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115th Congress    }                                  {   Rept. 115-254
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                  {          Part 1

======================================================================



 
                MEDICARE PART B IMPROVEMENT ACT OF 2017

                                _______
                                

 July 25, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Brady of Texas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3178]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 3178) to amend title XVIII of the Social Security 
Act to improve the delivery of home infusion therapy and 
dialysis and the application of the Stark rule under the 
Medicare program, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. SUMMARY AND BACKGROUND...........................................7
          A. Purpose and Summary.................................     7
          B. Background and Need for Legislation.................     8
          C. Legislative History.................................     8
 II. EXPLANATION OF THE BILL..........................................9
          A. Medicare Part B Improvement Act of 2017.............     9
III. VOTES OF THE COMMITTEE..........................................12
 IV. BUDGET EFFECTS OF THE BILL......................................12
          A. Committee Estimate of Budgetary Effects.............    12
          B. Statement Regarding New Budget Authority and Tax 
              Expenditures Budget Authority......................    12
          C. Cost Estimate Prepared by the Congressional Budget 
              Office.............................................    13
  V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE......16
          A. Committee Oversight Findings and Recommendations....    16
          B. Statement of General Performance Goals and 
              Objectives.........................................    16
          C. Information Relating to Unfunded Mandates...........    16
          D. Congressional Earmarks, Limited Tax Benefits, and 
              Limited Tariff Benefits............................    16
          E. Duplication of Federal Programs.....................    16
          F. Disclosure of Directed Rule Makings.................    16
 VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........16
 VII  EXCHANGES OF LETTERS WITH ADDITIONAL COMMITTEES OF REFERRAL...162

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Medicare Part B 
Improvement Act of 2017''.
  (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.

      TITLE I--IMPROVEMENTS IN PROVISION OF HOME INFUSION THERAPY

Sec. 101. Home infusion therapy services temporary transitional 
payment.
Sec. 102. Extension of Medicare Patient IVIG Access Demonstration 
Project.
Sec. 103. Orthotist's and prosthetist's clinical notes as part of the 
patient's medical record.

              TITLE II--IMPROVEMENTS IN DIALYSIS SERVICES

Sec. 201. Independent accreditation for dialysis facilities and 
assurance of high quality surveys.
Sec. 202. Expanding access to home dialysis therapy.

          TITLE III--IMPROVEMENTS IN APPLICATION OF STARK RULE

Sec. 301. Modernizing the application of the Stark rule under Medicare.
Sec. 302. Funds from the Medicare Improvement Fund.

      TITLE I--IMPROVEMENTS IN PROVISION OF HOME INFUSION THERAPY

SEC. 101. HOME INFUSION THERAPY SERVICES TEMPORARY TRANSITIONAL 
                    PAYMENT.

  (a) In General.--Section 1834(u) of the Social Security Act (42 
U.S.C. 1395m(u)) is amended, by adding at the end the following new 
paragraph:
          ``(7) Home infusion therapy services temporary transitional 
        payment.--
                  ``(A) Temporary transitional payment.--
                          ``(i) In general.--The Secretary shall, in 
                        accordance with the payment methodology 
                        described in subparagraph (B) and subject to 
                        the provisions of this paragraph, provide a 
                        home infusion therapy services temporary 
                        transitional payment under this part to an 
                        eligible home infusion supplier (as defined in 
                        subparagraph (F)) for items and services 
                        described in subparagraphs (A) and (B) of 
                        section 1861(iii)(2)) furnished during the 
                        period specified in clause (ii) by such 
                        supplier in coordination with the furnishing of 
                        transitional home infusion drugs (as defined in 
                        clause (iii)).
                          ``(ii) Period specified.--For purposes of 
                        clause (i), the period specified in this clause 
                        is the period beginning on January 1, 2019, and 
                        ending on the day before the date of the 
                        implementation of the payment system under 
                        paragraph (1)(A).
                          ``(iii) Transitional home infusion drug 
                        defined.--For purposes of this paragraph, the 
                        term `transitional home infusion drug' has the 
                        meaning given to the term `home infusion drug' 
                        under section 1861(iii)(3)(C)), except that 
                        clause (ii) of such section shall not apply if 
                        a drug described in such clause is identified 
                        in clauses (i), (ii), (iii) or (iv) of 
                        subparagraph (C) as of the date of the 
                        enactment of this paragraph.
                  ``(B) Payment methodology.--For purposes of this 
                paragraph, the Secretary shall establish a payment 
                methodology, with respect to items and services 
                described in subparagraph (A)(i). Under such payment 
                methodology the Secretary shall--
                          ``(i) create the three payment categories 
                        described in clauses (i), (ii), and (iii) of 
                        subparagraph (C);
                          ``(ii) assign drugs to such categories, in 
                        accordance with such clauses;
                          ``(iii) assign appropriate Healthcare Common 
                        Procedure Coding System (HCPCS) codes to each 
                        payment category; and
                          ``(iv) establish a single payment amount for 
                        each such payment category, in accordance with 
                        subparagraph (D), for each infusion drug 
                        administration calendar day in the individual's 
                        home for drugs assigned to such category.
                  ``(C) Payment categories.--
                          ``(i) Payment category 1.--The Secretary 
                        shall create a payment category 1 and assign to 
                        such category drugs which are covered under the 
                        Local Coverage Determination on External 
                        Infusion Pumps (LCD number L33794) and billed 
                        with the following HCPCS codes (as identified 
                        as of July 1, 2017, and as subsequently 
                        modified by the Secretary): J0133, J0285, 
                        J0287, J0288, J0289, J0895, J1170, J1250, 
                        J1265, J1325, J1455, J1457, J1570, J2175, 
                        J2260, J2270, J2274, J2278, J3010, or J3285.
                          ``(ii) Payment category 2.--The Secretary 
                        shall create a payment category 2 and assign to 
                        such category drugs which are covered under 
                        such local coverage determination and billed 
                        with the following HCPCS codes (as identified 
                        as of July 1, 2017, and as subsequently 
                        modified by the Secretary): J1559 JB, J1561 JB, 
                        J1562 JB, J1569 JB, or J1575 JB.
                          ``(iii) Payment category 3.--The Secretary 
                        shall create a payment category 3 and assign to 
                        such category drugs which are covered under 
                        such local coverage determination and billed 
                        with the following HCPCS codes (as identified 
                        as of July 1, 2017, and as subsequently 
                        modified by the Secretary): J9000, J9039, 
                        J9040, J9065, J9100, J9190, J9200, J9360, or 
                        J9370.
                          ``(iv) Infusion drugs not otherwise 
                        included.--With respect to drugs that are not 
                        included in payment category 1, 2, or 3 under 
                        clause (i), (ii), or (iii), respectively, the 
                        Secretary shall assign to the most appropriate 
                        of such categories, as determined by the 
                        Secretary, drugs which are--
                                  ``(I) covered under such local 
                                coverage determination and billed under 
                                HCPCS codes J7799 or J7999 (as 
                                identified as of July 1, 2017, and as 
                                subsequently modified by the 
                                Secretary); or
                                  ``(II) billed under any code that is 
                                implemented after the date of the 
                                enactment of this paragraph and 
                                included in such local coverage 
                                determination or included in 
                                subregulatory guidance as a home 
                                infusion drug described in subparagraph 
                                (A)(i).
                  ``(D) Payment amounts.--
                          ``(i) In general.--Under the payment 
                        methodology, the Secretary shall pay eligible 
                        home infusion suppliers, with respect to items 
                        and services described in subparagraph (A)(i) 
                        furnished during the period described in 
                        subparagraph (A)(ii) by such supplier to an 
                        individual, at amounts equal to the amounts 
                        determined under the physician fee schedule 
                        established under section 1848 for services 
                        furnished during the year for codes and units 
                        of such codes described in clauses (ii), (iii), 
                        and (iv) with respect to drugs included in the 
                        payment category under subparagraph (C) 
                        specified in the respective clause, determined 
                        without application of any adjustment under 
                        such section.
                          ``(ii) Payment amount for category 1.--For 
                        purposes of clause (i), the codes and units 
                        described in this clause, with respect to drugs 
                        included in payment category 1 described in 
                        subparagraph (C)(i), are one unit of HCPCS code 
                        96365 plus four units of HCPCS code 96366 (as 
                        identified as of July 1, 2017, and as 
                        subsequently modified by the Secretary).
                          ``(iii) Payment amount for category 2.--For 
                        purposes of clause (i), the codes and units 
                        described in this clause, with respect to drugs 
                        included in payment category 2 described in 
                        subparagraph (C)(i), are one unit of HCPCS code 
                        96369 plus four units of HCPCS code 96370 (as 
                        identified as of July 1, 2017, and as 
                        subsequently modified by the Secretary).
                          ``(iv) Payment amount for category 3.--For 
                        purposes of clause (i), the codes and units 
                        described in this clause, with respect to drugs 
                        included in payment category 3 described in 
                        subparagraph (C)(i), are one unit of HCPCS code 
                        96413 plus four units of HCPCS code 96415 (as 
                        identified as of July 1, 2017, and as 
                        subsequently modified by the Secretary).
                  ``(E) Clarifications.--
                          ``(i) Infusion drug administration day.--For 
                        purposes of this subsection, a reference, with 
                        respect to the furnishing of transitional home 
                        infusion drugs or home infusion drugs to an 
                        individual by an eligible home infusion 
                        supplier, to payment to such supplier for an 
                        infusion drug administration calendar day in 
                        the individual's home shall refer to payment 
                        only for the date on which professional 
                        services (as described in section 
                        1861(iii)(2)(A)) were furnished to administer 
                        such drugs to such individual. For purposes of 
                        the previous sentence, an infusion drug 
                        administration calendar day shall include all 
                        such drugs administered to such individual on 
                        such day.
                          ``(ii) Treatment of multiple drugs 
                        administered on same infusion drug 
                        administration day.--In the case that an 
                        eligible home infusion supplier, with respect 
                        to an infusion drug administration calendar day 
                        in an individual's home, furnishes to such 
                        individual transitional home infusion drugs 
                        which are not all assigned to the same payment 
                        category under subparagraph (C), payment to 
                        such supplier for such infusion drug 
                        administration calendar day in the individual's 
                        home shall be a single payment equal to the 
                        amount of payment under this paragraph for the 
                        drug, among all such drugs so furnished to such 
                        individual during such calendar day, for which 
                        the highest payment would be made under this 
                        paragraph.
                  ``(F) Eligible home infusion suppliers.--In this 
                paragraph, the term `eligible home infusion supplier' 
                means a supplier that is enrolled under this part as a 
                pharmacy that provides external infusion pumps and 
                external infusion pump supplies and that maintains all 
                pharmacy licensure requirements in the State in which 
                the applicable infusion drugs are administered.
                  ``(G) Implementation.--Notwithstanding any other 
                provision of law, the Secretary may implement this 
                paragraph by program instruction or otherwise.''.
  (b) Conforming Amendment.--Section 1842(b)(6)(I) of the Social 
Security Act (42 U.S.C. 1395u(b)(6)(I)) is amended by inserting ``or, 
in the case of items and services described in clause (i) of section 
1834(u)(7)(A) furnished to an individual during the period described in 
clause (ii) of such section, payment shall be made to the eligible home 
infusion therapy supplier'' after ``payment shall be made to the 
qualified home infusion therapy supplier''.

SEC. 102. EXTENSION OF MEDICARE PATIENT IVIG ACCESS DEMONSTRATION 
                    PROJECT.

  Section 101(b) of the Medicare IVIG Access and Strengthening Medicare 
and Repaying Taxpayers Act of 2012 (42 U.S.C. 1395l note) is amended--
          (1) in paragraph (1), by inserting after ``for a period of 3 
        years'' the following: ``and, subject to the availability of 
        funds under subsection (g)--
                  ``(A) if the date of enactment of the Medicare Part B 
                Improvement Act of 2017 is on or before September 30, 
                2017, for the period beginning on October 1, 2017, and 
                ending on December 31, 2020; and
                  ``(B) if the date of enactment of such Act is after 
                September 30, 2017, for the period beginning on the 
                date of enactment of such Act and ending on December 
                31, 2020''; and
          (2) in paragraph (2), by adding at the end the following new 
        sentence: ``Subject to the preceding sentence, a Medicare 
        beneficiary enrolled in the demonstration project on September 
        30, 2017, shall be automatically enrolled during the period 
        beginning on the date of the enactment of the Medicare Part B 
        Improvement Act of 2017 and ending on December 31, 2020, 
        without submission of another application.''.

SEC. 103. ORTHOTIST'S AND PROSTHETIST'S CLINICAL NOTES AS PART OF THE 
                    PATIENT'S MEDICAL RECORD.

  Section 1834(h) of the Social Security Act (42 U.S.C. 1395m(h)) is 
amended by adding at the end the following new paragraph:
          ``(5) Documentation created by orthotists and prosthetists.--
        For purposes of determining the reasonableness and medical 
        necessity of orthotics and prosthetics, documentation created 
        by an orthotist or prosthetist shall be considered part of the 
        individual's medical record to support documentation created by 
        eligible professionals described in section 1848(k)(3)(B).''.

              TITLE II--IMPROVEMENTS IN DIALYSIS SERVICES

SEC. 201. INDEPENDENT ACCREDITATION FOR DIALYSIS FACILITIES AND 
                    ASSURANCE OF HIGH QUALITY SURVEYS.

  (a) Accreditation and Surveys.--
          (1) In general.--Section 1865 of the Social Security Act (42 
        U.S.C. 1395bb) is amended--
                  (A) in subsection (a)--
                          (i) in paragraph (1), in the matter preceding 
                        subparagraph (A), by striking ``or the 
                        conditions and requirements under section 
                        1881(b)''; and
                          (ii) in paragraph (4), by inserting 
                        ``(including a renal dialysis facility)'' after 
                        ``facility''; and
                  (B) by adding at the end the following new 
                subsection:
  ``(e) With respect to an accreditation body that has received 
approval from the Secretary under subsection (a)(3)(A) for 
accreditation of provider entities that are required to meet the 
conditions and requirements under section 1881(b), in addition to 
review and oversight authorities otherwise applicable under this title, 
the Secretary shall (as the Secretary determines appropriate) conduct, 
with respect to such accreditation body and provider entities, any or 
all of the following more frequently than is otherwise required to be 
conducted under this title with respect to other accreditation bodies 
or other provider entities:
          ``(1) Validation surveys referred to in subsection (d).
          ``(2) Accreditation program reviews (as defined in section 
        488.8(c) of title 42 of the Code of Federal Regulations, or a 
        successor regulation).
          ``(3) Performance reviews (as defined in section 488.8(a) of 
        title 42 of the Code of Federal Regulations, or a successor 
        regulation).''.
          (2) Timing for acceptance of requests from accreditation 
        organizations.--Not later than 90 days after the date of 
        enactment of this Act, the Secretary of Health and Human 
        Services shall begin accepting requests from national 
        accreditation bodies for a finding described in section 
        1865(a)(3)(A) of the Social Security Act (42 U.S.C. 
        1395bb(a)(3)(A)) for purposes of accrediting provider entities 
        that are required to meet the conditions and requirements under 
        section 1881(b) of such Act (42 U.S.C. 1395rr(b)).
  (b) Requirement for Timing of Surveys of New Dialysis Facilities.--
Section 1881(b)(1) of the Social Security Act (42 U.S.C. 1395rr(b)(1)) 
is amended by adding at the end the following new sentence: ``Beginning 
180 days after the date of the enactment of this sentence, an initial 
survey of a provider of services or a renal dialysis facility to 
determine if the conditions and requirements under this paragraph are 
met shall be initiated not later than 90 days after such date on which 
both the provider enrollment form (without regard to whether such form 
is submitted prior to or after such date of enactment) has been 
determined by the Secretary to be complete and the provider's 
enrollment status indicates approval is pending the results of such 
survey.''.

SEC. 202. EXPANDING ACCESS TO HOME DIALYSIS THERAPY.

  (a) Allowing Use of Telehealth for Monthly End Stage Renal Disease-
related Visits.--
          (1) In general.--Paragraph (3) of section 1881(b) of the 
        Social Security Act (42 U.S.C. 1395rr(b)) is amended--
                  (A) by redesignating subparagraphs (A) and (B) as 
                clauses (i) and (ii), respectively;
                  (B) in clause (i), as redesignated by subparagraph 
                (A), by striking ``under this subparagraph'' and 
                inserting ``under this clause'';
                  (C) in clause (ii), as redesignated by subparagraph 
                (A), by inserting ``subject to subparagraph (B),'' 
                before ``on a comprehensive'';
                  (D) by striking ``With respect to'' and inserting 
                ``(A) With respect to''; and
                  (E) by adding at the end the following new 
                subparagraph:
  ``(B)(i) Subject to clause (ii), an individual who is determined to 
have end stage renal disease and who is receiving home dialysis may 
choose to receive monthly end stage renal disease-related visits, 
furnished on or after January 1, 2019, via telehealth.
  ``(ii) Clause (i) shall apply to an individual only if the individual 
receives a face-to-face visit, without the use of telehealth--
          ``(I) in the case of the initial three months of home 
        dialysis of such individual, at least monthly; and
          ``(II) after such initial three months, at least once every 
        three consecutive months.''.
          (2) Conforming amendment.--Paragraph (1) of such section is 
        amended by striking ``paragraph (3)(A)'' and inserting 
        ``paragraph (3)(A)(i)''.
  (b) Expanding Originating Sites for Telehealth to Include Renal 
Dialysis Facilities and the Home for Purposes of Monthly End Stage 
Renal Disease-related Visits.--
          (1) In general.--Section 1834(m) of the Social Security Act 
        (42 U.S.C. 1395m(m)) is amended--
                  (A) in paragraph (4)(C)(ii), by adding at the end the 
                following new subclauses:
                                  ``(IX) A renal dialysis facility, but 
                                only for purposes of section 
                                1881(b)(3)(B).
                                  ``(X) The home of an individual, but 
                                only for purposes of section 
                                1881(b)(3)(B).''; and
                  (B) by adding at the end the following new paragraph:
          ``(5) Treatment of home dialysis monthly esrd-related 
        visit.--The geographic requirements described in paragraph 
        (4)(C)(i) shall not apply with respect to telehealth services 
        furnished on or after January 1, 2019, for purposes of section 
        1881(b)(3)(B), at an originating site described in subclause 
        (VI), (IX), or (X) of paragraph (4)(C)(ii)), subject to 
        applicable State law requirements, including State licensure 
        requirements.''.
          (2) No facility fee if originating site for home dialysis 
        therapy is the home.--Section 1834(m)(2)(B) of the Social 
        Security (42 U.S.C. 1395m(m)(2)(B)) is amended--
                  (A) by redesignating clauses (i) and (ii) as 
                subclauses (I) and (II), respectively, and by indenting 
                each of such subclauses 2 ems to the right;
                  (B) in subclause (II), as redesignated by 
                subparagraph (A), by striking ``clause (i) or this 
                clause'' and inserting ``subclause (I) or this 
                subclause'';
                  (C) by striking ``site.--With respect to'' and 
                inserting ``site.--
                          ``(i) In general.--Subject to clause (ii), 
                        with respect to''; and
                  (D) by adding at the end the following new clause:
                          ``(ii) No facility fee if originating site 
                        for home dialysis therapy is the home.--No 
                        facility fee shall be paid under this 
                        subparagraph to an originating site described 
                        in subclause (X) of paragraph (4)(C)(ii).''.
  (c) Clarification Regarding Telehealth Provided to Beneficiaries.--
Section 1128A(i)(6) of the Social Security Act (42 U.S.C. 1320a-
7a(i)(6)) is amended--
          (1) in subparagraph (H), by striking ``; or'' and inserting a 
        semicolon;
          (2) in subparagraph (I), by striking the period at the end 
        and inserting ``; or''; and
          (3) by adding at the end the following new subparagraph:
                  ``(J) the provision of telehealth on or after January 
                1, 2019, to individuals with end stage renal disease 
                under title XVIII by a health care provider for the 
                purpose of furnishing of telehealth.''.
  (d) Study and Report on Further Expansion.--
          (1) Study.--The Comptroller General of the United States 
        shall conduct a study to examine the benefits and drawbacks of 
        expanding the coverage under the Medicare program under title 
        XVIII of the Social Security Act of renal dialysis services as 
        telehealth services, pursuant to the amendments made by this 
        section, to include coverage of renal dialysis services 
        furnished via telehealth and store-and-forward technologies.
          (2) Report.--Not later than two years after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        Congress a report on the results of the study conducted under 
        paragraph (1).

          TITLE III--IMPROVEMENTS IN APPLICATION OF STARK RULE

SEC. 301. MODERNIZING THE APPLICATION OF THE STARK RULE UNDER MEDICARE.

  (a) Clarification of the Writing Requirement and Signature 
Requirement for Arrangements Pursuant to the Stark Rule.--
          (1) Writing requirement.--Section 1877(h)(1) of the Social 
        Security Act (42 U.S.C. 1395nn(h)(1)) is amended by adding at 
        the end the following new subparagraph:
          ``(D) Written requirement clarified.--In the case of any 
        requirement pursuant to this section for a compensation 
        arrangement to be in writing, such requirement shall be 
        satisfied by such means as determined by the Secretary, 
        including by a collection of documents, including 
        contemporaneous documents evidencing the course of conduct 
        between the parties involved.''.
          (2) Signature requirement.--Section 1877(e) of the Social 
        Security Act (42 U.S.C. 1395nn(e)) is amended--
                  (A) in paragraph (1)(A)(i), by inserting ``before or 
                not later than 90 days after the effective date of the 
                lease'' after ``signed by the parties'';
                  (B) in paragraph (1)(B)(i), by inserting ``before or 
                not later than 90 days after the effective date of the 
                lease'' after ``signed by the parties''; and
                  (C) in paragraph (3)(A)(i), by inserting ``before or 
                not later than 90 days after the effective date of the 
                arrangement'' after ``signed by the parties''.
  (b) Indefinite Holdover for Lease Arrangements and Personal Services 
Arrangements Pursuant to the Stark Rule.--Section 1877 of the Social 
Security Act (42 U.S.C. 1395nn) is amended--
          (1) in subsection (e)--
                  (A) in paragraph (1), by adding at the end the 
                following new subparagraph:
                  ``(C) Holdover lease arrangements.--In the case of a 
                holdover lease arrangement for the lease of office 
                space or equipment, which immediately follows a lease 
                arrangement described in subparagraph (A) for the use 
                of such office space or subparagraph (B) for the use of 
                such equipment and that expired after a term of at 
                least one year, payments made by the lessee to the 
                lessor pursuant to such holdover lease arrangement, 
                if--
                          ``(i) the lease arrangement met the 
                        conditions of subparagraph (A) for the lease of 
                        office space or subparagraph (B) for the use of 
                        equipment when the arrangement expired;
                          ``(ii) the holdover lease arrangement is on 
                        the same terms and conditions as the 
                        immediately preceding arrangement; and
                          ``(iii) the holdover arrangement continues to 
                        satisfy the conditions of subparagraph (A) for 
                        the lease of office space or subparagraph (B) 
                        for the use of equipment.''; and
                  (B) in paragraph (3), by adding at the end the 
                following new subparagraph:
                  ``(C) Holdover personal service arrangement.--In the 
                case of a holdover personal service arrangement, which 
                immediately follows an arrangement described in 
                subparagraph (A) that expired after a term of at least 
                one year, remuneration from an entity pursuant to such 
                holdover personal service arrangement, if--
                          ``(i) the personal service arrangement met 
                        the conditions of subparagraph (A) when the 
                        arrangement expired;
                          ``(ii) the holdover personal service 
                        arrangement is on the same terms and conditions 
                        as the immediately preceding arrangement; and
                          ``(iii) the holdover arrangement continues to 
                        satisfy the conditions of subparagraph (A).''; 
                        and
          (2) in subsection (h)(1), as amended by subsection (a)(1)--
                  (A) in the heading, by inserting ``; holdover 
                arrangement'' after ``remuneration''; and
                  (B) by adding at the end the following new 
                subparagraph:
          ``(E) Holdover arrangement.--The term `holdover arrangement' 
        means an arrangement, with respect to an agreement (including a 
        lease or other arrangement) that has expired but as of the date 
        of such expiration had been in compliance with the applicable 
        requirements of this section, under which the parties to such 
        expired agreement have, since such date of expiration, 
        continued to perform under the terms and conditions of such 
        expired agreement.''.

SEC. 302. FUNDS FROM THE MEDICARE IMPROVEMENT FUND.

  Section 1898(b)(1) of the Social Security Act (42 U.S.C. 
1395iii(b)(1)) is amended by striking ``during and after fiscal year 
2021, $270,000,000'' and inserting ``during and after fiscal year 2021, 
$245,000,000''.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The bill, H.R. 3178, the ``Medicare Part B Improvement Act 
of 2017,'' as ordered reported by the Committee on Ways and 
Means on July 13, 2017, would improve the delivery of home 
infusion therapy and dialysis and the application of the Stark 
rule under the Medicare program.
    H.R. 3178 includes bipartisan policies sponsored by several 
Committee Members aimed at improving both the program and 
beneficiary experience that would:
           Create a transitional Medicare payment for 
        home infusion services to expand access and ensure 
        beneficiaries do not experience a gap in care before 
        the permanent home infusion benefit takes effect in 
        2021;
           Extend an ongoing intravenous immunoglobulin 
        (IVIG) demonstration program to increase patient 
        education and appropriate utilization of infusion 
        services;
           Streamline rules to preserve access to 
        orthotics and prosthetics for patients in need;
           Allow telehealth technologies to monitor 
        patients receiving dialysis in their home;
           Expedite accreditation of dialysis 
        facilities for Medicare billing purposes by allowing 
        private organizations to accredit new facilities; and
           Modify Medicare's physician self-referral 
        laws to clarify rules for providers.

                 B. Background and Need for Legislation

    On July 11, 2017, Representative Brady (R-TX) and 
Representative Neal (D-MA) introduced H.R. 3178, legislation to 
improve Medicare Part B programs, including expanding access to 
in-home treatments for patients. The Committee on Ways and 
Means received an additional referral for the bill because it 
includes Medicare provisions that fall within the jurisdiction 
of the Committee, including changes to relevant provisions of 
the Social Security Act (SSA). As the Medicare program 
continues to take steps towards prioritizing value based care 
over volume, it is the Committee's priority to continually 
strengthen Medicare for beneficiaries and the providers who 
serve them. This goal, along with the principles of expanding 
patients' choices in where they can receive care and increasing 
provider's abilities to collaborate and manage the continuum of 
care whether the patient is at home or in a provider's office, 
were the nexus for the policies in this markup.

                         C. Legislative History


Background

    H.R. 3178 was introduced on July 11, 2017, and was referred 
to the Committee on Energy and Commerce and additionally to the 
Committee on Ways and Means.

Committee hearings

    On June 8, 2017, the Committee held a hearing on The 
Department of Health and Human Services' Fiscal Year 2018 
Budget Request where topics such as telehealth and Stark law 
were discussed.
    On September 14, 2016, the Subcommittee on Health held a 
Hearing on Exploring the Use of Technology and Innovation to 
Create Efficiencies and Higher Quality in Health Care in which 
telehealth was a focus.
    On June 8, 2016, the Subcommittee on Health held a Member 
Day hearing on various proposals to make improvements to the 
Medicare program and strengthen it ensure it is able to provide 
affordable care in the future.

Committee action

    The Committee on Ways and Means marked up H.R. 3178, the 
Medicare Part B Improvement Act of 2017, on July 13, 2017, and 
ordered the bill, as amended, favorably reported (with a quorum 
being present).

                      II. EXPLANATION OF THE BILL


               A. Medicare Part B Improvement Act of 2017


                              PRESENT LAW

Section 101:

    The 21st Century Cures Act (Cures) (1) changed the way 
Medicare pays for home infusion services beginning in 2017, and 
(2) created a new Medicare benefit for home infusion education 
and services provided by clinicians delivering infusion to 
patients in their homes but not until 2021.

Section 102:

    Section 101(b) of the Medicare intravenous immunoglobulin 
(IVIG) Access and Strengthening Medicare and Repaying Taxpayers 
Act of 2012 enacted the demonstration policy in 2012 until 
September 31, 2017.

Section 103:

    Section 1834(h) of the SSA determines that Medicare pays 
for orthotics and prosthetics for beneficiaries who medically 
need those items.

Section 201:

    Section 1865 of the SSA requires that facilities that 
provide care for Medicare beneficiaries must satisfactorily 
complete both a state survey and certification process as well 
as the Medicare accreditation process in order to participate 
in the Medicare program. While other Medicare providers may use 
an outside agency to accredit their facility for Medicare 
participation, under the statute dialysis facilities are not 
able to exercise this option.

Section 202:

    Currently, beneficiaries receiving dialysis in their homes 
are not able to receive monitoring via telehealth.

Section 301:

    Section 1877(h)(1) of the SSA, referred to as the ``Stark 
Laws'' provides rules to prevent clinician financial interests 
from interfering with medical decisions regarding patients. The 
Stark laws prohibit physicians from referring Medicare 
beneficiaries to facilities in which they (or a close family 
member) have a financial stake and prohibit such facility from 
billing for Medicare services performed as a result of such a 
referral. The law does not differentiate between technical 
Stark violations and intentional ones.

Section 302:

    Section 1898(b)(1), the Medicare Improvement Fund (MIF), 
currently retains $270,000,000 in funds for the purposes of 
Medicare improvements.

                           REASONS FOR CHANGE

Section 101:

    The new payment methodology for home infusion drugs took 
effect in January 2017; however, the new home infusion nursing 
benefit does not begin until 2021. This gap could cause 
beneficiaries to experience issues with access to home infusion 
during the four years between the change in payment policy and 
the new home infusion nursing benefit.

Section 102:

    This legislation would extend the demonstration policy 
originally enacted in 2012 for an additional three years, until 
2020. This extension would benefit those have both been 
utilizing services within the demonstration as well as those 
who beneficiaries who would enroll in the demonstration after 
September 30, 2017. Additionally, the Centers for Medicare & 
Medicaid Services (CMS) would have further time to study and 
evaluate the benefits of this demonstration.

Section 103:

    Medicare's claims review process to prevent fraud and abuse 
in certain cases has led to payment denials for medically 
necessary orthotics or prosthetics as a result of insufficient 
evidence and incomplete medical record notes to document 
medical necessity. Currently, some suppliers are experiencing a 
delay in payment for prosthetics already supplied to Medicare 
beneficiaries.

Section 201:

    While some Medicare providers may use an outside agency to 
accredit their health care facility for Medicare participation, 
this option is not available to dialysis facilities. This may 
result in access issues for end-stage renal disease (ESRD) 
patients in areas where accreditation of dialysis facilities 
does not keep pace with new facilities seeking Medicare 
participation privileges.

Section 202:

    For ESRD patients who choose to undergo dialysis treatment 
at home, telehealth could allow for necessary monitoring 
without additional visits to a providers' office or dialysis 
facility, as well as alert providers if an emergent health need 
arises immediately.

Section 301:

    Violations of Stark law can range from unknowing to 
willful. CMS recently changed Stark law regulations relating to 
when leases were in violation of the Stark laws and when 
signatures were required to document the terms of legal 
arrangements.

                       EXPLANATION OF PROVISIONS

Section 101:

    This legislation would address the home infusion service 
gap created by changing the payments for home infusion drugs in 
2017 and creating a home infusion nursing benefit in 2021 by 
creating a temporary transition service and education Medicare 
payment for home infusion beginning in 2019.

Section 102:

    This legislation provides a three year extension of the 
IVIG demonstration policy and would evaluate the benefits of 
providing payment for items and services needed for the in-home 
administration of IVIG for the treatment of primary immune 
deficiency diseases.

Section 103:

    This legislation would allow additional information 
provided by prosthetists and orthotists, who evaluate and fit 
the beneficiary for the prosthetics and orthotics, to be 
considered by Medicare to support documentation of medical 
necessity for prosthetics and orthotics.

Section 201:

    This legislation would allow dialysis facilities to seek 
outside accreditation, from organizations approved by Medicare, 
in order to be able to bill Medicare for ESRD services. It is 
the Committee's intent that implementation should not increase 
burdens on providers, particularly small independent providers.

Section 202:

    This legislation would allow ESRD providers to utilize 
telehealth for home dialysis patient monitoring.

Section 301:

    This legislation codifies the changes CMS made in 
regulations to streamline and clarify rules for providers 
regarding compliance with the Stark anti-kickback laws, 
including leases that were in violation and when signatures 
were required to document the terms of legal arrangements.

Section 302:

    This legislation would reduce funding in the Medicare 
Improvement Fun (MIF), otherwise available to the Department of 
Health and Human Services, by $31 million to offset the 
policies contained in the legislation.

                             EFFECTIVE DATE

    For section 101, the legislation becomes effective 
beginning in 2019.
    For section 102, the demonstration policy is extended an 
additional three years, ending in 2020.
    For section 103, the legislation becomes effective upon 
enactment.
    For section 201, the legislation becomes effective not 
later than 90 days after the date of enactment.
    For section 202, the provision becomes effective on or 
after January 1, 2019 to individuals with ESRD under title 
XVIII by a health care provider for the purpose of furnishing 
telehealth.
    For section 301, the legislation becomes effective upon 
enactment.
    For section 302, the legislation becomes effective upon 
enactment.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the vote of the Committee on Ways and Means in its 
consideration of H.R. 3178, the Medicare Part B Improvement Act 
of 2017, on July 13, 2017.
    The Chairman's amendment in the nature of a substitute was 
adopted by a voice vote (with a quorum being present).
    Mr. Nunes' motion to table Mr. Doggett's appeal of the 
ruling of the Chair was agreed to by a roll call vote of 20 
yeas and 16 nays (with a quorum being present). The vote was as 
follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Brady......................     ........  .........  Mr. Neal.........  ........     .........
Mr. Johnson....................  ........  ........  .........  Mr. Levin........  ........     .........
Mr. Nunes......................     ........  .........  Mr. Lewis........  ........     .........
Mr. Tiberi.....................     ........  .........  Mr. Doggett......  ........     .........
Mr. Reichert...................     ........  .........  Mr. Thompson.....  ........     .........
Mr. Roskam.....................     ........  .........  Mr. Larson.......  ........     .........
Mr. Buchanan...................     ........  .........  Mr. Blumenauer...  ........     .........
Mr. Smith (NE).................     ........  .........  Mr. Kind.........  ........     .........
Ms. Jenkins....................     ........  .........  Mr. Pascrell.....  ........     .........
Mr. Paulsen....................     ........  .........  Mr. Crowley......  ........     .........
Mr. Marchant...................  ........  ........  .........  Mr. Davis........  ........     .........
Ms. Black......................     ........  .........  Ms. Sanchez......  ........     .........
Mr. Reed.......................     ........  .........  Mr. Higgins......  ........     .........
Mr. Kelly......................     ........  .........  Ms. Sewell.......  ........     .........
Mr. Renacci....................  ........  ........  .........  Ms. DelBene......  ........     .........
Mr. Meehan.....................  ........  ........  .........  Ms. Chu..........  ........     .........
Ms. Noem.......................  
Mr. Holding....................  
Mr. Smith (MO).................  
Mr. Rice.......................  
Mr. Schweikert.................  
Ms. Walorski...................  
Mr. Curbelo....................  
Mr. Bishop.....................  
----------------------------------------------------------------------------------------------------------------

    The bill, H.R. 3178, was ordered favorably reported as 
amended by voice vote (with a quorum being present).

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of the bill, H.R. 3178, as 
reported. The Committee agrees with the estimate prepared by 
the Congressional Budget Office (CBO), which is included below.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority. The 
Committee states further that the bill involves no new or 
increased tax expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 24, 2017.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3178, the Medicare 
Part B Improvement Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lara 
Robillard.
            Sincerely,
                                             Mark P. Hadley
                                        (For Keith Hall, Director).
    Enclosure.

H.R. 3178--Medicare Part B Improvement Act of 2017

    Summary: H.R. 3178 would modify several Medicare policies 
related to coverage and payment for services under Part B of 
the program. CBO estimates that enacting H.R. 3178 would reduce 
direct spending by $4 million over the 2018-2027 period.
    Pay-as-you-go procedures apply because enacting the 
legislation would affect direct spending. The legislation would 
not affect revenues.
    CBO estimates that enacting the legislation would not 
increase net direct spending or on-budget deficits in any of 
the four consecutive 10-year periods beginning in 2028.
    H.R. 3178 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated Cost to the Federal Government: The estimated 
budgetary effect of H.R. 3178 is shown in the following table. 
The costs of this legislation fall within budget function 570 
(Medicare).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2017    2018    2019    2020    2021    2022    2023    2024    2025    2026    2027   2017-2022  2017-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      INCREASES OR DECREASES (-) IN DIRECT SPENDING
 
Estimated Budget Authority................       0      23      77     -17     -55     -12       0       0       0       0       0        -4         -4
Estimated Outlays.........................       0      23      77     -17     -55     -12       0       0       0       0       0        -4         -4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of Estimate: For this estimate, CBO assumes that H.R. 
3178 will be enacted near the end of fiscal year 2017. CBO 
estimates that enacting H.R. 3178 would affect direct spending 
in fiscal years 2018 through 2022 and would decrease direct 
spending by $4 million over that period. The bill would make a 
number of changes to Medicare, including changes to rules 
related to self-referral by physicians and modifications to 
telehealth utilization by beneficiaries with end-stage renal 
disease. The provisions that would affect direct spending are 
discussed below.
    Transitional payment for home infusion therapy services. 
Currently, the Medicare program does not pay for nursing and 
administration services when beneficiaries receive a drug 
infusion in the home setting. Many drugs that beneficiaries 
receive in that setting are delivered via a pump, which 
Medicare does cover as part of the durable medical equipment 
(DME) benefit. Medicare also pays for covered drugs 
administered through a pump for beneficiaries in the home 
setting.
    The 21st Century Cures Act of 2016 (Public Law 114-255) 
added a home infusion benefit to Medicare, but that benefit 
will not become available until January 1, 2021. That act also 
modified, as of January 1, 2017, the payment rate for drugs 
delivered through DME, which lowered the payment rate 
significantly for several infused drugs. According to 
stakeholders, suppliers had used the difference between their 
cost to purchase infused drugs and the Medicare payment rate to 
pay for administration services for beneficiaries receiving 
infused drugs in the home setting. After that reduction in 
payment rates for drugs administered through DME was 
implemented, evidence suggests that many beneficiaries now 
receive their infusions in physicians' offices or hospital 
outpatient departments instead of at home.
    H.R. 3178 would add a temporary home infusion benefit to 
Medicare, beginning on January 1, 2019, and ending on December 
31, 2020. Payment for home infusion services under the new 
benefit would be based on payment rates for infusion services 
under the Medicare physician fee schedule (PFS). The payment 
would vary depending on the drug being administered, and would 
be set based on the PFS rate for a five-hour infusion.
    CBO analyzed how drugs that would be included in the 
temporary benefit were utilized across settings prior to the 
enactment of the 21st Century Cures Act, to understand where 
beneficiaries typically had received drug infusions. CBO also 
assessed how those utilization patterns likely changed since 
the enactment of the 21st Century Cures Act and how the 
distribution across settings would change if H.R. 3178 is 
enacted.
    Some beneficiaries who now receive infusions at home would 
continue to do so if the legislation is enacted. For those 
beneficiaries, the bill would increase Medicare spending for 
drug administration services. Other beneficiaries currently 
receive infusion services in the physician office setting and 
some would choose to receive infusions at home if H.R. 3178 
becomes law. In that case, Medicare spending would increase 
slightly, because CBO estimates that the average duration of a 
physician-administered infusion is shorter than the five hours 
allowed for in H.R. 3178. For beneficiaries currently receiving 
infusions in the hospital outpatient setting who would switch 
to the home setting, H.R. 3178 would reduce spending, as the 
temporary rate would be lower than the equivalent rate in the 
outpatient setting.
    Based on CBO's expectation that Medicare would pay for 
about 25 million infusions per year in the home setting, CBO 
estimates that on net, the home infusion provision would 
increase direct spending by $15 million over the 2018-2027 
period.
    Extension of Medicare Patient IVIG Access Demonstration 
Project. The Medicare IVIG Access and Strengthening Medicare 
and Repaying Taxpayers Act of 2012 (Public Law 112-242) 
authorized a three-year demonstration project under which 
Medicare pays for services related to the infusion of 
intravenous immune globulin (IVIG) to certain beneficiaries. 
Under the demonstration Medicare makes a per-visit payment for 
items and services needed for the in-home administration of 
IVIG. The demonstration is scheduled to end on September 30, 
2017.
    H.R. 3178 would extend the existing demonstration through 
December 31, 2020. Public Law 112-242 appropriated $45 million 
for the project; as of January 2017, about $5 million has been 
spent. Although the funding made available for the 
demonstration has not been exhausted, the authority to spend 
that money will lapse as of October 1, 2017. As a result, 
extending the demonstration would result in new direct 
spending. Based on historical enrollment and spending patterns 
for the demonstration, CBO estimates that the extension in H.R. 
3178 would increase direct spending by about $16 million over 
the 2018-2027 period.
    Rescission. H.R. 3178 would rescind $25 million earmarked 
under current law for making improvements to the Medicare fee-
for-service program. Changes in spending in the fee-for-service 
sector affect both payment to Medicare Advantage plans and 
collections of Part B premiums. Taking those effects into 
account, CBO estimates that rescission would reduce direct 
spending for Medicare by $35 million over the 2017-2027 period.
    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. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table.

           CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 3178, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON JULY 13, 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2017    2018    2019    2020    2021    2022    2023    2024    2025    2026    2027   2017-2022  2017-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             NET DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact............       0       3      77     -17     -55     -12       0       0       0       0       0        -4         -4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term direct spending and deficits: CBO 
estimates that enacting the legislation would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    Intergovernmental and private-sector impact: H.R. 3178 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal costs: Lara Robillard and 
Rebecca Yip; Impact on state, local, and tribal governments: 
Zachary Byrum; Impact on the private sector: Amy Petz.
    Estimate approved by: Holly Harvey, Deputy Assistant 
Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the Committee made findings and 
recommendations that are reflected in this report.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill does not authorize funding, so no statement of general 
performance goals and objectives is required.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

  D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill, and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                   E. Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                 F. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (115th Congress), 
the following statement is made concerning directed rule 
makings:
    The Committee advises that the bill requires no directed 
rulemakings within the meaning of such section.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                          SOCIAL SECURITY ACT




           *       *       *       *       *       *       *
     TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE 
SIMPLIFICATION

