1, 2007, and before the effective date of the
implementation of a revised payment system under subparagraph
(D), if--
(i) the standard overhead amount under subparagraph
(A) for a facility service for such procedure, without
the application of any geographic adjustment, exceeds
(ii) the Medicare OPD fee schedule amount established
under the prospective payment system for hospital
outpatient department services under paragraph (3)(D)
of section 1833(t) for such service for such year,
determined without regard to geographic adjustment
under paragraph (2)(D) of such section,
the Secretary shall substitute under subparagraph (A) the
amount described in clause (ii) for the standard overhead
amount for such service referred to in clause (i).
(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).
(7)(A) For purposes of paragraph (2)(D)(iv), the Secretary
may provide, in the case of an ambulatory surgical center that
does not submit, to the Secretary in accordance with this
paragraph, data required to be submitted on measures selected
under this paragraph with respect to a year, any annual
increase provided under the system established under paragraph
(2)(D) for such year shall be reduced by 2.0 percentage points.
A reduction under this subparagraph shall apply only with
respect to the year involved and the Secretary shall not take
into account such reduction in computing any annual increase
factor for a subsequent year.
(B) Except as the Secretary may otherwise provide, the
provisions of subparagraphs (B), (C), (D), and (E) of paragraph
(17) of section 1833(t) shall apply with respect to services of
ambulatory surgical centers under this paragraph in a similar
manner to the manner in which they apply under such paragraph
and, for purposes of this subparagraph, any reference to a
hospital, outpatient setting, or outpatient hospital services
is deemed a reference to an ambulatory surgical center, the
setting of such a center, or services of such a center,
respectively.
(8) The Secretary shall conduct a similar type of review as
required under paragraph (22) of section 1833(t)), including
the second sentence of subparagraph (C) of such paragraph, to
payment for services under this subsection, and make such
revisions under this paragraph, in an appropriate manner (as
determined by the Secretary).
(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, as amended by section 6132 of the
Omnibus Budget Reconciliation Act of 1989.
(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. 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
(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) In the case of physicians' services furnished in a
year 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, 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) 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) The Secretary shall post on the Internet website of the
Centers for Medicare & 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) 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 January 1, 1989) 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), 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) 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)(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) Striken.]
(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) 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);
(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)), diagnostic mammography, or
personalized prevention plan services
(as defined in section 1861(hhh)(1));
and
(v) does not include applicable items
and services (as defined in
subparagraph (A) of paragraph (21))
that are furnished on or after January
1, 2017, by an off-campus outpatient
department of a provider (as defined in
subparagraph (B) of such paragraph).
(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) subject to paragraph (19), 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;
(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
(H) 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 and
for stranded and non-stranded devices furnished
on or after July 1, 2007.
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) 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, subject to paragraph (17)
and subparagraph (F) of this paragraph,
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.
(F) Productivity and other adjustment.--After
determining the OPD fee schedule increase
factor under subparagraph (C)(iv), the
Secretary shall reduce such increase factor--
(i) for 2012 and subsequent years, by
the productivity adjustment described
in section 1886(b)(3)(B)(xi)(II); and
(ii) for each of 2010 through 2019,
by the adjustment described in
subparagraph (G).
The application of this subparagraph may result
in the increase factor under subparagraph
(C)(iv) being less than 0.0 for a year, and may
result in payment rates under the payment
system under this subsection for a year being
less than such payment rates for the preceding
year.
(G) Other adjustment.--For purposes of
subparagraph (F)(ii), the adjustment described
in this subparagraph is--
(i) for each of 2010 and 2011, 0.25
percentage point;
(ii) for each of 2012 and 2013, 0.1
percentage point;
(iii) for 2014, 0.3 percentage point;
(iv) for each of 2015 and 2016, 0.2
percentage point; and
(v) for each of 2017, 2018, and 2019,
0.75 percentage point.
(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) 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.--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.--Subject
to subparagraph (G), 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) subject to subparagraph (H), 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) 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. This clause
shall not apply for 2018.
(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) 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.
(G) Pass-through extension for certain drugs
and biologicals.--In the case of a drug or
biological whose period of pass-through status
under this paragraph ended on December 31,
2017, and for which payment under this
subsection was packaged into a payment for a
covered OPD service (or group of services)
furnished beginning January 1, 2018, such pass-
through status shall be extended for a 2-year
period beginning on October 1, 2018.
(H) Temporary payment rule for certain drugs
and biologicals.--In the case of a drug or
biological whose period of pass-through status
under this paragraph ended on December 31,
2017, and for which payment under this
subsection was packaged into a payment for a
covered OPD service (or group of services)
furnished beginning January 1, 2018, the
payment amount for such drug or biological
under this subsection that is furnished during
the period beginning on October 1, 2018, and
ending on March 31, 2019, shall be the greater
of--
(i) the payment amount that would
otherwise apply under subparagraph
(D)(i) for such drug or biological
during such period; or
(ii) the payment amount that applied
under such subparagraph (D)(i) for such
drug or biological on December 31,
2017.
(I) Special payment adjustment rules for last
quarter of 2018.--In the case of a drug or
biological whose period of pass-through status
under this paragraph ended on December 31,
2017, and for which payment under this
subsection was packaged into a payment amount
for a covered OPD service (or group of
services) beginning January 1, 2018, the
following rules shall apply with respect to
payment amounts under this subsection for
covered a OPD service (or group of services)
furnished during the period beginning on
October 1, 2018, and ending on December 31,
2018:
(i) The Secretary shall remove the
packaged costs of such drug or
biological (as determined by the
Secretary) from the payment amount
under this subsection for the covered
OPD service (or group of services) with
which it is packaged.
(ii) The Secretary shall not make any
adjustments to payment amounts under
this subsection for a covered OPD
service (or group of services) for
which no costs were removed under
clause (i).
(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
rural hospitals.--(I) 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, for covered OPD services
furnished before January 1, 2006, 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) In the case of a hospital
located in a rural area and that has
not more than 100 beds and that is not
a sole community hospital (as defined
in section 1886(d)(5)(D)(iii)), for
covered OPD services furnished on or
after January 1, 2006, and before
January 1, 2013, for which the PPS
amount is less than the pre-BBA amount,
the amount of payment under this
subsection shall be increased by the
applicable percentage of the amount of
such difference. For purposes of the
preceding sentence, the applicable
percentage shall be 95 percent with
respect to covered OPD services
furnished in 2006, 90 percent with
respect to such services furnished in
2007, and 85 percent with respect to
such services furnished in 2008, 2009,
2010, 2011, or 2012.
(III) In the case of a sole community
hospital (as defined in section
1886(d)(5)(D)(iii)) that has not more
than 100 beds, for covered OPD services
furnished on or after January 1, 2009,
and before January 1, 2013, for which
the PPS amount is less than the pre-BBA
amount, the amount of payment under
this subsection shall be increased by
85 percent of the amount of such
difference. In the case of covered OPD
services furnished on or after January
1, 2010, and before March 1, 2012, the
preceding sentence shall be applied
without regard to the 100-bed
limitation.
(ii) Permanent treatment for cancer
hospitals and children's hospitals.--In
the case of a hospital described in
clause (iii) or (v) of section
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.--
(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).
(E) 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).
(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) 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) 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) 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) 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) 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) Payment for devices of brachytherapy and
therapeutic radiopharmaceuticals 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,
2010, and for therapeutic radiopharmaceuticals
furnished on or after January 1, 2008, and
before January 1, 2010, the payment basis for
the device or therapeutic radiopharmaceutical
under this subsection shall be equal to the
hospital's charges for each device or
therapeutic radiopharmaceutical furnished,
adjusted to cost. Charges for such devices or
therapeutic radiopharmaceuticals shall not be
included in determining any outlier payment
under this subsection.
(D) Special payment rule.--
(i) In general.--In the case of
covered OPD services furnished on or
after April 1, 2013, in a hospital
described in clause (ii), if--
(I) the payment rate that
would otherwise apply under
this subsection for
stereotactic radiosurgery,
complete course of treatment of
cranial lesion(s) consisting of
1 session that is multi-source
Cobalt 60 based (identified as
of January 1, 2013, by HCPCS
code 77371 (and any succeeding
code) and reimbursed as of such
date under APC 0127 (and any
succeeding classification
group)); exceeds
(II) the payment rate that
would otherwise apply under
this subsection for linear
accelerator based stereotactic
radiosurgery, complete course
of therapy in one session
(identified as of January 1,
2013, by HCPCS code G0173 (and
any succeeding code) and
reimbursed as of such date
under APC 0067 (and any
succeeding classification
group)),
the payment rate for the service
described in subclause (I) shall be
reduced to an amount equal to the
payment rate for the service described
in subclause (II).
(ii) Hospital described.--A hospital
described in this clause is a hospital
that is not--
(I) located in a rural area
(as defined in section
1886(d)(2)(D));
(II) classified as a rural
referral center under section
1886(d)(5)(C); or
(III) a sole community
hospital (as defined in section
1886(d)(5)(D)(iii)).
(iii) Not budget neutral.--In making
any budget neutrality adjustments under
this subsection for 2013 (with respect
to covered OPD services furnished on or
after April 1, 2013, and before January
1, 2014) or a subsequent year, the
Secretary shall not take into account
the reduced expenditures that result
from the application of this
subparagraph.
(E) Application of appropriate use criteria
for certain imaging services.--For provisions
relating to the application of appropriate use
criteria for certain imaging services, see
section 1834(q).
(F) Payment incentive for the transition from
traditional x-ray imaging to digital
radiography.--Notwithstanding the previous
provisions of this subsection:
(i) Limitation on payment for film x-
ray imaging services.--In the case of
an imaging service that is an X-ray
taken using film and that is furnished
during 2017 or a subsequent year, the
payment amount for such service
(including the X-ray component of a
packaged service) that would otherwise
be determined under this section
(without application of this paragraph
and before application of any other
adjustment under this subsection) for
such year shall be reduced by 20
percent.
(ii) Phased-in limitation on payment
for computed radiography imaging
services.--In the case of an imaging
service that is an X-ray taken using
computed radiography technology (as
defined in section 1848(b)(9)(C))--
(I) in the case of such a
service furnished during 2018,
2019, 2020, 2021, or 2022, the
payment amount for such service
(including the X-ray component
of a packaged service) that
would otherwise be determined
under this section (without
application of this paragraph
and before application of any
other adjustment under this
subsection) for such year shall
be reduced by 7 percent; and
(II) in the case of such a
service furnished during 2023
or a subsequent year, the
payment amount for such service
(including the X-ray component
of a packaged service) that
would otherwise be determined
under this section (without
application of this paragraph
and before application of any
other adjustment under this
subsection) for such year shall
be reduced by 10 percent.
(iii) Application without regard to
budget neutrality.--The reductions made
under this subparagraph--
(I) shall not be considered
an adjustment under paragraph
(2)(E); and
(II) shall not be implemented
in a budget neutral manner.
(iv) Implementation.--In order to
implement this subparagraph, the
Secretary shall adopt appropriate
mechanisms which may include use of
modifiers.
(17) Quality reporting.--
(A) Reduction in update for failure to
report.--
(i) In general.--For purposes of
paragraph (3)(C)(iv) for 2009 and each
subsequent year, in the case of a
subsection (d) hospital (as defined in
section 1886(d)(1)(B)) that does not
submit, to the Secretary in accordance
with this paragraph, data required to
be submitted on measures selected under
this paragraph with respect to such a
year, the OPD fee schedule increase
factor under paragraph (3)(C)(iv) for
such year shall be reduced by 2.0
percentage points.
(ii) Non-cumulative application.--A
reduction under this subparagraph shall
apply only with respect to the year
involved and the Secretary shall not
take into account such reduction in
computing the OPD fee schedule increase
factor for a subsequent year.
(B) Form and manner of submission.--Each
subsection (d) hospital shall submit data on
measures selected under this paragraph to the
Secretary in a form and manner, and at a time,
specified by the Secretary for purposes of this
paragraph.
(C) Development of outpatient measures.--
(i) In general.--The Secretary shall
develop measures that the Secretary
determines to be appropriate for the
measurement of the quality of care
(including medication errors) furnished
by hospitals in outpatient settings and
that reflect consensus among affected
parties and, to the extent feasible and
practicable, shall include measures set
forth by one or more national consensus
building entities.
(ii) Construction.--Nothing in this
paragraph shall be construed as
preventing the Secretary from selecting
measures that are the same as (or a
subset of) the measures for which data
are required to be submitted under
section 1886(b)(3)(B)(viii).
(D) Replacement of measures.--For purposes of
this paragraph, the Secretary may replace any
measures or indicators in appropriate cases,
such as where all hospitals are effectively in
compliance or the measures or indicators have
been subsequently shown not to represent the
best clinical practice.
(E) Availability of data.--The Secretary
shall establish procedures for making data
submitted under this paragraph available to the
public. Such procedures shall ensure that a
hospital has the opportunity to review the data
that are to be made public with respect to the
hospital prior to such data being made public.
The Secretary shall report quality measures of
process, structure, outcome, patients'
perspectives on care, efficiency, and costs of
care that relate to services furnished in
outpatient settings in hospitals on the
Internet website of the Centers for Medicare &
Medicaid Services.
(18) Authorization of adjustment for cancer
hospitals.--
(A) Study.--The Secretary shall conduct a
study to determine if, under the system under
this subsection, costs incurred by hospitals
described in section 1886(d)(1)(B)(v) with
respect to ambulatory payment classification
groups exceed those costs incurred by other
hospitals furnishing services under this
subsection (as determined appropriate by the
Secretary). In conducting the study under this
subparagraph, the Secretary shall take into
consideration the cost of drugs and biologicals
incurred by such hospitals.
(B) Authorization of adjustment.--Insofar as
the Secretary determines under subparagraph (A)
that costs incurred by hospitals described in
section 1886(d)(1)(B)(v) exceed those costs
incurred by other hospitals furnishing services
under this subsection, the Secretary shall,
subject to subparagraph (C), provide for an
appropriate adjustment under paragraph (2)(E)
to reflect those higher costs effective for
services furnished on or after January 1, 2011.
(C) Target pcr adjustment.--In applying
section 419.43(i) of title 42 of the Code of
Federal Regulations to implement the
appropriate adjustment under this paragraph for
services furnished on or after January 1, 2018,
the Secretary shall use a target PCR that is
1.0 percentage points less than the target PCR
that would otherwise apply. In addition to the
percentage point reduction under the previous
sentence, the Secretary may consider making an
additional percentage point reduction to such
target PCR that takes into account payment
rates for applicable items and services
described in paragraph (21)(C) other than for
services furnished by hospitals described in
section 1886(d)(1)(B)(v). In making any budget
neutrality adjustments under this subsection
for 2018 or a subsequent year, the Secretary
shall not take into account the reduced
expenditures that result from the application
of this subparagraph.
(19) Floor on area wage adjustment factor for
hospital outpatient department services in frontier
states.--
(A) In general.--Subject to subparagraph (B),
with respect to covered OPD services furnished
on or after January 1, 2011, the area wage
adjustment factor applicable under the payment
system established under this subsection to any
hospital outpatient department which is located
in a frontier State (as defined in section
1886(d)(3)(E)(iii)(II)) may not be less than
1.00. The preceding sentence shall not be
applied in a budget neutral manner.
(B) Limitation.--This paragraph shall not
apply to any hospital outpatient department
located in a State that receives a non-labor
related share adjustment under section
1886(d)(5)(H).
(20) Not budget neutral application of reduced
expenditures resulting from quality incentives for
computed tomography.--The Secretary shall not take into
account the reduced expenditures that result from the
application of section 1834(p) in making any budget
neutrality adjustments this subsection.
(21) Services furnished by an off-campus outpatient
department of a provider.--
(A) Applicable items and services.--For
purposes of paragraph (1)(B)(v) and this
paragraph, the term ``applicable items and
services'' means items and services other than
items and services furnished by a dedicated
emergency department (as defined in section
489.24(b) of title 42 of the Code of Federal
Regulations).
(B) Off-campus outpatient department of a
provider.--
(i) In general.--For purposes of
paragraph (1)(B)(v) and this paragraph,
subject to the subsequent provisions of
this subparagraph, the term ``off-
campus outpatient department of a
provider'' means a department of a
provider (as defined in section
413.65(a)(2) of title 42 of the Code of
Federal Regulations, as in effect as of
the date of the enactment of this
paragraph) that is not located--
(I) on the campus (as defined
in such section 413.65(a)(2))
of such provider; or
(II) within the distance
(described in such definition
of campus) from a remote
location of a hospital facility
(as defined in such section
413.65(a)(2)).
(ii) Exception.--For purposes of
paragraph (1)(B)(v) and this paragraph,
the term ``off-campus outpatient
department of a provider'' shall not
include a department of a provider (as
so defined) that was billing under this
subsection with respect to covered OPD
services furnished prior to the date of
the enactment of this paragraph.
(iii) Deemed treatment for 2017.--For
purposes of applying clause (ii) with
respect to applicable items and
services furnished during 2017, a
department of a provider (as so
defined) not described in such clause
is deemed to be billing under this
subsection with respect to covered OPD
services furnished prior to November 2,
2015, if the Secretary received from
the provider prior to December 2, 2015,
an attestation (pursuant to section
413.65(b)(3) of title 42 of the Code of
Federal Regulations) that such
department was a department of a
provider (as so defined).
(iv) Alternative exception beginning
with 2018.--For purposes of paragraph
(1)(B)(v) and this paragraph with
respect to applicable items and
services furnished during 2018 or a
subsequent year, the term ``off-campus
outpatient department of a provider''
also shall not include a department of
a provider (as so defined) that is not
described in clause (ii) if--
(I) the Secretary receives
from the provider an
attestation (pursuant to such
section 413.65(b)(3)) not later
than December 31, 2016 (or, if
later, 60 days after the date
of the enactment of this
clause), that such department
met the requirements of a
department of a provider
specified in section 413.65 of
title 42 of the Code of Federal
Regulations;
(II) the provider includes
such department as part of the
provider on its enrollment form
in accordance with the
enrollment process under
section 1866(j); and
(III) the department met the
mid-build requirement of clause
(v) and the Secretary receives,
not later than 60 days after
the date of the enactment of
this clause, from the chief
executive officer or chief
operating officer of the
provider a written
certification that the
department met such
requirement.
(v) Mid-build requirement
described.--The mid-build requirement
of this clause is, with respect to a
department of a provider, that before
November 2, 2015, the provider had a
binding written agreement with an
outside unrelated party for the actual
construction of such department.
(vi) Exclusion for certain cancer
hospitals.--For purposes of paragraph
(1)(B)(v) and this paragraph with
respect to applicable items and
services furnished during 2017 or a
subsequent year, the term ``off-campus
outpatient department of a provider''
also shall not include a department of
a provider (as so defined) that is not
described in clause (ii) if the
provider is a hospital described in
section 1886(d)(1)(B)(v) and--
(I) in the case of a
department that met the
requirements of section 413.65
of title 42 of the Code of
Federal Regulations after
November 1, 2015, and before
the date of the enactment of
this clause, the Secretary
receives from the provider an
attestation that such
department met such
requirements not later than 60
days after such date of
enactment; or
(II) in the case of a
department that meets such
requirements after such date of
enactment, the Secretary
receives from the provider an
attestation that such
department meets such
requirements not later than 60
days after the date such
requirements are first met with
respect to such department.
(vii) Audit.--Not later than December
31, 2018, the Secretary shall audit the
compliance with requirements of clause
(iv) with respect to each department of
a provider to which such clause
applies. Not later than 2 years after
the date the Secretary receives an
attestation under clause (vi) relating
to compliance of a department of a
provider with requirements referred to
in such clause, the Secretary shall
audit the compliance with such
requirements with respect to the
department. If the Secretary finds as a
result of an audit under this clause
that the applicable requirements were
not met with respect to such
department, the department shall not be
excluded from the term ``off-campus
outpatient department of a provider''
under such clause.
(viii) Implementation.--For purposes
of implementing clauses (iii) through
(vii):
(I) Notwithstanding any other
provision of law, the Secretary
may implement such clauses by
program instruction or
otherwise.
(II) Subchapter I of chapter
35 of title 44, United States
Code, shall not apply.
(III) For purposes of
carrying out this subparagraph
with respect to clauses (iii)
and (iv) (and clause (vii)
insofar as it relates to clause
(iv)), $10,000,000 shall be
available from the Federal
Supplementary Medical Insurance
Trust Fund under section 1841,
to remain available until
December 31, 2018. For purposes
of carrying out this
subparagraph with respect to
clause (vi) (and clause (vii)
insofar as it relates to such
clause), $2,000,000 shall be
available from the Federal
Supplementary Medical Insurance
Trust Fund under section 1841,
to remain available until
expended.
(C) Availability of payment under other
payment systems.--Payments for applicable items
and services furnished by an off-campus
outpatient department of a provider that are
described in paragraph (1)(B)(v) shall be made
under the applicable payment system under this
part (other than under this subsection) if the
requirements for such payment are otherwise
met.
(D) Information needed for implementation.--
Each hospital shall provide to the Secretary
such information as the Secretary determines
appropriate to implement this paragraph and
paragraph (1)(B)(v) (which may include
reporting of information on a hospital claim
using a code or modifier and reporting
information about off-campus outpatient
departments of a provider on the enrollment
form described in section 1866(j)).
(E) Limitations.--There shall be no
administrative or judicial review under section
1869, section 1878, or otherwise of the
following:
(i) The determination of the
applicable items and services under
subparagraph (A) and applicable payment
systems under subparagraph (C).
(ii) The determination of whether a
department of a provider meets the term
described in subparagraph (B).
(iii) Any information that hospitals
are required to report pursuant to
subparagraph (D).
(iv) The determination of an audit
under subparagraph (B)(vii).
(22) Review and revisions of payments for non-opioid
alternative treatments.--
(A) In general.--With respect to payments
made under this subsection for covered OPD
services (or groups of services), including
covered OPD services assigned to a
comprehensive ambulatory payment
classification, the Secretary--
(i) shall, as soon as practicable,
conduct a review (part of which may
include a request for information) of
payments for opioids and evidence-based
non-opioid alternatives for pain
management (including drugs and
devices, nerve blocks, surgical
injections, and neuromodulation) with a
goal of ensuring that there are not
financial incentives to use opioids
instead of non-opioid alternatives;
(ii) may, as the Secretary determines
appropriate, conduct subsequent reviews
of such payments; and
(iii) shall consider the extent to
which revisions under this subsection
to such payments (such as the creation
of additional groups of covered OPD
services to classify separately those
procedures that utilize opioids and
non-opioid alternatives for pain
management) would reduce payment
incentives to use opioids instead of
non-opioid alternatives for pain
management.
(B) Priority.--In conducting the review under
clause (i) of subparagraph (A) and considering
revisions under clause (iii) of such
subparagraph, the Secretary shall focus on
covered OPD services (or groups of services)
assigned to a comprehensive ambulatory payment
classification, ambulatory payment
classifications that primarily include surgical
services, and other services determined by the
Secretary which generally involve treatment for
pain management.
(C) Revisions.--If the Secretary identifies
revisions to payments pursuant to subparagraph
(A)(iii), the Secretary shall, as determined
appropriate, begin making such revisions for
services furnished on or after January 1, 2020.
Revisions under the previous sentence shall be
treated as adjustments for purposes of
application of paragraph (9)(B).
(D) Rules of construction.--Nothing in this
paragraph shall be construed to preclude the
Secretary--
(i) from conducting a demonstration
before making the revisions described
in subparagraph (C); or
(ii) prior to implementation of this
paragraph, from changing payments under
this subsection for covered OPD
services (or groups of services) which
include opioids or non-opioid
alternatives for pain management.
(u) Incentive Payments for Physician Scarcity Areas.--
(1) In general.--In the case of physicians' services
furnished on or after January 1, 2005, and before July
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) Special rule.--With respect to
physicians' services furnished on or after
January 1, 2008, and before July 1, 2008, for
purposes of this subsection, the Secretary
shall use the primary care scarcity counties
and the specialty care scarcity counties (as
identified under the preceding provisions of
this paragraph) that the Secretary was using
under this subsection with respect to
physicians' services furnished on December 31,
2007.
(E) Judicial review.--There shall be no
administrative or judicial review under section
1869, 1878, or otherwise, respecting--
116.(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 &
Medicaid Services.
(v) Increase of FQHC Payment Limits.--In the case of services
furnished by Federally qualified health centers (as defined in
section 1861(aa)(4)), the Secretary shall establish payment
limits with respect to such services under this part for
services furnished--
(1) in 2010, at the limits otherwise established
under this part for such year increased by $5; and
(2) in a subsequent year, at the limits established
under this subsection for the previous year increased
by the percentage increase in the MEI (as defined in
section 1842(i)(3)) for such subsequent year.
(w) Methods of Payment.--The Secretary may develop
alternative methods of payment for items and services provided
under clinical trials and comparative effectiveness studies
sponsored or supported by an agency of the Department of Health
and Human Services, as determined by the Secretary, to those
that would otherwise apply under this section, to the extent
such alternative methods are necessary to preserve the
scientific validity of such trials or studies, such as in the
case where masking the identity of interventions from patients
and investigators is necessary to comply with the particular
trial or study design.
(x) Incentive Payments for Primary Care Services.--
(1) In general.--In the case of primary care services
furnished on or after January 1, 2011, and before
January 1, 2016, by a primary care practitioner, in
addition to the amount of payment that would otherwise
be made for such services under this part, there also
shall be paid (on a monthly or quarterly basis) an
amount equal to 10 percent of the payment amount for
the service under this part.
(2) Definitions.--In this subsection:
(A) Primary care practitioner.--The term
``primary care practitioner'' means an
individual--
(i) who--
(I) is a physician (as
described in section
1861(r)(1)) who has a primary
specialty designation of family
medicine, internal medicine,
geriatric medicine, or
pediatric medicine; or
(II) is a nurse practitioner,
clinical nurse specialist, or
physician assistant (as those
terms are defined in section
1861(aa)(5)); and
(ii) for whom primary care services
accounted for at least 60 percent of
the allowed charges under this part for
such physician or practitioner in a
prior period as determined appropriate
by the Secretary.
(B) Primary care services.--The term
``primary care services'' means services
identified, as of January 1, 2009, by the
following HCPCS codes (and as subsequently
modified by the Secretary):
(i) 99201 through 99215.
(ii) 99304 through 99340.
(iii) 99341 through 99350.
(3) Coordination with other payments.--The amount of
the additional payment for a service under this
subsection and subsection (m) shall be determined
without regard to any additional payment for the
service under subsection (m) and this subsection,
respectively. The amount of the additional payment for
a service under this subsection and subsection (z)
shall be determined without regard to any additional
payment for the service under subsection (z) and this
subsection, respectively.
(4) Limitation on review.--There shall be no
administrative or judicial review under section 1869,
1878, or otherwise, respecting the identification of
primary care practitioners under this subsection.
(y) Incentive Payments for Major Surgical Procedures
Furnished in Health Professional Shortage Areas.--
(1) In general.--In the case of major surgical
procedures furnished on or after January 1, 2011, and
before January 1, 2016, by a general surgeon 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 the year involved, in addition to the
amount of payment that would otherwise be made for such
services under this part, there also shall be paid (on
a monthly or quarterly basis) an amount equal to 10
percent of the payment amount for the service under
this part.
(2) Definitions.--In this subsection:
(A) General surgeon.--In this subsection, the
term ``general surgeon'' means a physician (as
described in section 1861(r)(1)) who has
designated CMS specialty code 02-General
Surgery as their primary specialty code in the
physician's enrollment under section 1866(j).
(B) Major surgical procedures.--The term
``major surgical procedures'' means physicians'
services which are surgical procedures for
which a 10-day or 90-day global period is used
for payment under the fee schedule under
section 1848(b).
(3) Coordination with other payments.--The amount of
the additional payment for a service under this
subsection and subsection (m) shall be determined
without regard to any additional payment for the
service under subsection (m) and this subsection,
respectively. The amount of the additional payment for
a service under this subsection and subsection (z)
shall be determined without regard to any additional
payment for the service under subsection (z) and this
subsection, respectively.
(4) Application.--The provisions of paragraph (2) and
(4) of subsection (m) shall apply to the determination
of additional payments under this subsection in the
same manner as such provisions apply to the
determination of additional payments under subsection
(m).
(z) Incentive Payments for Participation in Eligible
Alternative Payment Models.--
(1) Payment incentive.--
(A) In general.--In the case of covered
professional services furnished by an eligible
professional during a year that is in the
period beginning with 2019 and ending with 2024
and for which the professional is a qualifying
APM participant with respect to such year, in
addition to the amount of payment that would
otherwise be made for such covered professional
services under this part for such year, there
also shall be paid to such professional an
amount equal to 5 percent of the estimated
aggregate payment amounts for such covered
professional services under this part for the
preceding year. For purposes of the previous
sentence, the payment amount for the preceding
year may be an estimation for the full
preceding year based on a period of such
preceding year that is less than the full year.
The Secretary shall establish policies to
implement this subparagraph in cases in which
payment for covered professional services
furnished by a qualifying APM participant in an
alternative payment model--
(i) is made to an eligible
alternative payment entity rather than
directly to the qualifying APM
participant; or
(ii) is made on a basis other than a
fee-for-service basis (such as payment
on a capitated basis).
(B) Form of payment.--Payments under this
subsection shall be made in a lump sum, on an
annual basis, as soon as practicable.
(C) Treatment of payment incentive.--Payments
under this subsection shall not be taken into
account for purposes of determining actual
expenditures under an alternative payment model
and for purposes of determining or rebasing any
benchmarks used under the alternative payment
model.
(D) Coordination.--The amount of the
additional payment under this subsection or
subsection (m) shall be determined without
regard to any additional payment under
subsection (m) and this subsection,
respectively. The amount of the additional
payment under this subsection or subsection (x)
shall be determined without regard to any
additional payment under subsection (x) and
this subsection, respectively. The amount of
the additional payment under this subsection or
subsection (y) shall be determined without
regard to any additional payment under
subsection (y) and this subsection,
respectively.
(2) Qualifying apm participant.--For purposes of this
subsection, the term ``qualifying APM participant''
means the following:
(A) 2019 and 2020.--With respect to 2019 and
2020, an eligible professional for whom the
Secretary determines that at least 25 percent
of payments under this part for covered
professional services furnished by such
professional during the most recent period for
which data are available (which may be less
than a year) were attributable to such services
furnished under this part through an eligible
alternative payment entity.
(B) 2021 and 2022.--With respect to 2021 and
2022, an eligible professional described in
either of the following clauses:
(i) Medicare payment threshold
option.--An eligible professional for
whom the Secretary determines that at
least 50 percent of payments under this
part for covered professional services
furnished by such professional during
the most recent period for which data
are available (which may be less than a
year) were attributable to such
services furnished under this part
through an eligible alternative payment
entity.
(ii) Combination all-payer and
medicare payment threshold option.--An
eligible professional--
(I) for whom the Secretary
determines, with respect to
items and services furnished by
such professional during the
most recent period for which
data are available (which may
be less than a year), that at
least 50 percent of the sum
of--
(aa) payments
described in clause
(i); and
(bb) all other
payments, regardless of
payer (other than
payments made by the
Secretary of Defense or
the Secretary of
Veterans Affairs and
other than payments
made under title XIX in
a State in which no
medical home or
alternative payment
model is available
under the State program
under that title),
meet the requirement described
in clause (iii)(I) with respect
to payments described in item
(aa) and meet the requirement
described in clause (iii)(II)
with respect to payments
described in item (bb);
(II) for whom the Secretary
determines at least 25 percent
of payments under this part for
covered professional services
furnished by such professional
during the most recent period
for which data are available
(which may be less than a year)
were attributable to such
services furnished under this
part through an eligible
alternative payment entity; and
(III) who provides to the
Secretary such information as
is necessary for the Secretary
to make a determination under
subclause (I), with respect to
such professional.
(iii) Requirement.--For purposes of
clause (ii)(I)--
(I) the requirement described
in this subclause, with respect
to payments described in item
(aa) of such clause, is that
such payments are made to an
eligible alternative payment
entity; and
(II) the requirement
described in this subclause,
with respect to payments
described in item (bb) of such
clause, is that such payments
are made under arrangements in
which--
(aa) quality measures
comparable to measures
under the performance
category described in
section
1848(q)(2)(B)(i) apply;
(bb) certified EHR
technology is used; and
(cc) the eligible
professional
participates in an
entity that--
(AA) bears
more than
nominal
financial risk
if actual
aggregate
expenditures
exceeds
expected
aggregate
expenditures;
or
(BB) with
respect to
beneficiaries
under title
XIX, is a
medical home
that meets
criteria
comparable to
medical homes
expanded under
section
1115A(c).
(C) Beginning in 2023.--With respect to 2023
and each subsequent year, an eligible
professional described in either of the
following clauses:
(i) Medicare payment threshold
option.--An eligible professional for
whom the Secretary determines that at
least 75 percent of payments under this
part for covered professional services
furnished by such professional during
the most recent period for which data
are available (which may be less than a
year) were attributable to such
services furnished under this part
through an eligible alternative payment
entity.
(ii) Combination all-payer and
medicare payment threshold option.--An
eligible professional--
(I) for whom the Secretary
determines, with respect to
items and services furnished by
such professional during the
most recent period for which
data are available (which may
be less than a year), that at
least 75 percent of the sum
of--
(aa) payments
described in clause
(i); and
(bb) all other
payments, regardless of
payer (other than
payments made by the
Secretary of Defense or
the Secretary of
Veterans Affairs and
other than payments
made under title XIX in
a State in which no
medical home or
alternative payment
model is available
under the State program
under that title),
meet the requirement described
in clause (iii)(I) with respect
to payments described in item
(aa) and meet the requirement
described in clause (iii)(II)
with respect to payments
described in item (bb);
(II) for whom the Secretary
determines at least 25 percent
of payments under this part for
covered professional services
furnished by such professional
during the most recent period
for which data are available
(which may be less than a year)
were attributable to such
services furnished under this
part through an eligible
alternative payment entity; and
(III) who provides to the
Secretary such information as
is necessary for the Secretary
to make a determination under
subclause (I), with respect to
such professional.
(iii) Requirement.--For purposes of
clause (ii)(I)--
(I) the requirement described
in this subclause, with respect
to payments described in item
(aa) of such clause, is that
such payments are made to an
eligible alternative payment
entity; and
(II) the requirement
described in this subclause,
with respect to payments
described in item (bb) of such
clause, is that such payments
are made under arrangements in
which--
(aa) quality measures
comparable to measures
under the performance
category described in
section
1848(q)(2)(B)(i) apply;
(bb) certified EHR
technology is used; and
(cc) the eligible
professional
participates in an
entity that--
(AA) bears
more than
nominal
financial risk
if actual
aggregate
expenditures
exceeds
expected
aggregate
expenditures;
or
(BB) with
respect to
beneficiaries
under title
XIX, is a
medical home
that meets
criteria
comparable to
medical homes
expanded under
section
1115A(c).
(D) Use of patient approach.--The Secretary
may base the determination of whether an
eligible professional is a qualifying APM
participant under this subsection and the
determination of whether an eligible
professional is a partial qualifying APM
participant under section 1848(q)(1)(C)(iii) by
using counts of patients in lieu of using
payments and using the same or similar
percentage criteria (as specified in this
subsection and such section, respectively), as
the Secretary determines appropriate.
(3) Additional definitions.--In this subsection:
(A) Covered professional services.--The term
``covered professional services'' has the
meaning given that term in section
1848(k)(3)(A).
(B) Eligible professional.--The term
``eligible professional'' has the meaning given
that term in section 1848(k)(3)(B) and includes
a group that includes such professionals.
(C) Alternative payment model (apm).--The
term ``alternative payment model'' means, other
than for purposes of subparagraphs
(B)(ii)(I)(bb) and (C)(ii)(I)(bb) of paragraph
(2), any of the following:
(i) A model under section 1115A
(other than a health care innovation
award).
(ii) The shared savings program under
section 1899.
(iii) A demonstration under section
1866C.
(iv) A demonstration required by
Federal law.
(D) Eligible alternative payment entity.--The
term ``eligible alternative payment entity''
means, with respect to a year, an entity that--
(i) participates in an alternative
payment model that--
(I) requires participants in
such model to use certified EHR
technology (as defined in
subsection (o)(4)); and
(II) provides for payment for
covered professional services
based on quality measures
comparable to measures under
the performance category
described in section
1848(q)(2)(B)(i); and
(ii)(I) bears financial risk for
monetary losses under such alternative
payment model that are in excess of a
nominal amount; or
(II) is a medical home expanded under
section 1115A(c).
(4) Limitation.--There shall be no administrative or
judicial review under section 1869, 1878, or otherwise,
of the following:
(A) The determination that an eligible
professional is a qualifying APM participant
under paragraph (2) and the determination that
an entity is an eligible alternative payment
entity under paragraph (3)(D).
(B) The determination of the amount of the 5
percent payment incentive under paragraph
(1)(A), including any estimation as part of
such determination.
(aa) Medical Review of Spinal Subluxation Services.--
(1) In general.--The Secretary shall implement a
process for the medical review (as described in
paragraph (2)) of treatment by a chiropractor described
in section 1861(r)(5) by means of manual manipulation
of the spine to correct a subluxation (as described in
such section) of an individual who is enrolled under
this part and apply such process to such services
furnished on or after January 1, 2017, focusing on
services such as--
(A) services furnished by a such a
chiropractor whose pattern of billing is
aberrant compared to peers; and
(B) services furnished by such a chiropractor
who, in a prior period, has a services denial
percentage in the 85th percentile or greater,
taking into consideration the extent that
service denials are overturned on appeal.
(2) Medical review.--
(A) Prior authorization medical review.--
(i) In general.--Subject to clause
(ii), the Secretary shall use prior
authorization medical review for
services described in paragraph (1)
that are furnished to an individual by
a chiropractor described in section
1861(r)(5) that are part of an episode
of treatment that includes more than 12
services. For purposes of the preceding
sentence, an episode of treatment shall
be determined by the underlying cause
that justifies the need for services,
such as a diagnosis code.
(ii) Ending application of prior
authorization medical review.--The
Secretary shall end the application of
prior authorization medical review
under clause (i) to services described
in paragraph (1) by such a chiropractor
if the Secretary determines that the
chiropractor has a low denial rate
under such prior authorization medical
review. The Secretary may subsequently
reapply prior authorization medical
review to such chiropractor if the
Secretary determines it to be
appropriate and the chiropractor has,
in the time period subsequent to the
determination by the Secretary of a low
denial rate with respect to the
chiropractor, furnished such services
described in paragraph (1).
(iii) Early request for prior
authorization review permitted.--
Nothing in this subsection shall be
construed to prevent such a
chiropractor from requesting prior
authorization for services described in
paragraph (1) that are to be furnished
to an individual before the
chiropractor furnishes the twelfth such
service to such individual for an
episode of treatment.
(B) Type of review.--The Secretary may use
pre-payment review or post-payment review of
services described in section 1861(r)(5) that
are not subject to prior authorization medical
review under subparagraph (A).
(C) Relationship to law enforcement
activities.--The Secretary may determine that
medical review under this subsection does not
apply in the case where potential fraud may be
involved.
(3) No payment without prior authorization.--With
respect to a service described in paragraph (1) for
which prior authorization medical review under this
subsection applies, the following shall apply:
(A) Prior authorization determination.--The
Secretary shall make a determination, prior to
the service being furnished, of whether the
service would or would not meet the applicable
requirements of section 1862(a)(1)(A).
(B) Denial of payment.--Subject to paragraph
(5), no payment may be made under this part for
the service unless the Secretary determines
pursuant to subparagraph (A) that the service
would meet the applicable requirements of such
section 1862(a)(1)(A).
(4) Submission of information.--A chiropractor
described in section 1861(r)(5) may submit the
information necessary for medical review by fax, by
mail, or by electronic means. The Secretary shall make
available the electronic means described in the
preceding sentence as soon as practicable.
(5) Timeliness.--If the Secretary does not make a
prior authorization determination under paragraph
(3)(A) within 14 business days of the date of the
receipt of medical documentation needed to make such
determination, paragraph (3)(B) shall not apply.
(6) Application of limitation on beneficiary
liability.--Where payment may not be made as a result
of the application of paragraph (2)(B), section 1879
shall apply in the same manner as such section applies
to a denial that is made by reason of section
1862(a)(1).
(7) Review by contractors.--The medical review
described in paragraph (2) may be conducted by medicare
administrative contractors pursuant to section
1874A(a)(4)(G) or by any other contractor determined
appropriate by the Secretary that is not a recovery
audit contractor.
(8) Multiple services.--The Secretary shall, where
practicable, apply the medical review under this
subsection in a manner so as to allow an individual
described in paragraph (1) to obtain, at a single time
rather than on a service-by-service basis, an
authorization in accordance with paragraph (3)(A) for
multiple services.
(9) Construction.--With respect to a service
described in paragraph (1) that has been affirmed by
medical review under this subsection, nothing in this
subsection shall be construed to preclude the
subsequent denial of a claim for such service that does
not meet other applicable requirements under this Act.
(10) Implementation.--
(A) Authority.--The Secretary may implement
the provisions of this subsection by interim
final rule with comment period.
(B) Administration.--Chapter 35 of title 44,
United States Code, shall not apply to medical
review under this subsection.
(bb) Additional Payments for Certain Rural Health Clinics
With Physicians or Practitioners Receiving DATA 2000 Waivers.--
(1) In general.--In the case of a rural health clinic
with respect to which, beginning on or after January 1,
2019, rural health clinic services (as defined in
section 1861(aa)(1)) are furnished for the treatment of
opioid use disorder by a physician or practitioner who
meets the requirements described in paragraph (3), the
Secretary shall, subject to availability of funds under
paragraph (4), make a payment (at such time and in such
manner as specified by the Secretary) to such rural
health clinic after receiving and approving an
application described in paragraph (2). Such payment
shall be in an amount determined by the Secretary,
based on an estimate of the average costs of training
for purposes of receiving a waiver described in
paragraph (3)(B). Such payment may be made only one
time with respect to each such physician or
practitioner.
(2) Application.--In order to receive a payment
described in paragraph (1), a rural health clinic shall
submit to the Secretary an application for such a
payment at such time, in such manner, and containing
such information as specified by the Secretary. A rural
health clinic may apply for such a payment for each
physician or practitioner described in paragraph (1)
furnishing services described in such paragraph at such
clinic.
(3) Requirements.--For purposes of paragraph (1), the
requirements described in this paragraph, with respect
to a physician or practitioner, are the following:
(A) The physician or practitioner is employed
by or working under contract with a rural
health clinic described in paragraph (1) that
submits an application under paragraph (2).
(B) The physician or practitioner first
receives a waiver under section 303(g) of the
Controlled Substances Act on or after January
1, 2019.
(4) Funding.--For purposes of making payments under
this subsection, there are appropriated, out of amounts
in the Treasury not otherwise appropriated, $2,000,000,
which shall remain available until expended.
SPECIAL PAYMENT RULES FOR PARTICULAR ITEMS AND SERVICES
Sec. 1834. (a) Payment for Durable Medical Equipment.--
(1) General rule for payment.--
(A) In general.--With respect to a covered
item (as defined in paragraph (13)) for which
payment is determined under this subsection,
payment shall be made in the frequency
specified in paragraphs (2) through (7) and in
an amount equal to 80 percent of the payment
basis described in subparagraph (B).
(B) Payment basis.--Subject to subparagraph
(F)(i), the payment basis described in this
subparagraph is the lesser of--
(i) the actual charge for the item,
or
(ii) the payment amount recognized
under paragraphs (2) through (7) of
this subsection for the item;
except that clause (i) shall not apply if the
covered item is furnished by a public home
health agency (or by another home health agency
which demonstrates to the satisfaction of the
Secretary that a significant portion of its
patients are low income) free of charge or at
nominal charges to the public.
(C) Exclusive payment rule.--Subject to
subparagraph (F)(ii), this subsection shall
constitute the exclusive provision of this
title for payment for covered items under this
part or under part A to a home health agency.
(D) Reduction in fee schedules for certain
items.--With respect to a seat-lift chair or
transcutaneous electrical nerve stimulator
furnished on or after April 1, 1990, the
Secretary shall reduce the payment amount
applied under subparagraph (B)(ii) for such an
item by 15 percent, and, in the case of a
transcutaneous electrical nerve stimulator
furnished on or after January 1, 1991, the
Secretary shall further reduce such payment
amount (as previously reduced) by 45 percent.
(E) Clinical conditions for coverage.--
(i) In general.--The Secretary shall
establish standards for clinical
conditions for payment for covered
items under this subsection.
(ii) Requirements.--The standards
established under clause (i) shall
include the specification of types or
classes of covered items that require,
as a condition of payment under this
subsection, a face-to-face examination
of the individual by a physician (as
defined in section 1861(r)), a
physician assistant, nurse
practitioner, or a clinical nurse
specialist (as those terms are defined
in section 1861(aa)(5)) and a
prescription for the item.
(iii) Priority of establishment of
standards.--In establishing the
standards under this subparagraph, the
Secretary shall first establish
standards for those covered items for
which the Secretary determines there
has been a proliferation of use,
consistent findings of charges for
covered items that are not delivered,
or consistent findings of falsification
of documentation to provide for payment
of such covered items under this part.
(iv) Standards for power
wheelchairs.--Effective on the date of
the enactment of this subparagraph, in
the case of a covered item consisting
of a motorized or power wheelchair for
an individual, payment may not be made
for such covered item unless a
physician (as defined in section
1861(r)(1)), a physician assistant,
nurse practitioner, or a clinical nurse
specialist (as those terms are defined
in section 1861(aa)(5)) has conducted a
face-to-face examination of the
individual and written a prescription
for the item.
(v) Limitation on payment for covered
items.--Payment may not be made for a
covered item under this subsection
unless the item meets any standards
established under this subparagraph for
clinical condition of coverage.
(F) Application of competitive acquisition;
limitation of inherent reasonableness
authority.--In the case of covered items
furnished on or after January 1, 2011, subject
to subparagraphs (G) and (H), that are included
in a competitive acquisition program in a
competitive acquisition area under section
1847(a)--
(i) the payment basis under this
subsection for such items and services
furnished in such area shall be the
payment basis determined under such
competitive acquisition program;
(ii) the Secretary may (and, in the
case of covered items furnished on or
after January 1, 2016, subject to
clause (iii), shall) use information on
the payment determined under such
competitive acquisition programs to
adjust the payment amount otherwise
recognized under subparagraph (B)(ii)
for an area that is not a competitive
acquisition area under section 1847 and
in the case of such adjustment,
paragraph (10)(B) shall not be applied;
and
(iii) in the case of covered items
furnished on or after January 1, 2016,
the Secretary shall continue to make
such adjustments described in clause
(ii) as, under such competitive
acquisition programs, additional
covered items are phased in or
information is updated as contracts
under section 1847 are recompeted in
accordance with section 1847(b)(3)(B).
(G) Use of information on competitive bid
rates.--The Secretary shall specify by
regulation the methodology to be used in
applying the provisions of subparagraph (F)(ii)
and subsection (h)(1)(H)(ii). In promulgating
such regulation, the Secretary shall consider
the costs of items and services in areas in
which such provisions would be applied compared
to the payment rates for such items and
services in competitive acquisition areas.In
the case of items and services furnished on or
after January 1, 2019, in making any
adjustments under clause (ii) or (iii) of
subparagraph (F), under subsection
(h)(1)(H)(ii), or under section 1842(s)(3)(B),
the Secretary shall--
(i) solicit and take into account
stakeholder input; and
(ii) take into account the highest
amount bid by a winning supplier in a
competitive acquisition area and a
comparison of each of the following
with respect to non-competitive
acquisition areas and competitive
acquisition areas:
(I) The average travel
distance and cost associated
with furnishing items and
services in the area.
(II) The average volume of
items and services furnished by
suppliers in the area.
(III) The number of suppliers
in the area.
(H) Diabetic supplies.--
(i) In general.--On or after the date
described in clause (ii), the payment
amount under this part for diabetic
supplies, including testing strips,
that are non-mail order items (as
defined by the Secretary) shall be
equal to the single payment amounts
established under the national mail
order competition for diabetic supplies
under section 1847.
(ii) Date described.--The date
described in this clause is the date of
the implementation of the single
payment amounts under the national mail
order competition for diabetic supplies
under section 1847.
(I) Treatment of vacuum erection systems.--
Effective for items and services furnished on
and after July 1, 2015, vacuum erection systems
described as prosthetic devices described in
section 1861(s)(8) shall be treated in the same
manner as erectile dysfunction drugs are
treated for purposes of section 1860D-
2(e)(2)(A).
(2) Payment for inexpensive and other routinely
purchased durable medical equipment.--
(A) In general.--Payment for an item of
durable medical equipment (as defined in
paragraph (13))--
(i) the purchase price of which does
not exceed $150,
(ii) which the Secretary determines
is acquired at least 75 percent of the
time by purchase,
(iii) which is an accessory used in
conjunction with a nebulizer,
aspirator, or a ventilator excluded
under paragraph (3)(A), or
(iv) in the case of devices furnished
on or after October 1, 2015, which
serves as a speech generating device or
which is an accessory that is needed
for the individual to effectively
utilize such a device,
shall be made on a rental basis or in a lump-
sum amount for the purchase of the item. The
payment amount recognized for purchase or
rental of such equipment is the amount
specified in subparagraph (B) for purchase or
rental, except that the total amount of
payments with respect to an item may not exceed
the payment amount specified in subparagraph
(B) with respect to the purchase of the item.
(B) Payment amount.--For purposes of
subparagraph (A), the amount specified in this
subparagraph, with respect to the purchase or
rental of an item furnished in a carrier
service area--
(i) in 1989 and in 1990 is the
average reasonable charge in the area
for the purchase or rental,
respectively, of the item for the 12-
month period ending on June 30, 1987,
increased by the percentage increase in
the consumer price index for all urban
consumers (U.S. city average) for the
6-month period ending with December
1987;
(ii) in 1991 is the sum of (I) 67
percent of the local payment amount for
the item or device computed under
subparagraph (C)(i)(I) for 1991, and
(II) 33 percent of the national limited
payment amount for the item or device
computed under subparagraph (C)(ii) for
1991;
(iii) in 1992 is the sum of (I) 33
percent of the local payment amount for
the item or device computed under
subparagraph (C)(i)(II) for 1992, and
(II) 67 percent of the national limited
payment amount for the item or device
computed under subparagraph (C)(ii) for
1992; and
(iv) in 1993 and each subsequent year
is the national limited payment amount
for the item or device computed under
subparagraph (C)(ii) for that year
(reduced by 10 percent, in the case of
a blood glucose testing strip furnished
after 1997 for an individual with
diabetes).
(C) Computation of local payment amount and
national limited payment amount.--For purposes
of subparagraph (B)--
(i) the local payment amount for an
item or device for a year is equal to--
(I) for 1991, the amount
specified in subparagraph
(B)(i) for 1990 increased by
the covered item update for
1991, and
(II) for 1992, 1993, and 1994
the amount determined under
this clause for the preceding
year increased by the covered
item update for the year; and
(ii) the national limited payment
amount for an item or device for a year
is equal to--
(I) for 1991, the local
payment amount determined under
clause (i) for such item or
device for that year, except
that the national limited
payment amount may not exceed
100 percent of the weighted
average of all local payment
amounts determined under such
clause for such item for that
year and may not be less than
85 percent of the weighted
average of all local payment
amounts determined under such
clause for such item,
(II) for 1992 and 1993, the
amount determined under this
clause for the preceding year
increased by the covered item
update for such subsequent
year,
(III) for 1994, the local
payment amount determined under
clause (i) for such item or
device for that year, except
that the national limited
payment amount may not exceed
100 percent of the median of
all local payment amounts
determined under such clause
for such item for that year and
may not be less than 85 percent
of the median of all local
payment amounts determined
under such clause for such item
or device for that year, and
(IV) for each subsequent
year, the amount determined
under this clause for the
preceding year increased by the
covered item update for such
subsequent year.
(3) Payment for items requiring frequent and
substantial servicing.--
(A) In general.--Payment for a covered item
(such as IPPB machines and ventilators,
excluding ventilators that are either
continuous airway pressure devices or
intermittent assist devices with continuous
airway pressure devices) for which there must
be frequent and substantial servicing in order
to avoid risk to the patient's health shall be
made on a monthly basis for the rental of the
item and the amount recognized is the amount
specified in subparagraph (B).
(B) Payment amount.--For purposes of
subparagraph (A), the amount specified in this
subparagraph, with respect to an item or device
furnished in a carrier service area--
(i) in 1989 and in 1990 is the
average reasonable charge in the area
for the rental of the item or device
for the 12-month period ending with
June 1987, increased by the percentage
increase in the consumer price index
for all urban consumers (U.S. city
average) for the 6-month period ending
with December 1987;
(ii) in 1991 is the sum of (I) 67
percent of the local payment amount for
the item or device computed under
subparagraph (C)(i)(I) for 1991, and
(II) 33 percent of the national limited
payment amount for the item or device
computed under subparagraph (C)(ii) for
1991;
(iii) in 1992 is the sum of (I) 33
percent of the local payment amount for
the item or device computed under
subparagraph (C)(i)(II) for 1992, and
(II) 67 percent of the national limited
payment amount for the item or device
computed under subparagraph (C)(ii) for
1992; and
(iv) in 1993 and each subsequent year
is the national limited payment amount
for the item or device computed under
subparagraph (C)(ii) for that year.
(C) Computation of local payment amount and
national limited payment amount.--For purposes
of subparagraph (B)--
(i) the local payment amount for an
item or device for a year is equal to--
(I) for 1991, the amount
specified in subparagraph
(B)(i) for 1990 increased by
the covered item update for
1991, and
(II) for 1992, 1993, and 1994
the amount determined under
this clause for the preceding
year increased by the covered
item update for the year; and
(ii) the national limited payment
amount for an item or device for a year
is equal to--
(I) for 1991, the local
payment amount determined under
clause (i) for such item or
device for that year, except
that the national limited
payment amount may not exceed
100 percent of the weighted
average of all local payment
amounts determined under such
clause for such item for that
year and may not be less than
85 percent of the weighted
average of all local payment
amounts determined under such
clause for such item,
(II) for 1992 and 1993, the
amount determined under this
clause for the preceding year
increased by the covered item
update for such subsequent
year,
(III) for 1994, the local
payment amount determined under
clause (i) for such item or
device for that year, except
that the national limited
payment amount may not exceed
100 percent of the median of
all local payment amounts
determined under such clause
for such item for that year and
may not be less than 85 percent
of the median of all local
payment amounts determined
under such clause for such item
or device for that year, and
(IV) for each subsequent
year, the amount determined
under this clause for the
preceding year increased by the
covered item update for such
subsequent year.
(4) Payment for certain customized items.--Payment
with respect to a covered item that is uniquely
constructed or substantially modified to meet the
specific needs of an individual patient, and for that
reason cannot be grouped with similar items for
purposes of payment under this title, shall be made in
a lump-sum amount (A) for the purchase of the item in a
payment amount based upon the carrier's individual
consideration for that item, and (B) for the reasonable
and necessary maintenance and servicing for parts and
labor not covered by the supplier's or manufacturer's
warranty, when necessary during the period of medical
need, and the amount recognized for such maintenance
and servicing shall be paid on a lump-sum, as needed
basis based upon the carrier's individual consideration
for that item. In the case of a wheelchair furnished on
or after January 1, 1992, the wheelchair shall be
treated as a customized item for purposes of this
paragraph if the wheelchair has been measured, fitted,
or adapted in consideration of the patient's body size,
disability, period of need, or intended use, and has
been assembled by a supplier or ordered from a
manufacturer who makes available customized features,
modifications, or components for wheelchairs that are
intended for an individual patient's use in accordance
with instructions from the patient's physician.
(5) Payment for oxygen and oxygen equipment.--
(A) In general.--Payment for oxygen and
oxygen equipment shall be made on a monthly
basis in the monthly payment amount recognized
under paragraph (9) for oxygen and oxygen
equipment (other than portable oxygen
equipment), subject to subparagraphs (B), (C),
(E), and (F).
(B) Add-on for portable oxygen equipment.--
When portable oxygen equipment is used, but
subject to subparagraph (D), the payment amount
recognized under subparagraph (A) shall be
increased by the monthly payment amount
recognized under paragraph (9) for portable
oxygen equipment.
(C) Volume adjustment.--When the attending
physician prescribes an oxygen flow rate--
(i) exceeding 4 liters per minute,
the payment amount recognized under
subparagraph (A), subject to
subparagraph (D), shall be increased by
50 percent, or
(ii) of less than 1 liter per minute,
the payment amount recognized under
subparagraph (A) shall be decreased by
50 percent.
(D) Limit on adjustment.--When portable
oxygen equipment is used and the attending
physician prescribes an oxygen flow rate
exceeding 4 liters per minute, there shall only
be an increase under either subparagraph (B) or
(C), whichever increase is larger, and not
under both such subparagraphs.
(E) Recertification for patients receiving
home oxygen therapy.--In the case of a patient
receiving home oxygen therapy services who, at
the time such services are initiated, has an
initial arterial blood gas value at or above a
partial pressure of 56 or an arterial oxygen
saturation at or above 89 percent (or such
other values, pressures, or criteria as the
Secretary may specify) no payment may be made
under this part for such services after the
expiration of the 90-day period that begins on
the date the patient first receives such
services unless the patient's attending
physician certifies that, on the basis of a
follow-up test of the patient's arterial blood
gas value or arterial oxygen saturation
conducted during the final 30 days of such 90-
day period, there is a medical need for the
patient to continue to receive such services.
(F) Rental Cap.--
(i) In general.--Payment for oxygen
equipment (including portable oxygen
equipment) under this paragraph may not
extend over a period of continuous use
(as determined by the Secretary) of
longer than 36 months.
(ii) Payments and rules after rental
cap.--After the 36th continuous month
during which payment is made for the
equipment under this paragraph--
(I) the supplier furnishing
such equipment under this
subsection shall continue to
furnish the equipment during
any period of medical need for
the remainder of the reasonable
useful lifetime of the
equipment, as determined by the
Secretary;
(II) payments for oxygen
shall continue to be made in
the amount recognized for
oxygen under paragraph (9) for
the period of medical need; and
(III) maintenance and
servicing payments shall, if
the Secretary determines such
payments are reasonable and
necessary, be made (for parts
and labor not covered by the
supplier's or manufacturer's
warranty, as determined by the
Secretary to be appropriate for
the equipment), and such
payments shall be in an amount
determined to be appropriate by
the Secretary.
(6) Payment for other covered items (other than
durable medical equipment).--Payment for other covered
items (other than durable medical equipment and other
covered items described in paragraph (3), (4), or (5))
shall be made in a lump-sum amount for the purchase of
the item in the amount of the purchase price recognized
under paragraph (8).
(7) Payment for other items of durable medical
equipment.--
(A) Payment.--In the case of an item of
durable medical equipment not described in
paragraphs (2) through (6), the following rules
shall apply:
(i) Rental.--
(I) In general.--Except as
provided in clause (iii),
payment for the item shall be
made on a monthly basis for the
rental of the item during the
period of medical need (but
payments under this clause may
not extend over a period of
continuous use (as determined
by the Secretary) of longer
than 13 months).
(II) Payment amount.--Subject
to subclause (III) and
subparagraph (B), the amount
recognized for the item, for
each of the first 3 months of
such period, is 10 percent of
the purchase price recognized
under paragraph (8) with
respect to the item, and, for
each of the remaining months of
such period, is 7.5 percent of
such purchase price.
(III) Special rule for power-
driven wheelchairs.--For
purposes of payment for power-
driven wheelchairs, subclause
(II) shall be applied by
substituting ``15 percent'' and
``6 percent'' for ``10
percent'' and ``7.5 percent'',
respectively.
(ii) Ownership after rental.--On the
first day that begins after the 13th
continuous month during which payment
is made for the rental of an item under
clause (i), the supplier of the item
shall transfer title to the item to the
individual.
(iii) Purchase agreement option for
complex, rehabilitative power-driven
wheelchairs.--In the case of a complex,
rehabilitative power-driven wheelchair,
at the time the supplier furnishes the
item, the supplier shall offer the
individual the option to purchase the
item, and payment for such item shall
be made on a lump-sum basis if the
individual exercises such option.
(iv) Maintenance and servicing.--
After the supplier transfers title to
the item under clause (ii) or in the
case of a power-driven wheelchair for
which a purchase agreement has been
entered into under clause (iii),
maintenance and servicing payments
shall, if the Secretary determines such
payments are reasonable and necessary,
be made (for parts and labor not
covered by the supplier's or
manufacturer's warranty, as determined
by the Secretary to be appropriate for
the particular type of durable medical
equipment), and such payments shall be
in an amount determined to be
appropriate by the Secretary.
(B) Range for rental amounts.--
(i) For 1989.--For items furnished
during 1989, the payment amount
recognized under subparagraph (A)(i)
shall not be more than 115 percent, and
shall not be less than 85 percent, of
the prevailing charge established for
rental of the item in January 1987,
increased by the percentage increase in
the consumer price index for all urban
consumers (U.S. city average) for the
6-month period ending with December
1987.
(ii) For 1990.--For items furnished
during 1990, clause (i) shall apply in
the same manner as it applies to items
furnished during 1989.
(C) Replacement of items.--
(i) Establishment of reasonable
useful lifetime.--In accordance with
clause (iii), the Secretary shall
determine and establish a reasonable
useful lifetime for items of durable
medical equipment for which payment may
be made under this paragraph.
(ii) Payment for replacement items.--
If the reasonable lifetime of such an
item, as so established, has been
reached during a continuous period of
medical need, or the carrier determines
that the item is lost or irreparably
damaged, the patient may elect to have
payment for an item serving as a
replacement for such item made--
(I) on a monthly basis for
the rental of the replacement
item in accordance with
subparagraph (A); or
(II) in the case of an item
for which a purchase agreement
has been entered into under
subparagraph (A)(iii), in a
lump-sum amount for the
purchase of the item.
(iii) Length of reasonable useful
lifetime.--The reasonable useful
lifetime of an item of durable medical
equipment under this subparagraph shall
be equal to 5 years, except that, if
the Secretary determines that, on the
basis of prior experience in making
payments for such an item under this
title, a reasonable useful lifetime of
5 years is not appropriate with respect
to a particular item, the Secretary
shall establish an alternative
reasonable lifetime for such item.
(8) Purchase price recognized for miscellaneous
devices and items.--For purposes of paragraphs (6) and
(7), the amount that is recognized under this paragraph
as the purchase price for a covered item is the amount
described in subparagraph (C) of this paragraph,
determined as follows:
(A) Computation of local purchase price.--
Each carrier under section 1842 shall compute a
base local purchase price for the item as
follows:
(i) The carrier shall compute a base
local purchase price, for each item
described--
(I) in paragraph (6) equal to
the average reasonable charge
in the locality for the
purchase of the item for the
12-month period ending with
June 1987, or
(II) in paragraph (7) equal
to the average of the purchase
prices on the claims submitted
on an assignment-related basis
for the unused item supplied
during the 6-month period
ending with December 1986.
(ii) The carrier shall compute a
local purchase price, with respect to
the furnishing of each particular
item--
(I) in 1989 and 1990, equal
to the base local purchase
price computed under clause (i)
increased by the percentage
increase in the consumer price
index for all urban consumers
(U.S. city average) for the 6-
month period ending with
December 1987,
(II) in 1991, equal to the
local purchase price computed
under this clause for the
previous year, increased by the
covered item update for 1991,
and decreased by the percentage
by which the average of the
reasonable charges for claims
paid for all items described in
paragraph (7) is lower than the
average of the purchase prices
submitted for such items during
the final 9 months of 1988; or
(III) in 1992, 1993, and 1994
equal to the local purchase
price computed under this
clause for the previous year
increased by the covered item
update for the year.
(B) Computation of national limited purchase
price.--With respect to the furnishing of a
particular item in a year, the Secretary shall
compute a national limited purchase price--
(i) for 1991, equal to the local
purchase price computed under
subparagraph (A)(ii) for the item for
the year, except that such national
limited purchase price may not exceed
100 percent of the weighted average of
all local purchase prices for the item
computed under such subparagraph for
the year, and may not be less than 85
percent of the weighted average of all
local purchase prices for the item
computed under such subparagraph for
the year;
(ii) for 1992 and 1993, the amount
determined under this subparagraph for
the preceding year increased by the
covered item update for such subsequent
year;
(iii) for 1994, the local purchase
price computed under subparagraph
(A)(ii) for the item for the year,
except that such national limited
purchase price may not exceed 100
percent of the median of all local
purchase prices computed for the item
under such subparagraph for the year
and may not be less than 85 percent of
the median of all local purchase prices
computed under such subparagraph for
the item for the year; and
(iv) for each subsequent year, equal
to the amount determined under this
subparagraph for the preceding year
increased by the covered item update
for such subsequent year.
(C) Purchase price recognized.--For purposes
of paragraphs (6) and (7), the amount that is
recognized under this paragraph as the purchase
price for each item furnished--
(i) in 1989 or 1990, is 100 percent
of the local purchase price computed
under subparagraph (A)(ii)(I);
(ii) in 1991, is the sum of (I) 67
percent of the local purchase price
computed under subparagraph (A)(ii)(II)
for 1991, and (II) 33 percent of the
national limited purchase price
computed under subparagraph (B) for
1991;
(iii) in 1992, is the sum of (I) 33
percent of the local purchase price
computed under subparagraph
(A)(ii)(III) for 1992, and (II) 67
percent of the national limited
purchase price computed under
subparagraph (B) for 1992; and
(iv) in 1993 or a subsequent year, is
the national limited purchase price
computed under subparagraph (B) for
that year.
(9) Monthly payment amount recognized with respect to
oxygen and oxygen equipment.--For purposes of paragraph
(5), the amount that is recognized under this paragraph
for payment for oxygen and oxygen equipment is the
monthly payment amount described in subparagraph (C) of
this paragraph. Such amount shall be computed
separately (i) for all items of oxygen and oxygen
equipment (other than portable oxygen equipment) and
(ii) for portable oxygen equipment (each such group
referred to in this paragraph as an ``item'').
(A) Computation of local monthly payment
rate.--Each carrier under this section shall
compute a base local payment rate for each item
as follows:
(i) The carrier shall compute a base
local average monthly payment rate per
beneficiary as an amount equal to (I)
the total reasonable charges for the
item during the 12-month period ending
with December 1986, divided by (II) the
total number of months for all
beneficiaries receiving the item in the
area during the 12-month period for
which the carrier made payment for the
item under this title.
(ii) The carrier shall compute a
local average monthly payment rate for
the item applicable--
(I) to 1989 and 1990, equal
to 95 percent of the base local
average monthly payment rate
computed under clause (i) for
the item increased by the
percentage increase in the
consumer price index for all
urban consumers (U.S. city
average) for the 6-month period
ending with December 1987, or
(II) to 1991, 1992, 1993, and
1994 equal to the local average
monthly payment rate computed
under this clause for the item
for the previous year increased
by the covered item increase
for the year.
(B) Computation of national limited monthly
payment rate.--With respect to the furnishing
of an item in a year, the Secretary shall
compute a national limited monthly payment rate
equal to--
(i) for 1991, the local monthly
payment rate computed under
subparagraph (A)(ii)(II) for the item
for the year, except that such national
limited monthly payment rate may not
exceed 100 percent of the weighted
average of all local monthly payment
rates computed for the item under such
subparagraph for the year, and may not
be less than 85 percent of the weighted
average of all local monthly payment
rates computed for the item under such
subparagraph for the year;
(ii) for 1992 and 1993, the amount
determined under this subparagraph for
the preceding year increased by the
covered item update for such subsequent
year;
(iii) for 1994, the local monthly
payment rate computed under
subparagraph (A)(ii) for the item for
the year, except that such national
limited monthly payment rate may not
exceed 100 percent of the median of all
local monthly payment rates computed
for the item under such subparagraph
for the year and may not be less than
85 percent of the median of all local
monthly payment rates computed for the
item under such subparagraph for the
year;
(iv) for 1995, 1996, and 1997, equal
to the amount determined under this
subparagraph for the preceding year
increased by the covered item update
for such subsequent year;
(v) for 1998, 75 percent of the
amount determined under this
subparagraph for 1997; and
(vi) for 1999 and each subsequent
year, 70 percent of the amount
determined under this subparagraph for
1997.
(C) Monthly payment amount recognized.--For
purposes of paragraph (5), the amount that is
recognized under this paragraph as the base
monthly payment amount for each item
furnished--
(i) in 1989 and in 1990, is 100
percent of the local average monthly
payment rate computed under
subparagraph (A)(ii) for the item;
(ii) in 1991, is the sum of (I) 67
percent of the local average monthly
payment rate computed under
subparagraph (A)(ii)(II) for the item
for 1991, and (II) 33 percent of the
national limited monthly payment rate
computed under subparagraph (B)(i) for
the item for 1991;
(iii) in 1992, is the sum of (I) 33
percent of the local average monthly
payment rate computed under
subparagraph (A)(ii)(II) for the item
for 1992, and (II) 67 percent of the
national limited monthly payment rate
computed under subparagraph (B)(ii) for
the item for 1992; and
(iv) in a subsequent year, is the
national limited monthly payment rate
computed under subparagraph (B) for the
item for that year.
(10) Exceptions and adjustments.--
(A) Areas outside continental united
states.--Exceptions to the amounts recognized
under the previous provisions of this
subsection shall be made to take into account
the unique circumstances of covered items
furnished in Alaska, Hawaii, or Puerto Rico.
(B) Adjustment for inherent reasonableness.--
The Secretary is authorized to apply the
provisions of paragraphs (8) and (9) of section
1842(b) to covered items and suppliers of such
items and payments under this subsection in an
area and with respect to covered items and
services for which the Secretary does not make
a payment amount adjustment under paragraph
(1)(F).
(C) Transcutaneous electrical nerve
stimulator (tens).--In order to permit an
attending physician time to determine whether
the purchase of a transcutaneous electrical
nerve stimulator is medically appropriate for a
particular patient, the Secretary may determine
an appropriate payment amount for the initial
rental of such item for a period of not more
than 2 months. If such item is subsequently
purchased, the payment amount with respect to
such purchase is the payment amount determined
under paragraph (2).
(11) Improper billing and requirement of physician
order.--
(A) Improper billing for certain rental
items.--Notwithstanding any other provision of
this title, a supplier of a covered item for
which payment is made under this subsection and
which is furnished on a rental basis shall
continue to supply the item without charge
(other than a charge provided under this
subsection for the maintenance and servicing of
the item) after rental payments may no longer
be made under this subsection. If a supplier
knowingly and willfully violates the previous
sentence, the Secretary may apply sanctions
against the supplier under section 1842(j)(2)
in the same manner such sanctions may apply
with respect to a physician.
(B) Requirement of physician order.--
(i) In general.--The Secretary is
authorized to require, for specified
covered items, that payment may be made
under this subsection with respect to
the item only if a physician enrolled
under section 1866(j) or an eligible
professional under section
1848(k)(3)(B) that is enrolled under
section 1866(j) has communicated to the
supplier, before delivery of the item,
a written order for the item.
(ii) Requirement for face to face
encounter.--The Secretary shall require
that such an order be written pursuant
to a physician, a physician assistant,
a nurse practitioner, or a clinical
nurse specialist (as those terms are
defined in section 1861(aa)(5))
documenting such physician, physician
assistant, practitioner, or specialist
has had a face-to-face encounter
(including through use of telehealth
under subsection (m) and other than
with respect to encounters that are
incident to services involved) with the
individual involved during the 6-month
period preceding such written order, or
other reasonable timeframe as
determined by the Secretary.
(12) Regional carriers.--The Secretary may designate,
by regulation under section 1842, one carrier for one
or more entire regions to process all claims within the
region for covered items under this section.
(13) Covered item.--In this subsection, the term
``covered item'' means durable medical equipment (as
defined in section 1861(n)), including such equipment
described in section 1861(m)(5), but not including
implantable items for which payment may be made under
section 1833(t).
(14) Covered item update.--In this subsection, the
term ``covered item update'' means, with respect to a
year--
(A) for 1991 and 1992, the percentage
increase in the consumer price index for all
urban consumers (U.S. city average) for the 12-
month period ending with June of the previous
year reduced by 1 percentage point;
(B) for 1993, 1994, 1995, 1996, and 1997, the
percentage increase in the consumer price index
for all urban consumers (U.S. city average) for
the 12-month period ending with June of the
previous year;
(C) for each of the years 1998 through 2000,
0 percentage points;
(D) for 2001, the percentage increase in the
consumer price index for all urban consumers
(U.S. city average) for the 12-month period
ending with June 2000;
(E) for 2002, 0 percentage points;
(F) for 2003, the percentage increase in the
consumer price index for all urban consumers
(U.S. urban average) for the 12-month period
ending with June of 2002;
(G) for 2004 through 2006--
(i) subject to clause (ii), in the
case of class III medical devices
described in section 513(a)(1)(C) of
the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360(c)(1)(C)), the
percentage increase described in
subparagraph (B) for the year involved;
and
(ii) in the case of covered items not
described in clause (i), 0 percentage
points;
(H) for 2007--
(i) subject to clause (ii), in the
case of class III medical devices
described in section 513(a)(1)(C) of
the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360(c)(1)(C)), the
percentage change determined by the
Secretary to be appropriate taking into
account recommendations contained in
the report of the Comptroller General
of the United States under section
302(c)(1)(B) of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003; and
(ii) in the case of covered items not
described in clause (i), 0 percentage
points;
(I) for 2008--
(i) subject to clause (ii), in the
case of class III medical devices
described in section 513(a)(1)(C) of
the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360(c)(1)(C)), the
percentage increase described in
subparagraph (B) (as applied to the
payment amount for 2007 determined
after the application of the percentage
change under subparagraph (H)(i)); and
(ii) in the case of covered items not
described in clause (i), 0 percentage
points;
(J) for 2009--
(i) in the case of items and services
furnished in any geographic area, if
such items or services were selected
for competitive acquisition in any area
under the competitive acquisition
program under section
1847(a)(1)(B)(i)(I) before July 1,
2008, including related accessories but
only if furnished with such items and
services selected for such competition
and diabetic supplies but only if
furnished through mail order, - 9.5
percent; or
(ii) in the case of other items and
services, the percentage increase in
the consumer price index for all urban
consumers (U.S. urban average) for the
12-month period ending with June 2008;
(K) for 2010, the percentage increase in the
consumer price index for all urban consumers
(U.S. urban average) for the 12-month period
ending with June of the previous year; and
(L) for 2011 and each subsequent year--
(i) the percentage increase in the
consumer price index for all urban
consumers (United States city average)
for the 12-month period ending with
June of the previous year, reduced by--
(ii) the productivity adjustment
described in section
1886(b)(3)(B)(xi)(II).
The application of subparagraph (L)(ii) may result in
the covered item update under this paragraph being less
than 0.0 for a year, and may result in payment rates
under this subsection for a year being less than such
payment rates for the preceding year.
(15) Advance determinations of coverage for certain
items.--
(A) Development of lists of items by
secretary.--The Secretary may develop and
periodically update a list of items for which
payment may be made under this subsection that
the Secretary determines, on the basis of prior
payment experience, are frequently subject to
unnecessary utilization throughout a carrier's
entire service area or a portion of such area.
(B) Development of lists of suppliers by
secretary.--The Secretary may develop and
periodically update a list of suppliers of
items for which payment may be made under this
subsection with respect to whom--
(i) the Secretary has found that a
substantial number of claims for
payment under this part for items
furnished by the supplier have been
denied on the basis of the application
of section 1862(a)(1); or
(ii) the Secretary has identified a
pattern of overutilization resulting
from the business practice of the
supplier.
(C) Determinations of coverage in advance.--A
carrier shall determine in advance of delivery
of an item whether payment for the item may not
be made because the item is not covered or
because of the application of section
1862(a)(1) if--
(i) the item is included on the list
developed by the Secretary under
subparagraph (A);
(ii) the item is furnished by a
supplier included on the list developed
by the Secretary under subparagraph
(B); or
(iii) the item is a customized item
(other than inexpensive items specified
by the Secretary) and the patient to
whom the item is to be furnished or the
supplier requests that such advance
determination be made.
