TITLE II - PROVISIONS RELATING TO PART B

Subtitle A - Hospital Outpatient Services
Sec. 201. Outlier Adjustment and Transitional Pass-Through For Certain Medical Devices, Drugs, And Biologicals
Inclusion of Certain Implantable Items Under System
Authorizing Payment Weights Based On Mean Hospital Costs
Limiting Variation of Costs of Services Classified with A Group
Annual Review of OPS PPS Components
Extension of Payment Provisions of Section 4522 Of BBA Until Implementation of PPS
Congressional Intentional Regarding Base Amounts Applying The HOPS PPS
Study Of Delivery of Intravenous Immune Globulin (IVIG) Outside Hospitals and Physicians' Offices
Sec. 202. Establishing a Transitional Corridor for Application Of OPD PPS
Sec. 203. Study and Report To Congress Regarding the Special Treatment of Rural and Cancer Hospitals in Prospective Payment System for Hospital Outpatient Department Services
Sec. 204. Limitation on Outpatient Hospital Copayment for a Procedure to The Hospital Deductible Amount

Subtitle B - Physician Services
Sec. 211. Modification of Update Adjustment Factor Provisions to Reduce Update Oscillations and Require Estimate Revisions
Sec. 212. Use of Data Collected by Organizations and Entities in Determining Practice Expenses Relative Values
Sec. 213. GAO Study on Resources Required to Provide Safe and Effective Outpatient Cancer Therapy

Subtitle C - Other Services
Sec. 221. Revision of Provisions Relating to Therapy Services
Sec. 222. Update in Renal Dialysis Composite Rate
Sec. 223. Implementation of the Inherent Reasonableness (IR) Authority
Sec. 224. Increased Reimbursement for Pap Smears
Sec. 225. Refinement of Ambulance Services Demonstration Project
Sec. 226. Phase-In of PPS for Ambulatory Surgical Centers
Sec. 227. Extension of Medicare Benefits For Immunosuppressive Drugs
Sec. 228. Temporary Increase in Payment Rates for Durable Medical Equipment and Oxygen
Sec. 229. Studies and Reports

Subtitle A - Hospital Outpatient Services

Outlier Adjustment And Transitional Pass-Through For Certain Medical Devices, Drugs And Biologic Agents (Section 201(a), (b), (c), (d) and (i))

Prior Law:
· The BBA required the Secretary to develop and implement an outpatient prospective payment system in which payments are made based on a fee schedule established for each service or group of services. The Secretary was permitted to establish adjustments, in a budget neutral manner, as determined to be necessary to ensure equitable payments, such as outlier adjustments.

Provisions:
· Outlier Adjustments - In order to ensure appropriate payment for high-cost cases, this provision provides additional payments for "outlier" services that cost more than a given threshold (taking into account any transitional pass-through payments described below). The threshold is to be established by the HHS Secretary. The additional payments are to cover the marginal cost of care beyond the threshold. These payments in total can be no more than 2.5 percent of total program payments for outpatient hospital services for each year before 2004 and no more than 3 percent in subsequent years. For services furnished before January 1, 2002, outlier payments may be based on costs for all services included in a bill for a patient submitted by an outpatient department, rather than for a specific outpatient service. In addition, the cost of services furnished to a patient may be based on an aggregate cost-to-charge ratio for the entire hospital, rather than cost-to-charge ratios for specific departments within the hospital.

· Transitional Pass-Through Payments - The provision also creates "transitional pass-through payments" for specific items in the outpatient setting in order to ensure beneficiary access to drugs, biologicals, and new technology. This means Medicare can, temporarily, pay above and beyond the prospective payment rate for orphan drugs, cancer therapy drugs, biologic agents, brachytherapy, radiopharmaceuticals, and new medical devices, drugs and biologic agents. New medical devices, drugs, and biologic agents shall receive a pass-through payment only if the cost is not insignificant in relation to the OPD fee schedule amount. For drugs and biologic agents, the pass-through payment will equal the difference between the otherwise applicable portion of the OPD PPS payment related to the drug or agent and 95 percent of the average wholesale price. For devices, the pass-through payment will equal the difference between that portion of the OPD PPS payment related to the device and the hospital's cost for the device (determined based on adjusting charges). Pass-through payments are limited to a period of two to three years. Total additional payments cannot exceed 2.5 percent of total program payments for outpatient hospital services for each year before 2004 and no more than 2 percent in subsequent years. If the Secretary estimates, before the beginning of the year, that total pass-through payments for the year will exceed those caps, the Secretary shall reduce pro rata the amount of each pass-through payment to ensure the limit is not exceeded.

