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101 STAT. 1330-93

(1) a relative value scale to serve as the basis for the payment for physician pathology services under part B of title XVIII of the Social Security Act, (2) using such scale and appropriate conversion factors, proposed fee schedules (on a regional, statewide, or carrier service area basis) for payment for physician pathology services under such part, that could be implemented for such services furytf nished during 1990, and (3) an appropriate index to be applied to updating such fee schedules annually for physician pathology services furnished in years after 1990. (b) CONSULTATION.—In carrying out subsection (a), the Secretary shall regularly consult closely with the Physician Payment Review Commission, the College of American Pathologists, and other organizations representing physicians who furnish physician pathology services and shall share with them the data and data analysis being used to make the determinations under subsection (a), including data on variations in current medicare payments by geographic area, and by service and physician specialty. (c) CONSIDERATION.—In developing the fee schedules under subsection (a), the Secretary shall take into consideration variations in the cost of furnishing physician pathology services among geographic areas. (d) REPORT.—The Secretary shall report, not later than April 1, 1989, to the Committees on Energy and Commerce and Ways and Means of the House of Representatives and the Committee on Finance of the Senate on the relative value scale, fee schedules, and the index developed under this section. Such report shall include recommendations on how to protect medicare beneficiaries against excessive charges for physician pathology services above the payment amounts established by the fee schedules.

c;; ysii S[

SEC. 4051. ELIMINATION OF MARKUP FOR CERTAIN PURCHASED SERVICES.

(a) IN GENERAL.—Section 1842 of the Social Security Act (42 U.S.C. 42 USC I395u. 1935u) is amended by adding at the end the following new subsection: "(n)(l) If a physician's bill or a request for payment for services billed by a physician includes a charge to a patient for a diagnostic test described in section 1861(s)(3) (other than a clinical diagnostic » J ic) laboratory test) for which payment does not indicate that the billing physician personally performed or supervised the performance of the test or that another physician with whom the physician who shares his practice personally performed or supervised the test, the amount payable with respect to the test shall be determined as follows: "(A) If the bill or request for payment indicates that the test was performed by a supplier, identifies the supplier, and indicates the amount the supplier charged the billing physician, ' i ^•"'." "^ t J payment for the test (less the applicable deductible and coinsurance amounts) shall be the actual acquisition costs (net of any r discounts) or, if lower, the [ ] [ ] [ ] [ ] ]32a enrolled under [ ] [ ] [ ] [ ] - [ ].^* "(B) If the bill or request for payment (i) does not indicate who performed the test, or (ii) indicates that the test was performed by a supplier but does not identify the supplier or include the '" Copy not legible.

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 101 STAT. 1330-94

PUBLIC LAW 100-203—DEC. 22, 1987

amount charged by the supplier, no payment shall be made tf under this part. "(2) A physician may not bill an individual enrolled under this part— "(A) any amount other than any applicable deductible and coinsurance for a diagnostic test for which payment is made pursuant to paragraph (I)(A), or "(B) any amount for a diagnostic test for which payment may not be made pursuant to paragraph (1)(B). "(3) If a physician knowingly and willfully in repeated cases bills one or more individuals in violation of paragraph (2), the Secretary may apply sanctions against such physician or supplier in accordance with section 1842(j)(2).". 42 USC 1395u.

(b) ADJUSTMENT IN MEDICARE PREVAILING CHARGES.—

(1) REVIEW.—The Secretary of Health and Human Services shall review payment levels under part B of title XVIII of the Social Security Act for diagnostic tests (described in section 1861(s)(3) of such Act, but excluding clinical diagnostic laboratory tests) which are commonly performed by independent suppliers, sold as a service to physicians, and billed by such physicians, in order to determine the reasonableness of payment amounts for such tests (and for associated professional services component of such tests). The Secretary may require physicians and suppliers to provide such information on the purchase or sale price (net of any discounts) for such tests as is necessary to complete the review and make the adjustments under this subsection. The Secretary shall also review the reasonableness of payment levels for comparable in-office diagnostic tests. (2) ESTABLISHMENT OF REVISED PAYMENT SCREENS.—If, as

.liti'-jfi

contracts.

42 USC 1395u

note.

a

result of such review, the Secretary determines, after notice and opportunity of at least 60 days for public comment, that the current prevailing charge levels (under the third and fourth sentences of section 1842(b) of the Social Security Act) for any such tests or associated professional services are excessive, the Secretary shall establish such charge levels at levels which, consistent with assuring that the test is widely and consistently available to medicare beneficiaries, reflect a reasonable price for the test without any markup. Alternatively, the Secretary, pursuant to guidelines published after notice and opportunity of at least 60 days for public comment, may delegate to carriers with contracts under section 1842 of the Social Security Act the establishment of new prevailing charge levels under this paragraph. When such charge levels are established, the provisions of section 1842(j)(l)(D) of such Act shall apply in the same manner as they apply to a reduction under section 1842(b)(8)(A) of such Act. (c) EFFECTIVE D A T E S. —

(1) The amendment made by subsection (a) shall apply to diagnostic tests performed on or sifter April 1, 1988. (2) The Secretary of Health and Human Services shall complete the review and make an appropriate adjustment of prevailing charge levels under subsection (b) for items and services furnisheid no later than January 1, 1989.

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license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


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Page:United States Statutes at Large Volume 101 Part 2.djvu/889

 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-95

SEC. 4052. COLLECTION OF PAST-DUE AMOUNTS OWED BY PHYSICIANS WHO BREACHED CONTRACTS UNDER THE NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP PROGRAM.

(a) IN GENERAL.—Title XVIII of the Social Security Act, as previously amended by this subtitle, is amended by adding at the end thereof the following new section: "OFFSET OF P A Y M E N T S TO PHYSICIANS TO COLLECT PAST-DUE OBLIGATIONS ARISING FROM BREACH OF SCHOLARSHIP CONTRACT "SEC. 1892. (a) IN GENERAL.—

"(I)(A) Subject to subparagraph (B), the Secretary shall enter into an agreement under this section with any physician who, by reason of a breach of a contract entered into by such physician pursuant to the National Health Service Corps Scholarship Program, owes a past-due obligation to the United States (as defined in subsection (b)). "(B) The Secretary shall not enter into an agreement with a physician under this section to the extent— "(i)(1) the physician has entered into a contract with the Secretary pursuant to section 204(a)(l) of the Public Health Service Amendments of 1987, and "(II) the physician has fulfilled or (as determined by the Secretary) is fulfilling the terms of such contract; or Ti • "(ii) the liability of the physician under such section 204(a)(l) has otherwise been relieved under such section; or "(iii) the physician is performing such physician's service obligation under a forbearance agreement entered into with the Secretary under subpart II of part D of title III of the Public Health Service Act. "(2) The agreement under this section shall provide that— "(A) deductions shall be made from the amounts otherwise payable to the physician under this title, in accordance with a formula and schedule agreed to by the Secretary and the physician, until such past-due obligation (and accrued interest) have been repaid; "(B) payment under this title for services provided by such physician shall be made only on an assignment-related basis; "(C) if the physician does not provide services, for which payment would otherwise be made under this title, of a sufficient quantity to maintain the offset collection according to the agreed upon formula and schedule— "(i) the Secretary shall immediately inform the Attorney General, and the Attorney General shall immediately commence an action to recover the full amount of the past-due obligation, and "(ii) subject to paragraph (3), the Secretary shall immediately exclude the physician from the program under this title, until such time as the entire past-due obligation has been repaid. "(3) If the physician refuses to enter into an agreement or breaches any provision of the s^eement— "(A) the Secretary shall immediately inform the Attorney General, and the Attorney General shall immediately commence an action to recover the full amount of the past-due obligation, and

42 USC 1395ccc.

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 101 STAT. 1330-96

.r)s?«'£r 0^1 i i

PUBLIC LAW 100-203—DEC. 22, 1987

"(B) subject to paragraph (3), the Secretary shall immediately exclude the physician from the program under this title, until such time as the entire past-due obligation has .^.j,. been repaid. Sv„c "(4) The Secretary shall not bar a physician pursuant to paragraph (2)(C)(ii) or paragraph (3)(B) if such physician is a sole community physician or sole source of essential specialized ~ services in a community. "(b) PAST-DUE OBLIGATION.—For purposes of this section, a pastdue obligation is any amount— "(1) owed by a physician to the United States by reason of a V breach of a scholarship contract under section 338E of the Public Health Service Act, and "(2) which has not been paid by the deadline established by the Secretary pursuant to section 338E of the Public Health Service Act, and has not been canceled, waived, or suspended by the Secretary pursuant to such section. "(c) COLLECTION UNDER THIS SECTION SHALL NOT B E EXCLUSIVE.—

This section shall not preclude the United States from applying other provisions of law otherwise applicable to the collection of obligations owed to the United States, including (but not limited to) the use of tsix refund offsets pursuant to section 3720A of title 31, United States Code, and the application of other procedures provided under chapter 37 of title 31, United States Code. "(d) COLLECTION FROM PROVIDERS AND HEALTH MAINTENANCE ORGANIZATIONS.—

"(1) In the case of a physician who owes a psist-due obligation, and who is an employee of, or affiliated by a medical services agreement with, a provider having an agreement under section 1866 or a health maintenance organization or competitive medical plan having a contract under section 1833 or section 1876, the Secretary shall deduct the amounts of such past-due obligation from amounts otherwise payable under this title to such provider, organization, or plan. "(2) Deductions shall be in accordance with a formula and schedule agreed to by the Secretary, the physician and the provider, organization, or plan. The deductions shall be made from the amounts otherwise payable to the physician under this title as long as the physician continued to be employed or affiliated by a medical services agreement. "(3) Such deduction shall not be made until 6 months after the Secretary notifies the provider, organization, or pl£m of the amount to be deducted and the particular physicians to whom C's the deductions are attributable. • "(4) A deduction made under this subsection shall relieve the physician of the obligation (to the extent of the amount collected) to the United States, but the provider, organization, or plan shall have a right of action to collect from such physician the amount deducted pursuant to this subsection (including accumulated interest). "(5) No deduction shall be made under this subsection if, 70:.' within the 6-month period after notice is given to the provider, organization, or plan, the physician pays the past-due obliga~ tion, or ceases to be employed by the provider, organization, or plan. "(6) The Secretary shall also apply the provisions of this subsection in the case of a physician who is a member of a group

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Page:United States Statutes at Large Volume 101 Part 2.djvu/891

 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-97

T JO practice, if such group practice submits bills under this program as a group, rather than by individual physicians. "(e) TRANSFER FROM TRUST FUNDS.—Amounts equal to the amounts deducted pursuant to this section shall be transferred from the Trust Fund from which the payment to the physician, provider, or other entity would otherwise have been made, to the general fund in the Treasury, and shall be credited as payment of the past-due obligation of the physician from whom (or with respect to whom) the deduction was made.". (b) CONFORMING REFERENCE.—Section 338E(b)(l) of the Public Health Service Act (42 U.S.C. 254o(b)(l)) is amended by adding at the end thereof the following new sentence: "Amounts not paid within such period shall be subject to collection through deductions in Medicare payments pursuant to section 1892 of the Social Security Act.". (c) EFFECTIVE DATE.—The amendments made by this section shall 42 USC 1395CCC note. be effective on the date of the enactment of this Act. SEC. 40.52. ELIMINATION OF 197.5 FLOOR FOR PREVAILING PHYSICIAN CHARGES.