(16) Disclosure of information and surety bond.--The
Secretary shall not provide for the issuance (or
renewal) of a provider number for a supplier of durable
medical equipment, for purposes of payment under this
part for durable medical equipment furnished by the
supplier, unless the supplier provides the Secretary on
a continuing basis--
(A) with--
(i) full and complete information as
to the identity of each person with an
ownership or control interest (as
defined in section 1124(a)(3)) in the
supplier or in any subcontractor (as
defined by the Secretary in
regulations) in which the supplier
directly or indirectly has a 5 percent
or more ownership interest; and
(ii) to the extent determined to be
feasible under regulations of the
Secretary, the name of any disclosing
entity (as defined in section
1124(a)(2)) with respect to which a
person with such an ownership or
control interest in the supplier is a
person with such an ownership or
control interest in the disclosing
entity; and
(B) with a surety bond in a form specified by
the Secretary and in an amount that is not less
than $50,000 that the Secretary determines is
commensurate with the volume of the billing of
the supplier.
The Secretary may waive the requirement of a bond under
subparagraph (B) in the case of a supplier that
provides a comparable surety bond under State law. The
Secretary, at the Secretary's discretion, may impose
the requirements of the first sentence with respect to
some or all providers of items or services under part A
or some or all suppliers or other persons (other than
physicians or other practitioners, as defined in
section 1842(b)(18)(C)) who furnish items or services
under this part.
(17) Prohibition against unsolicited telephone
contacts by suppliers.--
(A) In general.--A supplier of a covered item
under this subsection may not contact an
individual enrolled under this part by
telephone regarding the furnishing of a covered
item to the individual unless 1 of the
following applies:
(i) The individual has given written
permission to the supplier to make
contact by telephone regarding the
furnishing of a covered item.
(ii) The supplier has furnished a
covered item to the individual and the
supplier is contacting the individual
only regarding the furnishing of such
covered item.
(iii) If the contact is regarding the
furnishing of a covered item other than
a covered item already furnished to the
individual, the supplier has furnished
at least 1 covered item to the
individual during the 15-month period
preceding the date on which the
supplier makes such contact.
(B) Prohibiting payment for items furnished
subsequent to unsolicited contacts.--If a
supplier knowingly contacts an individual in
violation of subparagraph (A), no payment may
be made under this part for any item
subsequently furnished to the individual by the
supplier.
(C) Exclusion from program for suppliers
engaging in pattern of unsolicited contacts.--
If a supplier knowingly contacts individuals in
violation of subparagraph (A) to such an extent
that the supplier's conduct establishes a
pattern of contacts in violation of such
subparagraph, the Secretary shall exclude the
supplier from participation in the programs
under this Act, in accordance with the
procedures set forth in subsections (c), (f),
and (g) of section 1128.
(18) Refund of amounts collected for certain
disallowed items.--
(A) In general.--If a nonparticipating
supplier furnishes to an individual enrolled
under this part a covered item for which no
payment may be made under this part by reason
of paragraph (17)(B), the supplier shall refund
on a timely basis to the patient (and shall be
liable to the patient for) any amounts
collected from the patient for the item,
unless--
(i) the supplier establishes that the
supplier did not know and could not
reasonably have been expected to know
that payment may not be made for the
item by reason of paragraph (17)(B), or
(ii) before the item was furnished,
the patient was informed that payment
under this part may not be made for
that item and the patient has agreed to
pay for that item.
(B) Sanctions.--If a supplier knowingly and
willfully fails to make refunds in violation of
subparagraph (A), the Secretary may apply
sanctions against the supplier in accordance
with section 1842(j)(2).
(C) Notice.--Each carrier with a contract in
effect under this part with respect to
suppliers of covered items shall send any
notice of denial of payment for covered items
by reason of paragraph (17)(B) and for which
payment is not requested on an assignment-
related basis to the supplier and the patient
involved.
(D) Timely basis defined.--A refund under
subparagraph (A) is considered to be on a
timely basis only if--
(i) in the case of a supplier who
does not request reconsideration or
seek appeal on a timely basis, the
refund is made within 30 days after the
date the supplier receives a denial
notice under subparagraph (C), or
(ii) in the case in which such a
reconsideration or appeal is taken, the
refund is made within 15 days after the
date the supplier receives notice of an
adverse determination on
reconsideration or appeal.
(19) Certain upgraded items.--
(A) Individual's right to choose upgraded
item.--Notwithstanding any other provision of
this title, the Secretary may issue regulations
under which an individual may purchase or rent
from a supplier an item of upgraded durable
medical equipment for which payment would be
made under this subsection if the item were a
standard item.
(B) Payments to supplier.--In the case of the
purchase or rental of an upgraded item under
subparagraph (A)--
(i) the supplier shall receive
payment under this subsection with
respect to such item as if such item
were a standard item; and
(ii) the individual purchasing or
renting the item shall pay the supplier
an amount equal to the difference
between the supplier's charge and the
amount under clause (i).
In no event may the supplier's charge for an
upgraded item exceed the applicable fee
schedule amount (if any) for such item.
(C) Consumer protection safeguards.--Any
regulations under subparagraph (A) shall
provide for consumer protection standards with
respect to the furnishing of upgraded equipment
under subparagraph (A). Such regulations shall
provide for--
(i) determination of fair market
prices with respect to an upgraded
item;
(ii) full disclosure of the
availability and price of standard
items and proof of receipt of such
disclosure information by the
beneficiary before the furnishing of
the upgraded item;
(iii) conditions of participation for
suppliers in the billing arrangement;
(iv) sanctions of suppliers who are
determined to engage in coercive or
abusive practices, including exclusion;
and
(v) such other safeguards as the
Secretary determines are necessary.
(20) Identification of quality standards.--
(A) In general.--Subject to subparagraph (C),
the Secretary shall establish and implement
quality standards for suppliers of items and
services described in subparagraph (D) to be
applied by recognized independent accreditation
organizations (as designated under subparagraph
(B)) and with which such suppliers shall be
required to comply in order to--
(i) furnish any such item or service
for which payment is made under this
part; and
(ii) receive or retain a provider or
supplier number used to submit claims
for reimbursement for any such item or
service for which payment may be made
under this title.
(B) Designation of independent accreditation
organizations.--Not later than the date that is
1 year after the date on which the Secretary
implements the quality standards under
subparagraph (A), notwithstanding section
1865(a), the Secretary shall designate and
approve one or more independent accreditation
organizations for purposes of such
subparagraph.
(C) Quality standards.--The quality standards
described in subparagraph (A) may not be less
stringent than the quality standards that would
otherwise apply if this paragraph did not apply
and shall include consumer services standards.
(D) Items and services described.--The items
and services described in this subparagraph are
the following items and services, as the
Secretary determines appropriate:
(i) Covered items (as defined in
paragraph (13)) for which payment may
otherwise be made under this
subsection.
(ii) Prosthetic devices and orthotics
and prosthetics described in section
1834(h)(4).
(iii) Items and services described in
section 1842(s)(2).
(E) Implementation.--The Secretary may
establish by program instruction or otherwise
the quality standards under this paragraph,
including subparagraph (F), after consultation
with representatives of relevant parties. Such
standards shall be applied prospectively and
shall be published on the Internet website of
the Centers for Medicare & Medicaid Services.
(F) Application of accreditation
requirement.--In implementing quality standards
under this paragraph--
(i) subject to clause (ii) and
subparagraph (G), the Secretary shall
require suppliers furnishing items and
services described in subparagraph (D)
on or after October 1, 2009, directly
or as a subcontractor for another
entity, to have submitted to the
Secretary evidence of accreditation by
an accreditation organization
designated under subparagraph (B) as
meeting applicable quality standards,
except that the Secretary shall not
require under this clause pharmacies to
obtain such accreditation before
January 1, 2010, except that the
Secretary shall not require a pharmacy
to have submitted to the Secretary such
evidence of accreditation prior to
January 1, 2011; and
(ii) in applying such standards and
the accreditation requirement of clause
(i) with respect to eligible
professionals (as defined in section
1848(k)(3)(B)), and including such
other persons, such as orthotists and
prosthetists, as specified by the
Secretary, furnishing such items and
services--
(I) such standards and
accreditation requirement shall
not apply to such professionals
and persons unless the
Secretary determines that the
standards being applied are
designed specifically to be
applied to such professionals
and persons; and
(II) the Secretary may exempt
such professionals and persons
from such standards and
requirement if the Secretary
determines that licensing,
accreditation, or other
mandatory quality requirements
apply to such professionals and
persons with respect to the
furnishing of such items and
services.
(G) Application of accreditation requirement
to certain pharmacies.--
(i) In general.--With respect to
items and services furnished on or
after January 1, 2011, in implementing
quality standards under this
paragraph--
(I) subject to subclause
(II), in applying such
standards and the accreditation
requirement of subparagraph
(F)(i) with respect to
pharmacies described in clause
(ii) furnishing such items and
services, such standards and
accreditation requirement shall
not apply to such pharmacies;
and
(II) the Secretary may apply
to such pharmacies an
alternative accreditation
requirement established by the
Secretary if the Secretary
determines such alternative
accreditation requirement is
more appropriate for such
pharmacies.
(ii) Pharmacies described.--A
pharmacy described in this clause is a
pharmacy that meets each of the
following criteria:
(I) The total billings by the
pharmacy for such items and
services under this title are
less than 5 percent of total
pharmacy sales, as determined
based on the average total
pharmacy sales for the previous
3 calendar years, 3 fiscal
years, or other yearly period
specified by the Secretary.
(II) The pharmacy has been
enrolled under section 1866(j)
as a supplier of durable
medical equipment, prosthetics,
orthotics, and supplies, has
been issued (which may include
the renewal of) a provider
number for at least 5 years,
and for which a final adverse
action (as defined in section
424.57(a) of title 42, Code of
Federal Regulations) has not
been imposed in the past 5
years.
(III) The pharmacy submits to
the Secretary an attestation,
in a form and manner, and at a
time, specified by the
Secretary, that the pharmacy
meets the criteria described in
subclauses (I) and (II). Such
attestation shall be subject to
section 1001 of title 18,
United States Code.
(IV) The pharmacy agrees to
submit materials as requested
by the Secretary, or during the
course of an audit conducted on
a random sample of pharmacies
selected annually, to verify
that the pharmacy meets the
criteria described in
subclauses (I) and (II).
Materials submitted under the
preceding sentence shall
include a certification by an
accountant on behalf of the
pharmacy or the submission of
tax returns filed by the
pharmacy during the relevant
periods, as requested by the
Secretary.
(21) Special payment rule for specified items and
supplies.--
(A) In general.--Notwithstanding the
preceding provisions of this subsection, for
specified items and supplies (described in
subparagraph (B)) furnished during 2005, the
payment amount otherwise determined under this
subsection for such specified items and
supplies shall be reduced by the percentage
difference between--
(i) the amount of payment otherwise
determined for the specified item or
supply under this subsection for 2002,
and
(ii) the amount of payment for the
specified item or supply under chapter
89 of title 5, United States Code, as
identified in the column entitled
``Median FEHP Price'' in the table
entitled ``SUMMARY OF MEDICARE PRICES
COMPARED TO VA, MEDICAID, RETAIL, AND
FEHP PRICES FOR 16 ITEMS'' included in
the Testimony of the Inspector General
before the Senate Committee on
Appropriations, June 12, 2002, or any
subsequent report by the Inspector
General.
(B) Specified item or supply described.--For
purposes of subparagraph (A), a specified item
or supply means oxygen and oxygen equipment,
standard wheelchairs (including standard power
wheelchairs), nebulizers, diabetic supplies
consisting of lancets and testing strips,
hospital beds, and air mattresses, but only if
the HCPCS code for the item or supply is
identified in a table referred to in
subparagraph (A)(ii).
(C) Application of update to special payment
amount.--The covered item update under
paragraph (14) for specified items and supplies
for 2006 and each subsequent year shall be
applied to the payment amount under
subparagraph (A) unless payment is made for
such items and supplies under section 1847.
(22) Special payment rule for diabetic supplies.--
Notwithstanding the preceding provisions of this
subsection, for purposes of determining the payment
amount under this subsection for diabetic supplies
furnished on or after the first day of the calendar
quarter during 2013 that is at least 30 days after the
date of the enactment of this paragraph and before the
date described in paragraph (1)(H)(ii), the Secretary
shall recalculate and apply the covered item update
under paragraph (14) as if subparagraph (J)(i) of such
paragraph was amended by striking ``but only if
furnished through mail order''.
(b) Fee Schedules for Radiologist Services.--
(1) Development.--The Secretary shall develop--
(A) a relative value scale to serve as the
basis for the payment for radiologist services
under this part, and
(B) using such scale and appropriate
conversion factors and subject to subsection
(c)(1)(A), fee schedules (on a regional,
statewide, locality, or carrier service area
basis) for payment for radiologist services
under this part, to be implemented for such
services furnished during 1989.
(2) Consultation.--In carrying out paragraph (1), the
Secretary shall regularly consult closely with the
Physician Payment Review Commission, the American
College of Radiology, and other organizations
representing physicians or suppliers who furnish
radiologist services and shall share with them the data
and data analysis being used to make the determinations
under paragraph (1), including data on variations in
current medicare payments by geographic area, and by
service and physician specialty.
(3) Considerations.--In developing the relative value
scale and fee schedules under paragraph (1), the
Secretary--
(A) shall take into consideration variations
in the cost of furnishing such services among
geographic areas and among different sites
where services are furnished, and
(B) may also take into consideration such
other factors respecting the manner in which
physicians in different specialties furnish
such services as may be appropriate to assure
that payment amounts are equitable and designed
to promote effective and efficient provision of
radiologist services by physicians in the
different specialties.
(4) Savings.--
(A) Budget neutral fee schedules.--The
Secretary shall develop preliminary fee
schedules for 1989, which are designed to
result in the same amount of aggregate payments
(net of any coinsurance and deductibles under
sections 1833(a)(1)(J) and 1833(b)) for
radiologist services furnished in 1989 as would
have been made if this subsection had not been
enacted.
(B) Initial savings.--The fee schedules
established for payment purposes under this
subsection for services furnished in 1989 shall
be 97 percent of the amounts permitted under
these preliminary fee schedules developed under
subparagraph (A).
(C) 1990 fee schedules.--For radiologist
services (other than portable X-ray services)
furnished under this part during 1990, after
March 31 of such year, the conversion factors
used under this subsection shall be 96 percent
of the conversion factors that applied under
this subsection as of December 31, 1989.
(D) 1991 fee schedules.--For radiologist
services (other than portable X-ray services)
furnished under this part during 1991, the
conversion factors used in a locality under
this subsection shall, subject to clause (vii),
be reduced to the adjusted conversion factor
for the locality determined as follows:
(i) National weighted average
conversion factor.--The Secretary shall
estimate the national weighted average
of the conversion factors used under
this subsection for services furnished
during 1990 beginning on April 1, using
the best available data.
(ii) Reduced national weighted
average.--The national weighted average
estimated under clause (i) shall be
reduced by 13 percent.
(iii) Computation of 1990 locality
index relative to national average.--
The Secretary shall establish an index
which reflects, for each locality, the
ratio of the conversion factor used in
the locality under this subsection to
the national weighted average estimated
under clause (i).
(iv) Adjusted conversion factor.--The
adjusted conversion factor for the
professional or technical component of
a service in a locality is the sum of
\1/2\ of the locally-adjusted amount
determined under clause (v) and \1/2\
of the GPCI-adjusted amount determined
under clause (vi).
(v) Locally-adjusted amount.--For
purposes of clause (iv), the locally
adjusted amount determined under this
clause is the product of (I) the
national weighted average conversion
factor computed under clause (ii), and
(II) the index value established under
clause (iii) for the locality.
(vi) GPCI-adjusted amount.--For
purposes of clause (iv), the GPCI-
adjusted amount determined under this
clause is the sum of--
(I) the product of (a) the
portion of the reduced national
weighted average conversion
factor computed under clause
(ii) which is attributable to
physician work and (b) the
geographic work index value for
the locality (specified in
Addendum C to the Model Fee
Schedule for Physician Services
(published on September 4,
1990, 55 Federal Register pp.
36238-36243)); and
(II) the product of (a) the
remaining portion of the
reduced national weighted
average conversion factor
computed under clause (ii), and
(b) the geographic practice
cost index value specified in
section 1842(b)(14)(C)(iv) for
the locality.
In applying this clause with respect to
the professional component of a
service, 80 percent of the conversion
factor shall be considered to be
attributable to physician work and with
respect to the technical component of
the service, 0 percent shall be
considered to be attributable to
physician work.
(vii) Limits on conversion factor.--
The conversion factor to be applied to
a locality to the professional or
technical component of a service shall
not be reduced under this subparagraph
by more than 9.5 percent below the
conversion factor applied in the
locality under subparagraph (C) to such
component, but in no case shall the
conversion factor be less than 60
percent of the national weighted
average of the conversion factors
(computed under clause (i)).
(E) Rule for certain scanning services.--In
the case of the technical components of
magnetic resonance imaging (MRI) services and
computer assisted tomography (CAT) services
furnished after December 31, 1990, the amount
otherwise payable shall be reduced by 10
percent.
(F) Subsequent updating.--For radiologist
services furnished in subsequent years, the fee
schedules shall be the schedules for the
previous year updated by the percentage
increase in the MEI (as defined in section
1842(i)(3)) for the year.
(G) Nonparticipating physicians and
suppliers.--Each fee schedule so established
shall provide that the payment rate recognized
for nonparticipating physicians and suppliers
is equal to the appropriate percent (as defined
in section 1842(b)(4)(A)(iv)) of the payment
rate recognized for participating physicians
and suppliers.
(5) Limiting charges of nonparticipating physicians
and suppliers.--
(A) In general.--In the case of radiologist
services furnished after January 1, 1989, for
which payment is made under a fee schedule
under this subsection, if a nonparticipating
physician or supplier furnishes the service to
an individual entitled to benefits under this
part, the physician or supplier may not charge
the individual more than the limiting charge
(as defined in subparagraph (B)).
(B) Limiting charge defined.--In subparagraph
(A), the term ``limiting charge'' means, with
respect to a service furnished--
(i) in 1989, 125 percent of the
amount specified for the service in the
appropriate fee schedule established
under paragraph (1),
(ii) in 1990, 120 percent of the
amount specified for the service in the
appropriate fee schedule established
under paragraph (1), and
(iii) after 1990, 115 percent of the
amount specified for the service in the
appropriate fee schedule established
under paragraph (1).
(C) Enforcement.--If a physician or supplier
knowingly and willfully bills in violation of
subparagraph (A), the Secretary may apply
sanctions against such physician or supplier in
accordance with section 1842(j)(2) in the same
manner as such sanctions may apply to a
physician.
(6) Radiologist services defined.--For the purposes
of this subsection and section 1833(a)(1)(J), the term
``radiologist services'' only includes radiology
services performed by, or under the direction or
supervision of, a physician--
(A) who is certified, or eligible to be
certified, by the American Board of Radiology,
or
(B) for whom radiology services account for
at least 50 percent of the total amount of
charges made under this part.
(c) Payment and Standards for Screening Mammography.--
(1) In general.--With respect to expenses incurred
for screening mammography (as defined in section
1861(jj)), payment may be made only--
(A) for screening mammography conducted
consistent with the frequency permitted under
paragraph (2); and
(B) if the screening mammography is conducted
by a facility that has a certificate (or
provisional certificate) issued under section
354 of the Public Health Service Act.
(2) Frequency covered.--
(A) In general.--Subject to revision by the
Secretary under subparagraph (B)--
(i) no payment may be made under this
part for screening mammography
performed on a woman under 35 years of
age;
(ii) payment may be made under this
part for only one screening mammography
performed on a woman over 34 years of
age, but under 40 years of age; and
(iii) in the case of a woman over 39
years of age, payment may not be made
under this part for screening
mammography performed within 11 months
following the month in which a previous
screening mammography was performed.
(B) Revision of frequency.--
(i) Review.--The Secretary, in
consultation with the Director of the
National Cancer Institute, shall review
periodically the appropriate frequency
for performing screening mammography,
based on age and such other factors as
the Secretary believes to be pertinent.
(ii) Revision of frequency.--The
Secretary, taking into consideration
the review made under clause (i), may
revise from time to time the frequency
with which screening mammography may be
paid for under this subsection.
(d) Frequency Limits and Payment for Colorectal Cancer
Screening Tests.--
(1) Screening fecal-occult blood tests.--
(A) Payment amount.--The payment amount for
colorectal cancer screening tests consisting of
screening fecal-occult blood tests is equal to
the payment amount established for diagnostic
fecal-occult blood tests under section 1833(h).
(B) Frequency limit.--No payment may be made
under this part for a colorectal cancer
screening test consisting of a screening fecal-
occult blood test--
(i) if the individual is under 50
years of age; or
(ii) if the test is performed within
the 11 months after a previous
screening fecal-occult blood test.
(2) Screening flexible sigmoidoscopies.--
(A) Fee schedule.--With respect to colorectal
cancer screening tests consisting of screening
flexible sigmoidoscopies, payment under section
1848 shall be consistent with payment under
such section for similar or related services.
(B) Payment limit.--In the case of screening
flexible sigmoidoscopy services, payment under
this part shall not exceed such amount as the
Secretary specifies, based upon the rates
recognized for diagnostic flexible
sigmoidoscopy services.
(C) Facility payment limit.--
(i) In general.--Notwithstanding
subsections (i)(2)(A) and (t) of
section 1833, in the case of screening
flexible sigmoidoscopy services
furnished on or after January 1, 1999,
that--
(I) in accordance with
regulations, may be performed
in an ambulatory surgical
center and for which the
Secretary permits ambulatory
surgical center payments under
this part, and
(II) are performed in an
ambulatory surgical center or
hospital outpatient department,
payment under this part shall be based
on the lesser of the amount under the
fee schedule that would apply to such
services if they were performed in a
hospital outpatient department in an
area or the amount under the fee
schedule that would apply to such
services if they were performed in an
ambulatory surgical center in the same
area.
(ii) Limitation on coinsurance.--
Notwithstanding any other provision of
this title, in the case of a
beneficiary who receives the services
described in clause (i)--
(I) in computing the amount
of any applicable copayment,
the computation of such
coinsurance shall be based upon
the fee schedule under which
payment is made for the
services, and
(II) the amount of such
coinsurance is equal to 25
percent of the payment amount
under the fee schedule
described in subclause (I).
(D) Special rule for detected lesions.--If
during the course of such screening flexible
sigmoidoscopy, a lesion or growth is detected
which results in a biopsy or removal of the
lesion or growth, payment under this part shall
not be made for the screening flexible
sigmoidoscopy but shall be made for the
procedure classified as a flexible
sigmoidoscopy with such biopsy or removal.
(E) Frequency limit.--No payment may be made
under this part for a colorectal cancer
screening test consisting of a screening
flexible sigmoidoscopy--
(i) if the individual is under 50
years of age; or
(ii) if the procedure is performed
within the 47 months after a previous
screening flexible sigmoidoscopy or, in
the case of an individual who is not at
high risk for colorectal cancer, if the
procedure is performed within the 119
months after a previous screening
colonoscopy.
(3) Screening colonoscopy.--
(A) Fee schedule.--With respect to colorectal
cancer screening test consisting of a screening
colonoscopy, payment under section 1848 shall
be consistent with payment amounts under such
section for similar or related services.
(B) Payment limit.--In the case of screening
colonoscopy services, payment under this part
shall not exceed such amount as the Secretary
specifies, based upon the rates recognized for
diagnostic colonoscopy services.
(C) Facility payment limit.--
(i) In general.--Notwithstanding
subsections (i)(2)(A) and (t) of
section 1833, in the case of screening
colonoscopy services furnished on or
after January 1, 1999, that are
performed in an ambulatory surgical
center or a hospital outpatient
department, payment under this part
shall be based on the lesser of the
amount under the fee schedule that
would apply to such services if they
were performed in a hospital outpatient
department in an area or the amount
under the fee schedule that would apply
to such services if they were performed
in an ambulatory surgical center in the
same area.
(ii) Limitation on coinsurance.--
Notwithstanding any other provision of
this title, in the case of a
beneficiary who receives the services
described in clause (i)--
(I) in computing the amount
of any applicable coinsurance,
the computation of such
coinsurance shall be based upon
the fee schedule under which
payment is made for the
services, and
(II) the amount of such
coinsurance is equal to 25
percent of the payment amount
under the fee schedule
described in subclause (I).
(D) Special rule for detected lesions.--If
during the course of such screening
colonoscopy, a lesion or growth is detected
which results in a biopsy or removal of the
lesion or growth, payment under this part shall
not be made for the screening colonoscopy but
shall be made for the procedure classified as a
colonoscopy with such biopsy or removal.
(E) Frequency limit.--No payment may be made
under this part for a colorectal cancer
screening test consisting of a screening
colonoscopy for individuals at high risk for
colorectal cancer if the procedure is performed
within the 23 months after a previous screening
colonoscopy or for other individuals if the
procedure is performed within the 119 months
after a previous screening colonoscopy or
within 47 months after a previous screening
flexible sigmoidoscopy.
(e) Accreditation Requirement for Advanced Diagnostic Imaging
Services.--
(1) In general.--
(A) In general.--Beginning with January 1,
2012, with respect to the technical component
of advanced diagnostic imaging services for
which payment is made under the fee schedule
established under section 1848(b) and that are
furnished by a supplier, payment may only be
made if such supplier is accredited by an
accreditation organization designated by the
Secretary under paragraph (2)(B)(i).
(B) Advanced diagnostic imaging services
defined.--In this subsection, the term
``advanced diagnostic imaging services''
includes--
(i) diagnostic magnetic resonance
imaging, computed tomography, and
nuclear medicine (including positron
emission tomography); and
(ii) such other diagnostic imaging
services, including services described
in section 1848(b)(4)(B) (excluding X-
ray, ultrasound, and fluoroscopy), as
specified by the Secretary in
consultation with physician specialty
organizations and other stakeholders.
(C) Supplier defined.--In this subsection,
the term ``supplier'' has the meaning given
such term in section 1861(d).
(2) Accreditation organizations.--
(A) Factors for designation of accreditation
organizations.--The Secretary shall consider
the following factors in designating
accreditation organizations under subparagraph
(B)(i) and in reviewing and modifying the list
of accreditation organizations designated
pursuant to subparagraph (C):
(i) The ability of the organization
to conduct timely reviews of
accreditation applications.
(ii) Whether the organization has
established a process for the timely
integration of new advanced diagnostic
imaging services into the
organization's accreditation program.
(iii) Whether the organization uses
random site visits, site audits, or
other strategies for ensuring
accredited suppliers maintain adherence
to the criteria described in paragraph
(3).
(iv) The ability of the organization
to take into account the capacities of
suppliers located in a rural area (as
defined in section 1886(d)(2)(D)).
(v) Whether the organization has
established reasonable fees to be
charged to suppliers applying for
accreditation.
(vi) Such other factors as the
Secretary determines appropriate.
(B) Designation.--Not later than January 1,
2010, the Secretary shall designate
organizations to accredit suppliers furnishing
the technical component of advanced diagnostic
imaging services. The list of accreditation
organizations so designated may be modified
pursuant to subparagraph (C).
(C) Review and modification of list of
accreditation organizations.--
(i) In general.--The Secretary shall
review the list of accreditation
organizations designated under
subparagraph (B) taking into account
the factors under subparagraph (A).
Taking into account the results of such
review, the Secretary may, by
regulation, modify the list of
accreditation organizations designated
under subparagraph (B).
(ii) Special rule for accreditations
done prior to removal from list of
designated accreditation
organizations.--In the case where the
Secretary removes an organization from
the list of accreditation organizations
designated under subparagraph (B), any
supplier that is accredited by the
organization during the period
beginning on the date on which the
organization is designated as an
accreditation organization under
subparagraph (B) and ending on the date
on which the organization is removed
from such list shall be considered to
have been accredited by an organization
designated by the Secretary under
subparagraph (B) for the remaining
period such accreditation is in effect.
(3) Criteria for accreditation.--The Secretary shall
establish procedures to ensure that the criteria used
by an accreditation organization designated under
paragraph (2)(B) to evaluate a supplier that furnishes
the technical component of advanced diagnostic imaging
services for the purpose of accreditation of such
supplier is specific to each imaging modality. Such
criteria shall include--
(A) standards for qualifications of medical
personnel who are not physicians and who
furnish the technical component of advanced
diagnostic imaging services;
(B) standards for qualifications and
responsibilities of medical directors and
supervising physicians, including standards
that recognize the considerations described in
paragraph (4);
(C) procedures to ensure that equipment used
in furnishing the technical component of
advanced diagnostic imaging services meets
performance specifications;
(D) standards that require the supplier have
procedures in place to ensure the safety of
persons who furnish the technical component of
advanced diagnostic imaging services and
individuals to whom such services are
furnished;
(E) standards that require the establishment
and maintenance of a quality assurance and
quality control program by the supplier that is
adequate and appropriate to ensure the
reliability, clarity, and accuracy of the
technical quality of diagnostic images produced
by such supplier; and
(F) any other standards or procedures the
Secretary determines appropriate.
(4) Recognition in standards for the evaluation of
medical directors and supervising physicians.--The
standards described in paragraph (3)(B) shall recognize
whether a medical director or supervising physician--
(A) in a particular specialty receives
training in advanced diagnostic imaging
services in a residency program;
(B) has attained, through experience, the
necessary expertise to be a medical director or
a supervising physician;
(C) has completed any continuing medical
education courses relating to such services; or
(D) has met such other standards as the
Secretary determines appropriate.
(5) Rule for accreditations made prior to
designation.--In the case of a supplier that is
accredited before January 1, 2010, by an accreditation
organization designated by the Secretary under
paragraph (2)(B) as of January 1, 2010, such supplier
shall be considered to have been accredited by an
organization designated by the Secretary under such
paragraph as of January 1, 2012, for the remaining
period such accreditation is in effect.
(f) Reduction in Payments for Physician Pathology Services
During 1991.--
(1) In general.--For physician pathology services
furnished under this part during 1991, the prevailing
charges used in a locality under this part shall be 7
percent below the prevailing charges used in the
locality under this part in 1990 after March 31.
(2) Limitation.--The prevailing charge for the
technical and professional components of an physician
pathology service furnished by a physician through an
independent laboratory shall not be reduced pursuant to
paragraph (1) to the extent that such reduction would
reduce such prevailing charge below 115 percent of the
prevailing charge for the professional component of
such service when furnished by a hospital-based
physician in the same locality. For purposes of the
preceding sentence, an independent laboratory is a
laboratory that is independent of a hospital and
separate from the attending or consulting physicians'
office.
(g) Payment for Outpatient Critical Access Hospital
Services.--
(1) In general.--The amount of payment for outpatient
critical access hospital services of a critical access
hospital is equal to 101 percent of the reasonable
costs of the hospital in providing such services,
unless the hospital makes the election under paragraph
(2).
(2) Election of cost-based hospital outpatient
service payment plus fee schedule for professional
services.--A critical access hospital may elect to be
paid for outpatient critical access hospital services
amounts equal to the sum of the following, less the
amount that such hospital may charge as described in
section 1866(a)(2)(A):
(A) Facility fee.--With respect to facility
services, not including any services for which
payment may be made under subparagraph (B), 101
percent of the reasonable costs of the critical
access hospital in providing such services.
(B) Fee schedule for professional services.--
With respect to professional services otherwise
included within outpatient critical access
hospital services, 115 percent of such amounts
as would otherwise be paid under this part if
such services were not included in outpatient
critical access hospital services. Subsections
(x) and (y) of section 1833 shall not be taken
into account in determining the amounts that
would otherwise be paid pursuant to the
preceding sentence.
The Secretary may not require, as a condition for
applying subparagraph (B) with respect to a critical
access hospital, that each physician or other
practitioner providing professional services in the
hospital must assign billing rights with respect to
such services, except that such subparagraph shall not
apply to those physicians and practitioners who have
not assigned such billing rights.
(3) Disregarding charges.--The payment amounts under
this subsection shall be determined without regard to
the amount of the customary or other charge.
(4) Treatment of clinical diagnostic laboratory
services.--No coinsurance, deductible, copayment, or
other cost-sharing otherwise applicable under this part
shall apply with respect to clinical diagnostic
laboratory services furnished as an outpatient critical
access hospital service. Nothing in this title shall be
construed as providing for payment for clinical
diagnostic laboratory services furnished as part of
outpatient critical access hospital services, other
than on the basis described in this subsection. For
purposes of the preceding sentence and section
1861(mm)(3), clinical diagnostic laboratory services
furnished by a critical access hospital shall be
treated as being furnished as part of outpatient
critical access services without regard to whether the
individual with respect to whom such services are
furnished is physically present in the critical access
hospital, or in a skilled nursing facility or a clinic
(including a rural health clinic) that is operated by a
critical access hospital, at the time the specimen is
collected.
(5) Coverage of costs for certain emergency room on-
call providers.--In determining the reasonable costs of
outpatient critical access hospital services under
paragraphs (1) and (2)(A), the Secretary shall
recognize as allowable costs, amounts (as defined by
the Secretary) for reasonable compensation and related
costs for physicians, physician assistants, nurse
practitioners, and clinical nurse specialists who are
on-call (as defined by the Secretary) to provide
emergency services but who are not present on the
premises of the critical access hospital involved, and
are not otherwise furnishing services covered under
this title and are not on-call at any other provider or
facility.
(h) Payment for Prosthetic Devices and Orthotics and
Prosthetics.--
(1) General rule for payment.--
(A) In general.--Payment under this
subsection for prosthetic devices and orthotics
and prosthetics shall be made in a lump-sum
amount for the purchase of the item in an
amount equal to 80 percent of the payment basis
described in subparagraph (B).
(B) Payment basis.--Except as provided in
subparagraphs (C), (E), and (H)(i), the payment
basis described in this subparagraph is the
lesser of--
(i) the actual charge for the item;
or
(ii) the amount recognized under
paragraph (2) as the purchase price for
the item.
(C) Exception for certain public home health
agencies.--Subparagraph (B)(i) shall not apply
to an item furnished by a public home health
agency (or by another home health agency which
demonstrates to the satisfaction of the
Secretary that a significant portion of its
patients are low income) free of charge or at
nominal charges to the public.
(D) Exclusive payment rule.--Subject to
subparagraph (H)(ii), this subsection shall
constitute the exclusive provision of this
title for payment for prosthetic devices,
orthotics, and prosthetics under this part or
under part A to a home health agency.
(E) Exception for certain items.--Payment for
ostomy supplies, tracheostomy supplies, and
urologicals shall be made in accordance with
subparagraphs (B) and (C) of section
1834(a)(2).
(F) Special payment rules for certain
prosthetics and custom-fabricated orthotics.--
(i) In general.--No payment shall be
made under this subsection for an item
of custom-fabricated orthotics
described in clause (ii) or for an item
of prosthetics unless such item is--
(I) furnished by a qualified
practitioner; and
(II) fabricated by a
qualified practitioner or a
qualified supplier at a
facility that meets such
criteria as the Secretary
determines appropriate.
(ii) Description of custom-fabricated
item.--
(I) In general.--An item
described in this clause is an
item of custom-fabricated
orthotics that requires
education, training, and
experience to custom-fabricate
and that is included in a list
established by the Secretary in
subclause (II). Such an item
does not include shoes and shoe
inserts.
(II) List of items.--The
Secretary, in consultation with
appropriate experts in
orthotics (including national
organizations representing
manufacturers of orthotics),
shall establish and update as
appropriate a list of items to
which this subparagraph
applies. No item may be
included in such list unless
the item is individually
fabricated for the patient over
a positive model of the
patient.
(iii) Qualified practitioner
defined.--In this subparagraph, the
term ``qualified practitioner'' means a
physician or other individual who--
(I) is a qualified physical
therapist or a qualified
occupational therapist;
(II) in the case of a State
that provides for the licensing
of orthotics and prosthetics,
is licensed in orthotics or
prosthetics by the State in
which the item is supplied; or
(III) in the case of a State
that does not provide for the
licensing of orthotics and
prosthetics, is specifically
trained and educated to provide
or manage the provision of
prosthetics and custom-designed
or -fabricated orthotics, and
is certified by the American
Board for Certification in
Orthotics and Prosthetics, Inc.
or by the Board for Orthotist/
Prosthetist Certification, or
is credentialed and approved by
a program that the Secretary
determines, in consultation
with appropriate experts in
orthotics and prosthetics, has
training and education
standards that are necessary to
provide such prosthetics and
orthotics.
(iv) Qualified supplier defined.--In
this subparagraph, the term ``qualified
supplier'' means any entity that is
accredited by the American Board for
Certification in Orthotics and
Prosthetics, Inc. or by the Board for
Orthotist/Prosthetist Certification, or
accredited and approved by a program
that the Secretary determines has
accreditation and approval standards
that are essentially equivalent to
those of such Board.
(G) Replacement of prosthetic devices and
parts.--
(i) In general.--Payment shall be
made for the replacement of prosthetic
devices which are artificial limbs, or
for the replacement of any part of such
devices, without regard to continuous
use or useful lifetime restrictions if
an ordering physician determines that
the provision of a replacement device,
or a replacement part of such a device,
is necessary because of any of the
following:
(I) A change in the
physiological condition of the
patient.
(II) An irreparable change in
the condition of the device, or
in a part of the device.
(III) The condition of the
device, or the part of the
device, requires repairs and
the cost of such repairs would
be more than 60 percent of the
cost of a replacement device,
or, as the case may be, of the
part being replaced.
(ii) Confirmation may be required if
device or part being replaced is less
than 3 years old.--If a physician
determines that a replacement device,
or a replacement part, is necessary
pursuant to clause (i)--
(I) such determination shall
be controlling; and
(II) such replacement device
or part shall be deemed to be
reasonable and necessary for
purposes of section
1862(a)(1)(A);
except that if the device, or part,
being replaced is less than 3 years old
(calculated from the date on which the
beneficiary began to use the device or
part), the Secretary may also require
confirmation of necessity of the
replacement device or replacement part,
as the case may be.
(H) Application of competitive acquisition to
orthotics, eyeglasses, and contact lenses;
limitation of inherent reasonableness
authority.--In the case of orthotics described
in paragraph (2)(C) of section 1847(a)
furnished on or after January 1, 2009, and of
eyeglasses and contact lenses described in
paragraph (2)(D) of such section, subject to
subsection (a)(1)(G), that are included in a
competitive acquisition program in a
competitive acquisition area under such
section--
(i) the payment basis under this
subsection for such orthotics or such
eyeglasses and contact lenses furnished
in such area shall be the payment basis
determined under such competitive
acquisition program; and
(ii) subject to subsection (a)(1)(G),
the Secretary may use information on
the payment determined under such
competitive acquisition programs to
adjust the payment amount otherwise
recognized under subparagraph (B)(ii)
for an area that is not a competitive
acquisition area under section 1847,
and in the case of such adjustment,
paragraphs (8) and (9) of section
1842(b) shall not be applied.
(2) Purchase price recognized.--For purposes of
paragraph (1), the amount that is recognized under this
paragraph as the purchase price for prosthetic devices,
orthotics, and prosthetics is the amount described in
subparagraph (C) of this paragraph, determined as
follows:
(A) Computation of local purchase price.--
Each carrier under section 1842 shall compute a
base local purchase price for the item as
follows:
(i) The carrier shall compute a base
local purchase price for each item
equal to the average reasonable charge
in the locality for the purchase of the
item for the 12-month period ending
with June 1987.
(ii) The carrier shall compute a
local purchase price, with respect to
the furnishing of each particular
item--
(I) in 1989 and 1990, equal
to the base local purchase
price computed under clause (i)
increased by the percentage
increase in the consumer price
index for all urban consumers
(United States city average)
for the 6-month period ending
with December 1987, or
(II) in 1991, 1992 or 1993,
equal to the local purchase
price computed under this
clause for the previous year
increased by the applicable
percentage increase for the
year.
(B) Computation of regional purchase price.--
With respect to the furnishing of a particular
item in each region (as defined by the
Secretary), the Secretary shall compute a
regional purchase price--
(i) for 1992, equal to the average
(weighted by relative volume of all
claims among carriers) of the local
purchase prices for the carriers in the
region computed under subparagraph
(A)(ii)(II) for the year, and
(ii) for each subsequent year, equal
to the regional purchase price computed
under this subparagraph for the
previous year increased by the
applicable percentage increase for the
year.
(C) Purchase price recognized.--For purposes
of paragraph (1) and subject to subparagraph
(D), the amount that is recognized under this
paragraph as the purchase price for each item
furnished--
(i) in 1989, 1990, or 1991, is 100
percent of the local purchase price
computed under subparagraph (A)(ii);
(ii) in 1992, is the sum of (I) 75
percent of the local purchase price
computed under subparagraph (A)(ii)(II)
for 1992, and (II) 25 percent of the
regional purchase price computed under
subparagraph (B) for 1992;
(iii) in 1993, is the sum of (I) 50
percent of the local purchase price
computed under subparagraph (A)(ii)(II)
for 1993, and (II) 50 percent of the
regional purchase price computed under
subparagraph (B) for 1993; and
(iv) in 1994 or a subsequent year, is
the regional purchase price computed
under subparagraph (B) for that year.
(D) Range on amount recognized.--The amount
that is recognized under subparagraph (C) as
the purchase price for an item furnished--
(i) in 1992, may not exceed 125
percent, and may not be lower than 85
percent, of the average of the purchase
prices recognized under such
subparagraph for all the carrier
service areas in the United States in
that year; and
(ii) in a subsequent year, may not
exceed 120 percent, and may not be
lower than 90 percent, of the average
of the purchase prices recognized under
such subparagraph for all the carrier
service areas in the United States in
that year.
(3) Applicability of certain provisions relating to
durable medical equipment.--Paragraphs (12) and (17)
and subparagraphs (A) and (B) of paragraph (10) and
paragraph (11) of subsection (a) shall apply to
prosthetic devices, orthotics, and prosthetics in the
same manner as such provisions apply to covered items
under such subsection.
(4) Definitions.--In this subsection--
(A) the term ``applicable percentage
increase'' means--
(i) for 1991, 0 percent;
(ii) for 1992 and 1993, the
percentage increase in the consumer
price index for all urban consumers
(United States city average) for the
12-month period ending with June of the
previous year;
(iii) for 1994 and 1995, 0 percent;
(iv) for 1996 and 1997, the
percentage increase in the consumer
price index for all urban consumers
(United States city average) for the
12-month period ending with June of the
previous year;
(v) for each of the years 1998
through 2000, 1 percent;
(vi) for 2001, the percentage
increase in the consumer price index
for all urban consumers (U.S. city
average) for the 12-month period ending
with June 2000;
(vii) for 2002, 1 percent;
(viii) for 2003, the percentage
increase in the consumer price index
for all urban consumers (United States
city average) for the 12-month period
ending with June of the previous year;
(ix) for 2004, 2005, and 2006, 0
percent;
(x) for for each of 2007 through
2010, the percentage increase in the
consumer price index for all urban
consumers (United States city average)
for the 12-month period ending with
June of the previous year; and
(xi) for 2011 and each subsequent
year--
(I) the percentage increase
in the consumer price index for
all urban consumers (United
States city average) for the
12-month period ending with
June of the previous year,
reduced by--
(II) the productivity
adjustment described in section
1886(b)(3)(B)(xi)(II).
(B) the term ``prosthetic devices'' has the
meaning given such term in section 1861(s)(8),
except that such term does not include
parenteral and enteral nutrition nutrients,
supplies, and equipment and does not include an
implantable item for which payment may be made
under section 1833(t); and
(C) the term ``orthotics and prosthetics''
has the meaning given such term in section
1861(s)(9) (and includes shoes described in
section 1861(s)(12)), but does not include
intraocular lenses or medical supplies
(including catheters, catheter supplies, ostomy
bags, and supplies related to ostomy care)
furnished by a home health agency under section
1861(m)(5).
The application of subparagraph (A)(xi)(II) may result
in the applicable percentage increase under
subparagraph (A) being less than 0.0 for a year, and
may result in payment rates under this subsection for a
year being less than such payment rates for the
preceding year.
(5) Documentation created by orthotists and
prosthetists.--For purposes of determining the
reasonableness and medical necessity of orthotics and
prosthetics, documentation created by an orthotist or
prosthetist shall be considered part of the
individual's medical record to support documentation
created by eligible professionals described in section
1848(k)(3)(B).
(6) Payment limitations for eyeglasses and contact
lenses.--
(A) In general.--With respect to eyeglasses
and contact lenses furnished to an individual
on or after January 1, 2022, subject to
subparagraph (B), payment may be made under
this part only--
(i) during a 2-year period, for
either 1 pair of eyeglasses (including
lenses and frames) or a 2-year supply
that is provided in not more than 180-
day increments of contact lenses;
(ii) with respect to amounts
attributable to the frames of such a
pair of eyeglasses and amounts
attributable to contact lenses
furnished during a year, in an amount
not greater than--
(I) for 2022, $100; and
(II) for a subsequent year,
the amount specified under this
subparagraph for the previous
year, increased by the
percentage change in the
consumer price index for all
urban consumers during such
previous year;
(iii) for types of eyeglass lenses,
and for types of contact lenses, as
determined appropriate by the
Secretary;
(iv) if furnished pursuant to a
written order of a physician described
in section 1861(kkk); and
(v) if during the 2-year period
described in clause (i), the individual
did not already receive (as described
in subparagraph (B)) one pair of
conventional eyeglasses or contact
lenses subsequent to a cataract surgery
with insertion of an intraocular lens
furnished during such period.
(B) Exception.--With respect to a 2-year
period described in subparagraph (A)(i), in the
case of an individual who receives cataract
surgery with insertion of an intraocular lens,
notwithstanding subparagraph (A), payment may
be made under this part for one pair of
conventional eyeglasses or contact lenses
furnished subsequent to such cataract surgery
during such period.
(i) Payment for Surgical Dressings.--
(1) In general.--Payment under this subsection for
surgical dressings (described in section 1861(s)(5))
shall be made in a lump sum amount for the purchase of
the item in an amount equal to 80 percent of the lesser
of--
(A) the actual charge for the item; or
(B) a payment amount determined in accordance
with the methodology described in subparagraphs
(B) and (C) of subsection (a)(2) (except that
in applying such methodology, the national
limited payment amount referred to in such
subparagraphs shall be initially computed based
on local payment amounts using average
reasonable charges for the 12-month period
ending December 31, 1992, increased by the
covered item updates described in such
subsection for 1993 and 1994).
(2) Exceptions.--Paragraph (1) shall not apply to
surgical dressings that are--
(A) furnished as an incident to a physician's
professional service; or
(B) furnished by a home health agency.
(j) Requirements for Suppliers of Medical Equipment and
Supplies.--
(1) Issuance and renewal of supplier number.--
(A) Payment.--Except as provided in
subparagraph (C), no payment may be made under
this part after the date of the enactment of
the Social Security Act Amendments of 1994 for
items furnished by a supplier of medical
equipment and supplies unless such supplier
obtains (and renews at such intervals as the
Secretary may require) a supplier number.
(B) Standards for possessing a supplier
number.--A supplier may not obtain a supplier
number unless--
(i) for medical equipment and
supplies furnished on or after the date
of the enactment of the Social Security
Act Amendments of 1994 and before
January 1, 1996, the supplier meets
standards prescribed by the Secretary
in regulations issued on June 18, 1992;
and
(ii) for medical equipment and
supplies furnished on or after January
1, 1996, the supplier meets revised
standards prescribed by the Secretary
(in consultation with representatives
of suppliers of medical equipment and
supplies, carriers, and consumers) that
shall include requirements that the
supplier--
(I) comply with all
applicable State and Federal
licensure and regulatory
requirements;
(II) maintain a physical
facility on an appropriate
site;
(III) have proof of
appropriate liability
insurance; and
(IV) meet such other
requirements as the Secretary
may specify.
(C) Exception for items furnished as incident
to a physician's service.--Subparagraph (A)
shall not apply with respect to medical
equipment and supplies furnished incident to a
physician's service.
(D) Prohibition against multiple supplier
numbers.--The Secretary may not issue more than
one supplier number to any supplier of medical
equipment and supplies unless the issuance of
more than one number is appropriate to identify
subsidiary or regional entities under the
supplier's ownership or control.
(E) Prohibition against delegation of
supplier determinations.--The Secretary may not
delegate (other than by contract under section
1842) the responsibility to determine whether
suppliers meet the standards necessary to
obtain a supplier number.
(2) Certificates of medical necessity.--
(A) Limitation on information provided by
suppliers on certificates of medical
necessity.--
(i) In general.--Effective 60 days
after the date of the enactment of the
Social Security Act Amendments of 1994,
a supplier of medical equipment and
supplies may distribute to physicians,
or to individuals entitled to benefits
under this part, a certificate of
medical necessity for commercial
purposes which contains no more than
the following information completed by
the supplier:
(I) An identification of the
supplier and the beneficiary to
whom such medical equipment and
supplies are furnished.
(II) A description of such
medical equipment and supplies.
(III) Any product code
identifying such medical
equipment and supplies.
(IV) Any other administrative
information (other than
information relating to the
beneficiary's medical
condition) identified by the
Secretary.
(ii) Information on payment amount
and charges.--If a supplier distributes
a certificate of medical necessity
containing any of the information
permitted to be supplied under clause
(i), the supplier shall also list on
the certificate of medical necessity
the fee schedule amount and the
supplier's charge for the medical
equipment or supplies being furnished
prior to distribution of such
certificate to the physician.
(iii) Penalty.--Any supplier of
medical equipment and supplies who
knowingly and willfully distributes a
certificate of medical necessity in
violation of clause (i) or fails to
provide the information required under
clause (ii) is subject to a civil money
penalty in an amount not to exceed
$1,000 for each such certificate of
medical necessity so distributed. The
provisions of section 1128A (other than
subsections (a) and (b)) shall apply to
civil money penalties under this
subparagraph in the same manner as they
apply to a penalty or proceeding under
section 1128A(a).
(B) Definition.--For purposes of this
paragraph, the term ``certificate of medical
necessity'' means a form or other document
containing information required by the carrier
to be submitted to show that an item is
reasonable and necessary for the diagnosis or
treatment of illness or injury or to improve
the functioning of a malformed body member.
(3) Coverage and review criteria.--The Secretary
shall annually review the coverage and utilization of
items of medical equipment and supplies to determine
whether such items should be made subject to coverage
and utilization review criteria, and if appropriate,
shall develop and apply such criteria to such items.
(4) Limitation on patient liability.--If a supplier
of medical equipment and supplies (as defined in
paragraph (5))--
(A) furnishes an item or service to a
beneficiary for which no payment may be made by
reason of paragraph (1);
(B) furnishes an item or service to a
beneficiary for which payment is denied in
advance under subsection (a)(15); or
(C) furnishes an item or service to a
beneficiary for which payment is denied under
section 1862(a)(1);
any expenses incurred for items and services furnished
to an individual by such a supplier not on an assigned
basis shall be the responsibility of such supplier. The
individual shall have no financial responsibility for
such expenses and the supplier shall refund on a timely
basis to the individual (and shall be liable to the
individual for) any amounts collected from the
individual for such items or services. The provisions
of subsection (a)(18) shall apply to refunds required
under the previous sentence in the same manner as such
provisions apply to refunds under such subsection.
(5) Definition.--The term ``medical equipment and
supplies'' means--
(A) durable medical equipment (as defined in
section 1861(n));
(B) prosthetic devices (as described in
section 1861(s)(8));
(C) orthotics and prosthetics (as described
in section 1861(s)(9));
(D) surgical dressings (as described in
section 1861(s)(5));
(E) such other items as the Secretary may
determine; and
(F) for purposes of paragraphs (1) and (3)--
(i) home dialysis supplies and
equipment (as described in section
1861(s)(2)(F)),
(ii) immunosuppressive drugs (as
described in section 1861(s)(2)(J)),
(iii) therapeutic shoes for diabetics
(as described in section 1861(s)(12)),
(iv) oral drugs prescribed for use as
an anticancer therapeutic agent (as
described in section 1861(s)(2)(Q)),
and
(v) self-administered erythropoetin
(as described in section
1861(s)(2)(P)).
(k) Payment for Outpatient Therapy Services and Comprehensive
Outpatient Rehabilitation Services.--
(1) In general.--With respect to services described
in section 1833(a)(8) or 1833(a)(9) for which payment
is determined under this subsection, the payment basis
shall be--
(A) for services furnished during 1998, the
amount determined under paragraph (2); or
(B) for services furnished during a
subsequent year, 80 percent of the lesser of--
(i) the actual charge for the
services, or
(ii) the applicable fee schedule
amount (as defined in paragraph (3))
for the services.
(2) Payment in 1998 based upon adjusted reasonable
costs.--The amount under this paragraph for services is
the lesser of--
(A) the charges imposed for the services, or
(B) the adjusted reasonable costs (as defined
in paragraph (4)) for the services,
less 20 percent of the amount of the charges imposed
for such services.
(3) Applicable fee schedule amount.--In this
subsection, the term ``applicable fee schedule amount''
means, with respect to services furnished in a year,
the amount determined under the fee schedule
established under section 1848 for such services
furnished during the year or, if there is no such fee
schedule established for such services, the amount
determined under the fee schedule established for such
comparable services as the Secretary specifies.
(4) Adjusted reasonable costs.--In paragraph (2), the
term ``adjusted reasonable costs'' means, with respect
to any services, reasonable costs determined for such
services, reduced by 10 percent. The 10-percent
reduction shall not apply to services described in
section 1833(a)(8)(B) (relating to services provided by
hospitals).
(5) Uniform coding.--For claims for services
submitted on or after April 1, 1998, for which the
amount of payment is determined under this subsection,
the claim shall include a code (or codes) under a
uniform coding system specified by the Secretary that
identifies the services furnished.
(6) Restraint on billing.--The provisions of
subparagraphs (A) and (B) of section 1842(b)(18) shall
apply to therapy services for which payment is made
under this subsection in the same manner as they apply
to services provided by a practitioner described in
section 1842(b)(18)(C).
(7) Adjustment in discount for certain multiple
therapy services.--In the case of therapy services
furnished on or after April 1, 2013, and for which
payment is made under this subsection pursuant to the
applicable fee schedule amount (as defined in paragraph
(3)), instead of the 25 percent multiple procedure
payment reduction specified in the final rule published
by the Secretary in the Federal Register on November
29, 2010, the reduction percentage shall be 50 percent.
(l) Establishment of Fee Schedule for Ambulance Services.--
(1) In general.--The Secretary shall establish a fee
schedule for payment for ambulance services whether
provided directly by a supplier or provider or under
arrangement with a provider under this part through a
negotiated rulemaking process described in title 5,
United States Code, and in accordance with the
requirements of this subsection.
(2) Considerations.--In establishing such fee
schedule, the Secretary shall--
(A) establish mechanisms to control increases
in expenditures for ambulance services under
this part;
(B) establish definitions for ambulance
services which link payments to the type of
services provided;
(C) consider appropriate regional and
operational differences;
(D) consider adjustments to payment rates to
account for inflation and other relevant
factors; and
(E) phase in the application of the payment
rates under the fee schedule in an efficient
and fair manner consistent with paragraph (11),
except that such phase-in shall provide for
full payment of any national mileage rate for
ambulance services provided by suppliers that
are paid by carriers in any of the 50 States
where payment by a carrier for such services
for all such suppliers in such State did not,
prior to the implementation of the fee
schedule, include a separate amount for all
mileage within the county from which the
beneficiary is transported.
(3) Savings.--In establishing such fee schedule, the
Secretary shall--
(A) ensure that the aggregate amount of
payments made for ambulance services under this
part during 2000 does not exceed the aggregate
amount of payments which would have been made
for such services under this part during such
year if the amendments made by section 4531(a)
of the Balanced Budget Act of 1997 continued in
effect, except that in making such
determination the Secretary shall assume an
update in such payments for 2002 equal to
percentage increase in the consumer price index
for all urban consumers (U.S. city average) for
the 12-month period ending with June of the
previous year reduced in the case of 2002 by
1.0 percentage points;
(B) set the payment amounts provided under
the fee schedule for services furnished in 2001
and each subsequent year at amounts equal to
the payment amounts under the fee schedule for
services furnished during the previous year,
increased, subject to subparagraph (C) and the
succeeding sentence of this paragraph, by the
percentage increase in the consumer price index
for all urban consumers (U.S. city average) for
the 12-month period ending with June of the
previous year reduced in the case of 2002 by
1.0 percentage points; and
(C) for 2011 and each subsequent year, after
determining the percentage increase under
subparagraph (B) for the year, reduce such
percentage increase by the productivity
adjustment described in section
1886(b)(3)(B)(xi)(II).
The application of subparagraph (C) may result in the
percentage increase under subparagraph (B) being less
than 0.0 for a year, and may result in payment rates
under the fee schedule under this subsection for a year
being less than such payment rates for the preceding
year.
(4) Consultation.--In establishing the fee schedule
for ambulance services under this subsection, the
Secretary shall consult with various national
organizations representing individuals and entities who
furnish and regulate ambulance services and share with
such organizations relevant data in establishing such
schedule.
(5) Limitation on review.--There shall be no
administrative or judicial review under section 1869 or
otherwise of the amounts established under the fee
schedule for ambulance services under this subsection,
including matters described in paragraph (2).
(6) Restraint on billing.--The provisions of
subparagraphs (A) and (B) of section 1842(b)(18) shall
apply to ambulance services for which payment is made
under this subsection in the same manner as they apply
to services provided by a practitioner described in
section 1842(b)(18)(C).
(7) Coding system.--The Secretary may require the
claim for any services for which the amount of payment
is determined under this subsection to include a code
(or codes) under a uniform coding system specified by
the Secretary that identifies the services furnished.
(8) Services furnished by critical access
hospitals.--Notwithstanding any other provision of this
subsection, the Secretary shall pay 101 percent of the
reasonable costs incurred in furnishing ambulance
services if such services are furnished--
(A) by a critical access hospital (as defined
in section 1861(mm)(1)), or
(B) by an entity that is owned and operated
by a critical access hospital,
but only if the critical access hospital or entity is
the only provider or supplier of ambulance services
that is located within a 35-mile drive of such critical
access hospital.
(9) Transitional assistance for rural providers.--In
the case of ground ambulance services furnished on or
after July 1, 2001, and before January 1, 2004, for
which the transportation originates in a rural area (as
defined in section 1886(d)(2)(D)) or in a rural census
tract of a metropolitan statistical area (as determined
under the most recent modification of the Goldsmith
Modification, originally published in the Federal
Register on February 27, 1992 (57 Fed. Reg. 6725)), the
fee schedule established under this subsection shall
provide that, with respect to the payment rate for
mileage for a trip above 17 miles, and up to 50 miles,
the rate otherwise established shall be increased by
not less than \1/2\ of the additional payment per mile
established for the first 17 miles of such a trip
originating in a rural area.
(10) Phase-in providing floor using blend of fee
schedule and regional fee schedules.--In carrying out
the phase-in under paragraph (2)(E) for each level of
ground service furnished in a year, the portion of the
payment amount that is based on the fee schedule shall
be the greater of the amount determined under such fee
schedule (without regard to this paragraph) or the
following blended rate of the fee schedule under
paragraph (1) and of a regional fee schedule for the
region involved:
(A) For 2004 (for services furnished on or
after July 1, 2004), the blended rate shall be
based 20 percent on the fee schedule under
paragraph (1) and 80 percent on the regional
fee schedule.
(B) For 2005, the blended rate shall be based
40 percent on the fee schedule under paragraph
(1) and 60 percent on the regional fee
schedule.
(C) For 2006, the blended rate shall be based
60 percent on the fee schedule under paragraph
(1) and 40 percent on the regional fee
schedule.
(D) For 2007, 2008, and 2009, the blended
rate shall be based 80 percent on the fee
schedule under paragraph (1) and 20 percent on
the regional fee schedule.
(E) For 2010 and each succeeding year, the
blended rate shall be based 100 percent on the
fee schedule under paragraph (1).
For purposes of this paragraph, the Secretary shall
establish a regional fee schedule for each of the nine
census divisions (referred to in section 1886(d)(2))
using the methodology (used in establishing the fee
schedule under paragraph (1)) to calculate a regional
conversion factor and a regional mileage payment rate
and using the same payment adjustments and the same
relative value units as used in the fee schedule under
such paragraph.
(11) Adjustment in payment for certain long trips.--
In the case of ground ambulance services furnished on
or after July 1, 2004, and before January 1, 2009,
regardless of where the transportation originates, the
fee schedule established under this subsection shall
provide that, with respect to the payment rate for
mileage for a trip above 50 miles the per mile rate
otherwise established shall be increased by \1/4\ of
the payment per mile otherwise applicable to miles in
excess of 50 miles in such trip.
(12) Assistance for rural providers furnishing
services in low population density areas.--
(A) In general.--In the case of ground
ambulance services furnished on or after July
1, 2004, and before January 1, 2023, for which
the transportation originates in a qualified
rural area (identified under subparagraph
(B)(iii)), the Secretary shall provide for a
percent increase in the base rate of the fee
schedule for a trip established under this
subsection. In establishing such percent
increase, the Secretary shall estimate the
average cost per trip for such services (not
taking into account mileage) in the lowest
quartile as compared to the average cost per
trip for such services (not taking into account
mileage) in the highest quartile of all rural
county populations.
(B) Identification of qualified rural
areas.--
(i) Determination of population
density in area.--Based upon data from
the United States decennial census for
the year 2000, the Secretary shall
determine, for each rural area, the
population density for that area.
(ii) Ranking of areas.--The Secretary
shall rank each such area based on such
population density.
(iii) Identification of qualified
rural areas.--The Secretary shall
identify those areas (in subparagraph
(A) referred to as ``qualified rural
areas'') with the lowest population
densities that represent, if each such
area were weighted by the population of
such area (as used in computing such
population densities), an aggregate
total of 25 percent of the total of the
population of all such areas.
(iv) Rural area.--For purposes of
this paragraph, the term ``rural area''
has the meaning given such term in
section 1886(d)(2)(D). If feasible, the
Secretary shall treat a rural census
tract of a metropolitan statistical
area (as determined under the most
recent modification of the Goldsmith
Modification, originally published in
the Federal Register on February 27,
1992 (57 Fed. Reg. 6725) as a rural
area for purposes of this paragraph.
(v) Judicial review.--There shall be
no administrative or judicial review
under section 1869, 1878, or otherwise,
respecting the identification of an
area under this subparagraph.
(13) Temporary increase for ground ambulance
services.--
(A) In general.--After computing the rates
with respect to ground ambulance services under
the other applicable provisions of this
subsection, in the case of such services
furnished on or after July 1, 2004, and before
January 1, 2007, and for such services
furnished on or after July 1, 2008, and before
January 1, 2023, for which the transportation
originates in--
(i) a rural area described in
paragraph (9) or in a rural census
tract described in such paragraph, the
fee schedule established under this
section shall provide that the rate for
the service otherwise established,
after the application of any increase
under paragraphs (11) and (12), shall
be increased by 2 percent (or 3 percent
if such service is furnished on or
after July 1, 2008, and before January
1, 2023); and
(ii) an area not described in clause
(i), the fee schedule established under
this subsection shall provide that the
rate for the service otherwise
established, after the application of
any increase under paragraph (11),
shall be increased by 1 percent (or 2
percent if such service is furnished on
or after July 1, 2008, and before
January 1, 2023).
(B) Application of increased payments after
applicable period.--The increased payments
under subparagraph (A) shall not be taken into
account in calculating payments for services
furnished after the applicable period specified
in such subparagraph.
(14) Providing appropriate coverage of rural air
ambulance services.--
(A) In general.--The regulations described in
section 1861(s)(7) shall provide, to the extent
that any ambulance services (whether ground or
air) may be covered under such section, that a
rural air ambulance service (as defined in
subparagraph (C)) is reimbursed under this
subsection at the air ambulance rate if the air
ambulance service--
(i) is reasonable and necessary based
on the health condition of the
individual being transported at or
immediately prior to the time of the
transport; and
(ii) complies with equipment and crew
requirements established by the
Secretary.
(B) Satisfaction of requirement of medically
necessary.--The requirement of subparagraph
(A)(i) is deemed to be met for a rural air
ambulance service if--
(i) subject to subparagraph (D), such
service is requested by a physician or
other qualified medical personnel (as
specified by the Secretary) who
certifies or reasonably determines that
the individual's condition is such that
the time needed to transport the
individual by land or the instability
of transportation by land poses a
threat to the individual's survival or
seriously endangers the individual's
health; or
(ii) such service is furnished
pursuant to a protocol that is
established by a State or regional
emergency medical service (EMS) agency
and recognized or approved by the
Secretary under which the use of an air
ambulance is recommended, if such
agency does not have an ownership
interest in the entity furnishing such
service.
(C) Rural air ambulance service defined.--For
purposes of this paragraph, the term ``rural
air ambulance service'' means fixed wing and
rotary wing air ambulance service in which the
point of pick up of the individual occurs in a
rural area (as defined in section
1886(d)(2)(D)) or in a rural census tract of a
metropolitan statistical area (as determined
under the most recent modification of the
Goldsmith Modification, originally published in
the Federal Register on February 27, 1992 (57
Fed. Reg. 6725)).
(D) Limitation.--
(i) In general.--Subparagraph (B)(i)
shall not apply if there is a financial
or employment relationship between the
person requesting the rural air
ambulance service and the entity
furnishing the ambulance service, or an
entity under common ownership with the
entity furnishing the air ambulance
service, or a financial relationship
between an immediate family member of
such requester and such an entity.
(ii) Exception.--Where a hospital and
the entity furnishing rural air
ambulance services are under common
ownership, clause (i) shall not apply
to remuneration (through employment or
other relationship) by the hospital of
the requester or immediate family
member if the remuneration is for
provider-based physician services
furnished in a hospital (as described
in section 1887) which are reimbursed
under part A and the amount of the
remuneration is unrelated directly or
indirectly to the provision of rural
air ambulance services.
(15) Payment adjustment for non-emergency ambulance
transports for esrd beneficiaries.--The fee schedule
amount otherwise applicable under the preceding
provisions of this subsection shall be reduced by 10
percent for ambulance services furnished during the
period beginning on October 1, 2013, and ending on
September 30, 2018, and by 23 percent for such services
furnished on or after October 1, 2018, consisting of
non-emergency basic life support services involving
transport of an individual with end-stage renal disease
for renal dialysis services (as described in section
1881(b)(14)(B)) furnished other than on an emergency
basis by a provider of services or a renal dialysis
facility.
(16) Prior authorization for repetitive scheduled
non-emergent ambulance transports.--
(A) In general.--Beginning January 1, 2017,
if the expansion to all States of the model of
prior authorization described in paragraph (2)
of section 515(a) of the Medicare Access and
CHIP Reauthorization Act of 2015 meets the
requirements described in paragraphs (1)
through (3) of section 1115A(c), then the
Secretary shall expand such model to all
States.
(B) Funding.--The Secretary shall use funds
made available under section 1893(h)(10) to
carry out this paragraph.
(C) Clarification regarding budget
neutrality.--Nothing in this paragraph may be
construed to limit or modify the application of
section 1115A(b)(3)(B) to models described in
such section, including with respect to the
model described in subparagraph (A) and
expanded beginning on January 1, 2017, under
such subparagraph.
(17) Submission of cost and other information.--
(A) Development of data collection system.--
The Secretary shall develop a data collection
system (which may include use of a cost survey)
to collect cost, revenue, utilization, and
other information determined appropriate by the
Secretary with respect to providers of services
(in this paragraph referred to as
``providers'') and suppliers of ground
ambulance services. Such system shall be
designed to collect information--
(i) needed to evaluate the extent to
which reported costs relate to payment
rates under this subsection;
(ii) on the utilization of capital
equipment and ambulance capacity,
including information consistent with
the type of information described in
section 1121(a); and
(iii) on different types of ground
ambulance services furnished in
different geographic locations,
including rural areas and low
population density areas described in
paragraph (12).
(B) Specification of data collection
system.--
(i) In general.--The Secretary
shall--
(I) not later than December
31, 2019, specify the data
collection system under
subparagraph (A); and
(II) identify the providers
and suppliers of ground
ambulance services that would
be required to submit
information under such data
collection system, including
the representative sample
described in clause (ii).
(ii) Determination of representative
sample.--
(I) In general.--Not later
than December 31, 2019, with
respect to the data collection
for the first year under such
system, and for each subsequent
year through 2024, the
Secretary shall determine a
representative sample to submit
information under the data
collection system.
(II) Requirements.--The
sample under subclause (I)
shall be representative of the
different types of providers
and suppliers of ground
ambulance services (such as
those providers and suppliers
that are part of an emergency
service or part of a government
organization) and the
geographic locations in which
ground ambulance services are
furnished (such as urban,
rural, and low population
density areas).
(III) Limitation.--The
Secretary shall not include an
individual provider or supplier
of ground ambulance services in
the sample under subclause (I)
in 2 consecutive years, to the
extent practicable.
(C) Reporting of cost information.--For each
year, a provider or supplier of ground
ambulance services identified by the Secretary
under subparagraph (B)(i)(II) as being required
to submit information under the data collection
system with respect to a period for the year
shall submit to the Secretary information
specified under the system. Such information
shall be submitted in a form and manner, and at
a time, specified by the Secretary for purposes
of this subparagraph.
(D) Payment reduction for failure to
report.--
(i) In general.--Beginning January 1,
2022, subject to clause (ii), a 10
percent reduction to payments under
this subsection shall be made for the
applicable period (as defined in clause
(ii)) to a provider or supplier of
ground ambulance services that--
(I) is required to submit
information under the data
collection system with respect
to a period under subparagraph
(C); and
(II) does not sufficiently
submit such information, as
determined by the Secretary.
(ii) Applicable period defined.--For
purposes of clause (i), the term
``applicable period'' means, with
respect to a provider or supplier of
ground ambulance services, a year
specified by the Secretary not more
than 2 years after the end of the
period with respect to which the
Secretary has made a determination
under clause (i)(II) that the provider
or supplier of ground ambulance
services failed to sufficiently submit
information under the data collection
system.
(iii) Hardship exemption.--The
Secretary may exempt a provider or
supplier from the payment reduction
under clause (i) with respect to an
applicable period in the event of
significant hardship, such as a natural
disaster, bankruptcy, or other similar
situation that the Secretary determines
interfered with the ability of the
provider or supplier of ground
ambulance services to submit such
information in a timely manner for the
specified period.
(iv) Informal review.--The Secretary
shall establish a process under which a
provider or supplier of ground
ambulance services may seek an informal
review of a determination that the
provider or supplier is subject to the
payment reduction under clause (i).
(E) Ongoing data collection.--
(i) Revision of data collection
system.--The Secretary may, as the
Secretary determines appropriate and,
if available, taking into consideration
the report (or reports) under
subparagraph (F), revise the data
collection system under subparagraph
(A).
(ii) Subsequent data collection.--In
order to continue to evaluate the
extent to which reported costs relate
to payment rates under this subsection
and for other purposes the Secretary
deems appropriate, the Secretary shall
require providers and suppliers of
ground ambulance services to submit
information for years after 2024 as the
Secretary determines appropriate, but
in no case less often than once every 3
years.
(F) Ground ambulance data collection system
study.--
(i) In general.--Not later than March
15, 2023, and as determined necessary
by the Medicare Payment Advisory
Commission thereafter, such Commission
shall assess, and submit to Congress a
report on, information submitted by
providers and suppliers of ground
ambulance services through the data
collection system under subparagraph
(A), the adequacy of payments for
ground ambulance services under this
subsection, and geographic variations
in the cost of furnishing such
services.
(ii) Contents.--A report under clause
(i) shall contain the following:
(I) An analysis of
information submitted through
the data collection system.
(II) An analysis of any
burden on providers and
suppliers of ground ambulance
services associated with the
data collection system.
(III) A recommendation as to
whether information should
continue to be submitted
through such data collection
system or if such system should
be revised under subparagraph
(E)(i).
(IV) Other information
determined appropriate by the
Commission.
(G) Public availability.--The Secretary shall
post information on the results of the data
collection under this paragraph on the Internet
website of the Centers for Medicare & Medicaid
Services, as determined appropriate by the
Secretary.
(H) Implementation.--The Secretary shall
implement this paragraph through notice and
comment rulemaking.
(I) Administration.--Chapter 35 of title 44,
United States Code, shall not apply to the
collection of information required under this
subsection.
(J) Limitations on review.--There shall be no
administrative or judicial review under section
1869, section 1878, or otherwise of the data
collection system or identification of
respondents under this paragraph.
(K) Funding for implementation.--For purposes
of carrying out subparagraph (A), the Secretary
shall provide for the transfer, from the
Federal Supplementary Medical Insurance Trust
Fund under section 1841, of $15,000,000 to the
Centers for Medicare & Medicaid Services
Program Management Account for fiscal year
2018. Amounts transferred under this
subparagraph shall remain available until
expended.
(m) Payment for Telehealth Services.--
(1) In general.--The Secretary shall pay for
telehealth services that are furnished via a
telecommunications system by a physician (as defined in
section 1861(r)) or a practitioner (described in
section 1842(b)(18)(C)) to an eligible telehealth
individual enrolled under this part notwithstanding
that the individual physician or practitioner providing
the telehealth service is not at the same location as
the beneficiary. For purposes of the preceding
sentence, in the case of any Federal telemedicine
demonstration program conducted in Alaska or Hawaii,
the term ``telecommunications system'' includes store-
and-forward technologies that provide for the
asynchronous transmission of health care information in
single or multimedia formats.
(2) Payment amount.--
(A) Distant site.--The Secretary shall pay to
a physician or practitioner located at a
distant site that furnishes a telehealth
service to an eligible telehealth individual an
amount equal to the amount that such physician
or practitioner would have been paid under this
title had such service been furnished without
the use of a telecommunications system.
(B) Facility fee for originating site.--
(i) In general.--Subject to clause
(ii) and paragraph (6)(C), with respect
to a telehealth service, subject to
section 1833(a)(1)(U), there shall be
paid to the originating site a facility
fee equal to--
(I) for the period beginning
on October 1, 2001, and ending
on December 31, 2001, and for
2002, $20; and
(II) for a subsequent year,
the facility fee specified in
subclause (I) or this subclause
for the preceding year
increased by the percentage
increase in the MEI (as defined
in section 1842(i)(3)) for such
subsequent year.
(ii) No facility fee if originating
site is the home.--No facility fee
shall be paid under this subparagraph
to an originating site described in
paragraph (4)(C)(ii)(X).
(C) Telepresenter not required.--Nothing in
this subsection shall be construed as requiring
an eligible telehealth individual to be
presented by a physician or practitioner at the
originating site for the furnishing of a
service via a telecommunications system, unless
it is medically necessary (as determined by the
physician or practitioner at the distant site).
(3) Limitation on beneficiary charges.--
(A) Physician and practitioner.--The
provisions of section 1848(g) and subparagraphs
(A) and (B) of section 1842(b)(18) shall apply
to a physician or practitioner receiving
payment under this subsection in the same
manner as they apply to physicians or
practitioners under such sections.
(B) Originating site.--The provisions of
section 1842(b)(18) shall apply to originating
sites receiving a facility fee in the same
manner as they apply to practitioners under
such section.
(4) Definitions.--For purposes of this subsection:
(A) Distant site.--The term ``distant site''
means the site at which the physician or
practitioner is located at the time the service
is provided via a telecommunications system.
(B) Eligible telehealth individual.--The term
``eligible telehealth individual'' means an
individual enrolled under this part who
receives a telehealth service furnished at an
originating site.
(C) Originating site.--
(i) In general.--Except as provided
in paragraphs (5), (6), and (7), the
term``originating site'' means only
those sites described in clause (ii) at
which the eligible telehealth
individual is located at the time the
service is furnished via a
telecommunications system and only if
such site is located--
(I) in an area that is
designated as a rural health
professional shortage area
under section 332(a)(1)(A) of
the Public Health Service Act
(42 U.S.C. 254e(a)(1)(A));
(II) in a county that is not
included in a Metropolitan
Statistical Area; or
(III) from an entity that
participates in a Federal
telemedicine demonstration
project that has been approved
by (or receives funding from)
the Secretary of Health and
Human Services as of December
31, 2000.
(ii) Sites described.--The sites
referred to in clause (i) are the
following sites:
(I) The office of a physician
or practitioner.
(II) A critical access
hospital (as defined in section
1861(mm)(1)).
(III) A rural health clinic
(as defined in section
1861(aa)(2)).
(IV) A Federally qualified
health center (as defined in
section 1861(aa)(4)).
(V) A hospital (as defined in
section 1861(e)).
(VI) A hospital-based or
critical access hospital-based
renal dialysis center
(including satellites).
(VII) A skilled nursing
facility (as defined in section
1819(a)).
(VIII) A community mental
health center (as defined in
section 1861(ff)(3)(B)).
(IX) A renal dialysis
facility, but only for purposes
of section 1881(b)(3)(B).
(X) The home of an
individual, but only for
purposes of section
1881(b)(3)(B) or telehealth
services described in paragraph
(7).
