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 100 STAT. 2012

42 USC 1395y.

PUBLIC LAW 99-509—OCT. 21, 1986

"(B) The special enrollment period referred to in the second sentences of paragraphs (1) and (2) is the period beginning with the first day of the first month in which the individual is no longer enrolled as an active individual in a large group health plan (as such terms are defined in section 1862(b)(4)(B)) and ending seven months later.". (4) The second sentence of section 1839(b) of such Act (42 U.S.C. 1395r(b)) is amended by inserting before the period the following: "or months during which the individual has not attained the age of 65 and for which the individual can demonstrate that the individual was enrolled in a large group health plan as an active individual (as those terms are defined in section 1862(b)(4)(B))". (d) TAX IMPOSED ON NONCONFORMING PLANS.—

Post, p. 2095.

-'

(1) Subtitle D of the Internal Revenue Code of 1954 (relating to miscellaneous excise taxes) is amended by adding at the end the following new chapter:

"CHAPTER 47—CERTAIN LARGE GROUP HEALTH PLANS "Sec. 5000. Certain large group health plans. 26 USC 5000.

oc ' vSO ^:' .ft I !¥: i s>

"SEC. 5000. CERTAIN LARGE GROUP HEALTH PLANS.

"(a) IMPOSITION OF TAX.—There is hereby imposed on any employer or employee organization that contributes to a nonconforming large group health plan a tax equal to 25 percent of the employer's or employee organization's expenses incurred during the calendar year for each large group health plan to which the employer or employee organization contributes. "(b) LARGE GROUP HEALTH PLAN.—For purposes of this section, the term 'large group health plan' means a plan of, or contributed to "^y* ^^ employer or employee organization (including a self-insured plan) to provide health care (directly or otherwise) to the employees, former employees, the employer, others associated or formerly associated with the employer in a business relationship, or their families, that covers employees of at least one employer that normally employed at least 100 employees on a typical business day during the previous calendar year. "(c) NONCONFORMING LARGE GROUP HEALTH PLAN.—For purposes

42 USC 1395y.

Reports.

42 USC 1395y

note.

of this section, the term 'nonconforming large group health plan' means a large group health plan that at any time during a calendar year does not comply with the requirements of section 1862(b)(4)(A)(i) of the Social Security Act. "(d) GOVERNMENT ENTITIES.—For purposes of this section, the term 'employer' does not include a Federal or other governmental entity.". (2) The table of chapters of subtitle D of such Code is amended by adding at the end thereof the following: . "CHAPTER 47. Certain large group health plans.". (e) S T U D Y OF IMPACT ON DISABLED BENEFICIARIES AND FAMILY.—

The Comptroller General shall study and report to Congress, by not later than March 1, 1990, the impact of the amendments made by this section on access of disabled individuals and members of their family to employment and health insurance. The report shall include information relating to— ^, ,,^.

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 PUBLIC LAW 99-509—OCT. 21, 1986 •p

£ 1

100 STAT. 2013

(1) the number of disabled medicare beneficiaries for whom medicare has become secondary, either through their employment or the employment of a family member; (2) the amount of savings to the medicare program achieved annually through this provision; and (3) the effect on employment, and employment-based health coverage, of disabled individuals and family members.

(- (f) EFFECTIVE DATES.—

42 USC l395y

)

^°^-

e f !

(1) Except as provided in paragraph (2), the amendments made by this section shall apply to items and services furnished on or after January 1, 1987. (2) The amendments made by subsection (c) shall apply to enrollments occurring on or after January 1, 1987.

SEC. 9320. PAYMENT FOR SERVICES OF CERTIFIED REGISTERED NURSE ANESTHETISTS. (a) EXTENSION OF PASS-THROUGH FOR COSTS OF CERTIFIED REGIS-

-'^-^ i i at; i

TERED NURSE ANESTHETISTS.—Section 2312(c) of the Deficit Reduction Act of 1984 is amended by striking "October 1, 1987." and inserting 42 USC I395ww "January 1, 1989. In the case of a cost reporting period that begins ^°^before January 1, 1989, but end after such date, additional pa3mients
 * M

under the amendment made by subsection (a) shall be proportionately reduced to reflect the portion of the period occurring after such date.". (b) COVERAGE OF SERVICES OF A CERTIFIED REGISTERED NURSE

ANESTHETIST UNDER PART B.—Section 1861(s) of the Social Security

Act (42 U.S.C. 1395x(s)) is amended— (1) by redesignating paragraphs (11) through (14) as paragraphs (12) through (15), respectively; I (2) by striking "and" at the end of paragraph (9); (3) by striking the period at the end of paragraph (10) and inserting "; and"; and i (4) by inserting after paragraph (10) the following new paragraph: t "(11) services of a certified registered nurse anesthetist (as - defined in subsection (bb)).". (c) DEFINITION OF SERVICES OF A CERTIFIED REGISTERED NURSE

ANESTHETIST.—Section 1861 of such Act is amended by inserting after subsection (aa) the following new subsection: "SERVICES OF A CERTIFIED REGISTERED NURSE ANESTHETIST

"(bbXD The term 'services of a certified registered nurse anesthetist' means anesthesia services and related care furnished by a certified registered nurse anesthetist (as defined in paragraph (2)) which the nurse anesthetist is legally authorized to perform as such by the State in which the services are furnished. "(2) The term 'certified registered nurse anesthetist' means a certified registered nurse anesthetist licensed by the State who meets such education, training, and other requirements relating to anesthesia services and related care as the Secretary may prescribe. In prescribing such requirements the Secretary may use the same requirements as those established by a national organization for the certification of nurse anesthetists.". (d) DIRECT PAYMENT FOR SERVICES.—Section 1832(a)(2)(B) of such Act (42 U.S.C. 1395k(a)(2)(B)) is amended— (1) by striking "and" at the end of clause (i),

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 100 STAT. 2014

Ante, p. 2013.

Effective date.

42 USC 1395u.

Health care professionals.

Claims. Contracts.

PUBLIC LAW 99-509—OCT. 21, 1986

fno ^ (2) by striking "; and" at the end of clause (ii) and inserting ^ -V0 ", and ', and (3) by adding at the end the following new clause: tevain?f "(iii) services of a certified registered nurse anesthetist; and". (e) AMOUNT OF PAYMENT.—(1) Section 1833(a)(1) of such Act (42 U.S.C. 13951(a)(l)) is amended by striking "and" at the end of subparagraph (E), and by adding at the end the following: "and (H) with respect to services of a certified registered nurse anesthetist under section 1861(s)(ll), the amounts paid shall be 80 percent of the lesser of the actual charge or the fee schedule for such services established by the Secretary in accordance with subsection (1),". (2) Section 1833 of such Act is further amended by adding at the end the following new subsection: "(IXD The Secretary shall establish a fee schedule for services of certified registered nurse anesthetists under section 1861(s)(ll). "(2) Except as provided in paragraph (3), the fee schedule established under p a r s ^ a p h (1) shall be initially based on audited data from cost reporting periods ending in fiscal year 1985. The fee schedule shall be adjusted annually (to become effective on January 1 of each calendar year) by the percentage increase in the MEI (as defined in section 1842(b)(4)(E)(ii)) for that year. "(3)(A) In establishing the initial fee schedule for those services, the Secretary shall adjust the fee schedule to the extent necessary to ensure that the estimated total amount which will be paid under this title for those services plus applicable coinsurance in 1989 will equal the estimated total amount which would be paid under this title for those services in 1989 if the services were included as inpatient hospital services and payment for such services was made under part A in the same manner as payment was made in fiscal year 1987, adjusted to take into account changes in prices and technology relating to the administration of anesthesia. "(B) The Secretary shall also reduce the prevailing charge of physicians for medical direction of a certified registered nurse anesthetist, or the fee schedule for services of certified registered nurse anesthetists, or both, to the extent necessary to ensure that the estimated total amount which will be paid under this title plus applicable coinsurance for such medical direction and such services in 1989 and 1990 will not exceed the estimated total amount which would have been paid but for the enactment of the amendments made by section 9320 of the Omnibus Budget Reconciliation Act of 1986. A reduced prevailing charge under this subparagraph shall become the prevailing charge but for subsequent years for purposes of applying the economic index under the fourth sentence of section 1842(b)(3). "(4) In establishing the fee schedule under paragraph (1), the Secretary may utilize a system of time units, a system of base and time units, or any appropriate methodology. The Secretary may establish a nationwide fee schedule or adjust the fee schedule for geographic areas (as the Secretary may determine to be appropriate). "(5)(A) Payment for the services of a certified registered nurse anesthetist (for which payment may otherwise be made under this part) may be made on the basis of a claim or request for payment presented by the certified registered nurse anesthetist furnishing such services, or by a hospital, physician, or group practice with which the certified registered nurse anesthetist furnishing such

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2015

services has an employment or contractual relationship that provides for payment to be made under this part for such services to such hospital, physician, or group practice. "(B)(i) Payment for the services of a certified registered nurse anesthetist under this part may be made only on an assignmentrelated basis, and any such assignment agreed to by a certified registered nurse anesthetist shall be binding upon any other person presenting a claim or request for payment for such services. "(ii) Except for deductible and coinsurance amounts applicable under this section, any person who knowingly and willfully presents, or causes to be presented, to an individual enrolled under this part a bill or request for payment for services of a certified registered nurse anesthetist for which payment may be made under this part only on an assignment-related basis is subject to a civil monetary penalty of not to exceed $2,000 for each such bill or request. Such a penalty shall be imposed in the same manner as civil monetary penalties are imposed under section 1128A with respect to actions described in subsection (a) of that section. "(C) No hospital that presents a claim or request for payment for services of a certified nurse anesthetist under this part may treat any uncollected coinsurance amount imposed under this part with respect to such services as a bad debt of such hospital for purposes of this title. "(6)(A) If an adjustment under paragraph (3)(B) results in a reduction in the reasonable charge for a physicians' service and a nonparticipating physician furnishes the service to an individual entitled to benefits under this part (subject to subparagraph (D)), the physician may not charge the individual more than the limiting charge (as defined in subparagraph (B)) plus (for services furnished during the 12-month period beginning on the effective date of the reduction) Vi of the amount by which the physician's actual charges for the service for the previous 12-month period exceeds the limiting charge. "(B) In subparagraph (A), the term 'limiting charge' means, with respect to a service, 125 percent of the prevailing charge for the service after the reduction referred to in subparagraph (A). "(C) If a physician knowingly and willfully imposes charges in violation of subparagraph (A), the Secretary may apply sanctions against such physician in accordance with subsection (j)(2). "(D) This paragraph shall not apply to services furnished after the earlier of (i) December 31, 1990, or (ii) one-year after the date the Secretary reports to Congress, under section 1845(e)(3), on the development of the relative value scale under section 1845.". (3) Section 1842(j)(2) of such Act (42 U.S.C. 1395uO*X2)) is amended by striking "paragraph (1) or subsection (k)" and inserting "this paragraph".

