[House Report 115-753]
[From the U.S. Government Publishing Office]
115th Congress } { Rept. 115-753
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
======================================================================
POSTOPERATIVE OPIOID PREVENTION ACT OF 2018
_______
June 13, 2018.--Committed to the Committee of the Whole House on the
State of the Union and Ordered to be printed
_______
Mr. Walden, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 5809]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 5809) to amend title XVIII of the Social
Security Act to encourage the use of non-opioid analgesics for
the management of post-surgical pain under the Medicare
program, and for other purposes, having considered the same,
report favorably thereon without amendment and recommend that
the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Committee Action................................................. 2
Committee Votes.................................................. 3
Oversight Findings and Recommendations........................... 6
New Budget Authority, Entitlement Authority, and Tax Expenditures 6
Congressional Budget Office Estimate............................. 6
Federal Mandates Statement....................................... 28
Statement of General Performance Goals and Objectives............ 28
Duplication of Federal Programs.................................. 28
Committee Cost Estimate.......................................... 28
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 29
Disclosure of Directed Rule Makings.............................. 29
Advisory Committee Statement..................................... 29
Applicability to Legislative Branch.............................. 29
Section-by-Section Analysis of the Legislation................... 29
Changes in Existing Law Made by the Bill, as Reported............ 29
Dissenting Views................................................. 94
Exchange of Letters with Additional Committees of Referral....... 96
Purpose and Summary
H.R. 5809, Postoperative Opioid Prevention Act of 2018, was
introduced on May 15, 2018, by Rep. Scott Peters (D-CA) and
Rep. Larry Bucshon (R-IN) to extend pass through payment for
certain qualifying drugs to encourage the development of non-
opioid drugs for post-surgical pain management under the
Medicare program.
Background and Need for Legislation
Medicare serves as a unique population in the context of
the opioids conversation. The Medicare program serves as the
healthcare coverage provider to over 58 million beneficiaries.
This number is projected to rise to over 80 million by 2030. In
serving the over age 65 population, Medicare accounts for a
large share of total opioid prescriptions. In 2016, one out of
every three beneficiaries was prescribed an opioid through
Medicare Part D. In total, this equates to almost 80 million
prescriptions and $4 billion in Medicare Part D spending. While
many Medicare beneficiaries with serious pain-related
conditions are being properly prescribed opioids, there is
mounting evidence of opioid misuse in the Medicare system. As
more seniors and individuals with disabilities come into the
program, the challenges of fraud, misuse, and abuse will only
increase.
This bill promotes the development of new, clinically
superior non-opioid alternative drugs in order to provide more
pain management options for patients and providers.
Committee Action
On April 11 and 12, 2018, the Subcommittee on Health held a
hearing entitled ``Combating the Opioid Crisis: Improving the
Ability of Medicare and Medicaid to Provide Care for Patients''
to review legislation related to the opioid epidemic. The
Subcommittee received testimony from:
Kimberly Brandt, Principal Deputy
Administrator for Operations, Centers for Medicare and
Medicaid Services, U.S. Department of Health and Human
Services;
Michael Botticelli, Executive Director,
Grayken Center for Addiction, Boston Medical Center;
Toby Douglas, Senior Vice President,
Medicaid Solutions, Centene Corporation;
David Guth, CEO, Centerstone;
John Kravitz, CIO, Geisinger Health System;
and,
Sam Srivastava, CEO, Magellan Health.
On April 25, 2018, the Subcommittee on Health met in open
markup session and forwarded a discussion draft, entitled
``Incentivizing Non-Opioid Drugs,'' without amendment, to the
full Committee by a record vote of 18 yeas and 11 nays. On May
17, 2018, the full Committee on Energy and Commerce met in open
markup session and ordered H.R. 5809, without amendment,
favorable reported to the House by a record vote of 34 yeas and
17 nays. H.R. 5809 was similar to the discussion draft
forwarded by the Subcommittee.
Committee Votes
Clause 3(b) of rule XIII requires the Committee to list the
record votes on the motion to report legislation and amendments
thereto. The following reflects the record votes taken during
the Committee consideration:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Oversight Findings and Recommendations
Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII, the Committee held a hearing and made findings that
are reflected in this report.
New Budget Authority, Entitlement Authority, and Tax Expenditures
Pursuant to clause 3(c)(2) of rule XIII, the Committee
finds that H.R. 5809 would result in no new or increased budget
authority, entitlement authority, or tax expenditures or
revenues.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII, the following is
the cost estimate provided by the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 6, 2018.
Hon. Greg Walden,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed document with cost estimates for the
opioid-related legislation ordered to be reported on May 9 and
May 17, 2018.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Tom Bradley
and Chad Chirico.
Sincerely,
Mark P. Hadley
(For Keith Hall, Director).
Enclosure.
Opioid Legislation
Summary: On May 9 and May 17, 2018, the House Committee on
Energy and Commerce ordered 59 bills to be reported related to
the nation's response to the opioid epidemic. Generally, the
bills would:
Provide grants to facilities and providers
that treat people with substance use disorders,
Direct various agencies within the
Department of Health and Human Services (HHS) to
explore nonopioid approaches to treating pain and to
educate providers about those alternatives,
Modify requirements under Medicaid and
Medicare for prescribing controlled substances,
Expand Medicaid coverage for substance abuse
treatment, and
Direct the Food and Drug Administration
(FDA) to modify its oversight of opioid drugs and other
medications that are used to manage pain.
Because of the large number of related bills ordered
reported by the Committee, CBO is publishing a single
comprehensive document that includes estimates for each piece
of legislation.
CBO estimates that enacting 20 of the bills would affect
direct spending, and 2 of the bills would affect revenues;
therefore, pay-as-you-go procedures apply for those bills.
CBO estimates that enacting H.R. 4998, the Health Insurance
for Former Foster Youth Act, would increase net direct spending
by more than $2.5 billion and on-budget deficits by more than
$5 billion in at least one of the four consecutive 10-year
periods beginning in 2029. None of the remaining 58 bills
included in this estimate would increase net direct spending by
more than $2.5 billion or on-budget deficits by more than $5
billion in any of the four consecutive 10-year periods
beginning in 2029.
One of the bills reviewed for this document, H.R. 5795,
would impose both intergovernmental and private-sector mandates
as defined in the Unfunded Mandates Reform Act (UMRA). CBO
estimates that the costs of those mandates on public and
private entities would fall below the thresholds in UMRA ($80
million and $160 million, respectively, in 2018, adjusted
annually for inflation). Five bills, H.R. 5228, H.R. 5333, H.R.
5554, H.R. 5687, and H.R. 5811, would impose private-sector
mandates as defined in UMRA. CBO estimates that the costs of
the mandates in three of the bills (H.R. 5333, H.R. 5554, and
H.R. 5811) would not exceed the UMRA threshold for private
entities. Because CBO is uncertain how federal agencies would
implement new authority granted in the other two bills, H.R.
5228 and H.R. 5687, CBO cannot determine whether the costs of
those mandates would exceed the UMRA threshold.
Estimated cost to the Federal Government: The estimates in
this document do not include the effects of interactions among
the bills. If all 59 bills were combined and enacted as one
piece of legislation, the budgetary effects would be different
from the sum of the estimates in this document, although CBO
expects that any such differences would be small. The costs of
this legislation fall within budget functions 550 (health), 570
(Medicare), 750 (administration of justice), and 800 (general
government).
Basis of estimate: For this estimate, CBO assumes that all
of the legislation will be enacted late in 2018 and that
authorized and estimated amounts will be appropriated each
year. Outlays for discretionary programs are estimated based on
historical spending patterns for similar programs.
Uncertainty
CBO aims to produce estimates that generally reflect the
middle of a range of the most likely budgetary outcomes that
would result if the legislation was enacted. Because data on
the utilization of mental health and substance abuse treatment
under Medicaid and Medicare is scarce, CBO cannot precisely
predict how patients or providers would respond to some policy
changes or what budgetary effects would result. In addition,
several of the bills would give the Department of Health and
Human Services (HHS) considerable latitude in designing and
implementing policies. Budgetary effects could differ from
those provided in CBO's analyses depending on those decisions.
Direct spending and revenues
Table 1 lists the 22 bills of the 59 ordered to be reported
that would affect direct spending or revenues.
TABLE 1.--ESTIMATED CHANGES IN MANDATORY SPENDING AND REVENUES
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
------------------------------------------------------------------------------------------------------------------------
2019-
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2019-2023 2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING
Legislation Primarily Affecting
Medicaid:
H.R. 1925, At-Risk Youth 0 * 5 5 5 10 10 10 10 10 10 25 75
Medicaid Protection Act of
2017......................
