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H.R.3075
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999
(Referred in Senate)
SEC. 211. OUTLIER ADJUSTMENT AND TRANSITIONAL PASS-THROUGH FOR CERTAIN MEDICAL DEVICES, DRUGS, AND
BIOLOGICALS.
(a) OUTLIER ADJUSTMENT- Section 1833(t) (42 U.S.C. 1395l(t)), as added by
section 4523(a) of BBA, is amended--
(1) by redesignating paragraphs (5) through (9) as paragraphs (7)
through (11), respectively; and
(2) by inserting after paragraph (4) the following new paragraph:
`(A) IN GENERAL- 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
projected or 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 projected or 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.'.
(b) TRANSITIONAL PASS-THROUGH FOR ADDITIONAL COSTS OF INNOVATIVE MEDICAL DEVICES, DRUGS, AND
BIOLOGICALS- Such section is further amended by inserting after paragraph (5)
the following new paragraph:
`(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- A drug or
biological that is used in cancer therapy, including (but not limited
to) a chemotherapeutic agent, antiemetic, hematopoietic growth factor,
colony stimulating factor, a biological response modifier, and a
bisphosponate, or brachytherapy, if payment for such drug, biological,
or device as an outpatient hospital service under this part was being
made on such first date.
`(iii) NEW MEDICAL
DEVICES, DRUGS, AND BIOLOGICALS- A medical device, drug, or
biological not described in clause (i) or (ii) 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 device, drug, or biological 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) LIMITED PERIOD OF PAYMENT- The payment under this paragraph with
respect to a medical device,
drug, or biological shall only apply during a period of at least 2 years,
but not more than 3 years, that begins--
`(i) on the first date this subsection is implemented in the case of
a drug or biological described in clause (i) or (ii) of subparagraph (A)
and in the case of a device, drug, or biological described in
subparagraph (A)(iii) for which payment under this part is made as an
outpatient hospital service before such first date; or
`(ii) in the case of a device, drug, or biological described in
subparagraph (A)(iii) not described in clause (i), on the first date on
which payment is made under this part for the device, drug, or
biological as an outpatient hospital service.
`(C) AMOUNT OF ADDITIONAL PAYMENT- Subject to subparagraph (D)(iii),
the amount of the payment under this paragraph with respect to a device,
drug, or biological provided as part of a covered OPD service
is--
`(i) in the case of a drug or biological, the amount by which the
amount determined under section 1842(o) 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.
`(D) 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
projected or 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 projected or estimated to be made
under this subsection for all covered OPD services furnished in that
year. If this paragraph is first applied to less than a full year, the
previous sentence shall apply only to the portion of such
year.
`(ii) APPLICABLE PERCENTAGE- For purposes of clause (i), the term
`applicable percentage' means--
`(I) for a year (or portion of a year) before 2004, 2.5 percent;
and
`(II) for 2004 and thereafter, a percentage specified by the
Secretary up to (but not to exceed) 2.0 percent.
`(iii) UNIFORM PROSPECTIVE REDUCTION IF AGGREGATE LIMIT PROJECTED TO
BE EXCEEDED- If the Secretary projects or 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 projected or estimated) do not
exceed such limit.'.
(c) APPLICATION OF NEW ADJUSTMENTS ON A BUDGET NEUTRAL BASIS- Section
1833(t)(2)(E) (42 U.S.C. 1395l(t)(2)(E)) is amended by striking `other
adjustments, in a budget neutral manner, as determined to be necessary to
ensure equitable payments, such a outlier adjustments or' and inserting `, 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'.
(d) LIMITATION ON JUDICIAL REVIEW FOR NEW ADJUSTMENTS- Section
1833(t)(11), as redesignated by subsection (a)(1), is amended--
(1) by striking `and' at the end of subparagraph (C);
(2) by striking the period at the end of subparagraph (D) and inserting
`; and'; and
(3) by adding at the end the following:
`(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 (consistent with paragraph (6)(B)), 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).'.
(e) INCLUSION OF MEDICAL
DEVICES UNDER SYSTEM- Section 1833(t) (42 U.S.C. 1395l(t)) is amended--
(1) in paragraph (1)(B)(ii), by striking `clause (iii)' and inserting
`clause (iv)' and by striking `but';
(2) by redesignating clause (iii) of paragraph (1)(B) as clause (iv) and
inserting after clause (ii) of such paragraph the following new
clause:
`(iii) includes medical devices (such as
implantable medical
devices); but'; and
(3) in paragraph (2)(B), by inserting after `resources' the following:
`and so that a device is classified to the group that includes the service
to which the device relates'.