V.''. Ante, pp. 2003, 2008. Claims.

Health care professionals.

.a*03tt

Health care professionals. Sanctions. Reports. Ante, p. 190.

(f) NOT TREATED AS PART OF INPATIENT HOSPITAL SERVICES.—

Section 1861(b)(4) of such Act (42 U.S.C. 1395x03X4)) is amended by inserting before the semicolon the following: ", anesthesia services provided by a certified certified registered nurse anesthetist". (g) CONFORMING AMENDMENTS TO HOSPITAL PAYMENTS.—(1) Section 1886(a)(4) of such Act (42 U.S.C. 1395ww(a)(4)) is amended by striking ", costs of anesthesia services provided by a certified registered nurse anesthetist,". (2) Section 1886(d)(5) of such Act (42 U.S.C. 1395ww(d)(5)) is amended by striking subparagraph (E).

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 100 STAT. 2016

PUBLIC LAW 99-509—OCT. 21, 1986 (h) OTHER CONFORMING AMENDMENTS.—(1) Section 1862(a)(14) of

such Act (42 U.S.C. 1395y(a)(14)) is amended by inserting before the period the following: "or are services of a certified registered nurse

42 USC 1395k note. 42 USC 1395k note.

(2) Section 1866(a)(l)(H) of such Act (42 U.S.C. 1395cc(a)(l)(H)) is amended by inserting ", and other than services of a certified registered nurse anesthetist" after "1862(a)(14)". (3) Sections 1864(a), 1865(a), 1902(a)(9)(C), and 1915(a)(l)(B)(ii)(I) of such Act (42 U.S.C. 1395aa(a), 1395bb(a), 1396a(a)(9)(C), 1396n(a)(l)(B)(iiXI)) are each amended by striking "paragraphs (11) and (12)" and inserting "paragraphs (12) and (13)". (i) EFFECTIVE DATE.—The amendments made by this section (other than subsection (a)) shall apply to services furnished on or after January 1, 1989. (j) CONSTRUCTION.—Nothing in this section or the amendments made by this section shall contravene provisions of State law relating to the practice of medicine or nursing or State law requirements or institutional requirements regarding the administration of anesthesia and its medical direction or supervision. SEC. 9321. TECHNICAL AMENDMENTS AND MISCELLANEOUS PROVISIONS RELATING TO PARTS A AND B. (a) TREATMENT OF GROUP PURCHASING VENDOR AGREEMENTS.—

contracts.

42 USC 1395nn note.

(1) IN GENERAL.—Section 1877(b)(3) of the Social Security Act (42 U.S.C. 1395nn(b)(3)) is amended— (A) by striking "and" at the end of subparagraph (A), (B) by striking the period at the end of subparagraph (B) and inserting "; and", and (C) by adding at the end the following: "(C) any amount paid by a vendor of goods or services to a person authorized to act as a purchasing agent for a group of individuals or entities who are furnishing services reimbursed under this title if— "(i) the person has a written contract, with each such individual or entity which specifies the amount to be paid the person, which amount may be a fixed amount or a fixed percentage of the value of the purchases made by each such individual or entity under the contract, and "(ii) in the case of an entity that is a provider of services, the person discloses (in such form and manner as the Secretary requires) to the entity and, upon request, to the Secretary the amount received from each such vendor with respect to purchases made by or on behalf of the entity.". (2) EFFECTIVE DATE.—The amendments made by paragraph (1) apply to payments made before, on, or after the date of the enactment of this Act. (b) EXTENSION AND CLARIFICATION OF COMPETITIVE CONTRACTING

42 USC 1395h note.

Ante, pp. 1997, 1998. 42 USC 1395WW note.

AUTHORITY.—Section 2326(a) of the Deficit Reduction Act of 1984 is amended— (1) by striking "of the fiscal years" and all that follows through ", the Secretary" and inserting "fiscal year (beginning with fiscal year 1985 and ending with fiscal year 1989), the Secretary", and (2) by inserting "or cost reimbursement provisions under sections 1816(c) or 1842(c) of such Act" after "such Act" the second place it appears. (c) TREATMENT OF CAPITAL-RELATED REGULATIONS.—

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100 STAT. 2017

(1) PROHIBITION OF ISSUANCE OF FINAL REGULATIONS ON CAPITAL-RELATED COSTS AS PART OF PAYMENT FOR OPERATING COSTS

BEFORE SEPTEMBER 1, 1987.—Notwithstanding any other provision of law (except as provided in paragraph (3)), the Secretary of Health and Human Services may not issue, in final form, after September 1, 1986, and before September 1, 1987, any regulation that changes the methodology for computing the amount of payment for capital-related costs (as defined in paragraph (4)) for inpatient hospital services under part A of title XVIII of the Social Security Act. Any regulation published in violation of the previous sentence before the date of the enactment of this Act is void and of no effect.

42 USC 1395c.

(2) NOT INCLUDING CAPITAL-RELATED REGULATIONS IN BUDGET

BASELINE.—Any reference in law to a regulation issued in final ..,, form or proposed by the Health Care Financing Administration ' pursuant to sections 1886(b)(3)(B), 1886(d)(3)(A), and 1886(e)(4) of the Social Security Act shall not include any regulation issued 42 USC 1395ww or proposed with respect to capital-related costs (as defined in paragraph (4)). (3) EXCEPTION.—Paragraph (1) shall not apply to any regulation issued for the sole purpose of implementing section 1886(g)(3)(A) and (B) of the Social Security Act (as amended by section 9303(a) of this Act). (4) CAPITAL-RELATED COSTS DEFINED.—In this subsection, the term "capital-related costs" means those capital-related costs that are specifically excluded, under the second sentence of "operating costs of inpatient hospital services" (as defined in that section) for cost reporting periods beginning prior to October 1, 1987. (d) LIMITATION ON AUTHORITY TO ISSUE CERTAIN FINAL REGULA- 42 USC I395ww TiONS AND INSTRUCTIONS RELATING TO HOSPITALS OR PHYSICIANS.— note. Notwithstanding any other provision of law, except as required to implement specific provisions required under statute and except as provided under subsection (c) with respect to a regulation described in that subsection, the Secretary of Health and Human Services is not authorized to issue in final form after the date of the enactment of this Act and before September 1, 1987, any regulation, instruction, or other policy which is estimated by the Secretary to result in a net reduction in expenditures under title XVIII of the Social Security Act in fiscal year 1988 of more than $50,000,000, and which 42 USC 1395. relates to hospitals or physicians. (e) 60-DAY NOTICE FOR PROPOSED REGULATIONS.— (1) IN GENERAL.—Section 1871 of the Social Security Act (42 U.S.C. 1395hh) is amended by inserting "(a)" after "1871." and by adding at the end the following new subsection: "(b)(1) Except as provided in paragraph (2), before issuing in final Federal form any regulation under subsection (a), the Secretary shall pro- Register, vide for notice of the proposed regulation in the Federal Register publication, and a period of not less than 60 days for public comment thereon. "(2) Paragraph (1) shall not apply where— "(A) a statute specifically permits a regulation to be issued in interim final form or otherwise with a shorter period for public comment, "(B) a statute establishes a specific deadline for the implementation of a provision and the deadline is less than 150 days after the date of the enactment of the statute in which the deadline is contained, or

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 100 STAT. 2018

PUBLIC LAW 99-509—OCT. 21, 1986

- "• "(C) subsection (b) of section 553 of title 5, United States Code, ^ does not apply pursuant to subparagraph (B) of such subsection.". (2) CONFORMING AMENDMENTS.—(A) Section 1886(e)(3)(A) of

such Act (42 U.S.C. 1395ww(e)(3)(A)), as amended by section 9302(e)(3)(B), is amended by striking "April" and inserting "March". (B) Section 1886(e)(5)(A) of such Act is amended by striking "June"and inserting "May". (3) EFFECTIVE DATES.— 42 USC 1395hh note. 42 USC 1395WW note. j f c j Vi.

(A) The amendments made by paragraph (1) shall apply to notices of proposed rulemaking issued after the date of the enactment of this Act. (B) The amendments made by paragraph (2) shall take effect beginning with fiscal year 1989.

