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H.R.3426
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999
(Introduced in the House)
SEC. 201. 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)) 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- 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.'.
(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 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, 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 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, biological, or device described in clause (i), (ii), or (iii) of
subparagraph (A) and in the case of a device, 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 device, drug, or biological described in
subparagraph (A)(iv) 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
estimated by the Secretary before the beginning of the year) may not
exceed the applicable percentage (specified in clause (ii)) of the total
program payments estimated to be made under this subsection for all
covered OPD services furnished in that year. If this paragraph is first
applied to less than a full year, the previous sentence shall apply only
to the portion of such year.
`(ii) APPLICABLE PERCENTAGE- For purposes of clause (i), the term
`applicable percentage' means--
`(I) for a year (or portion of a year) before 2004, 2.5 percent;
and
`(II) for 2004 and thereafter, a percentage specified by the
Secretary up to (but not to exceed) 2.0 percent.
`(iii) UNIFORM PROSPECTIVE REDUCTION IF AGGREGATE LIMIT PROJECTED TO
BE EXCEEDED- If the Secretary estimates before the beginning of a year
that the amount of the additional payments under this paragraph for the
year (or portion thereof) as determined under clause (i) without regard
to this clause will exceed the limit established under such clause, the
Secretary shall reduce pro rata the amount of each of the additional
payments under this paragraph for that year (or portion thereof) in
order to ensure that the aggregate additional payments under this
paragraph (as so estimated) do not exceed such limit.'.
(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 as 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 CERTAIN IMPLANTABLE ITEMS UNDER SYSTEM-
(1) IN GENERAL- Section 1833(t) (42 U.S.C. 1395l(t)) is amended--
(A) in paragraph (1)(B)(ii), by striking `clause (iii)' and inserting
`clause (iv)' and by striking `but';
(B) 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 implantable items described in paragraph (3), (6),
or (8) of section 1861(s); but'; and
(C) in paragraph (2)(B), by inserting after `resources' the following:
`and so that an implantable item is classified to the group that includes
the service to which the item relates'.
(2) CONFORMING AMENDMENT- (A) Section 1834(a)(13) (42 U.S.C.
1395m(a)(13)) is amended by striking `1861(m)(5))' and inserting
`1861(m)(5), but not including implantable items for which payment may be
made under section 1833(t)'.
(B) Section 1834(h)(4)(B) (42 U.S.C. 1395m(h)(4)(B)) is amended by
inserting before the semicolon the following: `and does not include an
implantable item for which payment may be made under section 1833(t)'.
(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 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.'.
(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) EXTENSION OF PAYMENT PROVISIONS OF SECTION 4522 OF BBA UNTIL
IMPLEMENTATION OF PPS- Section 1861(v)(1)(S)(ii) (42 U.S.C.
1395x(v)(1)(S)(ii)) is amended in subclauses (I) and (II) by striking `and
during fiscal year 2000 before January 1, 2000' and inserting `and until the
first date that the prospective payment system under section 1833(t) is
implemented' each place it appears.
(l) CONGRESSIONAL INTENTION REGARDING BASE AMOUNTS IN APPLYING THE HOPD
PPS- With respect to determining the amount of copayments described in
paragraph (3)(A)(ii) of section 1833(t) of the Social Security Act, as added
by section 4523(a) of BBA, Congress finds that such amount should be
determined without regard to such section, in a budget neutral manner with
respect to aggregate payments to hospitals, and that the Secretary of Health
and Human Services has the authority to determine such amount without regard
to such section.
(m) 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.
(n) 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 Ways and Means and Commerce of the House of Representatives
and the Committee on Finance of the Senate within 18 months after the date
of the enactment of this Act. The Secretary shall include in the report
recommendations regarding 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. 202. 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 201(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 201(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; 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;
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