[House Report 116-620] [From the U.S. Government Publishing Office] 116th Congress } { Rept. 116-620 HOUSE OF REPRESENTATIVES 2d Session } { Part 1 ====================================================================== HEARTS AND RURAL RELIEF ACT _______ December 7, 2020.--Ordered to be printed _______ Mr. Neal, from the Committee on Ways and Means, submitted the following R E P O R T [To accompany H.R. 3429] [Including cost estimate of the Congressional Budget Office] The Committee on Ways and Means, to whom was referred the bill (H.R. 3429) to provide for health equity and access for returning troops and servicemembers, to provide for ambulatory surgical payment transparency under the Medicare program, and for other purposes, having considered the same, reports favorably thereon with an amendment and recommends that the bill as amended do pass. CONTENTS Page I. SUMMARY AND BACKGROUND............................................5 A. Purpose and Summary................................... 5 B. Background and Need for Legislation................... 5 C. Legislative History................................... 9 II. EXPLANATION OF THE BILL...........................................9 A. HEARTS and Rural Relief Act........................... 9 __Effective Dates........................................ 15 III.VOTES OF THE COMMITTEE...........................................16 IV. BUDGET EFFECTS OF THE BILL.......................................16 A. Committee Estimate of Budgetary Effects............... 16 B. Statement Regarding New Budget Authority and Tax Expenditures Budget Authority........................ 16 C. Cost Estimate Prepared by the Congressional Budget Office............................................... 16 V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......21 A. Committee Oversight Findings and Recommendations...... 21 B. Statement of General Performance Goals and Objectives. 21 C. Information Relating to Unfunded Mandates............. 21 D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff Benefits.............................. 21 E. Duplication of Federal Programs....................... 21 F. Hearings.............................................. 22 VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............22 The amendment is as follows: Strike all after the enacting clause and insert the following: SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) Short Title.--This Act may be cited as the ``HEARTS and Rural Relief Act''. (b) Table of Contents.--The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Health Equity and Access for Returning Troops and Servicemembers Act of 2019. Sec. 3. Ambulatory Surgical Center Payment Transparency. Sec. 4. Exclusion of complex rehabilitative manual wheelchairs from Medicare competitive acquisition program; Non-application of Medicare fee-schedule adjustments for certain wheelchair accessories and cushions. Sec. 5. Extension of enforcement instruction on supervision requirements for outpatient therapeutic services in critical access and small rural hospitals through 2021. SEC. 2. HEALTH EQUITY AND ACCESS FOR RETURNING TROOPS AND SERVICEMEMBERS ACT OF 2019. (a) Modification of Requirement for Certain Former Members of the Armed Forces to Enroll in Medicare Part B to Be Eligible for TRICARE for Life.-- (1) TRICARE eligibility.-- (A) In general.--Subsection (d) of section 1086 of title 10, United States Code, is amended by adding at the end the following new paragraph: ``(6)(A) The requirement in paragraph (2)(A) to enroll in the supplementary medical insurance program under part B of title XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) shall not apply to a person described in subparagraph (B) during any month in which such person is not entitled to a benefit described in subparagraph (A) of section 226(b)(2) of the Social Security Act (42 U.S.C. 426(b)(2)) if such person has received the counseling and information under subparagraph (C). ``(B) A person described in this subparagraph is a person-- ``(i) who is under 65 years of age; ``(ii) who is entitled to hospital insurance benefits under part A of title XVIII of the Social Security Act pursuant to subparagraph (A) or (C) of section 226(b)(2) of such Act (42 U.S.C. 426(b)(2)); ``(iii) whose entitlement to a benefit described in subparagraph (A) of such section has terminated due to performance of substantial gainful activity; and ``(iv) who is retired under chapter 61 of this title. ``(C) The Secretary of Defense shall coordinate with the Secretary of Health and Human Services and the Commissioner of Social Security to notify persons described in subparagraph (B) of, and provide information and counseling regarding, the effects of not enrolling in the supplementary medical insurance program under part B of title XVIII of the Social Security Act (42 U.S.C. 1395j et seq.), as described in subparagraph (A).''. (B) Conforming amendment.--Paragraph (2)(A) of such subsection is amended by striking ``is enrolled'' and inserting ``except as provided by paragraph (6), is enrolled''. (C) Identification of persons.--Section 1110a of such title is amended by adding at the end the following new subsection: ``(c) Certain Individuals Not Required To Enroll in Medicare Part B.--In carrying out subsection (a), the Secretary of Defense shall coordinate with the Secretary of Health and Human Services and the Commissioner of Social Security to-- ``(1) identify persons described in subparagraph (B) of section 1086(d)(6) of this title; and ``(2) provide information and counseling pursuant to subparagraph (C) of such section.''. (2) Non-application of medicare part b late enrollment penalty.--Section 1839(b) of the Social Security Act (42 U.S.C. 1395r(b)) is amended, in the second sentence, by inserting ``or months for which the individual can demonstrate that the individual is an individual described in paragraph (6)(B) of section 1086(d) of title 10, United States Code, who is enrolled in the TRICARE program pursuant to such section'' after ``an individual described in section 1837(k)(3)''. (3) Report.--Not later than October 1, 2024, the Secretary of Defense, the Secretary of Health and Human Services, and the Commissioner of Social Security shall jointly submit to the Committees on Armed Services of the House of Representatives and the Senate, the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives, and the Committee on Finance of the Senate a report on the implementation of section 1086(d)(6) of title 10, United States Code, as added by paragraph (1). Such report shall include, with respect to the period covered by the report-- (A) the number of individuals enrolled in TRICARE for Life who are not enrolled in the supplementary medical insurance program under part B of title XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) by reason of such section 1086(d)(6); and (B) the number of individuals who-- (i) are retired from the Armed Forces under chapter 61 of title 10, United States Code; (ii) are entitled to hospital insurance benefits under part A of title XVIII of the Social Security Act pursuant to receiving benefits for 24 months as described in subparagraph (A) or (C) of section 226(b)(2) of such Act (42 U.S.C. 426(b)(2)); and (iii) because of such entitlement, are no longer enrolled in TRICARE Standard, TRICARE Prime, TRICARE Extra, or TRICARE Select under chapter 55 of title 10, United States Code. (4) Deposit of savings into medicare improvement fund.-- Section 1898(b)(1) of the Social Security Act (42 U.S.C. 1395iii(b)(1)) is amended by striking ``during and after fiscal year 2021, $0'' and inserting ``during and after fiscal year 2024, $5,000,000''. (5) Application.--The amendments made by paragraphs (1) and (2) shall apply with respect to a person who, on or after October 1, 2023, is a person described in section 1086(d)(6)(B) of title 10, United States Code, as added by paragraph (1). (b) Coverage of Certain DNA Specimen Provenance Assay Tests Under Medicare.-- (1) Benefit.-- (A) Coverage.--Section 1861 of the Social Security Act (42 U.S.C. 1395x) is amended-- (i) in subsection (s)(2)-- (I) in subparagraph (GG), by striking ``and'' at the end; (II) in subparagraph (HH), by striking the period and inserting ``; and''; and (III) by adding at the end the following new subparagraph: ``(II) a prostate cancer DNA Specimen Provenance Assay test (DSPA test) (as defined in subsection (kkk));''; and (ii) by adding at the end the following new subsection: ``(kkk) Prostate Cancer DNA Specimen Provenance Assay Test.--The term `prostate cancer DNA Specimen Provenance Assay Test' (DSPA test) means a test that, after a determination of cancer in one or more prostate biopsy specimens obtained from an individual, assesses the identity of the DNA in such specimens by comparing such DNA with the DNA that was separately taken from such individual at the time of the biopsy.''. (B) Exclusion from coverage.--Section 1862(a)(1) of the Social Security Act (42 U.S.C. 1395y(a)(1)) is amended-- (i) in subparagraph (O), by striking ``and'' at the end; (ii) in subparagraph (P), by striking the semicolon at the end and inserting ``, and''; and (iii) by adding at the end the following new subparagraph: ``(Q) in the case of a prostate cancer DNA Specimen Provenance Assay test (DSPA test) (as defined in section 1861(kkk)), unless such test is furnished on or after January 1, 2021, and before January 1, 2026, and such test is ordered by the physician who furnished the prostate cancer biopsy that obtained the specimen tested;''. (2) Payment amount and related requirements.--Section 1834 of the Social Security Act (42 U.S.C. 1395m) is amended by adding at the end the following new subsection: ``(x) Prostate Cancer DNA Specimen Provenance Assay Tests.-- ``(1) Payment for covered tests.-- ``(A) In general.--Subject to subparagraph (B), the payment amount for a prostate cancer DNA Specimen Provenance Assay test (DSPA test) (as defined in section 1861(kkk)) shall be $200. Such payment shall be payment for all of the specimens obtained from the biopsy furnished to an individual that are tested. ``(B) Limitation.--Payment for a DSPA test under subparagraph (A) may only be made on an assignment- related basis. ``(C) Prohibition on separate payment.--No separate payment shall be made for obtaining DNA that was separately taken from an individual at the time of a biopsy described in subparagraph (A). ``(2) HCPCS code and modifier assignment.-- ``(A) In general.--The Secretary shall assign one or more HCPCS codes to a prostate cancer DNA Specimen Provenance Assay test and may use a modifier to facilitate making payment under this section for such test. ``(B) Identification of dna match on claim.--The Secretary shall require an indication on a claim for a prostate cancer DNA Specimen Provenance Assay test of whether the DNA of the prostate biopsy specimens match the DNA of the individual diagnosed with prostate cancer. Such indication may be made through use of a HCPCS code, a modifier, or other means, as determined appropriate by the Secretary. ``(3) DNA match review.-- ``(A) In general.--The Secretary shall review at least three years of claims under part B for prostate cancer DNA Specimen Provenance Assay tests to identify whether the DNA of the prostate biopsy specimens match the DNA of the individuals diagnosed with prostate cancer. ``(B) Posting on internet website.--Not later than July 1, 2023, the Secretary shall post on the internet website of the Centers for Medicare & Medicaid Services the findings of the review conducted under subparagraph (A).''. (3) Cost-sharing.--Section 1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)) is amended-- (A) by striking ``and (CC)'' and inserting ``(CC)''; and (B) by inserting before the semicolon at the end the following: ``, and (DD) with respect to a prostate cancer DNA Specimen Provenance Assay test (DSPA test) (as defined in section 1861(kkk)), the amount paid shall be an amount equal to 80 percent of the lesser of the actual charge for the test or the amount specified under section 1834(x)''. SEC. 3. AMBULATORY SURGICAL CENTER PAYMENT TRANSPARENCY. (a) Advisory Panel on Hospital Outpatient Payment Representation.-- (1) ASC representative.--The second sentence of section 1833(t)(9)(A) of the Social Security Act (42 U.S.C. 1395l(t)(9)(A)) is amended by inserting ``and at least one ambulatory surgical center representative'' after ``an appropriate selection of representatives of providers''. (2) Effective date.--The amendment made by paragraph (1) shall apply with respect to advisory panels consulted on or after the date that is 1 year after the date of the enactment of this Act. (b) Reasons for Excluding Additional Procedures From ASC Approved List.--Section 1833(i)(1) of the Social Security Act (42 U.S.C. 1395l(i)(1)) is amended by adding at the end the following: ``In updating such lists for application in years beginning with the second year beginning after the date of the enactment of this sentence, for each procedure that was not proposed to be included in such lists in the proposed rule with respect to such lists and that was subsequently requested to be included in such lists during the public comment period with respect to such proposed rule and that is not included in the final rule updating such lists, the Secretary shall cite in such final rule the specific criteria in paragraph (b) or (c) of section 416.166 of title 42, Code of Federal Regulations (or any successor regulation), based on which the procedure was excluded. If paragraph (b) of such section is cited for exclusion of a procedure, the Secretary shall identify the peer-reviewed research, if any, or the evidence upon which such determination is based.''. SEC. 4. EXCLUSION OF COMPLEX REHABILITATIVE MANUAL WHEELCHAIRS FROM MEDICARE COMPETITIVE ACQUISITION PROGRAM; NON- APPLICATION OF MEDICARE FEE-SCHEDULE ADJUSTMENTS FOR CERTAIN WHEELCHAIR ACCESSORIES AND CUSHIONS. (a) Exclusion of Complex Rehabilitative Manual Wheelchairs From Competitive Acquisition Program.--Section 1847(a)(2)(A) of the Social Security Act (42 U.S.C. 1395w-3(a)(2)(A)) is amended-- (1) by inserting ``, complex rehabilitative manual wheelchairs (as determined by the Secretary), and certain manual wheelchairs (identified, as of October 1, 2018, by HCPCS codes E1235, E1236, E1237, E1238, and K0008 or any successor to such codes)'' after ``group 3 or higher''; and (2) by striking ``such wheelchairs'' and inserting ``such complex rehabilitative power wheelchairs, complex rehabilitative manual wheelchairs, and certain manual wheelchairs''. (b) Non-Application of Medicare Fee Schedule Adjustments for Wheelchair Accessories and Seat and Back Cushions When Furnished in Connection With Complex Rehabilitative Manual Wheelchairs.-- (1) In general.--Notwithstanding any other provision of law, the Secretary of Health and Human Services shall not, during the period beginning on January 1, 2020, and ending on December 31, 2020, use information on the payment determined under the competitive acquisition programs under section 1847 of the Social Security Act (42 U.S.C. 1395w-3) to adjust the payment amount that would otherwise be recognized under section 1834(a)(1)(B)(ii) of such Act (42 U.S.C. 1395m(a)(1)(B)(ii)) for wheelchair accessories (including seating systems) and seat and back cushions when furnished in connection with complex rehabilitative manual wheelchairs (as determined by the Secretary), and certain manual wheelchairs (identified, as of October 1, 2018, by HCPCS codes E1235, E1236, E1237, E1238, and K0008 or any successor to such codes). (2) Implementation.--Notwithstanding any other provision of law, the Secretary may implement this subsection by program instruction or otherwise. SEC. 5. EXTENSION OF ENFORCEMENT INSTRUCTION ON SUPERVISION REQUIREMENTS FOR OUTPATIENT THERAPEUTIC SERVICES IN CRITICAL ACCESS AND SMALL RURAL HOSPITALS THROUGH 2021. Section 1 of Public Law 113-198, as amended by section 1 of Public Law 114-112, section 16004 of Public Law 114-255, and section 51007 of Public Law 115-123, is amended-- (1) in the section heading, by striking ``2017'' and inserting ``2021''; and (2) by striking ``and 2017'' and inserting ``, 2017, 2020, and 2021''. I. SUMMARY AND BACKGROUND A. Purpose and Summary The bill, H.R. 3429, the HEARTS and Rural Relief Act of 2019, as amended and ordered reported by the Committee on Ways and Means on June 26, 2019, includes provisions amending title XVIII of the Social Security Act. The HEARTS and Rural Relief Act was introduced by Representative Terri Sewell (D-AL) and Representative Devin Nunes (R-CA). Provisions of the legislation relate to Ambulatory Surgical Center (ASC) transparency, Medicare premium penalties for certain individuals eligible for TRICARE for Life, certain wheelchair accessories from competitive bidding under title XVIII, non-enforcement instruction relating to direct supervision in Critical Access Hospitals (CAHs), and Medicare coverage of a certain test. This legislation also provides important protections for certain veterans, provides temporary exemption from certain statutory requirements for durable medical equipment manufacturers and critical access hospitals, and will allow ASCs to put a representative on a Centers for Medicare & Medicaid Services (CMS) panel. B. Background and Need for Legislation H.R. 3429 incorporates the provisions of several other previously introduced bills. Section 2 was adapted from H.R. 2371, the Health Equity and Access for Returning Troops and Servicemembers (HEARTS) Act of 2019, introduced by Representative Mike Thompson (D-CA) and Representative Drew Ferguson (R-GA). Section 2 would allow qualified service members who return to work and no longer receive cash Social Security Disability Insurance (SSDI) benefits to maintain TRICARE coverage without a late enrollment penalty or need to pay Medicare Part B premiums. This section would also provide Medicare coverage for the DNA Specimen Provenance Assay Test (DSPA test) from H.R. 2557, the Prostate Cancer Misdiagnosis Elimination Act of 2017, introduced by Representative Larry Bucshon (R-IN) and Representative Bobby Rush (D-IL). Section 3 was adapted from H.R. 3433, the Ambulatory Surgical Center (ASC) Payment Transparency Act of 2019, introduced by Representative John Larson (D-CT) and Representative Devin Nunes (R-CA) and would add an ASC representative to the Advisory Panel on Hospital Outpatient Payment and require CMS to justify reasons for excluding procedures from the ASC approved list of procedures. Section 4 was adapted from H.R. 2293, the Protecting Access to Wheelchairs Act, introduced by Representative John Larson (D-CT) and Representative Lee Zeldin (R-NY) and would exclude complex rehabilitative technology (CRT) manual wheelchairs, other certain manual wheelchairs, and their accessories from the Medicare Durable Medical Equipment (DME) Competitive Bidding Program (CBP). Section 5 was adapted from H.R. 3431, a bill to provide for the extension of the enforcement instruction on supervision requirements for outpatient therapeutic services in critical access and small rural hospitals through 2021, introduced by Representative Cindy Axne (D-IA) and Representative Adrian Smith (R-NE). The bill would extend the delay of enforcement of direct supervision requirements for outpatient therapeutic services at CAHs and small rural hospitals through calendar year 2021. Various stakeholder organizations, including Federation of American Hospitals (FAH), the American Hospital Association (AHA), and the Wounded Warrior Project, expressed support for this bill. According to FAH: ``We appreciate the Committee on Ways & Means taking action to, among other items, improve the Medicare experience for beneficiaries . . . and improve the delivery of care for patients with chronic medical conditions.''\1\ The AHA said, ``[t]his [bill] would provide regulatory relief to small, rural hospitals . . . and ensure these communities will continue to have access to outpatient therapeutic services.''\2\ --------------------------------------------------------------------------- \1\FAH Supports Ways and Means Committee Action on Vital Health Care Bill, Federation of Am. Hospitals (June 25, 2019), https:// www.fah.org/blog/fah-supports-ways-and-means- committee-action-on-vital-health-care-bills. \2\Thomas P. Nickels, AHA Letter of Support for Bill that Would Provide Regulatory Relief to Small, Rural Hospitals, Am. Hospital Assoc. (Mar. 27, 2019), https://www.aha.org/system/files/media/file/ 2019/03/190327-aha-senate-direct-supervision-support.pdf. --------------------------------------------------------------------------- Health Equity and Access for Returning Troops and Servicemembers (HEARTS) Act of 2019 Coordination of Benefits for Returning Troops and Service Members When wounded servicemembers return home and retire from the military, they are eligible for TRICARE and may also be eligible for the Social Security Disability Insurance (SSDI) program due to their injuries. If they qualify for SSDI benefits, they will be eligible for Medicare coverage after two years on the SSDI program. When veterans with disabilities return to work, they must keep Medicare Part B to maintain access to the TRICARE coverage they have earned.\3\ However, Medicare premiums are more expensive than TRICARE premiums. --------------------------------------------------------------------------- \3\See Chairman Johnson's question at the Social Security Subcommittee's February 7, 2018 hearing, ``Ensuring Social Security Serves America's Veterans,'' available at: https:// waysandmeans.house.gov/event/hearingensuring-social-security-serves- americas-veterans/. --------------------------------------------------------------------------- The HEARTS and Rural Relief Act of 2019 improves coordination between SSDI and the TRICARE program by allowing certain veterans who return to work to retain TRICARE without also continuing Medicare Part B, and also ensures these individuals are not charged Medicare penalties if they return to Part B later in life. The bill allows veterans who qualify for SSDI benefits and then return to work, to maintain their TRICARE coverage without having to keep Part B coverage or pay late enrollment penalties upon continuing Part B. Improving the Quality of Laboratory Diagnoses of Prostate Cancer Prostate cancer is the most common cancer among men, second to non-melanoma skin cancer.\4\ The current biopsy method used to diagnose prostate cancer includes nearly 20 different steps, which makes these tests particularly susceptible to complications. Such complications, or specimen identification errors, in prostate biopsies occur because specimens were transposed among patients or the DNA itself is contaminated along the way.\5\ Between 0.6 and 6 percent of all urologic specimens are subject to specimen identification errors.\6\ This leads to patients receiving false-negatives and losing the opportunity to treat their cancer at its earliest possible stage. It can also lead to patients receiving false-positives and having to contend with the shock and emotional burden of an initial misdiagnosis. --------------------------------------------------------------------------- \4\https://www.cdc.gov/cancer/prostate/statistics/index.htm. \5\Lanthem Wojno et al., ``Specimen Provenance Testing Identifies Contamination That Affects Molecular Prognostic Assay Results in Prostate Cancer Biopsy Specimens,'' Urology, 115:87-91, 2018. \6\John Pfeifer and Jingxia Liu, ``Rate of Occult Specimen Provenance Complications in Routine Clinical Practice,'' Am J Clin Pathol, 139:93-100, 2013. --------------------------------------------------------------------------- The DNA Specimen Provenance Assay (DSPA) can prevent these adverse outcomes by testing genetic material in a prostate cancer biopsy specimen to ensure that the sample came from the beneficiary to whom it is attributed. In 2016, Medicare paid for about 148,000 prostate biopsies, with about 40 percent of those being positive.\7\ When a beneficiary is diagnosed with prostate cancer, they can choose either active treatment (including surgery, radiation, and chemotherapy) or they can choose active surveillance, also called watchful waiting. Clinical data indicate that some prostate biopsies yield false positives, resulting in treatment for patients who do not actually have prostate cancer.\8\ With the addition of Medicare coverage for DSPA, the program would reduce the number of false positives and thus fewer men would be treated for prostate cancer they do not have.\9\ --------------------------------------------------------------------------- \7\Report of the Committee on Energy and Commerce to accompany H.R. 2557, Prostate Cancer Misdiagnosis Elimination Act of 2017, Rept. 115- 449, Part I, available at: https://www.govinfo.gov/content/pkg/CRPT- 115hrpt449/html/CRPT-115hrpt449-pt1.htm. \8\Id. \9\Id. --------------------------------------------------------------------------- Ambulatory Surgical Center Payment Transparency Ambulatory Surgical Centers (ASCs) furnish surgical and other services to patients in an outpatient setting that is similar to outpatient hospitals. Medicare spends more than $4 billion each year on ASC services--and more than three million Medicare beneficiaries receive care in an ASC for cataract surgery, endoscopies, and other surgeries.\10\ --------------------------------------------------------------------------- \10\Report to the Congress: Medicare Payment Policy 2019, Chapter 5: Ambulatory Surgical Center Services, MedPac at 127 (Mar. 2019), http://www.medpac.gov/docs/default-source/reports/ mar19_medpac_ch5_sec.pdf?sfvrsn=0. --------------------------------------------------------------------------- The Advisory Panel on Hospital Outpatient Payment consists of up to 15 members representing a large array of health care stakeholders or providers related to outpatient care. The panel does not currently include an ASC representative, even though ASC payment is part of outpatient payment policy. Maintaining Access to Complex Rehabilitative Technology and Other Manual Wheelchairs and Accessories Complex Rehabilitative Technology (CRT) wheelchairs are specialized wheelchairs for patients with complex mobility needs, such as patients with multiple sclerosis or amyotrophic lateral sclerosis (ALS). Certain patients need complex devices and accessories, such as specialized head rests, to fit to their individual needs. Congress excluded power, but not manual, CRT wheelchairs and the associated accessories from the competitive bidding process because this individualized customization may not be reflected otherwise in the competitively bid price for DME. This bill also would exclude manual CRT wheelchairs and accessories from competitive bidding, as manual CRT wheelchairs also require similar customization. The ITEM Coalition, which includes the National Multiple Sclerosis Society and the American Academy of Physical Medicine and Rehabilitation has said, ``Regardless of injury, illness, disability, or chronic condition, all Medicare beneficiaries with mobility impairments should be eligible for the same access to medically necessary mobility devices, services, and accessories. Anything less can have serious consequences for beneficiaries.''\11\ --------------------------------------------------------------------------- \11\Please Pass Legislation to Restore Access to Manual CRT Wheelchair Accessories, Independence Through Enhancement of Medicare and Medicaid Coalition (Sept. 21, 2018), https:// itemcoalition.files.wordpress.com/2018/09/item-coalition-letter-please- pass-manual-crt-wheelchair-accessory-legislation-sept-2018.pdf. --------------------------------------------------------------------------- Minimizing Burden for Critical Access Hospitals and Small Rural Hospitals For many outpatient services, CMS requires direct supervision in hospital outpatient departments. Direct supervision means that a physician or allowed provider must be immediately available but does not require supervision to occur in the same room. In 2009, CMS clarified the rule to include critical access hospitals (CAHs) and small rural hospitals of less than 100 beds.\12\ --------------------------------------------------------------------------- \12\Report to the Congress: Physician Supervision Requirements in Critical Access Hospitals and Small Rural Hospitals, MedPac at v (Dec. 2017) http://www.medpac.gov/docs/default-source/ reports/dec17_physiciansupervision_sec.pdf. --------------------------------------------------------------------------- Rural hospitals and CAHs have indicated that meeting these requirements would be challenging. In 2010, CMS delayed the implementation until 2013 to give CAHs and rural hospitals more time to comply.\13\ After subsequent statutory delays through 2017, CMS suspended the requirements for CAHs and certain rural hospitals through December 31, 2019 through regulation.\14\ --------------------------------------------------------------------------- \13\Id. at 4. \14\Id. at v. --------------------------------------------------------------------------- C. Legislative History Background H.R. 3429 was introduced on June 24, 2019 and was referred to the Committee on Energy and Commerce and in addition to the Committees on Ways and Means and Armed Services. Committee hearings On June 4, 2019, the Committee on Ways and Means held a full committee Member Day hearing to discuss the range of issues, concerns, and proposals among on-committee and off- committee members. During that hearing, Rep. Adrian Smith (R- NE-03) discussed the need to permanently lift unnecessary barriers to care at Critical Access Hospitals (CAHs). Representatives Terri Sewell (D-AL), Adrian Smith (R-NE), Devin Nunes (R-CA), Anthony Brindisi (D-NY), and Xochitl Torres Small (D-NM), also discussed broadly, the need for supporting rural hospitals. Representative TJ Cox (D-CA) also testified about one of his constituents, a Vietnam War Bronze Star recipient, and the need to improve service members' health care experience. Committee action The Committee on Ways and Means marked up H.R. 3429, the HEARTS and Rural Relief Act, on June 26, 2019, and ordered the bill, as amended, favorably reported (with a quorum being present) by a voice vote. II. EXPLANATION OF THE BILL A. HEARTS and Rural Relief Act of 2019 (1) Section 2: Health Equity and Access for Returning Troops and Servicemembers (HEARTS) Act of 2019 CURRENT LAW\15\ --------------------------------------------------------------------------- \15\All discussions of Current Law in this report refer to current law as of the date of the markup (i.e., June 26, 2019) and do not reflect subsequent law changes. --------------------------------------------------------------------------- Coordination of Benefits for Returning Troops and Service Members In general, persons aged 65 or older are entitled to Medicare if they or their spouse paid Medicare payroll taxes for at least 10 years.\16\ Individuals under the age of 65 who receive cash disability benefits (SSDI) from Social Security for at least 24 months and individuals of any age with end- stage renal disease (ESRD) are also entitled to Medicare.\17\ Individuals on SSDI who return to work and receive earnings over a certain amount for a specified length of time may lose eligibility to SSDI, but retain their eligibility for Medicare for a longer period of time.\18\ --------------------------------------------------------------------------- \16\Sections 1811, 1831, 1851, and 1860-D-1 of the Social Security Act. \17\Id. \18\Medicare Information, Social Security Administration, available at: https://www.ssa.gov/ disabilityresearch/wi/medicare.htm. --------------------------------------------------------------------------- Individuals entitled to Medicare Part A are also eligible to enroll in Part B.\19\ Individuals eligible for Medicare Part B who choose not to enroll in Part B upon becoming eligible may choose to enroll during the annual general enrollment period subject to the late enrollment penalty. The late enrollment penalty increases the Medicare Part B premium by 10 percent for each full 12-month period that an individual was eligible to enroll in Part B but did not do so.\20\ For those on SSDI, the Part B premiums are deducted from those benefits. --------------------------------------------------------------------------- \19\Id. \20\Id. --------------------------------------------------------------------------- The Department of Defense (DOD) administers a health entitlement under chapter 55 of title 10, U.S. Code, called TRICARE for Life (TFL). TFL is available to certain Medicare- eligible military retirees and functions as a secondary payer, or wrap-around, to Medicare.\21\ As a wrap-around, TFL pays the out-of-pocket costs for Medicare-covered services as well as services only covered by TRICARE.\22\ As a condition to TFL participation, TRICARE-eligible beneficiaries must also enroll in and pay monthly premiums for Medicare Part B.\23\ TRICARE- eligible beneficiaries who are entitled to Medicare Part A based on age, disability, or ESRD diagnosis, but decline Part B, lose eligibility for TFL.\24\ --------------------------------------------------------------------------- \21\TRICARE for Life Handbook, 8-9, Department of Defense, February 2020, available at: https://www.tricare.mil/ cents/media/ Files/TRICARE/Publications/Handbooks/TFL_HBK.pdf \22\Id. \23\Id. \24\Id. --------------------------------------------------------------------------- Improving the Quality of Laboratory Diagnoses of Prostate Cancer Medicare covers prostate cancer screening through digital rectal examination as well as with a blood test for prostate specific antigens (PSA), each of which is covered when provided no more frequently than once every 12 months.\25\ Beneficiaries are responsible for a 20 percent coinsurance on the Medicare- approved payment amount for the digital rectal exam after the yearly Part B deductible; the PSA test requires no beneficiary cost sharing. --------------------------------------------------------------------------- \25\Section 4103 of the Balanced Budget Act of 1997 provides for coverage of certain prostate cancer screening tests subject to certain coverage, frequency, and payment limitations; National Coverage Determination (NCD) for Prostate Cancer Screening Tests (210.1), Centers for Medicare & Medicaid Services (CMS), U.S. Department of Health and Human Services (June 2006), available at: https:// www.cms.gov/medicare-coverage-database/details/ncd-details.aspx?NCDI d268. --------------------------------------------------------------------------- The DNA Specimen Provenance Assay (DSPA) is a genetic test that compares the ``DNA fingerprint'' of an individual (as ascertained through a cheek swab) with that of a putatively malignant specimen to verify that the correct individual is being diagnosed with a given condition. Medicare does not currently reimburse for DNA Specimen Provenance Assay (DSPA), which is not a traditional clinical laboratory diagnostic service, but rather a procedure to help laboratories ensure quality control of specimens in an effort to improve the efficiency and accuracy of diagnoses, including for prostate cancer. The DPSA test helps laboratories to validate the identity and purity of specimens from biopsies that are done to diagnose prostate cancer. REASONS FOR CHANGE Coordination of Benefits for Returning Troops and Service Members Section 2 of the HEARTS and Rural Relief Act of 2019 addresses the interaction between Medicare and the TRICARE program to eliminate the penalty service members with disabilities encounter upon successfully returning to work. Service members who qualify for Medicare due to disability status, receive Social Security Disability Income (SSDI), but then when they return to work, they are required to continue to pay Medicare Part B premiums and late enrollment penalties as a condition for continued eligibility for TRICARE. These Part B cost sharing obligations are taken from SSDI and tend to be more expensive than TRICARE benefits. Therefore, improved coordination between SSDI, Medicare, and TRICARE is needed to ensure service members are not unfairly penalized upon returning to work. Improving the Quality of Laboratory Diagnoses of Prostate Cancer Medicare does not currently cover the DNA specimen provenance assay (DSPA) such test because it does not diagnose illness for the patient; rather it seeks to ensure the integrity of the sample and thus the quality of the biopsy. Medical literature shows that some men are falsely diagnosed with prostate cancer (a false positive) or without prostate cancer. This false diagnosis leads to unnecessary treatments at cost to the patient and Medicare. This quality improvement can benefit the system by helping to reduce the rate of false diagnoses and non-diagnoses. DPSA can mitigate the risk of delayed treatment to patients who receive false negative diagnoses and avoid wasting laboratory and therapeutic resources due to false positives results. EXPLANATION OF PROVISIONS Section 2 allows veterans who qualify for SSDI benefits and then return to work to maintain their TRICARE coverage without having to keep their Medicare Part B coverage or pay late enrollment penalties to Medicare beginning on or after October 1, 2023. The section also directs the Secretaries of HHS and Defense as well as the Commissioner of Social Security to submit a joint report to Congress by October 1, 2024. This section also adds prostate cancer DNA specimen provenance assay (DSPA) tests for a 5-year period (January 1, 2020 through December 31, 2024) to Medicare covered services at a rate of $200 per beneficiary. (2) Section 3: Ambulatory Surgical Center (ASC) Payment Transparency CURRENT LAW Medicare pays for hospital outpatient services according to the outpatient prospective payment system (OPPS).\26\ The law requires the HHS Secretary to ``consult with an expert outside advisory panel composed of an appropriate selection of representatives of providers to review (and advise the Secretary concerning)'' the clinical appropriateness of the groupings, weights, and the wage and other adjustments in consideration of ``changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors.''\27\ The Advisory Panel on Hospital Outpatient Payment (OPPS Advisory Panel) developed to fulfill this role is re-chartered every 2 years.\28\ --------------------------------------------------------------------------- \26\Balanced Budget Act of 1997, P.L 105-33 (August 5, 1997). \27\Id.; section 1833(t)(9)(A) of the Social Security Act (42 USC 1395l(t)(9)(A)). \28\Charter of the Advisory Panel on Hospital Outpatient Payment, Office of the Secretary, U.S. Department of Health and Human Services (November 19, 2018), available at: https://www.cms.gov/Regulations-and- Guidance/Guidance/FACA/Downloads/2018-HOP-Panel- Charter.pdf. --------------------------------------------------------------------------- The Medicare Prescription Drug, Improvement, and Modernization Act of 2003\29\ required the development of a new payment system for ambulatory surgical centers (ASCs). On January 1, 2008, Medicare began paying for facility (but not professional) services provided in ASCs under the new payment system, which was largely linked to the hospital OPPS. The ASC and OPPS payment systems use the same relative weights for most procedures that reflect differences in the cost of providing different services, however, the update and conversion factors to set payment amounts in the two settings are determined separately. --------------------------------------------------------------------------- \29\Pub. L. No. 108-173. --------------------------------------------------------------------------- Included among the items for which the Secretary must consult with the OPPS Advisory Panel is the specification of surgical procedures that are appropriately performed on an inpatient basis in a hospital but also can be performed safely on an ambulatory basis in an ASC, critical access hospital (CAH), or hospital outpatient department.\30\ The panel consists of up to 15 total members who are representatives of providers representing a variety of fields and interests including hospital payment systems, hospital medical care delivery systems, provider billing and accounting systems, drugs, medical devices, and other services in the hospital outpatient setting and other forms of relevant expertise. --------------------------------------------------------------------------- \30\Section 1833(t)(2)(B) of the Social Security Act. --------------------------------------------------------------------------- REASONS FOR CHANGE Medicare spends more than $4 billion each year on surgical and other services in ASC outpatient settings. The Advisory Panel on Hospital Outpatient Payment consists of up to 15 members representing a large array of health care stakeholders of providers related to outpatient care (including hospital payment systems, hospital medical care delivery systems, provider billing and accounting systems, drugs, medical devices, and other services in the hospital outpatient setting). The panel does not currently include an ASC representative and the Secretary does not provide full information on the surgeries that are eligible to be performed in an ASC. EXPLANATION OF PROVISIONS Section 3 adds an Ambulatory Surgical Center (ASC) representative to the Advisory Panel on Hospital Outpatient Payment effective one year after the date of enactment. This section also requires CMS to provide additional information regarding the reasons for excluding additional procedures from the ASC approved list. (3) Section 4: Exclusion of Complex Rehabilitative Manual Wheelchairs from Medicare Competitive Acquisition Program; Non-Application of Medicare Fee-Schedule Adjustments for Certain Wheelchair Accessories and Cushions CURRENT LAW Medicare covers a variety of durable medical equipment (DME) when it is medically necessary and prescribed by a physician.\31\ The amount that Medicare will pay for the equipment is determined in one of two ways. First, in competitive bidding geographic areas, the Medicare payments are determined for selected items based on the bids (or estimates of the cost of providing the item) submitted by winning DME suppliers.\32\ Second, outside of competitive bidding areas, payments are determined through statutorily specified formulas (fee schedules) adjusted based on information from the competitive bidding process, when information is available.\33\ Not all items of DME are competitively bid, and therefore, not all items outside of competitive bidding areas have their fee schedule payments adjusted based on competitive bidding information. Competitive bidding tends to result in lower payment amounts for DME, so adjusting the fee schedules based on competitive bidding can result in lower payments. --------------------------------------------------------------------------- \31\Section 1847(a) of the Social Security Act, as amended by section 302(b)(1) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108-173). \32\Id. \33\Section 1834(a)(1)(F)(ii) of the Social Security Act; section 1847(a)(3) of the Social Security Act. --------------------------------------------------------------------------- Certain items of DME were statutorily excluded from the competitive bidding program, including Group 3 complex rehabilitative power wheelchairs and their accessories.\34\ Group 2 complex rehabilitative power wheelchairs and their accessories were not excluded and were competitively bid in the first round of the program. Certain accessories can be used with either Group 2 or Group 3 chairs and were part of the competitive bidding process. In general, the difference between Group 2 and Group 3 complex rehabilitative power wheelchairs is related to the number of different power accessories that can be plugged into the chair and to the power, durability, and performance of the chair. --------------------------------------------------------------------------- \34\Section 1847(a)(2)(A) of the Social Security Act. --------------------------------------------------------------------------- The HHS Secretary published final regulations that would have adjusted the fee schedule payments for wheelchair accessories based on information from the competitive bidding program regardless of the type of wheelchair the accessory was used with for areas outside of competitive bidding areas.\35\ However, the Patient Access and Medicare Protection Act prohibited the Secretary from using information from the competitive bidding program to adjust the fee schedule payments for accessories furnished in conjunction with Group 3 complex rehabilitative power wheelchairs prior to January 1, 2017.\36\ Congress then delayed the date when the Secretary could begin using information from competitive bidding to adjust the fee schedule rates for accessories used with Group 3 complex rehabilitative power wheelchairs by six months (to July 1, 2017).\37\ However, effective July 1, 2017, the Secretary extended the policy of paying for accessories used with Group 3 complex rehabilitative power wheelchairs based on fee schedule amounts that had not been adjusted based on competitive bidding. --------------------------------------------------------------------------- \35\Medicare Program; End-Stage Renal Disease Prospective Payment System, Quality Incentive Program, and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies; Final Rule, 79 Fed. Reg. 66120, 66124 (November 6, 2014). \36\Pub. L. No. 114-115. \37\Increasing Choice, Access, and Quality in Health Care for Americans Act (Division C of the 21st Century Cures Act; P.L. 114-255). --------------------------------------------------------------------------- REASONS FOR CHANGE The distinction between payment for manual and power complex rehabilitative technology (CRT) wheelchairs (i.e., competitive versus non-competitive bidding) has contributed to a decrease in suppliers of CRT. This provision would ensure parity in payment for power or manual CRT wheelchairs. EXPLANATION OF PROVISIONS Section 4 excludes complex rehabilitative technology (CRT) manual wheelchairs, certain manual wheelchairs, associated accessories, and seat and back cushions from the Medicare Durable Medical Equipment (DME) Competitive Bidding Program (CBP). The section also prohibits the Secretary of HHS from using competitive bidding information, from July 1, 2019 and December 31, 2020, to inform adjustments to payments under the non-competitive payment system. (4) Section 5: Extension of Enforcement Instruction on Supervision Requirements for Outpatient Therapeutic Services in Critical Access and Small Rural Hospitals through 2021 CURRENT LAW Critical access hospitals have noted that direct supervision requirements can be challenging, as they may require supervising specialists that are hard to find or completely unavailable. The 2009 OPPS final rule required that therapeutic hospital outpatient services be furnished under the direct supervision of a physician.\38\ However, beginning in calendar year (CY) 2010, CMS instructed its contractors not to evaluate or enforce the supervision requirements for therapeutic services provided to outpatients in CAHs and small rural hospitals with 100 or fewer beds, extending this non-enforcement instruction for CY2011.\39\ --------------------------------------------------------------------------- \38\Medicare Program: Changes to the Hospital Outpatient Prospective Payment System and CY 2010 Payment Rates; Changes to the Ambulatory Surgical Center Payment System and CY 2010 Payment Rates; Final Rule, 74 Fed. Reg. 60316, 60583 (Nov. 20, 2009). \39\Enforcement Instruction on Supervision Requirements for Outpatient Therapeutic Services in Critical Access Hospitals and Small Rural Hospitals, Centers for Medicare & Medicaid Services, U.S. Department of Health and Human Services (December 1, 2017), available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/ Downloads/Moratorium-on-Hospital-Supervision-Enforcement.pdf. --------------------------------------------------------------------------- The non-enforcement instruction for critical access and small rural hospitals has been extended several times through legislation and rules. Most recently, Section 51007 of the Bipartisan Budget Act of 2018 extended the non-enforcement instruction through CY2017 (retroactively) and the 2018 OPPS/ ASC final rule further extended the instruction from January 1, 2018 through December 31, 2019.\40\\41\ --------------------------------------------------------------------------- \40\Bipartisan Budget Act of 2018 (P.L. 115-123). \41\Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs, 82 Fed. Reg. 59216, 59390 (December 14, 2017). --------------------------------------------------------------------------- REASONS FOR CHANGE Critical access hospitals have noted that direct supervision requirements can be challenging, as they may require supervising specialists that are hard to find or completely unavailable. EXPLANATION OF PROVISIONS Section 5 temporarily codifies a delay in the direct supervision rule for outpatient therapeutic services provided in critical access and small rural hospitals through calendar year 2021. EFFECTIVE DATES Section 2--Health Equity and Access for Returning Troops and Servicemembers Act of 2019 Coordination of Benefits for Returning Troops and Service Members Effective beginning on October 1, 2023. Improving the Quality of Laboratory Diagnoses of Prostate Cancer Effective beginning on January 1, 2020. Section 3--Ambulatory Surgical Center Payment Transparency Effective beginning on or after one year after the date of enactment, adding at least one ASC representative on the advisory panel on hospital outpatient payment representation. Effective beginning the second year after the date of enactment, providing additional information for procedures excluded from the ASC-approved list. Section 4--Exclusion of Complex Rehabilitative Manual Wheelchairs from Medicare Competitive Acquisition Program; Non-Application of Medicare Fee-Schedule Adjustments for Certain Wheelchair Accessories and Cushions Effective beginning on the date of enactment, exclusion of complex rehabilitative manual wheelchairs and certain manual wheelchairs from the Medicare DME CBP. Effective during beginning on January 1, 2020 and ending December 31, 2020, the prohibition from using competitive bidding information to inform adjustments to payments under the non-competitive payment system. Section 5--Extension of Enforcement Instruction on Supervision Requirements for Outpatient Therapeutic Services in Critical Access and Small Rural Hospitals through 2021 Effective beginning on the date of enactment. III. VOTES OF THE COMMITTEE In compliance with clause 3(b) of rule XIII of the Rules of the House of Representatives, the following statement is made concerning the vote of the Committee on Ways and Means in its consideration of H.R. 3429, the HEARTS and Rural Relief Act, on June 26, 2019. The Chairman's amendment in the nature of a substitute was adopted by a voice vote (with a quorum being present). The bill, H.R. 3429 as amended, was ordered favorably reported as amended by a voice vote (with a quorum being present). IV. BUDGET EFFECTS OF THE BILL A. Committee Estimate of Budgetary Effects In compliance with clause 3(d) of rule XIII of the Rules of the House of Representatives, the following statement is made concerning the effects on the budget of the bill, H.R. 3429, as reported. The Committee agrees with the estimate prepared by CBO, which is included below. B. Statement Regarding New Budget Authority and Tax Expenditures Budget Authority In compliance with clause 3(c)(2) of rule XIII of the Rules of the House of Representatives, the Committee states that the bill involves no new or increased budget authority. The Committee states further that the bill involves no new or increased tax expenditures. C. Cost Estimate Prepared by the Congressional Budget Office In compliance with clause 3(c)(3) of rule XIII of the Rules of the House of Representatives, requiring a cost estimate prepared by the CBO, the following statement by CBO is provided. U.S. Congress, Congressional Budget Office, Washington, DC, September 10, 2019. Hon. Richard Neal, Chairman, Committee on Ways and Means, House of Representatives, Washington, DC. Dear Mr. Chairman: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3429, the HEARTS and Rural Relief Act. If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contact is Tom Bradley. Sincerely, Phillip L. Swagel, Director. Enclosure.The bill would
Modify the rules for coordinating coverage between Medicare and TRICARE, the military health benefits plan Make the DNA specimen provenance assay (DSPA) for prostate cancer screening a Medicare-covered service Make funding available to improve fee-for- servicebenefits in Medicare Prohibit Medicare payment adjustments for some durable medical equipment (DME) Change supervision requirements for some outpatient services Estimated budgetary effects would primarily stem from Changing the rules for Medicare and TRICARE coordination Adding Medicare coverage for the DSPA Excluding Medicare payment adjustments for some DME Spending of funds deposited into the Medicare Improvement Fund Areas of significant uncertainty include Projecting the number of military retirees who would forgo enrollment in Medicare Part B Anticipating trends in prostate cancer testing and treatment Bill summary: H.R. 3429 would modify the rules under which TRICARE (the health benefits plan for members of the armed forces, their families, retirees, and some survivors and former spouses) coordinates with Medicare. The bill also would add the DNA provenance assay for prostate cancer to the list of Medicare-covered services, and provide for deposits into the Medicare Improvement Fund. Other provisions would change Medicare's payments for some durable medical equipment and change supervision requirements for certain services. Estimated Federal cost: The estimated budgetary effect of H.R. 3429 is shown in Table I. The costs of the legislation fall within budget functions 550 (health) and 570 (Medicare). TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 3429 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ By fiscal year, millions of dollars-- -------------------------------------------------------------------------------------------------------------------------------------------------------- 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2019-2024 2019-2029 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Increases or Decreases (-) in Direct Spending The HEARTS Act of 2019 TRICARE and Medicare Part B Enrollment: Estimated Budget Authority......... 0 0 0 0 0 * 1 1 1 1 1 * 4 Estimated Outlays.................. 0 0 0 0 0 * 1 1 1 1 1 * 4 Coverage for the DNA Specimen Provenance Assay: Estimated Budget Authority......... 0 * -3 -14 -15 -17 -17 -8 -1 0 0 -48 -74 Estimated Outlays.................. 0 * -3 -14 -15 -17 -17 -8 -1 0 0 -48 -74 Medicare Improvement Fund: Estimated Budget Authority......... 0 0 0 0 0 5 3 0 0 0 0 5 8 Estimated Outlays.................. 0 0 0 0 0 5 3 0 0 0 0 5 8 Subtotal HEARTS Act: Estimated Budget Authority......... 0 * -3 -14 -15 -11 -14 -7 -1 1 1 -43 -62 Estimated Outlays.................. 0 * -3 -14 -15 -11 -14 -7 -1 1 1 -43 -62 Other Provisions Complex Rehabilitative Manual Wheelchairs and Accessories: Estimated Budget Authority......... 0 30 30 0 0 0 5 5 5 10 15 60 100 Estimated Outlays.................. 0 30 30 0 0 0 5 5 5 10 15 60 100 Supervision Requirements for Outpatient Therapeutic Services: Estimated Budget Authority......... 0 1 3 1 0 0 0 0 0 0 0 5 5 Estimated Outlays.................. 0 1 3 1 0 0 0 0 0 0 0 5 5 Total Changes: Estimated Budget Authority......... 0 31 30 -12 -15 -11 -9 -2 4 11 16 23 43 Estimated Outlays.................. 0 31 30 -12 -15 -11 -9 -2 4 11 16 23 43 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Components may not sum to totals because of rounding; * = between -$500,000 and $500,000. Basis of estimate: For this estimate, CBO assumes that the bill will be enacted near the end of fiscal year 2019. Direct spending: Several provisions of section 2 (referred to in the bill as the Health Equity and Access for Returning Troops and Servicemembers, or HEARTS, Act of 2019) would decrease direct spending, on net, by $62 million over the 2019- 2029 period. Including the effects of other provisions, the bill would, on net, increase direct spending by $43 million over the 2019- 2029 period. TRICARE and Medicare Part B enrollment. The health care of most armed forces retirees and their family members is paid for by TRICARE. When those beneficiaries become eligible for Medicare, TRICARE provides supplemental health benefits: It pays for almost all of a beneficiary's physician and hospital charges that are not covered by Medicare. Eligible beneficiaries must enroll in Medicare Part B to receive those supplemental benefits. After 2023, disabled retirees who are eligible for Social Security Disability Insurance would be allowed to forgo enrollment in Medicare Part B if they return to the workforce. In those circumstances, Medicare would pay for hospital inpatient services and TRICARE would pay for most outpatient services. CBO estimates that each year about 350 military retirees would choose not to enroll in Medicare Part B. The added cost to TRICARE would mostly be offset by a corresponding reduction in benefits paid by Medicare. However, the annual net cost to the government would be about $2,000 per beneficiary, mainly from the forgone receipts of Medicare Part B premiums. In total, CBO estimates, enacting this provision would increase direct spending by about $4 million over the 2024-2029 period. Coverage for the DNA specimen provenance assay. H.R. 3429 would establish Medicare coverage of and payment for the DSPA, which is used to test genetic material in prostate cancer biopsy specimens to ensure that the sample came from the beneficiary to whom it is attributed. CBO estimates that, on average, the annual cost of treatment for prostate cancer is about $29,000 per patient. Clinical data indicate that a prostate biopsy can yield a false positive if a sample is contaminated with material from a different patient, thus risking unnecessary medical intervention. CBO expects that the new provision requiring Medicare to cover the test would increase its use, reduce the number of false positives, and lower treatment costs. Using clinical and other information, CBO estimates that about 1.5 percent of all assays would reveal a false positive and thus prevent unnecessary treatment; the number of men who did not undergo treatment would rise from about 60 in 2019 to 450 in 2029. The savings from averted treatment would more than offset the cost of DSPA testing. The net reduction in costs over the 2019-2029 period would be $74 million, CBO estimates. Medicare improvement fund. H.R. 3429 would provide $5 million to make improvements to the Medicare fee-for-service program in fiscal year 2024 and increase fee-for-service spending. Such an increase will lead to higher payments to Medicare Advantage plans and collections of Part B premiums. Taking those effects into account, CBO estimates that this provision would increase direct spending for Medicare by $8 million over the 2019-2029 period. Coverage for complex rehabilitative manual wheelchairs and wheelchair accessories. Medicare's payments for some durable medical equipment, including wheelchairs, hospital beds, and diabetic-testing supplies, are based on bids submitted by suppliers. Not all DME is subject to competitive bidding, and bids are used only in some parts of the country. The Centers for Medicare & Medicaid Services (CMS) can use comparable bids to adjust prices for items and geographic areas not currently included in the competitive-bidding program. This provision would prevent CMS from adjusting the Medicare payment rate for specific wheelchair accessories on the basis of the comparable bids it receives. The bill also would exclude certain types of wheelchairs from competitive bidding. CBO compared current prices for the relevant DME with average discounts for items included in competitive bidding. On the basis of that price difference and the expected volume of use for those items, CBO estimates that the provision would increase direct spending by about $100 million over the 2020- 2029 period. Supervision requirements for outpatient therapeutic services. In general, hospital outpatient therapeutic services must be provided to patients under the direct supervision of physicians. There is an exception to that requirement under current law for patients in critical access and small rural hospitals; however, that exception expires on December 31, 2019. H.R. 3429 would require the Secretary of Health and Human Services to continue to apply the exception through calendar year 2021 and also apply it to those hospitals for any other services added to the list of services requiring direct supervision. CBO estimates that this provision would increase direct spending by $5 million over the 2019-2029 period because of additional services provided to Medicare beneficiaries.\1\ --------------------------------------------------------------------------- \1\On August 9, 2019, the Secretary issued a proposed rule for 2020 that would change the required level of supervision from direct to general, which is identical to a provision in H.R. 3429. In accordance with CBO's standard practice for incorporating the effects of proposed rules in its baseline projections, CBO's baseline reflects the assumption that there is a 50 percent chance that the final issued rule will be the same as the proposed one and a 50 percent chance that no new rule like the proposed one will be issued. On the basis of that assumption, the estimated increase in direct spending of $5 million over the 2020-2029 period reflects a 50 percent reduction from the full cost of $11 million. --------------------------------------------------------------------------- Uncertainty: The number of TRICARE beneficiaries who choose to forgo enrollment in Medicare Part B under the new rules proposed by section 2 could differ from CBO' s estimate, and thus the estimated federal cost of that provision could be higher or lower than CBO estimates. CBO's estimate for the provision concerning the DSPA is based on trends in testing and treatment of prostate cancer. Over time, treatment options could change and thus affect the costs of averting treatment. Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in Table 1. Increase in long-term deficits: CBO estimates that enacting H.R. 3429 would not significantly increase on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2030. Mandates: None Estimate prepared by: Federal costs: Lori Housman, Lara Robillard, Matthew Schmit, and Rebecca Yip; Mandates: Andrew Laughlin. Estimate reviewed by: Tom Bradley, Chief, Health Systems and Medicare Cost Estimates Unit; David Newman, Chief, Defense Cost Estimates Unit; Leo Lex, Deputy Assistant Director for Budget Analysis; Theresa Gullo, Assistant Director for Budget Analysis. V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE A. Committee Oversight Findings and Recommendations With respect to clause 3(c)(1) of rule XIII and clause 2(b)(1) of rule X of the Rules of the House of Representatives, the Committee made findings and recommendations that are reflected in this report. B. Statement of General Performance Goals and Objectives With respect to clause 3(c)(4) of rule XIII of the Rules of the House of Representatives, the Committee advises that the bill contains no measure that authorizes funding, so no statement of general performance goals and objectives for which any measure authorizes funding is required. C. Information Relating to Unfunded Mandates This information is provided in accordance with section 423 of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104 4). The Committee has determined that the bill does not contain Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental mandate on State, local, or tribal governments. D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff Benefits With respect to clause 9 of rule XXI of the Rules of the House of Representatives, the Committee has carefully reviewed the provisions of the bill, and states that the provisions of the bill do not contain any congressional earmarks, limited tax benefits, or limited tariff benefits within the meaning of the rule. E. Duplication of Federal Programs In compliance with clause 3(c)(5) of Rule XIII of the Rules of the House of Representatives, the Committee states that no provision of the bill establishes or reauthorizes: (1) a program of the Federal Government known to be duplicative of another Federal program; (2) a program included in any report to Congress pursuant to section 21 of Public Law 111-139; or (3) a program related to a program identified in the most recent Catalog of Federal Domestic Assistance, published pursuant to section 6104 of title 31, United States Code. F. Hearings In compliance with Sec. 103(i) of H. Res. 6 (116th Congress) (1) the following hearing was used to develop or consider H.R. 3429: On July 22, 2015, the Committee on Ways and Means Subcommittee on Health held a hearing entitled, ``Hearing with MedPAC To Discuss Hospital Payment Issues, Rural Health Issues, and Beneficiary Access to Care.'' VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED In compliance with clause 3(e)(1)(B) of rule XIII of the Rules of the House of Representatives, changes in existing law proposed by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, existing law in which no change is proposed is shown in roman): Changes in Existing Law Made by the Bill, as Reported In compliance with clause 3(e) of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, and existing law in which no change is proposed is shown in roman): TITLE 10, UNITED STATES CODE * * * * * * * SUBTITLE A--GENERAL MILITARY LAW * * * * * * * PART II--PERSONNEL * * * * * * * CHAPTER 55--MEDICAL AND DENTAL CARE * * * * * * * Sec. 1086. Contracts for health benefits for certain members, former members, and their dependents (a) To assure that health benefits are available for the persons covered by subsection (c), the Secretary of Defense, after consulting with the other administering Secretaries, shall contract under the authority of this section for health benefits for those persons under the same insurance, medical service, or health plans he contracts for under section 1079(a) of this title. However, eye examinations may not be provided under such plans for persons covered by subsection (c). (b) For persons covered by this section the plans contracted for under section 1079(a) of this title shall contain the following provisions for payment by the patient: (1) Except as provided in paragraph (2), the first $150 each calendar year of the charges for all types of care authorized by this section and received while in an outpatient status and 25 percent of all subsequent charges for such care during a calendar year. (2) A family group of two or more persons covered by this section shall not be required to pay collectively more than the first $300 each calendar year of the charges for all types of care authorized by this section and received while in an outpatient status and 25 percent of the additional charges for such care during a calendar year. (3) 25 percent of the charges for inpatient care, except that in no case may the charges for inpatient care for a patient exceed $535 per day during the period beginning on April 1, 2006, and ending on September 30, 2011. The Secretary of Defense may exempt a patient from paying such charges if the hospital to which the patient is admitted does not impose a legal obligation on any of its patients to pay for inpatient care. (4) A member or former member of a uniformed service covered by this section by reason of section 1074(b) of this title, or an individual or family group of two or more persons covered by this section, may not be required to pay a total of more than $3,000 for health care received during any calendar year under a plan contracted for under section 1079(a) of this title. (c) Except as provided in subsection (d), the following persons are eligible for health benefits under this section: (1) Those covered by sections 1074(b) and 1076(b) of this title, except those covered by section 1072(2)(E) of this title. (2) A dependent (other than a dependent covered by section 1072(2)(E) of this title) of a member of a uniformed service-- (A) who died while on active duty for a period of more than 30 days; or (B) who died from an injury, illness, or disease incurred or aggravated-- (i) while on active duty under a call or order to active duty of 30 days or less, on active duty for training, or on inactive duty training; or (ii) while traveling to or from the place at which the member is to perform, or has performed, such active duty, active duty for training, or inactive duty training. (3) A dependent covered by clause (F), (G), or (H) of section 1072(2) of this title who is not eligible under paragraph (1). (d)(1) A person who is entitled to hospital insurance benefits under part A of title XVIII of the Social Security Act (42 U.S.C. 1395c et seq.) is not eligible for health benefits under this section. (2) The prohibition contained in paragraph (1) shall not apply to a person referred to in subsection (c) who-- (A) [is enrolled] except as provided by paragraph (6), is enrolled in the supplementary medical insurance program under part B of such title (42 U.S.C. 1395j et seq.); and (B) in the case of a person under 65 years of age, is entitled to hospital insurance benefits under part A of title XVIII of the Social Security Act pursuant to subparagraph (A) or (C) of section 226(b)(2) of such Act (42 U.S.C. 426(b)(2)) or section 226A(a) of such Act (42 U.S.C. 426-1(a)). (3)(A) Subject to subparagraph (B), if a person described in paragraph (2) receives medical or dental care for which payment may be made under medicare and a plan contracted for under subsection (a), the amount payable for that care under the plan shall be the amount of the actual out-of-pocket costs incurred by the person for that care over the sum of-- (i) the amount paid for that care under medicare; and (ii) the total of all amounts paid or payable by third party payers other than medicare. (B) The amount payable for care under a plan pursuant to subparagraph (A) may not exceed the total amount that would be paid under the plan if payment for that care were made solely under the plan. (C) In this paragraph: (i) The term ``medicare'' means title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.). (ii) The term ``third party payer'' has the meaning given such term in section 1095(h)(1) of this title. (4)(A) If a person referred to in subsection (c) and described by paragraph (2)(B) is subject to a retroactive determination by the Social Security Administration of entitlement to hospital insurance benefits described in paragraph (1), the person shall, during the period described in subparagraph (B), be deemed for purposes of health benefits under this section-- (i) not to have been covered by paragraph (1); and (ii) not to have been subject to the requirements of section 1079(i)(1) of this title, whether through the operation of such section or subsection (g) of this section. (B) The period described in this subparagraph with respect to a person covered by subparagraph (A) is the period that-- (i) begins on the date that eligibility of the person for hospital insurance benefits referred to in paragraph (1) is effective under the retroactive determination of eligibility with respect to the person as described in subparagraph (A); and (ii) ends on the date of the issuance of such retroactive determination of eligibility by the Social Security Administration. (5) The administering Secretaries shall develop a mechanism by which persons described in subparagraph (B) of paragraph (2) who do not satisfy the condition specified in subparagraph (A) of such paragraph are promptly notified of their ineligibility for health benefits under this section. In developing the notification mechanism, the administering Secretaries shall consult with the Administrator of the Centers for Medicare & Medicaid Services. (6)(A) The requirement in paragraph (2)(A) to enroll in the supplementary medical insurance program under part B of title XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) shall not apply to a person described in subparagraph (B) during any month in which such person is not entitled to a benefit described in subparagraph (A) of section 226(b)(2) of the Social Security Act (42 U.S.C. 426(b)(2)) if such person has received the counseling and information under subparagraph (C). (B) A person described in this subparagraph is a person-- (i) who is under 65 years of age; (ii) who is entitled to hospital insurance benefits under part A of title XVIII of the Social Security Act pursuant to subparagraph (A) or (C) of section 226(b)(2) of such Act (42 U.S.C. 426(b)(2)); (iii) whose entitlement to a benefit described in subparagraph (A) of such section has terminated due to performance of substantial gainful activity; and (iv) who is retired under chapter 61 of this title. (C) The Secretary of Defense shall coordinate with the Secretary of Health and Human Services and the Commissioner of Social Security to notify persons described in subparagraph (B) of, and provide information and counseling regarding, the effects of not enrolling in the supplementary medical insurance program under part B of title XVIII of the Social Security Act (42 U.S.C. 1395j et seq.), as described in subparagraph (A). (e) A person covered by this section may elect to receive inpatient medical care either in (1) Government facilities, under the conditions prescribed in sections 1074 and 1076-1078 of this title, or (2) the facilities provided under a plan contracted for under this section. However, under joint regulations issued by the administering Secretaries, the right to make this election may be limited for those persons residing in an area where adequate facilities of the uniformed service are available. In addition, subsections (b) and (c) of section 1080 of this title shall apply in making the determination whether to issue a nonavailability of health care statement for a person covered by this section. (f) The provisions of section 1079(h) of this title shall apply to payments for services by an individual health-care professional (or other noninstitutional health-care provider) under a plan contracted for under subsection (a). (g) Section 1079(i) of this title shall apply to a plan contracted for under this section, except that no person eligible for health benefits under this section may be denied benefits under this section with respect to care or treatment for any service-connected disability which is compensable under chapter 11 of title 38 solely on the basis that such person is entitled to care or treatment for such disability in facilities of the Department of Veterans Affairs. (h)(1) Subject to paragraph (2), the Secretary of Defense may, upon request, make payments under this section for a charge for services for which a claim is submitted under a plan contracted for under subsection (a) to a hospital that does not impose a legal obligation on any of its patients to pay for such services. (2) A payment under paragraph (1) may not exceed the average amount paid for comparable services in the geographic area in which the hospital is located or, if no comparable services are available in that area, in an area similar to the area in which the hospital is located. (3) The Secretary of Defense shall periodically review the billing practices of each hospital the Secretary approves for payment under this subsection to ensure that the hospital's practices of not billing patients for payment are not resulting in increased costs to the Government. (4) The Secretary of Defense may require each hospital the Secretary approves for payment under this subsection to provide evidence that it has sources of revenue to cover unbilled costs. * * * * * * * Sec. 1110a. Notification of certain individuals regarding options for enrollment under Medicare part B (a) In General.