· Budget Neutrality - These outlier and pass-through payments must be made in a budget neutral manner so that they generate no increase or decrease in total payment for outpatient hospital services.

· No Impact on Copayments - The outlier and pass-through payments shall have no effect on beneficiary copayment amounts.

· Limitation on Judicial Review for New Adjustments - The following components of the outlier adjustments shall not be subject to administrative or judicial review: the threshold for determining whether a service shall receive an outlier payment; the marginal cost of care beyond the threshold; and the percentage used to limit aggregate outlier adjustments. The following components of the transitional pass-through payments shall not be subject to administrative or judicial review: the determination of insignificance of cost for new devices, drugs, and biologic agents; the duration of additional payments; the portion of the OPD fee schedule amount associated with particular devices, drugs, or biologicals; and the application of any pro rata reduction to ensure that the aggregate limit is not exceeded.

Effective Date:
· Upon implementation of the prospective payment system.

Inclusion of Certain Implantable Items Under System (Section 201(e))

Previous Law:
· Previous law required implantable prosthetic devices and implantable durable medical equipment (DME) furnished in OPDs to be paid under the prosthetics and DME fee schedules. Implantable items associated with diagnostic tests were already paid under the payment system for outpatient department services.

Provision:
· Requires implantable prosthetic devices, implantable durable medical equipment, and any implantable items associated with diagnostic tests to be paid for under the outpatient prospective payment system when furnished in a hospital outpatient department. Such an implantable item must be classified to the group that includes the service to which it relates.

Effective Date:
· As if included in the BBA.

Authorizing Payment Weights Based on Mean Hospital Costs (Section 201(f))

Prior Law:
· The law required that the weights for the OPD PPS be based on median hospital costs.

Provision:
· This provision allows the HHS Secretary to base payment weights for the OPD PPS on mean hospital costs.

Effective Date:
· As if included in the BBA.

Limiting Variation of Costs of Services Classified With a Group (Section 201(g))

Prior Law:
· The law required the Secretary to establish groups of outpatient services so that services classified within each group are comparable clinically and with respect to the use of resources.

Provision:
· Stipulates that in classifying services to groups, the highest median cost for an item or service within a group can not exceed two times the lowest median cost for an item or service within the group. The Secretary may make exceptions in unusual cases, such as for low volume items and services, but may not make exceptions for orphan drugs.

Effective Date:
· As if included in the BBA.

Annual Review of OPD PPS Components (Section 201(h))

Prior Law:
· The law required the Secretary to periodically review and revise the groups, the relative payment weights, and the wage and other adjustments 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.

Provision:
· Requires the Secretary to review components of the OPD PPS not less often than annually. The Secretary is also required to consult with an expert outside advisory panel, composed of representatives of providers, to review and advise the Secretary on the clinical integrity of the groups and weights. The panel may use data collected or developed by entities other than the Department of Health and Human Services.

Effective Date:
· Requires the Secretary to first conduct the annual review in 2001 for application in 2002.

Extension of Payment Provisions of Section 4522 of BBA until Implementation of PPS (Section 201(k))

Prior Law:
· Section 4522 of the Balanced Budget Act extended through calendar year 1999 the following two provisions that would otherwise have expired at the end of 1998: the 10 percent reduction in payments for hospital outpatient capital, and the 5.8 percent reduction for outpatient services paid on a cost basis.