PART 3—PROVISIONS RELATING TO MEDICARE PARTE SEC. 9331. PAYMENT FOR PHYSICIANS' SERVICES. (a) DETERMINATION OF MAXIMUM CHARGES FOR PHYSICIANS' SERVICES.—

ALLOWABLE

PREVAILING

(1) IN GENERAL.—Section 1842(b)(4)(A) of the Social Security Act (42 U.S.C. 1395u(b)(4)(A)) is amended by striking clause (iii) and inserting the following: "(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) In determining the prevailing charge level under the third and fourth sentences of paragraph (3) for a physicians' service furnished on or after January 1, 1987, by a nonparticipating physician, the Secretary shall set the level at 96 percent of the prevailing charge levels established under such sentences with respect to such service furnished by participating physicians. "(v) Beginning with 1987, the percentage increase in the MEI (as defined in subparagraph (E)(ii)) for each year shall be the same for nonparticipating physicians as for participating physicians.". (2) CONFORMING AMENDMENT.—Section 1842(b)(4)(C) of such Act is amended— (A) by striking "(i)" after "(C)", and (B) by striking clause (ii). (3) DEFINITIONS.—Section 1842(b)(4) of such Act is further amended by adding at the end the following new subparagraph: "(E) In this section: "(i) 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)(D), and the term 'nonparticipating physician' "' refers, with respect to the furnishing of services, a physician who at the time of furnishing the services is not a participating physician.

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2019

"(ii) 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 paragraph (3)) appHcable to such services furnished as of the first day of that year.", (4) EFFECTIVE DATE.—The amendments made by this subsection shall apply to services furnished on or after January 1, 1987. (b) GENERAL LIMIT ON ACTUAL CHARGES FOR NONPARTICIPATING PHYSICIANS.—

42 USC 1395u note. 42 USC 1395u.

(1) IN GENERAL.—Section 1842(j)(l) of such Act is amended— (A) by inserting "(A)" after "(j)(D". and (B) by adding at the end the following new subparagraph: "(B)(i) During any period (on or after January 1, 1987, and before Sanctions. the date specified in clause (ii)), during which a physician is a nonparticipating physician, the Secretary shall monitor each such physician's actual charges for physicians' services furnished to individuals enrolled under this part. If such physician knowingly and willfully bills for such a service a physician's actual charge (as defined in subparagraph (C)(vi) 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 the earlier of (I) December 31, 1990, or (II) one-year after the date the Secretary reports to Congress, under section 1845(e)(3), on the devel- Ante, p. 190. opment of the relative value scale under section 1845. "(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 actual charge for that service in the previous year was— "(I) less than 115 percent of the prevailing charge for the year involved for such service furnished by nonparticipating physicians, 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 prevailing charge for the year involved for such service furnished by nonparticipating physicians, 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 ix^QK 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, VA, "(II) for 1988, Va, "(III) for 1989, ¥2, and .'. "(IV) for any subsequent year, 1.

VI

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 100 STAT. 2020

PUBLIC LAW 99-509—OCT. 21, 1986

"(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 1987, in the case of a
 * )8IA !.t» 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 12month period ending June 30 of that previous year. "(vi) For purposes of this subparagraph and subparagraph (B), 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.". (2) PROVISION OF ACTUAL CHARGE INFORMATION BY CARRIER TO

42 USC 1395u.

42 USC 1395u note. 42 USC 1395u note. 42 USC 1395J.

NONPARTICIPATING PHYSICIANS.—Section 1842(b)(3) of such Act is amended— (A) by striking "and" at the end of subparagraph (E), ^,,,,., (B) by inserting "and" at the end of subparagraph (F), and (C) by inserting after subparagraph (F) the following new subparagraph: ^^ "(G) will provide to each nonparticipating physician, at the beginning of each year, a list of the physician's maximum allowable actual charges (established under subsection (j)(l)(C)) for the year for the physicians' services mostly commonly furnished by that physician;". (3) CONFORMING AMENDMENT.—Section 1842(b)(4)(D) of such Act is amended by adding at the end the following new clause: "(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)(l)(C).". (4) EFFECTIVE DATE.—The amendments made by this subsection shall apply to services furnished on or after January 1, 1987. (c) MEDICARE ECONOMIC INDEX.—

(1) FOR 1987.—Notwithstanding any other provision of law, for purposes of part B of title XVIII of the Social Security Act for physicians' services furnished in 1987, the percentage increase in the MEI (as defined in section 1842(b)(4)(E)(ii) of the Social Security Act) shall be 3.2 percent. (2) PROHIBITING RETROACTIVE ADJUSTMENT OF MEDICARE ECO-

NOMIC INDEX.—The Secretary of Health and Human Services is not authorized to revise the MEI in a manner that provides, for any period before January 1, 1985, for the substitution of a

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 w

PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2021

rental equivalence or rental substitution factor for the housing component of the consumer price index. (3) ANNUALIZATION OF MEL—(A) The fourth sentence of section 1842(b)(3) of the Social Security Act (42 U.S.C. 1395u(b)(3)) is amended by inserting after "ending June 30, 1973," the following: "or (with respect to physicians services furnished in a year after 1987) the level determined under this sentence for the previous year", and inserting "year-to-year" before "economic changes". (B) The amendments made by subparagraph (A) shall apply to physicians' services furnished on or after January 1, 1988. (4) STUDY.—The Secretary shall conduct a study of the extent to which the MEI appropriately and equitably reflects economic changes in the provision of the physicians' services to medicare beneficiaries. In conducting such study the Secretary shall consult with appropriate experts. (5) LIMITATION ON CHANGES IN MEI METHODOLOGY.—The Secretary shall not change the methodology (including the basis and elements) used in the MEI from that in effect as of October 1, 1985, until completion of the study under paragraph (4). After the completion of the study, the Secretary may not change such methodology except after providing notice in the Federal Register and opportunity for public comment. (6) MEI DEFINED.—In this subsection, the term "MEI" means the economic index referred to in the fourth sentence of section 1842(b)(3) of the Social Security Act. (d) DEVELOPMENT AND USE OF H C F A COMMON PROCEDURE CODING SYSTEM.—

1

1 1 i

42 USC 1395u note. 42 USC 1395u note.

Public information. 42 USC 1395u note.

42 USC 1395u note. 42 USC 1395u note. Public information.

(1) Not later than July 1, 1989, the Secretary of Health and Human Services (in this subsection referred to as the "Secretary"), after public notice and opportunity for public comment and after consulation with appropriate medical and other experts, shall group the procedure codes contained in any HCFA Common Procedure Coding System for payment purposes to minimize inappropriate increases in the intensity or volume of services provided as a result of coding distinctions which do not reflect substantial differences in the services rendered. (2) Not later than January 1, 1990, each carrier with which contracts. the Secretary has entered into a contract under section 1842 of the Social Security Act shall make payments under part B of 42 USC 1395U. title XVIII of such Act based on the grouping of procedure codes 42 USC 1395J. effected under paragraph (1). (e) RECOMMENDATIONS.—

(1) Section 1845(e) of the Social Security Act is amended by Ante, p. 192. adding at the end thereof the following new paragraph: "(4)(A) In making recommendations with respect to the ap5 plication of the relative value scale for purposes of establishing ,3. i a fee schedule, the Secretary shall— t "(i) develop and assess an appropriate index to be used for making adjustments to reflect justifiable differences in the -5'--costs of practice based upon geographic location without exacerbating the geographic maldistribution of physicians, and "(ii) assess the advisability and feasibility of developing ,^.»t:> an appropriate adjustment to assist in attracting and retaining physicians in medically underserved areas.

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Page:United States Statutes at Large Volume 100 Part 3.djvu/214

 100 STAT. 2022

PUBLIC LAW 99-509—OCT. 21, 1986

•g^-rr "(B) In carrying out the requirements of subparagraph (A), the Secretary shall take into consideration the recommendations made by the Physician Payment Review Commission. "(C)(i) The Secretary shall develop an interim index under subparagraph (A)(i) prior to January 1, 1988, based upon the most accurate and recent data that are available with respect to the costs of practice. "(ii) The Secretary shall collect data with respect to the costs of practice (including, but not limited to, data on nonphysician ,, v'., personnel costs, malpractice insurance costs, and commercial sv.' rents) for the purpose of refining the index under subparagraph ,f,f;^,,^ (A)(i) prior to December 31, 1989, and periodically updating the T^.^oindex thereafter. "(D) In conjunction with developing an index under subparagraph (A), the Secretary shall conduct a study of the advisability of redefining the localities designated by carriers for payment purposes.". 42 USC 1395W-1. (2) Section 1845(b)(3) of such Act is amended by inserting "and „. .... respecting the index and the adjustment described in subsection 5">f^ (e)(4)(A)" after "subsection (e)". (3) Section 1845(e)(3) of such Act is amended— (A) by striking "July 1, 1987" and inserting in lieu thereof "July 1, 1989", and (B) by striking "on or after January 1, 1988" and insertii?~k' ing in lieu thereof "after December 31, 1989". SEC. 9332. INCENTIVES FOR PHYSICIAN PARTICIPATION. (a) RECRUITING.— (1) CARRIER RESPONSIBILITY.—Section 1842(b)(3) of the Social f<C!3.irT,-^'.'

Contracts. 42 USC 1395u note.

42 USC 1395U note. 42 USC 1395J.

Security Act (42 U.S.C. 1395u(b)(3)), as amended by section 9331(b)(2), is further amended— (A) by striking "and" at the end of subparagraph (F), (B) by inserting "and" at the end of subparagraph (G), and • (C) by inserting after subparagraph (G) the following new subparagraph: ^5^ "(H) if it makes determinations or payments with respect to physicians' services, will implement— "(i) programs to recruit and retain physicians as participating physicians in the area served by the carrier, including educational and outreach activities and the use of cin: w: professional relations personnel to handle billing and other problems relating to payment of claims of participating physicians; and vci fc'*>; "(ii) programs to familiarize beneficiaries with the participating physician program and to assist such beneA - ' ficiaries in locating participating physicians;". (2) MEASURING CARRIER PERFORMANCE.—The Secretary of

Health and Human Services shall provide, in the standards and criteria established under section 1842(b)(2) of the Social Security Act for contracts under that section, a system to measure a carrier's performance of the responsibilities described in sections 1842(b)(3)(H) and 1842(h) of such Act. (3) CARRIER

BONUSES

FOR GOOD

PERFORMANCE.—Of

the

amounts appropriated for administrative activities to carry out part B of title XVIII of the Social Security Act, the Secretary of Health and Human Services shall provide payments, totaling 1

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Page:United States Statutes at Large Volume 100 Part 3.djvu/215

 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2023

percent of the total payments to carriers for claims processing in any fiscal year, to carriers under section 1842 of such Act, to reward such carriers for their success in increasing the proportion of physicians in the carrier's service area who are participating physicians. (4) EFFECTIVE DATES.— (A) CARRIER RESPONSIBILITY.—The

amendment made by paragraph (1) shall be effective for contracts under section 1842 of the Social Security Act as of October 1, 1987.