--(1) As soon as practicable, the Secretary of Defense shall notify each individual described in subsection (b)-- (A) that the individual is no longer eligible for health care benefits under the TRICARE program under this chapter; and (B) of options available for enrollment of the individual in the supplementary medical insurance program under part B of title XVIII of the Social Security Act (42 U.S.C. 1395j et seq.). (2) In carrying out this subsection, the Secretary of Defense shall-- (A) establish procedures for identifying individuals described in subsection (b); and (B) consult with the Secretary of Health and Human Services to accurately identify and notify such individuals. (b) Individuals Described.--An individual described in this subsection is an individual who is-- (1) a covered beneficiary; (2) entitled to benefits under part A of title XVIII of the Social Security Act (42 U.S.C. 1395c) under section 226(b) or section 226A of such Act (42 U.S.C. 426(b) and 426-1); and (3) eligible to enroll in the supplementary medical insurance program under part B of such title (42 U.S.C. 1395j et seq.). (c) Certain Individuals Not Required to Enroll in Medicare Part B.--In carrying out subsection (a), the Secretary of Defense shall coordinate with the Secretary of Health and Human Services and the Commissioner of Social Security to-- (1) identify persons described in subparagraph (B) of section 1086(d)(6) of this title; and (2) provide information and counseling pursuant to subparagraph (C) of such section. * * * * * * * ---------- SOCIAL SECURITY ACT TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED * * * * * * * Part B--Supplementary Medical Insurance Benefits for the Aged and Disabled * * * * * * * PAYMENT OF BENEFITS Sec. 1833. (a) Except as provided in section 1876, and subject to the succeeding provisions of this section, there shall be paid from the Federal Supplementary Medical Insurance Trust Fund, in the case of each individual who is covered under the insurance program established by this part and incurs expenses for services with respect to which benefits are payable under this part, amounts equal to--(1) in the case of services described in section 1832(a)(1)--80 percent of the reasonable charges for the services; except that (A) an organization which provides medical and other health services (or arranges for their availability) on a prepayment basis (and either is sponsored by a union or employer, or does not provide, or arrange for the provision of, any inpatient hospital services) may elect to be paid 80 percent of the reasonable cost of services for which payment may be made under this part on behalf of individuals enrolled in such organization in lieu of 80 percent of the reasonable charges for such services if the organization undertakes to charge such individuals no more than 20 percent of such reasonable cost plus any amounts payable by them as a result of subsection (b), (B) with respect to items and services described in section 1861(s)(10)(A), the amounts paid shall be 100 percent of the reasonable charges for such items and services, (C) with respect to expenses incurred for those physicians' services for which payment may be made under this part that are described in section 1862(a)(4), the amounts paid shall be subject to such limitations as may be prescribed by regulations, (D) with respect to clinical diagnostic laboratory tests for which payment is made under this part (i)(I) on the basis of a fee schedule under subsection (h)(1) (for tests furnished before January 1, 2017) or section 1834(d)(1), the amount paid shall be equal to 80 percent (or 100 percent, in the case of such tests for which payment is made on an assignment-related basis) of the lesser of the amount determined under such fee schedule, the limitation amount for that test determined under subsection (h)(4)(B), or the amount of the charges billed for the tests, or (II) undersection 1834A (for tests furnished on or after January1, 2017), the amount paid shall be equal to 80 percent(or 100 percent, in the case of such tests for whichpayment is made on an assignment-related basis) ofthe lesser of the amount determined under such sectionor the amount of the charges billed for the tests, or (ii) for tests furnished before January 1, 2017,on the basis of a negotiated rate established under subsection (h)(6), the amount paid shall be equal to 100 percent of such negotiated rate,,(E) with respect to services furnished to individuals who have been determined to have end stage renal disease, the amounts paid shall be determined subject to the provisions of section 1881,(F) with respect to clinical social worker services under section 1861(s)(2)(N), the amounts paid shall be 80 percent of the lesser of (i) the actual charge for the services or (ii) 75 percent of the amount determined for payment of a psychologist under clause (L), (G) with respect to facility services furnished in connection with a surgical procedure specified pursuant to subsection (i)(1)(A) and furnished to an individual in an ambulatory surgical center described in such subsection, for services furnished beginning with the implementation date of a revised payment system for such services in such facilities specified in subsection (i)(2)(D), the amounts paid shall be 80 percent of the lesser of the actual charge for the services or the amount determined by the Secretary under such revised payment system, (H) with respect to services of a certified registered nurse anesthetist under section 1861(s)(11), the amounts paid shall be 80 percent of the least of the actual charge, the prevailing charge that would be recognized (or, for services furnished on or after January 1, 1992, the fee schedule amount provided under section 1848) if the services had been performed by an anesthesiologist, or the fee schedule for such services established by the Secretary in accordance with subsection (l), (I) with respect to covered items (described in section 1834(a)(13)), the amounts paid shall be the amounts described in section 1834(a)(1), and(J) with respect to expenses incurred for radiologist services (as defined in section 1834(b)(6)), subject to section 1848, the amounts paid shall be 80 percent of the lesser of the actual charge for the services or the amount provided under the fee schedule established under section 1834(b), (K) with respect to certified nurse-midwife services under section 1861(s)(2)(L), the amounts paid shall be 80 percent of the lesser of the actual charge for the services or the amount determined by a fee schedule established by the Secretary for the purposes of this subparagraph (but in no event shall such fee schedule exceed 65 percent of the prevailing charge that would be allowed for the same service performed by a physician, or, for services furnished on or after January 1, 1992, 65 percent (or 100 percent for services furnished on or after January 1, 2011) of the fee schedule amount provided under section 1848 for the same service performed by a physician), (L) with respect to qualified psychologist services under section 1861(s)(2)(M), the amounts paid shall be 80 percent of the lesser of the actual charge for the services or the amount determined by a fee schedule established by the Secretary for the purposes of this subparagraph, (M) with respect to prosthetic devices and orthotics and prosthetics (as defined in section 1834(h)(4)), the amounts paid shall be the amounts described in section 1834(h)(1), (N) with respect to expenses incurred for physicians' services (as defined in section 1848(j)(3)) other than personalized prevention plan services (as defined in section 1861(hhh)(1)), the amounts paid shall be 80 percent of the payment basis determined under section 1848(a)(1), (O) with respect to services described in section 1861(s)(2)(K) (relating to services furnished by physician assistants, nurse practitioners, or clinic nurse specialists), the amounts paid shall be equal to 80 percent of (i) the lesser of the actual charge or 85 percent of the fee schedule amount provided under section 1848, or (ii) in the case of services as an assistant at surgery, the lesser of the actual charge or 85 percent of the amount that would otherwise be recognized if performed by a physician who is serving as an assistant at surgery, (P) with respect to surgical dressings, the amounts paid shall be the amounts determined under section 1834(i), (Q) with respect to items or services for which fee schedules are established pursuant to section 1842(s), the amounts paid shall be 80 percent of the lesser of the actual charge or the fee schedule established in such section, (R) with respect to ambulance services, (i) the amounts paid shall be 80 percent of the lesser of the actual charge for the services or the amount determined by a fee schedule established by the Secretary under section 1834(l) and (ii) with respect to ambulance services described in section 1834(l)(8), the amounts paid shall be the amounts determined under section 1834(g) for outpatient critical access hospital services, (S) with respect to drugs and biologicals (including intravenous immune globulin (as defined in section 1861(zz))) not paid on a cost or prospective payment basis as otherwise provided in this part (other than items and services described in subparagraph (B)), the amounts paid shall be 80 percent of the lesser of the actual charge or the payment amount established in section 1842(o) (or, if applicable, under section 1847, 1847A, or 1847B), (T) with respect to medical nutrition therapy services (as defined in section 1861(vv)), the amount paid shall be 80 percent (or 100 percent if such services are recommended with a grade of A or B by the United States Preventive Services Task Force for any indication or population and are appropriate for the individual) of the lesser of the actual charge for the services or 85 percent of the amount determined under the fee schedule established under section 1848(b) for the same services if furnished by a physician, (U) with respect to facility fees described in section 1834(m)(2)(B), the amounts paid shall be 80 percent of the lesser of the actual charge or the amounts specified in such section, (V) notwithstanding subparagraphs (I) (relating to durable medical equipment), (M) (relating to prosthetic devices and orthotics and prosthetics), and (Q) (relating to 1842(s) items), with respect to competitively priced items and services (described in section 1847(a)(2)) that are furnished in a competitive area, the amounts paid shall be the amounts described in section 1847(b)(5), (W) with respect to additional preventive services (as defined in section 1861(ddd)(1)), the amount paid shall be (i) in the case of such services which are clinical diagnostic laboratory tests, the amount determined under subparagraph (D) (if such subparagraph were applied, by substituting ``100 percent'' for ``80 percent''), and (ii) in the case of all other such services, 100 percent of the lesser of the actual charge for the service or the amount determined under a fee schedule established by the Secretary for purposes of this subparagraph, (X) with respect to personalized prevention plan services (as defined in section 1861(hhh)(1)), the amount paid shall be 100 percent of the lesser of the actual charge for the services or the amount determined under the payment basis determined under section 1848, (Y) with respect to preventive services described in subparagraphs (A) and (B) of section 1861(ddd)(3) that are appropriate for the individual and, in the case of such services described in subparagraph (A), are recommended with a grade of A or B by the United States Preventive Services Task Force for any indication or population, the amount paid shall be 100 percent of (i) except as provided in clause (ii), the lesser of the actual charge for the services or the amount determined under the fee schedule that applies to such services under this part, and (ii) in the case of such services that are covered OPD services (as defined in subsection (t)(1)(B)), the amount determined under subsection (t), (Z) with respect to Federally qualified health center services for which payment is made under section 1834(o), the amounts paid shall be 80 percent of the lesser of the actual charge or the amount determined under such section, (AA) with respect to an applicable disposable device (as defined in paragraph (2) of section 1834(s)) furnished to an individual pursuant to paragraph (1) of such section, the amount paid shall be equal to 80 percent of the lesser of the actual charge or the amount determined under paragraph (3) of such section, (BB) with respect to home infusion therapy, the amount paid shall be an amount equal to 80 percent of the lesser of the actual charge for the services or the amount determined under section 1834(u), [and (CC)] (CC) with respect to opioid use disorder treatment services furnished during an episode of care, the amount paid shall be equal to the amount payable under section 1834(w) less any copayment required as specified by the Secretary, and (DD) with respect to a prostate cancer DNA Specimen Provenance Assay test (DSPA test) (as defined in section 1861(kkk)), the amount paid shall be an amount equal to 80 percent of the lesser of the actual charge for the test or the amount specified under section 1834(x); (2) in the case of services described in section 1832(a)(2) (except those services described in subparagraphs (C), (D), (E), (F), (G), (H), and (I) of such section and unless otherwise specified in section 1881)-- (A) with respect to home health services (other than a covered osteoporosis drug) (as defined in section 1861(kk)), the amount determined under the prospective payment system under section 1895; (B) with respect to other items and services (except those described in subparagraph (C), (D), or (E) of this paragraph and except as may be provided in section 1886 or section 1888(e)(9))-- (i) furnished before January 1, 1999, the lesser of-- (I) the reasonable cost of such services, as determined under section 1861(v), or (II) the customary charges with respect to such services,--less the amount a provider may charge as described in clause (ii) of section 1866(a)(2)(A), but in no case may the payment for such other services exceed 80 percent of such reasonable cost, or (ii) if such services are furnished before January 1, 1999, by a public provider of services, or by another provider which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low-income (and requests that payment be made under this clause), free of charge or at nominal charges to the public, 80 percent of the amount determined in accordance with section 1814(b)(2), or (iii) if such services are furnished on or after January 1, 1999, the amount determined under subsection (t), or (iv) if (and for so long as) the conditions described in section 1814(b)(3) are met, the amounts determined under the reimbursement system described in such section; (C) with respect to services described in the second sentence of section 1861(p), 80 percent of the reasonable charges for such services; (D) with respect to clinical diagnostic laboratory tests for which payment is made under this part (i)(I)on the basis of a fee schedule determined under subsection(h)(1) (for tests furnished before January 1, 2017) or section 1834(d)(1), the amount paid shall be equal to 80 percent (or 100 percent, in the case of such tests for which payment is made on an assignment-related basis or to a provider having an agreement under section 1866) of the lesser of the amount determined under such fee schedule, the limitation amount for that test determined under subsection (h)(4)(B), or the amount of the charges billed for the tests, or (II) under section 1834A (for tests furnished on or after January 1, 2017), the amount paid shall be equal to 80 percent (or 100 percent, in the case of such tests for which payment is made on an assignment-related basis or to a provider having an agreement under section 1866) of the lesser of the amount determined under such section or the amount of the charges billed for the tests, or (ii) for tests furnished before January 1, 2017, on the basis of a negotiated rate established under subsection (h)(6), the amount paid shall be equal to 100 percent of such negotiated rate for such tests; (E) with respect to-- (i) outpatient hospital radiology services (including diagnostic and therapeutic radiology, nuclear medicine and CAT scan procedures, magnetic resonance imaging, and ultrasound and other imaging services, but excluding screening mammography and, for services furnished on or after January 1, 2005, diagnostic mammography), and (ii) effective for procedures performed on or after 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 tests), the amount determined under subsection (n) or, for services or procedures performed on or after January 1, 1999, subsection (t); (F) with respect to a covered osteoporosis drug (as defined in section 1861(kk)) furnished by a home health agency, 80 percent of the reasonable cost of such service, as determined under section 1861(v); (G) with respect to items and services described in section 1861(s)(10)(A), the lesser of-- (i) the reasonable cost of such services, as determined under section 1861(v), or (ii) the customary charges with respect to such services; and (H) with respect to personalized prevention plan services (as defined in section 1861(hhh)(1)) furnished by an outpatient department of a hospital, the amount determined under paragraph (1)(X), or, if such services are furnished by a public provider of services, or by another provider which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low-income (and requests that payment be made under this provision), free of charge or at nominal charges to the public, the amount determined in accordance with section 1814(b)(2); (3) in the case of services described in section 1832(a)(2)(D)-- (A) except as provided in subparagraph (B), the costs which are reasonable and related to the cost of furnishing such services or which are based on such other tests of reasonableness as the Secretary may prescribe in regulations, including those authorized under section 1861(v)(1)(A), less the amount a provider may charge as described in clause (ii) of section 1866(a)(2)(A), but in no case may the payment for such services (other than for items and services described in section 1861(s)(10)(A)) exceed 80 percent of such costs; or (B) with respect to the services described in clause (ii) of section 1832(a)(2)(D) that are furnished to an individual enrolled with a MA plan under part C pursuant to a written agreement described in section 1853(a)(4), the amount (if any) by which-- (i) the amount of payment that would have otherwise been provided (I) under subparagraph (A) (calculated as if ``100 percent'' were substituted for ``80 percent'' in such subparagraph) for such services if the individual had not been so enrolled, or (II) in the case of such services furnished on or after the implementation date of the prospective payment system under section 1834(o), under such section (calculated as if ``100 percent'' were substituted for ``80 percent'' in such section) for such services if the individual had not been so enrolled; exceeds (ii) the amount of the payments received under such written agreement for such services (not including any financial incentives provided for in such agreement such as risk pool payments, bonuses, or withholds), less the amount the federally qualified health center may charge as described in section 1857(e)(3)(B); (4) in the case of facility services described in section 1832(a)(2)(F), and outpatient hospital facility services furnished in connection with surgical procedures specified by the Secretary pursuant to section 1833(i)(1)(A), the applicable amount as determined under paragraph (2) or (3) of subsection (i) or subsection (t); (5) in the case of covered items (described in section 1834(a)(13)) the amounts described in section 1834(a)(1); (6) in the case of outpatient critical access hospital services, the amounts described in section 1834(g); (7) in the case of prosthetic devices and orthotics and prosthetics (as described in section 1834(h)(4)), the amounts described in section 1834(h); (8) in the case of-- (A) outpatient physical therapy services, outpatient speech-language pathology services, and outpatient occupational therapy services furnished-- (i) by a rehabilitation agency, public health agency, clinic, comprehensive outpatient rehabilitation facility, or skilled nursing facility, (ii) by a home health agency to an individual who is not homebound, or (iii) by another entity under an arrangement with an entity described in clause (i) or (ii); and (B) outpatient physical therapy services, outpatient speech-language pathology services, and outpatient occupational therapy services furnished-- (i) by a hospital to an outpatient or to a hospital inpatient who is entitled to benefits under part A but has exhausted benefits for inpatient hospital services during a spell of illness or is not so entitled to benefits under part A, or (ii) by another entity under an arrangement with a hospital described in clause (i), the amounts described in section 1834(k); and (9) in the case of services described in section 1832(a)(2)(E) that are not described in paragraph (8), the amounts described in section 1834(k). Paragraph (3)(A) shall not apply to Federally qualified health center services furnished on or after the implementation date of the prospective payment system under section 1834(0). (b) Before applying subsection (a) with respect to expenses incurred by an individual during any calendar year, the total amount of the expenses incurred by such individual during such year (which would, except for this subsection, constitute incurred expenses from which benefits payable under subsection (a) are determinable) shall be reduced by a deductible of $75 for calendar years before 1991, $100 for 1991 through 2004, $110 for 2005, and for a subsequent year the amount of such deductible for the previous year increased by the annual percentage increase in the monthly actuarial rate under section 1839(a)(1) ending with such subsequent year (rounded to the nearest $1); except that (1) such total amount shall not include expenses incurred for preventive services described in subparagraph (A) of section 1861(ddd)(3) that are recommended with a grade of A or B by the United States Preventive Services Task Force for any indication or population and are appropriate for the individual., (2) such deductible shall not apply with respect to home health services (other than a covered osteoporosis drug (as defined in section 1861(kk))), (3) such deductible shall not apply with respect to clinical diagnostic laboratory tests for which payment is made under this part (A) under subsection (a)(1)(D)(i) or (a)(2)(D)(i) on an assignment- related basis, or to a provider having an agreement under section 1866, or (B) for tests furnished before January 1, 2017,on the basis of a negotiated rate determined under subsection (h)(6), (4) such deductible shall not apply to Federally qualified health center services, (5) such deductible shall not apply with respect to screening mammography (as described in section 1861(jj)), (6) such deductible shall not apply with respect to screening pap smear and screening pelvic exam (as described in section 1861(nn)), (7) such deductible shall not apply with respect to ultrasound screening for abdominal aortic aneurysm (as defined in section 1861(bbb)), (8) such deductible shall not apply with respect to colorectal cancer screening tests (as described in section 1861(pp)(1)), (9) such deductible shall not apply with respect to an initial preventive physical examination (as defined in section 1861(ww)), and (10) such deductible shall not apply with respect to personalized prevention plan services (as defined in section 1861(hhh)(1)). The total amount of the expenses incurred by an individual as determined under the preceding sentence shall, after the reduction specified in such sentence, be further reduced by an amount equal to the expenses incurred for the first three pints of whole blood (or equivalent quantities of packed red blood cells, as defined under regulations) furnished to the individual during the calendar year, except that such deductible for such blood shall in accordance with regulations be appropriately reduced to the extent that there has been a replacement of such blood (or equivalent quantities of packed red blood cells, as so defined); and for such purposes blood (or equivalent quantities of packed red blood cells, as so defined) furnished such individual shall be deemed replaced when the institution or other person furnishing such blood (or such equivalent quantities of packed red blood cells, as so defined) is given one pint of blood for each pint of blood (or equivalent quantities of packed red blood cells, as so defined) furnished such individual with respect to which a deduction is made under this sentence. The deductible under the previous sentence for blood or blood cells furnished an individual in a year shall be reduced to the extent that a deductible has been imposed under section 1813(a)(2) to blood or blood cells furnished the individual in the year. Paragraph (1) of the first sentence of this subsection shall apply with respect to a colorectal cancer screening test regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure that is furnished in connection with, as a result of, and in the same clinical encounter as the screening test. (c)(1) Notwithstanding any other provision of this part, with respect to expenses incurred in a calendar year in connection with the treatment of mental, psychoneurotic, and personality disorders of an individual who is not an inpatient of a hospital at the time such expenses are incurred, there shall be considered as incurred expenses for purposes of subsections (a) and (b)-- (A) for expenses incurred in years prior to 2010, only 62\1/2\ percent of such expenses; (B) for expenses incurred in 2010 or 2011, only 68\3/ 4\ percent of such expenses; (C) for expenses incurred in 2012, only 75 percent of such expenses; (D) for expenses incurred in 2013, only 81\1/4\ percent of such expenses; and (E) for expenses incurred in 2014 or any subsequent calendar year, 100 percent of such expenses. (2) For purposes of subparagraphs (A) through (D) of paragraph (1), the term ``treatment'' does not include brief office visits (as defined by the Secretary) for the sole purpose of monitoring or changing drug prescriptions used in the treatment of such disorders or partial hospitalization services that are not directly provided by a physician (d) No payment may be made under this part with respect to any services furnished an individual to the extent that such individual is entitled (or would be entitled except for section 1813) to have payment made with respect to such services under part A. (e) No payment shall be made to any provider of services or other person under this part unless there has been furnished such information as may be necessary in order to determine the amounts due such provider or other person under this part for the period with respect to which the amounts are being paid or for any prior period. (f) In establishing limits under subsection (a) on payment for rural health clinic services provided by rural health clinics (other than such clinics in hospitals with less than 50 beds), the Secretary shall establish such limit, for services provided-- (1) in 1988, after March 31, at $46 per visit, and (2) in a subsequent year, at the limit established under this subsection for the previous year increased by the percentage increase in the MEI (as defined in section 1842(i)(3)) applicable to primary care services (as defined in section 1842(i)(4)) furnished as of the first day of that year. (g)(1)(A) Subject to paragraphs (4) and (5), in the case of physical therapy services of the type described in section 1861(p) and speech-language pathology services of the type described in such section through the application of section 1861(ll)(2), but (except as provided in paragraph (6)) not described in subsection (a)(8)(B), and physical therapy services and speech-language pathology services of such type which are furnished by a physician or as incident to physicians' services, with respect to expenses incurred in any calendar year, no more than the amount specified in paragraph (2) for the year shall be considered as incurred expenses for purposes of subsections (a) and (b). The preceding sentence shall not apply to expenses incurred with respect to services furnished after December 31, 2017. (B) With respect to services furnished during 2018 or a subsequent year, in the case of physical therapy services of the type described in section 1861(p), speech-language pathology services of the type described in such section through the application of section 1861(ll)(2), and physical therapy services and speech-language pathology services of such type which are furnished by a physician or as incident to physicians' services, with respect to expenses incurred in any calendar year, any amount that is more than the amount specified in paragraph (2) for the year shall not be considered as incurred expenses for purposes of subsections (a) and (b) unless the applicable requirements of paragraph (7) are met. (2) The amount specified in this paragraph-- (A) for 1999, 2000, and 2001, is $1,500, and (B) for a subsequent year is the amount specified in this paragraph for the preceding year increased by the percentage increase in the MEI (as defined in section 1842(i)(3)) for such subsequent year; except that if an increase under subparagraph (B) for a year is not a multiple of $10, it shall be rounded to the nearest multiple of $10. (3)(A) Subject to paragraphs (4) and (5), in the case of occupational therapy services (of the type that are described in section 1861(p) (but (except as provided in paragraph (6)) not described in subsection (a)(8)(B)) through the operation of section 1861(g) and of such type which are furnished by a physician or as incident to physicians' services), with respect to expenses incurred in any calendar year, no more than the amount specified in paragraph (2) for the year shall be considered as incurred expenses for purposes of subsections (a) and (b). The preceding sentence shall not apply to expenses incurred with respect to services furnished after December 31, 2017. (B) With respect to services furnished during 2018 or a subsequent year, in the case of occupational therapy services (of the type that are described in section 1861(p) through the operation of section 1861(g) and of such type which are furnished by a physician or as incident to physicians' services), with respect to expenses incurred in any calendar year, any amount that is more than the amount specified in paragraph (2) for the year shall not be considered as incurred expenses for purposes of subsections (a) and (b) unless the applicable requirements of paragraph (7) are met. (4) This subsection shall not apply to expenses incurred with respect to services furnished during 2000, 2001, 2002, 2004, and 2005. (5)(A) With respect to expenses incurred during the period beginning on January 1, 2006, and ending on December 31, 2017, for services, the Secretary shall implement a process under which an individual enrolled under this part may, upon request of the individual or a person on behalf of the individual, obtain an exception from the uniform dollar limitation specified in paragraph (2), for services described in paragraphs (1) and (3) if the provision of such services is determined to be medically necessary and if the requirement of subparagraph (B) is met. Under such process, if the Secretary does not make a decision on such a request for an exception within 10 business days of the date of the Secretary's receipt of the request made in accordance with such requirement, the Secretary shall be deemed to have found the services to be medically necessary. (B) In the case of outpatient therapy services for which an exception is requested under the first sentence of subparagraph (A), the claim for such services shall contain an appropriate modifier (such as the KX modifier used as of the date of the enactment of this subparagraph) indicating that such services are medically necessary as justified by appropriate documentation in the medical record involved. (C)(i) In applying this paragraph with respect to a request for an exception with respect to expenses that would be incurred for outpatient therapy services (including services described in subsection (a)(8)(B)) that would exceed the threshold described in clause (ii) for a year, the request for such an exception, for services furnished on or after October 1, 2012, shall be subject to a manual medical review process that, subject to subparagraph (E), is similar to the manual medical review process used for certain exceptions under this paragraph in 2006. (ii) The threshold under this clause for a year is $3,700. Such threshold shall be applied separately-- (I) for physical therapy services and speech-language pathology services; and (II) for occupational therapy services. (E)(i) In place of the manual medical review process under subparagraph (C)(i), the Secretary shall implement a process for medical review under this subparagraph under which the Secretary shall identify and conduct medical review for services described in subparagraph (C)(i) furnished by a provider of services or supplier (in this subparagraph referred to as a ``therapy provider'') using such factors as the Secretary determines to be appropriate. (ii) Such factors may include the following: (I) The therapy provider has had a high claims denial percentage for therapy services under this part or is less compliant with applicable requirements under this title. (II) The therapy provider has a pattern of billing for therapy services under this part that is aberrant compared to peers or otherwise has questionable billing practices for such services, such as billing medically unlikely units of services in a day. (III) The therapy provider is newly enrolled under this title or has not previously furnished therapy services under this part. (IV) The services are furnished to treat a type of medical condition. (V) The therapy provider is part of group that includes another therapy provider identified using the factors determined under this subparagraph. (iii) For purposes of carrying out this subparagraph, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under section 1841, of $5,000,000 to the Centers for Medicare & Medicaid Services Program Management Account for fiscal years 2015 and 2016, to remain available until expended. Such funds may not be used by a contractor under section 1893(h) for medical reviews under this subparagraph. (iv) The targeted review process under this subparagraph shall not apply to services for which expenses are incurred beyond the period for which the exceptions process under subparagraph (A) is implemented, except as such process is applied under paragraph (7)(B). (6)(A) In applying paragraphs (1) and (3) to services furnished during the period beginning not later than October 1, 2012, and ending on December 31, 2017, the exclusion of services described in subsection (a)(8)(B) from the uniform dollar limitation specified in paragraph (2) shall not apply to such services furnished during 2012 through 2017. (B)(i) With respect to outpatient therapy services furnished beginning on or after January 1, 2013, and before January 1, 2014, for which payment is made under section 1834(g), the Secretary shall count toward the uniform dollar limitations described in paragraphs (1) and (3) and the threshold described in paragraph (5)(C) the amount that would be payable under this part if such services were paid under section 1834(k)(1)(B) instead of being paid under section 1834(g). (ii) Nothing in clause (i) shall be construed as changing the method of payment for outpatient therapy services under section 1834(g). (7) For purposes of paragraphs (1)(B) and (3)(B), with respect to services described in such paragraphs, the requirements described in this paragraph are as follows: (A) Inclusion of appropriate modifier.--The claim for such services contains an appropriate modifier (such as the KX modifier described in paragraph (5)(B)) indicating that such services are medically necessary as justified by appropriate documentation in the medical record involved. (B) Targeted medical review for certain services above threshold.-- (i) In general.--In the case where expenses that would be incurred for such services would exceed the threshold described in clause (ii) for the year, such services shall be subject to the process for medical review implemented under paragraph (5)(E). (ii) Threshold.--The threshold under this clause for-- (I) a year before 2028, is $3,000; (II) 2028, is the amount specified in subclause (I) increased by the percentage increase in the MEI (as defined in section 1842(i)(3)) for 2028; and (III) a subsequent year, is the amount specified in this clause for the preceding year increased by the percentage increase in the MEI (as defined in section 1842(i)(3)) for such subsequent year; except that if an increase under subclause (II) or (III) for a year is not a multiple of $10, it shall be rounded to the nearest multiple of $10. (iii) Application.--The threshold under clause (ii) shall be applied separately-- (I) for physical therapy services and speech-language pathology services; and (II) for occupational therapy services. (iv) Funding.--For purposes of carrying out this subparagraph, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under section 1841 to the Centers for Medicare & Medicaid Services Program Management Account, of $5,000,000 for each fiscal year beginning with fiscal year 2018, to remain available until expended. Such funds may not be used by a contractor under section 1893(h) for medical reviews under this subparagraph. (8) With respect to services furnished on or after January 1, 2013, where payment may not be made as a result of application of paragraphs (1) and (3), section 1879 shall apply in the same manner as such section applies to a denial that is made by reason of section 1862(a)(1). (h)(1)(A) Subject to section 1834(d)(1), the Secretary shall establish fee schedules for clinical diagnostic laboratory tests (including prostate cancer screening tests under section 1861(oo) consisting of prostate-specific antigen blood tests) for which payment is made under this part, other than such tests performed by a provider of services for an inpatient of such provider. (B) In the case of clinical diagnostic laboratory tests performed by a physician or by a laboratory (other than tests performed by a qualified hospital laboratory (as defined in subparagraph (D)) for outpatients of such hospital), the fee schedules established under subparagraph (A) shall be established on a regional, statewide, or carrier service area basis (as the Secretary may determine to be appropriate) for tests furnished on or after July 1, 1984. (C) In the case of clinical diagnostic laboratory tests performed by a qualified hospital laboratory (as defined in subparagraph (D)) for outpatients of such hospital, the fee schedules established under subparagraph (A) shall be established on a regional, statewide, or carrier service area basis (as the Secretary may determine to be appropriate) for tests furnished on or after July 1, 1984. (D) In this subsection, the term ``qualified hospital laboratory'' means a hospital laboratory, in a sole community hospital (as defined in section 1886(d)(5)(D)(iii)), which provides some clinical diagnostic laboratory tests 24 hours a day in order to serve a hospital emergency room which is available to provide services 24 hours a day and 7 days a week. (2)(A)(i) Except as provided in clause (v), subparagraph (B), and paragraph (4), the Secretary shall set the fee schedules at 60 percent (or, in the case of a test performed by a qualified hospital laboratory (as defined in paragraph (1)(D)) for outpatients of such hospital, 62 percent) of the prevailing charge level determined pursuant to the third and fourth sentences of section 1842(b)(3) for similar clinical diagnostic laboratory tests for the applicable region, State, or area for the 12-month period beginning July 1, 1984, adjusted annually (to become effective on January 1 of each year) by, subject to clause (iv), a percentage increase or decrease equal to the percentage increase or decrease in the Consumer Price Index for All Urban Consumers (United States city average) minus, for each of the years 2009 and 2010, 0.5 percentage points, and, for tests furnished before the dateof enactment of section 1834A, subject to such other adjustments as the Secretary determines are justified by technological changes. (ii) Notwithstanding clause (i)-- (I) any change in the fee schedules which would have become effective under this subsection 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, (II) the Secretary shall not adjust the fee schedules under clause (i) to take into account any increase in the consumer price index for 1988, (III) the annual adjustment in the fee schedules determined under clause (i) for each of the years 1991, 1992, and 1993 shall be 2 percent, and (IV) the annual adjustment in the fee schedules determined under clause (i) for each of the years 1994 and 1995, 1998 through 2002, and 2004 through 2008 shall be 0 percent. (iii) In establishing fee schedules under clause (i) 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, and such reduced fee schedules shall serve as the base for 1989 and subsequent years. (iv) After determining the adjustment to the fee schedules under clause (i), the Secretary shall reduce such adjustment-- (I) for 2011 and each subsequent year, by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II); and (II) for each of 2011 through 2015, by 1.75 percentage points. Subclause (I) shall not apply in a year where the adjustment to the fee schedules determined under clause (i) is 0.0 or a percentage decrease for a year. The application of the productivity adjustment under subclause (I) shall not result in an adjustment to the fee schedules under clause (i) being less than 0.0 for a year. The application of subclause (II) may result in an adjustment to the fee schedules under clause (i) being less than 0.0 for a year, and may result in payment rates for a year being less than such payment rates for the preceding year. (v) The Secretary shall reduce by 2 percent the fee schedules otherwise determined under clause (i) for 2013, and such reduced fee schedules shall serve as the base for 2014 and subsequent years. (B) The Secretary may make further adjustments or exceptions to the fee schedules to assure adequate reimbursement of (i) emergency laboratory tests needed for the provision of bona fide emergency services, and (ii) certain low volume high-cost tests where highly sophisticated equipment or extremely skilled personnel are necessary to assure quality. (3) In addition to the amounts provided under the fee schedules (for tests furnished before January 1, 2017)or under section 1834A (for tests furnished on or after January 1, 2017), subject to subsection (b)(5) of such section, the Secretary shall provide for and establish (A) a nominal fee to cover the appropriate costs in collecting the sample on which a clinical diagnostic laboratory test was performed and for which payment is made under this part, except that not more than one such fee may be provided under this paragraph with respect to samples collected in the same encounter, and (B) a fee to cover the transportation and personnel expenses for trained personnel to travel to the location of an individual to collect the sample, except that such a fee may be provided only with respect to an individual who is homebound or an inpatient in an inpatient facility (other than a hospital). In establishing a fee to cover the transportation and personnel expenses for trained personnel to travel to the location of an individual to collect a sample, the Secretary shall provide a method for computing the fee based on the number of miles traveled and the personnel costs associated with the collection of each individual sample, but the Secretary shall only be required to apply such method in the case of tests furnished during the period beginning on April 1, 1989, and ending on December 31, 1990, by a laboratory that establishes to the satisfaction of the Secretary (based on data for the 12-month period ending June 30, 1988) that (i) the laboratory is dependent upon payments under this title for at least 80 percent of its collected revenues for clinical diagnostic laboratory tests, (ii) at least 85 percent of its gross revenues for such tests are attributable to tests performed with respect to individuals who are homebound or who are residents in a nursing facility, and (iii) the laboratory provided such tests for residents in nursing facilities representing at least 20 percent of the number of such facilities in the State in which the laboratory is located. (4)(A) In establishing any fee schedule under this subsection, the Secretary may provide for an adjustment to take into account, with respect to the portion of the expenses of clinical diagnostic laboratory tests attributable to wages, the relative difference between a region's or local area's wage rates and the wage rate presumed in the data on which the schedule is based. (B) For purposes of subsections (a)(1)(D)(i) and (a)(2)(D)(i), the limitation amount for a clinical diagnostic laboratory test performed-- (i) on or after July 1, 1986, and before April 1, 1988, is equal to 115 percent of the median of all the fee schedules established for that test for that laboratory setting under paragraph (1), (ii) after March 31, 1988, and before January 1, 1990, is equal to the median of all the fee schedules established for that test for that laboratory setting under paragraph (1), (iii) after December 31, 1989, and before January 1, 1991, is equal to 93 percent of the median of all the fee schedules established for that test for that laboratory setting under paragraph (1), (iv) after December 31, 1990, and before January 1, 1994, is equal to 88 percent of such median, (v) after December 31, 1993, and before January 1, 1995, is equal to 84 percent of such median, (vi) after December 31, 1994, and before January 1, 1996, is equal to 80 percent of such median, (vii) after December 31, 1995, and before January 1, 1998, is equal to 76 percent of such median, and (viii) after December 31, 1997, is equal to 74 percent of such median (or 100 percent of such median in the case of a clinical diagnostic laboratory test performed on or after January 1, 2001, that the Secretary determines is a new test for which no limitation amount has previously been established under this subparagraph). (5)(A) In the case of a bill or request for payment for a clinical diagnostic laboratory test for which payment may otherwise be made under this part on an assignment-related basis or under a provider agreement under section 1866, payment may be made only to the person or entity which performed or supervised the performance of such test; except that-- (i) if a physician performed or supervised the performance of such test, payment may be made to another physician with whom he shares his practice, (ii) in the case of a test performed at the request of a laboratory by another laboratory, payment may be made to the referring laboratory but only if-- (I) the referring laboratory is located in, or is part of, a rural hospital, (II) the referring laboratory is wholly owned by the entity performing such test, the referring laboratory wholly owns the entity performing such test, or both the referring laboratory and the entity performing such test are wholly-owned by a third entity, or (III) not more than 30 percent of the clinical diagnostic laboratory tests for which such referring laboratory (but not including a laboratory described in subclause (II)), receives requests for testing during the year in which the test is performed are performed by another laboratory, and (iii) in the case of a clinical diagnostic laboratory test provided under an arrangement (as defined in section 1861(w)(1)) made by a hospital, critical access hospital, or skilled nursing facility, payment shall be made to the hospital or skilled nursing facility. (B) In the case of such a bill or request for payment for a clinical diagnostic laboratory test for which payment may otherwise be made under this part, and which is not described in subparagraph (A), payment may be made to the beneficiary only on the basis of the itemized bill of the person or entity which performed or supervised the performance of the test. (C) Payment for a clinical diagnostic laboratory test, including a test performed in a physician's office but excluding a test performed by a rural health clinic may only be made on an assignment-related basis or to a provider of services with an agreement in effect under section 1866. (D) A person may not bill for a clinical diagnostic laboratory test, including a test performed in a physician's office but excluding a test performed by a rural health clinic, other than on an assignment-related basis. If a person knowingly and willfully and on a repeated basis bills for a clinical diagnostic laboratory test in violation of the previous sentence, the Secretary may apply sanctions against the person in the same manner as the Secretary may apply sanctions against a physician in accordance with paragraph (2) of section 1842(j) in the same manner such paragraphs apply with respect to a physician. Paragraph (4) of such section shall apply in this subparagraph in the same manner as such paragraph applies to such section. (6) For tests furnished before January 1, 2017, inthe case of any diagnostic laboratory test payment for which is not made on the basis of a fee schedule under paragraph (1), the Secretary may establish a payment rate which is acceptable to the person or entity performing the test and which would be considered the full charge for such tests. Such negotiated rate shall be limited to an amount not in excess of the total payment that would have been made for the services in the absence of such rate. (7) Notwithstanding paragraphs (1) and (4)and section 1834A, the Secretary shall establish a national minimum payment amount under this part for a diagnostic or screening pap smear laboratory test (including all cervical cancer screening technologies that have been approved by the Food and Drug Administration as a primary screening method for detection of cervical cancer) equal to $14.60 for tests furnished in 2000. For such tests furnished in subsequent years, such national minimum payment amount shall be adjusted annually as provided in paragraph (2). (8)(A) The Secretary shall establish by regulation procedures for determining the basis for, and amount of, payment under this subsection for any clinical diagnostic laboratory test with respect to which a new or substantially revised HCPCS code is assigned on or after January 1, 2005 (in this paragraph referred to as ``new tests''). (B) Determinations under subparagraph (A) shall be made only after the Secretary-- (i) makes available to the public (through an Internet website and other appropriate mechanisms) a list that includes any such test for which establishment of a payment amount under this subsection is being considered for a year; (ii) on the same day such list is made available, causes to have published in the Federal Register notice of a meeting to receive comments and recommendations (and data on which recommendations are based) from the public on the appropriate basis under this subsection for establishing payment amounts for the tests on such list; (iii) not less than 30 days after publication of such notice convenes a meeting, that includes representatives of officials of the Centers for Medicare & Medicaid Services involved in determining payment amounts, to receive such comments and recommendations (and data on which the recommendations are based); (iv) taking into account the comments and recommendations (and accompanying data) received at such meeting, develops and makes available to the public (through an Internet website and other appropriate mechanisms) a list of proposed determinations with respect to the appropriate basis for establishing a payment amount under this subsection for each such code, together with an explanation of the reasons for each such determination, the data on which the determinations are based, and a request for public written comments on the proposed determination; and (v) taking into account the comments received during the public comment period, develops and makes available to the public (through an Internet website and other appropriate mechanisms) a list of final determinations of the payment amounts for such tests under this subsection, together with the rationale for each such determination, the data on which the determinations are based, and responses to comments and suggestions received from the public. (C) Under the procedures established pursuant to subparagraph (A), the Secretary shall-- (i) set forth the criteria for making determinations under subparagraph (A); and (ii) make available to the public the data (other than proprietary data) considered in making such determinations. (D) The Secretary may convene such further public meetings to receive public comments on payment amounts for new tests under this subsection as the Secretary deems appropriate. (E) For purposes of this paragraph: (i) The term ``HCPCS'' refers to the Health Care Procedure Coding System. (ii) A code shall be considered to be ``substantially revised'' if there is a substantive change to the definition of the test or procedure to which the code applies (such as a new analyte or a new methodology for measuring an existing analyte-specific test). (9) Notwithstanding any other provision in this part, in the case of any diagnostic laboratory test for HbA1c that is labeled by the Food and Drug Administration for home use and is furnished on or after April 1, 2008, the payment rate for such test shall be the payment rate established under this part for a glycated hemoglobin test (identified as of October 1, 2007, by HCPCS code 83036 (and any succeeding codes)). (i)(1) The Secretary shall, in consultation with appropriate medical organizations-- (A) specify those surgical procedures which are appropriately (when considered in terms of the proper utilization of hospital inpatient facilities) performed on an inpatient basis in a hospital but which also can be performed safely on an ambulatory basis in an ambulatory surgical center (meeting the standards specified under section 1832(a)(2)(F)(i)), critical access hospital, or hospital outpatient department, and (B) specify those surgical procedures which are appropriately (when considered in terms of the proper utilization of hospital inpatient facilities) performed on an inpatient basis in a hospital but which also can be performed safely on an ambulatory basis in a physician's office. The lists of procedures established under subparagraphs (A) and (B) shall be reviewed and updated not less often than every 2 years, in consultation with appropriate trade and professional organizations. In updating such lists for application in years beginning with the second year beginning after the date of the enactment of this sentence, for each procedure that was not proposed to be included in such lists in the proposed rule with respect to such lists and that was subsequently requested to be included in such lists during the public comment period with respect to such proposed rule and that is not included in the final rule updating such lists, the Secretary shall cite in such final rule the specific criteria in paragraph (b) or (c) of section 416.166 of title 42, Code of Federal Regulations (or any successor regulation), based on which the procedure was excluded. If paragraph (b) of such section is cited for exclusion of a procedure, the Secretary shall identify the peer-reviewed research, if any, or the evidence upon which such determination is based. (2)(A) For services furnished prior to the implementation of the system described in subparagraph (D), subject to subparagraph (E), the amount of payment to be made for facility services furnished in connection with a surgical procedure specified pursuant to paragraph (1)(A) and furnished to an individual in an ambulatory surgical center described in such paragraph shall be equal to 80 percent of a standard overhead amount established by the Secretary (with respect to each such procedure) on the basis of the Secretary's estimate of a fair fee which-- (i) takes into account the costs incurred by such centers, or classes of centers, generally in providing services furnished in connection with the performance of such procedure, as determined in accordance with a survey (based upon a representative sample of procedures and facilities) of the actual audited costs incurred by such centers in providing such services, (ii) takes such costs into account in such a manner as will assure that the performance of the procedure in such a center will result in substantially less amounts paid under this title than would have been paid if the procedure had been performed on an inpatient basis in a hospital, and (iii) in the case of insertion of an intraocular lens during or subsequent to cataract surgery includes payment which is reasonable and related to the cost of acquiring the class of lens involved. Each amount so established shall be reviewed and updated not later than July 1, 1987, and annually thereafter to take account of varying conditions in different areas. (B) The amount of payment to be made under this part for facility services furnished, in connection with a surgical procedure specified pursuant to paragraph (1)(B), in a physician's office shall be equal to 80 percent of a standard overhead amount established by the Secretary (with respect to each such procedure) on the basis of the Secretary's estimate of a fair fee which-- (i) takes into account additional costs, not usually included in the professional fee, incurred by physicians in securing, maintaining, and staffing the facilities and ancillary services appropriate for the performance of such procedure in the physician's office, and (ii) takes such items into account in such a manner which will assure that the performance of such procedure in the physician's office will result in substantially less amounts paid under this title than would have been paid if the services had been furnished on an inpatient basis in a hospital. Each amount so established shall be reviewed and updated not later than July 1, 1987, and annually thereafter to take account of varying conditions in different areas. (C)(i) Notwithstanding the second sentence of each of subparagraphs (A) and (B), except as otherwise specified in clauses (ii), (iii), and (iv), if the Secretary has not updated amounts established under such subparagraphs or under subparagraph (D), with respect to facility services furnished during a fiscal year (beginning with fiscal year 1986 or a calendar year (beginning with 2006)), such amounts shall be increased by the percentage increase in the Consumer Price Index for all urban consumers (U.S. city average) as estimated by the Secretary for the 12-month period ending with the midpoint of the year involved. (ii) In each of the fiscal years 1998 through 2002, the increase under this subparagraph shall be reduced (but not below zero) by 2.0 percentage points. (iii) In fiscal year 2004, beginning with April 1, 2004, the increase under this subparagraph shall be the Consumer Price Index for all urban consumers (U.S. city average) as estimated by the Secretary for the 12-month period ending with March 31, 2003, minus 3.0 percentage points. (iv) In fiscal year 2005, the last quarter of calendar year 2005, and each of calendar years 2006 through 2009, the increase under this subparagraph shall be 0 percent. (D)(i) Taking into account the recommendations in the report under section 626(d) of Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the Secretary shall implement a revised payment system for payment of surgical services furnished in ambulatory surgical centers. (ii) In the year the system described in clause (i) is implemented, such system shall be designed to result in the same aggregate amount of expenditures for such services as would be made if this subparagraph did not apply, as estimated by the Secretary and taking into account reduced expenditures that would apply if subparagraph (E) were to continue to apply, as estimated by the Secretary. (iii) The Secretary shall implement the system described in clause (i) for periods in a manner so that it is first effective beginning on or after January 1, 2006, and not later than January 1, 2008. (iv) The Secretary may implement such system in a manner so as to provide for a reduction in any annual update for failure to report on quality measures in accordance with paragraph (7). (v) In implementing the system described in clause (i) for 2011 and each subsequent year, any annual update under such system for the year, after application of clause (iv), shall be reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II). The application of the preceding sentence may result in such update being less than 0.0 for a year, and may result in payment rates under the system described in clause (i) for a year being less than such payment rates for the preceding year. (vi) There shall be no administrative or judicial review under section 1869, 1878, or otherwise, of the classification system, the relative weights, payment amounts, and the geographic adjustment factor, if any, under this subparagraph. (E) With respect to surgical procedures furnished on or after January 1, 2007, and before the effective date of the implementation of a revised payment system under subparagraph (D), if-- (i) the standard overhead amount under subparagraph (A) for a facility service for such procedure, without the application of any geographic adjustment, exceeds (ii) the Medicare OPD fee schedule amount established under the prospective payment system for hospital outpatient department services under paragraph (3)(D) of section 1833(t) for such service for such year, determined without regard to geographic adjustment under paragraph (2)(D) of such section, the Secretary shall substitute under subparagraph (A) the amount described in clause (ii) for the standard overhead amount for such service referred to in clause (i). (3)(A) The aggregate amount of the payments to be made under this part for outpatient hospital facility services or critical access hospital services furnished before January 1, 1999, in connection with surgical procedures specified under paragraph (1)(A) 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 (described in subparagraph (B)). (B)(i) The blend amount for a cost reporting period is the sum of-- (I) the cost proportion (as defined in clause (ii)(I)) of the amount described in subparagraph (A)(i), and (II) the ASC proportion (as defined in clause (ii)(II)) of the standard overhead amount payable with respect to the same surgical procedure as if it were provided in an ambulatory surgical center in the same area, as determined under paragraph (2)(A), less the amount a provider may charge as described in clause (ii) of section 1866(a)(2)(A). (ii) Subject to paragraph (4), in this paragraph: (I) The term ``cost proportion'' means 75 percent for cost reporting periods beginning in fiscal year 1988, 50 percent for portions of cost reporting periods beginning on or after October 1, 1988, and ending on or before December 31, 1990, and 42 percent for portions of cost reporting periods beginning on or after January 1, 1991. (II) The term ``ASC proportion'' means 25 percent for cost reporting periods beginning in fiscal year 1988, 50 percent for portions of cost reporting periods beginning on or after October 1, 1988, and ending on or before December 31, 1990, and 58 percent for portions of cost reporting periods beginning on or after January 1, 1991. (4)(A) In the case of a hospital that-- (i) makes application to the Secretary and demonstrates that it specializes in eye services or eye and ear services (as determined by the Secretary), (ii) receives more than 30 percent of its total revenues from outpatient services, and (iii) on October 1, 1987-- (I) was an eye specialty hospital or an eye and ear specialty hospital, or (II) was operated as an eye or eye and ear unit (as defined in subparagraph (B)) of a general acute care hospital which, on the date of the application described in clause (i), operates less than 20 percent of the beds that the hospital operated on October 1, 1987, and has sold or otherwise disposed of a substantial portion of the hospital's other acute care operations, the cost proportion and ASC proportion in effect under subclauses (I) and (II) of paragraph (3)(B)(ii) for cost reporting periods beginning in fiscal year 1988 shall remain in effect for cost reporting periods beginning on or after October 1, 1988, and before January 1, 1995. (B) For purposes of this subparagraph (A)(iii)(II), the term ``eye or eye and ear unit'' means a physically separate or distinct unit containing separate surgical suites devoted solely to eye or eye and ear services. (5)(A) The Secretary is authorized to provide by regulations that in the case of a surgical procedure, specified by the Secretary pursuant to paragraph (1)(A), performed in an ambulatory surgical center described in such paragraph, there shall be paid (in lieu of any amounts otherwise payable under this part) with respect to the facility services furnished by such center and with respect to all related services (including physicians' services, laboratory, X-ray, and diagnostic services) a single all-inclusive fee established pursuant to subparagraph (B), if all parties furnishing all such services agree to accept such fee (to be divided among the parties involved in such manner as they shall have previously agreed upon) as full payment for the services furnished. (B) In implementing this paragraph, the Secretary shall establish with respect to each surgical procedure specified pursuant to paragraph (1)(A) the amount of the all-inclusive fee for such procedure, taking into account such factors as may be appropriate. The amount so established with respect to any surgical procedure shall be reviewed periodically and may be adjusted by the Secretary, when appropriate, to take account of varying conditions in different areas. (6) Any person, including a facility having an agreement under section 1832(a)(2)(F)(i), who knowingly and willfully presents, or causes to be presented, a bill or request for payment, for an intraocular lens inserted during or subsequent to cataract surgery for which payment may be made under paragraph (2)(A)(iii), is subject to a civil money penalty of not to exceed $2,000. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). (7)(A) For purposes of paragraph (2)(D)(iv), the Secretary may provide, in the case of an ambulatory surgical center that does not submit, to the Secretary in accordance with this paragraph, data required to be submitted on measures selected under this paragraph with respect to a year, any annual increase provided under the system established under paragraph (2)(D) for such year shall be reduced by 2.0 percentage points. A reduction under this subparagraph shall apply only with respect to the year involved and the Secretary shall not take into account such reduction in computing any annual increase factor for a subsequent year. (B) Except as the Secretary may otherwise provide, the provisions of subparagraphs (B), (C), (D), and (E) of paragraph (17) of section 1833(t) shall apply with respect to services of ambulatory surgical centers under this paragraph in a similar manner to the manner in which they apply under such paragraph and, for purposes of this subparagraph, any reference to a hospital, outpatient setting, or outpatient hospital services is deemed a reference to an ambulatory surgical center, the setting of such a center, or services of such a center, respectively. (8) The Secretary shall conduct a similar type of review as required under paragraph (22) of section 1833(t)), including the second sentence of subparagraph (C) of such paragraph, to payment for services under this subsection, and make such revisions under this paragraph, in an appropriate manner (as determined by the Secretary). (j) Whenever a final determination is made that the amount of payment made under this part either to a provider of services or to another person pursuant to an assignment under section 1842(b)(3)(B)(ii) was in excess of or less than the amount of payment that is due, and payment of such excess or deficit is not made (or effected by offset) within 30 days of the date of the determination, interest shall accrue on the balance of such excess or deficit not paid or offset (to the extent that the balance is owed by or owing to the provider) at a rate determined in accordance with the regulations of the Secretary of the Treasury applicable to charges for late payments. (k) With respect to services described in section 1861(s)(10)(B), the Secretary may provide, instead of the amount of payment otherwise provided under this part, for payment of such an amount or amounts as reasonably reflects the general cost of efficiently providing such services. (l)(1)(A) The Secretary shall establish a fee schedule for services of certified registered nurse anesthetists under section 1861(s)(11). (B) In establishing the fee schedule under this paragraph the Secretary may utilize a system of time units, a system of base and time units, or any appropriate methodology. (C) The provisions of this subsection shall not apply to certain services furnished in certain hospitals in rural areas under the provisions of section 9320(k) of the Omnibus Budget Reconciliation Act of 1986, as amended by section 6132 of the Omnibus Budget Reconciliation Act of 1989. (2) Except as provided in paragraph (3), the fee schedule established under paragraph (1) shall be initially based on audited data from cost reporting periods ending in fiscal year 1985 and such other data as the Secretary determines necessary. (3)(A) In establishing the initial fee schedule for those services, the Secretary shall adjust the fee schedule to the extent necessary to ensure that the estimated total amount which will be paid under this title for those services plus applicable coinsurance in 1989 will equal the estimated total amount which would be paid under this title for those services in 1989 if the services were included as inpatient hospital services and payment for such services was made under part A in the same manner as payment was made in fiscal year 1987, adjusted to take into account changes in prices and technology relating to the administration of anesthesia. (B) The Secretary shall also reduce the prevailing charge of physicians for medical direction of a certified registered nurse anesthetist, or the fee schedule for services of certified registered nurse anesthetists, or both, to the extent necessary to ensure that the estimated total amount which will be paid under this title plus applicable coinsurance for such medical direction and such services in 1989 and 1990 will not exceed the estimated total amount which would have been paid plus applicable coinsurance but for the enactment of the amendments made by section 9320 of the Omnibus Budget Reconciliation Act of 1986. A reduced prevailing charge under this subparagraph shall become the prevailing charge but for subsequent years for purposes of applying the economic index under the fourth sentence of section 1842(b)(3). (4)(A) Except as provided in subparagraphs (C) and (D), in determining the amount paid under the fee schedule under this subsection for services furnished on or after January 1, 1991, by a certified registered nurse anesthetist who is not medically directed-- (i) the conversion factor shall be-- (I) for services furnished in 1991, $15.50, (II) for services furnished in 1992, $15.75, (III) for services furnished in 1993, $16.00, (IV) for services furnished in 1994, $16.25, (V) for services furnished in 1995, $16.50, (VI) for services furnished in 1996, $16.75, and (VII) for services furnished in calendar years after 1996, the previous year's conversion factor increased by the update determined under section 1848(d) for physician anesthesia services for that year; (ii) the payment areas to be used shall be the fee schedule areas used under section 1848 (or, in the case of services furnished during 1991, the localities used under section 1842(b)) for purposes of computing payments for physicians' services that are anesthesia services; (iii) the geographic adjustment factors to be applied to the conversion factor under clause (i) for services in a fee schedule area or locality is-- (I) in the case of services furnished in 1991, the geographic work index value and the geographic practice cost index value specified in section 1842(q)(1)(B) for physicians' services that are anesthesia services furnished in the area or locality, and (II) in the case of services furnished after 1991, the geographic work index value, the geographic practice cost index value, and the geographic malpractice index value used for determining payments for physicians' services that are anesthesia services under section 1848, with 70 percent of the conversion factor treated as attributable to work and 30 percent as attributable to overhead for services furnished in 1991 (and the portions attributable to work, practice expenses, and malpractice expenses in 1992 and thereafter being the same as is applied under section 1848). (B)(i) Except as provided in clause (ii) and subparagraph (D), in determining the amount paid under the fee schedule under this subsection for services furnished on or after January 1, 1991, and before January 1, 1994, by a certified registered nurse anesthetist who is medically directed, the Secretary shall apply the same methodology specified in subparagraph (A). (ii) The conversion factor used under clause (i) shall be-- (I) for services furnished in 1991, $10.50, (II) for services furnished in 1992, $10.75, and (III) for services furnished in 1993, $11.00. (iii) In the case of services of a certified registered nurse anesthetist who is medically directed or medically supervised by a physician which are furnished on or after January 1, 1994, the fee schedule amount shall be one-half of the amount described in section 1848(a)(5)(B) with respect to the physician. (C) Notwithstanding subclauses (I) through (V) of subparagraph (A)(i)-- (i) in the case of a 1990 conversion factor that is greater than $16.50, the conversion factor for a calendar year after 1990 and before 1996 shall be the 1990 conversion factor reduced by the product of the last digit of the calendar year and one-fifth of the amount by which the 1990 conversion factor exceeds $16.50; and (ii) in the case of a 1990 conversion factor that is greater than $15.49 but less than $16.51, the conversion factor for a calendar year after 1990 and before 1996 shall be the greater of-- (I) the 1990 conversion factor, or (II) the conversion factor specified in subparagraph (A)(i) for the year involved. (D) Notwithstanding subparagraph (C), in no case may the conversion factor used to determine payment for services in a fee schedule area or locality under this subsection, as adjusted by the adjustment factors specified in subparagraphs (A)(iii), exceed the conversion factor used to determine the amount paid for physicians' services that are anesthesia services in the area or locality. (5)(A) Payment for the services of a certified registered nurse anesthetist (for which payment may otherwise be made under this part) may be made on the basis of a claim or request for payment presented by the certified registered nurse anesthetist furnishing such services, or by a hospital, critical access hospital, physician, group practice, or ambulatory surgical center with which the certified registered nurse anesthetist furnishing such services has an employment or contractual relationship that provides for payment to be made under this part for such services to such hospital, critical access hospital, physician, group practice, or ambulatory surgical center. (B) No hospital or critical access hospital that presents a claim or request for payment for services of a certified nurse anesthetist under this part may treat any uncollected coinsurance amount imposed under this part with respect to such services as a bad debt of such hospital or critical access hospital for purposes of this title. (6) If an adjustment under paragraph (3)(B) results in a reduction in the reasonable charge for a physicians' service and a nonparticipating physician furnishes the service to an individual entitled to benefits under this part after the effective date of the reduction, the physician's actual charge is subject to a limit under section 1842(j)(1)(D). (m)(1) In the case of physicians' services furnished in a year to an individual, who is covered under the insurance program established by this part and who incurs expenses for such services, in an area that is designated (under section 332(a)(1)(A) of the Public Health Service Act) as a health professional shortage area as identified by the Secretary prior to the beginning of such year, in addition to the amount otherwise paid under this part, there also shall be paid to the physician (or to an employer or facility in the cases described in clause (A) of section 1842(b)(6)) (on a monthly or quarterly basis) from the Federal Supplementary Medical Insurance Trust Fund an amount equal to 10 percent of the payment amount for the service under this part. (2) For each health professional shortage area identified in paragraph (1) that consists of an entire county, the Secretary shall provide for the additional payment under paragraph (1) without any requirement on the physician to identify the health professional shortage area involved. The Secretary may implement the previous sentence using the method specified in subsection (u)(4)(C). (3) The Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services a list of the health professional shortage areas identified in paragraph (1) that consist of a partial county to facilitate the additional payment under paragraph (1) in such areas. (4) There shall be no administrative or judicial review under section 1869, section 1878, or otherwise, respecting-- (A) the identification of a county or area; (B) the assignment of a specialty of any physician under this paragraph; (C) the assignment of a physician to a county under this subsection; or (D) the assignment of a postal ZIP Code to a county or other area under this subsection. (n)(1)(A) The aggregate amount of the payments to be made for all or part of a cost reporting period for services described in subsection (a)(2)(E)(i) furnished under this part on or after October 1, 1988, and before January 1, 1999, and for services described in subsection (a)(2)(E)(ii) furnished under this part on or after October 1, 1989, and before January 1, 1999, 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 (ii)(II)) 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 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 the prevailing charge or (for services described in subsection (a)(2)(E)(i) furnished on or after January 1, 1989) the fee schedule amount established 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), less the amount a provider may charge as described in clause (ii) of section 1866(a)(2)(A). (ii) In this subparagraph: (I) The term ``cost proportion'' means 50 percent, except that such term means 65 percent in the case of outpatient radiology services for portions of cost reporting periods which occur in fiscal year 1989 and in the case of diagnostic procedures described in subsection (a)(2)(E)(ii) for portions of cost reporting periods which occur in fiscal year 1990, and such term means 42 percent in the case of outpatient radiology services for portions of cost reporting periods beginning on or after January 1, 1991. (II) The term ``charge proportion'' means 100 percent minus the cost proportion. (o)(1) In the case of shoes described in section 1861(s)(12)-- (A) no payment may be made under this part, with respect to any individual for any year, for the furnishing of-- (i) more than one pair of custom molded shoes (including inserts provided with such shoes) and 2 additional pairs of inserts for such shoes, or (ii) more than one pair of extra-depth shoes (not including inserts provided with such shoes) and 3 pairs of inserts for such shoes, and (B) with respect to expenses incurred in any calendar year, no more than the amount of payment applicable under paragraph (2) shall be considered as incurred expenses for purposes of subsections (a) and (b). Payment for shoes (or inserts) under this part shall be considered to include payment for any expenses for the fitting of such shoes (or inserts). (2)(A) Except as provided by the Secretary under subparagraphs (B) and (C), the amount of payment under this paragraph for custom molded shoes, extra-depth shoes, and inserts shall be the amount determined for such items by the Secretary under section 1834(h). (B) The Secretary may establish payment amounts for shoes and inserts that are lower than the amount established under section 1834(h) if the Secretary finds that shoes and inserts of an appropriate quality are readily available at or below the amount established under such section. (C) In accordance with procedures established by the Secretary, an individual entitled to benefits with respect to shoes described in section 1861(s)(12) may substitute modification of such shoes instead of obtaining one (or more, as specified by the Secretary) pair of inserts (other than the original pair of inserts with respect to such shoes). In such case, the Secretary shall substitute, for the payment amount established under section 1834(h), a payment amount that the Secretary estimates will assure that there is no net increase in expenditures under this subsection as a result of this subparagraph. (3) In this title, the term ``shoes'' includes, except for purposes of subparagraphs (A)(ii) and (B) of paragraph (2), inserts for extra-depth shoes. [(p) Striken.] (q)(1) Each request for payment, or bill submitted, for an item or service furnished by an entity for which payment may be made under this part and for which the entity knows or has reason to believe there has been a referral by a referring physician (within the meaning of section 1877) shall include the name and unique physician identification number for the referring physician. (2)(A) In the case of a request for payment for an item or service furnished by an entity under this part on an assignment-related basis and for which information is required to be provided under paragraph (1) but not included, payment may be denied under this part. (B) In the case of a request for payment for an item or service furnished by an entity under this part not submitted on an assignment-related basis and for which information is required to be provided under paragraph (1) but not included-- (i) if the entity knowingly and willfully fails to provide such information promptly upon request of the Secretary or a carrier, the entity may be subject to a civil money penalty in an amount not to exceed $2,000, and (ii) if the entity knowingly, willfully, and in repeated cases fails, after being notified by the Secretary of the obligations and requirements of this subsection to provide the information required under paragraph (1), the entity may be subject to exclusion from participation in the programs under this Act for a period not to exceed 5 years, in accordance with the procedures of subsections (c), (f), and (g) of section 1128. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to civil money penalties under clause (i) in the same manner as they apply to a penalty or proceeding under section 1128A(a). (r)(1) With respect to services described in section 1861(s)(2)(K)(ii) (relating to nurse practitioner or clinical nurse specialist services), payment may be made on the basis of a claim or request for payment presented by the nurse practitioner or clinical nurse specialist furnishing such services, or by a hospital, critical access hospital, skilled nursing facility or nursing facility (as defined in section 1919(a)), physician, group practice, or ambulatory surgical center with which the nurse practitioner or clinical nurse specialist has an employment or contractual relationship that provides for payment to be made under this part for such services to such hospital, physician, group practice, or ambulatory surgical center. (2) No hospital or critical access hospital that presents a claim or request for payment under this part for services described in section 1861(s)(2)(K)(ii) may treat any uncollected coinsurance amount imposed under this part with respect to such services as a bad debt of such hospital for purposes of this title. (s) The Secretary may not provide for payment under subsection (a)(1)(A) with respect to an organization unless the organization provides assurances satisfactory to the Secretary that the organization meets the requirement of section 1866(f) (relating to maintaining written policies and procedures respecting advance directives). (t) Prospective Payment System for Hospital Outpatient Department Services.-- (1) Amount of payment.-- (A) In general.--With respect to covered OPD services (as defined in subparagraph (B)) furnished during a year beginning with 1999, the amount of payment under this part shall be determined under a prospective payment system established by the Secretary in accordance with this subsection. (B) Definition of covered opd services.--For purposes of this subsection, the term ``covered OPD services''-- (i) means hospital outpatient services designated by the Secretary; (ii) subject to clause (iv), includes inpatient hospital services designated by the Secretary that are covered under this part and furnished to a hospital inpatient who (I) is entitled to benefits under part A but has exhausted benefits for inpatient hospital services during a spell of illness, or (II) is not so entitled; (iii) includes implantable items described in paragraph (3), (6), or (8) of section 1861(s); (iv) does not include any therapy services described in subsection (a)(8) or ambulance services, for which payment is made under a fee schedule described in section 1834(k) or section 1834(l) and does not include screening mammography (as defined in section 1861(jj)), diagnostic mammography, or personalized prevention plan services (as defined in section 1861(hhh)(1)); and (v) does not include applicable items and services (as defined in subparagraph (A) of paragraph (21)) that are furnished on or after January 1, 2017, by an off-campus outpatient department of a provider (as defined in subparagraph (B) of such paragraph). (2) System requirements.--Under the payment system-- (A) the Secretary shall develop a classification system for covered OPD services; (B) the Secretary may establish groups of covered OPD services, within the classification system described in subparagraph (A), so that services classified within each group are comparable clinically and with respect to the use of resources and so that an implantable item is classified to the group that includes the service to which the item relates; (C) the Secretary shall, using data on claims from 1996 and using data from the most recent available cost reports, establish relative payment weights for covered OPD services (and any groups of such services described in subparagraph (B)) based on median (or, at the election of the Secretary, mean) hospital costs and shall determine projections of the frequency of utilization of each such service (or group of services) in 1999; (D) subject to paragraph (19), the Secretary shall determine a wage adjustment factor to adjust the portion of payment and coinsurance attributable to labor-related costs for relative differences in labor and labor-related costs across geographic regions in a budget neutral manner; (E) the Secretary shall establish, in a budget neutral manner, outlier adjustments under paragraph (5) and transitional pass- through payments under paragraph (6) and other adjustments as determined to be necessary to ensure equitable payments, such as adjustments for certain classes of hospitals; (F) the Secretary shall develop a method for controlling unnecessary increases in the volume of covered OPD services; (G) the Secretary shall create additional groups of covered OPD services that classify separately those procedures that utilize contrast agents from those that do not; and (H) with respect to devices of brachytherapy consisting of a seed or seeds (or radioactive source), the Secretary shall create additional groups of covered OPD services that classify such devices separately from the other services (or group of services) paid for under this subsection in a manner reflecting the number, isotope, and radioactive intensity of such devices furnished, including separate groups for palladium-103 and iodine-125 devices and for stranded and non-stranded devices furnished on or after July 1, 2007. For purposes of subparagraph (B), items and services within a group shall not be treated as ``comparable with respect to the use of resources'' if the highest median cost (or mean cost, if elected by the Secretary under subparagraph (C)) for an item or service within the group is more than 2 times greater than the lowest median cost (or mean cost, if so elected) for an item or service within the group; except that the Secretary may make exceptions in unusual cases, such as low volume items and services, but may not make such an exception in the case of a drug or biological that has been designated as an orphan drug under section 526 of the Federal Food, Drug and Cosmetic Act. (3) Calculation of base amounts.-- (A) Aggregate amounts that would be payable if deductibles were disregarded.--The Secretary shall estimate the sum of-- (i) the total amounts that would be payable from the Trust Fund under this part for covered OPD services in 1999, determined without regard to this subsection, as though the deductible under section 1833(b) did not apply, and (ii) the total amounts of copayments estimated to be paid under this subsection by beneficiaries to hospitals for covered OPD services in 1999, as though the deductible under section 1833(b) did not apply. (B) Unadjusted copayment amount.-- (i) In general.--For purposes of this subsection, subject to clause (ii), the ``unadjusted copayment amount'' applicable to a covered OPD service (or group of such services) is 20 percent of the national median of the charges for the service (or services within the group) furnished during 1996, updated to 1999 using the Secretary's estimate of charge growth during the period. (ii) Adjusted to be 20 percent when fully phased in.--If the pre-deductible payment percentage for a covered OPD service (or group of such services) furnished in a year would be equal to or exceed 80 percent, then the unadjusted copayment amount shall be 20 percent of amount determined under subparagraph (D). (iii) Rules for new services.--The Secretary shall establish rules for establishment of an unadjusted copayment amount for a covered OPD service not furnished during 1996, based upon its classification within a group of such services. (C) Calculation of conversion factors.-- (i) For 1999.-- (I) In general.--The Secretary shall establish a 1999 conversion factor for determining the medicare OPD fee schedule amounts for each covered OPD service (or group of such services) furnished in 1999. Such conversion factor shall be established on the basis of the weights and frequencies described in paragraph (2)(C) and in such a manner that the sum for all services and groups of the products (described in subclause (II) for each such service or group) equals the total projected amount described in subparagraph (A). (II) Product described.--The Secretary shall determine for each service or group the product of the medicare OPD fee schedule amounts (taking into account appropriate adjustments described in paragraphs (2)(D) and (2)(E)) and the estimated frequencies for such service or group. (ii) Subsequent years.--Subject to paragraph (8)(B), the Secretary shall establish a conversion factor for covered OPD services furnished in subsequent years in an amount equal to the conversion factor established under this subparagraph and applicable to such services furnished in the previous year increased by the OPD fee schedule increase factor specified under clause (iv) for the year involved. (iii) Adjustment for service mix changes.--Insofar as the Secretary determines that the adjustments for service mix under paragraph (2) for a previous year (or estimates that such adjustments for a future year) did (or are likely to) result in a change in aggregate payments under this subsection during the year that are a result of changes in the coding or classification of covered OPD services that do not reflect real changes in service mix, the Secretary may adjust the conversion factor computed under this subparagraph for subsequent years so as to eliminate the effect of such coding or classification changes. (iv) OPD fee schedule increase factor.--For purposes of this subparagraph, subject to paragraph (17) and subparagraph (F) of this paragraph, the ``OPD fee schedule increase factor'' for services furnished in a year is equal to the market basket percentage increase applicable under section 1886(b)(3)(B)(iii) to hospital discharges occurring during the fiscal year ending in such year, reduced by 1 percentage point for such factor for services furnished in each of 2000 and 2002. In applying the previous sentence for years beginning with 2000, the Secretary may substitute for the market basket percentage increase an annual percentage increase that is computed and applied with respect to covered OPD services furnished in a year in the same manner as the market basket percentage increase is determined and applied to inpatient hospital services for discharges occurring in a fiscal year. (D) Calculation of medicare opd fee schedule amounts.--The Secretary shall compute a medicare OPD fee schedule amount for each covered OPD service (or group of such services) furnished in a year, in an amount equal to the product of-- (i) the conversion factor computed under subparagraph (C) for the year, and (ii) the relative payment weight (determined under paragraph (2)(C)) for the service or group. (E) Pre-deductible payment percentage.--The pre-deductible payment percentage for a covered OPD service (or group of such services) furnished in a year is equal to the ratio of-- (i) the medicare OPD fee schedule amount established under subparagraph (D) for the year, minus the unadjusted copayment amount determined under subparagraph (B) for the service or group, to (ii) the medicare OPD fee schedule amount determined under subparagraph (D) for the year for such service or group. (F) Productivity and other adjustment.--After determining the OPD fee schedule increase factor under subparagraph (C)(iv), the Secretary shall reduce such increase factor-- (i) for 2012 and subsequent years, by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II); and (ii) for each of 2010 through 2019, by the adjustment described in subparagraph (G). The application of this subparagraph may result in the increase factor under subparagraph (C)(iv) being less than 0.0 for a year, and may result in payment rates under the payment system under this subsection for a year being less than such payment rates for the preceding year. (G) Other adjustment.--For purposes of subparagraph (F)(ii), the adjustment described in this subparagraph is-- (i) for each of 2010 and 2011, 0.25 percentage point; (ii) for each of 2012 and 2013, 0.1 percentage point; (iii) for 2014, 0.3 percentage point; (iv) for each of 2015 and 2016, 0.2 percentage point; and (v) for each of 2017, 2018, and 2019, 0.75 percentage point. (4) Medicare payment amount.--The amount of payment made from the Trust Fund under this part for a covered OPD service (and such services classified within a group) furnished in a year is determined, subject to paragraph (7), as follows: (A) Fee schedule adjustments.--The medicare OPD fee schedule amount (computed under paragraph (3)(D)) for the service or group and year is adjusted for relative differences in the cost of labor and other factors determined by the Secretary, as computed under paragraphs (2)(D) and (2)(E). (B) Subtract applicable deductible.--Reduce the adjusted amount determined under subparagraph (A) by the amount of the deductible under section 1833(b), to the extent applicable. (C) Apply payment proportion to remainder.-- The amount of payment is the amount so determined under subparagraph (B) multiplied by the pre-deductible payment percentage (as determined under paragraph (3)(E)) for the service or group and year involved, plus the amount of any reduction in the copayment amount attributable to paragraph (8)(C). (5) Outlier adjustment.-- (A) In general.--Subject to subparagraph (D), the Secretary shall provide for an additional payment for each covered OPD service (or group of services) for which a hospital's charges, adjusted to cost, exceed-- (i) a fixed multiple of the sum of-- (I) the applicable medicare OPD fee schedule amount determined under paragraph (3)(D), as adjusted under paragraph (4)(A) (other than for adjustments under this paragraph or paragraph (6)); and (II) any transitional pass- through payment under paragraph (6); and (ii) at the option of the Secretary, such fixed dollar amount as the Secretary may establish. (B) Amount of adjustment.--The amount of the additional payment under subparagraph (A) shall be determined by the Secretary and shall approximate the marginal cost of care beyond the applicable cutoff point under such subparagraph. (C) Limit on aggregate outlier adjustments.-- (i) In general.--The total of the additional payments made under this paragraph for covered OPD services furnished in a year (as estimated by the Secretary before the beginning of the year) may not exceed the applicable percentage (specified in clause (ii)) of the total program payments estimated to be made under this subsection for all covered OPD services furnished in that year. If this paragraph is first applied to less than a full year, the previous sentence shall apply only to the portion of such year. (ii) Applicable percentage.--For purposes of clause (i), the term ``applicable percentage'' means a percentage specified by the Secretary up to (but not to exceed)-- (I) for a year (or portion of a year) before 2004, 2.5 percent; and (II) for 2004 and thereafter, 3.0 percent. (D) Transitional authority.--In applying subparagraph (A) for covered OPD services furnished before January 1, 2002, the Secretary may-- (i) apply such subparagraph to a bill for such services related to an outpatient encounter (rather than for a specific service or group of services) using OPD fee schedule amounts and transitional pass-through payments covered under the bill; and (ii) use an appropriate cost-to- charge ratio for the hospital involved (as determined by the Secretary), rather than for specific departments within the hospital. (E) Exclusion of separate drug and biological apcs from outlier payments.--No additional payment shall be made under subparagraph (A) in the case of ambulatory payment classification groups established separately for drugs or biologicals. (6) Transitional pass-through for additional costs of innovative medical devices, drugs, and biologicals.-- (A) In general.--The Secretary shall provide for an additional payment under this paragraph for any of the following that are provided as part of a covered OPD service (or group of services): (i) Current orphan drugs.--A drug or biological that is used for a rare disease or condition with respect to which the drug or biological has been designated as an orphan drug under section 526 of the Federal Food, Drug and Cosmetic Act if payment for the drug or biological as an outpatient hospital service under this part was being made on the first date that the system under this subsection is implemented. (ii) Current cancer therapy drugs and biologicals and brachytherapy.--A drug or biological that is used in cancer therapy, including (but not limited to) a chemotherapeutic agent, an antiemetic, a hematopoietic growth factor, a colony stimulating factor, a biological response modifier, a bisphosphonate, and a device of brachytherapy or temperature monitored cryoablation, if payment for such drug, biological, or device as an outpatient hospital service under this part was being made on such first date. (iii) Current radiopharmaceutical drugs and biological products.--A radiopharmaceutical drug or biological product used in diagnostic, monitoring, and therapeutic nuclear medicine procedures if payment for the drug or biological as an outpatient hospital service under this part was being made on such first date. (iv) New medical devices, drugs, and biologicals.--A medical device, drug, or biological not described in clause (i), (ii), or (iii) if-- (I) payment for the device, drug, or biological as an outpatient hospital service under this part was not being made as of December 31, 1996; and (II) the cost of the drug or biological or the average cost of the category of devices is not insignificant in relation to the OPD fee schedule amount (as calculated under paragraph (3)(D)) payable for the service (or group of services) involved. (B) Use of categories in determining eligibility of a device for pass-through payments.--The following provisions apply for purposes of determining whether a medical device qualifies for additional payments under clause (ii) or (iv) of subparagraph (A): (i) Establishment of initial categories.-- (I) In general.--The Secretary shall initially establish under this clause categories of medical devices based on type of device by April 1, 2001. Such categories shall be established in a manner such that each medical device that meets the requirements of clause (ii) or (iv) of subparagraph (A) as of January 1, 2001, is included in such a category and no such device is included in more than one category. For purposes of the preceding sentence, whether a medical device meets such requirements as of such date shall be determined on the basis of the program memoranda issued before such date. (II) Authorization of implementation other than through regulations.--The categories may be established under this clause by program memorandum or otherwise, after consultation with groups representing hospitals, manufacturers of medical devices, and other affected parties. (ii) Establishing criteria for additional categories.-- (I) In general.--The Secretary shall establish criteria that will be used for creation of additional categories (other than those established under clause (i)) through rulemaking (which may include use of an interim final rule with comment period). (II) Standard.--Such categories shall be established under this clause in a manner such that no medical device is described by more than one category. Such criteria shall include a test of whether the average cost of devices that would be included in a category and are in use at the time the category is established is not insignificant, as described in subparagraph (A)(iv)(II). (III) Deadline.--Criteria shall first be established under this clause by July 1, 2001. The Secretary may establish in compelling circumstances categories under this clause before the date such criteria are established. (IV) Adding categories.--The Secretary shall promptly establish a new category of medical devices under this clause for any medical device that meets the requirements of subparagraph (A)(iv) and for which none of the categories in effect (or that were previously in effect) is appropriate. (iii) Period for which category is in effect.--A category of medical devices established under clause (i) or (ii) shall be in effect for a period of at least 2 years, but not more than 3 years, that begins-- (I) in the case of a category established under clause (i), on the first date on which payment was made under this paragraph for any device described by such category (including payments made during the period before April 1, 2001); and (II) in the case of any other category, on the first date on which payment is made under this paragraph for any medical device that is described by such category. (iv) Requirements treated as met.--A medical device shall be treated as meeting the requirements of subparagraph (A)(iv), regardless of whether the device meets the requirement of subclause (I) of such subparagraph, if-- (I) the device is described by a category established and in effect under clause (i); or (II) the device is described by a category established and in effect under clause (ii) and an application under section 515 of the Federal Food, Drug, and Cosmetic Act has been approved with respect to the device, or the device has been cleared for market under section 510(k) of such Act, or the device is exempt from the requirements of section 510(k) of such Act pursuant to subsection (l) or (m) of section 510 of such Act or section 520(g) of such Act. Nothing in this clause shall be construed as requiring an application or prior approval (other than that described in subclause (II)) in order for a covered device described by a category to qualify for payment under this paragraph. (C) Limited period of payment.-- (i) Drugs and biologicals.--Subject to subparagraph (G), the payment under this paragraph with respect to a drug or biological shall only apply during a period of at least 2 years, but not more than 3 years, that begins-- (I) on the first date this subsection is implemented in the case of a drug or biological described in clause (i), (ii), or (iii) of subparagraph (A) and in the case of a drug or biological described in subparagraph (A)(iv) and for which payment under this part is made as an outpatient hospital service before such first date; or (II) in the case of a drug or biological described in subparagraph (A)(iv) not described in subclause (I), on the first date on which payment is made under this part for the drug or biological as an outpatient hospital service. (ii) Medical devices.--Payment shall be made under this paragraph with respect to a medical device only if such device-- (I) is described by a category of medical devices established and in effect under subparagraph (B); and (II) is provided as part of a service (or group of services) paid for under this subsection and provided during the period for which such category is in effect under such subparagraph. (D) Amount of additional payment.--Subject to subparagraph (E)(iii), the amount of the payment under this paragraph with respect to a device, drug, or biological provided as part of a covered OPD service is-- (i) subject to subparagraph (H), in the case of a drug or biological, the amount by which the amount determined under section 1842(o) (or if the drug or biological is covered under a competitive acquisition contract under section 1847B, an amount determined by the Secretary equal to the average price for the drug or biological for all competitive acquisition areas and year established under such section as calculated and adjusted by the Secretary for purposes of this paragraph) for the drug or biological exceeds the portion of the otherwise applicable medicare OPD fee schedule that the Secretary determines is associated with the drug or biological; or (ii) in the case of a medical device, the amount by which the hospital's charges for the device, adjusted to cost, exceeds the portion of the otherwise applicable medicare OPD fee schedule that the Secretary determines is associated with the device. (E) Limit on aggregate annual adjustment.-- (i) In general.--The total of the additional payments made under this paragraph for covered OPD services furnished in a year (as estimated by the Secretary before the beginning of the year) may not exceed the applicable percentage (specified in clause (ii)) of the total program payments estimated to be made under this subsection for all covered OPD services furnished in that year. If this paragraph is first applied to less than a full year, the previous sentence shall apply only to the portion of such year. This clause shall not apply for 2018. (ii) Applicable percentage.--For purposes of clause (i), the term ``applicable percentage'' means-- (I) for a year (or portion of a year) before 2004, 2.5 percent; and (II) for 2004 and thereafter, a percentage specified by the Secretary up to (but not to exceed) 2.0 percent. (iii) Uniform prospective reduction if aggregate limit projected to be exceeded.--If the Secretary estimates before the beginning of a year that the amount of the additional payments under this paragraph for the year (or portion thereof) as determined under clause (i) without regard to this clause will exceed the limit established under such clause, the Secretary shall reduce pro rata the amount of each of the additional payments under this paragraph for that year (or portion thereof) in order to ensure that the aggregate additional payments under this paragraph (as so estimated) do not exceed such limit. (F) Limitation of application of functional equivalence standard.-- (i) In general.--The Secretary may not publish regulations that apply a functional equivalence standard to a drug or biological under this paragraph. (ii) Application.--Clause (i) shall apply to the application of a functional equivalence standard to a drug or biological on or after the date of enactment of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 unless-- (I) such application was being made to such drug or biological prior to such date of enactment; and (II) the Secretary applies such standard to such drug or biological only for the purpose of determining eligibility of such drug or biological for additional payments under this paragraph and not for the purpose of any other payments under this title. (iii) Rule of construction.--Nothing in this subparagraph shall be construed to effect the Secretary's authority to deem a particular drug to be identical to another drug if the 2 products are pharmaceutically equivalent and bioequivalent, as determined by the Commissioner of Food and Drugs. (G) Pass-through extension for certain drugs and biologicals.--In the case of a drug or biological whose period of pass-through status under this paragraph ended on December 31, 2017, and for which payment under this subsection was packaged into a payment for a covered OPD service (or group of services) furnished beginning January 1, 2018, such pass- through status shall be extended for a 2-year period beginning on October 1, 2018. (H) Temporary payment rule for certain drugs and biologicals.--In the case of a drug or biological whose period of pass-through status under this paragraph ended on December 31, 2017, and for which payment under this subsection was packaged into a payment for a covered OPD service (or group of services) furnished beginning January 1, 2018, the payment amount for such drug or biological under this subsection that is furnished during the period beginning on October 1, 2018, and ending on March 31, 2019, shall be the greater of-- (i) the payment amount that would otherwise apply under subparagraph (D)(i) for such drug or biological during such period; or (ii) the payment amount that applied under such subparagraph (D)(i) for such drug or biological on December 31, 2017. (I) Special payment adjustment rules for last quarter of 2018.--In the case of a drug or biological whose period of pass-through status under this paragraph ended on December 31, 2017, and for which payment under this subsection was packaged into a payment amount for a covered OPD service (or group of services) beginning January 1, 2018, the following rules shall apply with respect to payment amounts under this subsection for covered a OPD service (or group of services) furnished during the period beginning on October 1, 2018, and ending on December 31, 2018: (i) The Secretary shall remove the packaged costs of such drug or biological (as determined by the Secretary) from the payment amount under this subsection for the covered OPD service (or group of services) with which it is packaged. (ii) The Secretary shall not make any adjustments to payment amounts under this subsection for a covered OPD service (or group of services) for which no costs were removed under clause (i). (7) Transitional adjustment to limit decline in payment.-- (A) Before 2002.--Subject to subparagraph (D), for covered OPD services furnished before January 1, 2002, for which the PPS amount (as defined in subparagraph (E)) is-- (i) at least 90 percent, but less than 100 percent, of the pre-BBA amount (as defined in subparagraph (F)), the amount of payment under this subsection shall be increased by 80 percent of the amount of such difference; (ii) at least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.71 and the pre-BBA amount, exceeds (II) the product of 0.70 and the PPS amount; (iii) at least 70 percent, but less than 80 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.63 and the pre-BBA amount, exceeds (II) the product of 0.60 and the PPS amount; or (iv) less than 70 percent of the pre- BBA amount, the amount of payment under this subsection shall be increased by 21 percent of the pre-BBA amount. (B) 2002.--Subject to subparagraph (D), for covered OPD services furnished during 2002, for which the PPS amount is-- (i) at least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by 70 percent of the amount of such difference; (ii) at least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.61 and the pre-BBA amount, exceeds (II) the product of 0.60 and the PPS amount; or (iii) less than 80 percent of the pre-BBA amount, the amount of payment under this subsection shall be increased by 13 percent of the pre-BBA amount. (C) 2003.--Subject to subparagraph (D), for covered OPD services furnished during 2003, for which the PPS amount is-- (i) at least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by 60 percent of the amount of such difference; or (ii) less than 90 percent of the pre- BBA amount, the amount of payment under this subsection shall be increased by 6 percent of the pre-BBA amount. (D) Hold harmless provisions.-- (i) Temporary treatment for certain rural hospitals.--(I) In the case of a hospital located in a rural area and that has not more than 100 beds or a sole community hospital (as defined in section 1886(d)(5)(D)(iii)) located in a rural area, for covered OPD services furnished before January 1, 2006, for which the PPS amount is less than the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount of such difference. (II) In the case of a hospital located in a rural area and that has not more than 100 beds and that is not a sole community hospital (as defined in section 1886(d)(5)(D)(iii)), for covered OPD services furnished on or after January 1, 2006, and before January 1, 2013, for which the PPS amount is less than the pre-BBA amount, the amount of payment under this subsection shall be increased by the applicable percentage of the amount of such difference. For purposes of the preceding sentence, the applicable percentage shall be 95 percent with respect to covered OPD services furnished in 2006, 90 percent with respect to such services furnished in 2007, and 85 percent with respect to such services furnished in 2008, 2009, 2010, 2011, or 2012. (III) In the case of a sole community hospital (as defined in section 1886(d)(5)(D)(iii)) that has not more than 100 beds, for covered OPD services furnished on or after January 1, 2009, and before January 1, 2013, for which the PPS amount is less than the pre-BBA amount, the amount of payment under this subsection shall be increased by 85 percent of the amount of such difference. In the case of covered OPD services furnished on or after January 1, 2010, and before March 1, 2012, the preceding sentence shall be applied without regard to the 100-bed limitation. (ii) Permanent treatment for cancer hospitals and children's hospitals.--In the case of a hospital described in clause (iii) or (v) of section 1886(d)(1)(B), for covered OPD services for which the PPS amount is less than the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount of such difference. (E) PPS amount defined.--In this paragraph, the term ``PPS amount'' means, with respect to covered OPD services, the amount payable under this title for such services (determined without regard to this paragraph), including amounts payable as copayment under paragraph (8), coinsurance under section 1866(a)(2)(A)(ii), and the deductible under section 1833(b). (F) Pre-BBA amount defined.-- (i) In general.--In this paragraph, the ``pre-BBA amount'' means, with respect to covered OPD services furnished by a hospital in a year, an amount equal to the product of the reasonable cost of the hospital for such services for the portions of the hospital's cost reporting period (or periods) occurring in the year and the base OPD payment-to-cost ratio for the hospital (as defined in clause (ii)). (ii) Base payment-to-cost-ratio defined.--For purposes of this subparagraph, the ``base payment-to- cost ratio'' for a hospital means the ratio of-- (I) the hospital's reimbursement under this part for covered OPD services furnished during the cost reporting period ending in 1996 (or in the case of a hospital that did not submit a cost report for such period, during the first subsequent cost reporting period ending before 2001 for which the hospital submitted a cost report), including any reimbursement for such services through cost- sharing described in subparagraph (E), to (II) the reasonable cost of such services for such period. The Secretary shall determine such ratios as if the amendments made by section 4521 of the Balanced Budget Act of 1997 were in effect in 1996. (G) Interim payments.--The Secretary shall make payments under this paragraph to hospitals on an interim basis, subject to retrospective adjustments based on settled cost reports. (H) No effect on copayments.--Nothing in this paragraph shall be construed to affect the unadjusted copayment amount described in paragraph (3)(B) or the copayment amount under paragraph (8). (I) Application without regard to budget neutrality.--The additional payments made under this paragraph-- (i) shall not be considered an adjustment under paragraph (2)(E); and (ii) shall not be implemented in a budget neutral manner. (8) Copayment amount.-- (A) In general.--Except as provided in subparagraphs (B) and (C), the copayment amount under this subsection is the amount by which the amount described in paragraph (4)(B) exceeds the amount of payment determined under paragraph (4)(C). (B) Election to offer reduced copayment amount.--The Secretary shall establish a procedure under which a hospital, before the beginning of a year (beginning with 1999), may elect to reduce the copayment amount otherwise established under subparagraph (A) for some or all covered OPD services to an amount that is not less than 20 percent of the medicare OPD fee schedule amount (computed under paragraph (3)(D)) for the service involved. Under such procedures, such reduced copayment amount may not be further reduced or increased during the year involved and the hospital may disseminate information on the reduction of copayment amount effected under this subparagraph. (C) Limitation on copayment amount.-- (i) To inpatient hospital deductible amount.--In no case shall the copayment amount for a procedure performed in a year exceed the amount of the inpatient hospital deductible established under section 1813(b) for that year. (ii) To specified percentage.--The Secretary shall reduce the national unadjusted copayment amount for a covered OPD service (or group of such services) furnished in a year in a manner so that the effective copayment rate (determined on a national unadjusted basis) for that service in the year does not exceed the following percentage: (I) For procedures performed in 2001, on or after April 1, 2001, 57 percent. (II) For procedures performed in 2002 or 2003, 55 percent. (III) For procedures performed in 2004, 50 percent. (IV) For procedures performed in 2005, 45 percent. (V) For procedures performed in 2006 and thereafter, 40 percent. (D) No impact on deductibles.--Nothing in this paragraph shall be construed as affecting a hospital's authority to waive the charging of a deductible under section 1833(b). (E) Computation ignoring outlier and pass- through adjustments.--The copayment amount shall be computed under subparagraph (A) as if the adjustments under paragraphs (5) and (6) (and any adjustment made under paragraph (2)(E) in relation to such adjustments) had not occurred. (9) Periodic review and adjustments components of prospective payment system.-- (A) Periodic review.--The Secretary shall review not less often than annually and revise the groups, the relative payment weights, and the wage and other adjustments described in paragraph (2) to take into account changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors. The Secretary shall consult with an expert outside advisory panel composed of an appropriate selection of representatives of providers and at least one ambulatory surgical center representative to review (and advise the Secretary concerning) the clinical integrity of the groups and weights. Such panel may use data collected or developed by entities and organizations (other than the Department of Health and Human Services) in conducting such review. (B) Budget neutrality adjustment.--If the Secretary makes adjustments under subparagraph (A), then the adjustments for a year may not cause the estimated amount of expenditures under this part for the year to increase or decrease from the estimated amount of expenditures under this part that would have been made if the adjustments had not been made. In determining adjustments under the preceding sentence for 2004 and 2005, the Secretary shall not take into account under this subparagraph or paragraph (2)(E) any expenditures that would not have been made but for the application of paragraph (14). (C) Update factor.--If the Secretary determines under methodologies described in paragraph (2)(F) that the volume of services paid for under this subsection increased beyond amounts established through those methodologies, the Secretary may appropriately adjust the update to the conversion factor otherwise applicable in a subsequent year. (10) Special rule for ambulance services.--The Secretary shall pay for hospital outpatient services that are ambulance services on the basis described in section 1861(v)(1)(U), or, if applicable, the fee schedule established under section 1834(l). (11) Special rules for certain hospitals.--In the case of hospitals described in clause (iii) or (v) of section 1886(d)(1)(B)-- (A) the system under this subsection shall not apply to covered OPD services furnished before January 1, 2000; and (B) the Secretary may establish a separate conversion factor for such services in a manner that specifically takes into account the unique costs incurred by such hospitals by virtue of their patient population and service intensity. (12) Limitation on review.--There shall be no administrative or judicial review under section 1869, 1878, or otherwise of-- (A) the development of the classification system under paragraph (2), including the establishment of groups and relative payment weights for covered OPD services, of wage adjustment factors, other adjustments, and methods described in paragraph (2)(F); (B) the calculation of base amounts under paragraph (3); (C) periodic adjustments made under paragraph (6); (D) the establishment of a separate conversion factor under paragraph (8)(B); and (E) the determination of the fixed multiple, or a fixed dollar cutoff amount, the marginal cost of care, or applicable percentage under paragraph (5) or the determination of insignificance of cost, the duration of the additional payments, the determination and deletion of initial and new categories (consistent with subparagraphs (B) and (C) of paragraph (6)), the portion of the medicare OPD fee schedule amount associated with particular devices, drugs, or biologicals, and the application of any pro rata reduction under paragraph (6). (13) Authorization of adjustment for rural hospitals.-- (A) Study.--The Secretary shall conduct a study to determine if, under the system under this subsection, costs incurred by hospitals located in rural areas by ambulatory payment classification groups (APCs) exceed those costs incurred by hospitals located in urban areas. (B) Authorization of adjustment.--Insofar as the Secretary determines under subparagraph (A) that costs incurred by hospitals located in rural areas exceed those costs incurred by hospitals located in urban areas, the Secretary shall provide for an appropriate adjustment under paragraph (2)(E) to reflect those higher costs by January 1, 2006. (14) Drug apc payment rates.-- (A) In general.--The amount of payment under this subsection for a specified covered outpatient drug (defined in subparagraph (B)) that is furnished as part of a covered OPD service (or group of services)-- (i) in 2004, in the case of-- (I) a sole source drug shall in no case be less than 88 percent, or exceed 95 percent, of the reference average wholesale price for the drug; (II) an innovator multiple source drug shall in no case exceed 68 percent of the reference average wholesale price for the drug; or (III) a noninnovator multiple source drug shall in no case exceed 46 percent of the reference average wholesale price for the drug; (ii) in 2005, in the case of-- (I) a sole source drug shall in no case be less than 83 percent, or exceed 95 percent, of the reference average wholesale price for the drug; (II) an innovator multiple source drug shall in no case exceed 68 percent of the reference average wholesale price for the drug; or (III) a noninnovator multiple source drug shall in no case exceed 46 percent of the reference average wholesale price for the drug; or (iii) in a subsequent year, shall be equal, subject to subparagraph (E)-- (I) to the average acquisition cost for the drug for that year (which, at the option of the Secretary, may vary by hospital group (as defined by the Secretary based on volume of covered OPD services or other relevant characteristics)), as determined by the Secretary taking into account the hospital acquisition cost survey data under subparagraph (D); or (II) if hospital acquisition cost data are not available, the average price for the drug in the year established under section 1842(o), section 1847A, or section 1847B, as the case may be, as calculated and adjusted by the Secretary as necessary for purposes of this paragraph. (B) Specified covered outpatient drug defined.-- (i) In general.--In this paragraph, the term ``specified covered outpatient drug'' means, subject to clause (ii), a covered outpatient drug (as defined in section 1927(k)(2)) for which a separate ambulatory payment classification group (APC) has been established and that is-- (I) a radiopharmaceutical; or (II) a drug or biological for which payment was made under paragraph (6) (relating to pass-through payments) on or before December 31, 2002. (ii) Exception.--Such term does not include-- (I) a drug or biological for which payment is first made on or after January 1, 2003, under paragraph (6); (II) a drug or biological for which a temporary HCPCS code has not been assigned; or (III) during 2004 and 2005, an orphan drug (as designated by the Secretary). (C) Payment for designated orphan drugs during 2004 and 2005.--The amount of payment under this subsection for an orphan drug designated by the Secretary under subparagraph (B)(ii)(III) that is furnished as part of a covered OPD service (or group of services) during 2004 and 2005 shall equal such amount as the Secretary may specify. (D) Acquisition cost survey for hospital outpatient drugs.-- (i) Annual gao surveys in 2004 and 2005.-- (I) In general.--The Comptroller General of the United States shall conduct a survey in each of 2004 and 2005 to determine the hospital acquisition cost for each specified covered outpatient drug. Not later than April 1, 2005, the Comptroller General shall furnish data from such surveys to the Secretary for use in setting the payment rates under subparagraph (A) for 2006. (II) Recommendations.--Upon the completion of such surveys, the Comptroller General shall recommend to the Secretary the frequency and methodology of subsequent surveys to be conducted by the Secretary under clause (ii). (ii) Subsequent secretarial surveys.--The Secretary, taking into account such recommendations, shall conduct periodic subsequent surveys to determine the hospital acquisition cost for each specified covered outpatient drug for use in setting the payment rates under subparagraph (A). (iii) Survey requirements.--The surveys conducted under clauses (i) and (ii) shall have a large sample of hospitals that is sufficient to generate a statistically significant estimate of the average hospital acquisition cost for each specified covered outpatient drug. With respect to the surveys conducted under clause (i), the Comptroller General shall report to Congress on the justification for the size of the sample used in order to assure the validity of such estimates. (iv) Differentiation in cost.--In conducting surveys under clause (i), the Comptroller General shall determine and report to Congress if there is (and the extent of any) variation in hospital acquisition costs for drugs among hospitals based on the volume of covered OPD services performed by such hospitals or other relevant characteristics of such hospitals (as defined by the Comptroller General). (v) Comment on proposed rates.--Not later than 30 days after the date the Secretary promulgated proposed rules setting forth the payment rates under subparagraph (A) for 2006, the Comptroller General shall evaluate such proposed rates and submit to Congress a report regarding the appropriateness of such rates based on the surveys the Comptroller General has conducted under clause (i). (E) Adjustment in payment rates for overhead costs.-- (i) Medpac report on drug apc design.--The Medicare Payment Advisory Commission shall submit to the Secretary, not later than July 1, 2005, a report on adjustment of payment for ambulatory payment classifications for specified covered outpatient drugs to take into account overhead and related expenses, such as pharmacy services and handling costs. Such report shall include-- (I) a description and analysis of the data available with regard to such expenses; (II) a recommendation as to whether such a payment adjustment should be made; and (III) if such adjustment should be made, a recommendation regarding the methodology for making such an adjustment. (ii) Adjustment authorized.--The Secretary may adjust the weights for ambulatory payment classifications for specified covered outpatient drugs to take into account the recommendations contained in the report submitted under clause (i). (F) Classes of drugs.--For purposes of this paragraph: (i) Sole source drugs.--The term ``sole source drug'' means-- (I) a biological product (as defined under section 1861(t)(1)); or (II) a single source drug (as defined in section 1927(k)(7)(A)(iv)). (ii) Innovator multiple source drugs.--The term ``innovator multiple source drug'' has the meaning given such term in section 1927(k)(7)(A)(ii). (iii) Noninnovator multiple source drugs.--The term ``noninnovator multiple source drug'' has the meaning given such term in section 1927(k)(7)(A)(iii). (G) Reference average wholesale price.--The term ``reference average wholesale price'' means, with respect to a specified covered outpatient drug, the average wholesale price for the drug as determined under section 1842(o) as of May 1, 2003. (H) Inapplicability of expenditures in determining conversion, weighting, and other adjustment factors.--Additional expenditures resulting from this paragraph shall not be taken into account in establishing the conversion, weighting, and other adjustment factors for 2004 and 2005 under paragraph (9), but shall be taken into account for subsequent years. (15) Payment for new drugs and biologicals until hcpcs code assigned.--With respect to payment under this part for an outpatient drug or biological that is covered under this part and is furnished as part of covered OPD services for which a HCPCS code has not been assigned, the amount provided for payment for such drug or biological under this part shall be equal to 95 percent of the average wholesale price for the drug or biological. (16) Miscellaneous provisions.-- (A) Application of reclassification of certain hospitals.--If a hospital is being treated as being located in a rural area under section 1886(d)(8)(E), that hospital shall be treated under this subsection as being located in that rural area. (B) Threshold for establishment of separate apcs for drugs.--The Secretary shall reduce the threshold for the establishment of separate ambulatory payment classification groups (APCs) with respect to drugs or biologicals to $50 per administration for drugs and biologicals furnished in 2005 and 2006. (C) Payment for devices of brachytherapy and therapeutic radiopharmaceuticals at charges adjusted to cost.--Notwithstanding the preceding provisions of this subsection, for a device of brachytherapy consisting of a seed or seeds (or radioactive source) furnished on or after January 1, 2004, and before January 1, 2010, and for therapeutic radiopharmaceuticals furnished on or after January 1, 2008, and before January 1, 2010, the payment basis for the device or therapeutic radiopharmaceutical under this subsection shall be equal to the hospital's charges for each device or therapeutic radiopharmaceutical furnished, adjusted to cost. Charges for such devices or therapeutic radiopharmaceuticals shall not be included in determining any outlier payment under this subsection. (D) Special payment rule.-- (i) In general.--In the case of covered OPD services furnished on or after April 1, 2013, in a hospital described in clause (ii), if-- (I) the payment rate that would otherwise apply under this subsection for stereotactic radiosurgery, complete course of treatment of cranial lesion(s) consisting of 1 session that is multi-source Cobalt 60 based (identified as of January 1, 2013, by HCPCS code 77371 (and any succeeding code) and reimbursed as of such date under APC 0127 (and any succeeding classification group)); exceeds (II) the payment rate that would otherwise apply under this subsection for linear accelerator based stereotactic radiosurgery, complete course of therapy in one session (identified as of January 1, 2013, by HCPCS code G0173 (and any succeeding code) and reimbursed as of such date under APC 0067 (and any succeeding classification group)), the payment rate for the service described in subclause (I) shall be reduced to an amount equal to the payment rate for the service described in subclause (II). (ii) Hospital described.--A hospital described in this clause is a hospital that is not-- (I) located in a rural area (as defined in section 1886(d)(2)(D)); (II) classified as a rural referral center under section 1886(d)(5)(C); or (III) a sole community hospital (as defined in section 1886(d)(5)(D)(iii)). (iii) Not budget neutral.--In making any budget neutrality adjustments under this subsection for 2013 (with respect to covered OPD services furnished on or after April 1, 2013, and before January 1, 2014) or a subsequent year, the Secretary shall not take into account the reduced expenditures that result from the application of this subparagraph. (E) Application of appropriate use criteria for certain imaging services.--For provisions relating to the application of appropriate use criteria for certain imaging services, see section 1834(q). (F) Payment incentive for the transition from traditional x-ray imaging to digital radiography.--Notwithstanding the previous provisions of this subsection: (i) Limitation on payment for film x- ray imaging services.--In the case of an imaging service that is an X-ray taken using film and that is furnished during 2017 or a subsequent year, the payment amount for such service (including the X-ray component of a packaged service) that would otherwise be determined under this section (without application of this paragraph and before application of any other adjustment under this subsection) for such year shall be reduced by 20 percent. (ii) Phased-in limitation on payment for computed radiography imaging services.--In the case of an imaging service that is an X-ray taken using computed radiography technology (as defined in section 1848(b)(9)(C))-- (I) in the case of such a service furnished during 2018, 2019, 2020, 2021, or 2022, the payment amount for such service (including the X-ray component of a packaged service) that would otherwise be determined under this section (without application of this paragraph and before application of any other adjustment under this subsection) for such year shall be reduced by 7 percent; and (II) in the case of such a service furnished during 2023 or a subsequent year, the payment amount for such service (including the X-ray component of a packaged service) that would otherwise be determined under this section (without application of this paragraph and before application of any other adjustment under this subsection) for such year shall be reduced by 10 percent. (iii) Application without regard to budget neutrality.--The reductions made under this subparagraph-- (I) shall not be considered an adjustment under paragraph (2)(E); and (II) shall not be implemented in a budget neutral manner. (iv) Implementation.--In order to implement this subparagraph, the Secretary shall adopt appropriate mechanisms which may include use of modifiers. (17) Quality reporting.-- (A) Reduction in update for failure to report.-- (i) In general.--For purposes of paragraph (3)(C)(iv) for 2009 and each subsequent year, in the case of a subsection (d) hospital (as defined in section 1886(d)(1)(B)) that does not submit, to the Secretary in accordance with this paragraph, data required to be submitted on measures selected under this paragraph with respect to such a year, the OPD fee schedule increase factor under paragraph (3)(C)(iv) for such year shall be reduced by 2.0 percentage points. (ii) Non-cumulative application.--A reduction under this subparagraph shall apply only with respect to the year involved and the Secretary shall not take into account such reduction in computing the OPD fee schedule increase factor for a subsequent year. (B) Form and manner of submission.--Each subsection (d) hospital shall submit data on measures selected under this paragraph to the Secretary in a form and manner, and at a time, specified by the Secretary for purposes of this paragraph. (C) Development of outpatient measures.-- (i) In general.--The Secretary shall develop measures that the Secretary determines to be appropriate for the measurement of the quality of care (including medication errors) furnished by hospitals in outpatient settings and that reflect consensus among affected parties and, to the extent feasible and practicable, shall include measures set forth by one or more national consensus building entities. (ii) Construction.--Nothing in this paragraph shall be construed as preventing the Secretary from selecting measures that are the same as (or a subset of) the measures for which data are required to be submitted under section 1886(b)(3)(B)(viii). (D) Replacement of measures.--For purposes of this paragraph, the Secretary may replace any measures or indicators in appropriate cases, such as where all hospitals are effectively in compliance or the measures or indicators have been subsequently shown not to represent the best clinical practice. (E) Availability of data.--The Secretary shall establish procedures for making data submitted under this paragraph available to the public. Such procedures shall ensure that a hospital has the opportunity to review the data that are to be made public with respect to the hospital prior to such data being made public. The Secretary shall report quality measures of process, structure, outcome, patients' perspectives on care, efficiency, and costs of care that relate to services furnished in outpatient settings in hospitals on the Internet website of the Centers for Medicare & Medicaid Services. (18) Authorization of adjustment for cancer hospitals.-- (A) Study.--The Secretary shall conduct a study to determine if, under the system under this subsection, costs incurred by hospitals described in section 1886(d)(1)(B)(v) with respect to ambulatory payment classification groups exceed those costs incurred by other hospitals furnishing services under this subsection (as determined appropriate by the Secretary). In conducting the study under this subparagraph, the Secretary shall take into consideration the cost of drugs and biologicals incurred by such hospitals. (B) Authorization of adjustment.--Insofar as the Secretary determines under subparagraph (A) that costs incurred by hospitals described in section 1886(d)(1)(B)(v) exceed those costs incurred by other hospitals furnishing services under this subsection, the Secretary shall, subject to subparagraph (C), provide for an appropriate adjustment under paragraph (2)(E) to reflect those higher costs effective for services furnished on or after January 1, 2011. (C) Target pcr adjustment.--In applying section 419.43(i) of title 42 of the Code of Federal Regulations to implement the appropriate adjustment under this paragraph for services furnished on or after January 1, 2018, the Secretary shall use a target PCR that is 1.0 percentage points less than the target PCR that would otherwise apply. In addition to the percentage point reduction under the previous sentence, the Secretary may consider making an additional percentage point reduction to such target PCR that takes into account payment rates for applicable items and services described in paragraph (21)(C) other than for services furnished by hospitals described in section 1886(d)(1)(B)(v). In making any budget neutrality adjustments under this subsection for 2018 or a subsequent year, the Secretary shall not take into account the reduced expenditures that result from the application of this subparagraph. (19) Floor on area wage adjustment factor for hospital outpatient department services in frontier states.-- (A) In general.--Subject to subparagraph (B), with respect to covered OPD services furnished on or after January 1, 2011, the area wage adjustment factor applicable under the payment system established under this subsection to any hospital outpatient department which is located in a frontier State (as defined in section 1886(d)(3)(E)(iii)(II)) may not be less than 1.00. The preceding sentence shall not be applied in a budget neutral manner. (B) Limitation.--This paragraph shall not apply to any hospital outpatient department located in a State that receives a non-labor related share adjustment under section 1886(d)(5)(H). (20) Not budget neutral application of reduced expenditures resulting from quality incentives for computed tomography.--The Secretary shall not take into account the reduced expenditures that result from the application of section 1834(p) in making any budget neutrality adjustments this subsection. (21) Services furnished by an off-campus outpatient department of a provider.-- (A) Applicable items and services.--For purposes of paragraph (1)(B)(v) and this paragraph, the term ``applicable items and services'' means items and services other than items and services furnished by a dedicated emergency department (as defined in section 489.24(b) of title 42 of the Code of Federal Regulations). (B) Off-campus outpatient department of a provider.-- (i) In general.--For purposes of paragraph (1)(B)(v) and this paragraph, subject to the subsequent provisions of this subparagraph, the term ``off- campus outpatient department of a provider'' means a department of a provider (as defined in section 413.65(a)(2) of title 42 of the Code of Federal Regulations, as in effect as of the date of the enactment of this paragraph) that is not located-- (I) on the campus (as defined in such section 413.65(a)(2)) of such provider; or (II) within the distance (described in such definition of campus) from a remote location of a hospital facility (as defined in such section 413.65(a)(2)). (ii) Exception.--For purposes of paragraph (1)(B)(v) and this paragraph, the term ``off-campus outpatient department of a provider'' shall not include a department of a provider (as so defined) that was billing under this subsection with respect to covered OPD services furnished prior to the date of the enactment of this paragraph. (iii) Deemed treatment for 2017.--For purposes of applying clause (ii) with respect to applicable items and services furnished during 2017, a department of a provider (as so defined) not described in such clause is deemed to be billing under this subsection with respect to covered OPD services furnished prior to November 2, 2015, if the Secretary received from the provider prior to December 2, 2015, an attestation (pursuant to section 413.65(b)(3) of title 42 of the Code of Federal Regulations) that such department was a department of a provider (as so defined). (iv) Alternative exception beginning with 2018.--For purposes of paragraph (1)(B)(v) and this paragraph with respect to applicable items and services furnished during 2018 or a subsequent year, the term ``off-campus outpatient department of a provider'' also shall not include a department of a provider (as so defined) that is not described in clause (ii) if-- (I) the Secretary receives from the provider an attestation (pursuant to such section 413.65(b)(3)) not later than December 31, 2016 (or, if later, 60 days after the date of the enactment of this clause), that such department met the requirements of a department of a provider specified in section 413.65 of title 42 of the Code of Federal Regulations; (II) the provider includes such department as part of the provider on its enrollment form in accordance with the enrollment process under section 1866(j); and (III) the department met the mid-build requirement of clause (v) and the Secretary receives, not later than 60 days after the date of the enactment of this clause, from the chief executive officer or chief operating officer of the provider a written certification that the department met such requirement. (v) Mid-build requirement described.--The mid-build requirement of this clause is, with respect to a department of a provider, that before November 2, 2015, the provider had a binding written agreement with an outside unrelated party for the actual construction of such department. (vi) Exclusion for certain cancer hospitals.--For purposes of paragraph (1)(B)(v) and this paragraph with respect to applicable items and services furnished during 2017 or a subsequent year, the term ``off-campus outpatient department of a provider'' also shall not include a department of a provider (as so defined) that is not described in clause (ii) if the provider is a hospital described in section 1886(d)(1)(B)(v) and-- (I) in the case of a department that met the requirements of section 413.65 of title 42 of the Code of Federal Regulations after November 1, 2015, and before the date of the enactment of this clause, the Secretary receives from the provider an attestation that such department met such requirements not later than 60 days after such date of enactment; or (II) in the case of a department that meets such requirements after such date of enactment, the Secretary receives from the provider an attestation that such department meets such requirements not later than 60 days after the date such requirements are first met with respect to such department. (vii) Audit.--Not later than December 31, 2018, the Secretary shall audit the compliance with requirements of clause (iv) with respect to each department of a provider to which such clause applies. Not later than 2 years after the date the Secretary receives an attestation under clause (vi) relating to compliance of a department of a provider with requirements referred to in such clause, the Secretary shall audit the compliance with such requirements with respect to the department. If the Secretary finds as a result of an audit under this clause that the applicable requirements were not met with respect to such department, the department shall not be excluded from the term ``off-campus outpatient department of a provider'' under such clause. (viii) Implementation.