           *       *       *       *       *       *       *



Part A--General Provisions

           *       *       *       *       *       *       *



                        civil monetary penalties

  Sec. 1128A. (a) Any person (including an organization, 
agency, or other entity, but excluding a beneficiary, as 
defined in subsection (i)(5)) that--
          (1) knowingly presents or causes to be presented to 
        an officer, employee, or agent of the United States, or 
        of any department or agency thereof, or of any State 
        agency (as defined in subsection (i)(1)), a claim (as 
        defined in subsection (i)(2)) that the Secretary 
        determines--
                  (A) is for a medical or other item or service 
                that the person knows or should know was not 
                provided as claimed, including any person who 
                engages in a pattern or practice of presenting 
                or causing to be presented a claim for an item 
                or service that is based on a code that the 
                person knows or should know will result in a 
                greater payment to the person than the code the 
                person knows or should know is applicable to 
                the item or service actually provided,
                  (B) is for a medical or other item or service 
                and the person knows or should know the claim 
                is false or fraudulent,
                  (C) is presented for a physician's service 
                (or an item or service incident to a 
                physician's service) by a person who knows or 
                should know that the individual who furnished 
                (or supervised the furnishing of) the service--
                          (i) was not licensed as a physician,
                          (ii) was licensed as a physician, but 
                        such license had been obtained through 
                        a misrepresentation of material fact 
                        (including cheating on an examination 
                        required for licensing), or
                          (iii) represented to the patient at 
                        the time the service was furnished that 
                        the physician was certified in a 
                        medical specialty by a medical 
                        specialty board when the individual was 
                        not so certified,
                  (D) is for a medical or other item or service 
                furnished during a period in which the person 
                was excluded from the program under which the 
                claim was made pursuant to a determination by 
                the Secretary under this section or under 
                section 1128, 1156, 1160(b) (as in effect on 
                September 2, 1982), 1862(d) (as in effect on 
                the date of the enactment of the Medicare and 
                Medicaid Patient and Program Protection Act of 
                1987), or 1866(b) or as a result of the 
                application of the provisions of section 
                1842(j)(2), or
                  (E) is for a pattern of medical or other 
                items or services that a person knows or should 
                know are not medically necessary;
          (2) knowingly presents or causes to be presented to 
        any person a request for payment which is in violation 
        of the terms of (A) an assignment under section 
        1842(b)(3)(B)(ii), or (B) an agreement with a State 
        agency (or other requirement of a State plan under 
        title XIX) not to charge a person for an item or 
        service in excess of the amount permitted to be 
        charged, or (C) an agreement to be a participating 
        physician or supplier under section 1842(h)(1), or (D) 
        an agreement pursuant to section 1866(a)(1)(G);
          (3) knowingly gives or causes to be given to any 
        person, with respect to coverage under title XVIII of 
        inpatient hospital services subject to the provisions 
        of section 1886, information that he knows or should 
        know is false or misleading, and that could reasonably 
        be expected to influence the decision when to discharge 
        such person or another individual from the hospital;
          (4) in the case of a person who is not an 
        organization, agency, or other entity, is excluded from 
        participating in a program under title XVIII or a State 
        health care program in accordance with this subsection 
        or under section 1128 and who, at the time of a 
        violation of this subsection--
                  (A) retains a direct or indirect ownership or 
                control interest in an entity that is 
                participating in a program under title XVIII or 
                a State health care program, and who knows or 
                should know of the action constituting the 
                basis for the exclusion; or
                  (B) is an officer or managing employee (as 
                defined in section 1126(b)) of such an entity;
          (5) offers to or transfers remuneration to any 
        individual eligible for benefits under title XVIII of 
        this Act, or under a State health care program (as 
        defined in section 1128(h)) that such person knows or 
        should know is likely to influence such individual to 
        order or receive from a particular provider, 
        practitioner, or supplier any item or service for which 
        payment may be made, in whole or in part, under title 
        XVIII, or a State health care program (as so defined);
          (6) arranges or contracts (by employment or 
        otherwise) with an individual or entity that the person 
        knows or should know is excluded from participation in 
        a Federal health care program (as defined in section 
        1128B(f)), for the provision of items or services for 
        which payment may be made under such a program;
          (7) commits an act described in paragraph (1) or (2) 
        of section 1128B(b);
          (8) knowingly makes, uses, or causes to be made or 
        used, a false record or statement material to a false 
        or fraudulent claim for payment for items and services 
        furnished under a Federal health care program; or
          (9) fails to grant timely access, upon reasonable 
        request (as defined by the Secretary in regulations), 
        to the Inspector General of the Department of Health 
        and Human Services, for the purpose of audits, 
        investigations, evaluations, or other statutory 
        functions of the Inspector General of the Department of 
        Health and Human Services;
          (8) orders or prescribes a medical or other item or 
        service during a period in which the person was 
        excluded from a Federal health care program (as so 
        defined), in the case where the person knows or should 
        know that a claim for such medical or other item or 
        service will be made under such a program;
          (9) knowingly makes or causes to be made any false 
        statement, omission, or misrepresentation of a material 
        fact in any application, bid, or contract to 
        participate or enroll as a provider of services or a 
        supplier under a Federal health care program (as so 
        defined), including Medicare Advantage organizations 
        under part C of title XVIII, prescription drug plan 
        sponsors under part D of title XVIII, medicaid managed 
        care organizations under title XIX, and entities that 
        apply to participate as providers of services or 
        suppliers in such managed care organizations and such 
        plans;
          (10) knows of an overpayment (as defined in paragraph 
        (4) of section 1128J(d)) and does not report and return 
        the overpayment in accordance with such section;
shall be subject, in addition to any other penalties that may 
be prescribed by law, to a civil money penalty of not more than 
$10,000 for each item or service (or, in cases under paragraph 
(3), $15,000 for each individual with respect to whom false or 
misleading information was given; in cases under paragraph (4), 
$10,000 for each day the prohibited relationship occurs; in 
cases under paragraph (7), $50,000 for each such act; or in 
cases under paragraph (9), $50,000 for each false statement or 
misrepresentation of a material fact). In addition, such a 
person shall be subject to an assessment of not more than 3 
times the amount claimed for each such item or service in lieu 
of damages sustained by the United States or a State agency 
because of such claim (or, in cases under paragraph (7), 
damages of not more than 3 times the total amount of 
remuneration offered, paid, solicited, or received, without 
regard to whether a portion of such remuneration was offered, 
paid, solicited, or received for a lawful purpose; or in cases 
under paragraph (9), an assessment of not more than 3 times the 
total amount claimed for each item or service for which payment 
was made based upon the application containing the false 
statement or misrepresentation of a material fact). In addition 
the Secretary may make a determination in the same proceeding 
to exclude the person from participation in the Federal health 
care programs (as defined in section 1128B(f)(1)) and to direct 
the appropriate State agency to exclude the person from 
participation in any State health care program.
  (b)(1) If a hospital or a critical access hospital knowingly 
makes a payment, directly or indirectly, to a physician as an 
inducement to reduce or limit medically necessary services 
provided with respect to individuals who--
          (A) are entitled to benefits under part A or part B 
        of title XVIII or to medical assistance under a State 
        plan approved under title XIX, and
          (B) are under the direct care of the physician,
the hospital or a critical access hospital shall be subject, in 
addition to any other penalties that may be prescribed by law, 
to a civil money penalty of not more than $2,000 for each such 
individual with respect to whom the payment is made.
  (2) Any physician who knowingly accepts receipt of a payment 
described in paragraph (1) shall be subject, in addition to any 
other penalties that may be prescribed by law, to a civil money 
penalty of not more than $2,000 for each individual described 
in such paragraph with respect to whom the payment is made.
  (3)(A) Any physician who executes a document described in 
subparagraph (B) with respect to an individual knowing that all 
of the requirements referred to in such subparagraph are not 
met with respect to the individual shall be subject to a civil 
monetary penalty of not more than the greater of--
          (i) $5,000, or
          (ii) three times the amount of the payments under 
        title XVIII for home health services which are made 
        pursuant to such certification.
  (B) A document described in this subparagraph is any document 
that certifies, for purposes of title XVIII, that an individual 
meets the requirements of section 1814(a)(2)(C) or 
1835(a)(2)(A) in the case of home health services furnished to 
the individual.
  (c)(1) The Secretary may initiate a proceeding to determine 
whether to impose a civil money penalty, assessment, or 
exclusion under subsection (a) or (b) only as authorized by the 
Attorney General pursuant to procedures agreed upon by them. 
The Secretary may not initiate an action under this section 
with respect to any claim, request for payment, or other 
occurrence described in this section later than six years after 
the date the claim was presented, the request for payment was 
made, or the occurrence took place. The Secretary may initiate 
an action under this section by serving notice of the action in 
any manner authorized by Rule 4 of the Federal Rules of Civil 
Procedure.
  (2) The Secretary shall not make a determination adverse to 
any person under subsection (a) or (b) until the person has 
been given written notice and an opportunity for the 
determination to be made on the record after a hearing at which 
the person is entitled to be represented by counsel, to present 
witnesses, and to cross-examine witnesses against the person.
  (3) In a proceeding under subsection (a) or (b) which--
          (A) is against a person who has been convicted 
        (whether upon a verdict after trial or upon a plea of 
        guilty or nolo contendere) of a Federal crime charging 
        fraud or false statements, and
          (B) involves the same transaction as in the criminal 
        action, the person is estopped from denying the 
        essential elements of the criminal offense.
  (4) The official conducting a hearing under this section may 
sanction a person, including any party or attorney, for failing 
to comply with an order or procedure, failing to defend an 
action, or other misconduct as would interfere with the speedy, 
orderly, or fair conduct of the hearing. Such sanction shall 
reasonably relate to the severity and nature of the failure or 
misconduct. Such sanction may include--
          (A) in the case of refusal to provide or permit 
        discovery, drawing negative factual inferences or 
        treating such refusal as an admission by deeming the 
        matter, or certain facts, to be established,
          (B) prohibiting a party from introducing certain 
        evidence or otherwise supporting a particular claim or 
        defense,
          (C) striking pleadings, in whole or in part,
          (D) staying the proceedings,
          (E) dismissal of the action,
          (F) entering a default judgment,
          (G) ordering the party or attorney to pay attorneys' 
        fees and other costs caused by the failure or 
        misconduct, and
          (H) refusing to consider any motion or other action 
        which is not filed in a timely manner.
  (d) In determining the amount or scope of any penalty, 
assessment, or exclusion imposed pursuant to subsection (a) or 
(b), the Secretary shall take into account--
          (1) the nature of claims and the circumstances under 
        which they were presented,
          (2) the degree of culpability, history of prior 
        offenses, and financial condition of the person 
        presenting the claims, and
          (3) such other matters as justice may require.
  (e) Any person adversely affected by a determination of the 
Secretary under this section may obtain a review of such 
determination in the United States Court of Appeals for the 
circuit in which the person resides, or in which the claim or 
specified claim was presented, by filing in such court (within 
sixty days following the date the person is notified of the 
Secretary's determination) a written petition requesting that 
the determination be modified or set aside. A copy of the 
petition shall be forthwith transmitted by the clerk of the 
court to the Secretary, and thereupon the Secretary shall file 
in the Court the record in the proceeding as provided in 
section 2112 of title 28, United States Code. Upon such filing, 
the court shall have jurisdiction of the proceeding and of the 
question determined therein, and shall have the power to make 
and enter upon the pleadings, testimony, and proceedings set 
forth in such record a decree affirming, modifying, remanding 
for further consideration, or setting aside, in whole or in 
part, the determination of the Secretary and enforcing the same 
to the extent that such order is affirmed or modified. No 
objection that has not been urged before the Secretary shall be 
considered by the court, unless the failure or neglect to urge 
such objection shall be excused because of extraordinary 
circumstances. The findings of the Secretary with respect to 
questions of fact, if supported by substantial evidence on the 
record considered as a whole, shall be conclusive. If any party 
shall apply to the court for leave to adduce additional 
evidence and shall show to the satisfaction of the court that 
such additional evidence is material and that there were 
reasonable grounds for the failure to adduce such evidence in 
the hearing before the Secretary, the court may order such 
additional evidence to be taken before the Secretary and to be 
made a part of the record. The Secretary may modify his 
findings as to the facts, or make new findings, by reason of 
additional evidence so taken and filed, and he shall file with 
the court such modified or new findings, which findings with 
respect to questions of fact, if supported by substantial 
evidence on the record considered as a whole, shall be 
conclusive, and his recommendations, if any, for the 
modification or setting aside of his original order. Upon the 
filing of the record with it, the jurisdiction of the court 
shall be exclusive and its judgment and decree shall be final, 
except that the same shall be subject to review by the Supreme 
Court of the United States, as provided in section 1254 of 
title 28, United States Code.
  (f) Civil money penalties and assessments imposed under this 
section may be compromised by the Secretary and may be 
recovered in a civil action in the name of the United States 
brought in United States district court for the district where 
the claim or specified claim (as defined in subsection (r)) was 
presented, or where the claimant (or, with respect to a person 
described in subsection (o), the person) resides, as determined 
by the Secretary. Amounts recovered under this section shall be 
paid to the Secretary and disposed of as follows:
          (1)(A) In the case of amounts recovered arising out 
        of a claim under title XIX, there shall be paid to the 
        State agency an amount bearing the same proportion to 
        the total amount recovered as the State's share of the 
        amount paid by the State agency for such claim bears to 
        the total amount paid for such claim.
          (B) In the case of amounts recovered arising out of a 
        claim under an allotment to a State under title V, 
        there shall be paid to the State agency an amount equal 
        to three-sevenths of the amount recovered.
          (2) Such portion of the amounts recovered as is 
        determined to have been paid out of the trust funds 
        under sections 1817 and 1841 shall be repaid to such 
        trust funds.
          (3) With respect to amounts recovered arising out of 
        a claim under a Federal health care program (as defined 
        in section 1128B(f)), the portion of such amounts as is 
        determined to have been paid by the program shall be 
        repaid to the program, and the portion of such amounts 
        attributable to the amounts recovered under this 
        section by reason of the amendments made by the Health 
        Insurance Portability and Accountability Act of 1996 
        (as estimated by the Secretary) shall be deposited into 
        the Federal Hospital Insurance Trust Fund pursuant to 
        section 1817(k)(2)(C).
          (4) The remainder of the amounts recovered shall be 
        deposited as miscellaneous receipts of the Treasury of 
        the United States.
The amount of such penalty or assessment, when finally 
determined, or the amount agreed upon in compromise, may be 
deducted from any sum then or later owing by the United States 
or a State agency (or, in the case of a penalty or assessment 
under subsection (o), by a specified State agency (as defined 
in subsection (q)(6)), to the person against whom the penalty 
or assessment has been assessed.
  (g) A determination by the Secretary to impose a penalty, 
assessment, or exclusion under subsection (a) or (b) shall be 
final upon the expiration of the sixty-day period referred to 
in subsection (e). Matters that were raised or that could have 
been raised in a hearing before the Secretary or in an appeal 
pursuant to subsection (e) may not be raised as a defense to a 
civil action by the United States to collect a penalty, 
assessment, or exclusion assessed under this section.
  (h) Whenever the Secretary's determination to impose a 
penalty, assessment, or exclusion under subsection (a) or (b) 
becomes final, he shall notify the appropriate State or local 
medical or professional organization, the appropriate State 
agency or agencies administering or supervising the 
administration of State health care programs (as defined in 
section 1128(h)), and the appropriate utilization and quality 
control peer review organization, and the appropriate State or 
local licensing agency or organization (including the agency 
specified in section 1864(a) and 1902(a)(33)) that such a 
penalty, assessment, or exclusion has become final and the 
reasons therefor.
  (i) For the purposes of this section:
          (1) The term ``State agency'' means the agency 
        established or designated to administer or supervise 
        the administration of the State plan under title XIX of 
        this Act or designated to administer the State's 
        program under title V or subtitle 1 of title XX of this 
        Act.
          (2) The term ``claim'' means an application for 
        payments for items and services under a Federal health 
        care program (as defined in section 1128B(f)).
          (3) The term ``item or service'' includes (A) any 
        particular item, device, medical supply, or service 
        claimed to have been provided to a patient and listed 
        in an itemized claim for payment, and (B) in the case 
        of a claim based on costs, any entry in the cost 
        report, books of account or other documents sup- 
        porting such claim.
          (4) The term ``agency of the United States''' 
        includes any contractor acting as a fiscal 
        intermediary, carrier, or fiscal agent or any other 
        claims processing agent for a Federal health care 
        program (as so defined).
          (5) The term ``beneficiary'' means an individual who 
        is eligible to receive items or services for which 
        payment may be made under a Federal health care program 
        (as so defined) but does not include a provider, 
        supplier, or practitioner.
          (6) The term ``remuneration'' includes the waiver of 
        coinsurance and deductible amounts (or any part 
        thereof), and transfers of items or services for free 
        or for other than fair market value. The term 
        ``remuneration'' does not include--
                  (A) the waiver of coinsurance and deductible 
                amounts by a person, if--
                          (i) the waiver is not offered as part 
                        of any advertisement or solicitation;
                          (ii) the person does not routinely 
                        waive coinsurance or deductible 
                        amounts; and
                          (iii) the person--
                                  (I) waives the coinsurance 
                                and deductible amounts after 
                                determining in good faith that 
                                the individual is in financial 
                                need; or
                                  (II) fails to collect 
                                coinsurance or deductible 
                                amounts after making reasonable 
                                collection efforts;
                  (B) subject to subsection (n), any 
                permissible practice described in any 
                subparagraph of section 1128B(b)(3) or in 
                regulations issued by the Secretary;
                  (C) differentials in coinsurance and 
                deductible amounts as part of a benefit plan 
                design as long as the differentials have been 
                disclosed in writing to all beneficiaries, 
                third party payers, and providers, to whom 
                claims are presented and as long as the 
                differentials meet the standards as defined in 
                regulations promulgated by the Secretary not 
                later than 180 days after the date of the 
                enactment of the Health Insurance Portability 
                and Accountability Act of 1996;
                  (D) incentives given to individuals to 
                promote the delivery of preventive care as 
                determined by the Secretary in regulations so 
                promulgated;
                  (E) a reduction in the copayment amount for 
                covered OPD services under section 
                1833(t)(5)(B);
                  (F) any other remuneration which promotes 
                access to care and poses a low risk of harm to 
                patients and Federal health care programs (as 
                defined in section 1128B(f) and designated by 
                the Secretary under regulations);
                  (G) the offer or transfer of items or 
                services for free or less than fair market 
                value by a person, if--
                          (i) the items or services consist of 
                        coupons, rebates, or other rewards from 
                        a retailer;
                          (ii) the items or services are 
                        offered or transferred on equal terms 
                        available to the general public, 
                        regardless of health insurance status; 
                        and
                          (iii) the offer or transfer of the 
                        items or services is not tied to the 
                        provision of other items or services 
                        reimbursed in whole or in part by the 
                        program under title XVIII or a State 
                        health care program (as defined in 
                        section 1128(h));
                  (H) the offer or transfer of items or 
                services for free or less than fair market 
                value by a person, if--
                          (i) the items or services are not 
                        offered as part of any advertisement or 
                        solicitation;
                          (ii) the items or services are not 
                        tied to the provision of other services 
                        reimbursed in whole or in part by the 
                        program under title XVIII or a State 
                        health care program (as so defined);
                          (iii) there is a reasonable 
                        connection between the items or 
                        services and the medical care of the 
                        individual; and
                          (iv) the person provides the items or 
                        services after determining in good 
                        faith that the individual is in 
                        financial need[; or];
                  (I) effective on a date specified by the 
                Secretary (but not earlier than January 1, 
                2011), the waiver by a PDP sponsor of a 
                prescription drug plan under part D of title 
                XVIII or an MA organization offering an MA PD 
                plan under part C of such title of any 
                copayment for the first fill of a covered part 
                D drug (as defined in section 1860D 2(e)) that 
                is a generic drug for individuals enrolled in 
                the prescription drug plan or MA PD plan, 
                respectively[.]; or
                  (J) the provision of telehealth on or after 
                January 1, 2019, to individuals with end stage 
                renal disease under title XVIII by a health 
                care provider for the purpose of furnishing of 
                telehealth.
          (7) The term ``should know'' means that a person, 
        with respect to information--
                  (A) acts in deliberate ignorance of the truth 
                or falsity of the information; or
                  (B) acts in reckless disregard of the truth 
                or falsity of the information,
        and no proof of specific intent to defraud is required.
  (j)(1) The provisions of subsections (d) and (e) of section 
205 shall apply with respect to this section to the same extent 
as they are applicable with respect to title II. The Secretary 
may delegate the authority granted by section 205(d) (as made 
applicable to this section) to the Inspector General of the 
Department of Health and Human Services for purposes of any 
investigation under this section.
  (2) The Secretary may delegate authority granted under this 
section and under section 1128 to the Inspector General of the 
Department of Health and Human Services.
  (k) Whenever the Secretary has reason to believe that any 
person has engaged, is engaging, or is about to engage in any 
activity which makes the person subject to a civil monetary 
penalty under this section, the Secretary may bring an action 
in an appropriate district court of the United States (or, if 
applicable, a United States court of any territory) to enjoin 
such activity, or to enjoin the person from concealing, 
removing, encumbering, or disposing of assets which may be 
required in order to pay a civil monetary penalty if any such 
penalty were to be imposed or to seek other appropriate relief.
  (l) A principal is liable for penalties, assessments, and an 
exclusion under this section for the actions of the principal's 
agent acting within the scope of the agency.
  (m)(1) For purposes of this section, with respect to a 
Federal health care program not contained in this Act, 
references to the Secretary in this section shall be deemed to 
be references to the Secretary or Administrator of the 
department or agency with jurisdiction over such program and 
references to the Inspector General of the Department of Health 
and Human Services in this section shall be deemed to be 
references to the Inspector General of the applicable 
department or agency.
  (2)(A) The Secretary and Administrator of the departments and 
agencies referred to in paragraph (1) may include in any action 
pursuant to this section, claims within the jurisdiction of 
other Federal departments or agencies as long as the following 
conditions are satisfied:
          (i) The case involves primarily claims submitted to 
        the Federal health care programs of the department or 
        agency initiating the action.
          (ii) The Secretary or Administrator of the department 
        or agency initiating the action gives notice and an 
        opportunity to participate in the investigation to the 
        Inspector General of the department or agency with 
        primary jurisdiction over the Federal health care 
        programs to which the claims were submitted.
  (B) If the conditions specified in subparagraph (A) are 
fulfilled, the Inspector General of the department or agency 
initiating the action is authorized to exercise all powers 
granted under the Inspector General Act of 1978 (5 U.S.C. App.) 
with respect to the claims submitted to the other departments 
or agencies to the same manner and extent as provided in that 
Act with respect to claims submitted to such departments or 
agencies.
  (n)(1) Subparagraph (B) of subsection (i)(6) shall not apply 
to a practice described in paragraph (2) unless--
          (A) the Secretary, through the Inspector General of 
        the Department of Health and Human Services, 
        promulgates a rule authorizing such a practice as an 
        exception to remuneration; and
          (B) the remuneration is offered or transferred by a 
        person under such rule during the 2-year period 
        beginning on the date the rule is first promulgated.
  (2) A practice described in this paragraph is a practice 
under which a health care provider or facility pays, in whole 
or in part, premiums for medicare supplemental policies for 
individuals entitled to benefits under part A of title XVIII 
pursuant to section 226A.
  (o) Any person (including an organization, agency, or other 
entity, but excluding a program beneficiary, as defined in 
subsection (q)(4)) that, with respect to a grant, contract, or 
other agreement for which the Secretary provides funding--
          (1) knowingly presents or causes to be presented a 
        specified claim (as defined in subsection (r)) under 
        such grant, contract, or other agreement that the 
        person knows or should know is false or fraudulent;
          (2) knowingly makes, uses, or causes to be made or 
        used any false statement, omission, or 
        misrepresentation of a material fact in any 
        application, proposal, bid, progress report, or other 
        document that is required to be submitted in order to 
        directly or indirectly receive or retain funds provided 
        in whole or in part by such Secretary pursuant to such 
        grant, contract, or other agreement;
          (3) knowingly makes, uses, or causes to be made or 
        used, a false record or statement material to a false 
        or fraudulent specified claim under such grant, 
        contract, or other agreement;
          (4) knowingly makes, uses, or causes to be made or 
        used, a false record or statement material to an 
        obligation (as defined in subsection (s)) to pay or 
        transmit funds or property to such Secretary with 
        respect to such grant, contract, or other agreement, or 
        knowingly conceals or knowingly and improperly avoids 
        or decreases an obligation to pay or transmit funds or 
        property to such Secretary with respect to such grant, 
        contract, or other agreement; or
          (5) fails to grant timely access, upon reasonable 
        request (as defined by such Secretary in regulations), 
        to the Inspector General of the Department, for the 
        purpose of audits, investigations, evaluations, or 
        other statutory functions of such Inspector General in 
        matters involving such grants, contracts, or other 
        agreements;
shall be subject, in addition to any other penalties that may 
be prescribed by law, to a civil money penalty in cases under 
paragraph (1), of not more than $10,000 for each specified 
claim; in cases under paragraph (2), not more than $50,000 for 
each false statement, omission, or misrepresentation of a 
material fact; in cases under paragraph (3), not more than 
$50,000 for each false record or statement; in cases under 
paragraph (4), not more than $50,000 for each false record or 
statement or $10,000 for each day that the person knowingly 
conceals or knowingly and improperly avoids or decreases an 
obligation to pay; or in cases under paragraph (5), not more 
than $15,000 for each day of the failure described in such 
paragraph. In addition, in cases under paragraphs (1) and (3), 
such a person shall be subject to an assessment of not more 
than 3 times the amount claimed in the specified claim 
described in such paragraph in lieu of damages sustained by the 
United States or a specified State agency because of such 
specified claim, and in cases under paragraphs (2) and (4), 
such a person shall be subject to an assessment of not more 
than 3 times the total amount of the funds described in 
paragraph (2) or (4), respectively (or, in the case of an 
obligation to transmit property to the Secretary described in 
paragraph (4), of the value of the property described in such 
paragraph) in lieu of damages sustained by the United States or 
a specified State agency because of such case. In addition, the 
Secretary may make a determination in the same proceeding to 
exclude the person from participation in the Federal health 
care programs (as defined in section 1128B(f)(1)) and to direct 
the appropriate State agency to exclude the person from 
participation in any State health care program.
  (p) The provisions of subsections (c), (d), (g), and (h) 
shall apply to a civil money penalty or assessment under 
subsection (o) in the same manner as such provisions apply to a 
penalty, assessment, or proceeding under subsection (a). In 
applying subsection (d), each reference to a claim under such 
subsection shall be treated as including a reference to a 
specified claim (as defined in subsection (r)).
  (q) For purposes of this subsection and subsections (o) and 
(p):
          (1) The term ``Department'' means the Department of 
        Health and Human Services.
          (2) The term ``material'' means having a natural 
        tendency to influence, or be capable of influencing, 
        the payment or receipt of money or property.
          (3) The term ``other agreement'' includes a 
        cooperative agreement, scholarship, fellowship, loan, 
        subsidy, payment for a specified use, donation 
        agreement, award, or subaward (regardless of whether 
        one or more of the persons entering into the agreement 
        is a contractor or subcontractor).
          (4) The term ``program beneficiary'' means, in the 
        case of a grant, contract, or other agreement designed 
        to accomplish the objective of awarding or otherwise 
        furnishing benefits or assistance to individuals and 
        for which the Secretary provides funding, an individual 
        who applies for, or who receives, such benefits or 
        assistance from such grant, contract, or other 
        agreement. Such term does not include, with respect to 
        such grant, contract, or other agreement, an officer, 
        employee, or agent of a person or entity that receives 
        such grant or that enters into such contract or other 
        agreement.
          (5) The term ``recipient'' includes a subrecipient or 
        subcontractor.
          (6) The term ``specified State agency'' means an 
        agency of a State government established or designated 
        to administer or supervise the administration of a 
        grant, contract, or other agreement funded in whole or 
        in part by the Secretary.
  (r) For purposes of this section, the term ``specified 
claim'' means any application, request, or demand under a 
grant, contract, or other agreement for money or property, 
whether or not the United States or a specified State agency 
has title to the money or property, that is not a claim (as 
defined in subsection (i)(2)) and that--
          (1) is presented or caused to be presented to an 
        officer, employee, or agent of the Department or agency 
        thereof, or of any specified State agency; or
          (2) is made to a contractor, grantee, or any other 
        recipient if the money or property is to be spent or 
        used on the Department's behalf or to advance a 
        Department program or interest, and if the Department--
                  (A) provides or has provided any portion of 
                the money or property requested or demanded; or
                  (B) will reimburse such contractor, grantee, 
                or other recipient for any portion of the money 
                or property which is requested or demanded.
  (s) For purposes of subsection (o), the term ``obligation'' 
means an established duty, whether or not fixed, arising from 
an express or implied contractual, grantor-grantee, or 
licensor-licensee relationship, for a fee-based or similar 
relationship, from statute or regulation, or from the retention 
of any overpayment.