Provision:
· This provision would extend the 10 percent reduction in payments for hospital outpatient capital and the 5.8 percent reduction for outpatient services paid on a cost basis beyond 1999 until such time as the outpatient prospective payment system is implemented.

Effective Date:
· As if included in the BBA.
Congressional Intention Regarding Base Amounts in Applying the HOPD PPS (Section 201(l))

Prior Law:
· The law required that the Secretary should determine the aggregate amount payable under the OPD PPS in 1999 (the base period) based on: (1) the total amount of Medicare payments that would have otherwise been paid for outpatient hospital services in 1999 in the absence of the PPS; and (2) the total amount of copayments that are estimated to be paid for outpatient hospital services in 1999 under the OPD PPS. This aggregate amount is then used to establish the conversion factor that is used to determine the OPD fee schedule amounts.

Provision:
· This provision authorizes the Secretary to determine the total amount of beneficiary copayments that were estimated to be paid for outpatient hospital services in 1999, without regard to the provision in prior law prescribing the manner in which this calculation was to be done. Instead, the provision requires only that the Secretary determine such amount in a budget neutral manner with respect to aggregate payments to hospitals.

Effective Date:
· As if included in the BBA.
Study of Delivery of Intravenous Immune Globulin (IVIG) Outside Hospitals and Physicians' Offices (Section 201(n))

Prior Law:
· No provision.

Provision:
· Requires the Secretary to study the extent to which intravenous immune globulin (IVIG) could be delivered and reimbursed by Medicare outside of a hospital or physician's office. The Secretary shall: consider sites of services that other payors use; determine whether covering these drugs in a patient's home raises safety concerns and whether it would reduce overall spending; and determine whether changing site of service would affect access to care. The Secretary shall make recommendations on the appropriate manner and settings under which Medicare should pay for IVIG outside a hospital or physician's office.

Effective Date:
· The study is due 18 months after enactment.
Establishing a Transitional Corridor for Application of OPD PPS (Section 202)

Prior Law:
· The law allowed the Secretary to establish adjustments to the OPD PPS, in a budget neutral manner, as determined to be necessary to ensure equitable payments.

Provision:
· Transitional Corridors - Establishes transitional corridors until January 1, 2004 for the OPD PPS to limit losses in payments under the OPD PPS. A formula is established so that hospitals receive additional Medicare payments if the amount they receive under the OPD PPS in relation to their costs is less than their payment to cost ratio in 1996. The 1996 payment to cost ratio is calculated as if the formula driven overpayment, which was eliminated in the Balanced Budget Act, effective on October 1, 1997, were eliminated in 1996. These transitional payments have no effect on beneficiary copayments and are not subject to budget neutrality.

In order to determine transitional payments, a comparison is made between a hospital's payments (including cost-sharing) under the prospective payment system in a given year (the PPS amount) and the hospital's costs in that year multiplied by the hospital's 1996 payment to cost ratio (the pre-BBA amount).

For OPD services furnished under the PPS before 2002, if a hospital's PPS amount is:
- between 90 percent and 100 percent of the pre-BBA amount, 80 percent of that loss will be made up by additional Medicare payments.
- between 80 percent and 90 percent of the pre-BBA amount, the hospital will receive additional payments equal to the amount by which 71 percent of the pre-BBA amount exceeds 70 percent of the PPS amount.
- between 70 percent and 80 percent of the pre-BBA amount, the hospital will receive additional payments equal to the amount by which 63 percent of the pre-BBA amount exceeds 60 percent of the PPS amount.
- less than 70 percent of the pre-BBA amount, the hospital will receive additional payments equal to 21 percent of the pre-BBA amount.

In 2002, if the hospital's PPS amount is:
- between 90 percent and 100 percent of the pre-BBA amount, 70 percent of that loss will be made up by additional Medicare payments.
- between 80 percent and 90 percent of the pre-BBA amount, the hospital will receive additional payments equal to the amount by which 61 percent of the pre-BBA amount exceeds 60 percent of the PPS amount.
- less than 80 percent of the pre-BBA amount, the hospital will receive additional payments equal to 13 percent of the pre-BBA amount.