42 USC 1395u note. Contracts. ''

(B) PERFORMANCE MEASURES.—The Secretary of Health biif^i

3 .,•

and Human Services shall provide for the establishment of the standards and criteria required under paragraph (2) by not later than October 1, 1987, which shall apply to contracts as of October 1, 1987. (C) CARRIER BONUSES.—From the amounts appropriated for each fiscal year (beginning with fiscal year 1988), the Secretary of Health and Human Services shall first provide for pa3mients of bonuses to carriers under paragraph (3) not later than April 1, 1988, to reflect performance of carriers during the enrollment period at the end of 1987.

(b) DIRECTORIES OF PARTICIPATING PHYSICIANS.— (1) REQUIRING DISTRIBUTION TO MEDICARE BENEFICIARIES, UPON

REQUEST.—Section 1842(h) of the Social Security Act (42 U.S.C. 1395u(h)) is amended— (A) in paragraph (2), by striking period and inserting the following: "and may request a copy of an appropriate directory published under paragraph (4). Each such carrier shall, without charge, mail a copy of such directory upon such a request."; EBW (B) in paragraph (5)— (i) by striking "publication of the directories" and inserting "the participation program under this subsection and the publication and availability of the directories", and (ii) by adding at the end the following: "The Secretary shall include such notice in the mailing of appropriate benefit checks provided under title II."; and (C) in the second sentence of paragraph (6)— (i) by inserting before the period the following: "and that an appropriate number of copies of each such directory is sent to hospitals located in the area", and I.;. (ii) by adding at the end the following: "Such copies shall be sent free of charge.". (2) ORGANIZATION OF DIRECTORIES.—Section 1842(h)(4) of such Act is amended by adding at the end the following: "Each g participating physician directory for an area shall provide an J alphabetical listing of all participating physicians practicing in the area and an alphabetical listing by locality and specialty of such physicians.". f. (3) EFFECTIVE DATES.—The amendments made by this paragraph shall first apply to directories for 1987. (c) PROHIBITING UNASSIGNED BILLING OF SERVICES DETERMINED TO BE MEDICALLY UNNECESSARY BY A CARRIER.—

(1) IN GENERAL.—Section 1842 of the Social Security Act is further amended by adding at the end the following new », subsection: 8, "(IXIXA) Subject to subparagraph (C), if—

Health care facilities.

il D81J Sl^

42 USC 1395u note.

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Page:United States Statutes at Large Volume 100 Part 3.djvu/216

 100 STAT. 2024

PUBLIC LAW 99-509—OCT. 21, 1986

'^"'

42 USC 1320c. 42 USC 1395y.

contracts.

Sanctions. 42 USC 1395u note. 42 USC 1395U.

'4!iu

"(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) a carrier determines under this part or a peer review 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, 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 oasis 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 if— "(i) 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 carrier with a contract in effect under this section with respect to physicians and each peer review 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).". (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to services furnished on or after October 1, 1987. (d) DISCLOSURE OF INFORMATION OF UNASSIGNED CLAIMS FOR CERTAIN PHYSICIANS' SERVICES.—

(1) IN GENERAL.—Section 1842 of the Social Security Act, as amended by subsection (c)(1), is further amended by adding at the end the following new subsection: "(m)(l) In the case of a nonparticipating physician who— "(A) performs an elective surgical procedure for an individual ^^n enrolled for benefits under this part and for which the physi*' * cian'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

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Page:United States Statutes at Large Volume 100 Part 3.djvu/217

 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2025

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 0X2). "(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).". (2) EFFECTIVE DATE.—'The amendment made by paragraph (1) shall apply to surgical procedures performed on or after October 1, 1987. (e) MAINTENANCE AND USE OF PARTICIPATING PHYSICIAN DIREC-

Sanctions..-:

42 USC 1395u note, 42 USC I395cc.

TORIES BY H O S P I T A L S. — (1) REQUIREMENT OF PARTICIPATION.—Section

1866(a)(1) of the Social Security Act, as amended by section 9305(b)(1), is further Ante, p. 1989. amended— (A) by striking "and" at the end of subparagraph (L), (B) by striking the period at the end of subparagraph (M) and inserting ", and", and (C) by inserting after subparagraph (M) the following new subparagraph: 3 i.|- "(N) in the case of hospitals— "(i) to make available to its patients the directory or directories of participating physicians (published under section 1842(h)(4)) for the area served by the hospital, and "(ii) if hospital personnel (including staff of any emergency or outpatient department) refer a patient to a .J,,., nonparticipating physician for further medical care on an outpatient basis, the personnel must inform the patient r, that the physician is a nonparticipating physician and, whenever practicable, must identify at least one qualified participating physician who is listed in such a directory and J..; • from whom the patient may receive the necessary services.". (2) EFFECTIVE DATE.—The amendment made by paragraph (1) 42 USC 1395cc shall apply to agreements under section 1866(a) of the Social note. Security Act as of October 1, 1987.
 * J

SEC. 9333. LIMITS ON REASONABLE CHARGES. (a) PROCEDURES FOR ESTABLISHMENT OF SPECIAL LIMITS ON REASONABLE CHARGES FOR PART B SERVICES.—Section 1842(b)(8) of the Social

g, „ ^.

Security Act (42 U.S.C. 1395u(b)(8)) is amended— (1) by redesignating subparagraphs (A) and (B) as clauses (i) T and (ii), respectively; (2) by inserting "(A)" after "(8)"; and (3) by adding at the end the following new subparagraphs: "(B)(i) The Secretary may provide for an increase or decrease in Health care the reasonable charge otherwise recognized under this section with professionals. respect to a specific physicians' service only in accordance with the

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Page:United States Statutes at Large Volume 100 Part 3.djvu/218

 100 STAT. 2026

42 USC 1396.

mMl tlfjll y .dJC't .%.','- ; <;' M^i'

•:< '>,

S:H5?^:^'

'?Tj St, "

Claims.

Post, p. 2035.

PUBLIC LAW 99-509—OCT. 21, 1986

criteria set forth in subparagraph (A) and with the succeeding provisions of this paragraph. "(ii) The factors described pursuant to subparagraph (A)(i) with respect to payment for physicians' services shall include, but need not be limited to, the following: "(I) Prevailing charges for a service in a particular locality are significantly in excess of or below prevailing charges in other comparable localities, taking into account the relative costs of furnishing the services in the different localities. "(II) The programs established under this title and title XIX are the sole or primary sources of payment for a service. "(Ill) The marketplace for a service is not truly competitive because of a limited number of physicians who perform that service. "(IV) There have been increases in charges for a service that cannot be explained by inflation or technology. «|^Y) rpj^g charges do not reflect changing technology, increased facility with that technology, or reductions in acquisition or production costs. "(VI) The prevailing charges for a service under this part are substantially higher or lower than the payments made for the service by other purchasers in the same locality. "(iii) In applying subparagraph (A), the Secretary may compare— "(I) the charges and resource costs for related procedures, "(II) charges and resource costs for the procedure over a period of time, "(III) charges for a procedure in different geographic areas, and "(IV) the charges and allowed payments for a procedure under this part and by other payors. "(iv) The factors considered under subparagraph (A)(ii) shall take into account regional differences in fees, unless there is substantial economic justification for a uniform fee or a uniform payment limit. Such substantial economic justification must be explained by the Secretary in the notice and final determination required by paragraph (9). "(v) An adjustment under clause (i) on the basis of a comparison of the prevailing charges in different localities may be made only if the Secretary determines that the prevailing charge allowed in one locality is out of line with prevailing charges allowed in other localities after accounting for differences in practice costs. «(yj) IJJ ^i^jg subparagraph, 'resource costs' include factors such as the time required to provide a procedure (including pre-procedure evaluation and post-procedure follow-up), the complexity of the procedure, the training required to perform the procedure, and the risk involved in the procedure. "(C) In determining whether to adjust payment rates under subparagraph (B)(i), the Secretary shall consider the potential impacts on quality, access, and beneficiary liability of the adjustment, including the likely effects on assignment rates, reasonable charge reductions on unassigned claims, and participation rates of physicians.". (b) INHERENT REASONABLENESS PROCEDURES.—Section 1842(b) of the Social Security Act (42 U.S.C. 1395u(b)) is amended by redesignating paragraph (9) as paragraph (11) and inserting after paragraph (8) the following new paragraphs: -

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Page:United States Statutes at Large Volume 100 Part 3.djvu/219