           *       *       *       *       *       *       *


TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

           *       *       *       *       *       *       *


   Part B--Supplementary Medical Insurance Benefits for the Aged and 
Disabled

           *       *       *       *       *       *       *


        SPECIAL PAYMENT RULES FOR PARTICULAR ITEMS AND SERVICES

  Sec. 1834. (a) Payment for Durable Medical Equipment.--
          (1) General rule for payment.--
                  (A) In general.--With respect to a covered 
                item (as defined in paragraph (13)) for which 
                payment is determined under this subsection, 
                payment shall be made in the frequency 
                specified in paragraphs (2) through (7) and in 
                an amount equal to 80 percent of the payment 
                basis described in subparagraph (B).
                  (B) Payment basis.--Subject to subparagraph 
                (F)(i), the payment basis described in this 
                subparagraph is the lesser of--
                          (i) the actual charge for the item, 
                        or
                          (ii) the payment amount recognized 
                        under paragraphs (2) through (7) of 
                        this subsection for the item;
                except that clause (i) shall not apply if the 
                covered item is furnished by a public home 
                health agency (or by another home health agency 
                which demonstrates to the satisfaction of the 
                Secretary that a significant portion of its 
                patients are low income) free of charge or at 
                nominal charges to the public.
                  (C) Exclusive payment rule.--Subject to 
                subparagraph (F)(ii), this subsection shall 
                constitute the exclusive provision of this 
                title for payment for covered items under this 
                part or under part A to a home health agency.
                  (D) Reduction in fee schedules for certain 
                items.--With respect to a seat-lift chair or 
                transcutaneous electrical nerve stimulator 
                furnished on or after April 1, 1990, the 
                Secretary shall reduce the payment amount 
                applied under subparagraph (B)(ii) for such an 
                item by 15 percent, and, in the case of a 
                transcutaneous electrical nerve stimulator 
                furnished on or after January 1, 1991, the 
                Secretary shall further reduce such payment 
                amount (as previously reduced) by 45 percent.
                  (E) Clinical conditions for coverage.--
                          (i) In general.--The Secretary shall 
                        establish standards for clinical 
                        conditions for payment for covered 
                        items under this subsection.
                          (ii) Requirements.--The standards 
                        established under clause (i) shall 
                        include the specification of types or 
                        classes of covered items that require, 
                        as a condition of payment under this 
                        subsection, a face-to-face examination 
                        of the individual by a physician (as 
                        defined in section 1861(r)), a 
                        physician assistant, nurse 
                        practitioner, or a clinical nurse 
                        specialist (as those terms are defined 
                        in section 1861(aa)(5)) and a 
                        prescription for the item.
                          (iii) Priority of establishment of 
                        standards.--In establishing the 
                        standards under this subparagraph, the 
                        Secretary shall first establish 
                        standards for those covered items for 
                        which the Secretary determines there 
                        has been a proliferation of use, 
                        consistent findings of charges for 
                        covered items that are not delivered, 
                        or consistent findings of falsification 
                        of documentation to provide for payment 
                        of such covered items under this part.
                          (iv) Standards for power 
                        wheelchairs.--Effective on the date of 
                        the enactment of this subparagraph, in 
                        the case of a covered item consisting 
                        of a motorized or power wheelchair for 
                        an individual, payment may not be made 
                        for such covered item unless a 
                        physician (as defined in section 
                        1861(r)(1)), a physician assistant, 
                        nurse practitioner, or a clinical nurse 
                        specialist (as those terms are defined 
                        in section 1861(aa)(5)) has conducted a 
                        face-to-face examination of the 
                        individual and written a prescription 
                        for the item.
                          (v) Limitation on payment for covered 
                        items.--Payment may not be made for a 
                        covered item under this subsection 
                        unless the item meets any standards 
                        established under this subparagraph for 
                        clinical condition of coverage.
                  (F) Application of competitive acquisition; 
                limitation of inherent reasonableness 
                authority.--In the case of covered items 
                furnished on or after January 1, 2011, subject 
                to subparagraphs (G) and (H), that are included 
                in a competitive acquisition program in a 
                competitive acquisition area under section 
                1847(a)--
                          (i) the payment basis under this 
                        subsection for such items and services 
                        furnished in such area shall be the 
                        payment basis determined under such 
                        competitive acquisition program;
                          (ii) the Secretary may (and, in the 
                        case of covered items furnished on or 
                        after January 1, 2016, subject to 
                        clause (iii), shall) use information on 
                        the payment determined under such 
                        competitive acquisition programs to 
                        adjust the payment amount otherwise 
                        recognized under subparagraph (B)(ii) 
                        for an area that is not a competitive 
                        acquisition area under section 1847 and 
                        in the case of such adjustment, 
                        paragraph (10)(B) shall not be applied; 
                        and
                          (iii) in the case of covered items 
                        furnished on or after January 1, 2016, 
                        the Secretary shall continue to make 
                        such adjustments described in clause 
                        (ii) as, under such competitive 
                        acquisition programs, additional 
                        covered items are phased in or 
                        information is updated as contracts 
                        under section 1847 are recompeted in 
                        accordance with section 1847(b)(3)(B).
                  (G) Use of information on competitive bid 
                rates.--The Secretary shall specify by 
                regulation the methodology to be used in 
                applying the provisions of subparagraph (F)(ii) 
                and subsection (h)(1)(H)(ii). In promulgating 
                such regulation, the Secretary shall consider 
                the costs of items and services in areas in 
                which such provisions would be applied compared 
                to the payment rates for such items and 
                services in competitive acquisition areas.In 
                the case of items and services furnished on or 
                after January 1, 2019, in making any 
                adjustments under clause (ii) or (iii) of 
                subparagraph (F), under subsection 
                (h)(1)(H)(ii), or under section 1842(s)(3)(B), 
                the Secretary shall--
                          (i) solicit and take into account 
                        stakeholder input; and
                          (ii) take into account the highest 
                        amount bid by a winning supplier in a 
                        competitive acquisition area and a 
                        comparison of each of the following 
                        with respect to non-competitive 
                        acquisition areas and competitive 
                        acquisition areas:
                                  (I) The average travel 
                                distance and cost associated 
                                with furnishing items and 
                                services in the area.
                                  (II) The average volume of 
                                items and services furnished by 
                                suppliers in the area.
                                  (III) The number of suppliers 
                                in the area.
                  (H) Diabetic supplies.--
                          (i) In general.--On or after the date 
                        described in clause (ii), the payment 
                        amount under this part for diabetic 
                        supplies, including testing strips, 
                        that are non-mail order items (as 
                        defined by the Secretary) shall be 
                        equal to the single payment amounts 
                        established under the national mail 
                        order competition for diabetic supplies 
                        under section 1847.
                          (ii) Date described.--The date 
                        described in this clause is the date of 
                        the implementation of the single 
                        payment amounts under the national mail 
                        order competition for diabetic supplies 
                        under section 1847.
                  (I) Treatment of vacuum erection systems.--
                Effective for items and services furnished on 
                and after July 1, 2015, vacuum erection systems 
                described as prosthetic devices described in 
                section 1861(s)(8) shall be treated in the same 
                manner as erectile dysfunction drugs are 
                treated for purposes of section 1860D-
                2(e)(2)(A).
          (2) Payment for inexpensive and other routinely 
        purchased durable medical equipment.--
                  (A) In general.--Payment for an item of 
                durable medical equipment (as defined in 
                paragraph (13))--
                          (i) the purchase price of which does 
                        not exceed $150,
                          (ii) which the Secretary determines 
                        is acquired at least 75 percent of the 
                        time by purchase,
                          (iii) which is an accessory used in 
                        conjunction with a nebulizer, 
                        aspirator, or a ventilator excluded 
                        under paragraph (3)(A), or
                          (iv) in the case of devices furnished 
                        on or after October 1, 2015, and before 
                        October 1, 2018, which serves as a 
                        speech generating device or which is an 
                        accessory that is needed for the 
                        individual to effectively utilize such 
                        a device,
                shall be made on a rental basis or in a lump-
                sum amount for the purchase of the item. The 
                payment amount recognized for purchase or 
                rental of such equipment is the amount 
                specified in subparagraph (B) for purchase or 
                rental, except that the total amount of 
                payments with respect to an item may not exceed 
                the payment amount specified in subparagraph 
                (B) with respect to the purchase of the item.
                  (B) Payment amount.--For purposes of 
                subparagraph (A), the amount specified in this 
                subparagraph, with respect to the purchase or 
                rental of an item furnished in a carrier 
                service area--
                          (i) in 1989 and in 1990 is the 
                        average reasonable charge in the area 
                        for the purchase or rental, 
                        respectively, of the item for the 12-
                        month period ending on June 30, 1987, 
                        increased by the percentage increase in 
                        the consumer price index for all urban 
                        consumers (U.S. city average) for the 
                        6-month period ending with December 
                        1987;
                          (ii) in 1991 is the sum of (I) 67 
                        percent of the local payment amount for 
                        the item or device computed under 
                        subparagraph (C)(i)(I) for 1991, and 
                        (II) 33 percent of the national limited 
                        payment amount for the item or device 
                        computed under subparagraph (C)(ii) for 
                        1991;
                          (iii) in 1992 is the sum of (I) 33 
                        percent of the local payment amount for 
                        the item or device computed under 
                        subparagraph (C)(i)(II) for 1992, and 
                        (II) 67 percent of the national limited 
                        payment amount for the item or device 
                        computed under subparagraph (C)(ii) for 
                        1992; and
                          (iv) in 1993 and each subsequent year 
                        is the national limited payment amount 
                        for the item or device computed under 
                        subparagraph (C)(ii) for that year 
                        (reduced by 10 percent, in the case of 
                        a blood glucose testing strip furnished 
                        after 1997 for an individual with 
                        diabetes).
                  (C) Computation of local payment amount and 
                national limited payment amount.--For purposes 
                of subparagraph (B)--
                          (i) the local payment amount for an 
                        item or device for a year is equal to--
                                  (I) for 1991, the amount 
                                specified in subparagraph 
                                (B)(i) for 1990 increased by 
                                the covered item update for 
                                1991, and
                                  (II) for 1992, 1993, and 1994 
                                the amount determined under 
                                this clause for the preceding 
                                year increased by the covered 
                                item update for the year; and
                          (ii) the national limited payment 
                        amount for an item or device for a year 
                        is equal to--
                                  (I) for 1991, the local 
                                payment amount determined under 
                                clause (i) for such item or 
                                device for that year, except 
                                that the national limited 
                                payment amount may not exceed 
                                100 percent of the weighted 
                                average of all local payment 
                                amounts determined under such 
                                clause for such item for that 
                                year and may not be less than 
                                85 percent of the weighted 
                                average of all local payment 
                                amounts determined under such 
                                clause for such item,
                                  (II) for 1992 and 1993, the 
                                amount determined under this 
                                clause for the preceding year 
                                increased by the covered item 
                                update for such subsequent 
                                year,
                                  (III) for 1994, the local 
                                payment amount determined under 
                                clause (i) for such item or 
                                device for that year, except 
                                that the national limited 
                                payment amount may not exceed 
                                100 percent of the median of 
                                all local payment amounts 
                                determined under such clause 
                                for such item for that year and 
                                may not be less than 85 percent 
                                of the median of all local 
                                payment amounts determined 
                                under such clause for such item 
                                or device for that year, and
                                  (IV) for each subsequent 
                                year, the amount determined 
                                under this clause for the 
                                preceding year increased by the 
                                covered item update for such 
                                subsequent year.
          (3) Payment for items requiring frequent and 
        substantial servicing.--
                  (A) In general.--Payment for a covered item 
                (such as IPPB machines and ventilators, 
                excluding ventilators that are either 
                continuous airway pressure devices or 
                intermittent assist devices with continuous 
                airway pressure devices) for which there must 
                be frequent and substantial servicing in order 
                to avoid risk to the patient's health shall be 
                made on a monthly basis for the rental of the 
                item and the amount recognized is the amount 
                specified in subparagraph (B).
                  (B) Payment amount.--For purposes of 
                subparagraph (A), the amount specified in this 
                subparagraph, with respect to an item or device 
                furnished in a carrier service area--
                          (i) in 1989 and in 1990 is the 
                        average reasonable charge in the area 
                        for the rental of the item or device 
                        for the 12-month period ending with 
                        June 1987, increased by the percentage 
                        increase in the consumer price index 
                        for all urban consumers (U.S. city 
                        average) for the 6-month period ending 
                        with December 1987;
                          (ii) in 1991 is the sum of (I) 67 
                        percent of the local payment amount for 
                        the item or device computed under 
                        subparagraph (C)(i)(I) for 1991, and 
                        (II) 33 percent of the national limited 
                        payment amount for the item or device 
                        computed under subparagraph (C)(ii) for 
                        1991;
                          (iii) in 1992 is the sum of (I) 33 
                        percent of the local payment amount for 
                        the item or device computed under 
                        subparagraph (C)(i)(II) for 1992, and 
                        (II) 67 percent of the national limited 
                        payment amount for the item or device 
                        computed under subparagraph (C)(ii) for 
                        1992; and
                          (iv) in 1993 and each subsequent year 
                        is the national limited payment amount 
                        for the item or device computed under 
                        subparagraph (C)(ii) for that year.
                  (C) Computation of local payment amount and 
                national limited payment amount.--For purposes 
                of subparagraph (B)--
                          (i) the local payment amount for an 
                        item or device for a year is equal to--
                                  (I) for 1991, the amount 
                                specified in subparagraph 
                                (B)(i) for 1990 increased by 
                                the covered item update for 
                                1991, and
                                  (II) for 1992, 1993, and 1994 
                                the amount determined under 
                                this clause for the preceding 
                                year increased by the covered 
                                item update for the year; and
                          (ii) the national limited payment 
                        amount for an item or device for a year 
                        is equal to--
                                  (I) for 1991, the local 
                                payment amount determined under 
                                clause (i) for such item or 
                                device for that year, except 
                                that the national limited 
                                payment amount may not exceed 
                                100 percent of the weighted 
                                average of all local payment 
                                amounts determined under such 
                                clause for such item for that 
                                year and may not be less than 
                                85 percent of the weighted 
                                average of all local payment 
                                amounts determined under such 
                                clause for such item,
                                  (II) for 1992 and 1993, the 
                                amount determined under this 
                                clause for the preceding year 
                                increased by the covered item 
                                update for such subsequent 
                                year,
                                  (III) for 1994, the local 
                                payment amount determined under 
                                clause (i) for such item or 
                                device for that year, except 
                                that the national limited 
                                payment amount may not exceed 
                                100 percent of the median of 
                                all local payment amounts 
                                determined under such clause 
                                for such item for that year and 
                                may not be less than 85 percent 
                                of the median of all local 
                                payment amounts determined 
                                under such clause for such item 
                                or device for that year, and
                                  (IV) for each subsequent 
                                year, the amount determined 
                                under this clause for the 
                                preceding year increased by the 
                                covered item update for such 
                                subsequent year.
          (4) Payment for certain customized items.--Payment 
        with respect to a covered item that is uniquely 
        constructed or substantially modified to meet the 
        specific needs of an individual patient, and for that 
        reason cannot be grouped with similar items for 
        purposes of payment under this title, shall be made in 
        a lump-sum amount (A) for the purchase of the item in a 
        payment amount based upon the carrier's individual 
        consideration for that item, and (B) for the reasonable 
        and necessary maintenance and servicing for parts and 
        labor not covered by the supplier's or manufacturer's 
        warranty, when necessary during the period of medical 
        need, and the amount recognized for such maintenance 
        and servicing shall be paid on a lump-sum, as needed 
        basis based upon the carrier's individual consideration 
        for that item. In the case of a wheelchair furnished on 
        or after January 1, 1992, the wheelchair shall be 
        treated as a customized item for purposes of this 
        paragraph if the wheelchair has been measured, fitted, 
        or adapted in consideration of the patient's body size, 
        disability, period of need, or intended use, and has 
        been assembled by a supplier or ordered from a 
        manufacturer who makes available customized features, 
        modifications, or components for wheelchairs that are 
        intended for an individual patient's use in accordance 
        with instructions from the patient's physician.
          (5) Payment for oxygen and oxygen equipment.--
                  (A) In general.--Payment for oxygen and 
                oxygen equipment shall be made on a monthly 
                basis in the monthly payment amount recognized 
                under paragraph (9) for oxygen and oxygen 
                equipment (other than portable oxygen 
                equipment), subject to subparagraphs (B), (C), 
                (E), and (F).
                  (B) Add-on for portable oxygen equipment.--
                When portable oxygen equipment is used, but 
                subject to subparagraph (D), the payment amount 
                recognized under subparagraph (A) shall be 
                increased by the monthly payment amount 
                recognized under paragraph (9) for portable 
                oxygen equipment.
                  (C) Volume adjustment.--When the attending 
                physician prescribes an oxygen flow rate--
                          (i) exceeding 4 liters per minute, 
                        the payment amount recognized under 
                        subparagraph (A), subject to 
                        subparagraph (D), shall be increased by 
                        50 percent, or
                          (ii) of less than 1 liter per minute, 
                        the payment amount recognized under 
                        subparagraph (A) shall be decreased by 
                        50 percent.
                  (D) Limit on adjustment.--When portable 
                oxygen equipment is used and the attending 
                physician prescribes an oxygen flow rate 
                exceeding 4 liters per minute, there shall only 
                be an increase under either subparagraph (B) or 
                (C), whichever increase is larger, and not 
                under both such subparagraphs.
                  (E) Recertification for patients receiving 
                home oxygen therapy.--In the case of a patient 
                receiving home oxygen therapy services who, at 
                the time such services are initiated, has an 
                initial arterial blood gas value at or above a 
                partial pressure of 56 or an arterial oxygen 
                saturation at or above 89 percent (or such 
                other values, pressures, or criteria as the 
                Secretary may specify) no payment may be made 
                under this part for such services after the 
                expiration of the 90-day period that begins on 
                the date the patient first receives such 
                services unless the patient's attending 
                physician certifies that, on the basis of a 
                follow-up test of the patient's arterial blood 
                gas value or arterial oxygen saturation 
                conducted during the final 30 days of such 90-
                day period, there is a medical need for the 
                patient to continue to receive such services.
                  (F) Rental Cap.--
                          (i) In general.--Payment for oxygen 
                        equipment (including portable oxygen 
                        equipment) under this paragraph may not 
                        extend over a period of continuous use 
                        (as determined by the Secretary) of 
                        longer than 36 months.
                          (ii) Payments and rules after rental 
                        cap.--After the 36th continuous month 
                        during which payment is made for the 
                        equipment under this paragraph--
                                  (I) the supplier furnishing 
                                such equipment under this 
                                subsection shall continue to 
                                furnish the equipment during 
                                any period of medical need for 
                                the remainder of the reasonable 
                                useful lifetime of the 
                                equipment, as determined by the 
                                Secretary;
                                  (II) payments for oxygen 
                                shall continue to be made in 
                                the amount recognized for 
                                oxygen under paragraph (9) for 
                                the period of medical need; and
                                  (III) maintenance and 
                                servicing payments shall, if 
                                the Secretary determines such 
                                payments are reasonable and 
                                necessary, be made (for parts 
                                and labor not covered by the 
                                supplier's or manufacturer's 
                                warranty, as determined by the 
                                Secretary to be appropriate for 
                                the equipment), and such 
                                payments shall be in an amount 
                                determined to be appropriate by 
                                the Secretary.
          (6) Payment for other covered items (other than 
        durable medical equipment).--Payment for other covered 
        items (other than durable medical equipment and other 
        covered items described in paragraph (3), (4), or (5)) 
        shall be made in a lump-sum amount for the purchase of 
        the item in the amount of the purchase price recognized 
        under paragraph (8).
          (7) Payment for other items of durable medical 
        equipment.--
                  (A) Payment.--In the case of an item of 
                durable medical equipment not described in 
                paragraphs (2) through (6), the following rules 
                shall apply:
                          (i) Rental.--
                                  (I) In general.--Except as 
                                provided in clause (iii), 
                                payment for the item shall be 
                                made on a monthly basis for the 
                                rental of the item during the 
                                period of medical need (but 
                                payments under this clause may 
                                not extend over a period of 
                                continuous use (as determined 
                                by the Secretary) of longer 
                                than 13 months).
                                  (II) Payment amount.--Subject 
                                to subclause (III) and 
                                subparagraph (B), the amount 
                                recognized for the item, for 
                                each of the first 3 months of 
                                such period, is 10 percent of 
                                the purchase price recognized 
                                under paragraph (8) with 
                                respect to the item, and, for 
                                each of the remaining months of 
                                such period, is 7.5 percent of 
                                such purchase price.
                                  (III) Special rule for power-
                                driven wheelchairs.--For 
                                purposes of payment for power-
                                driven wheelchairs, subclause 
                                (II) shall be applied by 
                                substituting ``15 percent'' and 
                                ``6 percent'' for ``10 
                                percent'' and ``7.5 percent'', 
                                respectively.
                          (ii) Ownership after rental.--On the 
                        first day that begins after the 13th 
                        continuous month during which payment 
                        is made for the rental of an item under 
                        clause (i), the supplier of the item 
                        shall transfer title to the item to the 
                        individual.
                          (iii) Purchase agreement option for 
                        complex, rehabilitative power-driven 
                        wheelchairs.--In the case of a complex, 
                        rehabilitative power-driven wheelchair, 
                        at the time the supplier furnishes the 
                        item, the supplier shall offer the 
                        individual the option to purchase the 
                        item, and payment for such item shall 
                        be made on a lump-sum basis if the 
                        individual exercises such option.
                          (iv) Maintenance and servicing.--
                        After the supplier transfers title to 
                        the item under clause (ii) or in the 
                        case of a power-driven wheelchair for 
                        which a purchase agreement has been 
                        entered into under clause (iii), 
                        maintenance and servicing payments 
                        shall, if the Secretary determines such 
                        payments are reasonable and necessary, 
                        be made (for parts and labor not 
                        covered by the supplier's or 
                        manufacturer's warranty, as determined 
                        by the Secretary to be appropriate for 
                        the particular type of durable medical 
                        equipment), and such payments shall be 
                        in an amount determined to be 
                        appropriate by the Secretary.
                  (B) Range for rental amounts.--
                          (i) For 1989.--For items furnished 
                        during 1989, the payment amount 
                        recognized under subparagraph (A)(i) 
                        shall not be more than 115 percent, and 
                        shall not be less than 85 percent, of 
                        the prevailing charge established for 
                        rental of the item in January 1987, 
                        increased by the percentage increase in 
                        the consumer price index for all urban 
                        consumers (U.S. city average) for the 
                        6-month period ending with December 
                        1987.
                          (ii) For 1990.--For items furnished 
                        during 1990, clause (i) shall apply in 
                        the same manner as it applies to items 
                        furnished during 1989.
                  (C) Replacement of items.--
                          (i) Establishment of reasonable 
                        useful lifetime.--In accordance with 
                        clause (iii), the Secretary shall 
                        determine and establish a reasonable 
                        useful lifetime for items of durable 
                        medical equipment for which payment may 
                        be made under this paragraph.
                          (ii) Payment for replacement items.--
                        If the reasonable lifetime of such an 
                        item, as so established, has been 
                        reached during a continuous period of 
                        medical need, or the carrier determines 
                        that the item is lost or irreparably 
                        damaged, the patient may elect to have 
                        payment for an item serving as a 
                        replacement for such item made--
                                  (I) on a monthly basis for 
                                the rental of the replacement 
                                item in accordance with 
                                subparagraph (A); or
                                  (II) in the case of an item 
                                for which a purchase agreement 
                                has been entered into under 
                                subparagraph (A)(iii), in a 
                                lump-sum amount for the 
                                purchase of the item.
                          (iii) Length of reasonable useful 
                        lifetime.--The reasonable useful 
                        lifetime of an item of durable medical 
                        equipment under this subparagraph shall 
                        be equal to 5 years, except that, if 
                        the Secretary determines that, on the 
                        basis of prior experience in making 
                        payments for such an item under this 
                        title, a reasonable useful lifetime of 
                        5 years is not appropriate with respect 
                        to a particular item, the Secretary 
                        shall establish an alternative 
                        reasonable lifetime for such item.
          (8) Purchase price recognized for miscellaneous 
        devices and items.--For purposes of paragraphs (6) and 
        (7), the amount that is recognized under this paragraph 
        as the purchase price for a covered item is the amount 
        described in subparagraph (C) of this paragraph, 
        determined as follows:
                  (A) Computation of local purchase price.--
                Each carrier under section 1842 shall compute a 
                base local purchase price for the item as 
                follows:
                          (i) The carrier shall compute a base 
                        local purchase price, for each item 
                        described--
                                  (I) in paragraph (6) equal to 
                                the average reasonable charge 
                                in the locality for the 
                                purchase of the item for the 
                                12-month period ending with 
                                June 1987, or
                                  (II) in paragraph (7) equal 
                                to the average of the purchase 
                                prices on the claims submitted 
                                on an assignment-related basis 
                                for the unused item supplied 
                                during the 6-month period 
                                ending with December 1986.
                          (ii) The carrier shall compute a 
                        local purchase price, with respect to 
                        the furnishing of each particular 
                        item--
                                  (I) in 1989 and 1990, equal 
                                to the base local purchase 
                                price computed under clause (i) 
                                increased by the percentage 
                                increase in the consumer price 
                                index for all urban consumers 
                                (U.S. city average) for the 6-
                                month period ending with 
                                December 1987,
                                  (II) in 1991, equal to the 
                                local purchase price computed 
                                under this clause for the 
                                previous year, increased by the 
                                covered item update for 1991, 
                                and decreased by the percentage 
                                by which the average of the 
                                reasonable charges for claims 
                                paid for all items described in 
                                paragraph (7) is lower than the 
                                average of the purchase prices 
                                submitted for such items during 
                                the final 9 months of 1988; or
                                  (III) in 1992, 1993, and 1994 
                                equal to the local purchase 
                                price computed under this 
                                clause for the previous year 
                                increased by the covered item 
                                update for the year.
                  (B) Computation of national limited purchase 
                price.--With respect to the furnishing of a 
                particular item in a year, the Secretary shall 
                compute a national limited purchase price--
                          (i) for 1991, equal to the local 
                        purchase price computed under 
                        subparagraph (A)(ii) for the item for 
                        the year, except that such national 
                        limited purchase price may not exceed 
                        100 percent of the weighted average of 
                        all local purchase prices for the item 
                        computed under such subparagraph for 
                        the year, and may not be less than 85 
                        percent of the weighted average of all 
                        local purchase prices for the item 
                        computed under such subparagraph for 
                        the year;
                          (ii) for 1992 and 1993, the amount 
                        determined under this subparagraph for 
                        the preceding year increased by the 
                        covered item update for such subsequent 
                        year;
                          (iii) for 1994, the local purchase 
                        price computed under subparagraph 
                        (A)(ii) for the item for the year, 
                        except that such national limited 
                        purchase price may not exceed 100 
                        percent of the median of all local 
                        purchase prices computed for the item 
                        under such subparagraph for the year 
                        and may not be less than 85 percent of 
                        the median of all local purchase prices 
                        computed under such subparagraph for 
                        the item for the year; and
                          (iv) for each subsequent year, equal 
                        to the amount determined under this 
                        subparagraph for the preceding year 
                        increased by the covered item update 
                        for such subsequent year.
                  (C) Purchase price recognized.--For purposes 
                of paragraphs (6) and (7), the amount that is 
                recognized under this paragraph as the purchase 
                price for each item furnished--
                          (i) in 1989 or 1990, is 100 percent 
                        of the local purchase price computed 
                        under subparagraph (A)(ii)(I);
                          (ii) in 1991, is the sum of (I) 67 
                        percent of the local purchase price 
                        computed under subparagraph (A)(ii)(II) 
                        for 1991, and (II) 33 percent of the 
                        national limited purchase price 
                        computed under subparagraph (B) for 
                        1991;
                          (iii) in 1992, is the sum of (I) 33 
                        percent of the local purchase price 
                        computed under subparagraph 
                        (A)(ii)(III) for 1992, and (II) 67 
                        percent of the national limited 
                        purchase price computed under 
                        subparagraph (B) for 1992; and
                          (iv) in 1993 or a subsequent year, is 
                        the national limited purchase price 
                        computed under subparagraph (B) for 
                        that year.
          (9) Monthly payment amount recognized with respect to 
        oxygen and oxygen equipment.--For purposes of paragraph 
        (5), the amount that is recognized under this paragraph 
        for payment for oxygen and oxygen equipment is the 
        monthly payment amount described in subparagraph (C) of 
        this paragraph. Such amount shall be computed 
        separately (i) for all items of oxygen and oxygen 
        equipment (other than portable oxygen equipment) and 
        (ii) for portable oxygen equipment (each such group 
        referred to in this paragraph as an ``item'').
                  (A) Computation of local monthly payment 
                rate.--Each carrier under this section shall 
                compute a base local payment rate for each item 
                as follows:
                          (i) The carrier shall compute a base 
                        local average monthly payment rate per 
                        beneficiary as an amount equal to (I) 
                        the total reasonable charges for the 
                        item during the 12-month period ending 
                        with December 1986, divided by (II) the 
                        total number of months for all 
                        beneficiaries receiving the item in the 
                        area during the 12-month period for 
                        which the carrier made payment for the 
                        item under this title.
                          (ii) The carrier shall compute a 
                        local average monthly payment rate for 
                        the item applicable--
                                  (I) to 1989 and 1990, equal 
                                to 95 percent of the base local 
                                average monthly payment rate 
                                computed under clause (i) for 
                                the item increased by the 
                                percentage increase in the 
                                consumer price index for all 
                                urban consumers (U.S. city 
                                average) for the 6-month period 
                                ending with December 1987, or
                                  (II) to 1991, 1992, 1993, and 
                                1994 equal to the local average 
                                monthly payment rate computed 
                                under this clause for the item 
                                for the previous year increased 
                                by the covered item increase 
                                for the year.
                  (B) Computation of national limited monthly 
                payment rate.--With respect to the furnishing 
                of an item in a year, the Secretary shall 
                compute a national limited monthly payment rate 
                equal to--
                          (i) for 1991, the local monthly 
                        payment rate computed under 
                        subparagraph (A)(ii)(II) for the item 
                        for the year, except that such national 
                        limited monthly payment rate may not 
                        exceed 100 percent of the weighted 
                        average of all local monthly payment 
                        rates computed for the item under such 
                        subparagraph for the year, and may not 
                        be less than 85 percent of the weighted 
                        average of all local monthly payment 
                        rates computed for the item under such 
                        subparagraph for the year;
                          (ii) for 1992 and 1993, the amount 
                        determined under this subparagraph for 
                        the preceding year increased by the 
                        covered item update for such subsequent 
                        year;
                          (iii) for 1994, the local monthly 
                        payment rate computed under 
                        subparagraph (A)(ii) for the item for 
                        the year, except that such national 
                        limited monthly payment rate may not 
                        exceed 100 percent of the median of all 
                        local monthly payment rates computed 
                        for the item under such subparagraph 
                        for the year and may not be less than 
                        85 percent of the median of all local 
                        monthly payment rates computed for the 
                        item under such subparagraph for the 
                        year;
                          (iv) for 1995, 1996, and 1997, equal 
                        to the amount determined under this 
                        subparagraph for the preceding year 
                        increased by the covered item update 
                        for such subsequent year;
                          (v) for 1998, 75 percent of the 
                        amount determined under this 
                        subparagraph for 1997; and
                          (vi) for 1999 and each subsequent 
                        year, 70 percent of the amount 
                        determined under this subparagraph for 
                        1997.
                  (C) Monthly payment amount recognized.--For 
                purposes of paragraph (5), the amount that is 
                recognized under this paragraph as the base 
                monthly payment amount for each item 
                furnished--
                          (i) in 1989 and in 1990, is 100 
                        percent of the local average monthly 
                        payment rate computed under 
                        subparagraph (A)(ii) for the item;
                          (ii) in 1991, is the sum of (I) 67 
                        percent of the local average monthly 
                        payment rate computed under 
                        subparagraph (A)(ii)(II) for the item 
                        for 1991, and (II) 33 percent of the 
                        national limited monthly payment rate 
                        computed under subparagraph (B)(i) for 
                        the item for 1991;
                          (iii) in 1992, is the sum of (I) 33 
                        percent of the local average monthly 
                        payment rate computed under 
                        subparagraph (A)(ii)(II) for the item 
                        for 1992, and (II) 67 percent of the 
                        national limited monthly payment rate 
                        computed under subparagraph (B)(ii) for 
                        the item for 1992; and
                          (iv) in a subsequent year, is the 
                        national limited monthly payment rate 
                        computed under subparagraph (B) for the 
                        item for that year.
          (10) Exceptions and adjustments.--
                  (A) Areas outside continental united 
                states.--Exceptions to the amounts recognized 
                under the previous provisions of this 
                subsection shall be made to take into account 
                the unique circumstances of covered items 
                furnished in Alaska, Hawaii, or Puerto Rico.
                  (B) Adjustment for inherent reasonableness.--
                The Secretary is authorized to apply the 
                provisions of paragraphs (8) and (9) of section 
                1842(b) to covered items and suppliers of such 
                items and payments under this subsection in an 
                area and with respect to covered items and 
                services for which the Secretary does not make 
                a payment amount adjustment under paragraph 
                (1)(F).
                  (C) Transcutaneous electrical nerve 
                stimulator (tens).--In order to permit an 
                attending physician time to determine whether 
                the purchase of a transcutaneous electrical 
                nerve stimulator is medically appropriate for a 
                particular patient, the Secretary may determine 
                an appropriate payment amount for the initial 
                rental of such item for a period of not more 
                than 2 months. If such item is subsequently 
                purchased, the payment amount with respect to 
                such purchase is the payment amount determined 
                under paragraph (2).
          (11) Improper billing and requirement of physician 
        order.--
                  (A) Improper billing for certain rental 
                items.--Notwithstanding any other provision of 
                this title, a supplier of a covered item for 
                which payment is made under this subsection and 
                which is furnished on a rental basis shall 
                continue to supply the item without charge 
                (other than a charge provided under this 
                subsection for the maintenance and servicing of 
                the item) after rental payments may no longer 
                be made under this subsection. If a supplier 
                knowingly and willfully violates the previous 
                sentence, the Secretary may apply sanctions 
                against the supplier under section 1842(j)(2) 
                in the same manner such sanctions may apply 
                with respect to a physician.
                  (B) Requirement of physician order.--
                          (i) In general.--The Secretary is 
                        authorized to require, for specified 
                        covered items, that payment may be made 
                        under this subsection with respect to 
                        the item only if a physician enrolled 
                        under section 1866(j) or an eligible 
                        professional under section 
                        1848(k)(3)(B) that is enrolled under 
                        section 1866(j) has communicated to the 
                        supplier, before delivery of the item, 
                        a written order for the item.
                          (ii) Requirement for face to face 
                        encounter.--The Secretary shall require 
                        that such an order be written pursuant 
                        to a physician, a physician assistant, 
                        a nurse practitioner, or a clinical 
                        nurse specialist (as those terms are 
                        defined in section 1861(aa)(5)) 
                        documenting such physician, physician 
                        assistant, practitioner, or specialist 
                        has had a face-to-face encounter 
                        (including through use of telehealth 
                        under subsection (m) and other than 
                        with respect to encounters that are 
                        incident to services involved) with the 
                        individual involved during the 6-month 
                        period preceding such written order, or 
                        other reasonable timeframe as 
                        determined by the Secretary.
          (12) Regional carriers.--The Secretary may designate, 
        by regulation under section 1842, one carrier for one 
        or more entire regions to process all claims within the 
        region for covered items under this section.
          (13) Covered item.--In this subsection, the term 
        ``covered item'' means durable medical equipment (as 
        defined in section 1861(n)), including such equipment 
        described in section 1861(m)(5), but not including 
        implantable items for which payment may be made under 
        section 1833(t).
          (14) Covered item update.--In this subsection, the 
        term ``covered item update'' means, with respect to a 
        year--
                  (A) for 1991 and 1992, the percentage 
                increase in the consumer price index for all 
                urban consumers (U.S. city average) for the 12-
                month period ending with June of the previous 
                year reduced by 1 percentage point;
                  (B) for 1993, 1994, 1995, 1996, and 1997, the 
                percentage increase in the consumer price index 
                for all urban consumers (U.S. city average) for 
                the 12-month period ending with June of the 
                previous year;
                  (C) for each of the years 1998 through 2000, 
                0 percentage points;
                  (D) for 2001, the percentage increase in the 
                consumer price index for all urban consumers 
                (U.S. city average) for the 12-month period 
                ending with June 2000;
                  (E) for 2002, 0 percentage points;
                  (F) for 2003, the percentage increase in the 
                consumer price index for all urban consumers 
                (U.S. urban average) for the 12-month period 
                ending with June of 2002;
                  (G) for 2004 through 2006--
                          (i) subject to clause (ii), in the 
                        case of class III medical devices 
                        described in section 513(a)(1)(C) of 
                        the Federal Food, Drug, and Cosmetic 
                        Act (21 U.S.C. 360(c)(1)(C)), the 
                        percentage increase described in 
                        subparagraph (B) for the year involved; 
                        and
                          (ii) in the case of covered items not 
                        described in clause (i), 0 percentage 
                        points;
                  (H) for 2007--
                          (i) subject to clause (ii), in the 
                        case of class III medical devices 
                        described in section 513(a)(1)(C) of 
                        the Federal Food, Drug, and Cosmetic 
                        Act (21 U.S.C. 360(c)(1)(C)), the 
                        percentage change determined by the 
                        Secretary to be appropriate taking into 
                        account recommendations contained in 
                        the report of the Comptroller General 
                        of the United States under section 
                        302(c)(1)(B) of the Medicare 
                        Prescription Drug, Improvement, and 
                        Modernization Act of 2003; and
                          (ii) in the case of covered items not 
                        described in clause (i), 0 percentage 
                        points;
                  (I) for 2008--
                          (i) subject to clause (ii), in the 
                        case of class III medical devices 
                        described in section 513(a)(1)(C) of 
                        the Federal Food, Drug, and Cosmetic 
                        Act (21 U.S.C. 360(c)(1)(C)), the 
                        percentage increase described in 
                        subparagraph (B) (as applied to the 
                        payment amount for 2007 determined 
                        after the application of the percentage 
                        change under subparagraph (H)(i)); and
                          (ii) in the case of covered items not 
                        described in clause (i), 0 percentage 
                        points;
                  (J) for 2009--
                          (i) in the case of items and services 
                        furnished in any geographic area, if 
                        such items or services were selected 
                        for competitive acquisition in any area 
                        under the competitive acquisition 
                        program under section 
                        1847(a)(1)(B)(i)(I) before July 1, 
                        2008, including related accessories but 
                        only if furnished with such items and 
                        services selected for such competition 
                        and diabetic supplies but only if 
                        furnished through mail order,--9.5 
                        percent; or
                          (ii) in the case of other items and 
                        services, the percentage increase in 
                        the consumer price index for all urban 
                        consumers (U.S. urban average) for the 
                        12-month period ending with June 2008;
                  (K) for 2010, the percentage increase in the 
                consumer price index for all urban consumers 
                (U.S. urban average) for the 12-month period 
                ending with June of the previous year; and
                  (L) for 2011 and each subsequent year--
                          (i) the percentage increase in the 
                        consumer price index for all urban 
                        consumers (United States city average) 
                        for the 12-month period ending with 
                        June of the previous year, reduced by--
                          (ii) the productivity adjustment 
                        described in section 
                        1886(b)(3)(B)(xi)(II).
        The application of subparagraph (L)(ii) may result in 
        the covered item update under this paragraph being less 
        than 0.0 for a year, and may result in payment rates 
        under this subsection for a year being less than such 
        payment rates for the preceding year.
          (15) Advance determinations of coverage for certain 
        items.--
                  (A) Development of lists of items by 
                secretary.--The Secretary may develop and 
                periodically update a list of items for which 
                payment may be made under this subsection that 
                the Secretary determines, on the basis of prior 
                payment experience, are frequently subject to 
                unnecessary utilization throughout a carrier's 
                entire service area or a portion of such area.
                  (B) Development of lists of suppliers by 
                secretary.--The Secretary may develop and 
                periodically update a list of suppliers of 
                items for which payment may be made under this 
                subsection with respect to whom--
                          (i) the Secretary has found that a 
                        substantial number of claims for 
                        payment under this part for items 
                        furnished by the supplier have been 
                        denied on the basis of the application 
                        of section 1862(a)(1); or
                          (ii) the Secretary has identified a 
                        pattern of overutilization resulting 
                        from the business practice of the 
                        supplier.
                  (C) Determinations of coverage in advance.--A 
                carrier shall determine in advance of delivery 
                of an item whether payment for the item may not 
                be made because the item is not covered or 
                because of the application of section 
                1862(a)(1) if--
                          (i) the item is included on the list 
                        developed by the Secretary under 
                        subparagraph (A);
                          (ii) the item is furnished by a 
                        supplier included on the list developed 
                        by the Secretary under subparagraph 
                        (B); or
                          (iii) the item is a customized item 
                        (other than inexpensive items specified 
                        by the Secretary) and the patient to 
                        whom the item is to be furnished or the 
                        supplier requests that such advance 
                        determination be made.
          (16) Disclosure of information and surety bond.--The 
        Secretary shall not provide for the issuance (or 
        renewal) of a provider number for a supplier of durable 
        medical equipment, for purposes of payment under this 
        part for durable medical equipment furnished by the 
        supplier, unless the supplier provides the Secretary on 
        a continuing basis--
                  (A) with--
                          (i) full and complete information as 
                        to the identity of each person with an 
                        ownership or control interest (as 
                        defined in section 1124(a)(3)) in the 
                        supplier or in any subcontractor (as 
                        defined by the Secretary in 
                        regulations) in which the supplier 
                        directly or indirectly has a 5 percent 
                        or more ownership interest; and
                          (ii) to the extent determined to be 
                        feasible under regulations of the 
                        Secretary, the name of any disclosing 
                        entity (as defined in section 
                        1124(a)(2)) with respect to which a 
                        person with such an ownership or 
                        control interest in the supplier is a 
                        person with such an ownership or 
                        control interest in the disclosing 
                        entity; and
                  (B) with a surety bond in a form specified by 
                the Secretary and in an amount that is not less 
                than $50,000 that the Secretary determines is 
                commensurate with the volume of the billing of 
                the supplier.
        The Secretary may waive the requirement of a bond under 
        subparagraph (B) in the case of a supplier that 
        provides a comparable surety bond under State law. The 
        Secretary, at the Secretary's discretion, may impose 
        the requirements of the first sentence with respect to 
        some or all providers of items or services under part A 
        or some or all suppliers or other persons (other than 
        physicians or other practitioners, as defined in 
        section 1842(b)(18)(C)) who furnish items or services 
        under this part.
          (17) Prohibition against unsolicited telephone 
        contacts by suppliers.--
                  (A) In general.--A supplier of a covered item 
                under this subsection may not contact an 
                individual enrolled under this part by 
                telephone regarding the furnishing of a covered 
                item to the individual unless 1 of the 
                following applies:
                          (i) The individual has given written 
                        permission to the supplier to make 
                        contact by telephone regarding the 
                        furnishing of a covered item.
                          (ii) The supplier has furnished a 
                        covered item to the individual and the 
                        supplier is contacting the individual 
                        only regarding the furnishing of such 
                        covered item.
                          (iii) If the contact is regarding the 
                        furnishing of a covered item other than 
                        a covered item already furnished to the 
                        individual, the supplier has furnished 
                        at least 1 covered item to the 
                        individual during the 15-month period 
                        preceding the date on which the 
                        supplier makes such contact.
                  (B) Prohibiting payment for items furnished 
                subsequent to unsolicited contacts.--If a 
                supplier knowingly contacts an individual in 
                violation of subparagraph (A), no payment may 
                be made under this part for any item 
                subsequently furnished to the individual by the 
                supplier.
                  (C) Exclusion from program for suppliers 
                engaging in pattern of unsolicited contacts.--
                If a supplier knowingly contacts individuals in 
                violation of subparagraph (A) to such an extent 
                that the supplier's conduct establishes a 
                pattern of contacts in violation of such 
                subparagraph, the Secretary shall exclude the 
                supplier from participation in the programs 
                under this Act, in accordance with the 
                procedures set forth in subsections (c), (f), 
                and (g) of section 1128.
          (18) Refund of amounts collected for certain 
        disallowed items.--
                  (A) In general.--If a nonparticipating 
                supplier furnishes to an individual enrolled 
                under this part a covered item for which no 
                payment may be made under this part by reason 
                of paragraph (17)(B), the supplier shall refund 
                on a timely basis to the patient (and shall be 
                liable to the patient for) any amounts 
                collected from the patient for the item, 
                unless--
                          (i) the supplier establishes that the 
                        supplier did not know and could not 
                        reasonably have been expected to know 
                        that payment may not be made for the 
                        item by reason of paragraph (17)(B), or
                          (ii) before the item was furnished, 
                        the patient was informed that payment 
                        under this part may not be made for 
                        that item and the patient has agreed to 
                        pay for that item.
                  (B) Sanctions.--If a supplier knowingly and 
                willfully fails to make refunds in violation of 
                subparagraph (A), the Secretary may apply 
                sanctions against the supplier in accordance 
                with section 1842(j)(2).
                  (C) Notice.--Each carrier with a contract in 
                effect under this part with respect to 
                suppliers of covered items shall send any 
                notice of denial of payment for covered items 
                by reason of paragraph (17)(B) and for which 
                payment is not requested on an assignment-
                related basis to the supplier and the patient 
                involved.
                  (D) Timely basis defined.--A refund under 
                subparagraph (A) is considered to be on a 
                timely basis only if--
                          (i) in the case of a supplier who 
                        does not request reconsideration or 
                        seek appeal on a timely basis, the 
                        refund is made within 30 days after the 
                        date the supplier receives a denial 
                        notice under subparagraph (C), or
                          (ii) in the case in which such a 
                        reconsideration or appeal is taken, the 
                        refund is made within 15 days after the 
                        date the supplier receives notice of an 
                        adverse determination on 
                        reconsideration or appeal.
          (19) Certain upgraded items.--
                  (A) Individual's right to choose upgraded 
                item.--Notwithstanding any other provision of 
                this title, the Secretary may issue regulations 
                under which an individual may purchase or rent 
                from a supplier an item of upgraded durable 
                medical equipment for which payment would be 
                made under this subsection if the item were a 
                standard item.
                  (B) Payments to supplier.--In the case of the 
                purchase or rental of an upgraded item under 
                subparagraph (A)--
                          (i) the supplier shall receive 
                        payment under this subsection with 
                        respect to such item as if such item 
                        were a standard item; and
                          (ii) the individual purchasing or 
                        renting the item shall pay the supplier 
                        an amount equal to the difference 
                        between the supplier's charge and the 
                        amount under clause (i).
                In no event may the supplier's charge for an 
                upgraded item exceed the applicable fee 
                schedule amount (if any) for such item.
                  (C) Consumer protection safeguards.--Any 
                regulations under subparagraph (A) shall 
                provide for consumer protection standards with 
                respect to the furnishing of upgraded equipment 
                under subparagraph (A). Such regulations shall 
                provide for--
                          (i) determination of fair market 
                        prices with respect to an upgraded 
                        item;
                          (ii) full disclosure of the 
                        availability and price of standard 
                        items and proof of receipt of such 
                        disclosure information by the 
                        beneficiary before the furnishing of 
                        the upgraded item;
                          (iii) conditions of participation for 
                        suppliers in the billing arrangement;
                          (iv) sanctions of suppliers who are 
                        determined to engage in coercive or 
                        abusive practices, including exclusion; 
                        and
                          (v) such other safeguards as the 
                        Secretary determines are necessary.
          (20) Identification of quality standards.--
                  (A) In general.--Subject to subparagraph (C), 
                the Secretary shall establish and implement 
                quality standards for suppliers of items and 
                services described in subparagraph (D) to be 
                applied by recognized independent accreditation 
                organizations (as designated under subparagraph 
                (B)) and with which such suppliers shall be 
                required to comply in order to--
                          (i) furnish any such item or service 
                        for which payment is made under this 
                        part; and
                          (ii) receive or retain a provider or 
                        supplier number used to submit claims 
                        for reimbursement for any such item or 
                        service for which payment may be made 
                        under this title.
                  (B) Designation of independent accreditation 
                organizations.--Not later than the date that is 
                1 year after the date on which the Secretary 
                implements the quality standards under 
                subparagraph (A), notwithstanding section 
                1865(a), the Secretary shall designate and 
                approve one or more independent accreditation 
                organizations for purposes of such 
                subparagraph.
                  (C) Quality standards.--The quality standards 
                described in subparagraph (A) may not be less 
                stringent than the quality standards that would 
                otherwise apply if this paragraph did not apply 
                and shall include consumer services standards.
                  (D) Items and services described.--The items 
                and services described in this subparagraph are 
                the following items and services, as the 
                Secretary determines appropriate:
                          (i) Covered items (as defined in 
                        paragraph (13)) for which payment may 
                        otherwise be made under this 
                        subsection.
                          (ii) Prosthetic devices and orthotics 
                        and prosthetics described in section 
                        1834(h)(4).
                          (iii) Items and services described in 
                        section 1842(s)(2).
                  (E) Implementation.--The Secretary may 
                establish by program instruction or otherwise 
                the quality standards under this paragraph, 
                including subparagraph (F), after consultation 
                with representatives of relevant parties. Such 
                standards shall be applied prospectively and 
                shall be published on the Internet website of 
                the Centers for Medicare & Medicaid Services.
                  (F) Application of accreditation 
                requirement.--In implementing quality standards 
                under this paragraph--
                          (i) subject to clause (ii) and 
                        subparagraph (G), the Secretary shall 
                        require suppliers furnishing items and 
                        services described in subparagraph (D) 
                        on or after October 1, 2009, directly 
                        or as a subcontractor for another 
                        entity, to have submitted to the 
                        Secretary evidence of accreditation by 
                        an accreditation organization 
                        designated under subparagraph (B) as 
                        meeting applicable quality standards, 
                        except that the Secretary shall not 
                        require under this clause pharmacies to 
                        obtain such accreditation before 
                        January 1, 2010, except that the 
                        Secretary shall not require a pharmacy 
                        to have submitted to the Secretary such 
                        evidence of accreditation prior to 
                        January 1, 2011; and
                          (ii) in applying such standards and 
                        the accreditation requirement of clause 
                        (i) with respect to eligible 
                        professionals (as defined in section 
                        1848(k)(3)(B)), and including such 
                        other persons, such as orthotists and 
                        prosthetists, as specified by the 
                        Secretary, furnishing such items and 
                        services--
                                  (I) such standards and 
                                accreditation requirement shall 
                                not apply to such professionals 
                                and persons unless the 
                                Secretary determines that the 
                                standards being applied are 
                                designed specifically to be 
                                applied to such professionals 
                                and persons; and
                                  (II) the Secretary may exempt 
                                such professionals and persons 
                                from such standards and 
                                requirement if the Secretary 
                                determines that licensing, 
                                accreditation, or other 
                                mandatory quality requirements 
                                apply to such professionals and 
                                persons with respect to the 
                                furnishing of such items and 
                                services.
                  (G) Application of accreditation requirement 
                to certain pharmacies.--
                          (i) In general.--With respect to 
                        items and services furnished on or 
                        after January 1, 2011, in implementing 
                        quality standards under this 
                        paragraph--
                                  (I) subject to subclause 
                                (II), in applying such 
                                standards and the accreditation 
                                requirement of subparagraph 
                                (F)(i) with respect to 
                                pharmacies described in clause 
                                (ii) furnishing such items and 
                                services, such standards and 
                                accreditation requirement shall 
                                not apply to such pharmacies; 
                                and
                                  (II) the Secretary may apply 
                                to such pharmacies an 
                                alternative accreditation 
                                requirement established by the 
                                Secretary if the Secretary 
                                determines such alternative 
                                accreditation requirement is 
                                more appropriate for such 
                                pharmacies.
                          (ii) Pharmacies described.--A 
                        pharmacy described in this clause is a 
                        pharmacy that meets each of the 
                        following criteria:
                                  (I) The total billings by the 
                                pharmacy for such items and 
                                services under this title are 
                                less than 5 percent of total 