(D) Physician.--The term ``physician'' has
the meaning given that term in section 1861(r).
(E) Practitioner.--The term ``practitioner''
has the meaning given that term in section
1842(b)(18)(C).
(F) Telehealth service.--
(i) In general.--The term
``telehealth service'' means
professional consultations, office
visits, and office psychiatry services
(identified as of July 1, 2000, by
HCPCS codes 99241-99275, 99201-99215,
90804-90809, and 90862 (and as
subsequently modified by the
Secretary)), and any additional service
specified by the Secretary.
(ii) Yearly update.--The Secretary
shall establish a process that
provides, on an annual basis, for the
addition or deletion of services (and
HCPCS codes), as appropriate, to those
specified in clause (i) for authorized
payment under paragraph (1).
(5) Treatment of home dialysis monthly esrd-related
visit.--The geographic requirements described in
paragraph (4)(C)(i) shall not apply with respect to
telehealth services furnished on or after January 1,
2019, for purposes of section 1881(b)(3)(B), at an
originating site described in subclause (VI), (IX), or
(X) of paragraph (4)(C)(ii).
(6) Treatment of stroke telehealth services.--
(A) Non-application of originating site
requirements.--The requirements described in
paragraph (4)(C) shall not apply with respect
to telehealth services furnished on or after
January 1, 2019, for purposes of diagnosis,
evaluation, or treatment of symptoms of an
acute stroke, as determined by the Secretary.
(B) Inclusion of certain sites.--With respect
to telehealth services described in
subparagraph (A), the term ``originating site''
shall include any hospital (as defined in
section 1861(e)) or critical access hospital
(as defined in section 1861(mm)(1)), any mobile
stroke unit (as defined by the Secretary), or
any other site determined appropriate by the
Secretary, at which the eligible telehealth
individual is located at the time the service
is furnished via a telecommunications system.
(C) No originating site facility fee for new
sites.--No facility fee shall be paid under
paragraph (2)(B) to an originating site with
respect to a telehealth service described in
subparagraph (A) if the originating site does
not otherwise meet the requirements for an
originating site under paragraph (4)(C).
(7) Treatment of substance use disorder services
furnished through telehealth.--The geographic
requirements described in paragraph (4)(C)(i) shall not
apply with respect to telehealth services furnished on
or after July 1, 2019, to an eligible telehealth
individual with a substance use disorder diagnosis for
purposes of treatment of such disorder or co-occurring
mental health disorder, as determined by the Secretary,
at an originating site described in paragraph
(4)(C)(ii) (other than an originating site described in
subclause (IX) of such paragraph).
(n) Authority To Modify or Eliminate Coverage of Certain
Preventive Services.--Notwithstanding any other provision of
this title, effective beginning on January 1, 2010, if the
Secretary determines appropriate, the Secretary may--
(1) modify--
(A) the coverage of any preventive service
described in subparagraph (A) of section
1861(ddd)(3) to the extent that such
modification is consistent with the
recommendations of the United States Preventive
Services Task Force; and
(B) the services included in the initial
preventive physical examination described in
subparagraph (B) of such section; and
(2) provide that no payment shall be made under this
title for a preventive service described in
subparagraph (A) of such section that has not received
a grade of A, B, C, or I by such Task Force.
(o) Development and Implementation of Prospective Payment
System.--
(1) Development.--
(A) In general.--The Secretary shall develop
a prospective payment system for payment for
Federally qualified health center services
furnished by Federally qualified health centers
under this title. Such system shall include a
process for appropriately describing the
services furnished by Federally qualified
health centers and shall establish payment
rates for specific payment codes based on such
appropriate descriptions of services. Such
system shall be established to take into
account the type, intensity, and duration of
services furnished by Federally qualified
health centers. Such system may include
adjustments, including geographic adjustments,
determined appropriate by the Secretary.
(B) Collection of data and evaluation.--By
not later than January 1, 2011, the Secretary
shall require Federally qualified health
centers to submit to the Secretary such
information as the Secretary may require in
order to develop and implement the prospective
payment system under this subsection, including
the reporting of services using HCPCS codes.
(2) Implementation.--
(A) In general.--Notwithstanding section
1833(a)(3)(A), the Secretary shall provide, for
cost reporting periods beginning on or after
October 1, 2014, for payments of prospective
payment rates for Federally qualified health
center services furnished by Federally
qualified health centers under this title in
accordance with the prospective payment system
developed by the Secretary under paragraph (1).
(B) Payments.--
(i) Initial payments.--The Secretary
shall implement such prospective
payment system so that the estimated
aggregate amount of prospective payment
rates (determined prior to the
application of section 1833(a)(1)(Z))
under this title for Federally
qualified health center services in the
first year that such system is
implemented is equal to 100 percent of
the estimated amount of reasonable
costs (determined without the
application of a per visit payment
limit or productivity screen and prior
to the application of section
1866(a)(2)(A)(ii)) that would have
occurred for such services under this
title in such year if the system had
not been implemented.
(ii) Payments in subsequent years.--
Payment rates in years after the year
of implementation of such system shall
be the payment rates in the previous
year increased--
(I) in the first year after
implementation of such system,
by the percentage increase in
the MEI (as defined in section
1842(i)(3)) for the year
involved; and
(II) in subsequent years, by
the percentage increase in a
market basket of Federally
qualified health center goods
and services as promulgated
through regulations, or if such
an index is not available, by
the percentage increase in the
MEI (as defined in section
1842(i)(3)) for the year
involved.
(C) Preparation for pps implementation.--
Notwithstanding any other provision of law, the
Secretary may establish and implement by
program instruction or otherwise the payment
codes to be used under the prospective payment
system under this section.
(3) Additional payments for certain fqhcs with
physicians or other practitioners receiving data 2000
waivers.--
(A) In general.--In the case of a Federally
qualified health center with respect to which,
beginning on or after January 1, 2019,
Federally qualified health center services (as
defined in section 1861(aa)(3)) are furnished
for the treatment of opioid use disorder by a
physician or practitioner who meets the
requirements described in subparagraph (C), the
Secretary shall, subject to availability of
funds under subparagraph (D), make a payment
(at such time and in such manner as specified
by the Secretary) to such Federally qualified
health center after receiving and approving an
application submitted by such Federally
qualified health center under subparagraph (B).
Such a payment shall be in an amount determined
by the Secretary, based on an estimate of the
average costs of training for purposes of
receiving a waiver described in subparagraph
(C)(ii). Such a payment may be made only one
time with respect to each such physician or
practitioner.
(B) Application.--In order to receive a
payment described in subparagraph (A), a
Federally qualified health center shall submit
to the Secretary an application for such a
payment at such time, in such manner, and
containing such information as specified by the
Secretary. A Federally qualified health center
may apply for such a payment for each physician
or practitioner described in subparagraph (A)
furnishing services described in such
subparagraph at such center.
(C) Requirements.--For purposes of
subparagraph (A), the requirements described in
this subparagraph, with respect to a physician
or practitioner, are the following:
(i) The physician or practitioner is
employed by or working under contract
with a Federally qualified health
center described in subparagraph (A)
that submits an application under
subparagraph (B).
(ii) The physician or practitioner
first receives a waiver under section
303(g) of the Controlled Substances Act
on or after January 1, 2019.
(D) Funding.--For purposes of making payments
under this paragraph, there are appropriated,
out of amounts in the Treasury not otherwise
appropriated, $6,000,000, which shall remain
available until expended.
(p) Quality Incentives To Promote Patient Safety and Public
Health in Computed Tomography.--
(1) Quality incentives.--In the case of an applicable
computed tomography service (as defined in paragraph
(2)) for which payment is made under an applicable
payment system (as defined in paragraph (3)) and that
is furnished on or after January 1, 2016, using
equipment that is not consistent with the CT equipment
standard (described in paragraph (4)), the payment
amount for such service shall be reduced by the
applicable percentage (as defined in paragraph (5)).
(2) Applicable computed tomography services
defined.--In this subsection, the term ``applicable
computed tomography service'' means a service billed
using diagnostic radiological imaging codes for
computed tomography (identified as of January 1, 2014,
by HCPCS codes 70450-70498, 71250-71275, 72125-72133,
72191-72194, 73200-73206, 73700-73706, 74150-74178,
74261-74263, and 75571-75574 (and any succeeding
codes).
(3) Applicable payment system defined.--In this
subsection, the term ``applicable payment system''
means the following:
(A) The technical component and the technical
component of the global fee under the fee
schedule established under section 1848(b).
(B) The prospective payment system for
hospital outpatient department services under
section 1833(t).
(4) Consistency with ct equipment standard.--In this
subsection, the term ``not consistent with the CT
equipment standard'' means, with respect to an
applicable computed tomography service, that the
service was furnished using equipment that does not
meet each of the attributes of the National Electrical
Manufacturers Association (NEMA) Standard XR-29-2013,
entitled ``Standard Attributes on CT Equipment Related
to Dose Optimization and Management''. Through
rulemaking, the Secretary may apply successor
standards.
(5) Applicable percentage defined.--In this
subsection, the term ``applicable percentage'' means--
(A) for 2016, 5 percent; and
(B) for 2017 and subsequent years, 15
percent.
(6) Implementation.--
(A) Information.--The Secretary shall require
that information be provided and attested to by
a supplier and a hospital outpatient department
that indicates whether an applicable computed
tomography service was furnished that was not
consistent with the CT equipment standard
(described in paragraph (4)). Such information
may be included on a claim and may be a
modifier. Such information shall be verified,
as appropriate, as part of the periodic
accreditation of suppliers under section
1834(e) and hospitals under section 1865(a).
(B) Administration.--Chapter 35 of title 44,
United States Code, shall not apply to
information described in subparagraph (A).
(q) Recognizing Appropriate Use Criteria for Certain Imaging
Services.--
(1) Program established.--
(A) In general.--The Secretary shall
establish a program to promote the use of
appropriate use criteria (as defined in
subparagraph (B)) for applicable imaging
services (as defined in subparagraph (C))
furnished in an applicable setting (as defined
in subparagraph (D)) by ordering professionals
and furnishing professionals (as defined in
subparagraphs (E) and (F), respectively).
(B) Appropriate use criteria defined.--In
this subsection, the term ``appropriate use
criteria'' means criteria, only developed or
endorsed by national professional medical
specialty societies or other provider-led
entities, to assist ordering professionals and
furnishing professionals in making the most
appropriate treatment decision for a specific
clinical condition for an individual. To the
extent feasible, such criteria shall be
evidence-based.
(C) Applicable imaging service defined.--In
this subsection, the term ``applicable imaging
service'' means an advanced diagnostic imaging
service (as defined in subsection (e)(1)(B))
for which the Secretary determines--
(i) one or more applicable
appropriate use criteria specified
under paragraph (2) apply;
(ii) there are one or more qualified
clinical decision support mechanisms
listed under paragraph (3)(C); and
(iii) one or more of such mechanisms
is available free of charge.
(D) Applicable setting defined.--In this
subsection, the term ``applicable setting''
means a physician's office, a hospital
outpatient department (including an emergency
department), an ambulatory surgical center, and
any other provider-led outpatient setting
determined appropriate by the Secretary.
(E) Ordering professional defined.--In this
subsection, the term ``ordering professional''
means a physician (as defined in section
1861(r)) or a practitioner described in section
1842(b)(18)(C) who orders an applicable imaging
service.
(F) Furnishing professional defined.--In this
subsection, the term ``furnishing
professional'' means a physician (as defined in
section 1861(r)) or a practitioner described in
section 1842(b)(18)(C) who furnishes an
applicable imaging service.
(2) Establishment of applicable appropriate use
criteria.--
(A) In general.--Not later than November 15,
2015, the Secretary shall through rulemaking,
and in consultation with physicians,
practitioners, and other stakeholders, specify
applicable appropriate use criteria for
applicable imaging services only from among
appropriate use criteria developed or endorsed
by national professional medical specialty
societies or other provider-led entities.
(B) Considerations.--In specifying applicable
appropriate use criteria under subparagraph
(A), the Secretary shall take into account
whether the criteria--
(i) have stakeholder consensus;
(ii) are scientifically valid and
evidence based; and
(iii) are based on studies that are
published and reviewable by
stakeholders.
(C) Revisions.--The Secretary shall review,
on an annual basis, the specified applicable
appropriate use criteria to determine if there
is a need to update or revise (as appropriate)
such specification of applicable appropriate
use criteria and make such updates or revisions
through rulemaking.
(D) Treatment of multiple applicable
appropriate use criteria.--In the case where
the Secretary determines that more than one
appropriate use criterion applies with respect
to an applicable imaging service, the Secretary
shall apply one or more applicable appropriate
use criteria under this paragraph for the
service.
(3) Mechanisms for consultation with applicable
appropriate use criteria.--
(A) Identification of mechanisms to consult
with applicable appropriate use criteria.--
(i) In general.--The Secretary shall
specify qualified clinical decision
support mechanisms that could be used
by ordering professionals to consult
with applicable appropriate use
criteria for applicable imaging
services.
(ii) Consultation.--The Secretary
shall consult with physicians,
practitioners, health care technology
experts, and other stakeholders in
specifying mechanisms under this
paragraph.
(iii) Inclusion of certain
mechanisms.--Mechanisms specified under
this paragraph may include any or all
of the following that meet the
requirements described in subparagraph
(B)(ii):
(I) Use of clinical decision
support modules in certified
EHR technology (as defined in
section 1848(o)(4)).
(II) Use of private sector
clinical decision support
mechanisms that are independent
from certified EHR technology,
which may include use of
clinical decision support
mechanisms available from
medical specialty
organizations.
(III) Use of a clinical
decision support mechanism
established by the Secretary.
(B) Qualified clinical decision support
mechanisms.--
(i) In general.--For purposes of this
subsection, a qualified clinical
decision support mechanism is a
mechanism that the Secretary determines
meets the requirements described in
clause (ii).
(ii) Requirements.--The requirements
described in this clause are the
following:
(I) The mechanism makes
available to the ordering
professional applicable
appropriate use criteria
specified under paragraph (2)
and the supporting
documentation for the
applicable imaging service
ordered.
(II) In the case where there
is more than one applicable
appropriate use criterion
specified under such paragraph
for an applicable imaging
service, the mechanism
indicates the criteria that it
uses for the service.
(III) The mechanism
determines the extent to which
an applicable imaging service
ordered is consistent with the
applicable appropriate use
criteria so specified.
(IV) The mechanism generates
and provides to the ordering
professional a certification or
documentation that documents
that the qualified clinical
decision support mechanism was
consulted by the ordering
professional.
(V) The mechanism is updated
on a timely basis to reflect
revisions to the specification
of applicable appropriate use
criteria under such paragraph.
(VI) The mechanism meets
privacy and security standards
under applicable provisions of
law.
(VII) The mechanism performs
such other functions as
specified by the Secretary,
which may include a requirement
to provide aggregate feedback
to the ordering professional.
(C) List of mechanisms for consultation with
applicable appropriate use criteria.--
(i) Initial list.--Not later than
April 1, 2016, the Secretary shall
publish a list of mechanisms specified
under this paragraph.
(ii) Periodic updating of list.--The
Secretary shall identify on an annual
basis the list of qualified clinical
decision support mechanisms specified
under this paragraph.
(4) Consultation with applicable appropriate use
criteria.--
(A) Consultation by ordering professional.--
Beginning with January 1, 2017, subject to
subparagraph (C), with respect to an applicable
imaging service ordered by an ordering
professional that would be furnished in an
applicable setting and paid for under an
applicable payment system (as defined in
subparagraph (D)), an ordering professional
shall--
(i) consult with a qualified decision
support mechanism listed under
paragraph (3)(C); and
(ii) provide to the furnishing
professional the information described
in clauses (i) through (iii) of
subparagraph (B).
(B) Reporting by furnishing professional.--
Beginning with January 1, 2017, subject to
subparagraph (C), with respect to an applicable
imaging service furnished in an applicable
setting and paid for under an applicable
payment system (as defined in subparagraph
(D)), payment for such service may only be made
if the claim for the service includes the
following:
(i) Information about which qualified
clinical decision support mechanism was
consulted by the ordering professional
for the service.
(ii) Information regarding--
(I) whether the service
ordered would adhere to the
applicable appropriate use
criteria specified under
paragraph (2);
(II) whether the service
ordered would not adhere to
such criteria; or
(III) whether such criteria
was not applicable to the
service ordered.
(iii) The national provider
identifier of the ordering professional
(if different from the furnishing
professional).
(C) Exceptions.--The provisions of
subparagraphs (A) and (B) and paragraph (6)(A)
shall not apply to the following:
(i) Emergency services.--An
applicable imaging service ordered for
an individual with an emergency medical
condition (as defined in section
1867(e)(1)).
(ii) Inpatient services.--An
applicable imaging service ordered for
an inpatient and for which payment is
made under part A.
(iii) Significant hardship.--An
applicable imaging service ordered by
an ordering professional who the
Secretary may, on a case-by-case basis,
exempt from the application of such
provisions if the Secretary determines,
subject to annual renewal, that
consultation with applicable
appropriate use criteria would result
in a significant hardship, such as in
the case of a professional who
practices in a rural area without
sufficient Internet access.
(D) Applicable payment system defined.--In
this subsection, the term ``applicable payment
system'' means the following:
(i) The physician fee schedule
established under section 1848(b).
(ii) The prospective payment system
for hospital outpatient department
services under section 1833(t).
(iii) The ambulatory surgical center
payment systems under section 1833(i).
(5) Identification of outlier ordering
professionals.--
(A) In general.--With respect to applicable
imaging services furnished beginning with 2017,
the Secretary shall determine, on an annual
basis, no more than five percent of the total
number of ordering professionals who are
outlier ordering professionals.
(B) Outlier ordering professionals.--The
determination of an outlier ordering
professional shall--
(i) be based on low adherence to
applicable appropriate use criteria
specified under paragraph (2), which
may be based on comparison to other
ordering professionals; and
(ii) include data for ordering
professionals for whom prior
authorization under paragraph (6)(A)
applies.
(C) Use of two years of data.--The Secretary
shall use two years of data to identify outlier
ordering professionals under this paragraph.
(D) Process.--The Secretary shall establish a
process for determining when an outlier
ordering professional is no longer an outlier
ordering professional.
(E) Consultation with stakeholders.--The
Secretary shall consult with physicians,
practitioners and other stakeholders in
developing methods to identify outlier ordering
professionals under this paragraph.
(6) Prior authorization for ordering professionals
who are outliers.--
(A) In general.--Beginning January 1, 2020,
subject to paragraph (4)(C), with respect to
services furnished during a year, the Secretary
shall, for a period determined appropriate by
the Secretary, apply prior authorization for
applicable imaging services that are ordered by
an outlier ordering professional identified
under paragraph (5).
(B) Appropriate use criteria in prior
authorization.--In applying prior authorization
under subparagraph (A), the Secretary shall
utilize only the applicable appropriate use
criteria specified under this subsection.
(C) Funding.--For purposes of carrying out
this paragraph, the Secretary shall provide for
the transfer, from the Federal Supplementary
Medical Insurance Trust Fund under section
1841, of $5,000,000 to the Centers for Medicare
& Medicaid Services Program Management Account
for each of fiscal years 2019 through 2021.
Amounts transferred under the preceding
sentence shall remain available until expended.
(7) Construction.--Nothing in this subsection shall
be construed as granting the Secretary the authority to
develop or initiate the development of clinical
practice guidelines or appropriate use criteria.
(r) Payment for Renal Dialysis Services for Individuals With
Acute Kidney Injury.--
(1) Payment rate.--In the case of renal dialysis
services (as defined in subparagraph (B) of section
1881(b)(14)) furnished under this part by a renal
dialysis facility or provider of services paid under
such section during a year (beginning with 2017) to an
individual with acute kidney injury (as defined in
paragraph (2)), the amount of payment under this part
for such services shall be the base rate for renal
dialysis services determined for such year under such
section, as adjusted by any applicable geographic
adjustment factor applied under subparagraph
(D)(iv)(II) of such section and may be adjusted by the
Secretary (on a budget neutral basis for payments under
this paragraph) by any other adjustment factor under
subparagraph (D) of such section.
(2) Individual with acute kidney injury defined.--In
this subsection, the term ``individual with acute
kidney injury'' means an individual who has acute loss
of renal function and does not receive renal dialysis
services for which payment is made under section
1881(b)(14).
(s) Payment for Applicable Disposable Devices.--
(1) Separate payment.--The Secretary shall make a
payment (separate from the payments otherwise made
under section 1895) in the amount established under
paragraph (3) to a home health agency for an applicable
disposable device (as defined in paragraph (2)) when
furnished on or after January 1, 2017, to an individual
who receives home health services for which payment is
made under section 1895(b).
(2) Applicable disposable device.--In this
subsection, the term applicable disposable device means
a disposable device that, as determined by the
Secretary, is--
(A) a disposable negative pressure wound
therapy device that is an integrated system
comprised of a non-manual vacuum pump, a
receptacle for collecting exudate, and
dressings for the purposes of wound therapy;
and
(B) a substitute for, and used in lieu of, a
negative pressure wound therapy durable medical
equipment item that is an integrated system of
a negative pressure vacuum pump, a separate
exudate collection canister, and dressings that
would otherwise be covered for individuals for
such wound therapy.
(3) Payment amount.--The separate payment amount
established under this paragraph for an applicable
disposable device for a year shall be equal to the
amount of the payment that would be made under section
1833(t) (relating to payment for covered OPD services)
for the year for the Level I Healthcare Common
Procedure Coding System (HCPCS) code for which the
description for a professional service includes the
furnishing of such device.
(t) Site-of-Service Price Transparency.--
(1) In general.--In order to facilitate price
transparency with respect to items and services for
which payment may be made either to a hospital
outpatient department or to an ambulatory surgical
center under this title, the Secretary shall, for 2018
and each year thereafter, make available to the public
via a searchable Internet website, with respect to an
appropriate number of such items and services--
(A) the estimated payment amount for the item
or service under the outpatient department fee
schedule under subsection (t) of section 1833
and the ambulatory surgical center payment
system under subsection (i) of such section;
and
(B) the estimated amount of beneficiary
liability applicable to the item or service.
(2) Calculation of estimated beneficiary liability.--
For purposes of paragraph (1)(B), the estimated amount
of beneficiary liability, with respect to an item or
service, is the amount for such item or service for
which an individual who does not have coverage under a
Medicare supplemental policy certified under section
1882 or any other supplemental insurance coverage is
responsible.
(3) Implementation.--In carrying out this subsection,
the Secretary--
(A) shall include in the notice described in
section 1804(a) a notification of the
availability of the estimated amounts made
available under paragraph (1); and
(B) may utilize mechanisms in existence on
the date of enactment of this subsection, such
as the portion of the Internet website of the
Centers for Medicare & Medicaid Services on
which information comparing physician
performance is posted (commonly referred to as
the Physician Compare Internet website), to
make available such estimated amounts under
such paragraph.
(4) Funding.--For purposes of implementing this
subsection, the Secretary shall provide for the
transfer, from the Federal Supplementary Medical
Insurance Trust Fund under section 1841 to the Centers
for Medicare & Medicaid Services Program Management
Account, of $6,000,000 for fiscal year 2017, to remain
available until expended.
(u) Payment and Related Requirements for Home Infusion
Therapy.--
(1) Payment.--
(A) Single payment.--
(i) In general.--Subject to clause
(iii) and subparagraphs (B) and (C),
the Secretary shall implement a payment
system under which a single payment is
made under this title to a qualified
home infusion therapy supplier for
items and services described in
subparagraphs (A) and (B) of section
1861(iii)(2)) furnished by a qualified
home infusion therapy supplier (as
defined in section 1861(iii)(3)(D)) in
coordination with the furnishing of
home infusion drugs (as defined in
section 1861(iii)(3)(C)) under this
part.
(ii) Unit of single payment.--A unit
of single payment under the payment
system implemented under this
subparagraph is for each infusion drug
administration calendar day in the
individual's home. The Secretary shall,
as appropriate, establish single
payment amounts for types of infusion
therapy, including to take into account
variation in utilization of nursing
services by therapy type.
(iii) Limitation.--The single payment
amount determined under this
subparagraph after application of
subparagraph (B) and paragraph (3)
shall not exceed the amount determined
under the fee schedule under section
1848 for infusion therapy services
furnished in a calendar day if
furnished in a physician office
setting, except such single payment
shall not reflect more than 5 hours of
infusion for a particular therapy in a
calendar day.
(B) Required adjustments.--The Secretary
shall adjust the single payment amount
determined under subparagraph (A) for home
infusion therapy services under section
1861(iii)(1) to reflect other factors such as--
(i) a geographic wage index and other
costs that may vary by region; and
(ii) patient acuity and complexity of
drug administration.
(C) Discretionary adjustments.--
(i) In general.--Subject to clause
(ii), the Secretary may adjust the
single payment amount determined under
subparagraph (A) (after application of
subparagraph (B)) to reflect outlier
situations and other factors as the
Secretary determines appropriate.
(ii) Requirement of budget
neutrality.--Any adjustment under this
subparagraph shall be made in a budget
neutral manner.
(2) Considerations.--In developing the payment system
under this subsection, the Secretary may consider the
costs of furnishing infusion therapy in the home,
consult with home infusion therapy suppliers, consider
payment amounts for similar items and services under
this part and part A, and consider payment amounts
established by Medicare Advantage plans under part C
and in the private insurance market for home infusion
therapy (including average per treatment day payment
amounts by type of home infusion therapy).
(3) Annual updates.--
(A) In general.--Subject to subparagraph (B),
the Secretary shall update the single payment
amount under this subsection from year to year
beginning in 2022 by increasing the single
payment amount from the prior year by the
percentage increase in the Consumer Price Index
for all urban consumers (United States city
average) for the 12-month period ending with
June of the preceding year.
(B) Adjustment.--For each year, the Secretary
shall reduce the percentage increase described
in subparagraph (A) by the productivity
adjustment described in section
1886(b)(3)(B)(xi)(II). The application of the
preceding sentence may result in a percentage
being less than 0.0 for a year, and may result
in payment being less than such payment rates
for the preceding year.
(4) Authority to apply prior authorization.--The
Secretary may, as determined appropriate by the
Secretary, apply prior authorization for home infusion
therapy services under section 1861(iii)(1).
(5) Accreditation of qualified home infusion therapy
suppliers.--
(A) Factors for designation of accreditation
organizations.--The Secretary shall consider
the following factors in designating
accreditation organizations under subparagraph
(B) and in reviewing and modifying the list of
accreditation organizations designated pursuant
to subparagraph (C):
(i) The ability of the organization
to conduct timely reviews of
accreditation applications.
(ii) The ability of the organization
to take into account the capacities of
suppliers located in a rural area (as
defined in section 1886(d)(2)(D)).
(iii) Whether the organization has
established reasonable fees to be
charged to suppliers applying for
accreditation.
(iv) Such other factors as the
Secretary determines appropriate.
(B) Designation.--Not later than January 1,
2021, the Secretary shall designate
organizations to accredit suppliers furnishing
home infusion therapy. The list of
accreditation organizations so designated may
be modified pursuant to subparagraph (C).
(C) Review and modification of list of
accreditation organizations.--
(i) In general.--The Secretary shall
review the list of accreditation
organizations designated under
subparagraph (B) taking into account
the factors under subparagraph (A).
Taking into account the results of such
review, the Secretary may, by
regulation, modify the list of
accreditation organizations designated
under subparagraph (B).
(ii) Special rule for accreditations
done prior to removal from list of
designated accreditation
organizations.--In the case where the
Secretary removes an organization from
the list of accreditation organizations
designated under subparagraph (B), any
supplier that is accredited by the
organization during the period
beginning on the date on which the
organization is designated as an
accreditation organization under
subparagraph (B) and ending on the date
on which the organization is removed
from such list shall be considered to
have been accredited by an organization
designated by the Secretary under
subparagraph (B) for the remaining
period such accreditation is in effect.
(D) Rule for accreditations made prior to
designation.--In the case of a supplier that is
accredited before January 1, 2021, by an
accreditation organization designated by the
Secretary under subparagraph (B) as of January
1, 2019, such supplier shall be considered to
have been accredited by an organization
designated by the Secretary under such
paragraph as of January 1, 2023, for the
remaining period such accreditation is in
effect.
(6) Notification of infusion therapy options
available prior to furnishing home infusion therapy.--
Prior to the furnishing of home infusion therapy to an
individual, the physician who establishes the plan
described in section 1861(iii)(1) for the individual
shall provide notification (in a form, manner, and
frequency determined appropriate by the Secretary) of
the options available (such as home, physician's
office, hospital outpatient department) for the
furnishing of infusion therapy under this part.
(7) Home infusion therapy services temporary
transitional payment.--
(A) Temporary transitional payment.--
(i) In general.--The Secretary shall,
in accordance with the payment
methodology described in subparagraph
(B) and subject to the provisions of
this paragraph, provide a home infusion
therapy services temporary transitional
payment under this part to an eligible
home infusion supplier (as defined in
subparagraph (F)) for items and
services described in subparagraphs (A)
and (B) of section 1861(iii)(2))
furnished during the period specified
in clause (ii) by such supplier in
coordination with the furnishing of
transitional home infusion drugs (as
defined in clause (iii)).
(ii) Period specified.--For purposes
of clause (i), the period specified in
this clause is the period beginning on
January 1, 2019, and ending on the day
before the date of the implementation
of the payment system under paragraph
(1)(A).
(iii) Transitional home infusion drug
defined.--For purposes of this
paragraph, the term ``transitional home
infusion drug'' has the meaning given
to the term ``home infusion drug''
under section 1861(iii)(3)(C)), except
that clause (ii) of such section shall
not apply if a drug described in such
clause is identified in clauses (i),
(ii), (iii) or (iv) of subparagraph (C)
as of the date of the enactment of this
paragraph.
(B) Payment methodology.--For purposes of
this paragraph, the Secretary shall establish a
payment methodology, with respect to items and
services described in subparagraph (A)(i).
Under such payment methodology the Secretary
shall--
(i) create the three payment
categories described in clauses (i),
(ii), and (iii) of subparagraph (C);
(ii) assign drugs to such categories,
in accordance with such clauses;
(iii) assign appropriate Healthcare
Common Procedure Coding System (HCPCS)
codes to each payment category; and
(iv) establish a single payment
amount for each such payment category,
in accordance with subparagraph (D),
for each infusion drug administration
calendar day in the individual's home
for drugs assigned to such category.
(C) Payment categories.--
(i) Payment category 1.--The
Secretary shall create a payment
category 1 and assign to such category
drugs which are covered under the Local
Coverage Determination on External
Infusion Pumps (LCD number L33794) and
billed with the following HCPCS codes
(as identified as of January 1, 2018,
and as subsequently modified by the
Secretary): J0133, J0285, J0287, J0288,
J0289, J0895, J1170, J1250, J1265,
J1325, J1455, J1457, J1570, J2175,
J2260, J2270, J2274, J2278, J3010, or
J3285.
(ii) Payment category 2.--The
Secretary shall create a payment
category 2 and assign to such category
drugs which are covered under such
local coverage determination and billed
with the following HCPCS codes (as
identified as of January 1, 2018, and
as subsequently modified by the
Secretary): J1555 JB, J1559 JB, J1561
JB, J1562 JB, J1569 JB, or J1575 JB.
(iii) Payment category 3.--The
Secretary shall create a payment
category 3 and assign to such category
drugs which are covered under such
local coverage determination and billed
with the following HCPCS codes (as
identified as of January 1, 2018, and
as subsequently modified by the
Secretary): J9000, J9039, J9040, J9065,
J9100, J9190, J9200, J9360, or J9370.
(iv) Infusion drugs not otherwise
included.--With respect to drugs that
are not included in payment category 1,
2, or 3 under clause (i), (ii), or
(iii), respectively, the Secretary
shall assign to the most appropriate of
such categories, as determined by the
Secretary, drugs which are--
(I) covered under such local
coverage determination and
billed under HCPCS codes J7799
or J7999 (as identified as of
July 1, 2017, and as
subsequently modified by the
Secretary); or
(II) billed under any code
that is implemented after the
date of the enactment of this
paragraph and included in such
local coverage determination or
included in subregulatory
guidance as a home infusion
drug described in subparagraph
(A)(i).
(D) Payment amounts.--
(i) In general.--Under the payment
methodology, the Secretary shall pay
eligible home infusion suppliers, with
respect to items and services described
in subparagraph (A)(i) furnished during
the period described in subparagraph
(A)(ii) by such supplier to an
individual, at amounts equal to the
amounts determined under the physician
fee schedule established under section
1848 for services furnished during the
year for codes and units of such codes
described in clauses (ii), (iii), and
(iv) with respect to drugs included in
the payment category under subparagraph
(C) specified in the respective clause,
determined without application of the
geographic adjustment under subsection
(e) of such section.
(ii) Payment amount for category 1.--
For purposes of clause (i), the codes
and units described in this clause,
with respect to drugs included in
payment category 1 described in
subparagraph (C)(i), are one unit of
HCPCS code 96365 plus three units of
HCPCS code 96366 (as identified as of
January 1, 2018, and as subsequently
modified by the Secretary).
(iii) Payment amount for category
2.--For purposes of clause (i), the
codes and units described in this
clause, with respect to drugs included
in payment category 2 described in
subparagraph (C)(i), are one unit of
HCPCS code 96369 plus three units of
HCPCS code 96370 (as identified as of
January 1, 2018, and as subsequently
modified by the Secretary).
(iv) Payment amount for category 3.--
For purposes of clause (i), the codes
and units described in this clause,
with respect to drugs included in
payment category 3 described in
subparagraph (C)(i), are one unit of
HCPCS code 96413 plus three units of
HCPCS code 96415 (as identified as of
January 1, 2018, and as subsequently
modified by the Secretary).
(E) Clarifications.--
(i) Infusion drug administration
day.--For purposes of this subsection,
with respect to the furnishing of
transitional home infusion drugs or
home infusion drugs to an individual by
an eligible home infusion supplier or a
qualified home infusion therapy
supplier, a reference to payment to
such supplier for an infusion drug
administration calendar day in the
individual's home shall refer to
payment only for the date on which
professional services (as described in
section 1861(iii)(2)(A)) were furnished
to administer such drugs to such
individual. For purposes of the
previous sentence, an infusion drug
administration calendar day shall
include all such drugs administered to
such individual on such day.
(ii) Treatment of multiple drugs
administered on same infusion drug
administration day.--In the case that
an eligible home infusion supplier,
with respect to an infusion drug
administration calendar day in an
individual's home, furnishes to such
individual transitional home infusion
drugs which are not all assigned to the
same payment category under
subparagraph (C), payment to such
supplier for such infusion drug
administration calendar day in the
individual's home shall be a single
payment equal to the amount of payment
under this paragraph for the drug,
among all such drugs so furnished to
such individual during such calendar
day, for which the highest payment
would be made under this paragraph.
(F) Eligible home infusion suppliers.--In
this paragraph, the term ``eligible home
infusion supplier'' means a supplier that is
enrolled under this part as a pharmacy that
provides external infusion pumps and external
infusion pump supplies and that maintains all
pharmacy licensure requirements in the State in
which the applicable infusion drugs are
administered.
(G) Implementation.--Notwithstanding any
other provision of law, the Secretary may
implement this paragraph by program instruction
or otherwise.
(v) Payment for Outpatient Physical Therapy Services and
Outpatient Occupational Therapy Services Furnished by a Therapy
Assistant.--
(1) In general.--In the case of an outpatient
physical therapy service or outpatient occupational
therapy service furnished on or after January 1, 2022,
for which payment is made under section 1848 or
subsection (k), that is furnished in whole or in part
by a therapy assistant (as defined by the Secretary),
the amount of payment for such service shall be an
amount equal to 85 percent of the amount of payment
otherwise applicable for the service under this part.
Nothing in the preceding sentence shall be construed to
change applicable requirements with respect to such
services.
(2) Use of modifier.--
(A) Establishment.--Not later than January 1,
2019, the Secretary shall establish a modifier
to indicate (in a form and manner specified by
the Secretary), in the case of an outpatient
physical therapy service or outpatient
occupational therapy service furnished in whole
or in part by a therapy assistant (as so
defined), that the service was furnished by a
therapy assistant.
(B) Required use.--Each request for payment,
or bill submitted, for an outpatient physical
therapy service or outpatient occupational
therapy service furnished in whole or in part
by a therapy assistant (as so defined) on or
after January 1, 2020, shall include the
modifier established under subparagraph (A) for
each such service.
(3) Implementation.--The Secretary shall implement
this subsection through notice and comment rulemaking.
(w) Opioid Use Disorder Treatment Services.--
(1) In general.--The Secretary shall pay to an opioid
treatment program (as defined in paragraph (2) of
section 1861(jjj)) an amount that is equal to 100
percent of a bundled payment under this part for opioid
use disorder treatment services (as defined in
paragraph (1) of such section) that are furnished by
such program to an individual during an episode of care
(as defined by the Secretary) beginning on or after
January 1, 2020. The Secretary shall ensure, as
determined appropriate by the Secretary, that no
duplicative payments are made under this part or part D
for items and services furnished by an opioid treatment
program.
(2) Considerations.--The Secretary may implement this
subsection through one or more bundles based on the
type of medication provided (such as buprenorphine,
methadone, naltrexone, or a new innovative drug), the
frequency of services, the scope of services furnished,
characteristics of the individuals furnished such
services, or other factors as the Secretary determine
appropriate. In developing such bundles, the Secretary
may consider payment rates paid to opioid treatment
programs for comparable services under State plans
under title XIX or under the TRICARE program under
chapter 55 of title 10 of the United States Code.
(3) Annual updates.--The Secretary shall provide an
update each year to the bundled payment amounts under
this subsection.
(x) Limitation for Vision Services.--With respect to vision
services (as defined in section 1861(kkk)) and an individual,
payment may be made under this part for only 1 routine eye
examination described in paragraph (1) of such section and 1
contact lens fitting service described in paragraph (2) of such
section during a 2-year period.
* * * * * * *
competitive acquisition of certain items and services
Sec. 1847. (a) Establishment of Competitive Acquisition
Programs.--
(1) Implementation of programs.--
(A) In general.--The Secretary shall
establish and implement programs under which
competitive acquisition areas are established
throughout the United States for contract award
purposes for the furnishing under this part of
competitively priced items and services
(described in paragraph (2)) for which payment
is made under this part. Such areas may differ
for different items and services.
(B) Phased-in implementation.--The programs--
(i) shall be phased in among
competitive acquisition areas in a
manner consistent with subparagraph (D)
so that the competition under the
programs occurs in--
(I) 10 of the largest
metropolitan statistical areas
in 2007;
(II) an additional 91 of the
largest metropolitan
statistical areas in 2011; and
(III) additional areas after
2011 (or, in the case of
national mail order for items
and services, after 2010); and
(ii) may be phased in first among the
highest cost and highest volume items
and services or those items and
services that the Secretary determines
have the largest savings potential.
(C) Waiver of certain provisions.--In
carrying out the programs, the Secretary may
waive such provisions of the Federal
Acquisition Regulation as are necessary for the
efficient implementation of this section, other
than provisions relating to confidentiality of
information and such other provisions as the
Secretary determines appropriate.
(D) Changes in competitive acquisition programs.--
(i) Round 1 of competitive acquisition
program.--Notwithstanding subparagraph
(B)(i)(I) and in implementing the first round
of the competitive acquisition programs under
this section--
(I) the contracts awarded under this
section before the date of the
enactment of this subparagraph are
terminated, no payment shall be made
under this title on or after the date
of the enactment of this subparagraph
based on such a contract, and, to the
extent that any damages may be
applicable as a result of the
termination of such contracts, such
damages shall be payable from the
Federal Supplementary Medical Insurance
Trust Fund under section 1841;
(II) the Secretary shall conduct the
competition for such round in a manner
so that it occurs in 2009 with respect
to the same items and services and the
same areas, except as provided in
subclauses (III) and (IV);
(III) the Secretary shall exclude
Puerto Rico so that such round of
competition covers 9, instead of 10, of
the largest metropolitan statistical
areas; and
(IV) there shall be excluded negative
pressure wound therapy items and
services.
Nothing in subclause (I) shall be construed to
provide an independent cause of action or right
to administrative or judicial review with
regard to the termination provided under such
subclause.
(ii) Round 2 of competitive acquisition
program.--In implementing the second round of
the competitive acquisition programs under this
section described in subparagraph (B)(i)(II)--
(I) the metropolitan statistical
areas to be included shall be those
metropolitan statistical areas selected
by the Secretary for such round as of
June 1, 2008;
(II) the Secretary shall include the
next 21 largest metropolitan
statistical areas by total population
(after those selected under subclause
(I)) for such round; and
(III) the Secretary may subdivide
metropolitan statistical areas with
populations (based upon the most recent
data from the Census Bureau) of at
least 8,000,000 into separate areas for
competitive acquisition purposes.
(iii) Exclusion of certain areas in
subsequent rounds of competitive acquisition
programs.--In implementing subsequent rounds of
the competitive acquisition programs under this
section, including under subparagraph
(B)(i)(III), for competitions occurring before
2015, the Secretary shall exempt from the
competitive acquisition program (other than
national mail order) the following:
(I) Rural areas.
(II) Metropolitan statistical areas
not selected under round 1 or round 2
with a population of less than 250,000.
(III) Areas with a low population
density within a metropolitan
statistical area that is otherwise
selected, as determined for purposes of
paragraph (3)(A).
(E) Verification by oig.--The Inspector General of the
Department of Health and Human Services shall, through post-
award audit, survey, or otherwise, assess the process used by
the Centers for Medicare & Medicaid Services to conduct
competitive bidding and subsequent pricing determinations under
this section that are the basis for pivotal bid amounts and
single payment amounts for items and services in competitive
bidding areas under rounds 1 and 2 of the competitive
acquisition programs under this section and may continue to
verify such calculations for subsequent rounds of such
programs.
(F) Supplier feedback on missing financial documentation.--
(i) In general.--In the case of a bid where one or
more covered documents in connection with such bid have
been submitted not later than the covered document
review date specified in clause (ii), the Secretary--
(I) shall provide, by not later than 45 days
(in the case of the first round of the
competitive acquisition programs as described
in subparagraph (B)(i)(I)) or 90 days (in the
case of a subsequent round of such programs)
after the covered document review date, for
notice to the bidder of all such documents that
are missing as of the covered document review
date; and
(II) may not reject the bid on the basis that
any covered document is missing or has not been
submitted on a timely basis, if all such
missing documents identified in the notice
provided to the bidder under subclause (I) are
submitted to the Secretary not later than 10
business days after the date of such notice.
(ii) Covered document review date.--The covered
document review date specified in this clause with
respect to a competitive acquisition program is the
later of--
(I) the date that is 30 days before the final
date specified by the Secretary for submission
of bids under such program; or
(II) the date that is 30 days after the first
date specified by the Secretary for submission
of bids under such program.
(iii) Limitations of process.--The process provided
under this subparagraph--
(I) applies only to the timely submission of
covered documents;
(II) does not apply to any determination as
to the accuracy or completeness of covered
documents submitted or whether such documents
meet applicable requirements;
(III) shall not prevent the Secretary from
rejecting a bid based on any basis not
described in clause (i)(II); and
(IV) shall not be construed as permitting a
bidder to change bidding amounts or to make
other changes in a bid submission.
(iv) Covered document defined.--In this subparagraph,
the term ``covered document'' means a financial, tax,
or other document required to be submitted by a bidder
as part of an original bid submission under a
competitive acquisition program in order to meet
required financial standards. Such term does not
include other documents, such as the bid itself or
accreditation documentation.
(G) Requiring bid bonds for bidding
entities.--With respect to rounds of
competitions beginning under this subsection
for contracts beginning not earlier than
January 1, 2017, and not later than January 1,
2019, an entity may not submit a bid for a
competitive acquisition area unless, as of the
deadline for bid submission, the entity has
obtained (and provided the Secretary with proof
of having obtained) a bid surety bond (in this
paragraph referred to as a ``bid bond'') in a
form specified by the Secretary consistent with
subparagraph (H) and in an amount that is not
less than $50,000 and not more than $100,000
for each competitive acquisition area in which
the entity submits the bid.
(H) Treatment of bid bonds submitted.--
(i) For bidders that submit bids at
or below the median and are offered but
do not accept the contract.--In the
case of a bidding entity that is
offered a contract for any product
category for a competitive acquisition
area, if--
(I) the entity's composite
bid for such product category
and area was at or below the
median composite bid rate for
all bidding entities included
in the calculation of the
single payment amounts for such
product category and area; and
(II) the entity does not
accept the contract offered for
such product category and area,
the bid bond submitted by such entity
for such area shall be forfeited by the
entity and the Secretary shall collect
on it.
(ii) Treatment of other bidders.--In
the case of a bidding entity for any
product category for a competitive
acquisition area, if the entity does
not meet the bid forfeiture conditions
in subclauses (I) and (II) of clause
(i) for any product category for such
area, the bid bond submitted by such
entity for such area shall be returned
within 90 days of the public
announcement of the contract suppliers
for such area.
(2) Items and services described.--The items and
services referred to in paragraph (1) are the
following:
(A) Durable medical equipment and medical
supplies.--Covered items (as defined in section
1834(a)(13)) for which payment would otherwise
be made under section 1834(a), including items
used in infusion and drugs (other than
inhalation drugs) and supplies used in
conjunction with durable medical equipment, but
excluding class III devices under the Federal
Food, Drug, and Cosmetic Act, excluding certain
complex rehabilitative power wheelchairs
recognized by the Secretary as classified
within group 3 or higher (and related
accessories when furnished in connection with
such wheelchairs), and excluding drugs and
biologicals describedin section 1842(o)(1)(D).
(B) Other equipment and supplies.--Items and
services described in section 1842(s)(2)(D),
other than parenteral nutrients, equipment, and
supplies.
(C) Off-the-shelf orthotics.--Orthotics
described in section 1861(s)(9) for which
payment would otherwise be made under section
1834(h) which require minimal self-adjustment
for appropriate use and do not require
expertise in trimming, bending, molding,
assembling, or customizing to fit to the
individual.
(D) Eyeglasses and contact lenses.--
Eyeglasses and contact lenses for which payment
would otherwise be made under section 1834(h).
(3) Exception authority.--In carrying out the
programs under this section, the Secretary may exempt--
(A) rural areas and areas with low population
density within urban areas that are not
competitive, unless there is a significant
national market through mail order for a
particular item or service; and
(B) items and services for which the
application of competitive acquisition is not
likely to result in significant savings.
(4) Special rule for certain rented items of durable
medical equipment and oxygen.--In the case of a covered
item for which payment is made on a rental basis under
section 1834(a) and in the case of payment for oxygen
under section 1834(a)(5), the Secretary shall establish
a process by which rental agreements for the covered
items and supply arrangements with oxygen suppliers
entered into before the application of the competitive
acquisition program under this section for the item may
be continued notwithstanding this section. In the case
of any such continuation, the supplier involved shall
provide for appropriate servicing and replacement, as
required under section 1834(a).
(5) Physician authorization.--
(A) In general.--With respect to items or
services included within a particular HCPCS
code, the Secretary may establish a process for
certain items and services under which a
physician may prescribe a particular brand or
mode of delivery of an item or service within
such code if the physician determines that use
of the particular item or service would avoid
an adverse medical outcome on the individual,
as determined by the Secretary.
(B) No effect on payment amount.--A
prescription under subparagraph (A) shall not
affect the amount of payment otherwise
applicable for the item or service under the
code involved.
(6) Application.--For each competitive acquisition
area in which the program is implemented under this
subsection with respect to items and services, the
payment basis determined under the competition
conducted under subsection (b) shall be substituted for
the payment basis otherwise applied under section
1834(a), section 1834(h), or section 1842(s), as
appropriate.
(7) Exemption from competitive acquisition.--The
programs under this section shall not apply to the
following:
(A) Certain off-the-shelf orthotics.--Items
and services described in paragraph (2)(C) if
furnished--
(i) by a physician or other
practitioner (as defined by the
Secretary) to the physician's or
practitioner's own patients as part of
the physician's or practitioner's
professional service; or
(ii) by a hospital to the hospital's
own patients during an admission or on
the date of discharge.
(B) Certain durable medical equipment.--Those
items and services described in paragraph
(2)(A)--
(i) that are furnished by a hospital
to the hospital's own patients during
an admission or on the date of
discharge; and
(ii) to which such programs would not
apply, as specified by the Secretary,
if furnished by a physician to the
physician's own patients as part of the
physician's professional service.
(C) Certain eyeglasses and contact lenses.--
Those items and services described in paragraph
(2)(D) if furnished by a physician or other
practitioner (as defined by the Secretary) to
the physician's or practitioner's own patients
as part of the physician's or practitioner's
professional service.
(b) Program Requirements.--
(1) In general.--The Secretary shall conduct a
competition among entities supplying items and services
described in subsection (a)(2) for each competitive
acquisition area in which the program is implemented
under subsection (a) with respect to such items and
services.
(2) Conditions for awarding contract.--
(A) In general.--The Secretary may not award
a contract to any entity under the competition
conducted in an competitive acquisition area
pursuant to paragraph (1) to furnish such items
or services unless the Secretary finds all of
the following:
(i) The entity meets applicable
quality standards specified by the
Secretary under section 1834(a)(20).
(ii) The entity meets applicable
financial standards specified by the
Secretary, taking into account the
needs of small providers.
(iii) The total amounts to be paid to
contractors in a competitive
acquisition area are expected to be
less than the total amounts that would
otherwise be paid.
(iv) Access of individuals to a
choice of multiple suppliers in the
area is maintained.
(v) The entity meets applicable State
licensure requirements.
(B) Timely implementation of program.--Any
delay in the implementation of quality
standards under section 1834(a)(20) or delay in
the receipt of advice from the program
oversight committee established under
subsection (c) shall not delay the
implementation of the competitive acquisition
program under this section.
(3) Contents of contract.--
(A) In general.--A contract entered into with
an entity under the competition conducted
pursuant to paragraph (1) is subject to terms
and conditions that the Secretary may specify.
(B) Term of contracts.--The Secretary shall
recompete contracts under this section not less
often than once every 3 years.
(C) Disclosure of subcontractors.--
(i) Initial disclosure.--Not later
than 10 days after the date a supplier
enters into a contract with the
Secretary under this section, such
supplier shall disclose to the
Secretary, in a form and manner
specified by the Secretary, the
information on--
(I) each subcontracting
relationship that such supplier
has in furnishing items and
services under the contract;
and
(II) whether each such
subcontractor meets the
requirement of section
1834(a)(20)(F)(i), if
applicable to such
subcontractor.
(ii) Subsequent disclosure.--Not
later than 10 days after such a
supplier subsequently enters into a
subcontracting relationship described
in clause (i)(II), such supplier shall
disclose to the Secretary, in such form
and manner, the information described
in subclauses (I) and (II) of clause
(i).
(4) Limit on number of contractors.--
(A) In general.--The Secretary may limit the
number of contractors in a competitive
acquisition area to the number needed to meet
projected demand for items and services covered
under the contracts. In awarding contracts, the
Secretary shall take into account the ability
of bidding entities to furnish items or
services in sufficient quantities to meet the
anticipated needs of individuals for such items
or services in the geographic area covered
under the contract on a timely basis.
(B) Multiple winners.--The Secretary shall
award contracts to multiple entities submitting
bids in each area for an item or service.
(5) Payment.--
(A) In general.--Payment under this part for
competitively priced items and services
described in subsection (a)(2) shall be based
on bids submitted and accepted under this
section for such items and services. Based on
such bids the Secretary shall determine a
single payment amount for each item or service
in each competitive acquisition area.
(B) Reduced beneficiary cost-sharing.--
(i) Application of coinsurance.--
Payment under this section for items
and services shall be in an amount
equal to 80 percent of the payment
basis described in subparagraph (A).
(ii) Application of deductible.--
Before applying clause (i), the
individual shall be required to meet
the deductible described in section
1833(b).
(C) Payment on assignment-related basis.--
Payment for any item or service furnished by
the entity may only be made under this section
on an assignment-related basis.
(D) Construction.--Nothing in this section
shall be construed as precluding the use of an
advanced beneficiary notice with respect to a
competitively priced item and service.
(6) Participating contractors.--
(A) In general.--Except as provided in
subsection (a)(4), payment shall not be made
for items and services described in subsection
(a)(2) furnished by a contractor and for which
competition is conducted under this section
unless--
(i) the contractor has submitted a
bid for such items and services under
this section; and
(ii) the Secretary has awarded a
contract to the contractor for such
items and services under this section.
(B) Bid defined.--In this section, the term
``bid'' means an offer to furnish an item or
service for a particular price and time period
that includes, where appropriate, any services
that are attendant to the furnishing of the
item or service.
(C) Rules for mergers and acquisitions.--In
applying subparagraph (A) to a contractor, the
contractor shall include a successor entity in
the case of a merger or acquisition, if the
successor entity assumes such contract along
with any liabilities that may have occurred
thereunder.
(D) Protection of small suppliers.--In
developing procedures relating to bids and the
awarding of contracts under this section, the
Secretary shall take appropriate steps to
ensure that small suppliers of items and
services have an opportunity to be considered
for participation in the program under this
section.
(7) Consideration in determining categories for
bids.--The Secretary may consider the clinical
efficiency and value of specific items within codes,
including whether some items have a greater therapeutic
advantage to individuals.
(8) Authority to contract for education, monitoring,
outreach, and complaint services.--The Secretary may
enter into contracts with appropriate entities to
address complaints from individuals who receive items
and services from an entity with a contract under this
section and to conduct appropriate education of and
outreach to such individuals and monitoring quality of
services with respect to the program.
(9) Authority to contract for implementation.--The
Secretary may contract with appropriate entities to
implement the competitive bidding program under this
section.
(10) Special rule in case of competition for diabetic
testing strips.--
(A) In general.--With respect to the
competitive acquisition program for diabetic
testing strips conducted after the first round
of the competitive acquisition programs, if an
entity does not demonstrate to the Secretary
that its bid covers types of diabetic testing
strip products that, in the aggregate and
taking into account volume for the different
products, cover 50 percent (or such higher
percentage as the Secretary may specify) of all
such types of products, the Secretary shall
reject such bid. With respect to bids to
furnish such types of products on or after
January 1, 2019, the volume for such types of
products shall be determined by the Secretary
through the use of multiple sources of data
(from mail order and non-mail order Medicare
markets), including market-based data measuring
sales of diabetic testing strip products that
are not exclusively sold by a single retailer
from such markets.
(B) Study of types of testing strip
products.--Before 2011, the Inspector General
of the Department of Health and Human Services
shall conduct a study to determine the types of
diabetic testing strip products by volume that
could be used to make determinations pursuant
to subparagraph (A) for the first competition
under the competitive acquisition program
described in such subparagraph and submit to
the Secretary a report on the results of the
study. The Inspector General shall also conduct
such a study and submit such a report before
the Secretary conducts a subsequent competitive
acquistion program described in subparagraph
(A).
(C) Demonstration of ability to furnish types
of diabetic testing strip products.--With
respect to bids to furnish diabetic testing
strip products on or after January 1, 2019, an
entity shall attest to the Secretary that the
entity has the ability to obtain an inventory
of the types and quantities of diabetic testing
strip products that will allow the entity to
furnish such products in a manner consistent
with its bid and--
(i) demonstrate to the Secretary,
through letters of intent with
manufacturers, wholesalers, or other
suppliers, or other evidence as the
Secretary may specify, such ability; or
(ii) demonstrate to the Secretary
that it made a good faith attempt to
obtain such a letter of intent or such
other evidence.
(D) Use of unlisted types in calculation of
percentage.--With respect to bids to furnish
diabetic testing strip products on or after
January 1, 2019, in determining under
subparagraph (A) whether a bid submitted by an
entity under such subparagraph covers 50
percent (or such higher percentage as the
Secretary may specify) of all types of diabetic
testing strip products, the Secretary may not
attribute a percentage to types of diabetic
testing strip products that the Secretary does
not identify by brand, model, and market share
volume.
(E) Adherence to demonstration.--
(i) In general.--In the case of an
entity that is furnishing diabetic
testing strip products on or after
January 1, 2019, under a contract
entered into under the competition
conducted pursuant to paragraph (1),
the Secretary shall establish a process
to monitor, on an ongoing basis, the
extent to which such entity continues
to cover the product types included in
the entity's bid.
(ii) Termination.--If the Secretary
determines that an entity described in
clause (i) fails to maintain in
inventory, or otherwise maintain ready
access to (through requirements,
contracts, or otherwise) a type of
product included in the entity's bid,
the Secretary may terminate such
contract unless the Secretary finds
that the failure of the entity to
maintain inventory of, or ready access
to, the product is the result of the
discontinuation of the product by the
product manufacturer, a market-wide
shortage of the product, or the
introduction of a newer model or
version of the product in the market
involved.
(11) Additional special rules in case of competition
for diabetic testing strips.--
(A) In general.--With respect to an entity
that is furnishing diabetic testing strip
products to individuals under a contract
entered into under the competitive acquisition
program established under this section, the
entity shall furnish to each individual a brand
of such products that is compatible with the
home blood glucose monitor selected by the
individual.
(B) Prohibition on influencing and
incentivizing.--An entity described in
subparagraph (A) may not attempt to influence
or incentivize an individual to switch the
brand of glucose monitor or diabetic testing
strip product selected by the individual,
including by--
(i) persuading, pressuring, or
advising the individual to switch; or
(ii) furnishing information about
alternative brands to the individual
where the individual has not requested
such information.
(C) Provision of information.--
(i) Standardized information.--Not
later than January 1, 2019, the
Secretary shall develop and make
available to entities described in
subparagraph (A) standardized
information that describes the rights
of an individual with respect to such
an entity. The information described in
the preceding sentence shall include
information regarding--
(I) the requirements
established under subparagraphs
(A) and (B);
(II) the right of the
individual to purchase diabetic
testing strip products from
another mail order supplier of
such products or a retail
pharmacy if the entity is not
able to furnish the brand of
such product that is compatible
with the home blood glucose
monitor selected by the
individual; and
(III) the right of the
individual to return diabetic
testing strip products
furnished to the individual by
the entity.
(ii) Requirement.--With respect to
diabetic testing strip products
furnished on or after the date on which
the Secretary develops the standardized
information under clause (i), an entity
described in subparagraph (A) may not
communicate directly to an individual
until the entity has verbally provided
the individual with such standardized
information.
(D) Order refills.--With respect to diabetic
testing strip products furnished on or after
January 1, 2019, the Secretary shall require an
entity furnishing diabetic testing strip
products to an individual to contact and
receive a request from the individual for such
products not more than 14 days prior to
dispensing a refill of such products to the
individual.
(12) No administrative or judicial review.--There
shall be no administrative or judicial review under
section 1869, section 1878, or otherwise, of--
(A) the establishment of payment amounts
under paragraph (5);
(B) the awarding of contracts under this
section;
(C) the designation of competitive
acquisition areas under subsection (a)(1)(A)
and the identification of areas under
subsection (a)(1)(D)(iii);
(D) the phased-in implementation under
subsection (a)(1)(B) and implementation of
subsection (a)(1)(D);
(E) the selection of items and services for
competitive acquisition under subsection
(a)(2);
(F) the bidding structure and number of
contractors selected under this section; or
(G) the implementation of the special rule
described in paragraph (10).
(c) Program Advisory and Oversight Committee.--
(1) Establishment.--The Secretary shall establish a
Program Advisory and Oversight Committee (hereinafter
in this section referred to as the ``Committee'').
(2) Membership; terms.--The Committee shall consist
of such members as the Secretary may appoint who shall
serve for such term as the Secretary may specify.
(3) Duties.--
(A) Advice.--The Committee shall provide
advice to the Secretary with respect to the
following functions:
(i) The implementation of the program
under this section.
(ii) The establishment of financial
standards for purposes of subsection
(b)(2)(A)(ii).
(iii) The establishment of
requirements for collection of data for
the efficient management of the
program.
(iv) The development of proposals for
efficient interaction among
manufacturers, providers of services,
suppliers (as defined in section
1861(d)), and individuals.
(v) The establishment of quality
standards under section 1834(a)(20).
(B) Additional duties.--The Committee shall
perform such additional functions to assist the
Secretary in carrying out this section as the
Secretary may specify.
(4) Inapplicability of faca.--The provisions of the
Federal Advisory Committee Act (5 U.S.C. App.) shall
not apply.
(5) Termination.--The Committee shall terminate on
December 31, 2011.
(d) Report.--Not later than July 1, 2011, the Secretary shall
submit to Congress a report on the programs under this section.
The report shall include information on savings, reductions in
cost-sharing, access to and quality of items and services, and
satisfaction of individuals.
(f) Competitive Acquisition Ombudsman.--The Secretary shall
provide for a competitive acquisition ombudsman within the
Centers for Medicare & Medicaid Services in order to respond to
complaints and inquiries made by suppliers and individuals
relating to the application of the competitive acquisition
program under this section. The ombudsman may be within the
office of the Medicare Beneficiary Ombudsman appointed under
section 1808(c). The ombudsman shall submit to Congress an
annual report on the activities under this subsection, which
report shall be coordinated with the report provided under
section 1808(c)(2)(C).
* * * * * * *
PAYMENT FOR PHYSICIANS' SERVICES
Sec. 1848. (a) Payment Based on Fee Schedule.--
(1) In general.--Effective for all physicians'
services (as defined in subsection (j)(3)) furnished
under this part during a year (beginning with 1992) for
which payment is otherwise made on the basis of a
reasonable charge or on the basis of a fee schedule
under section 1834(b), payment under this part shall
instead be based on the lesser of--
(A) the actual charge for the service, or
(B) subject to the succeeding provisions of
this subsection, the amount determined under
the fee schedule established under subsection
(b) for services furnished during that year (in
this subsection referred to as the ``fee
schedule amount'').
(2) Transition to full fee schedule.--
(A) Limiting reductions and increases to 15
percent in 1992.--
(i) Limit on increase.--In the case
of a service in a fee schedule area (as
defined in subsection (j)(2)) for which
the adjusted historical payment basis
(as defined in subparagraph (D)) is
less than 85 percent of the fee
schedule amount for services furnished
in 1992, there shall be substituted for
the fee schedule amount an amount equal
to the adjusted historical payment
basis plus 15 percent of the fee
schedule amount otherwise established
(without regard to this paragraph).
(ii) Limit in reduction.--In the case
of a service in a fee schedule area for
which the adjusted historical payment
basis exceeds 115 percent of the fee
schedule amount for services furnished
in 1992, there shall be substituted for
the fee schedule amount an amount equal
to the adjusted historical payment
basis minus 15 percent of the fee
schedule amount otherwise established
(without regard to this paragraph).
(B) Special rule for 1993, 1994, and 1995.--
If a physicians' service in a fee schedule area
is subject to the provisions of subparagraph
(A) in 1992, for physicians' services furnished
in the area--
(i) during 1993, there shall be
substituted for the fee schedule amount
an amount equal to the sum of--
(I) 75 percent of the fee
schedule amount determined
under subparagraph (A),
adjusted by the update
established under subsection
(d)(3) for 1993, and
(II) 25 percent of the fee
schedule amount determined
under paragraph (1) for 1993
without regard to this
paragraph;
(ii) during 1994, there shall be
substituted for the fee schedule amount
an amount equal to the sum of--
(I) 67 percent of the fee
schedule amount determined
under clause (i), adjusted by
the update established under
subsection (d)(3) for 1994 and
as adjusted under subsection
(c)(2)(F)(ii) and under section
13515(b) of the Omnibus Budget
Reconciliation Act of 1993, and
(II) 33 percent of the fee
schedule amount determined
under paragraph (1) for 1994
without regard to this
paragraph; and
(iii) during 1995, there shall be
substituted for the fee schedule amount
an amount equal to the sum of--
(I) 50 percent of the fee
schedule amount determined
under clause (ii) adjusted by
the update established under
subsection (d)(3) for 1995, and
(II) 50 percent of the fee
schedule amount determined
under paragraph (1) for 1995
without regard to this
paragraph.
(C) Special rule for anesthesia and radiology
services.--With respect to physicians' services
which are anesthesia services, the Secretary
shall provide for a transition in the same
manner as a transition is provided for other
services under subparagraph (B). With respect
to radiology services, ``109 percent'' and ``9
percent'' shall be substituted for ``115
percent'' and ``15 percent'', respectively, in
subparagraph (A)(ii).
(D) Adjusted historical payment basis
defined.--
(i) In general.--In this paragraph,
the term ``adjusted historical payment
basis'' means, with respect to a
physicians' service furnished in a fee
schedule area, the weighted average
prevailing charge applied in the area
for the service in 1991 (as determined
by the Secretary without regard to
physician specialty and as adjusted to
reflect payments for services with
customary charges below the prevailing
charge or other payment limitations
imposed by law or regulation) adjusted
by the update established under
subsection (d)(3) for 1992.
(ii) Application to radiology
services.--In applying clause (i) in
the case of physicians' services which
are radiology services (including
radiologist services, as defined in
section 1834(b)(6)), but excluding
nuclear medicine services that are
subject to section 6105(b) of the
Omnibus Budget Reconciliation Act of
1989, there shall be substituted for
the weighted average prevailing charge
the amount provided under the fee
schedule established for the service
for the fee schedule area under section
1834(b).
(iii) Nuclear medicine services.--In
applying clause (i) in the case of
physicians' services which are nuclear
medicine services, there shall be
substituted for the weighted average
prevailing charge the amount provided
under section 6105(b) of the Omnibus
Budget Reconciliation Act of 1989.
(3) Incentives for participating physicians and
suppliers.--In applying paragraph (1)(B) in the case of
a nonparticipating physician or a nonparticipating
supplier or other person, the fee schedule amount shall
be 95 percent of such amount otherwise applied under
this subsection (without regard to this paragraph). In
the case of physicians' services (including services
which the Secretary excludes pursuant to subsection
(j)(3)) of a nonparticipating physician, supplier, or
other person for which payment is made under this part
on a basis other than the fee schedule amount, the
payment shall be based on 95 percent of the payment
basis for such services furnished by a participating
physician, supplier, or other person.
(4) Special rule for medical direction.--
(A) In general.--With respect to physicians'
services furnished on or after January 1, 1994,
and consisting of medical direction of two,
three, or four concurrent anesthesia cases,
except as provided in paragraph (5), the fee
schedule amount to be applied shall be equal to
one-half of the amount described in
subparagraph (B).
(B) Amount.--The amount described in this
subparagraph, for a physician's medical
direction of the performance of anesthesia
services, is the following percentage of the
fee schedule amount otherwise applicable under
this section if the anesthesia services were
personally performed by the physician alone:
(i) For services furnished during
1994, 120 percent.
(ii) For services furnished during
1995, 115 percent.
(iii) For services furnished during
1996, 110 percent.
(iv) For services furnished during
1997, 105 percent.
(v) For services furnished after
1997, 100 percent.
(5) Incentives for electronic prescribing.--
(A) Adjustment.--
(i) In general.--Subject to
subparagraph (B) and subsection
(m)(2)(B), with respect to covered
professional services furnished by an
eligible professional during 2012, 2013
or 2014, if the eligible professional
is not a successful electronic
prescriber for the reporting period for
the year (as determined under
subsection (m)(3)(B)), the fee schedule
amount for such services furnished by
such professional during the year
(including the fee schedule amount for
purposes of determining a payment based
on such amount) shall be equal to the
applicable percent of the fee schedule
amount that would otherwise apply to
such services under this subsection
(determined after application of
paragraph (3) but without regard to
this paragraph).
(ii) Applicable percent.--For
purposes of clause (i), the term
``applicable percent'' means--
(I) for 2012, 99 percent;
(II) for 2013, 98.5 percent;
and
(III) for 2014, 98 percent.
(B) Significant hardship exception.--The
Secretary may, on a case-by-case basis, exempt
an eligible professional from the application
of the payment adjustment under subparagraph
(A) if the Secretary determines, subject to
annual renewal, that compliance with the
requirement for being a successful electronic
prescriber would result in a significant
hardship, such as in the case of an eligible
professional who practices in a rural area
without sufficient Internet access.
(C) Application.--
(i) Physician reporting system
rules.--Paragraphs (5), (6), and (8) of
subsection (k) shall apply for purposes
of this paragraph in the same manner as
they apply for purposes of such
subsection.
(ii) Incentive payment validation
rules.--Clauses (ii) and (iii) of
subsection (m)(5)(D) shall apply for
purposes of this paragraph in a similar
manner as they apply for purposes of
such subsection.
(D) Definitions.--For purposes of this
paragraph:
(i) Eligible professional; covered
professional services.--The terms
``eligible professional'' and ``covered
professional services'' have the
meanings given such terms in subsection
(k)(3).
(ii) Physician reporting system.--The
term ``physician reporting system''
means the system established under
subsection (k).
(iii) Reporting period.--The term
``reporting period'' means, with
respect to a year, a period specified
by the Secretary.
(6) Special rule for teaching anesthesiologists.--
With respect to physicians' services furnished on or
after January 1, 2010, in the case of teaching
anesthesiologists involved in the training of physician
residents in a single anesthesia case or two concurrent
anesthesia cases, the fee schedule amount to be applied
shall be 100 percent of the fee schedule amount
otherwise applicable under this section if the
anesthesia services were personally performed by the
teaching anesthesiologist alone and paragraph (4) shall
not apply if--
(A) the teaching anesthesiologist is present
during all critical or key portions of the
anesthesia service or procedure involved; and
(B) the teaching anesthesiologist (or another
anesthesiologist with whom the teaching
anesthesiologist has entered into an
arrangement) is immediately available to
furnish anesthesia services during the entire
procedure.
(7) Incentives for meaningful use of certified ehr
technology.--
(A) Adjustment.--
(i) In general.--Subject to
subparagraphs (B) and (D), with respect
to covered professional services
furnished by an eligible professional
during each of 2015 through 2018, if
the eligible professional is not a
meaningful EHR user (as determined
under subsection (o)(2)) for an EHR
reporting period for the year, the fee
schedule amount for such services
furnished by such professional during
the year (including the fee schedule
amount for purposes of determining a
payment based on such amount) shall be
equal to the applicable percent of the
fee schedule amount that would
otherwise apply to such services under
this subsection (determined after
application of paragraph (3) but
without regard to this paragraph).
(ii) Applicable percent.--Subject to
clause (iii), for purposes of clause
(i), the term ``applicable percent''
means--
(I) for 2015, 99 percent (or,
in the case of an eligible
professional who was subject to
the application of the payment
adjustment under section
1848(a)(5) for 2014, 98
percent);
(II) for 2016, 98 percent;
and
(III) for 2017 and 2018, 97
percent.
(iii) Authority to decrease
applicable percentage for 2018.--For
2018, if the Secretary finds that the
proportion of eligible professionals
who are meaningful EHR users (as
determined under subsection (o)(2)) is
less than 75 percent, the applicable
percent shall be decreased by 1
percentage point from the applicable
percent in the preceding year.
(B) Significant hardship exception.--The
Secretary may, on a case-by-case basis (and,
with respect to the payment adjustment under
subparagraph (A) for 2017, for categories of
eligible professionals, as established by the
Secretary and posted on the Internet website of
the Centers for Medicare & Medicaid Services
prior to December 15, 2015, an application for
which must be submitted to the Secretary by not
later than March 15, 2016), exempt an eligible
professional from the application of the
payment adjustment under subparagraph (A) if
the Secretary determines, subject to annual
renewal, that compliance with the requirement
for being a meaningful EHR user would result in
a significant hardship, such as in the case of
an eligible professional who practices in a
rural area without sufficient Internet access.
The Secretary shall exempt an eligible
professional from the application of the
payment adjustment under subparagraph (A) with
respect to a year, subject to annual renewal,
if the Secretary determines that compliance
with the requirement for being a meaningful EHR
user is not possible because the certified EHR
technology used by such professional has been
decertified under a program kept or recognized
pursuant to section 3001(c)(5) of the Public
Health Service Act. In no case may an eligible
professional be granted an exemption under this
subparagraph for more than 5 years.
(C) Application of physician reporting system
rules.--Paragraphs (5), (6), and (8) of
subsection (k) shall apply for purposes of this
paragraph in the same manner as they apply for
purposes of such subsection.
(D) Non-application to hospital-based and
ambulatory surgical center-based eligible
professionals.--
(i) Hospital-based.--No payment
adjustment may be made under
subparagraph (A) in the case of
hospital-based eligible professionals
(as defined in subsection
(o)(1)(C)(ii)).
(ii) Ambulatory surgical center-
based.--Subject to clause (iv), no
payment adjustment may be made under
subparagraph (A) for 2017 and 2018 in
the case of an eligible professional
with respect to whom substantially all
of the covered professional services
furnished by such professional are
furnished in an ambulatory surgical
center.
(iii) Determination.--The
determination of whether an eligible
professional is an eligible
professional described in clause (ii)
may be made on the basis of--
(I) the site of service (as
defined by the Secretary); or
(II) an attestation submitted
by the eligible professional.
Determinations made under subclauses
(I) and (II) shall be made without
regard to any employment or billing
arrangement between the eligible
professional and any other supplier or
provider of services.
(iv) Sunset.--Clause (ii) shall no
longer apply as of the first year that
begins more than 3 years after the date
on which the Secretary determines,
through notice and comment rulemaking,
that certified EHR technology
applicable to the ambulatory surgical
center setting is available.
(E) Definitions.--For purposes of this
paragraph:
(i) Covered professional services.--
The term ``covered professional
services'' has the meaning given such
term in subsection (k)(3).
(ii) EHR reporting period.--The term
``EHR reporting period'' means, with
respect to a year, a period (or
periods) specified by the Secretary.
(iii) Eligible professional.--The
term ``eligible professional'' means a
physician, as defined in section
1861(r).
(8) Incentives for quality reporting.--
(A) Adjustment.--
(i) In general.--With respect to
covered professional services furnished
by an eligible professional during each
of 2015 through 2018, if the eligible
professional does not satisfactorily
submit data on quality measures for
covered professional services for the
quality reporting period for the year
(as determined under subsection
(m)(3)(A)), the fee schedule amount for
such services furnished by such
professional during the year (including
the fee schedule amount for purposes of
determining a payment based on such
amount) shall be equal to the
applicable percent of the fee schedule
amount that would otherwise apply to
such services under this subsection
(determined after application of
paragraphs (3), (5), and (7), but
without regard to this paragraph).
(ii) Applicable percent.--For
purposes of clause (i), the term
``applicable percent'' means--
(I) for 2015, 98.5 percent;
and
(II) for 2016, 2017, and
2018, 98 percent.
(B) Application.--
(i) Physician reporting system
rules.--Paragraphs (5), (6), and (8) of
subsection (k) shall apply for purposes
of this paragraph in the same manner as
they apply for purposes of such
subsection.
(ii) Incentive payment validation
rules.--Clauses (ii) and (iii) of
subsection (m)(5)(D) shall apply for
purposes of this paragraph in a similar
manner as they apply for purposes of
such subsection.
(C) Definitions.--For purposes of this
paragraph:
(i) Eligible professional; covered
professional services.--The terms
``eligible professional'' and ``covered
professional services'' have the
meanings given such terms in subsection
(k)(3).
(ii) Physician reporting system.--The
term ``physician reporting system''
means the system established under
subsection (k).
(iii) Quality reporting period.--The
term ``quality reporting period''
means, with respect to a year, a period
specified by the Secretary.
(9) Information reporting on services included in
global surgical packages.--With respect to services for
which a physician is required to report information in
accordance with subsection (c)(8)(B)(i), the Secretary
may through rulemaking delay payment of 5 percent of
the amount that would otherwise be payable under the
physician fee schedule under this section for such
services until the information so required is reported.
(b) Establishment of Fee Schedules.--
(1) In general.--Before November 1 of the preceding
year, for each year beginning with 1998, subject to
subsection (p), the Secretary shall establish, by
regulation, fee schedules that establish payment
amounts for all physicians' services furnished in all
fee schedule areas (as defined in subsection (j)(2))
for the year. Except as provided in paragraph (2), each
such payment amount for a service shall be equal to the
product of--
(A) the relative value for the service (as
determined in subsection (c)(2)),
(B) the conversion factor (established under
subsection (d)) for the year, and
(C) the geographic adjustment factor
(established under subsection (e)(2)) for the
service for the fee schedule area.
(2) Treatment of radiology services and anesthesia
services.--
(A) Radiology services.--With respect to
radiology services (including radiologist
services, as defined in section 1834(b)(6)),
the Secretary shall base the relative values on
the relative value scale developed under
section 1834(b)(1)(A), with appropriate
modifications of the relative values to assure
that the relative values established for
radiology services which are similar or related
to other physicians' services are consistent
with the relative values established for those
similar or related services.