 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2027

"(9)(A) In the case of any physicians' service with respect to which the Secretary— "(i) determines, after appropriate consultation with representatives of the physicians likely to be affected by any change in the reasonable charge, that the application of this subsection results in the determination of a reasonable charge that, by reason of its grossly excessive or grossly deficient amount, is not inherently reasonable, and "(ii) proposes to establish a reasonable charge that is realistic and equitable or a methodology for arriving at such a charge, the Secretary shall publish notice of such proposal in the Federal Register. "(B) A notice required by subparagraph (A) shall— "(i) specify the charge or methodology proposed to be established with respect to a service and shall explain the factors and data that the Secretary took into account in determining the charge or methodology so specified, and "(ii) explain the potential impacts described in paragraph (8)(C). "(C) After publication of the notice required by subparagraph (A), the Secretary shall allow not less than 60 days for public comment on the proposal. "(D) In addition to carrying out its functions under section 1845, the Physician Payment Review Commission (in this paragraph referred to as the 'Commission') shall comment on any such proposal within the period of comment allowed by the Secretary pursuant to subparagraph (C). "(E)(i) Taking into consideration the comments made by the Commission and the public, the Secretary shall publish in the Federal Register a final determination with respect to the reasonable charge or methodology to be established with respect to the 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, and shall include and respond to the comments made by the Commission pursuant to subparagraph (D). "(10)(A)(i) If an adjustment under paragraph (8)(B) results in a reduction in the reasonable charge for a physicians' service, and a nonparticipating physician furnishes the service to an individual entitled to benefits under this part after the effective date of such reduction and before the end of the period described in subparagraph (C), the physician may not charge the individual more than the limiting charge (as defined in clause (ii)) plus (for services furnished during the 12-month period beginning on the effective date of the reduction) V of the amount by which the physician's 2 actual charge for the service for the previous 12-month period exceeds the limiting charge. "(ii) In clause (i), the term 'limiting charge' means, with respect to a service, 125 percent of the inherently reasonable charge established under paragraph (8). "(B) If a physician knowingly and willfully imposes charges in violation of subparagraph (A), the Secretary may apply sanctions against such physician in accordance with subsection 0X2). "(C) Subparagraph (A) shall not apply to services furnished after the earlier of (i) December 31, 1990, or (ii) one-year after the date the

Health care professionals.

Federal Register, publication.

Ante, p. 190.

Federal Register, publication.

Health care professionals.

'iuxiDo^'

Sanctions.

Reports.

.siio&
 * l.T -^i,

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Page:United States Statutes at Large Volume 100 Part 3.djvu/220

 100 STAT. 2028 Ante, p. 192. 42 USC 1395u note.

42 USC 1395J.

42 USC 1395u note.

PUBLIC LAW 99-509—OCT. 21, 1986

Secretary reports to Congress, under section 1845(e)(3), on the development of the relative value scale under section 1845.". (c) REVIEW OF PROCEDURES.—Not later than October 1, 1987, the Secretary of Health and Human Services shall review the inherent reasonableness of the reasonable charges for at least 10 of the most costly procedures with respect to which payment is made under part B of title XVIII of the Social Security Act (determined on the basis of the aggregate annual payments under such part with respect to each such procedure). (d) EFFECTIVE DATE.—The amendments made by this section shall take effect on the date of the enactment of this Act. SEC. 9334. PAYMENT FOR CATARACT SURGICAL PROCEDURES.

Sanctions.

^

(a) LIMITATIONS.—Section 1842(b)(ll) of the Social Security Act (42 U.S.C. 1395u(b)(ll)), as redesignated by section 9333(b), is amended— (1) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, ,,...- ,, (2) by inserting "(A)" after "(11)", and (3) by adding at the end the following new subparagraphs: "(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 and shall be further reduced by 2 percent with respect to procedures performed in 1988. A reduced prevailing charge under this subparagraph shall become the prevailing charge level for subsequent years for purposes of applying the economic index under the fourth sentence of paragraph (3). "(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) In the case of a reduction in the reasonable charge for a physicians' service under subparagraph (B), if a nonparticipating physician furnishes the service to an individual entitled to benefits under this part after the effective date of such reduction (subject to clause (iv)), the physician may not charge the individual more than the limiting charge (as defined in clause (ii)) plus (for services furnished during the 12-month period beginning on the effective date of the reduction) Vz of the amount by which the physician's actual charges for the service for the previous 12-month period exceeds the limiting charge. "(ii) In clause (i), the term 'limiting charge' means, with respect to a service, 125 percent of the prevailing charge for the service after the reduction referred to in clause (i). "(iii) If a physician knowingly and willfully imposes charges in violation of clause (i), the Secretary may apply sanctions against such physician in accordance with subsection (j)(2). "(iv) "This subparagraph shall not apply to services furnished after the earlier of (I) December 31, 1990, or (II) one-year after the date the Secretary reports to Congress, under section 1845(e)(3), on the development of the relative value scale under section 1845.". Qo) RATIFICATION OF REGULATIONS.—

42 USC 1395u note.

(1) IN GENERAL.—The Congress hereby ratifies the final regulation of the Secretary of Health and Human Services published

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Page:United States Statutes at Large Volume 100 Part 3.djvu/221

 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2029

on page 35693 of volume 51 of the Federal Register on October 7, 1986, relating to reasonable charge payment limits for anesthesia services under the medicare program. (2) PATIENT PROTECTIONS.—In the case of any reduction in the Health care reasonable charge for physicians' services effected under the professionals. regulation described in paragraph (1), the provisions of section 1842(b)(10) of the Social Security Act (added by the amendment 42 USC 1395u. made by subsection (a)(3)) shall apply in the same manner and to the same extent as they apply to a reduction in the reasonable charge for a physicians' service effected under section 1842(b)(8) of such Act. (c) EFFECTIVE DATE.—The amendments made by this section shall 42 USC 1395u note. apply to services furnished on or after January 1, 1987. SEC. 9335. PAYMENT RATES FOR RENAL SERVICES AND IMPROVEMENTS IN ADMINISTRATION OF END STAGE RENAL DISEASE NETWORKS AND PROGRAM. 42 USC 1395rr note.

(a) COMPOSITE RATES FOR DIALYSIS SERVICES.—

(1) IN GENERAL.—Effective with respect to dialysis services provided on or after October 1, 1986, and before October 1, 1988, the Secretary of Health and Human Services shall establish the base rate for routine dialysis treatment in a free-standing facility and in a hospital-based facility under section 1881(b)(7) of the Social Security Act at a level equal to the respective rate in 42 USC 1395rr. effect as of May 13, 1986, reduced by $2.00. (2)

' ,^ ^ ' •i.

ASSURING

PROMPT

CONSIDERATION

^ 5 ' 5 '

EXCEPTION

REQUESTS.—Section 1881(b)(7) of the Social Security Act (42 U.S.C. 1395rr(b)(7)) is amended— (A) in the third sentence, by inserting "and of pediatric facilities" after "isolated, rural areas", and (B) by inserting after the third sentence the following new sentence: "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.". (3) EFFECTIVE DATE.—The amendments made by paragraph (2) 42 USC 1395rr shall apply to applications filed on or after the date of the note. enactment of this Act.

' (b) REPORT ON PAYMENT RATES.—

'^

OF

42 USC 1395rr note.

(1) IN GENERAL.—The Secretary of Health and Human Services shall provide for— (A) a study to evaluate the effects of reductions in the Health care rates of payment for facility and physicians' services under professionals. the medicare program for patients with end stage renal disease on their access to care or on the quality of care, and (B) a report to Congress on the results of the study by not Reports. later than January 1, 1988. (2) ARRANGEMENTS WITH INSTITUTE OF MEDICINE.—The Secretary shall request the National Academy of Sciences, acting through appropriate units, to submit an application to conduct the study described in paragraph (1). If the Academy submits an acceptable application, the Secretary shall enter into an appropriate arrangement with the Academy for the conduct of the study. If the Academy does not submit an acceptable application to conduct the study, the Secretary may request one or more appropriate nonprofit private entities to submit an application to conduct the study and may enter into an appropriate

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Page:United States Statutes at Large Volume 100 Part 3.djvu/222

 100 STAT. 2030 '

PUBLIC LAW 99-509—OCT. 21, 1986 arrangement for the conduct of the study by the entity which submits the best acceptable application. (c) COVERAGE OF IMMUNOSUPPRESSIVE DRUGS.—

no-^q

42 USC 1395x note.

(1) IN GENERAL.—Section 1861(s)(2) of the Social Security Act (42 U.S.C. 1395x(s)(2)) is amended— (A) by striking "and" at the end of subparagraph (H)(ii), (B) by inserting "and" at the end of subparagraph (I), and (C) by inserting after subparagraph (I) the following new subparagraph: "(J) immunosuppressive drugs furnished, to an individual who receives an organ transplant for which payment is made under this title, within 1 year after the date of the transplant procedure;". (2) EFFECTIVE DATE.—The amendments made by paragraph (1) shall apply to immunosuppressive drugs furnished on or after January 1, 1987. (d) REORGANIZATION OF E S R D NETWORK AREAS AND ORGANIZATIONS.—

Health care professionals.

Federal Register, publication.

Federal Register, publication. KqaR

(1) IN GENERAL.—Subparagraph (A) of subsection (c)(1) of section 1881 of the Social Security Act (42 U.S.C. 1395rr) is amended to read as follows: "(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

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Page:United States Statutes at Large Volume 100 Part 3.djvu/223

 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2031

successor to the agreement on the basis of competitive bidding and in a manner that provides an orderly transition. '. (2) DEADLINE FOR ESTABLISHING NEW AREAS.—The Secretary of

Health and Human Services shall established stage renal disease network areas, pursuant to the amendment made by paragraph (1), not later than May 1, 1987. The Secretary shall establish network administrative organizations for such areas by not later than July 1, 1987. (3) TRANSITION.—If, under the amendment made by paragraph (1), the Secretary designates a network administrative organization for an area which was not previously designated for that area, the Secretary shall offer to continue to fund the previously designated organization for that area for a period of 30 days after the first date the newly designated organization assumes the duties of a network administrative organization for that area.