--For purposes of implementing clauses (iii) through (vii): (I) Notwithstanding any other provision of law, the Secretary may implement such clauses by program instruction or otherwise. (II) Subchapter I of chapter 35 of title 44, United States Code, shall not apply. (III) For purposes of carrying out this subparagraph with respect to clauses (iii) and (iv) (and clause (vii) insofar as it relates to clause (iv)), $10,000,000 shall be available from the Federal Supplementary Medical Insurance Trust Fund under section 1841, to remain available until December 31, 2018. For purposes of carrying out this subparagraph with respect to clause (vi) (and clause (vii) insofar as it relates to such clause), $2,000,000 shall be available from the Federal Supplementary Medical Insurance Trust Fund under section 1841, to remain available until expended. (C) Availability of payment under other payment systems.--Payments for applicable items and services furnished by an off-campus outpatient department of a provider that are described in paragraph (1)(B)(v) shall be made under the applicable payment system under this part (other than under this subsection) if the requirements for such payment are otherwise met. (D) Information needed for implementation.-- Each hospital shall provide to the Secretary such information as the Secretary determines appropriate to implement this paragraph and paragraph (1)(B)(v) (which may include reporting of information on a hospital claim using a code or modifier and reporting information about off-campus outpatient departments of a provider on the enrollment form described in section 1866(j)). (E) Limitations.--There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of the following: (i) The determination of the applicable items and services under subparagraph (A) and applicable payment systems under subparagraph (C). (ii) The determination of whether a department of a provider meets the term described in subparagraph (B). (iii) Any information that hospitals are required to report pursuant to subparagraph (D). (iv) The determination of an audit under subparagraph (B)(vii). (22) Review and revisions of payments for non-opioid alternative treatments.-- (A) In general.--With respect to payments made under this subsection for covered OPD services (or groups of services), including covered OPD services assigned to a comprehensive ambulatory payment classification, the Secretary-- (i) shall, as soon as practicable, conduct a review (part of which may include a request for information) of payments for opioids and evidence-based non-opioid alternatives for pain management (including drugs and devices, nerve blocks, surgical injections, and neuromodulation) with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives; (ii) may, as the Secretary determines appropriate, conduct subsequent reviews of such payments; and (iii) shall consider the extent to which revisions under this subsection to such payments (such as the creation of additional groups of covered OPD services to classify separately those procedures that utilize opioids and non-opioid alternatives for pain management) would reduce payment incentives to use opioids instead of non-opioid alternatives for pain management. (B) Priority.--In conducting the review under clause (i) of subparagraph (A) and considering revisions under clause (iii) of such subparagraph, the Secretary shall focus on covered OPD services (or groups of services) assigned to a comprehensive ambulatory payment classification, ambulatory payment classifications that primarily include surgical services, and other services determined by the Secretary which generally involve treatment for pain management. (C) Revisions.--If the Secretary identifies revisions to payments pursuant to subparagraph (A)(iii), the Secretary shall, as determined appropriate, begin making such revisions for services furnished on or after January 1, 2020. Revisions under the previous sentence shall be treated as adjustments for purposes of application of paragraph (9)(B). (D) Rules of construction.--Nothing in this paragraph shall be construed to preclude the Secretary-- (i) from conducting a demonstration before making the revisions described in subparagraph (C); or (ii) prior to implementation of this paragraph, from changing payments under this subsection for covered OPD services (or groups of services) which include opioids or non-opioid alternatives for pain management. (u) Incentive Payments for Physician Scarcity Areas.-- (1) In general.--In the case of physicians' services furnished on or after January 1, 2005, and before July 1, 2008-- (A) by a primary care physician in a primary care scarcity county (identified under paragraph (4)); or (B) by a physician who is not a primary care physician in a specialist care scarcity county (as so identified), in addition to the amount of payment that would otherwise be made for such services under this part, there also shall be paid an amount equal to 5 percent of the payment amount for the service under this part. (2) Determination of ratios of physicians to medicare beneficiaries in area.--Based upon available data, the Secretary shall establish for each county or equivalent area in the United States, the following: (A) Number of physicians practicing in the area.--The number of physicians who furnish physicians' services in the active practice of medicine or osteopathy in that county or area, other than physicians whose practice is exclusively for the Federal Government, physicians who are retired, or physicians who only provide administrative services. Of such number, the number of such physicians who are-- (i) primary care physicians; or (ii) physicians who are not primary care physicians. (B) Number of medicare beneficiaries residing in the area.--The number of individuals who are residing in the county and are entitled to benefits under part A or enrolled under this part, or both (in this subsection referred to as ``individuals''). (C) Determination of ratios.-- (i) Primary care ratio.--The ratio (in this paragraph referred to as the ``primary care ratio'') of the number of primary care physicians (determined under subparagraph (A)(i)), to the number of individuals determined under subparagraph (B). (ii) Specialist care ratio.--The ratio (in this paragraph referred to as the ``specialist care ratio'') of the number of other physicians (determined under subparagraph (A)(ii)), to the number of individuals determined under subparagraph (B). (3) Ranking of counties.--The Secretary shall rank each such county or area based separately on its primary care ratio and its specialist care ratio. (4) Identification of counties.-- (A) In general.--The Secretary shall identify-- (i) those counties and areas (in this paragraph referred to as ``primary care scarcity counties'') with the lowest primary care ratios that represent, if each such county or area were weighted by the number of individuals determined under paragraph (2)(B), an aggregate total of 20 percent of the total of the individuals determined under such paragraph; and (ii) those counties and areas (in this subsection referred to as ``specialist care scarcity counties'') with the lowest specialist care ratios that represent, if each such county or area were weighted by the number of individuals determined under paragraph (2)(B), an aggregate total of 20 percent of the total of the individuals determined under such paragraph. (B) Periodic revisions.--The Secretary shall periodically revise the counties or areas identified in subparagraph (A) (but not less often than once every three years) unless the Secretary determines that there is no new data available on the number of physicians practicing in the county or area or the number of individuals residing in the county or area, as identified in paragraph (2). (C) Identification of counties where service is furnished.--For purposes of paying the additional amount specified in paragraph (1), if the Secretary uses the 5-digit postal ZIP Code where the service is furnished, the dominant county of the postal ZIP Code (as determined by the United States Postal Service, or otherwise) shall be used to determine whether the postal ZIP Code is in a scarcity county identified in subparagraph (A) or revised in subparagraph (B). (D) Special rule.--With respect to physicians' services furnished on or after January 1, 2008, and before July 1, 2008, for purposes of this subsection, the Secretary shall use the primary care scarcity counties and the specialty care scarcity counties (as identified under the preceding provisions of this paragraph) that the Secretary was using under this subsection with respect to physicians' services furnished on December 31, 2007. (E) Judicial review.--There shall be no administrative or judicial review under section 1869, 1878, or otherwise, respecting-- 116.(i) the identification of a county or area; (ii) the assignment of a specialty of any physician under this paragraph; (iii) the assignment of a physician to a county under paragraph (2); or (iv) the assignment of a postal ZIP Code to a county or other area under this subsection. (5) Rural census tracts.--To the extent feasible, the Secretary shall treat a rural census tract of a metropolitan statistical area (as determined under the most recent modification of the Goldsmith Modification, originally published in the Federal Register on February 27, 1992 (57 Fed. Reg. 6725)), as an equivalent area for purposes of qualifying as a primary care scarcity county or specialist care scarcity county under this subsection. (6) Physician Defined.--For purposes of this paragraph, the term ``physician'' means a physician described in section 1861(r)(1) and the term ``primary care physician'' means a physician who is identified in the available data as a general practitioner, family practice practitioner, general internist, or obstetrician or gynecologist. (7) Publication of list of counties; posting on website.--With respect to a year for which a county or area is identified or revised under paragraph (4), the Secretary shall identify such counties or areas as part of the proposed and final rule to implement the physician fee schedule under section 1848 for the applicable year. The Secretary shall post the list of counties identified or revised under paragraph (4) on the Internet website of the Centers for Medicare & Medicaid Services. (v) Increase of FQHC Payment Limits.--In the case of services furnished by Federally qualified health centers (as defined in section 1861(aa)(4)), the Secretary shall establish payment limits with respect to such services under this part for services furnished-- (1) in 2010, at the limits otherwise established under this part for such year increased by $5; and (2) in a subsequent year, at the limits established under this subsection for the previous year increased by the percentage increase in the MEI (as defined in section 1842(i)(3)) for such subsequent year. (w) Methods of Payment.--The Secretary may develop alternative methods of payment for items and services provided under clinical trials and comparative effectiveness studies sponsored or supported by an agency of the Department of Health and Human Services, as determined by the Secretary, to those that would otherwise apply under this section, to the extent such alternative methods are necessary to preserve the scientific validity of such trials or studies, such as in the case where masking the identity of interventions from patients and investigators is necessary to comply with the particular trial or study design. (x) Incentive Payments for Primary Care Services.-- (1) In general.--In the case of primary care services furnished on or after January 1, 2011, and before January 1, 2016, by a primary care practitioner, in addition to the amount of payment that would otherwise be made for such services under this part, there also shall be paid (on a monthly or quarterly basis) an amount equal to 10 percent of the payment amount for the service under this part. (2) Definitions.--In this subsection: (A) Primary care practitioner.--The term ``primary care practitioner'' means an individual-- (i) who-- (I) is a physician (as described in section 1861(r)(1)) who has a primary specialty designation of family medicine, internal medicine, geriatric medicine, or pediatric medicine; or (II) is a nurse practitioner, clinical nurse specialist, or physician assistant (as those terms are defined in section 1861(aa)(5)); and (ii) for whom primary care services accounted for at least 60 percent of the allowed charges under this part for such physician or practitioner in a prior period as determined appropriate by the Secretary. (B) Primary care services.--The term ``primary care services'' means services identified, as of January 1, 2009, by the following HCPCS codes (and as subsequently modified by the Secretary): (i) 99201 through 99215. (ii) 99304 through 99340. (iii) 99341 through 99350. (3) Coordination with other payments.--The amount of the additional payment for a service under this subsection and subsection (m) shall be determined without regard to any additional payment for the service under subsection (m) and this subsection, respectively. The amount of the additional payment for a service under this subsection and subsection (z) shall be determined without regard to any additional payment for the service under subsection (z) and this subsection, respectively. (4) Limitation on review.--There shall be no administrative or judicial review under section 1869, 1878, or otherwise, respecting the identification of primary care practitioners under this subsection. (y) Incentive Payments for Major Surgical Procedures Furnished in Health Professional Shortage Areas.-- (1) In general.--In the case of major surgical procedures furnished on or after January 1, 2011, and before January 1, 2016, by a general surgeon in an area that is designated (under section 332(a)(1)(A) of the Public Health Service Act) as a health professional shortage area as identified by the Secretary prior to the beginning of the year involved, in addition to the amount of payment that would otherwise be made for such services under this part, there also shall be paid (on a monthly or quarterly basis) an amount equal to 10 percent of the payment amount for the service under this part. (2) Definitions.--In this subsection: (A) General surgeon.--In this subsection, the term ``general surgeon'' means a physician (as described in section 1861(r)(1)) who has designated CMS specialty code 02-General Surgery as their primary specialty code in the physician's enrollment under section 1866(j). (B) Major surgical procedures.--The term ``major surgical procedures'' means physicians' services which are surgical procedures for which a 10-day or 90-day global period is used for payment under the fee schedule under section 1848(b). (3) Coordination with other payments.--The amount of the additional payment for a service under this subsection and subsection (m) shall be determined without regard to any additional payment for the service under subsection (m) and this subsection, respectively. The amount of the additional payment for a service under this subsection and subsection (z) shall be determined without regard to any additional payment for the service under subsection (z) and this subsection, respectively. (4) Application.--The provisions of paragraph (2) and (4) of subsection (m) shall apply to the determination of additional payments under this subsection in the same manner as such provisions apply to the determination of additional payments under subsection (m). (z) Incentive Payments for Participation in Eligible Alternative Payment Models.-- (1) Payment incentive.-- (A) In general.--In the case of covered professional services furnished by an eligible professional during a year that is in the period beginning with 2019 and ending with 2024 and for which the professional is a qualifying APM participant with respect to such year, in addition to the amount of payment that would otherwise be made for such covered professional services under this part for such year, there also shall be paid to such professional an amount equal to 5 percent of the estimated aggregate payment amounts for such covered professional services under this part for the preceding year. For purposes of the previous sentence, the payment amount for the preceding year may be an estimation for the full preceding year based on a period of such preceding year that is less than the full year. The Secretary shall establish policies to implement this subparagraph in cases in which payment for covered professional services furnished by a qualifying APM participant in an alternative payment model-- (i) is made to an eligible alternative payment entity rather than directly to the qualifying APM participant; or (ii) is made on a basis other than a fee-for-service basis (such as payment on a capitated basis). (B) Form of payment.--Payments under this subsection shall be made in a lump sum, on an annual basis, as soon as practicable. (C) Treatment of payment incentive.--Payments under this subsection shall not be taken into account for purposes of determining actual expenditures under an alternative payment model and for purposes of determining or rebasing any benchmarks used under the alternative payment model. (D) Coordination.--The amount of the additional payment under this subsection or subsection (m) shall be determined without regard to any additional payment under subsection (m) and this subsection, respectively. The amount of the additional payment under this subsection or subsection (x) shall be determined without regard to any additional payment under subsection (x) and this subsection, respectively. The amount of the additional payment under this subsection or subsection (y) shall be determined without regard to any additional payment under subsection (y) and this subsection, respectively. (2) Qualifying apm participant.--For purposes of this subsection, the term ``qualifying APM participant'' means the following: (A) 2019 and 2020.--With respect to 2019 and 2020, an eligible professional for whom the Secretary determines that at least 25 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an eligible alternative payment entity. (B) 2021 and 2022.--With respect to 2021 and 2022, an eligible professional described in either of the following clauses: (i) Medicare payment threshold option.--An eligible professional for whom the Secretary determines that at least 50 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an eligible alternative payment entity. (ii) Combination all-payer and medicare payment threshold option.--An eligible professional-- (I) for whom the Secretary determines, with respect to items and services furnished by such professional during the most recent period for which data are available (which may be less than a year), that at least 50 percent of the sum of-- (aa) payments described in clause (i); and (bb) all other payments, regardless of payer (other than payments made by the Secretary of Defense or the Secretary of Veterans Affairs and other than payments made under title XIX in a State in which no medical home or alternative payment model is available under the State program under that title), meet the requirement described in clause (iii)(I) with respect to payments described in item (aa) and meet the requirement described in clause (iii)(II) with respect to payments described in item (bb); (II) for whom the Secretary determines at least 25 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an eligible alternative payment entity; and (III) who provides to the Secretary such information as is necessary for the Secretary to make a determination under subclause (I), with respect to such professional. (iii) Requirement.--For purposes of clause (ii)(I)-- (I) the requirement described in this subclause, with respect to payments described in item (aa) of such clause, is that such payments are made to an eligible alternative payment entity; and (II) the requirement described in this subclause, with respect to payments described in item (bb) of such clause, is that such payments are made under arrangements in which-- (aa) quality measures comparable to measures under the performance category described in section 1848(q)(2)(B)(i) apply; (bb) certified EHR technology is used; and (cc) the eligible professional participates in an entity that-- (AA) bears more than nominal financial risk if actual aggregate expenditures exceeds expected aggregate expenditures; or (BB) with respect to beneficiaries under title XIX, is a medical home that meets criteria comparable to medical homes expanded under section 1115A(c). (C) Beginning in 2023.--With respect to 2023 and each subsequent year, an eligible professional described in either of the following clauses: (i) Medicare payment threshold option.--An eligible professional for whom the Secretary determines that at least 75 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an eligible alternative payment entity. (ii) Combination all-payer and medicare payment threshold option.--An eligible professional-- (I) for whom the Secretary determines, with respect to items and services furnished by such professional during the most recent period for which data are available (which may be less than a year), that at least 75 percent of the sum of-- (aa) payments described in clause (i); and (bb) all other payments, regardless of payer (other than payments made by the Secretary of Defense or the Secretary of Veterans Affairs and other than payments made under title XIX in a State in which no medical home or alternative payment model is available under the State program under that title), meet the requirement described in clause (iii)(I) with respect to payments described in item (aa) and meet the requirement described in clause (iii)(II) with respect to payments described in item (bb); (II) for whom the Secretary determines at least 25 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an eligible alternative payment entity; and (III) who provides to the Secretary such information as is necessary for the Secretary to make a determination under subclause (I), with respect to such professional. (iii) Requirement.--For purposes of clause (ii)(I)-- (I) the requirement described in this subclause, with respect to payments described in item (aa) of such clause, is that such payments are made to an eligible alternative payment entity; and (II) the requirement described in this subclause, with respect to payments described in item (bb) of such clause, is that such payments are made under arrangements in which-- (aa) quality measures comparable to measures under the performance category described in section 1848(q)(2)(B)(i) apply; (bb) certified EHR technology is used; and (cc) the eligible professional participates in an entity that-- (AA) bears more than nominal financial risk if actual aggregate expenditures exceeds expected aggregate expenditures; or (BB) with respect to beneficiaries under title XIX, is a medical home that meets criteria comparable to medical homes expanded under section 1115A(c). (D) Use of patient approach.--The Secretary may base the determination of whether an eligible professional is a qualifying APM participant under this subsection and the determination of whether an eligible professional is a partial qualifying APM participant under section 1848(q)(1)(C)(iii) by using counts of patients in lieu of using payments and using the same or similar percentage criteria (as specified in this subsection and such section, respectively), as the Secretary determines appropriate. (3) Additional definitions.--In this subsection: (A) Covered professional services.--The term ``covered professional services'' has the meaning given that term in section 1848(k)(3)(A). (B) Eligible professional.--The term ``eligible professional'' has the meaning given that term in section 1848(k)(3)(B) and includes a group that includes such professionals. (C) Alternative payment model (apm).--The term ``alternative payment model'' means, other than for purposes of subparagraphs (B)(ii)(I)(bb) and (C)(ii)(I)(bb) of paragraph (2), any of the following: (i) A model under section 1115A (other than a health care innovation award). (ii) The shared savings program under section 1899. (iii) A demonstration under section 1866C. (iv) A demonstration required by Federal law. (D) Eligible alternative payment entity.--The term ``eligible alternative payment entity'' means, with respect to a year, an entity that-- (i) participates in an alternative payment model that-- (I) requires participants in such model to use certified EHR technology (as defined in subsection (o)(4)); and (II) provides for payment for covered professional services based on quality measures comparable to measures under the performance category described in section 1848(q)(2)(B)(i); and (ii)(I) bears financial risk for monetary losses under such alternative payment model that are in excess of a nominal amount; or (II) is a medical home expanded under section 1115A(c). (4) Limitation.--There shall be no administrative or judicial review under section 1869, 1878, or otherwise, of the following: (A) The determination that an eligible professional is a qualifying APM participant under paragraph (2) and the determination that an entity is an eligible alternative payment entity under paragraph (3)(D). (B) The determination of the amount of the 5 percent payment incentive under paragraph (1)(A), including any estimation as part of such determination. (aa) Medical Review of Spinal Subluxation Services.-- (1) In general.--The Secretary shall implement a process for the medical review (as described in paragraph (2)) of treatment by a chiropractor described in section 1861(r)(5) by means of manual manipulation of the spine to correct a subluxation (as described in such section) of an individual who is enrolled under this part and apply such process to such services furnished on or after January 1, 2017, focusing on services such as-- (A) services furnished by a such a chiropractor whose pattern of billing is aberrant compared to peers; and (B) services furnished by such a chiropractor who, in a prior period, has a services denial percentage in the 85th percentile or greater, taking into consideration the extent that service denials are overturned on appeal. (2) Medical review.-- (A) Prior authorization medical review.-- (i) In general.--Subject to clause (ii), the Secretary shall use prior authorization medical review for services described in paragraph (1) that are furnished to an individual by a chiropractor described in section 1861(r)(5) that are part of an episode of treatment that includes more than 12 services. For purposes of the preceding sentence, an episode of treatment shall be determined by the underlying cause that justifies the need for services, such as a diagnosis code. (ii) Ending application of prior authorization medical review.--The Secretary shall end the application of prior authorization medical review under clause (i) to services described in paragraph (1) by such a chiropractor if the Secretary determines that the chiropractor has a low denial rate under such prior authorization medical review. The Secretary may subsequently reapply prior authorization medical review to such chiropractor if the Secretary determines it to be appropriate and the chiropractor has, in the time period subsequent to the determination by the Secretary of a low denial rate with respect to the chiropractor, furnished such services described in paragraph (1). (iii) Early request for prior authorization review permitted.-- Nothing in this subsection shall be construed to prevent such a chiropractor from requesting prior authorization for services described in paragraph (1) that are to be furnished to an individual before the chiropractor furnishes the twelfth such service to such individual for an episode of treatment. (B) Type of review.--The Secretary may use pre-payment review or post-payment review of services described in section 1861(r)(5) that are not subject to prior authorization medical review under subparagraph (A). (C) Relationship to law enforcement activities.--The Secretary may determine that medical review under this subsection does not apply in the case where potential fraud may be involved. (3) No payment without prior authorization.--With respect to a service described in paragraph (1) for which prior authorization medical review under this subsection applies, the following shall apply: (A) Prior authorization determination.--The Secretary shall make a determination, prior to the service being furnished, of whether the service would or would not meet the applicable requirements of section 1862(a)(1)(A). (B) Denial of payment.--Subject to paragraph (5), no payment may be made under this part for the service unless the Secretary determines pursuant to subparagraph (A) that the service would meet the applicable requirements of such section 1862(a)(1)(A). (4) Submission of information.--A chiropractor described in section 1861(r)(5) may submit the information necessary for medical review by fax, by mail, or by electronic means. The Secretary shall make available the electronic means described in the preceding sentence as soon as practicable. (5) Timeliness.--If the Secretary does not make a prior authorization determination under paragraph (3)(A) within 14 business days of the date of the receipt of medical documentation needed to make such determination, paragraph (3)(B) shall not apply. (6) Application of limitation on beneficiary liability.--Where payment may not be made as a result of the application of paragraph (2)(B), section 1879 shall apply in the same manner as such section applies to a denial that is made by reason of section 1862(a)(1). (7) Review by contractors.--The medical review described in paragraph (2) may be conducted by medicare administrative contractors pursuant to section 1874A(a)(4)(G) or by any other contractor determined appropriate by the Secretary that is not a recovery audit contractor. (8) Multiple services.--The Secretary shall, where practicable, apply the medical review under this subsection in a manner so as to allow an individual described in paragraph (1) to obtain, at a single time rather than on a service-by-service basis, an authorization in accordance with paragraph (3)(A) for multiple services. (9) Construction.--With respect to a service described in paragraph (1) that has been affirmed by medical review under this subsection, nothing in this subsection shall be construed to preclude the subsequent denial of a claim for such service that does not meet other applicable requirements under this Act. (10) Implementation.-- (A) Authority.--The Secretary may implement the provisions of this subsection by interim final rule with comment period. (B) Administration.--Chapter 35 of title 44, United States Code, shall not apply to medical review under this subsection. (bb) Additional Payments for Certain Rural Health Clinics With Physicians or Practitioners Receiving DATA 2000 Waivers.-- (1) In general.--In the case of a rural health clinic with respect to which, beginning on or after January 1, 2019, rural health clinic services (as defined in section 1861(aa)(1)) are furnished for the treatment of opioid use disorder by a physician or practitioner who meets the requirements described in paragraph (3), the Secretary shall, subject to availability of funds under paragraph (4), make a payment (at such time and in such manner as specified by the Secretary) to such rural health clinic after receiving and approving an application described in paragraph (2). Such payment shall be in an amount determined by the Secretary, based on an estimate of the average costs of training for purposes of receiving a waiver described in paragraph (3)(B). Such payment may be made only one time with respect to each such physician or practitioner. (2) Application.--In order to receive a payment described in paragraph (1), a rural health clinic shall submit to the Secretary an application for such a payment at such time, in such manner, and containing such information as specified by the Secretary. A rural health clinic may apply for such a payment for each physician or practitioner described in paragraph (1) furnishing services described in such paragraph at such clinic. (3) Requirements.--For purposes of paragraph (1), the requirements described in this paragraph, with respect to a physician or practitioner, are the following: (A) The physician or practitioner is employed by or working under contract with a rural health clinic described in paragraph (1) that submits an application under paragraph (2). (B) The physician or practitioner first receives a waiver under section 303(g) of the Controlled Substances Act on or after January 1, 2019. (4) Funding.--For purposes of making payments under this subsection, there are appropriated, out of amounts in the Treasury not otherwise appropriated, $2,000,000, which shall remain available until expended. SPECIAL PAYMENT RULES FOR PARTICULAR ITEMS AND SERVICES Sec. 1834. (a) Payment for Durable Medical Equipment.-- (1) General rule for payment.-- (A) In general.--With respect to a covered item (as defined in paragraph (13)) for which payment is determined under this subsection, payment shall be made in the frequency specified in paragraphs (2) through (7) and in an amount equal to 80 percent of the payment basis described in subparagraph (B). (B) Payment basis.--Subject to subparagraph (F)(i), the payment basis described in this subparagraph is the lesser of-- (i) the actual charge for the item, or (ii) the payment amount recognized under paragraphs (2) through (7) of this subsection for the item; except that clause (i) shall not apply if the covered item is furnished by a public home health agency (or by another home health agency which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low income) free of charge or at nominal charges to the public. (C) Exclusive payment rule.--Subject to subparagraph (F)(ii), this subsection shall constitute the exclusive provision of this title for payment for covered items under this part or under part A to a home health agency. (D) Reduction in fee schedules for certain items.--With respect to a seat-lift chair or transcutaneous electrical nerve stimulator furnished on or after April 1, 1990, the Secretary shall reduce the payment amount applied under subparagraph (B)(ii) for such an item by 15 percent, and, in the case of a transcutaneous electrical nerve stimulator furnished on or after January 1, 1991, the Secretary shall further reduce such payment amount (as previously reduced) by 45 percent. (E) Clinical conditions for coverage.-- (i) In general.--The Secretary shall establish standards for clinical conditions for payment for covered items under this subsection. (ii) Requirements.--The standards established under clause (i) shall include the specification of types or classes of covered items that require, as a condition of payment under this subsection, a face-to-face examination of the individual by a physician (as defined in section 1861(r)), a physician assistant, nurse practitioner, or a clinical nurse specialist (as those terms are defined in section 1861(aa)(5)) and a prescription for the item. (iii) Priority of establishment of standards.--In establishing the standards under this subparagraph, the Secretary shall first establish standards for those covered items for which the Secretary determines there has been a proliferation of use, consistent findings of charges for covered items that are not delivered, or consistent findings of falsification of documentation to provide for payment of such covered items under this part. (iv) Standards for power wheelchairs.--Effective on the date of the enactment of this subparagraph, in the case of a covered item consisting of a motorized or power wheelchair for an individual, payment may not be made for such covered item unless a physician (as defined in section 1861(r)(1)), a physician assistant, nurse practitioner, or a clinical nurse specialist (as those terms are defined in section 1861(aa)(5)) has conducted a face-to-face examination of the individual and written a prescription for the item. (v) Limitation on payment for covered items.--Payment may not be made for a covered item under this subsection unless the item meets any standards established under this subparagraph for clinical condition of coverage. (F) Application of competitive acquisition; limitation of inherent reasonableness authority.--In the case of covered items furnished on or after January 1, 2011, subject to subparagraphs (G) and (H), that are included in a competitive acquisition program in a competitive acquisition area under section 1847(a)-- (i) the payment basis under this subsection for such items and services furnished in such area shall be the payment basis determined under such competitive acquisition program; (ii) the Secretary may (and, in the case of covered items furnished on or after January 1, 2016, subject to clause (iii), shall) use information on the payment determined under such competitive acquisition programs to adjust the payment amount otherwise recognized under subparagraph (B)(ii) for an area that is not a competitive acquisition area under section 1847 and in the case of such adjustment, paragraph (10)(B) shall not be applied; and (iii) in the case of covered items furnished on or after January 1, 2016, the Secretary shall continue to make such adjustments described in clause (ii) as, under such competitive acquisition programs, additional covered items are phased in or information is updated as contracts under section 1847 are recompeted in accordance with section 1847(b)(3)(B). (G) Use of information on competitive bid rates.--The Secretary shall specify by regulation the methodology to be used in applying the provisions of subparagraph (F)(ii) and subsection (h)(1)(H)(ii). In promulgating such regulation, the Secretary shall consider the costs of items and services in areas in which such provisions would be applied compared to the payment rates for such items and services in competitive acquisition areas.In the case of items and services furnished on or after January 1, 2019, in making any adjustments under clause (ii) or (iii) of subparagraph (F), under subsection (h)(1)(H)(ii), or under section 1842(s)(3)(B), the Secretary shall-- (i) solicit and take into account stakeholder input; and (ii) take into account the highest amount bid by a winning supplier in a competitive acquisition area and a comparison of each of the following with respect to non-competitive acquisition areas and competitive acquisition areas: (I) The average travel distance and cost associated with furnishing items and services in the area. (II) The average volume of items and services furnished by suppliers in the area. (III) The number of suppliers in the area. (H) Diabetic supplies.-- (i) In general.--On or after the date described in clause (ii), the payment amount under this part for diabetic supplies, including testing strips, that are non-mail order items (as defined by the Secretary) shall be equal to the single payment amounts established under the national mail order competition for diabetic supplies under section 1847. (ii) Date described.--The date described in this clause is the date of the implementation of the single payment amounts under the national mail order competition for diabetic supplies under section 1847. (I) Treatment of vacuum erection systems.-- Effective for items and services furnished on and after July 1, 2015, vacuum erection systems described as prosthetic devices described in section 1861(s)(8) shall be treated in the same manner as erectile dysfunction drugs are treated for purposes of section 1860D- 2(e)(2)(A). (2) Payment for inexpensive and other routinely purchased durable medical equipment.-- (A) In general.--Payment for an item of durable medical equipment (as defined in paragraph (13))-- (i) the purchase price of which does not exceed $150, (ii) which the Secretary determines is acquired at least 75 percent of the time by purchase, (iii) which is an accessory used in conjunction with a nebulizer, aspirator, or a ventilator excluded under paragraph (3)(A), or (iv) in the case of devices furnished on or after October 1, 2015, which serves as a speech generating device or which is an accessory that is needed for the individual to effectively utilize such a device, shall be made on a rental basis or in a lump- sum amount for the purchase of the item. The payment amount recognized for purchase or rental of such equipment is the amount specified in subparagraph (B) for purchase or rental, except that the total amount of payments with respect to an item may not exceed the payment amount specified in subparagraph (B) with respect to the purchase of the item. (B) Payment amount.--For purposes of subparagraph (A), the amount specified in this subparagraph, with respect to the purchase or rental of an item furnished in a carrier service area-- (i) in 1989 and in 1990 is the average reasonable charge in the area for the purchase or rental, respectively, of the item for the 12- month period ending on June 30, 1987, increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6-month period ending with December 1987; (ii) in 1991 is the sum of (I) 67 percent of the local payment amount for the item or device computed under subparagraph (C)(i)(I) for 1991, and (II) 33 percent of the national limited payment amount for the item or device computed under subparagraph (C)(ii) for 1991; (iii) in 1992 is the sum of (I) 33 percent of the local payment amount for the item or device computed under subparagraph (C)(i)(II) for 1992, and (II) 67 percent of the national limited payment amount for the item or device computed under subparagraph (C)(ii) for 1992; and (iv) in 1993 and each subsequent year is the national limited payment amount for the item or device computed under subparagraph (C)(ii) for that year (reduced by 10 percent, in the case of a blood glucose testing strip furnished after 1997 for an individual with diabetes). (C) Computation of local payment amount and national limited payment amount.--For purposes of subparagraph (B)-- (i) the local payment amount for an item or device for a year is equal to-- (I) for 1991, the amount specified in subparagraph (B)(i) for 1990 increased by the covered item update for 1991, and (II) for 1992, 1993, and 1994 the amount determined under this clause for the preceding year increased by the covered item update for the year; and (ii) the national limited payment amount for an item or device for a year is equal to-- (I) for 1991, the local payment amount determined under clause (i) for such item or device for that year, except that the national limited payment amount may not exceed 100 percent of the weighted average of all local payment amounts determined under such clause for such item for that year and may not be less than 85 percent of the weighted average of all local payment amounts determined under such clause for such item, (II) for 1992 and 1993, the amount determined under this clause for the preceding year increased by the covered item update for such subsequent year, (III) for 1994, the local payment amount determined under clause (i) for such item or device for that year, except that the national limited payment amount may not exceed 100 percent of the median of all local payment amounts determined under such clause for such item for that year and may not be less than 85 percent of the median of all local payment amounts determined under such clause for such item or device for that year, and (IV) for each subsequent year, the amount determined under this clause for the preceding year increased by the covered item update for such subsequent year. (3) Payment for items requiring frequent and substantial servicing.-- (A) In general.--Payment for a covered item (such as IPPB machines and ventilators, excluding ventilators that are either continuous airway pressure devices or intermittent assist devices with continuous airway pressure devices) for which there must be frequent and substantial servicing in order to avoid risk to the patient's health shall be made on a monthly basis for the rental of the item and the amount recognized is the amount specified in subparagraph (B). (B) Payment amount.--For purposes of subparagraph (A), the amount specified in this subparagraph, with respect to an item or device furnished in a carrier service area-- (i) in 1989 and in 1990 is the average reasonable charge in the area for the rental of the item or device for the 12-month period ending with June 1987, increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6-month period ending with December 1987; (ii) in 1991 is the sum of (I) 67 percent of the local payment amount for the item or device computed under subparagraph (C)(i)(I) for 1991, and (II) 33 percent of the national limited payment amount for the item or device computed under subparagraph (C)(ii) for 1991; (iii) in 1992 is the sum of (I) 33 percent of the local payment amount for the item or device computed under subparagraph (C)(i)(II) for 1992, and (II) 67 percent of the national limited payment amount for the item or device computed under subparagraph (C)(ii) for 1992; and (iv) in 1993 and each subsequent year is the national limited payment amount for the item or device computed under subparagraph (C)(ii) for that year. (C) Computation of local payment amount and national limited payment amount.--For purposes of subparagraph (B)-- (i) the local payment amount for an item or device for a year is equal to-- (I) for 1991, the amount specified in subparagraph (B)(i) for 1990 increased by the covered item update for 1991, and (II) for 1992, 1993, and 1994 the amount determined under this clause for the preceding year increased by the covered item update for the year; and (ii) the national limited payment amount for an item or device for a year is equal to-- (I) for 1991, the local payment amount determined under clause (i) for such item or device for that year, except that the national limited payment amount may not exceed 100 percent of the weighted average of all local payment amounts determined under such clause for such item for that year and may not be less than 85 percent of the weighted average of all local payment amounts determined under such clause for such item, (II) for 1992 and 1993, the amount determined under this clause for the preceding year increased by the covered item update for such subsequent year, (III) for 1994, the local payment amount determined under clause (i) for such item or device for that year, except that the national limited payment amount may not exceed 100 percent of the median of all local payment amounts determined under such clause for such item for that year and may not be less than 85 percent of the median of all local payment amounts determined under such clause for such item or device for that year, and (IV) for each subsequent year, the amount determined under this clause for the preceding year increased by the covered item update for such subsequent year. (4) Payment for certain customized items.--Payment with respect to a covered item that is uniquely constructed or substantially modified to meet the specific needs of an individual patient, and for that reason cannot be grouped with similar items for purposes of payment under this title, shall be made in a lump-sum amount (A) for the purchase of the item in a payment amount based upon the carrier's individual consideration for that item, and (B) for the reasonable and necessary maintenance and servicing for parts and labor not covered by the supplier's or manufacturer's warranty, when necessary during the period of medical need, and the amount recognized for such maintenance and servicing shall be paid on a lump-sum, as needed basis based upon the carrier's individual consideration for that item. In the case of a wheelchair furnished on or after January 1, 1992, the wheelchair shall be treated as a customized item for purposes of this paragraph if the wheelchair has been measured, fitted, or adapted in consideration of the patient's body size, disability, period of need, or intended use, and has been assembled by a supplier or ordered from a manufacturer who makes available customized features, modifications, or components for wheelchairs that are intended for an individual patient's use in accordance with instructions from the patient's physician. (5) Payment for oxygen and oxygen equipment.-- (A) In general.--Payment for oxygen and oxygen equipment shall be made on a monthly basis in the monthly payment amount recognized under paragraph (9) for oxygen and oxygen equipment (other than portable oxygen equipment), subject to subparagraphs (B), (C), (E), and (F). (B) Add-on for portable oxygen equipment.-- When portable oxygen equipment is used, but subject to subparagraph (D), the payment amount recognized under subparagraph (A) shall be increased by the monthly payment amount recognized under paragraph (9) for portable oxygen equipment. (C) Volume adjustment.--When the attending physician prescribes an oxygen flow rate-- (i) exceeding 4 liters per minute, the payment amount recognized under subparagraph (A), subject to subparagraph (D), shall be increased by 50 percent, or (ii) of less than 1 liter per minute, the payment amount recognized under subparagraph (A) shall be decreased by 50 percent. (D) Limit on adjustment.--When portable oxygen equipment is used and the attending physician prescribes an oxygen flow rate exceeding 4 liters per minute, there shall only be an increase under either subparagraph (B) or (C), whichever increase is larger, and not under both such subparagraphs. (E) Recertification for patients receiving home oxygen therapy.--In the case of a patient receiving home oxygen therapy services who, at the time such services are initiated, has an initial arterial blood gas value at or above a partial pressure of 56 or an arterial oxygen saturation at or above 89 percent (or such other values, pressures, or criteria as the Secretary may specify) no payment may be made under this part for such services after the expiration of the 90-day period that begins on the date the patient first receives such services unless the patient's attending physician certifies that, on the basis of a follow-up test of the patient's arterial blood gas value or arterial oxygen saturation conducted during the final 30 days of such 90- day period, there is a medical need for the patient to continue to receive such services. (F) Rental Cap.-- (i) In general.--Payment for oxygen equipment (including portable oxygen equipment) under this paragraph may not extend over a period of continuous use (as determined by the Secretary) of longer than 36 months. (ii) Payments and rules after rental cap.--After the 36th continuous month during which payment is made for the equipment under this paragraph-- (I) the supplier furnishing such equipment under this subsection shall continue to furnish the equipment during any period of medical need for the remainder of the reasonable useful lifetime of the equipment, as determined by the Secretary; (II) payments for oxygen shall continue to be made in the amount recognized for oxygen under paragraph (9) for the period of medical need; and (III) maintenance and servicing payments shall, if the Secretary determines such payments are reasonable and necessary, be made (for parts and labor not covered by the supplier's or manufacturer's warranty, as determined by the Secretary to be appropriate for the equipment), and such payments shall be in an amount determined to be appropriate by the Secretary. (6) Payment for other covered items (other than durable medical equipment).--Payment for other covered items (other than durable medical equipment and other covered items described in paragraph (3), (4), or (5)) shall be made in a lump-sum amount for the purchase of the item in the amount of the purchase price recognized under paragraph (8). (7) Payment for other items of durable medical equipment.-- (A) Payment.--In the case of an item of durable medical equipment not described in paragraphs (2) through (6), the following rules shall apply: (i) Rental.-- (I) In general.--Except as provided in clause (iii), payment for the item shall be made on a monthly basis for the rental of the item during the period of medical need (but payments under this clause may not extend over a period of continuous use (as determined by the Secretary) of longer than 13 months). (II) Payment amount.--Subject to subclause (III) and subparagraph (B), the amount recognized for the item, for each of the first 3 months of such period, is 10 percent of the purchase price recognized under paragraph (8) with respect to the item, and, for each of the remaining months of such period, is 7.5 percent of such purchase price. (III) Special rule for power- driven wheelchairs.--For purposes of payment for power- driven wheelchairs, subclause (II) shall be applied by substituting ``15 percent'' and ``6 percent'' for ``10 percent'' and ``7.5 percent'', respectively. (ii) Ownership after rental.--On the first day that begins after the 13th continuous month during which payment is made for the rental of an item under clause (i), the supplier of the item shall transfer title to the item to the individual. (iii) Purchase agreement option for complex, rehabilitative power-driven wheelchairs.--In the case of a complex, rehabilitative power-driven wheelchair, at the time the supplier furnishes the item, the supplier shall offer the individual the option to purchase the item, and payment for such item shall be made on a lump-sum basis if the individual exercises such option. (iv) Maintenance and servicing.-- After the supplier transfers title to the item under clause (ii) or in the case of a power-driven wheelchair for which a purchase agreement has been entered into under clause (iii), maintenance and servicing payments shall, if the Secretary determines such payments are reasonable and necessary, be made (for parts and labor not covered by the supplier's or manufacturer's warranty, as determined by the Secretary to be appropriate for the particular type of durable medical equipment), and such payments shall be in an amount determined to be appropriate by the Secretary. (B) Range for rental amounts.-- (i) For 1989.--For items furnished during 1989, the payment amount recognized under subparagraph (A)(i) shall not be more than 115 percent, and shall not be less than 85 percent, of the prevailing charge established for rental of the item in January 1987, increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6-month period ending with December 1987. (ii) For 1990.--For items furnished during 1990, clause (i) shall apply in the same manner as it applies to items furnished during 1989. (C) Replacement of items.-- (i) Establishment of reasonable useful lifetime.--In accordance with clause (iii), the Secretary shall determine and establish a reasonable useful lifetime for items of durable medical equipment for which payment may be made under this paragraph. (ii) Payment for replacement items.-- If the reasonable lifetime of such an item, as so established, has been reached during a continuous period of medical need, or the carrier determines that the item is lost or irreparably damaged, the patient may elect to have payment for an item serving as a replacement for such item made-- (I) on a monthly basis for the rental of the replacement item in accordance with subparagraph (A); or (II) in the case of an item for which a purchase agreement has been entered into under subparagraph (A)(iii), in a lump-sum amount for the purchase of the item. (iii) Length of reasonable useful lifetime.--The reasonable useful lifetime of an item of durable medical equipment under this subparagraph shall be equal to 5 years, except that, if the Secretary determines that, on the basis of prior experience in making payments for such an item under this title, a reasonable useful lifetime of 5 years is not appropriate with respect to a particular item, the Secretary shall establish an alternative reasonable lifetime for such item. (8) Purchase price recognized for miscellaneous devices and items.--For purposes of paragraphs (6) and (7), the amount that is recognized under this paragraph as the purchase price for a covered item is the amount described in subparagraph (C) of this paragraph, determined as follows: (A) Computation of local purchase price.-- Each carrier under section 1842 shall compute a base local purchase price for the item as follows: (i) The carrier shall compute a base local purchase price, for each item described-- (I) in paragraph (6) equal to the average reasonable charge in the locality for the purchase of the item for the 12-month period ending with June 1987, or (II) in paragraph (7) equal to the average of the purchase prices on the claims submitted on an assignment-related basis for the unused item supplied during the 6-month period ending with December 1986. (ii) The carrier shall compute a local purchase price, with respect to the furnishing of each particular item-- (I) in 1989 and 1990, equal to the base local purchase price computed under clause (i) increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6- month period ending with December 1987, (II) in 1991, equal to the local purchase price computed under this clause for the previous year, increased by the covered item update for 1991, and decreased by the percentage by which the average of the reasonable charges for claims paid for all items described in paragraph (7) is lower than the average of the purchase prices submitted for such items during the final 9 months of 1988; or (III) in 1992, 1993, and 1994 equal to the local purchase price computed under this clause for the previous year increased by the covered item update for the year. (B) Computation of national limited purchase price.--With respect to the furnishing of a particular item in a year, the Secretary shall compute a national limited purchase price-- (i) for 1991, equal to the local purchase price computed under subparagraph (A)(ii) for the item for the year, except that such national limited purchase price may not exceed 100 percent of the weighted average of all local purchase prices for the item computed under such subparagraph for the year, and may not be less than 85 percent of the weighted average of all local purchase prices for the item computed under such subparagraph for the year; (ii) for 1992 and 1993, the amount determined under this subparagraph for the preceding year increased by the covered item update for such subsequent year; (iii) for 1994, the local purchase price computed under subparagraph (A)(ii) for the item for the year, except that such national limited purchase price may not exceed 100 percent of the median of all local purchase prices computed for the item under such subparagraph for the year and may not be less than 85 percent of the median of all local purchase prices computed under such subparagraph for the item for the year; and (iv) for each subsequent year, equal to the amount determined under this subparagraph for the preceding year increased by the covered item update for such subsequent year. (C) Purchase price recognized.--For purposes of paragraphs (6) and (7), the amount that is recognized under this paragraph as the purchase price for each item furnished-- (i) in 1989 or 1990, is 100 percent of the local purchase price computed under subparagraph (A)(ii)(I); (ii) in 1991, is the sum of (I) 67 percent of the local purchase price computed under subparagraph (A)(ii)(II) for 1991, and (II) 33 percent of the national limited purchase price computed under subparagraph (B) for 1991; (iii) in 1992, is the sum of (I) 33 percent of the local purchase price computed under subparagraph (A)(ii)(III) for 1992, and (II) 67 percent of the national limited purchase price computed under subparagraph (B) for 1992; and (iv) in 1993 or a subsequent year, is the national limited purchase price computed under subparagraph (B) for that year. (9) Monthly payment amount recognized with respect to oxygen and oxygen equipment.--For purposes of paragraph (5), the amount that is recognized under this paragraph for payment for oxygen and oxygen equipment is the monthly payment amount described in subparagraph (C) of this paragraph. Such amount shall be computed separately (i) for all items of oxygen and oxygen equipment (other than portable oxygen equipment) and (ii) for portable oxygen equipment (each such group referred to in this paragraph as an ``item''). (A) Computation of local monthly payment rate.--Each carrier under this section shall compute a base local payment rate for each item as follows: (i) The carrier shall compute a base local average monthly payment rate per beneficiary as an amount equal to (I) the total reasonable charges for the item during the 12-month period ending with December 1986, divided by (II) the total number of months for all beneficiaries receiving the item in the area during the 12-month period for which the carrier made payment for the item under this title. (ii) The carrier shall compute a local average monthly payment rate for the item applicable-- (I) to 1989 and 1990, equal to 95 percent of the base local average monthly payment rate computed under clause (i) for the item increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6-month period ending with December 1987, or (II) to 1991, 1992, 1993, and 1994 equal to the local average monthly payment rate computed under this clause for the item for the previous year increased by the covered item increase for the year. (B) Computation of national limited monthly payment rate.--With respect to the furnishing of an item in a year, the Secretary shall compute a national limited monthly payment rate equal to-- (i) for 1991, the local monthly payment rate computed under subparagraph (A)(ii)(II) for the item for the year, except that such national limited monthly payment rate may not exceed 100 percent of the weighted average of all local monthly payment rates computed for the item under such subparagraph for the year, and may not be less than 85 percent of the weighted average of all local monthly payment rates computed for the item under such subparagraph for the year; (ii) for 1992 and 1993, the amount determined under this subparagraph for the preceding year increased by the covered item update for such subsequent year; (iii) for 1994, the local monthly payment rate computed under subparagraph (A)(ii) for the item for the year, except that such national limited monthly payment rate may not exceed 100 percent of the median of all local monthly payment rates computed for the item under such subparagraph for the year and may not be less than 85 percent of the median of all local monthly payment rates computed for the item under such subparagraph for the year; (iv) for 1995, 1996, and 1997, equal to the amount determined under this subparagraph for the preceding year increased by the covered item update for such subsequent year; (v) for 1998, 75 percent of the amount determined under this subparagraph for 1997; and (vi) for 1999 and each subsequent year, 70 percent of the amount determined under this subparagraph for 1997. (C) Monthly payment amount recognized.--For purposes of paragraph (5), the amount that is recognized under this paragraph as the base monthly payment amount for each item furnished-- (i) in 1989 and in 1990, is 100 percent of the local average monthly payment rate computed under subparagraph (A)(ii) for the item; (ii) in 1991, is the sum of (I) 67 percent of the local average monthly payment rate computed under subparagraph (A)(ii)(II) for the item for 1991, and (II) 33 percent of the national limited monthly payment rate computed under subparagraph (B)(i) for the item for 1991; (iii) in 1992, is the sum of (I) 33 percent of the local average monthly payment rate computed under subparagraph (A)(ii)(II) for the item for 1992, and (II) 67 percent of the national limited monthly payment rate computed under subparagraph (B)(ii) for the item for 1992; and (iv) in a subsequent year, is the national limited monthly payment rate computed under subparagraph (B) for the item for that year. (10) Exceptions and adjustments.-- (A) Areas outside continental united states.--Exceptions to the amounts recognized under the previous provisions of this subsection shall be made to take into account the unique circumstances of covered items furnished in Alaska, Hawaii, or Puerto Rico. (B) Adjustment for inherent reasonableness.-- The Secretary is authorized to apply the provisions of paragraphs (8) and (9) of section 1842(b) to covered items and suppliers of such items and payments under this subsection in an area and with respect to covered items and services for which the Secretary does not make a payment amount adjustment under paragraph (1)(F). (C) Transcutaneous electrical nerve stimulator (tens).--In order to permit an attending physician time to determine whether the purchase of a transcutaneous electrical nerve stimulator is medically appropriate for a particular patient, the Secretary may determine an appropriate payment amount for the initial rental of such item for a period of not more than 2 months. If such item is subsequently purchased, the payment amount with respect to such purchase is the payment amount determined under paragraph (2). (11) Improper billing and requirement of physician order.-- (A) Improper billing for certain rental items.--Notwithstanding any other provision of this title, a supplier of a covered item for which payment is made under this subsection and which is furnished on a rental basis shall continue to supply the item without charge (other than a charge provided under this subsection for the maintenance and servicing of the item) after rental payments may no longer be made under this subsection. If a supplier knowingly and willfully violates the previous sentence, the Secretary may apply sanctions against the supplier under section 1842(j)(2) in the same manner such sanctions may apply with respect to a physician. (B) Requirement of physician order.-- (i) In general.--The Secretary is authorized to require, for specified covered items, that payment may be made under this subsection with respect to the item only if a physician enrolled under section 1866(j) or an eligible professional under section 1848(k)(3)(B) that is enrolled under section 1866(j) has communicated to the supplier, before delivery of the item, a written order for the item. (ii) Requirement for face to face encounter.--The Secretary shall require that such an order be written pursuant to a physician, a physician assistant, a nurse practitioner, or a clinical nurse specialist (as those terms are defined in section 1861(aa)(5)) documenting such physician, physician assistant, practitioner, or specialist has had a face-to-face encounter (including through use of telehealth under subsection (m) and other than with respect to encounters that are incident to services involved) with the individual involved during the 6-month period preceding such written order, or other reasonable timeframe as determined by the Secretary. (12) Regional carriers.--The Secretary may designate, by regulation under section 1842, one carrier for one or more entire regions to process all claims within the region for covered items under this section. (13) Covered item.--In this subsection, the term ``covered item'' means durable medical equipment (as defined in section 1861(n)), including such equipment described in section 1861(m)(5), but not including implantable items for which payment may be made under section 1833(t). (14) Covered item update.--In this subsection, the term ``covered item update'' means, with respect to a year-- (A) for 1991 and 1992, the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12- month period ending with June of the previous year reduced by 1 percentage point; (B) for 1993, 1994, 1995, 1996, and 1997, the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year; (C) for each of the years 1998 through 2000, 0 percentage points; (D) for 2001, the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June 2000; (E) for 2002, 0 percentage points; (F) for 2003, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June of 2002; (G) for 2004 through 2006-- (i) subject to clause (ii), in the case of class III medical devices described in section 513(a)(1)(C) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360(c)(1)(C)), the percentage increase described in subparagraph (B) for the year involved; and (ii) in the case of covered items not described in clause (i), 0 percentage points; (H) for 2007-- (i) subject to clause (ii), in the case of class III medical devices described in section 513(a)(1)(C) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360(c)(1)(C)), the percentage change determined by the Secretary to be appropriate taking into account recommendations contained in the report of the Comptroller General of the United States under section 302(c)(1)(B) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003; and (ii) in the case of covered items not described in clause (i), 0 percentage points; (I) for 2008-- (i) subject to clause (ii), in the case of class III medical devices described in section 513(a)(1)(C) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360(c)(1)(C)), the percentage increase described in subparagraph (B) (as applied to the payment amount for 2007 determined after the application of the percentage change under subparagraph (H)(i)); and (ii) in the case of covered items not described in clause (i), 0 percentage points; (J) for 2009-- (i) in the case of items and services furnished in any geographic area, if such items or services were selected for competitive acquisition in any area under the competitive acquisition program under section 1847(a)(1)(B)(i)(I) before July 1, 2008, including related accessories but only if furnished with such items and services selected for such competition and diabetic supplies but only if furnished through mail order, - 9.5 percent; or (ii) in the case of other items and services, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June 2008; (K) for 2010, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June of the previous year; and (L) for 2011 and each subsequent year-- (i) the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year, reduced by-- (ii) the productivity adjustment described in section 1886(b)(3)(B)(xi)(II). The application of subparagraph (L)(ii) may result in the covered item update under this paragraph being less than 0.0 for a year, and may result in payment rates under this subsection for a year being less than such payment rates for the preceding year. (15) Advance determinations of coverage for certain items.-- (A) Development of lists of items by secretary.--The Secretary may develop and periodically update a list of items for which payment may be made under this subsection that the Secretary determines, on the basis of prior payment experience, are frequently subject to unnecessary utilization throughout a carrier's entire service area or a portion of such area. (B) Development of lists of suppliers by secretary.--The Secretary may develop and periodically update a list of suppliers of items for which payment may be made under this subsection with respect to whom-- (i) the Secretary has found that a substantial number of claims for payment under this part for items furnished by the supplier have been denied on the basis of the application of section 1862(a)(1); or (ii) the Secretary has identified a pattern of overutilization resulting from the business practice of the supplier. (C) Determinations of coverage in advance.--A carrier shall determine in advance of delivery of an item whether payment for the item may not be made because the item is not covered or because of the application of section 1862(a)(1) if-- (i) the item is included on the list developed by the Secretary under subparagraph (A); (ii) the item is furnished by a supplier included on the list developed by the Secretary under subparagraph (B); or (iii) the item is a customized item (other than inexpensive items specified by the Secretary) and the patient to whom the item is to be furnished or the supplier requests that such advance determination be made. (16) Disclosure of information and surety bond.--The Secretary shall not provide for the issuance (or renewal) of a provider number for a supplier of durable medical equipment, for purposes of payment under this part for durable medical equipment furnished by the supplier, unless the supplier provides the Secretary on a continuing basis-- (A) with-- (i) full and complete information as to the identity of each person with an ownership or control interest (as defined in section 1124(a)(3)) in the supplier or in any subcontractor (as defined by the Secretary in regulations) in which the supplier directly or indirectly has a 5 percent or more ownership interest; and (ii) to the extent determined to be feasible under regulations of the Secretary, the name of any disclosing entity (as defined in section 1124(a)(2)) with respect to which a person with such an ownership or control interest in the supplier is a person with such an ownership or control interest in the disclosing entity; and (B) with a surety bond in a form specified by the Secretary and in an amount that is not less than $50,000 that the Secretary determines is commensurate with the volume of the billing of the supplier. The Secretary may waive the requirement of a bond under subparagraph (B) in the case of a supplier that provides a comparable surety bond under State law. The Secretary, at the Secretary's discretion, may impose the requirements of the first sentence with respect to some or all providers of items or services under part A or some or all suppliers or other persons (other than physicians or other practitioners, as defined in section 1842(b)(18)(C)) who furnish items or services under this part. (17) Prohibition against unsolicited telephone contacts by suppliers.-- (A) In general.--A supplier of a covered item under this subsection may not contact an individual enrolled under this part by telephone regarding the furnishing of a covered item to the individual unless 1 of the following applies: (i) The individual has given written permission to the supplier to make contact by telephone regarding the furnishing of a covered item. (ii) The supplier has furnished a covered item to the individual and the supplier is contacting the individual only regarding the furnishing of such covered item. (iii) If the contact is regarding the furnishing of a covered item other than a covered item already furnished to the individual, the supplier has furnished at least 1 covered item to the individual during the 15-month period preceding the date on which the supplier makes such contact. (B) Prohibiting payment for items furnished subsequent to unsolicited contacts.