(B) Anesthesia services.--In establishing the
fee schedule for anesthesia services for which
a relative value guide has been established
under section 4048(b) of the Omnibus Budget
Reconciliation Act of 1987, the Secretary shall
use, to the extent practicable, such relative
value guide, with appropriate adjustment of the
conversion factor, in a manner to assure that
the fee schedule amounts for anesthesia
services are consistent with the fee schedule
amounts for other services determined by the
Secretary to be of comparable value. In
applying the previous sentence, the Secretary
shall adjust the conversion factor by
geographic adjustment factors in the same
manner as such adjustment is made under
paragraph (1)(C).
(C) Consultation.--The Secretary shall
consult with the Physician Payment Review
Commission and organizations representing
physicians or suppliers who furnish radiology
services and anesthesia services in applying
subparagraphs (A) and (B).
(3) Treatment of interpretation of
electrocardiograms.--The Secretary--
(A) shall make separate payment under this
section for the interpretation of
electrocardiograms performed or ordered to be
performed as part of or in conjunction with a
visit to or a consultation with a physician,
and
(B) shall adjust the relative values
established for visits and consultations under
subsection (c) so as not to include relative
value units for interpretations of
electrocardiograms in the relative value for
visits and consultations.
(4) Special rule for imaging services.--
(A) In general.--In the case of imaging
services described in subparagraph (B)
furnished on or after January 1, 2007, if--
(i) the technical component
(including the technical component
portion of a global fee) of the service
established for a year under the fee
schedule described in paragraph (1)
without application of the geographic
adjustment factor described in
paragraph (1)(C), exceeds
(ii) the Medicare OPD fee schedule
amount established under the
prospective payment system for hospital
outpatient department services under
paragraph (3)(D) of section 1833(t) for
such service for such year, determined
without regard to geographic adjustment
under paragraph (2)(D) of such section,
the Secretary shall substitute the amount
described in clause (ii), adjusted by the
geographic adjustment factor described in
paragraph (1)(C), for the fee schedule amount
for such technical component for such year.
(B) Imaging services described.--For purposes
of this paragraph, imaging services described
in this subparagraph are imaging and computer-
assisted imaging services, including X-ray,
ultrasound (including echocardiography),
nuclear medicine (including positron emission
tomography), magnetic resonance imaging,
computed tomography, and fluoroscopy, but
excluding diagnostic and screening mammography,
and for 2010, 2011, and the first 2 months of
2012, dual-energy x-ray absorptiometry services
(as described in paragraph (6)).
(C) Adjustment in imaging utilization rate.--
With respect to fee schedules established for
2011, 2012, and 2013, in the methodology for
determining practice expense relative value
units for expensive diagnostic imaging
equipment under the final rule published by the
Secretary in the Federal Register on November
25, 2009 (42 CFR 410 et al.), the Secretary
shall use a 75 percent assumption instead of
the utilization rates otherwise established in
such final rule. With respect to fee schedules
established for 2014 and subsequent years, in
such methodology, the Secretary shall use a 90
percent utilization rate.
(D) Adjustment in technical component
discount on single-session imaging involving
consecutive body parts.--For services furnished
on or after July 1, 2010, the Secretary shall
increase the reduction in payments attributable
to the multiple procedure payment reduction
applicable to the technical component for
imaging under the final rule published by the
Secretary in the Federal Register on November
21, 2005 (part 405 of title 42, Code of Federal
Regulations) from 25 percent to 50 percent.
(5) Treatment of intensive cardiac rehabilitation
program.--
(A) In general.--In the case of an intensive
cardiac rehabilitation program described in
section 1861(eee)(4), the Secretary shall
substitute the Medicare OPD fee schedule amount
established under the prospective payment
system for hospital outpatient department
service under paragraph (3)(D) of section
1833(t) for cardiac rehabilitation (under HCPCS
codes 93797 and 93798 for calendar year 2007,
or any succeeding HCPCS codes for cardiac
rehabilitation).
(B) Definition of session.--Each of the
services described in subparagraphs (A) through
(E) of section 1861(eee)(3), when furnished for
one hour, is a separate session of intensive
cardiac rehabilitation.
(C) Multiple sessions per day.--Payment may
be made for up to 6 sessions per day of the
series of 72 one-hour sessions of intensive
cardiac rehabilitation services described in
section 1861(eee)(4)(B).
(6) Treatment of bone mass scans.--For dual-energy x-
ray absorptiometry services (identified in 2006 by
HCPCS codes 76075 and 76077 (and any succeeding codes))
furnished during 2010, 2011, and the first 2 months of
2012, instead of the payment amount that would
otherwise be determined under this section for such
years, the payment amount shall be equal to 70 percent
of the product of--
(A) the relative value for the service (as
determined in subsection (c)(2)) for 2006;
(B) the conversion factor (established under
subsection (d)) for 2006; and
(C) the geographic adjustment factor
(established under subsection (e)(2)) for the
service for the fee schedule area for 2010,
2011, and the first 2 months of 2012,
respectively.
(7) Adjustment in discount for certain multiple
therapy services.--In the case of therapy services
furnished on or after January 1, 2011, and before April
1, 2013, and for which payment is made under fee
schedules established under this section, instead of
the 25 percent multiple procedure payment reduction
specified in the final rule published by the Secretary
in the Federal Register on November 29, 2010, the
reduction percentage shall be 20 percent. In the case
of such services furnished on or after April 1, 2013,
and for which payment is made under such fee schedules,
instead of the 25 percent multiple procedure payment
reduction specified in such final rule, the reduction
percentage shall be 50 percent.
(8) Encouraging care management for individuals with
chronic care needs.--
(A) In general.--In order to encourage the
management of care for individuals with chronic
care needs the Secretary shall, subject to
subparagraph (B), make payment (as the
Secretary determines to be appropriate) under
this section for chronic care management
services furnished on or after January 1, 2015,
by a physician (as defined in section
1861(r)(1)), physician assistant or nurse
practitioner (as defined in section
1861(aa)(5)(A)), clinical nurse specialist (as
defined in section 1861(aa)(5)(B)), or
certified nurse midwife (as defined in section
1861(gg)(2)).
(B) Policies relating to payment.--In
carrying out this paragraph, with respect to
chronic care management services, the Secretary
shall--
(i) make payment to only one
applicable provider for such services
furnished to an individual during a
period;
(ii) not make payment under
subparagraph (A) if such payment would
be duplicative of payment that is
otherwise made under this title for
such services; and
(iii) not require that an annual
wellness visit (as defined in section
1861(hhh)) or an initial preventive
physical examination (as defined in
section 1861(ww)) be furnished as a
condition of payment for such
management services.
(9) Special rule to incentivize transition from
traditional x-ray imaging to digital radiography.--
(A) Limitation on payment for film x-ray
imaging services.--In the case of an imaging
service (including the imaging portion of a
service) that is an X-ray taken using film and
that is furnished during 2017 or a subsequent
year, the payment amount for the technical
component (including the technical component
portion of a global service) of such service
that would otherwise be determined under this
section (without application of this paragraph
and before application of any other adjustment
under this section) for such year shall be
reduced by 20 percent.
(B) Phased-in limitation on payment for
computed radiography imaging services.--In the
case of an imaging service (including the
imaging portion of a service) that is an X-ray
taken using computed radiography technology--
(i) in the case of such a service
furnished during 2018, 2019, 2020,
2021, or 2022, the payment amount for
the technical component (including the
technical component portion of a global
service) of such service that would
otherwise be determined under this
section (without application of this
paragraph and before application of any
other adjustment under this section)
for such year shall be reduced by 7
percent; and
(ii) in the case of such a service
furnished during 2023 or a subsequent
year, the payment amount for the
technical component (including the
technical component portion of a global
service) of such service that would
otherwise be determined under this
section (without application of this
paragraph and before application of any
other adjustment under this section)
for such year shall be reduced by 10
percent.
(C) Computed radiography technology
defined.--For purposes of this paragraph, the
term ``computed radiography technology'' means
cassette-based imaging which utilizes an
imaging plate to create the image involved.
(D) Implementation.--In order to implement
this paragraph, the Secretary shall adopt
appropriate mechanisms which may include use of
modifiers.
(10) Reduction of discount in payment for
professional component of multiple imaging services.--
In the case of the professional component of imaging
services furnished on or after January 1, 2017, instead
of the 25 percent reduction for multiple procedures
specified in the final rule published by the Secretary
in the Federal Register on November 28, 2011, as
amended in the final rule published by the Secretary in
the Federal Register on November 16, 2012, the
reduction percentage shall be 5 percent.
(11) Special rule for certain radiation therapy
services.--The code definitions, the work relative
value units under subsection (c)(2)(C)(i), and the
direct inputs for the practice expense relative value
units under subsection (c)(2)(C)(ii) for radiation
treatment delivery and related imaging services
(identified in 2016 by HCPCS G-codes G6001 through
G6015) for the fee schedule established under this
subsection for services furnished in 2017, 2018, and
2019 shall be the same as such definitions, units, and
inputs for such services for the fee schedule
established for services furnished in 2016.
(c) Determination of Relative Values for Physicians'
Services.--
(1) Division of physicians' services into
components.--In this section, with respect to a
physicians' service:
(A) Work component defined.--The term ``work
component'' means the portion of the resources
used in furnishing the service that reflects
physician time and intensity in furnishing the
service. Such portion shall--
(i) include activities before and
after direct patient contact, and
(ii) be defined, with respect to
surgical procedures, to reflect a
global definition including pre-
operative and post-operative
physicians' services.
(B) Practice expense component defined.--The
term ``practice expense component'' means the
portion of the resources used in furnishing the
service that reflects the general categories of
expenses (such as office rent and wages of
personnel, but excluding malpractice expenses)
comprising practice expenses.
(C) Malpractice component defined.--The term
``malpractice component'' means the portion of
the resources used in furnishing the service
that reflects malpractice expenses in
furnishing the service.
(2) Determination of relative values.--
(A) In general.--
(i) Combination of units for
components.--The Secretary shall
develop a methodology for combining the
work, practice expense, and malpractice
relative value units, determined under
subparagraph (C), for each service in a
manner to produce a single relative
value for that service. Such relative
values are subject to adjustment under
subparagraph (F)(i) and section
13515(b) of the Omnibus Budget
Reconciliation Act of 1993.
(ii) Extrapolation.--The Secretary
may use extrapolation and other
techniques to determine the number of
relative value units for physicians'
services for which specific data are
not available and shall take into
account recommendations of the
Physician Payment Review Commission and
the results of consultations with
organizations representing physicians
who provide such services.
(B) Periodic review and adjustments in
relative values.--
(i) Periodic review.--The Secretary,
not less often than every 5 years,
shall review the relative values
established under this paragraph for
all physicians' services.
(ii) Adjustments.--
(I) In general.--The
Secretary shall, to the extent
the Secretary determines to be
necessary and subject to
subclause (II) and paragraph
(7), adjust the number of such
units to take into account
changes in medical practice,
coding changes, new data on
relative value components, or
the addition of new procedures.
The Secretary shall publish an
explanation of the basis for
such adjustments.
(II) Limitation on annual
adjustments.--Subject to
clauses (iv) and (v), the
adjustments under subclause (I)
for a year may not cause the
amount of expenditures under
this part for the year to
differ by more than $20,000,000
from the amount of expenditures
under this part that would have
been made if such adjustments
had not been made.
(iii) Consultation.--The Secretary,
in making adjustments under clause
(ii), shall consult with the Medicare
Payment Advisory Commission and
organizations representing physicians.
(iv) Exemption of certain additional
expenditures from budget neutrality.--
The additional expenditures
attributable to--
(I) subparagraph (H) shall
not be taken into account in
applying clause (ii)(II) for
2004;
(II) subparagraph (I) insofar
as it relates to a physician
fee schedule for 2005 or 2006
shall not be taken into account
in applying clause (ii)(II) for
drug administration services
under the fee schedule for such
year for a specialty described
in subparagraph (I)(ii)(II);
(III) subparagraph (J)
insofar as it relates to a
physician fee schedule for 2005
or 2006 shall not be taken into
account in applying clause
(ii)(II) for drug
administration services under
the fee schedule for such year;
[and]
(IV) subsection (b)(6) shall
not be taken into account in
applying clause (ii)(II) for
2010, 2011, or the first 2
months of 2012[.]; and
(V) the amendment made by
section 2(d)(1) of the Medicare
Vision Act of 2019 shall not be
taken into account in applying
clause (ii)(II) for 2022 and
2023.
(v) Exemption of certain reduced
expenditures from budget-neutrality
calculation.--The following reduced
expenditures, as estimated by the
Secretary, shall not be taken into
account in applying clause (ii)(II):
(I) Reduced payment for
multiple imaging procedures.--
Effective for fee schedules
established beginning with
2007, reduced expenditures
attributable to the multiple
procedure payment reduction for
imaging under the final rule
published by the Secretary in
the Federal Register on
November 21, 2005 (42 CFR 405,
et al.) insofar as it relates
to the physician fee schedules
for 2006 and 2007.
(II) OPD payment cap for
imaging services.--Effective
for fee schedules established
beginning with 2007, reduced
expenditures attributable to
subsection (b)(4).
(III) Change in utilization
rate for certain imaging
services.--Effective for fee
schedules established beginning
with 2011, reduced expenditures
attributable to the changes in
the utilization rate applicable
to 2011 and 2014, as described
in the first and second
sentence, respectively, of
subsection (b)(4)(C).
(VI) Additional reduced
payment for multiple imaging
procedures.--Effective for fee
schedules established beginning
with 2010 (but not applied for
services furnished prior to
July 1, 2010), reduced
expenditures attributable to
the increase in the multiple
procedure payment reduction
from 25 to 50 percent (as
described in subsection
(b)(4)(D)).
(VII) Reduced expenditures
for multiple therapy
services.--Effective for fee
schedules established beginning
with 2011, reduced expenditures
attributable to the multiple
procedure payment reduction for
therapy services (as described
in subsection (b)(7)).
(VIII) Reduced expenditures
attributable to application of
quality incentives for computed
tomography.--Effective for fee
schedules established beginning
with 2016, reduced expenditures
attributable to the application
of the quality incentives for
computed tomography under
section 1834(p)
(IX) Reductions for misvalued
services if target not met.--
Effective for fee schedules
beginning with 2016, reduced
expenditures attributable to
the application of the target
recapture amount described in
subparagraph (O)(iii).
(X) Reduced expenditures
attributable to incentives to
transition to digital
radiography.--Effective for fee
schedules established beginning
with 2017, reduced expenditures
attributable to subparagraph
(A) of subsection (b)(9) and
effective for fee schedules
established beginning with
2018, reduced expenditures
attributable to subparagraph
(B) of such subsection.
(XI) Discount in payment for
professional component of
imaging services.--Effective
for fee schedules established
beginning with 2017, reduced
expenditures attributable to
subsection (b)(10).
(vi) Alternative application of
budget-neutrality adjustment.--
Notwithstanding subsection (d)(9)(A),
effective for fee schedules established
beginning with 2009, with respect to
the 5-year review of work relative
value units used in fee schedules for
2007 and 2008, in lieu of continuing to
apply budget-neutrality adjustments
required under clause (ii) for 2007 and
2008 to work relative value units, the
Secretary shall apply such budget-
neutrality adjustments to the
conversion factor otherwise determined
for years beginning with 2009.
(C) Computation of relative value units for
components.--For purposes of this section for
each physicians' service--
(i) Work relative value units.--The
Secretary shall determine a number of
work relative value units for the
service or group of services based on
the relative resources incorporating
physician time and intensity required
in furnishing the service or group of
services.
(ii) Practice expense relative value
units.--The Secretary shall determine a
number of practice expense relative
value units for the service for years
before 1999 equal to the product of--
(I) the base allowed charges
(as defined in subparagraph
(D)) for the service, and
(II) the practice expense
percentage for the service (as
determined under paragraph
(3)(C)(ii)),
and for years beginning with 1999 based
on the relative practice expense
resources involved in furnishing the
service or group of services. For 1999,
such number of units shall be
determined based 75 percent on such
product and based 25 percent on the
relative practice expense resources
involved in furnishing the service. For
2000, such number of units shall be
determined based 50 percent on such
product and based 50 percent on such
relative practice expense resources.
For 2001, such number of units shall be
determined based 25 percent on such
product and based 75 percent on such
relative practice expense resources.
For a subsequent year, such number of
units shall be determined based
entirely on such relative practice
expense resources.
(iii) Malpractice relative value
units.--The Secretary shall determine a
number of malpractice relative value
units for the service or group of
services for years before 2000 equal to
the product of--
(I) the base allowed charges
(as defined in subparagraph
(D)) for the service or group
of services, and
(II) the malpractice
percentage for the service or
group of services (as
determined under paragraph
(3)(C)(iii)),
and for years beginning with 2000 based
on the malpractice expense resources
involved in furnishing the service or
group of services.
(D) Base allowed charges defined.--In this
paragraph, the term ``base allowed charges''
means, with respect to a physician's service,
the national average allowed charges for the
service under this part for services furnished
during 1991, as estimated by the Secretary
using the most recent data available.
(E) Reduction in practice expense relative
value units for certain services.--
(i) In general.--Subject to clause
(ii), the Secretary shall reduce the
practice expense relative value units
applied to services described in clause
(iii) furnished in--
(I) 1994, by 25 percent of
the number by which the number
of practice expense relative
value units (determined for
1994 without regard to this
subparagraph) exceeds the
number of work relative value
units determined for 1994,
(II) 1995, by an additional
25 percent of such excess, and
(III) 1996, by an additional
25 percent of such excess.
(ii) Floor on reductions.--The
practice expense relative value units
for a physician's service shall not be
reduced under this subparagraph to a
number less than 128 percent of the
number of work relative value units.
(iii) Services covered.--For purposes
of clause (i), the services described
in this clause are physicians' services
that are not described in clause (iv)
and for which--
(I) there are work relative
value units, and
(II) the number of practice
expense relative value units
(determined for 1994) exceeds
128 percent of the number of
work relative value units
(determined for such year).
(iv) Excluded services.--For purposes
of clause (iii), the services described
in this clause are services which the
Secretary determines at least 75
percent of which are provided under
this title in an office setting.
(F) Budget neutrality adjustments.--The
Secretary--
(i) shall reduce the relative values
for all services (other than anesthesia
services) established under this
paragraph (and in the case of
anesthesia services, the conversion
factor established by the Secretary for
such services) by such percentage as
the Secretary determines to be
necessary so that, beginning in 1996,
the amendment made by section 13514(a)
of the Omnibus Budget Reconciliation
Act of 1993 would not result in
expenditures under this section that
exceed the amount of such expenditures
that would have been made if such
amendment had not been made, and
(ii) shall reduce the amounts
determined under subsection
(a)(2)(B)(ii)(I) by such percentage as
the Secretary determines to be required
to assure that, taking into account the
reductions made under clause (i), the
amendment made by section 13514(a) of
the Omnibus Budget Reconciliation Act
of 1993 would not result in
expenditures under this section in 1994
that exceed the amount of such
expenditures that would have been made
if such amendment had not been made.
(G) Adjustments in relative value units for
1998.--
(i) In general.--The Secretary
shall--
(I) subject to clauses (iv)
and (v), reduce the practice
expense relative value units
applied to any services
described in clause (ii)
furnished in 1998 to a number
equal to 110 percent of the
number of work relative value
units, and
(II) increase the practice
expense relative value units
for office visit procedure
codes during 1998 by a uniform
percentage which the Secretary
estimates will result in an
aggregate increase in payments
for such services equal to the
aggregate decrease in payments
by reason of subclause (I).
(ii) Services covered.--For purposes
of clause (i), the services described
in this clause are physicians' services
that are not described in clause (iii)
and for which--
(I) there are work relative
value units, and
(II) the number of practice
expense relative value units
(determined for 1998) exceeds
110 percent of the number of
work relative value units
(determined for such year).
(iii) Excluded services.--For
purposes of clause (ii), the services
described in this clause are services
which the Secretary determines at least
75 percent of which are provided under
this title in an office setting.
(iv) Limitation on aggregate
reallocation.--If the application of
clause (i)(I) would result in an
aggregate amount of reductions under
such clause in excess of $390,000,000,
such clause shall be applied by
substituting for 110 percent such
greater percentage as the Secretary
estimates will result in the aggregate
amount of such reductions equaling
$390,000,000.
(v) No reduction for certain
services.--Practice expense relative
value units for a procedure performed
in an office or in a setting out of an
office shall not be reduced under
clause (i) if the in-office or out-of-
office practice expense relative value,
respectively, for the procedure would
increase under the proposed rule on
resource-based practice expenses issued
by the Secretary on June 18, 1997 (62
Federal Register 33158 et seq.).
(H) Adjustments in practice expense relative
value units for certain drug administration
services beginning in 2004.--
(i) Use of survey data.--In
establishing the physician fee schedule
under subsection (b) with respect to
payments for services furnished on or
after January 1, 2004, the Secretary
shall, in determining practice expense
relative value units under this
subsection, utilize a survey submitted
to the Secretary as of January 1, 2003,
by a physician specialty organization
pursuant to section 212 of the
Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999 if the
survey--
(I) covers practice expenses
for oncology drug
administration services; and
(II) meets criteria
established by the Secretary
for acceptance of such surveys.
(ii) Pricing of clinical oncology
nurses in practice expense
methodology.--If the survey described
in clause (i) includes data on wages,
salaries, and compensation of clinical
oncology nurses, the Secretary shall
utilize such data in the methodology
for determining practice expense
relative value units under subsection
(c).
(iii) Work relative value units for
certain drug administration services.--
In establishing the relative value
units under this paragraph for drug
administration services described in
clause (iv) furnished on or after
January 1, 2004, the Secretary shall
establish work relative value units
equal to the work relative value units
for a level 1 office medical visit for
an established patient.
(iv) Drug administration services
described.--The drug administration
services described in this clause are
physicians' services--
(I) which are classified as
of October 1, 2003, within any
of the following groups of
procedures: therapeutic or
diagnostic infusions (excluding
chemotherapy); chemotherapy
administration services; and
therapeutic, prophylactic, or
diagnostic injections;
(II) for which there are no
work relative value units
assigned under this subsection
as of such date; and
(III) for which national
relative value units have been
assigned under this subsection
as of such date.
(I) Adjustments in practice expense relative
value units for certain drug administration
services beginning with 2005.--
(i) In general.--In establishing the
physician fee schedule under subsection
(b) with respect to payments for
services furnished on or after January
1, 2005 or 2006, the Secretary shall
adjust the practice expense relative
value units for such year consistent
with clause (ii).
(ii) Use of supplemental survey
data.--
(I) In general.--Subject to
subclause (II), if a specialty
submits to the Secretary by not
later than March 1, 2004, for
2005, or March 1, 2005, for
2006, data that includes
expenses for the administration
of drugs and biologicals for
which the payment amount is
determined pursuant to section
1842(o), the Secretary shall
use such supplemental survey
data in carrying out this
subparagraph for the years
involved insofar as they are
collected and provided by
entities and organizations
consistent with the criteria
established by the Secretary
pursuant to section 212(a) of
the Medicare, Medicaid, and
SCHIP Balanced Budget
Refinement Act of 1999.
(II) Limitation on
specialty.--Subclause (I) shall
apply to a specialty only
insofar as not less than 40
percent of payments for the
specialty under this title in
2002 are attributable to the
administration of drugs and
biologicals, as determined by
the Secretary.
(III) Application.--This
clause shall not apply with
respect to a survey to which
subparagraph (H)(i) applies.
(J) Provisions for appropriate reporting and
billing for physicians' services associated
with the administration of covered outpatient
drugs and biologicals.--
(i) Evaluation of codes.--The
Secretary shall promptly evaluate
existing drug administration codes for
physicians' services to ensure accurate
reporting and billing for such
services, taking into account levels of
complexity of the administration and
resource consumption.
(ii) Use of existing processes.--In
carrying out clause (i), the Secretary
shall use existing processes for the
consideration of coding changes and, to
the extent coding changes are made,
shall use such processes in
establishing relative values for such
services.
(iii) Implementation.--In carrying
out clause (i), the Secretary shall
consult with representatives of
physician specialties affected by the
implementation of section 1847A or
section 1847B, and shall take such
steps within the Secretary's authority
to expedite such considerations under
clause (ii).
(iv) Subsequent, budget neutral
adjustments permitted.--Nothing in
subparagraph (H) or (I) or this
subparagraph shall be construed as
preventing the Secretary from providing
for adjustments in practice expense
relative value units under (and
consistent with) subparagraph (B) for
years after 2004, 2005, or 2006,
respectively.
(K) Potentially misvalued codes.--
(i) In general.--The Secretary
shall--
(I) periodically identify
services as being potentially
misvalued using criteria
specified in clause (ii); and
(II) review and make
appropriate adjustments to the
relative values established
under this paragraph for
services identified as being
potentially misvalued under
subclause (I).
(ii) Identification of potentially
misvalued codes.--For purposes of
identifying potentially misvalued codes
pursuant to clause (i)(I), the
Secretary shall examine codes (and
families of codes as appropriate) based
on any or all of the following
criteria:
(I) Codes that have
experienced the fastest growth.
(II) Codes that have
experienced substantial changes
in practice expenses.
(III) Codes that describe new
technologies or services within
an appropriate time period
(such as 3 years) after the
relative values are initially
established for such codes.
(IV) Codes which are multiple
codes that are frequently
billed in conjunction with
furnishing a single service.
(V) Codes with low relative
values, particularly those that
are often billed multiple times
for a single treatment.
(VI) Codes that have not been
subject to review since
implementation of the fee
schedule.
(VII) Codes that account for
the majority of spending under
the physician fee schedule.
(VIII) Codes for services
that have experienced a
substantial change in the
hospital length of stay or
procedure time.
(IX) Codes for which there
may be a change in the typical
site of service since the code
was last valued.
(X) Codes for which there is
a significant difference in
payment for the same service
between different sites of
service.
(XI) Codes for which there
may be anomalies in relative
values within a family of
codes.
(XII) Codes for services
where there may be efficiencies
when a service is furnished at
the same time as other
services.
(XIII) Codes with high intra-
service work per unit of time.
(XIV) Codes with high
practice expense relative value
units.
(XV) Codes with high cost
supplies.
(XVI) Codes as determined
appropriate by the Secretary.
(iii) Review and adjustments.--
(I) The Secretary may use
existing processes to receive
recommendations on the review
and appropriate adjustment of
potentially misvalued services
described in clause (i)(II).
(II) The Secretary may
conduct surveys, other data
collection activities, studies,
or other analyses as the
Secretary determines to be
appropriate to facilitate the
review and appropriate
adjustment described in clause
(i)(II).
(III) The Secretary may use
analytic contractors to
identify and analyze services
identified under clause (i)(I),
conduct surveys or collect
data, and make recommendations
on the review and appropriate
adjustment of services
described in clause (i)(II).
(IV) The Secretary may
coordinate the review and
appropriate adjustment
described in clause (i)(II)
with the periodic review
described in subparagraph (B).
(V) As part of the review and
adjustment described in clause
(i)(II), including with respect
to codes with low relative
values described in clause
(ii), the Secretary may make
appropriate coding revisions
(including using existing
processes for consideration of
coding changes) which may
include consolidation of
individual services into
bundled codes for payment under
the fee schedule under
subsection (b).
(VI) The provisions of
subparagraph (B)(ii)(II) and
paragraph (7) shall apply to
adjustments to relative value
units made pursuant to this
subparagraph in the same manner
as such provisions apply to
adjustments under subparagraph
(B)(ii)(I).
(iv) Treatment of certain radiation
therapy services.--Radiation treatment
delivery and related imaging services
identified under subsection (b)(11)
shall not be considered as potentially
misvalued services for purposes of this
subparagraph and subparagraph (O) for
2017, 2018, and 2019.
(L) Validating relative value units.--
(i) In general.--The Secretary shall
establish a process to validate
relative value units under the fee
schedule under subsection (b).
(ii) Components and elements of
work.--The process described in clause
(i) may include validation of work
elements (such as time, mental effort
and professional judgment, technical
skill and physical effort, and stress
due to risk) involved with furnishing a
service and may include validation of
the pre-, post-, and intra-service
components of work.
(iii) Scope of codes.--The validation
of work relative value units shall
include a sampling of codes for
services that is the same as the codes
listed under subparagraph (K)(ii).
(iv) Methods.--The Secretary may
conduct the validation under this
subparagraph using methods described in
subclauses (I) through (V) of
subparagraph (K)(iii) as the Secretary
determines to be appropriate.
(v) Adjustments.--The Secretary shall
make appropriate adjustments to the
work relative value units under the fee
schedule under subsection (b). The
provisions of subparagraph (B)(ii)(II)
shall apply to adjustments to relative
value units made pursuant to this
subparagraph in the same manner as such
provisions apply to adjustments under
subparagraph (B)(ii)(II).
(M) Authority to collect and use information
on physicians' services in the determination of
relative values.--
(i) Collection of information.--
Notwithstanding any other provision of
law, the Secretary may collect or
obtain information on the resources
directly or indirectly related to
furnishing services for which payment
is made under the fee schedule
established under subsection (b). Such
information may be collected or
obtained from any eligible professional
or any other source.
(ii) Use of information.--
Notwithstanding any other provision of
law, subject to clause (v), the
Secretary may (as the Secretary
determines appropriate) use information
collected or obtained pursuant to
clause (i) in the determination of
relative values for services under this
section.
(iii) Types of information.--The
types of information described in
clauses (i) and (ii) may, at the
Secretary's discretion, include any or
all of the following:
(I) Time involved in
furnishing services.
(II) Amounts and types of
practice expense inputs
involved with furnishing
services.
(III) Prices (net of any
discounts) for practice expense
inputs, which may include paid
invoice prices or other
documentation or records.
(IV) Overhead and accounting
information for practices of
physicians and other suppliers.
(V) Any other element that
would improve the valuation of
services under this section.
(iv) Information collection
mechanisms.--Information may be
collected or obtained pursuant to this
subparagraph from any or all of the
following:
(I) Surveys of physicians,
other suppliers, providers of
services, manufacturers, and
vendors.
(II) Surgical logs, billing
systems, or other practice or
facility records.
(III) Electronic health
records.
(IV) Any other mechanism
determined appropriate by the
Secretary.
(v) Transparency of use of
information.--
(I) In general.--Subject to
subclauses (II) and (III), if
the Secretary uses information
collected or obtained under
this subparagraph in the
determination of relative
values under this subsection,
the Secretary shall disclose
the information source and
discuss the use of such
information in such
determination of relative
values through notice and
comment rulemaking.
(II) Thresholds for use.--The
Secretary may establish
thresholds in order to use such
information, including the
exclusion of information
collected or obtained from
eligible professionals who use
very high resources (as
determined by the Secretary) in
furnishing a service.
(III) Disclosure of
information.--The Secretary
shall make aggregate
information available under
this subparagraph but shall not
disclose information in a form
or manner that identifies an
eligible professional or a
group practice, or information
collected or obtained pursuant
to a nondisclosure agreement.
(vi) Incentive to participate.--The
Secretary may provide for such payments
under this part to an eligible
professional that submits such
solicited information under this
subparagraph as the Secretary
determines appropriate in order to
compensate such eligible professional
for such submission. Such payments
shall be provided in a form and manner
specified by the Secretary.
(vii) Administration.--Chapter 35 of
title 44, United States Code, shall not
apply to information collected or
obtained under this subparagraph.
(viii) Definition of eligible
professional.--In this subparagraph,
the term ``eligible professional'' has
the meaning given such term in
subsection (k)(3)(B).
(ix) Funding.--For purposes of
carrying out this subparagraph, in
addition to funds otherwise
appropriated, the Secretary shall
provide for the transfer, from the
Federal Supplementary Medical Insurance
Trust Fund under section 1841, of
$2,000,000 to the Centers for Medicare
& Medicaid Services Program Management
Account for each fiscal year beginning
with fiscal year 2014. Amounts
transferred under the preceding
sentence for a fiscal year shall be
available until expended.
(N) Authority for alternative approaches to
establishing practice expense relative
values.--The Secretary may establish or adjust
practice expense relative values under this
subsection using cost, charge, or other data
from suppliers or providers of services,
including information collected or obtained
under subparagraph (M).
(O) Target for relative value adjustments for
misvalued services.--With respect to fee
schedules established for each of 2016 through
2018, the following shall apply:
(i) Determination of net reduction in
expenditures.--For each year, the
Secretary shall determine the estimated
net reduction in expenditures under the
fee schedule under this section with
respect to the year as a result of
adjustments to the relative values
established under this paragraph for
misvalued codes.
(ii) Budget neutral redistribution of
funds if target met and counting
overages towards the target for the
succeeding year.--If the estimated net
reduction in expenditures determined
under clause (i) for the year is equal
to or greater than the target for the
year--
(I) reduced expenditures
attributable to such
adjustments shall be
redistributed for the year in a
budget neutral manner in
accordance with subparagraph
(B)(ii)(II); and
(II) the amount by which such
reduced expenditures exceeds
the target for the year shall
be treated as a reduction in
expenditures described in
clause (i) for the succeeding
year, for purposes of
determining whether the target
has or has not been met under
this subparagraph with respect
to that year.
(iii) Exemption from budget
neutrality if target not met.--If the
estimated net reduction in expenditures
determined under clause (i) for the
year is less than the target for the
year, reduced expenditures in an amount
equal to the target recapture amount
shall not be taken into account in
applying subparagraph (B)(ii)(II) with
respect to fee schedules beginning with
2016.
(iv) Target recapture amount.--For
purposes of clause (iii), the target
recapture amount is, with respect to a
year, an amount equal to the difference
between--
(I) the target for the year;
and
(II) the estimated net
reduction in expenditures
determined under clause (i) for
the year.
(v) Target.--For purposes of this
subparagraph, with respect to a year,
the target is calculated as 0.5 percent
(or, for 2016, 1.0 percent) of the
estimated amount of expenditures under
the fee schedule under this section for
the year.
(3) Component percentages.--For purposes of paragraph
(2), the Secretary shall determine a work percentage, a
practice expense percentage, and a malpractice
percentage for each physician's service as follows:
(A) Division of services by specialty.--For
each physician's service or class of
physicians' services, the Secretary shall
determine the average percentage of each such
service or class of services that is performed,
nationwide, under this part by physicians in
each of the different physician specialties (as
identified by the Secretary).
(B) Division of specialty by component.--The
Secretary shall determine the average
percentage division of resources, among the
work component, the practice expense component,
and the malpractice component, used by
physicians in each of such specialties in
furnishing physicians' services. Such
percentages shall be based on national data
that describe the elements of physician
practice costs and revenues, by physician
specialty. The Secretary may use extrapolation
and other techniques to determine practice
costs and revenues for specialties for which
adequate data are not available.
(C) Determination of component percentages.--
(i) Work percentage.--The work
percentage for a service (or class of
services) is equal to the sum (for all
physician specialties) of--
(I) the average percentage
division for the work component
for each physician specialty
(determined under subparagraph
(B)), multiplied by
(II) the proportion
(determined under subparagraph
(A)) of such service (or
services) performed by
physicians in that specialty.
(ii) Practice expense percentage.--
For years before 2002, the practice
expense percentage for a service (or
class of services) is equal to the sum
(for all physician specialties) of--
(I) the average percentage
division for the practice
expense component for each
physician specialty (determined
under subparagraph (B)),
multiplied by
(II) the proportion
(determined under subparagraph
(A)) of such service (or
services) performed by
physicians in that specialty.
(iii) Malpractice percentage.--For
years before 1999, the malpractice
percentage for a service (or class of
services) is equal to the sum (for all
physician specialties) of--
(I) the average percentage
division for the malpractice
component for each physician
specialty (determined under
subparagraph (B)), multiplied
by
(II) the proportion
(determined under subparagraph
(A)) of such service (or
services) performed by
physicians in that specialty.
(D) Periodic recomputation.--The Secretary
may, from time to time, provide for the
recomputation of work percentages, practice
expense percentages, and malpractice
percentages determined under this paragraph.
(4) Ancillary policies.--The Secretary may establish
ancillary policies (with respect to the use of
modifiers, local codes, and other matters) as may be
necessary to implement this section.
(5) Coding.--The Secretary shall establish a uniform
procedure coding system for the coding of all
physicians' services. The Secretary shall provide for
an appropriate coding structure for visits and
consultations. The Secretary may incorporate the use of
time in the coding for visits and consultations. The
Secretary, in establishing such coding system, shall
consult with the Physician Payment Review Commission
and other organizations representing physicians.
(6) No variation for specialists.--The Secretary may
not vary the conversion factor or the number of
relative value units for a physicians' service based on
whether the physician furnishing the service is a
specialist or based on the type of specialty of the
physician.
(7) Phase-in of significant relative value unit (rvu)
reductions.--Effective for fee schedules established
beginning with 2016, for services that are not new or
revised codes, if the total relative value units for a
service for a year would otherwise be decreased by an
estimated amount equal to or greater than 20 percent as
compared to the total relative value units for the
previous year, the applicable adjustments in work,
practice expense, and malpractice relative value units
shall be phased-in over a 2-year period.
(8) Global surgical packages.--
(A) Prohibition of implementation of rule
regarding global surgical packages.--
(i) In general.--The Secretary shall
not implement the policy established in
the final rule published on November
13, 2014 (79 Fed. Reg. 67548 et seq.),
that requires the transition of all 10-
day and 90-day global surgery packages
to 0-day global periods.
(ii) Construction.--Nothing in clause
(i) shall be construed to prevent the
Secretary from revaluing misvalued
codes for specific surgical services or
assigning values to new or revised
codes for surgical services.
(B) Collection of data on services included
in global surgical packages.--
(i) In general.--Subject to clause
(ii), the Secretary shall through
rulemaking develop and implement a
process to gather, from a
representative sample of physicians,
beginning not later than January 1,
2017, information needed to value
surgical services. Such information
shall include the number and level of
medical visits furnished during the
global period and other items and
services related to the surgery and
furnished during the global period, as
appropriate. Such information shall be
reported on claims at the end of the
global period or in another manner
specified by the Secretary. For
purposes of carrying out this paragraph
(other than clause (iii)), the
Secretary shall transfer from the
Federal Supplemental Medical Insurance
Trust Fund under section 1841
$2,000,000 to the Center for Medicare &
Medicaid Services Program Management
Account for fiscal year 2015. Amounts
transferred under the previous sentence
shall remain available until expended.
(ii) Reassessment and potential
sunset.--Every 4 years, the Secretary
shall reassess the value of the
information collected pursuant to
clause (i). Based on such a
reassessment and by regulation, the
Secretary may discontinue the
requirement for collection of
information under such clause if the
Secretary determines that the Secretary
has adequate information from other
sources, such as qualified clinical
data registries, surgical logs, billing
systems or other practice or facility
records, and electronic health records,
in order to accurately value global
surgical services under this section.
(iii) Inspector general audit.--The
Inspector General of the Department of
Health and Human Services shall audit a
sample of the information reported
under clause (i) to verify the accuracy
of the information so reported.
(C) Improving accuracy of pricing for
surgical services.--For years beginning with
2019, the Secretary shall use the information
reported under subparagraph (B)(i) as
appropriate and other available data for the
purpose of improving the accuracy of valuation
of surgical services under the physician fee
schedule under this section.
(d) Conversion Factors.--
(1) Establishment.--
(A) In general.--The conversion factor for
each year shall be the conversion factor
established under this subsection for the
previous year (or, in the case of 1992,
specified in subparagraph (B)) adjusted by the
update (established under paragraph (3)) for
the year involved (for years before 2001) and,
for years beginning with 2001 and ending with
2025, multiplied by the update (established
under paragraph (4) or a subsequent paragraph)
for the year involved. There shall be two
separate conversion factors for each year
beginning with 2026, one for items and services
furnished by a qualifying APM participant (as
defined in section 1833(z)(2)) (referred to in
this subsection as the ``qualifying APM
conversion factor'') and the other for other
items and services (referred to in this
subsection as the ``nonqualifying APM
conversion factor''), equal to the respective
conversion factor for the previous year (or, in
the case of 2026, equal to the single
conversion factor for 2025) multiplied by the
update established under paragraph (20) for
such respective conversion factor for such
year.
(B) Special provision for 1992.--For purposes
of subparagraph (A), the conversion factor
specified in this subparagraph is a conversion
factor (determined by the Secretary) which, if
this section were to apply during 1991 using
such conversion factor, would result in the
same aggregate amount of payments under this
part for physicians' services as the estimated
aggregate amount of the payments under this
part for such services in 1991.
(C) Special rules for 1998.--Except as
provided in subparagraph (D), the single
conversion factor for 1998 under this
subsection shall be the conversion factor for
primary care services for 1997, increased by
the Secretary's estimate of the weighted
average of the three separate updates that
would otherwise occur were it not for the
enactment of chapter 1 of subtitle F of title
IV of the Balanced Budget Act of 1997.
(D) Special rules for anesthesia services.--
The separate conversion factor for anesthesia
services for a year shall be equal to 46
percent of the single conversion factor (or,
beginning with 2026, applicable conversion
factor) established for other physicians'
services, except as adjusted for changes in
work, practice expense, or malpractice relative
value units.
(E) Publication and dissemination of
information.--The Secretary shall--
(i) cause to have published in the
Federal Register not later than
November 1 of each year (beginning with
2000) the conversion factor which will
apply to physicians' services for the
succeeding year, the update determined
under paragraph (4) for such succeeding
year, and the allowed expenditures
under such paragraph for such
succeeding year; and
(ii) make available to the Medicare
Payment Advisory Commission and the
public by March 1 of each year
(beginning with 2000) an estimate of
the sustainable growth rate and of the
conversion factor which will apply to
physicians' services for the succeeding
year and data used in making such
estimate.
(3) Update for 1999 and 2000.--
(A) In general.--Unless otherwise provided by
law, subject to subparagraph (D) and the
budget-neutrality factor determined by the
Secretary under subsection (c)(2)(B)(ii), the
update to the single conversion factor
established in paragraph (1)(C) for 1999 and
2000 is equal to the product of--
(i) 1 plus the Secretary's estimate
of the percentage increase in the MEI
(as defined in section 1842(i)(3)) for
the year (divided by 100), and
(ii) 1 plus the Secretary's estimate
of the update adjustment factor for the
year (divided by 100),
minus 1 and multiplied by 100.
(B) Update adjustment factor.--For purposes
of subparagraph (A)(ii), the ``update
adjustment factor'' for a year is equal (as
estimated by the Secretary) to--
(i) the difference between (I) the
sum of the allowed expenditures for
physicians' services (as determined
under subparagraph (C)) for the period
beginning April 1, 1997, and ending on
March 31 of the year involved, and (II)
the amount of actual expenditures for
physicians' services furnished during
the period beginning April 1, 1997, and
ending on March 31 of the preceding
year; divided by
(ii) the actual expenditures for
physicians' services for the 12-month
period ending on March 31 of the
preceding year, increased by the
sustainable growth rate under
subsection (f) for the fiscal year
which begins during such 12-month
period.
(C) Determination of allowed expenditures.--
For purposes of this paragraph and paragraph
(4), the allowed expenditures for physicians'
services for the 12-month period ending with
March 31 of--
(i) 1997 is equal to the actual
expenditures for physicians' services
furnished during such 12-month period,
as estimated by the Secretary; or
(ii) a subsequent year is equal to
the allowed expenditures for
physicians' services for the previous
year, increased by the sustainable
growth rate under subsection (f) for
the fiscal year which begins during
such 12-month period.
(D) Restriction on variation from medicare
economic index.--Notwithstanding the amount of
the update adjustment factor determined under
subparagraph (B) for a year, the update in the
conversion factor under this paragraph for the
year may not be--
(i) greater than 100 times the
following amount: (1.03 + (MEI
percentage/100)) -1; or
(ii) less than 100 times the
following amount: (0.93 + (MEI
percentage/100)) -1,
where ``MEI percentage'' means the Secretary's
estimate of the percentage increase in the MEI
(as defined in section 1842(i)(3)) for the year
involved.
(4) Update for years beginning with 2001 and ending
with 2014.--
(A) In general.--Unless otherwise provided by
law, subject to the budget-neutrality factor
determined by the Secretary under subsection
(c)(2)(B)(ii) and subject to adjustment under
subparagraph (F), the update to the single
conversion factor established in paragraph
(1)(C) for a year beginning with 2001 and
ending with 2014 is equal to the product of--
(i) 1 plus the Secretary's estimate
of the percentage increase in the MEI
(as defined in section 1842(i)(3)) for
the year (divided by 100); and
(ii) 1 plus the Secretary's estimate
of the update adjustment factor under
subparagraph (B) for the year.
(B) Update adjustment factor.--For purposes
of subparagraph (A)(ii), subject to
subparagraph (D) and the succeeding paragraphs
of this subsection, the ``update adjustment
factor'' for a year is equal (as estimated by
the Secretary) to the sum of the following:
(i) Prior year adjustment
component.--An amount determined by--
(I) computing the difference
(which may be positive or
negative) between the amount of
the allowed expenditures for
physicians' services for the
prior year (as determined under
subparagraph (C)) and the
amount of the actual
expenditures for such services
for that year;
(II) dividing that difference
by the amount of the actual
expenditures for such services
for that year; and
(III) multiplying that
quotient by 0.75.
(ii) Cumulative adjustment
component.--An amount determined by--
(I) computing the difference
(which may be positive or
negative) between the amount of
the allowed expenditures for
physicians' services (as
determined under subparagraph
(C)) from April 1, 1996,
through the end of the prior
year and the amount of the
actual expenditures for such
services during that period;
(II) dividing that difference
by actual expenditures for such
services for the prior year as
increased by the sustainable
growth rate under subsection
(f) for the year for which the
update adjustment factor is to
be determined; and
(III) multiplying that
quotient by 0.33.
(C) Determination of allowed expenditures.--
For purposes of this paragraph:
(i) Period up to april 1, 1999.--The
allowed expenditures for physicians'
services for a period before April 1,
1999, shall be the amount of the
allowed expenditures for such period as
determined under paragraph (3)(C).
(ii) Transition to calendar year
allowed expenditures.--Subject to
subparagraph (E), the allowed
expenditures for--
(I) the 9-month period
beginning April 1, 1999, shall
be the Secretary's estimate of
the amount of the allowed
expenditures that would be
permitted under paragraph
(3)(C) for such period; and
(II) the year of 1999, shall
be the Secretary's estimate of
the amount of the allowed
expenditures that would be
permitted under paragraph
(3)(C) for such year.
(iii) Years beginning with 2000.--The
allowed expenditures for a year
(beginning with 2000) is equal to the
allowed expenditures for physicians'
services for the previous year,
increased by the sustainable growth
rate under subsection (f) for the year
involved.
(D) Restriction on update adjustment
factor.--The update adjustment factor
determined under subparagraph (B) for a year
may not be less than -0.07 or greater than
0.03.
(E) Recalculation of allowed expenditures for
updates beginning with 2001.--For purposes of
determining the update adjustment factor for a
year beginning with 2001, the Secretary shall
recompute the allowed expenditures for previous
periods beginning on or after April 1, 1999,
consistent with subsection (f)(3).
(F) Transitional adjustment designed to
provide for budget neutrality.--Under this
subparagraph the Secretary shall provide for an
adjustment to the update under subparagraph
(A)--
(i) for each of 2001, 2002, 2003, and
2004, of -0.2 percent; and
(ii) for 2005 of +0.8 percent.
(5) Update for 2004 and 2005.--The update to the
single conversion factor established in paragraph
(1)(C) for each of 2004 and 2005 shall be not less than
1.5 percent.
(6) Update for 2006.--The update to the single
conversion factor established in paragraph (1)(C) for
2006 shall be 0 percent.
(7) Conversion factor for 2007.--
(A) In general.--The conversion factor that
would otherwise be applicable under this
subsection for 2007 shall be the amount of such
conversion factor divided by the product of--
(i) 1 plus the Secretary's estimate
of the percentage increase in the MEI
(as defined in section 1842(i)(3)) for
2007 (divided by 100); and
(ii) 1 plus the Secretary's estimate
of the update adjustment factor under
paragraph (4)(B) for 2007.
(B) No effect on computation of conversion
factor for 2008.--The conversion factor under
this subsection shall be computed under
paragraph (1)(A) for 2008 as if subparagraph
(A) had never applied.
(8) Update for 2008.--
(A) In general.--Subject to paragraph (7)(B),
in lieu of the update to the single conversion
factor established in paragraph (1)(C) that
would otherwise apply for 2008, the update to
the single conversion factor shall be 0.5
percent.
(B) No effect on computation of conversion
factor for 2009.--The conversion factor under
this subsection shall be computed under
paragraph (1)(A) for 2009 and subsequent years
as if subparagraph (A) had never applied.
(9) Update for 2009.--
(A) In general.--Subject to paragraphs (7)(B)
and (8)(B), in lieu of the update to the single
conversion factor established in paragraph
(1)(C) that would otherwise apply for 2009, the
update to the single conversion factor shall be
1.1 percent.
(B) No effect on computation of conversion
factor for 2010 and subsequent years.--The
conversion factor under this subsection shall
be computed under paragraph (1)(A) for 2010 and
subsequent years as if subparagraph (A) had
never applied.
(10) Update for January through may of 2010.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), and (9)(B), in lieu of the
update to the single conversion factor
established in paragraph (1)(C) that would
otherwise apply for 2010 for the period
beginning on January 1, 2010, and ending on May
31, 2010, the update to the single conversion
factor shall be 0 percent for 2010.
(B) No effect on computation of conversion
factor for remaining portion of 2010 and
subsequent years.--The conversion factor under
this subsection shall be computed under
paragraph (1)(A) for the period beginning on
June 1, 2010, and ending on December 31, 2010,
and for 2011 and subsequent years as if
subparagraph (A) had never applied.
(11) Update for june through december of 2010.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), (9)(B), and (10)(B), in lieu of
the update to the single conversion factor
established in paragraph (1)(C) that would
otherwise apply for 2010 for the period
beginning on June 1, 2010, and ending on
December 31, 2010, the update to the single
conversion factor shall be 2.2 percent.
(B) No effect on computation of conversion
factor for 2011 and subsequent years.--The
conversion factor under this subsection shall
be computed under paragraph (1)(A) for 2011 and
subsequent years as if subparagraph (A) had
never applied.
(12) Update for 2011.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), (9)(B), (10)(B), and (11)(B),
in lieu of the update to the single conversion
factor established in paragraph (1)(C) that
would otherwise apply for 2011, the update to
the single conversion factor shall be 0
percent.
(B) No effect on computation of conversion
factor for 2012 and subsequent years.--The
conversion factor under this subsection shall
be computed under paragraph (1)(A) for 2012 and
subsequent years as if subparagraph (A) had
never applied.
(13) Update for 2012.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), (9)(B), (10)(B), (11)(B), and
(12)(B), in lieu of the update to the single
conversion factor established in paragraph
(1)(C) that would otherwise apply for 2012, the
update to the single conversion factor shall be
zero percent.
(B) No effect on computation of conversion
factor for 2013 and subsequent years.--The
conversion factor under this subsection shall
be computed under paragraph (1)(A) for 2013 and
subsequent years as if subparagraph (A) had
never applied.
(14) Update for 2013.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), (9)(B), (10)(B), (11)(B),
(12)(B), and (13)(B), in lieu of the update to
the single conversion factor established in
paragraph (1)(C) that would otherwise apply for
2013, the update to the single conversion
factor for such year shall be zero percent.
(B) No effect on computation of conversion
factor for 2014 and subsequent years.--The
conversion factor under this subsection shall
be computed under paragraph (1)(A) for 2014 and
subsequent years as if subparagraph (A) had
never applied.
(15) Update for 2014.--
(A) In general.--Subject to paragraphs
(7)(B), (8)(B), (9)(B), (10)(B), (11)(B),
(12)(B), (13)(B), and (14)(B), in lieu of the
update to the single conversion factor
established in paragraph (1)(C) that would
otherwise apply for 2014, the update to the
single conversion factor shall be 0.5 percent.
(B) No effect on computation of conversion
factor for subsequent years.--The conversion
factor under this subsection shall be computed
under paragraph (1)(A) for 2015 and subsequent
years as if subparagraph (A) had never applied.
(16) Update for january through june of 2015.--
Subject to paragraphs (7)(B), (8)(B), (9)(B), (10)(B),
(11)(B), (12)(B), (13)(B), (14)(B), and (15)(B), in
lieu of the update to the single conversion factor
established in paragraph (1)(C) that would otherwise
apply for 2015 for the period beginning on January 1,
2015, and ending on June 30, 2015, the update to the
single conversion factor shall be 0.0 percent.
(17) Update for july through december of 2015.--The
update to the single conversion factor established in
paragraph (1)(C) for the period beginning on July 1,
2015, and ending on December 31, 2015, shall be 0.5
percent.
(18) Update for 2016 through 2019.--The update to the
single conversion factor established in paragraph
(1)(C)--
(A) for 2016 and each subsequent year through
2018 shall be 0.5 percent; and
(B) for 2019 shall be 0.25 percent.
(19) Update for 2020 through 2025.--The update to the
single conversion factor established in paragraph
(1)(C) for 2020 and each subsequent year through 2025
shall be 0.0 percent.
(20) Update for 2026 and subsequent years.--For 2026
and each subsequent year, the update to the qualifying
APM conversion factor established under paragraph
(1)(A) is 0.75 percent, and the update to the
nonqualifying APM conversion factor established under
such paragraph is 0.25 percent.
(e) Geographic Adjustment Factors.--
(1) Establishment of geographic indices.--
(A) In general.--Subject to subparagraphs
(B), (C), (E), (G), (H), and (I), the Secretary
shall establish--
(i) an index which reflects the
relative costs of the mix of goods and
services comprising practice expenses
(other than malpractice expenses) in
the different fee schedule areas
compared to the national average of
such costs,
(ii) an index which reflects the
relative costs of malpractice expenses
in the different fee schedule areas
compared to the national average of
such costs, and
(iii) an index which reflects \1/4\
of the difference between the relative
value of physicians' work effort in
each of the different fee schedule
areas and the national average of such
work effort.
(B) Class-specific geographic cost-of-
practice indices.--The Secretary may establish
more than one index under subparagraph (A)(i)
in the case of classes of physicians' services,
if, because of differences in the mix of goods
and services comprising practice expenses for
the different classes of services, the
application of a single index under such clause
to different classes of such services would be
substantially inequitable.
(C) Peridic review and adjustments in
geographic adjustment factors.--The Secretary,
not less often than every 3 years, shall, in
consultation with appropriate representatives
of physicians, review the indices established
under subparagraph (A) and the geographic index
values applied under this subsection for all
fee schedule areas. Based on such review, the
Secretary may revise such index and adjust such
index values, except that, if more than 1 year
has elapsed since the date of the last previous
adjustment, the adjustment to be applied in the
first year of the next adjustment shall be \1/
2\ of the adjustment that otherwise would be
made.
(D) Use of recent data.--In establishing
indices and index values under this paragraph,
the Secretary shall use the most recent data
available relating to practice expenses,
malpractice expenses, and physician work effort
in different fee schedule areas.
(E) Floor at 1.0 on work geographic index.--
After calculating the work geographic index in
subparagraph (A)(iii), for purposes of payment
for services furnished on or after January 1,
2004, and before January 1, 2020, the Secretary
shall increase the work geographic index to
1.00 for any locality for which such work
geographic index is less than 1.00.
(G) Floor for practice expense, malpractice,
and work geographic indices for services
furnished in alaska.--For purposes of payment
for services furnished in Alaska on or after
January 1, 2004, and before January 1, 2006,
after calculating the practice expense,
malpractice, and work geographic indices in
clauses (i), (ii), and (iii) of subparagraph
(A) and in subparagraph (B), the Secretary
shall increase any such index to 1.67 if such
index would otherwise be less than 1.67. For
purposes of payment for services furnished in
the State described in the preceding sentence
on or after January 1, 2009, after calculating
the work geographic index in subparagraph
(A)(iii), the Secretary shall increase the work
geographic index to 1.5 if such index would
otherwise be less than 1.5
(H) Practice expense geographic adjustment
for 2010 and subsequent years.--
(i) For 2010.--Subject to clause
(iii), for services furnished during
2010, the employee wage and rent
portions of the practice expense
geographic index described in
subparagraph (A)(i) shall reflect \1/2\
of the difference between the relative
costs of employee wages and rents in
each of the different fee schedule
areas and the national average of such
employee wages and rents.
(ii) For 2011.--Subject to clause
(iii), for services furnished during
2011, the employee wage and rent
portions of the practice expense
geographic index described in
subparagraph (A)(i) shall reflect \1/2\
of the difference between the relative
costs of employee wages and rents in
each of the different fee schedule
areas and the national average of such
employee wages and rents.
(iii) Hold harmless.--The practice
expense portion of the geographic
adjustment factor applied in a fee
schedule area for services furnished in
2010 or 2011 shall not, as a result of
the application of clause (i) or (ii),
be reduced below the practice expense
portion of the geographic adjustment
factor under subparagraph (A)(i) (as
calculated prior to the application of
such clause (i) or (ii), respectively)
for such area for such year.
(iv) Analysis.--The Secretary shall
analyze current methods of establishing
practice expense geographic adjustments
under subparagraph (A)(i) and evaluate
data that fairly and reliably
establishes distinctions in the costs
of operating a medical practice in the
different fee schedule areas. Such
analysis shall include an evaluation of
the following:
(I) The feasibility of using
actual data or reliable survey
data developed by medical
organizations on the costs of
operating a medical practice,
including office rents and non-
physician staff wages, in
different fee schedule areas.
(II) The office expense
portion of the practice expense
geographic adjustment described
in subparagraph (A)(i),
including the extent to which
types of office expenses are
determined in local markets
instead of national markets.
(III) The weights assigned to
each of the categories within
the practice expense geographic
adjustment described in
subparagraph (A)(i).
(v) Revision for 2012 and subsequent
years.--As a result of the analysis
described in clause (iv), the Secretary
shall, not later than January 1, 2012,
make appropriate adjustments to the
practice expense geographic adjustment
described in subparagraph (A)(i) to
ensure accurate geographic adjustments
across fee schedule areas, including--
(I) basing the office rents
component and its weight on
office expenses that vary among
fee schedule areas; and
(II) considering a
representative range of
professional and non-
professional personnel employed
in a medical office based on
the use of the American
Community Survey data or other
reliable data for wage
adjustments.
Such adjustments shall be made without
regard to adjustments made pursuant to
clauses (i) and (ii) and shall be made
in a budget neutral manner.
(I) Floor for practice expense index for
services furnished in frontier states.--
(i) In general.--Subject to clause
(ii), for purposes of payment for
services furnished in a frontier State
(as defined in section
1886(d)(3)(E)(iii)(II)) on or after
January 1, 2011, after calculating the
practice expense index in subparagraph
(A)(i), the Secretary shall increase
any such index to 1.00 if such index
would otherwise be less that 1.00. The
preceding sentence shall not be applied
in a budget neutral manner.
(ii) Limitation.--This subparagraph
shall not apply to services furnished
in a State that receives a non-labor
related share adjustment under section
1886(d)(5)(H).
(2) Computation of geographic adjustment factor.--For
purposes of subsection (b)(1)(C), for all physicians'
services for each fee schedule area the Secretary shall
establish a geographic adjustment factor equal to the
sum of the geographic cost-of-practice adjustment
factor (specified in paragraph (3)), the geographic
malpractice adjustment factor (specified in paragraph
(4)), and the geographic physician work adjustment
factor (specified in paragraph (5)) for the service and
the area.
(3) Geographic cost-of-practice adjustment factor.--
For purposes of paragraph (2), the ``geographic cost-
of-practice adjustment factor'', for a service for a
fee schedule area, is the product of--
(A) the proportion of the total relative
value for the service that reflects the
relative value units for the practice expense
component, and
(B) the geographic cost-of-practice index
value for the area for the service, based on
the index established under paragraph (1)(A)(i)
or (1)(B) (as the case may be).
(4) Geographic malpractice adjustment factor.--For
purposes of paragraph (2), the ``geographic malpractice
adjustment factor'', for a service for a fee schedule
area, is the product of--
(A) the proportion of the total relative
value for the service that reflects the
relative value units for the malpractice
component, and
(B) the geographic malpractice index value
for the area, based on the index established
under paragraph (1)(A)(ii).
(5) Geographic physician work adjustment factor.--For
purposes of paragraph (2), the ``geographic physician
work adjustment factor'', for a service for a fee
schedule area, is the product of--
(A) the proportion of the total relative
value for the service that reflects the
relative value units for the work component,
and
(B) the geographic physician work index value
for the area, based on the index established
under paragraph (1)(A)(iii).
(6) Use of msas as fee schedule areas in
california.--
(A) In general.--Subject to the succeeding
provisions of this paragraph and
notwithstanding the previous provisions of this
subsection, for services furnished on or after
January 1, 2017, the fee schedule areas used
for payment under this section applicable to
California shall be the following:
(i) Each Metropolitan Statistical
Area (each in this paragraph referred
to as an ``MSA''), as defined by the
Director of the Office of Management
and Budget as of December 31 of the
previous year, shall be a fee schedule
area.
(ii) All areas not included in an MSA
shall be treated as a single rest-of-
State fee schedule area.
(B) Transition for msas previously in rest-
of-state payment locality or in locality 3.--
(i) In general.--For services
furnished in California during a year
beginning with 2017 and ending with
2021 in an MSA in a transition area (as
defined in subparagraph (D)), subject
to subparagraph (C), the geographic
index values to be applied under this
subsection for such year shall be equal
to the sum of the following:
(I) Current law component.--
The old weighting factor
(described in clause (ii)) for
such year multiplied by the
geographic index values under
this subsection for the fee
schedule area that included
such MSA that would have
applied in such area (as
estimated by the Secretary) if
this paragraph did not apply.
(II) MSA-based component.--
The MSA-based weighting factor
(described in clause (iii)) for
such year multiplied by the
geographic index values
computed for the fee schedule
area under subparagraph (A) for
the year (determined without
regard to this subparagraph).
(ii) Old weighting factor.--The old
weighting factor described in this
clause--
(I) for 2017, is \5/6\; and
(II) for each succeeding
year, is the old weighting
factor described in this clause
for the previous year minus \1/
6\.
(iii) MSA-based weighting factor.--
The MSA-based weighting factor
described in this clause for a year is
1 minus the old weighting factor under
clause (ii) for that year.
(C) Hold harmless.--For services furnished in
a transition area in California during a year
beginning with 2017, the geographic index
values to be applied under this subsection for
such year shall not be less than the
corresponding geographic index values that
would have applied in such transition area (as
estimated by the Secretary) if this paragraph
did not apply.
(D) Transition area defined.--In this
paragraph, the term ``transition area'' means
each of the following fee schedule areas for
2013:
(i) The rest-of-State payment
locality.
(ii) Payment locality 3.
(E) References to fee schedule areas.--
Effective for services furnished on or after
January 1, 2017, for California, any reference
in this section to a fee schedule area shall be
deemed a reference to a fee schedule area
established in accordance with this paragraph.
(f) Sustainable Growth Rate.--
(1) Publication.--The Secretary shall cause to have
published in the Federal Register not later than--
(A) November 1, 2000, the sustainable growth
rate for 2000 and 2001; and
(B) November 1 of each succeeding year
through 2014 the sustainable growth rate for
such succeeding year and each of the preceding
2 years.
(2) Specification of growth rate.--The sustainable
growth rate for all physicians' services for a fiscal
year (beginning with fiscal year 1998 and ending with
fiscal year 2000) and a year beginning with 2000 and
ending with 2014 shall be equal to the product of--
(A) 1 plus the Secretary's estimate of the
weighted average percentage increase (divided
by 100) in the fees for all physicians'
services in the applicable period involved,
(B) 1 plus the Secretary's estimate of the
percentage change (divided by 100) in the
average number of individuals enrolled under
this part (other than Medicare+Choice plan
enrollees) from the previous applicable period
to the applicable period involved,
(C) 1 plus the Secretary's estimate of the
annual average percentage growth in real gross
domestic product per capita (divided by 100)
during the 10-year period ending with the
applicable period involved, and
(D) 1 plus the Secretary's estimate of the
percentage change (divided by 100) in
expenditures for all physicians' services in
the applicable period (compared with the
previous applicable period) which will result
from changes in law and regulations, determined
without taking into account estimated changes
in expenditures resulting from the update
adjustment factor determined under subsection
(d)(3)(B) or (d)(4)(B), as the case may be,
minus 1 and multiplied by 100.
(3) Data to be used.--For purposes of determining the
update adjustment factor under subsection (d)(4)(B) for
a year beginning with 2001, the sustainable growth
rates taken into consideration in the determination
under paragraph (2) shall be determined as follows:
(A) For 2001.--For purposes of such
calculations for 2001, the sustainable growth
rates for fiscal year 2000 and the years 2000
and 2001 shall be determined on the basis of
the best data available to the Secretary as of
September 1, 2000.
(B) For 2002.--For purposes of such
calculations for 2002, the sustainable growth
rates for fiscal year 2000 and for years 2000,
2001, and 2002 shall be determined on the basis
of the best data available to the Secretary as
of September 1, 2001.
(C) For 2003 and succeeding years.--For
purposes of such calculations for a year after
2002--
(i) the sustainable growth rates for
that year and the preceding 2 years
shall be determined on the basis of the
best data available to the Secretary as
of September 1 of the year preceding
the year for which the calculation is
made; and
(ii) the sustainable growth rate for
any year before a year described in
clause (i) shall be the rate as most
recently determined for that year under
this subsection.
Nothing in this paragraph shall be construed as
affecting the sustainable growth rates established for
fiscal year 1998 or fiscal year 1999.
(4) Definitions.--In this subsection:
(A) Services included in physicians'
services.--The term ``physicians' services''
includes other items and services (such as
clinical diagnostic laboratory tests and
radiology services), specified by the
Secretary, that are commonly performed or
furnished by a physician or in a physician's
office, but does not include services furnished
to a Medicare+Choice plan enrollee.
(B) Medicare+choice plan enrollee.--The term
``Medicare+Choice plan enrollee'' means, with
respect to a fiscal year, an individual
enrolled under this part who has elected to
receive benefits under this title for the
fiscal year through a Medicare+Choice plan
offered under part C, and also includes an
individual who is receiving benefits under this
part through enrollment with an eligible
organization with a risk-sharing contract under
section 1876.
(C) Applicable period.--The term ``applicable
period'' means--
(i) a fiscal year, in the case of
fiscal year 1998, fiscal year 1999, and
fiscal year 2000; or
(ii) a calendar year with respect to
a year beginning with 2000;
as the case may be.
(g) Limitation on Beneficiary Liability.--
(1) Limitation on actual charges.--
(A) In general.--In the case of a
nonparticipating physician or nonparticipating
supplier or other person (as defined in section
1842(i)(2)) who does not accept payment on an
assignment-related basis for a physician's
service furnished with respect to an individual
enrolled under this part, the following rules
apply:
(i) Application of limiting charge.--
No person may bill or collect an actual
charge for the service in excess of the
limiting charge described in paragraph
(2) for such service.
(ii) No liability for excess
charges.--No person is liable for
payment of any amounts billed for the
service in excess of such limiting
charge.
(iii) Correction of excess charges.--
If such a physician, supplier, or other
person bills, but does not collect, an
actual charge for a service in
violation of clause (i), the physician,
supplier, or other person shall reduce
on a timely basis the actual charge
billed for the service to an amount not
to exceed the limiting charge for the
service.
(iv) Refund of excess collections.--
If such a physician, supplier, or other
person collects an actual charge for a
service in violation of clause (i), the
physician, supplier, or other person
shall provide on a timely basis a
refund to the individual charged in the
amount by which the amount collected
exceeded the limiting charge for the
service. The amount of such a refund
shall be reduced to the extent the
individual has an outstanding balance
owed by the individual to the
physician.
(B) Sanctions.--If a physician, supplier, or
other person--
(i) knowingly and willfully bills or
collects for services in violation of
subparagraph (A)(i) on a repeated
basis, or
(ii) fails to comply with clause
(iii) or (iv) of subparagraph (A) on a
timely basis,
the Secretary may apply sanctions against the
physician, supplier, or other person in
accordance with paragraph (2) of section
1842(j). In applying this subparagraph,
paragraph (4) of such section applies in the
same manner as such paragraph applies to such
section and any reference in such section to a
physician is deemed also to include a reference
to a supplier or other person under this
subparagraph.
(C) Timely basis.--For purposes of this
paragraph, a correction of a bill for an excess
charge or refund of an amount with respect to a
violation of subparagraph (A)(i) in the case of
a service is considered to be provided ``on a
timely basis'', if the reduction or refund is
made not later than 30 days after the date the
physician, supplier, or other person is
notified by the carrier under this part of such
violation and of the requirements of
subparagraph (A).
(2) Limiting charge defined.--
(A) For 1991.--For physicians' services of a
physician furnished during 1991, other than
radiologist services subject to section
1834(b), the ``limiting charge'' shall be the
same percentage (or, if less, 25 percent) above
the recognized payment amount under this part
with respect to the physician (as a
nonparticipating physician) as the percentage
by which--
(i) the maximum allowable actual
charge (as determined under section
1842(j)(1)(C) as of December 31, 1990,
or, if less, the maximum actual charge
otherwise permitted for the service
under this part as of such date) for
the service of the physician, exceeds
(ii) the recognized payment amount
for the service of the physician (as a
nonparticipating physician) as of such
date.
In the case of evaluation and management services (as specified
in section 1842(b)(16)(B)(ii)), the preceding sentence shall be
applied by substituting ``40 percent'' for ``25 percent''.
(B) For 1992.--For physicians' services
furnished during 1992, other than radiologist
services subject to section 1834(b), the
``limiting charge'' shall be the same
percentage (or, if less, 20 percent) above the
recognized payment amount under this part for
nonparticipating physicians as the percentage
by which--
(i) the limiting charge (as
determined under subparagraph (A) as of
December 31, 1991) for the service,
exceeds
(ii) the recognized payment amount
for the service for nonparticipating
physicians as of such date.
(C) After 1992.--For physicians' services
furnished in a year after 1992, the ``limiting
charge'' shall be 115 percent of the recognized
payment amount under this part for
nonparticipating physicians or for
nonparticipating suppliers or other persons.
(D) Recognized payment amount.--In this
section, the term ``recognized payment amount''
means, for services furnished on or after
January 1, 1992, the fee schedule amount
determined under subsection (a) (or, if payment
under this part is made on a basis other than
the fee schedule under this section, 95 percent
of the other payment basis), and, for services
furnished during 1991, the applicable
percentage (as defined in section
1842(b)(4)(A)(iv)) of the prevailing charge (or
fee schedule amount) for nonparticipating
physicians for that year.
(3) Limitation on charges for medicare beneficiaries
eligible for medicaid benefits.--
(A) In general.--Payment for physicians'
services furnished on or after April 1, 1990,
to an individual who is enrolled under this
part and eligible for any medical assistance
(including as a qualified medicare beneficiary,
as defined in section 1905(p)(1)) with respect
to such services under a State plan approved
under title XIX may only be made on an
assignment-related basis and the provisions of
section 1902(n)(3)(A) apply to further limit
permissible charges under this section.
(B) Penalty.--A person may not bill for
physicians' services subject to subparagraph
(A) other than on an assignment-related basis.
No person is liable for payment of any amounts
billed for such a service in violation of the
previous sentence. If a person knowingly and
willfully bills for physicians' services in
violation of the first sentence, the Secretary
may apply sanctions against the person in
accordance with section 1842(j)(2).
(4) Physician submission of claims.--
(A) In general.--For services furnished on or
after September 1, 1990, within 1 year after
the date of providing a service for which
payment is made under this part on a reasonable
charge or fee schedule basis, a physician,
supplier, or other person (or an employer or
facility in the cases described in section
1842(b)(6)(A))--
(i) shall complete and submit a claim
for such service on a standard claim
form specified by the Secretary to the
carrier on behalf of a beneficiary, and
(ii) may not impose any charge
relating to completing and submitting
such a form.
(B) Penalty.--(i) With respect to an assigned
claim wherever a physician, provider, supplier
or other person (or an employer or facility in
the cases described in section 1842(b)(6)(A))
fails to submit such a claim as required in
subparagraph (A), the Secretary shall reduce by
10 percent the amount that would otherwise be
paid for such claim under this part.
(ii) If a physician, supplier, or other
person (or an employer or facility in the cases
described in section 1842(b)(6)(A)) fails to
submit a claim required to be submitted under
subparagraph (A) or imposes a charge in
violation of such subparagraph, the Secretary
shall apply the sanction with respect to such a
violation in the same manner as a sanction may
be imposed under section 1842(p)(3) for a
violation of section 1842(p)(1).
(5) Electronic billing; direct deposit.--The
Secretary shall encourage and develop a system
providing for expedited payment for claims submitted
electronically. The Secretary shall also encourage and
provide incentives allowing for direct deposit as
payments for services furnished by participating
physicians. The Secretary shall provide physicians with
such technical information as necessary to enable such
physicians to submit claims electronically. The
Secretary shall submit a plan to Congress on this
paragraph by May 1, 1990.
(6) Monitoring of charges.--
(A) In general.--The Secretary shall
monitor--
(i) the actual charges of
nonparticipating physicians for
physicians' services furnished on or
after January 1, 1991, to individuals
enrolled under this part, and
(ii) changes (by specialty, type of
service, and geographic area) in (I)
the proportion of expenditures for
physicians' services provided under
this part by participating physicians,
(II) the proportion of expenditures for
such services for which payment is made
under this part on an assignment-
related basis, and (III) the amounts
charged above the recognized payment
amounts under this part.
(B) Report.--The Secretary shall, by not
later than April 15 of each year (beginning in
1992), report to the Congress information on
the extent to which actual charges exceed
limiting charges, the number and types of
services involved, and the average amount of
excess charges and information regarding the
changes described in subparagraph (A)(ii).
(C) Plan.--If the Secretary finds that there
has been a significant decrease in the
proportions described in subclauses (I) and
(II) of subparagraph (A)(ii) or an increase in
the amounts described in subclause (III) of
that subparagraph, the Secretary shall develop
a plan to address such a problem and transmit
to Congress recommendations regarding the plan.
The Medicare Payment Advisory Commission shall
review the Secretary's plan and recommendations
and transmit to Congress its comments regarding
such plan and recommendations.
(7) Monitoring of utilization and access.--
(A) In general.--The Secretary shall
monitor--
(i) changes in the utilization of and
access to services furnished under this
part within geographic, population, and
service related categories,
(ii) possible sources of
inappropriate utilization of services
furnished under this part which
contribute to the overall level of
expenditures under this part, and
(iii) factors underlying these
changes and their interrelationships.
(B) Report.--The Secretary shall by not later
than April 15, of each year (beginning with
1991) report to the Congress on the changes
described in subparagraph (A)(i) and shall
include in the report an examination of the
factors (including factors relating to
different services and specific categories and
groups of services and geographic and
demographic variations in utilization) which
may contribute to such changes.
(C) Recommendations.--The Secretary shall
include in each annual report under
subparagraph (B) recommendations--
(i) addressing any identified
patterns of inappropriate utilization,
(ii) on utilization review,
(iii) on physician education or
patient education,
(iv) addressing any problems of
beneficiary access to care made evident
by the monitoring process, and
(v) on such other matters as the
Secretary deems appropriate.
The Medicare Payment Advisory Commission shall
comment on the Secretary's recommendations and
in developing its comments, the Commission
shall convene and consult a panel of physician
experts to evaluate the implications of medical
utilization patterns for the quality of and
access to patient care.
(h) Sending Information to Physicians.--Before the beginning
of each year (beginning with 1992), the Secretary shall send to
each physician or nonparticipating supplier or other person
furnishing physicians' services (as defined in section
1848(j)(3)) furnishing physicians' services under this part,
for services commonly performed by the physician, supplier, or
other person, information on fee schedule amounts that apply
for the year in the fee schedule area for participating and
non-participating physicians, and the maximum amount that may
be charged consistent with subsection (g)(2). Such information
shall be transmitted in conjunction with notices to physicians,
suppliers, and other persons under section 1842(h) (relating to
the participating physician program) for a year.
(i) Miscellaneous Provisions.--
(1) Restriction on administrative and judicial
review.--There shall be no administrative or judicial
review under section 1869 or otherwise of--
(A) the determination of the adjusted
historical payment basis (as defined in
subsection (a)(2)(D)(i)),
(B) the determination of relative values and
relative value units under subsection (c),
including adjustments under subsections
(c)(2)(F), (c)(2)(H), and (c)(2)(I) and section
13515(b) of the Omnibus Budget Reconciliation
Act of 1993,
(C) the determination of conversion factors
under subsection (d), including without
limitation a prospective redetermination of the
sustainable growth rates for any or all
previous fiscal years,
(D) the establishment of geographic
adjustment factors under subsection (e),
(E) the establishment of the system for the
coding of physicians' services under this
section, and
(F) the collection and use of information in
the determination of relative values under
subsection (c)(2)(M).