In 2003, if the hospital's PPS amount is:
- between 90 percent and 100 percent of the pre-BBA amount, 60 percent of that loss will be made up by additional Medicare payments.
- less than 90 percent of the pre-BBA amount, the hospital will receive additional payments equal to 6 percent of the pre-BBA amount.

· Temporary Treatment for Small Rural Hospitals - If a hospital with not more than 100 beds is located in a rural area, Medicare payments shall be increased to that hospital to ensure that their PPS amount is no lower than their pre-BBA amount for each year before 2004.

· Permanent Treatment for Cancer Hospitals - In the case of cancer hospitals, Medicare payments shall be increased to ensure that their PPS amount in each year is no lower than their pre-BBA amount.

· Interim Payments - The Secretary shall make additional transitional payments to hospitals under this provision on an interim basis, subject to retrospective adjustments based on settled cost reports.

Effective Date:
· As if included in the BBA.

Study and Report to Congress Regarding the Special Treatment of Rural and Cancer Hospitals in Prospective Payment System for Hospital Outpatient Department Services (Section 203)

Prior Law:
· No provision

Provision:
· The Medicare Payment Advisory Commission (MedPAC) is required to conduct a study to determine the appropriateness (and appropriate method) of paying the following hospitals for OPD services under the OPD PPS: Medicare-dependent small rural hospitals, sole community hospitals, rural health clinics, rural referral centers, any other rural hospital with not more than 100 beds, any other rural hospital that the Secretary determines appropriate, and cancer hospitals. MedPAC is required to make recommendations for legislation that it determines is appropriate as a result of the study.

Effective Date:
· The report is due 2 years after enactment. The Secretary is required to comment on the report no later than 60 days after completion.
Limitation on Outpatient Hospital Copayment for A Procedure to the Hospital Deductible Amount (Section 204)

Prior Law:
· When the PPS is implemented, the law establishes beneficiary copayments at 20 percent of national median charges. These rates are frozen until the copayment represents 20 percent of the total fee schedule amount. Under previous law, there were no upper limits on copayment amounts.

Provision
· Caps beneficiary copayments for outpatient services under the prospective payment system to the dollar amount of the deductible for an inpatient hospital stay (under Part A) with Medicare making up the difference between the limited copayment amount and the otherwise applicable copayment amount.

Effective Date:
· Effective as if included in the BBA.

Subtitle B - Physician Services

Modification of Update Adjustment Factor Provisions to Reduce Oscillations and Require Estimate Revisions (Section 211)

Prior Law:
· The BBA established the Sustainable Growth Rate (SGR) to balance the need to control total Medicare spending with the need to ensure adequate payment for physicians' services. However, the formula resulted in wide, unintended fluctuations from year to year.

Provision:
· This provision stabilizes the formula for updating physician payment rates. It moves the SGR target for total physician spending, which is used to adjust inflation updates, to a calendar year basis, beginning with 2000. It requires, within 90 days from enactment, a Federal Register notice on factors relating to the transition of the SGR from a fiscal to a calendar year basis, including the SGR for 2000. It modifies the update adjustment factor to blend 75 percent of the difference between actual and target expenditures in the previous year, and 33 percent of the cumulative difference between actual and target expenditures. To promote budget neutrality, it provides special adjustments of -0.2 percent for 2001 through 2004 and +0.8 percent for 2005. It requires the SGR to be revised based on later data available by September 1st of the year of the revision. It includes a transition provision for years in which the SGR is revised. After the transition, each November 1st, the Secretary must publish the SGR for the following year and revise the SGR for the current year and two preceding years. The SGR for the third preceding year would be final.

· It requires a Federal Register notice by November 1 of each year, beginning with 2000, publishing the update, conversion factor, and allowed expenditures that will apply for the next year. It requires, by March 1 of each year beginning with 2000, that an estimate of the next year's sustainable growth rate and of the conversion factor and the data used in making the estimate be made available to the Medicare Payment Advisory Commission (MedPAC) and the public. It requires MedPAC to include in their June 1st annual report to Congress a review of the estimate of the conversion factor for the next year.