(a) IN GENERAL.—Section 1842(b)(3) of the Social Security Act (42 U.S.C. 1395u(b)(3)) is amended by striking the next-to-last sentence (which begins "Notwithstanding the provisions of). (b) EFFECTIVE DATE.—The amendment made by subsection (a) 42 USC 1395u shall apply to payment for services furnished on or after January 1, note. 1988. SEC. 4053. APPLICATION OF MAXIMUM ALLOWABLE ACTUAL CHARGE (MAAC).

(a) APPLICATION ON INDIVIDUAL CHARGE BASIS.—Section 1842(j)(l) of the Social Security Act (42 U.S.C. 1395u(j)(l)) is amended— ', -, (1) in the first sentence of subparagraph (B)(i), by striking "each such physician's actual charges" and inserting "the 5itt actual charges of each such physician"; (2) in the second sentence of subparagraph (B)(i)^ by striking "for such a service a physician's actual charge {as defined in ' subparagraph (C)(vi)" and inserting "on a repeated basis for such a service an actual charge"; and (3) in subparagraph (C)(vi), by striking "and subparagraph (B)". (b) ADJUSTMENT.—In the case of a physician who did not have actual charges under title XVIII of the Social Security Act for a procedure in the calendar quarter beginning on April 1, 1984, but who establishes to the satisfaction of a carrier that he or she had actual charges (whether under such title or otherwise) for the procedure performed prior to June 30, 1984, the carrier shall compute the maximum allowable actual charge under section 1842(j) of the Social Security Act for such procedure performed by such physician in 1988 based on such physician's actual charges for the procedure. (c) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to charges imposed for services furnished on or after April 1, 1988.

42 USC 1395u note.

42 USC 1395u note.

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 101 STAT. 1330-98 42 USC 1395/ note.

PUBLIC LAW 100-203—DEC. 22, 1987

SEC. 4054. APPLYING COPAYMENT AND DEDUCTIBLE TO CERTAIN OUTPATIENT PHYSICIANS' SERVICES.

Notwithstanding any other provision of law, payment under part B of title XVIII of the Social Security Act for physicians' services specified in section 1833(i)(l) of such Act and furnished on or after April 1, 1988, in an ambulatory surgical center or hospital outpatient department on an assignment-related basis shall be subject to the deductible under section 1833(b) of such Act and 20 percent coinsurance. SEC. 4055. PHYSICIAN PAYMENT STUDIES. 42 USC 1395u

note. .4j

(a) DEFINITIONS OF M E D I C A L AND SURGICAL PROCEDURES.— (1) REPORT ON VARIATIONS IN CARRIER PAYMENT PRACTICE.—

The Secretary of Health and Human Services (in this section referred to as the "Secretary") shall conduct a study of variations in payment practices for physicians' services among the different carriers under section 1842 of the Social Security Act. Such study shall examine carrier variations in the services included in global fees and pre- and post-operative services included in payment for the operation. The Secretary shall report to Congress on such study by not later than May 1, 1988. (2) UNIFORM DEFINITIONS OF PROCEDURES FOR PAYMENT PUR-

POSES.—The Secretary shall develop, in consultation with appropriate national medical specialty societies and by not later than July 1, 1989, uniform definitions of physicians' services (including appropriate classification scheme for procedures) which could serve as the basis for making payments for such services under part B of title XVIII of the Social Security Act. In developing such list, to the extent practicable— (A) ancillary services commonly performed in conjunction with a major procedure would be included with the major procedure; (B) pre- and post-procedure services would be included in the procedure; and (C) similar procedures would be listed together if the procedures are similar in resource requirements. 42 USC 1395W-1 note.

i#x

Reports. Reports.

(b) EXPANSION OF RELATIVE VALUE SCALE (RVS) STUDY.— (1) ADDITIONAL SERVICES.—The Secretary shall expand

the study being conducted, under section 1845(e) of the Social Security Act, to develop a relative value scale for physicians' services to include physicians' services in the fields of cardiology, dermatology, emergency medicine, gastroenterology, hematology, infectious disease, nephrology, neurology, neurosurgery, nuclear medicine, oncology, physical medicine and rehabilitation, plastic surgery, pulmonary medicine, and radiation therapy, and for physicians who specialize in osteopathic procedures. (2) No DELAY IN CURRENT STUDY.—The expansion under paragraph (1) shall not be conducted in a manner that delays the completion of the current study or the report to Congress required under section 1845(e)(3) of the Social Security Act. The Secretary shall report to Congress on the services described in paragraph (1) by not later than October 1, 1989. (3) PROMPT SUBMITTAL OF STUDY RESULTS TO PHYSICIAN PAYMENT REVIEW COMMISSION.—The Secretary shall submit to the Physician Payment Review Commission a copy of any report submitted to the Secretary pursuant to a cooperative agreement in the fulfillment of the requirement of section 1845(e) of such

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 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-99

Act, with all relevant supporting data (including survey data, analj^ic data files, and file documentation), by no later than 30 days after the date the final report is received by the Secretary. ^c) OTHER PHYSICIAN PAYMENT STUDIES.— (1) FEE SCHEDULE IMPLEMENTATION.—The

42 USC 1395/ note.

Secretary shall conduct a study of changes in the payment system for physicians' services, under part B of title XVIII of the Social Security Act, that would be required for the implementation of a national fee schedule for such services furnished on or after January 1, 1990. Such study shall identify any major technical problems related to such implementation and recommendations on ways in which to address such problems. The Secretary shall report to the Reports. Congress on such study by not later than July 1, 1989. (2) VOLUME AND INTENSITY OF PHYSICIAN SERVICES.—The Secretary shall conduct a study of issues relating to the volume and intensity of physicians' services under part B of title XVIII of the Social Security Act, including— (A) historical trends with regard to increeises in the volume and intensity of physicians' services furnished on a per enrollee basis (with appropriate adjustments to account for changes in the demographic composition of the medicare population); (B) geographic variations in volume and intensity in physicians' services; (C) an analysis of the effectiveness of methods currently used under such part to ensure that payments under such part are made only for services which are medically necessary; (D) the development and analysis of alternative methods to control the volume of services; and (E) the impact of the implementation of the relative value scale developed under section 1845(e) of such Act on the volume and intensity of physicians' services. The Secretary shall submit to Congress an interim report on Reports. such study not later than May 1, 1988, and a final report on such study not later than May 1, 1989. (3) SURVEY OF OUT-OF-POCKET COSTS OF MEDICARE BENEFICIARIES

FOR HEALTH CARE SERVICES.—The Secretary shall conduct a survey to determine the distribution of— (A) the liabilities and expenditures for health care services of individuals entitled to benefits under title XVIII of the Social Security Act, including liabilities for charges (not paid on an assignment-related basis) in excess of the reasonable charge recognized, and (B) the collection rates among different classes of physicians for such liabilities, including collection rates for re}j, t quired coinsurance and for charges (not paid on an assignment-related basis) in excess of the reasonable charge recognized. The Secretary shall report to Congress on such study by not later than July 1, 1990. (d) STUDY OFFICES.—

OF PAYMENT FOR CHEMOTHERAPY IN PHYSICIANS'

(1) IN GENERAL.—The Secretary shall study ways of modifying part B of title XVIII of the Social Security Act to permit adequate payment under such part for the costs associated with providing chemotherapy to cancer patients in physicians' of-

Reports. 42 USC 1395/ note.

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 101 STAT. 1330-100

PUBLIC LAW 100-203—DEC. 22, 1987

flees. The study shall be performed in consultation with physicians and other health care providers who are experts in cancer therapy and with representation of health insurers who have experience in these payment issues. (2) REPORT.—The Secretary shall report to Congress on the results of the study by not later than April 1, 1989.

Subpart B—Provisions Relating to Payments for Other Services 2 USC 902 note.

SEC. 4061. EXTENSION OF REDUCTION FOR OTHER PART B ITEMS AND SERVICES PAYMENTS UNDER SEQUESTER ORDER.

Notwithstanding any other provision of law (including any other provision of this Act), the reductions in the amount of payments required under title XVIII of the Social Security Act made by the final sequester order issued by the President on November 20, 1987, pursuant to section 252(b) of the Balanced Budget Emergency Deficit Control Act of 1985 shall continue to be effective (as provided by sections 252(a)(4)(B) and 256(dK2) of such Act) through March 31, 1988, with respect to payments for all items and services (other than physicians' services) under part B of such title. SEC. 4062. PAYMENTS FOR DURABLE MEDICAL EQUIPMENT, PROSTHETIC DEVICES, ORTHOTICS. AND PROSTHETICS. 42 USC 1395u note.

(a) 1-YEAR FREEZE ON CHARGE LIMITATIONS.—

(1) IN GENERAL.—In imposing limitations on allowable charges for items and services (other than physicians' services) furnished in 1988 under part B of title XVIII of such Act and for which payment is made on the basis of the reasonable charge for the item or service, the Secretary of Health and Human Services shall not impose any limitation at a level higher than the same level as was in effect in December 1987. (2) TRANSITION.—The provisions of section 4041(a)(2) (other than subparagraph (D) thereof) of this subtitle shall apply to suppliers of items and services described in paragraph (1), and directories of participating suppliers of such items and services, in the same manner as such section applies to physicians furnishing physicians' services, and directories of participating physicians. (b) AMOUNT AND FREQUENCY OF PAYMENT FOR DURABLE MEDICAL EQUIPMENT, PROSTHETIC DEVICES, ORTHOTICS, AND PROSTHETICS.—

Part B of title XVIII of the Social Security Act is amended by inserting after section 1833 the following new section: "SPECIAL PAYMENT RULES FOR PARTICULAR SERVICES 42 USC 1395m.