42 USC 1395rr note.

42 USC 1395rr note.

.erK«<-a

(e) PATIENT REPRESENTATION ON COUNCILS AND MEDICAL REVIEW

BOARDS.—Subparagraph (B) of subsection (c)(1) of section 1881 of the 42 USC 1395rr. Social Security Act is amended to read as follows: "(B) At least one patient representative shall serve as a member of each network council and each medical review board.". (f)

RESPONSIBILITIES OF NETWORK

ORGANIZATIONS.—Subsection

(c)(2) of section 1881 of such Act is amended— (1) in subparagraph (A), by inserting before the semicolon the following: "and the participation of patients, providers of services, and renal disease facilities in vocational rehabilitation programs"; (2) in subparagraph (B), by inserting before the first semicolon the following: "and with respect to working with patients, facilities, and providers in encouraging participation in vocational rehabilitation programs"; (3) in subparagraph (D), by inserting before the semicolon the ^ following: "and reporting to the Secretary on facilities and providers that are not providing appropriate medical care"; ' (4) in subparagraph (E), by inserting "and encourag^ ing participation in vocational rehabilitation programs" after "self-care settings and transplantation"; and -Pf., ^ (5) by redesignating subparagraphs (D) and (E) as subpara• graphs (G) and (H), respectively, and inserting after subparagraph (C) the following new subparagraphs: "(D) implementing a procedure for evaluating and resolving f patient grievances; "(E) conducting on-site reviews of facilities and providers as necessary (as determined by a medical review board or the I Secretary), utilizing standards of care established by the network organization to assure proper medical t are; I "(F) collecting, validating, and analyzing • such data as are Reports. necessary to prepare the reports required \y subparagraph (H) ! and subsection (g) and to assure the mainter ance of the registry <• established under paragraph (7);". (g) FACILITY COOPERATION WITH NETWORKS.—1 he first sentence of subsection (c)(3) of section 1881 of such Act is ariended by inserting "or to follow the recommendations of the mec ical review board" after "consistently failed to cooperate with network plans and goals". (h) INTENT OF CONGRESS RESPECTING MAXIA;UM USE OF VOCATIONAL REHABILITATION SERVICES.—The first sentence of subsection

ijfci

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 100 STAT. 2032 42 USC 1395rr.

42 USC 1395rr.

PUBLIC LAW 99-509—OCT. 21, 1986

(c)(6) of section 1881 of such Act is amended by inserting before the period the following: "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". (i) NATIONAL END STAGE RENAL DISEASE REGISTRY.—

(1) ESTABLISHMENT OF REGISTRY.—Subsection (c) of section

Reports.

Research and development.

42 USC 1395rr note.

1881 of such Act is further amended by adding at the end the following new paragraph: "(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.". (2) REPORT.—The Secretary of Health and Human Services shall submit to the Congress, no later than April 1, 1987, a full report on the progress made in establishing the national end paragraph (1) and shall establish such registry by not later than • January 1, 1988. (j) FUNDING OF E S R D NETWORK ORGANIZATIONS.—
 * fti, stage renal disease registry under the amendment made by

.«tS'>q^jH

42 USC 1395rr note.

(1) IN GENERAL.—Subsection (b)(7) of section 1881 of the Social Security Act is amended by adding at the end the following new VI sentence: "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 network administrative organization (designated under subsection (c)(1)(A) for the network area in which the treatment is probrm vided) for its necessary and proper administrative costs incurred in carrying out its responsibilities under subsection (c)(2).". (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to treatment furnished on or after January 1, 1987.

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2033

(k) PROTOCOLS ON REUSE OF DIALYSIS FILTERS AND OTHER DIALYSIS SUPPLIES.—

(1) ESTABLISHMENT OF PROTOCOLS.—Paragraph (7) of subsec-

tion (f) of section 1881 of the Social Security Act is amended to read as follows: "(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, 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.". (2) DEADLINE.—The Secretary of Health and Human Services shall establish the protocols described in section 1881(f)(7)(A) of the Social Security Act by not later than October 1, 1987. (1) EFFECTIVE DATE FOR CERTAIN AMENDMENTS.—The amendments made by subsections (e), (f), and (g) shall apply to network administrative organizations designated for network areas established under the amendment made by subsection (d)(1).

42 USC 1395rr

42 USC 1395rr note. 42 USC 1395rr note.

® SEC. 9336. VISION CARE. (a) DEFINING SERVICES AN OPTOMETRIST CAN PROVIDE.—Clause (4)

of section 1861(r) of the Social Security Act (42 U.S.C. 1395x(r)) is amended to read as follows: "(4) a doctor of optometry, but only with respect to the provision of items or services described in subsection (s) which he is legally authorized to perform as a doctor of optometry ^ by the State in which he performs them, or". (b) EFFECTIVE DATE.—The amendment made by subsection (a) 42 USC 1395x note. shall apply to services furnished on or after April 1, 1987. SEC. 9337. OCCUPATIONAL THERAPY SERVICES.

8

(a) COVERAGE.—Subparagraph (C) of section 1832(a)(2) of the Social Security Act (42 U.S.C. 1395k(a)(2)) is amended to read as follows: "(C) outpatient physical therapy services (other than b If services to which the second sentence of section 1861(p) applies) and outpatient occupational therapy services (other 1 than services to which such sentence applies through the n operation of section 1861(g));". n (b) LIMITATION ON PAYMENTS.—Section 1833(g) of such Act (42 e U.S.C. 13951(g)) is amended— (1) by striking "next to last sentence" and inserting "second Si sentence", and w (2) by adding at the end thereof the following new sentence: "In the case of outpatient occupational therapy services which > are described in the second sentence of section 1861(p) through if the operation of section 1861(g), with respect to expenses incurred in any calendar year, no more than $500 shall be consid-

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 100 STAT. 2034

PUBLIC LAW 99-509—OCT. 21, 1986

at?.^ ered as incurred expenses for purposes of subsections (a) and (b).". fc) CERTIFICATION STANDARD.—(1) Section 1835(a)(2)(C) of such Act S* (42 U.S.C. 1395n(a)(2)(C)) is amended— (A) by inserting "or outpatient occupational therapy services" I >» after "outpatient physical therapy services", . luif (B) in clause (i), by inserting "or occupational therapy services, respectively," after "physical therapy services", and (C) in clause (ii), by inserting "or qualified occupational therapist, respectively," after "qualified physical therapist". (2) The second sentence of section 1835(a) of such Act and section . 1866(e) of such Act (42 U.S.C. 1395n(a), 1395cc(e)) are each amended— (A) by inserting "(or meets the requirements of such section through the operation of section 1861(g))" after "1861(p)(4)(A)" i),i, and after "1861(p)(4)(B)", and 1; ^ (B) by inserting "or (through the operation of section 1861(g)) -«<;j J with respect to the furnishing of outpatient occupational therapy services" after "(as therein defined)", (d) DEFINITION AND INCLUSION WITH OTHER PART B SERVICES.—(1)

tO0

si5 r

42 USC 1395k note.

OUTPATIENT OCCUPATIONAL THERAPY SERVICES

"(g) The term 'outpatient occupational therapy services' has the meaning given the term 'outpatient physical therapy services' in subsection (p), except that 'occupational' shall be substituted for 'physical' each place it appears therein.". (2) Section 1861(s)(2)(D) of such Act (42 U.S.C. 1395x(s)(2)(D)) is amended by inserting "and outpatient occupational therapy services" after "outpatient physical therapy services". (3) Section 1861(v)(5)(A) of such Act (42 U.S.C. 1395x(v)(5)(A)) is amended by inserting "(including through the operation of section 1861(g))" after "section 1861(p)". (e) EFFECTIVE DATE.—The amendments made by this section shall apply to expenses incurred for outpatient occupational therapy services furnished on or after July 1, 1987. SEC. 9338. SERVICES OF A PHYSICIAN ASSISTANT.

"

(a) SERVICES COVERED.—Section 1861(s)(2) of the Social Security Act (42 U.S.C. 1395x(s)(2)), as amended by section 9335(c)(1) of this subtitle, is amended— (1) by striking "and" at the end of subparagraph (I), (2) by adding "and" at the end of subparagraph (J), and (3^ by adding at the end the following new subparagraph: »aj '*(K)(i) services which would be physicians' services if furnished by a physician (as defined in subsection (r)(l)) and which n^ are performed by a physician assistant (as defined in subsection (aa)(3)) under the supervision of a physician (as so defined) in a s^mya hospital, skilled nursing facility, or intermediate care facility (as defined in section 1905(c)) or as an assistant at surgery and 42 USC 1396d. which the physician assistant is legally authorized to perform by the State in which the services are performed, and "(ii) such services and supplies furnished as an incident to such services as would be covered under subparagraph (A) if furnished as an incident to a physician's professional service;".

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2035

(b) DETERMINATION OF PAYMENT AMOUNT.—Section 1842(b) of such Act (42 U.S.C. 1395u(b)), as amended by section 9333(b), is amended by adding at the end the following new paragraph: "(12)(A) With respect to services described in section 1861(s)(2)(K) (relating to a physician assistant acting under the supervision of a physician)— "(i) payment under this part may only be made on an assigne ment-related basis; and d (ii) the prevailing charges determined under paragraph (3) shall not exceed— r ( ^.. "(I) in the case of services performed as an assistant at surgery, 65 percent of the amount that would otherwise be recognized if performed by a physician who is serving as an if, i'- assistant at surgery, or !^i:: "(II) in other cases, the applicable percentage (as defined I ->a. in subparagraph (B)) of the prevailing charge rate determined for such services performed by physicians who are not specialists. "(B) In subparagraph (A)(ii)(II), the term 'applicable percentage' means— "(i) 75 percent in the case of services performed (other than as an assistant at surgery) in a hospital, and "(ii) 85 percent in the case of other services. "(C) Except for deductible and coinsurance amounts applicable under section 1833, any person who knowingly and willfully presents, or causes to be presented, to an individual enrolled under this part a bill or request for payment for services described in section 1861(s)(2)(K) in violation of subparagraph (A)(i) is subject to a civil monetary penalty of not to exceed $2,000 for each such bill or request. Such a penalty shall be imposed in the same manner as civil monetary penalties are imposed under section 1128A with respect to actions described in subsection (a) of that section.". (c) PAYMENT TO EMPLOYER.—The first sentence of section 1842(b)(6) of such Act (42 U.S.C. 1395u(b)(6)) is amended— (1) by striking "except that payment may be made (A)(i)" and inserting "except that (A) payment may be made (i)"; i'(2) by striking "or (B)" and by inserting "(B) payment may be » made"; and (3) by inserting before the period at the end the following: ", a and (C) in the case of services described in section 1861(s)(2)(K) H payment shall be made to the employer of the physician assistant involved". (d) REDUCTION IN PAYMENT TO AVOID DUPLICATE PAYMENT.—Not-

42 USC 1395x.

Ante, p. 2014.