--If a supplier knowingly contacts an individual in violation of subparagraph (A), no payment may be made under this part for any item subsequently furnished to the individual by the supplier. (C) Exclusion from program for suppliers engaging in pattern of unsolicited contacts.-- If a supplier knowingly contacts individuals in violation of subparagraph (A) to such an extent that the supplier's conduct establishes a pattern of contacts in violation of such subparagraph, the Secretary shall exclude the supplier from participation in the programs under this Act, in accordance with the procedures set forth in subsections (c), (f), and (g) of section 1128. (18) Refund of amounts collected for certain disallowed items.-- (A) In general.--If a nonparticipating supplier furnishes to an individual enrolled under this part a covered item for which no payment may be made under this part by reason of paragraph (17)(B), the supplier shall refund on a timely basis to the patient (and shall be liable to the patient for) any amounts collected from the patient for the item, unless-- (i) the supplier establishes that the supplier did not know and could not reasonably have been expected to know that payment may not be made for the item by reason of paragraph (17)(B), or (ii) before the item was furnished, the patient was informed that payment under this part may not be made for that item and the patient has agreed to pay for that item. (B) Sanctions.--If a supplier knowingly and willfully fails to make refunds in violation of subparagraph (A), the Secretary may apply sanctions against the supplier in accordance with section 1842(j)(2). (C) Notice.--Each carrier with a contract in effect under this part with respect to suppliers of covered items shall send any notice of denial of payment for covered items by reason of paragraph (17)(B) and for which payment is not requested on an assignment- related basis to the supplier and the patient involved. (D) Timely basis defined.--A refund under subparagraph (A) is considered to be on a timely basis only if-- (i) in the case of a supplier who does not request reconsideration or seek appeal on a timely basis, the refund is made within 30 days after the date the supplier receives a denial notice under subparagraph (C), or (ii) in the case in which such a reconsideration or appeal is taken, the refund is made within 15 days after the date the supplier receives notice of an adverse determination on reconsideration or appeal. (19) Certain upgraded items.-- (A) Individual's right to choose upgraded item.--Notwithstanding any other provision of this title, the Secretary may issue regulations under which an individual may purchase or rent from a supplier an item of upgraded durable medical equipment for which payment would be made under this subsection if the item were a standard item. (B) Payments to supplier.--In the case of the purchase or rental of an upgraded item under subparagraph (A)-- (i) the supplier shall receive payment under this subsection with respect to such item as if such item were a standard item; and (ii) the individual purchasing or renting the item shall pay the supplier an amount equal to the difference between the supplier's charge and the amount under clause (i). In no event may the supplier's charge for an upgraded item exceed the applicable fee schedule amount (if any) for such item. (C) Consumer protection safeguards.--Any regulations under subparagraph (A) shall provide for consumer protection standards with respect to the furnishing of upgraded equipment under subparagraph (A). Such regulations shall provide for-- (i) determination of fair market prices with respect to an upgraded item; (ii) full disclosure of the availability and price of standard items and proof of receipt of such disclosure information by the beneficiary before the furnishing of the upgraded item; (iii) conditions of participation for suppliers in the billing arrangement; (iv) sanctions of suppliers who are determined to engage in coercive or abusive practices, including exclusion; and (v) such other safeguards as the Secretary determines are necessary. (20) Identification of quality standards.-- (A) In general.--Subject to subparagraph (C), the Secretary shall establish and implement quality standards for suppliers of items and services described in subparagraph (D) to be applied by recognized independent accreditation organizations (as designated under subparagraph (B)) and with which such suppliers shall be required to comply in order to-- (i) furnish any such item or service for which payment is made under this part; and (ii) receive or retain a provider or supplier number used to submit claims for reimbursement for any such item or service for which payment may be made under this title. (B) Designation of independent accreditation organizations.--Not later than the date that is 1 year after the date on which the Secretary implements the quality standards under subparagraph (A), notwithstanding section 1865(a), the Secretary shall designate and approve one or more independent accreditation organizations for purposes of such subparagraph. (C) Quality standards.--The quality standards described in subparagraph (A) may not be less stringent than the quality standards that would otherwise apply if this paragraph did not apply and shall include consumer services standards. (D) Items and services described.--The items and services described in this subparagraph are the following items and services, as the Secretary determines appropriate: (i) Covered items (as defined in paragraph (13)) for which payment may otherwise be made under this subsection. (ii) Prosthetic devices and orthotics and prosthetics described in section 1834(h)(4). (iii) Items and services described in section 1842(s)(2). (E) Implementation.--The Secretary may establish by program instruction or otherwise the quality standards under this paragraph, including subparagraph (F), after consultation with representatives of relevant parties. Such standards shall be applied prospectively and shall be published on the Internet website of the Centers for Medicare & Medicaid Services. (F) Application of accreditation requirement.--In implementing quality standards under this paragraph-- (i) subject to clause (ii) and subparagraph (G), the Secretary shall require suppliers furnishing items and services described in subparagraph (D) on or after October 1, 2009, directly or as a subcontractor for another entity, to have submitted to the Secretary evidence of accreditation by an accreditation organization designated under subparagraph (B) as meeting applicable quality standards, except that the Secretary shall not require under this clause pharmacies to obtain such accreditation before January 1, 2010, except that the Secretary shall not require a pharmacy to have submitted to the Secretary such evidence of accreditation prior to January 1, 2011; and (ii) in applying such standards and the accreditation requirement of clause (i) with respect to eligible professionals (as defined in section 1848(k)(3)(B)), and including such other persons, such as orthotists and prosthetists, as specified by the Secretary, furnishing such items and services-- (I) such standards and accreditation requirement shall not apply to such professionals and persons unless the Secretary determines that the standards being applied are designed specifically to be applied to such professionals and persons; and (II) the Secretary may exempt such professionals and persons from such standards and requirement if the Secretary determines that licensing, accreditation, or other mandatory quality requirements apply to such professionals and persons with respect to the furnishing of such items and services. (G) Application of accreditation requirement to certain pharmacies.-- (i) In general.--With respect to items and services furnished on or after January 1, 2011, in implementing quality standards under this paragraph-- (I) subject to subclause (II), in applying such standards and the accreditation requirement of subparagraph (F)(i) with respect to pharmacies described in clause (ii) furnishing such items and services, such standards and accreditation requirement shall not apply to such pharmacies; and (II) the Secretary may apply to such pharmacies an alternative accreditation requirement established by the Secretary if the Secretary determines such alternative accreditation requirement is more appropriate for such pharmacies. (ii) Pharmacies described.--A pharmacy described in this clause is a pharmacy that meets each of the following criteria: (I) The total billings by the pharmacy for such items and services under this title are less than 5 percent of total pharmacy sales, as determined based on the average total pharmacy sales for the previous 3 calendar years, 3 fiscal years, or other yearly period specified by the Secretary. (II) The pharmacy has been enrolled under section 1866(j) as a supplier of durable medical equipment, prosthetics, orthotics, and supplies, has been issued (which may include the renewal of) a provider number for at least 5 years, and for which a final adverse action (as defined in section 424.57(a) of title 42, Code of Federal Regulations) has not been imposed in the past 5 years. (III) The pharmacy submits to the Secretary an attestation, in a form and manner, and at a time, specified by the Secretary, that the pharmacy meets the criteria described in subclauses (I) and (II). Such attestation shall be subject to section 1001 of title 18, United States Code. (IV) The pharmacy agrees to submit materials as requested by the Secretary, or during the course of an audit conducted on a random sample of pharmacies selected annually, to verify that the pharmacy meets the criteria described in subclauses (I) and (II). Materials submitted under the preceding sentence shall include a certification by an accountant on behalf of the pharmacy or the submission of tax returns filed by the pharmacy during the relevant periods, as requested by the Secretary. (21) Special payment rule for specified items and supplies.-- (A) In general.--Notwithstanding the preceding provisions of this subsection, for specified items and supplies (described in subparagraph (B)) furnished during 2005, the payment amount otherwise determined under this subsection for such specified items and supplies shall be reduced by the percentage difference between-- (i) the amount of payment otherwise determined for the specified item or supply under this subsection for 2002, and (ii) the amount of payment for the specified item or supply under chapter 89 of title 5, United States Code, as identified in the column entitled ``Median FEHP Price'' in the table entitled ``SUMMARY OF MEDICARE PRICES COMPARED TO VA, MEDICAID, RETAIL, AND FEHP PRICES FOR 16 ITEMS'' included in the Testimony of the Inspector General before the Senate Committee on Appropriations, June 12, 2002, or any subsequent report by the Inspector General. (B) Specified item or supply described.--For purposes of subparagraph (A), a specified item or supply means oxygen and oxygen equipment, standard wheelchairs (including standard power wheelchairs), nebulizers, diabetic supplies consisting of lancets and testing strips, hospital beds, and air mattresses, but only if the HCPCS code for the item or supply is identified in a table referred to in subparagraph (A)(ii). (C) Application of update to special payment amount.--The covered item update under paragraph (14) for specified items and supplies for 2006 and each subsequent year shall be applied to the payment amount under subparagraph (A) unless payment is made for such items and supplies under section 1847. (22) Special payment rule for diabetic supplies.-- Notwithstanding the preceding provisions of this subsection, for purposes of determining the payment amount under this subsection for diabetic supplies furnished on or after the first day of the calendar quarter during 2013 that is at least 30 days after the date of the enactment of this paragraph and before the date described in paragraph (1)(H)(ii), the Secretary shall recalculate and apply the covered item update under paragraph (14) as if subparagraph (J)(i) of such paragraph was amended by striking ``but only if furnished through mail order''. (b) Fee Schedules for Radiologist Services.-- (1) Development.--The Secretary shall develop-- (A) a relative value scale to serve as the basis for the payment for radiologist services under this part, and (B) using such scale and appropriate conversion factors and subject to subsection (c)(1)(A), fee schedules (on a regional, statewide, locality, or carrier service area basis) for payment for radiologist services under this part, to be implemented for such services furnished during 1989. (2) Consultation.--In carrying out paragraph (1), the Secretary shall regularly consult closely with the Physician Payment Review Commission, the American College of Radiology, and other organizations representing physicians or suppliers who furnish radiologist services and shall share with them the data and data analysis being used to make the determinations under paragraph (1), including data on variations in current medicare payments by geographic area, and by service and physician specialty. (3) Considerations.--In developing the relative value scale and fee schedules under paragraph (1), the Secretary-- (A) shall take into consideration variations in the cost of furnishing such services among geographic areas and among different sites where services are furnished, and (B) may also take into consideration such other factors respecting the manner in which physicians in different specialties furnish such services as may be appropriate to assure that payment amounts are equitable and designed to promote effective and efficient provision of radiologist services by physicians in the different specialties. (4) Savings.-- (A) Budget neutral fee schedules.--The Secretary shall develop preliminary fee schedules for 1989, which are designed to result in the same amount of aggregate payments (net of any coinsurance and deductibles under sections 1833(a)(1)(J) and 1833(b)) for radiologist services furnished in 1989 as would have been made if this subsection had not been enacted. (B) Initial savings.--The fee schedules established for payment purposes under this subsection for services furnished in 1989 shall be 97 percent of the amounts permitted under these preliminary fee schedules developed under subparagraph (A). (C) 1990 fee schedules.--For radiologist services (other than portable X-ray services) furnished under this part during 1990, after March 31 of such year, the conversion factors used under this subsection shall be 96 percent of the conversion factors that applied under this subsection as of December 31, 1989. (D) 1991 fee schedules.--For radiologist services (other than portable X-ray services) furnished under this part during 1991, the conversion factors used in a locality under this subsection shall, subject to clause (vii), be reduced to the adjusted conversion factor for the locality determined as follows: (i) National weighted average conversion factor.--The Secretary shall estimate the national weighted average of the conversion factors used under this subsection for services furnished during 1990 beginning on April 1, using the best available data. (ii) Reduced national weighted average.--The national weighted average estimated under clause (i) shall be reduced by 13 percent. (iii) Computation of 1990 locality index relative to national average.-- The Secretary shall establish an index which reflects, for each locality, the ratio of the conversion factor used in the locality under this subsection to the national weighted average estimated under clause (i). (iv) Adjusted conversion factor.--The adjusted conversion factor for the professional or technical component of a service in a locality is the sum of \1/2\ of the locally-adjusted amount determined under clause (v) and \1/2\ of the GPCI-adjusted amount determined under clause (vi). (v) Locally-adjusted amount.--For purposes of clause (iv), the locally adjusted amount determined under this clause is the product of (I) the national weighted average conversion factor computed under clause (ii), and (II) the index value established under clause (iii) for the locality. (vi) GPCI-adjusted amount.--For purposes of clause (iv), the GPCI- adjusted amount determined under this clause is the sum of-- (I) the product of (a) the portion of the reduced national weighted average conversion factor computed under clause (ii) which is attributable to physician work and (b) the geographic work index value for the locality (specified in Addendum C to the Model Fee Schedule for Physician Services (published on September 4, 1990, 55 Federal Register pp. 36238-36243)); and (II) the product of (a) the remaining portion of the reduced national weighted average conversion factor computed under clause (ii), and (b) the geographic practice cost index value specified in section 1842(b)(14)(C)(iv) for the locality. In applying this clause with respect to the professional component of a service, 80 percent of the conversion factor shall be considered to be attributable to physician work and with respect to the technical component of the service, 0 percent shall be considered to be attributable to physician work. (vii) Limits on conversion factor.-- The conversion factor to be applied to a locality to the professional or technical component of a service shall not be reduced under this subparagraph by more than 9.5 percent below the conversion factor applied in the locality under subparagraph (C) to such component, but in no case shall the conversion factor be less than 60 percent of the national weighted average of the conversion factors (computed under clause (i)). (E) Rule for certain scanning services.--In the case of the technical components of magnetic resonance imaging (MRI) services and computer assisted tomography (CAT) services furnished after December 31, 1990, the amount otherwise payable shall be reduced by 10 percent. (F) Subsequent updating.--For radiologist services furnished in subsequent years, the fee schedules shall be the schedules for the previous year updated by the percentage increase in the MEI (as defined in section 1842(i)(3)) for the year. (G) Nonparticipating physicians and suppliers.--Each fee schedule so established shall provide that the payment rate recognized for nonparticipating physicians and suppliers is equal to the appropriate percent (as defined in section 1842(b)(4)(A)(iv)) of the payment rate recognized for participating physicians and suppliers. (5) Limiting charges of nonparticipating physicians and suppliers.-- (A) In general.--In the case of radiologist services furnished after January 1, 1989, for which payment is made under a fee schedule under this subsection, if a nonparticipating physician or supplier furnishes the service to an individual entitled to benefits under this part, the physician or supplier may not charge the individual more than the limiting charge (as defined in subparagraph (B)). (B) Limiting charge defined.--In subparagraph (A), the term ``limiting charge'' means, with respect to a service furnished-- (i) in 1989, 125 percent of the amount specified for the service in the appropriate fee schedule established under paragraph (1), (ii) in 1990, 120 percent of the amount specified for the service in the appropriate fee schedule established under paragraph (1), and (iii) after 1990, 115 percent of the amount specified for the service in the appropriate fee schedule established under paragraph (1). (C) Enforcement.--If a physician or supplier knowingly and willfully bills in violation of subparagraph (A), the Secretary may apply sanctions against such physician or supplier in accordance with section 1842(j)(2) in the same manner as such sanctions may apply to a physician. (6) Radiologist services defined.--For the purposes of this subsection and section 1833(a)(1)(J), the term ``radiologist services'' only includes radiology services performed by, or under the direction or supervision of, a physician-- (A) who is certified, or eligible to be certified, by the American Board of Radiology, or (B) for whom radiology services account for at least 50 percent of the total amount of charges made under this part. (c) Payment and Standards for Screening Mammography.-- (1) In general.--With respect to expenses incurred for screening mammography (as defined in section 1861(jj)), payment may be made only-- (A) for screening mammography conducted consistent with the frequency permitted under paragraph (2); and (B) if the screening mammography is conducted by a facility that has a certificate (or provisional certificate) issued under section 354 of the Public Health Service Act. (2) Frequency covered.-- (A) In general.--Subject to revision by the Secretary under subparagraph (B)-- (i) no payment may be made under this part for screening mammography performed on a woman under 35 years of age; (ii) payment may be made under this part for only one screening mammography performed on a woman over 34 years of age, but under 40 years of age; and (iii) in the case of a woman over 39 years of age, payment may not be made under this part for screening mammography performed within 11 months following the month in which a previous screening mammography was performed. (B) Revision of frequency.-- (i) Review.--The Secretary, in consultation with the Director of the National Cancer Institute, shall review periodically the appropriate frequency for performing screening mammography, based on age and such other factors as the Secretary believes to be pertinent. (ii) Revision of frequency.--The Secretary, taking into consideration the review made under clause (i), may revise from time to time the frequency with which screening mammography may be paid for under this subsection. (d) Frequency Limits and Payment for Colorectal Cancer Screening Tests.-- (1) Screening fecal-occult blood tests.-- (A) Payment amount.--The payment amount for colorectal cancer screening tests consisting of screening fecal-occult blood tests is equal to the payment amount established for diagnostic fecal-occult blood tests under section 1833(h). (B) Frequency limit.--No payment may be made under this part for a colorectal cancer screening test consisting of a screening fecal- occult blood test-- (i) if the individual is under 50 years of age; or (ii) if the test is performed within the 11 months after a previous screening fecal-occult blood test. (2) Screening flexible sigmoidoscopies.-- (A) Fee schedule.--With respect to colorectal cancer screening tests consisting of screening flexible sigmoidoscopies, payment under section 1848 shall be consistent with payment under such section for similar or related services. (B) Payment limit.--In the case of screening flexible sigmoidoscopy services, payment under this part shall not exceed such amount as the Secretary specifies, based upon the rates recognized for diagnostic flexible sigmoidoscopy services. (C) Facility payment limit.-- (i) In general.--Notwithstanding subsections (i)(2)(A) and (t) of section 1833, in the case of screening flexible sigmoidoscopy services furnished on or after January 1, 1999, that-- (I) in accordance with regulations, may be performed in an ambulatory surgical center and for which the Secretary permits ambulatory surgical center payments under this part, and (II) are performed in an ambulatory surgical center or hospital outpatient department, payment under this part shall be based on the lesser of the amount under the fee schedule that would apply to such services if they were performed in a hospital outpatient department in an area or the amount under the fee schedule that would apply to such services if they were performed in an ambulatory surgical center in the same area. (ii) Limitation on coinsurance.-- Notwithstanding any other provision of this title, in the case of a beneficiary who receives the services described in clause (i)-- (I) in computing the amount of any applicable copayment, the computation of such coinsurance shall be based upon the fee schedule under which payment is made for the services, and (II) the amount of such coinsurance is equal to 25 percent of the payment amount under the fee schedule described in subclause (I). (D) Special rule for detected lesions.--If during the course of such screening flexible sigmoidoscopy, a lesion or growth is detected which results in a biopsy or removal of the lesion or growth, payment under this part shall not be made for the screening flexible sigmoidoscopy but shall be made for the procedure classified as a flexible sigmoidoscopy with such biopsy or removal. (E) Frequency limit.--No payment may be made under this part for a colorectal cancer screening test consisting of a screening flexible sigmoidoscopy-- (i) if the individual is under 50 years of age; or (ii) if the procedure is performed within the 47 months after a previous screening flexible sigmoidoscopy or, in the case of an individual who is not at high risk for colorectal cancer, if the procedure is performed within the 119 months after a previous screening colonoscopy. (3) Screening colonoscopy.-- (A) Fee schedule.--With respect to colorectal cancer screening test consisting of a screening colonoscopy, payment under section 1848 shall be consistent with payment amounts under such section for similar or related services. (B) Payment limit.--In the case of screening colonoscopy services, payment under this part shall not exceed such amount as the Secretary specifies, based upon the rates recognized for diagnostic colonoscopy services. (C) Facility payment limit.-- (i) In general.--Notwithstanding subsections (i)(2)(A) and (t) of section 1833, in the case of screening colonoscopy services furnished on or after January 1, 1999, that are performed in an ambulatory surgical center or a hospital outpatient department, payment under this part shall be based on the lesser of the amount under the fee schedule that would apply to such services if they were performed in a hospital outpatient department in an area or the amount under the fee schedule that would apply to such services if they were performed in an ambulatory surgical center in the same area. (ii) Limitation on coinsurance.-- Notwithstanding any other provision of this title, in the case of a beneficiary who receives the services described in clause (i)-- (I) in computing the amount of any applicable coinsurance, the computation of such coinsurance shall be based upon the fee schedule under which payment is made for the services, and (II) the amount of such coinsurance is equal to 25 percent of the payment amount under the fee schedule described in subclause (I). (D) Special rule for detected lesions.--If during the course of such screening colonoscopy, a lesion or growth is detected which results in a biopsy or removal of the lesion or growth, payment under this part shall not be made for the screening colonoscopy but shall be made for the procedure classified as a colonoscopy with such biopsy or removal. (E) Frequency limit.--No payment may be made under this part for a colorectal cancer screening test consisting of a screening colonoscopy for individuals at high risk for colorectal cancer if the procedure is performed within the 23 months after a previous screening colonoscopy or for other individuals if the procedure is performed within the 119 months after a previous screening colonoscopy or within 47 months after a previous screening flexible sigmoidoscopy. (e) Accreditation Requirement for Advanced Diagnostic Imaging Services.-- (1) In general.-- (A) In general.--Beginning with January 1, 2012, with respect to the technical component of advanced diagnostic imaging services for which payment is made under the fee schedule established under section 1848(b) and that are furnished by a supplier, payment may only be made if such supplier is accredited by an accreditation organization designated by the Secretary under paragraph (2)(B)(i). (B) Advanced diagnostic imaging services defined.--In this subsection, the term ``advanced diagnostic imaging services'' includes-- (i) diagnostic magnetic resonance imaging, computed tomography, and nuclear medicine (including positron emission tomography); and (ii) such other diagnostic imaging services, including services described in section 1848(b)(4)(B) (excluding X- ray, ultrasound, and fluoroscopy), as specified by the Secretary in consultation with physician specialty organizations and other stakeholders. (C) Supplier defined.--In this subsection, the term ``supplier'' has the meaning given such term in section 1861(d). (2) Accreditation organizations.-- (A) Factors for designation of accreditation organizations.--The Secretary shall consider the following factors in designating accreditation organizations under subparagraph (B)(i) and in reviewing and modifying the list of accreditation organizations designated pursuant to subparagraph (C): (i) The ability of the organization to conduct timely reviews of accreditation applications. (ii) Whether the organization has established a process for the timely integration of new advanced diagnostic imaging services into the organization's accreditation program. (iii) Whether the organization uses random site visits, site audits, or other strategies for ensuring accredited suppliers maintain adherence to the criteria described in paragraph (3). (iv) The ability of the organization to take into account the capacities of suppliers located in a rural area (as defined in section 1886(d)(2)(D)). (v) Whether the organization has established reasonable fees to be charged to suppliers applying for accreditation. (vi) Such other factors as the Secretary determines appropriate. (B) Designation.--Not later than January 1, 2010, the Secretary shall designate organizations to accredit suppliers furnishing the technical component of advanced diagnostic imaging services. The list of accreditation organizations so designated may be modified pursuant to subparagraph (C). (C) Review and modification of list of accreditation organizations.-- (i) In general.--The Secretary shall review the list of accreditation organizations designated under subparagraph (B) taking into account the factors under subparagraph (A). Taking into account the results of such review, the Secretary may, by regulation, modify the list of accreditation organizations designated under subparagraph (B). (ii) Special rule for accreditations done prior to removal from list of designated accreditation organizations.--In the case where the Secretary removes an organization from the list of accreditation organizations designated under subparagraph (B), any supplier that is accredited by the organization during the period beginning on the date on which the organization is designated as an accreditation organization under subparagraph (B) and ending on the date on which the organization is removed from such list shall be considered to have been accredited by an organization designated by the Secretary under subparagraph (B) for the remaining period such accreditation is in effect. (3) Criteria for accreditation.--The Secretary shall establish procedures to ensure that the criteria used by an accreditation organization designated under paragraph (2)(B) to evaluate a supplier that furnishes the technical component of advanced diagnostic imaging services for the purpose of accreditation of such supplier is specific to each imaging modality. Such criteria shall include-- (A) standards for qualifications of medical personnel who are not physicians and who furnish the technical component of advanced diagnostic imaging services; (B) standards for qualifications and responsibilities of medical directors and supervising physicians, including standards that recognize the considerations described in paragraph (4); (C) procedures to ensure that equipment used in furnishing the technical component of advanced diagnostic imaging services meets performance specifications; (D) standards that require the supplier have procedures in place to ensure the safety of persons who furnish the technical component of advanced diagnostic imaging services and individuals to whom such services are furnished; (E) standards that require the establishment and maintenance of a quality assurance and quality control program by the supplier that is adequate and appropriate to ensure the reliability, clarity, and accuracy of the technical quality of diagnostic images produced by such supplier; and (F) any other standards or procedures the Secretary determines appropriate. (4) Recognition in standards for the evaluation of medical directors and supervising physicians.--The standards described in paragraph (3)(B) shall recognize whether a medical director or supervising physician-- (A) in a particular specialty receives training in advanced diagnostic imaging services in a residency program; (B) has attained, through experience, the necessary expertise to be a medical director or a supervising physician; (C) has completed any continuing medical education courses relating to such services; or (D) has met such other standards as the Secretary determines appropriate. (5) Rule for accreditations made prior to designation.--In the case of a supplier that is accredited before January 1, 2010, by an accreditation organization designated by the Secretary under paragraph (2)(B) as of January 1, 2010, such supplier shall be considered to have been accredited by an organization designated by the Secretary under such paragraph as of January 1, 2012, for the remaining period such accreditation is in effect. (f) Reduction in Payments for Physician Pathology Services During 1991.-- (1) In general.--For physician pathology services furnished under this part during 1991, the prevailing charges used in a locality under this part shall be 7 percent below the prevailing charges used in the locality under this part in 1990 after March 31. (2) Limitation.--The prevailing charge for the technical and professional components of an physician pathology service furnished by a physician through an independent laboratory shall not be reduced pursuant to paragraph (1) to the extent that such reduction would reduce such prevailing charge below 115 percent of the prevailing charge for the professional component of such service when furnished by a hospital-based physician in the same locality. For purposes of the preceding sentence, an independent laboratory is a laboratory that is independent of a hospital and separate from the attending or consulting physicians' office. (g) Payment for Outpatient Critical Access Hospital Services.-- (1) In general.--The amount of payment for outpatient critical access hospital services of a critical access hospital is equal to 101 percent of the reasonable costs of the hospital in providing such services, unless the hospital makes the election under paragraph (2). (2) Election of cost-based hospital outpatient service payment plus fee schedule for professional services.--A critical access hospital may elect to be paid for outpatient critical access hospital services amounts equal to the sum of the following, less the amount that such hospital may charge as described in section 1866(a)(2)(A): (A) Facility fee.--With respect to facility services, not including any services for which payment may be made under subparagraph (B), 101 percent of the reasonable costs of the critical access hospital in providing such services. (B) Fee schedule for professional services.-- With respect to professional services otherwise included within outpatient critical access hospital services, 115 percent of such amounts as would otherwise be paid under this part if such services were not included in outpatient critical access hospital services. Subsections (x) and (y) of section 1833 shall not be taken into account in determining the amounts that would otherwise be paid pursuant to the preceding sentence. The Secretary may not require, as a condition for applying subparagraph (B) with respect to a critical access hospital, that each physician or other practitioner providing professional services in the hospital must assign billing rights with respect to such services, except that such subparagraph shall not apply to those physicians and practitioners who have not assigned such billing rights. (3) Disregarding charges.--The payment amounts under this subsection shall be determined without regard to the amount of the customary or other charge. (4) Treatment of clinical diagnostic laboratory services.--No coinsurance, deductible, copayment, or other cost-sharing otherwise applicable under this part shall apply with respect to clinical diagnostic laboratory services furnished as an outpatient critical access hospital service. Nothing in this title shall be construed as providing for payment for clinical diagnostic laboratory services furnished as part of outpatient critical access hospital services, other than on the basis described in this subsection. For purposes of the preceding sentence and section 1861(mm)(3), clinical diagnostic laboratory services furnished by a critical access hospital shall be treated as being furnished as part of outpatient critical access services without regard to whether the individual with respect to whom such services are furnished is physically present in the critical access hospital, or in a skilled nursing facility or a clinic (including a rural health clinic) that is operated by a critical access hospital, at the time the specimen is collected. (5) Coverage of costs for certain emergency room on- call providers.--In determining the reasonable costs of outpatient critical access hospital services under paragraphs (1) and (2)(A), the Secretary shall recognize as allowable costs, amounts (as defined by the Secretary) for reasonable compensation and related costs for physicians, physician assistants, nurse practitioners, and clinical nurse specialists who are on-call (as defined by the Secretary) to provide emergency services but who are not present on the premises of the critical access hospital involved, and are not otherwise furnishing services covered under this title and are not on-call at any other provider or facility. (h) Payment for Prosthetic Devices and Orthotics and Prosthetics.-- (1) General rule for payment.-- (A) In general.--Payment under this subsection for prosthetic devices and orthotics and prosthetics shall be made in a lump-sum amount for the purchase of the item in an amount equal to 80 percent of the payment basis described in subparagraph (B). (B) Payment basis.--Except as provided in subparagraphs (C), (E), and (H)(i), the payment basis described in this subparagraph is the lesser of-- (i) the actual charge for the item; or (ii) the amount recognized under paragraph (2) as the purchase price for the item. (C) Exception for certain public home health agencies.--Subparagraph (B)(i) shall not apply to an item furnished by a public home health agency (or by another home health agency which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low income) free of charge or at nominal charges to the public. (D) Exclusive payment rule.--Subject to subparagraph (H)(ii), this subsection shall constitute the exclusive provision of this title for payment for prosthetic devices, orthotics, and prosthetics under this part or under part A to a home health agency. (E) Exception for certain items.--Payment for ostomy supplies, tracheostomy supplies, and urologicals shall be made in accordance with subparagraphs (B) and (C) of section 1834(a)(2). (F) Special payment rules for certain prosthetics and custom-fabricated orthotics.-- (i) In general.--No payment shall be made under this subsection for an item of custom-fabricated orthotics described in clause (ii) or for an item of prosthetics unless such item is-- (I) furnished by a qualified practitioner; and (II) fabricated by a qualified practitioner or a qualified supplier at a facility that meets such criteria as the Secretary determines appropriate. (ii) Description of custom-fabricated item.-- (I) In general.--An item described in this clause is an item of custom-fabricated orthotics that requires education, training, and experience to custom-fabricate and that is included in a list established by the Secretary in subclause (II). Such an item does not include shoes and shoe inserts. (II) List of items.--The Secretary, in consultation with appropriate experts in orthotics (including national organizations representing manufacturers of orthotics), shall establish and update as appropriate a list of items to which this subparagraph applies. No item may be included in such list unless the item is individually fabricated for the patient over a positive model of the patient. (iii) Qualified practitioner defined.--In this subparagraph, the term ``qualified practitioner'' means a physician or other individual who-- (I) is a qualified physical therapist or a qualified occupational therapist; (II) in the case of a State that provides for the licensing of orthotics and prosthetics, is licensed in orthotics or prosthetics by the State in which the item is supplied; or (III) in the case of a State that does not provide for the licensing of orthotics and prosthetics, is specifically trained and educated to provide or manage the provision of prosthetics and custom-designed or -fabricated orthotics, and is certified by the American Board for Certification in Orthotics and Prosthetics, Inc. or by the Board for Orthotist/ Prosthetist Certification, or is credentialed and approved by a program that the Secretary determines, in consultation with appropriate experts in orthotics and prosthetics, has training and education standards that are necessary to provide such prosthetics and orthotics. (iv) Qualified supplier defined.--In this subparagraph, the term ``qualified supplier'' means any entity that is accredited by the American Board for Certification in Orthotics and Prosthetics, Inc. or by the Board for Orthotist/Prosthetist Certification, or accredited and approved by a program that the Secretary determines has accreditation and approval standards that are essentially equivalent to those of such Board. (G) Replacement of prosthetic devices and parts.-- (i) In general.--Payment shall be made for the replacement of prosthetic devices which are artificial limbs, or for the replacement of any part of such devices, without regard to continuous use or useful lifetime restrictions if an ordering physician determines that the provision of a replacement device, or a replacement part of such a device, is necessary because of any of the following: (I) A change in the physiological condition of the patient. (II) An irreparable change in the condition of the device, or in a part of the device. (III) The condition of the device, or the part of the device, requires repairs and the cost of such repairs would be more than 60 percent of the cost of a replacement device, or, as the case may be, of the part being replaced. (ii) Confirmation may be required if device or part being replaced is less than 3 years old.--If a physician determines that a replacement device, or a replacement part, is necessary pursuant to clause (i)-- (I) such determination shall be controlling; and (II) such replacement device or part shall be deemed to be reasonable and necessary for purposes of section 1862(a)(1)(A); except that if the device, or part, being replaced is less than 3 years old (calculated from the date on which the beneficiary began to use the device or part), the Secretary may also require confirmation of necessity of the replacement device or replacement part, as the case may be. (H) Application of competitive acquisition to orthotics; limitation of inherent reasonableness authority.--In the case of orthotics described in paragraph (2)(C) of section 1847(a) furnished on or after January 1, 2009, subject to subsection (a)(1)(G), that are included in a competitive acquisition program in a competitive acquisition area under such section-- (i) the payment basis under this subsection for such orthotics furnished in such area shall be the payment basis determined under such competitive acquisition program; and (ii) subject to subsection (a)(1)(G), the Secretary may use information on the payment determined under such competitive acquisition programs to adjust the payment amount otherwise recognized under subparagraph (B)(ii) for an area that is not a competitive acquisition area under section 1847, and in the case of such adjustment, paragraphs (8) and (9) of section 1842(b) shall not be applied. (2) Purchase price recognized.--For purposes of paragraph (1), the amount that is recognized under this paragraph as the purchase price for prosthetic devices, orthotics, and prosthetics is the amount described in subparagraph (C) of this paragraph, determined as follows: (A) Computation of local purchase price.-- Each carrier under section 1842 shall compute a base local purchase price for the item as follows: (i) The carrier shall compute a base local purchase price for each item equal to the average reasonable charge in the locality for the purchase of the item for the 12-month period ending with June 1987. (ii) The carrier shall compute a local purchase price, with respect to the furnishing of each particular item-- (I) in 1989 and 1990, equal to the base local purchase price computed under clause (i) increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 6-month period ending with December 1987, or (II) in 1991, 1992 or 1993, equal to the local purchase price computed under this clause for the previous year increased by the applicable percentage increase for the year. (B) Computation of regional purchase price.-- With respect to the furnishing of a particular item in each region (as defined by the Secretary), the Secretary shall compute a regional purchase price-- (i) for 1992, equal to the average (weighted by relative volume of all claims among carriers) of the local purchase prices for the carriers in the region computed under subparagraph (A)(ii)(II) for the year, and (ii) for each subsequent year, equal to the regional purchase price computed under this subparagraph for the previous year increased by the applicable percentage increase for the year. (C) Purchase price recognized.--For purposes of paragraph (1) and subject to subparagraph (D), the amount that is recognized under this paragraph as the purchase price for each item furnished-- (i) in 1989, 1990, or 1991, is 100 percent of the local purchase price computed under subparagraph (A)(ii); (ii) in 1992, is the sum of (I) 75 percent of the local purchase price computed under subparagraph (A)(ii)(II) for 1992, and (II) 25 percent of the regional purchase price computed under subparagraph (B) for 1992; (iii) in 1993, is the sum of (I) 50 percent of the local purchase price computed under subparagraph (A)(ii)(II) for 1993, and (II) 50 percent of the regional purchase price computed under subparagraph (B) for 1993; and (iv) in 1994 or a subsequent year, is the regional purchase price computed under subparagraph (B) for that year. (D) Range on amount recognized.--The amount that is recognized under subparagraph (C) as the purchase price for an item furnished-- (i) in 1992, may not exceed 125 percent, and may not be lower than 85 percent, of the average of the purchase prices recognized under such subparagraph for all the carrier service areas in the United States in that year; and (ii) in a subsequent year, may not exceed 120 percent, and may not be lower than 90 percent, of the average of the purchase prices recognized under such subparagraph for all the carrier service areas in the United States in that year. (3) Applicability of certain provisions relating to durable medical equipment.--Paragraphs (12) and (17) and subparagraphs (A) and (B) of paragraph (10) and paragraph (11) of subsection (a) shall apply to prosthetic devices, orthotics, and prosthetics in the same manner as such provisions apply to covered items under such subsection. (4) Definitions.--In this subsection-- (A) the term ``applicable percentage increase'' means-- (i) for 1991, 0 percent; (ii) for 1992 and 1993, the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year; (iii) for 1994 and 1995, 0 percent; (iv) for 1996 and 1997, the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year; (v) for each of the years 1998 through 2000, 1 percent; (vi) for 2001, the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June 2000; (vii) for 2002, 1 percent; (viii) for 2003, the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year; (ix) for 2004, 2005, and 2006, 0 percent; (x) for for each of 2007 through 2010, the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year; and (xi) for 2011 and each subsequent year-- (I) the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year, reduced by-- (II) the productivity adjustment described in section 1886(b)(3)(B)(xi)(II). (B) the term ``prosthetic devices'' has the meaning given such term in section 1861(s)(8), except that such term does not include parenteral and enteral nutrition nutrients, supplies, and equipment and does not include an implantable item for which payment may be made under section 1833(t); and (C) the term ``orthotics and prosthetics'' has the meaning given such term in section 1861(s)(9) (and includes shoes described in section 1861(s)(12)), but does not include intraocular lenses or medical supplies (including catheters, catheter supplies, ostomy bags, and supplies related to ostomy care) furnished by a home health agency under section 1861(m)(5). The application of subparagraph (A)(xi)(II) may result in the applicable percentage increase under subparagraph (A) being less than 0.0 for a year, and may result in payment rates under this subsection for a year being less than such payment rates for the preceding year. (5) Documentation created by orthotists and prosthetists.--For purposes of determining the reasonableness and medical necessity of orthotics and prosthetics, documentation created by an orthotist or prosthetist shall be considered part of the individual's medical record to support documentation created by eligible professionals described in section 1848(k)(3)(B). (i) Payment for Surgical Dressings.-- (1) In general.--Payment under this subsection for surgical dressings (described in section 1861(s)(5)) shall be made in a lump sum amount for the purchase of the item in an amount equal to 80 percent of the lesser of-- (A) the actual charge for the item; or (B) a payment amount determined in accordance with the methodology described in subparagraphs (B) and (C) of subsection (a)(2) (except that in applying such methodology, the national limited payment amount referred to in such subparagraphs shall be initially computed based on local payment amounts using average reasonable charges for the 12-month period ending December 31, 1992, increased by the covered item updates described in such subsection for 1993 and 1994). (2) Exceptions.--Paragraph (1) shall not apply to surgical dressings that are-- (A) furnished as an incident to a physician's professional service; or (B) furnished by a home health agency. (j) Requirements for Suppliers of Medical Equipment and Supplies.-- (1) Issuance and renewal of supplier number.-- (A) Payment.--Except as provided in subparagraph (C), no payment may be made under this part after the date of the enactment of the Social Security Act Amendments of 1994 for items furnished by a supplier of medical equipment and supplies unless such supplier obtains (and renews at such intervals as the Secretary may require) a supplier number. (B) Standards for possessing a supplier number.--A supplier may not obtain a supplier number unless-- (i) for medical equipment and supplies furnished on or after the date of the enactment of the Social Security Act Amendments of 1994 and before January 1, 1996, the supplier meets standards prescribed by the Secretary in regulations issued on June 18, 1992; and (ii) for medical equipment and supplies furnished on or after January 1, 1996, the supplier meets revised standards prescribed by the Secretary (in consultation with representatives of suppliers of medical equipment and supplies, carriers, and consumers) that shall include requirements that the supplier-- (I) comply with all applicable State and Federal licensure and regulatory requirements; (II) maintain a physical facility on an appropriate site; (III) have proof of appropriate liability insurance; and (IV) meet such other requirements as the Secretary may specify. (C) Exception for items furnished as incident to a physician's service.--Subparagraph (A) shall not apply with respect to medical equipment and supplies furnished incident to a physician's service. (D) Prohibition against multiple supplier numbers.--The Secretary may not issue more than one supplier number to any supplier of medical equipment and supplies unless the issuance of more than one number is appropriate to identify subsidiary or regional entities under the supplier's ownership or control. (E) Prohibition against delegation of supplier determinations.--The Secretary may not delegate (other than by contract under section 1842) the responsibility to determine whether suppliers meet the standards necessary to obtain a supplier number. (2) Certificates of medical necessity.-- (A) Limitation on information provided by suppliers on certificates of medical necessity.-- (i) In general.--Effective 60 days after the date of the enactment of the Social Security Act Amendments of 1994, a supplier of medical equipment and supplies may distribute to physicians, or to individuals entitled to benefits under this part, a certificate of medical necessity for commercial purposes which contains no more than the following information completed by the supplier: (I) An identification of the supplier and the beneficiary to whom such medical equipment and supplies are furnished. (II) A description of such medical equipment and supplies. (III) Any product code identifying such medical equipment and supplies. (IV) Any other administrative information (other than information relating to the beneficiary's medical condition) identified by the Secretary. (ii) Information on payment amount and charges.--If a supplier distributes a certificate of medical necessity containing any of the information permitted to be supplied under clause (i), the supplier shall also list on the certificate of medical necessity the fee schedule amount and the supplier's charge for the medical equipment or supplies being furnished prior to distribution of such certificate to the physician. (iii) Penalty.--Any supplier of medical equipment and supplies who knowingly and willfully distributes a certificate of medical necessity in violation of clause (i) or fails to provide the information required under clause (ii) is subject to a civil money penalty in an amount not to exceed $1,000 for each such certificate of medical necessity so distributed. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to civil money penalties under this subparagraph in the same manner as they apply to a penalty or proceeding under section 1128A(a). (B) Definition.--For purposes of this paragraph, the term ``certificate of medical necessity'' means a form or other document containing information required by the carrier to be submitted to show that an item is reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. (3) Coverage and review criteria.--The Secretary shall annually review the coverage and utilization of items of medical equipment and supplies to determine whether such items should be made subject to coverage and utilization review criteria, and if appropriate, shall develop and apply such criteria to such items. (4) Limitation on patient liability.--If a supplier of medical equipment and supplies (as defined in paragraph (5))-- (A) furnishes an item or service to a beneficiary for which no payment may be made by reason of paragraph (1); (B) furnishes an item or service to a beneficiary for which payment is denied in advance under subsection (a)(15); or (C) furnishes an item or service to a beneficiary for which payment is denied under section 1862(a)(1); any expenses incurred for items and services furnished to an individual by such a supplier not on an assigned basis shall be the responsibility of such supplier. The individual shall have no financial responsibility for such expenses and the supplier shall refund on a timely basis to the individual (and shall be liable to the individual for) any amounts collected from the individual for such items or services. The provisions of subsection (a)(18) shall apply to refunds required under the previous sentence in the same manner as such provisions apply to refunds under such subsection. (5) Definition.--The term ``medical equipment and supplies'' means-- (A) durable medical equipment (as defined in section 1861(n)); (B) prosthetic devices (as described in section 1861(s)(8)); (C) orthotics and prosthetics (as described in section 1861(s)(9)); (D) surgical dressings (as described in section 1861(s)(5)); (E) such other items as the Secretary may determine; and (F) for purposes of paragraphs (1) and (3)-- (i) home dialysis supplies and equipment (as described in section 1861(s)(2)(F)), (ii) immunosuppressive drugs (as described in section 1861(s)(2)(J)), (iii) therapeutic shoes for diabetics (as described in section 1861(s)(12)), (iv) oral drugs prescribed for use as an anticancer therapeutic agent (as described in section 1861(s)(2)(Q)), and (v) self-administered erythropoetin (as described in section 1861(s)(2)(P)). (k) Payment for Outpatient Therapy Services and Comprehensive Outpatient Rehabilitation Services.-- (1) In general.--With respect to services described in section 1833(a)(8) or 1833(a)(9) for which payment is determined under this subsection, the payment basis shall be-- (A) for services furnished during 1998, the amount determined under paragraph (2); or (B) for services furnished during a subsequent year, 80 percent of the lesser of-- (i) the actual charge for the services, or (ii) the applicable fee schedule amount (as defined in paragraph (3)) for the services. (2) Payment in 1998 based upon adjusted reasonable costs.--The amount under this paragraph for services is the lesser of-- (A) the charges imposed for the services, or (B) the adjusted reasonable costs (as defined in paragraph (4)) for the services, less 20 percent of the amount of the charges imposed for such services. (3) Applicable fee schedule amount.--In this subsection, the term ``applicable fee schedule amount'' means, with respect to services furnished in a year, the amount determined under the fee schedule established under section 1848 for such services furnished during the year or, if there is no such fee schedule established for such services, the amount determined under the fee schedule established for such comparable services as the Secretary specifies. (4) Adjusted reasonable costs.--In paragraph (2), the term ``adjusted reasonable costs'' means, with respect to any services, reasonable costs determined for such services, reduced by 10 percent. The 10-percent reduction shall not apply to services described in section 1833(a)(8)(B) (relating to services provided by hospitals). (5) Uniform coding.--For claims for services submitted on or after April 1, 1998, for which the amount of payment is determined under this subsection, the claim shall include a code (or codes) under a uniform coding system specified by the Secretary that identifies the services furnished. (6) Restraint on billing.--The provisions of subparagraphs (A) and (B) of section 1842(b)(18) shall apply to therapy services for which payment is made under this subsection in the same manner as they apply to services provided by a practitioner described in section 1842(b)(18)(C). (7) Adjustment in discount for certain multiple therapy services.--In the case of therapy services furnished on or after April 1, 2013, and for which payment is made under this subsection pursuant to the applicable fee schedule amount (as defined in paragraph (3)), instead of the 25 percent multiple procedure payment reduction specified in the final rule published by the Secretary in the Federal Register on November 29, 2010, the reduction percentage shall be 50 percent. (l) Establishment of Fee Schedule for Ambulance Services.-- (1) In general.--The Secretary shall establish a fee schedule for payment for ambulance services whether provided directly by a supplier or provider or under arrangement with a provider under this part through a negotiated rulemaking process described in title 5, United States Code, and in accordance with the requirements of this subsection. (2) Considerations.--In establishing such fee schedule, the Secretary shall-- (A) establish mechanisms to control increases in expenditures for ambulance services under this part; (B) establish definitions for ambulance services which link payments to the type of services provided; (C) consider appropriate regional and operational differences; (D) consider adjustments to payment rates to account for inflation and other relevant factors; and (E) phase in the application of the payment rates under the fee schedule in an efficient and fair manner consistent with paragraph (11), except that such phase-in shall provide for full payment of any national mileage rate for ambulance services provided by suppliers that are paid by carriers in any of the 50 States where payment by a carrier for such services for all such suppliers in such State did not, prior to the implementation of the fee schedule, include a separate amount for all mileage within the county from which the beneficiary is transported. (3) Savings.--In establishing such fee schedule, the Secretary shall-- (A) ensure that the aggregate amount of payments made for ambulance services under this part during 2000 does not exceed the aggregate amount of payments which would have been made for such services under this part during such year if the amendments made by section 4531(a) of the Balanced Budget Act of 1997 continued in effect, except that in making such determination the Secretary shall assume an update in such payments for 2002 equal to percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year reduced in the case of 2002 by 1.0 percentage points; (B) set the payment amounts provided under the fee schedule for services furnished in 2001 and each subsequent year at amounts equal to the payment amounts under the fee schedule for services furnished during the previous year, increased, subject to subparagraph (C) and the succeeding sentence of this paragraph, by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year reduced in the case of 2002 by 1.0 percentage points; and (C) for 2011 and each subsequent year, after determining the percentage increase under subparagraph (B) for the year, reduce such percentage increase by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II). The application of subparagraph (C) may result in the percentage increase under subparagraph (B) being less than 0.0 for a year, and may result in payment rates under the fee schedule under this subsection for a year being less than such payment rates for the preceding year. (4) Consultation.--In establishing the fee schedule for ambulance services under this subsection, the Secretary shall consult with various national organizations representing individuals and entities who furnish and regulate ambulance services and share with such organizations relevant data in establishing such schedule. (5) Limitation on review.--There shall be no administrative or judicial review under section 1869 or otherwise of the amounts established under the fee schedule for ambulance services under this subsection, including matters described in paragraph (2). (6) Restraint on billing.--The provisions of subparagraphs (A) and (B) of section 1842(b)(18) shall apply to ambulance services for which payment is made under this subsection in the same manner as they apply to services provided by a practitioner described in section 1842(b)(18)(C). (7) Coding system.--The Secretary may require the claim for any services for which the amount of payment is determined under this subsection to include a code (or codes) under a uniform coding system specified by the Secretary that identifies the services furnished. (8) Services furnished by critical access hospitals.--Notwithstanding any other provision of this subsection, the Secretary shall pay 101 percent of the reasonable costs incurred in furnishing ambulance services if such services are furnished-- (A) by a critical access hospital (as defined in section 1861(mm)(1)), or (B) by an entity that is owned and operated by a critical access hospital, but only if the critical access hospital or entity is the only provider or supplier of ambulance services that is located within a 35-mile drive of such critical access hospital. (9) Transitional assistance for rural providers.--In the case of ground ambulance services furnished on or after July 1, 2001, and before January 1, 2004, for which the transportation originates in a rural area (as defined in section 1886(d)(2)(D)) or in a rural census tract of a metropolitan statistical area (as determined under the most recent modification of the Goldsmith Modification, originally published in the Federal Register on February 27, 1992 (57 Fed. Reg. 6725)), the fee schedule established under this subsection shall provide that, with respect to the payment rate for mileage for a trip above 17 miles, and up to 50 miles, the rate otherwise established shall be increased by not less than \1/2\ of the additional payment per mile established for the first 17 miles of such a trip originating in a rural area. (10) Phase-in providing floor using blend of fee schedule and regional fee schedules.--In carrying out the phase-in under paragraph (2)(E) for each level of ground service furnished in a year, the portion of the payment amount that is based on the fee schedule shall be the greater of the amount determined under such fee schedule (without regard to this paragraph) or the following blended rate of the fee schedule under paragraph (1) and of a regional fee schedule for the region involved: (A) For 2004 (for services furnished on or after July 1, 2004), the blended rate shall be based 20 percent on the fee schedule under paragraph (1) and 80 percent on the regional fee schedule. (B) For 2005, the blended rate shall be based 40 percent on the fee schedule under paragraph (1) and 60 percent on the regional fee schedule. (C) For 2006, the blended rate shall be based 60 percent on the fee schedule under paragraph (1) and 40 percent on the regional fee schedule. (D) For 2007, 2008, and 2009, the blended rate shall be based 80 percent on the fee schedule under paragraph (1) and 20 percent on the regional fee schedule. (E) For 2010 and each succeeding year, the blended rate shall be based 100 percent on the fee schedule under paragraph (1). For purposes of this paragraph, the Secretary shall establish a regional fee schedule for each of the nine census divisions (referred to in section 1886(d)(2)) using the methodology (used in establishing the fee schedule under paragraph (1)) to calculate a regional conversion factor and a regional mileage payment rate and using the same payment adjustments and the same relative value units as used in the fee schedule under such paragraph. (11) Adjustment in payment for certain long trips.-- In the case of ground ambulance services furnished on or after July 1, 2004, and before January 1, 2009, regardless of where the transportation originates, the fee schedule established under this subsection shall provide that, with respect to the payment rate for mileage for a trip above 50 miles the per mile rate otherwise established shall be increased by \1/4\ of the payment per mile otherwise applicable to miles in excess of 50 miles in such trip. (12) Assistance for rural providers furnishing services in low population density areas.-- (A) In general.--In the case of ground ambulance services furnished on or after July 1, 2004, and before January 1, 2023, for which the transportation originates in a qualified rural area (identified under subparagraph (B)(iii)), the Secretary shall provide for a percent increase in the base rate of the fee schedule for a trip established under this subsection. In establishing such percent increase, the Secretary shall estimate the average cost per trip for such services (not taking into account mileage) in the lowest quartile as compared to the average cost per trip for such services (not taking into account mileage) in the highest quartile of all rural county populations. (B) Identification of qualified rural areas.-- (i) Determination of population density in area.--Based upon data from the United States decennial census for the year 2000, the Secretary shall determine, for each rural area, the population density for that area. (ii) Ranking of areas.--The Secretary shall rank each such area based on such population density. (iii) Identification of qualified rural areas.--The Secretary shall identify those areas (in subparagraph (A) referred to as ``qualified rural areas'') with the lowest population densities that represent, if each such area were weighted by the population of such area (as used in computing such population densities), an aggregate total of 25 percent of the total of the population of all such areas. (iv) Rural area.--For purposes of this paragraph, the term ``rural area'' has the meaning given such term in section 1886(d)(2)(D). If feasible, the Secretary shall treat a rural census tract of a metropolitan statistical area (as determined under the most recent modification of the Goldsmith Modification, originally published in the Federal Register on February 27, 1992 (57 Fed. Reg. 6725) as a rural area for purposes of this paragraph. (v) Judicial review.--There shall be no administrative or judicial review under section 1869, 1878, or otherwise, respecting the identification of an area under this subparagraph. (13) Temporary increase for ground ambulance services.-- (A) In general.--After computing the rates with respect to ground ambulance services under the other applicable provisions of this subsection, in the case of such services furnished on or after July 1, 2004, and before January 1, 2007, and for such services furnished on or after July 1, 2008, and before January 1, 2023, for which the transportation originates in-- (i) a rural area described in paragraph (9) or in a rural census tract described in such paragraph, the fee schedule established under this section shall provide that the rate for the service otherwise established, after the application of any increase under paragraphs (11) and (12), shall be increased by 2 percent (or 3 percent if such service is furnished on or after July 1, 2008, and before January 1, 2023); and (ii) an area not described in clause (i), the fee schedule established under this subsection shall provide that the rate for the service otherwise established, after the application of any increase under paragraph (11), shall be increased by 1 percent (or 2 percent if such service is furnished on or after July 1, 2008, and before January 1, 2023). (B) Application of increased payments after applicable period.--The increased payments under subparagraph (A) shall not be taken into account in calculating payments for services furnished after the applicable period specified in such subparagraph. (14) Providing appropriate coverage of rural air ambulance services.-- (A) In general.--The regulations described in section 1861(s)(7) shall provide, to the extent that any ambulance services (whether ground or air) may be covered under such section, that a rural air ambulance service (as defined in subparagraph (C)) is reimbursed under this subsection at the air ambulance rate if the air ambulance service-- (i) is reasonable and necessary based on the health condition of the individual being transported at or immediately prior to the time of the transport; and (ii) complies with equipment and crew requirements established by the Secretary. (B) Satisfaction of requirement of medically necessary.--The requirement of subparagraph (A)(i) is deemed to be met for a rural air ambulance service if-- (i) subject to subparagraph (D), such service is requested by a physician or other qualified medical personnel (as specified by the Secretary) who certifies or reasonably determines that the individual's condition is such that the time needed to transport the individual by land or the instability of transportation by land poses a threat to the individual's survival or seriously endangers the individual's health; or (ii) such service is furnished pursuant to a protocol that is established by a State or regional emergency medical service (EMS) agency and recognized or approved by the Secretary under which the use of an air ambulance is recommended, if such agency does not have an ownership interest in the entity furnishing such service. (C) Rural air ambulance service defined.--For purposes of this paragraph, the term ``rural air ambulance service'' means fixed wing and rotary wing air ambulance service in which the point of pick up of the individual occurs in a rural area (as defined in section 1886(d)(2)(D)) or in a rural census tract of a metropolitan statistical area (as determined under the most recent modification of the Goldsmith Modification, originally published in the Federal Register on February 27, 1992 (57 Fed. Reg. 6725)). (D) Limitation.-- (i) In general.--Subparagraph (B)(i) shall not apply if there is a financial or employment relationship between the person requesting the rural air ambulance service and the entity furnishing the ambulance service, or an entity under common ownership with the entity furnishing the air ambulance service, or a financial relationship between an immediate family member of such requester and such an entity. (ii) Exception.--Where a hospital and the entity furnishing rural air ambulance services are under common ownership, clause (i) shall not apply to remuneration (through employment or other relationship) by the hospital of the requester or immediate family member if the remuneration is for provider-based physician services furnished in a hospital (as described in section 1887) which are reimbursed under part A and the amount of the remuneration is unrelated directly or indirectly to the provision of rural air ambulance services. (15) Payment adjustment for non-emergency ambulance transports for esrd beneficiaries.