H.R. 4998, Health Insurance 0 0 0 0 0 * 10 21 33 46 61 * 171
for Former Foster Youth
Act.......................
H.R. 5477, Rural 0 13 35 58 68 83 27 9 3 3 3 256 301
Development of Opioid
Capacity Services Act.....
H.R. 5583, a bill to amend 0 * * * * * * * * * * * *
title XI of the Social
Security Act to require
States to annually report
on certain adult health
quality measures, and for
other purposes............
H.R. 5797, IMD CARE Act.... 0 38 158 251 265 279 0 0 0 0 0 991 991
H.R. 5799, Medicaid DRUG 0 * * 1 1 1 1 1 1 1 1 2 5
Improvement Acta..........
H.R. 5801 Medicaid 0 * * * * * * * * * * * *
Providers Are Required To
Note Experiences in Record
Systems to Help In-Need
Patients (PARTNERSHIP)
Acta......................
H.R. 5808, Medicaid 0 * -1 -1 -1 -1 -2 -2 -2 -2 -2 -4 -13
Pharmaceutical Home Act of
2018a.....................
H.R. 5810, Medicaid Health 0 94 58 62 56 52 48 43 38 32 25 323 509
HOME Act..................
Legislation Primarily Affecting
Medicare:
H.R. 3528, Every 0 0 0 -24 -35 -33 -30 -33 -32 -31 -32 -92 -250
Prescription Conveyed
Securely Act..............
H.R. 4841, Standardizing 0 0 0 * * * * * * * * * *
Electronic Prior
Authorization for Safe
Prescribing Act of 2018...
H.R. 5603, Access to 0 2 * * * 1 1 1 2 2 2 3 11
Telehealth Services for
Opioid Use Disorders Act..
H.R. 5605, Advancing High 0 0 0 15 26 24 23 23 10 1 * 65 122
Quality Treatment for
Opioid Use Disorders in
Medicare Act..............
H.R. 5675, a bill to amend 0 0 0 -6 -7 -7 -7 -8 -9 -9 -11 -20 -64
title XVIII of the Social
Security Act to require
prescription drug plan
sponsors under the
Medicare program to
establish drug management
programs for at-risk
beneficiaries.............
H.R. 5684, Protecting 0 0 0 * * * * * * * * * *
Seniors From Opioid Abuse
Act.......................
H.R. 5796, Responsible 0 10 25 50 10 5 0 0 0 0 0 100 100
Education Achieves Care
and Healthy Outcomes for
Users' Treatment Act of
2018......................
H.R. 5798, Opioid Screening 0 0 * 1 1 1 1 1 1 1 1 2 5
and Chronic Pain
Management Alternatives
for Seniors Act...........
H.R. 5804, Post-Surgical 0 0 25 30 25 20 10 5 0 0 0 100 115
Injections as an Opioid
Alternative Acta..........
H.R. 5809, Postoperative 0 0 0 0 10 15 20 25 30 35 45 25 180
Opioid Prevention Act of
2018......................
Legislation Primarily Affecting
the Food and Drug
Administration:
H.R. 5333, Over-the-Counter 0 0 * * * * * * * * * * *
Monograph Safety,
Innovation, and Reform Act
of 2018a..................
INCREASES OR DECREASES (-) IN REVENUESb
H.R. 5752, Stop Illicit 0 * * * * * * * * * * * *
Drug Importation Act of
2018......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual amounts may not sum to totals because of rounding. * = between -$500,000 and $500,000. Budget authority is equivalent to outlays.
aThis bill also would affect spending subject to appropriation.
bOne additional bill, H.R. 5228, the Stop Counterfeit Drugs by Regulating and Enhancing Enforcement Now Act, would have a negligible effect on revenues.
Legislation Primarily Affecting Medicaid. The following
nine bills would affect direct spending for the Medicaid
program.
H.R. 1925, the At-Risk Youth Medicaid Protection Act of
2017, would require states to suspend, rather than terminate,
Medicaid eligibility for juvenile enrollees (generally under 21
years of age) who become inmates of public correctional
institutions. States also would have to redetermine those
enrollees' Medicaid eligibility before their release and
restore their coverage upon release if they qualify for the
program. States would be required to process Medicaid
applications submitted by or on behalf of juveniles in public
correctional institutions who were not enrolled in Medicaid
before becoming inmates and ensure that Medicaid coverage is
provided when they are released if they are found to be
eligible. On the basis of an analysis of juvenile incarceration
trends and of the per enrollee spending for Medicaid foster
care children, who have a similar health profile to
incarcerated juveniles, CBO estimates that implementing the
bill would cost $75 million over the 2019-2028 period.
H.R. 4998, the Health Insurance for Former Foster Youth
Act, would require states to provide Medicaid coverage to
adults up to age 25 who had aged out of foster care in any
state. Under current law, such coverage is mandatory only if
the former foster care youth has aged out in the state in which
the individual applies for coverage. The policy also would
apply to former foster children who had been in foster care
upon turning 14 years of age but subsequently left foster care
to enter into a legal guardianship with a kinship caregiver.
The provisions would take effect respect for foster youth who
turn 18 on or after January 1, 2023. On the basis of spending
for Medicaid foster care children and data from the Census
Bureau regarding annual migration rates between states, CBO
estimates that implementing the bill would cost $171 million
over the 2019-2028 period.
H.R. 5477, the Rural Development of Opioid Capacity
Services Act, would direct the Secretary of HHS to conduct a
five-year demonstration to increase the number and ability of
providers participating in Medicaid to provide treatment for
substance use disorders. On the basis of an analysis of federal
and state spending for treatment of substance use disorders and
the prevalence of such disorders, CBO estimates that enacting
the bill would increase direct spending by $301 million over
the 2019-2028 period.
H.R. 5583, a bill to amend title XI of the Social Security
Act to require States to annually report on certain adult
health quality measures, and for other purposes, would require
states to include behavioral health indicators in their annual
reports on the quality of care under Medicaid. Although the
bill would add a requirement for states, CBO estimates that its
enactment would not have a significant budgetary effect because
most states have systems in place for reporting such measures
to the federal government.
H.R. 5797, the IMD CARE Act, would expand Medicaid coverage
for people with opioid use disorder who are in institutions for
mental disease (IMDs) for up to 30 days per year. Under a
current-law policy known as the IMD exclusion, the federal
government generally does not make matching payments to state
Medicaid programs for most services provided by IMDs to adults
between the ages of 21 and 64. Recent administrative changes
have made federal financing for IMDs available in limited
circumstances, but the statutory prohibition remains in place.
CBO analyzed several data sets, primarily those collected by
the Substance Abuse and Mental Health Services Administration
(SAMHSA), to estimate current federal spending under Medicaid
for IMD services and to estimate spending under H.R. 5797.
Using that analysis, CBO estimates that enacting H.R. 5797
would increase direct spending by $991 million over the 2019-
2028 period.
H.R. 5799, the Medicaid DRUG Improvement Act, would require
state Medicaid programs to implement additional reviews of
opioid prescriptions, monitor concurrent prescribing of opioids
and certain other drugs, and monitor use of antipsychotic drugs
by children. CBO estimates that the bill would increase direct
spending by $5 million over the 2019-2028 period to cover the
administrative costs of complying with those requirements. On
the basis of stakeholder feedback, CBO expects that the bill
would not have a significant effect on Medicaid spending for
prescription drugs because many of the bill's requirements
would duplicate current efforts to curb opioid and
antipsychotic drug use. (If enacted, H.R. 5799 also would
affect spending subject to appropriation; CBO has not completed
an estimate of that amount.)
H.R. 5801, the Medicaid Providers Are Required To Note
Experiences in Record Systems to Help In-Need Patients
(PARTNERSHIP) Act, would require providers who are permitted to
prescribe controlled substances and who participate in Medicaid
to query prescription drug monitoring programs (PDMPs) before
prescribing controlled substances to Medicaid patients. PDMPs
are statewide electronic databases that collect data on
controlled substances dispensed in the state. The bill also
would require PDMPs to comply with certain data and system
criteria, and it would provide additional federal matching
funds to certain states to help cover administrative costs. On
the basis of a literature review and stakeholder feedback, CBO
estimates that the net budgetary effect of enacting H.R. 5801
would be insignificant. Costs for states to come into
compliance with the systems and administrative requirements
would be roughly offset by savings from small reductions in the
number of controlled substances paid for by Medicaid under the
proposal. (If enacted, H.R. 5801 also would affect spending
subject to appropriation; CBO has not completed an estimate of
that amount.)