Ante, pp. 2003, 2008.

\ct-gl DBl) 'It

Health care facilities. 42 USC 1395x note.

withstanding any other provision of law, the Secretary of Health and Human Services may reduce the amount of payments otherwise made to hospitals and skilled nursing facilities under title XVIII of the Social Security Act, so as to eliminate estimated duplicate 42 USC 1395. payments for historical or current costs attributable to services described in section 1861(s)(2)(K) of such Act (for which payment may be made under the amendments made by this section). (e) STUDY OF PAYMENT RATES.—The Secretary shall report to Reports. Congress, by not later than April 1, 1988, concerning adjustments to 42 USC 1395x the amount of payment made, under part B of title XVIII of the note. Social Security Act, for services described in section 1861(s)(2)(K) of 42 USC 1395J. such Act, to ensure that the amount of such payments reflects the approximate cost of furnishing the services, taking into account

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 100 STAT. 2036

42 USC 1395x note. ^.,,.

PUBLIC LAW 99-509—OCT. 21, 1986

compensation costs and overhead and supervision costs attributable to physician assistants. (f) EFFECTIVE DATE.—The amendments made by this section shall apply to services furnished on or after January 1, 1987. SEC. 9339. PAYMENT FOR CLINICAL DIAGNOSTIC LABORATORY TESTS. (a) TREATMENT OF HOSPITAL OUTPATIENT LABORATORIES.—

.1"

c; i n^

42 USC 1395/ "ote.
 * Vs***

(1) IN GENERAL.—Section 1833(h) of the Social Security Act (42 ,' U.S.C. 13951(h)) is amended— (A) in paragraph (1)(B), by striking "hospital laboratory" and inserting "qualified hospital laboratory (as defined in '. •• • subparagraph (D))", (B) in paragraph (1)(C)— (i) in the first sentence, by striking "hospital labora!'' tory" and inserting "qualified hospital laboratory (as - -• ' defined in subparagraph (D))", and by striking ", and ending on December 31, 1987", and (ii) by striking the second sentence; (C) by adding at the end of paragraph (1) the following new subparagraph: "(D) In this subsection, the term 'qualified hospital laboratory' means a hospital laboratory which provides some clinical diagnostic laboratory tests 24 hours a day in order to serve a hospital emergency room which is available to provide services 24 hours a day and 7 days a week."; and (D) in paragraph (2), by striking "hospital laboratory" I-- and inserting "qualified hospital laboratory (as defined in f / paragraph (1)(D))". t (2) EFFECTIVE DATE.—The amendments made by this subsection apply to clinical diagnostic laboratory tests performed on or after January 1, 1987. (b) DELAYING FOR 2 YEARS REQUIREMENT OF NATIONAL FEE SCHEDULE.—

(1) IN GENERAL.—Section 1833(h)(1)(B) of such Act is amended bii by striking "1987" and "1988" and inserting "1989" and "1990", respectively. i<l (2) CONFORMING AMENDMENT.—Section 1833(h)(2) of such Act is amended by striking "(or, effective January 1, 1988, for the (3) REPORT.—The Secretary of Health and Human Services shall report to Congress, by not later than April 1, 1988, on the advisability and feasibility of, and methodology for, establishing national fee schedules for payment for clinical diagnostic laboratory tests under section 1833(h) of the Social Security Act.
 * United States)".

42 USC 1395/ note-

y J

(c) PAYMENT FOR TIME AND TRAVEL COSTS TO COLLECT SAMPLES FROM CERTAIN IMMOBILE BENEFICIARIES.—

(1) IN GENERAL.—Section 1833(h)(3) of such Act is amended— (A) by inserting "(A)" after "provide for and establish", • i-":--

'i.;*^ .-;;

' -^

>

and

(B) by inserting before the period at the end the following: ", and (B) a fee to cover the transportation and personnel expenses for trained personnel to travel to the location of an individual to collect the sample, except that such a fee may be provided only with respect to an individual who is homebound or an inpatient in an inpatient facility (other than a hospital)".

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2037

(2) EFFECTIVE DATE.—The amendment made by paragraph (1) 42 USC 1395Z shall apply to samples collected on or after January 1, 1987. note. (d) STATE STANDARDS FOR DIRECTORS OF CLINICAL LABORATORIES.—

(1) IN GENERAL.—If a State (as defined for purposes of title XVIII of the Social Security Act) provides for the licensing or other standards with respect to the operation of clinical laboratories (including such laboratories in hospitals) in the State under which such a laboratory may be directed by an individual with certain qualifications, nothing in such title shall be construed as authorizing the Secretary of Health and Human Services to require such a laboratory, as a condition of payment or participation under such title, to be directed by an individual with other qualifications. (2) EFFECTIVE DATE.—Paragraph (1) shall take effect on January 1, 1987. (e) EXTENSION OF MORATORIUM ON LABORATORY PAYMENT DEM-

ONSTRATION.—Section 9204(a) of the Consolidated Omnibus Budget Reconciliation Act of 1985 is amended by striking "January 1, 1987" and inserting "January 1, 1988".

42 USC 1395Z note. 42 USC 1395.

42 USC 1395WW note. Ante, p. 177.

SEC. 9340. PAYMENT FOR PARENTERAL AND ENTERAL NUTRITION SUPPLIES AND EQUIPMENT.

The Secretary of Health and Human Services shall apply the sixth sentence of section 1842(b)(3) of the Social Security Act to 42 USC 1395u note. payment— (1) for enteral nutrition nutrients, supplies, and equipment and parenteral nutrition supplies and equipment furnished on or after January 1, 1987, and (2) for parenteral nutrition nutrients furnished on or after October 1, 1987. SEC. 9341. CHANGING MEDICARE APPEAL RIGHTS. (a) REVIEW OF PART B DETERMINATIONS.—(1) Section 1869 of

the

Social Security Act (42 U.S.C. 1395ff) is amended— (A) by inserting "or part B" in subsection (a) after "amount of benefits under part A", (B) by inserting "or part B" in subsection (b)(1)(C) after "part A", (C) by amending paragraph (2) of subsection (b) to read as follows: "(2) Notwithstanding paragraph (I)(C), in the case of a claim arising— "(A) under part A, a hearing shall not be available to an individual under paragraph (1)(C) if the amount in controversy is less than $100 and judicial review shall not be available to the individual under that paragraph if the amount in controversy is less than $1,000; or "(B) under part B, a hearing shall not be available to an individual under paragraph (1)(C) if the amount in controversy is less than $500 and judicial review shall not be available to the individual under that paragraph if the aggregate amount in controversy is less than $1,000. In determining the amount in controversy, the Secretary, under Regulations. regulations, shall allow two or more claims to be aggregated if the Claims. claims involve the delivery of similar or related services to the same individual or involve common issues of law and fact arising from services furnished to two or more individuals.", and

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 100 STAT. 2038 \::'X

PUBLIC LAW 99-509—OCT. 21, 1986

~

(D) by adding at the end the following new paragraphs: "(3) Review of any national coverage determination under section 42 USC 1395y. 1862(a)(1) respecting whether or not a particular type or class of items or services is covered under this title shall be subject to the 3 '.., iii following limitations: "(A) Such a determination shall not be reviewed by any administrative law judge. "(B) Such a determination shall not be held unlawful or set aside on the ground that a requirement of chapter 5 of title 5, 5 USC 500 et seq; United States Code, or section 1871(b), relating to publication in ante, p. 2017. the Federal Register or opportunity for public comment, was i r j not satisfied. Records. "(C) In any case in which a court determines that the record is
 * , ' incomplete or otherwise lacks adequate information to support

the validity of the determination, it shall remand the matter to ithe Secretary for additional proceedings to supplement the vi record and the court may not determine that an item or service q a*nK is Covered except upon review of the supplemented record. "(4) A regulation or instruction which relates to a method for determining the amount of payment under part B and which was initially issued before January 1, 1981, shall not be subject to judicial review.". (2) Section 1842(b)(3)(C) of such Act (42 U.S.C. 1395u(b)(3)(C)) is amended by striking "$100 or more" and inserting "at least $100, but not more than $500". (3) Section 1879(d) of such Act (42 U.S.C. 1395pp(d)) is amended by striking "section 1869(b)" and all that follows through "part B)" and 42 USC 1395ff. inserting "sections 1869(b) and 1842(b)(3)(C) (as may be applicable)". 42 USC 1395ff (b) EFFECTIVE DATE.—The amendments made by subsection (a) note. shall apply to items and services furnished on or after January 1, 1987. ,... 42 USC 1395b-l note.