•••Jo«

"SEC. 1834. (a) PAYMENT FOR DURABLE MEDICAL EQUIPMENT, PROSTHETIC DEVICES, ORTHOTICS, AND PROSTHETICS.— "(1) GENERAL RULE FOR PAYMENT.—

' -^ '^

"(A) IN GENERAL.—With respect to a covered item (as defined in paragraph (13)) for which payment is determined under this subsection, payment shall be made in the frequency specified in paragraphs (2) through (7) and in an amount equal to 80 percent of the payment basis described in subparagraph (B). "(B) PAYMENT BASIS.—The payment basis described in this subparagraph is the lesser of—

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 PUBLIC LAW 100-203—DEC. 22, 1987

'*

101 STAT. 1330-101

"(i) the actual charge for the item, or "(ii) the payment amount recognized under paragraphs (2) through (7) of this subsection for the item; except that clause (i) shall not apply if the covered item is furnished by a public home health agency (or by another home health agency which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low income) free of charge or at nominal charges to the public. "(C) EXCLUSIVE PAYMENT RULE.—This subsection shall constitute the exclusive provision of this title for payment for covered items under this part.

"(2) PAYMENT FOR INEXPENSIVE AND OTHER ROUTINELY PURCHASED DURABLE MEDICAL EQUIPMENT.—

"(A) IN GENERAL.—Payment for an item of durable medical equipment (as defined in paragraph (13XA))— "(i) the purchase price of which does not exceed $150, or "(ii) which the Secretary determines is acquired at least 75 percent of the time by purchase, shall be made on a rental basis or in a lump-sum amount for the purchase of the item. The payment amount recognized for purchase or rental of such equipment is the amount specified in subparagraph (B) for purchase or rental, except that the total amount of rental payments with respect to an item may not exceed the payment amount specified in subparagraph (B) with respect to the purchase of the item. "(B) PAYMENT AMOUNT.—For purposes of subparagraph (A), the amount specified in this subparagraph, with respect to the purchase or rental of an item furnished in a carrier service area— "(i) in 1989 is the average allowed charge in the area '!ii'. for the purchase or rental, respectively, of the item for the 12-month period ending on June 30, 1987, increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6month period ending with December 1987; or "(ii) in a subsequent year, is the amount specified in i' '• this subparagraph for the preceding year increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12month period ending with June of that preceding year. "(3) PAYMENT FOR ITEMS REQUIRING FREQUENT AND SUBSTANTIAL SERVICING.—

"(A) IN GENERAL.—Payment for a covered item (such as ventilators, aspirators, IPPB machines, and nebulizers) for which there must be frequent and substantial servicing in order to avoid risk to the patient's health shall be made on a monthly basis for the rental of the item and the amount recognized is the amount specified in subparagraph (B). "(B) PAYMENT AMOUNT.—For purposes of subparagraph (A), the amount specified in this subparagraph, with respect to an item or device furnished in a carrier service area— "(i) in 1989 is the average allowable charge in the area for the rental of the item or device for the 12-

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Page:United States Statutes at Large Volume 101 Part 2.djvu/896

 101 STAT. 1330-102

PUBLIC LAW 100-203—DEC. 22, 1987

month period ending with June 1987,^^ increased by fx t the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6-month period ending with December 1987; or "(ii) in a subsequent year, is the amount specified in this subparagraph for the preceding year increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12month period ending with June of that preceding year. "(4) PAYMENT FOR CERTAIN CUSTOMIZED ITEMS.—Payment with respect to a covered item that is uniquely constructed or substantially modified to meet the specific needs of an individual patient shall be made in a lump-sum ^* amount for the purchase of the item in a payment amount based upon the carrier's individual consideration for that item, and for the reasonable and necessary maintenance and service for parts and labor not covered by the supplier's or manufacturer's warranty, when necessary during the period of medical need, and the amount recognized for such maintenance and service shall be paid on a lump-sum, as needed basis based upon the carrier's individual consideration for that item. "(5) PAYMENT FOR OXYGEN AND OXYGEN EQUIPMENT.—

"(A) IN GENERAL.—Payment for oxygen and oxygen equipment shall be made on a monthly basis in the monthly payment amount recognized under paragraph (9) for oxygen and oxygen equipment (other than portable oxygen equipment), subject to subpargigraphs (B) and (C). "(B) ADD-ON FOR PORTABLE OXYGEN EQUIPMENT.—When

portable oxygen equipment is used, but subject to subparagraph (D), the payment amount recognized under subparagraph (A) shall be increased by the monthly payment amount recognized under paragraph (9) for portable oxygen equipment. "(C) VOLUME ADJUSTMENT.—When the attending physi-

<

cian prescribes an oxygen flow rate— "(i) exceeding 4 liters per minute, the payment amount recognized under subparagraph (A), subject to subparagraph (D), shall be increased by 50 percent, or "(ii) of less than 1 liter per minute, the payment amount recognized under subparagraph (A) shall be decreased by 50 percent. "(D) LIMIT ON ADJUSTMENT.—When portable

oxygen

equipment is used and the attending physician prescribes an oxygen flow rate exceeding 4 liters per minute, there shall only be an increase under either subparagraph (B) or (C), whichever increase is larger, and not under both such subparagraphs. "(6) PAYMENT FOR OTHER COVERED ITEMS (OTHER THAN DURABLE MEDICAL EQUIPMENT).—Payment for other covered items

(other than durable medical equipment and other covered items described in paragraph (3), (4), or (5)) shall be made in a lumpsum amount for the purchase of the item in the amount of the purchase price recognized under paragraph (8). " Copy read "June, 1987,",
 * Copy read "lump sum".

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 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-103

"(7) PAYMENT FOR OTHER ITEMS OF DURABLE MEDICAL EQUIPMENT.—

"(A) IN GENERAL.—In the case of an item of durable medical equipment not described in paragraphs (2) through (6)"(i) payment shall be made on a monthly basis for the rental of such item during the period of medical need O^ut payments under this subparagraph may not extend over a period of continuous use of longer than 15 months), and, subject to subparagraph (B), the amount recognized for each such month is 10 percent of the purchase price recognized under paragraph (8) with respect to the item; (ii) during the succeeding 6-month period of medical need, no payment shall be made for rental or servicing of the item; and "(iii) during the first month of each succeeding 6month period of medical need, a service and maintenance payment may be made (for parts and labor not covered by the supplier's or manufacturer's warranty, as determined by the Secretary to be appropriate for the particular type of durable medical equipment) and the amount recognized for each such 6-month period is the lower of (I) a reasonable and necessary maintenance and servicing fee established by the carrier, or (II) 10 percent of the total of the purchase price recognized under paragraph (8) with respect to the item. The Secretary shall determine the meaning of the term 'continuous' in subparagraph (A). "(B) RANGE FOR RENTAL AMOUNTS.—

'

"(i) FOR 1989.—For items furnished during 1989, the payment amount recognized under subparagraph (A)(i) shall not be more than 115 percent, and shall not be less than 85 percent, of the prevailing charge established for rental of the item January 1987, increased by the percentage increase in the consumer price index for all urbgm consumers (U.S. city average) for the 6-month period ending with December [ ].^*^ "(ii) FOR 1990.—For items furnished during 1990, the payment amount recognized under subparagraph (A)(i) shall not be more than the maximum amount established under clause (i), and shall not be less than the minimum amount established under such clause, for 1989, each such amount increased by the percents^e increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June 1989. "(8) PURCHASE PRICE RECOGNIZED FOR MISCELLANEOUS DEVICES

AND ITEMS.—For purposes of paragraphs (6) and (7), the amount that is recognized under this paragraph as the purchase price for a covered item is the amount described in subparagraph (C) of this paragraph, determined as follows: (A) COMPUTATION OF LOCAL PURCHASE PRICE.—Each carrier under section 1842 shall compute a base local purchase price for the item as follows: "(i) The carrier shall compute a base local purchase price, for each item described— '** Copy not legible.

91-194 O - 90 - 29: QL.3 Part 2

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 101 STAT. 1330-104

PUBLIC LAW 100-203—DEC. 22, 1987

-<irj|!S.; oir •

,

"(I) in paragraph (6) equal to the average allowable charge in the locality for the purchase of the '.'--• item for the 12-month period ending with June 1987, or "(11) in paragraph (7) equal to the average of the QH purchase prices on the claims submitted on an assignment-related basis for the unused item supplied during the 6-month period ending with December 1986. "(ii) The carrier shall compute a local purchase price, with respect to the furnishing of each particular item— "(I) in 1989, equal to the base local purchase price computed under clause (i) increased by the 'souV^iii 1' percentage increase in the consumer price index •^il'>i\^--b'- X. for all urban consumers (U.S. city average) for the 6-month period ending with December 1987, or "(II) in 1990, 1991, or 1992, equal to the local purchase price computed under this clause for the previous year increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year. "(B) COMPUTATION OF REGIONAL PURCHASE PRICE.—With

respect to the furnishing of a particular item in each region (as defined in section 1886(d)(2)(D)), the Secretary shall compute a regional purchase price— "(i) for 1991, and for 1992, equal to the average (weighted by relative volume of all claims among carriers) of the local purchase prices for the carriers in the region computed under subparagraph (A)(iiXII) for the >Hj pn year, and "(ii) for each subsequent year, equal to the regional purchase price computed under this subparagraph for the previous year increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year. "(C) PURCHASE PRICE RECOGNIZED.—For purposes of paragraphs (6) and (7) and subject to subparagraph (D), the amount that is recognized under this paragraph as the purchase price for each item furnished— "(i) in 1989 or 1990, is 100 percent of the local purchase price computed under subparagraph (A)(iiXI); "(ii) in 1991, is the sum of (I) 75 percent of the local purchase price computed under subparagraph (A)(iiXII) for 1991, and (II) 25 percent of the regional purchase price computed under subparagraph (B) for 1991; "(iii) in 1992, is the sum of (I) 50 percent of the local purchase price computed under subparagraph (A)(iiXII) for 1992, and (II) 50 percent of the regional purchase ^ price computed under subparagraph (B) for 1992; and "(iv) in 1993 or a subsequent year, is the regional purchase price computed under subparagraph (B) for that year. "(D) RANGE ON AMOUNT RECOGNIZED.—The amount that is e2J? recognized under subparagraph (C) as the purchase price for an item furnished— .„ .; „... „.

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Page:United States Statutes at Large Volume 101 Part 2.djvu/899

 PUBLIC LAW 100-203—DEC. 22, 1987

Is. J l^-)Ki[ '*:. •! vb I

101 STAT. 1330-105

"(i) in 1991, may not exceed 130 percent, and may not be lower than 80 percent, of the average of the purchase prices recognized under such subparagraph for all the carrier service areas in the United States in that year; and "(ii) in a subsequent year, may not exceed 125 percent, and may not be lower than 85 percent, of the average of the purchase prices recognized under such subparagraph for all the carrier service areas in the United States in that year.