(f) AUTHORIZING PAYMENT WEIGHTS BASED ON MEAN HOSPITAL COSTS- Section
1833(t)(2)(C) (42 U.S.C. 1395l(t)(2)(C)) is amended by inserting `(or, at the
election of the Secretary, mean)' after `median'.
(g) LIMITING VARIATION OF COSTS OF SERVICES CLASSIFIED WITH A GROUP-
Section 1833(t)(2) (42 U.S.C. 1395l(t)(2)) is amended by adding at the end the
following new flush sentence:
`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 two
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 has been
designated as an orphan drug under section 526 of the Federal Food, Drug and
Cosmetic Act.'.
(h) ANNUAL REVIEW OF OPD PPS COMPONENTS-
(1) IN GENERAL- Section 1833(t)(8)(A) (42 U.S.C. 1395l(t)(8)(A)), as
redesignated by subsection (a), is amended--
(A) by striking `may periodically review' and inserting `shall review
not less often than annually'; and
(B) by adding at the end the following: `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.'.
(2) EFFECTIVE DATES- The Secretary of Health and Human Services shall
first conduct the annual review under the amendment made by paragraph (1)(A)
in 2001 for application in 2002 and the amendment made by paragraph (1)(B)
takes effect on the date of the enactment of this Act.
(i) NO IMPACT ON COPAYMENT- Section 1833(t)(7) (42 U.S.C. 1395l(t)(7)), as
redesignated by subsection (a), is amended by adding at the end the following
new subparagraph:
`(D) COMPUTATION IGNORING OUTLIER AND PASS-THROUGH ADJUSTMENTS- The
copayment amount shall be computed under subparagraph (A) as if the
adjustments under paragraphs (5) and (6) (and any adjustment made under
paragraph (2)(E) in relation to such adjustments) had not
occurred.'.
(j) TECHNICAL CORRECTION IN REFERENCE RELATING TO HOSPITAL-BASED AMBULANCE
SERVICES- Section 1833(t)(9) (42 U.S.C. 1395l(t)(9)), as redesignated by
subsection (a), is amended by striking `the matter in subsection (a)(1)
preceding subparagraph (A)' and inserting `section 1861(v)(1)(U)'.
(k) EFFECTIVE DATE- Except as provided in this section, the amendments
made by this section shall be effective as if included in the enactment of
BBA.
(l) STUDY OF DELIVERY OF INTRAVENOUS IMMUNE GLOBULIN (IVIG) OUTSIDE
HOSPITALS AND PHYSICIANS' OFFICES-
(1) STUDY- The Secretary of Health and Human Services shall conduct a
study of the extent to which intravenous immune globulin (IVIG) could be
delivered and reimbursed under the Medicare program outside of a
hospital or physician's office. In conducting the study, the Secretary
shall--
(A) consider the sites of service that other payors, including Medicare +Choice plans, use for
these drugs and biologicals;
(B) determine whether covering the delivery of these drugs and
biologicals in a Medicare
patient's home raises any additional safety and health concerns for the
patient;
(C) determine whether covering the delivery of these drugs and
biologicals in a patient's home can reduce overall spending under the
Medicare program;
and
(D) determine whether changing the site of setting for these services
would affect beneficiary access to care.
(2) REPORT- The Secretary shall submit a report on such study to the
Committees on Way and Means and Commerce of the House of Representatives and
the Committee on Finance of the Senate within 1 year after the date of the
enactment of this Act. The Secretary shall include in the report
recommendations regarding on the appropriate manner and settings under which
the Medicare program should
pay for these drugs and biologicals delivered outside of a hospital or
physician's office.
SEC. 212. ESTABLISHING A TRANSITIONAL CORRIDOR FOR APPLICATION OF OPD
PPS.
(a) IN GENERAL- Section 1833(t) (42 U.S.C. 1395l(t)), as amended by
section 211(a), is further amended--
(1) in paragraph (4), in the matter before subparagraph (A), by
inserting `, subject to paragraph (7),' after `is determined'; and
(2) by redesignating paragraphs (7) through (11) as paragraphs (8)
through (12), respectively; and
(3) by inserting after paragraph (6), as inserted by section 211(b), the
following new paragraph:
`(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;
`(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;
`(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) SPECIAL RULE FOR SMALL RURAL HOSPITALS- In the case of a hospital
located in a rural area and that has not more than 100 beds, for covered
OPD services furnished before January 1, 2004, for which the PPS amount is
less than the pre-BBA amount, the amount of payment under this subsection
shall be increased by 100 percent of 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 (5), 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--
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