(2) Assistants-at-surgery.--
(A) In general.--Subject to subparagraph (B),
in the case of a surgical service furnished by
a physician, if payment is made separately
under this part for the services of a physician
serving as an assistant-at-surgery, the fee
schedule amount shall not exceed 16 percent of
the fee schedule amount otherwise determined
under this section for the global surgical
service involved.
(B) Denial of payment in certain cases.--If
the Secretary determines, based on the most
recent data available, that for a surgical
procedure (or class of surgical procedures) the
national average percentage of such procedure
performed under this part which involve the use
of a physician as an assistant at surgery is
less than 5 percent, no payment may be made
under this part for services of an assistant at
surgery involved in the procedure.
(3) No comparability adjustment.--For physicians'
services for which payment under this part is
determined under this section--
(A) a carrier may not make any adjustment in
the payment amount under section 1842(b)(3)(B)
on the basis that the payment amount is higher
than the charge applicable, for comparable
services and under comparable circumstances, to
the policyholders and subscribers of the
carrier,
(B) no payment adjustment may be made under
section 1842(b)(8), and
(C) section 1842(b)(9) shall not apply.
(j) Definitions.--In this section:
(1) Category.--For services furnished before January
1, 1998, the term ``category'' means, with respect to
physicians' services, surgical services (as defined by
the Secretary and including anesthesia services),
primary care services (as defined in section
1842(i)(4)), and all other physicians' services. The
Secretary shall define surgical services and publish
such definitions in the Federal Register no later than
May 1, 1990, after consultation with organizations
representing physicians.
(2) Fee schedule area.--Except as provided in
subsection (e)(6)(D), the term ``fee schedule area''
means a locality used under section 1842(b) for
purposes of computing payment amounts for physicians'
services.
(3) Physicians' services.--The term ``physicians'
services'' includes items and services described in
paragraphs (1), (2)(A), (2)(D), (2)(G), (2)(P) (with
respect to services described in subparagraphs (A) and
(C) of section 1861(oo)(2)), (2)(R) (with respect to
services described in suparagraphs (B), (C), and (D) of
section 1861(pp)(1)), (2)(S), (2)(W), (2)(AA), (2)(DD),
(2)(EE), (2)(FF) (including administration of the
health risk assessment), (2)(II), (3), (4), (13), (14)
(with respect to services described in section
1861(nn)(2)), and (15) of section 1861(s) (other than
clinical diagnostic laboratory tests and, except for
purposes of subsection (a)(3), (g), and (h) such other
items and services as the Secretary may specify).
(4) Practice expenses.--The term ``practice
expenses'' includes all expenses for furnishing
physicians' services, excluding malpractice expenses,
physician compensation, and other physician fringe
benefits.
(k) Quality Reporting System.--
(1) In general.--The Secretary shall implement a
system for the reporting by eligible professionals of
data on quality measures specified under paragraph (2).
Such data shall be submitted in a form and manner
specified by the Secretary (by program instruction or
otherwise), which may include submission of such data
on claims under this part.
(2) Use of consensus-based quality measures.--
(A) For 2007.--
(i) In general.--For purposes of
applying this subsection for the
reporting of data on quality measures
for covered professional services
furnished during the period beginning
July 1, 2007, and ending December 31,
2007, the quality measures specified
under this paragraph are the measures
identified as 2007 physician quality
measures under the Physician Voluntary
Reporting Program as published on the
public website of the Centers for
Medicare & Medicaid Services as of the
date of the enactment of this
subsection, except as may be changed by
the Secretary based on the results of a
consensus-based process in January of
2007, if such change is published on
such website by not later than April 1,
2007.
(ii) Subsequent refinements in
application permitted.--The Secretary
may, from time to time (but not later
than July 1, 2007), publish on such
website (without notice or opportunity
for public comment) modifications or
refinements (such as code additions,
corrections, or revisions) for the
application of quality measures
previously published under clause (i),
but may not, under this clause, change
the quality measures under the
reporting system.
(iii) Implementation.--
Notwithstanding any other provision of
law, the Secretary may implement by
program instruction or otherwise this
subsection for 2007.
(B) For 2008 and 2009.--
(i) In general.--For purposes of
reporting data on quality measures for
covered professional services furnished
during 2008 and 2009, the quality
measures specified under this paragraph
for covered professional services shall
be measures that have been adopted or
endorsed by a consensus organization
(such as the National Quality Forum or
AQA), that include measures that have
been submitted by a physician
specialty, and that the Secretary
identifies as having used a consensus-
based process for developing such
measures. Such measures shall include
structural measures, such as the use of
electronic health records and
electronic prescribing technology.
(ii) Proposed set of measures.--Not
later than August 15 of each of 2007
and 2008, the Secretary shall publish
in the Federal Register a proposed set
of quality measures that the Secretary
determines are described in clause (i)
and would be appropriate for eligible
professionals to use to submit data to
the Secretary in 2008 or 2009, as
applicable. The Secretary shall provide
for a period of public comment on such
set of measures.
(iii) Final set of measures.--Not
later than November 15 of each of 2007
and 2008, the Secretary shall publish
in the Federal Register a final set of
quality measures that the Secretary
determines are described in clause (i)
and would be appropriate for eligible
professionals to use to submit data to
the Secretary in 2008 or 2009, as
applicable.
(C) For 2010 and subsequent years.--
(i) In general.--Subject to clause
(ii), for purposes of reporting data on
quality measures for covered
professional services furnished during
2010 and each subsequent year, subject
to subsection (m)(3)(C), the quality
measures (including electronic
prescribing quality measures) specified
under this paragraph shall be such
measures selected by the Secretary from
measures that have been endorsed by the
entity with a contract with the
Secretary under section 1890(a).
(ii) Exception.--In the case of a
specified area or medical topic
determined appropriate by the Secretary
for which a feasible and practical
measure has not been endorsed by the
entity with a contract under section
1890(a), the Secretary may specify a
measure that is not so endorsed as long
as due consideration is given to
measures that have been endorsed or
adopted by a consensus organization
identified by the Secretary, such as
the AQA alliance.
(D) Opportunity to provide input on measures
for 2009 and subsequent years.--For each
quality measure (including an electronic
prescribing quality measure) adopted by the
Secretary under subparagraph (B) (with respect
to 2009) or subparagraph (C), the Secretary
shall ensure that eligible professionals have
the opportunity to provide input during the
development, endorsement, or selection of
measures applicable to services they furnish.
(3) Covered professional services and eligible
professionals defined.--For purposes of this
subsection:
(A) Covered professional services.--The term
``covered professional services'' means
services for which payment is made under, or is
based on, the fee schedule established under
this section and which are furnished by an
eligible professional.
(B) Eligible professional.--The term
``eligible professional'' means any of the
following:
(i) A physician.
(ii) A practitioner described in
section 1842(b)(18)(C).
(iii) A physical or occupational
therapist or a qualified speech-
language pathologist.
(iv) Beginning with 2009, a qualified
audiologist (as defined in section
1861(ll)(3)(B)).
(4) Use of registry-based reporting.--As part of the
publication of proposed and final quality measures for
2008 under clauses (ii) and (iii) of paragraph (2)(B),
the Secretary shall address a mechanism whereby an
eligible professional may provide data on quality
measures through an appropriate medical registry (such
as the Society of Thoracic Surgeons National Database)
or through a Maintenance of Certification program
operated by a specialty body of the American Board of
Medical Specialties that meets the criteria for such a
registry, as identified by the Secretary.
(5) Identification units.--For purposes of applying
this subsection, the Secretary may identify eligible
professionals through billing units, which may include
the use of the Provider Identification Number, the
unique physician identification number (described in
section 1833(q)(1)), the taxpayer identification
number, or the National Provider Identifier. For
purposes of applying this subsection for 2007, the
Secretary shall use the taxpayer identification number
as the billing unit.
(6) Education and outreach.--The Secretary shall
provide for education and outreach to eligible
professionals on the operation of this subsection.
(7) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise, of the development and
implementation of the reporting system under paragraph
(1), including identification of quality measures under
paragraph (2) and the application of paragraphs (4) and
(5).
(8) Implementation.--The Secretary shall carry out
this subsection acting through the Administrator of the
Centers for Medicare & Medicaid Services.
(9) Continued application for purposes of mips and
for certain professionals volunteering to report.--The
Secretary shall, in accordance with subsection
(q)(1)(F), carry out the provisions of this
subsection--
(A) for purposes of subsection (q); and
(B) for eligible professionals who are not
MIPS eligible professionals (as defined in
subsection (q)(1)(C)) for the year involved.
(l) Physician Assistance and Quality Initiative Fund.--
(1) Establishment.--The Secretary shall establish
under this subsection a Physician Assistance and
Quality Initiative Fund (in this subsection referred to
as the ``Fund'') which shall be available to the
Secretary for physician payment and quality improvement
initiatives, which may include application of an
adjustment to the update of the conversion factor under
subsection (d).
(2) Funding.--
(A) Amount available.--
(i) In general.--Subject to clause
(ii), there shall be available to the
Fund the following amounts:
(I) For expenditures during
2008, an amount equal to
$150,500,000.
(II) For expenditures during
2009, an amount equal to
$24,500,000.
(ii) Limitations on expenditures.--
(I) 2008.--The amount
available for expenditures
during 2008 shall be reduced as
provided by subparagraph (A) of
section 225(c)(1) and section
524 of the Departments of
Labor, Health and Human
Services, and Education, and
Related Agencies Appropriations
Act, 2008 (division G of the
Consolidated Appropriations
Act, 2008).
(II) 2009.--The amount
available for expenditures
during 2009 shall be reduced as
provided by subparagraph (B) of
such section 225(c)(1).
(B) Timely obligation of all available funds
for services.--The Secretary shall provide for
expenditures from the Fund in a manner designed
to provide (to the maximum extent feasible) for
the obligation of the entire amount available
for expenditures, after application of
subparagraph (A)(ii), during--
(i) 2008 for payment with respect to
physicians' services furnished during
2008; and
(ii) 2009 for payment with respect to
physicians' services furnished during
2009.
(C) Payment from trust fund.--The amount
specified in subparagraph (A) shall be
available to the Fund, as expenditures are made
from the Fund, from the Federal Supplementary
Medical Insurance Trust Fund under section
1841.
(D) Funding limitation.--Amounts in the Fund
shall be available in advance of appropriations
in accordance with subparagraph (B) but only if
the total amount obligated from the Fund does
not exceed the amount available to the Fund
under subparagraph (A). The Secretary may
obligate funds from the Fund only if the
Secretary determines (and the Chief Actuary of
the Centers for Medicare & Medicaid Services
and the appropriate budget officer certify)
that there are available in the Fund sufficient
amounts to cover all such obligations incurred
consistent with the previous sentence.
(E) Construction.--In the case that
expenditures from the Fund are applied to, or
otherwise affect, a conversion factor under
subsection (d) for a year, the conversion
factor under such subsection shall be computed
for a subsequent year as if such application or
effect had never occurred.
(m) Incentive Payments for Quality Reporting.--
(1) Incentive payments.--
(A) In general.--For 2007 through 2014, with
respect to covered professional services
furnished during a reporting period by an
eligible professional, if--
(i) there are any quality measures
that have been established under the
physician reporting system that are
applicable to any such services
furnished by such professional for such
reporting period;
(ii) the eligible professional
satisfactorily submits (as determined
under this subsection) to the Secretary
data on such quality measures in
accordance with such reporting system
for such reporting period,
in addition to the amount otherwise paid under
this part, there also shall be paid to the
eligible professional (or to an employer or
facility in the cases described in clause (A)
of section 1842(b)(6)) or, in the case of a
group practice under paragraph (3)(C), to the
group practice, from the Federal Supplementary
Medical Insurance Trust Fund established under
section 1841 an amount equal to the applicable
quality percent of the Secretary's estimate
(based on claims submitted not later than 2
months after the end of the reporting period)
of the allowed charges under this part for all
such covered professional services furnished by
the eligible professional (or, in the case of a
group practice under paragraph (3)(C), by the
group practice) during the reporting period.
(B) Applicable quality percent.--For purposes
of subparagraph (A), the term ``applicable
quality percent'' means--
(i) for 2007 and 2008, 1.5 percent;
and
(ii) for 2009 and 2010, 2.0 percent;
(iii) for 2011, 1.0 percent; and
(iv) for 2012, 2013, and 2014, 0.5
percent.
(2) Incentive payments for electronic prescribing.--
(A) In general.--Subject to subparagraph (D),
for 2009 through 2013, with respect to covered
professional services furnished during a
reporting period by an eligible professional,
if the eligible professional is a successful
electronic prescriber for such reporting
period, in addition to the amount otherwise
paid under this part, there also shall be paid
to the eligible professional (or to an employer
or facility in the cases described in clause
(A) of section 1842(b)(6)) or, in the case of a
group practice under paragraph (3)(C), to the
group practice, from the Federal Supplementary
Medical Insurance Trust Fund established under
section 1841 an amount equal to the applicable
electronic prescribing percent of the
Secretary's estimate (based on claims submitted
not later than 2 months after the end of the
reporting period) of the allowed charges under
this part for all such covered professional
services furnished by the eligible professional
(or, in the case of a group practice under
paragraph (3)(C), by the group practice) during
the reporting period.
(B) Limitation with respect to electronic
prescribing quality measures.--The provisions
of this paragraph and subsection (a)(5) shall
not apply to an eligible professional (or, in
the case of a group practice under paragraph
(3)(C), to the group practice) if, for the
reporting period (or, for purposes of
subsection (a)(5), for the reporting period for
a year)--
(i) the allowed charges under this
part for all covered professional
services furnished by the eligible
professional (or group, as applicable)
for the codes to which the electronic
prescribing quality measure applies (as
identified by the Secretary and
published on the Internet website of
the Centers for Medicare & Medicaid
Services as of January 1, 2008, and as
subsequently modified by the Secretary)
are less than 10 percent of the total
of the allowed charges under this part
for all such covered professional
services furnished by the eligible
professional (or the group, as
applicable); or
(ii) if determined appropriate by the
Secretary, the eligible professional
does not submit (including both
electronically and nonelectronically) a
sufficient number (as determined by the
Secretary) of prescriptions under part
D.
If the Secretary makes the determination to
apply clause (ii) for a period, then clause (i)
shall not apply for such period.
(C) Applicable electronic prescribing
percent.--For purposes of subparagraph (A), the
term ``applicable electronic prescribing
percent'' means--
(i) for 2009 and 2010, 2.0 percent;
(ii) for 2011 and 2012, 1.0 percent;
and
(iii) for 2013, 0.5 percent.
(D) Limitation with respect to ehr incentive
payments.--The provisions of this paragraph
shall not apply to an eligible professional
(or, in the case of a group practice under
paragraph (3)(C), to the group practice) if,
for the EHR reporting period the eligible
professional (or group practice) receives an
incentive payment under subsection (o)(1)(A)
with respect to a certified EHR technology (as
defined in subsection (o)(4)) that has the
capability of electronic prescribing.
(3) Satisfactory reporting and successful electronic
prescriber and described.--
(A) In general.--For purposes of paragraph
(1), an eligible professional shall be treated
as satisfactorily submitting data on quality
measures for covered professional services for
a reporting period (or, for purposes of
subsection (a)(8), for the quality reporting
period for the year) if quality measures have
been reported as follows:
(i) Three or fewer quality measures
applicable.--If there are no more than
3 quality measures that are provided
under the physician reporting system
and that are applicable to such
services of such professional furnished
during the period, each such quality
measure has been reported under such
system in at least 80 percent of the
cases in which such measure is
reportable under the system.
(ii) Four or more quality measures
applicable.--If there are 4 or more
quality measures that are provided
under the physician reporting system
and that are applicable to such
services of such professional
furnishedduring the period, at least 3
such quality measures have been
reported under such system in at least
80 percent of the cases in which the
respective measure is reportable under
the system.
For years after 2008, quality measures for
purposes of this subparagraph shall not include
electronic prescribing quality measures.
(B) Successful electronic prescriber.--
(i) In general.--For purposes of
paragraph (2) and subsection (a)(5), an
eligible professional shall be treated
as a successful electronic prescriber
for a reporting period (or, for
purposes of subsection (a)(5), for the
reporting period for a year) if the
eligible professional meets the
requirement described in clause (ii),
or, if the Secretary determines
appropriate, the requirement described
in clause (iii). If the Secretary makes
the determination under the preceding
sentence to apply the requirement
described in clause (iii) for a period,
then the requirement described in
clause (ii) shall not apply for such
period.
(ii) Requirement for submitting data
on electronic prescribing quality
measures.--The requirement described in
this clause is that, with respect to
covered professional services furnished
by an eligible professional during a
reporting period (or, for purposes of
subsection (a)(5), for the reporting
period for a year), if there are any
electronic prescribing quality measures
that have been established under the
physician reporting system and are
applicable to any such services
furnished by such professional for the
period, such professional reported each
such measure under such system in at
least 50 percent of the cases in which
such measure is reportable by such
professional under such system.
(iii) Requirement for electronically
prescribing under part d.--The
requirement described in this clause is
that the eligible professional
electronically submitted a sufficient
number (as determined by the Secretary)
of prescriptions under part D during
the reporting period (or, for purposes
of subsection (a)(5), for the reporting
period for a year).
(iv) Use of part d data.--
Notwithstanding sections 1860D-
15(d)(2)(B) and 1860D-15(f)(2), the
Secretary may use data regarding drug
claims submitted for purposes of
section 1860D-15 that are necessary for
purposes of clause (iii), paragraph
(2)(B)(ii), and paragraph (5)(G).
(v) Standards for electronic
prescribing.--To the extent
practicable, in determining whether
eligible professionals meet the
requirements under clauses (ii) and
(iii) for purposes of clause (i), the
Secretary shall ensure that eligible
professionals utilize electronic
prescribing systems in compliance with
standards established for such systems
pursuant to the Part D Electronic
Prescribing Program under section
1860D-4(e).
(C) Satisfactory reporting measures for group
practices.--
(i) In general.--By January 1, 2010,
the Secretary shall establish and have
in place a process under which eligible
professionals in a group practice (as
defined by the Secretary) shall be
treated as satisfactorily submitting
data on quality measures under
subparagraph (A) and as meeting the
requirement described in subparagraph
(B)(ii) for covered professional
services for a reporting period (or,
for purposes of subsection (a)(5), for
a reporting period for a year, or, for
purposes of subsection (a)(8), for a
quality reporting period for the year)
if, in lieu of reporting measures under
subsection (k)(2)(C), the group
practice reports measures determined
appropriate by the Secretary, such as
measures that target high-cost chronic
conditions and preventive care, in a
form and manner, and at a time,
specified by the Secretary.
(ii) Statistical sampling model.--The
process under clause (i) shall provide
and, for 2016 and subsequent years, may
provide for the use of a statistical
sampling model to submit data on
measures, such as the model used under
the Physician Group Practice
demonstration project under section
1866A.
(iii) No double payments.--Payments
to a group practice under this
subsection by reason of the process
under clause (i) shall be in lieu of
the payments that would otherwise be
made under this subsection to eligible
professionals in the group practice for
satisfactorily submitting data on
quality measures.
(D) Satisfactory reporting measures through
participation in a qualified clinical data
registry.--For 2014 and subsequent years, the
Secretary shall treat an eligible professional
as satisfactorily submitting data on quality
measures under subparagraph (A) and, for 2016
and subsequent years, subparagraph (A) or (C)
if, in lieu of reporting measures under
subsection (k)(2)(C), the eligible professional
is satisfactorily participating, as determined
by the Secretary, in a qualified clinical data
registry (as described in subparagraph (E)) for
the year.
(E) Qualified clinical data registry.--
(i) In general.--The Secretary shall
establish requirements for an entity to
be considered a qualified clinical data
registry. Such requirements shall
include a requirement that the entity
provide the Secretary with such
information, at such times, and in such
manner, as the Secretary determines
necessary to carry out this subsection.
(ii) Considerations.--In establishing
the requirements under clause (i), the
Secretary shall consider whether an
entity--
(I) has in place mechanisms
for the transparency of data
elements and specifications,
risk models, and measures;
(II) requires the submission
of data from participants with
respect to multiple payers;
(III) provides timely
performance reports to
participants at the individual
participant level; and
(IV) supports quality
improvement initiatives for
participants.
(iii) Measures.--With respect to
measures used by a qualified clinical
data registry--
(I) sections 1890(b)(7) and
1890A(a) shall not apply; and
(II) measures endorsed by the
entity with a contract with the
Secretary under section 1890(a)
may be used.
(iv) Consultation.--In carrying out
this subparagraph, the Secretary shall
consult with interested parties.
(v) Determination.--The Secretary
shall establish a process to determine
whether or not an entity meets the
requirements established under clause
(i). Such process may involve one or
both of the following:
(I) A determination by the
Secretary.
(II) A designation by the
Secretary of one or more
independent organizations to
make such determination.
(F) Authority to revise satisfactorily
reporting data.--For years after 2009, the
Secretary, in consultation with stakeholders
and experts, may revise the criteria under this
subsection for satisfactorily submitting data
on quality measures under subparagraph (A) and
the criteria for submitting data on electronic
prescribing quality measures under subparagraph
(B)(ii).
(4) Form of payment.--The payment under this
subsection shall be in the form of a single
consolidated payment.
(5) Application.--
(A) Physician reporting system rules.--
Paragraphs (5), (6),and (8) of subsection (k)
shall apply for purposes of this subsection in
the same manner as they apply for purposes of
such subsection.
(B) Coordination with other bonus payments.--
The provisions of this subsection shall not be
taken into account in applying subsections (m)
and (u) of section 1833 and any payment under
such subsections shall not be taken into
account in computing allowable charges under
this subsection.
(C) Implementation.--Notwithstanding any
other provision of law, for 2007, 2008, and
2009, the Secretary may implement by program
instruction or otherwise this subsection.
(D) Validation.--
(i) In general.--Subject to the
succeeding provisions of this
subparagraph, for purposes of
determining whether a measure is
applicable to the covered professional
services of an eligible professional
under this subsection for 2007 and 288,
the Secretary shall presume that if an
eligible professional submits data for
a measure, such measure is applicable
to such professional.
(ii) Method.--The Secretary may
establish procedures to validate (by
sampling or other means as the
Secretary determines to be appropriate)
whether measures applicable to covered
professional services of an eligible
professional have been reported.
(iii) Denial of payment authority.--
If the Secretary determines that an
eligible professional (or, in the case
of a group practice under paragraph
(3)(C), the group practice) has not
reported measures applicable to covered
professional services of such
professional, the Secretary shall not
pay the incentive payment under this
subsection. If such payments for such
period have already been made, the
Secretary shall recoup such payments
from the eligible professional (or the
group practice).
(E) Limitations on review.--
Except as provided in subparagraph
(I), there shall be no administrative
or judicial review under 1869, section
1878, or otherwise of
(i) the determination of measures
applicable to services furnished by
eligible professionals under this
subsection;
(ii) the determination of
satisfactory reporting under this
subsection;
(iii) the determination of a
successful electronic prescriber under
paragraph (3), the limitation under
paragraph (2)(B), and the exception
under subsection (a)(5)(B); and
(iv) the determination of any
incentive payment under this subsection
and the payment adjustment under
paragraphs (5)(A) and (8)(A) of
subsection (a).
(F) Extension.--For 2008 through reporting
periods occurring in 2015, the Secretary shall
establish and, for reporting periods occurring
in 2016 and subsequent years, the Secretary may
establish alternative criteria for
satisfactorily reporting under this subsection
and alternative reporting periods under
paragraph (6)(C) for reporting groups of
measures under subsection (k)(2)(B) and for
reporting using the method specified in
subsection (k)(4).
(G) Posting on website.--The Secretary shall
post on the Internet website of the Centers for
Medicare & Medicaid Services, in an easily
understandable format, a list of the names of
the following:
(i) The eligible professionals (or,
in the case of reporting under
paragraph (3)(C), the group practices)
who satisfactorily submitted data on
quality measures under this subsection.
(ii) The eligible professionals (or,
in the case of reporting under
paragraph (3)(C), the group practices)
who are successful electronic
prescribers.
(H) Feedback.--The Secretary shall provide
timely feedback to eligible professionals on
the performance of the eligible professional
with respect to satisfactorily submitting data
on quality measures under this subsection.
(I) Informal appeals process.--The Secretary
shall, by not later than January 1, 2011,
establish and have in place an informal process
for eligible professionals to seek a review of
the determination that an eligible professional
did not satisfactorily submit data on quality
measures under this subsection.
(6) Definitions.--For purposes of this subsection:
(A) Eligible professional; covered
professional services.--The terms ``eligible
professional'' and ``covered professional
services'' have the meanings given such termsin
subsection (k)(3).
(B) Physician reporting system.--The term
``physician reporting system'' means the system
established under subsection (k).
(C) Reporting period.--
(i) In general.--Subject to clauses
(ii) and (iii), the term ``reporting
period'' means--
(I) for 2007, the period
beginning on July 1, 2007, and
ending on December 31, 2007;
and
(II) for 2008 and subsequent
years, the entire year.
(ii) Authority to revise reporting
period.--For years after 2009, the
Secretary may revise the reporting
period under clause (i) if the
Secretary determines such revision is
appropriate, produces valid results on
measures reported, and is consistent
with the goals of maximizing scientific
validity and reducing administrative
burden. If the Secretary revises such
period pursuant to the preceding
sentence, the term ``reporting period''
shall mean such revised period.
(iii) Reference.--Any reference in
this subsection to a reporting period
with respect to the application of
subsection (a)(5) (a)(8) shall be
deemed a reference to the reporting
period under subsection (a)(5)(D)(iii)
or the quality reporting period under
subsection (a)(8)(D)(iii),
respectively.
(7) Integration of physician quality reporting and
ehr reporting.--Not later than January 1, 2012, the
Secretary shall develop a plan to integrate reporting
on quality measures under this subsection with
reporting requirements under subsection (o) relating to
the meaningful use of electronic health records. Such
integration shall consist of the following:
(A) The selection of measures, the reporting
of which would both demonstrate--
(i) meaningful use of an electronic
health record for purposes of
subsection (o); and
(ii) quality of care furnished to an
individual.
(B) Such other activities as specified by the
Secretary.
(8) Additional incentive payment.--
(A) In general.--For 2011 through 2014, if an
eligible professional meets the requirements
described in subparagraph (B), the applicable
quality percent for such year, as described in
clauses (iii) and (iv) of paragraph (1)(B),
shall be increased by 0.5 percentage points.
(B) Requirements described.--In order to
qualify for the additional incentive payment
described in subparagraph (A), an eligible
professional shall meet the following
requirements:
(i) The eligible professional shall--
(I) satisfactorily submit
data on quality measures for
purposes of paragraph (1) for a
year; and
(II) have such data submitted
on their behalf through a
Maintenance of Certification
Program (as defined in
subparagraph (C)(i)) that
meets--
(aa) the criteria for
a registry (as
described in subsection
(k)(4)); or
(bb) an alternative
form and manner
determined appropriate
by the Secretary.
(ii) The eligible professional, more
frequently than is required to qualify
for or maintain board certification
status--
(I) participates in such a
Maintenance of Certification
program for a year; and
(II) successfully completes a
qualified Maintenance of
Certification Program practice
assessment (as defined in
subparagraph (C)(ii)) for such
year.
(iii) A Maintenance of Certification
program submits to the Secretary, on
behalf of the eligible professional,
information--
(I) in a form and manner
specified by the Secretary,
that the eligible professional
has successfully met the
requirements of clause (ii)
(which may be in the form of a
structural measure);
(II) if requested by the
Secretary, on the survey of
patient experience with care
(as described in subparagraph
(C)(ii)(II)); and
(III) as the Secretary may
require, on the methods,
measures, and data used under
the Maintenance of
Certification Program and the
qualified Maintenance of
Certification Program practice
assessment.
(C) Definitions.--For purposes of this
paragraph:
(i) The term ``Maintenance of
Certification Program'' means a
continuous assessment program, such as
qualified American Board of Medical
Specialties Maintenance of
Certification program or an equivalent
program (as determined by the
Secretary), that advances quality and
the lifelong learning and self-
assessment of board certified specialty
physicians by focusing on the
competencies of patient care, medical
knowledge, practice-based learning,
interpersonal and communication skills
and professionalism. Such a program
shall include the following:
(I) The program requires the
physician to maintain a valid,
unrestricted medical license in
the United States.
(II) The program requires a
physician to participate in
educational and self-assessment
programs that require an
assessment of what was learned.
(III) The program requires a
physician to demonstrate,
through a formalized, secure
examination, that the physician
has the fundamental diagnostic
skills, medical knowledge, and
clinical judgment to provide
quality care in their
respective specialty.
(IV) The program requires
successful completion of a
qualified Maintenance of
Certification Program practice
assessment as described in
clause (ii).
(ii) The term ``qualified Maintenance
of Certification Program practice
assessment'' means an assessment of a
physician's practice that--
(I) includes an initial
assessment of an eligible
professional's practice that is
designed to demonstrate the
physician's use of evidence-
based medicine;
(II) includes a survey of
patient experience with care;
and
(III) requires a physician to
implement a quality improvement
intervention to address a
practice weakness identified in
the initial assessment under
subclause (I) and then to
remeasure to assess performance
improvement after such
intervention.
(9) Continued application for purposes of mips and
for certain professionals volunteering to report.--The
Secretary shall, in accordance with subsection
(q)(1)(F), carry out the processes under this
subsection--
(A) for purposes of subsection (q); and
(B) for eligible professionals who are not
MIPS eligible professionals (as defined in
subsection (q)(1)(C)) for the year involved.
(n) Physician Feedback Program.--
(1) Establishment.--
(A) In general.--
(i) Establishment.--The Secretary
shall establish a Physician Feedback
Program (in this subsection referred to
as the ``Program'').
(ii) Reports on resources.--The
Secretary shall use claims data under
this title (and may use other data) to
provide confidential reports to
physicians (and, as determined
appropriate by the Secretary, to groups
of physicians) that measure the
resources involved in furnishing care
to individuals under this title.
(iii) Inclusion of certain
information.--If determined appropriate
by the Secretary, the Secretary may
include information on the quality of
care furnished to individuals under
this title by the physician (or group
of physicians) in such reports.
(B) Resource use.--The resources described in
subparagraph (A)(ii) may be measured--
(i) on an episode basis;
(ii) on a per capita basis; or
(iii) on both an episode and a per
capita basis.
(2) Implementation.--The Secretary shall implement
the Program by not later than January 1, 2009.
(3) Data for reports.--To the extent practicable,
reports under the Program shall be based on the most
recent data available.
(4) Authority to focus initial application.--The
Secretary may focus the initial application of the
Program as appropriate, such as focusing the Program
on--
(A) physician specialties that account for a
certain percentage of all spending for
physicians' services under this title;
(B) physicians who treat conditions that have
a high cost or a high volume, or both, under
this title;
(C) physicians who use a high amount of
resources compared to other physicians;
(D) physicians practicing in certain
geographic areas; or
(E) physicians who treat a minimum number of
individuals under this title.
(5) Authority to exclude certain information if
insufficient information.--The Secretary may exclude
certain information regarding a service from a report
under the Program with respect to a physician (or group
of physicians) if the Secretary determines that there
is insufficient information relating to that service to
provide a valid report on that service.
(6) Adjustment of data.--To the extent practicable,
the Secretary shall make appropriate adjustments to the
data used in preparing reports under the Program, such
as adjustments to take into account variations in
health status and other patient characteristics. For
adjustments for reports on utilization under paragraph
(9), see subparagraph (D) of such paragraph.
(7) Education and outreach.--The Secretary shall
provide for education and outreach activities to
physicians on the operation of, and methodologies
employed under, the Program.
(8) Disclosure exemption.--Reports under the Program
shall be exempt from disclosure under section 552 of
title 5, United States Code.
(9) Reports on utilization.--
(A) Development of episode grouper.--
(i) In general.--The Secretary shall
develop an episode grouper that
combines separate but clinically
related items and services into an
episode of care for an individual, as
appropriate.
(ii) Timeline for development.--The
episode grouper described in
subparagraph (A) shall be developed by
not later than January 1, 2012.
(iii) Public availability.--The
Secretary shall make the details of the
episode grouper described in
subparagraph (A) available to the
public.
(iv) Endorsement.--The Secretary
shall seek endorsement of the episode
grouper described in subparagraph (A)
by the entity with a contract under
section 1890(a).
(B) Reports on utilization.--Effective
beginning with 2012, the Secretary shall
provide reports to physicians that compare, as
determined appropriate by the Secretary,
patterns of resource use of the individual
physician to such patterns of other physicians.
(C) Analysis of data.--The Secretary shall,
for purposes of preparing reports under this
paragraph, establish methodologies as
appropriate, such as to--
(i) attribute episodes of care, in
whole or in part, to physicians;
(ii) identify appropriate physicians
for purposes of comparison under
subparagraph (B); and
(iii) aggregate episodes of care
attributed to a physician under clause
(i) into a composite measure per
individual.
(D) Data adjustment.--In preparing reports
under this paragraph, the Secretary shall make
appropriate adjustments, including
adjustments--
(i) to account for differences in
socioeconomic and demographic
characteristics, ethnicity, and health
status of individuals (such as to
recognize that less healthy individuals
may require more intensive
interventions); and
(ii) to eliminate the effect of
geographic adjustments in payment rates
(as described in subsection (e)).
(E) Public availability of methodology.--The
Secretary shall make available to the public--
(i) the methodologies established
under subparagraph (C);
(ii) information regarding any
adjustments made to data under
subparagraph (D); and
(iii) aggregate reports with respect
to physicians.
(F) Definition of physician.--In this
paragraph:
(i) In general.--The term
``physician'' has the meaning given
that term in section 1861(r)(1).
(ii) Treatment of groups.--Such term
includes, as the Secretary determines
appropriate, a group of physicians.
(G) Limitations on review.--There shall be no
administrative or judicial review under section
1869, section 1878, or otherwise of the
establishment of the methodology under
subparagraph (C), including the determination
of an episode of care under such methodology.
(10) Coordination with other value-based purchasing
reforms.--The Secretary shall coordinate the Program
with the value-based payment modifier established under
subsection (p) and, as the Secretary determines
appropriate, other similar provisions of this title.
(11) Reports ending with 2017.--Reports under the
Program shall not be provided after December 31, 2017.
See subsection (q)(12) for reports under the eligible
professionals Merit-based Incentive Payment System.
(o) Incentives for Adoption and Meaningful Use of Certified
EHR Technology.--
(1) Incentive payments.--
(A) In general.--
(i) In general.--Subject to the
succeeding subparagraphs of this
paragraph, with respect to covered
professional services furnished by an
eligible professional during a payment
year (as defined in subparagraph (E)),
if the eligible professional is a
meaningful EHR user (as determined
under paragraph (2)) for the EHR
reporting period with respect to such
year, in addition to the amount
otherwise paid under this part, there
also shall be paid to the eligible
professional (or to an employer or
facility in the cases described in
clause (A) of section 1842(b)(6)), from
the Federal Supplementary Medical
Insurance Trust Fund established under
section 1841 an amount equal to 75
percent of the Secretary's estimate
(based on claims submitted not later
than 2 months after the end of the
payment year) of the allowed charges
under this part for all such covered
professional services furnished by the
eligible professional during such year.
(ii) No incentive payments with
respect to years after 2016.--No
incentive payments may be made under
this subsection with respect to a year
after 2016.
(B) Limitations on amounts of incentive
payments.--
(i) In general.--In no case shall the
amount of the incentive payment
provided under this paragraph for an
eligible professional for a payment
year exceed the applicable amount
specified under this subparagraph with
respect to such eligible professional
and such year.
(ii) Amount.--Subject to clauses
(iii) through (v), the applicable
amount specified in this subparagraph
for an eligible professional is as
follows:
(I) For the first payment
year for such professional,
$15,000 (or, if the first
payment year for such eligible
professional is 2011 or 2012,
$18,000).
(II) For the second payment
year for such professional,
$12,000.
(III) For the third payment
year for such professional,
$8,000.
(IV) For the fourth payment
year for such professional,
$4,000.
(V) For the fifth payment
year for such professional,
$2,000.
(VI) For any succeeding
payment year for such
professional, $0.
(iii) Phase down for eligible
professionals first adopting ehr after
2013.--If the first payment year for an
eligible professional is after 2013,
then the amount specified in this
subparagraph for a payment year for
such professional is the same as the
amount specified in clause (ii) for
such payment year for an eligible
professional whose first payment year
is 2013.
(iv) Increase for certain eligible
professionals.--In the case of an
eligible professional who predominantly
furnishes services under this part in
an area that is designated by the
Secretary (under section 332(a)(1)(A)
of the Public Health Service Act) as a
health professional shortage area, the
amount that would otherwise apply for a
payment year for such professional
under subclauses (I) through (V) of
clause (ii) shall be increased by 10
percent. In implementing the preceding
sentence, the Secretary may, as
determined appropriate, apply
provisions of subsections (m) and (u)
of section 1833 in a similar manner as
such provisions apply under such
subsection.
(v) No incentive payment if first
adopting after 2014.--If the first
payment year for an eligible
professional is after 2014 then the
applicable amount specified in this
subparagraph for such professional for
such year and any subsequent year shall
be $0.
(C) Non-application to hospital-based
eligible professionals.--
(i) In general.--No incentive payment
may be made under this paragraph in the
case of a hospital-based eligible
professional.
(ii) Hospital-based eligible
professional.--For purposes of clause
(i), the term ``hospital-based eligible
professional'' means, with respect to
covered professional services furnished
by an eligible professional during the
EHR reporting period for a payment
year, an eligible professional, such as
a pathologist, anesthesiologist, or
emergency physician, who furnishes
substantially all of such services in a
hospital inpatient or emergency room
setting and through the use of the
facilities and equipment, including
qualified electronic health records, of
the hospital. The determination of
whether an eligible professional is a
hospital-based eligible professional
shall be made on the basis of the site
of service (as defined by the
Secretary) and without regard to any
employment or billing arrangement
between the eligible professional and
any other provider.
(D) Payment.--
(i) Form of payment.--The payment
under this paragraph may be in the form
of a single consolidated payment or in
the form of such periodic installments
as the Secretary may specify.
(ii) Coordination of application of
limitation for professionals in
different practices.--In the case of an
eligible professional furnishing
covered professional services in more
than one practice (as specified by the
Secretary), the Secretary shall
establish rules to coordinate the
incentive payments, including the
application of the limitation on
amounts of such incentive payments
under this paragraph, among such
practices.
(iii) Coordination with medicaid.--
The Secretary shall seek, to the
maximum extent practicable, to avoid
duplicative requirements from Federal
and State governments to demonstrate
meaningful use of certified EHR
technology under this title and title
XIX. The Secretary may also adjust the
reporting periods under such title and
such subsections in order to carry out
this clause.
(E) Payment year defined.--
(i) In general.--For purposes of this
subsection, the term ``payment year''
means a year beginning with 2011.
(ii) First, second, etc. payment
year.--The term ``first payment year''
means, with respect to covered
professional services furnished by an
eligible professional, the first year
for which an incentive payment is made
for such services under this
subsection. The terms ``second payment
year'', ``third payment year'',
``fourth payment year'', and ``fifth
payment year'' mean, with respect to
covered professional services furnished
by such eligible professional, each
successive year immediately following
the first payment year for such
professional.
(2) Meaningful ehr user.--
(A) In general.--An eligible professional
shall be treated as a meaningful EHR user for
an EHR reporting period for a payment year (or,
for purposes of subsection (a)(7), for an EHR
reporting period under such subsection for a
year, or pursuant to subparagraph (D) for
purposes of subsection (q), for a performance
period under such subsection for a year) if
each of the following requirements is met:
(i) Meaningful use of certified ehr
technology.--The eligible professional
demonstrates to the satisfaction of the
Secretary, in accordance with
subparagraph (C)(i), that during such
period the professional is using
certified EHR technology in a
meaningful manner, which shall include
the use of electronic prescribing as
determined to be appropriate by the
Secretary.
(ii) Information exchange.--The
eligible professional demonstrates to
the satisfaction of the Secretary, in
accordance with subparagraph (C)(i),
that during such period such certified
EHR technology is connected in a manner
that provides, in accordance with law
and standards applicable to the
exchange of information, for the
electronic exchange of health
information to improve the quality of
health care, such as promoting care
coordination, and the professional
demonstrates (through a process
specified by the Secretary, such as the
use of an attestation) that the
professional has not knowingly and
willfully taken action (such as to
disable functionality) to limit or
restrict the compatibility or
interoperability of the certified EHR
technology.
(iii) Reporting on measures using
ehr.--Subject to subparagraph (B)(ii)
and subsection (q)(5)(B)(ii)(II) and
using such certified EHR technology,
the eligible professional submits
information for such period, in a form
and manner specified by the Secretary,
on such clinical quality measures and
such other measures as selected by the
Secretary under subparagraph (B)(i).
The Secretary may provide for the use of
alternative means for meeting the requirements
of clauses (i), (ii), and (iii) in the case of
an eligible professional furnishing covered
professional services in a group practice (as
defined by the Secretary). The Secretary shall
seek to improve the use of electronic health
records and health care quality over time.
(B) Reporting on measures.--
(i) Selection.--The Secretary shall
select measures for purposes of
subparagraph (A)(iii) but only
consistent with the following:
(I) The Secretary shall
provide preference to clinical
quality measures that have been
endorsed by the entity with a
contract with the Secretary
under section 1890(a).
(II) Prior to any measure
being selected under this
subparagraph, the Secretary
shall publish in the Federal
Register such measure and
provide for a period of public
comment on such measure.
(ii) Limitation.--The Secretary may
not require the electronic reporting of
information on clinical quality
measures under subparagraph (A)(iii)
unless the Secretary has the capacity
to accept the information
electronically, which may be on a pilot
basis.
(iii) Coordination of reporting of
information.--In selecting such
measures, and in establishing the form
and manner for reporting measures under
subparagraph (A)(iii), the Secretary
shall seek to avoid redundant or
duplicative reporting otherwise
required, including reporting under
subsection (k)(2)(C).
(C) Demonstration of meaningful use of
certified ehr technology and information
exchange.--
(i) In general.--A professional may
satisfy the demonstration requirement
of clauses (i) and (ii) of subparagraph
(A) through means specified by the
Secretary, which may include--
(I) an attestation;
(II) the submission of claims
with appropriate coding (such
as a code indicating that a
patient encounter was
documented using certified EHR
technology);
(III) a survey response;
(IV) reporting under
subparagraph (A)(iii); and
(V) other means specified by
the Secretary.
(ii) Use of part d data.--
Notwithstanding sections 1860D-
15(d)(2)(B) and 1860D-15(f)(2), the
Secretary may use data regarding drug
claims submitted for purposes of
section 1860D-15 that are necessary for
purposes of subparagraph (A).
(D) Continued application for purposes of
mips.--With respect to 2019 and each subsequent
payment year, the Secretary shall, for purposes
of subsection (q) and in accordance with
paragraph (1)(F) of such subsection, determine
whether an eligible professional who is a MIPS
eligible professional (as defined in subsection
(q)(1)(C)) for such year is a meaningful EHR
user under this paragraph for the performance
period under subsection (q) for such year. The
provisions of subparagraphs (B) and (D) of
subsection (a)(7), shall apply to assessments
of MIPS eligible professionals under subsection
(q) with respect to the performance category
described in subsection (q)(2)(A)(iv) in an
appropriate manner which may be similar to the
manner in which such provisions apply with
respect to payment adjustments made under
subsection (a)(7)(A).
(3) Application.--
(A) Physician reporting system rules.--
Paragraphs (5), (6), and (8) of subsection (k)
shall apply for purposes of this subsection in
the same manner as they apply for purposes of
such subsection.
(B) Coordination with other payments.--The
provisions of this subsection shall not be
taken into account in applying the provisions
of subsection (m) of this section and of
section 1833(m) and any payment under such
provisions shall not be taken into account in
computing allowable charges under this
subsection.
(C) Limitations on review.--There shall be no
administrative or judicial review under section
1869, section 1878, or otherwise, of--
(i) the methodology and standards for
determining payment amounts under this
subsection and payment adjustments
under subsection (a)(7)(A), including
the limitation under paragraph (1)(B)
and coordination under clauses (ii) and
(iii) of paragraph (1)(D);
(ii) the methodology and standards
for determining a meaningful EHR user
under paragraph (2), including
selection of measures under paragraph
(2)(B), specification of the means of
demonstrating meaningful EHR use under
paragraph (2)(C), and the hardship
exception under subsection (a)(7)(B);
(iii) the methodology and standards
for determining a hospital-based
eligible professional under paragraph
(1)(C); and
(iv) the specification of reporting
periods under paragraph (5) and the
selection of the form of payment under
paragraph (1)(D)(i).
(D) Posting on website.--The Secretary shall
post on the Internet website of the Centers for
Medicare & Medicaid Services, in an easily
understandable format, a list of the names,
business addresses, and business phone numbers
of the eligible professionals who are
meaningful EHR users and, as determined
appropriate by the Secretary, of group
practices receiving incentive payments under
paragraph (1).
(4) Certified ehr technology defined.--For purposes
of this section, the term ``certified EHR technology''
means a qualified electronic health record (as defined
in section 3000(13) of the Public Health Service Act)
that is certified pursuant to section 3001(c)(5) of
such Act as meeting standards adopted under section
3004 of such Act that are applicable to the type of
record involved (as determined by the Secretary, such
as an ambulatory electronic health record for office-
based physicians or an inpatient hospital electronic
health record for hospitals).
(5) Definitions.--For purposes of this subsection:
(A) Covered professional services.--The term
``covered professional services'' has the
meaning given such term in subsection (k)(3).
(B) EHR reporting period.--The term ``EHR
reporting period'' means, with respect to a
payment year, any period (or periods) as
specified by the Secretary.
(C) Eligible professional.--The term
``eligible professional'' means a physician, as
defined in section 1861(r).
(p) Establishment of Value-based Payment Modifier.--
(1) In general.--The Secretary shall establish a
payment modifier that provides for differential payment
to a physician or a group of physicians under the fee
schedule established under subsection (b) based upon
the quality of care furnished compared to cost (as
determined under paragraphs (2) and (3), respectively)
during a performance period. Such payment modifier
shall be separate from the geographic adjustment
factors established under subsection (e).
(2) Quality.--
(A) In general.--For purposes of paragraph
(1), quality of care shall be evaluated, to the
extent practicable, based on a composite of
measures of the quality of care furnished (as
established by the Secretary under subparagraph
(B)).
(B) Measures.--
(i) The Secretary shall establish
appropriate measures of the quality of
care furnished by a physician or group
of physicians to individuals enrolled
under this part, such as measures that
reflect health outcomes. Such measures
shall be risk adjusted as determined
appropriate by the Secretary.
(ii) The Secretary shall seek
endorsement of the measures established
under this subparagraph by the entity
with a contract under section 1890(a).
(C) Continued application for purposes of
mips.--The Secretary shall, in accordance with
subsection (q)(1)(F), carry out subparagraph
(B) for purposes of subsection (q).
(3) Costs.--For purposes of paragraph (1), costs
shall be evaluated, to the extent practicable, based on
a composite of appropriate measures of costs
established by the Secretary (such as the composite
measure under the methodology established under
subsection (n)(9)(C)(iii)) that eliminate the effect of
geographic adjustments in payment rates (as described
in subsection (e)), and take into account risk factors
(such as socioeconomic and demographic characteristics,
ethnicity, and health status of individuals (such as to
recognize that less healthy individuals may require
more intensive interventions) and other factors
determined appropriate by the Secretary. With respect
to 2019 and each subsequent year, the Secretary shall,
in accordance with subsection (q)(1)(F), carry out this
paragraph for purposes of subsection (q).
(4) Implementation.--
(A) Publication of measures, dates of
implementation, performance period.--Not later
than January 1, 2012, the Secretary shall
publish the following:
(i) The measures of quality of care
and costs established under paragraphs
(2) and (3), respectively.
(ii) The dates for implementation of
the payment modifier (as determined
under subparagraph (B)).
(iii) The initial performance period
(as specified under subparagraph
(B)(ii)).
(B) Deadlines for implementation.--
(i) Initial implementation.--Subject
to the preceding provisions of this
subparagraph, the Secretary shall begin
implementing the payment modifier
established under this subsection
through the rulemaking process during
2013 for the physician fee schedule
established under subsection (b).
(ii) Initial performance period.--
(I) In general.--The
Secretary shall specify an
initial performance period for
application of the payment
modifier established under this
subsection with respect to
2015.
(II) Provision of information
during initial performance
period.--During the initial
performance period, the
Secretary shall, to the extent
practicable, provide
information to physicians and
groups of physicians about the
quality of care furnished by
the physician or group of
physicians to individuals
enrolled under this part
compared to cost (as determined
under paragraphs (2) and (3),
respectively) with respect to
the performance period.
(iii) Application.--The Secretary
shall apply the payment modifier
established under this subsection for
items and services furnished on or
after January 1, 2015, with respect to
specific physicians and groups of
physicians the Secretary determines
appropriate, and for services furnished
on or after January 1, 2017, with
respect to all physicians and groups of
physicians. Such payment modifier shall
not be applied for items and services
furnished on or after January 1, 2019.
(C) Budget neutrality.--The payment modifier
established under this subsection shall be
implemented in a budget neutral manner.
(5) Systems-based care.--The Secretary shall, as
appropriate, apply the payment modifier established
under this subsection in a manner that promotes
systems-based care.
(6) Consideration of special circumstances of certain
providers.--In applying the payment modifier under this
subsection, the Secretary shall, as appropriate, take
into account the special circumstances of physicians or
groups of physicians in rural areas and other
underserved communities.
(7) Application.--For purposes of the initial
application of the payment modifier established under
this subsection during the period beginning on January
1, 2015, and ending on December 31, 2016, the term
``physician'' has the meaning given such term in
section 1861(r). On or after January 1, 2017, the
Secretary may apply this subsection to eligible
professionals (as defined in subsection (k)(3)(B)) as
the Secretary determines appropriate.
(8) Definitions.--For purposes of this subsection:
(A) Costs.--The term ``costs'' means
expenditures per individual as determined
appropriate by the Secretary. In making the
determination under the preceding sentence, the
Secretary may take into account the amount of
growth in expenditures per individual for a
physician compared to the amount of such growth
for other physicians.
(B) Performance period.--The term
``performance period'' means a period specified
by the Secretary.
(9) Coordination with other value-based purchasing
reforms.--The Secretary shall coordinate the value-
based payment modifier established under this
subsection with the Physician Feedback Program under
subsection (n) and, as the Secretary determines
appropriate, other similar provisions of this title.
(10) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of--
(A) the establishment of the value-based
payment modifier under this subsection;
(B) the evaluation of quality of care under
paragraph (2), including the establishment of
appropriate measures of the quality of care
under paragraph (2)(B);
(C) the evaluation of costs under paragraph
(3), including the establishment of appropriate
measures of costs under such paragraph;
(D) the dates for implementation of the
value-based payment modifier;
(E) the specification of the initial
performance period and any other performance
period under paragraphs (4)(B)(ii) and (8)(B),
respectively;
(F) the application of the value-based
payment modifier under paragraph (7); and
(G) the determination of costs under
paragraph (8)(A).
(q) Merit-Based Incentive Payment System.--
(1) Establishment.--
(A) In general.--Subject to the succeeding
provisions of this subsection, the Secretary
shall establish an eligible professional Merit-
based Incentive Payment System (in this
subsection referred to as the ``MIPS'') under
which the Secretary shall--
(i) develop a methodology for
assessing the total performance of each
MIPS eligible professional according to
performance standards under paragraph
(3) for a performance period (as
established under paragraph (4)) for a
year;
(ii) using such methodology, provide
for a composite performance score in
accordance with paragraph (5) for each
such professional for each performance
period; and
(iii) use such composite performance
score of the MIPS eligible professional
for a performance period for a year to
determine and apply a MIPS adjustment
factor (and, as applicable, an
additional MIPS adjustment factor)
under paragraph (6) to the professional
for the year.
Notwithstanding subparagraph (C)(ii), under the
MIPS, the Secretary shall permit any eligible
professional (as defined in subsection
(k)(3)(B)) to report on applicable measures and
activities described in paragraph (2)(B).
(B) Program implementation.--The MIPS shall
apply to payments for covered professional
services (as defined in subsection (k)(3)(A))
furnished on or after January 1, 2019.
(C) MIPS eligible professional defined.--
(i) In general.--For purposes of this
subsection, subject to clauses (ii) and
(iv), the term ``MIPS eligible
professional'' means--
(I) for the first and second
years for which the MIPS
applies to payments (and for
the performance period for such
first and second year), a
physician (as defined in
section 1861(r)), a physician
assistant, nurse practitioner,
and clinical nurse specialist
(as such terms are defined in
section 1861(aa)(5)), a
certified registered nurse
anesthetist (as defined in
section 1861(bb)(2)), and a
group that includes such
professionals; and
(II) for the third year for
which the MIPS applies to
payments (and for the
performance period for such
third year) and for each
succeeding year (and for the
performance period for each
such year), the professionals
described in subclause (I),
such other eligible
professionals (as defined in
subsection (k)(3)(B)) as
specified by the Secretary, and
a group that includes such
professionals.
(ii) Exclusions.--For purposes of
clause (i), the term ``MIPS eligible
professional'' does not include, with
respect to a year, an eligible
professional (as defined in subsection
(k)(3)(B)) who--
(I) is a qualifying APM
participant (as defined in
section 1833(z)(2));
(II) subject to clause (vii),
is a partial qualifying APM
participant (as defined in
clause (iii)) for the most
recent period for which data
are available and who, for the
performance period with respect
to such year, does not report
on applicable measures and
activities described in
paragraph (2)(B) that are
required to be reported by such
a professional under the MIPS;
or
(III) for the performance
period with respect to such
year, does not exceed the low-
volume threshold measurement
selected under clause (iv).
(iii) Partial qualifying apm
participant.--For purposes of this
subparagraph, the term ``partial
qualifying APM participant'' means,
with respect to a year, an eligible
professional for whom the Secretary
determines the minimum payment
percentage (or percentages), as
applicable, described in paragraph (2)
of section 1833(z) for such year have
not been satisfied, but who would be
considered a qualifying APM participant
(as defined in such paragraph) for such
year if--
(I) with respect to 2019 and
2020, the reference in
subparagraph (A) of such
paragraph to 25 percent was
instead a reference to 20
percent;
(II) with respect to 2021 and
2022--
(aa) the reference in
subparagraph (B)(i) of
such paragraph to 50
percent was instead a
reference to 40
percent; and
(bb) the references
in subparagraph (B)(ii)
of such paragraph to 50
percent and 25 percent
of such paragraph were
instead references to
40 percent and 20
percent, respectively;
and
(III) with respect to 2023
and subsequent years--
(aa) the reference in
subparagraph (C)(i) of
such paragraph to 75
percent was instead a
reference to 50
percent; and
(bb) the references
in subparagraph (C)(ii)
of such paragraph to 75
percent and 25 percent
of such paragraph were
instead references to
50 percent and 20
percent, respectively.
(iv) Selection of low-volume
threshold measurement.--The Secretary
shall select a low-volume threshold to
apply for purposes of clause (ii)(III),
which may include one or more or a
combination of the following:
(I) The minimum number (as
determined by the Secretary)
of--
(aa) for performance
periods beginning
before January 1, 2018,
individuals enrolled
under this part who are
treated by the eligible
professional for the
performance period
involved; and
(bb) for performance
periods beginning on or
after January 1, 2018,
individuals enrolled
under this part who are
furnished covered
professional services
(as defined in
subsection (k)(3)(A))
by the eligible
professional for the
performance period
involved.
(II) The minimum number (as
determined by the Secretary) of
covered professional services
(as defined in subsection
(k)(3)(A)) furnished to
individuals enrolled under this
part by such professional for
such performance period.
(III) The minimum amount (as
determined by the Secretary)
of--
(aa) for performance
periods beginning
before January 1, 2018,
allowed charges billed
by such professional
under this part for
such performance
period; and
(bb) for performance
periods beginning on or
after January 1, 2018,
allowed charges for
covered professional
services (as defined in
subsection (k)(3)(A))
billed by such
professional for such
performance period.
(v) Treatment of new medicare
enrolled eligible professionals.--In
the case of a professional who first
becomes a Medicare enrolled eligible
professional during the performance
period for a year (and had not
previously submitted claims under this
title such as a person, an entity, or a
part of a physician group or under a
different billing number or tax
identifier), such professional shall
not be treated under this subsection as
a MIPS eligible professional until the
subsequent year and performance period
for such subsequent year.
(vi) Clarification.--In the case of
items and services furnished during a
year by an individual who is not a MIPS
eligible professional (including
pursuant to clauses (ii) and (v)) with
respect to a year, in no case shall a
MIPS adjustment factor (or additional
MIPS adjustment factor) under paragraph
(6) apply to such individual for such
year.
(vii) Partial qualifying apm
participant clarifications.--
(I) Treatment as mips
eligible professional.--In the
case of an eligible
professional who is a partial
qualifying APM participant,
with respect to a year, and
who, for the performance period
for such year, reports on
applicable measures and
activities described in
paragraph (2)(B) that are
required to be reported by such
a professional under the MIPS,
such eligible professional is
considered to be a MIPS
eligible professional with
respect to such year.
(II) Not eligible for
qualifying apm participant
payments.--In no case shall an
eligible professional who is a
partial qualifying APM
participant, with respect to a
year, be considered a
qualifying APM participant (as
defined in paragraph (2) of
section 1833(z)) for such year
or be eligible for the
additional payment under
paragraph (1) of such section
for such year.
(D) Application to group practices.--
(i) In general.--Under the MIPS:
(I) Quality performance
category.--The Secretary shall
establish and apply a process
that includes features of the
provisions of subsection
(m)(3)(C) for MIPS eligible
professionals in a group
practice with respect to
assessing performance of such
group with respect to the
performance category described
in clause (i) of paragraph
(2)(A).
(II) Other performance
categories.--The Secretary may
establish and apply a process
that includes features of the
provisions of subsection
(m)(3)(C) for MIPS eligible
professionals in a group
practice with respect to
assessing the performance of
such group with respect to the
performance categories
described in clauses (ii)
through (iv) of such paragraph.
(ii) Ensuring comprehensiveness of
group practice assessment.--The process
established under clause (i) shall to
the extent practicable reflect the
range of items and services furnished
by the MIPS eligible professionals in
the group practice involved.
(E) Use of registries.--Under the MIPS, the
Secretary shall encourage the use of qualified
clinical data registries pursuant to subsection
(m)(3)(E) in carrying out this subsection.
(F) Application of certain provisions.--In
applying a provision of subsection (k), (m),
(o), or (p) for purposes of this subsection,
the Secretary shall--
(i) adjust the application of such
provision to ensure the provision is
consistent with the provisions of this
subsection; and
(ii) not apply such provision to the
extent that the provision is
duplicative with a provision of this
subsection.
(G) Accounting for risk factors.--
(i) Risk factors.--Taking into
account the relevant studies conducted
and recommendations made in reports
under section 2(d) of the Improving
Medicare Post-Acute Care Transformation
Act of 2014, and, as appropriate, other
information, including information
collected before completion of such
studies and recommendations, the
Secretary, on an ongoing basis, shall,
as the Secretary determines appropriate
and based on an individual's health
status and other risk factors--
(I) assess appropriate
adjustments to quality
measures, resource use
measures, and other measures
used under the MIPS; and
(II) assess and implement
appropriate adjustments to
payment adjustments, composite
performance scores, scores for
performance categories, or
scores for measures or
activities under the MIPS.
(2) Measures and activities under performance
categories.--
(A) Performance categories.--Under the MIPS,
the Secretary shall use the following
performance categories (each of which is
referred to in this subsection as a performance
category) in determining the composite
performance score under paragraph (5):
(i) Quality.
(ii) Resource use.
(iii) Clinical practice improvement
activities.
(iv) Meaningful use of certified EHR
technology.
(B) Measures and activities specified for
each category.--For purposes of paragraph
(3)(A) and subject to subparagraph (C),
measures and activities specified for a
performance period (as established under
paragraph (4)) for a year are as follows:
(i) Quality.--For the performance
category described in subparagraph
(A)(i), the quality measures included
in the final measures list published
under subparagraph (D)(i) for such year
and the list of quality measures
described in subparagraph (D)(vi) used
by qualified clinical data registries
under subsection (m)(3)(E).
(ii) Resource use.--For the
performance category described in
subparagraph (A)(ii), the measurement
of resource use for such period under
subsection (p)(3), using the
methodology under subsection (r) as
appropriate, and, as feasible and
applicable, accounting for the cost of
drugs under part D.
(iii) Clinical practice improvement
activities.--For the performance
category described in subparagraph
(A)(iii), clinical practice improvement
activities (as defined in subparagraph
(C)(v)(III)) under subcategories
specified by the Secretary for such
period, which shall include at least
the following:
(I) The subcategory of
expanded practice access, such
as same day appointments for
urgent needs and after hours
access to clinician advice.
(II) The subcategory of
population management, such as
monitoring health conditions of
individuals to provide timely
health care interventions or
participation in a qualified
clinical data registry.
(III) The subcategory of care
coordination, such as timely
communication of test results,
timely exchange of clinical
information to patients and
other providers, and use of
remote monitoring or
telehealth.
(IV) The subcategory of
beneficiary engagement, such as
the establishment of care plans
for individuals with complex
care needs, beneficiary self-
management assessment and
training, and using shared
decision-making mechanisms.
(V) The subcategory of
patient safety and practice
assessment, such as through use
of clinical or surgical
checklists and practice
assessments related to
maintaining certification.
(VI) The subcategory of
participation in an alternative
payment model (as defined in
section 1833(z)(3)(C)).
In establishing activities under this
clause, the Secretary shall give
consideration to the circumstances of
small practices (consisting of 15 or
fewer professionals) and practices
located in rural areas and in health
professional shortage areas (as
designated under section 332(a)(1)(A)
of the Public Health Service Act).
(iv) Meaningful ehr use.--For the
performance category described in
subparagraph (A)(iv), the requirements
established for such period under
subsection (o)(2) for determining
whether an eligible professional is a
meaningful EHR user.
(C) Additional provisions.--
(i) Emphasizing outcome measures
under the quality performance
category.--In applying subparagraph
(B)(i), the Secretary shall, as
feasible, emphasize the application of
outcome measures.
(ii) Application of additional system
measures.--The Secretary may use
measures used for a payment system
other than for physicians, such as
measures for inpatient hospitals, for
purposes of the performance categories
described in clauses (i) and (ii) of
subparagraph (A). For purposes of the
previous sentence, the Secretary may
not use measures for hospital
outpatient departments, except in the
case of items and services furnished by
emergency physicians, radiologists, and
anesthesiologists.
(iii) Global and population-based
measures.--The Secretary may use global
measures, such as global outcome
measures, and population-based measures
for purposes of the performance
category described in subparagraph
(A)(i).
(iv) Application of measures and
activities to non-patient-facing
professionals.--In carrying out this
paragraph, with respect to measures and
activities specified in subparagraph
(B) for performance categories
described in subparagraph (A), the
Secretary--
(I) shall give consideration
to the circumstances of
professional types (or
subcategories of those types
determined by practice
characteristics) who typically
furnish services that do not
involve face-to-face
interaction with a patient; and
(II) may, to the extent
feasible and appropriate, take
into account such circumstances
and apply under this subsection
with respect to MIPS eligible
professionals of such
professional types or
subcategories, alternative
measures or activities that
fulfill the goals of the
applicable performance
category.
In carrying out the previous sentence,
the Secretary shall consult with
professionals of such professional
types or subcategories.
(v) Clinical practice improvement
activities.--
(I) Request for
information.--In initially
applying subparagraph (B)(iii),
the Secretary shall use a
request for information to
solicit recommendations from
stakeholders to identify
activities described in such
subparagraph and specifying
criteria for such activities.
(II) Contract authority for
clinical practice improvement
activities performance
category.--In applying
subparagraph (B)(iii), the
Secretary may contract with
entities to assist the
Secretary in--
(aa) identifying
activities described in
subparagraph (B)(iii);
(bb) specifying
criteria for such
activities; and
(cc) determining
whether a MIPS eligible
professional meets such
criteria.
(III) Clinical practice
improvement activities
defined.--For purposes of this
subsection, the term ``clinical
practice improvement activity''
means an activity that relevant
eligible professional
organizations and other
relevant stakeholders identify
as improving clinical practice
or care delivery and that the
Secretary determines, when
effectively executed, is likely
to result in improved outcomes.
(D) Annual list of quality measures available
for mips assessment.--
(i) In general.--Under the MIPS, the
Secretary, through notice and comment
rulemaking and subject to the
succeeding clauses of this
subparagraph, shall, with respect to
the performance period for a year,
establish an annual final list of
quality measures from which MIPS
eligible professionals may choose for
purposes of assessment under this
subsection for such performance period.
Pursuant to the previous sentence, the
Secretary shall--
(I) not later than November 1
of the year prior to the first
day of the first performance
period under the MIPS,
establish and publish in the
Federal Register a final list
of quality measures; and
(II) not later than November
1 of the year prior to the
first day of each subsequent
performance period, update the
final list of quality measures
from the previous year (and
publish such updated final list
in the Federal Register), by--
(aa) removing from
such list, as
appropriate, quality
measures, which may
include the removal of
measures that are no
longer meaningful (such
as measures that are
topped out);
(bb) adding to such
list, as appropriate,
new quality measures;
and
(cc) determining
whether or not quality
measures on such list
that have undergone
substantive changes
should be included in
the updated list.
(ii) Call for quality measures.--
(I) In general.--Eligible
professional organizations and
other relevant stakeholders
shall be requested to identify
and submit quality measures to
be considered for selection
under this subparagraph in the
annual list of quality measures
published under clause (i) and
to identify and submit updates
to the measures on such list.
For purposes of the previous
sentence, measures may be
submitted regardless of whether
such measures were previously
published in a proposed rule or
endorsed by an entity with a
contract under section 1890(a).
(II) Eligible professional
organization defined.--In this
subparagraph, the term
``eligible professional
organization'' means a
professional organization as
defined by nationally
recognized specialty boards of
certification or equivalent
certification boards.
(iii) Requirements.--In selecting
quality measures for inclusion in the
annual final list under clause (i), the
Secretary shall--
(I) provide that, to the
extent practicable, all quality
domains (as defined in
subsection (s)(1)(B)) are
addressed by such measures; and
(II) ensure that such
selection is consistent with
the process for selection of
measures under subsections (k),
(m), and (p)(2).
(iv) Peer review.--Before including a
new measure in the final list of
measures published under clause (i) for
a year, the Secretary shall submit for
publication in applicable specialty-
appropriate, peer-reviewed journals
such measure and the method for
developing and selecting such measure,
including clinical and other data
supporting such measure.
(v) Measures for inclusion.--The
final list of quality measures
published under clause (i) shall
include, as applicable, measures under
subsections (k), (m), and (p)(2),
including quality measures from among--
(I) measures endorsed by a
consensus-based entity;
(II) measures developed under
subsection (s); and
(III) measures submitted
under clause (ii)(I).
Any measure selected for inclusion in
such list that is not endorsed by a
consensus-based entity shall have a
focus that is evidence-based.
(vi) Exception for qualified clinical
data registry measures.--Measures used
by a qualified clinical data registry
under subsection (m)(3)(E) shall not be
subject to the requirements under
clauses (i), (iv), and (v). The
Secretary shall publish the list of
measures used by such qualified
clinical data registries on the
Internet website of the Centers for
Medicare & Medicaid Services.
(vii) Exception for existing quality
measures.--Any quality measure
specified by the Secretary under
subsection (k) or (m), including under
subsection (m)(3)(E), and any measure
of quality of care established under
subsection (p)(2) for the reporting
period or performance period under the
respective subsection beginning before
the first performance period under the
MIPS--
(I) shall not be subject to
the requirements under clause
(i) (except under items (aa)
and (cc) of subclause (II) of
such clause) or to the
requirement under clause (iv);
and
(II) shall be included in the
final list of quality measures
published under clause (i)
unless removed under clause
(i)(II)(aa).
(viii) Consultation with relevant
eligible professional organizations and
other relevant stakeholders.--Relevant
eligible professional organizations and
other relevant stakeholders, including
State and national medical societies,
shall be consulted in carrying out this
subparagraph.
(ix) Optional application.--The
process under section 1890A is not
required to apply to the selection of
measures under this subparagraph.
(3) Performance standards.--
(A) Establishment.--Under the MIPS, the
Secretary shall establish performance standards
with respect to measures and activities
specified under paragraph (2)(B) for a
performance period (as established under
paragraph (4)) for a year.
(B) Considerations in establishing
standards.--In establishing such performance
standards with respect to measures and
activities specified under paragraph (2)(B),
the Secretary shall consider the following:
(i) Historical performance standards.
(ii) Improvement.
(iii) The opportunity for continued
improvement.
(4) Performance period.--The Secretary shall
establish a performance period (or periods) for a year
(beginning with 2019). Such performance period (or
periods) shall begin and end prior to the beginning of
such year and be as close as possible to such year. In
this subsection, such performance period (or periods)
for a year shall be referred to as the performance
period for the year.
(5) Composite performance score.--
(A) In general.--Subject to the succeeding
provisions of this paragraph and taking into
account, as available and applicable, paragraph
(1)(G), the Secretary shall develop a
methodology for assessing the total performance
of each MIPS eligible professional according to
performance standards under paragraph (3) with
respect to applicable measures and activities
specified in paragraph (2)(B) with respect to
each performance category applicable to such
professional for a performance period (as
established under paragraph (4)) for a year.
Using such methodology, the Secretary shall
provide for a composite assessment (using a
scoring scale of 0 to 100) for each such
professional for the performance period for
such year. In this subsection such a composite
assessment for such a professional with respect
to a performance period shall be referred to as
the ``composite performance score'' for such
professional for such performance period.
(B) Incentive to report; encouraging use of
certified ehr technology for reporting quality
measures.--
(i) Incentive to report.--Under the
methodology established under
subparagraph (A), the Secretary shall
provide that in the case of a MIPS
eligible professional who fails to
report on an applicable measure or
activity that is required to be
reported by the professional, the
professional shall be treated as
achieving the lowest potential score
applicable to such measure or activity.
(ii) Encouraging use of certified ehr
technology and qualified clinical data
registries for reporting quality
measures.--Under the methodology
established under subparagraph (A), the
Secretary shall--
(I) encourage MIPS eligible
professionals to report on
applicable measures with
respect to the performance
category described in paragraph
(2)(A)(i) through the use of
certified EHR technology and
qualified clinical data
registries; and
(II) with respect to a
performance period, with
respect to a year, for which a
MIPS eligible professional
reports such measures through
the use of such EHR technology,
treat such professional as
satisfying the clinical quality
measures reporting requirement
described in subsection
(o)(2)(A)(iii) for such year.
(C) Clinical practice improvement activities
performance score.--
(i) Rule for certification.--A MIPS
eligible professional who is in a
practice that is certified as a
patient-centered medical home or
comparable specialty practice, as
determined by the Secretary, with
respect to a performance period shall
be given the highest potential score
for the performance category described
in paragraph (2)(A)(iii) for such
period.
(ii) APM participation.--
Participation by a MIPS eligible
professional in an alternative payment
model (as defined in section
1833(z)(3)(C)) with respect to a
performance period shall earn such
eligible professional a minimum score
of one-half of the highest potential
score for the performance category
described in paragraph (2)(A)(iii) for
such performance period.
(iii) Subcategories.--A MIPS eligible
professional shall not be required to
perform activities in each subcategory
under paragraph (2)(B)(iii) or
participate in an alternative payment
model in order to achieve the highest
potential score for the performance
category described in paragraph
(2)(A)(iii).
(D) Achievement and improvement.--
(i) Taking into account
improvement.--Beginning with the second
year to which the MIPS applies, in
addition to the achievement of a MIPS
eligible professional, if data
sufficient to measure improvement is
available, the methodology developed
under subparagraph (A)--
(I) in the case of the
performance score for the
performance category described
in clauses (i) and (ii) of
paragraph (2)(A), subject to
clause (iii), shall take into
account the improvement of the
professional; and
(II) in the case of
performance scores for other
performance categories, may
take into account the
improvement of the
professional.
(ii) Assigning higher weight for
achievement.--Subject to clause (i),
under the methodology developed under
subparagraph (A), the Secretary may
assign a higher scoring weight under
subparagraph (F) with respect to the
achievement of a MIPS eligible
professional than with respect to any
improvement of such professional
applied under clause (i) with respect
to a measure, activity, or category
described in paragraph (2).
(iii) Transition years.--For each of
the second, third, fourth, and fifth
years for which the MIPS applies to
payments, the performance score for the
performance category described in
paragraph (2)(A)(ii) shall not take
into account the improvement of the
professional involved.
(E) Weights for the performance categories.--
(i) In general.--Under the
methodology developed under
subparagraph (A), subject to
subparagraph (F)(i) and clause (ii),
the composite performance score shall
be determined as follows:
(I) Quality.--
(aa) In general.--
Subject to item (bb),
thirty percent of such
score shall be based on
performance with
respect to the category
described in clause (i)
of paragraph (2)(A). In
applying the previous
sentence, the Secretary
shall, as feasible,
encourage the
application of outcome
measures within such
category.
(bb) First 5 years.--
For each of the first
through fifth years for
which the MIPS applies
to payments, the
percentage applicable
under item (aa) shall
be increased in a
manner such that the
total percentage points
of the increase under
this item for the
respective year equals
the total number of
percentage points by
which the percentage
applied under subclause
(II)(bb) for the
respective year is less
than 30 percent.
(II) Resource use.--
(aa) In general.--
Subject to item (bb),
thirty percent of such
score shall be based on
performance with
respect to the category
described in clause
(ii) of paragraph
(2)(A).
(bb) First 5 years.--
For the first year for
which the MIPS applies
to payments, not more
than 10 percent of such
score shall be based on
performance with
respect to the category
described in clause
(ii) of paragraph
(2)(A). For each of the
second, third, fourth,
and fifth years for
which the MIPS applies
to payments, not less
than 10 percent and not
more than 30 percent of
such score shall be
based on performance
with respect to the
category described in
clause (ii) of
paragraph (2)(A).
Nothing in the previous
sentence shall be
construed, with respect
to a performance period
for a year described in
the previous sentence,
as preventing the
Secretary from basing
30 percent of such
score for such year
with respect to the
category described in
such clause (ii), if
the Secretary
determines, based on
information posted
under subsection
(r)(2)(I) that
sufficient resource use
measures are ready for
adoption for use under
the performance
category under
paragraph (2)(A)(ii)
for such performance
period.
(III) Clinical practice
improvement activities.--
Fifteen percent of such score
shall be based on performance
with respect to the category
described in clause (iii) of
paragraph (2)(A).
(IV) Meaningful use of
certified ehr technology.--
Twenty-five percent of such
score shall be based on
performance with respect to the
category described in clause
(iv) of paragraph (2)(A).
(ii) Authority to adjust percentages
in case of high ehr meaningful use
adoption.--In any year in which the
Secretary estimates that the proportion
of eligible professionals (as defined
in subsection (o)(5)) who are
meaningful EHR users (as determined
under subsection (o)(2)) is 75 percent
or greater, the Secretary may reduce
the percent applicable under clause
(i)(IV), but not below 15 percent. If
the Secretary makes such reduction for
a year, subject to subclauses (I)(bb)
and (II)(bb) of clause (i), the
percentages applicable under one or
more of subclauses (I), (II), and (III)
of clause (i) for such year shall be
increased in a manner such that the
total percentage points of the increase
under this clause for such year equals
the total number of percentage points
reduced under the preceding sentence
for such year.
(F) Certain flexibility for weighting
performance categories, measures, and
activities.--Under the methodology under
subparagraph (A), if there are not sufficient
measures and activities (described in paragraph
(2)(B)) applicable and available to each type
of eligible professional involved, the
Secretary shall assign different scoring
weights (including a weight of 0)--
(i) which may vary from the scoring
weights specified in subparagraph (E),
for each performance category based on
the extent to which the category is
applicable to the type of eligible
professional involved; and
(ii) for each measure and activity
specified under paragraph (2)(B) with
respect to each such category based on
the extent to which the measure or
activity is applicable and available to
the type of eligible professional
involved.