"(9) MONTHLY PAYMENT AMOUNT RECOGNIZED WITH RESPECT TO

OXYGEN AND OXYGEN EQUIPMENT.—For purposes of paragraph (5), the amount that is recognized under this paragraph for payment for oxygen and oxygen equipment is the monthly payment amount described in subparagraph (C) of this paragraph. Such amount shall be computed separately (i) for all items of oxygen and oxygen equipment (other than portable oxygen equipment) and (ii) for portable oxygen equipment (each such group referred to in this paragraph as an 'item). "(A) COMPUTATION OF LOCAL MONTHLY PAYMENT RATE.—

Each carrier under this section shall compute a base local payment rate for each item as follows: ,^.;^, ^ "(i) The carrier shall compute a base local average monthly payment rate per beneficiary as an amount equal to (I) the total reasonable charges for the item during the 12-month period ending with December 1986, divided by (II) the total number of months for all A, . beneficiaries receiving the item in the area during the 12-month period for which the carrier made payment for the item under this title. "(ii) The carrier shall compute a local average monthlv payment rate for the item applicable— (I) to 1989, equal to 95 percent of the base local average monthly payment rate computed under clause (i) for the item increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with December 1987, or "(II) to 1990 and to 1991, equal to the local '^'''^' average monthly payment rate computed under this clause for the item for the previous year increased by the percentage increase in the ^'"^ consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year. "(B)

COMPUTATION

OF

REGIONAL

MONTHLY

PAYMENT

RATE.—With respect to the furnishing of an item in each region (as defined in section 1886(d)(2)(D)), the Secretary shall compute a regional monthly payment rate— "(i) for 1991, and 1992, equal to the average (weighted by relative volume of all claims among carriers) of the local monthly payment rates for the carriers in the region computed under subparagraph (A)(iiXID for the year, and "(ii) for each subsequent year, equal to the regional monthly payment rates computed under this subparagraph for the previous year increased by the percent-

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Page:United States Statutes at Large Volume 101 Part 2.djvu/900

 101 STAT. 1330-106

"1 ^ '

'^<^

^. ' '' ^" ^ ' " ? '

,^ _ ^ ' >

IJ. ^

ri

.

PUBLIC LAW 100-203—DEC. 22, 1987 age increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year. "(C) MONTHLY PAYMENT AMOUNT RECOGNIZED.—For purposes of paragraph (5), the amount that is recognized under this paragraph as the base monthly payment amount for each item furnished— "(i) in 1989 and in 1990, is 100 percent of the local '^ average monthly payment rate computed under subparagraph (A)(iiXI) for the item; "(ii) in 1991, is the sum of (I) 75 percent of the local average monthly payment rate computed under subparagraph (A)(ii)(II) for the item for 1991, and (II) 25 percent of the regional monthly payment rate computed under subparagraph (B)(i) for the item for 1991; "(iii) in 1992, is the sum of (I) 50 percent of the local average monthly payment rate computed under subparagraph (A)(iiXII) for the item for 1992, and (II) 50 percent of the regional monthly payment rate computed under subparagraph (B)(i) for the item for 1992; and "(iv) in a subsequent year, is the regional monthly payment rate computed under subparagraph (B) for the item for that year. "(D) RANGE ON AMOUNT RECOGNIZED.—The amount that is recognized under subparagraph (C) as the base monthly payment amount for an item furnished— "(i) in 1991, may not exceed 130 percent, and may not be lower than 80 percent, of the average of the base monthly payment amounts recognized under such subparagraph for all the carrier service areas in the United States in that year; and "(ii) in a subsequent year, may not exceed 125 percent, and may not be lower than 85 percent, of the average of the base monthly payment amounts recognized under such subparagraph for all the carrier service areas in the United States in that year. "(10) EXCEPTIONS AND ADJUSTMENTS.— "(A) AREAS OUTSIDE CONTINENTAL UNITED STATES.—Excep-

tions to the amounts recognized under the previous provisions of this subsection shall be made to take into account the unique circumstances of covered items furnished in Alaska, Hawaii, or Puerto Rico, "(B) ADJUSTMENT FOR INHERENT REASONABLENESS.—For

fv •f ?; b

i

covered items furnished on or after January 1, 1991, the Secretary is authorized to apply the provisions of paragraphs (8) and (9) (other than subparagraph (D)) of section 1842(b) to covered items and suppliers of such items. "(C)

TRANSCUTANEOUS ELECTRICAL NERVE STIMULATOR

(TENS).—In order to permit an attending physician time to determine whether the purchase of a transcutaneous electrical nerve stimulator is medically appropriate for a particular patient, the Secretary may determine an appropriate payment amount for the initial rental of such item for a period of not more than 2 months. If such item is subsequently purchased, the payment amount with respect

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Page:United States Statutes at Large Volume 101 Part 2.djvu/901

 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-107

to such purchase is the payment amount determined under paragraph (2). "(11) IMPROPER BILLING AND REQUIREMENT OF PHYSICIAN ORDER.—

"(A) IMPROPER BILLING FOR CERTAIN RENTAL ITEMS.—Not-

withstanding any other provision of this title, a supplier of a covered item for which payment is made under this subsection and which is furnished on a rental basis shall continue to supply the item without charge (other than a charge provided under this subsection for the servicing of the item) after rental payments may no longer be made under this subsection. If a supplier knowingly and willfully violates the previous sentence, the Secretary may apply sanctions against the supplier under subsection (j)(2) in the same manner such sanctions may apply with respect to a physician. "(B) REQUIREMENT OF PHYSICIAN ORDER.—The Secretary is

authorized to require, for specified covered items, that payment may be made under this subsection with respect to the item only if a physician has communicated to the supplier, before delivery of the item, a written order for the item. "(12) REGIONAL CARRIERS.—The Secretary may designate, by regulation under section 1842, one carrier for each region (as defined in section 1886(d)(2)(D)) to process all claims within the region for covered items under this section. "(13) COVERED ITEM.—In this subsection, the term 'covered item' means— "(A) durable medical equipment (as defined in section 1861(n)), including such equipment described in section 1861(m)(5); BtK;.: "(B) prosthetic devices (described in section 1861(s)(8)), but not including parenteral and enteral nutrition nutrients, supplies, and equipment; and "(C) orthotics and prosthetics (described in section 1861(s)(9)); but does not include intraocular lenses. "(14) CARRIER.—In this subsection, any reference to the term 'carrier' includes a reference, with respect to durable medical equipment furnished by a home health agency as part of home health services, to a fiscal intermediary.", (c) STUDY AND EVALUATION.—(1) The Secretary of Health and

Human Services shall monitor the impact of the amendments made by this section on the availability of covered items and shall evaluate the appropriateness of the volume adjustment for oxygen and oxygen equipment under section 1834(a)(5)(C) of the Social Security Act (as amended by subsection (b) of this section). The Secretary shall report to Congress, by not later than January 1, 1991, on such impact and on the evaluation and shall include in such report recommendations for changes in payment methodology for covered items under section 1834(a) of such Act. (2) Before January 1, 1991, the Secretary may not conduct any demonstration project respecting alternative methods of payment for covered items under title XVIII of the Social Security Act. (3) In this subsection, the term "covered item" has the meaning given such term in section 1834(a)(13) of the Social Security Act (as amended by subsection (b) of this section).

42 USC 1395m note.

Reports.

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Page:United States Statutes at Large Volume 101 Part 2.djvu/902

 101 STAT. 1330-108

Reports.

PUBLIC LAW 100-203—DEC. 22, 1987

(4) The Secretary shall, upon written request, provide the data and information used in determining the payment amounts for covered items under section 1834(a) of the Social Security Act. (5) The Comptroller General shall conduct a study on the appropriateness of the level of payments allowed for covered items under the medicare program, and shall report to Congress on the results of such study (including recommendations on the transition to regional or national rates) by not later than January 1, 1991. Entities furnishing such items which fail to provide the Comptroller General with reasonable access to necessary records to carry out the study under this paragraph are subject to exclusion from the medicare program under section 1128(a) of the Social Security Act. (d) CONFORMING AMENDMENTS.—

^. ^, (1) Section 1814 of such Act (42 U.S.C. 1395f) is amended— _ (A) in subsection (j)(2)(B), by amending subparagraph (B) ,; to read as follows: X"(B) Section 1834(a)(l)(B).", and (B) in subsection (k), by striking all that follows "shall be" «, and insert "the amount described in section 1834(a)(1).". li' (2) Section 1832(a) of such Act (42 U.S.C. 1395k(a)) is amended— / (A) in paragraph (2)(A), by inserting "(other than items ki described in subparagraph (G))" after "services"; (B) in paragraph (2)(B), by inserting "(other than items described in subparagraph (G))" after "medical and other biv ^' health services"; and (C) in paragraph (2)— "*"• (i) by striking "and" at the end of subparagraph (E), AO: Ttt. (ii) by striking the period at the end of subparagraph (F) and inserting "; and", and (iii) by adding at the end the following new subparagraph: "(G) covered items (described in section 1834(a)(13)) furnished by a provider of services or by others under arrangements with them made by a provider of services.". 42 USC 1395/. (3) Section 1833(a) of such Act (42 U.S.C. 13951(a)) is amended— _..,, (A) in paragraph (1)— "" (i) by striking "; and" at the end of clause (G) and tj„^.. inserting a comma, and ?;^ n 313^^ ^ (ii) by adding at the end the following: "and (I) with respect to covered items (described in section i.^. 1834(a)(13)), the amounts paid shall be the amounts '•-. described in section 1834(a)(l),"; /l (B) in paragraph (2)— >q&y ,{ (i) by striking "and (F)" and inserting "(F), and (G)", f, and pf (ii) in subparagraph (A), by striking "(other than durable medical equipment)"; ^os i '**>(C) by striking "and" at the end of paragraph (3); tc '^(D) by striking the period at the end of paragraph (4) and inserting "; and"; and •.y&C.

'*^ Copy read "(B)". '*= Copy read "(C)".

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 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-109

3«(E) by adding at the end the following new paragraph: "(5) in the case of covered items (described in section 1834(a)(13)) the amounts described in section 1834(aKl).". (4) Section 1866(a)(2)(A) of such Act (42 U.S.C. 1395cc(a)(2)(A)) is amended by adding at the end the following new sentence: "Notwithstanding the first sentence of this subparagraph, a >• • home health agency may charge such a n individual or person, ""'" with respect to covered items subject to payment under section 1834(a), the a m o u n t of any deduction imposed under section 1833(b) and 20 percent of the payment basis described in section 1834(a)(2).". (5) Section 1889 of such Act (42 U.S.C. 1395zz) is repealed. 42 USC I395zz. (e) EFFECTIVE DATE.—The amendments made by this section shall 42 USC I395f apply to covered items furnished on or after January 1, 1989. "ote. SEC. 4063. PAYMENT FOR INTRAOCULAR LENSES.