H.R. 5808, the Medicaid Pharmaceutical Home Act of 2018,
would require state Medicaid programs to operate pharmacy
programs that would identify people at high risk of abusing
controlled substances and require those patients to use a
limited number of providers and pharmacies. Although nearly all
state Medicaid programs currently meet such a requirement, a
small number of high-risk Medicaid beneficiaries are not now
monitored. Based on an analysis of information about similar
state and federal programs, CBO estimates that net Medicaid
spending under the bill would decrease by $13 million over the
2019-2028 period. That amount represents a small increase in
administrative costs and a small reduction in the number of
controlled substances paid for by Medicaid under the proposal.
(If enacted, H.R. 5808 also would affect spending subject to
appropriation; CBO has not completed an estimate of that
amount.)
H.R. 5810, the Medicaid Health HOME Act, would allow states
to receive six months of enhanced federal Medicaid funding for
programs that coordinate care for people with substance use
disorders. Based on enrollment and spending data from states
that currently participate in Medicaid's Health Homes program,
CBO estimates that the expansion would cost approximately $469
million over the 2019-2028 period. The bill also would require
states to cover all FDA-approved drugs used in medication-
assisted treatment for five years, although states could seek a
waiver from that requirement. (Medication-assisted treatment
combines behavioral therapy and pharmaceutical treatment for
substance use disorders.) Under current law, states already
cover most FDA-approved drugs used in such programs in some
capacity, although a few exclude methadone dispensed by opioid
treatment programs. CBO estimates that a small share of those
states would begin to cover methadone if this bill was enacted
at a federal cost of about $39 million over the 2019-2028
period. In sum, CBO estimates that the enacting H.R. 5810 would
increase direct spending by $509 million over the 2019-2028
period.
Legislation Primarily Affecting Medicare. The following ten
bills would affect direct spending for the Medicare program.
H.R. 3528, the Every Prescription Conveyed Securely Act,
would require prescriptions for controlled substances covered
under Medicare Part D to be transmitted electronically,
starting on January 1, 2021. Based on CBO's analysis of
prescription drug spending, spending for controlled substances
is a small share of total drug spending. CBO also assumes a
small share of those prescriptions would not be filled because
they are not converted to an electronic format. Therefore, CBO
expects that enacting H.R. 3528 would reduce the number of
prescriptions filled and estimates that Medicare spending would
be reduced by $250 million over the 2019-2028 period.
H.R. 4841, the Standardizing Electronic Prior Authorization
for Safe Prescribing Act of 2018, would require health care
professionals to submit prior authorization requests
electronically, starting on January 1, 2021, for drugs covered
under Medicare Part D. Taking into account that many
prescribers already use electronic methods to submit such
requests, CBO estimates that enacting H.R. 4841 would not
significantly affect direct spending for Part D.
H.R. 5603, the Access to Telehealth Services for Opioid Use
Disorders Act, would permit the Secretary of HHS to lift
current geographic and other restrictions on coverage of
telehealth services under Medicare for treatment of substance
use disorders or co-occurring mental health disorders. Under
the bill, the Secretary of HHS would be directed to encourage
other payers to coordinate payments for opioid use disorder
treatments and to evaluate the extent to which the
demonstration reduces hospitalizations, increases the use of
medication-assisted treatments, and improves the health
outcomes of individuals with opioid use disorders during and
after the demonstration. Based on current use of Medicare
telehealth services for treatment of substance use disorders,
CBO estimates that expanding that coverage would increase
direct spending by $11 million over the 2019-2028 period.
H.R. 5605, the Advancing High Quality Treatment for Opioid
Use Disorders in Medicare Act, would establish a five-year
demonstration program to increase access to treatment for
opioid use disorder. The demonstration would provide incentive
payments and funding for care management services based on
criteria such as patient engagement, use of evidence-based
treatments, and treatment length and intensity. Under the bill,
the Secretary of HHS would be directed to encourage other
payers to coordinate payments for opioid use disorder
treatments and to evaluate the extent to which the
demonstration reduces hospitalizations, increases the use of
medication-assisted treatments, and improves the health
outcomes of individuals with opioid use disorders during and
after the demonstration. Based on historical utilization of
opioid use disorder treatments and projected spending on
incentive payments and care management fees, CBO estimates that
increased use of treatment services and the demonstration's
incentive payments would increase direct spending by $122
million over the 2019-2028 period.
H.R. 5675, a bill to amend title XVIII of the Social
Security Act to require prescription drug plan sponsors under
the Medicare program to establish drug management programs for
at-risk beneficiaries, would require Part D prescription drug
plans to provide drug management programs for Medicare
beneficiaries who are at risk for prescription drug abuse.
(Under current law, Part D plans are permitted but not required
to establish such programs as of 2019.) Based on an analysis of
the number of plans currently providing those programs, CBO
estimates that enacting H.R. 5675 would lower federal spending
by $64 million over the 2019-2028 period by reducing the number
of prescriptions filled and Medicare's payments for controlled
substances.
H.R. 5684, the Protecting Seniors From Opioid Abuse Act,
would expand medication therapy management programs under
Medicare Part D to include beneficiaries who are at risk for
prescription drug abuse. Because relatively few beneficiaries
would be affected by this bill, CBO estimates that its
enactment would not significantly affect direct spending for
Part D.
H.R. 5796, the Responsible Education Achieves Care and
Healthy Outcomes for Users' Treatment Act of 2018, would allow
the Secretary of HHS to award grants to certain organizations
that provide technical assistance and education to high-volume
prescribers of opioids. The bill would appropriate $100 million
for fiscal year 2019. Based on historical spending patterns for
similar activities, CBO estimates that implementing H.R. 5796
would cost $100 million over the 2019-2028 period.
H.R. 5798, the Opioid Screening and Chronic Pain Management
Alternatives for Seniors Act, would add an assessment of
current opioid prescriptions and screening for opioid use
disorder to the Welcome to Medicare Initial Preventive Physical
Examination. Based on historical use of the examinations and
pain management alternatives, CBO expects that enacting the
bill would increase use of pain management services and
estimates that direct spending would increase by $5 million
over the 2019-2028 period.
H.R. 5804, the Post-Surgical Injections as an Opioid
Alternative Act, would freeze the Medicare payment rate for
certain analgesic injections provided in ambulatory surgical
centers (ASCs). (For injections identified by specific billing
codes, Medicare would pay the 2016 rate, which is higher than
the current rate, during the 2020-2024 period.) Based on
current utilization in the ASC setting, CBO estimates that
enacting the legislation would increase direct spending by
about $115 million over the 2019-2028 period. (If enacted, H.R.
5804 also would affect spending subject to appropriation; see
Table 3.)
H.R. 5809, the Postoperative Opioid Prevention Act of 2018,
would create an additional payment under Medicare for nonopioid
analgesics. Under current law, certain new drugs and devices
may receive an additional payment--separate from the bundled
payment for a surgical procedure--in outpatient hospital
departments and ambulatory surgical centers. The bill would
allow nonopioid analgesics to qualify for a five-year period of
additional payments. Based on its assessment of current
spending for analgesics and on the probability of new nonopioid
analgesics coming to market, CBO estimates that H.R. 5809 would
increase direct spending by about $180 million over the 2019-
2028 period.
Legislation Primarily Affecting the Food and Drug
Administration. One bill related to the FDA would affect direct
spending.
H.R. 5333, the Over-the-Counter Monograph Safety,
Innovation, and Reform Act of 2018, would change the way that
the FDA regulates the marketing of over-the-counter (OTC)
medicines, and it would authorize that agency to grant 18
months of exclusive market protection for certain qualifying
OTC drugs, thus delaying the entry of other versions of the
same qualifying OTC product. Medicaid currently provides some
coverage for OTC medicines, but only if a medicine is the least
costly alternative in its drug class. On the basis of
stakeholder feedback, CBO expects that delaying the
availability of additional OTC versions of a drug would not
significantly affect the average net price paid by Medicaid. As
a result, CBO estimates that enacting H.R. 5333 would have a
negligible effect on the federal budget. (If enacted, H.R. 5333
also would affect spending subject to appropriation; see Table
3.)
Legislation with Revenue Effects. Two bills would affect
revenues. However, CBO estimates that one bill, H.R. 5228, the
Stop Counterfeit Drugs by Regulating and Enhancing Enforcement
Now Act, would have only a negligible effect.