                                pharmacy sales, as determined 
                                based on the average total 
                                pharmacy sales for the previous 
                                3 calendar years, 3 fiscal 
                                years, or other yearly period 
                                specified by the Secretary.
                                  (II) The pharmacy has been 
                                enrolled under section 1866(j) 
                                as a supplier of durable 
                                medical equipment, prosthetics, 
                                orthotics, and supplies, has 
                                been issued (which may include 
                                the renewal of) a provider 
                                number for at least 5 years, 
                                and for which a final adverse 
                                action (as defined in section 
                                424.57(a) of title 42, Code of 
                                Federal Regulations) has not 
                                been imposed in the past 5 
                                years.
                                  (III) The pharmacy submits to 
                                the Secretary an attestation, 
                                in a form and manner, and at a 
                                time, specified by the 
                                Secretary, that the pharmacy 
                                meets the criteria described in 
                                subclauses (I) and (II). Such 
                                attestation shall be subject to 
                                section 1001 of title 18, 
                                United States Code.
                                  (IV) The pharmacy agrees to 
                                submit materials as requested 
                                by the Secretary, or during the 
                                course of an audit conducted on 
                                a random sample of pharmacies 
                                selected annually, to verify 
                                that the pharmacy meets the 
                                criteria described in 
                                subclauses (I) and (II). 
                                Materials submitted under the 
                                preceding sentence shall 
                                include a certification by an 
                                accountant on behalf of the 
                                pharmacy or the submission of 
                                tax returns filed by the 
                                pharmacy during the relevant 
                                periods, as requested by the 
                                Secretary.
          (21) Special payment rule for specified items and 
        supplies.--
                  (A) In general.--Notwithstanding the 
                preceding provisions of this subsection, for 
                specified items and supplies (described in 
                subparagraph (B)) furnished during 2005, the 
                payment amount otherwise determined under this 
                subsection for such specified items and 
                supplies shall be reduced by the percentage 
                difference between--
                          (i) the amount of payment otherwise 
                        determined for the specified item or 
                        supply under this subsection for 2002, 
                        and
                          (ii) the amount of payment for the 
                        specified item or supply under chapter 
                        89 of title 5, United States Code, as 
                        identified in the column entitled 
                        ``Median FEHP Price'' in the table 
                        entitled ``SUMMARY OF MEDICARE PRICES 
                        COMPARED TO VA, MEDICAID, RETAIL, AND 
                        FEHP PRICES FOR 16 ITEMS'' included in 
                        the Testimony of the Inspector General 
                        before the Senate Committee on 
                        Appropriations, June 12, 2002, or any 
                        subsequent report by the Inspector 
                        General.
                  (B) Specified item or supply described.--For 
                purposes of subparagraph (A), a specified item 
                or supply means oxygen and oxygen equipment, 
                standard wheelchairs (including standard power 
                wheelchairs), nebulizers, diabetic supplies 
                consisting of lancets and testing strips, 
                hospital beds, and air mattresses, but only if 
                the HCPCS code for the item or supply is 
                identified in a table referred to in 
                subparagraph (A)(ii).
                  (C) Application of update to special payment 
                amount.--The covered item update under 
                paragraph (14) for specified items and supplies 
                for 2006 and each subsequent year shall be 
                applied to the payment amount under 
                subparagraph (A) unless payment is made for 
                such items and supplies under section 1847.
          (22) Special payment rule for diabetic supplies.--
        Notwithstanding the preceding provisions of this 
        subsection, for purposes of determining the payment 
        amount under this subsection for diabetic supplies 
        furnished on or after the first day of the calendar 
        quarter during 2013 that is at least 30 days after the 
        date of the enactment of this paragraph and before the 
        date described in paragraph (1)(H)(ii), the Secretary 
        shall recalculate and apply the covered item update 
        under paragraph (14) as if subparagraph (J)(i) of such 
        paragraph was amended by striking ``but only if 
        furnished through mail order''.
  (b) Fee Schedules for Radiologist Services.--
          (1) Development.--The Secretary shall develop--
                  (A) a relative value scale to serve as the 
                basis for the payment for radiologist services 
                under this part, and
                  (B) using such scale and appropriate 
                conversion factors and subject to subsection 
                (c)(1)(A), fee schedules (on a regional, 
                statewide, locality, or carrier service area 
                basis) for payment for radiologist services 
                under this part, to be implemented for such 
                services furnished during 1989.
          (2) Consultation.--In carrying out paragraph (1), the 
        Secretary shall regularly consult closely with the 
        Physician Payment Review Commission, the American 
        College of Radiology, and other organizations 
        representing physicians or suppliers who furnish 
        radiologist services and shall share with them the data 
        and data analysis being used to make the determinations 
        under paragraph (1), including data on variations in 
        current medicare payments by geographic area, and by 
        service and physician specialty.
          (3) Considerations.--In developing the relative value 
        scale and fee schedules under paragraph (1), the 
        Secretary--
                  (A) shall take into consideration variations 
                in the cost of furnishing such services among 
                geographic areas and among different sites 
                where services are furnished, and
                  (B) may also take into consideration such 
                other factors respecting the manner in which 
                physicians in different specialties furnish 
                such services as may be appropriate to assure 
                that payment amounts are equitable and designed 
                to promote effective and efficient provision of 
                radiologist services by physicians in the 
                different specialties.
          (4) Savings.--
                  (A) Budget neutral fee schedules.--The 
                Secretary shall develop preliminary fee 
                schedules for 1989, which are designed to 
                result in the same amount of aggregate payments 
                (net of any coinsurance and deductibles under 
                sections 1833(a)(1)(J) and 1833(b)) for 
                radiologist services furnished in 1989 as would 
                have been made if this subsection had not been 
                enacted.
                  (B) Initial savings.--The fee schedules 
                established for payment purposes under this 
                subsection for services furnished in 1989 shall 
                be 97 percent of the amounts permitted under 
                these preliminary fee schedules developed under 
                subparagraph (A).
                  (C)  1990 fee schedules.--For radiologist 
                services (other than portable X-ray services) 
                furnished under this part during 1990, after 
                March 31 of such year, the conversion factors 
                used under this subsection shall be 96 percent 
                of the conversion factors that applied under 
                this subsection as of December 31, 1989.
                  (D)  1991 fee schedules.--For radiologist 
                services (other than portable X-ray services) 
                furnished under this part during 1991, the 
                conversion factors used in a locality under 
                this subsection shall, subject to clause (vii), 
                be reduced to the adjusted conversion factor 
                for the locality determined as follows:
                          (i) National weighted average 
                        conversion factor.--The Secretary shall 
                        estimate the national weighted average 
                        of the conversion factors used under 
                        this subsection for services furnished 
                        during 1990 beginning on April 1, using 
                        the best available data.
                          (ii) Reduced national weighted 
                        average.--The national weighted average 
                        estimated under clause (i) shall be 
                        reduced by 13 percent.
                          (iii) Computation of 1990 locality 
                        index relative to national average.--
                        The Secretary shall establish an index 
                        which reflects, for each locality, the 
                        ratio of the conversion factor used in 
                        the locality under this subsection to 
                        the national weighted average estimated 
                        under clause (i).
                          (iv) Adjusted conversion factor.--The 
                        adjusted conversion factor for the 
                        professional or technical component of 
                        a service in a locality is the sum of 
                        \1/2\ of the locally-adjusted amount 
                        determined under clause (v) and \1/2\ 
                        of the GPCI-adjusted amount determined 
                        under clause (vi).
                          (v) Locally-adjusted amount.--For 
                        purposes of clause (iv), the locally 
                        adjusted amount determined under this 
                        clause is the product of (I) the 
                        national weighted average conversion 
                        factor computed under clause (ii), and 
                        (II) the index value established under 
                        clause (iii) for the locality.
                          (vi) GPCI-adjusted amount.--For 
                        purposes of clause (iv), the GPCI-
                        adjusted amount determined under this 
                        clause is the sum of--
                                  (I) the product of (a) the 
                                portion of the reduced national 
                                weighted average conversion 
                                factor computed under clause 
                                (ii) which is attributable to 
                                physician work and (b) the 
                                geographic work index value for 
                                the locality (specified in 
                                Addendum C to the Model Fee 
                                Schedule for Physician Services 
                                (published on September 4, 
                                1990, 55 Federal Register pp. 
                                36238 36243)); and
                                  (II) the product of (a) the 
                                remaining portion of the 
                                reduced national weighted 
                                average conversion factor 
                                computed under clause (ii), and 
                                (b) the geographic practice 
                                cost index value specified in 
                                section 1842(b)(14)(C)(iv) for 
                                the locality.
                        In applying this clause with respect to 
                        the professional component of a 
                        service, 80 percent of the conversion 
                        factor shall be considered to be 
                        attributable to physician work and with 
                        respect to the technical component of 
                        the service, 0 percent shall be 
                        considered to be attributable to 
                        physician work.
                          (vii) Limits on conversion factor.--
                        The conversion factor to be applied to 
                        a locality to the professional or 
                        technical component of a service shall 
                        not be reduced under this subparagraph 
                        by more than 9.5 percent below the 
                        conversion factor applied in the 
                        locality under subparagraph (C) to such 
                        component, but in no case shall the 
                        conversion factor be less than 60 
                        percent of the national weighted 
                        average of the conversion factors 
                        (computed under clause (i)).
                  (E) Rule for certain scanning services.--In 
                the case of the technical components of 
                magnetic resonance imaging (MRI) services and 
                computer assisted tomography (CAT) services 
                furnished after December 31, 1990, the amount 
                otherwise payable shall be reduced by 10 
                percent.
                  (F) Subsequent updating.--For radiologist 
                services furnished in subsequent years, the fee 
                schedules shall be the schedules for the 
                previous year updated by the percentage 
                increase in the MEI (as defined in section 
                1842(i)(3)) for the year.
                  (G) Nonparticipating physicians and 
                suppliers.--Each fee schedule so established 
                shall provide that the payment rate recognized 
                for nonparticipating physicians and suppliers 
                is equal to the appropriate percent (as defined 
                in section 1842(b)(4)(A)(iv)) of the payment 
                rate recognized for participating physicians 
                and suppliers.
          (5) Limiting charges of nonparticipating physicians 
        and suppliers.--
                  (A) In general.--In the case of radiologist 
                services furnished after January 1, 1989, for 
                which payment is made under a fee schedule 
                under this subsection, if a nonparticipating 
                physician or supplier furnishes the service to 
                an individual entitled to benefits under this 
                part, the physician or supplier may not charge 
                the individual more than the limiting charge 
                (as defined in subparagraph (B)).
                  (B) Limiting charge defined.--In subparagraph 
                (A), the term ``limiting charge'' means, with 
                respect to a service furnished--
                          (i) in 1989, 125 percent of the 
                        amount specified for the service in the 
                        appropriate fee schedule established 
                        under paragraph (1),
                          (ii) in 1990, 120 percent of the 
                        amount specified for the service in the 
                        appropriate fee schedule established 
                        under paragraph (1), and
                          (iii) after 1990, 115 percent of the 
                        amount specified for the service in the 
                        appropriate fee schedule established 
                        under paragraph (1).
                  (C) Enforcement.--If a physician or supplier 
                knowingly and willfully bills in violation of 
                subparagraph (A), the Secretary may apply 
                sanctions against such physician or supplier in 
                accordance with section 1842(j)(2) in the same 
                manner as such sanctions may apply to a 
                physician.
          (6) Radiologist services defined.--For the purposes 
        of this subsection and section 1833(a)(1)(J), the term 
        ``radiologist services''' only includes radiology 
        services performed by, or under the direction or 
        supervision of, a physician--
                  (A) who is certified, or eligible to be 
                certified, by the American Board of Radiology, 
                or
                  (B) for whom radiology services account for 
                at least 50 percent of the total amount of 
                charges made under this part.
  (c) Payment and Standards for Screening Mammography.--
          (1) In general.--With respect to expenses incurred 
        for screening mammography (as defined in section 
        1861(jj)), payment may be made only--
                  (A) for screening mammography conducted 
                consistent with the frequency permitted under 
                paragraph (2); and
                  (B) if the screening mammography is conducted 
                by a facility that has a certificate (or 
                provisional certificate) issued under section 
                354 of the Public Health Service Act.
          (2) Frequency covered.--
                  (A) In general.--Subject to revision by the 
                Secretary under subparagraph (B)--
                          (i) no payment may be made under this 
                        part for screening mammography 
                        performed on a woman under 35 years of 
                        age;
                          (ii) payment may be made under this 
                        part for only one screening mammography 
                        performed on a woman over 34 years of 
                        age, but under 40 years of age; and
                          (iii) in the case of a woman over 39 
                        years of age, payment may not be made 
                        under this part for screening 
                        mammography performed within 11 months 
                        following the month in which a previous 
                        screening mammography was performed.
                  (B) Revision of frequency.--
                          (i) Review.--The Secretary, in 
                        consultation with the Director of the 
                        National Cancer Institute, shall review 
                        periodically the appropriate frequency 
                        for performing screening mammography, 
                        based on age and such other factors as 
                        the Secretary believes to be pertinent.
                          (ii) Revision of frequency.--The 
                        Secretary, taking into consideration 
                        the review made under clause (i), may 
                        revise from time to time the frequency 
                        with which screening mammography may be 
                        paid for under this subsection.
  (d) Frequency Limits and Payment for Colorectal Cancer 
Screening Tests.--
          (1) Screening fecal-occult blood tests.--
                  (A) Payment amount.--The payment amount for 
                colorectal cancer screening tests consisting of 
                screening fecal-occult blood tests is equal to 
                the payment amount established for diagnostic 
                fecal-occult blood tests under section 1833(h).
                  (B) Frequency limit.--No payment may be made 
                under this part for a colorectal cancer 
                screening test consisting of a screening fecal-
                occult blood test--
                          (i) if the individual is under 50 
                        years of age; or
                          (ii) if the test is performed within 
                        the 11 months after a previous 
                        screening fecal-occult blood test.
          (2) Screening flexible sigmoidoscopies.--
                  (A) Fee schedule.--With respect to colorectal 
                cancer screening tests consisting of screening 
                flexible sigmoidoscopies, payment under section 
                1848 shall be consistent with payment under 
                such section for similar or related services.
                  (B) Payment limit.--In the case of screening 
                flexible sigmoidoscopy services, payment under 
                this part shall not exceed such amount as the 
                Secretary specifies, based upon the rates 
                recognized for diagnostic flexible 
                sigmoidoscopy services.
                  (C) Facility payment limit.--
                          (i) In general.--Notwithstanding 
                        subsections (i)(2)(A) and (t) of 
                        section 1833, in the case of screening 
                        flexible sigmoidoscopy services 
                        furnished on or after January 1, 1999, 
                        that--
                                  (I) in accordance with 
                                regulations, may be performed 
                                in an ambulatory surgical 
                                center and for which the 
                                Secretary permits ambulatory 
                                surgical center payments under 
                                this part, and
                                  (II) are performed in an 
                                ambulatory surgical center or 
                                hospital outpatient department,
                        payment under this part shall be based 
                        on the lesser of the amount under the 
                        fee schedule that would apply to such 
                        services if they were performed in a 
                        hospital outpatient department in an 
                        area or the amount under the fee 
                        schedule that would apply to such 
                        services if they were performed in an 
                        ambulatory surgical center in the same 
                        area.
                          (ii) Limitation on coinsurance.--
                        Notwithstanding any other provision of 
                        this title, in the case of a 
                        beneficiary who receives the services 
                        described in clause (i)--
                                  (I) in computing the amount 
                                of any applicable copayment, 
                                the computation of such 
                                coinsurance shall be based upon 
                                the fee schedule under which 
                                payment is made for the 
                                services, and
                                  (II) the amount of such 
                                coinsurance is equal to 25 
                                percent of the payment amount 
                                under the fee schedule 
                                described in subclause (I).
                  (D) Special rule for detected lesions.--If 
                during the course of such screening flexible 
                sigmoidoscopy, a lesion or growth is detected 
                which results in a biopsy or removal of the 
                lesion or growth, payment under this part shall 
                not be made for the screening flexible 
                sigmoidoscopy but shall be made for the 
                procedure classified as a flexible 
                sigmoidoscopy with such biopsy or removal.
                  (E) Frequency limit.--No payment may be made 
                under this part for a colorectal cancer 
                screening test consisting of a screening 
                flexible sigmoidoscopy--
                          (i) if the individual is under 50 
                        years of age; or
                          (ii) if the procedure is performed 
                        within the 47 months after a previous 
                        screening flexible sigmoidoscopy or, in 
                        the case of an individual who is not at 
                        high risk for colorectal cancer, if the 
                        procedure is performed within the 119 
                        months after a previous screening 
                        colonoscopy.
          (3) Screening colonoscopy.--
                  (A) Fee schedule.--With respect to colorectal 
                cancer screening test consisting of a screening 
                colonoscopy, payment under section 1848 shall 
                be consistent with payment amounts under such 
                section for similar or related services.
                  (B) Payment limit.--In the case of screening 
                colonoscopy services, payment under this part 
                shall not exceed such amount as the Secretary 
                specifies, based upon the rates recognized for 
                diagnostic colonoscopy services.
                  (C) Facility payment limit.--
                          (i) In general.--Notwithstanding 
                        subsections (i)(2)(A) and (t) of 
                        section 1833, in the case of screening 
                        colonoscopy services furnished on or 
                        after January 1, 1999, that are 
                        performed in an ambulatory surgical 
                        center or a hospital outpatient 
                        department, payment under this part 
                        shall be based on the lesser of the 
                        amount under the fee schedule that 
                        would apply to such services if they 
                        were performed in a hospital outpatient 
                        department in an area or the amount 
                        under the fee schedule that would apply 
                        to such services if they were performed 
                        in an ambulatory surgical center in the 
                        same area.
                          (ii) Limitation on coinsurance.--
                        Notwithstanding any other provision of 
                        this title, in the case of a 
                        beneficiary who receives the services 
                        described in clause (i)--
                                  (I) in computing the amount 
                                of any applicable coinsurance, 
                                the computation of such 
                                coinsurance shall be based upon 
                                the fee schedule under which 
                                payment is made for the 
                                services, and
                                  (II) the amount of such 
                                coinsurance is equal to 25 
                                percent of the payment amount 
                                under the fee schedule 
                                described in subclause (I).
                  (D) Special rule for detected lesions.--If 
                during the course of such screening 
                colonoscopy, a lesion or growth is detected 
                which results in a biopsy or removal of the 
                lesion or growth, payment under this part shall 
                not be made for the screening colonoscopy but 
                shall be made for the procedure classified as a 
                colonoscopy with such biopsy or removal.
                  (E) Frequency limit.--No payment may be made 
                under this part for a colorectal cancer 
                screening test consisting of a screening 
                colonoscopy for individuals at high risk for 
                colorectal cancer if the procedure is performed 
                within the 23 months after a previous screening 
                colonoscopy or for other individuals if the 
                procedure is performed within the 119 months 
                after a previous screening colonoscopy or 
                within 47 months after a previous screening 
                flexible sigmoidoscopy.
  (e) Accreditation Requirement for Advanced Diagnostic Imaging 
Services.--
          (1) In general.--
                  (A) In general.--Beginning with January 1, 
                2012, with respect to the technical component 
                of advanced diagnostic imaging services for 
                which payment is made under the fee schedule 
                established under section 1848(b) and that are 
                furnished by a supplier, payment may only be 
                made if such supplier is accredited by an 
                accreditation organization designated by the 
                Secretary under paragraph (2)(B)(i).
                  (B) Advanced diagnostic imaging services 
                defined.--In this subsection, the term 
                ``advanced diagnostic imaging services''' 
                includes--
                          (i) diagnostic magnetic resonance 
                        imaging, computed tomography, and 
                        nuclear medicine (including positron 
                        emission tomography); and
                          (ii) such other diagnostic imaging 
                        services, including services described 
                        in section 1848(b)(4)(B) (excluding X-
                        ray, ultrasound, and fluoroscopy), as 
                        specified by the Secretary in 
                        consultation with physician specialty 
                        organizations and other stakeholders.
                  (C) Supplier defined.--In this subsection, 
                the term ``supplier'' has the meaning given 
                such term in section 1861(d).
          (2) Accreditation organizations.--
                  (A) Factors for designation of accreditation 
                organizations.--The Secretary shall consider 
                the following factors in designating 
                accreditation organizations under subparagraph 
                (B)(i) and in reviewing and modifying the list 
                of accreditation organizations designated 
                pursuant to subparagraph (C):
                          (i) The ability of the organization 
                        to conduct timely reviews of 
                        accreditation applications.
                          (ii) Whether the organization has 
                        established a process for the timely 
                        integration of new advanced diagnostic 
                        imaging services into the 
                        organization's accreditation program.
                          (iii) Whether the organization uses 
                        random site visits, site audits, or 
                        other strategies for ensuring 
                        accredited suppliers maintain adherence 
                        to the criteria described in paragraph 
                        (3).
                          (iv) The ability of the organization 
                        to take into account the capacities of 
                        suppliers located in a rural area (as 
                        defined in section 1886(d)(2)(D)).
                          (v) Whether the organization has 
                        established reasonable fees to be 
                        charged to suppliers applying for 
                        accreditation.
                          (vi) Such other factors as the 
                        Secretary determines appropriate.
                  (B) Designation.--Not later than January 1, 
                2010, the Secretary shall designate 
                organizations to accredit suppliers furnishing 
                the technical component of advanced diagnostic 
                imaging services. The list of accreditation 
                organizations so designated may be modified 
                pursuant to subparagraph (C).
                  (C) Review and modification of list of 
                accreditation organizations.--
                          (i) In general.--The Secretary shall 
                        review the list of accreditation 
                        organizations designated under 
                        subparagraph (B) taking into account 
                        the factors under subparagraph (A). 
                        Taking into account the results of such 
                        review, the Secretary may, by 
                        regulation, modify the list of 
                        accreditation organizations designated 
                        under subparagraph (B).
                          (ii) Special rule for accreditations 
                        done prior to removal from list of 
                        designated accreditation 
                        organizations.--In the case where the 
                        Secretary removes an organization from 
                        the list of accreditation organizations 
                        designated under subparagraph (B), any 
                        supplier that is accredited by the 
                        organization during the period 
                        beginning on the date on which the 
                        organization is designated as an 
                        accreditation organization under 
                        subparagraph (B) and ending on the date 
                        on which the organization is removed 
                        from such list shall be considered to 
                        have been accredited by an organization 
                        designated by the Secretary under 
                        subparagraph (B) for the remaining 
                        period such accreditation is in effect.
          (3) Criteria for accreditation.--The Secretary shall 
        establish procedures to ensure that the criteria used 
        by an accreditation organization designated under 
        paragraph (2)(B) to evaluate a supplier that furnishes 
        the technical component of advanced diagnostic imaging 
        services for the purpose of accreditation of such 
        supplier is specific to each imaging modality. Such 
        criteria shall include--
                  (A) standards for qualifications of medical 
                personnel who are not physicians and who 
                furnish the technical component of advanced 
                diagnostic imaging services;
                  (B) standards for qualifications and 
                responsibilities of medical directors and 
                supervising physicians, including standards 
                that recognize the considerations described in 
                paragraph (4);
                  (C) procedures to ensure that equipment used 
                in furnishing the technical component of 
                advanced diagnostic imaging services meets 
                performance specifications;
                  (D) standards that require the supplier have 
                procedures in place to ensure the safety of 
                persons who furnish the technical component of 
                advanced diagnostic imaging services and 
                individuals to whom such services are 
                furnished;
                  (E) standards that require the establishment 
                and maintenance of a quality assurance and 
                quality control program by the supplier that is 
                adequate and appropriate to ensure the 
                reliability, clarity, and accuracy of the 
                technical quality of diagnostic images produced 
                by such supplier; and
                  (F) any other standards or procedures the 
                Secretary determines appropriate.
          (4) Recognition in standards for the evaluation of 
        medical directors and supervising physicians.--The 
        standards described in paragraph (3)(B) shall recognize 
        whether a medical director or supervising physician--
                  (A) in a particular specialty receives 
                training in advanced diagnostic imaging 
                services in a residency program;
                  (B) has attained, through experience, the 
                necessary expertise to be a medical director or 
                a supervising physician;
                  (C) has completed any continuing medical 
                education courses relating to such services; or
                  (D) has met such other standards as the 
                Secretary determines appropriate.
          (5) Rule for accreditations made prior to 
        designation.--In the case of a supplier that is 
        accredited before January 1, 2010, by an accreditation 
        organization designated by the Secretary under 
        paragraph (2)(B) as of January 1, 2010, such supplier 
        shall be considered to have been accredited by an 
        organization designated by the Secretary under such 
        paragraph as of January 1, 2012, for the remaining 
        period such accreditation is in effect.
  (f) Reduction in Payments for Physician Pathology Services 
During 1991.--
          (1) In general.--For physician pathology services 
        furnished under this part during 1991, the prevailing 
        charges used in a locality under this part shall be 7 
        percent below the prevailing charges used in the 
        locality under this part in 1990 after March 31.
          (2) Limitation.--The prevailing charge for the 
        technical and professional components of an physician 
        pathology service furnished by a physician through an 
        independent laboratory shall not be reduced pursuant to 
        paragraph (1) to the extent that such reduction would 
        reduce such prevailing charge below 115 percent of the 
        prevailing charge for the professional component of 
        such service when furnished by a hospital-based 
        physician in the same locality. For purposes of the 
        preceding sentence, an independent laboratory is a 
        laboratory that is independent of a hospital and 
        separate from the attending or consulting physicians' 
        office.
  (g) Payment for Outpatient Critical Access Hospital 
Services.--
          (1) In general.--The amount of payment for outpatient 
        critical access hospital services of a critical access 
        hospital is equal to 101 percent of the reasonable 
        costs of the hospital in providing such services, 
        unless the hospital makes the election under paragraph 
        (2).
          (2) Election of cost-based hospital outpatient 
        service payment plus fee schedule for professional 
        services.--A critical access hospital may elect to be 
        paid for outpatient critical access hospital services 
        amounts equal to the sum of the following, less the 
        amount that such hospital may charge as described in 
        section 1866(a)(2)(A):
                  (A) Facility fee.--With respect to facility 
                services, not including any services for which 
                payment may be made under subparagraph (B), 101 
                percent of the reasonable costs of the critical 
                access hospital in providing such services.
                  (B) Fee schedule for professional services.--
                With respect to professional services otherwise 
                included within outpatient critical access 
                hospital services, 115 percent of such amounts 
                as would otherwise be paid under this part if 
                such services were not included in outpatient 
                critical access hospital services. Subsections 
                (x) and (y) of section 1833 shall not be taken 
                into account in determining the amounts that 
                would otherwise be paid pursuant to the 
                preceding sentence.
        The Secretary may not require, as a condition for 
        applying subparagraph (B) with respect to a critical 
        access hospital, that each physician or other 
        practitioner providing professional services in the 
        hospital must assign billing rights with respect to 
        such services, except that such subparagraph shall not 
        apply to those physicians and practitioners who have 
        not assigned such billing rights.
          (3) Disregarding charges.--The payment amounts under 
        this subsection shall be determined without regard to 
        the amount of the customary or other charge.
          (4) Treatment of clinical diagnostic laboratory 
        services.--No coinsurance, deductible, copayment, or 
        other cost-sharing otherwise applicable under this part 
        shall apply with respect to clinical diagnostic 
        laboratory services furnished as an outpatient critical 
        access hospital service. Nothing in this title shall be 
        construed as providing for payment for clinical 
        diagnostic laboratory services furnished as part of 
        outpatient critical access hospital services, other 
        than on the basis described in this subsection. For 
        purposes of the preceding sentence and section 
        1861(mm)(3), clinical diagnostic laboratory services 
        furnished by a critical access hospital shall be 
        treated as being furnished as part of outpatient 
        critical access services without regard to whether the 
        individual with respect to whom such services are 
        furnished is physically present in the critical access 
        hospital, or in a skilled nursing facility or a clinic 
        (including a rural health clinic) that is operated by a 
        critical access hospital, at the time the specimen is 
        collected.
          (5) Coverage of costs for certain emergency room on-
        call providers.--In determining the reasonable costs of 
        outpatient critical access hospital services under 
        paragraphs (1) and (2)(A), the Secretary shall 
        recognize as allowable costs, amounts (as defined by 
        the Secretary) for reasonable compensation and related 
        costs for physicians, physician assistants, nurse 
        practitioners, and clinical nurse specialists who are 
        on-call (as defined by the Secretary) to provide 
        emergency services but who are not present on the 
        premises of the critical access hospital involved, and 
        are not otherwise furnishing services covered under 
        this title and are not on-call at any other provider or 
        facility.
  (h) Payment for Prosthetic Devices and Orthotics and 
Prosthetics.--
          (1) General rule for payment.--
                  (A) In general.--Payment under this 
                subsection for prosthetic devices and orthotics 
                and prosthetics shall be made in a lump-sum 
                amount for the purchase of the item in an 
                amount equal to 80 percent of the payment basis 
                described in subparagraph (B).
                  (B) Payment basis.--Except as provided in 
                subparagraphs (C), (E), and (H)(i), the payment 
                basis described in this subparagraph is the 
                lesser of--
                          (i) the actual charge for the item; 
                        or
                          (ii) the amount recognized under 
                        paragraph (2) as the purchase price for 
                        the item.
                  (C) Exception for certain public home health 
                agencies.--Subparagraph (B)(i) shall not apply 
                to an item furnished by a public home health 
                agency (or by another home health agency which 
                demonstrates to the satisfaction of the 
                Secretary that a significant portion of its 
                patients are low income) free of charge or at 
                nominal charges to the public.
                  (D) Exclusive payment rule.--Subject to 
                subparagraph (H)(ii), this subsection shall 
                constitute the exclusive provision of this 
                title for payment for prosthetic devices, 
                orthotics, and prosthetics under this part or 
                under part A to a home health agency.
                  (E) Exception for certain items.--Payment for 
                ostomy supplies, tracheostomy supplies, and 
                urologicals shall be made in accordance with 
                subparagraphs (B) and (C) of section 
                1834(a)(2).
                  (F) Special payment rules for certain 
                prosthetics and custom-fabricated orthotics.--
                          (i) In general.--No payment shall be 
                        made under this subsection for an item 
                        of custom-fabricated orthotics 
                        described in clause (ii) or for an item 
                        of prosthetics unless such item is--
                                  (I) furnished by a qualified 
                                practitioner; and
                                  (II) fabricated by a 
                                qualified practitioner or a 
                                qualified supplier at a 
                                facility that meets such 
                                criteria as the Secretary 
                                determines appropriate.
                          (ii) Description of custom-fabricated 
                        item.--
                                  (I) In general.--An item 
                                described in this clause is an 
                                item of custom-fabricated 
                                orthotics that requires 
                                education, training, and 
                                experience to custom-fabricate 
                                and that is included in a list 
                                established by the Secretary in 
                                subclause (II). Such an item 
                                does not include shoes and shoe 
                                inserts.
                                  (II) List of items.--The 
                                Secretary, in consultation with 
                                appropriate experts in 
                                orthotics (including national 
                                organizations representing 
                                manufacturers of orthotics), 
                                shall establish and update as 
                                appropriate a list of items to 
                                which this subparagraph 
                                applies. No item may be 
                                included in such list unless 
                                the item is individually 
                                fabricated for the patient over 
                                a positive model of the 
                                patient.
                          (iii) Qualified practitioner 
                        defined.--In this subparagraph, the 
                        term ``qualified practitioner'' means a 
                        physician or other individual who--
                                  (I) is a qualified physical 
                                therapist or a qualified 
                                occupational therapist;
                                  (II) in the case of a State 
                                that provides for the licensing 
                                of orthotics and prosthetics, 
                                is licensed in orthotics or 
                                prosthetics by the State in 
                                which the item is supplied; or
                                  (III) in the case of a State 
                                that does not provide for the 
                                licensing of orthotics and 
                                prosthetics, is specifically 
                                trained and educated to provide 
                                or manage the provision of 
                                prosthetics and custom-designed 
                                or -fabricated orthotics, and 
                                is certified by the American 
                                Board for Certification in 
                                Orthotics and Prosthetics, Inc. 
                                or by the Board for Orthotist/
                                Prosthetist Certification, or 
                                is credentialed and approved by 
                                a program that the Secretary 
                                determines, in consultation 
                                with appropriate experts in 
                                orthotics and prosthetics, has 
                                training and education 
                                standards that are necessary to 
                                provide such prosthetics and 
                                orthotics.
                          (iv) Qualified supplier defined.--In 
                        this subparagraph, the term ``qualified 
                        supplier'' means any entity that is 
                        accredited by the American Board for 
                        Certification in Orthotics and 
                        Prosthetics, Inc. or by the Board for 
                        Orthotist/Prosthetist Certification, or 
                        accredited and approved by a program 
                        that the Secretary determines has 
                        accreditation and approval standards 
                        that are essentially equivalent to 
                        those of such Board.
                  (G) Replacement of prosthetic devices and 
                parts.--
                          (i) In general.--Payment shall be 
                        made for the replacement of prosthetic 
                        devices which are artificial limbs, or 
                        for the replacement of any part of such 
                        devices, without regard to continuous 
                        use or useful lifetime restrictions if 
                        an ordering physician determines that 
                        the provision of a replacement device, 
                        or a replacement part of such a device, 
                        is necessary because of any of the 
                        following:
                                  (I) A change in the 
                                physiological condition of the 
                                patient.
                                  (II) An irreparable change in 
                                the condition of the device, or 
                                in a part of the device.
                                  (III) The condition of the 
                                device, or the part of the 
                                device, requires repairs and 
                                the cost of such repairs would 
                                be more than 60 percent of the 
                                cost of a replacement device, 
                                or, as the case may be, of the 
                                part being replaced.
                          (ii) Confirmation may be required if 
                        device or part being replaced is less 
                        than 3 years old.--If a physician 
                        determines that a replacement device, 
                        or a replacement part, is necessary 
                        pursuant to clause (i)--
                                  (I) such determination shall 
                                be controlling; and
                                  (II) such replacement device 
                                or part shall be deemed to be 
                                reasonable and necessary for 
                                purposes of section 
                                1862(a)(1)(A);
                        except that if the device, or part, 
                        being replaced is less than 3 years old 
                        (calculated from the date on which the 
                        beneficiary began to use the device or 
                        part), the Secretary may also require 
                        confirmation of necessity of the 
                        replacement device or replacement part, 
                        as the case may be.
                  (H) Application of competitive acquisition to 
                orthotics; limitation of inherent 
                reasonableness authority.--In the case of 
                orthotics described in paragraph (2)(C) of 
                section 1847(a) furnished on or after January 
                1, 2009, subject to subsection (a)(1)(G), that 
                are included in a competitive acquisition 
                program in a competitive acquisition area under 
                such section--
                          (i) the payment basis under this 
                        subsection for such orthotics furnished 
                        in such area shall be the payment basis 
                        determined under such competitive 
                        acquisition program; and
                          (ii) subject to subsection (a)(1)(G), 
                        the Secretary may use information on 
                        the payment determined under such 
                        competitive acquisition programs to 
                        adjust the payment amount otherwise 
                        recognized under subparagraph (B)(ii) 
                        for an area that is not a competitive 
                        acquisition area under section 1847, 
                        and in the case of such adjustment, 
                        paragraphs (8) and (9) of section 
                        1842(b) shall not be applied.
          (2) Purchase price recognized.--For purposes of 
        paragraph (1), the amount that is recognized under this 
        paragraph as the purchase price for prosthetic devices, 
        orthotics, and prosthetics is the amount described in 
        subparagraph (C) of this paragraph, determined as 
        follows:
                  (A) Computation of local purchase price.--
                Each carrier under section 1842 shall compute a 
                base local purchase price for the item as 
                follows:
                          (i) The carrier shall compute a base 
                        local purchase price for each item 
                        equal to the average reasonable charge 
                        in the locality for the purchase of the 
                        item for the 12-month period ending 
                        with June 1987.
                          (ii) The carrier shall compute a 
                        local purchase price, with respect to 
                        the furnishing of each particular 
                        item--
                                  (I) in 1989 and 1990, equal 
                                to the base local purchase 
                                price computed under clause (i) 
                                increased by the percentage 
                                increase in the consumer price 
                                index for all urban consumers 
                                (United States city average) 
                                for the 6-month period ending 
                                with December 1987, or
                                  (II) in 1991, 1992 or 1993, 
                                equal to the local purchase 
                                price computed under this 
                                clause for the previous year 
                                increased by the applicable 
                                percentage increase for the 
                                year.
                  (B) Computation of regional purchase price.--
                With respect to the furnishing of a particular 
                item in each region (as defined by the 
                Secretary), the Secretary shall compute a 
                regional purchase price--
                          (i) for 1992, equal to the average 
                        (weighted by relative volume of all 
                        claims among carriers) of the local 
                        purchase prices for the carriers in the 
                        region computed under subparagraph 
                        (A)(ii)(II) for the year, and
                          (ii) for each subsequent year, equal 
                        to the regional purchase price computed 
                        under this subparagraph for the 
                        previous year increased by the 
                        applicable percentage increase for the 
                        year.
                  (C) Purchase price recognized.--For purposes 
                of paragraph (1) and subject to subparagraph 
                (D), the amount that is recognized under this 
                paragraph as the purchase price for each item 
                furnished--
                          (i) in 1989, 1990, or 1991, is 100 
                        percent of the local purchase price 
                        computed under subparagraph (A)(ii);
                          (ii) in 1992, is the sum of (I) 75 
                        percent of the local purchase price 
                        computed under subparagraph (A)(ii)(II) 
                        for 1992, and (II) 25 percent of the 
                        regional purchase price computed under 
                        subparagraph (B) for 1992;
                          (iii) in 1993, is the sum of (I) 50 
                        percent of the local purchase price 
                        computed under subparagraph (A)(ii)(II) 
                        for 1993, and (II) 50 percent of the 
                        regional purchase price computed under 
                        subparagraph (B) for 1993; and
                          (iv) in 1994 or a subsequent year, is 
                        the regional purchase price computed 
                        under subparagraph (B) for that year.
                  (D) Range on amount recognized.--The amount 
                that is recognized under subparagraph (C) as 
                the purchase price for an item furnished--
                          (i) in 1992, may not exceed 125 
                        percent, and may not be lower than 85 
                        percent, of the average of the purchase 
                        prices recognized under such 
                        subparagraph for all the carrier 
                        service areas in the United States in 
                        that year; and
                          (ii) in a subsequent year, may not 
                        exceed 120 percent, and may not be 
                        lower than 90 percent, of the average 
                        of the purchase prices recognized under 
                        such subparagraph for all the carrier 
                        service areas in the United States in 
                        that year.
          (3) Applicability of certain provisions relating to 
        durable medical equipment.--Paragraphs (12) and (17) 
        and subparagraphs (A) and (B) of paragraph (10) and 
        paragraph (11) of subsection (a) shall apply to 
        prosthetic devices, orthotics, and prosthetics in the 
        same manner as such provisions apply to covered items 
        under such subsection.
          (4) Definitions.--In this subsection--
                  (A) the term ``applicable percentage 
                increase'' means--
                          (i) for 1991, 0 percent;
                          (ii) for 1992 and 1993, the 
                        percentage increase in the consumer 
                        price index for all urban consumers 
                        (United States city average) for the 
                        12-month period ending with June of the 
                        previous year;
                          (iii) for 1994 and 1995, 0 percent;
                          (iv) for 1996 and 1997, the 
                        percentage increase in the consumer 
                        price index for all urban consumers 
                        (United States city average) for the 
                        12-month period ending with June of the 
                        previous year;
                          (v) for each of the years 1998 
                        through 2000, 1 percent;
                          (vi) for 2001, the percentage 
                        increase in the consumer price index 
                        for all urban consumers (U.S. city 
                        average) for the 12-month period ending 
                        with June 2000;
                          (vii) for 2002, 1 percent;
                          (viii) for 2003, the percentage 
                        increase in the consumer price index 
                        for all urban consumers (United States 
                        city average) for the 12-month period 
                        ending with June of the previous year;
                          (ix) for 2004, 2005, and 2006, 0 
                        percent;
                          (x) for for each of 2007 through 
                        2010, the percentage increase in the 
                        consumer price index for all urban 
                        consumers (United States city average) 
                        for the 12-month period ending with 
                        June of the previous year; and
                          (xi) for 2011 and each subsequent 
                        year--
                                  (I) the percentage increase 
                                in the consumer price index for 
                                all urban consumers (United 
                                States city average) for the 
                                12-month period ending with 
                                June of the previous year, 
                                reduced by--
                                  (II) the productivity 
                                adjustment described in section 
                                1886(b)(3)(B)(xi)(II).
                  (B) the term ``prosthetic devices''' has the 
                meaning given such term in section 1861(s)(8), 
                except that such term does not include 
                parenteral and enteral nutrition nutrients, 
                supplies, and equipment and does not include an 
                implantable item for which payment may be made 
                under section 1833(t); and
                  (C) the term ``orthotics and prosthetics''' 
                has the meaning given such term in section 
                1861(s)(9) (and includes shoes described in 
                section 1861(s)(12)), but does not include 
                intraocular lenses or medical supplies 
                (including catheters, catheter supplies, ostomy 
                bags, and supplies related to ostomy care) 
                furnished by a home health agency under section 
                1861(m)(5).
        The application of subparagraph (A)(xi)(II) may result 
        in the applicable percentage increase under 
        subparagraph (A) being less than 0.0 for a year, and 
        may result in payment rates under this subsection for a 
        year being less than such payment rates for the 
        preceding year.
          (5) Documentation created by orthotists and 
        prosthetists.--For purposes of determining the 
        reasonableness and medical necessity of orthotics and 
        prosthetics, documentation created by an orthotist or 
        prosthetist shall be considered part of the 
        individual's medical record to support documentation 
        created by eligible professionals described in section 
        1848(k)(3)(B).
  (i) Payment for Surgical Dressings.--
          (1) In general.--Payment under this subsection for 
        surgical dressings (described in section 1861(s)(5)) 
        shall be made in a lump sum amount for the purchase of 
        the item in an amount equal to 80 percent of the lesser 
        of--
                  (A) the actual charge for the item; or
                  (B) a payment amount determined in accordance 
                with the methodology described in subparagraphs 
                (B) and (C) of subsection (a)(2) (except that 
                in applying such methodology, the national 
                limited payment amount referred to in such 
                subparagraphs shall be initially computed based 
                on local payment amounts using average 
                reasonable charges for the 12-month period 
                ending December 31, 1992, increased by the 
                covered item updates described in such 
                subsection for 1993 and 1994).
          (2) Exceptions.--Paragraph (1) shall not apply to 
        surgical dressings that are--
                  (A) furnished as an incident to a physician's 
                professional service; or
                  (B) furnished by a home health agency.
  (j) Requirements for Suppliers of Medical Equipment and 
Supplies.--
          (1) Issuance and renewal of supplier number.--
                  (A) Payment.--Except as provided in 
                subparagraph (C), no payment may be made under 
                this part after the date of the enactment of 
                the Social Security Act Amendments of 1994 for 
                items furnished by a supplier of medical 
                equipment and supplies unless such supplier 
                obtains (and renews at such intervals as the 
                Secretary may require) a supplier number.
                  (B) Standards for possessing a supplier 
                number.--A supplier may not obtain a supplier 
                number unless--
                          (i) for medical equipment and 
                        supplies furnished on or after the date 
                        of the enactment of the Social Security 
                        Act Amendments of 1994 and before 
                        January 1, 1996, the supplier meets 
                        standards prescribed by the Secretary 
                        in regulations issued on June 18, 1992; 
                        and
                          (ii) for medical equipment and 
                        supplies furnished on or after January 
                        1, 1996, the supplier meets revised 
                        standards prescribed by the Secretary 
                        (in consultation with representatives 
                        of suppliers of medical equipment and 
                        supplies, carriers, and consumers) that 
                        shall include requirements that the 
                        supplier--
                                  (I) comply with all 
                                applicable State and Federal 
                                licensure and regulatory 
                                requirements;
                                  (II) maintain a physical 
                                facility on an appropriate 
                                site;
                                  (III) have proof of 
                                appropriate liability 
                                insurance; and
                                  (IV) meet such other 
                                requirements as the Secretary 
                                may specify.
                  (C) Exception for items furnished as incident 
                to a physician's service.--Subparagraph (A) 
                shall not apply with respect to medical 
                equipment and supplies furnished incident to a 
                physician's service.
                  (D) Prohibition against multiple supplier 
                numbers.--The Secretary may not issue more than 
                one supplier number to any supplier of medical 
                equipment and supplies unless the issuance of 
                more than one number is appropriate to identify 
                subsidiary or regional entities under the 
                supplier's ownership or control.
                  (E) Prohibition against delegation of 
                supplier determinations.--The Secretary may not 
                delegate (other than by contract under section 
                1842) the responsibility to determine whether 
                suppliers meet the standards necessary to 
                obtain a supplier number.
          (2) Certificates of medical necessity.--
                  (A) Limitation on information provided by 
                suppliers on certificates of medical 
                necessity.--
                          (i) In general.--Effective 60 days 
                        after the date of the enactment of the 
                        Social Security Act Amendments of 1994, 
                        a supplier of medical equipment and 
                        supplies may distribute to physicians, 
                        or to individuals entitled to benefits 
                        under this part, a certificate of 
                        medical necessity for commercial 
                        purposes which contains no more than 
                        the following information completed by 
                        the supplier:
                                  (I) An identification of the 
                                supplier and the beneficiary to 
                                whom such medical equipment and 
                                supplies are furnished.
                                  (II) A description of such 
                                medical equipment and supplies.
                                  (III) Any product code 
                                identifying such medical 
                                equipment and supplies.
                                  (IV) Any other administrative 
                                information (other than 
                                information relating to the 
                                beneficiary's medical 
                                condition) identified by the 
                                Secretary.
                          (ii) Information on payment amount 
                        and charges.--If a supplier distributes 
                        a certificate of medical necessity 
                        containing any of the information 
                        permitted to be supplied under clause 
                        (i), the supplier shall also list on 
                        the certificate of medical necessity 
                        the fee schedule amount and the 
                        supplier's charge for the medical 
                        equipment or supplies being furnished 
                        prior to distribution of such 
                        certificate to the physician.
                          (iii) Penalty.--Any supplier of 
                        medical equipment and supplies who 
                        knowingly and willfully distributes a 
                        certificate of medical necessity in 
                        violation of clause (i) or fails to 
                        provide the information required under 
                        clause (ii) is subject to a civil money 
                        penalty in an amount not to exceed 
                        $1,000 for each such certificate of 
                        medical necessity so distributed. The 
                        provisions of section 1128A (other than 
                        subsections (a) and (b)) shall apply to 
                        civil money penalties under this 
                        subparagraph in the same manner as they 
                        apply to a penalty or proceeding under 
                        section 1128A(a).
                  (B) Definition.--For purposes of this 
                paragraph, the term ``certificate of medical 
                necessity'' means a form or other document 
                containing information required by the carrier 
                to be submitted to show that an item is 
                reasonable and necessary for the diagnosis or 
                treatment of illness or injury or to improve 
                the functioning of a malformed body member.
          (3) Coverage and review criteria.--The Secretary 
        shall annually review the coverage and utilization of 
        items of medical equipment and supplies to determine 
        whether such items should be made subject to coverage 
        and utilization review criteria, and if appropriate, 
        shall develop and apply such criteria to such items.
          (4) Limitation on patient liability.--If a supplier 
        of medical equipment and supplies (as defined in 
        paragraph (5))--
                  (A) furnishes an item or service to a 
                beneficiary for which no payment may be made by 
                reason of paragraph (1);
                  (B) furnishes an item or service to a 
                beneficiary for which payment is denied in 
                advance under subsection (a)(15); or
                  (C) furnishes an item or service to a 
                beneficiary for which payment is denied under 
                section 1862(a)(1);
        any expenses incurred for items and services furnished 
        to an individual by such a supplier not on an assigned 
        basis shall be the responsibility of such supplier. The 
        individual shall have no financial responsibility for 
        such expenses and the supplier shall refund on a timely 
        basis to the individual (and shall be liable to the 
        individual for) any amounts collected from the 
        individual for such items or services. The provisions 
        of subsection (a)(18) shall apply to refunds required 
        under the previous sentence in the same manner as such 
        provisions apply to refunds under such subsection.
          (5) Definition.--The term ``medical equipment and 
        supplies''' means--
                  (A) durable medical equipment (as defined in 
                section 1861(n));
                  (B) prosthetic devices (as described in 
                section 1861(s)(8));
                  (C) orthotics and prosthetics (as described 
                in section 1861(s)(9));
                  (D) surgical dressings (as described in 
                section 1861(s)(5));
                  (E) such other items as the Secretary may 
                determine; and
                  (F) for purposes of paragraphs (1) and (3)--
                          (i) home dialysis supplies and 
                        equipment (as described in section 
                        1861(s)(2)(F)),
                          (ii) immunosuppressive drugs (as 
                        described in section 1861(s)(2)(J)),
                          (iii) therapeutic shoes for diabetics 
                        (as described in section 1861(s)(12)),
                          (iv) oral drugs prescribed for use as 
                        an anticancer therapeutic agent (as 
                        described in section 1861(s)(2)(Q)), 
                        and
                          (v) self-administered erythropoetin 
                        (as described in section 
                        1861(s)(2)(P)).
  (k) Payment for Outpatient Therapy Services and Comprehensive 
Outpatient Rehabilitation Services.--
          (1) In general.--With respect to services described 
        in section 1833(a)(8) or 1833(a)(9) for which payment 
        is determined under this subsection, the payment basis 
        shall be--
                  (A) for services furnished during 1998, the 
                amount determined under paragraph (2); or
                  (B) for services furnished during a 
                subsequent year, 80 percent of the lesser of--
                          (i) the actual charge for the 
                        services, or
                          (ii) the applicable fee schedule 
                        amount (as defined in paragraph (3)) 
                        for the services.
          (2) Payment in 1998 based upon adjusted reasonable 
        costs.--The amount under this paragraph for services is 
        the lesser of--
                  (A) the charges imposed for the services, or
                  (B) the adjusted reasonable costs (as defined 
                in paragraph (4)) for the services,
        less 20 percent of the amount of the charges imposed 
        for such services.
          (3) Applicable fee schedule amount.--In this 
        subsection, the term ``applicable fee schedule amount'' 
        means, with respect to services furnished in a year, 
        the amount determined under the fee schedule 
        established under section 1848 for such services 
        furnished during the year or, if there is no such fee 
        schedule established for such services, the amount 
        determined under the fee schedule established for such 
        comparable services as the Secretary specifies.
          (4) Adjusted reasonable costs.--In paragraph (2), the 
        term ``adjusted reasonable costs''' means, with respect 
        to any services, reasonable costs determined for such 
        services, reduced by 10 percent. The 10-percent 
        reduction shall not apply to services described in 
        section 1833(a)(8)(B) (relating to services provided by 
        hospitals).
          (5) Uniform coding.--For claims for services 
        submitted on or after April 1, 1998, for which the 
        amount of payment is determined under this subsection, 
        the claim shall include a code (or codes) under a 
        uniform coding system specified by the Secretary that 
        identifies the services furnished.
          (6) Restraint on billing.--The provisions of 
        subparagraphs (A) and (B) of section 1842(b)(18) shall 
        apply to therapy services for which payment is made 
        under this subsection in the same manner as they apply 
        to services provided by a practitioner described in 
        section 1842(b)(18)(C).
          (7) Adjustment in discount for certain multiple 
        therapy services.--In the case of therapy services 
        furnished on or after April 1, 2013, and for which 
        payment is made under this subsection pursuant to the 
        applicable fee schedule amount (as defined in paragraph 
        (3)), instead of the 25 percent multiple procedure 
        payment reduction specified in the final rule published 
        by the Secretary in the Federal Register on November 
        29, 2010, the reduction percentage shall be 50 percent.
  (l) Establishment of Fee Schedule for Ambulance Services.--
          (1) In general.--The Secretary shall establish a fee 
        schedule for payment for ambulance services whether 
        provided directly by a supplier or provider or under 
        arrangement with a provider under this part through a 
        negotiated rulemaking process described in title 5, 
        United States Code, and in accordance with the 
        requirements of this subsection.
          (2) Considerations.--In establishing such fee 
        schedule, the Secretary shall--
                  (A) establish mechanisms to control increases 
                in expenditures for ambulance services under 
                this part;
                  (B) establish definitions for ambulance 
                services which link payments to the type of 
                services provided;
                  (C) consider appropriate regional and 
                operational differences;
                  (D) consider adjustments to payment rates to 
                account for inflation and other relevant 
                factors; and
                  (E) phase in the application of the payment 
                rates under the fee schedule in an efficient 
                and fair manner consistent with paragraph (11), 
                except that such phase-in shall provide for 
                full payment of any national mileage rate for 
                ambulance services provided by suppliers that 
                are paid by carriers in any of the 50 States 
                where payment by a carrier for such services 
                for all such suppliers in such State did not, 
                prior to the implementation of the fee 
                schedule, include a separate amount for all 
                mileage within the county from which the 
                beneficiary is transported.
          (3) Savings.--In establishing such fee schedule, the 
        Secretary shall--
                  (A) ensure that the aggregate amount of 
                payments made for ambulance services under this 
                part during 2000 does not exceed the aggregate 
                amount of payments which would have been made 
                for such services under this part during such 
                year if the amendments made by section 4531(a) 
                of the Balanced Budget Act of 1997 continued in 
                effect, except that in making such 
                determination the Secretary shall assume an 
                update in such payments for 2002 equal to 
                percentage increase in the consumer price index 
                for all urban consumers (U.S. city average) for 
                the 12-month period ending with June of the 
                previous year reduced in the case of 2002 by 
                1.0 percentage points;
                  (B) set the payment amounts provided under 
                the fee schedule for services furnished in 2001 
                and each subsequent year at amounts equal to 
                the payment amounts under the fee schedule for 
                services furnished during the previous year, 
                increased, subject to subparagraph (C) and the 
                succeeding sentence of this paragraph, by the 
                percentage increase in the consumer price index 
                for all urban consumers (U.S. city average) for 
                the 12-month period ending with June of the 
                previous year reduced in the case of 2002 by 
                1.0 percentage points; and
                  (C) for 2011 and each subsequent year, after 
                determining the percentage increase under 
                subparagraph (B) for the year, reduce such 
                percentage increase by the productivity 
                adjustment described in section 
                1886(b)(3)(B)(xi)(II).
        The application of subparagraph (C) may result in the 
        percentage increase under subparagraph (B) being less 