(G) Resource use.--Analysis of the
performance category described in paragraph
(2)(A)(ii) shall include results from the
methodology described in subsection (r)(5), as
appropriate.
(H) Inclusion of quality measure data from
other payers.--In applying subsections (k),
(m), and (p) with respect to measures described
in paragraph (2)(B)(i), analysis of the
performance category described in paragraph
(2)(A)(i) may include data submitted by MIPS
eligible professionals with respect to items
and services furnished to individuals who are
not individuals entitled to benefits under part
A or enrolled under part B.
(I) Use of voluntary virtual groups for
certain assessment purposes.--
(i) In general.--In the case of MIPS
eligible professionals electing to be a
virtual group under clause (ii) with
respect to a performance period for a
year, for purposes of applying the
methodology under subparagraph (A) with
respect to the performance categories
described in clauses (i) and (ii) of
paragraph (2)(A)--
(I) the assessment of
performance provided under such
methodology with respect to
such performance categories
that is to be applied to each
such professional in such group
for such performance period
shall be with respect to the
combined performance of all
such professionals in such
group for such period; and
(II) with respect to the
composite performance score
provided under this paragraph
for such performance period for
each such MIPS eligible
professional in such virtual
group, the components of the
composite performance score
that assess performance with
respect to such performance
categories shall be based on
the assessment of the combined
performance under subclause (I)
for such performance categories
and performance period.
(ii) Election of practices to be a
virtual group.--The Secretary shall, in
accordance with the requirements under
clause (iii), establish and have in
place a process to allow an individual
MIPS eligible professional or a group
practice consisting of not more than 10
MIPS eligible professionals to elect,
with respect to a performance period
for a year to be a virtual group under
this subparagraph with at least one
other such individual MIPS eligible
professional or group practice. Such a
virtual group may be based on
appropriate classifications of
providers, such as by geographic areas
or by provider specialties defined by
nationally recognized specialty boards
of certification or equivalent
certification boards.
(iii) Requirements.--The requirements
for the process under clause (ii)
shall--
(I) provide that an election
under such clause, with respect
to a performance period, shall
be made before the beginning of
such performance period and may
not be changed during such
performance period;
(II) provide that an
individual MIPS eligible
professional and a group
practice described in clause
(ii) may elect to be in no more
than one virtual group for a
performance period and that, in
the case of such a group
practice that elects to be in
such virtual group for such
performance period, such
election applies to all MIPS
eligible professionals in such
group practice;
(III) provide that a virtual
group be a combination of tax
identification numbers;
(IV) provide for formal
written agreements among MIPS
eligible professionals electing
to be a virtual group under
this subparagraph; and
(V) include such other
requirements as the Secretary
determines appropriate.
(6) MIPS payments.--
(A) MIPS adjustment factor.--Taking into
account paragraph (1)(G), the Secretary shall
specify a MIPS adjustment factor for each MIPS
eligible professional for a year. Such MIPS
adjustment factor for a MIPS eligible
professional for a year shall be in the form of
a percent and shall be determined--
(i) by comparing the composite
performance score of the eligible
professional for such year to the
performance threshold established under
subparagraph (D)(i) for such year;
(ii) in a manner such that the
adjustment factors specified under this
subparagraph for a year result in
differential payments under this
paragraph reflecting that--
(I) MIPS eligible
professionals with composite
performance scores for such
year at or above such
performance threshold for such
year receive zero or positive
payment adjustment factors for
such year in accordance with
clause (iii), with such
professionals having higher
composite performance scores
receiving higher adjustment
factors; and
(II) MIPS eligible
professionals with composite
performance scores for such
year below such performance
threshold for such year receive
negative payment adjustment
factors for such year in
accordance with clause (iv),
with such professionals having
lower composite performance
scores receiving lower
adjustment factors;
(iii) in a manner such that MIPS
eligible professionals with composite
scores described in clause (ii)(I) for
such year, subject to clauses (i) and
(ii) of subparagraph (F), receive a
zero or positive adjustment factor on a
linear sliding scale such that an
adjustment factor of 0 percent is
assigned for a score at the performance
threshold and an adjustment factor of
the applicable percent specified in
subparagraph (B) is assigned for a
score of 100; and
(iv) in a manner such that--
(I) subject to subclause
(II), MIPS eligible
professionals with composite
performance scores described in
clause (ii)(II) for such year
receive a negative payment
adjustment factor on a linear
sliding scale such that an
adjustment factor of 0 percent
is assigned for a score at the
performance threshold and an
adjustment factor of the
negative of the applicable
percent specified in
subparagraph (B) is assigned
for a score of 0; and
(II) MIPS eligible
professionals with composite
performance scores that are
equal to or greater than 0, but
not greater than \1/4\ of the
performance threshold specified
under subparagraph (D)(i) for
such year, receive a negative
payment adjustment factor that
is equal to the negative of the
applicable percent specified in
subparagraph (B) for such year.
(B) Applicable percent defined.--For purposes
of this paragraph, the term ``applicable
percent'' means--
(i) for 2019, 4 percent;
(ii) for 2020, 5 percent;
(iii) for 2021, 7 percent; and
(iv) for 2022 and subsequent years, 9
percent.
(C) Additional mips adjustment factors for
exceptional performance.--For 2019 and each
subsequent year through 2024, in the case of a
MIPS eligible professional with a composite
performance score for a year at or above the
additional performance threshold under
subparagraph (D)(ii) for such year, in addition
to the MIPS adjustment factor under
subparagraph (A) for the eligible professional
for such year, subject to subparagraph (F)(iv),
the Secretary shall specify an additional
positive MIPS adjustment factor for such
professional and year. Such additional MIPS
adjustment factors shall be in the form of a
percent and determined by the Secretary in a
manner such that professionals having higher
composite performance scores above the
additional performance threshold receive higher
additional MIPS adjustment factors.
(D) Establishment of performance
thresholds.--
(i) Performance threshold.--For each
year of the MIPS, the Secretary shall
compute a performance threshold with
respect to which the composite
performance score of MIPS eligible
professionals shall be compared for
purposes of determining adjustment
factors under subparagraph (A) that are
positive, negative, and zero. Subject
to clauses (iii) and (iv), such
performance threshold for a year shall
be the mean or median (as selected by
the Secretary) of the composite
performance scores for all MIPS
eligible professionals with respect to
a prior period specified by the
Secretary. The Secretary may reassess
the selection of the mean or median
under the previous sentence every 3
years.
(ii) Additional performance threshold
for exceptional performance.--In
addition to the performance threshold
under clause (i), for each year of the
MIPS (beginning with 2019 and ending
with 2024), the Secretary shall compute
an additional performance threshold for
purposes of determining the additional
MIPS adjustment factors under
subparagraph (C). For each such year,
subject to clause (iii), the Secretary
shall apply either of the following
methods for computing such additional
performance threshold for such a year:
(I) The threshold shall be
the score that is equal to the
25th percentile of the range of
possible composite performance
scores above the performance
threshold determined under
clause (i).
(II) The threshold shall be
the score that is equal to the
25th percentile of the actual
composite performance scores
for MIPS eligible professionals
with composite performance
scores at or above the
performance threshold with
respect to the prior period
described in clause (i).
(iii) Special rule for initial 5
years.--With respect to each of the
first five years to which the MIPS
applies, the Secretary shall, prior to
the performance period for such years,
establish a performance threshold for
purposes of determining MIPS adjustment
factors under subparagraph (A) and a
threshold for purposes of determining
additional MIPS adjustment factors
under subparagraph (C). Each such
performance threshold shall--
(I) be based on a period
prior to such performance
periods; and
(II) take into account--
(aa) data available
with respect to
performance on measures
and activities that may
be used under the
performance categories
under subparagraph
(2)(B); and
(bb) other factors
determined appropriate
by the Secretary.
(iv) Additional special rule for
third, fourth and fifth years of
mips.--For purposes of determining MIPS
adjustment factors under subparagraph
(A), in addition to the requirements
specified in clause (iii), the
Secretary shall increase the
performance threshold with respect to
each of the third, fourth, and fifth
years to which the MIPS applies to
ensure a gradual and incremental
transition to the performance threshold
described in clause (i) (as estimated
by the Secretary) with respect to the
sixth year to which the MIPS applies.
(E) Application of mips adjustment factors.--
In the case of covered professional services
(as defined in subsection (k)(3)(A)) furnished
by a MIPS eligible professional during a year
(beginning with 2019), the amount otherwise
paid under this part with respect to such
covered professional services and MIPS eligible
professional for such year, shall be multiplied
by--
(i) 1, plus
(ii) the sum of--
(I) the MIPS adjustment
factor determined under
subparagraph (A) divided by
100, and
(II) as applicable, the
additional MIPS adjustment
factor determined under
subparagraph (C) divided by
100.
(F) Aggregate application of mips adjustment
factors.--
(i) Application of scaling factor.--
(I) In general.--With respect
to positive MIPS adjustment
factors under subparagraph
(A)(ii)(I) for eligible
professionals whose composite
performance score is above the
performance threshold under
subparagraph (D)(i) for such
year, subject to subclause
(II), the Secretary shall
increase or decrease such
adjustment factors by a scaling
factor in order to ensure that
the budget neutrality
requirement of clause (ii) is
met.
(II) Scaling factor limit.--
In no case may the scaling
factor applied under this
clause exceed 3.0.
(ii) Budget neutrality requirement.--
(I) In general.--Subject to
clause (iii), the Secretary
shall ensure that the estimated
amount described in subclause
(II) for a year is equal to the
estimated amount described in
subclause (III) for such year.
(II) Aggregate increases.--
The amount described in this
subclause is the estimated
increase in the aggregate
allowed charges resulting from
the application of positive
MIPS adjustment factors under
subparagraph (A) (after
application of the scaling
factor described in clause (i))
to MIPS eligible professionals
whose composite performance
score for a year is above the
performance threshold under
subparagraph (D)(i) for such
year.
(III) Aggregate decreases.--
The amount described in this
subclause is the estimated
decrease in the aggregate
allowed charges resulting from
the application of negative
MIPS adjustment factors under
subparagraph (A) to MIPS
eligible professionals whose
composite performance score for
a year is below the performance
threshold under subparagraph
(D)(i) for such year.
(iii) Exceptions.--
(I) In the case that all MIPS
eligible professionals receive
composite performance scores
for a year that are below the
performance threshold under
subparagraph (D)(i) for such
year, the negative MIPS
adjustment factors under
subparagraph (A) shall apply
with respect to such MIPS
eligible professionals and the
budget neutrality requirement
of clause (ii) and the
additional adjustment factors
under clause (iv) shall not
apply for such year.
(II) In the case that, with
respect to a year, the
application of clause (i)
results in a scaling factor
equal to the maximum scaling
factor specified in clause
(i)(II), such scaling factor
shall apply and the budget
neutrality requirement of
clause (ii) shall not apply for
such year.
(iv) Additional incentive payment
adjustments.--
(I) In general.--Subject to
subclause (II), in specifying
the MIPS additional adjustment
factors under subparagraph (C)
for each applicable MIPS
eligible professional for a
year, the Secretary shall
ensure that the estimated
aggregate increase in payments
under this part resulting from
the application of such
additional adjustment factors
for MIPS eligible professionals
in a year shall be equal (as
estimated by the Secretary) to
$500,000,000 for each year
beginning with 2019 and ending
with 2024.
(II) Limitation on additional
incentive payment
adjustments.--The MIPS
additional adjustment factor
under subparagraph (C) for a
year for an applicable MIPS
eligible professional whose
composite performance score is
above the additional
performance threshold under
subparagraph (D)(ii) for such
year shall not exceed 10
percent. The application of the
previous sentence may result in
an aggregate amount of
additional incentive payments
that are less than the amount
specified in subclause (I).
(7) Announcement of result of adjustments.--Under the
MIPS, the Secretary shall, not later than 30 days prior
to January 1 of the year involved, make available to
MIPS eligible professionals the MIPS adjustment factor
(and, as applicable, the additional MIPS adjustment
factor) under paragraph (6) applicable to the eligible
professional for covered professional services (as
defined in subsection (k)(3)(A)) furnished by the
professional for such year. The Secretary may include
such information in the confidential feedback under
paragraph (12).
(8) No effect in subsequent years.--The MIPS
adjustment factors and additional MIPS adjustment
factors under paragraph (6) shall apply only with
respect to the year involved, and the Secretary shall
not take into account such adjustment factors in making
payments to a MIPS eligible professional under this
part in a subsequent year.
(9) Public reporting.--
(A) In general.--The Secretary shall, in an
easily understandable format, make available on
the Physician Compare Internet website of the
Centers for Medicare & Medicaid Services the
following:
(i) Information regarding the
performance of MIPS eligible
professionals under the MIPS, which--
(I) shall include the
composite score for each such
MIPS eligible professional and
the performance of each such
MIPS eligible professional with
respect to each performance
category; and
(II) may include the
performance of each such MIPS
eligible professional with
respect to each measure or
activity specified in paragraph
(2)(B).
(ii) The names of eligible
professionals in eligible alternative
payment models (as defined in section
1833(z)(3)(D)) and, to the extent
feasible, the names of such eligible
alternative payment models and
performance of such models.
(B) Disclosure.--The information made
available under this paragraph shall indicate,
where appropriate, that publicized information
may not be representative of the eligible
professional's entire patient population, the
variety of services furnished by the eligible
professional, or the health conditions of
individuals treated.
(C) Opportunity to review and submit
corrections.--The Secretary shall provide for
an opportunity for a professional described in
subparagraph (A) to review, and submit
corrections for, the information to be made
public with respect to the professional under
such subparagraph prior to such information
being made public.
(D) Aggregate information.--The Secretary
shall periodically post on the Physician
Compare Internet website aggregate information
on the MIPS, including the range of composite
scores for all MIPS eligible professionals and
the range of the performance of all MIPS
eligible professionals with respect to each
performance category.
(10) Consultation.--The Secretary shall consult with
stakeholders in carrying out the MIPS, including for
the identification of measures and activities under
paragraph (2)(B) and the methodologies developed under
paragraphs (5)(A) and (6) and regarding the use of
qualified clinical data registries. Such consultation
shall include the use of a request for information or
other mechanisms determined appropriate.
(11) Technical assistance to small practices and
practices in health professional shortage areas.--
(A) In general.--The Secretary shall enter
into contracts or agreements with appropriate
entities (such as quality improvement
organizations, regional extension centers (as
described in section 3012(c) of the Public
Health Service Act), or regional health
collaboratives) to offer guidance and
assistance to MIPS eligible professionals in
practices of 15 or fewer professionals (with
priority given to such practices located in
rural areas, health professional shortage areas
(as designated under in section 332(a)(1)(A) of
such Act), and medically underserved areas, and
practices with low composite scores) with
respect to--
(i) the performance categories
described in clauses (i) through (iv)
of paragraph (2)(A); or
(ii) how to transition to the
implementation of and participation in
an alternative payment model as
described in section 1833(z)(3)(C).
(B) Funding for technical assistance.--For
purposes of implementing subparagraph (A), the
Secretary shall provide for the transfer from
the Federal Supplementary Medical Insurance
Trust Fund established under section 1841 to
the Centers for Medicare & Medicaid Services
Program Management Account of $20,000,000 for
each of fiscal years 2016 through 2020. Amounts
transferred under this subparagraph for a
fiscal year shall be available until expended.
(12) Feedback and information to improve
performance.--
(A) Performance feedback.--
(i) In general.--Beginning July 1,
2017, the Secretary--
(I) shall make available
timely (such as quarterly)
confidential feedback to MIPS
eligible professionals on the
performance of such
professionals with respect to
the performance categories
under clauses (i) and (ii) of
paragraph (2)(A); and
(II) may make available
confidential feedback to such
professionals on the
performance of such
professionals with respect to
the performance categories
under clauses (iii) and (iv) of
such paragraph.
(ii) Mechanisms.--The Secretary may
use one or more mechanisms to make
feedback available under clause (i),
which may include use of a web-based
portal or other mechanisms determined
appropriate by the Secretary. With
respect to the performance category
described in paragraph (2)(A)(i),
feedback under this subparagraph shall,
to the extent an eligible professional
chooses to participate in a data
registry for purposes of this
subsection (including registries under
subsections (k) and (m)), be provided
based on performance on quality
measures reported through the use of
such registries. With respect to any
other performance category described in
paragraph (2)(A), the Secretary shall
encourage provision of feedback through
qualified clinical data registries as
described in subsection (m)(3)(E)).
(iii) Use of data.--For purposes of
clause (i), the Secretary may use data,
with respect to a MIPS eligible
professional, from periods prior to the
current performance period and may use
rolling periods in order to make
illustrative calculations about the
performance of such professional.
(iv) Disclosure exemption.--Feedback
made available under this subparagraph
shall be exempt from disclosure under
section 552 of title 5, United States
Code.
(v) Receipt of information.--The
Secretary may use the mechanisms
established under clause (ii) to
receive information from professionals,
such as information with respect to
this subsection.
(B) Additional information.--
(i) In general.--Beginning July 1,
2018, the Secretary shall make
available to MIPS eligible
professionals information, with respect
to individuals who are patients of such
MIPS eligible professionals, about
items and services for which payment is
made under this title that are
furnished to such individuals by other
suppliers and providers of services,
which may include information described
in clause (ii). Such information may be
made available under the previous
sentence to such MIPS eligible
professionals by mechanisms determined
appropriate by the Secretary, which may
include use of a web-based portal. Such
information may be made available in
accordance with the same or similar
terms as data are made available to
accountable care organizations
participating in the shared savings
program under section 1899.
(ii) Type of information.--For
purposes of clause (i), the information
described in this clause, is the
following:
(I) With respect to selected
items and services (as
determined appropriate by the
Secretary) for which payment is
made under this title and that
are furnished to individuals,
who are patients of a MIPS
eligible professional, by
another supplier or provider of
services during the most recent
period for which data are
available (such as the most
recent three-month period),
such as the name of such
providers furnishing such items
and services to such patients
during such period, the types
of such items and services so
furnished, and the dates such
items and services were so
furnished.
(II) Historical data, such as
averages and other measures of
the distribution if
appropriate, of the total, and
components of, allowed charges
(and other figures as
determined appropriate by the
Secretary).
(13) Review.--
(A) Targeted review.--The Secretary shall
establish a process under which a MIPS eligible
professional may seek an informal review of the
calculation of the MIPS adjustment factor (or
factors) applicable to such eligible
professional under this subsection for a year.
The results of a review conducted pursuant to
the previous sentence shall not be taken into
account for purposes of paragraph (6) with
respect to a year (other than with respect to
the calculation of such eligible professional's
MIPS adjustment factor for such year or
additional MIPS adjustment factor for such
year) after the factors determined in
subparagraph (A) and subparagraph (C) of such
paragraph have been determined for such year.
(B) Limitation.--Except as provided for in
subparagraph (A), there shall be no
administrative or judicial review under section
1869, section 1878, or otherwise of the
following:
(i) The methodology used to determine
the amount of the MIPS adjustment
factor under paragraph (6)(A) and the
amount of the additional MIPS
adjustment factor under paragraph
(6)(C) and the determination of such
amounts.
(ii) The establishment of the
performance standards under paragraph
(3) and the performance period under
paragraph (4).
(iii) The identification of measures
and activities specified under
paragraph (2)(B) and information made
public or posted on the Physician
Compare Internet website of the Centers
for Medicare & Medicaid Services under
paragraph (9).
(iv) The methodology developed under
paragraph (5) that is used to calculate
performance scores and the calculation
of such scores, including the weighting
of measures and activities under such
methodology.
(r) Collaborating With the Physician, Practitioner, and Other
Stakeholder Communities To Improve Resource Use Measurement.--
(1) In general.--In order to involve the physician,
practitioner, and other stakeholder communities in
enhancing the infrastructure for resource use
measurement, including for purposes of the Merit-based
Incentive Payment System under subsection (q) and
alternative payment models under section 1833(z), the
Secretary shall undertake the steps described in the
succeeding provisions of this subsection.
(2) Development of care episode and patient condition
groups and classification codes.--
(A) In general.--In order to classify similar
patients into care episode groups and patient
condition groups, the Secretary shall undertake
the steps described in the succeeding
provisions of this paragraph.
(B) Public availability of existing efforts
to design an episode grouper.--Not later than
180 days after the date of the enactment of
this subsection, the Secretary shall post on
the Internet website of the Centers for
Medicare & Medicaid Services a list of the
episode groups developed pursuant to subsection
(n)(9)(A) and related descriptive information.
(C) Stakeholder input.--The Secretary shall
accept, through the date that is 120 days after
the day the Secretary posts the list pursuant
to subparagraph (B), suggestions from physician
specialty societies, applicable practitioner
organizations, and other stakeholders for
episode groups in addition to those posted
pursuant to such subparagraph, and specific
clinical criteria and patient characteristics
to classify patients into--
(i) care episode groups; and
(ii) patient condition groups.
(D) Development of proposed classification
codes.--
(i) In general.--Taking into account
the information described in
subparagraph (B) and the information
received under subparagraph (C), the
Secretary shall--
(I) establish care episode
groups and patient condition
groups, which account for a
target of an estimated \1/2\ of
expenditures under parts A and
B (with such target increasing
over time as appropriate); and
(II) assign codes to such
groups.
(ii) Care episode groups.--In
establishing the care episode groups
under clause (i), the Secretary shall
take into account--
(I) the patient's clinical
problems at the time items and
services are furnished during
an episode of care, such as the
clinical conditions or
diagnoses, whether or not
inpatient hospitalization
occurs, and the principal
procedures or services
furnished; and
(II) other factors determined
appropriate by the Secretary.
(iii) Patient condition groups.--In
establishing the patient condition
groups under clause (i), the Secretary
shall take into account--
(I) the patient's clinical
history at the time of a
medical visit, such as the
patient's combination of
chronic conditions, current
health status, and recent
significant history (such as
hospitalization and major
surgery during a previous
period, such as 3 months); and
(II) other factors determined
appropriate by the Secretary,
such as eligibility status
under this title (including
eligibility under section
226(a), 226(b), or 226A, and
dual eligibility under this
title and title XIX).
(E) Draft care episode and patient condition
groups and classification codes.--Not later
than 270 days after the end of the comment
period described in subparagraph (C), the
Secretary shall post on the Internet website of
the Centers for Medicare & Medicaid Services a
draft list of the care episode and patient
condition codes established under subparagraph
(D) (and the criteria and characteristics
assigned to such code).
(F) Solicitation of input.--The Secretary
shall seek, through the date that is 120 days
after the Secretary posts the list pursuant to
subparagraph (E), comments from physician
specialty societies, applicable practitioner
organizations, and other stakeholders,
including representatives of individuals
entitled to benefits under part A or enrolled
under this part, regarding the care episode and
patient condition groups (and codes) posted
under subparagraph (E). In seeking such
comments, the Secretary shall use one or more
mechanisms (other than notice and comment
rulemaking) that may include use of open door
forums, town hall meetings, or other
appropriate mechanisms.
(G) Operational list of care episode and
patient condition groups and codes.--Not later
than 270 days after the end of the comment
period described in subparagraph (F), taking
into account the comments received under such
subparagraph, the Secretary shall post on the
Internet website of the Centers for Medicare &
Medicaid Services an operational list of care
episode and patient condition codes (and the
criteria and characteristics assigned to such
code).
(H) Subsequent revisions.--Not later than
November 1 of each year (beginning with 2018),
the Secretary shall, through rulemaking, make
revisions to the operational lists of care
episode and patient condition codes as the
Secretary determines may be appropriate. Such
revisions may be based on experience, new
information developed pursuant to subsection
(n)(9)(A), and input from the physician
specialty societies, applicable practitioner
organizations, and other stakeholders,
including representatives of individuals
entitled to benefits under part A or enrolled
under this part.
(I) Information.--The Secretary shall, not
later than December 31st of each year
(beginning with 2018), post on the Internet
website of the Centers for Medicare & Medicaid
Services information on resource use measures
in use under subsection (q), resource use
measures under development and the time-frame
for such development, potential future resource
use measure topics, a description of
stakeholder engagement, and the percent of
expenditures under part A and this part that
are covered by resource use measures.
(3) Attribution of patients to physicians or
practitioners.--
(A) In general.--In order to facilitate the
attribution of patients and episodes (in whole
or in part) to one or more physicians or
applicable practitioners furnishing items and
services, the Secretary shall undertake the
steps described in the succeeding provisions of
this paragraph.
(B) Development of patient relationship
categories and codes.--The Secretary shall
develop patient relationship categories and
codes that define and distinguish the
relationship and responsibility of a physician
or applicable practitioner with a patient at
the time of furnishing an item or service. Such
patient relationship categories shall include
different relationships of the physician or
applicable practitioner to the patient (and the
codes may reflect combinations of such
categories), such as a physician or applicable
practitioner who--
(i) considers themself to have the
primary responsibility for the general
and ongoing care for the patient over
extended periods of time;
(ii) considers themself to be the
lead physician or practitioner and who
furnishes items and services and
coordinates care furnished by other
physicians or practitioners for the
patient during an acute episode;
(iii) furnishes items and services to
the patient on a continuing basis
during an acute episode of care, but in
a supportive rather than a lead role;
(iv) furnishes items and services to
the patient on an occasional basis,
usually at the request of another
physician or practitioner; or
(v) furnishes items and services only
as ordered by another physician or
practitioner.
(C) Draft list of patient relationship
categories and codes.--Not later than one year
after the date of the enactment of this
subsection, the Secretary shall post on the
Internet website of the Centers for Medicare &
Medicaid Services a draft list of the patient
relationship categories and codes developed
under subparagraph (B).
(D) Stakeholder input.--The Secretary shall
seek, through the date that is 120 days after
the Secretary posts the list pursuant to
subparagraph (C), comments from physician
specialty societies, applicable practitioner
organizations, and other stakeholders,
including representatives of individuals
entitled to benefits under part A or enrolled
under this part, regarding the patient
relationship categories and codes posted under
subparagraph (C). In seeking such comments, the
Secretary shall use one or more mechanisms
(other than notice and comment rulemaking) that
may include open door forums, town hall
meetings, web-based forums, or other
appropriate mechanisms.
(E) Operational list of patient relationship
categories and codes.--Not later than 240 days
after the end of the comment period described
in subparagraph (D), taking into account the
comments received under such subparagraph, the
Secretary shall post on the Internet website of
the Centers for Medicare & Medicaid Services an
operational list of patient relationship
categories and codes.
(F) Subsequent revisions.--Not later than
November 1 of each year (beginning with 2018),
the Secretary shall, through rulemaking, make
revisions to the operational list of patient
relationship categories and codes as the
Secretary determines appropriate. Such
revisions may be based on experience, new
information developed pursuant to subsection
(n)(9)(A), and input from the physician
specialty societies, applicable practitioner
organizations, and other stakeholders,
including representatives of individuals
entitled to benefits under part A or enrolled
under this part.
(4) Reporting of information for resource use
measurement.--Claims submitted for items and services
furnished by a physician or applicable practitioner on
or after January 1, 2018, shall, as determined
appropriate by the Secretary, include--
(A) applicable codes established under
paragraphs (2) and (3); and
(B) the national provider identifier of the
ordering physician or applicable practitioner
(if different from the billing physician or
applicable practitioner).
(5) Methodology for resource use analysis.--
(A) In general.--In order to evaluate the
resources used to treat patients (with respect
to care episode and patient condition groups),
the Secretary shall, as the Secretary
determines appropriate--
(i) use the patient relationship
codes reported on claims pursuant to
paragraph (4) to attribute patients (in
whole or in part) to one or more
physicians and applicable
practitioners;
(ii) use the care episode and patient
condition codes reported on claims
pursuant to paragraph (4) as a basis to
compare similar patients and care
episodes and patient condition groups;
and
(iii) conduct an analysis of resource
use (with respect to care episodes and
patient condition groups of such
patients).
(B) Analysis of patients of physicians and
practitioners.--In conducting the analysis
described in subparagraph (A)(iii) with respect
to patients attributed to physicians and
applicable practitioners, the Secretary shall,
as feasible--
(i) use the claims data experience of
such patients by patient condition
codes during a common period, such as
12 months; and
(ii) use the claims data experience
of such patients by care episode
codes--
(I) in the case of episodes
without a hospitalization,
during periods of time (such as
the number of days) determined
appropriate by the Secretary;
and
(II) in the case of episodes
with a hospitalization, during
periods of time (such as the
number of days) before, during,
and after the hospitalization.
(C) Measurement of resource use.--In
measuring such resource use, the Secretary--
(i) shall use per patient total
allowed charges for all services under
part A and this part (and, if the
Secretary determines appropriate, part
D) for the analysis of patient resource
use, by care episode codes and by
patient condition codes; and
(ii) may, as determined appropriate,
use other measures of allowed charges
(such as subtotals for categories of
items and services) and measures of
utilization of items and services (such
as frequency of specific items and
services and the ratio of specific
items and services among attributed
patients or episodes).
(D) Stakeholder input.--The Secretary shall
seek comments from the physician specialty
societies, applicable practitioner
organizations, and other stakeholders,
including representatives of individuals
entitled to benefits under part A or enrolled
under this part, regarding the resource use
methodology established pursuant to this
paragraph. In seeking comments the Secretary
shall use one or more mechanisms (other than
notice and comment rulemaking) that may include
open door forums, town hall meetings, web-based
forums, or other appropriate mechanisms.
(6) Implementation.--To the extent that the Secretary
contracts with an entity to carry out any part of the
provisions of this subsection, the Secretary may not
contract with an entity or an entity with a subcontract
if the entity or subcontracting entity currently makes
recommendations to the Secretary on relative values for
services under the fee schedule for physicians'
services under this section.
(7) Limitation.--There shall be no administrative or
judicial review under section 1869, section 1878, or
otherwise of--
(A) care episode and patient condition groups
and codes established under paragraph (2);
(B) patient relationship categories and codes
established under paragraph (3); and
(C) measurement of, and analyses of resource
use with respect to, care episode and patient
condition codes and patient relationship codes
pursuant to paragraph (5).
(8) Administration.--Chapter 35 of title 44, United
States Code, shall not apply to this section.
(9) Definitions.--In this subsection:
(A) Physician.--The term ``physician'' has
the meaning given such term in section
1861(r)(1).
(B) Applicable practitioner.--The term
``applicable practitioner'' means--
(i) a physician assistant, nurse
practitioner, and clinical nurse
specialist (as such terms are defined
in section 1861(aa)(5)), and a
certified registered nurse anesthetist
(as defined in section 1861(bb)(2));
and
(ii) beginning January 1, 2019, such
other eligible professionals (as
defined in subsection (k)(3)(B)) as
specified by the Secretary.
(10) Clarification.--The provisions of sections
1890(b)(7) and 1890A shall not apply to this
subsection.
(s) Priorities and Funding for Measure Development.--
(1) Plan identifying measure development priorities
and timelines.--
(A) Draft measure development plan.--Not
later than January 1, 2016, the Secretary shall
develop, and post on the Internet website of
the Centers for Medicare & Medicaid Services, a
draft plan for the development of quality
measures for application under the applicable
provisions (as defined in paragraph (5)). Under
such plan the Secretary shall--
(i) address how measures used by
private payers and integrated delivery
systems could be incorporated under
title XVIII;
(ii) describe how coordination, to
the extent possible, will occur across
organizations developing such measures;
and
(iii) take into account how clinical
best practices and clinical practice
guidelines should be used in the
development of quality measures.
(B) Quality domains.--For purposes of this
subsection, the term ``quality domains'' means
at least the following domains:
(i) Clinical care.
(ii) Safety.
(iii) Care coordination.
(iv) Patient and caregiver
experience.
(v) Population health and prevention.
(C) Consideration.--In developing the draft
plan under this paragraph, the Secretary shall
consider--
(i) gap analyses conducted by the
entity with a contract under section
1890(a) or other contractors or
entities;
(ii) whether measures are applicable
across health care settings;
(iii) clinical practice improvement
activities submitted under subsection
(q)(2)(C)(iv) for identifying possible
areas for future measure development
and identifying existing gaps with
respect to such measures; and
(iv) the quality domains applied
under this subsection.
(D) Priorities.--In developing the draft plan
under this paragraph, the Secretary shall give
priority to the following types of measures:
(i) Outcome measures, including
patient reported outcome and functional
status measures.
(ii) Patient experience measures.
(iii) Care coordination measures.
(iv) Measures of appropriate use of
services, including measures of over
use.
(E) Stakeholder input.--The Secretary shall
accept through March 1, 2016, comments on the
draft plan posted under paragraph (1)(A) from
the public, including health care providers,
payers, consumers, and other stakeholders.
(F) Final measure development plan.--Not
later than May 1, 2016, taking into account the
comments received under this subparagraph, the
Secretary shall finalize the plan and post on
the Internet website of the Centers for
Medicare & Medicaid Services an operational
plan for the development of quality measures
for use under the applicable provisions. Such
plan shall be updated as appropriate.
(2) Contracts and other arrangements for quality
measure development.--
(A) In general.--The Secretary shall enter
into contracts or other arrangements with
entities for the purpose of developing,
improving, updating, or expanding in accordance
with the plan under paragraph (1) quality
measures for application under the applicable
provisions. Such entities shall include
organizations with quality measure development
expertise.
(B) Prioritization.--
(i) In general.--In entering into
contracts or other arrangements under
subparagraph (A), the Secretary shall
give priority to the development of the
types of measures described in
paragraph (1)(D).
(ii) Consideration.--In selecting
measures for development under this
subsection, the Secretary shall
consider--
(I) whether such measures
would be electronically
specified; and
(II) clinical practice
guidelines to the extent that
such guidelines exist.
(3) Annual report by the secretary.--
(A) In general.--Not later than May 1, 2017,
and annually thereafter, the Secretary shall
post on the Internet website of the Centers for
Medicare & Medicaid Services a report on the
progress made in developing quality measures
for application under the applicable
provisions.
(B) Requirements.--Each report submitted
pursuant to subparagraph (A) shall include the
following:
(i) A description of the Secretary's
efforts to implement this paragraph.
(ii) With respect to the measures
developed during the previous year--
(I) a description of the
total number of quality
measures developed and the
types of such measures, such as
an outcome or patient
experience measure;
(II) the name of each measure
developed;
(III) the name of the
developer and steward of each
measure;
(IV) with respect to each
type of measure, an estimate of
the total amount expended under
this title to develop all
measures of such type; and
(V) whether the measure would
be electronically specified.
(iii) With respect to measures in
development at the time of the report--
(I) the information described
in clause (ii), if available;
and
(II) a timeline for
completion of the development
of such measures.
(iv) A description of any updates to
the plan under paragraph (1) (including
newly identified gaps and the status of
previously identified gaps) and the
inventory of measures applicable under
the applicable provisions.
(v) Other information the Secretary
determines to be appropriate.
(4) Stakeholder input.--With respect to paragraph
(1), the Secretary shall seek stakeholder input with
respect to--
(A) the identification of gaps where no
quality measures exist, particularly with
respect to the types of measures described in
paragraph (1)(D);
(B) prioritizing quality measure development
to address such gaps; and
(C) other areas related to quality measure
development determined appropriate by the
Secretary.
(5) Definition of applicable provisions.--In this
subsection, the term ``applicable provisions'' means
the following provisions:
(A) Subsection (q)(2)(B)(i).
(B) Section 1833(z)(3)(D).
(6) Funding.--For purposes of carrying out this
subsection, the Secretary shall provide for the
transfer, from the Federal Supplementary Medical
Insurance Trust Fund under section 1841, of $15,000,000
to the Centers for Medicare & Medicaid Services Program
Management Account for each of fiscal years 2015
through 2019. Amounts transferred under this paragraph
shall remain available through the end of fiscal year
2022.
(7) Administration.--Chapter 35 of title 44, United
States Code, shall not apply to the collection of
information for the development of quality measures.
* * * * * * *
Part E--Miscellaneous Provisions
definitions of services, institutions, etc.
Sec. 1861. For purposes of this title--
Spell of Illness
(a) The term ``spell of illness'' with respect to any
individual means a period of consecutive days--
(1) beginning with the first day (not included in a
previous spell of illness) (A) on which such individual
is furnished inpatient hospital services, inpatient
critical access hospital services or extended care
services, and (B) which occurs in a month for which he
is entitled to benefits under part A, and
(2) ending with the close of the first period of 60
consecutive days thereafter on each of which he is
neither an inpatient of a hospital or critical access
hospital nor an inpatient of a facility described in
section 1819(a)(1) or subsection (y)(1).
Inpatient Hospital Services
(b) The term ``inpatient hospital services'' means the
following items and services furnished to an inpatient of a
hospital and (except as provided in paragraph (3)) by the
hospital--
(1) bed and board;
(2) such nursing services and other related services,
such use of hospital facilities, and such medical
social services as are ordinarily furnished by the
hospital for the care and treatment of inpatients, and
such drugs, biologicals, supplies, appliances, and
equipment, for use in the hospital, as are ordinarily
furnished by such hospital for the care and treatment
of inpatients; and
(3) such other diagnostic or therapeutic items or
services, furnished by the hospital or by others under
arrangements with them made by the hospital, as are
ordinarily furnished to inpatients either by such
hospital or by others under such arrangements;
excluding, however--
(4) medical or surgical services provided by a
physician, resident, or intern, services described by
subsection (s)(2)(K), certified nurse-midwife services,
qualified psychologist services, and services of a
certified registered nurse anesthetist; and
(5) the services of a private-duty nurse or other
private-duty attendant.
Paragraph (4) shall not apply to services provided in a
hospital by--
(6) an intern or a resident-in-training under a
teaching program approved by the Council on Medical
Education of the American Medical Association or, in
the case of an osteopathic hospital, approved by the
Committee on Hospitals of the Bureau of Professional
Education of the American Osteopathic Association, or,
in the case of services in a hospital or osteopathic
hospital by an intern or resident-in-training in the
field of dentistry, approved by the Council on Dental
Education of the American Dental Association, or in the
case of services in a hospital or osteopathic hospital
by an intern or resident-in-training in the field of
podiatry, approved by the Council on Podiatric Medical
Education of the American Podiatric Medical
Association; or
(7) a physician where the hospital has a teaching
program approved as specified in paragraph (6), if (A)
the hospital elects to receive any payment due under
this title for reasonable costs of such services, and
(B) all physicians in such hospital agree not to bill
charges for professional services rendered in such
hospital to individuals covered under the insurance
program established by this title.
Inpatient Psychiatric Hospital Services
(c) The term ``inpatient psychiatric hospital services''
means inpatient hospital services furnished to an inpatient of
a psychiatric hospital.
Supplier
(d) The term ``supplier'' means, unless the context otherwise
requires, a physician or other practitioner, a facility, or
other entity (other than a provider of services) that furnishes
items or services under this title.
Hospital
(e) The term ``hospital'' (except for purposes of sections
1814(d), 1814(f), and 1835(b), subsection (a)(2) of this
section, paragraph (7) of this subsection, and subsection (i)
of this section) means an institution which--
(1) is primarily engaged in providing, by or under
the supervision of physicians, to inpatients (A)
diagnostic services and therapeutic services for
medical diagnosis, treatment, and care of injured,
disabled, or sick persons, or (B) rehabilitation
services for the rehabilitation of injured, disabled,
or sick persons;
(2) maintains clinical records on all patients;
(3) has bylaws in effect with respect to its staff of
physicians;
(4) has a requirement that every patient with respect
to whom payment may be made under this title must be
under the care of a physician, except that a patient
receiving qualified psychologist services (as defined
in subsection (ii)) may be under the care of a clinical
psychologist with respect to such services to the
extent permitted under State law;
(5) provides 24-hour nursing service rendered or
supervised by a registered professional nurse, and has
a licensed practical nurse or registered professional
nurse on duty at all times; except that until January
1, 1979, the Secretary is authorized to waive the
requirement of this paragraph for any one-year period
with respect to any institution, insofar as such
requirement relates to the provision of twenty-four-
hour nursing service rendered or supervised by a
registered professional nurse (except that in any event
a registered professional nurse must be present on the
premises to render or supervise the nursing service
provided, during at least the regular daytime shift),
where immediately preceding such one-year period he
finds that--
(A) such institution is located in a rural
area and the supply of hospital services in
such area is not sufficient to meet the needs
of individuals residing therein,
(B) the failure of such institution to
qualify as a hospital would seriously reduce
the availability of such services to such
individuals, and
(C) such institution has made and continues
to make a good faith effort to comply with this
paragraph, but such compliance is impeded by
the lack of qualified nursing personnel in such
area;
(6)(A) has in effect a hospital utilization review
plan which meets the requirements of subsection (k) and
(B) has in place a discharge planning process that
meets the requirements of subsection (ee);
(7) in the case of an institution in any State in
which State or applicable local law provides for the
licensing of hospitals, (A) is licensed pursuant to
such law or (B) is approved, by the agency of such
State or locality responsible for licensing hospitals,
as meeting the standards established for such
licensing;
(8) has in effect an overall plan and budget that
meets the requirements of subsection (z); and
(9) meets such other requirements as the Secretary
finds necessary in the interest of the health and
safety of individuals who are furnished services in the
institution.
For purposes of subsection (a)(2), such term includes any
institution which meets the requirements of paragraph (1) of
this subsection. For purposes of sections 1814(d) and 1835(b)
(including determination of whether an individual received
inpatient hospital services or diagnostic services for purposes
of such sections), section 1814(f)(2), and subsection (i) of
this section, such term includes any institution which (i)
meets the requirements of paragraphs (5) and (7) of this
subsection, (ii) is not primarily engaged in providing the
services described in section 1861(j)(1)(A) and (iii) is
primarily engaged in providing, by or under the supervision of
individuals referred to in paragraph (1) of section 1861(r), to
inpatients diagnostic services and therapeutic services for
medical diagnosis, treatment, and care of injured, disabled, or
sick persons, or rehabilitation services for the rehabilitation
of injured, disabled, or sick persons. For purposes of section
1814(f)(1), such term includes an institution which (i) is a
hospital for purposes of sections 1814(d), 1814(f)(2), and
1835(b) and (ii) is accredited by a national accreditation body
recognized by the Secretary under section 1865(a), or is
accredited by or approved by a program of the country in which
such institution is located if the Secretary finds the
accreditation or comparable approval standards of such program
to be essentially equivalent to those of such a national
accreditation body.. Notwithstanding the preceding provisions
of this subsection, such term shall not, except for purposes of
subsection (a)(2), include any institution which is primarily
for the care and treatment of mental diseases unless it is a
psychiatric hospital (as defined in subsection (f)). The term
``hospital'' also includes a religious nonmedical health care
institution (as defined in subsection (ss)(1)), but only with
respect to items and services ordinarily furnished by such
institution to inpatients, and payment may be made with respect
to services provided by or in such an institution only to such
extent and under such conditions, limitations, and requirements
(in addition to or in lieu of the conditions, limitations, and
requirements otherwise applicable) as may be provided in
regulations consistent with section 1821. For provisions
deeming certain requirements of this subsection to be met in
the case of accredited institutions, see section 1865. The term
``hospital'' also includes a facility of fifty beds or less
which is located in an area determined by the Secretary to meet
the definition relating to a rural area described in
subparagraph (A) of paragraph (5) of this subsection and which
meets the other requirements of this subsection, except that--
(A) with respect to the requirements for nursing
services applicable after December 31, 1978, such
requirements shall provide for temporary waiver of the
requirements, for such period as the Secretary deems
appropriate, where (i) the facility's failure to fully
comply with the requirements is attributable to a
temporary shortage of qualified nursing personnel in
the area in which the facility is located, (ii) a
registered professional nurse is present on the
premises to render or supervise the nursing service
provided during at least the regular daytime shift, and
(iii) the Secretary determines that the employment of
such nursing personnel as are available to the facility
during such temporary period will not adversely affect
the health and safety of patients;
(B) with respect to the health and safety
requirements promulgated under paragraph (9), such
requirements shall be applied by the Secretary to a
facility herein defined in such manner as to assure
that personnel requirements take into account the
availability of technical personnel and the educational
opportunities for technical personnel in the area in
which such facility is located, and the scope of
services rendered by such facility; and the Secretary,
by regulations, shall provide for the continued
participation of such a facility where such personnel
requirements are not fully met, for such period as the
Secretary determines that (i) the facility is making
good faith efforts to fully comply with the personnel
requirements, (ii) the employment by the facility of
such personnel as are available to the facility will
not adversely affect the health and safety of patients,
and (iii) if the Secretary has determined that because
of the facility's waiver under this subparagraph the
facility should limit its scope of services in order
not to adversely affect the health and safety of the
facility's patients, the facility is so limiting the
scope of services it provides; and
(C) with respect to the fire and safety requirements
promulgated under paragraph (9), the Secretary (i) may
waive, for such period as he deems appropriate,
specific provisions of such requirements which if
rigidly applied would result in unreasonable hardship
for such a facility and which, if not applied, would
not jeopardize the health and safety of patients, and
(ii) may accept a facility's compliance with all
applicable State codes relating to fire and safety in
lieu of compliance with the fire and safety
requirements promulgated under paragraph (9), if he
determines that such State has in effect fire and
safety codes, imposed by State law, which adequately
protect patients.
The term ``hospital'' does not include, unless the context
otherwise requires, a critical access hospital (as defined in
section 1861(mm)(1)).
Psychiatric Hospital
(f) The term ``psychiatric hospital'' means an institution
which--
(1) is primarily engaged in providing, by or under
the supervision of a physician, psychiatric services
for the diagnosis and treatment of mentally ill
persons;
(2) satisfies the requirements of paragraphs (3)
through (9) of subsection (e);
(3) maintains clinical records on all patients and
maintains such records as the Secretary finds to be
necessary to determine the degree and intensity of the
treatment provided to individuals entitled to hospital
insurance benefits under part A; and
(4) meets such staffing requirements as the Secretary
finds necessary for the institution to carry out an
active program of treatment for individuals who are
furnished services in the institution.
In the case of an institution which satisfies paragraphs (1)
and (2) of the preceding sentence and which contains a distinct
part which also satisfies paragraphs (3) and (4) of such
sentence, such distinct part shall be considered to be a
``psychiatric hospital''.
Outpatient Occupational Therapy Services
(g) The term ``outpatient occupational therapy services'' has
the meaning given the term ``outpatient physical therapy
services'' in subsection (p), except that ``occupational''
shall be substituted for ``physical'' each place it appears
therein.
Extended Care Services
(h) The term ``extended care services'' means the following
items and services furnished to an inpatient of a skilled
nursing facility and (except as provided in paragraphs (3), (6)
and (7)) by such skilled nursing facility--
(1) nursing care provided by or under the supervision
of a registered professional nurse;
(2) bed and board in connection with the furnishing
of such nursing care;
(3) physical or occupational therapy or speech-
language pathology services furnished by the skilled
nursing facility or by others under arrangements with
them made by the facility;
(4) medical social services;
(5) such drugs, biologicals, supplies, appliances,
and equipment, furnished for use in the skilled nursing
facility, as are ordinarily furnished by such facility
for the care and treatment of inpatients;
(6) medical services provided by an intern or
resident-in- training of a hospital with which the
facility has in effect a transfer agreement (meeting
the requirements of subsection (l)), under a teaching
program of such hospital approved as provided in the
last sentence of subsection (b), and other diagnostic
or therapeutic services provided by a hospital with
which the facility has such an agreement in effect; and
(7) such other services necessary to the health of
the patients as are generally provided by skilled
nursing facilities, or by others under arrangements
with them made by the facility;
excluding, however, any item or service if it would not be
included under subsection (b) if furnished to an inpatient of a
hospital.
Post-Hospital Extended Care Services
(i) The term ``post-hospital extended care services'' means
extended care services furnished an individual after transfer
from a hospital in which he was an inpatient for not less than
3 consecutive days before his discharge from the hospital in
connection with such transfer. For purposes of the preceding
sentence, items and services shall be deemed to have been
furnished to an individual after transfer from a hospital, and
he shall be deemed to have been an inpatient in the hospital
immediately before transfer therefrom, if he is admitted to the
skilled nursing facility (A) within 30 days after discharge
from such hospital, or (B) within such time as it would be
medically appropriate to begin an active course of treatment,
in the case of an individual whose condition is such that
skilled nursing facility care would not be medically
appropriate within 30 days after discharge from a hospital; and
an individual shall be deemed not to have been discharged from
a skilled nursing facility if, within 30 days after discharge
therefrom, he is admitted to such facility or any other skilled
nursing facility.
Skilled Nursing Facility
(j) The term ``skilled nursing facility'' has the meaning
given such term in section 1819(a).
Utilization Review
(k) A utilization review plan of a hospital or skilled
nursing facility shall be considered sufficient if it is
applicable to services furnished by the institution to
individuals entitled to insurance benefits under this title and
if it provides--
(1) for the review, on a sample or other basis, of
admissions to the institution, the duration of stays
therein, and the professional services (including drugs
and biologicals) furnished, (A) with respect to the
medical necessity of the services, and (B) for the
purpose of promoting the most efficient use of
available health facilities and services;
(2) for such review to be made by either (A) a staff
committee of the institution composed of two or more
physicians (of which at least two must be physicians
described in subsection (r)(1) of this section), with
or without participation of other professional
personnel, or (B) a group outside the institution which
is similarly composed and (i) which is established by
the local medical society and some or all of the
hospitals and skilled nursing facilities in the
locality, or (ii) if (and for as long as) there has not
been established such a group which serves such
institution, which is established in such other manner
as may be approved by the Secretary;
(3) for such review, in each case of inpatient
hospital services or extended care services furnished
to such an individual during a continuous period of
extended duration, as of such days of such period
(which may differ for different classes of cases) as
may be specified in regulations, with such review to be
made as promptly as possible, after each day so
specified, and in no event later than one week
following such day; and
(4) for prompt notification to the institution, the
individual, and his attending physician of any finding
(made after opportunity for consultation to such
attending physician) by the physician members of such
committee or group that any further stay in the
institution is not medically necessary.
The review committee must be composed as provided in clause (B)
of paragraph (2) rather than as provided in clause (A) of such
paragraph in the case of any hospital or skilled nursing
facility where, because of the small size of the institution,
or (in the case of a skilled nursing facility) because of lack
of an organized medical staff, or for such other reason or
reasons as may be included in regulations, it is impracticable
for the institution to have a properly functioning staff
committee for the purposes of this subsection. If the Secretary
determines that the utilization review procedures established
pursuant to title XIX are superior in their effectiveness to
the procedures required under this section, he may, to the
extent that he deems it appropriate, require for purposes of
this title that the procedures established pursuant to title
XIX be utilized instead of the procedures required by this
section.
Agreements for Transfer Between Skilled Nursing Facilities and
Hospitals
(l) A hospital and a skilled nursing facility shall be
considered to have a transfer agreement in effect if, by reason
of a written agreement between them or (in case the two
institutions are under common control) by reason of a written
undertaking by the person or body which controls them, there is
reasonable assurance that--
(1) transfer of patients will be effected between the
hospital and the skilled nursing facility whenever such
transfer is medically appropriate as determined by the
attending physician; and
(2) there will be interchange of medical and other
information necessary or useful in the care and
treatment of individuals transferred between the
institutions, or in determining whether such
individuals can be adequately cared for otherwise than
in either of such institutions.
Any skilled nursing facility which does not have such an
agreement in effect, but which is found by a State agency (of
the State in which such facility is situated) with which an
agreement under section 1864 is in effect (or, in the case of a
State in which no such agency has an agreement under section
1864, by the Secretary) to have attempted in good faith to
enter into such an agreement with a hospital sufficiently close
to the facility to make feasible the transfer between them of
patients and the information referred to in paragraph (2),
shall be considered to have such an agreement in effect if and
for so long as such agency (or the Secretary, as the case may
be) finds that to do so is in the public interest and essential
to assuring extended care services for persons in the community
who are eligible for payments with respect to such services
under this title.
Home Health Services
(m) The term ``home health services'' means the following
items and services furnished to an individual, who is under the
care of a physician, by a home health agency or by others under
arrangements with them made by such agency, under a plan (for
furnishing such items and services to such individual)
established and periodically reviewed by a physician, which
items and services are, except as provided in paragraph (7),
provided on a visiting basis in a place of residence used as
such individual's home--
(1) part-time or intermittent nursing care provided
by or under the supervision of a registered
professional nurse;
(2) physical or occupational therapy or speech-
language pathology services;
(3) medical social services under the direction of a
physician;
(4) to the extent permitted in regulations, part-time
or intermittent services of a home health aide who has
successfully completed a training program approved by
the Secretary;
(5) medical supplies (including catheters, catheter
supplies, ostomy bags, and supplies related to ostomy
care, and a covered osteoporosis drug (as defined in
subsection (kk)), but excluding other drugs and
biologicals) and durable medical equipment and
applicable disposable devices (as defined in section
1834(s)(2)) while under such a plan;
(6) in the case of a home health agency which is
affiliated or under common control with a hospital,
medical services provided by an intern or resident-in-
training of such hospital, under a teaching program of
such hospital approved as provided in the last sentence
of subsection (b); and
(7) any of the foregoing items and services which are
provided on an outpatient basis, under arrangements
made by the home health agency, at a hospital or
skilled nursing facility, or at a rehabilitation center
which meets such standards as may be prescribed in
regulations, and--
(A) the furnishing of which involves the use
of equipment of such a nature that the items
and services cannot readily be made available
to the individual in such place of residence,
or
(B) which are furnished at such facility
while he is there to receive any such item or
service described in clause (A),
but not including transportation of the individual in
connection with any such item or service;
excluding, however, any item or service if it would not be
included under subsection (b) if furnished to an inpatient of a
hospital and home infusion therapy (as defined in subsection
(iii)(i)). For purposes of paragraphs (1) and (4), the term
``part-time or intermittent services'' means skilled nursing
and home health aide services furnished any number of days per
week as long as they are furnished (combined) less than 8 hours
each day and 28 or fewer hours each week (or, subject to review
on a case-by-case basis as to the need for care, less than 8
hours each day and 35 or fewer hours per week). For purposes of
sections 1814(a)(2)(C) and 1835(a)(2)(A), ``intermittent''
means skilled nursing care that is either provided or needed on
fewer than 7 days each week, or less than 8 hours of each day
for periods of 21 days or less (with extensions in exceptional
circumstances when the need for additional care is finite and
predictable).
Durable Medical Equipment
(n) The term ``durable medical equipment'' includes iron
lungs, oxygen tents, hospital beds, and wheelchairs (which may
include a power-operated vehicle that may be appropriately used
as a wheelchair, but only where the use of such a vehicle is
determined to be necessary on the basis of the individual's
medical and physical condition and the vehicle meets such
safety requirements as the Secretary may prescribe) used in the
patient's home (including an institution used as his home other
than an institution that meets the requirements of subsection
(e)(1) of this section or section 1819(a)(1)), whether
furnished on a rental basis or purchased, and includes blood-
testing strips and blood glucose monitors for individuals with
diabetes without regard to whether the individual has Type I or
Type II diabetes or to the individual's use of insulin (as
determined under standards established by the Secretary in
consultation with the appropriate organizations) and eye
tracking and gaze interaction accessories for speech generating
devices furnished to individuals with a demonstrated medical
need for such accessories; except that such term does not
include such equipment furnished by a supplier who has used,
for the demonstration and use of specific equipment, an
individual who has not met such minimum training standards as
the Secretary may establish with respect to the demonstration
and use of such specific equipment. With respect to a seat-lift
chair, such term includes only the seat-lift mechanism and does
not include the chair.
Home Health Agency
(o) The term ``home health agency'' means a public agency or
private organization, or a subdivision of such an agency or
organization, which--
(1) is primarily engaged in providing skilled nursing
services and other therapeutic services;
(2) has policies, established by a group of
professional personnel (associated with the agency or
organization), including one or more physicians and one
or more registered professional nurses, to govern the
services (referred to in paragraph (1)) which it
provides, and provides for supervision of such services
by a physician or registered professional nurse;
(3) maintains clinical records on all patients;
(4) in the case of an agency or organization in any
State in which State or applicable local law provides
for the licensing of agencies or organizations of this
nature, (A) is licensed pursuant to such law, or (B) is
approved, by the agency of such State or locality
responsible for licensing agencies or organizations of
this nature, as meeting the standards established for
such licensing;
(5) has in effect an overall plan and budget that
meets the requirements of subsection (z);
(6) meets the conditions of participation specified
in section 1891(a) and such other conditions of
participation as the Secretary may find necessary in
the interest of the health and safety of individuals
who are furnished services by such agency or
organization;
(7) provides the Secretary with a surety bond--
(A) in a form specified by the Secretary and
in an amount that is not less than the minimum
of $50,000; and
(B) that the Secretary determines is
commensurate with the volume of payments to the
home health agency; and
(8) meets such additional requirements (including
conditions relating to bonding or establishing of
escrow accounts as the Secretary finds necessary for
the financial security of the program) as the Secretary
finds necessary for the effective and efficient
operation of the program;
except that for purposes of part A such term shall not include
any agency or organization which is primarily for the care and
treatment of mental diseases. The Secretary may waive the
requirement of a surety bond under paragraph (7) in the case of
an agency or organization that provides a comparable surety
bond under State law.
Outpatient Physical Therapy Services
(p) The term ``outpatient physical therapy services'' means
physical therapy services furnished by a provider of services,
a clinic, rehabilitation agency, or a public health agency, or
by others under an arrangement with, and under the supervision
of, such provider, clinic, rehabilitation agency, or public
health agency to an individual as an outpatient--
(1) who is under the care of a physician (as defined
in paragraph (1), (3), or (4) of section 1861(r)), and
(2) with respect to whom a plan prescribing the type,
amount, and duration of physical therapy services that
are to be furnished such individual has been
established by a physician (as so defined) or by a
qualified physical therapist and is periodically
reviewed by a physician (as so defined);
excluding, however--
(3) any item or service if it would not be included
under subsection (b) if furnished to an inpatient of a
hospital; and
(4) any such service--
(A) if furnished by a clinic or
rehabilitation agency, or by others under
arrangements with such clinic or agency, unless
such clinic or rehabilitation agency--
(i) provides an adequate program of
physical therapy services for
outpatients and has the facilities and
personnel required for such program or
required for the supervision of such a
program, in accordance with such
requirements as the Secretary may
specify,
(ii) has policies, established by a
group of professional personnel,
including one or more physicians
(associated with the clinic or
rehabilitation agency) and one or more
qualified physical therapists, to
govern the services (referred to in
clause (i)) it provides,
(iii) maintains clinical records on
all patients,
(iv) if such clinic or agency is
situated in a State in which State or
applicable local law provides for the
licensing of institutions of this
nature, (I) is licensed pursuant to
such law, or (II) is approved by the
agency of such State or locality
responsible for licensing institutions
of this nature, as meeting the
standards established for such
licensing; and
(v) meets such other conditions
relating to the health and safety of
individuals who are furnished services
by such clinic or agency on an
outpatient basis, as the Secretary may
find necessary, and provides the
Secretary on a continuing basis with a
surety bond in a form specified by the
Secretary and in an amount that is not
less than $50,000, or
(B) if furnished by a public health agency,
unless such agency meets such other conditions
relating to health and safety of individuals
who are furnished services by such agency on an
outpatient basis, as the Secretary may find
necessary.
The term ``outpatient physical therapy services'' also includes
physical therapy services furnished an individual by a physical
therapist (in his office or in such individual's home) who
meets licensing and other standards prescribed by the Secretary
in regulations, otherwise than under an arrangement with and
under the supervision of a provider of services, clinic,
rehabilitation agency, or public health agency, if the
furnishing of such services meets such conditions relating to
health and safety as the Secretary may find necessary. In
addition, such term includes physical therapy services which
meet the requirements of the first sentence of this subsection
except that they are furnished to an individual as an inpatient
of a hospital or extended care facility. Nothing in this
subsection shall be construed as requiring, with respect to
outpatients who are not entitled to benefits under this title,
a physical therapist to provide outpatient physical therapy
services only to outpatients who are under the care of a
physician or pursuant to a plan of care established by a
physician. The Secretary may waive the requirement of a surety
bond under paragraph (4)(A)(v) in the case of a clinic or
agency that provides a comparable surety bond under State law.
Physicians' Services
(q) The term ``physicians' services'' means professional
services performed by physicians, including surgery,
consultation, and home, office, and institutional calls (but
not including services described in subsection (b)(6)).
Physician
(r) The term ``physician'', when used in connection with the
performance of any function or action, means (1) a doctor of
medicine or osteopathy legally authorized to practice medicine
and surgery by the State in which he performs such function or
action (including a physician within the meaning of section
1101(a)(7)), (2) a doctor of dental surgery or of dental
medicine who is legally authorized to practice dentistry by the
State in which he performs such function and who is acting
within the scope of his license when he performs such
functions, (3) a doctor of podiatric medicine for the purposes
of subsections (k), (m), (p)(1), and (s) of this section and
sections 1814(a), 1832(a)(2)(F)(ii), and 1835 but only with
respect to functions which he is legally authorized to perform
as such by the State in which he performs them, (4) a doctor of
optometry, but only for purposes of subsection (p)(1) and with
respect to the provision of items or services described in
subsection (s) which he is legally authorized to perform as a
doctor of optometry by the State in which he performs them, or
(5) a chiropractor who is licensed as such by the State (or in
a State which does not license chiropractors as such, is
legally authorized to perform the services of a chiropractor in
the jurisdiction in which he performs such services), and who
meets uniform minimum standards promulgated by the Secretary,
but only for the purpose of sections 1861(s)(1) and
1861(s)(2)(A) and only with respect to treatment by means of
manual manipulation of the spine (to correct a subluxation)
which he is legally authorized to perform by the State or
jurisdiction in which such treatment is provided. For the
purposes of section 1862(a)(4) and subject to the limitations
and conditions provided in the previous sentence, such term
includes a doctor of one of the arts, specified in such
previous sentence, legally authorized to practice such art in
the country in which the inpatient hospital services (referred
to in such section 1862(a)(4)) are furnished.
Medical and Other Health Services
(s) The term ``medical and other health services'' means any
of the following items or services:
(1) physicians' services;
(2)(A) services and supplies (including drugs and
biologicals which are not usually self-administered by
the patient) furnished as an incident to a physician's
professional service, of kinds which are commonly
furnished in physicians' offices and are commonly
either rendered without charge or included in the
physicians' bills (or would have been so included but
for the application of section 1847B);
(B) hospital services (including drugs and
biologicals which are not usually self-administered by
the patient) incident to physicians' services rendered
to outpatients and partial hospitalization services
incident to such services;
(C) diagnostic services which are--
(i) furnished to an individual as an
outpatient by a hospital or by others under
arrangements with them made by a hospital, and
(ii) ordinarily furnished by such hospital
(or by others under such arrangements) to its
outpatients for the purpose of diagnostic
study;
(D) outpatient physical therapy services, outpatient
speech-language pathology services, and outpatient
occupational therapy services;
(E) rural health clinic services and Federally
qualified health center services;
(F) home dialysis supplies and equipment, self-care
home dialysis support services, and institutional
dialysis services and supplies, and, for items and
services furnished on or after January 1, 2011, renal
dialysis services (as defined in section
1881(b)(14)(B)), including such renal dialysis services
furnished on or after January 1, 2017, by a renal
dialysis facility or provider of services paid under
section 1881(b)(14) to an individual with acute kidney
injury (as defined in section 1834(r)(2));
(G) antigens (subject to quantity limitations
prescribed in regulations by the Secretary) prepared by
a physician, as defined in section 1861(r)(1), for a
particular patient, including antigens so prepared
which are forwarded to another qualified person
(including a rural health clinic) for administration to
such patient, from time to time, by or under the
supervision of another such physician;
(H)(i) services furnished pursuant to a contract
under section 1876 to a member of an eligible
organization by a physician assistant or by a nurse
practitioner (as defined in subsection (aa)(5)) and
such services and supplies furnished as an incident to
his service to such a member as would otherwise be
covered under this part if furnished by a physician or
as an incident to a physician's service; and
(ii) services furnished pursuant to a risk-sharing
contract under section 1876(g) to a member of an
eligible organization by a clinical psychologist (as
defined by the Secretary) or by a clinical social
worker (as defined in subsection (hh)(2)), and such
services and supplies furnished as an incident to such
clinical psychologist's services or clinical social
worker's services to such a member as would otherwise
be covered under this part if furnished by a physician
or as an incident to a physician's service;
(I) blood clotting factors, for hemophilia patients
competent to use such factors to control bleeding
without medical or other supervision, and items related
to the administration of such factors, subject to
utilization controls deemed necessary by the Secretary
for the efficient use of such factors;
(J) prescription drugs used in immunosuppressive
therapy furnished, to an individual who receives an
organ transplant for which payment is made under this
title;
(K)(i) services which would be physicians' services
and services described in subsections (ww)(1) and (hhh)
if furnished by a physician (as defined in subsection
(r)(1)) and which are performed by a physician
assistant (as defined in subsection (aa)(5)) under the
supervision of a physician (as so defined) and which
the physician assistant is legally authorized to
perform by the State in which the services are
performed, and such services and supplies furnished as
incident to such services as would be covered under
subparagraph (A) if furnished incident to a physician's
professional service, but only if no facility or other
provider charges or is paid any amounts with respect to
the furnishing of such services,
(ii) services which would be physicians' services and
services described in subsections (ww)(1) and (hhh) if
furnished by a physician (as defined in subsection
(r)(1)) and which are performed by a nurse practitioner
or clinical nurse specialist (as defined in subsection
(aa)(5)) working in collaboration (as defined in
subsection (aa)(6)) with a physician (as defined in
subsection (r)(1)) which the nurse practitioner or
clinical nurse specialist is legally authorized to
perform by the State in which the services are
performed, and such services and supplies furnished as
an incident to such services as would be covered under
subparagraph (A) if furnished incident to a physician's
professional service, but only if no facility or other
provider charges or is paid any amounts with respect to
the furnishing of such services;
(L) certified nurse-midwife services;
(M) qualified psychologist services;
(N) clinical social worker services (as defined in
subsection (hh)(2));
(O) erythropoietin for dialysis patients competent to
use such drug without medical or other supervision with
respect to the administration of such drug, subject to
methods and standards established by the Secretary by
regulation for the safe and effective use of such drug,
and items related to the administration of such drug;
(P) prostate cancer screening tests (as defined in
subsection (oo));
(Q) an oral drug (which is approved by the Federal
Food and Drug Administration) prescribed for use as an
anticancer chemotherapeutic agent for a given
indication, and containing an active ingredient (or
ingredients), which is the same indication and active
ingredient (or ingredients) as a drug which the carrier
determines would be covered pursuant to subparagraph
(A) or (B) if the drug could not be self-administered;
(R) colorectal cancer screening tests (as defined in
subsection (pp));
(S) diabetes outpatient self-management training
services (as defined in subsection (qq));
(T) an oral drug (which is approved by the Federal
Food and Drug Administration) prescribed for use as an
acute anti-emetic used as part of an anticancer
chemotherapeutic regimen if the drug is administered by
a physician (or as prescribed by a physician)--
(i) for use immediately before, at, or within
48 hours after the time of the administration
of the anticancer chemotherapeutic agent; and
(ii) as a full replacement for the anti-
emetic therapy which would otherwise be
administered intravenously;
(U) screening for glaucoma (as defined in subsection
(uu)) for individuals determined to be at high risk for
glaucoma, individuals with a family history of glaucoma
and individuals with diabetes;
(V) medical nutrition therapy services (as defined in
subsection (vv)(1)) in the case of a beneficiary with
diabetes or a renal disease who--
(i) has not received diabetes outpatient
self-management training services within a time
period determined by the Secretary;
(ii) is not receiving maintenance dialysis
for which payment is made under section 1881;
and
(iii) meets such other criteria determined by
the Secretary after consideration of protocols
established by dietitian or nutrition
professional organizations;
(W) an initial preventive physical examination (as
defined in subsection (ww));
(X) cardiovascular screening blood tests (as defined
in subsection (xx)(1));
(Y) diabetes screening tests (as defined in
subsection (yy));
(Z) intravenous immune globulin for the treatment of
primary immune deficiency diseases in the home (as
defined in subsection (zz));
(AA) ultrasound screening for abdominal aortic
aneurysm (as defined in subsection (bbb)) for an
individual--
(i) who receives a referral for such an
ultrasound screening as a result of an initial
preventive physical examination (as defined in
section 1861(ww)(1));
(ii) who has not been previously furnished
such an ultrasound screening under this title;
and
(iii) who--
(I) has a family history of abdominal
aortic aneurysm; or
(II) manifests risk factors included
in a beneficiary category recommended
for screening by the United States
Preventive Services Task Force
regarding abdominal aortic aneurysms;
(BB) additional preventive services (described in
subsection (ddd)(1));
(CC) items and services furnished under a
cardiac rehabilitation program (as defined in
subsection (eee)(1)) or under a pulmonary
rehabilitation program (as defined in
subsection (fff)(1));
(DD) items and services furnished under an
intensive cardiac rehabilitation program (as
defined in subsection (eee)(4));
(EE) kidney disease education services (as defined in
subsection (ggg));
(FF) personalized prevention plan services (as
defined in subsection (hhh));
(GG) home infusion therapy (as defined in subsection
(iii)(1)); [and]
(HH) opioid use disorder treatment services (as
defined in subsection (jjj))[.]; and
(II) vision services (as defined in subsection
(kkk));
(3) diagnostic X-ray tests (including tests under the
supervision of a physician, furnished in a place of
residence used as the patient's home, if the
performance of such tests meets such conditions
relating to health and safety as the Secretary may find
necessary and including diagnostic mammography if
conducted by a facility that has a certificate (or
provisional certificate) issued under section 354 of
the Public Health Service Act), diagnostic laboratory
tests, and other diagnostic tests;
(4) X-ray, radium, and radioactive isotope therapy,
including materials and services of technicians;
(5) surgical dressings, and splints, casts, and other
devices used for reduction of fractures and
dislocations;
(6) durable medical equipment;
(7) ambulance service where the use of other methods
of transportation is contraindicated by the
individual's condition, but, subject to section
1834(l)(14), only to the extent provided in
regulations;
(8) prosthetic devices (other than dental) which
replace all or part of an internal body organ
(including colostomy bags and supplies directly related
to colostomy care), including replacement of such
devices[, and including one pair of conventional
eyeglasses or contact lenses furnished subsequent to
each cataract surgery with insertion of an intraocular
lens], including one pair of conventional eyeglasses or
contact lenses furnished subsequent to each cataract
surgery with insertion of an intraocular lens, if
furnished before January 1, 2022, and including
conventional eyeglasses or contact lenses, whether or
not furnished subsequent to such a surgery, if
furnished on or after January 1, 2022;
(9) leg, arm, back, and neck braces, and artificial
legs, arms, and eyes, including replacements if
required because of a change in the patient's physical
condition;
(10)(A) pneumococcal vaccine and its administration
and, subject to section 4071(b) of the Omnibus Budget
Reconciliation Act of 1987, influenza vaccine and its
administration; and
(B) hepatitis B vaccine and its administration,
furnished to an individual who is at high or
intermediate risk of contracting hepatitis B (as
determined by the Secretary under regulations);
(11) services of a certified registered nurse
anesthetist (as defined in subsection (bb));
(12) subject to section 4072(e) of the Omnibus Budget
Reconciliation Act of 1987, extra-depth shoes with
inserts or custom molded shoes with inserts for an
individual with diabetes, if--
(A) the physician who is managing the
individual's diabetic condition (i) documents
that the individual has peripheral neuropathy
with evidence of callus formation, a history of
pre-ulcerative calluses, a history of previous
ulceration, foot deformity, or previous
amputation, or poor circulation, and (ii)
certifies that the individual needs such shoes
under a comprehensive plan of care related to
the individual's diabetic condition;
(B) the particular type of shoes are
prescribed by a podiatrist or other qualified
physician (as established by the Secretary);
and
(C) the shoes are fitted and furnished by a
podiatrist or other qualified individual (such
as a pedorthist or orthotist, as established by
the Secretary) who is not the physician
described in subparagraph (A) (unless the
Secretary finds that the physician is the only
such qualified individual in the area);
(13) screening mammography (as defined in subsection
(jj));
(14) screening pap smear and screening pelvic exam;
and
(15) bone mass measurement (as defined in subsection
(rr)).
No diagnostic tests performed in any laboratory, including a
laboratory that is part of a rural health clinic, or a hospital
(which, for purposes of this sentence, means an institution
considered a hospital for purposes of section 1814(d)) shall be
included within paragraph (3) unless such laboratory--
(16) if situated in any State in which State or
applicable local law provides for licensing of
establishments of this nature, (A) is licensed pursuant
to such law, or (B) is approved, by the agency of such
State or locality responsible for licensing
establishments of this nature, as meeting the standards
established for such licensing; and
(17)(A) meets the certification requirements under
section 353 of the Public Health Service Act; and
(B) meets such other conditions relating to the
health and safety of individuals with respect to whom
such tests are performed as the Secretary may find
necessary.
There shall be excluded from the diagnostic services specified
in paragraph (2)(C) any item or service (except services
referred to in paragraph (1)) which would not be included under
subsection (b) if it were furnished to an inpatient of a
hospital. None of the items and services referred to in the
preceding paragraphs (other than paragraphs (1) and (2)(A)) of
this subsection which are furnished to a patient of an
institution which meets the definition of a hospital for
purposes of section 1814(d) shall be included unless such other
conditions are met as the Secretary may find necessary relating
to health and safety of individuals with respect to whom such
items and services are furnished.
Drugs and Biologicals
(t)(1) The term ``drugs'' and the term ``biologicals'',
except for purposes of subsection (m)(5) and paragraph (2),
include only such drugs (including contrast agents) and
biologicals, respectively, as are included (or approved for
inclusion) in the United States Pharmacopoeia, the National
Formulary, or the United States Homeopathic Pharmacopoeia, or
in New Drugs or Accepted Dental Remedies (except for any drugs
and biologicals unfavorably evaluated therein), or as are
approved by the pharmacy and drug therapeutics committee (or
equivalent committee) of the medical staff of the hospital
furnishing such drugs and biologicals for use in such hospital.
(2)(A) For purposes of paragraph (1), the term ``drugs'' also
includes any drugs or biologicals used in an anticancer
chemotherapeutic regimen for a medically accepted indication
(as described in subparagraph (B)).
(B) In subparagraph (A), the term ``medically accepted
indication'', with respect to the use of a drug, includes any
use which has been approved by the Food and Drug Administration
for the drug, and includes another use of the drug if--
(i) the drug has been approved by the Food and Drug
Administration; and
(ii)(I) such use is supported by one or more
citations which are included (or approved for
inclusion) in one or more of the following compendia:
the American Hospital Formulary Service-Drug
Information, the American Medical Association Drug
Evaluations, the United States Pharmacopoeia-Drug
Information (or its successor publications), and other
authoritative compendia as identified by the Secretary,
unless the Secretary has determined that the use is not
medically appropriate or the use is identified as not
indicated in one or more such compendia, or
(II) the carrier involved determines, based upon
guidance provided by the Secretary to carriers for
determining accepted uses of drugs, that such use is
medically accepted based on supportive clinical
evidence in peer reviewed medical literature appearing
in publications which have been identified for purposes
of this subclause by the Secretary.
The Secretary may revise the list of compendia in clause
(ii)(I) as is appropriate for identifying medically accepted
indications for drugs. On and after January 1, 2010, no
compendia may be included on the list of compendia under this
subparagraph unless the compendia has a publicly transparent
process for evaluating therapies and for identifying potential
conflicts of interests.
Provider of Services
(u) The term ``provider of services'' means a hospital,
critical access hospital, skilled nursing facility,
comprehensive outpatient rehabilitation facility, home health
agency, hospice program, or, for purposes of section 1814(g)
and section 1835(e), a fund.