H.R. 5752, the Stop Illicit Drug Importation Act of 2018,
would amend the Federal, Food, Drug, and Cosmetic Act (FDCA) to
strengthen the FDA's seizure powers and enhance its authority
to detain, refuse, seize, or destroy illegal products offered
for import. The legislation would subject more people to
debarment under the FDCA and thus increase the potential for
violations, and subsequently, the assessment of civil
penalties, which are recorded in the budget as revenues. CBO
estimates that those collections would result in an
insignificant increase in revenues. Because H.R. 5752 would
prohibit the importation of drugs that are in the process of
being scheduled, it also could reduce amounts collected in
customs duties. CBO anticipates that the result would be a
negligible decrease in revenues. With those results taken
together, CBO estimates, enacting H.R. 5752 would generate an
insignificant net increase in revenues over the 2019-2028
period.
Spending subject to appropriation
For this document, CBO has grouped bills with spending that
would be subject to appropriation into four general categories:
Bills that would have no budgetary effect,
Bills with provisions that would authorize
specified amounts to be appropriated (see Table 2),
Bills with provisions for which CBO has
estimated an authorization of appropriations (see Table
3), and
Bills with provisions that would affect
spending subject to appropriation for which CBO has not
yet completed an estimate.
No Budgetary Effect. CBO estimates that 6 of the 59 bills
would have no effect on direct spending, revenues, or spending
subject to appropriation.
H.R. 3192, the CHIP Mental Health Parity Act, would require
all Children's Health Insurance Program (CHIP) plans to cover
mental health and substance abuse treatment. In addition,
states would not be allowed to impose financial or utilization
limits on mental health treatment that are lower than limits
placed on physical health treatment. Based on information from
the Centers for Medicare and Medicaid Services, CBO estimates
that enacting the bill would have no budgetary effect because
all CHIP enrollees are already in plans that meet those
requirements.
H.R. 3331, a bill to amend title XI of the Social Security
Act to promote testing of incentive payments for behavioral
health providers for adoption and use of certified electronic
health record technology, would give the Center for Medicare
and Medicaid Innovation (CMMI) explicit authorization to test a
program offering incentive payments to behavioral health
providers that adopt and use certified electronic health record
technology. Because it is already clear to CMMI that it has
that authority, CBO estimates that enacting the legislation
would not affect federal spending.
H.R. 5202, the Ensuring Patient Access to Substance Use
Disorder Treatments Act of 2018, would clarify permission for
pharmacists to deliver controlled substances to providers under
certain circumstances. Because this provision would codify
current practice, CBO estimates that H.R. 5202 would not affect
direct spending or revenues during the 2019-2028 period.
H.R. 5685, the Medicare Opioid Safety Education Act of
2018, would require the Secretary of HHS to include information
on opioid use, pain management, and nonopioid pain management
treatments in future editions of Medicare & You, the program's
handbook for beneficiaries, starting on January 1, 2019.
Because H.R. 5685 would add information to an existing
administrative document, CBO estimates that enacting the bill
would have no budgetary effect.
H.R. 5686, the Medicare Clear Health Options in Care for
Enrollees Act of 2018, would require prescription drug plans
that provide coverage under Medicare Part D to furnish
information to beneficiaries about the risks of opioid use and
the availability of alternative treatments for pain. CBO
estimates that enacting the bill would not affect direct
spending because the required activities would not impose
significant administrative costs.
H.R. 5716, the Commit to Opioid Medical Prescriber
Accountability and Safety for Seniors Act, would require the
Secretary of HHS on an annual basis to identify high
prescribers of opioids and furnish them with information about
proper prescribing methods. Because HHS already has the
capacity to meet those requirements, CBO estimates that
enacting that provision would not impose additional
administrative costs on the agency.
Specified Authorizations. Table 2 lists the ten bills that
would authorize specified amounts to be appropriated over the
2019-2023 period. Spending from those authorized amounts would
be subject to appropriation.
TABLE 2.--ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR BILLS WITH SPECIFIED AUTHORIZATIONS
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
----------------------------------------------------------
2018 2019 2020 2021 2022 2023 2019-2023
----------------------------------------------------------------------------------------------------------------
INCREASES IN SPENDING SUBJECT TO APPROPRIATION
H.R. 4684, Ensuring Access to Quality Sober Living
Act:
Authorization Level.............................. 0 3 0 0 0 0 3
Estimated Outlays................................ 0 1 2 * * * 3
H.R. 5102, Substance Use Disorder Workforce Loan
Repayment Act of 2018:
Authorization Level.............................. 0 25 25 25 25 25 125
Estimated Outlays................................ 0 9 19 23 25 25 100
H.R. 5176, Preventing Overdoses While in Emergency
Rooms Act of 2018:
Authorization Level.............................. 0 50 0 0 0 0 50
Estimated Outlays................................ 0 16 26 6 2 1 50
H.R. 5197, Alternatives to Opioids (ALTO) in the
Emergency Department Act:
Authorization Level.............................. 0 10 10 10 0 0 30
Estimated Outlays................................ 0 3 8 10 7 2 30
H.R. 5261, Treatment, Education, and Community Help
to Combat Addiction Act of 2018:
Authorization Level.............................. 0 4 4 4 4 4 20
Estimated Outlays................................ 0 1 3 4 4 4 16
H.R. 5327, Comprehensive Opioid Recovery Centers Act
of 2018:
Authorization Level.............................. 0 10 10 10 10 10 50
Estimated Outlays................................ 0 3 8 10 10 10 41
H.R. 5329, Poison Center Network Enhancement Act of
2018:
Authorization Level.............................. 0 30 30 30 30 30 151
Estimated Outlays................................ 0 12 25 29 29 29 125
H.R. 5353, Eliminating Opioid-Related Infectious
Diseases Act of 2018:
Authorization Level.............................. 0 40 40 40 40 40 200
Estimated Outlays................................ 0 15 34 38 39 40 166
H.R. 5580, Surveillance and Testing of Opioids to
Prevent Fentanyl Deaths Act of 2018:
Authorization Level.............................. 30 30 30 30 30 0 120
Estimated Outlays................................ 0 11 25 29 29 19 113
H.R. 5587, Peer Support Communities of Recovery Act:
Authorization Level.............................. 0 15 15 15 15 15 75
Estimated Outlays................................ 0 5 13 14 15 15 62
----------------------------------------------------------------------------------------------------------------
Annual amounts may not sum to totals because of rounding. * = between zero and $500,000.
H.R. 4684, the Ensuring Access to Quality Sober Living Act,
would direct the Secretary of HHS to develop and disseminate
best practices for organizations that operate housing designed
for people recovering from substance use disorders. The bill
would authorize a total of $3 million over the 2019-2021 period
for that purpose. Based on historical spending patterns for
similar activities, CBO estimates that implementing H.R. 4684
would cost $3 million over the 2019-2023 period.
H.R. 5102, the Substance Use Disorder Workforce Loan
Repayment Act of 2018, would establish a loan repayment program
for mental health professionals who practice in areas with few
mental health providers or with high rates of death from
overdose and would authorize $25 million per year over the
2019-2028 period for that purpose. Based on historical spending
patterns for similar activities, CBO estimates that
implementing H.R. 5102 would cost $100 million over the 2019-
2023 period; the remaining amounts would be spent in years
after 2023.
H.R. 5176, the Preventing Overdoses While in Emergency
Rooms Act of 2018, would require the Secretary of HHS to
develop protocols and a grant program for health care providers
to address the needs of people who survive a drug overdose, and
it would authorize $50 million in 2019 for that purpose. Based
on historical spending patterns for similar activities, CBO
estimates that implementing H.R. 5176 would cost $50 million
over the 2019-2023 period.
H.R. 5197, the Alternatives to Opioids (ALTO) in the
Emergency Department Act, would direct the Secretary of HHS to
carry out a demonstration program for hospitals and emergency
departments to develop alternative protocols for pain
management that limit the use of opioids and would authorize
$10 million annually in grants for fiscal years 2019 through
2021. Based on historical spending patterns for similar
programs, CBO estimates that implementing H.R. 5197 would cost
$30 million over the 2019-2023 period.
H.R. 5261, the Treatment, Education, and Community Help to
Combat Addiction Act of 2018, would direct the Secretary of
HHS to designate regional centers of excellence to improve the
training of health professionals who treat substance use
disorders. The bill would authorize $4 million annually for
grants to those programs over the 2019-2023 period. Based on
historical spending patterns for similar activities, CBO
estimates that implementing H.R. 5261 would cost $16 million
over the 2019-2023 period; the remaining amounts would be spent
in years after 2023.
H.R. 5327, the Comprehensive Opioid Recovery Centers Act of
2018, would direct the Secretary of HHS to award grants to at
least 10 providers that offer treatment services for people
with opioid use disorder, and it would authorize $10 million
per year over the 2019-2023 period for that purpose. Based on
historical spending patterns for similar activities, CBO
estimates that implementing H.R. 5327 would cost $41 million
over the 2019-2023 period; the remaining amounts would be spent
in years after 2023.