        than 0.0 for a year, and may result in payment rates 
        under the fee schedule under this subsection for a year 
        being less than such payment rates for the preceding 
        year.
          (4) Consultation.--In establishing the fee schedule 
        for ambulance services under this subsection, the 
        Secretary shall consult with various national 
        organizations representing individuals and entities who 
        furnish and regulate ambulance services and share with 
        such organizations relevant data in establishing such 
        schedule.
          (5) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869 or 
        otherwise of the amounts established under the fee 
        schedule for ambulance services under this subsection, 
        including matters described in paragraph (2).
          (6) Restraint on billing.--The provisions of 
        subparagraphs (A) and (B) of section 1842(b)(18) shall 
        apply to ambulance services for which payment is made 
        under this subsection in the same manner as they apply 
        to services provided by a practitioner described in 
        section 1842(b)(18)(C).
          (7) Coding system.--The Secretary may require the 
        claim for any services for which the amount of payment 
        is determined under this subsection to include a code 
        (or codes) under a uniform coding system specified by 
        the Secretary that identifies the services furnished.
          (8) Services furnished by critical access 
        hospitals.--Notwithstanding any other provision of this 
        subsection, the Secretary shall pay 101 percent of the 
        reasonable costs incurred in furnishing ambulance 
        services if such services are furnished--
                  (A) by a critical access hospital (as defined 
                in section 1861(mm)(1)), or
                  (B) by an entity that is owned and operated 
                by a critical access hospital,
        but only if the critical access hospital or entity is 
        the only provider or supplier of ambulance services 
        that is located within a 35-mile drive of such critical 
        access hospital.
          (9) Transitional assistance for rural providers.--In 
        the case of ground ambulance services furnished on or 
        after July 1, 2001, and before January 1, 2004, for 
        which the transportation originates in a rural area (as 
        defined in section 1886(d)(2)(D)) or in a rural census 
        tract of a metropolitan statistical area (as determined 
        under the most recent modification of the Goldsmith 
        Modification, originally published in the Federal 
        Register on February 27, 1992 (57 Fed. Reg. 6725)), the 
        fee schedule established under this subsection shall 
        provide that, with respect to the payment rate for 
        mileage for a trip above 17 miles, and up to 50 miles, 
        the rate otherwise established shall be increased by 
        not less than \1/2\ of the additional payment per mile 
        established for the first 17 miles of such a trip 
        originating in a rural area.
          (10) Phase-in providing floor using blend of fee 
        schedule and regional fee schedules.--In carrying out 
        the phase-in under paragraph (2)(E) for each level of 
        ground service furnished in a year, the portion of the 
        payment amount that is based on the fee schedule shall 
        be the greater of the amount determined under such fee 
        schedule (without regard to this paragraph) or the 
        following blended rate of the fee schedule under 
        paragraph (1) and of a regional fee schedule for the 
        region involved:
                  (A) For 2004 (for services furnished on or 
                after July 1, 2004), the blended rate shall be 
                based 20 percent on the fee schedule under 
                paragraph (1) and 80 percent on the regional 
                fee schedule.
                  (B) For 2005, the blended rate shall be based 
                40 percent on the fee schedule under paragraph 
                (1) and 60 percent on the regional fee 
                schedule.
                  (C) For 2006, the blended rate shall be based 
                60 percent on the fee schedule under paragraph 
                (1) and 40 percent on the regional fee 
                schedule.
                  (D) For 2007, 2008, and 2009, the blended 
                rate shall be based 80 percent on the fee 
                schedule under paragraph (1) and 20 percent on 
                the regional fee schedule.
                  (E) For 2010 and each succeeding year, the 
                blended rate shall be based 100 percent on the 
                fee schedule under paragraph (1).
        For purposes of this paragraph, the Secretary shall 
        establish a regional fee schedule for each of the nine 
        census divisions (referred to in section 1886(d)(2)) 
        using the methodology (used in establishing the fee 
        schedule under paragraph (1)) to calculate a regional 
        conversion factor and a regional mileage payment rate 
        and using the same payment adjustments and the same 
        relative value units as used in the fee schedule under 
        such paragraph.
          (11) Adjustment in payment for certain long trips.--
        In the case of ground ambulance services furnished on 
        or after July 1, 2004, and before January 1, 2009, 
        regardless of where the transportation originates, the 
        fee schedule established under this subsection shall 
        provide that, with respect to the payment rate for 
        mileage for a trip above 50 miles the per mile rate 
        otherwise established shall be increased by \1/4\ of 
        the payment per mile otherwise applicable to miles in 
        excess of 50 miles in such trip.
          (12) Assistance for rural providers furnishing 
        services in low population density areas.--
                  (A) In general.--In the case of ground 
                ambulance services furnished on or after July 
                1, 2004, and before January 1, 2018, for which 
                the transportation originates in a qualified 
                rural area (identified under subparagraph 
                (B)(iii)), the Secretary shall provide for a 
                percent increase in the base rate of the fee 
                schedule for a trip established under this 
                subsection. In establishing such percent 
                increase, the Secretary shall estimate the 
                average cost per trip for such services (not 
                taking into account mileage) in the lowest 
                quartile as compared to the average cost per 
                trip for such services (not taking into account 
                mileage) in the highest quartile of all rural 
                county populations.
                  (B) Identification of qualified rural 
                areas.--
                          (i) Determination of population 
                        density in area.--Based upon data from 
                        the United States decennial census for 
                        the year 2000, the Secretary shall 
                        determine, for each rural area, the 
                        population density for that area.
                          (ii) Ranking of areas.--The Secretary 
                        shall rank each such area based on such 
                        population density.
                          (iii) Identification of qualified 
                        rural areas.--The Secretary shall 
                        identify those areas (in subparagraph 
                        (A) referred to as ``qualified rural 
                        areas''') with the lowest population 
                        densities that represent, if each such 
                        area were weighted by the population of 
                        such area (as used in computing such 
                        population densities), an aggregate 
                        total of 25 percent of the total of the 
                        population of all such areas.
                          (iv) Rural area.--For purposes of 
                        this paragraph, the term ``rural area'' 
                        has the meaning given such term in 
                        section 1886(d)(2)(D). If feasible, the 
                        Secretary shall treat a rural census 
                        tract of a metropolitan statistical 
                        area (as determined under the most 
                        recent modification of the Goldsmith 
                        Modification, originally published in 
                        the Federal Register on February 27, 
                        1992 (57 Fed. Reg. 6725) as a rural 
                        area for purposes of this paragraph.
                          (v) Judicial review.--There shall be 
                        no administrative or judicial review 
                        under section 1869, 1878, or otherwise, 
                        respecting the identification of an 
                        area under this subparagraph.
          (13) Temporary increase for ground ambulance 
        services.--
                  (A) In general.--After computing the rates 
                with respect to ground ambulance services under 
                the other applicable provisions of this 
                subsection, in the case of such services 
                furnished on or after July 1, 2004, and before 
                January 1, 2007, and for such services 
                furnished on or after July 1, 2008, and before 
                January 1, 2018, for which the transportation 
                originates in--
                          (i) a rural area described in 
                        paragraph (9) or in a rural census 
                        tract described in such paragraph, the 
                        fee schedule established under this 
                        section shall provide that the rate for 
                        the service otherwise established, 
                        after the application of any increase 
                        under paragraphs (11) and (12), shall 
                        be increased by 2 percent (or 3 percent 
                        if such service is furnished on or 
                        after July 1, 2008, and before January 
                        1, 2018); and
                          (ii) an area not described in clause 
                        (i), the fee schedule established under 
                        this subsection shall provide that the 
                        rate for the service otherwise 
                        established, after the application of 
                        any increase under paragraph (11), 
                        shall be increased by 1 percent (or 2 
                        percent if such service is furnished on 
                        or after July 1, 2008, and before 
                        January 1, 2018).
                  (B) Application of increased payments after 
                applicable period.--The increased payments 
                under subparagraph (A) shall not be taken into 
                account in calculating payments for services 
                furnished after the applicable period specified 
                in such subparagraph.
          (14) Providing appropriate coverage of rural air 
        ambulance services.--
                  (A) In general.--The regulations described in 
                section 1861(s)(7) shall provide, to the extent 
                that any ambulance services (whether ground or 
                air) may be covered under such section, that a 
                rural air ambulance service (as defined in 
                subparagraph (C)) is reimbursed under this 
                subsection at the air ambulance rate if the air 
                ambulance service--
                          (i) is reasonable and necessary based 
                        on the health condition of the 
                        individual being transported at or 
                        immediately prior to the time of the 
                        transport; and
                          (ii) complies with equipment and crew 
                        requirements established by the 
                        Secretary.
                  (B) Satisfaction of requirement of medically 
                necessary.--The requirement of subparagraph 
                (A)(i) is deemed to be met for a rural air 
                ambulance service if--
                          (i) subject to subparagraph (D), such 
                        service is requested by a physician or 
                        other qualified medical personnel (as 
                        specified by the Secretary) who 
                        certifies or reasonably determines that 
                        the individual's condition is such that 
                        the time needed to transport the 
                        individual by land or the instability 
                        of transportation by land poses a 
                        threat to the individual's survival or 
                        seriously endangers the individual's 
                        health; or
                          (ii) such service is furnished 
                        pursuant to a protocol that is 
                        established by a State or regional 
                        emergency medical service (EMS) agency 
                        and recognized or approved by the 
                        Secretary under which the use of an air 
                        ambulance is recommended, if such 
                        agency does not have an ownership 
                        interest in the entity furnishing such 
                        service.
                  (C) Rural air ambulance service defined.--For 
                purposes of this paragraph, the term ``rural 
                air ambulance service'' means fixed wing and 
                rotary wing air ambulance service in which the 
                point of pick up of the individual occurs in a 
                rural area (as defined in section 
                1886(d)(2)(D)) or in a rural census tract of a 
                metropolitan statistical area (as determined 
                under the most recent modification of the 
                Goldsmith Modification, originally published in 
                the Federal Register on February 27, 1992 (57 
                Fed. Reg. 6725)).
                  (D) Limitation.--
                          (i) In general.--Subparagraph (B)(i) 
                        shall not apply if there is a financial 
                        or employment relationship between the 
                        person requesting the rural air 
                        ambulance service and the entity 
                        furnishing the ambulance service, or an 
                        entity under common ownership with the 
                        entity furnishing the air ambulance 
                        service, or a financial relationship 
                        between an immediate family member of 
                        such requester and such an entity.
                          (ii) Exception.--Where a hospital and 
                        the entity furnishing rural air 
                        ambulance services are under common 
                        ownership, clause (i) shall not apply 
                        to remuneration (through employment or 
                        other relationship) by the hospital of 
                        the requester or immediate family 
                        member if the remuneration is for 
                        provider-based physician services 
                        furnished in a hospital (as described 
                        in section 1887) which are reimbursed 
                        under part A and the amount of the 
                        remuneration is unrelated directly or 
                        indirectly to the provision of rural 
                        air ambulance services.
          (15) Payment adjustment for non-emergency ambulance 
        transports for esrd beneficiaries.--The fee schedule 
        amount otherwise applicable under the preceding 
        provisions of this subsection shall be reduced by 10 
        percent for ambulance services furnished on or after 
        October 1, 2013, consisting of non-emergency basic life 
        support services involving transport of an individual 
        with end-stage renal disease for renal dialysis 
        services (as described in section 1881(b)(14)(B)) 
        furnished other than on an emergency basis by a 
        provider of services or a renal dialysis facility.
          (16) Prior authorization for repetitive scheduled 
        non-emergent ambulance transports.--
                  (A) In general.--Beginning January 1, 2017, 
                if the expansion to all States of the model of 
                prior authorization described in paragraph (2) 
                of section 515(a) of the Medicare Access and 
                CHIP Reauthorization Act of 2015 meets the 
                requirements described in paragraphs (1) 
                through (3) of section 1115A(c), then the 
                Secretary shall expand such model to all 
                States.
                  (B) Funding.--The Secretary shall use funds 
                made available under section 1893(h)(10) to 
                carry out this paragraph.
                  (C) Clarification regarding budget 
                neutrality.--Nothing in this paragraph may be 
                construed to limit or modify the application of 
                section 1115A(b)(3)(B) to models described in 
                such section, including with respect to the 
                model described in subparagraph (A) and 
                expanded beginning on January 1, 2017, under 
                such subparagraph.
  (m) Payment for Telehealth Services.--
          (1) In general.--The Secretary shall pay for 
        telehealth services that are furnished via a 
        telecommunications system by a physician (as defined in 
        section 1861(r)) or a practitioner (described in 
        section 1842(b)(18)(C)) to an eligible telehealth 
        individual enrolled under this part notwithstanding 
        that the individual physician or practitioner providing 
        the telehealth service is not at the same location as 
        the beneficiary. For purposes of the preceding 
        sentence, in the case of any Federal telemedicine 
        demonstration program conducted in Alaska or Hawaii, 
        the term ``telecommunications system'' includes store-
        and-forward technologies that provide for the 
        asynchronous transmission of health care information in 
        single or multimedia formats.
          (2) Payment amount.--
                  (A) Distant site.--The Secretary shall pay to 
                a physician or practitioner located at a 
                distant site that furnishes a telehealth 
                service to an eligible telehealth individual an 
                amount equal to the amount that such physician 
                or practitioner would have been paid under this 
                title had such service been furnished without 
                the use of a telecommunications system.
                  (B) Facility fee for originating [site.--] 
                [With respect to] site._
                          (i) In general._Subject to clause 
                        (ii), with respect to  a telehealth 
                        service, subject to section 
                        1833(a)(1)(U), there shall be paid to 
                        the originating site a facility fee 
                        equal to--
                                  [(i)] (I) for the period 
                                beginning on October 1, 2001, 
                                and ending on December 31, 
                                2001, and for 2002, $20; and
                                  [(ii)] (II) for a subsequent 
                                year, the facility fee 
                                specified in [clause (i) or 
                                this clause] subclause (I) or 
                                this subclause for the 
                                preceding year increased by the 
                                percentage increase in the MEI 
                                (as defined in section 
                                1842(i)(3)) for such subsequent 
                                year.
                          (ii) No facility fee if originating 
                        site for home dialysis therapy is the 
                        home.--No facility fee shall be paid 
                        under this subparagraph to an 
                        originating site described in subclause 
                        (X) of paragraph (4)(C)(ii).
                  (C) Telepresenter not required.--Nothing in 
                this subsection shall be construed as requiring 
                an eligible telehealth individual to be 
                presented by a physician or practitioner at the 
                originating site for the furnishing of a 
                service via a telecommunications system, unless 
                it is medically necessary (as determined by the 
                physician or practitioner at the distant site).
          (3) Limitation on beneficiary charges.--
                  (A) Physician and practitioner.--The 
                provisions of section 1848(g) and subparagraphs 
                (A) and (B) of section 1842(b)(18) shall apply 
                to a physician or practitioner receiving 
                payment under this subsection in the same 
                manner as they apply to physicians or 
                practitioners under such sections.
                  (B) Originating site.--The provisions of 
                section 1842(b)(18) shall apply to originating 
                sites receiving a facility fee in the same 
                manner as they apply to practitioners under 
                such section.
          (4) Definitions.--For purposes of this subsection:
                  (A) Distant site.--The term ``distant site'' 
                means the site at which the physician or 
                practitioner is located at the time the service 
                is provided via a telecommunications system.
                  (B) Eligible telehealth individual.--The term 
                ``eligible telehealth individual'' means an 
                individual enrolled under this part who 
                receives a telehealth service furnished at an 
                originating site.
                  (C) Originating site.--
                          (i) In general.--The term 
                        ``originating site'' means only those 
                        sites described in clause (ii) at which 
                        the eligible telehealth individual is 
                        located at the time the service is 
                        furnished via a telecommunications 
                        system and only if such site is 
                        located--
                                  (I) in an area that is 
                                designated as a rural health 
                                professional shortage area 
                                under section 332(a)(1)(A) of 
                                the Public Health Service Act 
                                (42 U.S.C. 254e(a)(1)(A));
                                  (II) in a county that is not 
                                included in a Metropolitan 
                                Statistical Area; or
                                  (III) from an entity that 
                                participates in a Federal 
                                telemedicine demonstration 
                                project that has been approved 
                                by (or receives funding from) 
                                the Secretary of Health and 
                                Human Services as of December 
                                31, 2000.
                          (ii) Sites described.--The sites 
                        referred to in clause (i) are the 
                        following sites:
                                  (I) The office of a physician 
                                or practitioner.
                                  (II) A critical access 
                                hospital (as defined in section 
                                1861(mm)(1)).
                                  (III) A rural health clinic 
                                (as defined in section 
                                1861(aa)(2)).
                                  (IV) A Federally qualified 
                                health center (as defined in 
                                section 1861(aa)(4)).
                                  (V) A hospital (as defined in 
                                section 1861(e)).
                                  (VI) A hospital-based or 
                                critical access hospital-based 
                                renal dialysis center 
                                (including satellites).
                                  (VII) A skilled nursing 
                                facility (as defined in section 
                                1819(a)).
                                  (VIII) A community mental 
                                health center (as defined in 
                                section 1861(ff)(3)(B)).
                                  (IX) A renal dialysis 
                                facility, but only for purposes 
                                of section 1881(b)(3)(B).
                                  (X) The home of an 
                                individual, but only for 
                                purposes of section 
                                1881(b)(3)(B).
                  (D) Physician.--The term ``physician'' has 
                the meaning given that term in section 1861(r).
                  (E) Practitioner.--The term ``practitioner'' 
                has the meaning given that term in section 
                1842(b)(18)(C).
                  (F) Telehealth service.--
                          (i) In general.--The term 
                        ``telehealth service'' means 
                        professional consultations, office 
                        visits, and office psychiatry services 
                        (identified as of July 1, 2000, by 
                        HCPCS codes 99241 99275, 99201 99215, 
                        90804 90809, and 90862 (and as 
                        subsequently modified by the 
                        Secretary)), and any additional service 
                        specified by the Secretary.
                          (ii) Yearly update.--The Secretary 
                        shall establish a process that 
                        provides, on an annual basis, for the 
                        addition or deletion of services (and 
                        HCPCS codes), as appropriate, to those 
                        specified in clause (i) for authorized 
                        payment under paragraph (1).
          (5) Treatment of home dialysis monthly esrd-related 
        visit.--The geographic requirements described in 
        paragraph (4)(C)(i) shall not apply with respect to 
        telehealth services furnished on or after January 1, 
        2019, for purposes of section 1881(b)(3)(B), at an 
        originating site described in subclause (VI), (IX), or 
        (X) of paragraph (4)(C)(ii)), subject to applicable 
        State law requirements, including State licensure 
        requirements.
  (n) Authority To Modify or Eliminate Coverage of Certain 
Preventive Services.--Notwithstanding any other provision of 
this title, effective beginning on January 1, 2010, if the 
Secretary determines appropriate, the Secretary may--
          (1) modify--
                  (A) the coverage of any preventive service 
                described in subparagraph (A) of section 
                1861(ddd)(3) to the extent that such 
                modification is consistent with the 
                recommendations of the United States Preventive 
                Services Task Force; and
                  (B) the services included in the initial 
                preventive physical examination described in 
                subparagraph (B) of such section; and
          (2) provide that no payment shall be made under this 
        title for a preventive service described in 
        subparagraph (A) of such section that has not received 
        a grade of A, B, C, or I by such Task Force.
  (o) Development and Implementation of Prospective Payment 
System.--
          (1) Development.--
                  (A) In general.--The Secretary shall develop 
                a prospective payment system for payment for 
                Federally qualified health center services 
                furnished by Federally qualified health centers 
                under this title. Such system shall include a 
                process for appropriately describing the 
                services furnished by Federally qualified 
                health centers and shall establish payment 
                rates for specific payment codes based on such 
                appropriate descriptions of services. Such 
                system shall be established to take into 
                account the type, intensity, and duration of 
                services furnished by Federally qualified 
                health centers. Such system may include 
                adjustments, including geographic adjustments, 
                determined appropriate by the Secretary.
                  (B) Collection of data and evaluation.--By 
                not later than January 1, 2011, the Secretary 
                shall require Federally qualified health 
                centers to submit to the Secretary such 
                information as the Secretary may require in 
                order to develop and implement the prospective 
                payment system under this subsection, including 
                the reporting of services using HCPCS codes.
          (2) Implementation.--
                  (A) In general.--Notwithstanding section 
                1833(a)(3)(A), the Secretary shall provide, for 
                cost reporting periods beginning on or after 
                October 1, 2014, for payments of prospective 
                payment rates for Federally qualified health 
                center services furnished by Federally 
                qualified health centers under this title in 
                accordance with the prospective payment system 
                developed by the Secretary under paragraph (1).
                  (B) Payments.--
                          (i) Initial payments.--The Secretary 
                        shall implement such prospective 
                        payment system so that the estimated 
                        aggregate amount of prospective payment 
                        rates (determined prior to the 
                        application of section 1833(a)(1)(Z)) 
                        under this title for Federally 
                        qualified health center services in the 
                        first year that such system is 
                        implemented is equal to 100 percent of 
                        the estimated amount of reasonable 
                        costs (determined without the 
                        application of a per visit payment 
                        limit or productivity screen and prior 
                        to the application of section 
                        1866(a)(2)(A)(ii)) that would have 
                        occurred for such services under this 
                        title in such year if the system had 
                        not been implemented.
                          (ii) Payments in subsequent years.--
                        Payment rates in years after the year 
                        of implementation of such system shall 
                        be the payment rates in the previous 
                        year increased--
                                  (I) in the first year after 
                                implementation of such system, 
                                by the percentage increase in 
                                the MEI (as defined in section 
                                1842(i)(3)) for the year 
                                involved; and
                                  (II) in subsequent years, by 
                                the percentage increase in a 
                                market basket of Federally 
                                qualified health center goods 
                                and services as promulgated 
                                through regulations, or if such 
                                an index is not available, by 
                                the percentage increase in the 
                                MEI (as defined in section 
                                1842(i)(3)) for the year 
                                involved.
                  (C) Preparation for pps implementation.--
                Notwithstanding any other provision of law, the 
                Secretary may establish and implement by 
                program instruction or otherwise the payment 
                codes to be used under the prospective payment 
                system under this section.
  (p) Quality Incentives To Promote Patient Safety and Public 
Health in Computed Tomography.--
          (1) Quality incentives.--In the case of an applicable 
        computed tomography service (as defined in paragraph 
        (2)) for which payment is made under an applicable 
        payment system (as defined in paragraph (3)) and that 
        is furnished on or after January 1, 2016, using 
        equipment that is not consistent with the CT equipment 
        standard (described in paragraph (4)), the payment 
        amount for such service shall be reduced by the 
        applicable percentage (as defined in paragraph (5)).
          (2) Applicable computed tomography services 
        defined.--In this subsection, the term ``applicable 
        computed tomography service'' means a service billed 
        using diagnostic radiological imaging codes for 
        computed tomography (identified as of January 1, 2014, 
        by HCPCS codes 70450 70498, 71250 71275, 72125 72133, 
        72191 72194, 73200 73206, 73700 73706, 74150 74178, 
        74261 74263, and 75571 75574 (and any succeeding 
        codes).
          (3) Applicable payment system defined.--In this 
        subsection, the term ``applicable payment system'' 
        means the following:
                  (A) The technical component and the technical 
                component of the global fee under the fee 
                schedule established under section 1848(b).
                  (B) The prospective payment system for 
                hospital outpatient department services under 
                section 1833(t).
          (4) Consistency with ct equipment standard.--In this 
        subsection, the term ``not consistent with the CT 
        equipment standard'' means, with respect to an 
        applicable computed tomography service, that the 
        service was furnished using equipment that does not 
        meet each of the attributes of the National Electrical 
        Manufacturers Association (NEMA) Standard XR 29 2013, 
        entitled ``Standard Attributes on CT Equipment Related 
        to Dose Optimization and Management''. Through 
        rulemaking, the Secretary may apply successor 
        standards.
          (5) Applicable percentage defined.--In this 
        subsection, the term ``applicable percentage'' means--
                  (A) for 2016, 5 percent; and
                  (B) for 2017 and subsequent years, 15 
                percent.
          (6) Implementation.--
                  (A) Information.--The Secretary shall require 
                that information be provided and attested to by 
                a supplier and a hospital outpatient department 
                that indicates whether an applicable computed 
                tomography service was furnished that was not 
                consistent with the CT equipment standard 
                (described in paragraph (4)). Such information 
                may be included on a claim and may be a 
                modifier. Such information shall be verified, 
                as appropriate, as part of the periodic 
                accreditation of suppliers under section 
                1834(e) and hospitals under section 1865(a).
                  (B) Administration.--Chapter 35 of title 44, 
                United States Code, shall not apply to 
                information described in subparagraph (A).
  (q) Recognizing Appropriate Use Criteria for Certain Imaging 
Services.--
          (1) Program established.--
                  (A) In general.--The Secretary shall 
                establish a program to promote the use of 
                appropriate use criteria (as defined in 
                subparagraph (B)) for applicable imaging 
                services (as defined in subparagraph (C)) 
                furnished in an applicable setting (as defined 
                in subparagraph (D)) by ordering professionals 
                and furnishing professionals (as defined in 
                subparagraphs (E) and (F), respectively).
                  (B) Appropriate use criteria defined.--In 
                this subsection, the term ``appropriate use 
                criteria'' means criteria, only developed or 
                endorsed by national professional medical 
                specialty societies or other provider-led 
                entities, to assist ordering professionals and 
                furnishing professionals in making the most 
                appropriate treatment decision for a specific 
                clinical condition for an individual. To the 
                extent feasible, such criteria shall be 
                evidence-based.
                  (C) Applicable imaging service defined.--In 
                this subsection, the term ``applicable imaging 
                service'' means an advanced diagnostic imaging 
                service (as defined in subsection (e)(1)(B)) 
                for which the Secretary determines--
                          (i) one or more applicable 
                        appropriate use criteria specified 
                        under paragraph (2) apply;
                          (ii) there are one or more qualified 
                        clinical decision support mechanisms 
                        listed under paragraph (3)(C); and
                          (iii) one or more of such mechanisms 
                        is available free of charge.
                  (D) Applicable setting defined.--In this 
                subsection, the term ``applicable setting'' 
                means a physician's office, a hospital 
                outpatient department (including an emergency 
                department), an ambulatory surgical center, and 
                any other provider-led outpatient setting 
                determined appropriate by the Secretary.
                  (E) Ordering professional defined.--In this 
                subsection, the term ``ordering professional'' 
                means a physician (as defined in section 
                1861(r)) or a practitioner described in section 
                1842(b)(18)(C) who orders an applicable imaging 
                service.
                  (F) Furnishing professional defined.--In this 
                subsection, the term ``furnishing 
                professional'' means a physician (as defined in 
                section 1861(r)) or a practitioner described in 
                section 1842(b)(18)(C) who furnishes an 
                applicable imaging service.
          (2) Establishment of applicable appropriate use 
        criteria.--
                  (A) In general.--Not later than November 15, 
                2015, the Secretary shall through rulemaking, 
                and in consultation with physicians, 
                practitioners, and other stakeholders, specify 
                applicable appropriate use criteria for 
                applicable imaging services only from among 
                appropriate use criteria developed or endorsed 
                by national professional medical specialty 
                societies or other provider-led entities.
                  (B) Considerations.--In specifying applicable 
                appropriate use criteria under subparagraph 
                (A), the Secretary shall take into account 
                whether the criteria--
                          (i) have stakeholder consensus;
                          (ii) are scientifically valid and 
                        evidence based; and
                          (iii) are based on studies that are 
                        published and reviewable by 
                        stakeholders.
                  (C) Revisions.--The Secretary shall review, 
                on an annual basis, the specified applicable 
                appropriate use criteria to determine if there 
                is a need to update or revise (as appropriate) 
                such specification of applicable appropriate 
                use criteria and make such updates or revisions 
                through rulemaking.
                  (D) Treatment of multiple applicable 
                appropriate use criteria.--In the case where 
                the Secretary determines that more than one 
                appropriate use criterion applies with respect 
                to an applicable imaging service, the Secretary 
                shall apply one or more applicable appropriate 
                use criteria under this paragraph for the 
                service.
          (3) Mechanisms for consultation with applicable 
        appropriate use criteria.--
                  (A) Identification of mechanisms to consult 
                with applicable appropriate use criteria.--
                          (i) In general.--The Secretary shall 
                        specify qualified clinical decision 
                        support mechanisms that could be used 
                        by ordering professionals to consult 
                        with applicable appropriate use 
                        criteria for applicable imaging 
                        services.
                          (ii) Consultation.--The Secretary 
                        shall consult with physicians, 
                        practitioners, health care technology 
                        experts, and other stakeholders in 
                        specifying mechanisms under this 
                        paragraph.
                          (iii) Inclusion of certain 
                        mechanisms.--Mechanisms specified under 
                        this paragraph may include any or all 
                        of the following that meet the 
                        requirements described in subparagraph 
                        (B)(ii):
                                  (I) Use of clinical decision 
                                support modules in certified 
                                EHR technology (as defined in 
                                section 1848(o)(4)).
                                  (II) Use of private sector 
                                clinical decision support 
                                mechanisms that are independent 
                                from certified EHR technology, 
                                which may include use of 
                                clinical decision support 
                                mechanisms available from 
                                medical specialty 
                                organizations.
                                  (III) Use of a clinical 
                                decision support mechanism 
                                established by the Secretary.
                  (B) Qualified clinical decision support 
                mechanisms.--
                          (i) In general.--For purposes of this 
                        subsection, a qualified clinical 
                        decision support mechanism is a 
                        mechanism that the Secretary determines 
                        meets the requirements described in 
                        clause (ii).
                          (ii) Requirements.--The requirements 
                        described in this clause are the 
                        following:
                                  (I) The mechanism makes 
                                available to the ordering 
                                professional applicable 
                                appropriate use criteria 
                                specified under paragraph (2) 
                                and the supporting 
                                documentation for the 
                                applicable imaging service 
                                ordered.
                                  (II) In the case where there 
                                is more than one applicable 
                                appropriate use criterion 
                                specified under such paragraph 
                                for an applicable imaging 
                                service, the mechanism 
                                indicates the criteria that it 
                                uses for the service.
                                  (III) The mechanism 
                                determines the extent to which 
                                an applicable imaging service 
                                ordered is consistent with the 
                                applicable appropriate use 
                                criteria so specified.
                                  (IV) The mechanism generates 
                                and provides to the ordering 
                                professional a certification or 
                                documentation that documents 
                                that the qualified clinical 
                                decision support mechanism was 
                                consulted by the ordering 
                                professional.
                                  (V) The mechanism is updated 
                                on a timely basis to reflect 
                                revisions to the specification 
                                of applicable appropriate use 
                                criteria under such paragraph.
                                  (VI) The mechanism meets 
                                privacy and security standards 
                                under applicable provisions of 
                                law.
                                  (VII) The mechanism performs 
                                such other functions as 
                                specified by the Secretary, 
                                which may include a requirement 
                                to provide aggregate feedback 
                                to the ordering professional.
                  (C) List of mechanisms for consultation with 
                applicable appropriate use criteria.--
                          (i) Initial list.--Not later than 
                        April 1, 2016, the Secretary shall 
                        publish a list of mechanisms specified 
                        under this paragraph.
                          (ii) Periodic updating of list.--The 
                        Secretary shall identify on an annual 
                        basis the list of qualified clinical 
                        decision support mechanisms specified 
                        under this paragraph.
          (4) Consultation with applicable appropriate use 
        criteria.--
                  (A) Consultation by ordering professional.--
                Beginning with January 1, 2017, subject to 
                subparagraph (C), with respect to an applicable 
                imaging service ordered by an ordering 
                professional that would be furnished in an 
                applicable setting and paid for under an 
                applicable payment system (as defined in 
                subparagraph (D)), an ordering professional 
                shall--
                          (i) consult with a qualified decision 
                        support mechanism listed under 
                        paragraph (3)(C); and
                          (ii) provide to the furnishing 
                        professional the information described 
                        in clauses (i) through (iii) of 
                        subparagraph (B).
                  (B) Reporting by furnishing professional.--
                Beginning with January 1, 2017, subject to 
                subparagraph (C), with respect to an applicable 
                imaging service furnished in an applicable 
                setting and paid for under an applicable 
                payment system (as defined in subparagraph 
                (D)), payment for such service may only be made 
                if the claim for the service includes the 
                following:
                          (i) Information about which qualified 
                        clinical decision support mechanism was 
                        consulted by the ordering professional 
                        for the service.
                          (ii) Information regarding--
                                  (I) whether the service 
                                ordered would adhere to the 
                                applicable appropriate use 
                                criteria specified under 
                                paragraph (2);
                                  (II) whether the service 
                                ordered would not adhere to 
                                such criteria; or
                                  (III) whether such criteria 
                                was not applicable to the 
                                service ordered.
                          (iii) The national provider 
                        identifier of the ordering professional 
                        (if different from the furnishing 
                        professional).
                  (C) Exceptions.--The provisions of 
                subparagraphs (A) and (B) and paragraph (6)(A) 
                shall not apply to the following:
                          (i) Emergency services.--An 
                        applicable imaging service ordered for 
                        an individual with an emergency medical 
                        condition (as defined in section 
                        1867(e)(1)).
                          (ii) Inpatient services.--An 
                        applicable imaging service ordered for 
                        an inpatient and for which payment is 
                        made under part A.
                          (iii) Significant hardship.--An 
                        applicable imaging service ordered by 
                        an ordering professional who the 
                        Secretary may, on a case-by-case basis, 
                        exempt from the application of such 
                        provisions if the Secretary determines, 
                        subject to annual renewal, that 
                        consultation with applicable 
                        appropriate use criteria would result 
                        in a significant hardship, such as in 
                        the case of a professional who 
                        practices in a rural area without 
                        sufficient Internet access.
                  (D) Applicable payment system defined.--In 
                this subsection, the term ``applicable payment 
                system'' means the following:
                          (i) The physician fee schedule 
                        established under section 1848(b).
                          (ii) The prospective payment system 
                        for hospital outpatient department 
                        services under section 1833(t).
                          (iii) The ambulatory surgical center 
                        payment systems under section 1833(i).
          (5) Identification of outlier ordering 
        professionals.--
                  (A) In general.--With respect to applicable 
                imaging services furnished beginning with 2017, 
                the Secretary shall determine, on an annual 
                basis, no more than five percent of the total 
                number of ordering professionals who are 
                outlier ordering professionals.
                  (B) Outlier ordering professionals.--The 
                determination of an outlier ordering 
                professional shall--
                          (i) be based on low adherence to 
                        applicable appropriate use criteria 
                        specified under paragraph (2), which 
                        may be based on comparison to other 
                        ordering professionals; and
                          (ii) include data for ordering 
                        professionals for whom prior 
                        authorization under paragraph (6)(A) 
                        applies.
                  (C) Use of two years of data.--The Secretary 
                shall use two years of data to identify outlier 
                ordering professionals under this paragraph.
                  (D) Process.--The Secretary shall establish a 
                process for determining when an outlier 
                ordering professional is no longer an outlier 
                ordering professional.
                  (E) Consultation with stakeholders.--The 
                Secretary shall consult with physicians, 
                practitioners and other stakeholders in 
                developing methods to identify outlier ordering 
                professionals under this paragraph.
          (6) Prior authorization for ordering professionals 
        who are outliers.--
                  (A) In general.--Beginning January 1, 2020, 
                subject to paragraph (4)(C), with respect to 
                services furnished during a year, the Secretary 
                shall, for a period determined appropriate by 
                the Secretary, apply prior authorization for 
                applicable imaging services that are ordered by 
                an outlier ordering professional identified 
                under paragraph (5).
                  (B) Appropriate use criteria in prior 
                authorization.--In applying prior authorization 
                under subparagraph (A), the Secretary shall 
                utilize only the applicable appropriate use 
                criteria specified under this subsection.
                  (C) Funding.--For purposes of carrying out 
                this paragraph, the Secretary shall provide for 
                the transfer, from the Federal Supplementary 
                Medical Insurance Trust Fund under section 
                1841, of $5,000,000 to the Centers for Medicare 
                & Medicaid Services Program Management Account 
                for each of fiscal years 2019 through 2021. 
                Amounts transferred under the preceding 
                sentence shall remain available until expended.
          (7) Construction.--Nothing in this subsection shall 
        be construed as granting the Secretary the authority to 
        develop or initiate the development of clinical 
        practice guidelines or appropriate use criteria.
  (r) Payment for Renal Dialysis Services for Individuals With 
Acute Kidney Injury.--
          (1) Payment rate.--In the case of renal dialysis 
        services (as defined in subparagraph (B) of section 
        1881(b)(14)) furnished under this part by a renal 
        dialysis facility or provider of services paid under 
        such section during a year (beginning with 2017) to an 
        individual with acute kidney injury (as defined in 
        paragraph (2)), the amount of payment under this part 
        for such services shall be the base rate for renal 
        dialysis services determined for such year under such 
        section, as adjusted by any applicable geographic 
        adjustment factor applied under subparagraph 
        (D)(iv)(II) of such section and may be adjusted by the 
        Secretary (on a budget neutral basis for payments under 
        this paragraph) by any other adjustment factor under 
        subparagraph (D) of such section.
          (2) Individual with acute kidney injury defined.--In 
        this subsection, the term ``individual with acute 
        kidney injury'' means an individual who has acute loss 
        of renal function and does not receive renal dialysis 
        services for which payment is made under section 
        1881(b)(14).
  (s) Payment for Applicable Disposable Devices.--
          (1) Separate payment.--The Secretary shall make a 
        payment (separate from the payments otherwise made 
        under section 1895) in the amount established under 
        paragraph (3) to a home health agency for an applicable 
        disposable device (as defined in paragraph (2)) when 
        furnished on or after January 1, 2017, to an individual 
        who receives home health services for which payment is 
        made under section 1895(b).
          (2) Applicable disposable device.--In this 
        subsection, the term applicable disposable device means 
        a disposable device that, as determined by the 
        Secretary, is--
                  (A) a disposable negative pressure wound 
                therapy device that is an integrated system 
                comprised of a non-manual vacuum pump, a 
                receptacle for collecting exudate, and 
                dressings for the purposes of wound therapy; 
                and
                  (B) a substitute for, and used in lieu of, a 
                negative pressure wound therapy durable medical 
                equipment item that is an integrated system of 
                a negative pressure vacuum pump, a separate 
                exudate collection canister, and dressings that 
                would otherwise be covered for individuals for 
                such wound therapy.
          (3) Payment amount.--The separate payment amount 
        established under this paragraph for an applicable 
        disposable device for a year shall be equal to the 
        amount of the payment that would be made under section 
        1833(t) (relating to payment for covered OPD services) 
        for the year for the Level I Healthcare Common 
        Procedure Coding System (HCPCS) code for which the 
        description for a professional service includes the 
        furnishing of such device.
  (t) Site-of-Service Price Transparency.--
          (1) In general.--In order to facilitate price 
        transparency with respect to items and services for 
        which payment may be made either to a hospital 
        outpatient department or to an ambulatory surgical 
        center under this title, the Secretary shall, for 2018 
        and each year thereafter, make available to the public 
        via a searchable Internet website, with respect to an 
        appropriate number of such items and services--
                  (A) the estimated payment amount for the item 
                or service under the outpatient department fee 
                schedule under subsection (t) of section 1833 
                and the ambulatory surgical center payment 
                system under subsection (i) of such section; 
                and
                  (B) the estimated amount of beneficiary 
                liability applicable to the item or service.
          (2) Calculation of estimated beneficiary liability.--
        For purposes of paragraph (1)(B), the estimated amount 
        of beneficiary liability, with respect to an item or 
        service, is the amount for such item or service for 
        which an individual who does not have coverage under a 
        Medicare supplemental policy certified under section 
        1882 or any other supplemental insurance coverage is 
        responsible.
          (3) Implementation.--In carrying out this subsection, 
        the Secretary--
                  (A) shall include in the notice described in 
                section 1804(a) a notification of the 
                availability of the estimated amounts made 
                available under paragraph (1); and
                  (B) may utilize mechanisms in existence on 
                the date of enactment of this subsection, such 
                as the portion of the Internet website of the 
                Centers for Medicare & Medicaid Services on 
                which information comparing physician 
                performance is posted (commonly referred to as 
                the Physician Compare Internet website), to 
                make available such estimated amounts under 
                such paragraph.
          (4) Funding.--For purposes of implementing this 
        subsection, the Secretary shall provide for the 
        transfer, from the Federal Supplementary Medical 
        Insurance Trust Fund under section 1841 to the Centers 
        for Medicare & Medicaid Services Program Management 
        Account, of $6,000,000 for fiscal year 2017, to remain 
        available until expended.
  (u) Payment and Related Requirements for Home Infusion 
Therapy.--
          (1) Payment.--
                  (A) Single payment.--
                          (i) In general.--Subject to clause 
                        (iii) and subparagraphs (B) and (C), 
                        the Secretary shall implement a payment 
                        system under which a single payment is 
                        made under this title to a qualified 
                        home infusion therapy supplier for 
                        items and services described in 
                        subparagraphs (A) and (B) of section 
                        1861(iii)(2)) furnished by a qualified 
                        home infusion therapy supplier (as 
                        defined in section 1861(iii)(3)(D)) in 
                        coordination with the furnishing of 
                        home infusion drugs (as defined in 
                        section 1861(iii)(3)(C)) under this 
                        part.
                          (ii) Unit of single payment.--A unit 
                        of single payment under the payment 
                        system implemented under this 
                        subparagraph is for each infusion drug 
                        administration calendar day in the 
                        individual's home. The Secretary shall, 
                        as appropriate, establish single 
                        payment amounts for types of infusion 
                        therapy, including to take into account 
                        variation in utilization of nursing 
                        services by therapy type.
                          (iii) Limitation.--The single payment 
                        amount determined under this 
                        subparagraph after application of 
                        subparagraph (B) and paragraph (3) 
                        shall not exceed the amount determined 
                        under the fee schedule under section 
                        1848 for infusion therapy services 
                        furnished in a calendar day if 
                        furnished in a physician office 
                        setting, except such single payment 
                        shall not reflect more than 5 hours of 
                        infusion for a particular therapy in a 
                        calendar day.
                  (B) Required adjustments.--The Secretary 
                shall adjust the single payment amount 
                determined under subparagraph (A) for home 
                infusion therapy services under section 
                1861(iii)(1) to reflect other factors such as--
                          (i) a geographic wage index and other 
                        costs that may vary by region; and
                          (ii) patient acuity and complexity of 
                        drug administration.
                  (C) Discretionary adjustments.--
                          (i) In general.--Subject to clause 
                        (ii), the Secretary may adjust the 
                        single payment amount determined under 
                        subparagraph (A) (after application of 
                        subparagraph (B)) to reflect outlier 
                        situations and other factors as the 
                        Secretary determines appropriate.
                          (ii) Requirement of budget 
                        neutrality.--Any adjustment under this 
                        subparagraph shall be made in a budget 
                        neutral manner.
          (2) Considerations.--In developing the payment system 
        under this subsection, the Secretary may consider the 
        costs of furnishing infusion therapy in the home, 
        consult with home infusion therapy suppliers, consider 
        payment amounts for similar items and services under 
        this part and part A, and consider payment amounts 
        established by Medicare Advantage plans under part C 
        and in the private insurance market for home infusion 
        therapy (including average per treatment day payment 
        amounts by type of home infusion therapy).
          (3) Annual updates.--
                  (A) In general.--Subject to subparagraph (B), 
                the Secretary shall update the single payment 
                amount under this subsection from year to year 
                beginning in 2022 by increasing the single 
                payment amount from the prior year by the 
                percentage increase in the Consumer Price Index 
                for all urban consumers (United States city 
                average) for the 12-month period ending with 
                June of the preceding year.
                  (B) Adjustment.--For each year, the Secretary 
                shall reduce the percentage increase described 
                in subparagraph (A) by the productivity 
                adjustment described in section 
                1886(b)(3)(B)(xi)(II). The application of the 
                preceding sentence may result in a percentage 
                being less than 0.0 for a year, and may result 
                in payment being less than such payment rates 
                for the preceding year.
          (4) Authority to apply prior authorization.--The 
        Secretary may, as determined appropriate by the 
        Secretary, apply prior authorization for home infusion 
        therapy services under section 1861(iii)(1).
          (5) Accreditation of qualified home infusion therapy 
        suppliers.--
                  (A) Factors for designation of accreditation 
                organizations.--The Secretary shall consider 
                the following factors in designating 
                accreditation organizations under subparagraph 
                (B) and in reviewing and modifying the list of 
                accreditation organizations designated pursuant 
                to subparagraph (C):
                          (i) The ability of the organization 
                        to conduct timely reviews of 
                        accreditation applications.
                          (ii) The ability of the organization 
                        to take into account the capacities of 
                        suppliers located in a rural area (as 
                        defined in section 1886(d)(2)(D)).
                          (iii) Whether the organization has 
                        established reasonable fees to be 
                        charged to suppliers applying for 
                        accreditation.
                          (iv) Such other factors as the 
                        Secretary determines appropriate.
                  (B) Designation.--Not later than January 1, 
                2021, the Secretary shall designate 
                organizations to accredit suppliers furnishing 
                home infusion therapy. The list of 
                accreditation organizations so designated may 
                be modified pursuant to subparagraph (C).
                  (C) Review and modification of list of 
                accreditation organizations.--
                          (i) In general.--The Secretary shall 
                        review the list of accreditation 
                        organizations designated under 
                        subparagraph (B) taking into account 
                        the factors under subparagraph (A). 
                        Taking into account the results of such 
                        review, the Secretary may, by 
                        regulation, modify the list of 
                        accreditation organizations designated 
                        under subparagraph (B).
                          (ii) Special rule for accreditations 
                        done prior to removal from list of 
                        designated accreditation 
                        organizations.--In the case where the 
                        Secretary removes an organization from 
                        the list of accreditation organizations 
                        designated under subparagraph (B), any 
                        supplier that is accredited by the 
                        organization during the period 
                        beginning on the date on which the 
                        organization is designated as an 
                        accreditation organization under 
                        subparagraph (B) and ending on the date 
                        on which the organization is removed 
                        from such list shall be considered to 
                        have been accredited by an organization 
                        designated by the Secretary under 
                        subparagraph (B) for the remaining 
                        period such accreditation is in effect.
                  (D) Rule for accreditations made prior to 
                designation.--In the case of a supplier that is 
                accredited before January 1, 2021, by an 
                accreditation organization designated by the 
                Secretary under subparagraph (B) as of January 
                1, 2019, such supplier shall be considered to 
                have been accredited by an organization 
                designated by the Secretary under such 
                paragraph as of January 1, 2023, for the 
                remaining period such accreditation is in 
                effect.
          (6) Notification of infusion therapy options 
        available prior to furnishing home infusion therapy.--
        Prior to the furnishing of home infusion therapy to an 
        individual, the physician who establishes the plan 
        described in section 1861(iii)(1) for the individual 
        shall provide notification (in a form, manner, and 
        frequency determined appropriate by the Secretary) of 
        the options available (such as home, physician's 
        office, hospital outpatient department) for the 
        furnishing of infusion therapy under this part.
          (7) Home infusion therapy services temporary 
        transitional payment.--
                  (A) Temporary transitional payment.--
                          (i) In general.--The Secretary shall, 
                        in accordance with the payment 
                        methodology described in subparagraph 
                        (B) and subject to the provisions of 
                        this paragraph, provide a home infusion 
                        therapy services temporary transitional 
                        payment under this part to an eligible 
                        home infusion supplier (as defined in 
                        subparagraph (F)) for items and 
                        services described in subparagraphs (A) 
                        and (B) of section 1861(iii)(2)) 
                        furnished during the period specified 
                        in clause (ii) by such supplier in 
                        coordination with the furnishing of 
                        transitional home infusion drugs (as 
                        defined in clause (iii)).
                          (ii) Period specified.--For purposes 
                        of clause (i), the period specified in 
                        this clause is the period beginning on 
                        January 1, 2019, and ending on the day 
                        before the date of the implementation 
                        of the payment system under paragraph 
                        (1)(A).
                          (iii) Transitional home infusion drug 
                        defined.--For purposes of this 
                        paragraph, the term ``transitional home 
                        infusion drug'' has the meaning given 
                        to the term ``home infusion drug'' 
                        under section 1861(iii)(3)(C)), except 
                        that clause (ii) of such section shall 
                        not apply if a drug described in such 
                        clause is identified in clauses (i), 
                        (ii), (iii) or (iv) of subparagraph (C) 
                        as of the date of the enactment of this 
                        paragraph.
                  (B) Payment methodology.--For purposes of 
                this paragraph, the Secretary shall establish a 
                payment methodology, with respect to items and 
                services described in subparagraph (A)(i). 
                Under such payment methodology the Secretary 
                shall--
                          (i) create the three payment 
                        categories described in clauses (i), 
                        (ii), and (iii) of subparagraph (C);
                          (ii) assign drugs to such categories, 
                        in accordance with such clauses;
                          (iii) assign appropriate Healthcare 
                        Common Procedure Coding System (HCPCS) 
                        codes to each payment category; and
                          (iv) establish a single payment 
                        amount for each such payment category, 
                        in accordance with subparagraph (D), 
                        for each infusion drug administration 
                        calendar day in the individual's home 
                        for drugs assigned to such category.
                  (C) Payment categories.--
                          (i) Payment category 1.--The 
                        Secretary shall create a payment 
                        category 1 and assign to such category 
                        drugs which are covered under the Local 
                        Coverage Determination on External 
                        Infusion Pumps (LCD number L33794) and 
                        billed with the following HCPCS codes 
                        (as identified as of July 1, 2017, and 
                        as subsequently modified by the 
                        Secretary): J0133, J0285, J0287, J0288, 
                        J0289, J0895, J1170, J1250, J1265, 
                        J1325, J1455, J1457, J1570, J2175, 
                        J2260, J2270, J2274, J2278, J3010, or 
                        J3285.
                          (ii) Payment category 2.--The 
                        Secretary shall create a payment 
                        category 2 and assign to such category 
                        drugs which are covered under such 
                        local coverage determination and billed 
                        with the following HCPCS codes (as 
                        identified as of July 1, 2017, and as 
                        subsequently modified by the 
                        Secretary): J1559 JB, J1561 JB, J1562 
                        JB, J1569 JB, or J1575 JB.
                          (iii) Payment category 3.--The 
                        Secretary shall create a payment 
                        category 3 and assign to such category 
                        drugs which are covered under such 
                        local coverage determination and billed 
                        with the following HCPCS codes (as 
                        identified as of July 1, 2017, and as 
                        subsequently modified by the 
                        Secretary): J9000, J9039, J9040, J9065, 
                        J9100, J9190, J9200, J9360, or J9370.
                          (iv) Infusion drugs not otherwise 
                        included.--With respect to drugs that 
                        are not included in payment category 1, 
                        2, or 3 under clause (i), (ii), or 
                        (iii), respectively, the Secretary 
                        shall assign to the most appropriate of 
                        such categories, as determined by the 
                        Secretary, drugs which are--
                                  (I) covered under such local 
                                coverage determination and 
                                billed under HCPCS codes J7799 
                                or J7999 (as identified as of 
                                July 1, 2017, and as 
                                subsequently modified by the 
                                Secretary); or
                                  (II) billed under any code 
                                that is implemented after the 
                                date of the enactment of this 
                                paragraph and included in such 
                                local coverage determination or 
                                included in subregulatory 
                                guidance as a home infusion 
                                drug described in subparagraph 
                                (A)(i).
                  (D) Payment amounts.--
                          (i) In general.--Under the payment 
                        methodology, the Secretary shall pay 
                        eligible home infusion suppliers, with 
                        respect to items and services described 
                        in subparagraph (A)(i) furnished during 
                        the period described in subparagraph 
                        (A)(ii) by such supplier to an 
                        individual, at amounts equal to the 
                        amounts determined under the physician 
                        fee schedule established under section 
                        1848 for services furnished during the 
                        year for codes and units of such codes 
                        described in clauses (ii), (iii), and 
                        (iv) with respect to drugs included in 
                        the payment category under subparagraph 
                        (C) specified in the respective clause, 
                        determined without application of any 
                        adjustment under such section.
                          (ii) Payment amount for category 1.--
                        For purposes of clause (i), the codes 
                        and units described in this clause, 
                        with respect to drugs included in 
                        payment category 1 described in 
                        subparagraph (C)(i), are one unit of 
                        HCPCS code 96365 plus four units of 
                        HCPCS code 96366 (as identified as of 
                        July 1, 2017, and as subsequently 
                        modified by the Secretary).
                          (iii) Payment amount for category 
                        2.--For purposes of clause (i), the 
                        codes and units described in this 
                        clause, with respect to drugs included 
                        in payment category 2 described in 
                        subparagraph (C)(i), are one unit of 
                        HCPCS code 96369 plus four units of 
                        HCPCS code 96370 (as identified as of 
                        July 1, 2017, and as subsequently 
                        modified by the Secretary).
                          (iv) Payment amount for category 3.--
                        For purposes of clause (i), the codes 
                        and units described in this clause, 
                        with respect to drugs included in 
                        payment category 3 described in 
                        subparagraph (C)(i), are one unit of 
                        HCPCS code 96413 plus four units of 
                        HCPCS code 96415 (as identified as of 
                        July 1, 2017, and as subsequently 
                        modified by the Secretary).
                  (E) Clarifications.--
                          (i) Infusion drug administration 
                        day.--For purposes of this subsection, 
                        a reference, with respect to the 
                        furnishing of transitional home 
                        infusion drugs or home infusion drugs 
                        to an individual by an eligible home 
                        infusion supplier, to payment to such 
                        supplier for an infusion drug 
                        administration calendar day in the 
                        individual's home shall refer to 
                        payment only for the date on which 
                        professional services (as described in 
                        section 1861(iii)(2)(A)) were furnished 
                        to administer such drugs to such 
                        individual. For purposes of the 
                        previous sentence, an infusion drug 
                        administration calendar day shall 
                        include all such drugs administered to 
                        such individual on such day.
                          (ii) Treatment of multiple drugs 
                        administered on same infusion drug 
                        administration day.--In the case that 
                        an eligible home infusion supplier, 
                        with respect to an infusion drug 
                        administration calendar day in an 
                        individual's home, furnishes to such 
                        individual transitional home infusion 
                        drugs which are not all assigned to the 
                        same payment category under 
                        subparagraph (C), payment to such 
                        supplier for such infusion drug 
                        administration calendar day in the 
                        individual's home shall be a single 
                        payment equal to the amount of payment 
                        under this paragraph for the drug, 
                        among all such drugs so furnished to 
                        such individual during such calendar 
                        day, for which the highest payment 
                        would be made under this paragraph.
                  (F) Eligible home infusion suppliers.--In 
                this paragraph, the term ``eligible home 
                infusion supplier'' means a supplier that is 
                enrolled under this part as a pharmacy that 
                provides external infusion pumps and external 
                infusion pump supplies and that maintains all 
                pharmacy licensure requirements in the State in 
                which the applicable infusion drugs are 
                administered.
                  (G) Implementation.--Notwithstanding any 
                other provision of law, the Secretary may 
                implement this paragraph by program instruction 
                or otherwise.