· It requires the Agency for Health Care Policy & Research to study: (1) ways to accurately estimate the impact on Medicare physician expenditures from: (a) improvements in medical capabilities; (b) advances in technology; (c) Medicare demographic changes; and (d) changes in geographical locations where beneficiaries receive services; (2) the rate of use of physician services in the original Medicare fee-for-service program among beneficiaries between ages 65 and 74, 75 and 84, 85 and over, and disabled beneficiaries under age 65; and (3) other factors that may reliably predict Medicare fee-for-service use of physician services. The Secretary must report to Congress within 3 years of enactment. MedPAC must report to Congress, within 6 months of the Secretary's report to Congress, including an analysis and evaluation of the Secretary's report and recommendations.

Effective Date:
· For determining the conversion factors for years beginning with 2001.

Use of Data Collected by Organizations and Entities in Determining Practice Expense Relative Values (Section 212)

Prior Law:
· Congress required that payment for physician practice expenses (overhead costs, etc.) be made based on the relative practice expense resources included in furnishing a service rather than on historical charges as in the past.

Provision:
· It requires a process to accept and use data collected or developed outside HHS to supplement HHS data in determining practice expense relative values. An interim final regulation must be published so such data can be used in computing practice expense relative value units for 2001. It requires that publication of the estimated and final updates for 2001 and 2002 include a description of the process for using external data in adjusting relative value units. It must also describe the extent to which such external data have been used, particularly where the data otherwise used are not based on a large enough sample to be statistically reliable.

Effective Date:
· Enactment, but applies to payments beginning with 2001. It requires an interim final regulation during 2000.
GAO Study on Resources Required to Provide Safe and Effective Outpatient Cancer Therapy (Section 213)

Prior Law:
· Medicare must pay for physician practice expenses based on the relative practice expense resources involved with furnishing the service.

Provision:
· It requires the GAO to conduct a nationwide study to determine the physician and non-physician clinical resources necessary to provide safe outpatient cancer therapy services and the appropriate Medicare payment rates. The GAO is required to: (1) determine the adequacy of practice expense relative value units associated with the use of those clinical resources; (2) determine the adequacy of work units in the practice expense formula; and (3) assess various standards to assure the provision of safe outpatient cancer therapy services. GAO is to report to Congress on these issues and include a cost estimate of their recommendations.

Effective Date:
· There is no statutory date for the report to Congress.

Subtitle C - Other Services

Revision of Provisions Relating To Therapy Services (Section 221)

Prior Law:
· Prior to BBA, there were two annual per beneficiary limits of $900 each for physical therapy and occupational therapy furnished by independent practitioners of therapy. The BBA broadened the scope of these limits by establishing two annual payment limits for all outpatient Part B therapy services, except for therapy services furnished in hospital outpatient departments. The limits were established as follows: a $1500 per beneficiary annual cap for all outpatient physical therapy and speech language pathology services and a $1500 per beneficiary annual cap for all outpatient occupational therapy services.

· The BBA required the Secretary to report to Congress by January 1, 2001 recommending a revised policy for therapy services based on classification of individuals by diagnostic category and prior use of services, in place of the dollar limitations. The recommendations were to include how such a system of durational limits might be implemented in a budget-neutral manner.

Provision:
· 2-Year Moratorium on Caps - Suspends the annual payment limits for therapy services for 2 years -- 2000 and 2001.

· Focused Medical Reviews of Claims - Requires the Secretary, during the 2-year suspension, to conduct focused medical reviews of therapy claims, with an emphasis on claims for services in skilled nursing facilities.

· Revision of BBA Report - Requires the Secretary to submit a report, by January 1, 2001, including recommendations on: (a) the establishment of a mechanism for assuring appropriate utilization of outpatient therapy services; and (b) the establishment of an alternative payment policy for such services based on classification of individuals by diagnostic category, functional status, prior use of services, and other criteria determined appropriate by the Secretary. The report shall recommend how such a policy can be implemented in a budget-neutral manner.