(a) PROVIDED I N PHYSICIAN'S OFFICE.—Section 1842 of the Social Security Act (42 U.S.C. 1395u), a s previously amended is amended— (1) in subsection (b)(ll)(C), as inserted by section 4046(a)(l)(C) of this subtitle— (A) by inserting "(i)" after "(C)" and by adding at the end the following new clause: "(ii) The reasonable charge for an intraocular lens implanted during cataract surgery in a physician's office may not exceed the actual acquisition cost for the lens (taking into account any discount) plus a handling fee (not to exceed 5 percent of such actual acquisition cost).", and (B)^^ in subparagraph (D), as so redesignated and as amended by section 4046(a)(l) of this subtitle, by inserting "or item" after "service" or "services" each place either appears; and (2) in subsection (j)(l)(D), a s added by section 4045(c)(l)(B) of this subtitle and a s amended by 4046(a)(2) of this subtitle— (A) in clause (ii), by striking " and " a t the end of subclause (IV), by redesignating subclause (V) a s subclause (VI) and by inserting before such subclause the following n e w ^1subclause: "(FV) a reasonable charge limit is established under subsecW tion (b)(llXCXii), and"; and (B) in clause (iii)— (i) by striking "or" at the end of subclause (I), -ri ir (ii) in subclause (II), by striking "(b)(llXO" and inserting "(b)(llXCXi)", (iii) by striking the period at the end of subclause (II) and inserting "; or", and £-'.«' -^ (iv) by adding at the end the following new subclause: "(III) under subsection (b)(UXCXii), the payment allowance established under such subsection.". (b)

PROVIDED

IN

AMBULATORY

SURGICAL

CENTERS.—Section

 * . >cii3 s*

 * ' ''^:,"t

1833(i)(2)(A) of such Act (42 U.S.C. 13951(i)(2)(A)) is amended— 42 USC 1395Z. (1) by striking "and" at the end of clause (i), (2) by striking the period at the end of clause (ii) and inserting ",and^and •xmH (3) by inserting after clause (ii) the following n e w clause: 3*"'Copy read "(D)". "» Copy read "(C)".

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Page:United States Statutes at Large Volume 101 Part 2.djvu/904

 101 STAT. 1330-110

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

42 USC 1395/ note.

"(iii) in the case of implantation of an intraocular lens during cataract surgery includes payment which is reasonable and related to the cost of acquiring the class of lens involved.". (c) EFFECTIVE DATE.—The amendments made by this section shall apply to items furnished on or after July 1, 1988. (d) SPECIAL RULE.—With respect to the^^ establishment of a reasonable charge limit under section 1842(b)(ll)(C)(ii) of the Social Security Act, in applying section 1842(j)(l)(D)(i) of such Act, the matter beginning with "plus" shall be considered to have been deleted. SEC. 4064. CLINICAL DIAGNOSTIC LABORATORY TESTS. (a) LIMITATION ON CHANGES IN FEE SCHEDULES.—

(1) 3-MONTH FREEZE IN FEE SCHEDULES.—Notwithstanding any other provision of law, any change in the fee schedules for clinical laboratory diagnostic laboratory tests under part B of title XVIII of such Act which would have become effective for tests furnished on or after January 1, 1988, shall not be effective for tests furnished during the 3-month period beginning on January 1, 1988. (2) ^fo CPi INCREASE IN 1988.—Notwithstanding any other provision of law, the Secretary of Health and Human Services shall not adjust the fee schedules established under section 1833(h) of the Social Security Act for 1988 to take into account any increase in the consumer price index. Oa) FEE SCHEDULES AND PAYMENT LIMITS.— (1) REBASING OF FEE SCHEDULES FOR CERTAIN AUTOMATED AND SIMILAR TESTS.—Section 1833(h)(2) of the Social Security Act (42

42 USC 1395/.

,/j ^2^.

I

42 USC 1395/ note. 42 USC 1395/ note.

Reports.

PUBLIC LAW 100-203—DEC. 22, 1987

U.S.C. 13951(h)(2)) is amended by adding at the end the following: "In establishing fee schedules under the first sentence of this paragraph with respect to automated tests and tests (other than cytopathology tests) which before July 1, 1984, the Secretary made subject to a limit based on lowest charge levels under the sixth sentence of section 1842(b)(3) performed after March 31, 1988, the Secretary shall reduce by 8.3 percent the fee schedules otherwise established for 1988.". (2) NATIONWIDE PAYMENT LIMITS.—Section 1833(h)(4)(B) of such Act is amended— (A) in clause (i), by striking "January" and inserting "April", and (B) by amending clause (ii) to read as follows: "(ii) March 31, 1988, and so long as a fee schedule for the test has not been established on a nationwide basis, is equal to the median of all the fee schedules established for that test for that laboratory setting under paragraph (1).". (3) EFFECTIVE DATES.—The amendments made by paragraphs (1) and (2) shall apply with respect to services furnished on or after April 1, 1988. (4) GAO STUDY OF FEE SCHEDULES.—The Comptroller General

shall conduct a study of the level of the fee schedules established for clinical diagnostic laboratory services under section ^r- 1833(h)(2) of the Social Security Act to determine, bsised on the costs of, and revenues received for, such tests the appropriate;*^ ness of such schedules. The Comptroller General shall report to the Congress on the results of such study by not later than January 1, 1990. Suppliers of such tests which fail to provide the Comptroller General with reasonable access to necessary records to carry out the study under this paragraph are subject ' Copy read "the the".

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Page:United States Statutes at Large Volume 101 Part 2.djvu/905

 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-111

to exclusion from the medicare program under section 1128(a) of the Social Security Act. (c) LIMITATION ON APPLICATION OF 2 PERCENT HOSPITAL LAB DIF-

FERENTIAL.—Section 1833(h)(2) of such Act is amended by striking "hospital laboratory" and inserting "laboratory in a sole community hospital".

42 USC 1395Z.

(d) INTERMEDIATE SANCTIONS.—

(1) Part B of title XVIII of such Act is amended by adding at the end thereof the following new section: "INTERMEDIATE SANCTIONS FOR PROVIDERS OF CLINICAL DIAGNOSTIC LABORATORY TESTS 35b

"SEC. 1846. (a) If the Secretary determines that any provider or 42 USC 1395w-2. clinical laboratory certified for participation under this title no longer substantially meets the conditions of participation specified under this title with respect to the provision of clinical diagnostic laboratory tests under this part, the Secretary may (for a period not to exceed one year) impose intermediate sanctions developed pursut ant to subsection (b), in lieu of canceling immediately the certification of the provider or clinical laboratory. "(b)(1) The Secretary shall develop and implement— "(A) a range of intermediate sanctions to apply to providers or certified clinical laboratories under the conditions described in subsection (a), and "(B) appropriate procedures for appealing determinations relating to the imposition of such sanctions. "(2)(A) The intermediate sanctions developed under paragraph (1) shall include— "(i) directed plans of correction, "(ii) civil fines and penalties, "(iii) payment for the costs of onsite monitoring by an agency responsible for conducting certification surveys, and "(iv) suspension of all or part of the payments to which a provider or certified clinical laboratory would otherwise be entitled under this title with respect to clinical diagnostic laboratory tests provided on or after the date in which the Secretary determines that intermediate sanctions should be imposed pursuant to subsection (a).^* "(B) The sanctions specified in subparagraph (A) are in addition to sanctions otherwise available under State or Federal law. "(3) The Secretary shall develop and implement specific procedures with respect to when and how each of the intermediate sanctions developed under paragraph (1) is to be applied, the amounts of any fines, and the severity of each of these penalties. Such procedures shall be designed so as to minimize the time between identification of violations and imposition of these sanctions and shall provide for the imposition of incrementally more severe fines for repeated or uncorrected deficiencies.". (2) The amendment made by paragraph (1) shall become Effective date. effective on January 1, 1990. 42 USC l395w-2 (e) STATE CERTIFICATION OF HIGH-VOLUME PHYSICIAN OFFICE LABS.—

(1) Section 1861(s) of such Act (42 U.S.C. 1395x(s)) is amended, in the sentence following paragraph (11), by inserting "a labora^""Copy read "TESTS" ". ' • Subparagraphs " '(i)", " '(ii)", " '(iii)", and " '(iv)" indented incorrectly.

"°*®

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Page:United States Statutes at Large Volume 101 Part 2.djvu/906

 101 STAT. 1330-112

42 USC 1395x note.

PUBLIC LAW 100-203—DEC. 22, 1987

tory not independent of a physician's office that has a volume of clinical diagnostic laboratory tests exceeding 5,000 per year" after "physician's office,". (2) The amendment made by paragraph (1) shall apply to diagnostic tests performed on or after January 1, 1990. SEC. 4065. RETURN ON EQUITY PAYMENTS TO OUTPATIENT DEPARTMENTS.

42 USC 1395x note.

(a) IN GENERAL.—Section 1861(v)(l) of the Social Security Act (42 U.S.C. 1395x(v)(l)) is amended by adding at the end thereof the following new subparagraph: "(S) Such regulations shall not include provision for specific recognition of any return on equity capital with respect to hospital outpatient departments.". O> CONFORMING AMENDMENT.—Section 18810t)X2)(C) of such Act t) (42 U.S.C. 1395rra)X2XC)) is amended by striking "facilities" and inserting "facilities (other than hospital outpatient departments)". (c) EFFECTIVE DATE.—The amendments made by this section shall become effective on January 1, 1988. SEC. 4066. PAYMENTS TO HOSPITAL OUTPATIENT DEPARTMENTS FOR RADIOLOGY.

(a) AMOUNTS PAYABLE.—Section 1833 of the Social Security Act (42 U.S.C. 13951) is amended— (1) in subsection (a)(2)— ili ' '^.-..,•,:,'> '^,^.:. (A) by striking "and" in subparagraph (C), (B) by adding "and" at the end of subparagraph (D), and ii) ii(C) by adding at the end thereof the following new subparagraph: "(E) with respect to— "(i) outpatient hospital radiology services (including •jn-jL diagnostic and therapeutic radiology, nuclear medicine and CAT scan procedures, magnetic resonance imaging, and ultrasound and other imaging services), and October 1, 1989, diagnostic procedures (as defined by the Secretary) described in section 1861(s)(3) (other than diagnostic x-ray tests and diagnostic laboratory ,,,j tests), the amount determined under subsection (n);"; and (2) by adding at the end, as previously amended, the following new subsection: "(n)(l)(A) The aggregate amount of the payments to be made for all or part of a cost reporting period beginning on or after October 1, 1988 under this part for services described in subsection (a)(2)(E) shall be equal to the lesser of— "(i) the amount determined with respect to such services under subsection (a)(2)(B), or "(ii) the blend amount for radiology services and diagnostic procedures determined in accordance with subparagraph (B). "(B)(i) The blend amount for radiology services and diagnostic procedures for a cost reporting period is the sum of— "(I) the cost proportion (as defined in clause (ii)) of the amount described in subparagraph (A)(i); and "(II) the charge proportion (as defined in clause (iiXID) of 62 percent (for services described in subsection (a)(2)(E)(i)), or (for procedures described in subsection (a)(2)(E)(ii)), 42 percent or
 * (ii) effective for procedures performed on or after

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Page:United States Statutes at Large Volume 101 Part 2.djvu/907

 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-113

such other percent established by the Secretary (or carriers acting pursuant to guidelines issued by the Secretary) based on prevailing charges established with actual charge data, of 80 percent of the prevailing charge for participating physicians for the same services as if they were furnished in a physician's office in the same locality as determined under section 1842(b). "(ii) In this subparagraph: "(I) The term 'cost proportion' means 65 percent for all or any part of cost reporting periods which occur in fiscal year 1989 and 50 percent for other cost reporting periods. "(II) The term 'charge proportion' means 35 percent for all or any parts of cost reporting periods which occur in fiscal year 1989 and 50 percent for other cost reporting periods.". (b) CONFORMING AMENDMENT.—Section 1833(a)(2)(B) of such Act (42 U.S.C. 13951(a)(2)(B)) is amended in the matter preceding clause (i) by striking "(C) or (D)" and inserting "(C), (D), or (E)". (c) EFFECTIVE DATE.—The amendments made by subsection (a) 42 USC 1395/ shall apply with respect to outpatient hospital radiology services note. furnished on or after October 1, 1988, and other diagnostic procedures performed on or after October 1, 1989. SEC. 4067. UPDATING MAXIMUM RATE OF PAYMENT PER VISIT FOR INDEPENDENT RURAL HEALTH CLINICS.