           *       *       *       *       *       *       *


          provisions relating to the administration of part b

  Sec. 1842. (a) The administration of this part shall be 
conducted through contracts with medicare administrative 
contractors under section 1874A.
  (b)
          (2)
  (C) In the case of residents of nursing facilities who 
receive services described in clause (i) or (ii) of section 
1861(s)(2)(K) performed by a member of a team, the Secretary 
shall instruct medicare administrative contractors to develop 
mechanisms which permit routine payment under this part for up 
to 1.5 visits per month per resident. In the previous sentence, 
the term ``team'' refers to a physician and includes a 
physician assistant acting under the supervision of the 
physician or a nurse practitioner working in collaboration with 
that physician, or both.
  (3) The Secretary--
          (A) shall take such action as may be necessary to 
        assure that, where payment under this part for a 
        service is on a cost basis, the cost is reasonable cost 
        (as determined under section 1861(v));
          (B) shall take such action as may be necessary to 
        assure that, where payment under this part for a 
        service is on a charge basis, such charge will be 
        reasonable and not higher than the charge applicable, 
        for a comparable service and under comparable 
        circumstances, to the policyholders and subscribers of 
        the medicare administrative contractor, and such 
        payment will (except as otherwise provided in section 
        1870(f)) be made--
                  (i) on the basis of an itemized bill; or
                  (ii) on the basis of an assignment under the 
                terms of which (I) the reasonable charge is the 
                full charge for the service, (II) the physician 
                or other person furnishing such service agrees 
                not to charge (and to refund amounts already 
                collected) for services for which payment under 
                this title is denied under section 1154(a)(2) 
                by reason of a determination under section 
                1154(a)(1)(B), and (III) the physician or other 
                person furnishing such service agrees not to 
                charge (and to refund amounts already 
                collected) for such service if payment may not 
                be made therefor by reason of the provisions of 
                paragraph (1) of section 1862(a), and if the 
                individual to whom such service was furnished 
                was without fault in incurring the expenses of 
                such service, and if the Secretary's 
                determination that payment (pursuant to such 
                assignment) was incorrect and was made 
                subsequent to the third year following the year 
                in which notice of such payment was sent to 
                such individual; except that the Secretary may 
                reduce such three-year period to not less than 
                one year if he finds such reduction is 
                consistent with the objectives of this title 
                (except in the case of physicians' services and 
                ambulance service furnished as described in 
                section 1862(a)(4), other than for purposes of 
                section 1870(f));
        but (in the case of bills submitted, or requests for 
        payment made, after March 1968) only if the bill is 
        submitted, or a written request for payment is made in 
        such other form as may be permitted under regulations, 
        no later than the period ending 1 calendar year after 
        the date of service;
          (F) shall take such action as may be necessary to 
        assure that where payment under this part for a service 
        rendered is on a charge basis, such payment shall be 
        determined on the basis of the charge that is 
        determined in accordance with this section on the basis 
        of customary and prevailing charge levels in effect at 
        the time the service was rendered or, in the case of 
        services rendered more than 12 months before the year 
        in which the bill is submitted or request for payment 
        is made, on the basis of such levels in effect for the 
        12-month period preceding such year;
          (G) shall, for a service that is furnished with 
        respect to an individual enrolled under this part, that 
        is not paid on an assignment-related basis, and that is 
        subject to a limiting charge under section 1848(g)--
                  (i) determine, prior to making payment, 
                whether the amount billed for such service 
                exceeds the limiting charge applicable under 
                section 1848(g)(2);
                  (ii) notify the physician, supplier, or other 
                person periodically (but not less often than 
                once every 30 days) of determinations that 
                amounts billed exceeded such applicable 
                limiting charges; and
                  (iii) provide for prompt response to 
                inquiries of physicians, suppliers, and other 
                persons concerning the accuracy of such 
                limiting charges for their services;
          (H) shall implement--
                  (i) programs to recruit and retain physicians 
                as participating physicians in the area served 
                by themedicare administrative contractor, 
                including educational and outreach activities 
                and the use of professional relations personnel 
                to handle billing and other problems relating 
                to payment of claims of participating 
                physicians; and
                  (ii) programs to familiarize beneficiaries 
                with the participating physician program and to 
                assist such beneficiaries in locating 
                participating physicians;
          (L) shall monitor and profile physicians' billing 
        patterns within each area or locality and provide 
        comparative data to physicians whose utilization 
        patterns vary significantly from other physicians in 
        the same payment area or locality.
In determining the reasonable charge for services for purposes 
of this paragraph, there shall be taken into consideration the 
customary charges for similar services generally made by the 
physician or other person furnishing such services, as well as 
the prevailing charges in the locality for similar services. No 
charge may be determined to be reasonable in the case of bills 
submitted or requests for payment made under this part after 
December 31, 1970, if it exceeds the higher of (i) the 
prevailing charge recognized by the carrier and found 
acceptable by the Secretary for similar services in the same 
locality in administering this part on December 31, 1970, or 
(ii) the prevailing charge level that, on the basis of 
statistical data and methodology acceptable to the Secretary, 
would cover 75 percent of the customary charges made for 
similar services in the same locality during the 12-month 
period ending on the June 30 last preceding the start of the 
calendar year in which the service is rendered. In the case of 
physicians' services the prevailing charge level determined for 
purposes of clause (ii) of the preceding sentence for any 
twelve-month period (beginning after June 30, 1973) specified 
in clause (ii) of such sentence may not exceed (in the 
aggregate) the level determined under such clause for the 
fiscal year ending June 30, 1973, or (with respect to 
physicians' services furnished in a year after 1987) the level 
determined under this sentence (or under any other provision of 
law affecting the prevailing charge level) for the previous 
year except to the extent that the Secretary finds, on the 
basis of appropriate economic index data, that such higher 
level is justified by year-to-year economic changes. With 
respect to power-operated wheelchairs for which payment may be 
made in accordance with section 1861(s)(6), charges determined 
to be reasonable may not exceed the lowest charge at which 
power-operated wheelchairs are available in the locality. In 
the case of medical services, supplies, and equipment 
(including equipment servicing) that, in the judgment of the 
Secretary, do not generally vary significantly in quality from 
one supplier to another, the charges incurred after December 
31, 1972, determined to be reasonable may not exceed the lowest 
charge levels at which such services, supplies, and equipment 
are widely and consistently available in a locality except to 
the extent and under the circumstances specified by the 
Secretary. The requirement in subparagraph (B) that a bill be 
submitted or request for payment be made by the close of the 
following calendar year shall not apply if (I) failure to 
submit the bill or request the payment by the close of such 
year is due to the error or misrepresentation of an officer, 
employee, fiscal intermediary, carrier, medicare administrative 
contractor, or agent of the Department of Health and Human 
Services performing functions under this title and acting 
within the scope of his or its authority, and (II) the bill is 
submitted or the payment is requested promptly after such error 
or misrepresentation is eliminated or corrected. 
Notwithstanding the provisions of the third and fourth 
sentences preceding this sentence, the prevailing charge level 
in the case of a physician service in a particular locality 
determined pursuant to such third and fourth sentences for any 
calendar year after 1974 shall, if lower than the prevailing 
charge level for the fiscal year ending June 30, 1975, in the 
case of a similar physician service in the same locality by 
reason of the application of economic index data, be raised to 
such prevailing charge level for the fiscal year ending June 
30, 1975, and shall remain at such prevailing charge level 
until the prevailing charge for a year (as adjusted by economic 
index data) equals or exceeds such prevailing charge level. The 
amount of any charges for outpatient services which shall be 
considered reasonable shall be subject to the limitations 
established by regulations issued by the Secretary pursuant to 
section 1861(v)(1)(K), and in determining the reasonable charge 
for such services, the Secretary may limit such reasonable 
charge to a percentage of the amount of the prevailing charge 
for similar services furnished in a physician's office, taking 
into account the extent to which overhead costs associated with 
such outpatient services have been included in the reasonable 
cost or charge of the facility. In applying subparagraph (B), 
the Secretary may specify exceptions to the 1 calendar year 
period specified in such subparagraph.
  (4)(A)(i) In determining the prevailing charge levels under 
the third and fourth sentences of paragraph (3) for physicians' 
services furnished during the 15-month period beginning July 1, 
1984, the Secretary shall not set any level higher than the 
same level as was set for the 12-month period beginning July 1, 
1983.
  (ii)(I) In determining the prevailing charge levels under the 
third and fourth sentences of paragraph (3) for physicians' 
services furnished during the 8-month period beginning May 1, 
1986, by a physician who is not a participating physician (as 
defined in subsection (h)(1)) at the time of furnishing the 
services, the Secretary shall not set any level higher than the 
same level as was set for the 12-month period beginning July 1, 
1983.
  (II) In determining the prevailing charge levels under the 
fourth sentence of paragraph (3) for physicians' services 
furnished during the 8-month period beginning May 1, 1986, by a 
physician who is a participating physician (as defined in 
subsection (h)(1)) at the time of furnishing the services, the 
Secretary shall permit an additional one percentage point 
increase in the increase otherwise permitted under that 
sentence.
  (iii) In determining the maximum allowable prevailing charges 
which may be recognized consistent with the index described in 
the fourth sentence of paragraph (3) for physicians' services 
furnished on or after January 1, 1987, by participating 
physicians, the Secretary shall treat the maximum allowable 
prevailing charges recognized as of December 31, 1986, under 
such sentence with respect to participating physicians as 
having been justified by economic changes.
  (iv) The reasonable charge for physicians' services furnished 
on or after January 1, 1987, and before January 1, 1992, by a 
nonparticipating physician shall be no greater than the 
applicable percent of the prevailing charge levels established 
under the third and fourth sentences of paragraph (3) (or under 
any other applicable provision of law affecting the prevailing 
charge level). In the previous sentence, the term ``applicable 
percent'' means for services furnished (I) on or after January 
1, 1987, and before April 1, 1988, 96 percent, (II) on or after 
April 1, 1988, and before January 1, 1989, 95.5 percent, and 
(III) on or after January 1, 1989, 95 percent.
  (v) In determining the prevailing charge levels under the 
third and fourth sentences of paragraph (3) for physicians' 
services furnished during the 3-month period beginning January 
1, 1988, the Secretary shall not set any level higher than the 
same level as was set for the 12-month period beginning January 
1, 1987.
  (vi) Before each year (beginning with 1989), the Secretary 
shall establish a prevailing charge floor for primary care 
services (as defined in subsection (i)(4)) equal to 60 percent 
of the estimated average prevailing charge levels based on the 
best available data (determined, under the third and fourth 
sentences of paragraph (3) and under paragraph (4), without 
regard to this clause and without regard to physician 
specialty) for such service for all localities in the United 
States (weighted by the relative frequency of the service in 
each locality) for the year.
  (vii) Beginning with 1987, the percentage increase in the MEI 
(as defined in subsection (i)(3)) for each year shall be the 
same for nonparticipating physicians as for participating 
physicians.
  (B)(i) In determining the reasonable charge under paragraph 
(3) for physicians' services furnished during the 15-month 
period beginning July 1, 1984, the customary charges shall be 
the same customary charges as were recognized under this 
section for the 12-month period beginning July 1, 1983.
  (ii) In determining the reasonable charge under paragraph (3) 
for physicians' services furnished during the 8-month period 
beginning May 1, 1986, by a physician who is not a 
participating physician (as defined in subsection (h)(1)) at 
the time of furnishing the services--
          (I) if the physician was not a participating 
        physician at any time during the 12-month period 
        beginning on October 1, 1984, the customary charges 
        shall be the same customary charges as were recognized 
        under this section for the 12-month period beginning 
        July 1, 1983, and
          (II) if the physician was a participating physician 
        at any time during the 12-month period beginning on 
        October 1, 1984, the physician's customary charges 
        shall be determined based upon the physician's actual 
        charges billed during the 12-month period ending on 
        March 31, 1985.
  (iii) In determining the reasonable charge under paragraph 
(3) for physicians' services furnished during the 3-month 
period beginning January 1, 1988, the customary charges shall 
be the same customary charges as were recognized under this 
section for the 12-month period beginning January 1, 1987.
  (iv) In determining the reasonable charge under paragraph (3) 
for physicians' services (other than primary care services, as 
defined in subsection (i)(4)) furnished during 1991, the 
customary charges shall be the same customary charges as were 
recognized under this section for the 9-month period beginning 
April 1, 1990. In a case in which subparagraph (F) applies 
(relating to new physicians) so as to limit the customary 
charges of a physician during 1990 to a percent of prevailing 
charges, the previous sentence shall not prevent such limit on 
customary charges under such subparagraph from increasing in 
1991 to a higher percent of such prevailing charges.
  (C) In determining the prevailing charge levels under the 
third and fourth sentences of paragraph (3) for physicians' 
services furnished during periods beginning after September 30, 
1985, the Secretary shall treat the level as set under 
subparagraph (A)(i) as having fully provided for the economic 
changes which would have been taken into account but for the 
limitations contained in subparagraph (A)(i).
  (D)(i) In determining the customary charges for physicians' 
services furnished during the 8-month period beginning May 1, 
1986, or the 12-month period beginning January 1, 1987, by a 
physician who was not a participating physician (as defined in 
subsection (h)(1)) on September 30, 1985, the Secretary shall 
not recognize increases in actual charges for services 
furnished during the 15- month period beginning on July 1, 
1984, above the level of the physician's actual charges billed 
in the 3-month period ending on June 30, 1984.
  (ii) In determining the customary charges for physicians' 
services furnished during the 12-month period beginning January 
1, 1987, by a physician who is not a participating physician 
(as defined in subsection (h)(1)) on April 30, 1986, the 
Secretary shall not recognize increases in actual charges for 
services furnished during the 7-month period beginning on 
October 1, 1985, above the level of the physician's actual 
charges billed during the 3-month period ending on June 30, 
1984.
  (iii) In determining the customary charges for physicians' 
services furnished during the 12-month period beginning January 
1, 1987, or January 1, 1988, by a physician who is not a 
participating physician (as defined in subsection (h)(1)) on 
December 31, 1986, the Secretary shall not recognize increases 
in actual charges for services furnished during the 8-month 
period beginning on May 1, 1986, above the level of the 
physician's actual charges billed during the 3-month period 
ending on June 30, 1984.
  (iv) In determining the customary charges for a physicians' 
service furnished on or after January 1, 1988, if a physician 
was a nonparticipating physician in a previous year (beginning 
with 1987), the Secretary shall not recognize any amount of 
such actual charges (for that service furnished during such 
previous year) that exceeds the maximum allowable actual charge 
for such service established under subsection (j)(1)(C).
  (E)(i) For purposes of this part for physicians' services 
furnished in 1987, the percentage increase in the MEI is 3.2 
percent.
  (ii) For purposes of this part for physicians' services 
furnished in 1988, on or after April 1, the percentage increase 
in the MEI is--
          (I) 3.6 percent for primary care services (as defined 
        in subsection (i)(4)), and
          (II) 1 percent for other physicians' services.
  (iii) For purposes of this part for physicians' services 
furnished in 1989, the percentage increase in the MEI is--
          (I) 3.0 percent for primary care services, and
          (II) 1 percent for other physicians' services.
  (iv) For purposes of this part for items and services 
furnished in 1990, after March 31, 1990, the percentage 
increase in the MEI is--
          (I) 0 percent for radiology services, for anesthesia 
        services, and for other services specified in the list 
        referred to in paragraph (14)(C)(i),
          (II) 2 percent for other services (other than primary 
        care services), and
          (III) such percentage increase in the MEI (as defined 
        in subsection (i)(3)) as would be otherwise determined 
        for primary care services (as defined in subsection 
        (i)(4)).
  (v) For purposes of this part for items and services 
furnished in 1991, the percentage increase in the MEI is--
          (I) 0 percent for services (other than primary care 
        services), and
          (II) 2 percent for primary care services (as defined 
        in subsection (i)(4)).
  (6) No payment under this part for a service provided to any 
individual shall (except as provided in section 1870) be made 
to anyone other than such individual or (pursuant to an 
assignment described in subparagraph (B)(ii) of paragraph (3)) 
the physician or other person who provided the service, except 
that (A) payment may be made (i) to the employer of such 
physician or other person if such physician or other person is 
required as a condition of his employment to turn over his fee 
for such service to his employer, or (ii) where the service was 
provided under a contractual arrangement between such physician 
or other person and an entity, to the entity if, under the 
contractual arrangement, the entity submits the bill for the 
service and the contractual arrangement meets such program 
integrity and other safeguards as the Secretary may determine 
to be appropriate, (B) payment may be made to an entity (i) 
which provides coverage of the services under a health benefits 
plan, but only to the extent that payment is not made under 
this part, (ii) which has paid the person who provided the 
service an amount (including the amount payable under this 
part) which that person has accepted as payment in full for the 
service, and (iii) to which the individual has agreed in 
writing that payment may be made under this part, (C) in the 
case of services described in clause (i) of section 
1861(s)(2)(K), payment shall be made to either (i) the employer 
of the physician assistant involved, or (ii) with respect to a 
physician assistant who was the owner of a rural health clinic 
(as described in section 1861(aa)(2)) for a continuous period 
beginning prior to the date of the enactment of the Balanced 
Budget Act of 1997 and ending on the date that the Secretary 
determines such rural health clinic no longer meets the 
requirements of section 1861(aa)(2), payment may be made 
directly to the physician assistant, (D) payment may be made to 
a physician for physicians' services (and services furnished 
incident to such services) furnished by a second physician to 
patients of the first physician if (i) the first physician is 
unavailable to provide the services; (ii) the services are 
furnished pursuant to an arrangement between the two physicians 
that (I) is informal and reciprocal, or (II) involves per diem 
or other fee-for-time compensation for such services; (iii) the 
services are not provided by the second physician over a 
continuous period of more than 60 days or are provided over a 
longer continuous period during all of which the first 
physician has been called or ordered to active duty as a member 
of a reserve component of the Armed Forces; and (iv) the claim 
form submitted to the medicare administrative contractor for 
such services includes the second physician's unique identifier 
(provided under the system established under subsection (r)) 
and indicates that the claim meets the requirements of this 
subparagraph for payment to the first physician, (E) in the 
case of an item or service (other than services described in 
section 1888(e)(2)(A)(ii)) furnished by, or under arrangements 
made by, a skilled nursing facility to an individual who (at 
the time the item or service is furnished) is a resident of a 
skilled nursing facility, payment shall be made to the 
facility, (F) in the case of home health services (including 
medical supplies described in section 1861(m)(5), but excluding 
durable medical equipment to the extent provided for in such 
section) furnished to an individual who (at the time the item 
or service is furnished) is under a plan of care of a home 
health agency, payment shall be made to the agency (without 
regard to whether or not the item or service was furnished by 
the agency, by others under arrangement with them made by the 
agency, or when any other contracting or consulting 
arrangement, or otherwise), (G) in the case of services in a 
hospital or clinic to which section 1880(e) applies, payment 
shall be made to such hospital or clinic, (H) in the case of 
services described in section 1861(aa)(3) that are furnished by 
a health care professional under contract with a Federally 
qualified health center, payment shall be made to the center, 
(I) in the case of home infusion therapy, payment shall be made 
to the qualified home infusion therapy supplier or, in the case 
of items and services described in clause (i) of section 
1834(u)(7)(A) furnished to an individual during the period 
described in clause (ii) of such section, payment shall be made 
to the eligible home infusion therapy supplier, and (J) in the 
case of outpatient physical therapy services furnished by 
physical therapists in a health professional shortage area (as 
defined in section 332(a)(1)(A) of the Public Health Service 
Act), a medically underserved area (as designated pursuant to 
section 330(b)(3)(A) of such Act), or a rural area (as defined 
in section 1886(d)(2)(D)), subparagraph (D) of this sentence 
shall apply to such services and therapists in the same manner 
as such subparagraph applies to physicians' services furnished 
by physicians. No payment which under the preceding sentence 
may be made directly to the physician or other person providing 
the service involved (pursuant to an assignment described in 
subparagraph (B)(ii) of paragraph (3)) shall be made to anyone 
else under a reassignment or power of attorney (except to an 
employer or entity as described in subparagraph (A) of such 
sentence); but nothing in this subsection shall be construed 
(i) to prevent the making of such a payment in accordance with 
an assignment from the individual to whom the service was 
provided or a reassignment from the physician or other person 
providing such service if such assignment or reassignment is 
made to a governmental agency or entity or is established by or 
pursuant to the order of a court of competent jurisdiction, or 
(ii) to preclude an agent of the physician or other person 
providing the service from receiving any such payment if (but 
only if) such agent does so pursuant to an agency agreement 
under which the compensation to be paid to the agent for his 
services for or in connection with the billing or collection of 
payments due such physician or other person under this title is 
unrelated (directly or indirectly) to the amount of such 
payments or the billings therefor, and is not dependent upon 
the actual collection of any such payment. For purposes of 
subparagraph (C) of the first sentence of this paragraph, an 
employment relationship may include any independent contractor 
arrangement, and employer status shall be determined in 
accordance with the law of the State in which the services 
described in such clause are performed.
  (7)(A) In the case of physicians' services furnished to a 
patient in a hospital with a teaching program approved as 
specified in section 1861(b)(6) but which does not meet the 
conditions described in section 1861(b)(7), the Secretary shall 
not provide (except on the basis described in subparagraph (C)) 
for payment for such services under this part--
          (i) unless--
                  (I) the physician renders sufficient personal 
                and identifiable physicians' services to the 
                patient to exercise full, personal control over 
                the management of the portion of the case for 
                which the payment is sought,
                  (II) the services are of the same character 
                as the services the physician furnishes to 
                patients not entitled to benefits under this 
                title, and
                  (III) at least 25 percent of the hospital's 
                patients (during a representative past period, 
                as determined by the Secretary) who were not 
                entitled to benefits under this title and who 
                were furnished services described in subclauses 
                (I) and (II) paid all or a substantial part of 
                charges (other than nominal charges) imposed 
                for such services; and
          (ii) to the extent that the payment is based upon a 
        reasonable charge for the services in excess of the 
        customary charge as determined in accordance with 
        subparagraph (B).
  (B) The customary charge for such services in a hospital 
shall be determined in accordance with regulations issued by 
the Secretary and taking into account the following factors:
          (i) In the case of a physician who is not a teaching 
        physician (as defined by the Secretary), the Secretary 
        shall take into account the amounts the physician 
        charges for similar services in the physician's 
        practice outside the teaching setting.
          (ii) In the case of a teaching physician, if the 
        hospital, its physicians, or other appropriate billing 
        entity has established one or more schedules of charges 
        which are collected for medical and surgical services, 
        the Secretary shall base payment under this title on 
        the greatest of--
                  (I) the charges (other than nominal charges) 
                which are most frequently collected in full or 
                substantial part with respect to patients who 
                were not entitled to benefits under this title 
                and who were furnished services described in 
                subclauses (I) and (II) of subparagraph (A)(i),
                  (II) the mean of the charges (other than 
                nominal charges) which were collected in full 
                or substantial part with respect to such 
                patients, or
                  (III) 85 percent of the prevailing charges 
                paid for similar services in the same locality.
          (iii) If all the teaching physicians in a hospital 
        agree to have payment made for all of their physicians' 
        services under this part furnished to patients in such 
        hospital on an assignment-related basis, the customary 
        charge for such services shall be equal to 90 percent 
        of the prevailing charges paid for similar services in 
        the same locality.
  (C) In the case of physicians' services furnished to a 
patient in a hospital with a teaching program approved as 
specified in section 1861(b)(6) but which does not meet the 
conditions described in section 1861(b)(7), if the conditions 
described in subclauses (I) and (II) of subparagraph (A)(i) are 
met and if the physician elects payment to be determined under 
this subparagraph, the Secretary shall provide for payment for 
such services under this part on the basis of regulations of 
the Secretary governing reimbursement for the services of 
hospital-based physicians (and not on any other basis).
  (D)(i) In the case of physicians' services furnished to a 
patient in a hospital with a teaching program approved as 
specified in section 1861(b)(6) but which does not meet the 
conditions described in section 1861(b)(7), no payment shall be 
made under this part for services of assistants at surgery with 
respect to a surgical procedure if such hospital has a training 
program relating to the medical specialty required for such 
surgical procedure and a qualified individual on the staff of 
the hospital is available to provide such services; except that 
payment may be made under this part for such services, to the 
extent that such payment is otherwise allowed under this 
paragraph, if such services, as determined under regulations of 
the Secretary--
          (I) are required due to exceptional medical 
        circumstances,
          (II) are performed by team physicians needed to 
        perform complex medical procedures, or
          (III) constitute concurrent medical care relating to 
        a medical condition which requires the presence of, and 
        active care by, a physician of another specialty during 
        surgery,
and under such other circumstances as the Secretary determines 
by regulation to be appropriate.
  (ii) For purposes of this subparagraph, the term ``assistant 
at surgery'' means a physician who actively assists the 
physician in charge of a case in performing a surgical 
procedure.
  (iii) The Secretary shall determine appropriate methods of 
reimbursement of assistants at surgery where such services are 
reimbursable under this part.
  (8)(A)(i) The Secretary shall by regulation--
          (I) describe the factors to be used in determining 
        the cases (of particular items or services) in which 
        the application of this title to payment under this 
        part (other than to physicians' services paid under 
        section 1848) results in the determination of an amount 
        that, because of its being grossly excessive or grossly 
        deficient, is not inherently reasonable, and
          (II) provide in those cases for the factors to be 
        considered in determining an amount that is realistic 
        and equitable.
  (ii) Notwithstanding the determination made in clause (i), 
the Secretary may not apply factors that would increase or 
decrease the payment under this part during any year for any 
particular item or service by more than 15 percent from such 
payment during the preceding year except as provided in 
subparagraph (B).
  (B) The Secretary may make a determination under this 
subparagraph that would result in an increase or decrease under 
subparagraph (A) of more than 15 percent of the payment amount 
for a year, but only if--
          (i) the Secretary's determination takes into account 
        the factors described in subparagraph (C) and any 
        additional factors the Secretary determines 
        appropriate,
          (ii) the Secretary's determination takes into account 
        the potential impacts described in subparagraph (D), 
        and
          (iii) the Secretary complies with the procedural 
        requirements of paragraph (9).
  (C) The factors described in this subparagraph are as 
follows:
          (i) The programs established under this title and 
        title XIX are the sole or primary sources of payment 
        for an item or service.
          (ii) The payment amount does not reflect changing 
        technology, increased facility with that technology, or 
        reductions in acquisition or production costs.
          (iii) The payment amount for an item or service under 
        this part is substantially higher or lower than the 
        payment made for the item or service by other 
        purchasers.
  (D) The potential impacts of a determination under 
subparagraph (B) on quality, access, and beneficiary liability, 
including the likely effects on assignment rates and 
participation rates.
  (9)(A) The Secretary shall consult with representatives of 
suppliers or other individuals who furnish an item or service 
before making a determination under paragraph (8)(B) with 
regard to that item or service.
  (B) The Secretary shall publish notice of a proposed 
determination under paragraph (8)(B) in the Federal Register--
          (i) specifying the payment amount proposed to be 
        established with respect to an item or service,
          (ii) explaining the factors and data that the 
        Secretary took into account in determining the payment 
        amount so specified, and
          (iii) explaining the potential impacts described in 
        paragraph (8)(D).
  (C) After publication of the notice required by subparagraph 
(B), the Secretary shall allow not less than 60 days for public 
comment on the proposed determination.
  (D)(i) Taking into consideration the comments made by the 
public, the Secretary shall publish in the Federal Register a 
final determination under paragraph (8)(B) with respect to the 
payment amount to be established with respect to the item or 
service.
  (ii) A final determination published pursuant to clause (i) 
shall explain the factors and data that the Secretary took into 
consideration in making the final determination.
  (10)(A)(i) In determining the reasonable charge for 
procedures described in subparagraph (B) and performed during 
the 9-month period beginning on April 1, 1988, the prevailing 
charge for such procedure shall be the prevailing charge 
otherwise recognized for such procedure for 1987--
          (I) subject to clause (iii), reduced by 2.0 percent, 
        and
          (II) further reduced by the applicable percentage 
        specified in clause (ii).
  (ii) For purposes of clause (i), the applicable percentage 
specified in this clause is--
          (I) 15 percent, in the case of a prevailing charge 
        otherwise recognized (without regard to this paragraph 
        and determined without regard to physician specialty) 
        that is at least 150 percent of the weighted national 
        average (as determined by the Secretary) of such 
        prevailing charges for such procedure for all 
        localities in the United States for 1987;
          (II) 0 percent, in the case of a prevailing charge 
        that does not exceed 85 percent of such weighted 
        national average; and
          (III) in the case of any other prevailing charge, a 
        percent determined on the basis of a straight line 
        sliding scale, equal to 3\1/3\ of a percentage point 
        for each percent by which the prevailing charge exceeds 
        85 percent of such weighted national average.
  (iii) In no case shall the reduction under clause (i) for a 
procedure result in a prevailing charge in a locality for 1988 
which is less than 85 percent of the Secretary's estimate of 
the weighted national average of such prevailing charges for 
such procedure for all localities in the United States for 1987 
(based upon the best available data and determined without 
regard to physician specialty) after making the reduction 
described in clause (i)(I).
  (B) The procedures described in this subparagraph are as 
follows: bronchoscopy, carpal tunnel repair, cataract surgery 
(including subsequent insertion of an intraocular lens), 
coronary artery bypass surgery, diagnostic and/or therapeutic 
dilation and curettage, knee arthroscopy, knee arthroplasty, 
pacemaker implantation surgery, total hip replacement, 
suprapubic prostatectomy, transurethral resection of the 
prostate, and upper gastrointestinal endoscopy.
  (C) In the case of a reduction in the reasonable charge for a 
physicians' service under subparagraph (A), if a 
nonparticipating physician furnishes the service to an 
individual entitled to benefits under this part, after the 
effective date of such reduction, the physician's actual charge 
is subject to a limit under subsection (j)(1)(D).
  (D) There shall be no administrative or judicial review under 
section 1869 or otherwise of any determination under 
subparagraph (A) or under paragraph (11)(B)(ii).
  (11)(A) In providing payment for cataract eyeglasses and 
cataract contact lenses, and professional services relating to 
them, under this part, each carrier shall--
          (i) provide for separate determinations of the 
        payment amount for the eyeglasses and lenses and of the 
        payment amount for the professional services of a 
        physician (as defined in section 1861(r)), and
          (ii) not recognize as reasonable for such eyeglasses 
        and lenses more than such amount as the Secretary 
        establishes in guidelines relating to the inherent 
        reasonableness of charges for such eyeglasses and 
        lenses.
  (B)(i) In determining the reasonable charge under paragraph 
(3) for a cataract surgical procedure, subject to clause (ii), 
the prevailing charge for such procedure otherwise recognized 
for participating and nonparticipating physicians shall be 
reduced by 10 percent with respect to procedures performed in 
1987.
  (ii) In no case shall the reduction under clause (i) for a 
surgical procedure result in a prevailing charge in a locality 
for a year which is less than 75 percent of the weighted 
national average of such prevailing charges for such procedure 
for all the localities in the United States for 1986.
  (C)(i) The prevailing charge level determined with respect to 
A-mode ophthalmic ultrasound procedures may not exceed 5 
percent of the prevailing charge level established with respect 
to extracapsular cataract removal with lens insertion.
  (ii) The reasonable charge for an intraocular lens inserted 
during or subsequent to cataract surgery in a physician's 
office may not exceed the actual acquisition cost for the lens 
(taking into account any discount) plus a handling fee (not to 
exceed 5 percent of such actual acquisition cost).
  (D) In the case of a reduction in the reasonable charge for a 
physicians' service or item under subparagraph (B) or (C), if a 
nonparticipating physician furnishes the service or item to an 
individual entitled to benefits under this part after the 
effective date of such reduction, the physician's actual charge 
is subject to a limit under subsection (j)(1)(D).
  (13)(A) In determining payments under section 1833(l) and 
section 1848 for anesthesia services furnished on or after 
January 1, 1994, the methodology for determining the base and 
time units used shall be the same for services furnished by 
physicians, for medical direction by physicians of two, three, 
or four certified registered nurse anesthetists, or for 
services furnished by a certified registered nurse anesthetist 
(whether or not medically directed) and shall be based on the 
methodology in effect, for anesthesia services furnished by 
physicians, as of the date of the enactment of the Omnibus 
Budget Reconciliation Act of 1993.
  (B) The Secretary shall require claims for physicians' 
services for medical direction of nurse anesthetists during the 
periods in which the provisions of subparagraph (A) apply to 
indicate the number of such anesthetists being medically 
directed concurrently at any time during the procedure, the 
name of each nurse anesthetist being directed, and the type of 
procedure for which the services are provided.
  (14)(A)(i) In determining the reasonable charge for a 
physicians' service specified in subparagraph (C)(i) and 
furnished during the 9-month period beginning on April 1, 1990, 
the prevailing charge for such service shall be the prevailing 
charge otherwise recognized for such service for 1989 reduced 
by 15 percent or, if less, \1/3\ of the percent (if any) by 
which the prevailing charge otherwise applied in the locality 
in 1989 exceeds the locally-adjusted reduced prevailing amount 
(as determined under subparagraph (B)(i)) for the service.
  (ii) In determining the reasonable charge for a physicians' 
service specified in subparagraph (C)(i) and furnished during 
1991, the prevailing charge for such service shall be the 
prevailing charge otherwise recognized for such service for the 
period during 1990 beginning on April 1, reduced by the same 
amount as the amount of the reduction effected under this 
paragraph (as amended by the Omnibus Budget Reconciliation Act 
of 1990) for such service during such period.
  (B) For purposes of this paragraph:
          (i) The ``locally-adjusted reduced prevailing 
        amount'' for a locality for a physicians' service is 
        equal to the product of--
                  (I) the reduced national weighted average 
                prevailing charge for the service (specified 
                under clause (ii)), and
                  (II) the adjustment factor (specified under 
                clause (iii)) for the locality.
          (ii) The ``reduced national weighted average 
        prevailing charge'' for a physicians' service is equal 
        to the national weighted average prevailing charge for 
        the service (specified in subparagraph (C)(ii)) reduced 
        by the percentage change (specified in subparagraph 
        (C)(iii)) for the service.
          (iii) The ``adjustment factor'', for a physicians' 
        service for a locality, is the sum of--
                  (I) the practice expense component (percent), 
                divided by 100, specified in appendix A (pages 
                187 through 194) of the Report of the Medicare 
                and Medicaid Health Budget Reconciliation 
                Amendments of 1989, prepared by the 
                Subcommittee on Health and the Environment of 
                the Committee on Energy and Commerce, House of 
                Representatives, (Committee Print 101 M, 101st 
                Congress, 1st Session) for the service, 
                multiplied by the geographic practice cost 
                index value (specified in subparagraph (C)(iv)) 
                for the locality, and
                  (II) 1 minus the practice expense component 
                (percent), divided by 100.
          (C) For purposes of this paragraph:
                  (i) The physicians' services specified in 
                this clause are the procedures specified (by 
                code and description) in the Overvalued 
                Procedures List for Finance Committee, Revised 
                September 20, 1989, prepared by the Physician 
                Payment Review Commission which specification 
                is of physicians' services that have been 
                identified as overvalued by at least 10 percent 
                based on a comparison of payments for such 
                services under a resource- based relative value 
                scale and of the national average prevailing 
                charges under this part.
                  (ii) The ``national weighted average 
                prevailing charge'' specified in this clause, 
                for a physicians' service specified in clause 
                (i), is the national weighted average 
                prevailing charge for the service in 1989 as 
                determined by the Secretary using the best data 
                available.
                  (iii) The ``percentage change'' specified in 
                this clause, for a physicians' service 
                specified in clause (i), is the percent 
                difference (but expressed as a positive number) 
                specified for the service in the list referred 
                to in clause (i).
                  (iv) The geographic practice cost index value 
                specified in this clause for a locality is the 
                Geographic Overhead Costs Index specified for 
                the locality in table 1 of the September 1989 
                Supplement to the Geographic Medicare Economic 
                Index: Alternative Approaches (prepared by the 
                Urban Institute and the Center for Health 
                Economics Research).
          (D) In the case of a reduction in the prevailing 
        charge for a physicians' service under subparagraph 
        (A), if a nonparticipating physician furnishes the 
        service to an individual entitled to benefits under 
        this part, after the effective date of such reduction, 
        the physician's actual charge is subject to a limit 
        under subsection (j)(1)(D).
  (15)(A) In determining the reasonable charge for surgery, 
radiology, and diagnostic physicians' services which the 
Secretary shall designate (based on their high volume of 
expenditures under this part) and for which the prevailing 
charge (but for this paragraph) differs by physician specialty, 
the prevailing charge for such a service may not exceed the 
prevailing charge or fee schedule amount for that specialty of 
physicians that furnish the service most frequently nationally.
  (B) In the case of a reduction in the prevailing charge for a 
physician's service under subparagraph (A), if 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 subsection (j)(1)(D).
  (16)(A) In determining the reasonable charge for all 
physicians' services other than physicians' services specified 
in subparagraph (B) furnished during 1991, the prevailing 
charge for a locality shall be 6.5 percent below the prevailing 
charges used in the locality under this part in 1990 after 
March 31.
  (B) For purposes of subparagraph (A), the physicians' 
services specified in this subparagraph are as follows:
          (i) Radiology, anesthesia and physician pathology 
        services, the technical components of diagnostic tests 
        specified in paragraph (17) and physicians' services 
        specified in paragraph (14)(C)(i).
          (ii) Primary care services specified in subsection 
        (i)(4), hospital inpatient medical services, 
        consultations, other visits, preventive medicine 
        visits, psychiatric services, emergency care facility 
        services, and critical care services.
          (iii) Partial mastectomy; tendon sheath injections 
        and small joint arthrocentesis; femoral fracture and 
        trochanteric fracture treatments; endotracheal 
        intubation; thoracentesis; thoracostomy; aneurysm 
        repair; cystourethroscopy; transurethral fulguration 
        and resection; tympanoplasty with mastoidectomy; and 
        ophthalmoscopy.
  (17) With respect to payment under this part for the 
technical (as distinct from professional) component of 
diagnostic tests (other than clinical diagnostic laboratory 
tests, tests specified in paragraph (14)(C)(i), and radiology 
services, including portable X-ray services) which the 
Secretary shall designate (based on their high volume of 
expenditures under this part), the reasonable charge for such 
technical component (including the applicable portion of a 
global service) may not exceed the national median of such 
charges for all localities, as estimated by the Secretary using 
the best available data.
  (18)(A) Payment for any service furnished by a practitioner 
described in subparagraph (C) and for which payment may be made 
under this part on a reasonable charge or fee schedule basis 
may only be made under this part on an assignment-related 
basis.
  (B) A practitioner described in subparagraph (C) or other 
person may not bill (or collect any amount from) the individual 
or another person for any service described in subparagraph 
(A), except for deductible and coinsurance amounts applicable 
under this part. No person is liable for payment of any amounts 
billed for such a service in violation of the previous 
sentence. If a practitioner or other person knowingly and 
willfully bills (or collects an amount) for such a service in 
violation of such sentence, the Secretary may apply sanctions 
against the practitioner or other person in the same manner as 
the Secretary may apply sanctions against a physician in 
accordance with subsection (j)(2) in the same manner as such 
section applies with respect to a physician. Paragraph (4) of 
subsection (j) shall apply in this subparagraph in the same 
manner as such paragraph applies to such section.
  (C) A practitioner described in this subparagraph is any of 
the following:
          (i) A physician assistant, nurse practitioner, or 
        clinical nurse specialist (as defined in section 
        1861(aa)(5)).
          (ii) A certified registered nurse anesthetist (as 
        defined in section 1861(bb)(2)).
          (iii) A certified nurse-midwife (as defined in 
        section 1861(gg)(2)).
          (iv) A clinical social worker (as defined in section 
        1861(hh)(1)).
          (v) A clinical psychologist (as defined by the 
        Secretary for purposes of section 1861(ii)).
          (vi) A registered dietitian or nutrition 
        professional.
  (D) For purposes of this paragraph, a service furnished by a 
practitioner described in subparagraph (C) includes any 
services and supplies furnished as incident to the service as 
would otherwise be covered under this part if furnished by a 
physician or as incident to a physician's service.
  (19) For purposes of section 1833(a)(1), the reasonable 
charge for ambulance services (as described in section 
1861(s)(7)) provided during calendar year 1998 and calendar 
year 1999 may not exceed the reasonable charge for such 
services provided during the previous calendar year (after 
application of this paragraph), 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 
reduced by 1.0 percentage point.
  (c)
  (2)(A) Each contract under section 1874A that provides for 
making payments under this part shall provide that payment 
shall be issued, mailed, or otherwise transmitted with respect 
to not less than 95 percent of all claims submitted under this 
part--
          (i) which are clean claims, and
          (ii) for which payment is not made on a periodic 
        interim payment basis,
within the applicable number of calendar days after the date on 
which the claim is received.
  (B) In this paragraph:
          (i) The term ``clean claim'' means a claim that has 
        no defect or impropriety (including any lack of any 
        required substantiating documentation) or particular 
        circumstance requiring special treatment that prevents 
        timely payment from being made on the claim under this 
        part.
          (ii) The term ``applicable number of calendar days''' 
        means--
                  (I) with respect to claims received in the 
                12-month period beginning October 1, 1986, 30 
                calendar days,
                  (II) with respect to claims received in the 
                12-month period beginning October 1, 1987, 26 
                calendar days (or 19 calendar days with respect 
                to claims submitted by participating 
                physicians),
                  (III) with respect to claims received in the 
                12-month period beginning October 1, 1988, 25 
                calendar days (or 18 calendar days with respect 
                to claims submitted by participating 
                physicians),
                  (IV) with respect to claims received in the 
                12-month period beginning October 1, 1989, and 
                claims received in any succeeding 12-month 
                period ending on or before September 30, 1993, 
                24 calendar days (or 17 calendar days with 
                respect to claims submitted by participating 
                physicians), and
                  (V) with respect to claims received in the 
                12-month period beginning October 1, 1993, and 
                claims received in any succeeding 12-month 
                period, 30 calendar days.
  (C) If payment is not issued, mailed, or otherwise 
transmitted within the applicable number of calendar days (as 
defined in clause (ii) of subparagraph (B)) after a clean claim 
(as defined in clause (i) of such subparagraph) is received, 
interest shall be paid at the rate used for purposes of section 
3902(a) of title 31, United States Code (relating to interest 
penalties for failure to make prompt payments) for the period 
beginning on the day after the required payment date and ending 
on the date on which payment is made.
  (3)(A) Each contract under this section which provides for 
the disbursement of funds, as described in section 
1874A(a)(3)(B), shall provide that no payment shall be issued, 
mailed, or otherwise transmitted with respect to any claim 
submitted under this title within the applicable number of 
calendar days after the date on which the claim is received.
  (B) In this paragraph, the term ``applicable number of 
calendar days''' means--
          (i) with respect to claims submitted electronically 
        as prescribed by the Secretary, 13 days, and
          (ii) with respect to claims submitted otherwise, 28 
        days.
  (4) Neither a medicare administrative contractor nor the 
Secretary may impose a fee under this title--
          (A) for the filing of claims related to physicians' 
        services,
          (B) for an error in filing a claim relating to 
        physicians' services or for such a claim which is 
        denied,
          (C) for any appeal under this title with respect to 
        physicians' services,
          (D) for applying for (or obtaining) a unique 
        identifier under subsection (r), or
          (E) for responding to inquiries respecting 
        physicians' services or for providing information with 
        respect to medical review of such services.
  (g) The Railroad Retirement Board shall, in accordance with 
such regulations as the Secretary may prescribe, contract with 
a medicare administrative contractor or contractors to perform 
the functions set out in this section with respect to 
individuals entitled to benefits as qualified railroad 
retirement beneficiaries pursuant to section 226(a) of this Act 
and section 7(d) of the Railroad Retirement Act of 1974.
  (h)(1) Any physician or supplier may voluntarily enter into 
an agreement with the Secretary to become a participating 
physician or supplier. For purposes of this section, the term 
``participating physician or supplier'' means a physician or 
supplier (excluding any provider of services) who, before the 
beginning of any year beginning with 1984, enters into an 
agreement with the Secretary which provides that such physician 
or supplier will accept payment under this part on an 
assignment-related basis for all items and services furnished 
to individuals enrolled under this part during such year. In 
the case of a newly licensed physician or a physician who 
begins a practice in a new area, or in the case of a new 
supplier who begins a new business, or in such similar cases as 
the Secretary may specify, such physician or supplier may enter 
into such an agreement after the beginning of a year, for items 
and services furnished during the remainder of the year.
  (2) The Secretary shall maintain a toll-free telephone number 
or numbers at which individuals enrolled under this part may 
obtain the names, addresses, specialty, and telephone numbers 
of participating physicians and suppliers and may request a 
copy of an appropriate directory published under paragraph (4). 
The Secretary shall, without charge, mail a copy of such 
directory upon such a request.
  (3)(A) In any case in which medicare administrative 
contractor having a contract under section 1874A that provides 
for making payments under this part is able to develop a system 
for the electronic transmission to such contractor of bills for 
services, such carrier shall establish direct lines for the 
electronic receipt of claims from participating physicians and 
suppliers.
  (B) The Secretary shall establish a procedure whereby an 
individual enrolled under this part may assign, in an 
appropriate manner on the form claiming a benefit under this 
part for an item or service furnished by a participating 
physician or supplier, the individual's rights of payment under 
a medicare supplemental policy (described in section 
1882(g)(1)) in which the individual is enrolled. In the case 
such an assignment is properly executed and a payment 
determination is made by a medicare administrative contractor 
with a contract under this section, the contractor shall 
transmit to the private entity issuing the medicare 
supplemental policy notice of such fact and shall include an 
explanation of benefits and any additional information that the 
Secretary may determine to be appropriate in order to enable 
the entity to decide whether (and the amount of) any payment is 
due under the policy. The Secretary may enter into agreements 
for the transmittal of such information to entities 
electronically. The Secretary shall impose user fees for the 
transmittal of information under this subparagraph by a 
medicare administrative contractor, whether electronically or 
otherwise, and such user fees shall be collected and retained 
by the contractor.
  (4) At the beginning of each year the Secretary shall publish 
directories (for appropriate local geographic areas) containing 
the name, address, and specialty of all participating 
physicians and suppliers (as defined in paragraph (1)) for that 
area for that year. Each directory shall be organized to make 
the most useful presentation of the information (as determined 
by the Secretary) for individuals enrolled under this part. 
Each participating physician directory for an area shall 
provide an alphabetical listing of all participating physicians 
practicing in the area and an alphabetical listing by locality 
and specialty of such physicians.
  (5)(A) The Secretary shall promptly notify individuals 
enrolled under this part through an annual mailing of the 
participation program under this subsection and the publication 
and availability of the directories and shall make the 
appropriate area directory or directories available in each 
district and branch office of the Social Security 
Administration, in the offices of medicare administrative 
contractors, and to senior citizen organizations.
  (B) The annual notice provided under subparagraph (A) shall 
include--
          (i) a description of the participation program,
          (ii) an explanation of the advantages to 
        beneficiaries of obtaining covered services through a 
        participating physician or supplier,
          (iii) an explanation of the assistance offered by 
        medicare administrative contractors in obtaining the 
        names of participating physicians and suppliers, and
          (iv) the toll-free telephone number under paragraph 
        (2)(A) for inquiries concerning the program and for 
        requests for free copies of appropriate directories.
  (6) The Secretary shall provide that the directories shall be 
available for purchase by the public. The Secretary shall 
provide that each appropriate area directory is sent to each 
participating physician located in that area and that an 
appropriate number of copies of each such directory is sent to 
hospitals located in the area. Such copies shall be sent free 
of charge.
  (7) The Secretary shall provide that each explanation of 
benefits provided under this part for services furnished in the 
United States, in conjunction with the payment of claims under 
section 1833(a)(1) (made other than on an assignment-related 
basis), shall include--
          (A) a prominent reminder of the participating 
        physician and supplier program established under this 
        subsection (including the limitation on charges that 
        may be imposed by such physicians and suppliers and a 
        clear statement of any amounts charged for the 
        particular items or services on the claim involved 
        above the amount recognized under this part),
          (B) the toll-free telephone number or numbers, 
        maintained under paragraph (2), at which an individual 
        enrolled under this part may obtain information on 
        participating physicians and suppliers,
          (C)(i) an offer of assistance to such an individual 
        in obtaining the names of participating physicians of 
        appropriate specialty and (ii) an offer to provide a 
        free copy of the appropriate participating physician 
        directory, and
          (D) in the case of services for which the billed 
        amount exceeds the limiting charge imposed under 
        section 1848(g), information regarding such applicable 
        limiting charge (including information concerning the 
        right to a refund under section 1848(g)(1)(A)(iv)).
  (8) The Secretary may refuse to enter into an agreement with 
a physician or supplier under this subsection, or may terminate 
or refuse to renew such agreement, in the event that such 
physician or supplier has been convicted of a felony under 
Federal or State law for an offense which the Secretary 
determines is detrimental to the best interests of the program 
or program beneficiaries.
  (9) The Secretary may revoke enrollment, for a period of not 
more than one year for each act, for a physician or supplier 
under section 1866(j) if such physician or supplier fails to 
maintain and, upon request of the Secretary, provide access to 
documentation relating to written orders or requests for 
payment for durable medical equipment, certifications for home 
health services, or referrals for other items or services 
written or ordered by such physician or supplier under this 
title, as specified by the Secretary.
  (i) For purposes of this title:
          (1) A claim is considered to be paid on an 
        ``assignment-related basis''' if the claim is paid on 
        the basis of an assignment described in subsection 
        (b)(3)(B)(ii), in accordance with subsection (b)(6)(B), 
        or under the procedure described in section 1870(f)(1).
          (2) The term ``participating physician'' refers, with 
        respect to the furnishing of services, to a physician 
        who at the time of furnishing the services is a 
        participating physician (under subsection (h)(1)); the 
        term ``nonparticipating physician'' refers, with 
        respect to the furnishing of services, to a physician 
        who at the time of furnishing the services is not a 
        participating physician; and the term 
        ``nonparticipating supplier or other person'' means a 
        supplier or other person (excluding a provider of 
        services) that is not a participating physician or 
        supplier (as defined in subsection (h)(1)).
          (3) The term ``percentage increase in the MEI'' 
        means, with respect to physicians' services furnished 
        in a year, the percentage increase in the medicare 
        economic index (referred to in the fourth sentence of 
        subsection (b)(3)) applicable to such services 
        furnished as of the first day of that year.
          (4) The term ``primary care services''' means 
        physicians' services which constitute office medical 
        services, emergency department services, home medical 
        services, skilled nursing, intermediate care, and long-
        term care medical services, or nursing home, boarding 
        home, domiciliary, or custodial care medical services.
  (j)(1)(A) In the case of a physician who is not a 
participating physician for items and services furnished during 
a portion of the 30-month period beginning July 1, 1984, the 
Secretary shall monitor the physician's actual charges to 
individuals enrolled under this part for physicians' services 
during that portion of that period. If such physician knowingly 
and willfully bills individuals enrolled under this part for 
actual charges in excess of such physician's actual charges for 
the calendar quarter beginning on April 1, 1984, the Secretary 
may apply sanctions against such physician in accordance with 
paragraph (2).
  (B)(i) During any period (on or after January 1, 1987, and 
before the date specified in clause (ii)), during which a 
physician is a nonparticipating physician, the Secretary shall 
monitor the actual charges of each such physician for 
physicians' services furnished to individuals enrolled under 
this part. If such physician knowingly and willfully bills on a 
repeated basis for such a service an actual charge in excess of 
the maximum allowable actual charge determined under 
subparagraph (C) for that service, the Secretary may apply 
sanctions against such physician in accordance with paragraph 
(2).
  (ii) Clause (i) shall not apply to services furnished after 
December 31, 1990.
  (C)(i) For a particular physicians' service furnished by a 
nonparticipating physician to individuals enrolled under this 
part during a year, for purposes of subparagraph (B), the 
maximum allowable actual charge is determined as follows: If 
the physician's maximum allowable actual charge for that 
service in the previous year was--
          (I) less than 115 percent of the applicable percent 
        (as defined in subsection (b)(4)(A)(iv)) of the 
        prevailing charge for the year and service involved, 
        the maximum allowable actual charge for the year 
        involved is the greater of the maximum allowable actual 
        charge described in subclause (II) or the charge 
        described in clause (ii), or
          (II) equal to, or greater than, 115 percent of the 
        applicable percent (as defined in subsection 
        (b)(4)(A)(iv)) of the prevailing charge for the year 
        and service involved, the maximum allowable actual 
        charge is 101 percent of the physician's maximum 
        allowable actual charge for the service for the 
        previous year.
  (ii) For purposes of clause (i)(I), the charge described in 
this clause for a particular physicians' service furnished in a 
year is the maximum allowable actual charge for the service of 
the physician for the previous year plus the product of (I) the 
applicable fraction (as defined in clause (iii)) and (II) the 
amount by which 115 percent of the prevailing charge for the 
year involved for such service furnished by nonparticipating 
physicians, exceeds the physician's maximum allowable actual 
charge for the service for the previous year.
  (iii) In clause (ii), the ``applicable fraction'' is--
          (I) for 1987, \1/4\,
          (II) for 1988, \1/3\,
          (III) for 1989, \1/2\, and
          (IV) for any subsequent year, 1.
  (iv) For purposes of determining the maximum allowable actual 
charge under clauses (i) and (ii) for 1987, in the case of a 
physicians' service for which the physician has actual charges 
for the calendar quarter beginning on April 1, 1984, the 
``maximum allowable actual charge'' for 1986 is the physician's 
actual charge for such service furnished during such quarter.
  (v) For purposes of determining the maximum allowable actual 
charge under clauses (i) and (ii) for a year after 1986, in the 
case of a physicians' service for which the physician has no 
actual charges for the calendar quarter beginning on April 1, 
1984, and for which a maximum allowable actual charge has not 
been previously established under this clause, the ``maximum 
allowable actual charge'' for the previous year shall be the 
50th percentile of the customary charges for the service 
(weighted by frequency of the service) performed by 
nonparticipating physicians in the locality during the 12-month 
period ending June 30 of that previous year.
  (vi) For purposes of this subparagraph, a ``physician's 
actual charge'' for a physicians' service furnished in a year 
or other period is the weighted average (or, at the option of 
the Secretary for a service furnished in the calendar quarter 
beginning April 1, 1984, the median) of the physician's charges 
for such service furnished in the year or other period.
  (vii) In the case of a nonparticipating physician who was a 
participating physician during a previous period, for the 
purpose of computing the physician's maximum allowable actual 
charge during the physician's period of nonparticipation, the 
physician shall be deemed to have had a maximum allowable 
actual charge during the period of participation, and such 
deemed maximum allowable actual charge shall be determined 
according to clauses (i) through (vi).
  (viii) Notwithstanding any other provision of this 
subparagraph, the maximum allowable actual charge for a 
particular physician's service furnished by a nonparticipating 
physician to individuals enrolled under this part during the 3-
month period beginning on January 1, 1988, shall be the amount 
determined under this subparagraph for 1987. The maximum 
allowable actual charge for any such service otherwise 
determined under this subparagraph for 1988 shall take effect 
on April 1, 1988.
  (ix) If there is a reduction under subsection (b)(13) in the 
reasonable charge for medical direction furnished by a 
nonparticipating physician, the maximum allowable actual charge 
otherwise permitted under this subsection for such services 
shall be reduced in the same manner and in the same percentage 
as the reduction in such reasonable charge.
  (D)(i) If an action described in clause (ii) results in a 
reduction in a reasonable charge for a physicians' service or 
item and a nonparticipating physician furnishes the service or 
item to an individual entitled to benefits under this part 
after the effective date of such action, the physician may not 
charge the individual more than 125 percent of the reduced 
payment allowance (as defined in clause (iii)) plus (for 
services or items furnished during the 12-month period (or 9-
month period in the case of an action described in clause 
(ii)(II)) beginning on the effective date of the action) \1/2\ 
of the amount by which the physician's maximum allowable actual 
charge for the service or item for the previous 12- month 
period exceeds such 125 percent level.
  (ii) The first sentence of clause (i) shall apply to--
          (I) an adjustment under subsection (b)(8)(B) 
        (relating to inherent reasonableness),
          (II) a reduction under subsection (b)(10)(A) or 
        (b)(14)(A) (relating to certain overpriced procedures),
          (III) a reduction under subsection (b)(11)(B) 
        (relating to certain cataract procedures),
          (IV) a prevailing charge limit established under 
        subsection (b)(11)(C)(i) or (b)(15)(A),
          (V) a reasonable charge limit established under 
        subsection (b)(11)(C)(ii), and
          (VI) an adjustment under section 1833(l)(3)(B) 
        (relating to physician supervision of certified 
        registered nurse anesthetists).
  (iii) In clause (i), the term ``reduced payment allowance'' 
means, with respect to an action--
          (I) under subsection (b)(8)(B), the inherently 
        reasonable charge established under subsection (b)(8);
          (II) under subsection (b)(10)(A), (b)(11)(B), 
        (b)(11)(C)(i), (b)(14)(A), or (b)(15)(A) or under 
        section 1833(l)(3)(B), the prevailing charge for the 
        service after the action; or
          (III) under subsection (b)(11)(C)(ii), the payment 
        allowance established under such subsection.
  (iv) If a physician knowingly and willfully bills in 
violation of clause (i) (whether or not such charge violates 
subparagraph (B)), the Secretary may apply sanctions against 
such physician in accordance with paragraph (2).
  (v) Clause (i) shall not apply to items and services 
furnished after December 31, 1990.
  (2) Subject to paragraph (3), the sanctions which the 
Secretary may apply under this paragraph are--
          (A) excluding a physician 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, or
          (B) civil monetary penalties and assessments, in the 
        same manner as such penalties and assessments are 
        authorized under section 1128A(a),
or both. The provisions of section 1128A (other than the first 
2 sentences of subsection (a) and other than subsection (b)) 
shall apply to a civil money penalty and assessment under 
subparagraph (B) in the same manner as such provisions apply to 
a penalty, assessment, or proceeding under section 1128A(a), 
except to the extent such provisions are inconsistent with 
subparagraph (A) or paragraph (3).
  (3)(A) The Secretary may not exclude a physician pursuant to 
paragraph (2)(A) if such physician is a sole community 
physician or sole source of essential specialized services in a 
community.
  (B) The Secretary shall take into account access of 
beneficiaries to physicians' services for which payment may be 
made under this part in determining whether to bar a physician 
from participation under paragraph (2)(A).
  (4) The Secretary may, out of any civil monetary penalty or 
assessment collected from a physician pursuant to this 
subsection, make a payment to a beneficiary enrolled under this 
part in the nature of restitution for amounts paid by such 
beneficiary to such physician which was determined to be an 
excess charge under paragraph (1).
  (k)(1) If a physician knowingly and willfully presents or 
causes to be presented a claim or bills an individual enrolled 
under this part for charges for services as an assistant at 
surgery for which payment may not be made by reason of section 
1862(a)(15), the Secretary may apply sanctions against such 
physician in accordance with subsection (j)(2) in the case of 
surgery performed on or after March 1, 1987.
  (2) If a physician knowingly and willfully presents or causes 
to be presented a claim or bills an individual enrolled under 
this part for charges that includes a charge for an assistant 
at surgery for which payment may not be made by reason of 
section 1862(a)(15), the Secretary may apply sanctions against 
such physician in accordance with subsection (j)(2) in the case 
of surgery performed on or after March 1, 1987.
  (l)(1)(A) Subject to subparagraph (C), if--
          (i) a nonparticipating physician furnishes services 
        to an individual enrolled for benefits under this part,
          (ii) payment for such services is not accepted on an 
        assignment-related basis,
          (iii)(I) a medicare administrative contractor 
        determines under this part or a quality improvement 
        organization determines under part B of title XI that 
        payment may not be made by reason of section 1862(a)(1) 
        because a service otherwise covered under this title is 
        not reasonable and necessary under the standards 
        described in that section or (II) payment under this 
        title for such services is denied under section 
        1154(a)(2) by reason of a determination under section 
        1154(a)(1)(B), and
          (iv) the physician has collected any amounts for such 
        services,
the physician shall refund on a timely basis to the individual 
(and shall be liable to the individual for) any amounts so 
collected.
  (B) A refund under subparagraph (A) is considered to be on a 
timely basis only if--
          (i) in the case of a physician who does not request 
        reconsideration or seek appeal on a timely basis, the 
        refund is made within 30 days after the date the 
        physician receives a denial notice under paragraph (2), 
        or
          (ii) in the case in which such a reconsideration or 
        appeal is taken, the refund is made within 15 days 
        after the date the physician receives notice of an 
        adverse determination on reconsideration or appeal.
  (C) Subparagraph (A) shall not apply to the furnishing of a 
service by a physician to an individual in the case described 
in subparagraph (A)(iii)(I) if--
          (i) the physician establishes that the physician did 
        not know and could not reasonably have been expected to 
        know that payment may not be made for the service by 
        reason of section 1862(a)(1), or
          (ii) before the service was provided, the individual 
        was informed that payment under this part may not be 
        made for the specific service and the individual has 
        agreed to pay for that service.
  (2) Each medicare administrative contractor with a contract 
in effect under this section with respect to physicians and 
each quality improvement organization with a contract under 
part B of title XI shall send any notice of denial of payment 
for physicians' services based on section 1862(a)(1) and for 
which payment is not requested on an assignment-related basis 
to the physician and the individual involved.
  (3) If a physician knowingly and willfully fails to make 
refunds in violation of paragraph (1)(A), the Secretary may 
apply sanctions against such physician in accordance with 
subsection (j)(2).
  (m)(1) In the case of a nonparticipating physician who--
          (A) performs an elective surgical procedure for an 
        individual enrolled for benefits under this part and 
        for which the physician's actual charge is at least 
        $500, and
          (B) does not accept payment for such procedure on an 
        assignment-related basis,
the physician must disclose to the individual, in writing and 
in a form approved by the Secretary, the physician's estimated 
actual charge for the procedure, the estimated approved charge 
under this part for the procedure, the excess of the 
physician's actual charge over the approved charge, and the 
coinsurance amount applicable to the procedure. The written 
estimate may not be used as the basis for, or evidence in, a 
civil suit.
  (2) A physician who fails to make a disclosure required under 
paragraph (1) with respect to a procedure shall refund on a 
timely basis to the individual (and shall be liable to the 
individual for) any amounts collected for the procedure in 
excess of the charges recognized and approved under this part.
  (3) If a physician knowingly and willfully fails to comply 
with paragraph (2), the Secretary may apply sanctions against 
such physician in accordance with subsection (j)(2).
  (4) The Secretary shall provide for such monitoring of 
requests for payment for physicians' services to which 
paragraph (1) applies as is necessary to assure compliance with 
paragraph (2).
  (n)(1) If a physician's bill or a request for payment for 
services billed by a physician includes a charge for a 
diagnostic test described in section 1861(s)(3) (other than a 
clinical diagnostic laboratory test) for which the bill or 
request for payment does not indicate that the billing 
physician personally performed or supervised the performance of 
the test or that another physician with whom the physician who 
shares a practice personally performed or supervised the 
performance of the test, the amount payable with respect to the 
test shall be determined as follows:
          (A) If the bill or request for payment indicates that 
        the test was performed by a supplier, identifies the 
        supplier, and indicates the amount the supplier charged 
        the billing physician, payment for the test (less the 
        applicable deductible and coinsurance amounts) shall be 
        the actual acquisition costs (net of any discounts) or, 
        if lower, the supplier's reasonable charge (or other 
        applicable limit) for the test.
          (B) If the bill or request for payment (i) does not 
        indicate who performed the test, or (ii) indicates that 
        the test was performed by a supplier but does not 
        identify the supplier or include the amount charged by 
        the supplier, no payment shall be made under this part.
  (2) A physician may not bill an individual enrolled under 
this part--
          (A) any amount other than the payment amount 
        specified in paragraph (1)(A) and any applicable 
        deductible and coinsurance for a diagnostic test for 
        which payment is made pursuant to paragraph (1)(A), or
          (B) any amount for a diagnostic test for which 
        payment may not be made pursuant to paragraph (1)(B).
  (3) If a physician knowingly and willfully in repeated cases 
bills one or more individuals in violation of paragraph (2), 
the Secretary may apply sanctions against such physician in 
accordance with section 1842(j)(2).
  (o)(1) If a physician's, supplier's, or any other person's 
bill or request for payment for services includes a charge for 
a drug or biological for which payment may be made under this 
part and the drug or biological is not paid on a cost or 
prospective payment basis as otherwise provided in this part, 
the amount payable for the drug or biological is equal to the 
following:
          (A) In the case of any of the following drugs or 
        biologicals, 95 percent of the average wholesale price:
                  (i) A drug or biological furnished before 
                January 1, 2004.
                  (ii) Blood clotting factors furnished during 
                2004.
                  (iii) A drug or biological furnished during 
                2004 that was not available for payment under 
                this part as of April 1, 2003.
                  (iv) A vaccine described in subparagraph (A) 
                or (B) of section 1861(s)(10) furnished on or 
                after January 1, 2004.
                  (v) A drug or biological furnished during 
                2004 in connection with the furnishing of renal 
                dialysis services if separately billed by renal 
                dialysis facilities.
          (B) In the case of a drug or biological furnished 
        during 2004 that is not described in--
                  (i) clause (ii), (iii), (iv), or (v) of 
                subparagraph (A),
                  (ii) subparagraph (D)(i), or
                  (iii) subparagraph (F),
        the amount determined under paragraph (4).
          (C) In the case of a drug or biological that is not 
        described in subparagraph (A)(iv), (D)(i), or (F) 
        furnished on or after January 1, 2005 (and including a 
        drug or biological described in subparagraph (D)(i) 
        furnished on or after January 1, 2017), the amount 
        provided under section 1847, section 1847A, section 
        1847B, or section 1881(b)(13), as the case may be for 
        the drug or biological.
          (D)(i) Except as provided in clause (ii), in the case 
        of infusion drugs or biologicals furnished through an 
        item of durable medical equipment covered under section 
        1861(n) on or after January 1, 2004, and before January 
        1, 2017, 95 percent of the average wholesale price in 
        effect on October 1, 2003.
          (ii) In the case of such infusion drugs or 
        biologicals furnished in a competitive acquisition area 
        under section 1847 on or after January 1, 2007, and 
        before the date of the enactment of the 21st Century 
        Cures Act., the amount provided under section 1847.
          (E) In the case of a drug or biological, consisting 
        of intravenous immune globulin, furnished--
                  (i) in 2004, the amount of payment provided 
                under paragraph (4); and
                  (ii) in 2005 and subsequent years, the amount 
                of payment provided under section 1847A.
          (F) In the case of blood and blood products (other 
        than blood clotting factors), the amount of payment 
        shall be determined in the same manner as such amount 
        of payment was determined on October 1, 2003.
          (G) In the case of inhalation drugs or biologicals 
        furnished through durable medical equipment covered 
        under section 1861(n) that are furnished--
                  (i) in 2004, the amount provided under 
                paragraph (4) for the drug or biological; and
                  (ii) in 2005 and subsequent years, the amount 
                provided under section 1847A for the drug or 
                biological.
  (2) If payment for a drug or biological is made to a licensed 
pharmacy approved to dispense drugs or biologicals under this 
part, the Secretary may pay a dispensing fee (less the 
applicable deductible and coinsurance amounts) to the pharmacy. 
This paragraph shall not apply in the case of payment under 
paragraph (1)(C).
  (3)(A) Payment for a charge for any drug or biological for 
which payment may be made under this part may be made only on 
an assignment-related basis.
  (B) The provisions of subsection (b)(18)(B) shall apply to 
charges for such drugs or biologicals in the same manner as 
they apply to services furnished by a practitioner described in 
subsection (b)(18)(C).
  (4)(A) Subject to the succeeding provisions of this 
paragraph, the amount of payment for a drug or biological under 
this paragraph furnished in 2004 is equal to 85 percent of the 
average wholesale price (determined as of April 1, 2003) for 
the drug or biological.
  (B) The Secretary shall substitute for the percentage under 
subparagraph (A) for a drug or biological the percentage that 
would apply to the drug or biological under the column entitled 
``Average of GAO and OIG data (percent)'' in the table entitled 
``Table 3.--Medicare Part B Drugs in the Most Recent GAO and 
OIG Studies''' published on August 20, 2003, in the Federal 
Register (68 Fed. Reg. 50445).
  (C)(i) The Secretary may substitute for the percentage under 
subparagraph (A) a percentage that is based on data and 
information submitted by the manufacturer of the drug or 
biological by October 15, 2003.
  (ii) The Secretary may substitute for the percentage under 
subparagraph (A) with respect to drugs and biologicals 
furnished during 2004 on or after April 1, 2004, a percentage 
that is based on data and information submitted by the 
manufacturer of the drug or biological after October 15, 2003, 
and before January 1, 2004.
  (D) In no case may the percentage substituted under 
subparagraph (B) or (C) be less than 80 percent.
  (5)(A) Subject to subparagraph (B), in the case of clotting 
factors furnished on or after January 1, 2005, the Secretary 
shall, after reviewing the January 2003 report to Congress by 
the Comptroller General of the United States entitled ``Payment 
for Blood Clotting Factor Exceeds Providers Acquisition Cost'', 
provide for a separate payment, to the entity which furnishes 
to the patient blood clotting factors, for items and services 
related to the furnishing of such factors in an amount that the 
Secretary determines to be appropriate. Such payment amount may 
take into account any or all of the following:
          (i) The mixing (if appropriate) and delivery of 
        factors to an individual, including special inventory 
        management and storage requirements.
          (ii) Ancillary supplies and patient training 
        necessary for the self-administration of such factors.
  (B) In determining the separate payment amount under 
subparagraph (A) for blood clotting factors furnished in 2005, 
the Secretary shall ensure that the total amount of payments 
under this part (as estimated by the Secretary) for such 
factors under paragraph (1)(C) and such separate payments for 
such factors does not exceed the total amount of payments that 
would have been made for such factors under this part (as 
estimated by the Secretary) if the amendments made by section 
303 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 had not been enacted.
  (C) The separate payment amount under this subparagraph for 
blood clotting factors furnished in 2006 or a subsequent year 
shall be equal to the separate payment amount determined under 
this paragraph for the previous year increased by the 
percentage increase in the consumer price index for medical 
care for the 12-month period ending with June of the previous 
year.
  (6) In the case of an immunosuppressive drug described in 
subparagraph (J) of section 1861(s)(2) and an oral drug 
described in subparagraph (Q) or (T) of such section, the 
Secretary shall pay to the pharmacy a supplying fee for such a 
drug determined appropriate by the Secretary (less the 
applicable deductible and coinsurance amounts).
  (7) There shall be no administrative or judicial review under 
section 1869, section 1878, or otherwise, of determinations of 
payment amounts, methods, or adjustments under paragraphs (4) 
through (6).
  (p)(1) Each request for payment, or bill submitted, for an 
item or service furnished by a physician or practitioner 
specified in subsection (b)(18)(C) for which payment may be 
made under this part shall include the appropriate diagnosis 
code (or codes) as established by the Secretary for such item 
or service.
  (2) In the case of a request for payment for an item or 
service furnished by a physician or practitioner specified in 
subsection (b)(18)(C) on an assignment-related basis which does 
not include the code (or codes) required under paragraph (1), 
payment may be denied under this part.
  (3) In the case of a request for payment for an item or 
service furnished by a physician not submitted on an 
assignment-related basis and which does not include the code 
(or codes) required under paragraph (1)--
          (A) if the physician knowingly and willfully fails to 
        provide the code (or codes) promptly upon request of 
        the Secretary or a medicare administrative contractor, 
        the physician may be subject to a civil money penalty 
        in an amount not to exceed $2,000, and
          (B) if the physician knowingly, willfully, and in 
        repeated cases fails, after being notified by the 
        Secretary of the obligations and requirements of this 
        subsection, to include the code (or codes) required 
        under paragraph (1), the physician may be subject to 
        the sanction described in section 1842(j)(2)(A).
The provisions of section 1128A (other than subsections (a) and 
(b)) shall apply to civil money penalties under subparagraph 
(A) in the same manner as they apply to a penalty or proceeding 
under section 1128A(a).
  (4) In the case of an item or service defined in paragraph 
(3), (6), (8), or (9) of subsection 1861(s) ordered by a 
physician or a practitioner specified in subsection (b)(18)(C), 
but furnished by another entity, if the Secretary (or fiscal 
agent of the Secretary) requires the entity furnishing the item 
or service to provide diagnostic or other medical information 
in order for payment to be made to the entity, the physician or 
practitioner shall provide that information to the entity at 
the time that the item or service is ordered by the physician 
or practitioner.
  (q)(1)(A) The Secretary, in consultation with groups 
representing physicians who furnish anesthesia services, shall 
establish by regulation a relative value guide for use in all 
localities in making payment for physician anesthesia services 
furnished under this part. Such guide shall be designed so as 
to result in expenditures under this title for such services in 
an amount that would not exceed the amount of such expenditures 
which would otherwise occur.
  (B) For physician anesthesia services furnished under this 
part during 1991, the prevailing charge conversion factor used 
in a locality under this subsection shall, subject to clause 
(iv), be reduced to the adjusted prevailing charge conversion 
factor for the locality determined as follows:
          (i) The Secretary shall estimate the national 
        weighted average of the prevailing charge conversion 
        factors used under this subsection for services 
        furnished during 1990 after March 31, using the best 
        available data.
          (ii) The national weighted average estimated under 
        clause (i) shall be reduced by 7 percent.
          (iii) The adjusted prevailing charge conversion 
        factor for a locality is the sum of--
                  (I) the product of (a) the portion of the 
                reduced national weighted average prevailing 
                charge conversion factor computed under clause 
                (ii) which is attributable to physician work 
                and (b) the geographic work index value for the 
                locality (specified in Addendum C to the Model 
                Fee Schedule for Physician Services (published 
                on September 4, 1990, 55 Federal Register pp. 
                36238 36243)); and
                  (II) the product of (a) the remaining portion 
                of the reduced national weighted average 
                prevailing charge conversion factor computed 
                under clause (ii) and (b) the geographic 
                practice cost index value specified in section 
                1842(b)(14)(C)(iv) for the locality.
        In applying this clause, 70 percent of the prevailing 
        charge conversion factor shall be considered to be 
        attributable to physician work.
          (iv) The prevailing charge conversion factor to be 
        applied to a locality under this subparagraph shall not 
        be reduced by more than 15 percent below the prevailing 
        charge conversion factor applied in the locality for 
        the period during 1990 after March 31, but in no case 
        shall the prevailing charge conversion factor be less 
        than 60 percent of the national weighted average of the 
        prevailing charge conversion factors (computed under 
        clause (i)).
  (2) For purposes of payment for anesthesia services (whether 
furnished by physicians or by certified registered nurse 
anesthetists) under this part, the time units shall be counted 
based on actual time rather than rounded to full time units.
  (r) The Secretary shall establish a system which provides for 
a unique identifier for each physician who furnishes services 
for which payment may be made under this title. Under such 
system, the Secretary may impose appropriate fees on such 
physicians to cover the costs of investigation and 
recertification activities with respect to the issuance of the 
identifiers.
  (s)(1)(A) Subject to paragraph (3), the Secretary may 
implement a statewide or other areawide fee schedule to be used 
for payment of any item or service described in paragraph (2) 
which is paid on a reasonable charge basis.
                  (B) Any fee schedule established under this 
                paragraph for such item or service shall be 
                updated--
                          (i) for years before 2011--
                                  (I) subject to subclause 
                                (II), by the percentage 
                                increase in the consumer price 
                                index for all urban consumers 
                                (United States city average) 
                                for the 12-month period ending 
                                with June of the preceding 
                                year; and
                                  (II) for items and services 
                                described in paragraph (2)(D) 
                                for 2009, section 
                                1834(a)(14)(J) shall apply 
                                under this paragraph instead of 
                                the percentage increase 
                                otherwise applicable; and
                          (ii) for 2011 and subsequent years--
                                  (I) the percentage increase 
                                in the consumer price index for 
                                all urban consumers (United 
                                States city average) for the 
                                12-month period ending with 
                                June of the previous year, 
                                reduced by--
                                  (II) the productivity 
                                adjustment described in section 
                                1886(b)(3)(B)(xi)(II).
        The application of subparagraph (B)(ii)(II) may result 
        in the update under this paragraph being less than 0.0 
        for a year, and may result in payment rates under any 
        fee schedule established under this paragraph for a 
        year being less than such payment rates for the 
        preceding year.
  (2) The items and services described in this paragraph are as 
follows:
          (A) Medical supplies.
          (B) Home dialysis supplies and equipment (as defined 
        in section 1881(b)(8)).
          (D) Parenteral and enteral nutrients, equipment, and 
        supplies.
          (E) Electromyogram devices.
          (F) Salivation devices.
          (G) Blood products.
          (H) Transfusion medicine.
  (3) In the case of items and services described in paragraph 
(2)(D) that are included in a competitive acquisition program 
in a competitive acquisition area under section 1847(a)--
          (A) the payment basis under this subsection for such 
        items and services furnished in such area shall be the 
        payment basis determined under such competitive 
        acquisition program; and
          (B) subject to section 1834(a)(1)(G), the Secretary 
        may use information on the payment determined under 
        such competitive acquisition programs to adjust the 
        payment amount otherwise applicable under paragraph (1) 
        for an area that is not a competitive acquisition area 
        under section 1847, and in the case of such adjustment, 
        paragraphs (8) and (9) of section 1842(b) shall not be 
        applied.
  (t)(1) Each request for payment, or bill submitted, for an 
item or service furnished to an individual who is a resident of 
a skilled nursing facility for which payment may be made under 
this part shall include the facility's medicare provider 
number.
  (2) Each request for payment, or bill submitted, for therapy 
services described in paragraph (1) or (3) of section 1833(g), 
including services described in section 1833(a)(8)(B), 
furnished on or after October 1, 2012, for which payment may be 
made under this part shall include the national provider 
identifier of the physician who periodically reviews the plan 
for such services under section 1861(p)(2).
  (u) Each request for payment, or bill submitted, for a drug 
furnished to an individual for the treatment of anemia in 
connection with the treatment of cancer shall include (in a 
form and manner specified by the Secretary) information on the 
hemoglobin or hematocrit levels for the individual.