H.R. 5329, the Poison Center Network Enhancement Act of
2018, would reauthorize the poison control center toll-free
number, national media campaign, and grant program under the
Public Health Service Act. Among other actions, H.R. 5329 would
increase the share of poison control center funding that could
be provided by federal grants. The bill would authorize a total
of about $30 million per year over the 2019-2023 period. Based
on historical spending patterns for similar activities, CBO
estimates that implementing H.R. 5329 would cost $125 million
over the 2019-2023 period; the remaining amounts would be spent
in years after 2023.
H.R. 5353, the Eliminating Opioid Related Infectious
Diseases Act of 2018, would amend the Public Health Service Act
by broadening the focus of surveillance and education programs
from preventing and treating hepatitis C virus to preventing
and treating infections associated with injection drug use. It
would authorize $40 million per year over 2019-2023 period for
that purpose. Based on historical spending patterns for similar
activities, CBO estimates that implementing H.R. 5353 would
cost $166 million over the 2019-2023 period; the remaining
amounts would be spent in years after 2023.
H.R. 5580, the Surveillance and Testing of Opioids to
Prevent Fentanyl Deaths Act of 2018, would establish a grant
program for public health laboratories that conduct testing for
fentanyl and other synthetic opioids. It also would direct the
Centers for Disease Control and Prevention to expand its drug
surveillance program, with a particular focus on collecting
data on fentanyl. The bill would authorize a total of $30
million per year over the 2018-2022 period for those
activities. Based on historical spending patterns for similar
activities, CBO estimates that implementing H.R. 5580 would
cost $113 million over the 2019-2023 period; the remaining
amounts would be spent in years after 2023.
H.R. 5587, Peer Support Communities of Recovery Act, would
direct the Secretary of HHS to award grants to nonprofit
organizations that support community-based, peer-delivered
support, including technical support for the establishment of
recovery community organizations, independent, nonprofit groups
led by people in recovery and their families. The bill would
authorize $15 million per year for the 2019-2023 period. Based
on historical spending patterns for similar activities, CBO
estimates that implementing H.R. 5587 would cost $62 million
over the 2019-2023 period; the remaining amounts would be spent
in years after 2023.
Estimated Authorizations. Table 3 shows CBO's estimates of
the appropriations that would be necessary to implement 19 of
the bills. Spending would be subject to appropriation of those
amounts.
H.R. 449, the Synthetic Drug Awareness Act of 2018, would
require the Surgeon General to report to the Congress on the
health effects of synthetic psychoactive drugs on children
between the ages of 12 and 18. Based on spending patterns for
similar activities, CBO estimates that implementing H.R. 449
would cost approximately $1 million over the 2019-2023 period.
H.R. 4005, the Medicaid Reentry Act, would direct the
Secretary of HHS to convene a group of stakeholders to develop
and report to the Congress on best practices for addressing
issues related to health care faced by those returning from
incarceration to their communities. The bill also would require
the Secretary to issue a letter to state Medicaid directors
about relevant demonstration projects. Based on an analysis of
anticipated workload, CBO estimates that implementing H.R. 4005
would cost less than $500,000 over the 2018-2023 period.
H.R. 4275, the Empowering Pharmacists in the Fight Against
Opioid Abuse Act, would require the Secretary of HHS to develop
and disseminate materials for training pharmacists, health care
practitioners, and the public about the circumstances under
which a pharmacist may decline to fill a prescription. Based on
historical spending patterns for similar activities, CBO
estimates that costs to the federal government for the
development and distribution of those materials would not be
significant.
TABLE 3.--ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR BILLS WITH ESTIMATED AUTHORIZATIONS
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------------------
2018 2019 2020 2021 2022 2023 2019-2023
----------------------------------------------------------------------------------------------------------------
INCREASES IN SPENDING SUBJECT TO APPROPRIATION
H.R. 449, Synthetic Drug Awareness Act of 2018:
Estimated Authorization Level................. 0 * * * 0 0 1
Estimated Outlays............................. 0 * * * 0 0 1
H.R. 4005, Medicaid Reentry Act:
Estimated Authorization Level................. * * 0 0 0 0 *
Estimated Outlays............................. * * 0 0 0 0 *
H.R. 4275, Empowering Pharmacists in the Fight
Against Opioid Abuse Act:
Estimated Authorization Level................. 0 * * * * * *
Estimated Outlays............................. 0 * * * * * *
H.R. 5009, Jessie's Law:
Estimated Authorization Level................. 0 * * * * * *
Estimated Outlays............................. 0 * * * * * *
H.R. 5041, Safe Disposal of Unused Medication Act:
Estimated Authorization Level................. 0 * * * * * *
Estimated Outlays............................. 0 * * * * * *
H.R. 5272, Reinforcing Evidence-Based Standards
Under Law in Treating Substance Abuse Act of
2018:
Estimated Authorization Level................. 0 1 1 1 1 1 4
Estimated Outlays............................. 0 1 1 1 1 1 4
H.R. 5333, Over-the-Counter Monograph Safety,
Innovation, and Reform Act of 2018:a
Food and Drug Administration:
Collections from fees:
Estimated Authorization Level......... 0 -22 -22 -26 -35 -42 -147
Estimated Outlays..................... 0 -22 -22 -26 -35 -42 -147
Spending of fees:
Estimated Authorization Level......... 0 22 22 26 35 42 147
Estimated Outlays..................... 0 6 17 30 44 41 137
Net effect on FDA:
Estimated Authorization Level......... 0 0 0 0 0 0 0
Estimated Outlays..................... 0 -17 -6 4 9 * -10
Government Accountability Office:
Estimated Authorization Level............. 0 0 0 0 0 * *
Estimated Outlays......................... 0 0 0 0 0 * *
Total, H.R. 5333:
Estimated Authorization Level............. 0 0 0 0 0 * *
Estimated Outlays......................... 0 -17 -6 4 9 * -10
H.R. 5473, Better Pain Management Through Better
Data Act of 2018:
Estimated Authorization Level................. 0 * * * * 0 1
Estimated Outlays............................. 0 * * * * * 1
H.R. 5483, Special Registration for Telemedicine
Clarification Act of 2018:
Estimated Authorization Level................. 0 * * * * * *
Estimated Outlays............................. 0 * * * * * *
H.R. 5554, Animal Drug and Animal Generic Drug
User Fee Amendments of 2018:
Collections from fees:
Animal drug fees.......................... 0 -30 -31 -32 -33 -34 -159
Generic animal drug fees.................. 0 -18 -19 -19 -20 -21 -97
Total, Estimated Authorization Level.. 0 -49 -50 -51 -53 -55 -257
Total, Estimated Outlays.............. 0 -49 -50 -51 -53 -55 -257
Spending of fees:
Animal drug fees.......................... 0 30 31 32 33 34 159
Generic animal drug fees.................. 0 18 19 19 20 21 97
Total, Estimated Authorization Level.. 0 49 50 51 53 55 257
Total, Estimated Outlays.............. 0 39 47 51 52 54 243
Net changes in fees:
Estimated Authorization Level............. 0 0 0 0 0 0 0
Estimated Outlays......................... 0 -10 -3 * * * -14
Other effects:
Estimated Authorization Level............. 0 3 1 1 1 1 6
Estimated Outlays......................... 0 2 1 1 1 1 6
Total, H.R. 5554:
Estimated Authorization Level............. 0 3 1 1 1 1 6
Estimated Outlays......................... 0 -8 -2 1 * * -8
H.R. 5582, Abuse Deterrent Access Act of 2018:
Estimated Authorization Level................. 0 0 * 0 0 0 *
Estimated Outlays............................. 0 0 * 0 0 0 *
H.R. 5590, Opioid Addiction Action Plan Act:
Estimated Authorization Level................. * * * * * * 2
Estimated Outlays............................. * * * * * * 2
H.R. 5687, Securing Opioids and Unused Narcotics
with Deliberate Disposal and Packaging Act of
2018:
Estimated Authorization Level................. 0 * * * * * *
Estimated Outlays............................. 0 * * * * * *
H.R. 5715, Strengthening Partnerships to Prevent
Opioid Abuse Act:
Estimated Authorization Level................. 0 2 2 2 2 2 9
Estimated Outlays............................. 0 2 2 2 2 2 9
H.R. 5789, a bill to require the Secretary of
Health and Human Services to issue guidance to
improve care for infants with neonatal abstinence
syndrome and their mothers, and to require the
Comptroller General of the United States to
conduct a study on gaps in Medicaid coverage for
pregnant and postpartum women with substance use
disorder:
Estimated Authorization Level................. 0 2 0 0 0 0 2
Estimated Outlays............................. 0 2 0 0 0 0 2
H.R. 5795, Overdose Prevention and Patient Safety
Act:
Estimated Authorization Level................. 0 1 0 0 0 0 1
Estimated Outlays............................. 0 1 0 0 0 0 1
H.R. 5800, Medicaid IMD ADDITIONAL INFO Act:
Estimated Authorization Level................. 0 1 0 0 0 0 1
Estimated Outlays............................. 0 * * 0 0 0 1
H.R. 5804, Post-Surgical Injections as an Opioid
Alternative Act:a
Estimated Authorization Level................. 0 0 0 0 1 1 1
Estimated Outlays............................. 0 0 0 0 1 1 1
H.R. 5811, a bill to amend the Federal Food, Drug,
and Cosmetic Act with respect to postapproval
study requirements for certain controlled
substances, and for other purposes:
Estimated Authorization Level................. 0 * * * * * *
Estimated Outlays............................. 0 * * * * * *
----------------------------------------------------------------------------------------------------------------
Annual amounts may not sum to totals because of rounding. * = between -$500,000 and $500,000.
aThis bill also would affect mandatory spending (see Table 1).