(a) IN GENERAL.—Section 1833 of the Social Security Act (42 U.S.C. 13951) is further amended by inserting after subsection (e) the following new subsection: c-. - >>' S* "(f) In establishing limits under subsection (a) on payment for -'-^ rural health clinic services provided by independent rural health clinics, the Secretary shall establish such limit, for services provided— .,J "(1) in 1988, after March 31, at $46, and "(2) in a subsequent year, at the limit established under this subsection for the previous year increased by the percentage increase in the medicare economic index (referred to in the fourth sentence of section 1842(b)(3)) applicable to physicians' services furnished as of the first day of that year.". 0)) REPORT ON RATES.—The Secretary of Health and Human Serv- 42 USC 1395/ ices shall report to Congress, by not later than March 1, 1989, on the note, adequacy of the amounts paid under title XVIII of the Social Security Act for rural health clinic services provided by independent rural health clinics. (c) EFFECTIVE DATE.—The amendment made by subsection (a) shall 42 USC 1395/ apply to services furnished on or after April 1, 1988. note. SEC. 4068. PAYMENT FOR AMBULATORY SURGERY AT EYE, AND EYE AND EAR, SPECIALTY HOSPITALS.

(a) IN GENERAL.—Section 1833(i)(3)(B)(ii) of the Social Security Act (42 U.S.C. 13951(i)(3)(B)(ii)) is amended— (1) by striking "In" and inserting "Subject to the last sentence of this clause, in"; and (2) by adding at the end thereof the following: "In the case of a hospital that makes application to the Secretary and demonstrates that it specializes in eye services or eye and ear services (as determined by the Secretary), receives more than 30 percent of its total revenues from outpatient services and was an eye specialty hospital or an eye and ear specialty hospital on October 1, 1987, the cost proportion and ASC proportion in effect under

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Page:United States Statutes at Large Volume 101 Part 2.djvu/908

 101 STAT. 1330-114

PUBLIC LAW 100-203—DEC. 22, 1987

subclauses (I) and (II) for cost reporting periods beginning in fiscal year 1988 shall remain in effect for cost reporting periods beginning in fiscal year 1989 or fiscal year 1990.". (b) DEVELOPMENT OF PROSPECTIVE PAYMENT METHODOLOGY FOR OUTPATIENT HOSPITAL SERVICES.—Section 1135(d) of the Social Secu-

42 USC 1395Z.

rity Act (42 U.S.C. 1320b-5(d)) is amended— (1) by adding at the end of paragraph (3) the following: "In { establishing such rates, the Secretary shall consider whether a r differential payment rate is appropriate for speciality hospitals."; and ^ (2) by adding at the end the following new paragraph: "(7) The Secretary shall solicit the views of the Prospective Payment Assessment Commission in developing the systems under paragraphs (1) and (6), and shall include in the Secretary's reports under this subsection any views the Commission may submit with respect to such systems.". (c) EFFECTIVE DATE.—The amendments made by subsection (a) shall be effective as if included in the amendment made by section 9343(a)(l)(B) of the Omnibus Budget Reconciliation Act of 1986.

Subpart C—Eligibility and Benefits Changes SEC. 4070. COVERAGE OF MENTAL HEALTH SERVICES.

42 USC 1395/ "ote.

(a) OUTPATIENT SERVICES UNDER PART B.—Section 1833(c) of the Social Security Act (42 U.S.C. 13951(c)) is amended— (1) by striking "$312.50" and inserting "$1375.00"; and (2) by adding at the end thereof the following: "For purposes of this subsection, the term 'treatment' does not include brief office visits (as defined by the Secretary) for the sole purpose of prescribing or monitoring prescription drugs used in the treatment of such disorders.". (b) PARTIAL HOSPITAUZATION COVERAGE.—

"^

^^

(1) Section 1861(s)(2)(B) of such Act (42 U.S.C. 1395x(s)(2)(B)) is amended by inserting "and partial hospitalization services incident to such services" before the semicolon. ^ (2) Section 1861 of such Act (42 U.S.C. 1395x) is amended by adding at the end thereof the following new subsection: "(ffKl) The term 'partial hospitalization services' means the items and services described in paragraph (2) prescribed by a physician and provided under a program described in paragraph (3) under the supervision of a physician pursuant to an individualized, written plan of treatment established and periodically reviewed by a physician (in consultation with appropriate staff participating in such program), which plan sets forth the physician's diagnosis, the type, amount, frequency, and duration of the items and services provided under the plan, and the goals for treatment under the plan. "(2) The items and services described in this paragraph are— "(A) individual and group therapy with physicians or psychologists (or other mental health professionals to the extent authorized under State law), "(B) occupational therapy requiring the skills of a qualified occupational therapist, •y "(C) services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients,

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101 STAT. 1330-115

"(D) drugs and biologicals furnished for therapeutic purposes (which cannot, as determined in accordance with regulations, be self-administered), "(E) individualized activity therapies that are not primarily recreational or diversionary, "(F) family counseling (the primary purpose of which is treatment of the individual's condition), "(G) patient training and education (to the extent that train,y, ing and educational activities are closely and clearly related to 'IT individual's care and treatment), "(H) diagnostic services, and "(I) such other items and services as the Secretary may provide (but in no event to include meals and transportation); that are reasonable and necessary for the diagnosis or active treatment of the individual's condition, reasonably expected to improve or maintain the individual's condition and functional level and to prevent relapse or hospitalization, and furnished pursuant to such guidelines relating to frequency and duration of services as the Secretary shall by regulation establish (taking into account accepted norms of medical practice and the reasonable expectation of patient improvement). (3) A program described in this paragraph is a program which is hospital-based or hospital-affiliated (as defined by the Secretary) and which is a distinct and organized intensive ambulatory treatment service offering less than 24-hour-daily care.". (3) Section 1835(a)(2) of such Act (42 U.S.C. 1395n(a)(2)) is amended— (A) by striking "and" at the end of subparagraph (D); (B) by striking the period at the end of subparagraph (E) and inserting "; and"; and (C) by inserting sifter subparagraph (E) the following new subparagraph: "(F) in the case of partial hospitalization services, (i) the individual would require inpatient psychiatric care in the ef absence of such services, (ii) an individualized, written plan for furnishing such services has been established by a physician and is reviewed periodically by a physician, and tifi (iii) such services are or were furnished while the individual is or was under the care of a physician.". &1 (4) Section 1833(c) of such Act, as amended by subsection (a), is further amended at the end thereof by inserting "or partial hospitalization services that are not directly provided by a ph3rsician" before the period. (c) EFFECTIVE DATE; IMPLEMENTATION.—

(1) The amendment made b^ subsection (a)(1) shall apply with respect to calendar years beginning with 1988; except that with respect to 1988, any reference in section 1833(c) of the Social Security Act, as amended by subsection (a), to "$1375.00" is deemed a reference to "$562.50". The amendment made by subsection (a)(2) shall apply to services furnished on or after January 1, 1989. (2)(A) The amendments made by subsection (b) shall become effective on the date of enactment of this Act. (B) The Secretary of Health and Human Services shall implement the amendments made by subsection (b) so as to ensure that there is no additional cost to the medicare program by reason of such amendments.

42 USC 1395/ note.

42 USC 1395x note.

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PUBLIC LAW 100-203—DEC. 22, 1987

SEC. 4071. COVERAGE OF INFLUENZA VACCINE AND ITS ADMINISTRATION.

(a) IN GENERAL.—Section 1861(s)(10)(A) of the Social Security Act (42 U.S.C. 1395x(a)(10)(A)) is amended by inserting before the semicolon the following: "and influenza vaccine and its administration". 42 USC 1395x

(b) CONTINGENT EFFECTIVE D A T E; DEMONSTRATION PROJECT.—

note. "^ t'^

^-

(1) The provisions of subsection (e) of section 4072 of this subpart shall apply to this section in the same manner as it applies to section 4072. (2) In conducting the demonstration project pursuant to paragraph (1), in order to determine the cost effectiveness of including influenza vaccine in the medicare program, the Secretary of Health and Human Services is required to conduct a demonstration of the provision of influenza vaccine as a service for medicare beneficiaries and to expend $25,000,000 each year of the demonstration project for this purpose. In conducting this demonstration, the Secretary is authorized to purchase in bulk influenza vaccine and to distribute it in a manner to make it widely available to medicare beneficiaries, to develop projects to provide vaccine in the same manner as other covered medicare services in large scale demonstration projects, including statewide projects, and to engage in other appropriate use of moneys to provide influenza vaccine to medicare beneficiaries and evaluate the cost effectiveness of its use. In determining cost effectiveness, the Secretary shall consider the direct cost of the vaccine, the utilization of vaccine which might otherwise not have occurred, the costs of illnesses and nursing home days avoided, and other relevant factors, except that extended life for beneficiaries shall not be considered to reduce the cost effectiveness of the vaccine.

SEC. 4072. PAYMENT FOR THERAPEUTIC SHOES FOR INDIVIDUALS WITH SEVERE DIABETIC FOOT DISEASE.