· Study and Report on Utilization - Requires the Secretary to conduct a study, by June 30, 2001, which compares utilization patterns of therapy services provided on or after January 1, 2000 with utilization patterns for services provided in 1998 and 1999. The Secretary is required to review a statistically significant number of claims. The report must include recommendations for legislation that the Secretary determines to be appropriate.

· Referrals by Optometrists - Allows optometrists to refer patients for therapy services as well as establish and review the plan of care.

Effective Date:
· The following provisions are effective for services furnished on or after January 1, 2000: the 2-year moratorium on the caps, the focused medical review of claims and the provision allowing referrals by optometrists.

· The revision of the BBA report is effective as if included in the BBA.

Update In Renal Dialysis Composite Rate (Section 222)

Prior Law:
· Reimbursement for dialysis services for end stage renal disease patients is based on a fixed prospective payment amount set in statute by the Omnibus Budget Reconciliation Act of 1986 (OBRA 1986). OBRA 1990 added one dollar to the base rate that existed after 1986, making the base composite rate $126 for hospital-based providers and $122 for freestanding facilities. The rate does not increase each year.

Provision:
· Increases all composite rate payments in the year 2000 by 1.2 percent above 1999 payment rates. Increases year 2001 composite rate payments by 1.2 percent above 2000 rates.
· Sunsets OBRA 1986 language (as amended by OBRA 1989 and 1990) which sets current composite rate. OBRA 1986 composite rate setting language is no longer effective as of January 1, 2000.
· Requires MedPAC to study the difference in payment for home and facility hemodialysis and make recommendations regarding potential changes. Due 18 months after enactment.

Effective Date:
· Enactment.

Implementation of the Inherent Reasonableness (IR) Authority (Section 223)

Prior Law:
· The BBA gave the Secretary the authority to establish realistic and equitable payment amounts for Part B services (other than physicians' services) when the existing payment amounts are inherently unreasonable because they are either grossly excessive or grossly deficient [interim final rule was published 1/7/98]. In September 1998, the DMERCs notified suppliers of proposed IR reductions for six items. On August 13, 1999, HCFA published a Federal Register notice proposing IR reductions for six items.

Provision:
· The Secretary may not use or permit fiscal intermediaries or carriers to use the IR authority until after the GAO releases a report on IR requested on March 1, 1999 and the Secretary publishes a notice of final rulemaking. This final rule must take into account both the GAO report and the comments that were received in response to the interim final rule. In the final rule, HCFA must reevaluate the appropriateness of the criteria for determining whether payments are excessive or deficient that was used in the interim final rule and take appropriate steps to ensure the use of valid and reliable data when using the IR authority.

Effective Date:
· Enactment

Increased Reimbursement for Pap Smears (Section 224)

Prior Law:
· Medicare pays for the lab test component of Pap smears under the clinical laboratory fee schedule. There are currently no minimum payment amounts under such fee schedule.

Provision:
· Requires the Secretary to establish a national minimum payment amount for all diagnostic and screening Pap smear technologies approved by the Food and Drug Administration (FDA) as a primary screening method for detection of cervical cancer. The minimum payment amount shall be $14.60 for tests furnished in 2000, and in subsequent years, the amount would be updated along with the rest of the clinical laboratory fee schedule.
· Expresses the sense of Congress that HCFA has been slow in providing incentives for use of new cervical cancer screening technologies, and should institute an appropriate payment increase for such technologies that have been approved by the FDA and that are significantly more effective than conventional Pap smears.

Effective Date:
· Test furnished on or after enactment.

Refinement of Ambulance Services Demonstration Project (Section 225)

Prior Law:
· The BBA mandated up to three demonstration projects under which local governments could contract with the Secretary to furnish ambulance services to beneficiaries in their jurisdiction on a capitated payment basis. In the first year, payment rates would equal 95 percent of the average per capita payment for ambulance services during the 3 most recent years for which data is available, with subsequent year increases based on the CPI-U.