H.R. 5009, Jessie's Law, would require HHS, in
collaboration with outside experts, to develop best practices
for displaying information about opioid use disorder in a
patient's medical record. HHS also would be required to develop
and disseminate written materials annually to health care
providers about what disclosures could be made while still
complying with federal laws that govern health care privacy.
Based on spending patterns for similar activities, CBO
estimates that implementing H.R. 5009 would have an
insignificant effect on spending over the 2019-2023 period.
H.R. 5041, the Safe Disposal of Unused Medication Act,
would require hospice programs to have written policies and
procedures for the disposal of controlled substances after a
patient's death. Certain licensed employees of hospice programs
would be permitted to assist in the disposal of controlled
substances that were lawfully dispensed. Using information from
the Department of Justice (DOJ), CBO estimates that
implementing the bill would cost less than $500,000 over the
2019-2023 period.
H.R. 5272, the Reinforcing Evidence-Based Standards Under
Law in Treating Substance Abuse Act of 2018, would require the
newly established National Mental Health and Substance Use
Policy Laboratory to issue guidance to applicants for SAMHSA
grants that support evidence-based practices. Using information
from HHS about the historical cost of similar activities, CBO
estimates that enacting this bill would cost approximately $4
million over the 2019-2023 period.
H.R. 5333, the Over-the-Counter Monograph Safety,
Innovation, and Reform Act of 2018, would change the FDA's
oversight of the commercial marketing of OTC medicines and
authorize the collection and spending of fees through 2023 to
cover the costs of expediting the FDA's administrative
procedures for certain regulatory activities relating to OTC
products. Under H.R. 5333, CBO estimates, the FDA would assess
about $147 million in fees over the 2019-2023 period that could
be collected and made available for obligation only to the
extent and in the amounts provided in advance in appropriation
acts. Because the FDA could spend those fees, CBO estimates
that the estimated budget authority for collections and
spending would offset each other exactly in each year, although
CBO expects that spending initially would lag behind
collections. Assuming appropriation action consistent with the
bill, CBO estimates that implementing H.R. 5333 would reduce
net discretionary outlays by $10 million over the 2019-2023
period, primarily because of that lag. The bill also would
require the Government Accountability Office to study exclusive
market protections for certain qualifying OTC drugs authorized
by the bill--a provision that CBO estimates would cost less
than $500,000. (If enacted, H.R. 5333 also would affect
mandatory spending; see Table 1.)
H.R. 5473, the Better Pain Management Through Better Data
Act of 2018, would require that the FDA conduct a public
meeting and issue guidance to industry addressing data
collection and labeling for medical products that reduce pain
while enabling the reduction, replacement, or avoidance of oral
opioids. Using information from the agency, CBO estimates that
implementing H.R. 5473 would cost about $1 million over the
2019-2023 period.
H.R. 5483, the Special Registration for Telemedicine
Clarification Act of 2018, would direct DOJ, within one year of
the bill's enactment, to issue regulations concerning the
practice of telemedicine (for remote diagnosis and treatment of
patients). Using information from DOJ, CBO estimates that
implementing the bill would cost less than $500,000 over the
2019-2023 period.
H.R. 5554, the Animal Drug and Animal Generic Drug User Fee
Amendments of 2018, would authorize the FDA to collect and
spend fees to cover the cost of expedited approval for the
development and marketing of certain drugs for use in animals.
The legislation would extend through fiscal year 2023, and make
several changes to, the FDA's existing approval processes and
fee programs for brand-name and generic veterinary drugs, which
expire at the end of fiscal year 2018. CBO estimates that
implementing H.R. 5554 would reduce net discretionary outlays
by $8 million over the 2019-2023 period, primarily because the
spending of fees lags somewhat behind their collection.
Fees authorized under the bill would supplement funds
appropriated to cover the FDA's cost of reviewing certain
applications and investigational submissions for brand-name and
generic drugs for use in animals. Those fees could be collected
and made available for obligation only to the extent and in the
amounts provided in advance in appropriation acts. Under H.R.
5554, CBO estimates, the FDA would assess about $257 million in
fees over the 2019-2023 period. Because the FDA could spend
those funds, CBO estimates that budget authority for
collections and spending would offset each other exactly in
each year. CBO estimates that the delay between collecting and
spending fees under the reauthorized programs would reduce net
discretionary outlays by $14 million over the 2019-2023 period,
assuming appropriation actions consistent with the bill.
Enacting H.R. 5554 would increase the FDA's workload
because the legislation would expand eligibility for
conditional approval for certain drugs. The agency's
administrative costs also would increase because of regulatory
activities required by a provision concerning petitions for
additives intended for use in animal food. H.R. 5554 also would
require the FDA to publish guidance or produce regulations on a
range of topics, transmit a report to the Congress, and hold
public meetings. CBO expects that the costs associated with
those activities would not be covered by fees, and it estimates
that implementing such provisions would cost $6 million over
the 2019-2023 period.
H.R. 5582, the Abuse Deterrent Access Act of 2018, would
require the Secretary of HHS to report to the Congress on
existing barriers to access to ``abuse-deterrent opioid
formulations'' by Medicare Part C and D beneficiaries. Such
formulations make the drugs more difficult to dissolve for
injection, for example, and thus can impede their abuse.
Assuming the availability of appropriated funds and based on
historical spending patterns for similar activities, CBO
estimates that implementing the legislation would cost less
than $500,000 over the 2019-2023 period.
H.R. 5590, the Opioid Addiction Action Plan Act, would
require the Secretary of HHS to develop an action plan by
January 1, 2019, for increasing access to medication-assisted
treatment among Medicare and Medicaid enrollees. The bill also
would require HHS to convene a stakeholder meeting and issue a
request for information within three months of enactment, and
to submit a report to the Congress by June 1, 2019. Based on
historical spending patterns for similar activities, CBO
estimates that implementing H.R. 5590 would cost approximately
$2 million over the 2019-2023 period.
H.R. 5687, the Securing Opioids and Unused Narcotics with
Deliberate Disposal and Packaging Act of 2018, would permit the
FDA to require certain packaging and disposal technologies,
controls, or measures to mitigate the risk of abuse and misuse
of drugs. Based on information from the FDA, CBO estimates that
implementing H.R. 5687 would not significantly affect spending
over the 2019-2023 period. This bill would also require that
the GAO study the effectiveness and use of packaging
technologies for controlled substances--a provision that CBO
estimates would cost less than $500,000.
H.R. 5715, the Strengthening Partnerships to Prevent Opioid
Abuse Act, would require the Secretary of HHS to establish a
secure Internet portal to allow HHS, Medicare Advantage plans,
and Medicare Part D plans to exchange information about fraud,
waste, and abuse among providers and suppliers no later than
two years after enactment. H.R. 5715 also would require
organizations with Medicare Advantage contracts to submit
information on investigations related to providers suspected of
prescribing large volumes of opioids through a process
established by the Secretary no later than January 2021. Based
on historical spending patterns for similar activities, CBO
estimates that implementing H.R. 5715 would cost approximately
$9 million over the 2019-2023 period.
H.R. 5789, a bill to require the Secretary of Health and
Human Services to issue guidance to improve care for infants
with neonatal abstinence syndrome and their mothers, and to
require the Comptroller General of the United States to conduct
a study on gaps in Medicaid coverage for pregnant and
postpartum women with substance use disorder, would direct the
Secretary of HHS to issue guidance to states on best practices
under Medicaid and CHIP for treating infants with neonatal
abstinence syndrome. H.R. 5789 also would direct the Government
Accountability Office to study Medicaid coverage for pregnant
and postpartum women with substance use disorders. Based on
information from HHS and historical spending patterns for
similar activities, CBO estimates that enacting H.R. 5789 would
cost approximately $2 million over the 2019-2023 period.