Part E--Miscellaneous Provisions

           *       *       *       *       *       *       *


                        effect of accreditation

  Sec. 1865. (a)(1) If the Secretary finds that accreditation 
of a provider entity (as defined in paragraph (4)) by the 
American Osteopathic Association or any other national 
accreditation body demonstrates that all of the applicable 
conditions or requirements of this title (other than the 
requirements of section 1834(j) [or the conditions and 
requirements under section 1881(b)]) are met or exceeded--
          (A) in the case of a provider entity not described in 
        paragraph (3)(B), the Secretary shall treat such entity 
        as meeting those conditions or requirements with 
        respect to which the Secretary made such finding; or
          (B) in the case of a provider entity described in 
        paragraph (3)(B), the Secretary may treat such entity 
        as meeting those conditions or requirements with 
        respect to which the Secretary made such finding.
  (2) In making such a finding, the Secretary shall consider, 
among other factors with respect to a national accreditation 
body, its requirements for accreditation, its survey 
procedures, its ability to provide adequate resources for 
conducting required surveys and supplying information for use 
in enforcement activities, its monitoring procedures for 
provider entities found out of compliance with the conditions 
or requirements, and its ability to provide the Secretary with 
necessary data for validation.
  (3)(A) Except as provided in subparagraph (B), not later than 
60 days after the date of receipt of a written request for a 
finding under paragraph (1) (with any documentation necessary 
to make a determination on the request), the Secretary shall 
publish a notice identifying the national accreditation body 
making the request, describing the nature of the request, and 
providing a period of at least 30 days for the public to 
comment on the request. The Secretary shall approve or deny a 
request for such a finding, and shall publish notice of such 
approval or denial, not later than 210 days after the date of 
receipt of the request (with such documentation). Such an 
approval shall be effective with respect to accreditation 
determinations made on or after such effective date (which may 
not be later than the date of publication of the approval) as 
the Secretary specifies in the publication notice.
  (B) The 210-day and 60-day deadlines specified in 
subparagraph (A) shall not apply in the case of any request for 
a finding with respect to accreditation of a provider entity to 
which the conditions and requirements of sections 1819 and 
1861(j) apply.
  (4) For purposes of this section, the term ``provider 
entity'' means a provider of services, supplier, facility 
(including a renal dialysis facility), clinic, agency, or 
laboratory.
  (b) The Secretary may not disclose any accreditation survey 
(other than a survey with respect to a home health agency) made 
and released to the Secretary by the American Osteopathic 
Association or any other national accreditation body, of an 
entity accredited by such body, except that the Secretary may 
disclose such a survey and information related to such a survey 
to the extent such survey and information relate to an 
enforcement action taken by the Secretary.
  (c) Notwithstanding any other provision of this title, if the 
Secretary finds that a provider entity has significant 
deficiencies (as defined in regulations pertaining to health 
and safety), the entity shall, after the date of notice of such 
finding to the entity and for such period as may be prescribed 
in regulations, be deemed not to meet the conditions or 
requirements the entity has been treated as meeting pursuant to 
subsection (a)(1).
  (d) For provisions relating to validation surveys of entities 
that are treated as meeting applicable conditions or 
requirements of this title pursuant to subsection (a)(1), see 
section 1864(c).
  (e) With respect to an accreditation body that has received 
approval from the Secretary under subsection (a)(3)(A) for 
accreditation of provider entities that are required to meet 
the conditions and requirements under section 1881(b), in 
addition to review and oversight authorities otherwise 
applicable under this title, the Secretary shall (as the 
Secretary determines appropriate) conduct, with respect to such 
accreditation body and provider entities, any or all of the 
following more frequently than is otherwise required to be 
conducted under this title with respect to other accreditation 
bodies or other provider entities:
          (1) Validation surveys referred to in subsection (d).
          (2) Accreditation program reviews (as defined in 
        section 488.8(c) of title 42 of the Code of Federal 
        Regulations, or a successor regulation).
          (3) Performance reviews (as defined in section 
        488.8(a) of title 42 of the Code of Federal 
        Regulations, or a successor regulation).

           *       *       *       *       *       *       *


               LIMITATION ON CERTAIN PHYSICIAN REFERRALS

  Sec. 1877. (a) Prohibition of Certain Referrals.--
          (1) In general.--Except as provided in subsection 
        (b), if a physician (or an immediate family member of 
        such physician) has a financial relationship with an 
        entity specified in paragraph (2), then--
                  (A) the physician may not make a referral to 
                the entity for the furnishing of designated 
                health services for which payment otherwise may 
                be made under this title, and
                  (B) the entity may not present or cause to be 
                presented a claim under this title or bill to 
                any individual, third party payor, or other 
                entity for designated health services furnished 
                pursuant to a referral prohibited under 
                subparagraph (A).
          (2) Financial relationship specified.--For purposes 
        of this section, a financial relationship of a 
        physician (or an immediate family member of such 
        physician) with an entity specified in this paragraph 
        is--
                  (A) except as provided in subsections (c) and 
                (d), an ownership or investment interest in the 
                entity, or
                  (B) except as provided in subsection (e), a 
                compensation arrangement (as defined in 
                subsection (h)(1)) between the physician (or an 
                immediate family member of such physician) and 
                the entity.
        An ownership or investment interest described in 
        subparagraph (A) may be through equity, debt, or other 
        means and includes an interest in an entity that holds 
        an ownership or investment interest in any entity 
        providing the designated health service.
  (b) General Exceptions to Both Ownership and Compensation 
Arrangement Prohibitions.--Subsection (a)(1) shall not apply in 
the following cases:
          (1) Physicians' services.--In the case of physicians' 
        services (as defined in section 1861(q)) provided 
        personally by (or under the personal supervision of) 
        another physician in the same group practice (as 
        defined in subsection (h)(4)) as the referring 
        physician.
          (2) In-office ancillary services.--In the case of 
        services (other than durable medical equipment 
        (excluding infusion pumps) and parenteral and enteral 
        nutrients, equipment, and supplies)--
                  (A) that are furnished--
                          (i) personally by the referring 
                        physician, personally by a physician 
                        who is a member of the same group 
                        practice as the referring physician, or 
                        personally by individuals who are 
                        directly supervised by the physician or 
                        by another physician in the group 
                        practice, and
                          (ii)(I) in a building in which the 
                        referring physician (or another 
                        physician who is a member of the same 
                        group practice) furnishes physicians' 
                        services unrelated to the furnishing of 
                        designated health services, or
                          (II) in the case of a referring 
                        physician who is a member of a group 
                        practice, in another building which is 
                        used by the group practice--
                                  (aa) for the provision of 
                                some or all of the group's 
                                clinical laboratory services, 
                                or
                                  (bb) for the centralized 
                                provision of the group's 
                                designated health services 
                                (other than clinical laboratory 
                                services),
                        unless the Secretary determines other 
                        terms and conditions under which the 
                        provision of such services does not 
                        present a risk of program or patient 
                        abuse, and
                  (B) that are billed by the physician 
                performing or supervising the services, by a 
                group practice of which such physician is a 
                member under a billing number assigned to the 
                group practice, or by an entity that is wholly 
                owned by such physician or such group practice,
        if the ownership or investment interest in such 
        services meets such other requirements as the Secretary 
        may impose by regulation as needed to protect against 
        program or patient abuse. Such requirements shall, with 
        respect to magnetic resonance imaging, computed 
        tomography, positron emission tomography, and any other 
        designated health services specified under subsection 
        (h)(6)(D) that the Secretary determines appropriate, 
        include a requirement that the referring physician 
        inform the individual in writing at the time of the 
        referral that the individual may obtain the services 
        for which the individual is being referred from a 
        person other than a person described in subparagraph 
        (A)(i) and provide such individual with a written list 
        of suppliers (as defined in section 1861(d)) who 
        furnish such services in the area in which such 
        individual resides.
          (3) Prepaid plans.--In the case of services furnished 
        by an organization--
                  (A) with a contract under section 1876 to an 
                individual enrolled with the organization,
                  (B) described in section 1833(a)(1)(A) to an 
                individual enrolled with the organization,
                  (C) receiving payments on a prepaid basis, 
                under a demonstration project under section 
                402(a) of the Social Security Amendments of 
                1967 or under section 222(a) of the Social 
                Security Amendments of 1972, to an individual 
                enrolled with the organization,
                  (D) that is a qualified health maintenance 
                organization (within the meaning of section 
                1310(d) of the Public Health Service Act) to an 
                individual enrolled with the organization, or
                  (E) that is a Medicare+Choice organization 
                under part C that is offering a coordinated 
                care plan described in section 1851(a)(2)(A) to 
                an individual enrolled with the organization.
          (4) Other permissible exceptions.--In the case of any 
        other financial relationship which the Secretary 
        determines, and specifies in regulations, does not pose 
        a risk of program or patient abuse.
          (5) Electronic prescribing.--An exception established 
        by regulation under section 1860D 3(e)(6).
  (c) General Exception Related Only to Ownership or Investment 
Prohibition for Ownership in Publicly Traded Securities and 
Mutual Funds.--Ownership of the following shall not be 
considered to be an ownership or investment interest described 
in subsection (a)(2)(A):
          (1) Ownership of investment securities (including 
        shares or bonds, debentures, notes, or other debt 
        instruments) which may be purchased on terms generally 
        available to the public and which are--
                  (A)(i) securities listed on the New York 
                Stock Exchange, the American Stock Exchange, or 
                any regional exchange in which quotations are 
                published on a daily basis, or foreign 
                securities listed on a recognized foreign, 
                national, or regional exchange in which 
                quotations are published on a daily basis, or
                  (ii) traded under an automated interdealer 
                quotation system operated by the National 
                Association of Securities Dealers, and
                  (B) in a corporation that had, at the end of 
                the corporation's most recent fiscal year, or 
                on average during the previous 3 fiscal years, 
                stockholder equity exceeding $75,000,000.
          (2) Ownership of shares in a regulated investment 
        company as defined in section 851(a) of the Internal 
        Revenue Code of 1986, if such company had, at the end 
        of the company's most recent fiscal year, or on average 
        during the previous 3 fiscal years, total assets 
        exceeding $75,000,000.
  (d) Additional Exceptions Related Only to Ownership or 
Investment Prohibition.--The following, if not otherwise 
excepted under subsection (b), shall not be considered to be an 
ownership or investment interest described in subsection 
(a)(2)(A):
          (1) Hospitals in puerto rico.--In the case of 
        designated health services provided by a hospital 
        located in Puerto Rico.
          (2) Rural providers.--In the case of designated 
        health services furnished in a rural area (as defined 
        in section 1886(d)(2)(D)) by an entity, if--
                  (A) substantially all of the designated 
                health services furnished by the entity are 
                furnished to individuals residing in such a 
                rural area;
                  (B) effective for the 18-month period 
                beginning on the date of the enactment of the 
                Medicare Prescription Drug, Improvement, and 
                Modernization Act of 2003, the entity is not a 
                specialty hospital (as defined in subsection 
                (h)(7)); and
                  (C) in the case where the entity is a 
                hospital, the hospital meets the requirements 
                of paragraph (3)(D).
          (3) Hospital ownership.--In the case of designated 
        health services provided by a hospital (other than a 
        hospital described in paragraph (1)) if--
                  (A) the referring physician is authorized to 
                perform services at the hospital;
                  (B) effective for the 18-month period 
                beginning on the date of the enactment of the 
                Medicare Prescription Drug, Improvement, and 
                Modernization Act of 2003, the hospital is not 
                a specialty hospital (as defined in subsection 
                (h)(7));
                  (C) the ownership or investment interest is 
                in the hospital itself (and not merely in a 
                subdivision of the hospital); and
                  (D) the hospital meets the requirements 
                described in subsection (i)(1) not later than 
                18 months after the date of the enactment of 
                this subparagraph.
  (e) Exceptions Relating to Other Compensation Arrangements.--
The following shall not be considered to be a compensation 
arrangement described in subsection (a)(2)(B):
          (1) Rental of office space; rental of equipment.--
                  (A) Office Space.--Payments made by a lessee 
                to a lessor for the use of premises if--
                          (i) the lease is set out in writing, 
                        signed by the parties before or not 
                        later than 90 days after the effective 
                        date of the lease, and specifies the 
                        premises covered by the lease,
                          (ii) the space rented or leased does 
                        not exceed that which is reasonable and 
                        necessary for the legitimate business 
                        purposes of the lease or rental and is 
                        used exclusively by the lessee when 
                        being used by the lessee, except that 
                        the lessee may make payments for the 
                        use of space consisting of common areas 
                        if such payments do not exceed the 
                        lessee's pro rata share of expenses for 
                        such space based upon the ratio of the 
                        space used exclusively by the lessee to 
                        the total amount of space (other than 
                        common areas) occupied by all persons 
                        using such common areas,
                          (iii) the lease provides for a term 
                        of rental or lease for at least 1 year,
                          (iv) the rental charges over the term 
                        of the lease are set in advance, are 
                        consistent with fair market value, and 
                        are not determined in a manner that 
                        takes into account the volume or value 
                        of any referrals or other business 
                        generated between the parties,
                          (v) the lease would be commercially 
                        reasonable even if no referrals were 
                        made between the parties, and
                          (vi) the lease meets such other 
                        requirements as the Secretary may 
                        impose by regulation as needed to 
                        protect against program or patient 
                        abuse.
                  (B) Equipment.--Payments made by a lessee of 
                equipment to the lessor of the equipment for 
                the use of the equipment if--
                          (i) the lease is set out in writing, 
                        signed by the parties before or not 
                        later than 90 days after the effective 
                        date of the lease, and specifies the 
                        equipment covered by the lease,
                          (ii) the equipment rented or leased 
                        does not exceed that which is 
                        reasonable and necessary for the 
                        legitimate business purposes of the 
                        lease or rental and is used exclusively 
                        by the lessee when being used by the 
                        lessee,
                          (iii) the lease provides for a term 
                        of rental or lease of at least 1 year,
                          (iv) the rental charges over the term 
                        of the lease are set in advance, are 
                        consistent with fair market value, and 
                        are not determined in a manner that 
                        takes into account the volume or value 
                        of any referrals or other business 
                        generated between the parties,
                          (v) the lease would be commercially 
                        reasonable even if no referrals were 
                        made between the parties, and
                          (vi) the lease meets such other 
                        requirements as the Secretary may 
                        impose by regulation as needed to 
                        protect against program or patient 
                        abuse.
                  (C) Holdover lease arrangements.--In the case 
                of a holdover lease arrangement for the lease 
                of office space or equipment, which immediately 
                follows a lease arrangement described in 
                subparagraph (A) for the use of such office 
                space or subparagraph (B) for the use of such 
                equipment and that expired after a term of at 
                least one year, payments made by the lessee to 
                the lessor pursuant to such holdover lease 
                arrangement, if--
                          (i) the lease arrangement met the 
                        conditions of subparagraph (A) for the 
                        lease of office space or subparagraph 
                        (B) for the use of equipment when the 
                        arrangement expired;
                          (ii) the holdover lease arrangement 
                        is on the same terms and conditions as 
                        the immediately preceding arrangement; 
                        and
                          (iii) the holdover arrangement 
                        continues to satisfy the conditions of 
                        subparagraph (A) for the lease of 
                        office space or subparagraph (B) for 
                        the use of equipment.
          (2) Bona fide employment relationships.--Any amount 
        paid by an employer to a physician (or an immediate 
        family member of such physician) who has a bona fide 
        employment relationship with the employer for the 
        provision of services if--
                  (A) the employment is for identifiable 
                services,
                  (B) the amount of the remuneration under the 
                employment--
                          (i) is consistent with the fair 
                        market value of the services, and
                          (ii) is not determined in a manner 
                        that takes into account (directly or 
                        indirectly) the volume or value of any 
                        referrals by the referring physician,
                  (C) the remuneration is provided pursuant to 
                an agreement which would be commercially 
                reasonable even if no referrals were made to 
                the employer, and
                  (D) the employment meets such other 
                requirements as the Secretary may impose by 
                regulation as needed to protect against program 
                or patient abuse.
        Subparagraph (B)(ii) shall not prohibit the payment of 
        remuneration in the form of a productivity bonus based 
        on services performed personally by the physician (or 
        an immediate family member of such physician).
          (3) Personal service arrangements.--
                  (A) In general.--Remuneration from an entity 
                under an arrangement (including remuneration 
                for specific physicians' services furnished to 
                a nonprofit blood center) if--
                          (i) the arrangement is set out in 
                        writing, signed by the parties before 
                        or not later than 90 days after the 
                        effective date of the arrangement, and 
                        specifies the services covered by the 
                        arrangement,
                          (ii) the arrangement covers all of 
                        the services to be provided by the 
                        physician (or an immediate family 
                        member of such physician) to the 
                        entity,
                          (iii) the aggregate services 
                        contracted for do not exceed those that 
                        are reasonable and necessary for the 
                        legitimate business purposes of the 
                        arrangement,
                          (iv) the term of the arrangement is 
                        for at least 1 year,
                          (v) the compensation to be paid over 
                        the term of the arrangement is set in 
                        advance, does not exceed fair market 
                        value, and except in the case of a 
                        physician incentive plan described in 
                        subparagraph (B), is not determined in 
                        a manner that takes into account the 
                        volume or value of any referrals or 
                        other business generated between the 
                        parties,
                          (vi) the services to be performed 
                        under the arrangement do not involve 
                        the counseling or promotion or a 
                        business arrangement or other activity 
                        that violates any State or Federal law, 
                        and
                          (vii) the arrangement meets such 
                        other requirements as the Secretary may 
                        impose by regulation as needed to 
                        protect against program or patient 
                        abuse.
                  (B) Physician incentive plan exception.--
                          (i) In general.--In the case of a 
                        physician incentive plan (as defined in 
                        clause (ii)) between a physician and an 
                        entity, the compensation may be 
                        determined in a manner (through a 
                        withhold, capitation, bonus, or 
                        otherwise) that takes into account 
                        directly or indirectly the volume or 
                        value of any referrals or other 
                        business generated between the parties, 
                        if the plan meets the following 
                        requirements:
                                  (I) No specific payment is 
                                made directly or indirectly 
                                under the plan to a physician 
                                or a physician group as an 
                                inducement to reduce or limit 
                                medically necessary services 
                                provided with respect to a 
                                specific individual enrolled 
                                with the entity.
                                  (II) In the case of a plan 
                                that places a physician or a 
                                physician group at substantial 
                                financial risk as determined by 
                                the Secretary pursuant to 
                                section 1876(i)(8)(A)(ii), the 
                                plan complies with any 
                                requirements the Secretary may 
                                impose pursuant to such 
                                section.
                                  (III) Upon request by the 
                                Secretary, the entity provides 
                                the Secretary with access to 
                                descriptive information 
                                regarding the plan, in order to 
                                permit the Secretary to 
                                determine whether the plan is 
                                in compliance with the 
                                requirements of this clause.
                          (ii) Physician incentive plan 
                        defined.--For purposes of this 
                        subparagraph, the term ``physician 
                        incentive plan'' means any compensation 
                        arrangement between an entity and a 
                        physician or physician group that may 
                        directly or indirectly have the effect 
                        of reducing or limiting services 
                        provided with respect to individuals 
                        enrolled with the entity.
                  (C) Holdover personal service arrangement.--
                In the case of a holdover personal service 
                arrangement, which immediately follows an 
                arrangement described in subparagraph (A) that 
                expired after a term of at least one year, 
                remuneration from an entity pursuant to such 
                holdover personal service arrangement, if--
                          (i) the personal service arrangement 
                        met the conditions of subparagraph (A) 
                        when the arrangement expired;
                          (ii) the holdover personal service 
                        arrangement is on the same terms and 
                        conditions as the immediately preceding 
                        arrangement; and
                          (iii) the holdover arrangement 
                        continues to satisfy the conditions of 
                        subparagraph (A).
          (4) Remuneration unrelated to the provision of 
        designated health services.--In the case of 
        remuneration which is provided by a hospital to a 
        physician if such remuneration does not relate to the 
        provision of designated health services.
          (5) Physician recruitment.--In the case of 
        remuneration which is provided by a hospital to a 
        physician to induce the physician to relocate to the 
        geographic area served by the hospital in order to be a 
        member of the medical staff of the hospital, if--
                  (A) the physician is not required to refer 
                patients to the hospital,
                  (B) the amount of the remuneration under the 
                arrangement is not determined in a manner that 
                takes into account (directly or indirectly) the 
                volume or value of any referrals by the 
                referring physician, and
                  (C) the arrangement meets such other 
                requirements as the Secretary may impose by 
                regulation as needed to protect against program 
                or patient abuse.
          (6) Isolated transactions.--In the case of an 
        isolated financial transaction, such as a one-time sale 
        of property or practice, if--
                  (A) the requirements described in 
                subparagraphs (B) and (C) of paragraph (2) are 
                met with respect to the entity in the same 
                manner as they apply to an employer, and
                  (B) the transaction meets such other 
                requirements as the Secretary may impose by 
                regulation as needed to protect against program 
                or patient abuse.
          (7) Certain group practice arrangements with a 
        hospital.--
                  (A) In general.--An arrangement between a 
                hospital and a group under which designated 
                health services are provided by the group but 
                are billed by the hospital if--
                          (i) with respect to services provided 
                        to an inpatient of the hospital, the 
                        arrangement is pursuant to the 
                        provision of inpatient hospital 
                        services under section 1861(b)(3),
                          (ii) the arrangement began before 
                        December 19, 1989, and has continued in 
                        effect without interruption since such 
                        date,
                          (iii) with respect to the designated 
                        health services covered under the 
                        arrangement, substantially all of such 
                        services furnished to patients of the 
                        hospital are furnished by the group 
                        under the arrangement,
                          (iv) the arrangement is pursuant to 
                        an agreement that is set out in writing 
                        and that specifies the services to be 
                        provided by the parties and the 
                        compensation for services provided 
                        under the agreement,
                          (v) the compensation paid over the 
                        term of the agreement is consistent 
                        with fair market value and the 
                        compensation per unit of services is 
                        fixed in advance and is not determined 
                        in a manner that takes into account the 
                        volume or value of any referrals or 
                        other business generated between the 
                        parties,
                          (vi) the compensation is provided 
                        pursuant to an agreement which would be 
                        commercially reasonable even if no 
                        referrals were made to the entity, and
                          (vii) the arrangement between the 
                        parties meets such other requirements 
                        as the Secretary may impose by 
                        regulation as needed to protect against 
                        program or patient abuse.
          (8) Payments by a physician for items and services.--
        Payments made by a physician--
                  (A) to a laboratory in exchange for the 
                provision of clinical laboratory services, or
                  (B) to an entity as compensation for other 
                items or services if the items or services are 
                furnished at a price that is consistent with 
                fair market value.
  (f) Reporting Requirements.--Each entity providing covered 
items or services for which payment may be made under this 
title shall provide the Secretary with the information 
concerning the entity's ownership, investment, and compensation 
arrangements, including--
          (1) the covered items and services provided by the 
        entity, and
          (2) the names and unique physician identification 
        numbers of all physicians with an ownership or 
        investment interest (as described in subsection 
        (a)(2)(A)), or with a compensation arrangement (as 
        described in subsection (a)(2)(B)), in the entity, or 
        whose immediate relatives have such an ownership or 
        investment interest or who have such a compensation 
        relationship with the entity.
Such information shall be provided in such form, manner, and at 
such times as the Secretary shall specify. The requirement of 
this subsection shall not apply to designated health services 
provided outside the United States or to entities which the 
Secretary determines provides services for which payment may be 
made under this title very infrequently.
  (g) Sanctions.--
          (1) Denial of payment.--No payment may be made under 
        this title for a designated health service which is 
        provided in violation of subsection (a)(1).
          (2) Requiring refunds for certain claims.--If a 
        person collects any amounts that were billed in 
        violation of subsection (a)(1), the person shall be 
        liable to the individual for, and shall refund on a 
        timely basis to the individual, any amounts so 
        collected.
          (3) Civil money penalty and exclusion for improper 
        claims.--Any person that presents or causes to be 
        presented a bill or a claim for a service that such 
        person knows or should know is for a service for which 
        payment may not be made under paragraph (1) or for 
        which a refund has not been made under paragraph (2) 
        shall be subject to a civil money penalty of not more 
        than $15,000 for each such service. The provisions of 
        section 1128A (other than the first sentence of 
        subsection (a) and other than subsection (b)) shall 
        apply to a civil money penalty under the previous 
        sentence in the same manner as such provisions apply to 
        a penalty or proceeding under section 1128A(a).
          (4) Civil money penalty and exclusion for 
        circumvention schemes.--Any physician or other entity 
        that enters into an arrangement or scheme (such as a 
        cross-referral arrangement) which the physician or 
        entity knows or should know has a principal purpose of 
        assuring referrals by the physician to a particular 
        entity which, if the physician directly made referrals 
        to such entity, would be in violation of this section, 
        shall be subject to a civil money penalty of not more 
        than $100,000 for each such arrangement or scheme. The 
        provisions of section 1128A (other than the first 
        sentence of subsection (a) and other than subsection 
        (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).
          (5) Failure to report information.--Any person who is 
        required, but fails, to meet a reporting requirement of 
        subsection (f) is subject to a civil money penalty of 
        not more than $10,000 for each day for which reporting 
        is required to have been made. The provisions of 
        section 1128A (other than the first sentence of 
        subsection (a) and other than subsection (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).
          (6) Advisory opinions.--
                  (A) In general.--The Secretary shall issue 
                written advisory opinions concerning whether a 
                referral relating to designated health services 
                (other than clinical laboratory services) is 
                prohibited under this section. Each advisory 
                opinion issued by the Secretary shall be 
                binding as to the Secretary and the party or 
                parties requesting the opinion.
                  (B) Application of certain rules.--The 
                Secretary shall, to the extent practicable, 
                apply the rules under subsections (b)(3) and 
                (b)(4) and take into account the regulations 
                promulgated under subsection (b)(5) of section 
                1128D in the issuance of advisory opinions 
                under this paragraph.
                  (C) Regulations.--In order to implement this 
                paragraph in a timely manner, the Secretary may 
                promulgate regulations that take effect on an 
                interim basis, after notice and pending 
                opportunity for public comment.
                  (D) Applicability.--This paragraph shall 
                apply to requests for advisory opinions made 
                after the date which is 90 days after the date 
                of the enactment of this paragraph and before 
                the close of the period described in section 
                1128D(b)(6).
  (h) Definitions and Special Rules.--For purposes of this 
section:
          (1) Compensation arrangement; remuneration; holdover 
        arrangement.--(A) The term ``compensation arrangement'' 
        means any arrangement involving any remuneration 
        between a physician (or an immediate family member of 
        such physician) and an entity other than an arrangement 
        involving only remuneration described in subparagraph 
        (C).
          (B) The term ``remuneration'' includes any 
        remuneration, directly or indirectly, overtly or 
        covertly, in cash or in kind.
          (C) Remuneration described in this subparagraph is 
        any remuneration consisting of any of the following:
                  (i) The forgiveness of amounts owed for 
                inaccurate tests or procedures, mistakenly 
                performed tests or procedures, or the 
                correction of minor billing errors.
                  (ii) The provision of items, devices, or 
                supplies that are used solely to--
                          (I) collect, transport, process, or 
                        store specimens for the entity 
                        providing the item, device, or supply, 
                        or
                          (II) order or communicate the results 
                        of tests or procedures for such entity.
                  (iii) A payment made by an insurer or a self-
                insured plan to a physician to satisfy a claim, 
                submitted on a fee for service basis, for the 
                furnishing of health services by that physician 
                to an individual who is covered by a policy 
                with the insurer or by the self-insured plan, 
                if--
                          (I) the health services are not 
                        furnished, and the payment is not made, 
                        pursuant to a contract or other 
                        arrangement between the insurer or the 
                        plan and the physician,
                          (II) the payment is made to the 
                        physician on behalf of the covered 
                        individual and would otherwise be made 
                        directly to such individual,
                          (III) the amount of the payment is 
                        set in advance, does not exceed fair 
                        market value, and is not determined in 
                        a manner that takes into account 
                        directly or indirectly the volume or 
                        value of any referrals, and
                          (IV) the payment meets such other 
                        requirements as the Secretary may 
                        impose by regulation as needed to 
                        protect against program or patient 
                        abuse.
          (D) Written requirement clarified.--In the case of 
        any requirement pursuant to this section for a 
        compensation arrangement to be in writing, such 
        requirement shall be satisfied by such means as 
        determined by the Secretary, including by a collection 
        of documents, including contemporaneous documents 
        evidencing the course of conduct between the parties 
        involved.
          (E) Holdover arrangement.--The term ``holdover 
        arrangement'' means an arrangement, with respect to an 
        agreement (including a lease or other arrangement) that 
        has expired but as of the date of such expiration had 
        been in compliance with the applicable requirements of 
        this section, under which the parties to such expired 
        agreement have, since such date of expiration, 
        continued to perform under the terms and conditions of 
        such expired agreement.
          (2) Employee.--An individual is considered to be 
        ``employed by'' or an ``employee'' of an entity if the 
        individual would be considered to be an employee of the 
        entity under the usual common law rules applicable in 
        determining the employer-employee relationship (as 
        applied for purposes of section 3121(d)(2) of the 
        Internal Revenue Code of 1986).
          (3) Fair market value.--The term ``fair market 
        value'' means the value in arms length transactions, 
        consistent with the general market value, and, with 
        respect to rentals or leases, the value of rental 
        property for general commercial purposes (not taking 
        into account its intended use) and, in the case of a 
        lease of space, not adjusted to reflect the additional 
        value the prospective lessee or lessor would attribute 
        to the proximity or convenience to the lessor where the 
        lessor is a potential source of patient referrals to 
        the lessee.
          (4) Group practice.--
                  (A) Definition of group practice.--The term 
                ``group practice'' means a group of 2 or more 
                physicians legally organized as a partnership, 
                professional corporation, foundation, not-for-
                profit corporation, faculty practice plan, or 
                similar association--
                          (i) in which each physician who is a 
                        member of the group provides 
                        substantially the full range of 
                        services which the physician routinely 
                        provides, including medical care, 
                        consultation, diagnosis, or treatment, 
                        through the joint use of shared office 
                        space, facilities, equipment and 
                        personnel,
                          (ii) for which substantially all of 
                        the services of the physicians who are 
                        members of the group are provided 
                        through the group and are billed under 
                        a billing number assigned to the group 
                        and amounts so received are treated as 
                        receipts of the group,
                          (iii) in which the overhead expenses 
                        of and the income from the practice are 
                        distributed in accordance with methods 
                        previously determined,
                          (iv) except as provided in 
                        subparagraph (B)(i), in which no 
                        physician who is a member of the group 
                        directly or indirectly receives 
                        compensation based on the volume or 
                        value of referrals by the physician,
                          (v) in which members of the group 
                        personally conduct no less than 75 
                        percent of the physician-patient 
                        encounters of the group practice, and
                          (vi) which meets such other standards 
                        as the Secretary may impose by 
                        regulation.
                  (B) Special Rules.--
                          (i) Profits and productivity 
                        bonuses.--A physician in a group 
                        practice may be paid a share of overall 
                        profits of the group, or a productivity 
                        bonus based on services personally 
                        performed or services incident to such 
                        personally performed services, so long 
                        as the share or bonus is not determined 
                        in any manner which is directly related 
                        to the volume or value of referrals by 
                        such physician.
                          (ii) Faculty practice plans.--In the 
                        case of a faculty practice plan 
                        associated with a hospital, institution 
                        of higher education, or medical school 
                        with an approved medical residency 
                        training program in which physician 
                        members may provide a variety of 
                        different specialty services and 
                        provide professional services both 
                        within and outside the group, as well 
                        as perform other tasks such as 
                        research, subparagraph (A) shall be 
                        applied only with respect to the 
                        services provided within the faculty 
                        practice plan.
          (5) Referral; referring physician.--
                  (A) Physicians' services.--Except as provided 
                in subparagraph (C), in the case of an item or 
                service for which payment may be made under 
                part B, the request by a physician for the item 
                or service, including the request by a 
                physician for a consultation with another 
                physician (and any test or procedure ordered 
                by, or to be performed by (or under the 
                supervision of) that other physician), 
                constitutes a ``referral'' by a ``referring 
                physician''.
                  (B) Other items.--Except as provided in 
                subparagraph (C), the request or establishment 
                of a plan of care by a physician which includes 
                the provision of the designated health service 
                constitutes a ``referral'' by a ``referring 
                physician''.
                  (C) Clarification respecting certain services 
                integral to a consultation by certain 
                specialists.--A request by a pathologist for 
                clinical diagnostic laboratory tests and 
                pathological examination services, a request by 
                a radiologist for diagnostic radiology 
                services, and a request by a radiation 
                oncologist for radiation therapy, if such 
                services are furnished by (or under the 
                supervision of) such pathologist, radiologist, 
                or radiation oncologist pursuant to a 
                consultation requested by another physician 
                does not constitute a ``referral'' by a 
                ``referring physician''.
          (6) Designated health services.--The term 
        ``designated health services''' means any of the 
        following items or services:
                  (A) Clinical laboratory services.
                  (B) Physical therapy services.
                  (C) Occupational therapy services.
                  (D) Radiology services, including magnetic 
                resonance imaging, computerized axial 
                tomography scans, and ultrasound services.
                  (E) Radiation therapy services and supplies.
                  (F) Durable medical equipment and supplies.
                  (G) Parenteral and enteral nutrients, 
                equipment, and supplies.
                  (H) Prosthetics, orthotics, and prosthetic 
                devices and supplies.
                  (I) Home health services.
                  (J) Outpatient prescription drugs.
                  (K) Inpatient and outpatient hospital 
                services.
                  (L) Outpatient speech-language pathology 
                services.
          (7) Specialty hospital.--
                  (A) In general.--For purposes of this 
                section, except as provided in subparagraph 
                (B), the term ``specialty hospital'' means a 
                subsection (d) hospital (as defined in section 
                1886(d)(1)(B)) that is primarily or exclusively 
                engaged in the care and treatment of one of the 
                following categories:
                          (i) Patients with a cardiac 
                        condition.
                          (ii) Patients with an orthopedic 
                        condition.
                          (iii) Patients receiving a surgical 
                        procedure.
                          (iv) Any other specialized category 
                        of services that the Secretary 
                        designates as inconsistent with the 
                        purpose of permitting physician 
                        ownership and investment interests in a 
                        hospital under this section.
                  (B) Exception.--For purposes of this section, 
                the term ``specialty hospital'' does not 
                include any hospital--
                          (i) determined by the Secretary--
                                  (I) to be in operation before 
                                November 18, 2003; or
                                  (II) under development as of 
                                such date;
                          (ii) for which the number of 
                        physician investors at any time on or 
                        after such date is no greater than the 
                        number of such investors as of such 
                        date;
                          (iii) for which the type of 
                        categories described in subparagraph 
                        (A) at any time on or after such date 
                        is no different than the type of such 
                        categories as of such date;
                          (iv) for which any increase in the 
                        number of beds occurs only in the 
                        facilities on the main campus of the 
                        hospital and does not exceed 50 percent 
                        of the number of beds in the hospital 
                        as of November 18, 2003, or 5 beds, 
                        whichever is greater; and
                          (v) that meets such other 
                        requirements as the Secretary may 
                        specify.
  (i) Requirements for Hospitals To Qualify for Rural Provider 
and Hospital Exception to Ownership or Investment 
Prohibition.--
          (1) Requirements described.--For purposes of 
        subsection (d)(3)(D), the requirements described in 
        this paragraph for a hospital are as follows:
                  (A) Provider agreement.--The hospital had--
                          (i) physician ownership or investment 
                        on December 31, 2010; and
                          (ii) a provider agreement under 
                        section 1866 in effect on such date.
                  (B) Limitation on expansion of facility 
                capacity.--Except as provided in paragraph (3), 
                the number of operating rooms, procedure rooms, 
                and beds for which the hospital is licensed at 
                any time on or after the date of the enactment 
                of this subsection is no greater than the 
                number of operating rooms, procedure rooms, and 
                beds for which the hospital is licensed as of 
                such date.
                  (C) Preventing conflicts of interest.--
                          (i) The hospital submits to the 
                        Secretary an annual report containing a 
                        detailed description of--
                                  (I) the identity of each 
                                physician owner or investor and 
                                any other owners or investors 
                                of the hospital; and
                                  (II) the nature and extent of 
                                all ownership and investment 
                                interests in the hospital.
                          (ii) The hospital has procedures in 
                        place to require that any referring 
                        physician owner or investor discloses 
                        to the patient being referred, by a 
                        time that permits the patient to make a 
                        meaningful decision regarding the 
                        receipt of care, as determined by the 
                        Secretary--
                                  (I) the ownership or 
                                investment interest, as 
                                applicable, of such referring 
                                physician in the hospital; and
                                  (II) if applicable, any such 
                                ownership or investment 
                                interest of the treating 
                                physician.
                          (iii) The hospital does not condition 
                        any physician ownership or investment 
                        interests either directly or indirectly 
                        on the physician owner or investor 
                        making or influencing referrals to the 
                        hospital or otherwise generating 
                        business for the hospital.
                          (iv) The hospital discloses the fact 
                        that the hospital is partially owned or 
                        invested in by physicians--
                                  (I) on any public website for 
                                the hospital; and
                                  (II) in any public 
                                advertising for the hospital.
                  (D) Ensuring bona fide investment.--
                          (i) The percentage of the total value 
                        of the ownership or investment 
                        interests held in the hospital, or in 
                        an entity whose assets include the 
                        hospital, by physician owners or 
                        investors in the aggregate does not 
                        exceed such percentage as of the date 
                        of enactment of this subsection.
                          (ii) Any ownership or investment 
                        interests that the hospital offers to a 
                        physician owner or investor are not 
                        offered on more favorable terms than 
                        the terms offered to a person who is 
                        not a physician owner or investor.
                          (iii) The hospital (or any owner or 
                        investor in the hospital) does not 
                        directly or indirectly provide loans or 
                        financing for any investment in the 
                        hospital by a physician owner or 
                        investor.
                          (iv) The hospital (or any owner or 
                        investor in the hospital) does not 
                        directly or indirectly guarantee a 
                        loan, make a payment toward a loan, or 
                        otherwise subsidize a loan, for any 
                        individual physician owner or investor 
                        or group of physician owners or 
                        investors that is related to acquiring 
                        any ownership or investment interest in 
                        the hospital.
                          (v) Ownership or investment returns 
                        are distributed to each owner or 
                        investor in the hospital in an amount 
                        that is directly proportional to the 
                        ownership or investment interest of 
                        such owner or investor in the hospital.
                          (vi) Physician owners and investors 
                        do not receive, directly or indirectly, 
                        any guaranteed receipt of or right to 
                        purchase other business interests 
                        related to the hospital, including the 
                        purchase or lease of any property under 
                        the control of other owners or 
                        investors in the hospital or located 
                        near the premises of the hospital.
                          (vii) The hospital does not offer a 
                        physician owner or investor the 
                        opportunity to purchase or lease any 
                        property under the control of the 
                        hospital or any other owner or investor 
                        in the hospital on more favorable terms 
                        than the terms offered to an individual 
                        who is not a physician owner or 
                        investor.
                  (E) Patient safety.--
                          (i) Insofar as the hospital admits a 
                        patient and does not have any physician 
                        available on the premises to provide 
                        services during all hours in which the 
                        hospital is providing services to such 
                        patient, before admitting the patient--
                                  (I) the hospital discloses 
                                such fact to a patient; and
                                  (II) following such 
                                disclosure, the hospital 
                                receives from the patient a 
                                signed acknowledgment that the 
                                patient understands such fact.
                          (ii) The hospital has the capacity 
                        to--
                                  (I) provide assessment and 
                                initial treatment for patients; 
                                and
                                  (II) refer and transfer 
                                patients to hospitals with the 
                                capability to treat the needs 
                                of the patient involved.
                  (F) Limitation on application to certain 
                converted facilities.--The hospital was not 
                converted from an ambulatory surgical center to 
                a hospital on or after the date of enactment of 
                this subsection.
          (2) Publication of information reported.--The 
        Secretary shall publish, and update on an annual basis, 
        the information submitted by hospitals under paragraph 
        (1)(C)(i) on the public Internet website of the Centers 
        for Medicare & Medicaid Services.
          (3) Exception to prohibition on expansion of facility 
        capacity.--
                  (A) Process.--
                          (i) Establishment.--The Secretary 
                        shall establish and implement a process 
                        under which a hospital that is an 
                        applicable hospital (as defined in 
                        subparagraph (E)) or is a high Medicaid 
                        facility described in subparagraph (F) 
                        may apply for an exception from the 
                        requirement under paragraph (1)(B).
                          (ii) Opportunity for community 
                        input.--The process under clause (i) 
                        shall provide individuals and entities 
                        in the community in which the 
                        applicable hospital applying for an 
                        exception is located with the 
                        opportunity to provide input with 
                        respect to the application.
                          (iii) Timing for implementation.--The 
                        Secretary shall implement the process 
                        under clause (i) on February 1, 2012.
                          (iv) Regulations.--Not later than 
                        January 1, 2012, the Secretary shall 
                        promulgate regulations to carry out the 
                        process under clause (i).
                  (B) Frequency.--The process described in 
                subparagraph (A) shall permit an applicable 
                hospital to apply for an exception up to once 
                every 2 years.
                  (C) Permitted increase.--
                          (i) In general.--Subject to clause 
                        (ii) and subparagraph (D), an 
                        applicable hospital granted an 
                        exception under the process described 
                        in subparagraph (A) may increase the 
                        number of operating rooms, procedure 
                        rooms, and beds for which the 
                        applicable hospital is licensed above 
                        the baseline number of operating rooms, 
                        procedure rooms, and beds of the 
                        applicable hospital (or, if the 
                        applicable hospital has been granted a 
                        previous exception under this 
                        paragraph, above the number of 
                        operating rooms, procedure rooms, and 
                        beds for which the hospital is licensed 
                        after the application of the most 
                        recent increase under such an 
                        exception).
                          (ii) 100 percent increase 
                        limitation.--The Secretary shall not 
                        permit an increase in the number of 
                        operating rooms, procedure rooms, and 
                        beds for which an applicable hospital 
                        is licensed under clause (i) to the 
                        extent such increase would result in 
                        the number of operating rooms, 
                        procedure rooms, and beds for which the 
                        applicable hospital is licensed 
                        exceeding 200 percent of the baseline 
                        number of operating rooms, procedure 
                        rooms, and beds of the applicable 
                        hospital.
                          (iii) Baseline number of operating 
                        rooms, procedure rooms, and beds.--In 
                        this paragraph, the term ``baseline 
                        number of operating rooms, procedure 
                        rooms, and beds''' means the number of 
                        operating rooms, procedure rooms, and 
                        beds for which the applicable hospital 
                        is licensed as of the date of enactment 
                        of this subsection (or, in the case of 
                        a hospital that did not have a provider 
                        agreement in effect as of such date but 
                        does have such an agreement in effect 
                        on December 31, 2010, the effective 
                        date of such provider agreement).
                  (D) Increase limited to facilities on the 
                main campus of the hospital.--Any increase in 
                the number of operating rooms, procedure rooms, 
                and beds for which an applicable hospital is 
                licensed pursuant to this paragraph may only 
                occur in facilities on the main campus of the 
                applicable hospital.
                  (E) Applicable hospital.--In this paragraph, 
                the term ``applicable hospital'' means a 
                hospital--
                          (i) that is located in a county in 
                        which the percentage increase in the 
                        population during the most recent 5-
                        year period (as of the date of the 
                        application under subparagraph (A)) is 
                        at least 150 percent of the percentage 
                        increase in the population growth of 
                        the State in which the hospital is 
                        located during that period, as 
                        estimated by Bureau of the Census;
                          (ii) whose annual percent of total 
                        inpatient admissions that represent 
                        inpatient admissions under the program 
                        under title XIX is equal to or greater 
                        than the average percent with respect 
                        to such admissions for all hospitals 
                        located in the county in which the 
                        hospital is located;
                          (iii) that does not discriminate 
                        against beneficiaries of Federal health 
                        care programs and does not permit 
                        physicians practicing at the hospital 
                        to discriminate against such 
                        beneficiaries;
                          (iv) that is located in a State in 
                        which the average bed capacity in the 
                        State is less than the national average 
                        bed capacity; and
                          (v) that has an average bed occupancy 
                        rate that is greater than the average 
                        bed occupancy rate in the State in 
                        which the hospital is located.
                  (F) High medicaid facility described.--A high 
                Medicaid facility described in this 
                subparagraph is a hospital that--
                          (i) is not the sole hospital in a 
                        county;
                          (ii) with respect to each of the 3 
                        most recent years for which data are 
                        available, has an annual percent of 
                        total inpatient admissions that 
                        represent inpatient admissions under 
                        title XIX that is estimated to be 
                        greater than such percent with respect 
                        to such admissions for any other 
                        hospital located in the county in which 
                        the hospital is located; and
                          (iii) meets the conditions described 
                        in subparagraph (E)(iii).
                  (G) Procedure rooms.--In this subsection, the 
                term ``procedure rooms''' includes rooms in 
                which catheterizations, angiographies, 
                angiograms, and endoscopies are performed, 
                except such term shall not include emergency 
                rooms or departments (exclusive of rooms in 
                which catheterizations, angiographies, 
                angiograms, and endoscopies are performed).
                  (H) Publication of final decisions.--Not 
                later than 60 days after receiving a complete 
                application under this paragraph, the Secretary 
                shall publish in the Federal Register the final 
                decision with respect to such application.
                  (I) Limitation on review.--There shall be no 
                administrative or judicial review under section 
                1869, section 1878, or otherwise of the process 
                under this paragraph (including the 
                establishment of such process).
          (4) Collection of ownership and investment 
        information.--For purposes of subparagraphs (A)(i) and 
        (D)(i) of paragraph (1), the Secretary shall collect 
        physician ownership and investment information for each 
        hospital.
          (5) Physician owner or investor defined.--For 
        purposes of this subsection, the term ``physician owner 
        or investor'' means a physician (or an immediate family 
        member of such physician) with a direct or an indirect 
        ownership or investment interest in the hospital.
          (6) Clarification.--Nothing in this subsection shall 
        be construed as preventing the Secretary from revoking 
        a hospital's provider agreement if not in compliance 
        with regulations implementing section 1866.