Reasonable Cost
(v)(1)(A) The reasonable cost of any services shall be the
cost actually incurred, excluding therefrom any part of
incurred cost found to be unnecessary in the efficient delivery
of needed health services, and shall be determined in
accordance with regulations establishing the method or methods
to be used, and the items to be included, in determining such
costs for various types or classes of institutions, agencies,
and services; except that in any case to which paragraph (2) or
(3) applies, the amount of the payment determined under such
paragraph with respect to the services involved shall be
considered the reasonable cost of such services. In prescribing
the regulations referred to in the preceding sentence, the
Secretary shall consider, among other things, the principles
generally applied by national organizations or established
prepayment organizations (which have developed such principles)
in computing the amount of payment, to be made by persons other
than the recipients of services, to providers of services on
account of services furnished to such recipients by such
providers. Such regulations may provide for determination of
the costs of services on a per diem, per unit, per capita, or
other basis, may provide for using different methods in
different circumstances, may provide for the use of estimates
of costs of particular items or services, may provide for the
establishment of limits on the direct or indirect overall
incurred costs or incurred costs of specific items or services
or groups of items or services to be recognized as reasonable
based on estimates of the costs necessary in the efficient
delivery of needed health services to individuals covered by
the insurance programs established under this title, and may
provide for the use of charges or a percentage of charges where
this method reasonably reflects the costs. Such regulations
shall (i) take into account both direct and indirect costs of
providers of services (excluding therefrom any such costs,
including standby costs, which are determined in accordance
with regulations to be unnecessary in the efficient delivery of
services covered by the insurance programs established under
this title) in order that, under the methods of determining
costs, the necessary costs of efficiently delivering covered
services to individuals covered by the insurance programs
established by this title will not be borne by individuals not
so covered, and the costs with respect to individuals not so
covered will not be borne by such insurance programs, and (ii)
provide for the making of suitable retroactive corrective
adjustments where, for a provider of services for any fiscal
period, the aggregate reimbursement produced by the methods of
determining costs proves to be either inadequate or excessive.
(B) In the case of extended care services, the regulations
under subparagraph (A) shall not include provision for specific
recognition of a return on equity capital.
(C) Where a hospital has an arrangement with a medical school
under which the faculty of such school provides services at
such hospital, an amount not in excess of the reasonable cost
of such services to the medical school shall be included in
determining the reasonable cost to the hospital of furnishing
services--
(i) for which payment may be made under part A, but
only if--
(I) payment for such services as furnished
under such arrangement would be made under part
A to the hospital had such services been
furnished by the hospital, and
(II) such hospital pays to the medical school
at least the reasonable cost of such services
to the medical school, or
(ii) for which payment may be made under part B, but
only if such hospital pays to the medical school at
least the reasonable cost of such services to the
medical school.
(D) Where (i) physicians furnish services which are either
inpatient hospital services (including services in conjunction
with the teaching programs of such hospital) by reason of
paragraph (7) of subsection (b) or for which entitlement exists
by reason of clause (II) of section 1832(a)(2)(B)(i), and (ii)
such hospital (or medical school under arrangement with such
hospital) incurs no actual cost in the furnishing of such
services, the reasonable cost of such services shall (under
regulations of the Secretary) be deemed to be the cost such
hospital or medical school would have incurred had it paid a
salary to such physicians rendering such services approximately
equivalent to the average salary paid to all physicians
employed by such hospital (or if such employment does not
exist, or is minimal in such hospital, by similar hospitals in
a geographic area of sufficient size to assure reasonable
inclusion of sufficient physicians in development of such
average salary).
(E) Such regulations may, in the case of skilled nursing
facilities in any State, provide for the use of rates,
developed by the State in which such facilities are located,
for the payment of the cost of skilled nursing facility
services furnished under the State's plan approved under title
XIX (and such rates may be increased by the Secretary on a
class or size of institution or on a geographical basis by a
percentage factor not in excess of 10 percent to take into
account determinable items or services or other requirements
under this title not otherwise included in the computation of
such State rates), if the Secretary finds that such rates are
reasonably related to (but not necessarily limited to) analyses
undertaken by such State of costs of care in comparable
facilities in such State. Notwithstanding the previous
sentence, such regulations with respect to skilled nursing
facilities shall take into account (in a manner consistent with
subparagraph (A) and based on patient-days of services
furnished) the costs (including the costs of services required
to attain or maintain the highest practicable physical, mental,
and psychosocial well-being of each resident eligible for
benefits under this title) of such facilities complying with
the requirements of subsections (b), (c), and (d) of section
1819 (including the costs of conducting nurse aide training and
competency evaluation programs and competency evaluation
programs).
(F) Such regulations shall require each provider of services
(other than a fund) to make reports to the Secretary of
information described in section 1121(a) in accordance with the
uniform reporting system (established under such section) for
that type of provider.
(G)(i) In any case in which a hospital provides inpatient
services to an individual that would constitute post-hospital
extended care services if provided by a skilled nursing
facility and a quality improvement organization (or, in the
absence of such a qualified organization, the Secretary or such
agent as the Secretary may designate) determines that inpatient
hospital services for the individual are not medically
necessary but post-hospital extended care services for the
individual are medically necessary and such extended care
services are not otherwise available to the individual (as
determined in accordance with criteria established by the
Secretary) at the time of such determination, payment for such
services provided to the individual shall continue to be made
under this title at the payment rate described in clause (ii)
during the period in which--
(I) such post-hospital extended care services for the
individual are medically necessary and not otherwise
available to the individual (as so determined),
(II) inpatient hospital services for the individual
are not medically necessary, and
(III) the individual is entitled to have payment made
for post-hospital extended care services under this
title,
except that if the Secretary determines that there is not an
excess of hospital beds in such hospital and (subject to clause
(iv)) there is not an excess of hospital beds in the area of
such hospital, such payment shall be made (during such period)
on the basis of the amount otherwise payable under part A with
respect to inpatient hospital services.
(ii)(I) Except as provided in subclause (II), the payment
rate referred to in clause (i) is a rate equal to the estimated
adjusted State-wide average rate per patient-day paid for
services provided in skilled nursing facilities under the State
plan approved under title XIX for the State in which such
hospital is located, or, if the State in which the hospital is
located does not have a State plan approved under title XIX,
the estimated adjusted State-wide average allowable costs per
patient-day for extended care services under this title in that
State.
(II) If a hospital has a unit which is a skilled nursing
facility, the payment rate referred to in clause (i) for the
hospital is a rate equal to the lesser of the rate described in
subclause (I) or the allowable costs in effect under this title
for extended care services provided to patients of such unit.
(iii) Any day on which an individual receives inpatient
services for which payment is made under this subparagraph
shall, for purposes of this Act (other than this subparagraph),
be deemed to be a day on which the individual received
inpatient hospital services.
(iv) In determining under clause (i), in the case of a public
hospital, whether or not there is an excess of hospital beds in
the area of such hospital, such determination shall be made on
the basis of only the public hospitals (including the hospital)
which are in the area of the hospital and which are under
common ownership with that hospital.
(H) In determining such reasonable cost with respect to home
health agencies, the Secretary may not include--
(i) any costs incurred in connection with bonding or
establishing an escrow account by any such agency as a
result of the surety bond requirement described in
subsection (o)(7) and the financial security
requirement described in subsection (o)(8);
(ii) in the case of home health agencies to which the
surety bond requirement described in subsection (o)(7)
and the financial security requirement described in
subsection (o)(8) apply, any costs attributed to
interest charged such an agency in connection with
amounts borrowed by the agency to repay overpayments
made under this title to the agency, except that such
costs may be included in reasonable cost if the
Secretary determines that the agency was acting in good
faith in borrowing the amounts;
(iii) in the case of contracts entered into by a home
health agency after the date of the enactment of this
subparagraph for the purpose of having services
furnished for or on behalf of such agency, any cost
incurred by such agency pursuant to any such contract
which is entered into for a period exceeding five
years; and
(iv) in the case of contracts entered into by a home
health agency before the date of the enactment of this
subparagraph for the purpose of having services
furnished for or on behalf of such agency, any cost
incurred by such agency pursuant to any such contract,
which determines the amount payable by the home health
agency on the basis of a percentage of the agency's
reimbursement or claim for reimbursement for services
furnished by the agency, to the extent that such cost
exceeds the reasonable value of the services furnished
on behalf of such agency.
(I) In determining such reasonable cost, the Secretary may
not include any costs incurred by a provider with respect to
any services furnished in connection with matters for which
payment may be made under this title and furnished pursuant to
a contract between the provider and any of its subcontractors
which is entered into after the date of the enactment of this
subparagraph and the value or cost of which is $10,000 or more
over a twelve-month period unless the contract contains a
clause to the effect that--
(i) until the expiration of four years after the
furnishing of such services pursuant to such contract,
the subcontractor shall make available, upon written
request by the Secretary, or upon request by the
Comptroller General, or any of their duly authorized
representatives, the contract, and books, documents and
records of such subcontractor that are necessary to
certify the nature and extent of such costs, and
(ii) if the subcontractor carries out any of the
duties of the contract through a subcontract, with a
value or cost of $10,000 or more over a twelve-month
period, with a related organization, such subcontract
shall contain a clause to the effect that until the
expiration of four years after the furnishing of such
services pursuant to such subcontract, the related
organization shall make available, upon written request
by the Secretary, or upon request by the Comptroller
General, or any of their duly authorized
representatives, the subcontract, and books, documents
and records of such organization that are necessary to
verify the nature and extent of such costs.
The Secretary shall prescribe in regulation criteria and
procedures which the Secretary shall use in obtaining access to
books, documents, and records under clauses required in
contracts and subcontracts under this subparagraph.
(J) Such regulations may not provide for any inpatient
routine salary cost differential as a reimbursable cost for
hospitals and skilled nursing facilities.
(K)(i) The Secretary shall issue regulations that provide, to
the extent feasible, for the establishment of limitations on
the amount of any costs or charges that shall be considered
reasonable with respect to services provided on an outpatient
basis by hospitals (other than bona fide emergency services as
defined in clause (ii)) or clinics (other than rural health
clinics), which are reimbursed on a cost basis or on the basis
of cost related charges, and by physicians utilizing such
outpatient facilities. Such limitations shall be reasonably
related to the charges in the same area for similar services
provided in physicians' offices. Such regulations shall provide
for exceptions to such limitations in cases where similar
services are not generally available in physicians' offices in
the area to individuals entitled to benefits under this title.
(ii) For purposes of clause (i), the term ``bona fide
emergency services'' means services provided in a hospital
emergency room after the sudden onset of a medical condition
manifesting itself by acute symptoms of sufficient severity
(including severe pain) such that the absence of immediate
medical attention could reasonably be expected to result in--
(I) placing the patient's health in serious jeopardy;
(II) serious impairment to bodily functions; or
(III) serious dysfunction of any bodily organ or
part.
(L)(i) The Secretary, in determining the amount of the
payments that may be made under this title with respect to
services furnished by home health agencies, may not recognize
as reasonable (in the efficient delivery of such services)
costs for the provision of such services by an agency to the
extent these costs exceed (on the aggregate for the agency) for
cost reporting periods beginning on or after--
(I) July 1, 1985, and before July 1, 1986, 120
percent of the mean of the labor-related and nonlabor
per visit costs for freestanding home health agencies,
(II) July 1, 1986, and before July 1, 1987, 115
percent of such mean,
(III) July 1, 1987, and before October 1, 1997, 112
percent of such mean,
(IV) October 1, 1997, and before October 1, 1998, 105
percent of the median of the labor-related and nonlabor
per visit costs for freestanding home health agencies,
or
(V) October 1, 1998, 106 percent of such median.
(ii) Effective for cost reporting periods beginning on or
after July 1, 1986, such limitations shall be applied on an
aggregate basis for the agency, rather than on a discipline
specific basis. The Secretary may provide for such exemptions
and exceptions to such limitation as he deems appropriate.
(iii) Not later than July 1, 1991, and annually thereafter
(but not for cost reporting periods beginning on or after July
1, 1994, and before July 1, 1996, or on or after July 1, 1997,
and before October 1, 1997), the Secretary shall establish
limits under this subparagraph for cost reporting periods
beginning on or after such date by utilizing the area wage
index applicable under section 1886(d)(3)(E) and determined
using the survey of the most recent available wages and wage-
related costs of hospitals located in the geographic area in
which the home health service is furnished (determined without
regard to whether such hospitals have been reclassified to a
new geographic area pursuant to section 1886(d)(8)(B), a
decision of the Medicare Geographic Classification Review Board
under section 1886(d)(10), or a decision of the Secretary).
(iv) In establishing limits under this subparagraph for cost
reporting periods beginning after September 30, 1997, the
Secretary shall not take into account any changes in the home
health market basket, as determined by the Secretary, with
respect to cost reporting periods which began on or after July
1, 1994, and before July 1, 1996.
(v) For services furnished by home health agencies for cost
reporting periods beginning on or after October 1, 1997,
subject to clause (viii)(I), the Secretary shall provide for an
interim system of limits. Payment shall not exceed the costs
determined under the preceding provisions of this subparagraph
or, if lower, the product of--
(I) an agency-specific per beneficiary annual
limitation calculated based 75 percent on 98 percent of
the reasonable costs (including nonroutine medical
supplies) for the agency's 12-month cost reporting
period ending during fiscal year 1994, and based 25
percent on 98 percent of the standardized regional
average of such costs for the agency's census division,
as applied to such agency, for cost reporting periods
ending during fiscal year 1994, such costs updated by
the home health market basket index; and
(II) the agency's unduplicated census count of
patients (entitled to benefits under this title) for
the cost reporting period subject to the limitation.
(vi) For services furnished by home health agencies for cost
reporting periods beginning on or after October 1, 1997, the
following rules apply:
(I) For new providers and those providers without a
12-month cost reporting period ending in fiscal year
1994 subject to clauses (viii)(II) and (viii)(III), the
per beneficiary limitation shall be equal to the median
of these limits (or the Secretary's best estimates
thereof) applied to other home health agencies as
determined by the Secretary. A home health agency that
has altered its corporate structure or name shall not
be considered a new provider for this purpose.
(II) For beneficiaries who use services furnished by
more than one home health agency, the per beneficiary
limitations shall be prorated among the agencies.
(vii)(I) Not later than January 1, 1998, the Secretary shall
establish per visit limits applicable for fiscal year 1998, and
not later than April 1, 1998, the Secretary shall establish per
beneficiary limits under clause (v)(I) for fiscal year 1998.
(II) Not later than August 1 of each year (beginning in 1998)
the Secretary shall establish the limits applicable under this
subparagraph for services furnished during the fiscal year
beginning October 1 of the year.
(viii)(I) In the case of a provider with a 12-month cost
reporting period ending in fiscal year 1994, if the limit
imposed under clause (v) (determined without regard to this
subclause) for a cost reporting period beginning during or
after fiscal year 1999 is less than the median described in
clause (vi)(I) (but determined as if any reference in clause
(v) to ``98 percent'' were a reference to ``100 percent''), the
limit otherwise imposed under clause (v) for such provider and
period shall be increased by \1/3\ of such difference.
(II) Subject to subclause (IV), for new providers and those
providers without a 12-month cost reporting period ending in
fiscal year 1994, but for which the first cost reporting period
begins before fiscal year 1999, for cost reporting periods
beginning during or after fiscal year 1999, the per beneficiary
limitation described in clause (vi)(I) shall be equal to the
median described in such clause (determined as if any reference
in clause (v) to ``98 percent'' were a reference to ``100
percent'').
(III) Subject to subclause (IV), in the case of a new
provider for which the first cost reporting period begins
during or after fiscal year 1999, the limitation applied under
clause (vi)(I) (but only with respect to such provider) shall
be equal to 75 percent of the median described in clause
(vi)(I).
(IV) In the case of a new provider or a provider without a
12-month cost reporting period ending in fiscal year 1994,
subclause (II) shall apply, instead of subclause (III), to a
home health agency which filed an application for home health
agency provider status under this title before September 15,
1998, or which was approved as a branch of its parent agency
before such date and becomes a subunit of the parent agency or
a separate agency on or after such date.
(V) Each of the amounts specified in subclauses (I) through
(III) are such amounts as adjusted under clause (iii) to
reflect variations in wages among different areas.
(ix) Notwithstanding the per beneficiary limit under clause
(viii), if the limit imposed under clause (v) (determined
without regard to this clause) for a cost reporting period
beginning during or after fiscal year 2000 is less than the
median described in clause (vi)(I) (but determined as if any
reference in clause (v) to ``98 percent'' were a reference to
``100 percent''), the limit otherwise imposed under clause (v)
for such provider and period shall be increased by 2 percent.
(x) Notwithstanding any other provision of this subparagraph,
in updating any limit under this subparagraph by a home health
market basket index for cost reporting periods beginning during
each of fiscal years 2000, 2002, and 2003, the update otherwise
provided shall be reduced by 1.1 percentage points. With
respect to cost reporting periods beginning during fiscal year
2001, the update to any limit under this subparagraph shall be
the home health market basket index.
(M) Such regulations shall provide that costs respecting care
provided by a provider of services, pursuant to an assurance
under title VI or XVI of the Public Health Service Act that the
provider will make available a reasonable volume of services to
persons unable to pay therefor, shall not be allowable as
reasonable costs.
(N) In determining such reasonable costs, costs incurred for
activities directly related to influencing employees respecting
unionization may not be included.
(O)(i) In establishing an appropriate allowance for
depreciation and for interest on capital indebtedness with
respect to an asset of a provider of services which has
undergone a change of ownership, such regulations shall
provide, except as provided in clause (iii), that the valuation
of the asset after such change of ownership shall be the
historical cost of the asset, as recognized under this title,
less depreciation allowed, to the owner of record as of the
date of enactment of the Balanced Budget Act of 1997 (or, in
the case of an asset not in existence as of that date, the
first owner of record of the asset after that date).
(ii) Such regulations shall not recognize, as reasonable in
the provision of health care services, costs (including legal
fees, accounting and administrative costs, travel costs, and
the costs of feasibility studies) attributable to the
negotiation or settlement of the sale or purchase of any
capital asset (by acquisition or merger) for which any payment
has previously been made under this title.
(iii) In the case of the transfer of a hospital from
ownership by a State to ownership by a nonprofit corporation
without monetary consideration, the basis for capital
allowances to the new owner shall be the book value of the
hospital to the State at the time of the transfer.
(P) If such regulations provide for the payment for a return
on equity capital (other than with respect to costs of
inpatient hospital services), the rate of return to be
recognized, for determining the reasonable cost of services
furnished in a cost reporting period, shall be equal to the
average of the rates of interest, for each of the months any
part of which is included in the period, on obligations issued
for purchase by the Federal Hospital Insurance Trust Fund.
(Q) Except as otherwise explicitly authorized, the Secretary
is not authorized to limit the rate of increase on allowable
costs of approved medical educational activities.
(R) In determining such reasonable cost, costs incurred by a
provider of services representing a beneficiary in an
unsuccessful appeal of a determination described in section
1869(b) shall not be allowable as reasonable costs.
(S)(i) Such regulations shall not include provision for
specific recognition of any return on equity capital with
respect to hospital outpatient departments.
(ii)(I) Such regulations shall provide that, in determining
the amount of the payments that may be made under this title
with respect to all the capital-related costs of outpatient
hospital services, the Secretary shall reduce the amounts of
such payments otherwise established under this title by 15
percent for payments attributable to portions of cost reporting
periods occurring during fiscal year 1990, by 15 percent for
payments attributable to portions of cost reporting periods
occurring during fiscal year 1991, and by 10 percent for
payments attributable to portions of cost reporting periods
occurring during fiscal years 1992 through 1999 and until the
first date that the prospective payment system under section
1833(t) is implemented.
(II) The Secretary shall reduce the reasonable cost of
outpatient hospital services (other than the capital-related
costs of such services) otherwise determined pursuant to
section 1833(a)(2)(B)(i)(I) by 5.8 percent for payments
attributable to portions of cost reporting periods occurring
during fiscal years 1991 through 1999 and until the first date
that the prospective payment system under section 1833(t) is
implemented.
(III) Subclauses (I) and (II) shall not apply to payments
with respect to the costs of hospital outpatient services
provided by any hospital that is a sole community hospital (as
defined in section 1886(d)(5)(D)(iii)) or a critical access
hospital (as defined in section 1861(mm)(1)).
(IV) In applying subclauses (I) and (II) to services for
which payment is made on the basis of a blend amount under
section 1833(i)(3)(A)(ii) or 1833(n)(1)(A)(ii), the costs
reflected in the amounts described in sections
1833(i)(3)(B)(i)(I) and 1833(n)(1)(B)(i)(I), respectively,
shall be reduced in accordance with such subclause.
(T) In determining such reasonable costs for hospitals, no
reduction in copayments under section 1833(t)(8)(B) shall be
treated as a bad debt and the amount of bad debts otherwise
treated as allowable costs which are attributable to the
deductibles and coinsurance amounts under this title shall be
reduced--
(i) for cost reporting periods beginning during
fiscal year 1998, by 25 percent of such amount
otherwise allowable,
(ii) for cost reporting periods beginning during
fiscal year 1999, by 40 percent of such amount
otherwise allowable,
(iii) for cost reporting periods beginning during
fiscal year 2000, by 45 percent of such amount
otherwise allowable,
(iv) for cost reporting periods beginning during
fiscal years 2001 through 2012, by 30 percent of such
amount otherwise allowable, and
(v) for cost reporting periods beginning during
fiscal year 2013 or a subsequent fiscal year, by 35
percent of such amount otherwise allowable.
(U) In determining the reasonable cost of ambulance services
(as described in subsection (s)(7)) provided during fiscal year
1998, during fiscal year 1999, and during so much of fiscal
year 2000 as precedes January 1, 2000, the Secretary shall not
recognize the costs per trip in excess of costs recognized as
reasonable for ambulance services provided on a per trip basis
during the previous fiscal year (after application of this
subparagraph), 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 fiscal year involved reduced by
1.0 percentage point. For ambulance services provided after
June 30, 1998, the Secretary may provide that claims for such
services must include a code (or codes) under a uniform coding
system specified by the Secretary that identifies the services
furnished.
(V) In determining such reasonable costs for skilled nursing
facilities and (beginning with respect to cost reporting
periods beginning during fiscal year 2013) for covered skilled
nursing services described in section 1888(e)(2)(A) furnished
by hospital providers of extended care services (as described
in section 1883), the amount of bad debts otherwise treated as
allowed costs which are attributable to the coinsurance amounts
under this title for individuals who are entitled to benefits
under part A and--
(i) are not described in section 1935(c)(6)(A)(ii)
shall be reduced by--
(I) for cost reporting periods beginning on or after
October 1, 2005, but before fiscal year 2013, 30
percent of such amount otherwise allowable; and
(II) for cost reporting periods beginning during
fiscal year 2013 or a subsequent fiscal year, by 35
percent of such amount otherwise allowable.
(ii) are described in such section--
(I) for cost reporting periods beginning on or after
October 1, 2005, but before fiscal year 2013, shall not
be reduced;
(II) for cost reporting periods beginning during
fiscal year 2013, shall be reduced by 12 percent of
such amount otherwise allowable;
(III) for cost reporting periods beginning during
fiscal year 2014, shall be reduced by 24 percent of
such amount otherwise allowable; and
(IV) for cost reporting periods beginning during a
subsequent fiscal year, shall be reduced by 35 percent
of such amount otherwise allowable.
(W)(i) In determining such reasonable costs for providers
described in clause (ii), the amount of bad debts otherwise
treated as allowable costs which are attributable to
deductibles and coinsurance amounts under this title shall be
reduced--
(I) for cost reporting periods beginning during
fiscal year 2013, by 12 percent of such amount
otherwise allowable;
(II) for cost reporting periods beginning during
fiscal year 2014, by 24 percent of such amount
otherwise allowable; and
(III) for cost reporting periods beginning during a
subsequent fiscal year, by 35 percent of such amount
otherwise allowable.
(ii) A provider described in this clause is a provider of
services not described in subparagraph (T) or (V), a supplier,
or any other type of entity that receives payment for bad debts
under the authority under subparagraph (A).
(2)(A) If the bed and board furnished as part of inpatient
hospital services (including inpatient tuberculosis hospital
services and inpatient psychiatric hospital services) or post-
hospital extended care services is in accommodations more
expensive than semi-private accommodations, the amount taken
into account for purposes of payment under this title with
respect to such services may not exceed the amount that would
be taken into account with respect to such services if
furnished in such semi-private accommodations unless the more
expensive accommodations were required for medical reasons.
(B) Where a provider of services which has an agreement in
effect under this title furnishes to an individual items or
services which are in excess of or more expensive than the
items or services with respect to which payment may be made
under part A or part B, as the case may be, the Secretary shall
take into account for purposes of payment to such provider of
services only the items or services with respect to which such
payment may be made.
(3) If the bed and board furnished as part of inpatient
hospital services (including inpatient tuberculosis hospital
services and inpatient psychiatric hospital services) or post-
hospital extended care services is in accommodations other
than, but not more expensive than, semi-private accommodations
and the use of such other accommodations rather than semi-
private accommodations was neither at the request of the
patient nor for a reason which the Secretary determines is
consistent with the purposes of this title, the amount of the
payment with respect to such bed and board under part A shall
be the amount otherwise payable under this title for such bed
and board furnished in semi-private accommodations minus the
difference between the charge customarily made by the hospital
or skilled nursing facility for bed and board in semi-private
accommodations and the charge customarily made by it for bed
and board in the accommodations furnished.
(4) If a provider of services furnishes items or services to
an individual which are in excess of or more expensive than the
items or services determined to be necessary in the efficient
delivery of needed health services and charges are imposed for
such more expensive items or services under the authority
granted in section 1866(a)(2)(B)(ii), the amount of payment
with respect to such items or services otherwise due such
provider in any fiscal period shall be reduced to the extent
that such payment plus such charges exceed the cost actually
incurred for such items or services in the fiscal period in
which such charges are imposed.
(5)(A) Where physical therapy services, occupational therapy
services, speech therapy services, or other therapy services or
services of other health-related personnel (other than
physicians) are furnished under an arrangement with a provider
of services or other organization, specified in the first
sentence of subsection (p) (including through the operation of
subsection (g)) the amount included in any payment to such
provider or other organization under this title as the
reasonable cost of such services (as furnished under such
arrangements) shall not exceed an amount equal to the salary
which would reasonably have been paid for such services
(together with any additional costs that would have been
incurred by the provider or other organization) to the person
performing them if they had been performed in an employment
relationship with such provider or other organization (rather
than under such arrangement) plus the cost of such other
expenses (including a reasonable allowance for traveltime and
other reasonable types of expense related to any differences in
acceptable methods of organization for the provision of such
therapy) incurred by such person, as the Secretary may in
regulations determine to be appropriate.
(B) Notwithstanding the provisions of subparagraph (A), if a
provider of services or other organization specified in the
first sentence of section 1861(p) requires the services of a
therapist on a limited part-time basis, or only to perform
intermittent services, the Secretary may make payment on the
basis of a reasonable rate per unit of service, even though
such rate is greater per unit of time than salary related
amounts, where he finds that such greater payment is, in the
aggregate, less than the amount that would have been paid if
such organization had employed a therapist on a full- or part-
time salary basis.
(6) For purposes of this subsection, the term ``semi-private
accommodations'' means two-bed, three-bed, or four-bed
accommodations.
(7)(A) For limitation on Federal participation for capital
expenditures which are out of conformity with a comprehensive
plan of a State or areawide planning agency, see section 1122.
(B) For further limitations on reasonable cost and
determination of payment amounts for operating costs of
inpatient hospital services and waivers for certain States, see
section 1886.
(C) For provisions restricting payment for provider-based
physicians' services and for payments under certain percentage
arrangements, see section 1887.
(D) For further limitations on reasonable cost and
determination of payment amounts for routine service costs of
skilled nursing facilities, see subsections (a) through (c) of
section 1888.
(8) Items unrelated to patient care.--Reasonable costs do not
include costs for the following--
(i) entertainment, including tickets to sporting and
other entertainment events;
(ii) gifts or donations;
(iii) personal use of motor vehicles;
(iv) costs for fines and penalties resulting from
violations of Federal, State, or local laws; and
(v) education expenses for spouses or other
dependents of providers of services, their employees or
contractors.
Arrangements for Certain Services
(w)(1) The term ``arrangements'' is limited to arrangements
under which receipt of payment by the hospital, critical access
hospital, skilled nursing facility, home health agency, or
hospice program (whether in its own right or as agent), with
respect to services for which an individual is entitled to have
payment made under this title, discharges the liability of such
individual or any other person to pay for the services.
(2) Utilization review activities conducted, in accordance
with the requirements of the program established under part B
of title XI of the Social Security Act with respect to services
furnished by a hospital or critical access hospital to patients
insured under part A of this title or entitled to have payment
made for such services under part B of this title or under a
State plan approved under title XIX, by a quality improvement
organization designated for the area in which such hospital or
critical access hospital is located shall be deemed to have
been conducted pursuant to arrangements between such hospital
or critical access hospital and such organization under which
such hospital or critical access hospital is obligated to pay
to such organization, as a condition of receiving payment for
hospital or critical access hospital services so furnished
under this part or under such a State plan, such amount as is
reasonably incurred and requested (as determined under
regulations of the Secretary) by such organization in
conducting such review activities with respect to services
furnished by such hospital or critical access hospital to such
patients.
State and United States
(x) The terms ``State'' and ``United States'' have the
meaning given to them by subsections (h) and (i), respectively,
of section 210.
Extended Care in Religious Nonmedical Health Care Institutions
(y)(1) The term ``skilled nursing facility'' also includes a
religious nonmedical health care institution (as defined in
subsection (ss)(1)), but only (except for purposes of
subsection (a)(2)) with respect to items and services
ordinarily furnished by such an institution to inpatients, and
payment may be made with respect to services provided by or in
such an institution only to such extent and under such
conditions, limitations, and requirements (in addition to or in
lieu of the conditions, limitations, and requirements otherwise
applicable) as may be provided in regulations consistent with
section 1821.
(2) Notwithstanding any other provision of this title,
payment under part A may not be made for services furnished an
individual in a skilled nursing facility to which paragraph (1)
applies unless such individual elects, in accordance with
regulations, for a spell of illness to have such services
treated as post-hospital extended care services for purposes of
such part; and payment under part A may not be made for post-
hospital extended care services--
(A) furnished an individual during such spell of
illness in a skilled nursing facility to which
paragraph (1) applies after--
(i) such services have been furnished to him
in such a facility for 30 days during such
spell, or
(ii) such services have been furnished to him
during such spell in a skilled nursing facility
to which such paragraph does not apply; or
(B) furnished an individual during such spell of
illness in a skilled nursing facility to which
paragraph (1) does not apply after such services have
been furnished to him during such spell in a skilled
nursing facility to which such paragraph applies.
(3) The amount payable under part A for post-hospital
extended care services furnished an individual during any spell
of illness in a skilled nursing facility to which paragraph (1)
applies shall be reduced by a coinsurance amount equal to one-
eighth of the inpatient hospital deductible for each day before
the 31st day on which he is furnished such services in such a
facility during such spell (and the reduction under this
paragraph shall be in lieu of any reduction under section
1813(a)(3)).
(4) For purposes of subsection (i), the determination of
whether services furnished by or in an institution described in
paragraph (1) constitute post-hospital extended care services
shall be made in accordance with and subject to such
conditions, limitations, and requirements as may be provided in
regulations.
Institutional Planning
(z) An overall plan and budget of a hospital, skilled nursing
facility, comprehensive outpatient rehabilitation facility, or
home health agency shall be considered sufficient if it--
(1) provides for an annual operating budget which
includes all anticipated income and expenses related to
items which would, under generally accepted accounting
principles, be considered income and expense items
(except that nothing in this paragraph shall require
that there be prepared, in connection with any budget,
an item-by-item identification of the components of
each type of anticipated expenditure or income);
(2)(A) provides for a capital expenditures plan for
at least a 3-year period (including the year to which
the operating budget described in paragraph (1) is
applicable) which includes and identifies in detail the
anticipated sources of financing for, and the
objectives of, each anticipated expenditure in excess
of $600,000 (or such lesser amount as may be
established by the State under section 1122(g)(1) in
which the hospital is located) related to the
acquisition of land, the improvement of land,
buildings, and equipment, and the replacement,
modernization, and expansion of the buildings and
equipment which would, under generally accepted
accounting principles, be considered capital items;
(B) provides that such plan is submitted to the
agency designated under section 1122(b), or if no such
agency is designated, to the appropriate health
planning agency in the State (but this subparagraph
shall not apply in the case of a facility exempt from
review under section 1122 by reason of section
1122(j));
(3) provides for review and updating at least
annually; and
(4) is prepared, under the direction of the governing
body of the institution or agency, by a committee
consisting of representatives of the governing body,
the administrative staff, and the medical staff (if
any) of the institution or agency.
Rural Health Clinic Services and Federally Qualified Health Center
Services
(aa)(1) The term ``rural health clinic services'' means --
(A) physicians' services and such services and
supplies as are covered under section 1861(s)(2)(A) if
furnished as an incident to a physician's professional
service and items and services described in section
1861(s)(10),
(B) such services furnished by a physician assistant
or a nurse practitioner (as defined in paragraph (5)),
by a clinical psychologist (as defined by the
Secretary) or by a clinical social worker (as defined
in subsection (hh)(1)), and such services and supplies
furnished as an incident to his service as would
otherwise be covered if furnished by a physician or as
an incident to a physician's service, and
(C) in the case of a rural health clinic located in
an area in which there exists a shortage of home health
agencies, part-time or intermittent nursing care and
related medical supplies (other than drugs and
biologicals) furnished by a registered professional
nurse or licensed practical nurse to a homebound
individual under a written plan of treatment (i)
established and periodically reviewed by a physician
described in paragraph (2)(B), or (ii) established by a
nurse practitioner or physician assistant and
periodically reviewed and approved by a physician
described in paragraph (2)(B),
when furnished to an individual as an outpatient of a rural
health clinic.
(2) The term ``rural health clinic'' means a facility which
--
(A) is primarily engaged in furnishing to outpatients
services described in subparagraphs (A) and (B) of
paragraph (1);
(B) in the case of a facility which is not a
physician-directed clinic, has an arrangement
(consistent with the provisions of State and local law
relative to the practice, performance, and delivery of
health services) with one or more physicians (as
defined in subsection (r)(1)) under which provision is
made for the periodic review by such physicians of
covered services furnished by physician assistants and
nurse practitioners, the supervision and guidance by
such physicians of physician assistants and nurse
practitioners, the preparation by such physicians of
such medical orders for care and treatment of clinic
patients as may be necessary, and the availability of
such physicians for such referral of and consultation
for patients as is necessary and for advice and
assistance in the management of medical emergencies;
and, in the case of a physician-directed clinic, has
one or more of its staff physicians perform the
activities accomplished through such an arrangement;
(C) maintains clinical records on all patients;
(D) has arrangements with one or more hospitals,
having agreements in effect under section 1866, for the
referral and admission of patients requiring inpatient
services or such diagnostic or other specialized
services as are not available at the clinic;
(E) has written policies, which are developed with
the advice of (and with provision for review of such
policies from time to time by) a group of professional
personnel, including one or more physicians and one or
more physician assistants or nurse practitioners, to
govern those services described in paragraph (1) which
it furnishes;
(F) has a physician, physician assistant, or nurse
practitioner responsible for the execution of policies
described in subparagraph (E) and relating to the
provision of the clinic's services;
(G) directly provides routine diagnostic services,
including clinical laboratory services, as prescribed
in regulations by the Secretary, and has prompt access
to additional diagnostic services from facilities
meeting requirements under this title;
(H) in compliance with State and Federal law, has
available for administering to patients of the clinic
at least such drugs and biologicals as are determined
by the Secretary to be necessary for the treatment of
emergency cases (as defined in regulations) and has
appropriate procedures or arrangements for storing,
administering, and dispensing any drugs and
biologicals;
(I) has a quality assessment and performance
improvement program, and appropriate procedures for
review of utilization of clinic services, as the
Secretary may specify;
(J) has a nurse practitioner, a physician assistant,
or a certified nurse-midwife (as defined in subsection
(gg)) available to furnish patient care services not
less than 50 percent of the time the clinic operates;
and
(K) meets such other requirements as the Secretary
may find necessary in the interest of the health and
safety of the individuals who are furnished services by
the clinic.
For the purposes of this title, such term includes only a
facility which (i) is located in an area that is not an
urbanized area (as defined by the Bureau of the Census) and in
which there are insufficient numbers of needed health care
practitioners (as determined by the Secretary), and that,
within the previous 4-year period, has been designated by the
chief executive officer of the State and certified by the
Secretary as an area with a shortage of personal health
services or designated by the Secretary either (I) as an area
with a shortage of personal health services under section
330(b)(3) or 1302(7) of the Public Health Service Act, (II) as
a health professional shortage area described in section
332(a)(1)(A) of that Act because of its shortage of primary
medical care manpower, (III) as a high impact area described in
section 329(a)(5) of that Act, of (IV) as an area which
includes a population group which the Secretary determines has
a health manpower shortage under section 332(a)(1)(B) of that
Act, (ii) has filed an agreement with the Secretary by which it
agrees not to charge any individual or other person for items
or services for which such individual is entitled to have
payment made under this title, except for the amount of any
deductible or coinsurance amount imposed with respect to such
items or services (not in excess of the amount customarily
charged for such items and services by such clinic), pursuant
to subsections (a) and (b) of section 1833, (iii) employs a
physician assistant or nurse practitioner, and (iv) is not a
rehabilitation agency or a facility which is primarily for the
care and treatment of mental diseases. A facility that is in
operation and qualifies as a rural health clinic under this
title or title XIX and that subsequently fails to satisfy the
requirement of clause (i) shall be considered, for purposes of
this title and title XIX, as still satisfying the requirement
of such clause if it is determined, in accordance with criteria
established by the Secretary in regulations, to be essential to
the delivery of primary care services that would otherwise be
unavailable in the geographic area served by the clinic. If a
State agency has determined under section 1864(a) that a
facility is a rural health clinic and the facility has applied
to the Secretary for approval as such a clinic, the Secretary
shall notify the facility of the Secretary's approval or
disapproval not later than 60 days after the date of the State
agency determination or the application (whichever is later).
(3) The term ``Federally qualified health center services''
means--
(A) services of the type described in subparagraphs
(A) through (C) of paragraph (1) and preventive
services (as defined in section 1861(ddd)(3)); and
(B) preventive primary health services that a center
is required to provide under section 330 of the Public
Health Service Act,
when furnished to an individual as an outpatient of a Federally
qualified health center by the center or by a health care
professional under contract with the center and, for this
purpose, any reference to a rural health clinic or a physician
described in paragraph (2)(B) is deemed a reference to a
Federally qualified health center or a physician at the center,
respectively.
(4) The term ``Federally qualified health center'' means an
entity which--
(A)(i) is receiving a grant under section 330 of the
Public Health Service Act, or
(ii)(I) is receiving funding from such a grant under
a contract with the recipient of such a grant, and (II)
meets the requirements to receive a grant under section
330 of such Act;
(B) based on the recommendation of the Health
Resources and Services Administration within the Public
Health Service, is determined by the Secretary to meet
the requirements for receiving such a grant;
(C) was treated by the Secretary, for purposes of
part B, as a comprehensive Federally funded health
center as of January 1, 1990; or
(D) is an outpatient health program or facility
operated by a tribe or tribal organization under the
Indian Self-Determination Act or by an urban Indian
organization receiving funds under title V of the
Indian Health Care Improvement Act.
(5)(A) The term ``physician assistant'' and the term ``nurse
practitioner'' mean, for purposes of this title, a physician
assistant or nurse practitioner who performs such services as
such individual is legally authorized to perform (in the State
in which the individual performs such services) in accordance
with State law (or the State regulatory mechanism provided by
State law), and who meets such training, education, and
experience requirements (or any combination thereof) as the
Secretary may prescribe in regulations.
(B) The term ``clinical nurse specialist'' means, for
purposes of this title, an individual who--
(i) is a registered nurse and is licensed to practice
nursing in the State in which the clinical nurse
specialist services are performed; and
(ii) holds a master's degree in a defined clinical
area of nursing from an accredited educational
institution.
(6) The term ``collaboration'' means a process in which a
nurse practitioner works with a physician to deliver health
care services within the scope of the practitioner's
professional expertise, with medical direction and appropriate
supervision as provided for in jointly developed guidelines or
other mechanisms as defined by the law of the State in which
the services are performed.
(7)(A) The Secretary shall waive for a 1-year period the
requirements of paragraph (2) that a rural health clinic employ
a physician assistant, nurse practitioner or certified nurse
midwife or that such clinic require such providers to furnish
services at least 50 percent of the time that the clinic
operates for any facility that requests such waiver if the
facility demonstrates that the facility has been unable,
despite reasonable efforts, to hire a physician assistant,
nurse practitioner, or certified nurse-midwife in the previous
90-day period.
(B) The Secretary may not grant such a waiver under
subparagraph (A) to a facility if the request for the waiver is
made less than 6 months after the date of the expiration of any
previous such waiver for the facility, or if the facility has
not yet been determined to meet the requirements (including
subparagraph (J) of the first sentence of paragraph (2)) of a
rural health clinic.
(C) A waiver which is requested under this paragraph shall be
deemed granted unless such request is denied by the Secretary
within 60 days after the date such request is received.
Services of a Certified Registered Nurse Anesthetist
(bb)(1) The term ``services of a certified registered nurse
anesthetist'' means anesthesia services and related care
furnished by a certified registered nurse anesthetist (as
defined in paragraph (2)) which the nurse anesthetist is
legally authorized to perform as such by the State in which the
services are furnished.
(2) The term ``certified registered nurse anesthetist'' means
a certified registered nurse anesthetist licensed by the State
who meets such education, training, and other requirements
relating to anesthesia services and related care as the
Secretary may prescribe. In prescribing such requirements the
Secretary may use the same requirements as those established by
a national organization for the certification of nurse
anesthetists. Such term also includes, as prescribed by the
Secretary, an anesthesiologist assistant.
Comprehensive Outpatient Rehabilitation Facility Services
(cc)(1) The term ``comprehensive outpatient rehabilitation
facility services'' means the following items and services
furnished by a physician or other qualified professional
personnel (as defined in regulations by the Secretary) to an
individual who is an outpatient of a comprehensive outpatient
rehabilitation facility under a plan (for furnishing such items
and services to such individual) established and periodically
reviewed by a physician--
(A) physicians' services;
(B) physical therapy, occupational therapy, speech-
language pathology services, and respiratory therapy;
(C) prosthetic and orthotic devices, including
testing, fitting, or training in the use of prosthetic
and orthotic devices;
(D) social and psychological services;
(E) nursing care provided by or under the supervision
of a registered professional nurse;
(F) drugs and biologicals which cannot, as determined
in accordance with regulations, be self-administered;
(G) supplies and durable medical equipment; and
(H) such other items and services as are medically
necessary for the rehabilitation of the patient and are
ordinarily furnished by comprehensive outpatient
rehabilitation facilities,
excluding, however, any item or service if it would not be
included under subsection (b) if furnished to an inpatient of a
hospital. In the case of physical therapy, occupational
therapy, and speech pathology services, there shall be no
requirement that the item or service be furnished at any single
fixed location if the item or service is furnished pursuant to
such plan and payments are not otherwise made for the item or
service under this title.
(2) The term ``comprehensive outpatient rehabilitation
facility'' means a facility which--
(A) is primarily engaged in providing (by or under
the supervision of physicians) diagnostic, therapeutic,
and restorative services to outpatients for the
rehabilitation of injured, disabled, or sick persons;
(B) provides at least the following comprehensive
outpatient rehabilitation services: (i) physicians'
services (rendered by physicians, as defined in section
1861(r)(1), who are available at the facility on a
full- or part-time basis); (ii) physical therapy; and
(iii) social or psychological services;
(C) maintains clinical records on all patients;
(D) has policies established by a group of
professional personnel (associated with the facility),
including one or more physicians defined in subsection
(r)(1) to govern the comprehensive outpatient
rehabilitation services it furnishes, and provides for
the carrying out of such policies by a full- or part-
time physician referred to in subparagraph (B)(i);
(E) has a requirement that every patient must be
under the care of a physician;
(F) in the case of a facility in any State in which
State or applicable local law provides for the
licensing of facilities of this nature (i) is licensed
pursuant to such law, or (ii) is approved by the agency
of such State or locality, responsible for licensing
facilities of this nature, as meeting the standards
established for such licensing;
(G) has in effect a utilization review plan in
accordance with regulations prescribed by the
Secretary;
(H) has in effect an overall plan and budget that
meets the requirements of subsection (z);
(I) provides the Secretary on a continuing basis with
a surety bond in a form specified by the Secretary and
in an amount that is not less than $50,000; and
(J) meets such other conditions of participation as
the Secretary may find necessary in the interest of the
health and safety of individuals who are furnished
services by such facility, including conditions
concerning qualifications of personnel in these
facilities.
The Secretary may waive the requirement of a surety bond under
subparagraph (I) in the case of a facility that provides a
comparable surety bond under State law.
Hospice Care; Hospice Program
(dd)(1) The term ``hospice care'' means the following items
and services provided to a terminally ill individual by, or by
others under arrangements made by, a hospice program under a
written plan (for providing such care to such individual)
established and periodically reviewed by the individual's
attending physician and by the medical director (and by the
interdisciplinary group described in paragraph (2)(B)) of the
program--
(A) nursing care provided by or under the supervision
of a registered professional nurse,
(B) physical or occupational therapy, or speech-
language pathology services,
(C) medical social services under the direction of a
physician,
(D)(i) services of a home health aide who has
successfully completed a training program approved by
the Secretary and (ii) homemaker services,
(E) medical supplies (including drugs and
biologicals) and the use of medical appliances, while
under such a plan,
(F) physicians' services,
(G) short-term inpatient care (including both respite
care and procedures necessary for pain control and
acute and chronic symptom management) in an inpatient
facility meeting such conditions as the Secretary
determines to be appropriate to provide such care, but
such respite care may be provided only on an
intermittent, nonroutine, and occasional basis and may
not be provided consecutively over longer than five
days,
(H) counseling (including dietary counseling) with
respect to care of the terminally ill individual and
adjustment to his death, and
(I) any other item or service which is specified in
the plan and for which payment may otherwise be made
under this title.
The care and services described in subparagraphs (A) and (D)
may be provided on a 24-hour, continuous basis only during
periods of crisis (meeting criteria established by the
Secretary) and only as necessary to maintain the terminally ill
individual at home.
(2) The term ``hospice program'' means a public agency or
private organization (or a subdivision thereof) which--
(A)(i) is primarily engaged in providing the care and
services described in paragraph (1) and makes such
services available (as needed) on a 24-hour basis and
which also provides bereavement counseling for the
immediate family of terminally ill individuals and
services described in section 1812(a)(5),
(ii) provides for such care and services in
individuals' homes, on an outpatient basis, and on a
short-term inpatient basis, directly or under
arrangements made by the agency or organization, except
that--
(I) the agency or organization must routinely
provide directly substantially all of each of
the services described in subparagraphs (A),
(C), and (H) of paragraph (1), except as
otherwise provided in paragraph (5), and
(II) in the case of other services described
in paragraph (1) which are not provided
directly by the agency or organization, the
agency or organization must maintain
professional management responsibility for all
such services furnished to an individual,
regardless of the location or facility in which
such services are furnished; and
(iii) provides assurances satisfactory to the
Secretary that the aggregate number of days of
inpatient care described in paragraph (1)(G) provided
in any 12-month period to individuals who have an
election in effect under section 1812(d) with respect
to that agency or organization does not exceed 20
percent of the aggregate number of days during that
period on which such elections for such individuals are
in effect;
(B) has an interdisciplinary group of personnel
which--
(i) includes at least--
(I) one physician (as defined in
subsection (r)(1)),
(II) one registered professional
nurse, and
(III) one social worker,
employed by or, in the case of a physician described in
subclause (I), under contract with the agency or
organization, and also includes at least one pastoral
or other counselor,
(ii) provides (or supervises the provision
of) the care and services described in
paragraph (1), and
(iii) establishes the policies governing the
provision of such care and services;
(C) maintains central clinical records on all
patients;
(D) does not discontinue the hospice care it provides
with respect to a patient because of the inability of
the patient to pay for such care;
(E)(i) utilizes volunteers in its provision of care
and services in accordance with standards set by the
Secretary, which standards shall ensure a continuing
level of effort to utilize such volunteers, and (ii)
maintains records on the use of these volunteers and
the cost savings and expansion of care and services
achieved through the use of these volunteers;
(F) in the case of an agency or organization in any
State in which State or applicable local law provides
for the licensing of agencies or organizations of this
nature, is licensed pursuant to such law; and
(G) meets such other requirements as the Secretary
may find necessary in the interest of the health and
safety of the individuals who are provided care and
services by such agency or organization.
(3)(A) An individual is considered to be ``terminally ill''
if the individual has a medical prognosis that the individual's
life expectancy is 6 months or less.
(B) The term ``attending physician'' means, with respect to
an individual, the physician (as defined in subsection (r)(1)),
the nurse practitioner (as defined in subsection (aa)(5)), or
the physician assistant (as defined in such subsection), who
may be employed by a hospice program, whom the individual
identifies as having the most significant role in the
determination and delivery of medical care to the individual at
the time the individual makes an election to receive hospice
care.
(4)(A) An entity which is certified as a provider of services
other than a hospice program shall be considered, for purposes
of certification as a hospice program, to have met any
requirements under paragraph (2) which are also the same
requirements for certification as such other type of provider.
The Secretary shall coordinate surveys for determining
certification under this title so as to provide, to the extent
feasible, for simultaneous surveys of an entity which seeks to
be certified as a hospice program and as a provider of services
of another type.
(B) Any entity which is certified as a hospice program and as
a provider of another type shall have separate provider
agreements under section 1866 and shall file separate cost
reports with respect to costs incurred in providing hospice
care and in providing other services and items under this
title.
(C) Any entity that is certified as a hospice program shall
be subject to a standard survey by an appropriate State or
local survey agency, or an approved accreditation agency, as
determined by the Secretary, not less frequently than once
every 36 months beginning 6 months after the date of the
enactment of this subparagraph and ending September 30, 2025.
(5)(A) The Secretary may waive the requirements of paragraph
(2)(A)(ii)(I) for an agency or organization with respect to all
or part of the nursing care described in paragraph (1)(A) if
such agency or organization--
(i) is located in an area which is not an urbanized
area (as defined by the Bureau of the Census);
(ii) was in operation on or before January 1, 1983;
and
(iii) has demonstrated a good faith effort (as
determined by the Secretary) to hire a sufficient
number of nurses to provide such nursing care directly.
(B) Any waiver, which is in such form and containing such
information as the Secretary may require and which is requested
by an agency or organization under subparagraph (A) or (C),
shall be deemed to be granted unless such request is denied by
the Secretary within 60 days after the date such request is
received by the Secretary. The granting of a waiver under
subparagraph (A) or (C) shall not preclude the granting of any
subsequent waiver request should such a waiver again become
necessary.
(C) The Secretary may waive the requirements of paragraph
(2)(A)(i) and (2)(A)(ii) for an agency or organization with
respect to the services described in paragraph (1)(B) and, with
respect to dietary counseling, paragraph (1)(H), if such agency
or organization--
(i) is located in an area which is not an urbanized
area (as defined by the Bureau of Census), and
(ii) demonstrates to the satisfaction of the
Secretary that the agency or organization has been
unable, despite diligent efforts, to recruit
appropriate personnel.
(D) In extraordinary, exigent, or other non-routine
circumstances, such as unanticipated periods of high patient
loads, staffing shortages due to illness or other events, or
temporary travel of a patient outside a hospice program's
service area, a hospice program may enter into arrangements
with another hospice program for the provision by that other
program of services described in paragraph (2)(A)(ii)(I). The
provisions of paragraph (2)(A)(ii)(II) shall apply with respect
to the services provided under such arrangements.
(E) A hospice program may provide services described in
paragraph (1)(A) other than directly by the program if the
services are highly specialized services of a registered
professional nurse and are provided non-routinely and so
infrequently so that the provision of such services directly
would be impracticable and prohibitively expensive.
Discharge Planning Process
(ee)(1) A discharge planning process of a hospital shall be
considered sufficient if it is applicable to services furnished
by the hospital to individuals entitled to benefits under this
title and if it meets the guidelines and standards established
by the Secretary under paragraph (2).
(2) The Secretary shall develop guidelines and standards for
the discharge planning process in order to ensure a timely and
smooth transition to the most appropriate type of and setting
for post-hospital or rehabilitative care. The guidelines and
standards shall include the following:
(A) The hospital must identify, at an early stage of
hospitalization, those patients who are likely to
suffer adverse health consequences upon discharge in
the absence of adequate discharge planning.
(B) Hospitals must provide a discharge planning
evaluation for patients identified under subparagraph
(A) and for other patients upon the request of the
patient, patient's representative, or patient's
physician.
(C) Any discharge planning evaluation must be made on
a timely basis to ensure that appropriate arrangements
for post-hospital care will be made before discharge
and to avoid unnecessary delays in discharge.
(D) A discharge planning evaluation must include an
evaluation of a patient's likely need for appropriate
post-hospital services, including hospice care and
post-hospital extended care services, and the
availability of those services, including the
availability of home health services through
individuals and entities that participate in the
program under this title and that serve the area in
which the patient resides and that request to be listed
by the hospital as available and, in the case of
individuals who are likely to need post-hospital
extended care services, the availability of such
services through facilities that participate in the
program under this title and that serve the area in
which the patient resides.
(E) The discharge planning evaluation must be
included in the patient's medical record for use in
establishing an appropriate discharge plan and the
results of the evaluation must be discussed with the
patient (or the patient's representative).
(F) Upon the request of a patient's physician, the
hospital must arrange for the development and initial
implementation of a discharge plan for the patient.
(G) Any discharge planning evaluation or discharge
plan required under this paragraph must be developed
by, or under the supervision of, a registered
professional nurse, social worker, or other
appropriately qualified personnel.
(H) Consistent with section 1802, the discharge plan
shall--
(i) not specify or otherwise limit the
qualified provider which may provide post-
hospital home health services, and
(ii) identify (in a form and manner specified
by the Secretary) any entity to whom the
individual is referred in which the hospital
has a disclosable financial interest (as
specified by the Secretary consistent with
section 1866(a)(1)(S)) or which has such an
interest in the hospital.
(3) With respect to a discharge plan for an individual who is
enrolled with a Medicare+Choice organization under a
Medicare+Choice plan and is furnished inpatient hospital
services by a hospital under a contract with the organization--
(A) the discharge planning evaluation under paragraph
(2)(D) is not required to include information on the
availability of home health services through
individuals and entities which do not have a contract
with the organization; and
(B) notwithstanding subparagraph (H)(i), the plan may
specify or limit the provider (or providers) of post-
hospital home health services or other post-hospital
services under the plan.
Partial Hospitalization Services
(ff)(1) The term ``partial hospitalization services'' means
the items and services described in paragraph (2) prescribed by
a physician and provided under a program described in paragraph
(3) under the supervision of a physician pursuant to an
individualized, written plan of treatment established and
periodically reviewed by a physician (in consultation with
appropriate staff participating in such program), which plan
sets forth the physician's diagnosis, the type, amount,
frequency, and duration of the items and services provided
under the plan, and the goals for treatment under the plan.
(2) The items and services described in this paragraph are--
(A) individual and group therapy with physicians or
psychologists (or other mental health professionals to
the extent authorized under State law),
(B) occupational therapy requiring the skills of a
qualified occupational therapist,
(C) services of social workers, trained psychiatric
nurses, and other staff trained to work with
psychiatric patients,
(D) drugs and biologicals furnished for therapeutic
purposes (which cannot, as determined in accordance
with regulations, be self-administered),
(E) individualized activity therapies that are not
primarily recreational or diversionary,
(F) family counseling (the primary purpose of which
is treatment of the individual's condition),
(G) patient training and education (to the extent
that training and educational activities are closely
and clearly related to individual's care and
treatment),
(H) diagnostic services, and
(I) such other items and services as the Secretary
may provide (but in no event to include meals and
transportation);
that are reasonable and necessary for the diagnosis or active
treatment of the individual's condition, reasonably expected to
improve or maintain the individual's condition and functional
level and to prevent relapse or hospitalization, and furnished
pursuant to such guidelines relating to frequency and duration
of services as the Secretary shall by regulation establish
(taking into account accepted norms of medical practice and the
reasonable expectation of patient improvement).
(3)(A) A program described in this paragraph is a program
which is furnished by a hospital to its outpatients or by a
community mental health center (as defined in subparagraph
(B)), and which is a distinct and organized intensive
ambulatory treatment service offering less than 24-hour-daily
care other than in an individual's home or in an inpatient or
residential setting.
(B) For purposes of subparagraph (A), the term ``community
mental health center'' means an entity that--
(i)(I) provides the mental health services described
in section 1913(c)(1) of the Public Health Service Act;
or
(II) in the case of an entity operating in a State
that by law precludes the entity from providing itself
the service described in subparagraph (E) of such
section, provides for such service by contract with an
approved organization or entity (as determined by the
Secretary);
(ii) meets applicable licensing or certification
requirements for community mental health centers in the
State in which it is located;
(iii) provides at least 40 percent of its services to
individuals who are not eligible for benefits under
this title; and
(iv) meets such additional conditions as the
Secretary shall specify to ensure (I) the health and
safety of individuals being furnished such services,
(II) the effective and efficient furnishing of such
services, and (III) the compliance of such entity with
the criteria described in section 1931(c)(1) of the
Public Health Service Act.
Certified Nurse-Midwife Services
(gg)(1) The term ``certified nurse-midwife services'' means
such services furnished by a certified nurse-midwife (as
defined in paragraph (2)) and such services and supplies
furnished as an incident to the nurse-midwife's service which
the certified nurse-midwife is legally authorized to perform
under State law (or the State regulatory mechanism provided by
State law) as would otherwise be covered if furnished by a
physician or as an incident to a physicians' service.
(2) The term ``certified nurse-midwife'' means a registered
nurse who has successfully completed a program of study and
clinical experience meeting guidelines prescribed by the
Secretary, or has been certified by an organization recognized
by the Secretary.
Clinical Social Worker; Clinical Social Worker Services
(hh)(1) The term ``clinical social worker'' means an
individual who--
(A) possesses a master's or doctor's degree in social
work;
(B) after obtaining such degree has performed at
least 2 years of supervised clinical social work; and
(C)(i) is licensed or certified as a clinical social
worker by the State in which the services are
performed, or
(ii) in the case of an individual in a State which
does not provide for licensure or certification--
(I) has completed at least 2 years or 3,000
hours of post-master's degree supervised
clinical social work practice under the
supervision of a master's level social worker
in an appropriate setting (as determined by the
Secretary), and
(II) meets such other criteria as the
Secretary establishes.
(2) The term ``clinical social worker services'' means
services performed by a clinical social worker (as defined in
paragraph (1)) for the diagnosis and treatment of mental
illnesses (other than services furnished to an inpatient of a
hospital and other than services furnished to an inpatient of a
skilled nursing facility which the facility is required to
provide as a requirement for participation) which the clinical
social worker is legally authorized to perform under State law
(or the State regulatory mechanism provided by State law) of
the State in which such services are performed as would
otherwise be covered if furnished by a physician or as an
incident to a physician's professional service.
Qualified Psychologist Services
(ii) The term ``qualified psychologist services'' means such
services and such services and supplies furnished as an
incident to his service furnished by a clinical psychologist
(as defined by the Secretary) which the psychologist is legally
authorized to perform under State law (or the State regulatory
mechanism provided by State law) as would otherwise be covered
if furnished by a physician or as an incident to a physician's
service.
Screening Mammography
(jj) The term ``screening mammography'' means a radiologic
procedure provided to a woman for the purpose of early
detection of breast cancer and includes a physician's
interpretation of the results of the procedure.
Covered Osteoporosis Drug
(kk) The term ``covered osteoporosis drug'' means an
injectable drug approved for the treatment of post-menopausal
osteoporosis provided to an individual by a home health agency
if, in accordance with regulations promulgated by the
Secretary--
(1) the individual's attending physician certifies
that the individual has suffered a bone fracture
related to post-menopausal osteoporosis and that the
individual is unable to learn the skills needed to
self-administer such drug or is otherwise physically or
mentally incapable of self-administering such drug; and
(2) the individual is confined to the individual's
home (except when receiving items and services referred
to in subsection (m)(7)).
Speech-Language Pathology Services; Audiology Services
(ll)(1) The term ``speech-language pathology services'' means
such speech, language, and related function assessment and
rehabilitation services furnished by a qualified speech-
language pathologist as the speech-language pathologist is
legally authorized to perform under State law (or the State
regulatory mechanism provided by State law) as would otherwise
be covered if furnished by a physician.
(2) The term ``outpatient speech-language pathology
services'' has the meaning given the term ``outpatient physical
therapy services'' in subsection (p), except that in applying
such subsection--
(A) ``speech-language pathology'' shall be
substituted for ``physical therapy'' each place it
appears; and
(B) ``speech-language pathologist'' shall be
substituted for ``physical therapist'' each place it
appears.
(3) The term ``audiology services'' means such hearing and
balance assessment services furnished by a qualified
audiologist as the audiologist is legally authorized to perform
under State law (or the State regulatory mechanism provided by
State law), as would otherwise be covered if furnished by a
physician.
(4) In this subsection:
(A) The term ``qualified speech-language
pathologist'' means an individual with a master's or
doctoral degree in speech-language pathology who--
(i) is licensed as a speech-language
pathologist by the State in which the
individual furnishes such services, or
(ii) in the case of an individual who
furnishes services in a State which does not
license speech-language pathologists, has
successfully completed 350 clock hours of
supervised clinical practicum (or is in the
process of accumulating such supervised
clinical experience), performed not less than 9
months of supervised full-time speech-language
pathology services after obtaining a master's
or doctoral degree in speech-language pathology
or a related field, and successfully completed
a national examination in speech-language
pathology approved by the Secretary.
(B) The term ``qualified audiologist'' means an
individual with a master's or doctoral degree in
audiology who--
(i) is licensed as an audiologist by the
State in which the individual furnishes such
services, or
(ii) in the case of an individual who
furnishes services in a State which does not
license audiologists, has successfully
completed 350 clock hours of supervised
clinical practicum (or is in the process of
accumulating such supervised clinical
experience), performed not less than 9 months
of supervised full-time audiology services
after obtaining a master's or doctoral degree
in audiology or a related field, and
successfully completed a national examination
in audiology approved by the Secretary.
Critical Access Hospital; Critical Access Hospital Services
(mm)(1) The term ``critical access hospital'' means a
facility certified by the Secretary as a critical access
hospital under section 1820(e).
(2) The term ``inpatient critical access hospital services''
means items and services, furnished to an inpatient of a
critical access hospital by such facility, that would be
inpatient hospital services if furnished to an inpatient of a
hospital by a hospital.
(3) The term ``outpatient critical access hospital services''
means medical and other health services furnished by a critical
access hospital on an outpatient basis.
Screening Pap Smear; Screening Pelvic Exam
(nn)(1) The term ``screening pap smear'' means a diagnostic
laboratory test consisting of a routine exfoliative cytology
test (Papanicolaou test) provided to a woman for the purpose of
early detection of cervical or vaginal cancer and includes a
physician's interpretation of the results of the test, if the
individual involved has not had such a test during the
preceding 2 years, or during the preceding year in the case of
a woman described in paragraph (3).
(2) The term ``screening pelvic exam'' means a pelvic
examination provided to a woman if the woman involved has not
had such an examination during the preceding 2 years, or during
the preceding year in the case of a woman described in
paragraph (3), and includes a clinical breast examination.
(3) A woman described in this paragraph is a woman who--
(A) is of childbearing age and has had a test
described in this subsection during any of the
preceding 3 years that indicated the presence of
cervical or vaginal cancer or other abnormality; or
(B) is at high risk of developing cervical or vaginal
cancer (as determined pursuant to factors identified by
the Secretary).
Prostate Cancer Screening Tests
(oo)(1) The term ``prostate cancer screening test'' means a
test that consists of any (or all) of the procedures described
in paragraph (2) provided for the purpose of early detection of
prostate cancer to a man over 50 years of age who has not had
such a test during the preceding year.
(2) The procedures described in this paragraph are as
follows:
(A) A digital rectal examination.
(B) A prostate-specific antigen blood test.
(C) For years beginning after 2002, such other
procedures as the Secretary finds appropriate for the
purpose of early detection of prostate cancer, taking
into account changes in technology and standards of
medical practice, availability, effectiveness, costs,
and such other factors as the Secretary considers
appropriate.
Colorectal Cancer Screening Tests
(pp)(1) The term ``colorectal cancer screening test'' means
any of the following procedures furnished to an individual for
the purpose of early detection of colorectal cancer:
(A) Screening fecal-occult blood test.
(B) Screening flexible sigmoidoscopy.
(C) Screening colonoscopy.
(D) Such other tests or procedures, and modifications
to tests and procedures under this subsection, with
such frequency and payment limits, as the Secretary
determines appropriate, in consultation with
appropriate organizations.
(2) An ``individual at high risk for colorectal cancer'' is
an individual who, because of family history, prior experience
of cancer or precursor neoplastic polyps, a history of chronic
digestive disease condition (including inflammatory bowel
disease, Crohn's Disease, or ulcerative colitis), the presence
of any appropriate recognized gene markers for colorectal
cancer, or other predisposing factors, faces a high risk for
colorectal cancer.
Diabetes Outpatient Self-Management Training Services
(qq)(1) The term ``diabetes outpatient self-management
training services'' means educational and training services
furnished (at such times as the Secretary determines
appropriate) to an individual with diabetes by a certified
provider (as described in paragraph (2)(A)) in an outpatient
setting by an individual or entity who meets the quality
standards described in paragraph (2)(B), but only if the
physician who is managing the individual's diabetic condition
certifies that such services are needed under a comprehensive
plan of care related to the individual's diabetic condition to
ensure therapy compliance or to provide the individual with
necessary skills and knowledge (including skills related to the
self-administration of injectable drugs) to participate in the
management of the individual's condition.
(2) In paragraph (1)--
(A) a ``certified provider'' is a physician, or other
individual or entity designated by the Secretary, that,
in addition to providing diabetes outpatient self-
management training services, provides other items or
services for which payment may be made under this
title; and
(B) a physician, or such other individual or entity,
meets the quality standards described in this paragraph
if the physician, or individual or entity, meets
quality standards established by the Secretary, except
that the physician or other individual or entity shall
be deemed to have met such standards if the physician
or other individual or entity meets applicable
standards originally established by the National
Diabetes Advisory Board and subsequently revised by
organizations who participated in the establishment of
standards by such Board, or is recognized by an
organization that represents individuals (including
individuals under this title) with diabetes as meeting
standards for furnishing the services.
Bone Mass Measurement
(rr)(1) The term ``bone mass measurement'' means a radiologic
or radioisotopic procedure or other procedure approved by the
Food and Drug Administration performed on a qualified
individual (as defined in paragraph (2)) for the purpose of
identifying bone mass or detecting bone loss or determining
bone quality, and includes a physician's interpretation of the
results of the procedure.
(2) For purposes of this subsection, the term ``qualified
individual'' means an individual who is (in accordance with
regulations prescribed by the Secretary)--
(A) an estrogen-deficient woman at clinical risk for
osteoporosis;
(B) an individual with vertebral abnormalities;
(C) an individual receiving long-term glucocorticoid
steroid therapy;
(D) an individual with primary hyperparathyroidism;
or
(E) an individual being monitored to assess the
response to or efficacy of an approved osteoporosis
drug therapy.
(3) The Secretary shall establish such standards regarding
the frequency with which a qualified individual shall be
eligible to be provided benefits for bone mass measurement
under this title.
Religious Nonmedical Health Care Institution
(ss)(1) The term ``religious nonmedical health care
institution'' means an institution that--
(A) is described in subsection (c)(3) of
section 501 of the Internal Revenue Code of
1986 and is exempt from taxes under subsection
(a) of such section;
(B) is lawfully operated under all applicable
Federal, State, and local laws and regulations;
(C) provides only nonmedical nursing items
and services exclusively to patients who choose
to rely solely upon a religious method of
healing and for whom the acceptance of medical
health services would be inconsistent with
their religious beliefs;
(D) provides such nonmedical items and
services exclusively through nonmedical nursing
personnel who are experienced in caring for the
physical needs of such patients;
(E) provides such nonmedical items and
services to inpatients on a 24-hour basis;
(F) on the basis of its religious beliefs,
does not provide through its personnel or
otherwise medical items and services (including
any medical screening, examination, diagnosis,
prognosis, treatment, or the administration of
drugs) for its patients;
(G)(i) is not owned by, under common
ownership with, or has an ownership interest
in, a provider of medical treatment or
services;
(ii) is not affiliated with--
(I) a provider of medical treatment
or services, or
(II) an individual who has an
ownership interest in a provider of
medical treatment or services;
(H) has in effect a utilization review plan
which--
(i) provides for the review of
admissions to the institution, of the
duration of stays therein, of cases of
continuous extended duration, and of
the items and services furnished by the
institution,
(ii) requires that such reviews be
made by an appropriate committee of the
institution that includes the
individuals responsible for overall
administration and for supervision of
nursing personnel at the institution,
(iii) provides that records be
maintained of the meetings, decisions,
and actions of such committee, and
(iv) meets such other requirements as
the Secretary finds necessary to
establish an effective utilization
review plan;
(I) provides the Secretary with such
information as the Secretary may require to
implement section 1821, including information
relating to quality of care and coverage
determinations; and
(J) meets such other requirements as the
Secretary finds necessary in the interest of
the health and safety of individuals who are
furnished services in the institution.
(2) To the extent that the Secretary finds that the
accreditation of an institution by a State, regional, or
national agency or association provides reasonable assurances
that any or all of the requirements of paragraph (1) are met or
exceeded, the Secretary may treat such institution as meeting
the condition or conditions with respect to which the Secretary
made such finding.
(3)(A)(i) In administering this subsection and section 1821,
the Secretary shall not require any patient of a religious
nonmedical health care institution to undergo medical
screening, examination, diagnosis, prognosis, or treatment or
to accept any other medical health care service, if such
patient (or legal representative of the patient) objects
thereto on religious grounds.
(ii) Clause (i) shall not be construed as preventing the
Secretary from requiring under section 1821(a)(2) the provision
of sufficient information regarding an individual's condition
as a condition for receipt of benefits under part A for
services provided in such an institution.
(B)(i) In administering this subsection and section 1821, the
Secretary shall not subject a religious nonmedical health care
institution or its personnel to any medical supervision,
regulation, or control, insofar as such supervision,
regulation, or control would be contrary to the religious
beliefs observed by the institution or such personnel.
(ii) Clause (i) shall not be construed as preventing the
Secretary from reviewing items and services billed by the
institution to the extent the Secretary determines such review
to be necessary to determine whether such items and services
were not covered under part A, are excessive, or are
fraudulent.
(4)(A) For purposes of paragraph (1)(G)(i), an ownership
interest of less than 5 percent shall not be taken into
account.
(B) For purposes of paragraph (1)(G)(ii), none of the
following shall be considered to create an affiliation:
(i) An individual serving as an uncompensated
director, trustee, officer, or other member of the
governing body of a religious nonmedical health care
institution.
(ii) An individual who is a director, trustee,
officer, employee, or staff member of a religious
nonmedical health care institution having a family
relationship with an individual who is affiliated with
(or has an ownership interest in) a provider of medical
treatment or services.
(iii) An individual or entity furnishing goods or
services as a vendor to both providers of medical
treatment or services and religious nonmedical health
care institutions.
Post-Institutional Home Health Services; Home Health Spell of Illness
(tt)(1) The term ``post-institutional home health services''
means home health services furnished to an individual--
(A) after discharge from a hospital or critical
access hospital in which the individual was an
inpatient for not less than 3 consecutive days before
such discharge if such home health services were
initiated within 14 days after the date of such
discharge; or
(B) after discharge from a skilled nursing facility
in which the individual was provided post-hospital
extended care services if such home health services
were initiated within 14 days after the date of such
discharge.
(2) The term ``home health spell of illness'' with respect to
any individual means a period of consecutive days--
(A) beginning with the first day (not included in a
previous home health spell of illness) (i) on which
such individual is furnished post-institutional home
health services, and (ii) which occurs in a month for
which the individual is entitled to benefits under part
A, and
(B) ending with the close of the first period of 60
consecutive days thereafter on each of which the
individual is neither an inpatient of a hospital or
critical access hospital nor an inpatient of a facility
described in section 1819(a)(1) or subsection (y)(1)
nor provided home health services.
Screening for Glaucoma
(uu) The term ``screening for glaucoma'' means a dilated eye
examination with an intraocular pressure measurement, and a
direct ophthalmoscopy or a slit-lamp biomicroscopic examination
for the early detection of glaucoma which is furnished by or
under the direct supervision of an optometrist or
ophthalmologist who is legally authorized to furnish such
services under State law (or the State regulatory mechanism
provided by State law) of the State in which the services are
furnished, as would otherwise be covered if furnished by a
physician or as an incident to a physician's professional
service, if the individual involved has not had such an
examination in the preceding year.
Medical Nutrition Therapy Services; Registered Dietitian or Nutrition
Professional
(vv)(1) The term ``medical nutrition therapy services'' means
nutritional diagnostic, therapy, and counseling services for
the purpose of disease management which are furnished by a
registered dietitian or nutrition professional (as defined in
paragraph (2)) pursuant to a referral by a physician (as
defined in subsection (r)(1)).
(2) Subject to paragraph (3), the term ``registered dietitian
or nutrition professional'' means an individual who--
(A) holds a baccalaureate or higher degree granted by
a regionally accredited college or university in the
United States (or an equivalent foreign degree) with
completion of the academic requirements of a program in
nutrition or dietetics, as accredited by an appropriate
national accreditation organization recognized by the
Secretary for this purpose;
(B) has completed at least 900 hours of supervised
dietetics practice under the supervision of a
registered dietitian or nutrition professional; and
(C)(i) is licensed or certified as a dietitian or
nutrition professional by the State in which the
services are performed; or
(ii) in the case of an individual in a State that
does not provide for such licensure or certification,
meets such other criteria as the Secretary establishes.
(3) Subparagraphs (A) and (B) of paragraph (2) shall not
apply in the case of an individual who, as of the date of the
enactment of this subsection, is licensed or certified as a
dietitian or nutrition professional by the State in which
medical nutrition therapy services are performed.
Initial Preventive Physical Examination
(ww)(1) The term ``initial preventive physical examination''
means physicians' services consisting of a physical examination
(including measurement of height, weight body mass index,, and
blood pressure) with the goal of health promotion and disease
detection and includes education, counseling, and referral with
respect to screening and other preventive services described in
paragraph (2), end-of-life planning (as defined in paragraph
(3)) upon the agreement with the individual, and the furnishing
of a review of any current opioid prescriptions (as defined in
paragraph (4)), but does not include clinical laboratory tests.
(2) The screening and other preventive services described in
this paragraph include the following:
(A) Pneumococcal, influenza, and hepatitis B vaccine
and administration under subsection (s)(10).
(B) Screening mammography as defined in subsection
(jj).
(C) Screening pap smear and screening pelvic exam as
defined in subsection (nn).
(D) Prostate cancer screening tests as defined in
subsection (oo).
(E) Colorectal cancer screening tests as defined in
subsection (pp).
(F) Diabetes outpatient self-management training
services as defined in subsection (qq)(1).
(G) Bone mass measurement as defined in subsection
(rr).
(H) Screening for glaucoma as defined in subsection
(uu).
(I) Medical nutrition therapy services as defined in
subsection (vv).
(J) Cardiovascular screening blood tests as defined
in subsection (xx)(1).
(K) Diabetes screening tests as defined in subsection
(yy).
(L) Ultrasound screening for abdominal aortic
aneurysm as defined in section 1861(bbb).
(M) An electrocardiogram.
(N) Screening for potential substance use disorders.
(O) Additional preventive services (as defined in
subsection (ddd)(1)).
(3) For purposes of paragraph (1), the term ``end-of-life
planning'' means verbal or written information regarding--
(A) an individual's ability to prepare an advance
directive in the case that an injury or illness causes
the individual to be unable to make health care
decisions; and
(B) whether or not the physician is willing to follow
the individual's wishes as expressed in an advance
directive.
(4) For purposes of paragraph (1), the term ``a review of any
current opioid prescriptions'' means, with respect to an
individual determined to have a current prescription for
opioids--
(A) a review of the potential risk factors to the
individual for opioid use disorder;
(B) an evaluation of the individual's severity of
pain and current treatment plan;
(C) the provision of information on non-opioid
treatment options; and
(D) a referral to a specialist, as appropriate.
Cardiovascular Screening Blood Test
(xx)(1) The term ``cardiovascular screening blood test''
means a blood test for the early detection of cardiovascular
disease (or abnormalities associated with an elevated risk of
cardiovascular disease) that tests for the following:
(A) Cholesterol levels and other lipid or
triglyceride levels.
(B) Such other indications associated with the
presence of, or an elevated risk for, cardiovascular
disease as the Secretary may approve for all
individuals (or for some individuals determined by the
Secretary to be at risk for cardiovascular disease),
including indications measured by noninvasive testing.
The Secretary may not approve an indication under subparagraph
(B) for any individual unless a blood test for such is
recommended by the United States Preventive Services Task
Force.
(2) The Secretary shall establish standards, in consultation
with appropriate organizations, regarding the frequency for
each type of cardiovascular screening blood tests, except that
such frequency may not be more often than once every 2 years.