--The fee schedule amount otherwise applicable under the preceding provisions of this subsection shall be reduced by 10 percent for ambulance services furnished during the period beginning on October 1, 2013, and ending on September 30, 2018, and by 23 percent for such services furnished on or after October 1, 2018, consisting of non-emergency basic life support services involving transport of an individual with end-stage renal disease for renal dialysis services (as described in section 1881(b)(14)(B)) furnished other than on an emergency basis by a provider of services or a renal dialysis facility. (16) Prior authorization for repetitive scheduled non-emergent ambulance transports.-- (A) In general.--Beginning January 1, 2017, if the expansion to all States of the model of prior authorization described in paragraph (2) of section 515(a) of the Medicare Access and CHIP Reauthorization Act of 2015 meets the requirements described in paragraphs (1) through (3) of section 1115A(c), then the Secretary shall expand such model to all States. (B) Funding.--The Secretary shall use funds made available under section 1893(h)(10) to carry out this paragraph. (C) Clarification regarding budget neutrality.--Nothing in this paragraph may be construed to limit or modify the application of section 1115A(b)(3)(B) to models described in such section, including with respect to the model described in subparagraph (A) and expanded beginning on January 1, 2017, under such subparagraph. (17) Submission of cost and other information.-- (A) Development of data collection system.-- The Secretary shall develop a data collection system (which may include use of a cost survey) to collect cost, revenue, utilization, and other information determined appropriate by the Secretary with respect to providers of services (in this paragraph referred to as ``providers'') and suppliers of ground ambulance services. Such system shall be designed to collect information-- (i) needed to evaluate the extent to which reported costs relate to payment rates under this subsection; (ii) on the utilization of capital equipment and ambulance capacity, including information consistent with the type of information described in section 1121(a); and (iii) on different types of ground ambulance services furnished in different geographic locations, including rural areas and low population density areas described in paragraph (12). (B) Specification of data collection system.-- (i) In general.--The Secretary shall-- (I) not later than December 31, 2019, specify the data collection system under subparagraph (A); and (II) identify the providers and suppliers of ground ambulance services that would be required to submit information under such data collection system, including the representative sample described in clause (ii). (ii) Determination of representative sample.-- (I) In general.--Not later than December 31, 2019, with respect to the data collection for the first year under such system, and for each subsequent year through 2024, the Secretary shall determine a representative sample to submit information under the data collection system. (II) Requirements.--The sample under subclause (I) shall be representative of the different types of providers and suppliers of ground ambulance services (such as those providers and suppliers that are part of an emergency service or part of a government organization) and the geographic locations in which ground ambulance services are furnished (such as urban, rural, and low population density areas). (III) Limitation.--The Secretary shall not include an individual provider or supplier of ground ambulance services in the sample under subclause (I) in 2 consecutive years, to the extent practicable. (C) Reporting of cost information.--For each year, a provider or supplier of ground ambulance services identified by the Secretary under subparagraph (B)(i)(II) as being required to submit information under the data collection system with respect to a period for the year shall submit to the Secretary information specified under the system. Such information shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph. (D) Payment reduction for failure to report.-- (i) In general.--Beginning January 1, 2022, subject to clause (ii), a 10 percent reduction to payments under this subsection shall be made for the applicable period (as defined in clause (ii)) to a provider or supplier of ground ambulance services that-- (I) is required to submit information under the data collection system with respect to a period under subparagraph (C); and (II) does not sufficiently submit such information, as determined by the Secretary. (ii) Applicable period defined.--For purposes of clause (i), the term ``applicable period'' means, with respect to a provider or supplier of ground ambulance services, a year specified by the Secretary not more than 2 years after the end of the period with respect to which the Secretary has made a determination under clause (i)(II) that the provider or supplier of ground ambulance services failed to sufficiently submit information under the data collection system. (iii) Hardship exemption.--The Secretary may exempt a provider or supplier from the payment reduction under clause (i) with respect to an applicable period in the event of significant hardship, such as a natural disaster, bankruptcy, or other similar situation that the Secretary determines interfered with the ability of the provider or supplier of ground ambulance services to submit such information in a timely manner for the specified period. (iv) Informal review.--The Secretary shall establish a process under which a provider or supplier of ground ambulance services may seek an informal review of a determination that the provider or supplier is subject to the payment reduction under clause (i). (E) Ongoing data collection.-- (i) Revision of data collection system.--The Secretary may, as the Secretary determines appropriate and, if available, taking into consideration the report (or reports) under subparagraph (F), revise the data collection system under subparagraph (A). (ii) Subsequent data collection.--In order to continue to evaluate the extent to which reported costs relate to payment rates under this subsection and for other purposes the Secretary deems appropriate, the Secretary shall require providers and suppliers of ground ambulance services to submit information for years after 2024 as the Secretary determines appropriate, but in no case less often than once every 3 years. (F) Ground ambulance data collection system study.-- (i) In general.--Not later than March 15, 2023, and as determined necessary by the Medicare Payment Advisory Commission thereafter, such Commission shall assess, and submit to Congress a report on, information submitted by providers and suppliers of ground ambulance services through the data collection system under subparagraph (A), the adequacy of payments for ground ambulance services under this subsection, and geographic variations in the cost of furnishing such services. (ii) Contents.--A report under clause (i) shall contain the following: (I) An analysis of information submitted through the data collection system. (II) An analysis of any burden on providers and suppliers of ground ambulance services associated with the data collection system. (III) A recommendation as to whether information should continue to be submitted through such data collection system or if such system should be revised under subparagraph (E)(i). (IV) Other information determined appropriate by the Commission. (G) Public availability.--The Secretary shall post information on the results of the data collection under this paragraph on the Internet website of the Centers for Medicare & Medicaid Services, as determined appropriate by the Secretary. (H) Implementation.--The Secretary shall implement this paragraph through notice and comment rulemaking. (I) Administration.--Chapter 35 of title 44, United States Code, shall not apply to the collection of information required under this subsection. (J) Limitations on review.--There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of the data collection system or identification of respondents under this paragraph. (K) Funding for implementation.--For purposes of carrying out subparagraph (A), the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under section 1841, of $15,000,000 to the Centers for Medicare & Medicaid Services Program Management Account for fiscal year 2018. Amounts transferred under this subparagraph shall remain available until expended. (m) Payment for Telehealth Services.-- (1) In general.--The Secretary shall pay for telehealth services that are furnished via a telecommunications system by a physician (as defined in section 1861(r)) or a practitioner (described in section 1842(b)(18)(C)) to an eligible telehealth individual enrolled under this part notwithstanding that the individual physician or practitioner providing the telehealth service is not at the same location as the beneficiary. For purposes of the preceding sentence, in the case of any Federal telemedicine demonstration program conducted in Alaska or Hawaii, the term ``telecommunications system'' includes store- and-forward technologies that provide for the asynchronous transmission of health care information in single or multimedia formats. (2) Payment amount.-- (A) Distant site.--The Secretary shall pay to a physician or practitioner located at a distant site that furnishes a telehealth service to an eligible telehealth individual an amount equal to the amount that such physician or practitioner would have been paid under this title had such service been furnished without the use of a telecommunications system. (B) Facility fee for originating site.-- (i) In general.--Subject to clause (ii) and paragraph (6)(C), with respect to a telehealth service, subject to section 1833(a)(1)(U), there shall be paid to the originating site a facility fee equal to-- (I) for the period beginning on October 1, 2001, and ending on December 31, 2001, and for 2002, $20; and (II) for a subsequent year, the facility fee specified in subclause (I) or this subclause for the preceding year increased by the percentage increase in the MEI (as defined in section 1842(i)(3)) for such subsequent year. (ii) No facility fee if originating site is the home.--No facility fee shall be paid under this subparagraph to an originating site described in paragraph (4)(C)(ii)(X). (C) Telepresenter not required.--Nothing in this subsection shall be construed as requiring an eligible telehealth individual to be presented by a physician or practitioner at the originating site for the furnishing of a service via a telecommunications system, unless it is medically necessary (as determined by the physician or practitioner at the distant site). (3) Limitation on beneficiary charges.-- (A) Physician and practitioner.--The provisions of section 1848(g) and subparagraphs (A) and (B) of section 1842(b)(18) shall apply to a physician or practitioner receiving payment under this subsection in the same manner as they apply to physicians or practitioners under such sections. (B) Originating site.--The provisions of section 1842(b)(18) shall apply to originating sites receiving a facility fee in the same manner as they apply to practitioners under such section. (4) Definitions.--For purposes of this subsection: (A) Distant site.--The term ``distant site'' means the site at which the physician or practitioner is located at the time the service is provided via a telecommunications system. (B) Eligible telehealth individual.--The term ``eligible telehealth individual'' means an individual enrolled under this part who receives a telehealth service furnished at an originating site. (C) Originating site.-- (i) In general.--Except as provided in paragraphs (5), (6), and (7), the term``originating site'' means only those sites described in clause (ii) at which the eligible telehealth individual is located at the time the service is furnished via a telecommunications system and only if such site is located-- (I) in an area that is designated as a rural health professional shortage area under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C. 254e(a)(1)(A)); (II) in a county that is not included in a Metropolitan Statistical Area; or (III) from an entity that participates in a Federal telemedicine demonstration project that has been approved by (or receives funding from) the Secretary of Health and Human Services as of December 31, 2000. (ii) Sites described.--The sites referred to in clause (i) are the following sites: (I) The office of a physician or practitioner. (II) A critical access hospital (as defined in section 1861(mm)(1)). (III) A rural health clinic (as defined in section 1861(aa)(2)). (IV) A Federally qualified health center (as defined in section 1861(aa)(4)). (V) A hospital (as defined in section 1861(e)). (VI) A hospital-based or critical access hospital-based renal dialysis center (including satellites). (VII) A skilled nursing facility (as defined in section 1819(a)). (VIII) A community mental health center (as defined in section 1861(ff)(3)(B)). (IX) A renal dialysis facility, but only for purposes of section 1881(b)(3)(B). (X) The home of an individual, but only for purposes of section 1881(b)(3)(B) or telehealth services described in paragraph (7). (D) Physician.--The term ``physician'' has the meaning given that term in section 1861(r). (E) Practitioner.--The term ``practitioner'' has the meaning given that term in section 1842(b)(18)(C). (F) Telehealth service.-- (i) In general.--The term ``telehealth service'' means professional consultations, office visits, and office psychiatry services (identified as of July 1, 2000, by HCPCS codes 99241-99275, 99201-99215, 90804-90809, and 90862 (and as subsequently modified by the Secretary)), and any additional service specified by the Secretary. (ii) Yearly update.--The Secretary shall establish a process that provides, on an annual basis, for the addition or deletion of services (and HCPCS codes), as appropriate, to those specified in clause (i) for authorized payment under paragraph (1). (5) Treatment of home dialysis monthly esrd-related visit.--The geographic requirements described in paragraph (4)(C)(i) shall not apply with respect to telehealth services furnished on or after January 1, 2019, for purposes of section 1881(b)(3)(B), at an originating site described in subclause (VI), (IX), or (X) of paragraph (4)(C)(ii). (6) Treatment of stroke telehealth services.-- (A) Non-application of originating site requirements.--The requirements described in paragraph (4)(C) shall not apply with respect to telehealth services furnished on or after January 1, 2019, for purposes of diagnosis, evaluation, or treatment of symptoms of an acute stroke, as determined by the Secretary. (B) Inclusion of certain sites.--With respect to telehealth services described in subparagraph (A), the term ``originating site'' shall include any hospital (as defined in section 1861(e)) or critical access hospital (as defined in section 1861(mm)(1)), any mobile stroke unit (as defined by the Secretary), or any other site determined appropriate by the Secretary, at which the eligible telehealth individual is located at the time the service is furnished via a telecommunications system. (C) No originating site facility fee for new sites.--No facility fee shall be paid under paragraph (2)(B) to an originating site with respect to a telehealth service described in subparagraph (A) if the originating site does not otherwise meet the requirements for an originating site under paragraph (4)(C). (7) Treatment of substance use disorder services furnished through telehealth.--The geographic requirements described in paragraph (4)(C)(i) shall not apply with respect to telehealth services furnished on or after July 1, 2019, to an eligible telehealth individual with a substance use disorder diagnosis for purposes of treatment of such disorder or co-occurring mental health disorder, as determined by the Secretary, at an originating site described in paragraph (4)(C)(ii) (other than an originating site described in subclause (IX) of such paragraph). (n) Authority To Modify or Eliminate Coverage of Certain Preventive Services.--Notwithstanding any other provision of this title, effective beginning on January 1, 2010, if the Secretary determines appropriate, the Secretary may-- (1) modify-- (A) the coverage of any preventive service described in subparagraph (A) of section 1861(ddd)(3) to the extent that such modification is consistent with the recommendations of the United States Preventive Services Task Force; and (B) the services included in the initial preventive physical examination described in subparagraph (B) of such section; and (2) provide that no payment shall be made under this title for a preventive service described in subparagraph (A) of such section that has not received a grade of A, B, C, or I by such Task Force. (o) Development and Implementation of Prospective Payment System.-- (1) Development.-- (A) In general.--The Secretary shall develop a prospective payment system for payment for Federally qualified health center services furnished by Federally qualified health centers under this title. Such system shall include a process for appropriately describing the services furnished by Federally qualified health centers and shall establish payment rates for specific payment codes based on such appropriate descriptions of services. Such system shall be established to take into account the type, intensity, and duration of services furnished by Federally qualified health centers. Such system may include adjustments, including geographic adjustments, determined appropriate by the Secretary. (B) Collection of data and evaluation.--By not later than January 1, 2011, the Secretary shall require Federally qualified health centers to submit to the Secretary such information as the Secretary may require in order to develop and implement the prospective payment system under this subsection, including the reporting of services using HCPCS codes. (2) Implementation.-- (A) In general.--Notwithstanding section 1833(a)(3)(A), the Secretary shall provide, for cost reporting periods beginning on or after October 1, 2014, for payments of prospective payment rates for Federally qualified health center services furnished by Federally qualified health centers under this title in accordance with the prospective payment system developed by the Secretary under paragraph (1). (B) Payments.-- (i) Initial payments.--The Secretary shall implement such prospective payment system so that the estimated aggregate amount of prospective payment rates (determined prior to the application of section 1833(a)(1)(Z)) under this title for Federally qualified health center services in the first year that such system is implemented is equal to 100 percent of the estimated amount of reasonable costs (determined without the application of a per visit payment limit or productivity screen and prior to the application of section 1866(a)(2)(A)(ii)) that would have occurred for such services under this title in such year if the system had not been implemented. (ii) Payments in subsequent years.-- Payment rates in years after the year of implementation of such system shall be the payment rates in the previous year increased-- (I) in the first year after implementation of such system, by the percentage increase in the MEI (as defined in section 1842(i)(3)) for the year involved; and (II) in subsequent years, by the percentage increase in a market basket of Federally qualified health center goods and services as promulgated through regulations, or if such an index is not available, by the percentage increase in the MEI (as defined in section 1842(i)(3)) for the year involved. (C) Preparation for pps implementation.-- Notwithstanding any other provision of law, the Secretary may establish and implement by program instruction or otherwise the payment codes to be used under the prospective payment system under this section. (3) Additional payments for certain fqhcs with physicians or other practitioners receiving data 2000 waivers.-- (A) In general.--In the case of a Federally qualified health center with respect to which, beginning on or after January 1, 2019, Federally qualified health center services (as defined in section 1861(aa)(3)) are furnished for the treatment of opioid use disorder by a physician or practitioner who meets the requirements described in subparagraph (C), the Secretary shall, subject to availability of funds under subparagraph (D), make a payment (at such time and in such manner as specified by the Secretary) to such Federally qualified health center after receiving and approving an application submitted by such Federally qualified health center under subparagraph (B). Such a payment shall be in an amount determined by the Secretary, based on an estimate of the average costs of training for purposes of receiving a waiver described in subparagraph (C)(ii). Such a payment may be made only one time with respect to each such physician or practitioner. (B) Application.--In order to receive a payment described in subparagraph (A), a Federally qualified health center shall submit to the Secretary an application for such a payment at such time, in such manner, and containing such information as specified by the Secretary. A Federally qualified health center may apply for such a payment for each physician or practitioner described in subparagraph (A) furnishing services described in such subparagraph at such center. (C) Requirements.--For purposes of subparagraph (A), the requirements described in this subparagraph, with respect to a physician or practitioner, are the following: (i) The physician or practitioner is employed by or working under contract with a Federally qualified health center described in subparagraph (A) that submits an application under subparagraph (B). (ii) The physician or practitioner first receives a waiver under section 303(g) of the Controlled Substances Act on or after January 1, 2019. (D) Funding.--For purposes of making payments under this paragraph, there are appropriated, out of amounts in the Treasury not otherwise appropriated, $6,000,000, which shall remain available until expended. (p) Quality Incentives To Promote Patient Safety and Public Health in Computed Tomography.-- (1) Quality incentives.--In the case of an applicable computed tomography service (as defined in paragraph (2)) for which payment is made under an applicable payment system (as defined in paragraph (3)) and that is furnished on or after January 1, 2016, using equipment that is not consistent with the CT equipment standard (described in paragraph (4)), the payment amount for such service shall be reduced by the applicable percentage (as defined in paragraph (5)). (2) Applicable computed tomography services defined.--In this subsection, the term ``applicable computed tomography service'' means a service billed using diagnostic radiological imaging codes for computed tomography (identified as of January 1, 2014, by HCPCS codes 70450-70498, 71250-71275, 72125-72133, 72191-72194, 73200-73206, 73700-73706, 74150-74178, 74261-74263, and 75571-75574 (and any succeeding codes). (3) Applicable payment system defined.--In this subsection, the term ``applicable payment system'' means the following: (A) The technical component and the technical component of the global fee under the fee schedule established under section 1848(b). (B) The prospective payment system for hospital outpatient department services under section 1833(t). (4) Consistency with ct equipment standard.--In this subsection, the term ``not consistent with the CT equipment standard'' means, with respect to an applicable computed tomography service, that the service was furnished using equipment that does not meet each of the attributes of the National Electrical Manufacturers Association (NEMA) Standard XR-29-2013, entitled ``Standard Attributes on CT Equipment Related to Dose Optimization and Management''. Through rulemaking, the Secretary may apply successor standards. (5) Applicable percentage defined.--In this subsection, the term ``applicable percentage'' means-- (A) for 2016, 5 percent; and (B) for 2017 and subsequent years, 15 percent. (6) Implementation.-- (A) Information.--The Secretary shall require that information be provided and attested to by a supplier and a hospital outpatient department that indicates whether an applicable computed tomography service was furnished that was not consistent with the CT equipment standard (described in paragraph (4)). Such information may be included on a claim and may be a modifier. Such information shall be verified, as appropriate, as part of the periodic accreditation of suppliers under section 1834(e) and hospitals under section 1865(a). (B) Administration.--Chapter 35 of title 44, United States Code, shall not apply to information described in subparagraph (A). (q) Recognizing Appropriate Use Criteria for Certain Imaging Services.-- (1) Program established.-- (A) In general.--The Secretary shall establish a program to promote the use of appropriate use criteria (as defined in subparagraph (B)) for applicable imaging services (as defined in subparagraph (C)) furnished in an applicable setting (as defined in subparagraph (D)) by ordering professionals and furnishing professionals (as defined in subparagraphs (E) and (F), respectively). (B) Appropriate use criteria defined.--In this subsection, the term ``appropriate use criteria'' means criteria, only developed or endorsed by national professional medical specialty societies or other provider-led entities, to assist ordering professionals and furnishing professionals in making the most appropriate treatment decision for a specific clinical condition for an individual. To the extent feasible, such criteria shall be evidence-based. (C) Applicable imaging service defined.--In this subsection, the term ``applicable imaging service'' means an advanced diagnostic imaging service (as defined in subsection (e)(1)(B)) for which the Secretary determines-- (i) one or more applicable appropriate use criteria specified under paragraph (2) apply; (ii) there are one or more qualified clinical decision support mechanisms listed under paragraph (3)(C); and (iii) one or more of such mechanisms is available free of charge. (D) Applicable setting defined.--In this subsection, the term ``applicable setting'' means a physician's office, a hospital outpatient department (including an emergency department), an ambulatory surgical center, and any other provider-led outpatient setting determined appropriate by the Secretary. (E) Ordering professional defined.--In this subsection, the term ``ordering professional'' means a physician (as defined in section 1861(r)) or a practitioner described in section 1842(b)(18)(C) who orders an applicable imaging service. (F) Furnishing professional defined.--In this subsection, the term ``furnishing professional'' means a physician (as defined in section 1861(r)) or a practitioner described in section 1842(b)(18)(C) who furnishes an applicable imaging service. (2) Establishment of applicable appropriate use criteria.-- (A) In general.--Not later than November 15, 2015, the Secretary shall through rulemaking, and in consultation with physicians, practitioners, and other stakeholders, specify applicable appropriate use criteria for applicable imaging services only from among appropriate use criteria developed or endorsed by national professional medical specialty societies or other provider-led entities. (B) Considerations.--In specifying applicable appropriate use criteria under subparagraph (A), the Secretary shall take into account whether the criteria-- (i) have stakeholder consensus; (ii) are scientifically valid and evidence based; and (iii) are based on studies that are published and reviewable by stakeholders. (C) Revisions.--The Secretary shall review, on an annual basis, the specified applicable appropriate use criteria to determine if there is a need to update or revise (as appropriate) such specification of applicable appropriate use criteria and make such updates or revisions through rulemaking. (D) Treatment of multiple applicable appropriate use criteria.--In the case where the Secretary determines that more than one appropriate use criterion applies with respect to an applicable imaging service, the Secretary shall apply one or more applicable appropriate use criteria under this paragraph for the service. (3) Mechanisms for consultation with applicable appropriate use criteria.-- (A) Identification of mechanisms to consult with applicable appropriate use criteria.-- (i) In general.--The Secretary shall specify qualified clinical decision support mechanisms that could be used by ordering professionals to consult with applicable appropriate use criteria for applicable imaging services. (ii) Consultation.--The Secretary shall consult with physicians, practitioners, health care technology experts, and other stakeholders in specifying mechanisms under this paragraph. (iii) Inclusion of certain mechanisms.--Mechanisms specified under this paragraph may include any or all of the following that meet the requirements described in subparagraph (B)(ii): (I) Use of clinical decision support modules in certified EHR technology (as defined in section 1848(o)(4)). (II) Use of private sector clinical decision support mechanisms that are independent from certified EHR technology, which may include use of clinical decision support mechanisms available from medical specialty organizations. (III) Use of a clinical decision support mechanism established by the Secretary. (B) Qualified clinical decision support mechanisms.-- (i) In general.--For purposes of this subsection, a qualified clinical decision support mechanism is a mechanism that the Secretary determines meets the requirements described in clause (ii). (ii) Requirements.--The requirements described in this clause are the following: (I) The mechanism makes available to the ordering professional applicable appropriate use criteria specified under paragraph (2) and the supporting documentation for the applicable imaging service ordered. (II) In the case where there is more than one applicable appropriate use criterion specified under such paragraph for an applicable imaging service, the mechanism indicates the criteria that it uses for the service. (III) The mechanism determines the extent to which an applicable imaging service ordered is consistent with the applicable appropriate use criteria so specified. (IV) The mechanism generates and provides to the ordering professional a certification or documentation that documents that the qualified clinical decision support mechanism was consulted by the ordering professional. (V) The mechanism is updated on a timely basis to reflect revisions to the specification of applicable appropriate use criteria under such paragraph. (VI) The mechanism meets privacy and security standards under applicable provisions of law. (VII) The mechanism performs such other functions as specified by the Secretary, which may include a requirement to provide aggregate feedback to the ordering professional. (C) List of mechanisms for consultation with applicable appropriate use criteria.-- (i) Initial list.--Not later than April 1, 2016, the Secretary shall publish a list of mechanisms specified under this paragraph. (ii) Periodic updating of list.--The Secretary shall identify on an annual basis the list of qualified clinical decision support mechanisms specified under this paragraph. (4) Consultation with applicable appropriate use criteria.-- (A) Consultation by ordering professional.-- Beginning with January 1, 2017, subject to subparagraph (C), with respect to an applicable imaging service ordered by an ordering professional that would be furnished in an applicable setting and paid for under an applicable payment system (as defined in subparagraph (D)), an ordering professional shall-- (i) consult with a qualified decision support mechanism listed under paragraph (3)(C); and (ii) provide to the furnishing professional the information described in clauses (i) through (iii) of subparagraph (B). (B) Reporting by furnishing professional.-- Beginning with January 1, 2017, subject to subparagraph (C), with respect to an applicable imaging service furnished in an applicable setting and paid for under an applicable payment system (as defined in subparagraph (D)), payment for such service may only be made if the claim for the service includes the following: (i) Information about which qualified clinical decision support mechanism was consulted by the ordering professional for the service. (ii) Information regarding-- (I) whether the service ordered would adhere to the applicable appropriate use criteria specified under paragraph (2); (II) whether the service ordered would not adhere to such criteria; or (III) whether such criteria was not applicable to the service ordered. (iii) The national provider identifier of the ordering professional (if different from the furnishing professional). (C) Exceptions.--The provisions of subparagraphs (A) and (B) and paragraph (6)(A) shall not apply to the following: (i) Emergency services.--An applicable imaging service ordered for an individual with an emergency medical condition (as defined in section 1867(e)(1)). (ii) Inpatient services.--An applicable imaging service ordered for an inpatient and for which payment is made under part A. (iii) Significant hardship.--An applicable imaging service ordered by an ordering professional who the Secretary may, on a case-by-case basis, exempt from the application of such provisions if the Secretary determines, subject to annual renewal, that consultation with applicable appropriate use criteria would result in a significant hardship, such as in the case of a professional who practices in a rural area without sufficient Internet access. (D) Applicable payment system defined.--In this subsection, the term ``applicable payment system'' means the following: (i) The physician fee schedule established under section 1848(b). (ii) The prospective payment system for hospital outpatient department services under section 1833(t). (iii) The ambulatory surgical center payment systems under section 1833(i). (5) Identification of outlier ordering professionals.-- (A) In general.--With respect to applicable imaging services furnished beginning with 2017, the Secretary shall determine, on an annual basis, no more than five percent of the total number of ordering professionals who are outlier ordering professionals. (B) Outlier ordering professionals.--The determination of an outlier ordering professional shall-- (i) be based on low adherence to applicable appropriate use criteria specified under paragraph (2), which may be based on comparison to other ordering professionals; and (ii) include data for ordering professionals for whom prior authorization under paragraph (6)(A) applies. (C) Use of two years of data.--The Secretary shall use two years of data to identify outlier ordering professionals under this paragraph. (D) Process.--The Secretary shall establish a process for determining when an outlier ordering professional is no longer an outlier ordering professional. (E) Consultation with stakeholders.--The Secretary shall consult with physicians, practitioners and other stakeholders in developing methods to identify outlier ordering professionals under this paragraph. (6) Prior authorization for ordering professionals who are outliers.-- (A) In general.--Beginning January 1, 2020, subject to paragraph (4)(C), with respect to services furnished during a year, the Secretary shall, for a period determined appropriate by the Secretary, apply prior authorization for applicable imaging services that are ordered by an outlier ordering professional identified under paragraph (5). (B) Appropriate use criteria in prior authorization.--In applying prior authorization under subparagraph (A), the Secretary shall utilize only the applicable appropriate use criteria specified under this subsection. (C) Funding.--For purposes of carrying out this paragraph, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under section 1841, of $5,000,000 to the Centers for Medicare & Medicaid Services Program Management Account for each of fiscal years 2019 through 2021. Amounts transferred under the preceding sentence shall remain available until expended. (7) Construction.--Nothing in this subsection shall be construed as granting the Secretary the authority to develop or initiate the development of clinical practice guidelines or appropriate use criteria. (r) Payment for Renal Dialysis Services for Individuals With Acute Kidney Injury.-- (1) Payment rate.--In the case of renal dialysis services (as defined in subparagraph (B) of section 1881(b)(14)) furnished under this part by a renal dialysis facility or provider of services paid under such section during a year (beginning with 2017) to an individual with acute kidney injury (as defined in paragraph (2)), the amount of payment under this part for such services shall be the base rate for renal dialysis services determined for such year under such section, as adjusted by any applicable geographic adjustment factor applied under subparagraph (D)(iv)(II) of such section and may be adjusted by the Secretary (on a budget neutral basis for payments under this paragraph) by any other adjustment factor under subparagraph (D) of such section. (2) Individual with acute kidney injury defined.--In this subsection, the term ``individual with acute kidney injury'' means an individual who has acute loss of renal function and does not receive renal dialysis services for which payment is made under section 1881(b)(14). (s) Payment for Applicable Disposable Devices.-- (1) Separate payment.--The Secretary shall make a payment (separate from the payments otherwise made under section 1895) in the amount established under paragraph (3) to a home health agency for an applicable disposable device (as defined in paragraph (2)) when furnished on or after January 1, 2017, to an individual who receives home health services for which payment is made under section 1895(b). (2) Applicable disposable device.--In this subsection, the term applicable disposable device means a disposable device that, as determined by the Secretary, is-- (A) a disposable negative pressure wound therapy device that is an integrated system comprised of a non-manual vacuum pump, a receptacle for collecting exudate, and dressings for the purposes of wound therapy; and (B) a substitute for, and used in lieu of, a negative pressure wound therapy durable medical equipment item that is an integrated system of a negative pressure vacuum pump, a separate exudate collection canister, and dressings that would otherwise be covered for individuals for such wound therapy. (3) Payment amount.--The separate payment amount established under this paragraph for an applicable disposable device for a year shall be equal to the amount of the payment that would be made under section 1833(t) (relating to payment for covered OPD services) for the year for the Level I Healthcare Common Procedure Coding System (HCPCS) code for which the description for a professional service includes the furnishing of such device. (t) Site-of-Service Price Transparency.-- (1) In general.--In order to facilitate price transparency with respect to items and services for which payment may be made either to a hospital outpatient department or to an ambulatory surgical center under this title, the Secretary shall, for 2018 and each year thereafter, make available to the public via a searchable Internet website, with respect to an appropriate number of such items and services-- (A) the estimated payment amount for the item or service under the outpatient department fee schedule under subsection (t) of section 1833 and the ambulatory surgical center payment system under subsection (i) of such section; and (B) the estimated amount of beneficiary liability applicable to the item or service. (2) Calculation of estimated beneficiary liability.-- For purposes of paragraph (1)(B), the estimated amount of beneficiary liability, with respect to an item or service, is the amount for such item or service for which an individual who does not have coverage under a Medicare supplemental policy certified under section 1882 or any other supplemental insurance coverage is responsible. (3) Implementation.--In carrying out this subsection, the Secretary-- (A) shall include in the notice described in section 1804(a) a notification of the availability of the estimated amounts made available under paragraph (1); and (B) may utilize mechanisms in existence on the date of enactment of this subsection, such as the portion of the Internet website of the Centers for Medicare & Medicaid Services on which information comparing physician performance is posted (commonly referred to as the Physician Compare Internet website), to make available such estimated amounts under such paragraph. (4) Funding.--For purposes of implementing this subsection, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under section 1841 to the Centers for Medicare & Medicaid Services Program Management Account, of $6,000,000 for fiscal year 2017, to remain available until expended. (u) Payment and Related Requirements for Home Infusion Therapy.-- (1) Payment.-- (A) Single payment.-- (i) In general.--Subject to clause (iii) and subparagraphs (B) and (C), the Secretary shall implement a payment system under which a single payment is made under this title to a qualified home infusion therapy supplier for items and services described in subparagraphs (A) and (B) of section 1861(iii)(2)) furnished by a qualified home infusion therapy supplier (as defined in section 1861(iii)(3)(D)) in coordination with the furnishing of home infusion drugs (as defined in section 1861(iii)(3)(C)) under this part. (ii) Unit of single payment.--A unit of single payment under the payment system implemented under this subparagraph is for each infusion drug administration calendar day in the individual's home. The Secretary shall, as appropriate, establish single payment amounts for types of infusion therapy, including to take into account variation in utilization of nursing services by therapy type. (iii) Limitation.--The single payment amount determined under this subparagraph after application of subparagraph (B) and paragraph (3) shall not exceed the amount determined under the fee schedule under section 1848 for infusion therapy services furnished in a calendar day if furnished in a physician office setting, except such single payment shall not reflect more than 5 hours of infusion for a particular therapy in a calendar day. (B) Required adjustments.--The Secretary shall adjust the single payment amount determined under subparagraph (A) for home infusion therapy services under section 1861(iii)(1) to reflect other factors such as-- (i) a geographic wage index and other costs that may vary by region; and (ii) patient acuity and complexity of drug administration. (C) Discretionary adjustments.-- (i) In general.--Subject to clause (ii), the Secretary may adjust the single payment amount determined under subparagraph (A) (after application of subparagraph (B)) to reflect outlier situations and other factors as the Secretary determines appropriate. (ii) Requirement of budget neutrality.--Any adjustment under this subparagraph shall be made in a budget neutral manner. (2) Considerations.--In developing the payment system under this subsection, the Secretary may consider the costs of furnishing infusion therapy in the home, consult with home infusion therapy suppliers, consider payment amounts for similar items and services under this part and part A, and consider payment amounts established by Medicare Advantage plans under part C and in the private insurance market for home infusion therapy (including average per treatment day payment amounts by type of home infusion therapy). (3) Annual updates.-- (A) In general.--Subject to subparagraph (B), the Secretary shall update the single payment amount under this subsection from year to year beginning in 2022 by increasing the single payment amount from the prior year by the percentage increase in the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with June of the preceding year. (B) Adjustment.--For each year, the Secretary shall reduce the percentage increase described in subparagraph (A) by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II). The application of the preceding sentence may result in a percentage being less than 0.0 for a year, and may result in payment being less than such payment rates for the preceding year. (4) Authority to apply prior authorization.--The Secretary may, as determined appropriate by the Secretary, apply prior authorization for home infusion therapy services under section 1861(iii)(1). (5) Accreditation of qualified home infusion therapy suppliers.-- (A) Factors for designation of accreditation organizations.--The Secretary shall consider the following factors in designating accreditation organizations under subparagraph (B) and in reviewing and modifying the list of accreditation organizations designated pursuant to subparagraph (C): (i) The ability of the organization to conduct timely reviews of accreditation applications. (ii) The ability of the organization to take into account the capacities of suppliers located in a rural area (as defined in section 1886(d)(2)(D)). (iii) Whether the organization has established reasonable fees to be charged to suppliers applying for accreditation. (iv) Such other factors as the Secretary determines appropriate. (B) Designation.--Not later than January 1, 2021, the Secretary shall designate organizations to accredit suppliers furnishing home infusion therapy. The list of accreditation organizations so designated may be modified pursuant to subparagraph (C). (C) Review and modification of list of accreditation organizations.-- (i) In general.--The Secretary shall review the list of accreditation organizations designated under subparagraph (B) taking into account the factors under subparagraph (A). Taking into account the results of such review, the Secretary may, by regulation, modify the list of accreditation organizations designated under subparagraph (B). (ii) Special rule for accreditations done prior to removal from list of designated accreditation organizations.--In the case where the Secretary removes an organization from the list of accreditation organizations designated under subparagraph (B), any supplier that is accredited by the organization during the period beginning on the date on which the organization is designated as an accreditation organization under subparagraph (B) and ending on the date on which the organization is removed from such list shall be considered to have been accredited by an organization designated by the Secretary under subparagraph (B) for the remaining period such accreditation is in effect. (D) Rule for accreditations made prior to designation.--In the case of a supplier that is accredited before January 1, 2021, by an accreditation organization designated by the Secretary under subparagraph (B) as of January 1, 2019, such supplier shall be considered to have been accredited by an organization designated by the Secretary under such paragraph as of January 1, 2023, for the remaining period such accreditation is in effect. (6) Notification of infusion therapy options available prior to furnishing home infusion therapy.-- Prior to the furnishing of home infusion therapy to an individual, the physician who establishes the plan described in section 1861(iii)(1) for the individual shall provide notification (in a form, manner, and frequency determined appropriate by the Secretary) of the options available (such as home, physician's office, hospital outpatient department) for the furnishing of infusion therapy under this part. (7) Home infusion therapy services temporary transitional payment.-- (A) Temporary transitional payment.-- (i) In general.--The Secretary shall, in accordance with the payment methodology described in subparagraph (B) and subject to the provisions of this paragraph, provide a home infusion therapy services temporary transitional payment under this part to an eligible home infusion supplier (as defined in subparagraph (F)) for items and services described in subparagraphs (A) and (B) of section 1861(iii)(2)) furnished during the period specified in clause (ii) by such supplier in coordination with the furnishing of transitional home infusion drugs (as defined in clause (iii)). (ii) Period specified.--For purposes of clause (i), the period specified in this clause is the period beginning on January 1, 2019, and ending on the day before the date of the implementation of the payment system under paragraph (1)(A). (iii) Transitional home infusion drug defined.--For purposes of this paragraph, the term ``transitional home infusion drug'' has the meaning given to the term ``home infusion drug'' under section 1861(iii)(3)(C)), except that clause (ii) of such section shall not apply if a drug described in such clause is identified in clauses (i), (ii), (iii) or (iv) of subparagraph (C) as of the date of the enactment of this paragraph. (B) Payment methodology.--For purposes of this paragraph, the Secretary shall establish a payment methodology, with respect to items and services described in subparagraph (A)(i). Under such payment methodology the Secretary shall-- (i) create the three payment categories described in clauses (i), (ii), and (iii) of subparagraph (C); (ii) assign drugs to such categories, in accordance with such clauses; (iii) assign appropriate Healthcare Common Procedure Coding System (HCPCS) codes to each payment category; and (iv) establish a single payment amount for each such payment category, in accordance with subparagraph (D), for each infusion drug administration calendar day in the individual's home for drugs assigned to such category. (C) Payment categories.-- (i) Payment category 1.--The Secretary shall create a payment category 1 and assign to such category drugs which are covered under the Local Coverage Determination on External Infusion Pumps (LCD number L33794) and billed with the following HCPCS codes (as identified as of January 1, 2018, and as subsequently modified by the Secretary): J0133, J0285, J0287, J0288, J0289, J0895, J1170, J1250, J1265, J1325, J1455, J1457, J1570, J2175, J2260, J2270, J2274, J2278, J3010, or J3285. (ii) Payment category 2.--The Secretary shall create a payment category 2 and assign to such category drugs which are covered under such local coverage determination and billed with the following HCPCS codes (as identified as of January 1, 2018, and as subsequently modified by the Secretary): J1555 JB, J1559 JB, J1561 JB, J1562 JB, J1569 JB, or J1575 JB. (iii) Payment category 3.--The Secretary shall create a payment category 3 and assign to such category drugs which are covered under such local coverage determination and billed with the following HCPCS codes (as identified as of January 1, 2018, and as subsequently modified by the Secretary): J9000, J9039, J9040, J9065, J9100, J9190, J9200, J9360, or J9370. (iv) Infusion drugs not otherwise included.--With respect to drugs that are not included in payment category 1, 2, or 3 under clause (i), (ii), or (iii), respectively, the Secretary shall assign to the most appropriate of such categories, as determined by the Secretary, drugs which are-- (I) covered under such local coverage determination and billed under HCPCS codes J7799 or J7999 (as identified as of July 1, 2017, and as subsequently modified by the Secretary); or (II) billed under any code that is implemented after the date of the enactment of this paragraph and included in such local coverage determination or included in subregulatory guidance as a home infusion drug described in subparagraph (A)(i). (D) Payment amounts.-- (i) In general.--Under the payment methodology, the Secretary shall pay eligible home infusion suppliers, with respect to items and services described in subparagraph (A)(i) furnished during the period described in subparagraph (A)(ii) by such supplier to an individual, at amounts equal to the amounts determined under the physician fee schedule established under section 1848 for services furnished during the year for codes and units of such codes described in clauses (ii), (iii), and (iv) with respect to drugs included in the payment category under subparagraph (C) specified in the respective clause, determined without application of the geographic adjustment under subsection (e) of such section. (ii) Payment amount for category 1.-- For purposes of clause (i), the codes and units described in this clause, with respect to drugs included in payment category 1 described in subparagraph (C)(i), are one unit of HCPCS code 96365 plus three units of HCPCS code 96366 (as identified as of January 1, 2018, and as subsequently modified by the Secretary). (iii) Payment amount for category 2.--For purposes of clause (i), the codes and units described in this clause, with respect to drugs included in payment category 2 described in subparagraph (C)(i), are one unit of HCPCS code 96369 plus three units of HCPCS code 96370 (as identified as of January 1, 2018, and as subsequently modified by the Secretary). (iv) Payment amount for category 3.-- For purposes of clause (i), the codes and units described in this clause, with respect to drugs included in payment category 3 described in subparagraph (C)(i), are one unit of HCPCS code 96413 plus three units of HCPCS code 96415 (as identified as of January 1, 2018, and as subsequently modified by the Secretary). (E) Clarifications.-- (i) Infusion drug administration day.--For purposes of this subsection, with respect to the furnishing of transitional home infusion drugs or home infusion drugs to an individual by an eligible home infusion supplier or a qualified home infusion therapy supplier, a reference to payment to such supplier for an infusion drug administration calendar day in the individual's home shall refer to payment only for the date on which professional services (as described in section 1861(iii)(2)(A)) were furnished to administer such drugs to such individual. For purposes of the previous sentence, an infusion drug administration calendar day shall include all such drugs administered to such individual on such day. (ii) Treatment of multiple drugs administered on same infusion drug administration day.--In the case that an eligible home infusion supplier, with respect to an infusion drug administration calendar day in an individual's home, furnishes to such individual transitional home infusion drugs which are not all assigned to the same payment category under subparagraph (C), payment to such supplier for such infusion drug administration calendar day in the individual's home shall be a single payment equal to the amount of payment under this paragraph for the drug, among all such drugs so furnished to such individual during such calendar day, for which the highest payment would be made under this paragraph. (F) Eligible home infusion suppliers.--In this paragraph, the term ``eligible home infusion supplier'' means a supplier that is enrolled under this part as a pharmacy that provides external infusion pumps and external infusion pump supplies and that maintains all pharmacy licensure requirements in the State in which the applicable infusion drugs are administered. (G) Implementation.--Notwithstanding any other provision of law, the Secretary may implement this paragraph by program instruction or otherwise. (v) Payment for Outpatient Physical Therapy Services and Outpatient Occupational Therapy Services Furnished by a Therapy Assistant.-- (1) In general.--In the case of an outpatient physical therapy service or outpatient occupational therapy service furnished on or after January 1, 2022, for which payment is made under section 1848 or subsection (k), that is furnished in whole or in part by a therapy assistant (as defined by the Secretary), the amount of payment for such service shall be an amount equal to 85 percent of the amount of payment otherwise applicable for the service under this part. Nothing in the preceding sentence shall be construed to change applicable requirements with respect to such services. (2) Use of modifier.-- (A) Establishment.--Not later than January 1, 2019, the Secretary shall establish a modifier to indicate (in a form and manner specified by the Secretary), in the case of an outpatient physical therapy service or outpatient occupational therapy service furnished in whole or in part by a therapy assistant (as so defined), that the service was furnished by a therapy assistant. (B) Required use.--Each request for payment, or bill submitted, for an outpatient physical therapy service or outpatient occupational therapy service furnished in whole or in part by a therapy assistant (as so defined) on or after January 1, 2020, shall include the modifier established under subparagraph (A) for each such service. (3) Implementation.--The Secretary shall implement this subsection through notice and comment rulemaking. (w) Opioid Use Disorder Treatment Services.-- (1) In general.--The Secretary shall pay to an opioid treatment program (as defined in paragraph (2) of section 1861(jjj)) an amount that is equal to 100 percent of a bundled payment under this part for opioid use disorder treatment services (as defined in paragraph (1) of such section) that are furnished by such program to an individual during an episode of care (as defined by the Secretary) beginning on or after January 1, 2020. The Secretary shall ensure, as determined appropriate by the Secretary, that no duplicative payments are made under this part or part D for items and services furnished by an opioid treatment program. (2) Considerations.--The Secretary may implement this subsection through one or more bundles based on the type of medication provided (such as buprenorphine, methadone, naltrexone, or a new innovative drug), the frequency of services, the scope of services furnished, characteristics of the individuals furnished such services, or other factors as the Secretary determine appropriate. In developing such bundles, the Secretary may consider payment rates paid to opioid treatment programs for comparable services under State plans under title XIX or under the TRICARE program under chapter 55 of title 10 of the United States Code. (3) Annual updates.--The Secretary shall provide an update each year to the bundled payment amounts under this subsection. (x) Prostate Cancer DNA Specimen Provenance Assay Tests.-- (1) Payment for covered tests.-- (A) In general.--Subject to subparagraph (B), the payment amount for a prostate cancer DNA Specimen Provenance Assay test (DSPA test) (as defined in section 1861(kkk)) shall be $200. Such payment shall be payment for all of the specimens obtained from the biopsy furnished to an individual that are tested. (B) Limitation.--Payment for a DSPA test under subparagraph (A) may only be made on an assignment-related basis. (C) Prohibition on separate payment.--No separate payment shall be made for obtaining DNA that was separately taken from an individual at the time of a biopsy described in subparagraph (A). (2) HCPCS code and modifier assignment.-- (A) In general.--The Secretary shall assign one or more HCPCS codes to a prostate cancer DNA Specimen Provenance Assay test and may use a modifier to facilitate making payment under this section for such test. (B) Identification of dna match on claim.-- The Secretary shall require an indication on a claim for a prostate cancer DNA Specimen Provenance Assay test of whether the DNA of the prostate biopsy specimens match the DNA of the individual diagnosed with prostate cancer. Such indication may be made through use of a HCPCS code, a modifier, or other means, as determined appropriate by the Secretary. (3) DNA match review.-- (A) In general.--The Secretary shall review at least three years of claims under part B for prostate cancer DNA Specimen Provenance Assay tests to identify whether the DNA of the prostate biopsy specimens match the DNA of the individuals diagnosed with prostate cancer. (B) Posting on internet website.--Not later than July 1, 2023, the Secretary shall post on the internet website of the Centers for Medicare & Medicaid Services the findings of the review conducted under subparagraph (A). * * * * * * * amounts of premiums Sec. 1839. (a)(1) The Secretary shall, during September of 1983 and of each year thereafter, determine the monthly actuarial rate for enrollees age 65 and over which shall be applicable for the succeeding calendar year. Subject to paragraphs (5) and (6), such actuarial rate shall be the amount the Secretary estimates to be necessary so that the aggregate amount for such calendar year with respect to those enrollees age 65 and older will equal one-half of the total of the benefits and administrative costs which he estimates will be payable from the Federal Supplementary Medical Insurance Trust Fund for services performed and related administrative costs incurred in such calendar year with respect to such enrollees. In calculating the monthly actuarial rate, the Secretary shall include an appropriate amount for a contingency margin. In applying this paragraph there shall not be taken into account additional payments under section 1848(o) and section 1853(l)(3) and the Government contribution under section 1844(a)(3). (2) The monthly premium of each individual enrolled under this part for each month after December 1983 shall be the amount determined under paragraph (3), adjusted as required in accordance with subsections (b), (c), (f), and (i), and to reflect any credit provided under section 1854(b)(1)(C)(ii)(III). (3) The Secretary, during September of each year, shall determine and promulgate a monthly premium rate for the succeeding calendar year that (except as provided in subsection (g)) is equal to 50 percent of the monthly actuarial rate for enrollees age 65 and over, determined according to paragraph (1), for that succeeding calendar year. Whenever the Secretary promulgates the dollar amount which shall be applicable as the monthly premium rate for any period, he shall, at the time such promulgation is announced, issue a public statement setting forth the actuarial assumptions and bases employed by him in arriving at the amount of an adequate actuarial rate for enrollees age 65 and older as provided in paragraph (1). (4) The Secretary shall also, during September of 1983 and of each year thereafter, determine the monthly actuarial rate for disabled enrollees under age 65 which shall be applicable for the succeeding calendar year. Such actuarial rate shall be the amount the Secretary estimates to be necessary so that the aggregate amount for such calendar year with respect to disabled enrollees under age 65 will equal one-half of the total of the benefits and administrative costs which he estimates will be payable from the Federal Supplementary Medical Insurance Trust Fund for services performed and related administrative costs incurred in such calendar year with respect to such enrollees. In calculating the monthly actuarial rate under this paragraph, the Secretary shall include an appropriate amount for a contingency margin. (5)(A) In applying this part (including subsection (i) and section 1833(b)), the monthly actuarial rate for enrollees age 65 and over for 2016 shall be determined as if subsection (f) did not apply. (B) Subsection (f) shall continue to be applied to paragraph (6)(A) (during a repayment month, as described in paragraph (6)(B)) and without regard to the application of subparagraph (A). (6)(A) With respect to a repayment month (as described in subparagraph (B)), the monthly premium otherwise established under paragraph (3) shall be increased by, subject to subparagraph (D), $3. (B) For purposes of this paragraph, a repayment month is a month during a year, beginning with 2016, for which a balance due amount is computed under subparagraph (C) as greater than zero. (C) For purposes of this paragraph, the balance due amount computed under this subparagraph, with respect to a month, is the amount estimated by the Chief Actuary of the Centers for Medicare & Medicaid Services to be equal to-- (i) the amount transferred under section 1844(d)(1); plus (ii) the amount that is equal to the aggregate reduction, for all individuals enrolled under this part, in the income related monthly adjustment amount as a result of the application of paragraph (5); minus (iii) the amounts payable under this part as a result of the application of this paragraph for preceding months. (D) If the balance due amount computed under subparagraph (C), without regard to this subparagraph, for December of a year would be less than zero, the Chief Actuary of the Centers for Medicare & Medicaid Services shall estimate, and the Secretary shall apply, a reduction to the dollar amount increase applied under subparagraph (A) for each month during such year in a manner such that the balance due amount for January of the subsequent year is equal to zero. (b) In the case of an individual whose coverage period began pursuant to an enrollment after his initial enrollment period (determined pursuant to subsection (c) or (d) of section 1837) and not pursuant to a special enrollment period under subsection (i)(4) or (l) of section 1837, the monthly premium determined under subsection (a) (without regard to any adjustment under subsection (i)) shall be increased by 10 percent of the monthly premium so determined for each full 12 months (in the same continuous period of eligibility) in which he could have been but was not enrolled. For purposes of the preceding sentence, there shall be taken into account (1) the months which elapsed between the close of his initial enrollment period and the close of the enrollment period in which he enrolled, plus (in the case of an individual who reenrolls) (2) the months which elapsed between the date of termination of a previous coverage period and the close of the enrollment period in which he reenrolled, but there shall not be taken into account months for which the individual can demonstrate that the individual was enrolled in a group health plan described in section 1862(b)(1)(A)(v) by reason of the individual's (or the individual's spouse's) current employment or months during which the individual has not attained the age of 65 and for which the individual can demonstrate that the individual was enrolled in a large group health plan as an active individual (as those terms are defined in section 1862(b)(1)(B)(iii)) or months for which the individual can demonstrate that the individual was an individual described in section 1837(k)(3) or months for which the individual can demonstrate that the individual is an individual described in paragraph (6)(B) of section 1086(d) of title 10, United States Code, who is enrolled in the TRICARE program pursuant to such section. Any increase in an individual's monthly premium under the first sentence of this subsection with respect to a particular continuous period of eligibility shall not be applicable with respect to any other continuous period of eligibility which such individual may have. No increase in the premium shall be effected for a month in the case of an individual who enrolls under this part during 2001, 2002, 2003, or 2004 and who demonstrates to the Secretary before December 31, 2004, that the individual is a covered beneficiary (as defined in section 1072(5) of title 10, United States Code). The Secretary of Health and Human Services shall consult with the Secretary of Defense in identifying individuals described in the previous sentence. (c) If any monthly premium determined under the foregoing provisions of this section is not a multiple of 10 cents, such premium shall be rounded to the nearest multiple of 10 cents. (d) For purposes of subsection (b) (and section 1837(g)(1)), an individual's ``continuous period of eligibility'' is the period beginning with the first day on which he is eligible to enroll under section 1836 and ending with his death; except that any period during all of which an individual satisfied paragraph (1) of section 1836 and which terminated in or before the month preceding the month in which he attained age 65 shall be a separate ``continuous period of eligibility'' with respect to such individual (and each such period which terminates shall be deemed not to have existed for purposes of subsequently applying this section). (e)(1) Upon the request of a State (or any appropriate State or local governmental entity specified by the Secretary), the Secretary may enter into an agreement with the State (or such entity) under which the State (or such entity) agrees to pay on a quarterly or other periodic basis to the Secretary (to be deposited in the Treasury to the credit of the Federal Supplementary Medical Insurance Trust Fund) an amount equal to the amount of the part B late enrollment premium increases with respect to the premiums for eligible individuals (as defined in paragraph (3)(A)). (2) No part B late enrollment premium increase shall apply to an eligible individual for premiums for months for which the amount of such an increase is payable under an agreement under paragraph (1). (3) In this subsection: (A) The term ``eligible individual'' means an individual who is enrolled under this part B and who is within a class of individuals specified in the agreement under paragraph (1). (B) The term ``part B late enrollment premium increase'' means any increase in a premium as a result of the application of subsection (b). (f) For any calendar year after 1988, if an individual is entitled to monthly benefits under section 202 or 223 or to a monthly annuity under section 3(a), 4(a), or 4(f) of the Railroad Retirement Act of 1974 for November and December of the preceding year, if the monthly premium of the individual under this section for December and for January is deducted from those benefits under section 1840(a)(1) or section 1840(b)(1), and if the amount of the individual's premium is not adjusted for such January under subsection (i), the monthly premium otherwise determined under this section for an individual for that year shall not be increased, pursuant to this subsection, to the extent that such increase would reduce the amount of benefits payable to that individual for that December below the amount of benefits payable to that individual for that November (after the deduction of the premium under this section). For purposes of this subsection, retroactive adjustments or payments and deductions on account of work shall not be taken into account in determining the monthly benefits to which an individual is entitled under section 202 or 223 or under the Railroad Retirement Act of 1974. (g) In estimating the benefits and administrative costs which will be payable from the Federal Supplementary Medical Insurance Trust Fund for a year for purposes of determining the monthly premium rate under subsection (a)(3), the Secretary shall exclude an estimate of any benefits and administrative costs attributable to-- (1) the application of section 1861(v)(1)(L)(viii) or to the establishment under section 1861(v)(1)(L)(i)(V) of a per visit limit at 106 percent of the median (instead of 105 percent of the median), but only to the extent payment for home health services under this title is not being made under section 1895 (relating to prospective payment for home health services); and (2) the medicare prescription drug discount card and transitional assistance program under section 1860D-31. (h) Potential Application of Comparative Cost Adjustment in CCA Areas.-- (1) In general.--Certain individuals who are residing in a CCA area under section 1860C-1 who are not enrolled in an MA plan under part C may be subject to a premium adjustment under subsection (f) of such section for months in which the CCA program under such section is in effect in such area. (2) No effect on late enrollment penalty or income- related adjustment in subsidies.--Nothing in this subsection or section 1860C-1(f) shall be construed as affecting the amount of any premium adjustment under subsection (b) or (i). Subsection (f) shall be applied without regard to any premium adjustment referred to in paragraph (1). (3) Implementation.--In order to carry out a premium adjustment under this subsection and section 1860C-1(f) (insofar as it is effected through the manner of collection of premiums under section 1840(a)), the Secretary shall transmit to the Commissioner of Social Security-- (A) at the beginning of each year, the name, social security account number, and the amount of the premium adjustment (if any) for each individual enrolled under this part for each month during the year; and (B) periodically throughout the year, information to update the information previously transmitted under this paragraph for the year. (i) Reduction in Premium Subsidy Based on Income.-- (1) In general.--In the case of an individual whose modified adjusted gross income exceeds the threshold amount under paragraph (2), the monthly amount of the premium subsidy applicable to the premium under this section for a month after December 2006 shall be reduced (and the monthly premium shall be increased) by the monthly adjustment amount specified in paragraph (3). (2) Threshold amount.--For purposes of this subsection, subject to paragraph (6), the threshold amount is-- (A) except as provided in subparagraph (B), $80,000 (or, beginning with 2018, $85,000), and (B) in the case of a joint return, twice the amount applicable under subparagraph (A) for the calendar year. (3) Monthly adjustment amount.-- (A) In general.--Subject to subparagraph (B), the monthly adjustment amount specified in this paragraph for an individual for a month in a year is equal to the product of the following: (i) Sliding scale percentage.-- Subject to paragraph (6), the applicable percentage specified in the applicable table in subparagraph (C) for the individual minus 25 percentage points. (ii) Unsubsidized part b premium amount.-- (I) 200 percent of the monthly actuarial rate for enrollees age 65 and over (as determined under subsection (a)(1) for the year); plus (II) 4 times the amount of the increase in the monthly premium under subsection (a)(6) for a month in the year. (B) 3-year phase in.--The monthly adjustment amount specified in this paragraph for an individual for a month in a year before 2009 is equal to the following percentage of the monthly adjustment amount specified in subparagraph (A): (i) For 2007, 33 percent. (ii) For 2008, 67 percent. (C) Applicable percentage.-- (i) In general.-- (I) Subject to paragraphs (5) and (6), for years before 2018: If the modified adjusted gross income is: The applicable percentage is: More than $80,000 but not more than $100,000.............35 percent More than $100,000 but not more than $150,000............50 percent More than $150,000 but not more than $200,000............65 percent More than $200,000.......................................80 percent. (II) Subject to paragraph (5), for 2018: If the modified adjusted gross income is: The applicable percentage is: More than $85,000 but not more than $107,000..... 35 percent More than $107,000 but not more than $133,500.... 