(a) COVERAGE UNDER PART B.—Section 1861(s) of the Social Security Act (42 U.S.C. 1395x(s)) is amended— (1) by redesignating paragraphs (12) through (15) as paragraphs (13) through (16), respectively, bi (2) by striking out "and" at the end of paragraph (10), k (3) by striking out the period at the end of paragraph (11) and inserting "; and", and ai (4) by inserting after paragraph (11) the following new paraift graph: & "(12) extra-depth shoes with inserts or custom molded shoes for an individual with diabetes, if— "(A) the physician who is managing the individual's diaXMIJ.?<>•''•.. betic condition (i) documents that the individual has peripheral neuropathy with evidence of callus formation, a history of pre-ulcerative calluses, a history of previous ulceration, foot deformity, or previous amputation, or poor circulation, and (ii) certifies that the individual needs such shoes under I' a comprehensive plan of care related to the individual's diabetic condition; .«''41 03; yi o^c^o* "(B) the particular t3T)e of shoes are prescribed by a '' •' podiatrist or other qualified physician (as established by the 'Sl:7~T Secretary); and @ ' "(C) the shoes are fitted and furnished by a podiatrist or t other qualified individual (such as a pedorthist or orthotist, as established by the Secretary) who is not the physician

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101 STAT. 1330-117

described in subparagraph (A) (unless the Secretary finds ,, f that the physician is the only such qualified individual in the area).'. (b) LIMITATION ON BENEFIT.—Section 1833 of such Act (42 U.S.C. 42 USC 1395/. 1395) is amended by inserting after subsection (e) the following new subsection: "(fKl) In the case of shoes described in section 1861(s)(12)— "(A) no payment may be made under this part for the furnishing of more than one pair of shoes for any individual for any calendar year, and .-.a<|9S "(B) with respect to expenses incurred in any calendar year, no more than the limit established under paragraph (2) shall be ni:>Hi¥H considered as incurred expenses for purposes of subsections (a) and (b). Payment for shoes under this part shall be considered to include payment for any expenses for the fitting of such shoes. '(2)(A) Except as provided by the Secretary under subparagraphs (B) and (C), the limit established under this paragraph— "(i) for the furnishing of one pair of custom molded shoes is $300; "(ii) for the furnishing of extra-depth shoes and inserts is— "(I) $100 for the pair of shoes itself, and i,« -v „Qj^ ^gQ ^^j. ijjggj.^ fQj. a pg^jj. Qf shoes. "(B) The Secretary or a carrier may establish limits for shoes that are lower than the limits established under subparagraph (A) if the Secretary finds that shoes and inserts of an appropriate quality are readily available at or below such lower limits. "(C) For each year after 1988, each dollar amount under subparagraph (A) or (B) (as previously adjusted under this subparagraph) shall be increased by the same percentage increase as the Secretary provides with respect to durable medical equipment for that year, except that if such increase is not a multiple of $1, it shall be rounded to the nearest multiple of $1. "(3) In this title, the term 'shoes' includes, except for purposes of subparagraphs (A)(ii) and (B) of paragraph (2), inserts for extradepth shoes.". (c) MODIFICATION OF EXCLUSION.—Section 1862(a)(8) of such Act (42 ../BU ilP U.S.C. 1395y(a)(8)) is amended by inserting ", other than shoes furnished pursuant to section 1861(s)(12)" before the semicolon. (d)

CONFORMING

AMENDMENTS.—Sections

1864(a),

1865(a),

1902(a)(9)(C), and 1915(a)(l)(B)(iiXI) 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 out "paragraphs (12) and (13)" and inserting "paragraphs (13) and (14)". (e) CONTINGENT EFFECTIVE DATE; DEMONSTRATION PROJECT.— 42 USC I395x (1) The amendments made by this section shall become effec- ^°^tive (if at all) in accordance with paragraph (2). (2)(A) The Secretary of Health and Human Services (in this paragraph referred to as the "Secretary"), shall establish a demonstration project to begin on October 1, 1988, to test the cost-effectiveness of furnishing therapeutic shoes under the medicare program to the extent provided under the amendments made by this section to a sample group of medicare beneficiaries. (B)(i) The demonstration project under subparagraph (A) shall be conducted for an initial period of 24 months. Not later than Reports. October 1, 1990, the Secretary shall report to the Congress on

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Page:United States Statutes at Large Volume 101 Part 2.djvu/912

 101 STAT. 1330-118 Effective date. irii^<:;«0 ij^

Reports. Effective date.

PUBLIC LAW 100-203—DEC. 22, 1987

the results of such project. If the Secretary finds, on the basis of existing data, that furnishing therapeutic shoes under the medicare program to the extent provided under the amendments made by this section is cost-effective, the Secretary shall include such finding in such report, such project shall be discontinued, and the amendments made by this section shall become effective on November 1, 1990. (ii) If the Secretary determines that such finding cannot be made on the basis of existing data, such project shall continue for an additional 24 months. Not later than April 1, 1993, the Secretary shall submit a final report to the Congress on the results of such project. The amendments made by this section shall become effective on the first day of the first month to begin after such report is submitted to the Congress unless the report contains a finding by the Secretary that furnishing therapeutic shoes under the medicare program to the extent provided under the amendments made by this section is not cost-effective (in which case the amendments made by this section shall not become effective). SEC. 4073. COVERAGE OF CERTIFIED NURSE-MIDWIFE SERVICES.

(a) COVERAGE OF SERVICES.—Section 1861(s)(2) of the Social Security Act (42 U.S.C. 1395x(s)(2)) is amended— (1) by striking "and" at the end of subparagraph (J); (2) by adding "and" at the end of subparagraph (K); and (3) by adding at the end thereof the following new subparagraph: "(L) certified nurse-midwife services;". (b) PAYMENT OF BENEFITS.—

42 USC 1395Z.

.x.v 5 '^F't ^ ""

(1) Section 1832(a)(2)(B) of such Act (42 U.S.C. 1395k(a)(2)(B)) is amended— (A) by striking "and" at the end of clause (ii); (B) by striking the semicolon at the end of clause (iii) and inserting a comma; and (C) by adding at the end thereof the following new clause: 'i^ "(iv) certified nurse-midwife services; and". (2) Section 1833(a)(1) of such Act (42 U.S.C. 1395k(a)(l)) is amended— (A) by striking "and" at the end of clause (F); (B) by striking "services; and" in clause (G) and inserting "services,"; and (C) ^' by adding at the end thereof the following: "and (I) with respect to certified nurse-midwife services under section 1861(s)(2)(L), the amounts paid shall be the amount determined by a fee schedule established by the Secretary for the purposes of this subparagraph (but in no event more c than 65 percent of the prevailing charge that would be allowed for the same service performed by a physician);". (3) Section 1833 of such Act (42 U.S.C. 13951) is amended by adding at the end the following new subsection: "(m) In the case of certified nurse-midwife services for which payment may be made under this part only pursuant to section 1861(s)(2)(L), payment may only be made under this part for such services on an assignment-related basis.". »' Copy read "(D)".

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(c) DEFINITION.—Section 1861 of such Act (42 U.S.C. 1395x) is amended by adding at the end thereof the following new subsection: "Certified Nurse-Midwife Services "(ffKD The term 'certified nurse-midwife services' means such services furnished by a certified nurse-midwife (as defined in paragraph (2)) and such services and supplies furnished as an incident to his service which the certified nurse-midwife is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) as would otherwise be covered if furnished by a physician or as an incident to a physician's service. "(2) The term 'certified nurse-midwife' means a registered nurse who has successfully completed a program of study and clinical experience meeting guidelines prescribed by the Secretary, or has been certified by an organization recognized by the Secretary, and performs services in the area of management of the care of mothers and babies throughout the maternity cycle.".

-'

..^

(d) 3* CONFORMING CHANGES.—

(1) Section 1905(a)(17) of such Act (42 U.S.C. 1396d(a)(17)) is amended by striking "as defined in subsection (m)" and inserting "as defined in section 1861(ff)". (2) Section 1905 of such Act (42 U.S.C. 1396d) is amended by striking subsection (m). (e) ^^ EFFECTIVE DATE.—The amendments made by this section 42 USC 1395k ^ shall be effective with respect to services performed on or after July note. "' 1, 1988. SEC. 4074. COVERAGE OF SOCIAL WORKER SERVICES FURNISHED BY A HEALTH MAINTENANCE ORGANIZATION TO ITS MEMBERS.

(a) IN GENERAL.—Section 1861(s)(2)(H)(ii) of the Social Security Act (42 U.S.C. 1395x(s)(2)(H)(ii)) is amended— (1) by inserting "or by a clinical social worker (as defined in subsection (ff))" after '^clinical psychologist (as defined by the Secretary)"; and (2) by striking "incident to his services" and inserting "incident to such clinical psychologist'services or clinical social worker'services". (b) CuNiCAL SOCIAL WORKER DEFINED.—Section 1861 of such Act (42 U.S.C. 1395x) is amended by adding at the end the following new subsection: "Clinical Social Worker "(ff) The term 'clinical social worker' means an individual who— "(1) possesses a master's or doctor's degree in social work; "(2) after obtaining such degree has performed at least 2 years of supervised clinical social work; and "(3)(A) is licensed or certified as a clinical social worker by the State in which the services are performed, or "(B) in the case of an individual in a State which does not provide for licensure or certification— "(i) has completed at least 2 years or 3,000 hours of post•»v master's degree supervised clinical social work practice under the supervision of a master's level social worker in " Copy read "(c)". »8 Copy read "(d)".

• •- f -• ^'

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42 USC 1395x note.

PUBLIC LAW 100-203—DEC. 22, 1987

an appropriate setting (as determined by the Secretary), and "(ii) meets such other criteria as the Secretary establishes.", (c) EFFECTIVE DATE.—The amendments made by this section shall be effective with respect to services performed on or after January 1, 1988. SEC. 4075. CLARIFICATION OF COVERAGE OF DRUGS USED IN IMMUNOSUPPRESSIVE THERAPY.

42 USC 1395x note.

(a) IN GENERAL.—Section 1861(s)(2)(J) of the Social Security Act (42 U.S.C. 1395x(s)(2)(J)) is amended by striking "immunosuppressive drugs" and inserting "prescription drugs used in immunosuppressive therapy". (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to drugs dispensed on or after the date of the enactment of this Act. SEC. 4076. SERVICES OF A PHYSICIAN ASSISTANT.