Provision:
· Requires the Secretary to publish a request for proposals for the demonstration by July 1, 2000, and amends the demonstration payment formula by authorizing the Secretary to establish a budget-neutral first-year capitated payment rate based on the most current available data, with payment in subsequent years adjusted for inflation.

Effective Date:
· Effective as if included in the BBA.

Phase-In of PPS for Ambulatory Surgical Centers (Section 226)

Prior Law:
· Medicare payments for services provided in ambulatory surgical centers are paid based on a fee schedule established in 1982. HCFA has proposed revising, rebasing, and regrouping the payment rates using data from a 1994 cost survey. The revised rates will be put in place at the time that the outpatient prospective payment system is implemented.

Provision:
· If the new payment rates are implemented for ambulatory surgical centers prior to incorporating data from the 1999 cost survey, the Secretary would be required to phase in the new rates. In the first year, no more than one-third of the payment could be based on the new rates; thus, two-thirds or more would be based on the current rates. In the next year, no more than two-thirds could be based on the new rates; thus, one-third or more would be based on the current rates.
Effective Date:
· Enactment

Extension of Medicare Benefits for Immunosuppressive Drugs (Section 227)

Prior Law:
· Medicare currently covers drugs used to provide immunosuppressive therapy for thirty-six months following a Medicare covered organ transplant.

Provision:
· Increases the number of months of coverage of immunosuppressive drug therapy for post-transplant beneficiaries by 8 months, from 36 to 44 months, for the year 2000, for individuals who exhaust their 36 months of coverage during that year.

· For individuals who exhaust the 36-month period for immunosuppressive drugs in calendar year 2001, the statute provides for 8 months (or more) of additional coverage. The Secretary must specify what any increase in the number of additional months of benefits beyond 8 months will be by May 1, 2001.

· For beneficiaries who exhaust the 36-month period in 2002, 2003 and 2004, the number of additional months of benefits may be more or less than 8 months. The Secretary must specify what the number of additional months of benefits will be for each of these years by May 1 of the preceding year.

· The Secretary must compute the number of additional months of coverage for 2001 through 2004 (if any) using appropriate actuarial methods and make such computation so that, based on the best available data at the time the computation is made, the total expenditures for the additional months for FY 2000 through FY 2004 do no exceed $150 million. The Secretary is directed to seek to provide for a level number of months of extension for FY 2001 through FY 2004. The Secretary is required to make an annual adjustment in the number of months of extension applicable to 2001 through 2004, to the extent necessary, based on differences between actual and estimated expenditures consistent with the $150 million five-year figure.

· For the year 2000, for Medicare+Choice plans, the Secretary is required to treat the additional months of coverage in the same manner that a national coverage determination is treated.

· The Secretary must issue a report to Congress by March 1, 2003 including an analysis of the impact of the extension provision, and recommendations regarding an appropriate cost-effective method of providing coverage of immunosuppressive drugs under Medicare on a permanent basis.
Effective Date:
· January 1, 2000

Temporary Increase in Payment Rates for Durable Medical Equipment (DME) and Oxygen (Section 228)

Prior Law:
· The BBA set the updates for DME to zero percentage points for each of the years 1998 through 2002. It also sets the national payment limit for oxygen at the 1997 limit reduced by 25 percent for 1998, and further reduced by 5 percent, for a total reduction of 30 percent for 1999 and subsequent years.

Provision:
· The payment amount for the covered items shall increase by 0.3 percent in 2001 and by 0.6 percent in 2002. These increases would affect payments only in the year specified.

Effective Date:
· Items furnished during 2001 and 2002.

Studies and Reports (Section 229)

Prior Law:
· No provision

Provision:
· Requires the following studies:
- MedPAC study on the cost-effectiveness of covering post-surgical recovery centers
- AHCPR study comparing the differences in the quality of ultrasound and other imaging services provided by credentialed and non-credentialed individuals
- MedPAC study of the regulatory burden placed on providers by the FFS Medicare system
- GAO study of Department of Justice's use of the False Claims Act

Effective Date:
· Enactment

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Last Updated February 7, 2000