50 percent More than $133,500 but not more than $160,000.... 65 percent More than $160,000............................... 80 percent. (III) Subject to paragraph (5), for years beginning with 2019: If the modified adjusted gross income is:......... The applicable percentage is: More than $85,000 but not more than $107,000...... 35 percent More than $107,000 but not more than $133,500..... 50 percent More than $133,500 but not more than $160,000..... 65 percent More than $160,000 but less than $500,000......... 80 percent At least $500,000................................. 85 percent. (ii) Joint returns.--In the case of a joint return, clause (i) shall be applied by substituting dollar amounts which are twice the dollar amounts otherwise applicable under clause (i) for the calendar year except, with respect to the dollar amounts applied in the last row of the table under subclause (III) of such clause (and the second dollar amount specified in the second to last row of such table), clause (i) shall be applied by substituting dollar amounts which are 150 percent of such dollar amounts for the calendar year. (iii) Married individuals filing separate returns.--In the case of an individual who-- (I) is married as of the close of the taxable year (within the meaning of section 7703 of the Internal Revenue Code of 1986) but does not file a joint return for such year, and (II) does not live apart from such individual's spouse at all times during the taxable year, clause (i) shall be applied by reducing each of the dollar amounts otherwise applicable under such clause for the calendar year by the threshold amount for such year applicable to an unmarried individual. (4) Modified adjusted gross income.-- (A) In general.--For purposes of this subsection, the term ``modified adjusted gross income'' means adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986)-- (i) determined without regard to sections 135, 911, 931, and 933 of such Code; and (ii) increased by the amount of interest received or accrued during the taxable year which is exempt from tax under such Code. In the case of an individual filing a joint return, any reference in this subsection to the modified adjusted gross income of such individual shall be to such return's modified adjusted gross income. (B) Taxable year to be used in determining modified adjusted gross income.-- (i) In general.--In applying this subsection for an individual's premiums in a month in a year, subject to clause (ii) and subparagraph (C), the individual's modified adjusted gross income shall be such income determined for the individual's last taxable year beginning in the second calendar year preceding the year involved. (ii) Temporary use of other data.-- If, as of October 15 before a calendar year, the Secretary of the Treasury does not have adequate data for an individual in appropriate electronic form for the taxable year referred to in clause (i), the individual's modified adjusted gross income shall be determined using the data in such form from the previous taxable year. Except as provided in regulations prescribed by the Commissioner of Social Security in consultation with the Secretary, the preceding sentence shall cease to apply when adequate data in appropriate electronic form are available for the individual for the taxable year referred to in clause (i), and proper adjustments shall be made to the extent that the premium adjustments determined under the preceding sentence were inconsistent with those determined using such taxable year. (iii) Non-filers.--In the case of individuals with respect to whom the Secretary of the Treasury does not have adequate data in appropriate electronic form for either taxable year referred to in clause (i) or clause (ii), the Commissioner of Social Security, in consultation with the Secretary, shall prescribe regulations which provide for the treatment of the premium adjustment with respect to such individual under this subsection, including regulations which provide for-- (I) the application of the highest applicable percentage under paragraph (3)(C) to such individual if the Commissioner has information which indicates that such individual's modified adjusted gross income might exceed the threshold amount for the taxable year referred to in clause (i), and (II) proper adjustments in the case of the application of an applicable percentage under subclause (I) to such individual which is inconsistent with such individual's modified adjusted gross income for such taxable year. (C) Use of more recent taxable year.-- (i) In general.--The Commissioner of Social Security in consultation with the Secretary of the Treasury shall establish a procedures under which an individual's modified adjusted gross income shall, at the request of such individual, be determined under this subsection-- (I) for a more recent taxable year than the taxable year otherwise used under subparagraph (B), or (II) by such methodology as the Commissioner, in consultation with such Secretary, determines to be appropriate, which may include a methodology for aggregating or disaggregating information from tax returns in the case of marriage or divorce. (ii) Standard for granting requests.--A request under clause (i)(I) to use a more recent taxable year may be granted only if-- (I) the individual furnishes to such Commissioner with respect to such year such documentation, such as a copy of a filed Federal income tax return or an equivalent document, as the Commissioner specifies for purposes of determining the premium adjustment (if any) under this subsection; and (II) the individual's modified adjusted gross income for such year is significantly less than such income for the taxable year determined under subparagraph (B) by reason of the death of such individual's spouse, the marriage or divorce of such individual, or other major life changing events specified in regulations prescribed by the Commissioner in consultation with the Secretary. (5) Inflation adjustment.-- (A) In general.--Subject to subparagraph (C), in the case of any calendar year beginning after 2007 (other than 2018 and 2019), each dollar amount in paragraph (2) or (3) shall be increased by an amount equal to-- (i) such dollar amount, multiplied by (ii) the percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period ending with August 2006 (or, in the case of a calendar year beginning with 2020, August 2018). (B) Rounding.--If any dollar amount after being increased under subparagraph (A) or (C) is not a multiple of $1,000, such dollar amount shall be rounded to the nearest multiple of $1,000. (C) Treatment of adjustments for certain higher income individuals.-- (i) In general.--Subparagraph (A) shall not apply with respect to each dollar amount in paragraph (3) of $500,000. (ii) Adjustment beginning 2028.--In the case of any calendar year beginning after 2027, each dollar amount in paragraph (3) of $500,000 shall be increased by an amount equal to-- (I) such dollar amount, multiplied by (II) the percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period ending with August 2026. (6) Temporary adjustment to income thresholds.-- Notwithstanding any other provision of this subsection, during the period beginning on January 1, 2011, and ending on December 31, 2017-- (A) the threshold amount otherwise applicable under paragraph (2) shall be equal to such amount for 2010; and (B) the dollar amounts otherwise applicable under paragraph (3)(C)(i) shall be equal to such dollar amounts for 2010. (7) Joint return defined.--For purposes of this subsection, the term ``joint return'' has the meaning given to such term by section 7701(a)(38) of the Internal Revenue Code of 1986. * * * * * * * competitive acquisition of certain items and services Sec. 1847. (a) Establishment of Competitive Acquisition Programs.-- (1) Implementation of programs.-- (A) In general.--The Secretary shall establish and implement programs under which competitive acquisition areas are established throughout the United States for contract award purposes for the furnishing under this part of competitively priced items and services (described in paragraph (2)) for which payment is made under this part. Such areas may differ for different items and services. (B) Phased-in implementation.--The programs-- (i) shall be phased in among competitive acquisition areas in a manner consistent with subparagraph (D) so that the competition under the programs occurs in-- (I) 10 of the largest metropolitan statistical areas in 2007; (II) an additional 91 of the largest metropolitan statistical areas in 2011; and (III) additional areas after 2011 (or, in the case of national mail order for items and services, after 2010); and (ii) may be phased in first among the highest cost and highest volume items and services or those items and services that the Secretary determines have the largest savings potential. (C) Waiver of certain provisions.--In carrying out the programs, the Secretary may waive such provisions of the Federal Acquisition Regulation as are necessary for the efficient implementation of this section, other than provisions relating to confidentiality of information and such other provisions as the Secretary determines appropriate. (D) Changes in competitive acquisition programs.-- (i) Round 1 of competitive acquisition program.--Notwithstanding subparagraph (B)(i)(I) and in implementing the first round of the competitive acquisition programs under this section-- (I) the contracts awarded under this section before the date of the enactment of this subparagraph are terminated, no payment shall be made under this title on or after the date of the enactment of this subparagraph based on such a contract, and, to the extent that any damages may be applicable as a result of the termination of such contracts, such damages shall be payable from the Federal Supplementary Medical Insurance Trust Fund under section 1841; (II) the Secretary shall conduct the competition for such round in a manner so that it occurs in 2009 with respect to the same items and services and the same areas, except as provided in subclauses (III) and (IV); (III) the Secretary shall exclude Puerto Rico so that such round of competition covers 9, instead of 10, of the largest metropolitan statistical areas; and (IV) there shall be excluded negative pressure wound therapy items and services. Nothing in subclause (I) shall be construed to provide an independent cause of action or right to administrative or judicial review with regard to the termination provided under such subclause. (ii) Round 2 of competitive acquisition program.--In implementing the second round of the competitive acquisition programs under this section described in subparagraph (B)(i)(II)-- (I) the metropolitan statistical areas to be included shall be those metropolitan statistical areas selected by the Secretary for such round as of June 1, 2008; (II) the Secretary shall include the next 21 largest metropolitan statistical areas by total population (after those selected under subclause (I)) for such round; and (III) the Secretary may subdivide metropolitan statistical areas with populations (based upon the most recent data from the Census Bureau) of at least 8,000,000 into separate areas for competitive acquisition purposes. (iii) Exclusion of certain areas in subsequent rounds of competitive acquisition programs.--In implementing subsequent rounds of the competitive acquisition programs under this section, including under subparagraph (B)(i)(III), for competitions occurring before 2015, the Secretary shall exempt from the competitive acquisition program (other than national mail order) the following: (I) Rural areas. (II) Metropolitan statistical areas not selected under round 1 or round 2 with a population of less than 250,000. (III) Areas with a low population density within a metropolitan statistical area that is otherwise selected, as determined for purposes of paragraph (3)(A). (E) Verification by oig.--The Inspector General of the Department of Health and Human Services shall, through post- award audit, survey, or otherwise, assess the process used by the Centers for Medicare & Medicaid Services to conduct competitive bidding and subsequent pricing determinations under this section that are the basis for pivotal bid amounts and single payment amounts for items and services in competitive bidding areas under rounds 1 and 2 of the competitive acquisition programs under this section and may continue to verify such calculations for subsequent rounds of such programs. (F) Supplier feedback on missing financial documentation.-- (i) In general.--In the case of a bid where one or more covered documents in connection with such bid have been submitted not later than the covered document review date specified in clause (ii), the Secretary-- (I) shall provide, by not later than 45 days (in the case of the first round of the competitive acquisition programs as described in subparagraph (B)(i)(I)) or 90 days (in the case of a subsequent round of such programs) after the covered document review date, for notice to the bidder of all such documents that are missing as of the covered document review date; and (II) may not reject the bid on the basis that any covered document is missing or has not been submitted on a timely basis, if all such missing documents identified in the notice provided to the bidder under subclause (I) are submitted to the Secretary not later than 10 business days after the date of such notice. (ii) Covered document review date.--The covered document review date specified in this clause with respect to a competitive acquisition program is the later of-- (I) the date that is 30 days before the final date specified by the Secretary for submission of bids under such program; or (II) the date that is 30 days after the first date specified by the Secretary for submission of bids under such program. (iii) Limitations of process.--The process provided under this subparagraph-- (I) applies only to the timely submission of covered documents; (II) does not apply to any determination as to the accuracy or completeness of covered documents submitted or whether such documents meet applicable requirements; (III) shall not prevent the Secretary from rejecting a bid based on any basis not described in clause (i)(II); and (IV) shall not be construed as permitting a bidder to change bidding amounts or to make other changes in a bid submission. (iv) Covered document defined.--In this subparagraph, the term ``covered document'' means a financial, tax, or other document required to be submitted by a bidder as part of an original bid submission under a competitive acquisition program in order to meet required financial standards. Such term does not include other documents, such as the bid itself or accreditation documentation. (G) Requiring bid bonds for bidding entities.--With respect to rounds of competitions beginning under this subsection for contracts beginning not earlier than January 1, 2017, and not later than January 1, 2019, an entity may not submit a bid for a competitive acquisition area unless, as of the deadline for bid submission, the entity has obtained (and provided the Secretary with proof of having obtained) a bid surety bond (in this paragraph referred to as a ``bid bond'') in a form specified by the Secretary consistent with subparagraph (H) and in an amount that is not less than $50,000 and not more than $100,000 for each competitive acquisition area in which the entity submits the bid. (H) Treatment of bid bonds submitted.-- (i) For bidders that submit bids at or below the median and are offered but do not accept the contract.--In the case of a bidding entity that is offered a contract for any product category for a competitive acquisition area, if-- (I) the entity's composite bid for such product category and area was at or below the median composite bid rate for all bidding entities included in the calculation of the single payment amounts for such product category and area; and (II) the entity does not accept the contract offered for such product category and area, the bid bond submitted by such entity for such area shall be forfeited by the entity and the Secretary shall collect on it. (ii) Treatment of other bidders.--In the case of a bidding entity for any product category for a competitive acquisition area, if the entity does not meet the bid forfeiture conditions in subclauses (I) and (II) of clause (i) for any product category for such area, the bid bond submitted by such entity for such area shall be returned within 90 days of the public announcement of the contract suppliers for such area. (2) Items and services described.--The items and services referred to in paragraph (1) are the following: (A) Durable medical equipment and medical supplies.--Covered items (as defined in section 1834(a)(13)) for which payment would otherwise be made under section 1834(a), including items used in infusion and drugs (other than inhalation drugs) and supplies used in conjunction with durable medical equipment, but excluding class III devices under the Federal Food, Drug, and Cosmetic Act, excluding certain complex rehabilitative power wheelchairs recognized by the Secretary as classified within group 3 or higher, complex rehabilitative manual wheelchairs (as determined by the Secretary), and certain manual wheelchairs (identified, as of October 1, 2018, by HCPCS codes E1235, E1236, E1237, E1238, and K0008 or any successor to such codes) (and related accessories when furnished in connection with [such wheelchairs] such complex rehabilitative power wheelchairs, complex rehabilitative manual wheelchairs, and certain manual wheelchairs), and excluding drugs and biologicals described in section 1842(o)(1)(D). (B) Other equipment and supplies.--Items and services described in section 1842(s)(2)(D), other than parenteral nutrients, equipment, and supplies. (C) Off-the-shelf orthotics.--Orthotics described in section 1861(s)(9) for which payment would otherwise be made under section 1834(h) which require minimal self-adjustment for appropriate use and do not require expertise in trimming, bending, molding, assembling, or customizing to fit to the individual. (3) Exception authority.--In carrying out the programs under this section, the Secretary may exempt-- (A) rural areas and areas with low population density within urban areas that are not competitive, unless there is a significant national market through mail order for a particular item or service; and (B) items and services for which the application of competitive acquisition is not likely to result in significant savings. (4) Special rule for certain rented items of durable medical equipment and oxygen.--In the case of a covered item for which payment is made on a rental basis under section 1834(a) and in the case of payment for oxygen under section 1834(a)(5), the Secretary shall establish a process by which rental agreements for the covered items and supply arrangements with oxygen suppliers entered into before the application of the competitive acquisition program under this section for the item may be continued notwithstanding this section. In the case of any such continuation, the supplier involved shall provide for appropriate servicing and replacement, as required under section 1834(a). (5) Physician authorization.-- (A) In general.--With respect to items or services included within a particular HCPCS code, the Secretary may establish a process for certain items and services under which a physician may prescribe a particular brand or mode of delivery of an item or service within such code if the physician determines that use of the particular item or service would avoid an adverse medical outcome on the individual, as determined by the Secretary. (B) No effect on payment amount.--A prescription under subparagraph (A) shall not affect the amount of payment otherwise applicable for the item or service under the code involved. (6) Application.--For each competitive acquisition area in which the program is implemented under this subsection with respect to items and services, the payment basis determined under the competition conducted under subsection (b) shall be substituted for the payment basis otherwise applied under section 1834(a), section 1834(h), or section 1842(s), as appropriate. (7) Exemption from competitive acquisition.--The programs under this section shall not apply to the following: (A) Certain off-the-shelf orthotics.--Items and services described in paragraph (2)(C) if furnished-- (i) by a physician or other practitioner (as defined by the Secretary) to the physician's or practitioner's own patients as part of the physician's or practitioner's professional service; or (ii) by a hospital to the hospital's own patients during an admission or on the date of discharge. (B) Certain durable medical equipment.--Those items and services described in paragraph (2)(A)-- (i) that are furnished by a hospital to the hospital's own patients during an admission or on the date of discharge; and (ii) to which such programs would not apply, as specified by the Secretary, if furnished by a physician to the physician's own patients as part of the physician's professional service. (b) Program Requirements.-- (1) In general.--The Secretary shall conduct a competition among entities supplying items and services described in subsection (a)(2) for each competitive acquisition area in which the program is implemented under subsection (a) with respect to such items and services. (2) Conditions for awarding contract.-- (A) In general.--The Secretary may not award a contract to any entity under the competition conducted in an competitive acquisition area pursuant to paragraph (1) to furnish such items or services unless the Secretary finds all of the following: (i) The entity meets applicable quality standards specified by the Secretary under section 1834(a)(20). (ii) The entity meets applicable financial standards specified by the Secretary, taking into account the needs of small providers. (iii) The total amounts to be paid to contractors in a competitive acquisition area are expected to be less than the total amounts that would otherwise be paid. (iv) Access of individuals to a choice of multiple suppliers in the area is maintained. (v) The entity meets applicable State licensure requirements. (B) Timely implementation of program.--Any delay in the implementation of quality standards under section 1834(a)(20) or delay in the receipt of advice from the program oversight committee established under subsection (c) shall not delay the implementation of the competitive acquisition program under this section. (3) Contents of contract.-- (A) In general.--A contract entered into with an entity under the competition conducted pursuant to paragraph (1) is subject to terms and conditions that the Secretary may specify. (B) Term of contracts.--The Secretary shall recompete contracts under this section not less often than once every 3 years. (C) Disclosure of subcontractors.-- (i) Initial disclosure.--Not later than 10 days after the date a supplier enters into a contract with the Secretary under this section, such supplier shall disclose to the Secretary, in a form and manner specified by the Secretary, the information on-- (I) each subcontracting relationship that such supplier has in furnishing items and services under the contract; and (II) whether each such subcontractor meets the requirement of section 1834(a)(20)(F)(i), if applicable to such subcontractor. (ii) Subsequent disclosure.--Not later than 10 days after such a supplier subsequently enters into a subcontracting relationship described in clause (i)(II), such supplier shall disclose to the Secretary, in such form and manner, the information described in subclauses (I) and (II) of clause (i). (4) Limit on number of contractors.-- (A) In general.--The Secretary may limit the number of contractors in a competitive acquisition area to the number needed to meet projected demand for items and services covered under the contracts. In awarding contracts, the Secretary shall take into account the ability of bidding entities to furnish items or services in sufficient quantities to meet the anticipated needs of individuals for such items or services in the geographic area covered under the contract on a timely basis. (B) Multiple winners.--The Secretary shall award contracts to multiple entities submitting bids in each area for an item or service. (5) Payment.-- (A) In general.--Payment under this part for competitively priced items and services described in subsection (a)(2) shall be based on bids submitted and accepted under this section for such items and services. Based on such bids the Secretary shall determine a single payment amount for each item or service in each competitive acquisition area. (B) Reduced beneficiary cost-sharing.-- (i) Application of coinsurance.-- Payment under this section for items and services shall be in an amount equal to 80 percent of the payment basis described in subparagraph (A). (ii) Application of deductible.-- Before applying clause (i), the individual shall be required to meet the deductible described in section 1833(b). (C) Payment on assignment-related basis.-- Payment for any item or service furnished by the entity may only be made under this section on an assignment-related basis. (D) Construction.--Nothing in this section shall be construed as precluding the use of an advanced beneficiary notice with respect to a competitively priced item and service. (6) Participating contractors.-- (A) In general.--Except as provided in subsection (a)(4), payment shall not be made for items and services described in subsection (a)(2) furnished by a contractor and for which competition is conducted under this section unless-- (i) the contractor has submitted a bid for such items and services under this section; and (ii) the Secretary has awarded a contract to the contractor for such items and services under this section. (B) Bid defined.--In this section, the term ``bid'' means an offer to furnish an item or service for a particular price and time period that includes, where appropriate, any services that are attendant to the furnishing of the item or service. (C) Rules for mergers and acquisitions.--In applying subparagraph (A) to a contractor, the contractor shall include a successor entity in the case of a merger or acquisition, if the successor entity assumes such contract along with any liabilities that may have occurred thereunder. (D) Protection of small suppliers.--In developing procedures relating to bids and the awarding of contracts under this section, the Secretary shall take appropriate steps to ensure that small suppliers of items and services have an opportunity to be considered for participation in the program under this section. (7) Consideration in determining categories for bids.--The Secretary may consider the clinical efficiency and value of specific items within codes, including whether some items have a greater therapeutic advantage to individuals. (8) Authority to contract for education, monitoring, outreach, and complaint services.--The Secretary may enter into contracts with appropriate entities to address complaints from individuals who receive items and services from an entity with a contract under this section and to conduct appropriate education of and outreach to such individuals and monitoring quality of services with respect to the program. (9) Authority to contract for implementation.--The Secretary may contract with appropriate entities to implement the competitive bidding program under this section. (10) Special rule in case of competition for diabetic testing strips.-- (A) In general.--With respect to the competitive acquisition program for diabetic testing strips conducted after the first round of the competitive acquisition programs, if an entity does not demonstrate to the Secretary that its bid covers types of diabetic testing strip products that, in the aggregate and taking into account volume for the different products, cover 50 percent (or such higher percentage as the Secretary may specify) of all such types of products, the Secretary shall reject such bid. With respect to bids to furnish such types of products on or after January 1, 2019, the volume for such types of products shall be determined by the Secretary through the use of multiple sources of data (from mail order and non-mail order Medicare markets), including market-based data measuring sales of diabetic testing strip products that are not exclusively sold by a single retailer from such markets. (B) Study of types of testing strip products.--Before 2011, the Inspector General of the Department of Health and Human Services shall conduct a study to determine the types of diabetic testing strip products by volume that could be used to make determinations pursuant to subparagraph (A) for the first competition under the competitive acquisition program described in such subparagraph and submit to the Secretary a report on the results of the study. The Inspector General shall also conduct such a study and submit such a report before the Secretary conducts a subsequent competitive acquistion program described in subparagraph (A). (C) Demonstration of ability to furnish types of diabetic testing strip products.--With respect to bids to furnish diabetic testing strip products on or after January 1, 2019, an entity shall attest to the Secretary that the entity has the ability to obtain an inventory of the types and quantities of diabetic testing strip products that will allow the entity to furnish such products in a manner consistent with its bid and-- (i) demonstrate to the Secretary, through letters of intent with manufacturers, wholesalers, or other suppliers, or other evidence as the Secretary may specify, such ability; or (ii) demonstrate to the Secretary that it made a good faith attempt to obtain such a letter of intent or such other evidence. (D) Use of unlisted types in calculation of percentage.--With respect to bids to furnish diabetic testing strip products on or after January 1, 2019, in determining under subparagraph (A) whether a bid submitted by an entity under such subparagraph covers 50 percent (or such higher percentage as the Secretary may specify) of all types of diabetic testing strip products, the Secretary may not attribute a percentage to types of diabetic testing strip products that the Secretary does not identify by brand, model, and market share volume. (E) Adherence to demonstration.-- (i) In general.--In the case of an entity that is furnishing diabetic testing strip products on or after January 1, 2019, under a contract entered into under the competition conducted pursuant to paragraph (1), the Secretary shall establish a process to monitor, on an ongoing basis, the extent to which such entity continues to cover the product types included in the entity's bid. (ii) Termination.--If the Secretary determines that an entity described in clause (i) fails to maintain in inventory, or otherwise maintain ready access to (through requirements, contracts, or otherwise) a type of product included in the entity's bid, the Secretary may terminate such contract unless the Secretary finds that the failure of the entity to maintain inventory of, or ready access to, the product is the result of the discontinuation of the product by the product manufacturer, a market-wide shortage of the product, or the introduction of a newer model or version of the product in the market involved. (11) Additional special rules in case of competition for diabetic testing strips.-- (A) In general.--With respect to an entity that is furnishing diabetic testing strip products to individuals under a contract entered into under the competitive acquisition program established under this section, the entity shall furnish to each individual a brand of such products that is compatible with the home blood glucose monitor selected by the individual. (B) Prohibition on influencing and incentivizing.--An entity described in subparagraph (A) may not attempt to influence or incentivize an individual to switch the brand of glucose monitor or diabetic testing strip product selected by the individual, including by-- (i) persuading, pressuring, or advising the individual to switch; or (ii) furnishing information about alternative brands to the individual where the individual has not requested such information. (C) Provision of information.-- (i) Standardized information.--Not later than January 1, 2019, the Secretary shall develop and make available to entities described in subparagraph (A) standardized information that describes the rights of an individual with respect to such an entity. The information described in the preceding sentence shall include information regarding-- (I) the requirements established under subparagraphs (A) and (B); (II) the right of the individual to purchase diabetic testing strip products from another mail order supplier of such products or a retail pharmacy if the entity is not able to furnish the brand of such product that is compatible with the home blood glucose monitor selected by the individual; and (III) the right of the individual to return diabetic testing strip products furnished to the individual by the entity. (ii) Requirement.--With respect to diabetic testing strip products furnished on or after the date on which the Secretary develops the standardized information under clause (i), an entity described in subparagraph (A) may not communicate directly to an individual until the entity has verbally provided the individual with such standardized information. (D) Order refills.--With respect to diabetic testing strip products furnished on or after January 1, 2019, the Secretary shall require an entity furnishing diabetic testing strip products to an individual to contact and receive a request from the individual for such products not more than 14 days prior to dispensing a refill of such products to the individual. (12) No administrative or judicial review.--There shall be no administrative or judicial review under section 1869, section 1878, or otherwise, of-- (A) the establishment of payment amounts under paragraph (5); (B) the awarding of contracts under this section; (C) the designation of competitive acquisition areas under subsection (a)(1)(A) and the identification of areas under subsection (a)(1)(D)(iii); (D) the phased-in implementation under subsection (a)(1)(B) and implementation of subsection (a)(1)(D); (E) the selection of items and services for competitive acquisition under subsection (a)(2); (F) the bidding structure and number of contractors selected under this section; or (G) the implementation of the special rule described in paragraph (10). (c) Program Advisory and Oversight Committee.-- (1) Establishment.--The Secretary shall establish a Program Advisory and Oversight Committee (hereinafter in this section referred to as the ``Committee''). (2) Membership; terms.--The Committee shall consist of such members as the Secretary may appoint who shall serve for such term as the Secretary may specify. (3) Duties.-- (A) Advice.--The Committee shall provide advice to the Secretary with respect to the following functions: (i) The implementation of the program under this section. (ii) The establishment of financial standards for purposes of subsection (b)(2)(A)(ii). (iii) The establishment of requirements for collection of data for the efficient management of the program. (iv) The development of proposals for efficient interaction among manufacturers, providers of services, suppliers (as defined in section 1861(d)), and individuals. (v) The establishment of quality standards under section 1834(a)(20). (B) Additional duties.--The Committee shall perform such additional functions to assist the Secretary in carrying out this section as the Secretary may specify. (4) Inapplicability of faca.--The provisions of the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply. (5) Termination.--The Committee shall terminate on December 31, 2011. (d) Report.--Not later than July 1, 2011, the Secretary shall submit to Congress a report on the programs under this section. The report shall include information on savings, reductions in cost-sharing, access to and quality of items and services, and satisfaction of individuals. [(e) Repealed.] (f) Competitive Acquisition Ombudsman.--The Secretary shall provide for a competitive acquisition ombudsman within the Centers for Medicare & Medicaid Services in order to respond to complaints and inquiries made by suppliers and individuals relating to the application of the competitive acquisition program under this section. The ombudsman may be within the office of the Medicare Beneficiary Ombudsman appointed under section 1808(c). The ombudsman shall submit to Congress an annual report on the activities under this subsection, which report shall be coordinated with the report provided under section 1808(c)(2)(C). * * * * * * * Part E--Miscellaneous Provisions definitions of services, institutions, etc. Sec. 1861. For purposes of this title-- Spell of Illness (a) The term ``spell of illness'' with respect to any individual means a period of consecutive days-- (1) beginning with the first day (not included in a previous spell of illness) (A) on which such individual is furnished inpatient hospital services, inpatient critical access hospital services or extended care services, and (B) which occurs in a month for which he is entitled to benefits under part A, and (2) ending with the close of the first period of 60 consecutive days thereafter on each of which he is neither an inpatient of a hospital or critical access hospital nor an inpatient of a facility described in section 1819(a)(1) or subsection (y)(1). Inpatient Hospital Services (b) The term ``inpatient hospital services'' means the following items and services furnished to an inpatient of a hospital and (except as provided in paragraph (3)) by the hospital-- (1) bed and board; (2) such nursing services and other related services, such use of hospital facilities, and such medical social services as are ordinarily furnished by the hospital for the care and treatment of inpatients, and such drugs, biologicals, supplies, appliances, and equipment, for use in the hospital, as are ordinarily furnished by such hospital for the care and treatment of inpatients; and (3) such other diagnostic or therapeutic items or services, furnished by the hospital or by others under arrangements with them made by the hospital, as are ordinarily furnished to inpatients either by such hospital or by others under such arrangements; excluding, however-- (4) medical or surgical services provided by a physician, resident, or intern, services described by subsection (s)(2)(K), certified nurse-midwife services, qualified psychologist services, and services of a certified registered nurse anesthetist; and (5) the services of a private-duty nurse or other private-duty attendant. Paragraph (4) shall not apply to services provided in a hospital by-- (6) an intern or a resident-in-training under a teaching program approved by the Council on Medical Education of the American Medical Association or, in the case of an osteopathic hospital, approved by the Committee on Hospitals of the Bureau of Professional Education of the American Osteopathic Association, or, in the case of services in a hospital or osteopathic hospital by an intern or resident-in-training in the field of dentistry, approved by the Council on Dental Education of the American Dental Association, or in the case of services in a hospital or osteopathic hospital by an intern or resident-in-training in the field of podiatry, approved by the Council on Podiatric Medical Education of the American Podiatric Medical Association; or (7) a physician where the hospital has a teaching program approved as specified in paragraph (6), if (A) the hospital elects to receive any payment due under this title for reasonable costs of such services, and (B) all physicians in such hospital agree not to bill charges for professional services rendered in such hospital to individuals covered under the insurance program established by this title. Inpatient Psychiatric Hospital Services (c) The term ``inpatient psychiatric hospital services'' means inpatient hospital services furnished to an inpatient of a psychiatric hospital. Supplier (d) The term ``supplier'' means, unless the context otherwise requires, a physician or other practitioner, a facility, or other entity (other than a provider of services) that furnishes items or services under this title. Hospital (e) The term ``hospital'' (except for purposes of sections 1814(d), 1814(f), and 1835(b), subsection (a)(2) of this section, paragraph (7) of this subsection, and subsection (i) of this section) means an institution which-- (1) is primarily engaged in providing, by or under the supervision of physicians, to inpatients (A) diagnostic services and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons, or (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons; (2) maintains clinical records on all patients; (3) has bylaws in effect with respect to its staff of physicians; (4) has a requirement that every patient with respect to whom payment may be made under this title must be under the care of a physician, except that a patient receiving qualified psychologist services (as defined in subsection (ii)) may be under the care of a clinical psychologist with respect to such services to the extent permitted under State law; (5) provides 24-hour nursing service rendered or supervised by a registered professional nurse, and has a licensed practical nurse or registered professional nurse on duty at all times; except that until January 1, 1979, the Secretary is authorized to waive the requirement of this paragraph for any one-year period with respect to any institution, insofar as such requirement relates to the provision of twenty-four- hour nursing service rendered or supervised by a registered professional nurse (except that in any event a registered professional nurse must be present on the premises to render or supervise the nursing service provided, during at least the regular daytime shift), where immediately preceding such one-year period he finds that-- (A) such institution is located in a rural area and the supply of hospital services in such area is not sufficient to meet the needs of individuals residing therein, (B) the failure of such institution to qualify as a hospital would seriously reduce the availability of such services to such individuals, and (C) such institution has made and continues to make a good faith effort to comply with this paragraph, but such compliance is impeded by the lack of qualified nursing personnel in such area; (6)(A) has in effect a hospital utilization review plan which meets the requirements of subsection (k) and (B) has in place a discharge planning process that meets the requirements of subsection (ee); (7) in the case of an institution in any State in which State or applicable local law provides for the licensing of hospitals, (A) is licensed pursuant to such law or (B) is approved, by the agency of such State or locality responsible for licensing hospitals, as meeting the standards established for such licensing; (8) has in effect an overall plan and budget that meets the requirements of subsection (z); and (9) meets such other requirements as the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services in the institution. For purposes of subsection (a)(2), such term includes any institution which meets the requirements of paragraph (1) of this subsection. For purposes of sections 1814(d) and 1835(b) (including determination of whether an individual received inpatient hospital services or diagnostic services for purposes of such sections), section 1814(f)(2), and subsection (i) of this section, such term includes any institution which (i) meets the requirements of paragraphs (5) and (7) of this subsection, (ii) is not primarily engaged in providing the services described in section 1861(j)(1)(A) and (iii) is primarily engaged in providing, by or under the supervision of individuals referred to in paragraph (1) of section 1861(r), to inpatients diagnostic services and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons, or rehabilitation services for the rehabilitation of injured, disabled, or sick persons. For purposes of section 1814(f)(1), such term includes an institution which (i) is a hospital for purposes of sections 1814(d), 1814(f)(2), and 1835(b) and (ii) is accredited by a national accreditation body recognized by the Secretary under section 1865(a), or is accredited by or approved by a program of the country in which such institution is located if the Secretary finds the accreditation or comparable approval standards of such program to be essentially equivalent to those of such a national accreditation body.. Notwithstanding the preceding provisions of this subsection, such term shall not, except for purposes of subsection (a)(2), include any institution which is primarily for the care and treatment of mental diseases unless it is a psychiatric hospital (as defined in subsection (f)). The term ``hospital'' also includes a religious nonmedical health care institution (as defined in subsection (ss)(1)), but only with respect to items and services ordinarily furnished by such institution to inpatients, and payment may be made with respect to services provided by or in such an institution only to such extent and under such conditions, limitations, and requirements (in addition to or in lieu of the conditions, limitations, and requirements otherwise applicable) as may be provided in regulations consistent with section 1821. For provisions deeming certain requirements of this subsection to be met in the case of accredited institutions, see section 1865. The term ``hospital'' also includes a facility of fifty beds or less which is located in an area determined by the Secretary to meet the definition relating to a rural area described in subparagraph (A) of paragraph (5) of this subsection and which meets the other requirements of this subsection, except that-- (A) with respect to the requirements for nursing services applicable after December 31, 1978, such requirements shall provide for temporary waiver of the requirements, for such period as the Secretary deems appropriate, where (i) the facility's failure to fully comply with the requirements is attributable to a temporary shortage of qualified nursing personnel in the area in which the facility is located, (ii) a registered professional nurse is present on the premises to render or supervise the nursing service provided during at least the regular daytime shift, and (iii) the Secretary determines that the employment of such nursing personnel as are available to the facility during such temporary period will not adversely affect the health and safety of patients; (B) with respect to the health and safety requirements promulgated under paragraph (9), such requirements shall be applied by the Secretary to a facility herein defined in such manner as to assure that personnel requirements take into account the availability of technical personnel and the educational opportunities for technical personnel in the area in which such facility is located, and the scope of services rendered by such facility; and the Secretary, by regulations, shall provide for the continued participation of such a facility where such personnel requirements are not fully met, for such period as the Secretary determines that (i) the facility is making good faith efforts to fully comply with the personnel requirements, (ii) the employment by the facility of such personnel as are available to the facility will not adversely affect the health and safety of patients, and (iii) if the Secretary has determined that because of the facility's waiver under this subparagraph the facility should limit its scope of services in order not to adversely affect the health and safety of the facility's patients, the facility is so limiting the scope of services it provides; and (C) with respect to the fire and safety requirements promulgated under paragraph (9), the Secretary (i) may waive, for such period as he deems appropriate, specific provisions of such requirements which if rigidly applied would result in unreasonable hardship for such a facility and which, if not applied, would not jeopardize the health and safety of patients, and (ii) may accept a facility's compliance with all applicable State codes relating to fire and safety in lieu of compliance with the fire and safety requirements promulgated under paragraph (9), if he determines that such State has in effect fire and safety codes, imposed by State law, which adequately protect patients. The term ``hospital'' does not include, unless the context otherwise requires, a critical access hospital (as defined in section 1861(mm)(1)). Psychiatric Hospital (f) The term ``psychiatric hospital'' means an institution which-- (1) is primarily engaged in providing, by or under the supervision of a physician, psychiatric services for the diagnosis and treatment of mentally ill persons; (2) satisfies the requirements of paragraphs (3) through (9) of subsection (e); (3) maintains clinical records on all patients and maintains such records as the Secretary finds to be necessary to determine the degree and intensity of the treatment provided to individuals entitled to hospital insurance benefits under part A; and (4) meets such staffing requirements as the Secretary finds necessary for the institution to carry out an active program of treatment for individuals who are furnished services in the institution. In the case of an institution which satisfies paragraphs (1) and (2) of the preceding sentence and which contains a distinct part which also satisfies paragraphs (3) and (4) of such sentence, such distinct part shall be considered to be a ``psychiatric hospital''. Outpatient Occupational Therapy Services (g) The term ``outpatient occupational therapy services'' has the meaning given the term ``outpatient physical therapy services'' in subsection (p), except that ``occupational'' shall be substituted for ``physical'' each place it appears therein. Extended Care Services (h) The term ``extended care services'' means the following items and services furnished to an inpatient of a skilled nursing facility and (except as provided in paragraphs (3), (6) and (7)) by such skilled nursing facility-- (1) nursing care provided by or under the supervision of a registered professional nurse; (2) bed and board in connection with the furnishing of such nursing care; (3) physical or occupational therapy or speech- language pathology services furnished by the skilled nursing facility or by others under arrangements with them made by the facility; (4) medical social services; (5) such drugs, biologicals, supplies, appliances, and equipment, furnished for use in the skilled nursing facility, as are ordinarily furnished by such facility for the care and treatment of inpatients; (6) medical services provided by an intern or resident-in- training of a hospital with which the facility has in effect a transfer agreement (meeting the requirements of subsection (l)), under a teaching program of such hospital approved as provided in the last sentence of subsection (b), and other diagnostic or therapeutic services provided by a hospital with which the facility has such an agreement in effect; and (7) such other services necessary to the health of the patients as are generally provided by skilled nursing facilities, or by others under arrangements with them made by the facility; excluding, however, any item or service if it would not be included under subsection (b) if furnished to an inpatient of a hospital. Post-Hospital Extended Care Services (i) The term ``post-hospital extended care services'' means extended care services furnished an individual after transfer from a hospital in which he was an inpatient for not less than 3 consecutive days before his discharge from the hospital in connection with such transfer. For purposes of the preceding sentence, items and services shall be deemed to have been furnished to an individual after transfer from a hospital, and he shall be deemed to have been an inpatient in the hospital immediately before transfer therefrom, if he is admitted to the skilled nursing facility (A) within 30 days after discharge from such hospital, or (B) within such time as it would be medically appropriate to begin an active course of treatment, in the case of an individual whose condition is such that skilled nursing facility care would not be medically appropriate within 30 days after discharge from a hospital; and an individual shall be deemed not to have been discharged from a skilled nursing facility if, within 30 days after discharge therefrom, he is admitted to such facility or any other skilled nursing facility. Skilled Nursing Facility (j) The term ``skilled nursing facility'' has the meaning given such term in section 1819(a). Utilization Review (k) A utilization review plan of a hospital or skilled nursing facility shall be considered sufficient if it is applicable to services furnished by the institution to individuals entitled to insurance benefits under this title and if it provides-- (1) for the review, on a sample or other basis, of admissions to the institution, the duration of stays therein, and the professional services (including drugs and biologicals) furnished, (A) with respect to the medical necessity of the services, and (B) for the purpose of promoting the most efficient use of available health facilities and services; (2) for such review to be made by either (A) a staff committee of the institution composed of two or more physicians (of which at least two must be physicians described in subsection (r)(1) of this section), with or without participation of other professional personnel, or (B) a group outside the institution which is similarly composed and (i) which is established by the local medical society and some or all of the hospitals and skilled nursing facilities in the locality, or (ii) if (and for as long as) there has not been established such a group which serves such institution, which is established in such other manner as may be approved by the Secretary; (3) for such review, in each case of inpatient hospital services or extended care services furnished to such an individual during a continuous period of extended duration, as of such days of such period (which may differ for different classes of cases) as may be specified in regulations, with such review to be made as promptly as possible, after each day so specified, and in no event later than one week following such day; and (4) for prompt notification to the institution, the individual, and his attending physician of any finding (made after opportunity for consultation to such attending physician) by the physician members of such committee or group that any further stay in the institution is not medically necessary. The review committee must be composed as provided in clause (B) of paragraph (2) rather than as provided in clause (A) of such paragraph in the case of any hospital or skilled nursing facility where, because of the small size of the institution, or (in the case of a skilled nursing facility) because of lack of an organized medical staff, or for such other reason or reasons as may be included in regulations, it is impracticable for the institution to have a properly functioning staff committee for the purposes of this subsection. If the Secretary determines that the utilization review procedures established pursuant to title XIX are superior in their effectiveness to the procedures required under this section, he may, to the extent that he deems it appropriate, require for purposes of this title that the procedures established pursuant to title XIX be utilized instead of the procedures required by this section. Agreements for Transfer Between Skilled Nursing Facilities and Hospitals (l) A hospital and a skilled nursing facility shall be considered to have a transfer agreement in effect if, by reason of a written agreement between them or (in case the two institutions are under common control) by reason of a written undertaking by the person or body which controls them, there is reasonable assurance that-- (1) transfer of patients will be effected between the hospital and the skilled nursing facility whenever such transfer is medically appropriate as determined by the attending physician; and (2) there will be interchange of medical and other information necessary or useful in the care and treatment of individuals transferred between the institutions, or in determining whether such individuals can be adequately cared for otherwise than in either of such institutions. Any skilled nursing facility which does not have such an agreement in effect, but which is found by a State agency (of the State in which such facility is situated) with which an agreement under section 1864 is in effect (or, in the case of a State in which no such agency has an agreement under section 1864, by the Secretary) to have attempted in good faith to enter into such an agreement with a hospital sufficiently close to the facility to make feasible the transfer between them of patients and the information referred to in paragraph (2), shall be considered to have such an agreement in effect if and for so long as such agency (or the Secretary, as the case may be) finds that to do so is in the public interest and essential to assuring extended care services for persons in the community who are eligible for payments with respect to such services under this title. Home Health Services (m) The term ``home health services'' means the following items and services furnished to an individual, who is under the care of a physician, by a home health agency or by others under arrangements with them made by such agency, under a plan (for furnishing such items and services to such individual) established and periodically reviewed by a physician, which items and services are, except as provided in paragraph (7), provided on a visiting basis in a place of residence used as such individual's home-- (1) part-time or intermittent nursing care provided by or under the supervision of a registered professional nurse; (2) physical or occupational therapy or speech- language pathology services; (3) medical social services under the direction of a physician; (4) to the extent permitted in regulations, part-time or intermittent services of a home health aide who has successfully completed a training program approved by the Secretary; (5) medical supplies (including catheters, catheter supplies, ostomy bags, and supplies related to ostomy care, and a covered osteoporosis drug (as defined in subsection (kk)), but excluding other drugs and biologicals) and durable medical equipment and applicable disposable devices (as defined in section 1834(s)(2)) while under such a plan; (6) in the case of a home health agency which is affiliated or under common control with a hospital, medical services provided by an intern or resident-in- training of such hospital, under a teaching program of such hospital approved as provided in the last sentence of subsection (b); and (7) any of the foregoing items and services which are provided on an outpatient basis, under arrangements made by the home health agency, at a hospital or skilled nursing facility, or at a rehabilitation center which meets such standards as may be prescribed in regulations, and-- (A) the furnishing of which involves the use of equipment of such a nature that the items and services cannot readily be made available to the individual in such place of residence, or (B) which are furnished at such facility while he is there to receive any such item or service described in clause (A), but not including transportation of the individual in connection with any such item or service; excluding, however, any item or service if it would not be included under subsection (b) if furnished to an inpatient of a hospital and home infusion therapy (as defined in subsection (iii)(i)). For purposes of paragraphs (1) and (4), the term ``part-time or intermittent services'' means skilled nursing and home health aide services furnished any number of days per week as long as they are furnished (combined) less than 8 hours each day and 28 or fewer hours each week (or, subject to review on a case-by-case basis as to the need for care, less than 8 hours each day and 35 or fewer hours per week). For purposes of sections 1814(a)(2)(C) and 1835(a)(2)(A), ``intermittent'' means skilled nursing care that is either provided or needed on fewer than 7 days each week, or less than 8 hours of each day for periods of 21 days or less (with extensions in exceptional circumstances when the need for additional care is finite and predictable). Durable Medical Equipment (n) The term ``durable medical equipment'' includes iron lungs, oxygen tents, hospital beds, and wheelchairs (which may include a power-operated vehicle that may be appropriately used as a wheelchair, but only where the use of such a vehicle is determined to be necessary on the basis of the individual's medical and physical condition and the vehicle meets such safety requirements as the Secretary may prescribe) used in the patient's home (including an institution used as his home other than an institution that meets the requirements of subsection (e)(1) of this section or section 1819(a)(1)), whether furnished on a rental basis or purchased, and includes blood- testing strips and blood glucose monitors for individuals with diabetes without regard to whether the individual has Type I or Type II diabetes or to the individual's use of insulin (as determined under standards established by the Secretary in consultation with the appropriate organizations) and eye tracking and gaze interaction accessories for speech generating devices furnished to individuals with a demonstrated medical need for such accessories; except that such term does not include such equipment furnished by a supplier who has used, for the demonstration and use of specific equipment, an individual who has not met such minimum training standards as the Secretary may establish with respect to the demonstration and use of such specific equipment. With respect to a seat-lift chair, such term includes only the seat-lift mechanism and does not include the chair. Home Health Agency (o) The term ``home health agency'' means a public agency or private organization, or a subdivision of such an agency or organization, which-- (1) is primarily engaged in providing skilled nursing services and other therapeutic services; (2) has policies, established by a group of professional personnel (associated with the agency or organization), including one or more physicians and one or more registered professional nurses, to govern the services (referred to in paragraph (1)) which it provides, and provides for supervision of such services by a physician or registered professional nurse; (3) maintains clinical records on all patients; (4) in the case of an agency or organization in any State in which State or applicable local law provides for the licensing of agencies or organizations of this nature, (A) is licensed pursuant to such law, or (B) is approved, by the agency of such State or locality responsible for licensing agencies or organizations of this nature, as meeting the standards established for such licensing; (5) has in effect an overall plan and budget that meets the requirements of subsection (z); (6) meets the conditions of participation specified in section 1891(a) and such other conditions of participation as the Secretary may find necessary in the interest of the health and safety of individuals who are furnished services by such agency or organization; (7) provides the Secretary with a surety bond-- (A) in a form specified by the Secretary and in an amount that is not less than the minimum of $50,000; and (B) that the Secretary determines is commensurate with the volume of payments to the home health agency; and (8) meets such additional requirements (including conditions relating to bonding or establishing of escrow accounts as the Secretary finds necessary for the financial security of the program) as the Secretary finds necessary for the effective and efficient operation of the program; except that for purposes of part A such term shall not include any agency or organization which is primarily for the care and treatment of mental diseases. The Secretary may waive the requirement of a surety bond under paragraph (7) in the case of an agency or organization that provides a comparable surety bond under State law. Outpatient Physical Therapy Services (p) The term ``outpatient physical therapy services'' means physical therapy services furnished by a provider of services, a clinic, rehabilitation agency, or a public health agency, or by others under an arrangement with, and under the supervision of, such provider, clinic, rehabilitation agency, or public health agency to an individual as an outpatient-- (1) who is under the care of a physician (as defined in paragraph (1), (3), or (4) of section 1861(r)), and (2) with respect to whom a plan prescribing the type, amount, and duration of physical therapy services that are to be furnished such individual has been established by a physician (as so defined) or by a qualified physical therapist and is periodically reviewed by a physician (as so defined); excluding, however-- (3) any item or service if it would not be included under subsection (b) if furnished to an inpatient of a hospital; and (4) any such service-- (A) if furnished by a clinic or rehabilitation agency, or by others under arrangements with such clinic or agency, unless such clinic or rehabilitation agency-- (i) provides an adequate program of physical therapy services for outpatients and has the facilities and personnel required for such program or required for the supervision of such a program, in accordance with such requirements as the Secretary may specify, (ii) has policies, established by a group of professional personnel, including one or more physicians (associated with the clinic or rehabilitation agency) and one or more qualified physical therapists, to govern the services (referred to in clause (i)) it provides, (iii) maintains clinical records on all patients, (iv) if such clinic or agency is situated in a State in which State or applicable local law provides for the licensing of institutions of this nature, (I) is licensed pursuant to such law, or (II) is approved by the agency of such State or locality responsible for licensing institutions of this nature, as meeting the standards established for such licensing; and (v) meets such other conditions relating to the health and safety of individuals who are furnished services by such clinic or agency on an outpatient basis, as the Secretary may find necessary, and provides the Secretary on a continuing basis with a surety bond in a form specified by the Secretary and in an amount that is not less than $50,000, or (B) if furnished by a public health agency, unless such agency meets such other conditions relating to health and safety of individuals who are furnished services by such agency on an outpatient basis, as the Secretary may find necessary. The term ``outpatient physical therapy services'' also includes physical therapy services furnished an individual by a physical therapist (in his office or in such individual's home) who meets licensing and other standards prescribed by the Secretary in regulations, otherwise than under an arrangement with and under the supervision of a provider of services, clinic, rehabilitation agency, or public health agency, if the furnishing of such services meets such conditions relating to health and safety as the Secretary may find necessary. In addition, such term includes physical therapy services which meet the requirements of the first sentence of this subsection except that they are furnished to an individual as an inpatient of a hospital or extended care facility. Nothing in this subsection shall be construed as requiring, with respect to outpatients who are not entitled to benefits under this title, a physical therapist to provide outpatient physical therapy services only to outpatients who are under the care of a physician or pursuant to a plan of care established by a physician. The Secretary may waive the requirement of a surety bond under paragraph (4)(A)(v) in the case of a clinic or agency that provides a comparable surety bond under State law. Physicians' Services (q) The term ``physicians' services'' means professional services performed by physicians, including surgery, consultation, and home, office, and institutional calls (but not including services described in subsection (b)(6)). Physician (r) The term ``physician'', when used in connection with the performance of any function or action, means (1) a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which he performs such function or action (including a physician within the meaning of section 1101(a)(7)), (2) a doctor of dental surgery or of dental medicine who is legally authorized to practice dentistry by the State in which he performs such function and who is acting within the scope of his license when he performs such functions, (3) a doctor of podiatric medicine for the purposes of subsections (k), (m), (p)(1), and (s) of this section and sections 1814(a), 1832(a)(2)(F)(ii), and 1835 but only with respect to functions which he is legally authorized to perform as such by the State in which he performs them, (4) a doctor of optometry, but only for purposes of subsection (p)(1) and with respect to the provision of items or services described in subsection (s) which he is legally authorized to perform as a doctor of optometry by the State in which he performs them, or (5) a chiropractor who is licensed as such by the State (or in a State which does not license chiropractors as such, is legally authorized to perform the services of a chiropractor in the jurisdiction in which he performs such services), and who meets uniform minimum standards promulgated by the Secretary, but only for the purpose of sections 1861(s)(1) and 1861(s)(2)(A) and only with respect to treatment by means of manual manipulation of the spine (to correct a subluxation) which he is legally authorized to perform by the State or jurisdiction in which such treatment is provided. For the purposes of section 1862(a)(4) and subject to the limitations and conditions provided in the previous sentence, such term includes a doctor of one of the arts, specified in such previous sentence, legally authorized to practice such art in the country in which the inpatient hospital services (referred to in such section 1862(a)(4)) are furnished. Medical and Other Health Services (s) The term ``medical and other health services'' means any of the following items or services: (1) physicians' services; (2)(A) services and supplies (including drugs and biologicals which are not usually self-administered by the patient) furnished as an incident to a physician's professional service, of kinds which are commonly furnished in physicians' offices and are commonly either rendered without charge or included in the physicians' bills (or would have been so included but for the application of section 1847B); (B) hospital services (including drugs and biologicals which are not usually self-administered by the patient) incident to physicians' services rendered to outpatients and partial hospitalization services incident to such services; (C) diagnostic services which are-- (i) furnished to an individual as an outpatient by a hospital or by others under arrangements with them made by a hospital, and (ii) ordinarily furnished by such hospital (or by others under such arrangements) to its outpatients for the purpose of diagnostic study; (D) outpatient physical therapy services, outpatient speech-language pathology services, and outpatient occupational therapy services; (E) rural health clinic services and Federally qualified health center services; (F) home dialysis supplies and equipment, self-care home dialysis support services, and institutional dialysis services and supplies, and, for items and services furnished on or after January 1, 2011, renal dialysis services (as defined in section 1881(b)(14)(B)), including such renal dialysis services furnished on or after January 1, 2017, by a renal dialysis facility or provider of services paid under section 1881(b)(14) to an individual with acute kidney injury (as defined in section 1834(r)(2)); (G) antigens (subject to quantity limitations prescribed in regulations by the Secretary) prepared by a physician, as defined in section 1861(r)(1), for a particular patient, including antigens so prepared which are forwarded to another qualified person (including a rural health clinic) for administration to such patient, from time to time, by or under the supervision of another such physician; (H)(i) services furnished pursuant to a contract under section 1876 to a member of an eligible organization by a physician assistant or by a nurse practitioner (as defined in subsection (aa)(5)) and such services and supplies furnished as an incident to his service to such a member as would otherwise be covered under this part if furnished by a physician or as an incident to a physician's service; and (ii) services furnished pursuant to a risk-sharing contract under section 1876(g) to a member of an eligible organization by a clinical psychologist (as defined by the Secretary) or by a clinical social worker (as defined in subsection (hh)(2)), and such services and supplies furnished as an incident to such clinical psychologist's services or clinical social worker's services to such a member as would otherwise be covered under this part if furnished by a physician or as an incident to a physician's service; (I) blood clotting factors, for hemophilia patients competent to use such factors to control bleeding without medical or other supervision, and items related to the administration of such factors, subject to utilization controls deemed necessary by the Secretary for the efficient use of such factors; (J) prescription drugs used in immunosuppressive therapy furnished, to an individual who receives an organ transplant for which payment is made under this title; (K)(i) services which would be physicians' services and services described in subsections (ww)(1) and (hhh) if furnished by a physician (as defined in subsection (r)(1)) and which are performed by a physician assistant (as defined in subsection (aa)(5)) under the supervision of a physician (as so defined) and which the physician assistant is legally authorized to perform by the State in which the services are performed, and such services and supplies furnished as incident to such services as would be covered under subparagraph (A) if furnished incident to a physician's professional service, but only if no facility or other provider charges or is paid any amounts with respect to the furnishing of such services, (ii) services which would be physicians' services