           *       *       *       *       *       *       *


         medicare coverage for end stage renal disease patients

  Sec. 1881. (a) The benefits provided by parts A and B of this 
title shall include benefits for individuals who have been 
determined to have end stage renal disease as provided in 
section 226A, and benefits for kidney donors as provided in 
subsection (d) of this section. Notwithstanding any other 
provision of this title, the type, duration, and scope of the 
benefit provided by parts A and B with respect to individuals 
who have been determined to have end stage renal disease and 
who are entitled to such benefits without regard to section 
226A shall in no case be less than the type, duration, and 
scope of the benefits so provided for individuals entitled to 
such benefits solely by reason of that section.
  (b)(1) Payments under this title with respect to services, in 
addition to services for which payment would otherwise be made 
under this title, furnished to individuals who have been 
determined to have end stage renal disease shall include (A) 
payments on behalf of such individuals to providers of services 
and renal dialysis facilities which meet such requirements as 
the Secretary shall by regulation prescribe for institutional 
dialysis services and supplies (including self-dialysis 
services in a self-care dialysis unit maintained by the 
provider or facility), transplantation services, self-care home 
dialysis support services which are furnished by the provider 
or facility, and routine professional services performed by a 
physician during a maintenance dialysis episode if payments for 
his other professional services furnished to an individual who 
has end stage renal disease are made on the basis specified in 
[paragraph (3)(A)] paragraph (3)(A)(i) of this subsection, (B) 
payments to or on behalf of such individuals for home dialysis 
supplies and equipment, and (C) payments to a supplier of home 
dialysis supplies and equipment that is not a provider of 
services, a renal dialysis facility, or a physician for self-
administered erythropoietin as described in section 
1861(s)(2)(P) if the Secretary finds that the patient receiving 
such drug from such a supplier can safely and effectively 
administer the drug (in accordance with the applicable methods 
and standards established by the Secretary pursuant to such 
section). The requirements prescribed by the Secretary under 
subparagraph (A) shall include requirements for a minimum 
utilization rate for transplantations. Beginning 180 days after 
the date of the enactment of this sentence, an initial survey 
of a provider of services or a renal dialysis facility to 
determine if the conditions and requirements under this 
paragraph are met shall be initiated not later than 90 days 
after such date on which both the provider enrollment form 
(without regard to whether such form is submitted prior to or 
after such date of enactment) has been determined by the 
Secretary to be complete and the provider's enrollment status 
indicates approval is pending the results of such survey.
  (2)(A) With respect to payments for dialysis services 
furnished by providers of services and renal dialysis 
facilities to individuals determined to have end stage renal 
disease for which payments may be made under part B of this 
title, such payments (unless otherwise provided in this 
section) shall be equal to 80 percent of the amounts determined 
in accordance with subparagraph (B); and with respect to 
payments for services for which payments may be made under part 
A of this title, the amounts of such payments (which amounts 
shall not exceed, in respect to costs in procuring organs 
attributable to payments made to an organ procurement agency or 
histocompatibility laboratory, the costs incurred by that 
agency or laboratory) shall be determined in accordance with 
section 1861(v) or section 1886 (if applicable). Payments shall 
be made to a renal dialysis facility only if it agrees to 
accept such payments as payment in full for covered services, 
except for payment by the individual of 20 percent of the 
estimated amounts for such services calculated on the basis 
established by the Secretary under subparagraph (B) and the 
deductible amount imposed by section 1833(b).
  (B) The Secretary shall prescribe in regulations any methods 
and procedures to (i) determine the costs incurred by providers 
of services and renal dialysis facilities in furnishing covered 
services to individuals determined to have end stage renal 
disease, and (ii) determine, on a cost-related basis or other 
economical and equitable basis (including any basis authorized 
under section 1861(v)) and consistent with any regulations 
promulgated under paragraph (7), the amounts of payments to be 
made for part B services furnished by such providers and 
facilities to such individuals.
  (C) Such regulations, in the case of services furnished by 
proprietary providers and facilities (other than hospital 
outpatient departments) may include, if the Secretary finds it 
feasible and appropriate, provision for recognition of a 
reasonable rate of return on equity capital, providing such 
rate of return does not exceed the rate of return stipulated in 
section 1861(v)(1)(B).
  (D) For purposes of section 1878, a renal dialysis facility 
shall be treated as a provider of services.
  (3) [With respect to] (A) With respect to  payments for 
physicians' services furnished to individuals determined to 
have end stage renal disease, the Secretary shall pay 80 
percent of the amounts calculated for such services--
                          [(A)] (i) on a reasonable charge 
                        basis (but may, in such case, make 
                        payment on the basis of the prevailing 
                        charges of other physicians for 
                        comparable services or, for services 
                        furnished on or after January 1, 1992, 
                        on the basis described in section 1848) 
                        except that payment may not be made 
                        [under this subparagraph] under this 
                        clause for routine services furnished 
                        during a maintenance dialysis episode, 
                        or
                          [(B)] (ii) subject to subparagraph 
                        (B), on a comprehensive monthly fee or 
                        other basis (which effectively 
                        encourages the efficient delivery of 
                        dialysis services and provides 
                        incentives for the increased use of 
                        home dialysis) for an aggregate of 
                        services provided over a period of time 
                        (as defined in regulations).
  (B)(i) Subject to clause (ii), an individual who is 
determined to have end stage renal disease and who is receiving 
home dialysis may choose to receive monthly end stage renal 
disease-related visits, furnished on or after January 1, 2019, 
via telehealth.
  (ii) Clause (i) shall apply to an individual only if the 
individual receives a face-to-face visit, without the use of 
telehealth--
          (I) in the case of the initial three months of home 
        dialysis of such individual, at least monthly; and
          (II) after such initial three months, at least once 
        every three consecutive months.
  (4)(A) Pursuant to agreements with approved providers of 
services and renal dialysis facilities, the Secretary may make 
payments to such providers and facilities for the cost of home 
dialysis supplies and equipment and self-care home dialysis 
support services furnished to patients whose self-care home 
dialysis is under the direct supervision of such provider or 
facility, on the basis of a target reimbursement rate (as 
defined in paragraph (6)) or on the basis of a method 
established under paragraph (7).
  (B) The Secretary shall make payments to a supplier of home 
dialysis supplies and equipment furnished to a patient whose 
self-care home dialysis is not under the direct supervision of 
an approved provider of services or renal dialysis facility 
only in accordance with a written agreement under which--
          (i) the patient certifies that the supplier is the 
        sole provider of such supplies and equipment to the 
        patient,
          (ii) the supplier agrees to receive payment for the 
        cost of such supplies and equipment only on an 
        assignment-related basis, and
          (iii) the supplier certifies that it has entered into 
        a written agreement with an approved provider of 
        services or renal dialysis facility under which such 
        provider or facility agrees to furnish to such patient 
        all self-care home dialysis support services and all 
        other necessary dialysis services and supplies, 
        including institutional dialysis services and supplies 
        and emergency services.
  (5) An agreement under paragraph (4) shall require, in 
accordance with regulations prescribed by the Secretary, that 
the provider or facility will--
          (A) assume full responsibility for directly obtaining 
        or arranging for the provision of--
                  (i) such medically necessary dialysis 
                equipment as is prescribed by the attending 
                physician;
                  (ii) dialysis equipment maintenance and 
                repair services;
                  (iii) the purchase and delivery of all 
                necessary medical supplies; and
                  (iv) where necessary, the services of trained 
                home dialysis aides;
          (B) perform all such administrative functions and 
        maintain such information and records as the Secretary 
        may require to verify the transactions and arrangements 
        described in subparagraph (A);
          (C) submit such cost reports, data, and information 
        as the Secretary may require with respect to the costs 
        incurred for equipment, supplies, and services 
        furnished to the facility's home dialysis patient 
        population; and
          (D) provide for full access for the Secretary to all 
        such records, data, and information as he may require 
        to perform his functions under this section.
  (6) The Secretary shall establish, for each calendar year, 
commencing with January 1, 1979, a target reimbursement rate 
for home dialysis which shall be adjusted for regional 
variations in the cost of providing home dialysis. In 
establishing such a rate, the Secretary shall include--
          (A) the Secretary's estimate of the cost of providing 
        medically necessary home dialysis supplies and 
        equipment;
          (B) an allowance, in an amount determined by the 
        Secretary, to cover the cost of providing personnel to 
        aid in home dialysis; and
          (C) an allowance, in an amount determined by the 
        Secretary, to cover administrative costs and to provide 
        an incentive for the efficient delivery of home 
        dialysis;
but in no event (except as may be provided in regulations under 
paragraph (7)) shall such target rate exceed 75 percent of the 
national average payment, adjusted for regional variations, for 
maintenance dialysis services furnished in approved providers 
and facilities during the preceding fiscal year. Any such 
target rate so established shall be utilized, without 
renegotiation of the rate, throughout the calendar year for 
which it is established. During the last quarter of each 
calendar year, the Secretary shall establish a home dialysis 
target reimbursement rate for the next calendar year based on 
the most recent data available to the Secretary at the time. In 
establishing any rate under this paragraph, the Secretary may 
utilize a competitive-bid procedure, a prenegotiated rate 
procedure, or any other procedure (including methods 
established under paragraph (7)) which the Secretary determines 
is appropriate and feasible in order to carry out this 
paragraph in an effective and efficient manner.
  (7) Subject to paragraph (12), the Secretary shall provide by 
regulation for a method (or methods) for determining 
prospectively the amounts of payments to be made for dialysis 
services furnished by providers of services and renal dialysis 
facilities to individuals in a facility and to such individuals 
at home. Such method (or methods) shall provide for the 
prospective determination of a rate (or rates) for each mode of 
care based on a single composite weighted formula (which takes 
into account the mix of patients who receive dialysis services 
at a facility or at home and the relative costs of providing 
such services in such settings) for hospital-based facilities 
and such a single composite weighted formula for other renal 
dialysis facilities, or based on such other method or 
combination of methods which differentiate between hospital-
based facilities and other renal dialysis facilities and which 
the Secretary determines, after detailed analysis, will more 
effectively encourage the more efficient delivery of dialysis 
services and will provide greater incentives for increased use 
of home dialysis than through the single composite weighted 
formulas. The amount of a payment made under any method other 
than a method based on a single composite weighted formula may 
not exceed the amount (or, in the case of continuous cycling 
peritoneal dialysis, 130 percent of the amount) of the median 
payment that would have been made under the formula for 
hospital-based facilities. Subject to section 422(a)(2) of the 
Medicare, Medicaid, and SCHIP Benefits Improvement and 
Protection Act of 2000, the Secretary shall provide for such 
exceptions to such methods as may be warranted by unusual 
circumstances (including the special circumstances of sole 
facilities located in isolated, rural areas and of pediatric 
facilities). Each application for such an exception shall be 
deemed to be approved unless the Secretary disapproves it by 
not later than 60 working days after the date the application 
is filed. The Secretary may provide that such method will serve 
in lieu of any target reimbursement rate that would otherwise 
be established under paragraph (6). The Secretary shall reduce 
the amount of each composite rate payment under this paragraph 
for each treatment by 50 cents (subject to such adjustments as 
may be required to reflect modes of dialysis other than 
hemodialysis) and provide for payment of such amount to the 
organizations (designated under subsection (c)(1)(A)) for such 
organizations' necessary and proper administrative costs 
incurred in carrying out the responsibilities described in 
subsection (c)(2). The Secretary shall provide that amounts 
paid under the previous sentence shall be distributed to the 
organizations described in subsection (c)(1)(A) to ensure 
equitable treatment of all such network organizations. The 
Secretary in distributing any such payments to network 
organizations shall take into account--
          (A) the geographic size of the network area;
          (B) the number of providers of end stage renal 
        disease services in the network area;
          (C) the number of individuals who are entitled to end 
        stage renal disease services in the network area; and
          (D) the proportion of the aggregate administrative 
        funds collected in the network area.
The Secretary shall increase the amount of each composite rate 
payment for dialysis services furnished during 2000 by 1.2 
percent above such composite rate payment amounts for such 
services furnished on December 31, 1999, for such services 
furnished on or after January 1, 2001, and before January 1, 
2005, by 2.4 percent above such composite rate payment amounts 
for such services furnished on December 31, 2000, and for such 
services furnished on or after January 1, 2005, by 1.6 percent 
above such composite rate payment amounts for such services 
furnished on December 31, 2004.
  (8) For purposes of this title, the term ``home dialysis 
supplies and equipment'' means medically necessary supplies and 
equipment (including supportive equipment) required by an 
individual suffering from end stage renal disease in connection 
with renal dialysis carried out in his home (as defined in 
regulations), including obtaining, installing, and maintaining 
such equipment.
  (9) For purposes of this title, the term ``self-care home 
dialysis support services''', to the extent permitted in 
regulation, means--
          (A) periodic monitoring of the patient's home 
        adaptation, including visits by qualified provider or 
        facility personnel (as defined in regulations), so long 
        as this is done in accordance with a plan prepared and 
        periodically reviewed by a professional team (as 
        defined in regulations) including the individual's 
        physician;
          (B) installation and maintenance of dialysis 
        equipment;
          (C) testing and appropriate treatment of the water; 
        and
          (D) such additional supportive services as the 
        Secretary finds appropriate and desirable.
  (10) For purposes of this title, the term ``self-care 
dialysis unit'' means a renal dialysis facility or a distinct 
part of such facility or of a provider of services, which has 
been approved by the Secretary to make self-dialysis services, 
as defined by the Secretary in regulations, available to 
individuals who have been trained for self-dialysis. A self-
care dialysis unit must, at a minimum, furnish the services, 
equipment and supplies needed for self-care dialysis, have 
patient-staff ratios which are appropriate to self-dialysis 
(allowing for such appropriate lesser degree of ongoing medical 
supervision and assistance of ancillary personnel than is 
required for full care maintenance dialysis), and meet such 
other requirements as the Secretary may prescribe with respect 
to the quality and cost-effectiveness of services.
  (11)(A) Hepatitis B vaccine and its administration, when 
provided to a patient determined to have end stage renal 
disease, shall not be included as dialysis services for 
purposes of payment under any prospective payment amount or 
comprehensive fee established under this section. Payment for 
such vaccine and its administration shall be made separately in 
accordance with section 1833.
  (B) Erythropoietin, when provided to a patient determined to 
have end stage renal disease, shall not be included as a 
dialysis service for purposes of payment under any prospective 
payment amount or comprehensive fee established under this 
section, and subject to paragraphs (12) and (13) payment for 
such item shall be made separately--
          (i) in the case of erythropoietin provided by a 
        physician, in accordance with section 1833; and
          (ii) in the case of erythropoietin provided by a 
        provider of services, renal dialysis facility, or other 
        supplier of home dialysis supplies and equipment--
                  (I) for erythropoietin provided during 1994, 
                in an amount equal to $10 per thousand units 
                (rounded to the nearest 100 units), and
                  (II) for erythropoietin provided during a 
                subsequent year, in an amount determined to be 
                appropriate by the Secretary, except that such 
                amount may not exceed the amount determined 
                under this clause for the previous year 
                increased by the percentage increase (if any) 
                in the implicit price deflator for gross 
                national product (as published by the 
                Department of Commerce) for the second quarter 
                of the preceding year over the implicit price 
                deflator for the second quarter of the second 
                preceding year.
  (C) The amount payable to a supplier of home dialysis 
supplies and equipment that is not a provider of services, a 
renal dialysis facility, or a physician for erythropoietin 
shall be determined in the same manner as the amount payable to 
a renal dialysis facility for such item.
  (12)(A) Subject to paragraph (14), in lieu of payment under 
paragraph (7) beginning with services furnished on January 1, 
2005, the Secretary shall establish a basic case-mix adjusted 
prospective payment system for dialysis services furnished by 
providers of services and renal dialysis facilities in a year 
to individuals in a facility and to such individuals at home. 
The case-mix under such system shall be for a limited number of 
patient characteristics. Under such system, the payment rate 
for dialysis services furnished on or after January 1, 2009, by 
providers of services shall be the same as the payment rate 
(computed without regard to this sentence) for such services 
furnished by renal dialysis facilities, and in applying the 
geographic index under subparagraph (D) to providers of 
services, the labor share shall be based on the labor share 
otherwise applied for renal dialysis facilities.
  (B) The system described in subparagraph (A) shall include--
          (i) the services comprising the composite rate 
        established under paragraph (7); and
          (ii) the difference between payment amounts under 
        this title for separately billed drugs and biologicals 
        (including erythropoietin) and acquisition costs of 
        such drugs and biologicals, as determined by the 
        Inspector General reports to the Secretary as required 
        by section 623(c) of the Medicare Prescription Drug, 
        Improvement, and Modernization Act of 2003--
                  (I) beginning with 2005, for such drugs and 
                biologicals for which a billing code exists 
                prior to January 1, 2004; and
                  (II) beginning with 2007, for such drugs and 
                biologicals for which a billing code does not 
                exist prior to January 1, 2004,
        adjusted to 2005, or 2007, respectively, as determined 
        to be appropriate by the Secretary.
  (C)(i) In applying subparagraph (B)(ii) for 2005, such 
payment amounts under this title shall be determined using the 
methodology specified in paragraph (13)(A)(i).
  (ii) For 2006, the Secretary shall provide for an adjustment 
to the payments under clause (i) to reflect the difference 
between the payment amounts using the methodology under 
paragraph (13)(A)(i) and the payment amount determined using 
the methodology applied by the Secretary under paragraph 
(13)(A)(iii) of such paragraph, as estimated by the Secretary.
  (D) The Secretary shall adjust the payment rates under such 
system by a geographic index as the Secretary determines to be 
appropriate. If the Secretary applies a geographic index under 
this paragraph that differs from the index applied under 
paragraph (7) the Secretary shall phase-in the application of 
the index under this paragraph over a multiyear period.
  (E)(i) Such system shall be designed to result in the same 
aggregate amount of expenditures for such services, as 
estimated by the Secretary, as would have been made for 2005 if 
this paragraph did not apply.
  (ii) The adjustment made under subparagraph (B)(ii)(II) shall 
be done in a manner to result in the same aggregate amount of 
expenditures after such adjustment as would otherwise have been 
made for such services for 2006 or 2007, respectively, as 
estimated by the Secretary, if this paragraph did not apply.
  (F) Beginning with 2006, the Secretary shall annually 
increase the basic case-mix adjusted payment amounts 
established under this paragraph, by an amount determined by--
          (i) applying the estimated growth in expenditures for 
        drugs and biologicals (including erythropoietin) that 
        are separately billable to the component of the basic 
        case-mix adjusted system described in subparagraph 
        (B)(ii); and
          (ii) converting the amount determined in clause (i) 
        to an increase applicable to the basic case-mix 
        adjusted payment amounts established under subparagraph 
        (B).
Except as provided in subparagraph (G), nothing in this 
paragraph or paragraph (14) shall be construed as providing for 
an update to the composite rate component of the basic case-mix 
adjusted system under subparagraph (B) or under the system 
under paragraph (14).
  (G) The Secretary shall increase the amount of the composite 
rate component of the basic case-mix adjusted system under 
subparagraph (B) for dialysis services--
          (i) furnished on or after January 1, 2006, and before 
        April 1, 2007, by 1.6 percent above the amount of such 
        composite rate component for such services furnished on 
        December 31, 2005;
          (ii) furnished on or after April 1, 2007, and before 
        January 1, 2009, by 1.6 percent above the amount of 
        such composite rate component for such services 
        furnished on March 31, 2007;
          (iii) furnished on or after January 1, 2009, and 
        before January 1, 2010, by 1.0 percent above the amount 
        of such composite rate component for such services 
        furnished on December 31, 2008; and
          (iv) furnished on or after January 1, 2010, by 1.0 
        percent above the amount of such composite rate 
        component for such services furnished on December 31, 
        2009.
  (H) There shall be no administrative or judicial review under 
section 1869, section 1878, or otherwise, of the case-mix 
system, relative weights, payment amounts, the geographic 
adjustment factor, or the update for the system established 
under this paragraph, or the determination of the difference 
between medicare payment amounts and acquisition costs for 
separately billed drugs and biologicals (including 
erythropoietin) under this paragraph and paragraph (13).
  (13)(A) Subject to paragraph (14), the payment amounts under 
this title for separately billed drugs and biologicals 
furnished in a year, beginning with 2004, are as follows:
          (i) For such drugs and biologicals (other than 
        erythropoietin) furnished in 2004, the amount 
        determined under section 1842(o)(1)(A)(v) for the drug 
        or biological.
          (ii) For such drugs and biologicals (including 
        erythropoietin) furnished in 2005, the acquisition cost 
        of the drug or biological, as determined by the 
        Inspector General reports to the Secretary as required 
        by section 623(c) of the Medicare Prescription Drug, 
        Improvement, and Modernization Act of 2003. Insofar as 
        the Inspector General has not determined the 
        acquisition cost with respect to a drug or biological, 
        the Secretary shall determine the payment amount for 
        such drug or biological.
          (iii) For such drugs and biologicals (including 
        erythropoietin) furnished in 2006 and subsequent years, 
        such acquisition cost or the amount determined under 
        section 1847A for the drug or biological, as the 
        Secretary may specify.
  (B) Drugs and biologicals (including erythropoietin) which 
were separately billed under this subsection on the day before 
the date of the enactment of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 shall continue to be 
separately billed on and after such date, subject to paragraph 
(14).
  (14)(A)(i) Subject to subparagraph (E), for services 
furnished on or after January 1, 2011, the Secretary shall 
implement a payment system under which a single payment is made 
under this title to a provider of services or a renal dialysis 
facility for renal dialysis services (as defined in 
subparagraph (B)) in lieu of any other payment (including a 
payment adjustment under paragraph (12)(B)(ii)) and for such 
services and items furnished pursuant to paragraph (4).
  (ii) In implementing the system under this paragraph the 
Secretary shall ensure that the estimated total amount of 
payments under this title for 2011 for renal dialysis services 
shall equal 98 percent of the estimated total amount of 
payments for renal dialysis services, including payments under 
paragraph (12)(B)(ii), that would have been made under this 
title with respect to services furnished in 2011 if such system 
had not been implemented. In making the estimation under 
subclause (I), the Secretary shall use per patient utilization 
data from 2007, 2008, or 2009, whichever has the lowest per 
patient utilization.
  (B) For purposes of this paragraph, the term ``renal dialysis 
services''' includes--
                  (i) items and services included in the 
                composite rate for renal dialysis services as 
                of December 31, 2010;
                  (ii) erythropoiesis stimulating agents and 
                any oral form of such agents that are furnished 
                to individuals for the treatment of end stage 
                renal disease;
                  (iii) other drugs and biologicals that are 
                furnished to individuals for the treatment of 
                end stage renal disease and for which payment 
                was (before the application of this paragraph) 
                made separately under this title, and any oral 
                equivalent form of such drug or biological; and
                  (iv) diagnostic laboratory tests and other 
                items and services not described in clause (i) 
                that are furnished to individuals for the 
                treatment of end stage renal disease.
Such term does not include vaccines.
  (C) The system under this paragraph may provide for payment 
on the basis of services furnished during a week or month or 
such other appropriate unit of payment as the Secretary 
specifies.
  (D) Such system--
          (i) shall include a payment adjustment based on case 
        mix that may take into account patient weight, body 
        mass index, comorbidities, length of time on dialysis, 
        age, race, ethnicity, and other appropriate factors;
          (ii) shall include a payment adjustment for high cost 
        outliers due to unusual variations in the type or 
        amount of medically necessary care, including 
        variations in the amount of erythropoiesis stimulating 
        agents necessary for anemia management;
          (iii) shall include a payment adjustment that 
        reflects the extent to which costs incurred by low-
        volume facilities (as defined by the Secretary) in 
        furnishing renal dialysis services exceed the costs 
        incurred by other facilities in furnishing such 
        services, and for payment for renal dialysis services 
        furnished on or after January 1, 2011, and before 
        January 1, 2014, such payment adjustment shall not be 
        less than 10 percent; and
          (iv) may include such other payment adjustments as 
        the Secretary determines appropriate, such as a payment 
        adjustment--
                  (I) for pediatric providers of services and 
                renal dialysis facilities;
                  (II) by a geographic index, such as the index 
                referred to in paragraph (12)(D), as the 
                Secretary determines to be appropriate; and
                  (III) for providers of services or renal 
                dialysis facilities located in rural areas.
The Secretary shall take into consideration the unique 
treatment needs of children and young adults in establishing 
such system.
  (E)(i) The Secretary shall provide for a four-year phase-in 
(in equal increments) of the payment amount under the payment 
system under this paragraph, with such payment amount being 
fully implemented for renal dialysis services furnished on or 
after January 1, 2014.
  (ii) A provider of services or renal dialysis facility may 
make a one-time election to be excluded from the phase-in under 
clause (i) and be paid entirely based on the payment amount 
under the payment system under this paragraph. Such an election 
shall be made prior to January 1, 2011, in a form and manner 
specified by the Secretary, and is final and may not be 
rescinded.
  (iii) The Secretary shall make an adjustment to the payments 
under this paragraph for years during which the phase-in under 
clause (i) is applicable so that the estimated total amount of 
payments under this paragraph, including payments under this 
subparagraph, shall equal the estimated total amount of 
payments that would otherwise occur under this paragraph 
without such phase-in.
  (F)(i)(I) Subject to subclauses (II) and (III) and clause 
(ii), beginning in 2012, the Secretary shall annually increase 
payment amounts established under this paragraph by an ESRD 
market basket percentage increase factor for a bundled payment 
system for renal dialysis services that reflects changes over 
time in the prices of an appropriate mix of goods and services 
included in renal dialysis services.I20 (II) For 2012 and each 
subsequent year, after determining the increase factor 
described in subclause (I), the Secretary shall reduce such 
increase factor by the productivity adjustment described in 
section 1886(b)(3)(B)(xi)(II). The application of the preceding 
sentence may result in such increase factor being less than 0.0 
for a year, and may result in payment rates under the payment 
system under this paragraph for a year being less than such 
payment rates for the preceding year. In order to accomplish 
the purposes of subparagraph (I) with respect to 2016, 2017, 
and 2018, after determining the increase factor described in 
the preceding sentence for each of 2016, 2017, and 2018, the 
Secretary shall reduce such increase factor by 1.25 percentage 
points for each of 2016 and 2017 and by 1 percentage point for 
2018.
  (II) Subject to subclause (III), for 2012 and each subsequent 
year, after determining the increase factor described in 
subclause (I), the Secretary shall reduce such increase factor 
by the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II). The application of the preceding 
sentence may result in such increase factor being less than 0.0 
for a year, and may result in payment rates under the payment 
system under this paragraph for a year being less than such 
payment rates for the preceding year.
          (III) Notwithstanding subclauses (I) and (II), in 
        order to accomplish the purposes of subparagraph (I) 
        with respect to 2015, the increase factor described in 
        subclause (I) for 2015 shall be 0.0 percent pursuant to 
        the regulation issued by the Secretary on December 2, 
        2013, entitled ``Medicare Program; End-Stage Renal 
        Disease Prospective Payment System, Quality Incentive 
        Program, and Durable Medical Equipment, Prosthetics, 
        Orthotics, and Supplies; Final Rule'' (78 Fed. Reg. 
        72156).
  (ii) For years during which a phase-in of the payment system 
pursuant to subparagraph (E) is applicable, the following rules 
shall apply to the portion of the payment under the system that 
is based on the payment of the composite rate that would 
otherwise apply if the system under this paragraph had not been 
enacted:
                          (I) The update under clause (i) shall 
                        not apply.
                          (II) Subject to clause (i)(II), the 
                        Secretary shall annually increase such 
                        composite rate by the ESRD market 
                        basket percentage increase factor 
                        described in clause (i)(I).
  (G) There shall be no administrative or judicial review under 
section 1869, section 1878, or otherwise of the determination 
of payment amounts under subparagraph (A), the establishment of 
an appropriate unit of payment under subparagraph (C), the 
identification of renal dialysis services included in the 
bundled payment, the adjustments under subparagraph (D), the 
application of the phase-in under subparagraph (E), and the 
establishment of the market basket percentage increase factors 
under subparagraph (F).
  (H) Erythropoiesis stimulating agents and other drugs and 
biologicals shall be treated as prescribed and dispensed or 
administered and available only under part B if they are--
          (i) furnished to an individual for the treatment of 
        end stage renal disease; and
          (ii) included in subparagraph (B) for purposes of 
        payment under this paragraph.
  (I) For services furnished on or after January 1, 2014, and 
before January 1, 2015, the Secretary shall, by comparing per 
patient utilization data from 2007 with such data from 2012, 
make reductions to the single payment that would otherwise 
apply under this paragraph for renal dialysis services to 
reflect the Secretary's estimate of the change in the 
utilization of drugs and biologicals described in clauses (ii), 
(iii), and (iv) of subparagraph (B) (other than oral-only ESRD-
related drugs, as such term is used in the final rule 
promulgated by the Secretary in the Federal Register on August 
12, 2010 (75 Fed. Reg. 49030)). In making reductions under the 
preceding sentence, the Secretary shall take into account the 
most recently available data on average sales prices and 
changes in prices for drugs and biological reflected in the 
ESRD market basket percentage increase factor under 
subparagraph (F).
  (c)(1)(A)(i) For the purpose of assuring effective and 
efficient administration of the benefits provided under this 
section, the Secretary shall, in accordance with such criteria 
as he finds necessary to assure the performance of the 
responsibilities and functions specified in paragraph (2)--
          (I) establish at least 17 end stage renal disease 
        network areas, and
          (II) for each such area, designate a network 
        administrative organization which, in accordance with 
        regulations of the Secretary, shall establish (aa) a 
        network council of renal dialysis and transplant 
        facilities located in the area and (bb) a medical 
        review board, which has a membership including at least 
        one patient representative and physicians, nurses, and 
        social workers engaged in treatment relating to end 
        stage renal disease.
The Secretary shall publish in the Federal Register a 
description of the geographic area that he determines, after 
consultation with appropriate professional and patient 
organizations, constitutes each network area and the criteria 
on the basis of which such determination is made.
  (ii)(I) In order to determine whether the Secretary should 
enter into, continue, or terminate an agreement with a network 
administrative organization designated for an area established 
under clause (i), the Secretary shall develop and publish in 
the Federal Register standards, criteria, and procedures to 
evaluate an applicant organization's capabilities to perform 
(and, in the case of an organization with which such an 
agreement is in effect, actual performance of) the 
responsibilities described in paragraph (2). The Secretary 
shall evaluate each applicant based on quality and scope of 
services and may not accord more than 20 percent of the weight 
of the evaluation to the element of price.
  (II) An agreement with a network administrative organization 
may be terminated by the Secretary only if he finds, after 
applying such standards and criteria, that the organization has 
failed to perform its prescribed responsibilities effectively 
and efficiently. If such an agreement is to be terminated, the 
Secretary shall select a successor to the agreement on the 
basis of competitive bidding and in a manner that provides an 
orderly transition.
  (B) At least one patient representative shall serve as a 
member of each network council and each medical review board.
  (C) The Secretary shall, in regulations, prescribe 
requirements with respect to membership in network 
organizations by individuals (and the relatives of such 
individuals) (i) who have an ownership or control interest in a 
facility or provider which furnishes services referred to in 
section 1861(s)(2)(F), or (ii) who have received remuneration 
from any such facility or provider in excess of such amounts as 
constitute reasonable compensation for services (including time 
and effort relative to the provision of professional medical 
services) or goods supplied to such facility or provider; and 
such requirements shall provide for the definition, disclosure, 
and, to the maximum extent consistent with effective 
administration, prevention of potential or actual financial or 
professional conflicts of interest with respect to decisions 
concerning the appropriateness, nature, or site of patient 
care.
  (2) The network organizations of each network shall be 
responsible, in addition to such other duties and functions as 
may be prescribed by the Secretary, for--
          (A) encouraging, consistent with sound medical 
        practice, the use of those treatment settings most 
        compatible with the successful rehabilitation of the 
        patient and the participation of patients, providers of 
        services, and renal disease facilities in vocational 
        rehabilitation programs;
          (B) developing criteria and standards relating to the 
        quality and appropriateness of patient care and with 
        respect to working with patients, facilities, and 
        providers in encouraging participation in vocational 
        rehabilitation programs; and network goals with respect 
        to the placement of patients in self-care settings and 
        undergoing or preparing for transplantation;
          (C) evaluating the procedure by which facilities and 
        providers in the network assess the appropriateness of 
        patients for proposed treatment modalities;
          (D) implementing a procedure for evaluating and 
        resolving patient grievances;
          (E) conducting on-site reviews of facilities and 
        providers as necessary (as determined by a medical 
        review board or the Secretary), utilizing standards of 
        care established by the network organization to assure 
        proper medical care;
          (F) collecting, validating, and analyzing such data 
        as are necessary to prepare the reports required by 
        subparagraph (H) and to assure the maintenance of the 
        registry established under paragraph (7);
          (G) identifying facilities and providers that are not 
        cooperating toward meeting network goals and assisting 
        such facilities and providers in developing appropriate 
        plans for correction and reporting to the Secretary on 
        facilities and providers that are not providing 
        appropriate medical care; and
          (H) submitting an annual report to the Secretary on 
        July 1 of each year which shall include a full 
        statement of the network's goals, data on the network's 
        performance in meeting its goals (including data on the 
        comparative performance of facilities and providers 
        with respect to the identification and placement of 
        suitable candidates in self-care settings and 
        transplantation and encouraging participation in 
        vocational rehabilitation programs), identification of 
        those facilities that have consistently failed to 
        cooperate with network goals, and recommendations with 
        respect to the need for additional or alternative 
        services or facilities in the network in order to meet 
        the network goals, including self-dialysis training, 
        transplantation, and organ procurement facilities.
  (3) Where the Secretary determines, on the basis of the data 
contained in the network's annual report and such other 
relevant data as may be available to him, that a facility or 
provider has consistently failed to cooperate with network 
plans and goals or to follow the recommendations of the medical 
review board, he may terminate or withhold certification of 
such facility or provider (for purposes of payment for services 
furnished to individuals with end stage renal disease) until he 
determines that such provider or facility is making reasonable 
and appropriate efforts to cooperate with the network's plans 
and goals. If the Secretary determines that the facility's or 
provider's failure to cooperate with network plans and goals 
does not jeopardize patient health or safety or justify 
termination of certification, he may instead, after reasonable 
notice to the provider or facility and to the public, impose 
such other sanctions as he determines to be appropriate, which 
sanctions may include denial of reimbursement with respect to 
some or all patients admitted to the facility after the date of 
notice to the facility or provider, and graduated reduction in 
reimbursement for all patients.
  (4) The Secretary shall, in determining whether to certify 
additional facilities or expansion of existing facilities 
within a network, take into account the network's goals and 
performance as reflected in the network's annual report.
  (5) The Secretary, after consultation with appropriate 
professional and planning organizations, shall provide such 
guidelines with respect to the planning and delivery of renal 
disease services as are necessary to assist network 
organizations in their development of their respective 
networks' goals to promote the optimum use of self-dialysis and 
transplantation by suitable candidates for such modalities.
  (6) It is the intent of the Congress that the maximum 
practical number of patients who are medically, socially, and 
psychologically suitable candidates for home dialysis or 
transplantation should be so treated and that the maximum 
practical number of patients who are suitable candidates for 
vocational rehabilitation services be given access to such 
services and encouraged to return to gainful employment. The 
Secretary shall consult with appropriate professional and 
network organizations and consider available evidence relating 
to developments in research, treatment methods, and technology 
for home dialysis and transplantation.
  (7) The Secretary shall establish a national end stage renal 
disease registry the purpose of which shall be to assemble and 
analyze the data reported by network organizations, transplant 
centers, and other sources on all end stage renal disease 
patients in a manner that will permit--
          (A) the preparation of the annual report to the 
        Congress required under subsection (g);
          (B) an identification of the economic impact, cost-
        effectiveness, and medical efficacy of alternative 
        modalities of treatment;
          (C) an evaluation with respect to the most 
        appropriate allocation of resources for the treatment 
        and research into the cause of end stage renal disease;
          (D) the determination of patient mortality and 
        morbidity rates, and trends in such rates, and other 
        indices of quality of care; and
          (E) such other analyses relating to the treatment and 
        management of end stage renal disease as will assist 
        the Congress in evaluating the end stage renal disease 
        program under this section.
The Secretary shall provide for such coordination of data 
collection activities, and such consolidation of existing end 
stage renal disease data systems, as is necessary to achieve 
the purpose of such registry, shall determine the appropriate 
location of the registry, and shall provide for the appointment 
of a professional advisory group to assist the Secretary in the 
formulation of policies and procedures relevant to the 
management of such registry.
  (8) The provisions of sections 1157 and 1160 shall apply with 
respect to network administrative organizations (including such 
organizations as medical review boards) with which the 
Secretary has entered into agreements under this subsection.
  (d) Notwithstanding any provision to the contrary in section 
226 any individual who donates a kidney for transplant surgery 
shall be entitled to benefits under parts A and B of this title 
with respect to such donation. Reimbursement for the reasonable 
expenses incurred by such an individual with respect to a 
kidney donation shall be made (without regard to the 
deductible, premium, and coinsurance provisions of this title), 
in such manner as may be prescribed by the Secretary in 
regulations, for all reasonable preparatory, operation, and 
postoperation recovery expenses associated with such donation, 
including but not limited to the expenses for which payment 
could be made if he were an eligible individual for purposes of 
parts A and B of this title without regard to this subsection. 
Payments for postoperation recovery expenses shall be limited 
to the actual period of recovery.
  (e)(1) Notwithstanding any other provision of this title, the 
Secretary may, pursuant to agreements with approved providers 
of services, renal dialysis facilities, and nonprofit entities 
which the Secretary finds can furnish equipment economically 
and efficiently, reimburse such providers, facilities, and 
nonprofit entities (without regard to the deductible and 
coinsurance provisions of this title) for the reasonable cost 
of the purchase, installation, maintenance and reconditioning 
for subsequent use of artificial kidney and automated dialysis 
peritoneal machines (including supportive equipment) which are 
to be used exclusively by entitled individuals dialyzing at 
home.
  (2) An agreement under this subsection shall require that the 
provider, facility, or other entity will--
          (A) make the equipment available for use only by 
        entitled individuals dialyzing at home;
          (B) recondition the equipment, as needed, for reuse 
        by such individuals throughout the useful life of the 
        equipment, including modification of the equipment 
        consistent with advances in research and technology;
          (C) provide for full access for the Secretary to all 
        records and information relating to the purchase, 
        maintenance, and use of the equipment; and
          (D) submit such reports, data, and information as the 
        Secretary may require with respect to the cost, 
        management, and use of the equipment.
  (3) For purposes of this section, the term ``supportive 
equipment'' includes blood pumps, heparin pumps, bubble 
detectors, other alarm systems, and such other items as the 
Secretary may determine are medically necessary.
  (f)(1) The Secretary shall initiate and carry out, at 
selected locations in the United States, pilot projects under 
which financial assistance in the purchase of new or used 
durable medical equipment for renal dialysis is provided to 
individuals suffering from end stage renal disease at the time 
home dialysis is begun, with provision for a trial period to 
assure successful adaptation to home dialysis before the actual 
purchase of such equipment.
  (2) The Secretary shall conduct experiments to evaluate 
methods for reducing the costs of the end stage renal disease 
program. Such experiments shall include (without being limited 
to) reimbursement for nurses and dialysis technicians to assist 
with home dialysis, and reimbursement to family members 
assisting with home dialysis.
  (3) The Secretary shall conduct experiments to evaluate 
methods of dietary control for reducing the costs of the end 
stage renal disease program, including (without being limited 
to) the use of protein-controlled products to delay the 
necessity for, or reduce the frequency of, dialysis in the 
treatment of end stage renal disease.
  (4) The Secretary shall conduct a comprehensive study of 
methods for increasing public participation in kidney donation 
and other organ donation programs.
  (5) The Secretary shall conduct a full and complete study of 
the reimbursement of physicians for services furnished to 
patients with end stage renal disease under this title, giving 
particular attention to the range of payments to physicians for 
such services, the average amounts of such payments, and the 
number of hours devoted to furnishing such services to patients 
at home, in renal disease facilities, in hospitals, and 
elsewhere.
  (6) The Secretary shall conduct a study of the number of 
patients with end stage renal disease who are not eligible for 
benefits with respect to such disease under this title (by 
reason of this section or otherwise), and of the economic 
impact of such noneligibility of such individuals. Such study 
shall include consideration of mechanisms whereby governmental 
and other health plans might be instituted or modified to 
permit the purchase of actuarially sound coverage for the costs 
of end stage renal disease.
  (7)(A) The Secretary shall establish protocols on standards 
and conditions for the reuse of dialyzer filters for those 
facilities and providers which voluntarily elect to reuse such 
filters.
  (B) With respect to dialysis services furnished on or after 
January 1, 1988 (or July 1, 1988, with respect to protocols 
that relate to the reuse of bloodlines), no dialysis facility 
may reuse dialysis supplies (other than dialyzer filters) 
unless the Secretary has established a protocol with respect to 
the reuse of such supplies and the facility follows the 
protocol so established.
  (C) The Secretary shall incorporate protocols established 
under this paragraph, and the requirement of subparagraph (B), 
into the requirements for facilities prescribed under 
subsection (b)(1)(A) and failure to follow such a protocol or 
requirement subjects such a facility to denial of participation 
in the program established under this section and to denial of 
payment for dialysis treatment not furnished in compliance with 
such a protocol or in violation of such requirement.
  (8) The Secretary shall submit to the Congress no later than 
October 1, 1979, a full report on the experiments conducted 
under paragraphs (1), (2), (3), and (7), and the studies under 
paragraphs (4), (5), (6), and (7). Such report shall include 
any recommendations for legislative changes which the Secretary 
finds necessary or desirable as a result of such experiments 
and studies.
  (g)(1) In any case where the Secretary--
          (A) finds that a renal dialysis facility is not in 
        substantial compliance with requirements for such 
        facilities prescribed under subsection (b)(1)(A),
          (B) finds that the facility's deficiencies do not 
        immediately jeopardize the health and safety of 
        patients, and
          (C) has given the facility a reasonable opportunity 
        to correct its deficiencies,
the Secretary may, in lieu of terminating approval of the 
facility, determine that payment under this title shall be made 
to the facility only for services furnished to individuals who 
were patients of the facility before the effective date of the 
notice.
  (2) The Secretary's decision to restrict payments under this 
subsection shall be made effective only after such notice to 
the public and to the facility as may be prescribed in 
regulations, and shall remain in effect until (A) the Secretary 
finds that the facility is in substantial compliance with the 
requirements under subsection (b)(1)(A), or (B) the Secretary 
terminates the agreement under this title with the facility.
  (3) A facility dissatisfied with a determination by the 
Secretary under paragraph (1) shall be entitled to a hearing 
thereon by the Secretary (after reasonable notice) to the same 
extent as is provided in section 205(b), and to judicial review 
of the Secretary's final decision after such hearing as is 
provided in section 205(g), except that, in so applying such 
sections and in applying section 205(l) thereto, any reference 
therein to the Commissioner of Social Security or the Social 
Security Administration shall be considered a reference to the 
Secretary or the Department of Health and Human Services, 
respectively.
  (h) Quality Incentives in the End-Stage Renal Disease 
Program.--
          (1) Quality incentives.--
                  (A) In general.--With respect to renal 
                dialysis services (as defined in subsection 
                (b)(14)(B)) furnished on or after January 1, 
                2012, in the case of a provider of services or 
                a renal dialysis facility that does not meet 
                the requirement described in subparagraph (B) 
                with respect to the year, payments otherwise 
                made to such provider or facility under the 
                system under subsection (b)(14) for such 
                services shall be reduced by up to 2.0 percent, 
                as determined appropriate by the Secretary.
                  (B) Requirement.--The requirement described 
                in this subparagraph is that the provider or 
                facility meets (or exceeds) the total 
                performance score under paragraph (3) with 
                respect to performance standards established by 
                the Secretary with respect to measures 
                specified in paragraph (2).
                  (C) No effect in subsequent years.--The 
                reduction under subparagraph (A) shall apply 
                only with respect to the year involved, and the 
                Secretary shall not take into account such 
                reduction in computing the single payment 
                amount under the system under paragraph (14) in 
                a subsequent year.
          (2) Measures.--
                  (A) In general.--The measures specified under 
                this paragraph with respect to the year 
                involved shall include--
                          (i) measures on anemia management 
                        that reflect the labeling approved by 
                        the Food and Drug Administration for 
                        such management and measures on 
                        dialysis adequacy;
                          (ii) to the extent feasible, such 
                        measure (or measures) of patient 
                        satisfaction as the Secretary shall 
                        specify;
                          (iii) for 2016 and subsequent years, 
                        measures described in subparagraph 
                        (E)(i); and
                          (iv) such other measures as the 
                        Secretary specifies, including, to the 
                        extent feasible, measures on--
                                  (I) iron management;
                                  (II) bone mineral metabolism; 
                                and
                                  (III) vascular access, 
                                including for maximizing the 
                                placement of arterial venous 
                                fistula.
                  (B) Use of endorsed measures.--
                          (i) In general.--Subject to clause 
                        (ii), any measure specified by the 
                        Secretary under subparagraph (A)(iv) 
                        must have been endorsed by the entity 
                        with a contract under section 1890(a).
                          (ii) Exception.--In the case of a 
                        specified area or medical topic 
                        determined appropriate by the Secretary 
                        for which a feasible and practical 
                        measure has not been endorsed by the 
                        entity with a contract under section 
                        1890(a), the Secretary may specify a 
                        measure that is not so endorsed as long 
                        as due consideration is given to 
                        measures that have been endorsed or 
                        adopted by a consensus organization 
                        identified by the Secretary.
                  (C) Updating measures.--The Secretary shall 
                establish a process for updating the measures 
                specified under subparagraph (A) in 
                consultation with interested parties.
                  (D) Consideration.--In specifying measures 
                under subparagraph (A), the Secretary shall 
                consider the availability of measures that 
                address the unique treatment needs of children 
                and young adults with kidney failure.
                  (E) Measures specific to the conditions 
                treated with oral-only drugs.--
                          (i) In general.--The measures 
                        described in this subparagraph are 
                        measures specified by the Secretary 
                        that are specific to the conditions 
                        treated with oral-only drugs. To the 
                        extent feasible, such measures shall be 
                        outcomes-based measures.
                          (ii) Consultation.--In specifying the 
                        measures under clause (i), the 
                        Secretary shall consult with interested 
                        stakeholders.
                          (iii) Use of endorsed measures.--
                                  (I) In general.--Subject to 
                                subclause (I), any measures 
                                specified under clause (i) must 
                                have been endorsed by the 
                                entity with a contract under 
                                section 1890(a).
                                  (II) Exception.--If the 
                                entity with a contract under 
                                section 1890(a) has not 
                                endorsed a measure for a 
                                specified area or topic related 
                                to measures described in clause 
                                (i) that the Secretary 
                                determines appropriate, the 
                                Secretary may specify a measure 
                                that is endorsed or adopted by 
                                a consensus organization 
                                recognized by the Secretary 
                                that has expertise in clinical 
                                guidelines for kidney disease.
          (3) Performance scores.--
                  (A) Total performance score.--
                          (i) In general.--Subject to clause 
                        (ii), the Secretary shall develop a 
                        methodology for assessing the total 
                        performance of each provider of 
                        services and renal dialysis facility 
                        based on performance standards with 
                        respect to the measures selected under 
                        paragraph (2) for a performance period 
                        established under paragraph (4)(D) (in 
                        this subsection referred to as the 
                        ``total performance score'').
                          (ii) Application.--For providers of 
                        services and renal dialysis facilities 
                        that do not meet (or exceed) the total 
                        performance score established by the 
                        Secretary, the Secretary shall ensure 
                        that the application of the methodology 
                        developed under clause (i) results in 
                        an appropriate distribution of 
                        reductions in payment under paragraph 
                        (1) among providers and facilities 
                        achieving different levels of total 
                        performance scores, with providers and 
                        facilities achieving the lowest total 
                        performance scores receiving the 
                        largest reduction in payment under 
                        paragraph (1)(A).
                          (iii) Weighting of measures.--In 
                        calculating the total performance 
                        score, the Secretary shall weight the 
                        scores with respect to individual 
                        measures calculated under subparagraph 
                        (B) to reflect priorities for quality 
                        improvement, such as weighting scores 
                        to ensure that providers of services 
                        and renal dialysis facilities have 
                        strong incentives to meet or exceed 
                        anemia management and dialysis adequacy 
                        performance standards, as determined 
                        appropriate by the Secretary.
                  (B) Performance score with respect to 
                individual measures.--The Secretary shall also 
                calculate separate performance scores for each 
                measure, including for dialysis adequacy and 
                anemia management.
          (4) Performance standards.--
                  (A) Establishment.--Subject to subparagraph 
                (E), the Secretary shall establish performance 
                standards with respect to measures selected 
                under paragraph (2) for a performance period 
                with respect to a year (as established under 
                subparagraph (D)).
                  (B) Achievement and improvement.--The 
                performance standards established under 
                subparagraph (A) shall include levels of 
                achievement and improvement, as determined 
                appropriate by the Secretary.
                  (C) Timing.--The Secretary shall establish 
                the performance standards under subparagraph 
                (A) prior to the beginning of the performance 
                period for the year involved.
                  (D) Performance period.--The Secretary shall 
                establish the performance period with respect 
                to a year. Such performance period shall occur 
                prior to the beginning of such year.
                  (E) Special rule.--The Secretary shall 
                initially use as the performance standard for 
                the measures specified under paragraph 
                (2)(A)(i) for a provider of services or a renal 
                dialysis facility the lesser of--
                          (i) the performance of such provider 
                        or facility for such measures in the 
                        year selected by the Secretary under 
                        the second sentence of subsection 
                        (b)(14)(A)(ii); or
                          (ii) a performance standard based on 
                        the national performance rates for such 
                        measures in a period determined by the 
                        Secretary.
          (5) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, 
        section 1878, or otherwise of the following:
                  (A) The determination of the amount of the 
                payment reduction under paragraph (1).
                  (B) The establishment of the performance 
                standards and the performance period under 
                paragraph (4).
                  (C) The specification of measures under 
                paragraph (2).
                  (D) The methodology developed under paragraph 
                (3) that is used to calculate total performance 
                scores and performance scores for individual 
                measures.
          (6) Public reporting.--
                  (A) In general.--The Secretary shall 
                establish procedures for making information 
                regarding performance under this subsection 
                available to the public, including--
                          (i) the total performance score 
                        achieved by the provider of services or 
                        renal dialysis facility under paragraph 
                        (3) and appropriate comparisons of 
                        providers of services and renal 
                        dialysis facilities to the national 
                        average with respect to such scores; 
                        and
                          (ii) the performance score achieved 
                        by the provider or facility with 
                        respect to individual measures.
                  (B) Opportunity to review.--The procedures 
                established under subparagraph (A) shall ensure 
                that a provider of services and a renal 
                dialysis facility has the opportunity to review 
                the information that is to be made public with 
                respect to the provider or facility prior to 
                such data being made public.
                  (C) Certificates.--
                          (i) In general.--The Secretary shall 
                        provide certificates to providers of 
                        services and renal dialysis facilities 
                        who furnish renal dialysis services 
                        under this section to display in 
                        patient areas. The certificate shall 
                        indicate the total performance score 
                        achieved by the provider or facility 
                        under paragraph (3).
                          (ii) Display.--Each facility or 
                        provider receiving a certificate under 
                        clause (i) shall prominently display 
                        the certificate at the provider or 
                        facility.
                  (D) Web-based list.--The Secretary shall 
                establish a list of providers of services and 
                renal dialysis facilities who furnish renal 
                dialysis services under this section that 
                indicates the total performance score and the 
                performance score for individual measures 
                achieved by the provider and facility under 
                paragraph (3). Such information shall be posted 
                on the Internet website of the Centers for 
                Medicare & Medicaid Services in an easily 
                understandable format.

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                       medicare improvement fund

  Sec. 1898.
  (a) Establishment.--The Secretary shall establish under this 
title a Medicare Improvement Fund (in this section referred to 
as the `Fund') which shall be available to the Secretary to 
make improvements under the original Medicare fee-for-service 
program under parts A and B for individuals entitled to, or 
enrolled for, benefits under part or enrolled under part B 
including adjustments to payments for items and services 
furnished by providers of services and suppliers under such 
original Medicare fee-for-service program.
  (b) Funding.--
          (1) In general.--There shall be available to the 
        Fund, for expenditures from the Fund for services 
        furnished [during and after fiscal year 2021, 
        $270,000,000] during and after fiscal year 2021, 
        $245,000,000
          (2) Payment from trust funds.--The amount specified 
        under paragraph (1) shall be available to the Fund, as 
        expenditures are made from the Fund, from the Federal 
        Hospital Insurance Trust Fund and the Federal 
        Supplementary Medical Insurance Trust Fund in such 
        proportion as the Secretary determines appropriate.
          (3) Funding limitation.--Amounts in the Fund shall be 
        available in advance of appropriations but only if the 
        total amount obligated from the Fund does not exceed 
        the amount available to the Fund under paragraph (1). 
        The Secretary may obligate funds from the Fund only if 
        the Secretary determines (and the Chief Actuary of the 
        Centers for Medicare & Medicaid Services and the 
        appropriate budget officer certify) that there are 
        available in the Fund sufficient amounts to cover all 
        such obligations incurred consistent with the previous 
        sentence.
          (4) No effect on payments in subsequent years.--In 
        the case that expenditures from the Fund are applied 
        to, or otherwise affect, a payment rate for an item or 
        service under this title for a year, the payment rate 
        for such item or service shall be computed for a 
        subsequent year as if such application or effect had 
        never occurred.

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                              ----------                              


MEDICARE IVIG ACCESS AND STRENGTHENING MEDICARE AND REPAYING TAXPAYERS 
                              ACT OF 2012



           *       *       *       *       *       *       *
                     TITLE I--MEDICARE IVIG ACCESS

SEC. 101. MEDICARE PATIENT IVIG ACCESS DEMONSTRATION PROJECT.

  (a) Establishment.--The Secretary shall establish and 
implement a demonstration project under part B of title XVIII 
of the Social Security Act to evaluate the benefits of 
providing payment for items and services needed for the in-home 
administration of intravenous immune globin for the treatment 
of primary immune deficiency diseases.
  (b) Duration and Scope.--
          (1) Duration.--Beginning not later than one year 
        after the date of enactment of this Act, the Secretary 
        shall conduct the demonstration project for a period of 
        3 years and, subject to the availability of funds under 
        subsection (g)--
                  (A) if the date of enactment of the Medicare 
                Part B Improvement Act of 2017 is on or before 
                September 30, 2017, for the period beginning on 
                October 1, 2017, and ending on December 31, 
                2020; and
                  (B) if the date of enactment of such Act is 
                after September 30, 2017, for the period 
                beginning on the date of enactment of such Act 
                and ending on December 31, 2020
          (2) Scope.--The Secretary shall enroll not more than 
        4,000 Medicare beneficiaries who have been diagnosed 
        with primary immunodeficiency disease for participation 
        in the demonstration project. A Medicare beneficiary 
        may participate in the demonstration project on a 
        voluntary basis and may terminate participation at any 
        time. Subject to the preceding sentence, a Medicare 
        beneficiary enrolled in the demonstration project on 
        September 30, 2017, shall be automatically enrolled 
        during the period beginning on the date of the 
        enactment of the Medicare Part B Improvement Act of 
        2017 and ending on December 31, 2020, without 
        submission of another application.
  (c) Coverage.--Except as otherwise provided in this section, 
items and services for which payment may be made under the 
demonstration program shall be treated and covered under part B 
of title XVIII of the Social Security Act in the same manner as 
similar items and services covered under such part.
  (d) Payment.--The Secretary shall establish a per visit 
payment amount for items and services needed for the in-home 
administration of intravenous immune globin based on the 
national per visit low-utilization payment amount under the 
prospective payment system for home health services established 
under section 1895 of the Social Security Act (42 U.S.C. 
1395fff).
  (e) Waiver Authority.--The Secretary may waive such 
requirements of title XVIII of the Social Security Act as may 
be necessary to carry out the demonstration project.
  (f) Study and Report to Congress.--
          (1) Interim evaluation and report.--Not later than 
        three years after the date of enactment of this Act, 
        the Secretary shall submit to Congress a report that 
        contains an interim evaluation of the impact of the 
        demonstration project on access for Medicare 
        beneficiaries to items and services needed for the in-
        home administration of intravenous immune globin.
          (2) Final evaluation and report.--Not later than one 
        year after the date of completion of the demonstration 
        project, the Secretary shall submit to Congress a 
        report that contains the following:
                  (A) A final evaluation of the impact of the 
                demonstration project on access for Medicare 
                beneficiaries to items and services needed for 
                the in-home administration of intravenous 
                immune globin.
                  (B) An analysis of the appropriateness of 
                implementing a new methodology for payment for 
                intravenous immune globulins in all care 
                settings under part B of title XVIII of the 
                Social Security Act (42 U.S.C. 1395k et seq.).
                  (C) An update to the report entitled 
                ``Analysis of Supply, Distribution, Demand, and 
                Access Issues Associated with Immune Globulin 
                Intravenous (IGIV)'', issued in February 2007 
                by the Office of the Assistant Secretary for 
                Planning and Evaluation of the Department of 
                Health and Human Services.
  (g) Funding.--There shall be made available to the Secretary 
to carry out the demonstration project not more than 
$45,000,000 from the Federal Supplementary Medical Insurance 
Trust Fund under section 1841 of the Social Security Act (42 
U.S.C. 1395t).
  (h) Definitions.--In this section:
          (1) Demonstration project.--The term ``demonstration 
        project'' means the demonstration project conducted 
        under this section.
          (2) Medicare beneficiary.--The term ``Medicare 
        beneficiary'' means an individual who is enrolled for 
        benefits under part B of title XVIII of the Social 
        Security Act.
          (3) Secretary.--The term ``Secretary'' means the 
        Secretary of Health and Human Services.

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    VII. EXCHANGES OF LETTERS WITH ADDITIONAL COMMITTEES OF REFERRAL





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