H.R. 5795, the Overdose Prevention and Patient Safety Act,
would amend the Public Health Service Act so that requirements
pertaining to the confidentiality and disclosure of medical
records relating to substance use disorders align with the
provisions of the Health Insurance Portability and
Accountability Act of 1996. The bill would require the Office
of the Secretary of HHS to issue regulations prohibiting
discrimination based on data disclosed from such medical
records, to issue regulations requiring covered entities to
provide written notice of privacy practices, and to develop
model training programs and materials for health care providers
and patients and their families. Based on spending patterns for
similar activities, CBO estimates that implementing H.R. 5795
would cost approximately $1 million over the 2019-2023 period.
H.R. 5800, Medicaid IMD ADDITIONAL INFO Act, would direct
the Medicaid and CHIP Payment and Access Commission to study
institutions for mental diseases in a representative sample of
states. Based on information from the commission about the cost
of similar work, CBO estimates that implementing H.R. 5800
would cost about $1 million over the 2019-2023 period.
H.R. 5804, the Post-Surgical Injections as an Opioid
Alternative Act, would freeze the Medicare payment rate for
certain analgesic injections provided in ambulatory surgical
centers. The bill also would mandate two studies of Medicare
coding and payments arising from enactment of this legislation.
Based on the cost of similar activities, CBO estimates that
those reports would cost $1 million over the 2019-2023 period.
(If enacted, H.R. 5804 also would affect mandatory spending;
see Table 1.)
H.R. 5811, a bill to amend the Federal Food, Drug, and
Cosmetic Act with respect to postapproval study requirements
for certain controlled substances, and for other purposes,
would allow the FDA to require that pharmaceutical
manufacturers study certain drugs after they are approved to
assess any potential reduction in those drugs' effectiveness
for the conditions of use prescribed, recommended, or suggested
in labeling. CBO anticipates that implementing H.R. 5811 would
not significantly affect the FDA's costs over the 2019-2023
period.
Other Authorizations. The following nine bills would
increase authorization levels, but CBO has not completed
estimates of amounts. All authorizations would be subject to
future appropriation action.
H.R. 4284, Indexing Narcotics, Fentanyl, and
Opioids Act of 2017
H.R. 5002, Advancing Cutting Edge Research
Act
H.R. 5228, Stop Counterfeit Drugs by
Regulating and Enhancing Enforcement Now Act (see Table
1 for an estimate of the revenue effects of H.R. 5228)
H.R. 5752, Stop Illicit Drug Importation Act
of 2018 (see Table 1 for an estimate of the revenue
effects of H.R. 5752)
H.R. 5799, Medicaid DRUG Improvement Act
(see Table 1 for an estimate of the direct spending
effects of H.R. 5799)
H.R. 5801, Medicaid Providers and
Pharmacists Are Required to Note Experiences in Record
Systems to Help In-Need Patients (PARTNERSHIP) Act (see
Table 1 for an estimate of the direct spending effects
of H.R. 5801)
H.R. 5806, 21st Century Tools for Pain and
Addiction Treatments Act
H.R. 5808, Medicaid Pharmaceutical Home Act
of 2018 (see Table 1 for an estimate of the direct
spending effects of H.R. 5808)
H.R. 5812, Creating Opportunities that
Necessitate New and Enhanced Connections That Improve
Opioid Navigation Strategies Act (CONNECTIONS) Act
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. Twenty-two of the bills discussed in this document
contain direct spending or revenues and are subject to pay-as-
you-go procedures. Details about the amount of direct spending
and revenues in those bills can be found in Table 1.
Increase in long-term direct spending and deficits: CBO
estimates that enacting H.R. 4998, the Health Insurance for
Former Foster Youth Act, would increase net direct spending by
more than $2.5 billion and on-budget deficits by more than $5
billion in at least one of the four consecutive 10-year periods
beginning in 2029.
CBO estimates that none of the remaining 58 bills included
in this estimate would increase net direct spending by more
than $2.5 billion or on-budget deficits by more than $5 billion
in any of the four consecutive 10-year periods beginning in
2029.
Mandates: One of the 59 bills included in this document,
H.R. 5795, would impose both intergovernmental and private-
sector mandates as defined in UMRA. CBO estimates that the
costs of that bill's mandates on public and private entities
would fall below UMRA's thresholds ($80 million and $160
million, respectively, for public- and private-sector entities
in 2018, adjusted annually for inflation).
In addition, five bills would impose private-sector
mandates as defined in UMRA. CBO estimates that the costs of
the mandates in three of those bills (H.R. 5333, H.R. 5554, and
H.R. 5811) would fall below the UMRA threshold. Because CBO
does not know how federal agencies would implement new
authority granted in the other two of those five bills, H.R.
5228 and 5687, CBO cannot determine whether the costs of their
mandates would exceed the threshold.
For large entitlement grant programs, including Medicaid
and CHIP, UMRA defines an increase in the stringency of
conditions on states or localities as an intergovernmental
mandate if the affected governments lack authority to offset
those costs while continuing to provide required services.
Because states possess significant flexibility to alter their
responsibilities within Medicaid and CHIP, the requirements
imposed by various bills in the markup on state administration
of those programs would not constitute mandates as defined in
UMRA.
Mandates Affecting Public and Private Entities
H.R. 5795, the Overdose Prevention and Patient Safety Act,
would impose intergovernmental and private-sector mandates by
requiring entities that provide treatment for substance use
disorders to notify patients of their privacy rights and also
to notify patients in the event that the confidentiality of
their records is breached. In certain circumstances, H.R. 5795
also would prohibit public and private entities from denying
entry to treatment on the basis of information in patient
health records. Those requirements would either supplant or
narrowly expand responsibilities under existing law, and
compliance with them would not impose significant additional
costs. CBO estimates that the costs of the mandates would fall
below the annual thresholds established in UMRA.
Mandates Affecting Private Entities
Five bills included in this document would impose private-
sector mandates:
H.R. 5228, the Stop Counterfeit Drugs by Regulating and
Enhancing Enforcement Now Act, would require drug distributors
to cease distributing any drug that the Secretary of HHS
determines might present an imminent or substantial hazard to
public health. CBO cannot determine what drugs could be subject
to such an order nor can it determine how private entities
would respond. Consequently, CBO cannot determine whether the
aggregate cost of the mandate would exceed the annual threshold
for private-sector mandates.
H.R. 5333, the Over-the-Counter Monograph Safety,
Innovation, and Reform Act of 2018, would require developers
and manufacturers of OTC drugs to pay certain fees to the FDA.
CBO estimates that about $30 million would be collected each
year, on average, for a total of $147 million over the 2019-
2023 period. Those amounts would not exceed the annual
threshold for private-sector mandates in any year during that
period.
H.R. 5554, the Animal Drug and Animal Generic Drug User Fee
Amendments of 2018, would require developers and manufacturers
of brand-name and generic veterinary drugs to pay application,
product, establishment, and sponsor fees to the FDA. CBO
estimates that about $51 million would be collected annually,
on average, for a total of $257 million over the 2019-2023
period. Those amounts would not exceed the annual threshold for
private-sector mandates in any year during that period.
H.R. 5687, the Securing Opioids and Unused Narcotics with
Deliberate Disposal and Packaging Act of 2018, would permit the
Secretary of HHS to require drug developers and manufacturers
to implement new packaging and disposal technology for certain
drugs. Based on information from the agency, CBO expects that
the Secretary would use the new regulatory authority provided
in the bill; however, it is uncertain how or when those
requirements would be implemented. Consequently, CBO cannot
determine whether the aggregate cost of the mandate would
exceed the annual threshold for private entities.
H.R. 5811, a bill to amend the Federal Food, Drug, and
Cosmetic Act with respect to postapproval study requirements
for certain controlled substances, and for other purposes,
would expand an existing mandate that requires drug developers
to conduct postapproval studies or clinical trials for certain
drugs. Under current law, in certain instances, the FDA can
require studies or clinical trials after a drug has been
approved. H.R. 5811 would permit the FDA to use that authority
if the reduction in a drug's effectiveness meant that its
benefits no longer outweighed its costs. CBO estimates that the
incremental cost of the mandate would fall below the annual
threshold established in UMRA because of the small number of
drugs affected and the narrow expansion of the authority that
exists under current law.
None of the remaining 53 bills included in this document
would impose an intergovernmental or private-sector mandate.