Diabetes Screening Tests
(yy)(1) The term ``diabetes screening tests'' means testing
furnished to an individual at risk for diabetes (as defined in
paragraph (2)) for the purpose of early detection of diabetes,
including--
(A) a fasting plasma glucose test; and
(B) such other tests, and modifications to tests, as
the Secretary determines appropriate, in consultation
with appropriate organizations.
(2) For purposes of paragraph (1), the term ``individual at
risk for diabetes'' means an individual who has any of the
following risk factors for diabetes:
(A) Hypertension.
(B) Dyslipidemia.
(C) Obesity, defined as a body mass index greater
than or equal to 30 kg/m2.
(D) Previous identification of an elevated impaired
fasting glucose.
(E) Previous identification of impaired glucose
tolerance.
(F) A risk factor consisting of at least 2 of the
following characteristics:
(i) Overweight, defined as a body mass index
greater than 25, but less than 30, kg/
m2.
(ii) A family history of diabetes.
(iii) A history of gestational diabetes
mellitus or delivery of a baby weighing greater
than 9 pounds.
(iv) 65 years of age or older.
(3) The Secretary shall establish standards, in consultation
with appropriate organizations, regarding the frequency of
diabetes screening tests, except that such frequency may not be
more often than twice within the 12-month period following the
date of the most recent diabetes screening test of that
individual.
Intravenous Immune Globulin
(zz) The term ``intravenous immune globulin'' means an
approved pooled plasma derivative for the treatment in the
patient's home of a patient with a diagnosed primary immune
deficiency disease, but not including items or services related
to the administration of the derivative, if a physician
determines administration of the derivative in the patient's
home is medically appropriate.
Extended Care in Religious Nonmedical Health Care Institutions
(aaa)(1) The term ``home health agency'' also includes a
religious nonmedical health care institution (as defined in
subsection (ss)(1)), but only with respect to items and
services ordinarily furnished by such an institution to
individuals in their homes, and that are comparable to items
and services furnished to individuals by a home health agency
that is not religious nonmedical health care institution.
(2)(A) Subject to subparagraphs (B), payment may be made with
respect to services provided by such an institution only to
such extent and under such conditions, limitations, and
requirements (in addition to or in lieu of the conditions,
limitations, and requirements otherwise applicable) as may be
provided in regulations consistent with section 1821.
(B) Notwithstanding any other provision of this title,
payment may not be made under subparagraph (A)--
(i) in a year insofar as such payments exceed
$700,000; and
(ii) after December 31, 2006.
Ultrasound Screening for Abdominal Aortic Aneurysm
(bbb) The term ``ultrasound screening for abdominal aortic
aneurysm'' means--
(1) a procedure using sound waves (or such other
procedures using alternative technologies, of
commensurate accuracy and cost, that the Secretary may
specify) provided for the early detection of abdominal
aortic aneurysm; and
(2) includes a physician's interpretation of the
results of the procedure.
Long-Term Care Hospital
(ccc) The term ``long-term care hospital'' means a hospital
which--
(1) is primarily engaged in providing inpatient
services, by or under the supervision of a physician,
to Medicare beneficiaries whose medically complex
conditions require a long hospital stay and programs of
care provided by a long-term care hospital;
(2) has an average inpatient length of stay (as
determined by the Secretary) of greater than 25 days,
or meets the requirements of clause (II) of section
1886(d)(1)(B)(iv);
(3) satisfies the requirements of subsection (e); and
(4) meets the following facility criteria:
(A) the institution has a patient review
process, documented in the patient medical
record, that screens patients prior to
admission for appropriateness of admission to a
long-term care hospital, validates within 48
hours of admission that patients meet admission
criteria for long-term care hospitals,
regularly evaluates patients throughout their
stay for continuation of care in a long-term
care hospital, and assesses the available
discharge options when patients no longer meet
such continued stay criteria;
(B) the institution has active physician
involvement with patients during their
treatment through an organized medical staff,
physician-directed treatment with physician on-
site availability on a daily basis to review
patient progress, and consulting physicians on
call and capable of being at the patient's side
within a moderate period of time, as determined
by the Secretary; and
(C) the institution has interdisciplinary
team treatment for patients, requiring
interdisciplinary teams of health care
professionals, including physicians, to prepare
and carry out an individualized treatment plan
for each patient.
Additional Preventive Services; Preventive Services
(ddd)(1) The term ``additional preventive services'' means
services not described in subparagraph (A) or (C) of paragraph
(3) that identify medical conditions or risk factors and that
the Secretary determines are--
(A) reasonable and necessary for the prevention or
early detection of an illness or disability;
(B) recommended with a grade of A or B by the United
States Preventive Services Task Force; and
(C) appropriate for individuals entitled to benefits
under part A or enrolled under part B.
(2) In making determinations under paragraph (1) regarding
the coverage of a new service, the Secretary shall use the
process for making national coverage determinations (as defined
in section 1869(f)(1)(B)) under this title. As part of the use
of such process, the Secretary may conduct an assessment of the
relation between predicted outcomes and the expenditures for
such service and may take into account the results of such
assessment in making such determination.
(3) The term ``preventive services'' means the following:
(A) The screening and preventive services described
in subsection (ww)(2) (other than the service described
in subparagraph (M) of such subsection).
(B) An initial preventive physical examination (as
defined in subsection (ww)).
(C) Personalized prevention plan services (as defined
in subsection (hhh)(1)).
Cardiac Rehabilitation Program; Intensive Cardiac Rehabilitation
Program
(eee)(1) The term ``cardiac rehabilitation program'' means a
program (as described in paragraph (2)) that furnishes the
items and services described in paragraph (3) under the
supervision of a physician (as defined in subsection (r)(1)) or
a physician assistant, nurse practitioner, or clinical nurse
specialist (as those terms are defined in subsection (aa)(5)).
(2) A program described in this paragraph is a program under
which--
(A) items and services under the program are
delivered--
(i) in a physician's office;
(ii) in a hospital on an outpatient basis; or
(iii) in other settings determined
appropriate by the Secretary;
(B) a physician (as defined in subsection (r)(1)) or
a physician assistant, nurse practitioner, or clinical
nurse specialist (as those terms are defined in
subsection (aa)(5)) is immediately available and
accessible for medical consultation and medical
emergencies at all times items and services are being
furnished under the program, except that, in the case
of items and services furnished under such a program in
a hospital, such availability shall be presumed; and
(C) individualized treatment is furnished under a
written plan established, reviewed, and signed by a
physician every 30 days that describes--
(i) the individual's diagnosis;
(ii) the type, amount, frequency, and
duration of the items and services furnished
under the plan; and
(iii) the goals set for the individual under
the plan.
(3) The items and services described in this paragraph are--
(A) physician-prescribed exercise;
(B) cardiac risk factor modification, including
education, counseling, and behavioral intervention (to
the extent such education, counseling, and behavioral
intervention is closely related to the individual's
care and treatment and is tailored to the individual's
needs);
(C) psychosocial assessment;
(D) outcomes assessment; and
(E) such other items and services as the Secretary
may determine, but only if such items and services
are--
(i) reasonable and necessary for the
diagnosis or active treatment of the
individual's condition;
(ii) reasonably expected to improve or
maintain the individual's condition and
functional level; and
(iii) furnished under such guidelines
relating to the frequency and duration of such
items and services as the Secretary shall
establish, taking into account accepted norms
of medical practice and the reasonable
expectation of improvement of the individual.
(4)(A) The term ``intensive cardiac rehabilitation program''
means a program (as described in paragraph (2)) that furnishes
the items and services described in paragraph (3) under the
supervision of a physician (as defined in subsection (r)(1)) or
a physician assistant, nurse practitioner, or clinical nurse
specialist (as those terms are defined in subsection (aa)(5))
and has shown, in peer-reviewed published research, that it
accomplished--
(i) one or more of the following:
(I) positively affected the progression of
coronary heart disease; or
(II) reduced the need for coronary bypass
surgery; or
(III) reduced the need for percutaneous
coronary interventions; and
(ii) a statistically significant reduction in 5 or
more of the following measures from their level before
receipt of cardiac rehabilitation services to their
level after receipt of such services:
(I) low density lipoprotein;
(II) triglycerides;
(III) body mass index;
(IV) systolic blood pressure;
(V) diastolic blood pressure; or
(VI) the need for cholesterol, blood
pressure, and diabetes medications.
(B) To be eligible for an intensive cardiac rehabilitation
program, an individual must have--
(i) had an acute myocardial infarction within the
preceding 12 months;
(ii) had coronary bypass surgery;
(iii) stable angina pectoris;
(iv) had heart valve repair or replacement;
(v) had percutaneous transluminal coronary
angioplasty (PTCA) or coronary stenting;
(vi) had a heart or heart-lung transplant;
(vii) stable, chronic heart failure (defined
as patients with left ventricular ejection
fraction of 35 percent or less and New York
Heart Association (NYHA) class II to IV
symptoms despite being on optimal heart failure
therapy for at least 6 weeks); or
(viii) any additional condition for which the
Secretary has determined that a cardiac
rehabilitation program shall be covered, unless
the Secretary determines, using the same
process used to determine that the condition is
covered for a cardiac rehabilitation program,
that such coverage is not supported by the
clinical evidence.
(C) An intensive cardiac rehabilitation program may be
provided in a series of 72 one-hour sessions (as defined in
section 1848(b)(5)), up to 6 sessions per day, over a period of
up to 18 weeks.
(5) The Secretary shall establish standards to ensure that a
physician with expertise in the management of individuals with
cardiac pathophysiology who is licensed to practice medicine in
the State in which a cardiac rehabilitation program (or the
intensive cardiac rehabilitation program, as the case may be)
is offered--
(A) is responsible for such program; and
(B) in consultation with appropriate staff, is
involved substantially in directing the progress of
individual in the program.
Pulmonary Rehabilitation Program
(fff)(1) The term ``pulmonary rehabilitation program'' means
a program (as described in subsection (eee)(2) with respect to
a program under this subsection) that furnishes the items and
services described in paragraph (2) under the supervision of a
physician (as defined in subsection (r)(1)) or a physician
assistant, nurse practitioner, or clinical nurse specialist (as
those terms are defined in subsection (aa)(5)).
(2) The items and services described in this paragraph are--
(A) physician-prescribed exercise;
(B) education or training (to the extent the
education or training is closely and clearly related to
the individual's care and treatment and is tailored to
such individual's needs);
(C) psychosocial assessment;
(D) outcomes assessment; and
(E) such other items and services as the Secretary
may determine, but only if such items and services
are--
(i) reasonable and necessary for the
diagnosis or active treatment of the
individual's condition;
(ii) reasonably expected to improve or
maintain the individual's condition and
functional level; and
(iii) furnished under such guidelines
relating to the frequency and duration of such
items and services as the Secretary shall
establish, taking into account accepted norms
of medical practice and the reasonable
expectation of improvement of the individual.
(3) The Secretary shall establish standards to ensure that a
physician with expertise in the management of individuals with
respiratory pathophysiology who is licensed to practice
medicine in the State in which a pulmonary rehabilitation
program is offered--
(A) is responsible for such program; and
(B) in consultation with appropriate staff, is
involved substantially in directing the progress of
individual in the program.
Kidney Disease Education Services
(ggg)(1) The term ``kidney disease education services'' means
educational services that are--
(A) furnished to an individual with stage IV chronic
kidney disease who, according to accepted clinical
guidelines identified by the Secretary, will require
dialysis or a kidney transplant;
(B) furnished, upon the referral of the physician
managing the individual's kidney condition, by a
qualified person (as defined in paragraph (2)); and
(C) designed--
(i) to provide comprehensive information
(consistent with the standards set under
paragraph (3)) regarding--
(I) the management of comorbidities,
including for purposes of delaying the
need for dialysis;
(II) the prevention of uremic
complications; and
(III) each option for renal
replacement therapy (including
hemodialysis and peritoneal dialysis at
home and in-center as well as vascular
access options and transplantation);
(ii) to ensure that the individual has the
opportunity to actively participate in the
choice of therapy; and
(iii) to be tailored to meet the needs of the
individual involved.
(2)(A) The term ``qualified person'' means--
(i) a physician (as defined in section 1861(r)(1)) or
a physician assistant, nurse practitioner, or clinical
nurse specialist (as defined in section 1861(aa)(5)),
who furnishes services for which payment may be made
under the fee schedule established under section 1848;
and
(ii) a provider of services located in a rural area
(as defined in section 1886(d)(2)(D)).
(B) Such term does not include a provider of services (other
than a provider of services described in subparagraph (A)(ii))
or a renal dialysis facility.
(3) The Secretary shall set standards for the content of such
information to be provided under paragraph (1)(C)(i) after
consulting with physicians, other health professionals, health
educators, professional organizations, accrediting
organizations, kidney patient organizations, dialysis
facilities, transplant centers, network organizations described
in section 1881(c)(2), and other knowledgeable persons. To the
extent possible the Secretary shall consult with persons or
entities described in the previous sentence, other than a
dialysis facility, that has not received industry funding from
a drug or biological manufacturer or dialysis facility.
(4) No individual shall be furnished more than 6 sessions of
kidney disease education services under this title.
Annual Wellness Visit
(hhh)(1) The term ``personalized prevention plan services''
means the creation of a plan for an individual--
(A) that includes a health risk assessment (that
meets the guidelines established by the Secretary under
paragraph (4)(A)) of the individual that is completed
prior to or as part of the same visit with a health
professional described in paragraph (3); and
(B) that--
(i) takes into account the results of the
health risk assessment; and
(ii) may contain the elements described in
paragraph (2).
(2) Subject to paragraph (4)(H), the elements described in
this paragraph are the following:
(A) The establishment of, or an update to, the
individual's medical and family history.
(B) A list of current providers and suppliers that
are regularly involved in providing medical care to the
individual (including a list of all prescribed
medications).
(C) A measurement of height, weight, body mass index
(or waist circumference, if appropriate), blood
pressure, and other routine measurements.
(D) Detection of any cognitive impairment.
(E) The establishment of, or an update to, the
following:
(i) A screening schedule for the next 5 to 10
years, as appropriate, based on recommendations
of the United States Preventive Services Task
Force and the Advisory Committee on
Immunization Practices, and the individual's
health status, screening history, and age-
appropriate preventive services covered under
this title.
(ii) A list of risk factors and conditions
for which primary, secondary, or tertiary
prevention interventions are recommended or are
underway, including any mental health
conditions or any such risk factors or
conditions that have been identified through an
initial preventive physical examination (as
described under subsection (ww)(1)), and a list
of treatment options and their associated risks
and benefits.
(F) The furnishing of personalized health advice and
a referral, as appropriate, to health education or
preventive counseling services or programs aimed at
reducing identified risk factors and improving self-
management, or community-based lifestyle interventions
to reduce health risks and promote self-management and
wellness, including weight loss, physical activity,
smoking cessation, fall prevention, and nutrition.
(G) Screening for potential substance use disorders
and referral for treatment as appropriate.
(H) The furnishing of a review of any current opioid
prescriptions (as defined in subsection (ww)(4)).
(I) Any other element determined appropriate by the
Secretary.
(3) A health professional described in this paragraph is--
(A) a physician;
(B) a practitioner described in clause (i) of section
1842(b)(18)(C); or
(C) a medical professional (including a health
educator, registered dietitian, or nutrition
professional) or a team of medical professionals, as
determined appropriate by the Secretary, under the
supervision of a physician.
(4)(A) For purposes of paragraph (1)(A), the Secretary, not
later than 1 year after the date of enactment of this
subsection, shall establish publicly available guidelines for
health risk assessments. Such guidelines shall be developed in
consultation with relevant groups and entities and shall
provide that a health risk assessment--
(i) identify chronic diseases, injury risks,
modifiable risk factors, and urgent health needs of the
individual; and
(ii) may be furnished--
(I) through an interactive telephonic or web-
based program that meets the standards
established under subparagraph (B);
(II) during an encounter with a health care
professional;
(III) through community-based prevention
programs; or
(IV) through any other means the Secretary
determines appropriate to maximize
accessibility and ease of use by beneficiaries,
while ensuring the privacy of such
beneficiaries.
(B) Not later than 1 year after the date of enactment of this
subsection, the Secretary shall establish standards for
interactive telephonic or web-based programs used to furnish
health risk assessments under subparagraph (A)(ii)(I). The
Secretary may utilize any health risk assessment developed
under section 4004(f) of the Patient Protection and Affordable
Care Act as part of the requirement to develop a personalized
prevention plan to comply with this subparagraph.
(C)(i) Not later than 18 months after the date of enactment
of this subsection, the Secretary shall develop and make
available to the public a health risk assessment model. Such
model shall meet the guidelines under subparagraph (A) and may
be used to meet the requirement under paragraph (1)(A).
(ii) Any health risk assessment that meets the guidelines
under subparagraph (A) and is approved by the Secretary may be
used to meet the requirement under paragraph (1)(A).
(D) The Secretary may coordinate with community-based
entities (including State Health Insurance Programs, Area
Agencies on Aging, Aging and Disability Resource Centers, and
the Administration on Aging) to--
(i) ensure that health risk assessments are
accessible to beneficiaries; and
(ii) provide appropriate support for the completion
of health risk assessments by beneficiaries.
(E) The Secretary shall establish procedures to make
beneficiaries and providers aware of the requirement that a
beneficiary complete a health risk assessment prior to or at
the same time as receiving personalized prevention plan
services.
(F) To the extent practicable, the Secretary shall encourage
the use of, integration with, and coordination of health
information technology (including use of technology that is
compatible with electronic medical records and personal health
records) and may experiment with the use of personalized
technology to aid in the development of self-management skills
and management of and adherence to provider recommendations in
order to improve the health status of beneficiaries.
(G) A beneficiary shall be eligible to receive only an
initial preventive physical examination (as defined under
subsection (ww)(1)) during the 12-month period after the date
that the beneficiary's coverage begins under part B and shall
be eligible to receive personalized prevention plan services
under this subsection each year thereafter provided that the
beneficiary has not received either an initial preventive
physical examination or personalized prevention plan services
within the preceding 12-month period.
(H) The Secretary shall issue guidance that--
(i) identifies elements under paragraph (2) that are
required to be provided to a beneficiary as part of
their first visit for personalized prevention plan
services; and
(ii) establishes a yearly schedule for appropriate
provision of such elements thereafter.
(iii) Home Infusion Therapy.--(1) The term ``home infusion
therapy'' means the items and services described in paragraph
(2) furnished by a qualified home infusion therapy supplier (as
defined in paragraph (3)(D)) which are furnished in the
individual's home (as defined in paragraph (3)(B)) to an
individual--
(A) who is under the care of an applicable provider
(as defined in paragraph (3)(A)); and
(B) with respect to whom a plan prescribing the type,
amount, and duration of infusion therapy services that
are to be furnished such individual has been
established by a physician (as defined in subsection
(r)(1)) and is periodically reviewed by a physician (as
so defined) in coordination with the furnishing of home
infusion drugs (as defined in paragraph (3)(C)) under
part B.
(2) The items and services described in this paragraph are
the following:
(A) Professional services, including nursing
services, furnished in accordance with the plan.
(B) Training and education (not otherwise paid for as
durable medical equipment (as defined in subsection
(n)), remote monitoring, and monitoring services for
the provision of home infusion therapy and home
infusion drugs furnished by a qualified home infusion
therapy supplier.
(3) For purposes of this subsection:
(A) The term ``applicable provider'' means--
(i) a physician;
(ii) a nurse practitioner; and
(iii) a physician assistant.
(B) The term ``home'' means a place of residence used
as the home of an individual (as defined for purposes
of subsection (n)).
(C) The term ``home infusion drug'' means a
parenteral drug or biological administered
intravenously, or subcutaneously for an administration
period of 15 minutes or more, in the home of an
individual through a pump that is an item of durable
medical equipment (as defined in subsection (n)). Such
term does not include the following:
(i) Insulin pump systems.
(ii) A self-administered drug or biological
on a self-administered drug exclusion list.
(D)(i) The term ``qualified home infusion therapy
supplier'' means a pharmacy, physician, or other
provider of services or supplier licensed by the State
in which the pharmacy, physician, or provider or
services or supplier furnishes items or services and
that--
(I) furnishes infusion therapy to individuals
with acute or chronic conditions requiring
administration of home infusion drugs;
(II) ensures the safe and effective provision
and administration of home infusion therapy on
a 7-day-a-week, 24-hour-a-day basis;
(III) is accredited by an organization
designated by the Secretary pursuant to section
1834(u)(5); and
(IV) meets such other requirements as the
Secretary determines appropriate, taking into
account the standards of care for home infusion
therapy established by Medicare Advantage plans
under part C and in the private sector.
(ii) A qualified home infusion therapy supplier may
subcontract with a pharmacy, physician, provider of
services, or supplier to meet the requirements of this
subparagraph.
(jjj) Opioid Use Disorder Treatment Services; Opioid
Treatment Program.--
(1) Opioid use disorder treatment services.--The term
``opioid use disorder treatment services'' means items
and services that are furnished by an opioid treatment
program for the treatment of opioid use disorder,
including--
(A) opioid agonist and antagonist treatment
medications (including oral, injected, or
implanted versions) that are approved by the
Food and Drug Administration under section 505
of the Federal Food, Drug, and Cosmetic Act for
use in the treatment of opioid use disorder;
(B) dispensing and administration of such
medications, if applicable;
(C) substance use counseling by a
professional to the extent authorized under
State law to furnish such services;
(D) individual and group therapy with a
physician or psychologist (or other mental
health professional to the extent authorized
under State law);
(E) toxicology testing, and
(F) other items and services that the
Secretary determines are appropriate (but in no
event to include meals or transportation).
(2) Opioid treatment program.--The term ``opioid
treatment program'' means an entity that is an opioid
treatment program (as defined in section 8.2 of title
42 of the Code of Federal Regulations, or any successor
regulation) that--
(A) is enrolled under section 1866(j);
(B) has in effect a certification by the
Substance Abuse and Mental Health Services
Administration for such a program;
(C) is accredited by an accrediting body
approved by the Substance Abuse and Mental
Health Services Administration; and
(D) meets such additional conditions as the
Secretary may find necessary to ensure--
(i) the health and safety of
individuals being furnished services
under such program; and
(ii) the effective and efficient
furnishing of such services.
(kkk) Vision Services.--The term ``vision services'' means--
(1) routine eye examinations to determine the
refractive state of the eyes, including procedures
performed during the course of such examination; and
(2) contact lens fitting services;
furnished on or after January 1, 2022, by or under the direct
supervision of an optometrist or ophthalmologist who is legally
authorized to furnish such examinations, procedures, or fitting
services (as applicable) under State law (or the State
regulatory mechanism provided by State law) of the State in
which the examinations, procedures, or fitting services are
furnished.
exclusions from coverage and medicare as secondary payer
Sec. 1862. (a) Notwithstanding any other provision of this
title, no payment may be made under part A or part B for any
expenses incurred for items or services--
(1)(A) which, except for items and services described
in a succeeding subparagraph or additional preventive
services (as described in section 1861(ddd)(1)), are
not reasonable and necessary for the diagnosis or
treatment of illness or injury or to improve the
functioning of a malformed body member,
(B) in the case of items and services described in
section 1861(s)(10), which are not reasonable and
necessary for the prevention of illness,
(C) in the case of hospice care, which are not
reasonable and necessary for the palliation or
management of terminal illness,
(D) in the case of clinical care items and services
provided with the concurrence of the Secretary and with
respect to research and experimentation conducted by,
or under contract with, the Medicare Payment Advisory
Commission or the Secretary, which are not reasonable
and necessary to carry out the purposes of section
1886(e)(6),
(E) in the case of research conducted pursuant to
section 1142, which is not reasonable and necessary to
carry out the purposes of that section,
(F) in the case of screening mammography, which is
performed more frequently than is covered under section
1834(c)(2) or which is not conducted by a facility
described in section 1834(c)(1)(B), in the case of
screening pap smear and screening pelvic exam, which is
performed more frequently than is provided under
section 1861(nn), and, in the case of screening for
glaucoma, which is performed more frequently than is
provided under section 1861(uu),
(G) in the case of prostate cancer screening tests
(as defined in section 1861(oo)), which are performed
more frequently than is covered under such section,
(H) in the case of colorectal cancer screening tests,
which are performed more frequently than is covered
under section 1834(d),
(I) the frequency and duration of home health
services which are in excess of normative guidelines
that the Secretary shall establish by regulation,
(J) in the case of a drug or biological specified in
section 1847A(c)(6)(C) for which payment is made under
part B that is furnished in a competitive area under
section 1847B, that is not furnished by an entity under
a contract under such section,
(K) in the case of an initial preventive physical
examination, which is performed more than 1 year after
the date the individual's first coverage period begins
under part B,
(L) in the case of cardiovascular screening blood
tests (as defined in section 1861(xx)(1)), which are
performed more frequently than is covered under section
1861(xx)(2),
(M) in the case of a diabetes screening test (as
defined in section 1861(yy)(1)), which is performed
more frequently than is covered under section
1861(yy)(3),
(N) in the case of ultrasound screening for abdominal
aortic aneurysm which is performed more frequently than
is provided for under section 1861(s)(2)(AA),
(O) in the case of kidney disease education services
(as defined in paragraph (1) of section 1861(ggg)),
which are furnished in excess of the number of sessions
covered under paragraph (4) of such section, [and]
(P) in the case of personalized prevention plan
services (as defined in section 1861(hhh)(1)), which
are performed more frequently than is covered under
such section[;], and
(Q) in the case of vision services (as defined in
section 1861(kkk)) that are routine eye examinations
and contact lens fitting services (as described in
paragraph (1) or (2), respectively, of such section),
which are furnished more frequently than once during a
2-year period;
(2) for which the individual furnished such items or
services has no legal obligation to pay, and which no
other person (by reason of such individual's membership
in a prepayment plan or otherwise) has a legal
obligation to provide or pay for, except in the case of
Federally qualified health center services;
(3) which are paid for directly or indirectly by a
governmental entity (other than under this Act and
other than under a health benefits or insurance plan
established for employees of such an entity), except in
the case of rural health clinic services, as defined in
section 1861(aa)(1), in the case of Federally qualified
health center services, as defined in section
1861(aa)(3), in the case of services for which payment
may be made under section 1880(e), and in such other
cases as the Secretary may specify;
(4) which are not provided within the United States
(except for inpatient hospital services furnished
outside the United States under the conditions
described in section 1814(f) and, subject to such
conditions, limitations, and requirements as are
provided under or pursuant to this title, physicians'
services and ambulance services furnished an individual
in conjunction with such inpatient hospital services
but only for the period during which such inpatient
hospital services were furnished);
(5) which are required as a result of war, or of an
act of war, occurring after the effective date of such
individual's current coverage under such part;
(6) which constitute personal comfort items (except,
in the case of hospice care, as is otherwise permitted
under paragraph (1)(C));
(7) where such expenses are for routine physical
checkups, eyeglasses (other than eyewear described in
section 1861(s)(8)) or eye examinations (other than
such an examination that is a vision service that is
covered under section 1861(s)(2)(II)) for the purpose
of prescribing, fitting, or changing eyeglasses,
procedures performed (during the course of any eye
examination) to determine the refractive state of the
eyes (other than such a procedure that is a vision
service that is covered under section 1861(s)(2)(II)),
hearing aids or examinations therefor, or immunizations
(except as otherwise allowed under section 1861(s)(10)
and subparagraph (B), (F), (G), (H), (K), or (P) of
paragraph (1));
(8) where such expenses are for orthopedic shoes or
other supportive devices for the feet, other than shoes
furnished pursuant to section 1861(s)(12);
(9) where such expenses are for custodial care
(except, in the case of hospice care, as is otherwise
permitted under paragraph (1)(C));
(10) where such expenses are for cosmetic surgery or
are incurred in connection therewith, except as
required for the prompt repair of accidental injury or
for improvement of the functioning of a malformed body
member;
(11) where such expenses constitute charges imposed
by immediate relatives of such individual or members of
his household;
(12) where such expenses are for services in
connection with the care, treatment, filling, removal,
or replacement of teeth or structures directly
supporting teeth, except that payment may be made under
part A in the case of inpatient hospital services in
connection with the provision of such dental services
if the individual, because of his underlying medical
condition and clinical status or because of the
severity of the dental procedure, requires
hospitalization in connection with the provision of
such services;
(13) where such expenses are for--
(A) the treatment of flat foot conditions and
the prescription of supportive devices
therefor,
(B) the treatment of subluxations of the
foot, or
(C) routine foot care (including the cutting
or removal of corns or calluses, the trimming
of nails, and other routine hygienic care);
(14) which are other than physicians' services (as
defined in regulations promulgated specifically for
purposes of this paragraph), services described by
section 1861(s)(2)(K), certified nurse-midwife
services, qualified psychologist services, and services
of a certified registered nurse anesthetist, and which
are furnished to an individual who is a patient of a
hospital or critical access hospital by an entity other
than the hospital or critical access hospital, unless
the services are furnished under arrangements (as
defined in section 1861(w)(1)) with the entity made by
the hospital or critical access hospital;
(15)(A) which are for services of an assistant at
surgery in a cataract operation (including subsequent
insertion of an intraocular lens) unless, before the
surgery is performed, the appropriate quality
improvement organization (under part B of title XI) or
a carrier under section 1842 has approved of the use of
such an assistant in the surgical procedure based on
the existence of a complicating medical condition, or
(B) which are for services of an assistant at surgery
to which section 1848(i)(2)(B) applies;
(16) in the case in which funds may not be used for
such items and services under the Assisted Suicide
Funding Restriction Act of 1997;
(17) where the expenses are for an item or service
furnished in a competitive acquisition area (as
established by the Secretary under section 1847(a)) by
an entity other than an entity with which the Secretary
has entered into a contract under section 1847(b) for
the furnishing of such an item or service in that area,
unless the Secretary finds that the expenses were
incurred in a case of urgent need, or in other
circumstances specified by the Secretary;
(18) which are covered skilled nursing facility
services described in section 1888(e)(2)(A)(i) and
which are furnished to an individual who is a resident
of a skilled nursing facility during a period in which
the resident is provided covered post-hospital extended
care services (or, for services described in section
1861(s)(2)(D), which are furnished to such an
individual without regard to such period), by an entity
other than the skilled nursing facility, unless the
services are furnished under arrangements (as defined
in section 1861(w)(1)) with the entity made by the
skilled nursing facility;
(19) which are for items or services which are
furnished pursuant to a private contract described in
section 1802(b);
(20) in the case of outpatient physical therapy
services, outpatient speech-language pathology
services, or outpatient occupational therapy services
furnished as an incident to a physician's professional
services (as described in section 1861(s)(2)(A)), that
do not meet the standards and conditions (other than
any licensing requirement specified by the Secretary)
under the second sentence of section 1861(p) (or under
such sentence through the operation of subsection (g)
or (ll)(2) of section 1861) as such standards and
conditions would apply to such therapy services if
furnished by a therapist;
(21) where such expenses are for home health services
(including medical supplies described in section
1861(m)(5), but excluding durable medical equipment to
the extent provided for in such section) furnished to
an individual who is under a plan of care of the home
health agency if the claim for payment for such
services is not submitted by the agency;
(22) subject to subsection (h), for which a claim is
submitted other than in an electronic form specified by
the Secretary;
(23) which are the technical component of advanced
diagnostic imaging services described in section
1834(e)(1)(B) for which payment is made under the fee
schedule established under section 1848(b) and that are
furnished by a supplier (as defined in section
1861(d)), if such supplier is not accredited by an
accreditation organization designated by the Secretary
under section 1834(e)(2)(B);
(24) where such expenses are for renal dialysis
services (as defined in subparagraph (B) of section
1881(b)(14)) for which payment is made under such
section unless such payment is made under such section
to a provider of services or a renal dialysis facility
for such services; or
(25) not later than January 1, 2014, for which the
payment is other than by electronic funds transfer
(EFT) or an electronic remittance in a form as
specified in ASC X12 835 Health Care Payment and
Remittance Advice or subsequent standard.
Paragraph (7) shall not apply to Federally qualified health
center services described in section 1861(aa)(3)(B). In making
a national coverage determination (as defined in paragraph
(1)(B) of section 1869(f)) the Secretary shall ensure
consistent with subsection (l) that the public is afforded
notice and opportunity to comment prior to implementation by
the Secretary of the determination; meetings of advisory
committees with respect to the determination are made on the
record; in making the determination, the Secretary has
considered applicable information (including clinical
experience and medical, technical, and scientific evidence)
with respect to the subject matter of the determination; and in
the determination, provide a clear statement of the basis for
the determination (including responses to comments received
from the public), the assumptions underlying that basis, and
make available to the public the data (other than proprietary
data) considered in making the determination.
(b) Medicare as Secondary Payer.--
(1) Requirements of group health plans.--
(A) Working aged under group health plans.--
(i) In general.--A group health
plan--
(I) may not take into account
that an individual (or the
individual's spouse) who is
covered under the plan by
virtue of the individual's
current employment status with
an employer is entitled to
benefits under this title under
section 226(a), and
(II) shall provide that any
individual age 65 or older (and
the spouse age 65 or older of
any individual) who has current
employment status with an
employer shall be entitled to
the same benefits under the
plan under the same conditions
as any such individual (or
spouse) under age 65.
(ii) Exclusion of group health plan
of a small employer.--Clause (i) shall
not apply to a group health plan unless
the plan is a plan of, or contributed
to by, an employer that has 20 or more
employees for each working day in each
of 20 or more calendar weeks in the
current calendar year or the preceding
calendar year.
(iii) Exception for small employers
in multiemployer or multiple employer
group health plans.--Clause (i) also
shall not apply with respect to
individuals enrolled in a multiemployer
or multiple employer group health plan
if the coverage of the individuals
under the plan is by virtue of current
employment status with an employer that
does not have 20 or more individuals in
current employment status for each
working day in each of 20 or more
calendar weeks in the current calendar
year and the preceding calendar year;
except that the exception provided in
this clause shall only apply if the
plan elects treatment under this
clause.
(iv) Exception for individuals with
end stage renal disease.--Subparagraph
(C) shall apply instead of clause (i)
to an item or service furnished in a
month to an individual if for the month
the individual is, or (without regard
to entitlement under section 226) would
upon application be, entitled to
benefits under section 226A.
(v) Group health plan defined.--In
this subparagraph, and subparagraph
(C), the term ``group health plan'' has
the meaning given such term in section
5000(b)(1) of the Internal Revenue Code
of 1986, without regard to section
5000(d) of such Code
(B) Disabled individuals in large group
health plans.--
(i) In general.--A large group health
plan (as defined in clause (iii)) may
not take into account that an
individual (or a member of the
individual's family) who is covered
under the plan by virtue of the
individual's current employment status
with an employer is entitled to
benefits under this title under section
226(b).
(ii) Exception for individuals with
end stage renal disease.--Subparagraph
(C) shall apply instead of clause (i)
to an item or service furnished in a
month to an individual if for the month
the individual is, or (without regard
to entitlement under section 226) would
upon application be, entitled to
benefits under section 226A.
(iii) Large Group Health Plan
Defined.--In this subparagraph, the
term ``large group health plan'' has
the meaning given such term in section
5000(b)(2) of the Internal Revenue Code
of 1986, without regard to section
5000(d) of such Code.
(C) Individuals with end stage renal
disease.--A group health plan (as defined in
subparagraph (A)(v))--
(i) may not take into account that an
individual is entitled to or eligible
for benefits under this title under
section 226A during the 12-month period
which begins with the first month in
which the individual becomes entitled
to benefits under part A under the
provisions of section 226A, or, if
earlier, the first month in which the
individual would have been entitled to
benefits under such part under the
provisions of section 226A if the
individual had filed an application for
such benefits; and
(ii) may not differentiate in the
benefits it provides between
individuals having end stage renal
disease and other individuals covered
by such plan on the basis of the
existence of end stage renal disease,
the need for renal dialysis, or in any
other manner;
except that clause (ii) shall not prohibit a
plan from paying benefits secondary to this
title when an individual is entitled to or
eligible for benefits under this title under
section 226A after the end of the 12-month
period described in clause (i). Effective for
items and services furnished on or after
February 1, 1991, and before the date of
enactment of the Balanced Budget Act of 1997
(with respect to periods beginning on or after
February 1, 1990), this subparagraph shall be
applied by substituting ``18- month'' for ``12-
month'' each place it appears. Effective for
items and services furnished on or after the
date of enactment of the Balanced Budget Act of
1997, (with respect to periods beginning on or
after the date that is 18 months prior to such
date), clauses (i) and (ii) shall be applied by
substituting ``30-month'' for ``12-month'' each
place it appears.
(D) Treatment of certain members of religious
orders.--In this subsection, an individual
shall not be considered to be employed, or an
employee, with respect to the performance of
services as a member of a religious order which
are considered employment only by virtue of an
election made by the religious order under
section 3121(r) of the Internal Revenue Code of
1986.
(E) General Provisions.--For purposes of this
subsection:
(i) Aggregation Rules.--
(I) All employers treated as
a single employer under
subsection (a) or (b) of
section 52 of the Internal
Revenue Code of 1986 shall be
treated as a single employer.
(II) All employees of the
members of an affiliated
service group (as defined in
section 414(m) of such Code)
shall be treated as employed by
a single employer.
(III) Leased employees (as
defined in section 414(n)(2) of
such Code) shall be treated as
employees of the person for
whom they perform services to
the extent they are so treated
under section 414(n) of such
Code.
In applying sections of the Internal
Revenue Code of 1986 under this clause,
the Secretary shall rely upon
regulations and decisions of the
Secretary of the Treasury respecting
such sections.
(ii) Current employment status
defined.--An individual has ``current
employment status'' with an employer if
the individual is an employee, is the
employer, or is associated with the
employer in a business relationship.
(iii) Treatment of self-employed
persons as employers.--The term
``employer'' includes a self-employed
person.
(F) Limitation on beneficiary liability.--An
individual who is entitled to benefits under
this title and is furnished an item or service
for which such benefits are incorrectly paid is
not liable for repayment of such benefits under
this paragraph unless payment of such benefits
was made to the individual.
(2) Medicare secondary payer.--
(A) In general.--Payment under this title may
not be made, except as provided in subparagraph
(B), with respect to any item or service to the
extent that--
(i) payment has been made, or can
reasonably be expected to be made, with
respect to the item or service as
required under paragraph (1), or
(ii) payment has been made or can
reasonably be expected to be made under
a workmen's compensation law or plan of
the United States or a State or under
an automobile or liability insurance
policy or plan (including a self-
insured plan) or under no fault
insurance.
In the subsection, the term ``primary plan''
means a group health plan or large group health
plan, to the extent that clause (i) applies,
and a workmen's compensation law or plan, an
automobile or liability insurance policy or
plan (including a self-insured plan) or no
fault insurance, to the extent that clause (ii)
applies. An entity that engages in a business,
trade, or profession shall be deemed to have a
self-insured plan if it carries its own risk
(whether by a failure to obtain insurance, or
otherwise) in whole or in part.
(B) Conditional payment.--
(i) Authority to make conditional
payment.--The Secretary may make
payment under this title with respect
to an item or service if a primary plan
described in subparagraph (A)(ii) has
not made or cannot reasonably be
expected to make payment with respect
to such item or service promptly (as
determined in accordance with
regulations). Any such payment by the
Secretary shall be conditioned on
reimbursement to the appropriate Trust
Fund in accordance with the succeeding
provisions of this subsection.
(ii) Repayment required.--Subject to
paragraph (9), a primary plan, and an
entity that receives payment from a
primary plan, shall reimburse the
appropriate Trust Fund for any payment
made by the Secretary under this title
with respect to an item or service if
it is demonstrated that such primary
plan has or had a responsibility to
make payment with respect to such item
or service. A primary plan's
responsibility for such payment may be
demonstrated by a judgment, a payment
conditioned upon the recipient's
compromise, waiver, or release (whether
or not there is a determination or
admission of liability) of payment for
items or services included in a claim
against the primary plan or the primary
plan's insured, or by other means. If
reimbursement is not made to the
appropriate Trust Fund before the
expiration of the 60-day period that
begins on the date notice of, or
information related to, a primary
plan's responsibility for such payment
or other information is received, the
Secretary may charge interest
(beginning with the date on which the
notice or other information is
received) on the amount of the
reimbursement until reimbursement is
made (at a rate determined by the
Secretary in accordance with
regulations of the Secretary of the
Treasury applicable to charges for late
payments).
(iii) Action by united states.--In
order to recover payment made under
this title for an item or service, the
United States may bring an action
against any or all entities that are or
were required or responsible (directly,
as an insurer or self-insurer, as a
third-party administrator, as an
employer that sponsors or contributes
to a group health plan, or large group
health plan, or otherwise) to make
payment with respect to the same item
or service (or any portion thereof)
under a primary plan. The United States
may, in accordance with paragraph
(3)(A) collect double damages against
any such entity. In addition, the
United States may recover under this
clause from any entity that has
received payment from a primary plan or
from the proceeds of a primary plan's
payment to any entity. The United
States may not recover from a third-
party administrator under this clause
in cases where the third-party
administrator would not be able to
recover the amount at issue from the
employer or group health plan and is
not employed by or under contract with
the employer or group health plan at
the time the action for recovery is
initiated by the United States or for
whom it provides administrative
services due to the insolvency or
bankruptcy of the employer or plan. An
action may not be brought by the United
States under this clause with respect
to payment owed unless the complaint is
filed not later than 3 years after the
date of the receipt of notice of a
settlement, judgment, award, or other
payment made pursuant to paragraph (8)
relating to such payment owed.
(iv) Subrogation rights.--The United
States shall be subrogated (to the
extent of payment made under this title
for such an item or service) to any
right under this subsection of an
individual or any other entity to
payment with respect to such item or
service under a primary plan.
(v) Waiver of rights.--The Secretary
may waive (in whole or in part) the
provisions of this subparagraph in the
case of an individual claim if the
Secretary determines that the waiver is
in the best interests of the program
established under this title.
(vi) Claims-filing period.--
Notwithstanding any other time limits
that may exist for filing a claim under
an employer group health plan, the
United States may seek to recover
conditional payments in accordance with
this subparagraph where the request for
payment is submitted to the entity
required or responsible under this
subsection to pay with respect to the
item or service (or any portion
thereof) under a primary plan within
the 3-year period beginning on the date
on which the item or service was
furnished.
(vii) Use of website to determine
final conditional reimbursement
amount.--
(I) Notice to secretary of
expected date of a settlement,
judgment, etc.--In the case of
a payment made by the Secretary
pursuant to clause (i) for
items and services provided to
the claimant, the claimant or
applicable plan (as defined in
paragraph (8)(F)) may at any
time beginning 120 days before
the reasonably expected date of
a settlement, judgment, award,
or other payment, notify the
Secretary that a payment is
reasonably expected and the
expected date of such payment.
(II) Secretarial providing
access to claims information
through a website.--The
Secretary shall maintain and
make available to individuals
to whom items and services are
furnished under this title (and
to authorized family or other
representatives recognized
under regulations and to an
applicable plan which has
obtained the consent of the
individual) access to
information on the claims for
such items and services
(including payment amounts for
such claims), including those
claims that relate to a
potential settlement, judgment,
award, or other payment. Such
access shall be provided to an
individual, representative, or
plan through a website that
requires a password to gain
access to the information. The
Secretary shall update the
information on claims and
payments on such website in as
timely a manner as possible but
not later than 15 days after
the date that payment is made.
Information related to claims
and payments subject to the
notice under subclause (I)
shall be maintained and made
available consistent with the
following:
(aa) The information
shall be as complete as
possible and shall
include provider or
supplier name,
diagnosis codes (if
any), dates of service,
and conditional payment
amounts.
(bb) The information
accurately identifies
those claims and
payments that are
related to a potential
settlement, judgment,
award, or other payment
to which the provisions
of this subsection
apply.
(cc) The website
provides a method for
the receipt of secure
electronic
communications with the
individual,
representative, or plan
involved.
(dd) The website
provides that
information is
transmitted from the
website in a form that
includes an official
time and date that the
information is
transmitted.
(ee) The website
shall permit the
individual,
representative, or plan
to download a statement
of reimbursement
amounts (in this clause
referred to as a
``statement of
reimbursement amount'')
on payments for claims
under this title
relating to a potential
settlement, judgment,
award, or other
payment.
(III) Use of timely web
download as basis for final
conditional amount.--If an
individual (or other claimant
or applicable plan with the
consent of the individual)
obtains a statement of
reimbursement amount from the
website during the protected
period as defined in subclause
(V) and the related settlement,
judgment, award or other
payment is made during such
period, then the last statement
of reimbursement amount that is
downloaded during such period
and within 3 business days
before the date of the
settlement, judgment, award, or
other payment shall constitute
the final conditional amount
subject to recovery under
clause (ii) related to such
settlement, judgment, award, or
other payment.
(IV) Resolution of
discrepancies.--If the
individual (or authorized
representative) believes there
is a discrepancy with the
statement of reimbursement
amount, the Secretary shall
provide a timely process to
resolve the discrepancy. Under
such process the individual (or
representative) must provide
documentation explaining the
discrepancy and a proposal to
resolve such discrepancy.
Within 11 business days after
the date of receipt of such
documentation, the Secretary
shall determine whether there
is a reasonable basis to
include or remove claims on the
statement of reimbursement. If
the Secretary does not make
such determination within the
11 business-day period, then
the proposal to resolve the
discrepancy shall be accepted.
If the Secretary determines
within such period that there
is not a reasonable basis to
include or remove claims on the
statement of reimbursement, the
proposal shall be rejected. If
the Secretary determines within
such period that there is a
reasonable basis to conclude
there is a discrepancy, the
Secretary must respond in a
timely manner by agreeing to
the proposal to resolve the
discrepancy or by providing
documentation showing with good
cause why the Secretary is not
agreeing to such proposal and
establishing an alternate
discrepancy resolution. In no
case shall the process under
this subclause be treated as an
appeals process or as
establishing a right of appeal
for a statement of
reimbursement amount and there
shall be no administrative or
judicial review of the
Secretary's determinations
under this subclause.
(V) Protected period.--In
subclause (III), the term
``protected period'' means,
with respect to a settlement,
judgment, award or other
payment relating to an injury
or incident, the portion (if
any) of the period beginning on
the date of notice under
subclause (I) with respect to
such settlement, judgment,
award, or other payment that is
after the end of a Secretarial
response period beginning on
the date of such notice to the
Secretary. Such Secretarial
response period shall be a
period of 65 days, except that
such period may be extended by
the Secretary for a period of
an additional 30 days if the
Secretary determines that
additional time is required to
address claims for which
payment has been made. Such
Secretarial response period
shall be extended and shall not
include any days for any part
of which the Secretary
determines (in accordance with
regulations) that there was a
failure in the claims and
payment posting system and the
failure was justified due to
exceptional circumstances (as
defined in such regulations).
Such regulations shall define
exceptional circumstances in a
manner so that not more than 1
percent of the repayment
obligations under this
subclause would qualify as
exceptional circumstances.
(VI) Effective date.--The
Secretary shall promulgate
final regulations to carry out
this clause not later than 9
months after the date of the
enactment of this clause.
(VII) Website including
successor technology.--In this
clause, the term ``website''
includes any successor
technology.
(viii) Right of appeal for secondary
payer determinations relating to
liability insurance (including self-
insurance), no fault insurance, and
workers' compensation laws and plans.--
The Secretary shall promulgate
regulations establishing a right of
appeal and appeals process, with
respect to any determination under this
subsection for a payment made under
this title for an item or service for
which the Secretary is seeking to
recover conditional payments from an
applicable plan (as defined in
paragraph (8)(F)) that is a primary
plan under subsection (A)(ii), under
which the applicable plan involved, or
an attorney, agent, or third party
administrator on behalf of such plan,
may appeal such determination. The
individual furnished such an item or
service shall be notified of the plan's
intent to appeal such determination
(C) Treatment of questionnaires.--The
Secretary may not fail to make payment under
subparagraph (A) solely on the ground that an
individual failed to complete a questionnaire
concerning the existence of a primary plan.
(3) Enforcement.--
(A) Private cause of action.--There is
established a private cause of action for
damages (which shall be in an amount double the
amount otherwise provided) in the case of a
primary plan which fails to provide for primary
payment (or appropriate reimbursement) in
accordance with paragraphs (1) and (2)(A).
(B) Reference to excise tax with respect to
nonconforming group health plans.--For
provision imposing an excise tax with respect
to nonconforming group health plans, see
section 5000 of the Internal Revenue Code of
1986.
(C) Prohibition of financial incentives not
to enroll in a group health plan or a large
group health plan.--It is unlawful for an
employer or other entity to offer any financial
or other incentive for an individual entitled
to benefits under this title not to enroll (or
to terminate enrollment) under a group health
plan or a large group health plan which would
(in the case of such enrollment) be a primary
plan (as defined in paragraph (2)(A)). Any
entity that violates the previous sentence is
subject to a civil money penalty of not to
exceed $5,000 for each such violation. 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).
(4) Coordination of benefits.--Where payment for an
item or service by a primary plan is less than the
amount of the charge for such item or service and is
not payment in full, payment may be made under this
title (without regard to deductibles and coinsurance
under this title) for the remainder of such charge,
but--
(A) payment under this title may not exceed
an amount which would be payable under this
title for such item or service if paragraph
(2)(A) did not apply; and
(B) payment under this title, when combined
with the amount payable under the primary plan,
may not exceed--
(i) in the case of an item or service
payment for which is determined under
this title on the basis of reasonable
cost (or other cost-related basis) or
under section 1886, the amount which
would be payable under this title on
such basis, and
(ii) in the case of an item or
service for which payment is authorized
under this title on another basis--
(I) the amount which would be
payable under the primary plan
(without regard to deductibles
and coinsurance under such
plan), or
(II) the reasonable charge or
other amount which would be
payable under this title
(without regard to deductibles
and coinsurance under this
title),
whichever is greater.
(5) Identification of secondary payer situations.--
(A) Requesting matching information.--
(i) Commissioner of social
security.--The Commissioner of Social
Security shall, not less often that
annually, transmit to the Secretary of
the Treasury a list of the names and
TINs of medicare beneficiaries (as
defined in section 6103(l)(12) of the
Internal Revenue Code of 1986) and
request that the Secretary disclose to
the Commissioner the information
described in subparagraph (A) of such
section.
(ii) Administrator.--The
Administrator of the Centers for
Medicare & Medicaid Services shall
request, not less often than annually,
the Commissioner of the Social Security
Administration to disclose to the
Administrator the information described
in subparagraph (B) of section
6103(l)(12) of the Internal Revenue
Code of 1986.
(B) Disclosure to fiscal intermediaries and
carriers.--In addition to any other information
provided under this title to fiscal
intermediaries and carriers, the Administrator
shall disclose to such intermediaries and
carriers (or to such a single intermediary or
carrier as the Secretary may designate) the
information received under subparagraph (A) for
purposes of carrying out this subsection.
(C) Contacting employers.--
(i) In general.--With respect to each
individual (in this subparagraph
referred to as an ``employee'') who was
furnished a written statement under
section 6051 of the Internal Revenue
Code of 1986 by a qualified employer
(as defined in section
6103(l)(12)(E)(iii) of such Code), as
disclosed under subparagraph (B), the
appropriate fiscal intermediary or
carrier shall contact the employer in
order to determine during what period
the employee or employee's spouse may
be (or have been) covered under a group
health plan of the employer and the
nature of the coverage that is or was
provided under the plan (including the
name, address, and identifying number
of the plan).
(ii) Employer response.--Within 30
days of the date of receipt of the
inquiry, the employer shall notify the
intermediary or carrier making the
inquiry as to the determinations
described in clause (i). An employer
(other than a Federal or other
governmental entity) who willfully or
repeatedly fails to provide timely and
accurate notice in accordance with the
previous sentence shall be subject to a
civil money penalty of not to exceed
$1,000 for each individual with respect
to which such an inquiry is made. The
provision 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).
(D) Obtaining information from
beneficiaries.--Before an individual applies
for benefits under part A or enrolls under part
B, the Administrator shall mail the individual
a questionnaire to obtain information on
whether the individual is covered under a
primary plan and the nature of the coverage
provided under the plan, including the name,
address, and identifying number of the plan.
(E) End date.--The provisions of this
paragraph shall not apply to information
required to be provided on or after July 1,
2016.
(6) Screening requirements for providers and
suppliers.--
(A) In general.--Notwithstanding any other
provision of this title, no payment may be made
for any item or service furnished under part B
unless the entity furnishing such item or
service completes (to the best of its knowledge
and on the basis of information obtained from
the individual to whom the item or service is
furnished) the portion of the claim form
relating to the availability of other health
benefit plans.
(B) Penalties.--An entity that knowingly,
willfully, and repeatedly fails to complete a
claim form in accordance with subparagraph (A)
or provides inaccurate information relating to
the availability of other health benefit plans
on a claim form under such subparagraph shall
be subject to a civil money penalty of not to
exceed $2,000 for each such incident. 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).
(7) Required submission of information by group
health plans.--
(A) Requirement.--On and after the first day
of the first calendar quarter beginning after
the date that is 1 year after the date of the
enactment of this paragraph, an entity serving
as an insurer or third party administrator for
a group health plan, as defined in paragraph
(1)(A)(v), and, in the case of a group health
plan that is self-insured and self-
administered, a plan administrator or
fiduciary, shall--
(i) secure from the plan sponsor and
plan participants such information as
the Secretary shall specify for the
purpose of identifying situations where
the group health plan is or has been--
(I) a primary plan to the
program under this title; or
(II) for calendar quarters
beginning on or after January
1, 2020, a primary payer with
respect to benefits relating to
prescription drug coverage
under part D; and
(ii) submit such information to the
Secretary in a form and manner
(including frequency) specified by the
Secretary.
(B) Enforcement.--
(i) In general.--An entity, a plan
administrator, or a fiduciary described
in subparagraph (A) that fails to
comply with the requirements under such
subparagraph shall be subject to a
civil money penalty of $1,000 for each
day of noncompliance for each
individual for which the information
under such subparagraph should have
been submitted. The provisions of
subsections (e) and (k) of section
1128A 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). A civil money penalty
under this clause shall be in addition
to any other penalties prescribed by
law and in addition to any Medicare
secondary payer claim under this title
with respect to an individual.
(ii) Deposit of amounts collected.--
Any amounts collected pursuant to
clause (i) shall be deposited in the
Federal Hospital Insurance Trust Fund
under section 1817.
(C) Sharing of information.--Notwithstanding
any other provision of law, under terms and
conditions established by the Secretary, the
Secretary--
(i) shall share information on
entitlement under Part A and enrollment
under Part B under this title with
entities, plan administrators, and
fiduciaries described in subparagraph
(A);
(ii) may share the entitlement and
enrollment information described in
clause (i) with entities and persons
not described in such clause; and
(iii) may share information collected
under this paragraph as necessary for
purposes of the proper coordination of
benefits.
(D) Implementation.--Notwithstanding any
other provision of law, the Secretary may
implement this paragraph by program instruction
or otherwise.
(8) Required submission of information by or on
behalf of liability insurance (including self-
insurance), no fault insurance, and workers'
compensation laws and plans.--
(A) Requirement.--On and after the first day
of the first calendar quarter beginning after
the date that is 18 months after the date of
the enactment of this paragraph, an applicable
plan shall--
(i) determine whether a claimant
(including an individual whose claim is
unresolved) is entitled to benefits
under the program under this title on
any basis; and
(ii) if the claimant is determined to
be so entitled, submit the information
described in subparagraph (B) with
respect to the claimant to the
Secretary in a form and manner
(including frequency) specified by the
Secretary.
(B) Required information.--The information
described in this subparagraph is--
(i) the identity of the claimant for
which the determination under
subparagraph (A) was made; and
(ii) such other information as the
Secretary shall specify in order to
enable the Secretary to make an
appropriate determination concerning
coordination of benefits, including any
applicable recovery claim.
Not later than 18 months after the date of
enactment of this sentence, the Secretary shall
modify the reporting requirements under this
paragraph so that an applicable plan in
complying with such requirements is permitted
but not required to access or report to the
Secretary beneficiary social security account
numbers or health identification claim numbers,
except that the deadline for such modification
shall be extended by one or more periods
(specified by the Secretary) of up to 1 year
each if the Secretary notifies the committees
of jurisdiction of the House of Representatives
and of the Senate that the prior deadline for
such modification, without such extension,
threatens patient privacy or the integrity of
the secondary payer program under this
subsection. Any such deadline extension notice
shall include information on the progress being
made in implementing such modification and the
anticipated implementation date for such
modification.
(C) Timing.--Information shall be submitted
under subparagraph (A)(ii) within a time
specified by the Secretary after the claim is
resolved through a settlement, judgment, award,
or other payment (regardless of whether or not
there is a determination or admission of
liability).
(D) Claimant.--For purposes of subparagraph
(A), the term ``claimant'' includes--
(i) an individual filing a claim
directly against the applicable plan;
and
(ii) an individual filing a claim
against an individual or entity insured
or covered by the applicable plan.
(E) Enforcement.--
(i) In general.--An applicable plan
that fails to comply with the
requirements under subparagraph (A)
with respect to any claimant may be
subject to a civil money penalty of up
to $1,000 for each day of noncompliance
with respect to each claimant. The
provisions of subsections (e) and (k)
of section 1128A 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). A
civil money penalty under this clause
shall be in addition to any other
penalties prescribed by law and in
addition to any Medicare secondary
payer claim under this title with
respect to an individual.
(ii) Deposit of amounts collected.--
Any amounts collected pursuant to
clause (i) shall be deposited in the
Federal Hospital Insurance Trust Fund.
(F) Applicable plan.--In this paragraph, the
term ``applicable plan'' means the following
laws, plans, or other arrangements, including
the fiduciary or administrator for such law,
plan, or arrangement:
(i) Liability insurance (including
self-insurance).
(ii) No fault insurance.
(iii) Workers' compensation laws or
plans.
(G) Sharing of information.--The Secretary
may share information collected under this
paragraph as necessary for purposes of the
proper coordination of benefits.
(H) Implementation.--Notwithstanding any
other provision of law, the Secretary may
implement this paragraph by program instruction
or otherwise.
(I) Regulations.--Not later than 60 days
after the date of the enactment of this
subparagraph, the Secretary shall publish a
notice in the Federal Register soliciting
proposals, which will be accepted during a 60-
day period, for the specification of practices
for which sanctions will and will not be
imposed under subparagraph (E), including not
imposing sanctions for good faith efforts to
identify a beneficiary pursuant to this
paragraph under an applicable entity
responsible for reporting information. After
considering the proposals so submitted, the
Secretary, in consultation with the Attorney
General, shall publish in the Federal Register,
including a 60-day period for comment, proposed
specified practices for which such sanctions
will and will not be imposed. After considering
any public comments received during such
period, the Secretary shall issue final rules
specifying such practices.
(9) Exception.--
(A) In general.--Clause (ii) of paragraph
(2)(B) and any reporting required by paragraph
(8) shall not apply with respect to any
settlement, judgment, award, or other payment
by an applicable plan arising from liability
insurance (including self-insurance) and from
alleged physical trauma-based incidents
(excluding alleged ingestion, implantation, or
exposure cases) constituting a total payment
obligation to a claimant of not more than the
single threshold amount calculated by the
Secretary under subparagraph (B) for the year
involved.
(B) Annual computation of threshold.--
(i) In general.--Not later than
November 15 before each year, the
Secretary shall calculate and publish a
single threshold amount for
settlements, judgments, awards, or
other payments for obligations arising
from liability insurance (including
self-insurance) and for alleged
physical trauma-based incidents
(excluding alleged ingestion,
implantation, or exposure cases)
subject to this section for that year.
The annual single threshold amount for
a year shall be set such that the
estimated average amount to be credited
to the Medicare trust funds of
collections of conditional payments
from such settlements, judgments,
awards, or other payments arising from
liability insurance (including self-
insurance) and for such alleged
incidents subject to this section shall
equal the estimated cost of collection
incurred by the United States
(including payments made to
contractors) for a conditional payment
arising from liability insurance
(including self-insurance) and for such
alleged incidents subject to this
section for the year. At the time of
calculating, but before publishing, the
single threshold amount for 2014, the
Secretary shall inform, and seek review
of, the Comptroller General of the
United States with regard to such
amount.
(ii) Publication.--The Secretary
shall include, as part of such
publication for a year--
(I) the estimated cost of
collection incurred by the
United States (including
payments made to contractors)
for a conditional payment
arising from liability
insurance (including self-
insurance) and for such alleged
incidents; and
(II) a summary of the
methodology and data used by
the Secretary in computing such
threshold amount and such cost
of collection.
(C) Exclusion of ongoing expenses.--For
purposes of this paragraph and with respect to
a settlement, judgment, award, or other payment
not otherwise addressed in clause (ii) of
paragraph (2)(B) that includes ongoing
responsibility for medical payments (excluding
settlements, judgments, awards, or other
payments made by a workers' compensation law or
plan or no fault insurance), the amount
utilized for calculation of the threshold
described in subparagraph (A) shall include
only the cumulative value of the medical
payments made under this title.
(D) Report to congress.--Not later than
November 15 before each year, the Secretary
shall submit to the Congress a report on the
single threshold amount for settlements,
judgments, awards, or other payments for
conditional payment obligations arising from
liability insurance (including self-insurance)
and alleged incidents described in subparagraph
(A) for that year and on the establishment and
application of similar thresholds for such
payments for conditional payment obligations
arising from worker compensation cases and from
no fault insurance cases subject to this
section for the year. For each such report, the
Secretary shall--
(i) calculate the threshold amount by
using the methodology applicable to
certain liability claims described in
subparagraph (B); and
(ii) include a summary of the
methodology and data used in
calculating each threshold amount and
the amount of estimated savings under
this title achieved by the Secretary
implementing each such threshold.
(c) No payment may be made under part B for any expenses
incurred for--
(1) a drug product--
(A) which is described in section 107(c)(3)
of the Drug Amendments of 1962,
(B) which may be dispensed only upon
prescription,
(C) for which the Secretary has issued a
notice of an opportunity for a hearing under
subsection (e) of section 505 of the Federal
Food, Drug, and Cosmetic Act on a proposed
order of the Secretary to withdraw approval of
an application for such drug product under such
section because the Secretary has determined
that the drug is less than effective for all
conditions of use prescribed, recommended, or
suggested in its labeling, and
(D) for which the Secretary has not
determined there is a compelling justification
for its medical need; and
(2) any other drug product--
(A) which is identical, related, or similar
(as determined in accordance with section 310.6
of title 21 of the Code of Federal Regulations)
to a drug product described in paragraph (1),
and
(B) for which the Secretary has not
determined there is a compelling justification
for its medical need,
until such time as the Secretary withdraws such proposed order.
(d) For purposes of subsection (a)(1)(A), in the case of any
item or service that is required to be provided pursuant to
section 1867 to an individual who is entitled to benefits under
this title, determinations as to whether the item or service is
reasonable and necessary shall be made on the basis of the
information available to the treating physician or practitioner
(including the patient's presenting symptoms or complaint) at
the time the item or service was ordered or furnished by the
physician or practitioner (and not on the patient's principal
diagnosis). When making such determinations with respect to
such an item or service, the Secretary shall not consider the
frequency with which the item or service was provided to the
patient before or after the time of the admission or visit.
(e)(1) No payment may be made under this title with respect
to any item or service (other than an emergency item or
service, not including items or services furnished in an
emergency room of a hospital) furnished--
(A) by an individual or entity during the period when
such individual or entity is excluded pursuant to
section 1128, 1128A, 1156 or 1842(j)(2) from
participation in the program under this title; or
(B) at the medical direction or on the prescription
of a physician during the period when he is excluded
pursuant to section 1128, 1128A, 1156 or 1842(j)(2)
from participation in the program under this title and
when the person furnishing such item or service knew or
had reason to know of the exclusion (after a reasonable
time period after reasonable notice has been furnished
to the person).
(2) Where an individual eligible for benefits under this
title submits a claim for payment for items or services
furnished by an individual or entity excluded from
participation in the programs under this title, pursuant to
section 1128, 1128A, 1156, 1160 (as in effect on September 2,
1982), 1842(j)(2), 1862(d) (as in effect on the date of the
enactment of the Medicare and Medicaid Patient and Program
Protection Act of 1987), or l866, and such beneficiary did not
know or have reason to know that such individual or entity was
so excluded, then, to the extent permitted by this title, and
notwithstanding such exclusion, payment shall be made for such
items or services. In each such case the Secretary shall notify
the beneficiary of the exclusion of the individual or entity
furnishing the items or services. Payment shall not be made for
items or services furnished by an excluded individual or entity
to a beneficiary after a reasonable time (as determined by the
Secretary in regulations) after the Secretary has notified the
beneficiary of the exclusion of that individual or entity.
(f) The Secretary shall establish utilization guidelines for
the determination of whether or not payment may be made,
consistent with paragraph (1)(A) of subsection (a), under part
A or part B for expenses incurred with respect to the provision
of home health services, and shall provide for the
implementation of such guidelines through a process of
selective postpayment coverage review by intermediaries or
otherwise.
(g) The Secretary shall, in making the determinations under
paragraphs (1) and (9) of subsection (a), and for the purposes
of promoting the effective, efficient, and economical delivery
of health care services, and of promoting the quality of
services of the type for which payment may be made under this
title, enter into contracts with quality improvement
organizations pursuant to part B of title XI of this Act.
(h)(1) The Secretary--
(A) shall waive the application of subsection (a)(22)
in cases in which--
(i) there is no method available for the
submission of claims in an electronic form; or
(ii) the entity submitting the claim is a
small provider of services or supplier; and
(B) may waive the application of such subsection in
such unusual cases as the Secretary finds appropriate.
(2) For purposes of this subsection, the term ``small
provider of services or supplier'' means--
(A) a provider of services with fewer than 25 full-
time equivalent employees; or
(B) a physician, practitioner, facility, or supplier
(other than provider of services) with fewer than 10
full-time equivalent employees.
(i) In order to supplement the activities of the Medicare
Payment Advisory Commission under section 1886(e) in assessing
the safety, efficacy, and cost-effectiveness of new and
existing medical procedures, the Secretary may carry out, or
award grants or contracts for, original research and
experimentation of the type described in clause (ii) of section
1886(e)(6)(E) with respect to such a procedure if the Secretary
finds that--
(1) such procedure is not of sufficient commercial
value to justify research and experimentation by a
commercial organization;
(2) research and experimentation with respect to such
procedure is not of a type that may appropriately be
carried out by an institute, division, or bureau of the
National Institutes of Health; and
(3) such procedure has the potential to be more cost-
effective in the treatment of a condition than
procedures currently in use with respect to such
condition.
(j)(1) Any advisory committee appointed to advise the
Secretary on matters relating to the interpretation,
application, or implementation of subsection (a)(1) shall
assure the full participation of a nonvoting member in the
deliberations of the advisory committee, and shall provide such
nonvoting member access to all information and data made
available to voting members of the advisory committee, other
than information that--
(A) is exempt from disclosure pursuant to subsection
(a) of section 552 of title 5, United States Code, by
reason of subsection (b)(4) of such section (relating
to trade secrets); or
(B) the Secretary determines would present a conflict
of interest relating to such nonvoting member.
(2) If an advisory committee described in paragraph (1)
organizes into panels of experts according to types of items or
services considered by the advisory committee, any such panel
of experts may report any recommendation with respect to such
items or services directly to the Secretary without the prior
approval of the advisory committee or an executive committee
thereof.
(k)(1) Subject to paragraph (2), a group health plan (as
defined in subsection (a)(1)(A)(v)) providing supplemental or
secondary coverage to individuals also entitled to services
under this title shall not require a medicare claims
determination under this title for dental benefits specifically
excluded under subsection (a)(12) as a condition of making a
claims determination for such benefits under the group health
plan.
(2) A group health plan may require a claims determination
under this title in cases involving or appearing to involve
inpatient dental hospital services or dental services expressly
covered under this title pursuant to actions taken by the
Secretary.
(l) National and Local Coverage Determination Process.--
(1) Factors and evidence used in making national
coverage determinations.--The Secretary shall make
available to the public the factors considered in
making national coverage determinations of whether an
item or service is reasonable and necessary. The
Secretary shall develop guidance documents to carry out
this paragraph in a manner similar to the development
of guidance documents under section 701(h) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C.
371(h)).
(2) Timeframe for decisions on requests for national
coverage determinations.--In the case of a request for
a national coverage determination that--
(A) does not require a technology assessment
from an outside entity or deliberation from the
Medicare Coverage Advisory Committee, the
decision on the request shall be made not later
than 6 months after the date of the request; or
(B) requires such an assessment or
deliberation and in which a clinical trial is
not requested, the decision on the request
shall be made not later than 9 months after the
date of the request.
(3) Process for public comment in national coverage
determinations.--
(A) Period for proposed decision.--Not later
than the end of the 6-month period (or 9-month
period for requests described in paragraph
(2)(B)) that begins on the date a request for a
national coverage determination is made, the
Secretary shall make a draft of proposed
decision on the request available to the public
through the Internet website of the Centers for
Medicare & Medicaid Services or other
appropriate means.
(B) 30-day period for public comment.--
Beginning on the date the Secretary makes a
draft of the proposed decision available under
subparagraph (A), the Secretary shall provide a
30-day period for public comment on such draft.
(C) 60-day period for final decision.--Not
later than 60 days after the conclusion of the
30-day period referred to under subparagraph
(B), the Secretary shall--
(i) make a final decision on the
request;
(ii) include in such final decision
summaries of the public comments
received and responses to such
comments;
(iii) make available to the public
the clinical evidence and other data
used in making such a decision when the
decision differs from the
recommendations of the Medicare
Coverage Advisory Committee; and
(iv) in the case of a final decision
under clause (i) to grant the request
for the national coverage
determination, the Secretary shall
assign a temporary or permanent code
(whether existing or unclassified) and
implement the coding change.
(4) Consultation with outside experts in certain
national coverage determinations.--With respect to a
request for a national coverage determination for which
there is not a review by the Medicare Coverage Advisory
Committee, the Secretary shall consult with appropriate
outside clinical experts.
(5) Local coverage determination process.--
(A) Plan to promote consistency of coverage
determinations.--The Secretary shall develop a
plan to evaluate new local coverage
determinations to determine which
determinations should be adopted nationally and
to what extent greater consistency can be
achieved among local coverage determinations.
(B) Consultation.--The Secretary shall
require the fiscal intermediaries or carriers
providing services within the same area to
consult on all new local coverage
determinations within the area.
(C) Dissemination of information.--The
Secretary should serve as a center to
disseminate information on local coverage
determinations among fiscal intermediaries and
carriers to reduce duplication of effort.
(D) Local coverage determinations.--The
Secretary shall require each Medicare
administrative contractor that develops a local
coverage determination to make available on the
Internet website of such contractor and on the
Medicare Internet website, at least 45 days
before the effective date of such
determination, the following information:
(i) Such determination in its
entirety.
(ii) Where and when the proposed
determination was first made public.
(iii) Hyperlinks to the proposed
determination and a response to
comments submitted to the contractor
with respect to such proposed
determination.
(iv) A summary of evidence that was
considered by the contractor during the
development of such determination and a
list of the sources of such evidence.
(v) An explanation of the rationale
that supports such determination.
(6) National and local coverage determination
defined.--For purposes of this subsection--
(A) National coverage determination.--The
term ``national coverage determination'' means
a determination by the Secretary with respect
to whether or not a particular item or service
is covered nationally under this title.
(B) Local coverage determination.--The term
``local coverage determination'' has the
meaning given that in section 1869(f)(2)(B).
(m) Coverage of Routine Costs Associated With Certain
Clinical Trials of Category A Devices.--
(1) In general.--In the case of an individual
entitled to benefits under part A, or enrolled under
part B, or both who participates in a category A
clinical trial, the Secretary shall not exclude under
subsection (a)(1) payment for coverage of routine costs
of care (as defined by the Secretary) furnished to such
individual in the trial.
(2) Category a clinical trial.--For purposes of
paragraph (1), a ``category A clinical trial'' means a
trial of a medical device if--
(A) the trial is of an experimental/
investigational (category A) medical device (as
defined in regulations under section 405.201(b)
of title 42, Code of Federal Regulations (as in
effect as of September 1, 2003));
(B) the trial meets criteria established by
the Secretary to ensure that the trial conforms
to appropriate scientific and ethical
standards; and
(C) in the case of a trial initiated before
January 1, 2010, the device involved in the
trial has been determined by the Secretary to
be intended for use in the diagnosis,
monitoring, or treatment of an immediately
life-threatening disease or condition.
(n) Requirement of a Surety Bond for Certain Providers of
Services and Suppliers.--
(1) In general.--The Secretary may require a provider
of services or supplier described in paragraph (2) to
provide the Secretary on a continuing basis with a
surety bond in a form specified by the Secretary in an
amount (not less than $50,000) that the Secretary
determines is commensurate with the volume of the
billing of the provider of services or supplier. The
Secretary may waive the requirement of a bond under the
preceding sentence in the case of a provider of
services or supplier that provides a comparable surety
bond under State law.
(2) Provider of services or supplier described.--A
provider of services or supplier described in this
paragraph is a provider of services or supplier the
Secretary determines appropriate based on the level of
risk involved with respect to the provider of services
or supplier, and consistent with the surety bond
requirements under sections 1834(a)(16)(B) and
1861(o)(7)(C).
(o) Suspension of Payments Pending Investigation of Credible
Allegations of Fraud.--
(1) In general.--The Secretary may suspend payments
to a provider of services or supplier under this title
pending an investigation of a credible allegation of
fraud against the provider of services or supplier,
unless the Secretary determines there is good cause not
to suspend such payments.
(2) Consultation.--The Secretary shall consult with
the Inspector General of the Department of Health and
Human Services in determining whether there is a
credible allegation of fraud against a provider of
services or supplier.
(3) Promulgation of regulations.--The Secretary shall
promulgate regulations to carry out this subsection,
section 1860D-12(b)(7) (including as applied pursuant
to section 1857(f)(3)(D)), and section 1903(i)(2)(C).
(4) Credible allegation of fraud.--In carrying out
this subsection, section 1860D-12(b)(7) (including as
applied pursuant to section 1857(f)(3)(D)), and section
1903(i)(2)(C), a fraud hotline tip (as defined by the
Secretary) without further evidence shall not be
treated as sufficient evidence for a credible
allegation of fraud.
* * * * * * *
VII. ADDITIONAL VIEWS
H.R. 4665 expands the fee-for-service Medicare entitlement.
Yet, this critical program is already suffering from funding
shortfalls and waves of baby boomers are continue to enroll.
The Hospital Insurance (HI) Trust Fund that funds Part A of
Medicare is expected to be insolvent by 2026, less than seven
years from today. That means benefits will have to be cut,
taxes will have to be raised, or some combination of both.
The Medicare fee-for-service system, as operated today, is
simply unsustainable. For years, Washington has punted on
structural changes to these entitlement programs. The result
has been a slowly crumbling social safety net that is failing
health care providers and, most importantly, our seniors who
rely on them most.
Either we tackle these problems now or they will tackle us.
Fortunately, there is a bright spot: Medicare Advantage,
private plans competing for seniors' business, is delivering
lower costs and providing more generous benefits for seniors
than the antiquated fee-for-service Medicare.
Premiums for the 24 million seniors expected to enroll in
2020 will be 23% lower than in 2018, which is the lowest
monthly premiums have been in 13 years. Seniors enrolled in
Medicare Advantage plans have seen billions of dollars in
savings for their health care costs.
Privately administered Medicare Advantage plans already
provide supplemental hearing, vision and dental benefits to
seniors. In fact, nearly nine out of ten total Medicare
Advantage plans offer some form of dental, vision, and hearing
coverage.
Now, we know ``Medicare for All'' would eliminate these
plans that seniors like. And Republicans are steadfast in our
opposition to that radical scheme.
Committee Republicans have serious reservations about
expanding Medicare fee-for-service without fixing its
fundamental flaws for those in or near retirement. The majority
rushed these bills through a markup without CBO scores. Despite
this lack of analysis, Republicans on the Committee were
willing to advance the process on these bills until such a time
when we can get a complete CBO analysis and are hopeful we can
come to an agreement on bipartisan pay-fors that do not include
H.R. 3's government price setting.
Should Congressional Democrats use the price setting cuts
to spending in their drug bill as a pay-for for these Medicare
fee-for-service expansion, Republicans will stand fast in
opposition.
Kevin Brady,
Republican Leader, Committee
on Ways and Means.
Devin Nunes,
Republican Leader, Health
Subcommittee, Committee
on Ways and Means.
[all]