42 USC 1395x note.

(a) SERVICES COVERED.—Section 1861(s)(2)(K) of the Social Security Act (42 U.S.C. 1395x(s)(2)(K)) is amended by inserting ", in a rural area (as defined in section 1886(d)(2)(D)) that is designated, under section 332(a)(l)(A) of the Public Health Service Act, as a health manpower shortage area," after "1905(c))". (b) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to services furnished on or after January 1, 1989. SEC. 4077. PSYCHOLOGIST SERVICES IN CLINICS. (a) COVERAGE OF PSYCHOLOGISTS' SERVICES FURNISHED AT RURAL HEALTH CUNICS.—

42 USC 1395x note.

(1) Section 1861(aaXlXB) of the Social Security Act (42 U.S.C. 1395x(aaXlXB)) is amended by striking "physician assistant or by a nurse practitioner" and inserting "physician assistant or a nurse practitioner (as defined in paragraph (3)), or by a clinical psychologist (as defined by the Secretary),'. (2) The amendment made by paragraph (1) shall be effective with respect to services furnished on or after the date of enactment of this Act. (b) DIRECT PAYMENT FOR PSYCHOLOGISTS' SERVICES FURNISHED AT A COMMUNITY MENTAL HEALTH CENTER.—

42 USC 1395Z.

(1) Section 1861(s)(2) of the Social Security Act (42 U.S.C. 1395x(s)(2)), as amended, is amended— (A) by striking "and" at the end of subparagraph (K); --.; (B) by adding 'and" at the end of subparagraph (L); and (C) by adding at the end thereof the following new subparagraph: "(M) qualified psychologist services;". (2) Section 1832(a)(2)(B) of such Act (42 U.S.C. 1395k(a)(2)(B)) is amended— (A) by striking "and" at the end of clause (ii); (B) by striking the semicolon in clause (iii) and inserting a comma; and (C) by adding at the end thereof the following new clause: (iv) qualified psychologist services; and '. (3) Section 1833(a)(l) of such Act (42 U.S.C. 1395k(a)(l)) is amended— (A) by striking "and" at the end of subparagraph (G);

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101 STAT. 1330-121

,

(B) by striking "services; and" in subparagraph (H) and inserting "services,"; (C) by adding "and" at the end of subparagraph (I); and (D) by adding at the end thereof the following new 3 subparagraph: "(J) with respect to qualified psychologist services under section 1861(s)(2)(M), the amounts paid shall be the amount determined by a fee schedule established by the Secretary for the purposes of this subparagraph;". (4) The subsection added by section 4073(b)(3) of this subpart is 42 USC 1395/. amended by inserting "and in the case of qualified psychologists services for which payment may be made under this part only pursuant to section 1861(s)(2)(M)" after "1861(s)(2)(L)". (5) Section 1861 of such Act (42 U.S.C. 1395x) is amended by adding at the end thereof the following new subsection: "Qualified Psychologist Services "(gg) The term 'qualified psychologist services' means such services and such services and supplies furnished as an incident to his service furnished by a clinical psychologist (as defined by the Secretary) at a community mental health center (as such term is used in the Public Health Service Act) which the psychologist is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) as would otherwise be covered if furnished by a physician or as an incident to a physician's service.".*" date. (6) * ^ The amendments made by this subsection shall be Effective1395k pf effective with respect to services performed on or after July 1, 42 USC note. , 1988. SEC. 4078. PROVISION OF OFFSITE COMPREHENSIVE OUTPATIENT REHABILITATION SERVICES.

Section 1861(ccXl) of the Social Security Act (42 U.S.C. 1395x(ccXl)) is amended by adding at the end thereof the following: "In the case of physical therapy, occupational therapy, and speech pathology services, there shall be no requirement that the item or service be furnished at any single fixed location if the item or service is furnished pursuant to such plan and payments are not otherwise made for the item or service under this title.". SEC. 4079. DEMONSTRATION PROJECTS TO PROVIDE PAYMENT ON A PRE« rw ' PAW, CAPITATED BASIS FOR COMMUNITY NURSING AND AMBULATORY CARE FURNISHED TO MEDICARE BENEFICIARIES.

(a) IN GENERAL.—The Secretary of Health and Human Services (in this section referred to as the "Secretary") shall enter into an agreement with not less than four eligible organizations submitting applications under this section to conduct demonstration projects to provide payment on a prepaid, capitated basis for community nursing and ambulatory care furnished to any individual entitled to benefits under part A and enrolled under part B of title XVIII of the Social Security Act (other than an individual medically determined to have end-stage renal disease) who resides in the geographic area
 * o Copy read "service.".
 * • Copy read "(5)".

42 USC 1395mm note.

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 101 STAT. 1330-122

PUBLIC LAW 100-203—DEC. 22, 1987

served by the organization and enrolls with such organization (in accordance with subsection (c)(2)). (b) DEFINITIONS OF COMMUNITY NURSING AND AMBULATORY CARE

"^

AND EuGiBLE ORGANIZATION.—As used in this section: (1) The term "community nursing and ambulatory care" means the following services: (A) Part-time or intermittent nursing care furnished by or under the supervision of registered professional nurses. '^^ '^' (B) Physical, occupational, or speech therapy. (C) Social and related services supportive of a plan of ambulatory care. (D) Part-time or intermittent services of a home health ¥ci fe^; aide. (E) Medical supplies (other than drugs and biologicals) and durable medical equipment while under a plan of care. (F) Medical and other health services described in paragraphs (2)(H)(ii) and (5) through (9) of section 1861(s) of the Social Security Act. (G) Rural health clinic services described in section 1861(aaXlXC) of such Act. (H) Certain other related services listed in section 1915(c)(4)(B) of such Act to the extent the Secretary finds such services are appropriate to prevent the need for institutionalization of a patient. (2) The term "eligible organization" means a public or private entity, organized under the laws of any State, which meets the ''' following requirements: ., • (A) The entity (or a division or part of such entity) is primarily engaged in the direct provision of community nursing and ambulatory care. (B) The entity provides directly, or through arrangements with other qualified personnel, the services described in paragraph (1). (C) The entity provides that all nursing care (including services of home health aids) is furnished by or under the supervision of a registered nurse. (D) The entity provides that all services are furnished by qualified staff and are coordinated by a registered professional nurse. (E) The entity has policies governing the furnishing of .^ community nursing and ambulatory care that are developed by registered professional nurses in cooperation with (as appropriate) other professionals. (F) The entity maintains clinical records on all patients. (G) The entity has protocols and procedures to assure, when appropriate, timely referral to or consultation with other health care providers or professionals. (H) The entity complies with applicable State and local laws governing the provision of community nursing and ambulatory care to patients. (I) The requirements of subparagraphs (B), (D), and (E) of section 1876(b)(2) of the Social Security Act. (c) AGREEMENTS WITH ELIGIBLE ORGANIZATIONS TO * ^ CONDUCT DEMONSTRATION PROJECTS.—
 * ' Copy read "WITH ELIGIBLE ORGANIZATIONS TO".

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101 STAT. 1330-123

(1) The Secretary may not enter into an agreement with an eligible organization to conduct a demonstration project under t h ^ section unless the organization meets the requirements of this subsection and subsection (d) with respect to members enrolled with the organization under this section. (2) The organization shall have an open enrollment period for the enrollment of individuals under this section. The duration of such period of enrollment and any other requirement pertaining to enrollment or termination of enrollment shall be specified in the agreement with the organization. (3) The organization must provide to members enrolled with the organization under this section, through providers and other persons that meet the applicable requirements of titles XVIII and XIX of the Social Security Act, community nursing and ambulatory care (as defined in subsection O^XD) which is generally available to individuals residing in the geographic area served by the organization, except that the organization may provide such members with such additional health care services as the members may elect, at their option, to have covered. (4) The organization must make community nursing and ambulatory care (and such other health care services as such individuals have contracted for) available and accessible to each individual enrolled with the organization under this section, within the area served by the organization, with reasonable promptness and in a manner which assures continuity. (5) Section 1876(c)(5) of the Social Security Act shall apply to organizations under this section in the same manner as it applies to organizations under section 1876 of such Act. (6) The organization must have arrangements, established in accordance with regulations of the Secretary, for an ongoing quality assurance program for health care services it provides to such individuals under the demonstration project conducted under this section, which program (A) stresses health outcomes and (B) provides review by health care professionals of the process followed in the provision of such health care services. (7) Under a demonstration project under this section— (A) the Secretary could require the organization to provide financial or other assurances (including financial risksharing) that minimize the inappropriate substitution of other services under title XVIII of such Act for community nursing services; and (B) if the Secretary determines that the organization has failed to perform in accordance with the requirements of the project (including meeting fincmcial responsibility requirements under the project, any pattern of disproportionate or inappropriate institutionalization) the Secretary shall, after notice, terminate the project. (d) DETERMINATION OF PER CAPITA PAYMENT RATES.—

(1) The Secretary shall determine for each 12-month period in which a demonstration project is conducted under this section, and shall announce (in a mcmner intended to provide notice to interested parties) not later than three months before the beginning of such period, with respect to each eligible organization conducting a demonstration project under this section, a per capita rate of payment for each class of individuals who are enrolled with such organization who are entitled to benefits

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 101 STAT. 1330-124

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m

m,

PUBLIC LAW 100-203—DEC. 22, 1987

under part A and enrolled under part B of title XVIII of the Social Security Act. (2)(A) Except as provided in paragraph (3), the per capita rate of payment under paragraph (1) shall be determined in accordance with this paragraph. (B) The Secretary shall define appropriate classes of members, based on age, disability status, and such other factors as the Secretary determines to be appropriate, so as to ensure actuarial equivalence. The Secretary may add to, modify, or substitute for such classes, if such changes will improve the determination of actuarial equivalence. (C) The per capita rate of payment under paragraph (1) for each such class shall be equal to 95 percent of the adjusted average per capita cost (as defined in subparagraph (D)) for that class. (D) For purposes of subparagraph (C), the term 'adjusted average per capita cost' means the average per capita amount that the Secretary estimates in advance (on the basis of actual experience, or retrospective actuarial equivalent based upon an adequate sample and other information and data, in a geographic area served by an eligible organization or in a similar area, with appropriate adjustments to assure actuarial equivalence) would be payable in any contract year for those services covered under parts A and B of title XVIII of the Social Security Act and types of expenses otherwise reimbursable under such parts A and B which are described in subparagraphs (A) through (G) of subsection (b)(l) (including administrative costs incurred by organizations described in sections 1816 and 1842 of such Act), if the services were to be furnished by other than an eligible organization. (3) The Secretary shall, in consultation with providers, health policy experts, and consumer groups develop capitation-based reimbursement rates for such classes of individuals entitled to benefits under part A and enrolled under part B of the Social Security Act as the Secretary shall determine. Such rates shall be applied in determining per capita rates of payment under paragraph (1) with respect to at least one eligible organization conducting a demonstration project under this section. (4)(A) In the case of an eligible organization conducting a demonstration project under this section, the Secretary shall make monthly payments in advance and in accordance with the rate determined under paragraph (2) or (3), except as provided in subsection (e)(3)(B), to the organization for each individual enrolled with the organization. (B) The amount of payment under paragraph (2) or (3) may be retroactively adjusted to take into account any difference between the actual number of individuals enrolled in the plan under this section and the number of such individuals estimated to be so enrolled in determining the amount of the advance payment. (5) The payment to an eligible orgsmization under this section for individuals enrolled under this section with the organization and entitled to benefits under part A and enrolled under part B of the Social Security Act shall be made from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund established under such Act in such proportions from each such trust fund as the Secretary

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