Previous CBO estimate: On June 6, 2018, CBO issued an
estimate for seven opioid-related bills ordered reported by the
House Committee on Ways and Means on May 16, 2018. Two of those
bills contain provisions that are identical or similar to the
legislation ordered reported by the Committee on Energy and
Commerce, and for those provisions, CBO's estimates are the
same.
In particular, five bills listed in this estimate contain
provisions that are identical or similar to those in several
sections of H.R. 5773, the Preventing Addiction for Susceptible
Seniors Act of 2018:
H.R. 5675, which would require prescription
drug plans to implement drug management programs, is
identical to section 2 of H.R. 5773.
H.R. 4841, regarding electronic prior
authorization for prescriptions under Medicare's Part
D, is similar to section 3 of H.R. 5773.
H.R. 5715, which would mandate the creation
of a new Internet portal to allow various stakeholders
to exchange information, is identical to section 4 of
H.R. 5773.
H.R. 5684, which would expand medication
therapy management, is the same as section 5 of H.R.
5773.
H.R. 5716, regarding prescriber
notification, is identical to section 6 of H.R. 5773.
In addition, in this estimate, a provision related to
Medicare beneficiary education in H.R. 5686, the Medicare Clear
Health Options in Care for Enrollees Act of 2018, is the same
as a provision in section 2 of H.R. 5775, the Providing
Reliable Options for Patients and Educational Resources Act of
2018, in CBO's estimate for the Committee on Ways and Means.
Estimate prepared by: Federal Costs: Rebecca Yip (Centers
for Disease Control and Prevention), Mark Grabowicz (Drug
Enforcement Agency), Julia Christensen, Ellen Werble (Food and
Drug Administration), Emily King, Andrea Noda, Lisa Ramirez-
Branum, Robert Stewart (Medicaid and Children's Health
Insurance Program), Philippa Haven, Lara Robillard, Colin Yee,
Rebecca Yip (Medicare), Philippa Haven (National Institutes of
Health), Alice Burns, Andrea Noda (Office of the Secretary of
the Department of Health and Human Services), Philippa Haven,
Lori Housman, Emily King (Substance Abuse and Mental Health
Services Administration, Health Resources and Services
Administration); Federal Revenues: Jacob Fabian, Peter Huether,
and Cecilia Pastrone; Fact Checking: Zachary Byrum and Kate
Kelly; Mandates: Andrew Laughlin.
Estimate reviewed by: Tom Bradley, Chief, Health Systems
and Medicare Cost Estimates Unit; Chad M. Chirico, Chief, Low-
Income Health Programs and Prescription Drugs Cost Estimates
Unit; Sarah Masi, Special Assistant for Health; Susan Willie,
Chief, Mandates Unit; Leo Lex, Deputy Assistant Director for
Budget Analysis; Theresa A. Gullo, Assistant Director for
Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII, the general
performance goal or objective of this legislation is to extend
pass through payment for certain qualifying drugs to encourage
the development of non-opioid drugs for post-surgical pain
management under the Medicare program.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII, no provision of
H.R. 5809 is known to be duplicative of another Federal
program, including any program that was included in a report to
Congress pursuant to section 21 of Public Law 111-139 or the
most recent Catalog of Federal Domestic Assistance.
Committee Cost Estimate
Pursuant to clause 3(d)(1) of rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974.
Earmark, Limited Tax Benefits, and Limited Tariff Benefits
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the
Committee finds that H.R. 5809 contains no earmarks, limited
tax benefits, or limited tariff benefits.
Disclosure of Directed Rule Makings
Pursuant to section 3(i) of H. Res. 5, the Committee finds
that H.R. 3331 contains no directed rule makings.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 provides that the Act may be cited as the
``Postoperative Opioid Prevention Act of 2018.''
Section 2. Medicare incentives for use of non-opioid analgesics in
hospital outpatient departments and ambulatory surgical centers
Section 2 extends the eligibility to receive pass through
payments from three years to five years for qualifying drugs.
In order to qualify, the drug must be a non-opioid analgesic,
demonstrate substantial clinical improvement through a process
developed by the Secretary, and either receive pass through
payment at the time of enactment or be a new drug coming to
market after enactment of the bill.
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 (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, and (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);
(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.
(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.
(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, or, in the case of
an eligible non-opioid analgesic (as
defined in subparagraph (J)), during a
period of 5 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).
(J) Eligible non-opioid analgesic defined.--
In this paragraph, the term ``eligible non-
opioid analgesic'' means a drug or biological--
(i) that is an analgesic that is not
an opioid;
(ii) that demonstrated substantial
clinical improvement; and
(iii) for which payment--
(I) as an outpatient hospital
service under this part was not
being made as of the date of
the enactment of this
subparagraph; or
(II) was being made under
this paragraph as of such date.
(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).
(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.
(z) 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.
* * * * * * *
DISSENTING VIEWS
H.R. 5809 would extend a temporary pass-through payment for
non-opioid analgesics for post-surgical pain management from
three to five years in the Medicare Outpatient Prospective
Payment System (OPPS). This bill is not an effective or
efficient use of taxpayer dollars, and would increase out-of-
pocket costs for Medicare beneficiaries. Additionally, there is
no evidence that this bill would have any positive impact on
the opioid crisis.
Under current law, new drugs maintain pass-through status
in the OPPS for three years, and are separately reimbursed.
After pass-through status expires, drugs that are deemed part
of an outpatient procedure or service are bundled into the cost
of the procedure. This encourages efficient use of hospital
resources. The bill would extend pass-through status for new
non-opioid analgesics for post-surgical pain from three to five
years, thereby allowing the manufacturers of these drugs to
obtain higher reimbursement for a longer period of time.
Supporters of H.R. 5809 state that extending pass-through
status would incentivize the development of more nonopioid
analgesics and thereby reduce opioid prescribing. However,
there is no evidence that this bill will have any impact on
reducing opioid prescribing. There are already many low cost
non-opioid analgesics for postoperative pain on the market.\1\
Yet the availability of these non-opioid alternatives does not
appear to have had any meaningful impact on the opioid crisis.
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\1\American Pain Society, Guidelines on the Management of
Postoperative Pain: A Clinical Practice Guideline From the American
Pain Society, the American Society of Regional Anesthesia and Pain
Medicine, and the American Society of Anesthesiologists' Committee on
Regional Anesthesia, Executive Committee, and Administrative Council,
The Journal of Pain (Feb. 2016).
---------------------------------------------------------------------------
Additionally, new drugs already get three years of pass
through status in the OPPS. There is no evidence to establish
that an additional two years of pass-through status is
necessary to incentivize the development of new non-opioid
analgesics.
Moreover, this bill is setting a troubling precedent of
Congress picking winners in the OPPS. The recent Balanced
Budget Act also extended pass-through status for two years for
a particular drug.\2\ Other drug companies will likely also
request extensions of pass-through status for their drugs.
Ultimately, more requests for extended pass-through status will
increase federal drug spending and out-of-pocket costs for
beneficiaries, who will now have to pay 20 percent coinsurance
on both the cost of the procedure and on the separately
reimbursed drug.
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\2\Buried in spending package: a big win for a small drug company,
STAT (Mar. 21, 2018) (www.statnews.com/2018/03/21/omeros-pass-through).
Eye drug company scores gift in spending bill, Axios (Mar. 22, 2018)
(www.axios.com/omeros-eye-drug-gift-1521729513-453a5b4f-7c86-44d0-b966-
f463c4bca05d.html).
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Supporters of H.R. 5809 have argued that we need to do more
to incentivize non-opioid alternatives for pain management.
While this is an important goal, but there are better ways to
address these concerns. At the Full Committee mark-up,
Representative Debbie Dingell offered an alternative to H.R.
5809, which would require the Centers for Medicare & Medicaid
Services (CMS) to conduct a comprehensive review of the
Outpatient Prospective Payment System (OPPS) and examine
whether there are financial disincentives to use non-opioid
alternatives for pain management, vis-a-vis opioid therapies.
The agency would be required to do this systematically, and
examine all the evidence-based non-opioid alternatives for pain
management that are currently on the market. The agency would
then be empowered to revise the OPPS to reduce any payment
incentives to use opioids instead of non-opioid alternatives.
CMS would do this on a budget neutral basis, rather than
costing taxpayers hundreds of millions of dollars. This is how
we should address the potential problem that the bill's
sponsors have raised, rather than Congress picking and choosing
winners. Unfortunately, the amendment failed on a roll call
vote.
H.R. 5809 is not a judicious use of taxpayer dollars, will
have no meaningful impact on the opioid crisis, and will set a
troubling precedent that likely increase federal spending on
drugs.
Frank Pallone, Jr.,
Ranking Member.
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