SEC. 9342. ALZHEIMER'S DISEASE DEMONSTRATION PROJECTS. (a) DEMONSTRATION PROJECTS.—The Secretary of Health and

Human Services (in this section referred to as the "Secretary") shall conduct at least 5 (and not more than 10) demonstration projects to determine the effectiveness, cost, and impact on health status and functioning of providing comprehensive services for individuals entitled to benefits under title XVIII of the Social Security Act (in this 42 USC 1395. section referred to as "medicare beneficiaries") who are victims of Alzheimer's disease or related disorders. (b) SERVICES UNDER DEMONSTRATION PROJECTS.—The services provided under demonstration projects must be designed to meet the specific needs of Alzheimer s disease patients and may include— (1) case management services, (2) home and community-based services, (3) mental health services, ^^ (4) outpatient drug therapy, (5) respite care and other supportive services and counseling
 * A

for family, r:: (6) adult day care services, and i'^ j? ? (7) other in-home services. •^iii (c) CONDUCT OF PROJECTS.—The demonstration projects shall— e! > (1) each be conducted over a period of 3 years; (2) provide each medicare beneficiary with a comprehensive Si. medical and mental status evaluation upon entering the project and at discharge;

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 2039

(3) be conducted by an entity which either directly or by contract is able to provide such comprehensive evaluations and the additional services (described in subsection (b)) covered by the project; (4) be conducted in sites which are chosen so as to be geographically diverse and located in States with a high proportion of medicare beneficiaries and in areas readily accessible to a significant number of medicare beneficiaries; and (5) involve community outreach efforts at each site to enroll the maximum number of medicare beneficiaries in each project. (d) EVALUATION AND REPORTS.—The Secretary shall provide for an evaluation of the demonstration projects and shall submit to the Committees on Energy and Commerce and Ways and Means of the House of Representatives and the Committee on Finance of the Senate— (1) a preliminary report during the third year of the projects, which report shall include a description of the sites at which the projects are being conducted and the services being provided at the different sites, and (2) a final report upon completion of the projects, which report shall include recommendations for appropriate legislative changes. (0 FUNDING.—Expenditures (not to exceed $40,000,000 for the projects and $2,000,000 for the evaluation of the projects) made for the demonstration projects shall be made from the Federal Supplementary Medical Insurance Trust Fund (established by section 1841 of the Social Security Act). Grants and payments under contracts may be made either in advance or by way of reimbursement, as may be determined by the Secretary, and shall be made in such installments and on such conditions as the Secretary finds necessary to carry out the purpose of this section. (g) WAIVER OF MEDICARE REQUIREMENTS.—The Secretary shall waive compliance with the requirements of title XVIII of the Social Security Act to the extent and for the period the Secretary finds necessary for the conduct of the demonstration projects.

Contracts.

State and local governments.

Grants. Contracts.

42 USC 1395t.

42 USC 1395.

SEC. 9343. PAYMENTS FOR AMBULATORY SURGERY. (a) AMOUNTS PAYABLE; ANNUAL UPDATING.—

(1)(A) Section 1833(a)(4) of the Social Security Act (42 U.S.C. 13951(a)(4)) is amended to read as follows: "(4) in the case of facility services described in section 1832(a)(2)(F), and outpatient hospital facility services furnished in connection with surgical procedures specified by the Secretary pursuant to section 1833(i)(l)(A), the applicable amount as determined under paragraph (2) or (3) of subsection (i).". (B) Section 1833(i) of such Act (42 U.S.C. 13951(i)) is amended by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively, and inserting after paragraph (2) the following new paragraph: "(3)(A) The aggregate amount of the payments to be made under this part for outpatient hospital facility services furnished in connection with surgical procedures specified under paragraph (1)(A) in a cost reporting period shall be equal to the lesser of— "(i) the amount determined with respect to such services I under subsection (a)(2)(B); or "(ii) the blend amount (described in subparagraph (B)).

Health care facilities. 42 USC 1395k.

Health care facilities.

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 100 STAT. 2040 ' '

'

PUBLIC LAW 99-509—OCT. 21, 1986

"(B)(i) The blend amount for a cost reporting period is the sum of— "(I) the cost proportion (as defined in clause (ii)(I)) of the amount described in subparagraph (A)(i), and "(ID the ASC proportion (as defined in clause (ii)(II)) of 80 percent of the standard overhead amount payable with respect to the same surgical procedure as if it were provided in an ambulatory surgical center in the same area, as determined under paragraph (2)(A). "(ii) In this paragraph: "(I) The term 'cost proportion' means 75 percent for cost reporting periods beginning in fiscal year 1988, and 50 percent for other cost reporting periods. "(II) The term 'ASC proportion' means 25 percent for cost reporting periods beginning in fiscal year 1988, and 50 percent for other cost reporting periods.". (2) CONFORMING AMENDMENT.—Section 1833(b)(3) of such Act is amended by striking "or (i)(4)" and inserting in lieu thereof "or (i)(5)".

•'

42 USC 1395/.

(b) UPDATING ASC RATES.—

(1) RATE UPDATE.—Subparagraphs (A) and (B) of section

\*:;  '^ ''^-

'^'

'

1833(i)(2) of such Act are each amended by striking "shall be reviewed periodically" and inserting in lieu thereof "shall be reviewed and updated not later than July 1, 1987, and annually thereafter". (2) ASC usT UPDATE.—Section 1833(i)(l) of such Act is amended by adding at the end (after and below subparagraph (B)) the following: "The lists of procedures established under subparagraphs (A) and (B) shall be reviewed and updated not less often than every 2 years.". (c) PREVENTING SERVICES TarmstroBot (talk) 02:35, 27 June 2011 (UTC)

'"' '

Health care facilities.

Ante, pp. 2003, 2008.

UNBUNDLING

OF

HOSPITAL

OUTPATIENT

(1)'Section 1862(a)(14) of such Act (42 U.S.C. 1395y{a)(14)) is amended by striking "inpatient" and inserting "patient". (2) Section 1866(a)(1)(H) of such Act (42 U.S.C. 1395cc(a)(l)(H)) is amended— (A) by striking "inpatient hospital", and (B) by striking "an inpatient" and inserting "a patient". '•••*-' (3) Section 1866 of such Act (42 U.S.C. 1395cc) is further amended by adding at the end the following new subsection: "(g) Except as permitted under subsection (a)(2), any person who knowingly and willfully presents, or causes to be presented, a bill or request for payment for a hospital outpatient service for which payment may be made under part B and such bill or request violates an arrangement under subsection (a)(1)(H), is subject to a civil monetary penalty of not to exceed $2,000. Such a penalty shall be imposed in the same manner as civil monetary penalties are imposed under section 1128A with respect to actions described in subsection (a) of that section.". (d) PRO REVIEW.—

(1) Section 1154(a)(1) of the Social Security Act (42 U.S.C. 1320c-3(a)(l)) is amended by inserting "and subject to the requirements of subsection (d)" after "subject to the terms of the contract". (2) Section 1154 of such Act is amended by adding at the end the following new subsection:

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100 STAT. 2041

"(d) Each contract under this part shall require that the utiliza- Contracts. tion and quality control peer review organization's review responsibility pursuant to subsection (a)(1) will include review of all ambulatory surgical procedures specified pursuant to section 1833(i)(l)(A) which are performed in the area, or, at the discretion of 42 USC 1395/. the Secretary (and except as provided in section 1164(b)(4)) a sample 42 USC 1320C-13. of such procedures.". (e) COINSURANCE AND DEDUCTIBLE TO APPLY WITHOUT REGARD TO SETTING OF AMBULATORY SURGERY.—

(1) Clauses (i) and (ii) of section 1832(a)(2)(F) of the Social Security Act (42 U.S.C. 1395k(a)(2)(F)) are each amended by inserting "standard overhead" before "amount". (2)(A) Section 1833(b) of such Act (42 U.S.C. 13951(b)) is amended by striking paragraph (3) and redesignating paragraphs (4) and (5) as paragraphs (3) and (4). (B) Subparagraphs (A) and (B) of section 1833(i)(2) of such Act are each amended by inserting "80 percent o f before "a standard overhead amount". (f) DEVELOPMENT OF PROSPECTIVE PAYMENT METHODOLOGY FOR OUTPATIENT HOSPITAL SERVICES.—Section 1135 of the Social Security

Act (42 U.S.C. 1320b-5) is amended by adding at the end the following new subsection: "(d)(1) The Secretary shall develop a fully prospective payment system for ambulatory surgical procedures performed on patients in hospitals on an outpatient basis. "(2) The system shall, to the extent practicable, provide for an allinclusive payment rate for ambulatory surgical procedures performed on patients in hospitals on an outpatient basis, which rate encompasses payment for facility services and all medical and other health services, other than physicians' services, commonly furnished in connection with such procedures. "(3) The system shall provide for appropriate payment rates with respect to such procedures. "(4) Such rates shall take into account at least the following considerations: "(A) The costs of hospitals providing ambulatory surgical procedures. "(B) The costs under this title of payment for such procedures performed in ambulatory surgical centers. "(C) The extent to which any differences in such costs are justifiable. "(5) The Secretary shall submit to Congress— "(A) an interim report on the development of the system by April 1, 1988, and "(B) a final report on such system by April 1, 1989. The report under subparagraph (B) shall include recommendations concerning the implementation of the payment system for ambulatory surgical procedures performed on or after October 1, 1989. (6)(A) The Secretary shall develop a model system for the payment for outpatient hospital services other than ambulatory surgery. "(B) The Secretary shall submit to Congress a report on the model payment system under subparagraph (A) by January 1, 1991.". (g) REPORTING OF O P D SERVICES USING H C P C S. — Not later than July 1, 1987, each fiscal intermediary which processes claims under part B of title XVIII of the Social Security Act shall require hospitals, as a condition of payment for outpatient hospital services

Reports.

Reports.

Claims. 42 USC 1395U note. 42 USC 1395J.

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