and services described in subsections (ww)(1) and (hhh) if furnished by a physician (as defined in subsection (r)(1)) and which are performed by a nurse practitioner or clinical nurse specialist (as defined in subsection (aa)(5)) working in collaboration (as defined in subsection (aa)(6)) with a physician (as defined in subsection (r)(1)) which the nurse practitioner or clinical nurse specialist is legally authorized to perform by the State in which the services are performed, and such services and supplies furnished as an incident to such services as would be covered under subparagraph (A) if furnished incident to a physician's professional service, but only if no facility or other provider charges or is paid any amounts with respect to the furnishing of such services; (L) certified nurse-midwife services; (M) qualified psychologist services; (N) clinical social worker services (as defined in subsection (hh)(2)); (O) erythropoietin for dialysis patients competent to use such drug without medical or other supervision with respect to the administration of such drug, subject to methods and standards established by the Secretary by regulation for the safe and effective use of such drug, and items related to the administration of such drug; (P) prostate cancer screening tests (as defined in subsection (oo)); (Q) an oral drug (which is approved by the Federal Food and Drug Administration) prescribed for use as an anticancer chemotherapeutic agent for a given indication, and containing an active ingredient (or ingredients), which is the same indication and active ingredient (or ingredients) as a drug which the carrier determines would be covered pursuant to subparagraph (A) or (B) if the drug could not be self-administered; (R) colorectal cancer screening tests (as defined in subsection (pp)); (S) diabetes outpatient self-management training services (as defined in subsection (qq)); (T) an oral drug (which is approved by the Federal Food and Drug Administration) prescribed for use as an acute anti-emetic used as part of an anticancer chemotherapeutic regimen if the drug is administered by a physician (or as prescribed by a physician)-- (i) for use immediately before, at, or within 48 hours after the time of the administration of the anticancer chemotherapeutic agent; and (ii) as a full replacement for the anti- emetic therapy which would otherwise be administered intravenously; (U) screening for glaucoma (as defined in subsection (uu)) for individuals determined to be at high risk for glaucoma, individuals with a family history of glaucoma and individuals with diabetes; (V) medical nutrition therapy services (as defined in subsection (vv)(1)) in the case of a beneficiary with diabetes or a renal disease who-- (i) has not received diabetes outpatient self-management training services within a time period determined by the Secretary; (ii) is not receiving maintenance dialysis for which payment is made under section 1881; and (iii) meets such other criteria determined by the Secretary after consideration of protocols established by dietitian or nutrition professional organizations; (W) an initial preventive physical examination (as defined in subsection (ww)); (X) cardiovascular screening blood tests (as defined in subsection (xx)(1)); (Y) diabetes screening tests (as defined in subsection (yy)); (Z) intravenous immune globulin for the treatment of primary immune deficiency diseases in the home (as defined in subsection (zz)); (AA) ultrasound screening for abdominal aortic aneurysm (as defined in subsection (bbb)) for an individual-- (i) who receives a referral for such an ultrasound screening as a result of an initial preventive physical examination (as defined in section 1861(ww)(1)); (ii) who has not been previously furnished such an ultrasound screening under this title; and (iii) who-- (I) has a family history of abdominal aortic aneurysm; or (II) manifests risk factors included in a beneficiary category recommended for screening by the United States Preventive Services Task Force regarding abdominal aortic aneurysms; (BB) additional preventive services (described in subsection (ddd)(1)); (CC) items and services furnished under a cardiac rehabilitation program (as defined in subsection (eee)(1)) or under a pulmonary rehabilitation program (as defined in subsection (fff)(1)); (DD) items and services furnished under an intensive cardiac rehabilitation program (as defined in subsection (eee)(4)); (EE) kidney disease education services (as defined in subsection (ggg)); (FF) personalized prevention plan services (as defined in subsection (hhh)); (GG) home infusion therapy (as defined in subsection (iii)(1)); [and] (HH) opioid use disorder treatment services (as defined in subsection (jjj))[.]; and (II) a prostate cancer DNA Specimen Provenance Assay test (DSPA test) (as defined in subsection (kkk)); (3) diagnostic X-ray tests (including tests under the supervision of a physician, furnished in a place of residence used as the patient's home, if the performance of such tests meets such conditions relating to health and safety as the Secretary may find necessary and including diagnostic mammography if conducted by a facility that has a certificate (or provisional certificate) issued under section 354 of the Public Health Service Act), diagnostic laboratory tests, and other diagnostic tests; (4) X-ray, radium, and radioactive isotope therapy, including materials and services of technicians; (5) surgical dressings, and splints, casts, and other devices used for reduction of fractures and dislocations; (6) durable medical equipment; (7) ambulance service where the use of other methods of transportation is contraindicated by the individual's condition, but, subject to section 1834(l)(14), only to the extent provided in regulations; (8) prosthetic devices (other than dental) which replace all or part of an internal body organ (including colostomy bags and supplies directly related to colostomy care), including replacement of such devices, and including one pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens; (9) leg, arm, back, and neck braces, and artificial legs, arms, and eyes, including replacements if required because of a change in the patient's physical condition; (10)(A) pneumococcal vaccine and its administration and, subject to section 4071(b) of the Omnibus Budget Reconciliation Act of 1987, influenza vaccine and its administration; and (B) hepatitis B vaccine and its administration, furnished to an individual who is at high or intermediate risk of contracting hepatitis B (as determined by the Secretary under regulations); (11) services of a certified registered nurse anesthetist (as defined in subsection (bb)); (12) subject to section 4072(e) of the Omnibus Budget Reconciliation Act of 1987, extra-depth shoes with inserts or custom molded shoes with inserts for an individual with diabetes, if-- (A) the physician who is managing the individual's diabetic 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 a comprehensive plan of care related to the individual's diabetic condition; (B) the particular type of shoes are prescribed by a podiatrist or other qualified physician (as established by the Secretary); and (C) the shoes are fitted and furnished by a podiatrist or other qualified individual (such as a pedorthist or orthotist, as established by the Secretary) who is not the physician described in subparagraph (A) (unless the Secretary finds that the physician is the only such qualified individual in the area); (13) screening mammography (as defined in subsection (jj)); (14) screening pap smear and screening pelvic exam; and (15) bone mass measurement (as defined in subsection (rr)). No diagnostic tests performed in any laboratory, including a laboratory that is part of a rural health clinic, or a hospital (which, for purposes of this sentence, means an institution considered a hospital for purposes of section 1814(d)) shall be included within paragraph (3) unless such laboratory-- (16) if situated in any State in which State or applicable local law provides for licensing of establishments of this nature, (A) is licensed pursuant to such law, or (B) is approved, by the agency of such State or locality responsible for licensing establishments of this nature, as meeting the standards established for such licensing; and (17)(A) meets the certification requirements under section 353 of the Public Health Service Act; and (B) meets such other conditions relating to the health and safety of individuals with respect to whom such tests are performed as the Secretary may find necessary. There shall be excluded from the diagnostic services specified in paragraph (2)(C) any item or service (except services referred to in paragraph (1)) which would not be included under subsection (b) if it were furnished to an inpatient of a hospital. None of the items and services referred to in the preceding paragraphs (other than paragraphs (1) and (2)(A)) of this subsection which are furnished to a patient of an institution which meets the definition of a hospital for purposes of section 1814(d) shall be included unless such other conditions are met as the Secretary may find necessary relating to health and safety of individuals with respect to whom such items and services are furnished. Drugs and Biologicals (t)(1) The term ``drugs'' and the term ``biologicals'', except for purposes of subsection (m)(5) and paragraph (2), include only such drugs (including contrast agents) and biologicals, respectively, as are included (or approved for inclusion) in the United States Pharmacopoeia, the National Formulary, or the United States Homeopathic Pharmacopoeia, or in New Drugs or Accepted Dental Remedies (except for any drugs and biologicals unfavorably evaluated therein), or as are approved by the pharmacy and drug therapeutics committee (or equivalent committee) of the medical staff of the hospital furnishing such drugs and biologicals for use in such hospital. (2)(A) For purposes of paragraph (1), the term ``drugs'' also includes any drugs or biologicals used in an anticancer chemotherapeutic regimen for a medically accepted indication (as described in subparagraph (B)). (B) In subparagraph (A), the term ``medically accepted indication'', with respect to the use of a drug, includes any use which has been approved by the Food and Drug Administration for the drug, and includes another use of the drug if-- (i) the drug has been approved by the Food and Drug Administration; and (ii)(I) such use is supported by one or more citations which are included (or approved for inclusion) in one or more of the following compendia: the American Hospital Formulary Service-Drug Information, the American Medical Association Drug Evaluations, the United States Pharmacopoeia-Drug Information (or its successor publications), and other authoritative compendia as identified by the Secretary, unless the Secretary has determined that the use is not medically appropriate or the use is identified as not indicated in one or more such compendia, or (II) the carrier involved determines, based upon guidance provided by the Secretary to carriers for determining accepted uses of drugs, that such use is medically accepted based on supportive clinical evidence in peer reviewed medical literature appearing in publications which have been identified for purposes of this subclause by the Secretary. The Secretary may revise the list of compendia in clause (ii)(I) as is appropriate for identifying medically accepted indications for drugs. On and after January 1, 2010, no compendia may be included on the list of compendia under this subparagraph unless the compendia has a publicly transparent process for evaluating therapies and for identifying potential conflicts of interests. Provider of Services (u) The term ``provider of services'' means a hospital, critical access hospital, skilled nursing facility, comprehensive outpatient rehabilitation facility, home health agency, hospice program, or, for purposes of section 1814(g) and section 1835(e), a fund. Reasonable Cost (v)(1)(A) The reasonable cost of any services shall be the cost actually incurred, excluding therefrom any part of incurred cost found to be unnecessary in the efficient delivery of needed health services, and shall be determined in accordance with regulations establishing the method or methods to be used, and the items to be included, in determining such costs for various types or classes of institutions, agencies, and services; except that in any case to which paragraph (2) or (3) applies, the amount of the payment determined under such paragraph with respect to the services involved shall be considered the reasonable cost of such services. In prescribing the regulations referred to in the preceding sentence, the Secretary shall consider, among other things, the principles generally applied by national organizations or established prepayment organizations (which have developed such principles) in computing the amount of payment, to be made by persons other than the recipients of services, to providers of services on account of services furnished to such recipients by such providers. Such regulations may provide for determination of the costs of services on a per diem, per unit, per capita, or other basis, may provide for using different methods in different circumstances, may provide for the use of estimates of costs of particular items or services, may provide for the establishment of limits on the direct or indirect overall incurred costs or incurred costs of specific items or services or groups of items or services to be recognized as reasonable based on estimates of the costs necessary in the efficient delivery of needed health services to individuals covered by the insurance programs established under this title, and may provide for the use of charges or a percentage of charges where this method reasonably reflects the costs. Such regulations shall (i) take into account both direct and indirect costs of providers of services (excluding therefrom any such costs, including standby costs, which are determined in accordance with regulations to be unnecessary in the efficient delivery of services covered by the insurance programs established under this title) in order that, under the methods of determining costs, the necessary costs of efficiently delivering covered services to individuals covered by the insurance programs established by this title will not be borne by individuals not so covered, and the costs with respect to individuals not so covered will not be borne by such insurance programs, and (ii) provide for the making of suitable retroactive corrective adjustments where, for a provider of services for any fiscal period, the aggregate reimbursement produced by the methods of determining costs proves to be either inadequate or excessive. (B) In the case of extended care services, the regulations under subparagraph (A) shall not include provision for specific recognition of a return on equity capital. (C) Where a hospital has an arrangement with a medical school under which the faculty of such school provides services at such hospital, an amount not in excess of the reasonable cost of such services to the medical school shall be included in determining the reasonable cost to the hospital of furnishing services-- (i) for which payment may be made under part A, but only if-- (I) payment for such services as furnished under such arrangement would be made under part A to the hospital had such services been furnished by the hospital, and (II) such hospital pays to the medical school at least the reasonable cost of such services to the medical school, or (ii) for which payment may be made under part B, but only if such hospital pays to the medical school at least the reasonable cost of such services to the medical school. (D) Where (i) physicians furnish services which are either inpatient hospital services (including services in conjunction with the teaching programs of such hospital) by reason of paragraph (7) of subsection (b) or for which entitlement exists by reason of clause (II) of section 1832(a)(2)(B)(i), and (ii) such hospital (or medical school under arrangement with such hospital) incurs no actual cost in the furnishing of such services, the reasonable cost of such services shall (under regulations of the Secretary) be deemed to be the cost such hospital or medical school would have incurred had it paid a salary to such physicians rendering such services approximately equivalent to the average salary paid to all physicians employed by such hospital (or if such employment does not exist, or is minimal in such hospital, by similar hospitals in a geographic area of sufficient size to assure reasonable inclusion of sufficient physicians in development of such average salary). (E) Such regulations may, in the case of skilled nursing facilities in any State, provide for the use of rates, developed by the State in which such facilities are located, for the payment of the cost of skilled nursing facility services furnished under the State's plan approved under title XIX (and such rates may be increased by the Secretary on a class or size of institution or on a geographical basis by a percentage factor not in excess of 10 percent to take into account determinable items or services or other requirements under this title not otherwise included in the computation of such State rates), if the Secretary finds that such rates are reasonably related to (but not necessarily limited to) analyses undertaken by such State of costs of care in comparable facilities in such State. Notwithstanding the previous sentence, such regulations with respect to skilled nursing facilities shall take into account (in a manner consistent with subparagraph (A) and based on patient-days of services furnished) the costs (including the costs of services required to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident eligible for benefits under this title) of such facilities complying with the requirements of subsections (b), (c), and (d) of section 1819 (including the costs of conducting nurse aide training and competency evaluation programs and competency evaluation programs). (F) Such regulations shall require each provider of services (other than a fund) to make reports to the Secretary of information described in section 1121(a) in accordance with the uniform reporting system (established under such section) for that type of provider. (G)(i) In any case in which a hospital provides inpatient services to an individual that would constitute post-hospital extended care services if provided by a skilled nursing facility and a quality improvement organization (or, in the absence of such a qualified organization, the Secretary or such agent as the Secretary may designate) determines that inpatient hospital services for the individual are not medically necessary but post-hospital extended care services for the individual are medically necessary and such extended care services are not otherwise available to the individual (as determined in accordance with criteria established by the Secretary) at the time of such determination, payment for such services provided to the individual shall continue to be made under this title at the payment rate described in clause (ii) during the period in which-- (I) such post-hospital extended care services for the individual are medically necessary and not otherwise available to the individual (as so determined), (II) inpatient hospital services for the individual are not medically necessary, and (III) the individual is entitled to have payment made for post-hospital extended care services under this title, except that if the Secretary determines that there is not an excess of hospital beds in such hospital and (subject to clause (iv)) there is not an excess of hospital beds in the area of such hospital, such payment shall be made (during such period) on the basis of the amount otherwise payable under part A with respect to inpatient hospital services. (ii)(I) Except as provided in subclause (II), the payment rate referred to in clause (i) is a rate equal to the estimated adjusted State-wide average rate per patient-day paid for services provided in skilled nursing facilities under the State plan approved under title XIX for the State in which such hospital is located, or, if the State in which the hospital is located does not have a State plan approved under title XIX, the estimated adjusted State-wide average allowable costs per patient-day for extended care services under this title in that State. (II) If a hospital has a unit which is a skilled nursing facility, the payment rate referred to in clause (i) for the hospital is a rate equal to the lesser of the rate described in subclause (I) or the allowable costs in effect under this title for extended care services provided to patients of such unit. (iii) Any day on which an individual receives inpatient services for which payment is made under this subparagraph shall, for purposes of this Act (other than this subparagraph), be deemed to be a day on which the individual received inpatient hospital services. (iv) In determining under clause (i), in the case of a public hospital, whether or not there is an excess of hospital beds in the area of such hospital, such determination shall be made on the basis of only the public hospitals (including the hospital) which are in the area of the hospital and which are under common ownership with that hospital. (H) In determining such reasonable cost with respect to home health agencies, the Secretary may not include-- (i) any costs incurred in connection with bonding or establishing an escrow account by any such agency as a result of the surety bond requirement described in subsection (o)(7) and the financial security requirement described in subsection (o)(8); (ii) in the case of home health agencies to which the surety bond requirement described in subsection (o)(7) and the financial security requirement described in subsection (o)(8) apply, any costs attributed to interest charged such an agency in connection with amounts borrowed by the agency to repay overpayments made under this title to the agency, except that such costs may be included in reasonable cost if the Secretary determines that the agency was acting in good faith in borrowing the amounts; (iii) in the case of contracts entered into by a home health agency after the date of the enactment of this subparagraph for the purpose of having services furnished for or on behalf of such agency, any cost incurred by such agency pursuant to any such contract which is entered into for a period exceeding five years; and (iv) in the case of contracts entered into by a home health agency before the date of the enactment of this subparagraph for the purpose of having services furnished for or on behalf of such agency, any cost incurred by such agency pursuant to any such contract, which determines the amount payable by the home health agency on the basis of a percentage of the agency's reimbursement or claim for reimbursement for services furnished by the agency, to the extent that such cost exceeds the reasonable value of the services furnished on behalf of such agency. (I) In determining such reasonable cost, the Secretary may not include any costs incurred by a provider with respect to any services furnished in connection with matters for which payment may be made under this title and furnished pursuant to a contract between the provider and any of its subcontractors which is entered into after the date of the enactment of this subparagraph and the value or cost of which is $10,000 or more over a twelve-month period unless the contract contains a clause to the effect that-- (i) until the expiration of four years after the furnishing of such services pursuant to such contract, the subcontractor shall make available, upon written request by the Secretary, or upon request by the Comptroller General, or any of their duly authorized representatives, the contract, and books, documents and records of such subcontractor that are necessary to certify the nature and extent of such costs, and (ii) if the subcontractor carries out any of the duties of the contract through a subcontract, with a value or cost of $10,000 or more over a twelve-month period, with a related organization, such subcontract shall contain a clause to the effect that until the expiration of four years after the furnishing of such services pursuant to such subcontract, the related organization shall make available, upon written request by the Secretary, or upon request by the Comptroller General, or any of their duly authorized representatives, the subcontract, and books, documents and records of such organization that are necessary to verify the nature and extent of such costs. The Secretary shall prescribe in regulation criteria and procedures which the Secretary shall use in obtaining access to books, documents, and records under clauses required in contracts and subcontracts under this subparagraph. (J) Such regulations may not provide for any inpatient routine salary cost differential as a reimbursable cost for hospitals and skilled nursing facilities. (K)(i) The Secretary shall issue regulations that provide, to the extent feasible, for the establishment of limitations on the amount of any costs or charges that shall be considered reasonable with respect to services provided on an outpatient basis by hospitals (other than bona fide emergency services as defined in clause (ii)) or clinics (other than rural health clinics), which are reimbursed on a cost basis or on the basis of cost related charges, and by physicians utilizing such outpatient facilities. Such limitations shall be reasonably related to the charges in the same area for similar services provided in physicians' offices. Such regulations shall provide for exceptions to such limitations in cases where similar services are not generally available in physicians' offices in the area to individuals entitled to benefits under this title. (ii) For purposes of clause (i), the term ``bona fide emergency services'' means services provided in a hospital emergency room after the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in-- (I) placing the patient's health in serious jeopardy; (II) serious impairment to bodily functions; or (III) serious dysfunction of any bodily organ or part. (L)(i) The Secretary, in determining the amount of the payments that may be made under this title with respect to services furnished by home health agencies, may not recognize as reasonable (in the efficient delivery of such services) costs for the provision of such services by an agency to the extent these costs exceed (on the aggregate for the agency) for cost reporting periods beginning on or after-- (I) July 1, 1985, and before July 1, 1986, 120 percent of the mean of the labor-related and nonlabor per visit costs for freestanding home health agencies, (II) July 1, 1986, and before July 1, 1987, 115 percent of such mean, (III) July 1, 1987, and before October 1, 1997, 112 percent of such mean, (IV) October 1, 1997, and before October 1, 1998, 105 percent of the median of the labor-related and nonlabor per visit costs for freestanding home health agencies, or (V) October 1, 1998, 106 percent of such median. (ii) Effective for cost reporting periods beginning on or after July 1, 1986, such limitations shall be applied on an aggregate basis for the agency, rather than on a discipline specific basis. The Secretary may provide for such exemptions and exceptions to such limitation as he deems appropriate. (iii) Not later than July 1, 1991, and annually thereafter (but not for cost reporting periods beginning on or after July 1, 1994, and before July 1, 1996, or on or after July 1, 1997, and before October 1, 1997), the Secretary shall establish limits under this subparagraph for cost reporting periods beginning on or after such date by utilizing the area wage index applicable under section 1886(d)(3)(E) and determined using the survey of the most recent available wages and wage- related costs of hospitals located in the geographic area in which the home health service is furnished (determined without regard to whether such hospitals have been reclassified to a new geographic area pursuant to section 1886(d)(8)(B), a decision of the Medicare Geographic Classification Review Board under section 1886(d)(10), or a decision of the Secretary). (iv) In establishing limits under this subparagraph for cost reporting periods beginning after September 30, 1997, the Secretary shall not take into account any changes in the home health market basket, as determined by the Secretary, with respect to cost reporting periods which began on or after July 1, 1994, and before July 1, 1996. (v) For services furnished by home health agencies for cost reporting periods beginning on or after October 1, 1997, subject to clause (viii)(I), the Secretary shall provide for an interim system of limits. Payment shall not exceed the costs determined under the preceding provisions of this subparagraph or, if lower, the product of-- (I) an agency-specific per beneficiary annual limitation calculated based 75 percent on 98 percent of the reasonable costs (including nonroutine medical supplies) for the agency's 12-month cost reporting period ending during fiscal year 1994, and based 25 percent on 98 percent of the standardized regional average of such costs for the agency's census division, as applied to such agency, for cost reporting periods ending during fiscal year 1994, such costs updated by the home health market basket index; and (II) the agency's unduplicated census count of patients (entitled to benefits under this title) for the cost reporting period subject to the limitation. (vi) For services furnished by home health agencies for cost reporting periods beginning on or after October 1, 1997, the following rules apply: (I) For new providers and those providers without a 12-month cost reporting period ending in fiscal year 1994 subject to clauses (viii)(II) and (viii)(III), the per beneficiary limitation shall be equal to the median of these limits (or the Secretary's best estimates thereof) applied to other home health agencies as determined by the Secretary. A home health agency that has altered its corporate structure or name shall not be considered a new provider for this purpose. (II) For beneficiaries who use services furnished by more than one home health agency, the per beneficiary limitations shall be prorated among the agencies. (vii)(I) Not later than January 1, 1998, the Secretary shall establish per visit limits applicable for fiscal year 1998, and not later than April 1, 1998, the Secretary shall establish per beneficiary limits under clause (v)(I) for fiscal year 1998. (II) Not later than August 1 of each year (beginning in 1998) the Secretary shall establish the limits applicable under this subparagraph for services furnished during the fiscal year beginning October 1 of the year. (viii)(I) In the case of a provider with a 12-month cost reporting period ending in fiscal year 1994, if the limit imposed under clause (v) (determined without regard to this subclause) for a cost reporting period beginning during or after fiscal year 1999 is less than the median described in clause (vi)(I) (but determined as if any reference in clause (v) to ``98 percent'' were a reference to ``100 percent''), the limit otherwise imposed under clause (v) for such provider and period shall be increased by \1/3\ of such difference. (II) Subject to subclause (IV), for new providers and those providers without a 12-month cost reporting period ending in fiscal year 1994, but for which the first cost reporting period begins before fiscal year 1999, for cost reporting periods beginning during or after fiscal year 1999, the per beneficiary limitation described in clause (vi)(I) shall be equal to the median described in such clause (determined as if any reference in clause (v) to ``98 percent'' were a reference to ``100 percent''). (III) Subject to subclause (IV), in the case of a new provider for which the first cost reporting period begins during or after fiscal year 1999, the limitation applied under clause (vi)(I) (but only with respect to such provider) shall be equal to 75 percent of the median described in clause (vi)(I). (IV) In the case of a new provider or a provider without a 12-month cost reporting period ending in fiscal year 1994, subclause (II) shall apply, instead of subclause (III), to a home health agency which filed an application for home health agency provider status under this title before September 15, 1998, or which was approved as a branch of its parent agency before such date and becomes a subunit of the parent agency or a separate agency on or after such date. (V) Each of the amounts specified in subclauses (I) through (III) are such amounts as adjusted under clause (iii) to reflect variations in wages among different areas. (ix) Notwithstanding the per beneficiary limit under clause (viii), if the limit imposed under clause (v) (determined without regard to this clause) for a cost reporting period beginning during or after fiscal year 2000 is less than the median described in clause (vi)(I) (but determined as if any reference in clause (v) to ``98 percent'' were a reference to ``100 percent''), the limit otherwise imposed under clause (v) for such provider and period shall be increased by 2 percent. (x) Notwithstanding any other provision of this subparagraph, in updating any limit under this subparagraph by a home health market basket index for cost reporting periods beginning during each of fiscal years 2000, 2002, and 2003, the update otherwise provided shall be reduced by 1.1 percentage points. With respect to cost reporting periods beginning during fiscal year 2001, the update to any limit under this subparagraph shall be the home health market basket index. (M) Such regulations shall provide that costs respecting care provided by a provider of services, pursuant to an assurance under title VI or XVI of the Public Health Service Act that the provider will make available a reasonable volume of services to persons unable to pay therefor, shall not be allowable as reasonable costs. (N) In determining such reasonable costs, costs incurred for activities directly related to influencing employees respecting unionization may not be included. (O)(i) In establishing an appropriate allowance for depreciation and for interest on capital indebtedness with respect to an asset of a provider of services which has undergone a change of ownership, such regulations shall provide, except as provided in clause (iii), that the valuation of the asset after such change of ownership shall be the historical cost of the asset, as recognized under this title, less depreciation allowed, to the owner of record as of the date of enactment of the Balanced Budget Act of 1997 (or, in the case of an asset not in existence as of that date, the first owner of record of the asset after that date). (ii) Such regulations shall not recognize, as reasonable in the provision of health care services, costs (including legal fees, accounting and administrative costs, travel costs, and the costs of feasibility studies) attributable to the negotiation or settlement of the sale or purchase of any capital asset (by acquisition or merger) for which any payment has previously been made under this title. (iii) In the case of the transfer of a hospital from ownership by a State to ownership by a nonprofit corporation without monetary consideration, the basis for capital allowances to the new owner shall be the book value of the hospital to the State at the time of the transfer. (P) If such regulations provide for the payment for a return on equity capital (other than with respect to costs of inpatient hospital services), the rate of return to be recognized, for determining the reasonable cost of services furnished in a cost reporting period, shall be equal to the average of the rates of interest, for each of the months any part of which is included in the period, on obligations issued for purchase by the Federal Hospital Insurance Trust Fund. (Q) Except as otherwise explicitly authorized, the Secretary is not authorized to limit the rate of increase on allowable costs of approved medical educational activities. (R) In determining such reasonable cost, costs incurred by a provider of services representing a beneficiary in an unsuccessful appeal of a determination described in section 1869(b) shall not be allowable as reasonable costs. (S)(i) Such regulations shall not include provision for specific recognition of any return on equity capital with respect to hospital outpatient departments. (ii)(I) Such regulations shall provide that, in determining the amount of the payments that may be made under this title with respect to all the capital-related costs of outpatient hospital services, the Secretary shall reduce the amounts of such payments otherwise established under this title by 15 percent for payments attributable to portions of cost reporting periods occurring during fiscal year 1990, by 15 percent for payments attributable to portions of cost reporting periods occurring during fiscal year 1991, and by 10 percent for payments attributable to portions of cost reporting periods occurring during fiscal years 1992 through 1999 and until the first date that the prospective payment system under section 1833(t) is implemented. (II) The Secretary shall reduce the reasonable cost of outpatient hospital services (other than the capital-related costs of such services) otherwise determined pursuant to section 1833(a)(2)(B)(i)(I) by 5.8 percent for payments attributable to portions of cost reporting periods occurring during fiscal years 1991 through 1999 and until the first date that the prospective payment system under section 1833(t) is implemented. (III) Subclauses (I) and (II) shall not apply to payments with respect to the costs of hospital outpatient services provided by any hospital that is a sole community hospital (as defined in section 1886(d)(5)(D)(iii)) or a critical access hospital (as defined in section 1861(mm)(1)). (IV) In applying subclauses (I) and (II) to services for which payment is made on the basis of a blend amount under section 1833(i)(3)(A)(ii) or 1833(n)(1)(A)(ii), the costs reflected in the amounts described in sections 1833(i)(3)(B)(i)(I) and 1833(n)(1)(B)(i)(I), respectively, shall be reduced in accordance with such subclause. (T) In determining such reasonable costs for hospitals, no reduction in copayments under section 1833(t)(8)(B) shall be treated as a bad debt and the amount of bad debts otherwise treated as allowable costs which are attributable to the deductibles and coinsurance amounts under this title shall be reduced-- (i) for cost reporting periods beginning during fiscal year 1998, by 25 percent of such amount otherwise allowable, (ii) for cost reporting periods beginning during fiscal year 1999, by 40 percent of such amount otherwise allowable, (iii) for cost reporting periods beginning during fiscal year 2000, by 45 percent of such amount otherwise allowable, (iv) for cost reporting periods beginning during fiscal years 2001 through 2012, by 30 percent of such amount otherwise allowable, and (v) for cost reporting periods beginning during fiscal year 2013 or a subsequent fiscal year, by 35 percent of such amount otherwise allowable. (U) In determining the reasonable cost of ambulance services (as described in subsection (s)(7)) provided during fiscal year 1998, during fiscal year 1999, and during so much of fiscal year 2000 as precedes January 1, 2000, the Secretary shall not recognize the costs per trip in excess of costs recognized as reasonable for ambulance services provided on a per trip basis during the previous fiscal year (after application of this subparagraph), increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) as estimated by the Secretary for the 12-month period ending with the midpoint of the fiscal year involved reduced by 1.0 percentage point. For ambulance services provided after June 30, 1998, the Secretary may provide that claims for such services must include a code (or codes) under a uniform coding system specified by the Secretary that identifies the services furnished. (V) In determining such reasonable costs for skilled nursing facilities and (beginning with respect to cost reporting periods beginning during fiscal year 2013) for covered skilled nursing services described in section 1888(e)(2)(A) furnished by hospital providers of extended care services (as described in section 1883), the amount of bad debts otherwise treated as allowed costs which are attributable to the coinsurance amounts under this title for individuals who are entitled to benefits under part A and-- (i) are not described in section 1935(c)(6)(A)(ii) shall be reduced by-- (I) for cost reporting periods beginning on or after October 1, 2005, but before fiscal year 2013, 30 percent of such amount otherwise allowable; and (II) for cost reporting periods beginning during fiscal year 2013 or a subsequent fiscal year, by 35 percent of such amount otherwise allowable. (ii) are described in such section-- (I) for cost reporting periods beginning on or after October 1, 2005, but before fiscal year 2013, shall not be reduced; (II) for cost reporting periods beginning during fiscal year 2013, shall be reduced by 12 percent of such amount otherwise allowable; (III) for cost reporting periods beginning during fiscal year 2014, shall be reduced by 24 percent of such amount otherwise allowable; and (IV) for cost reporting periods beginning during a subsequent fiscal year, shall be reduced by 35 percent of such amount otherwise allowable. (W)(i) In determining such reasonable costs for providers described in clause (ii), the amount of bad debts otherwise treated as allowable costs which are attributable to deductibles and coinsurance amounts under this title shall be reduced-- (I) for cost reporting periods beginning during fiscal year 2013, by 12 percent of such amount otherwise allowable; (II) for cost reporting periods beginning during fiscal year 2014, by 24 percent of such amount otherwise allowable; and (III) for cost reporting periods beginning during a subsequent fiscal year, by 35 percent of such amount otherwise allowable. (ii) A provider described in this clause is a provider of services not described in subparagraph (T) or (V), a supplier, or any other type of entity that receives payment for bad debts under the authority under subparagraph (A). (2)(A) If the bed and board furnished as part of inpatient hospital services (including inpatient tuberculosis hospital services and inpatient psychiatric hospital services) or post- hospital extended care services is in accommodations more expensive than semi-private accommodations, the amount taken into account for purposes of payment under this title with respect to such services may not exceed the amount that would be taken into account with respect to such services if furnished in such semi-private accommodations unless the more expensive accommodations were required for medical reasons. (B) Where a provider of services which has an agreement in effect under this title furnishes to an individual items or services which are in excess of or more expensive than the items or services with respect to which payment may be made under part A or part B, as the case may be, the Secretary shall take into account for purposes of payment to such provider of services only the items or services with respect to which such payment may be made. (3) If the bed and board furnished as part of inpatient hospital services (including inpatient tuberculosis hospital services and inpatient psychiatric hospital services) or post- hospital extended care services is in accommodations other than, but not more expensive than, semi-private accommodations and the use of such other accommodations rather than semi- private accommodations was neither at the request of the patient nor for a reason which the Secretary determines is consistent with the purposes of this title, the amount of the payment with respect to such bed and board under part A shall be the amount otherwise payable under this title for such bed and board furnished in semi-private accommodations minus the difference between the charge customarily made by the hospital or skilled nursing facility for bed and board in semi-private accommodations and the charge customarily made by it for bed and board in the accommodations furnished. (4) If a provider of services furnishes items or services to an individual which are in excess of or more expensive than the items or services determined to be necessary in the efficient delivery of needed health services and charges are imposed for such more expensive items or services under the authority granted in section 1866(a)(2)(B)(ii), the amount of payment with respect to such items or services otherwise due such provider in any fiscal period shall be reduced to the extent that such payment plus such charges exceed the cost actually incurred for such items or services in the fiscal period in which such charges are imposed. (5)(A) Where physical therapy services, occupational therapy services, speech therapy services, or other therapy services or services of other health-related personnel (other than physicians) are furnished under an arrangement with a provider of services or other organization, specified in the first sentence of subsection (p) (including through the operation of subsection (g)) the amount included in any payment to such provider or other organization under this title as the reasonable cost of such services (as furnished under such arrangements) shall not exceed an amount equal to the salary which would reasonably have been paid for such services (together with any additional costs that would have been incurred by the provider or other organization) to the person performing them if they had been performed in an employment relationship with such provider or other organization (rather than under such arrangement) plus the cost of such other expenses (including a reasonable allowance for traveltime and other reasonable types of expense related to any differences in acceptable methods of organization for the provision of such therapy) incurred by such person, as the Secretary may in regulations determine to be appropriate. (B) Notwithstanding the provisions of subparagraph (A), if a provider of services or other organization specified in the first sentence of section 1861(p) requires the services of a therapist on a limited part-time basis, or only to perform intermittent services, the Secretary may make payment on the basis of a reasonable rate per unit of service, even though such rate is greater per unit of time than salary related amounts, where he finds that such greater payment is, in the aggregate, less than the amount that would have been paid if such organization had employed a therapist on a full- or part- time salary basis. (6) For purposes of this subsection, the term ``semi-private accommodations'' means two-bed, three-bed, or four-bed accommodations. (7)(A) For limitation on Federal participation for capital expenditures which are out of conformity with a comprehensive plan of a State or areawide planning agency, see section 1122. (B) For further limitations on reasonable cost and determination of payment amounts for operating costs of inpatient hospital services and waivers for certain States, see section 1886. (C) For provisions restricting payment for provider-based physicians' services and for payments under certain percentage arrangements, see section 1887. (D) For further limitations on reasonable cost and determination of payment amounts for routine service costs of skilled nursing facilities, see subsections (a) through (c) of section 1888. (8) Items unrelated to patient care.--Reasonable costs do not include costs for the following-- (i) entertainment, including tickets to sporting and other entertainment events; (ii) gifts or donations; (iii) personal use of motor vehicles; (iv) costs for fines and penalties resulting from violations of Federal, State, or local laws; and (v) education expenses for spouses or other dependents of providers of services, their employees or contractors. Arrangements for Certain Services (w)(1) The term ``arrangements'' is limited to arrangements under which receipt of payment by the hospital, critical access hospital, skilled nursing facility, home health agency, or hospice program (whether in its own right or as agent), with respect to services for which an individual is entitled to have payment made under this title, discharges the liability of such individual or any other person to pay for the services. (2) Utilization review activities conducted, in accordance with the requirements of the program established under part B of title XI of the Social Security Act with respect to services furnished by a hospital or critical access hospital to patients insured under part A of this title or entitled to have payment made for such services under part B of this title or under a State plan approved under title XIX, by a quality improvement organization designated for the area in which such hospital or critical access hospital is located shall be deemed to have been conducted pursuant to arrangements between such hospital or critical access hospital and such organization under which such hospital or critical access hospital is obligated to pay to such organization, as a condition of receiving payment for hospital or critical access hospital services so furnished under this part or under such a State plan, such amount as is reasonably incurred and requested (as determined under regulations of the Secretary) by such organization in conducting such review activities with respect to services furnished by such hospital or critical access hospital to such patients. State and United States (x) The terms ``State'' and ``United States'' have the meaning given to them by subsections (h) and (i), respectively, of section 210. Extended Care in Religious Nonmedical Health Care Institutions (y)(1) The term ``skilled nursing facility'' also includes a religious nonmedical health care institution (as defined in subsection (ss)(1)), but only (except for purposes of subsection (a)(2)) with respect to items and services ordinarily furnished by such an institution to inpatients, and payment may be made with respect to services provided by or in such an institution only to such extent and under such conditions, limitations, and requirements (in addition to or in lieu of the conditions, limitations, and requirements otherwise applicable) as may be provided in regulations consistent with section 1821. (2) Notwithstanding any other provision of this title, payment under part A may not be made for services furnished an individual in a skilled nursing facility to which paragraph (1) applies unless such individual elects, in accordance with regulations, for a spell of illness to have such services treated as post-hospital extended care services for purposes of such part; and payment under part A may not be made for post- hospital extended care services-- (A) furnished an individual during such spell of illness in a skilled nursing facility to which paragraph (1) applies after-- (i) such services have been furnished to him in such a facility for 30 days during such spell, or (ii) such services have been furnished to him during such spell in a skilled nursing facility to which such paragraph does not apply; or (B) furnished an individual during such spell of illness in a skilled nursing facility to which paragraph (1) does not apply after such services have been furnished to him during such spell in a skilled nursing facility to which such paragraph applies. (3) The amount payable under part A for post-hospital extended care services furnished an individual during any spell of illness in a skilled nursing facility to which paragraph (1) applies shall be reduced by a coinsurance amount equal to one- eighth of the inpatient hospital deductible for each day before the 31st day on which he is furnished such services in such a facility during such spell (and the reduction under this paragraph shall be in lieu of any reduction under section 1813(a)(3)). (4) For purposes of subsection (i), the determination of whether services furnished by or in an institution described in paragraph (1) constitute post-hospital extended care services shall be made in accordance with and subject to such conditions, limitations, and requirements as may be provided in regulations. Institutional Planning (z) An overall plan and budget of a hospital, skilled nursing facility, comprehensive outpatient rehabilitation facility, or home health agency shall be considered sufficient if it-- (1) provides for an annual operating budget which includes all anticipated income and expenses related to items which would, under generally accepted accounting principles, be considered income and expense items (except that nothing in this paragraph shall require that there be prepared, in connection with any budget, an item-by-item identification of the components of each type of anticipated expenditure or income); (2)(A) provides for a capital expenditures plan for at least a 3-year period (including the year to which the operating budget described in paragraph (1) is applicable) which includes and identifies in detail the anticipated sources of financing for, and the objectives of, each anticipated expenditure in excess of $600,000 (or such lesser amount as may be established by the State under section 1122(g)(1) in which the hospital is located) related to the acquisition of land, the improvement of land, buildings, and equipment, and the replacement, modernization, and expansion of the buildings and equipment which would, under generally accepted accounting principles, be considered capital items; (B) provides that such plan is submitted to the agency designated under section 1122(b), or if no such agency is designated, to the appropriate health planning agency in the State (but this subparagraph shall not apply in the case of a facility exempt from review under section 1122 by reason of section 1122(j)); (3) provides for review and updating at least annually; and (4) is prepared, under the direction of the governing body of the institution or agency, by a committee consisting of representatives of the governing body, the administrative staff, and the medical staff (if any) of the institution or agency. Rural Health Clinic Services and Federally Qualified Health Center Services (aa)(1) The term ``rural health clinic services'' means -- (A) physicians' services and such services and supplies as are covered under section 1861(s)(2)(A) if furnished as an incident to a physician's professional service and items and services described in section 1861(s)(10), (B) such services furnished by a physician assistant or a nurse practitioner (as defined in paragraph (5)), by a clinical psychologist (as defined by the Secretary) or by a clinical social worker (as defined in subsection (hh)(1)), and such services and supplies furnished as an incident to his service as would otherwise be covered if furnished by a physician or as an incident to a physician's service, and (C) in the case of a rural health clinic located in an area in which there exists a shortage of home health agencies, part-time or intermittent nursing care and related medical supplies (other than drugs and biologicals) furnished by a registered professional nurse or licensed practical nurse to a homebound individual under a written plan of treatment (i) established and periodically reviewed by a physician described in paragraph (2)(B), or (ii) established by a nurse practitioner or physician assistant and periodically reviewed and approved by a physician described in paragraph (2)(B), when furnished to an individual as an outpatient of a rural health clinic. (2) The term ``rural health clinic'' means a facility which -- (A) is primarily engaged in furnishing to outpatients services described in subparagraphs (A) and (B) of paragraph (1); (B) in the case of a facility which is not a physician-directed clinic, has an arrangement (consistent with the provisions of State and local law relative to the practice, performance, and delivery of health services) with one or more physicians (as defined in subsection (r)(1)) under which provision is made for the periodic review by such physicians of covered services furnished by physician assistants and nurse practitioners, the supervision and guidance by such physicians of physician assistants and nurse practitioners, the preparation by such physicians of such medical orders for care and treatment of clinic patients as may be necessary, and the availability of such physicians for such referral of and consultation for patients as is necessary and for advice and assistance in the management of medical emergencies; and, in the case of a physician-directed clinic, has one or more of its staff physicians perform the activities accomplished through such an arrangement; (C) maintains clinical records on all patients; (D) has arrangements with one or more hospitals, having agreements in effect under section 1866, for the referral and admission of patients requiring inpatient services or such diagnostic or other specialized services as are not available at the clinic; (E) has written policies, which are developed with the advice of (and with provision for review of such policies from time to time by) a group of professional personnel, including one or more physicians and one or more physician assistants or nurse practitioners, to govern those services described in paragraph (1) which it furnishes; (F) has a physician, physician assistant, or nurse practitioner responsible for the execution of policies described in subparagraph (E) and relating to the provision of the clinic's services; (G) directly provides routine diagnostic services, including clinical laboratory services, as prescribed in regulations by the Secretary, and has prompt access to additional diagnostic services from facilities meeting requirements under this title; (H) in compliance with State and Federal law, has available for administering to patients of the clinic at least such drugs and biologicals as are determined by the Secretary to be necessary for the treatment of emergency cases (as defined in regulations) and has appropriate procedures or arrangements for storing, administering, and dispensing any drugs and biologicals; (I) has a quality assessment and performance improvement program, and appropriate procedures for review of utilization of clinic services, as the Secretary may specify; (J) has a nurse practitioner, a physician assistant, or a certified nurse-midwife (as defined in subsection (gg)) available to furnish patient care services not less than 50 percent of the time the clinic operates; and (K) meets such other requirements as the Secretary may find necessary in the interest of the health and safety of the individuals who are furnished services by the clinic. For the purposes of this title, such term includes only a facility which (i) is located in an area that is not an urbanized area (as defined by the Bureau of the Census) and in which there are insufficient numbers of needed health care practitioners (as determined by the Secretary), and that, within the previous 4-year period, has been designated by the chief executive officer of the State and certified by the Secretary as an area with a shortage of personal health services or designated by the Secretary either (I) as an area with a shortage of personal health services under section 330(b)(3) or 1302(7) of the Public Health Service Act, (II) as a health professional shortage area described in section 332(a)(1)(A) of that Act because of its shortage of primary medical care manpower, (III) as a high impact area described in section 329(a)(5) of that Act, of (IV) as an area which includes a population group which the Secretary determines has a health manpower shortage under section 332(a)(1)(B) of that Act, (ii) has filed an agreement with the Secretary by which it agrees not to charge any individual or other person for items or services for which such individual is entitled to have payment made under this title, except for the amount of any deductible or coinsurance amount imposed with respect to such items or services (not in excess of the amount customarily charged for such items and services by such clinic), pursuant to subsections (a) and (b) of section 1833, (iii) employs a physician assistant or nurse practitioner, and (iv) is not a rehabilitation agency or a facility which is primarily for the care and treatment of mental diseases. A facility that is in operation and qualifies as a rural health clinic under this title or title XIX and that subsequently fails to satisfy the requirement of clause (i) shall be considered, for purposes of this title and title XIX, as still satisfying the requirement of such clause if it is determined, in accordance with criteria established by the Secretary in regulations, to be essential to the delivery of primary care services that would otherwise be unavailable in the geographic area served by the clinic. If a State agency has determined under section 1864(a) that a facility is a rural health clinic and the facility has applied to the Secretary for approval as such a clinic, the Secretary shall notify the facility of the Secretary's approval or disapproval not later than 60 days after the date of the State agency determination or the application (whichever is later). (3) The term ``Federally qualified health center services'' means-- (A) services of the type described in subparagraphs (A) through (C) of paragraph (1) and preventive services (as defined in section 1861(ddd)(3)); and (B) preventive primary health services that a center is required to provide under section 330 of the Public Health Service Act, when furnished to an individual as an outpatient of a Federally qualified health center by the center or by a health care professional under contract with the center and, for this purpose, any reference to a rural health clinic or a physician described in paragraph (2)(B) is deemed a reference to a Federally qualified health center or a physician at the center, respectively. (4) The term ``Federally qualified health center'' means an entity which-- (A)(i) is receiving a grant under section 330 of the Public Health Service Act, or (ii)(I) is receiving funding from such a grant under a contract with the recipient of such a grant, and (II) meets the requirements to receive a grant under section 330 of such Act; (B) based on the recommendation of the Health Resources and Services Administration within the Public Health Service, is determined by the Secretary to meet the requirements for receiving such a grant; (C) was treated by the Secretary, for purposes of part B, as a comprehensive Federally funded health center as of January 1, 1990; or (D) is an outpatient health program or facility operated by a tribe or tribal organization under the Indian Self-Determination Act or by an urban Indian organization receiving funds under title V of the Indian Health Care Improvement Act. (5)(A) The term ``physician assistant'' and the term ``nurse practitioner'' mean, for purposes of this title, a physician assistant or nurse practitioner who performs such services as such individual is legally authorized to perform (in the State in which the individual performs such services) in accordance with State law (or the State regulatory mechanism provided by State law), and who meets such training, education, and experience requirements (or any combination thereof) as the Secretary may prescribe in regulations. (B) The term ``clinical nurse specialist'' means, for purposes of this title, an individual who-- (i) is a registered nurse and is licensed to practice nursing in the State in which the clinical nurse specialist services are performed; and (ii) holds a master's degree in a defined clinical area of nursing from an accredited educational institution. (6) The term ``collaboration'' means a process in which a nurse practitioner works with a physician to deliver health care services within the scope of the practitioner's professional expertise, with medical direction and appropriate supervision as provided for in jointly developed guidelines or other mechanisms as defined by the law of the State in which the services are performed. (7)(A) The Secretary shall waive for a 1-year period the requirements of paragraph (2) that a rural health clinic employ a physician assistant, nurse practitioner or certified nurse midwife or that such clinic require such providers to furnish services at least 50 percent of the time that the clinic operates for any facility that requests such waiver if the facility demonstrates that the facility has been unable, despite reasonable efforts, to hire a physician assistant, nurse practitioner, or certified nurse-midwife in the previous 90-day period. (B) The Secretary may not grant such a waiver under subparagraph (A) to a facility if the request for the waiver is made less than 6 months after the date of the expiration of any previous such waiver for the facility, or if the facility has not yet been determined to meet the requirements (including subparagraph (J) of the first sentence of paragraph (2)) of a rural health clinic. (C) A waiver which is requested under this paragraph shall be deemed granted unless such request is denied by the Secretary within 60 days after the date such request is received. Services of a Certified Registered Nurse Anesthetist (bb)(1) The term ``services of a certified registered nurse anesthetist'' means anesthesia services and related care furnished by a certified registered nurse anesthetist (as defined in paragraph (2)) which the nurse anesthetist is legally authorized to perform as such by the State in which the services are furnished. (2) The term ``certified registered nurse anesthetist'' means a certified registered nurse anesthetist licensed by the State who meets such education, training, and other requirements relating to anesthesia services and related care as the Secretary may prescribe. In prescribing such requirements the Secretary may use the same requirements as those established by a national organization for the certification of nurse anesthetists. Such term also includes, as prescribed by the Secretary, an anesthesiologist assistant. Comprehensive Outpatient Rehabilitation Facility Services (cc)(1) The term ``comprehensive outpatient rehabilitation facility services'' means the following items and services furnished by a physician or other qualified professional personnel (as defined in regulations by the Secretary) to an individual who is an outpatient of a comprehensive outpatient rehabilitation facility under a plan (for furnishing such items and services to such individual) established and periodically reviewed by a physician-- (A) physicians' services; (B) physical therapy, occupational therapy, speech- language pathology services, and respiratory therapy; (C) prosthetic and orthotic devices, including testing, fitting, or training in the use of prosthetic and orthotic devices; (D) social and psychological services; (E) nursing care provided by or under the supervision of a registered professional nurse; (F) drugs and biologicals which cannot, as determined in accordance with regulations, be self-administered; (G) supplies and durable medical equipment; and (H) such other items and services as are medically necessary for the rehabilitation of the patient and are ordinarily furnished by comprehensive outpatient rehabilitation facilities, excluding, however, any item or service if it would not be included under subsection (b) if furnished to an inpatient of a hospital. 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. (2) The term ``comprehensive outpatient rehabilitation facility'' means a facility which-- (A) is primarily engaged in providing (by or under the supervision of physicians) diagnostic, therapeutic, and restorative services to outpatients for the rehabilitation of injured, disabled, or sick persons; (B) provides at least the following comprehensive outpatient rehabilitation services: (i) physicians' services (rendered by physicians, as defined in section 1861(r)(1), who are available at the facility on a full- or part-time basis); (ii) physical therapy; and (iii) social or psychological services; (C) maintains clinical records on all patients; (D) has policies established by a group of professional personnel (associated with the facility), including one or more physicians defined in subsection (r)(1) to govern the comprehensive outpatient rehabilitation services it furnishes, and provides for the carrying out of such policies by a full- or part- time physician referred to in subparagraph (B)(i); (E) has a requirement that every patient must be under the care of a physician; (F) in the case of a facility in any State in which State or applicable local law provides for the licensing of facilities of this nature (i) is licensed pursuant to such law, or (ii) is approved by the agency of such State or locality, responsible for licensing facilities of this nature, as meeting the standards established for such licensing; (G) has in effect a utilization review plan in accordance with regulations prescribed by the Secretary; (H) has in effect an overall plan and budget that meets the requirements of subsection (z); (I) provides the Secretary on a continuing basis with a surety bond in a form specified by the Secretary and in an amount that is not less than $50,000; and (J) meets such other conditions of participation as the Secretary may find necessary in the interest of the health and safety of individuals who are furnished services by such facility, including conditions concerning qualifications of personnel in these facilities. The Secretary may waive the requirement of a surety bond under subparagraph (I) in the case of a facility that provides a comparable surety bond under State law. Hospice Care; Hospice Program (dd)(1) The term ``hospice care'' means the following items and services provided to a terminally ill individual by, or by others under arrangements made by, a hospice program under a written plan (for providing such care to such individual) established and periodically reviewed by the individual's attending physician and by the medical director (and by the interdisciplinary group described in paragraph (2)(B)) of the program-- (A) nursing care provided by or under the supervision of a registered professional nurse, (B) physical or occupational therapy, or speech- language pathology services, (C) medical social services under the direction of a physician, (D)(i) services of a home health aide who has successfully completed a training program approved by the Secretary and (ii) homemaker services, (E) medical supplies (including drugs and biologicals) and the use of medical appliances, while under such a plan, (F) physicians' services, (G) short-term inpatient care (including both respite care and procedures necessary for pain control and acute and chronic symptom management) in an inpatient facility meeting such conditions as the Secretary determines to be appropriate to provide such care, but such respite care may be provided only on an intermittent, nonroutine, and occasional basis and may not be provided consecutively over longer than five days, (H) counseling (including dietary counseling) with respect to care of the terminally ill individual and adjustment to his death, and (I) any other item or service which is specified in the plan and for which payment may otherwise be made under this title. The care and services described in subparagraphs (A) and (D) may be provided on a 24-hour, continuous basis only during periods of crisis (meeting criteria established by the Secretary) and only as necessary to maintain the terminally ill individual at home. (2) The term ``hospice program'' means a public agency or private organization (or a subdivision thereof) which-- (A)(i) is primarily engaged in providing the care and services described in paragraph (1) and makes such services available (as needed) on a 24-hour basis and which also provides bereavement counseling for the immediate family of terminally ill individuals and services described in section 1812(a)(5), (ii) provides for such care and services in individuals' homes, on an outpatient basis, and on a short-term inpatient basis, directly or under arrangements made by the agency or organization, except that-- (I) the agency or organization must routinely provide directly substantially all of each of the services described in subparagraphs (A), (C), and (H) of paragraph (1), except as otherwise provided in paragraph (5), and (II) in the case of other services described in paragraph (1) which are not provided directly by the agency or organization, the agency or organization must maintain professional management responsibility for all such services furnished to an individual, regardless of the location or facility in which such services are furnished; and (iii) provides assurances satisfactory to the Secretary that the aggregate number of days of inpatient care described in paragraph (1)(G) provided in any 12-month period to individuals who have an election in effect under section 1812(d) with respect to that agency or organization does not exceed 20 percent of the aggregate number of days during that period on which such elections for such individuals are in effect; (B) has an interdisciplinary group of personnel which-- (i) includes at least-- (I) one physician (as defined in subsection (r)(1)), (II) one registered professional nurse, and (III) one social worker, employed by or, in the case of a physician described in subclause (I), under contract with the agency or organization, and also includes at least one pastoral or other counselor, (ii) provides (or supervises the provision of) the care and services described in paragraph (1), and (iii) establishes the policies governing the provision of such care and services; (C) maintains central clinical records on all patients; (D) does not discontinue the hospice care it provides with respect to a patient because of the inability of the patient to pay for such care; (E)(i) utilizes volunteers in its provision of care and services in accordance with standards set by the Secretary, which standards shall ensure a continuing level of effort to utilize such volunteers, and (ii) maintains records on the use of these volunteers and the cost savings and expansion of care and services achieved through the use of these volunteers; (F) in the case of an agency or organization in any State in which State or applicable local law provides for the licensing of agencies or organizations of this nature, is licensed pursuant to such law; and (G) meets such other requirements as the Secretary may find necessary in the interest of the health and safety of the individuals who are provided care and services by such agency or organization. (3)(A) An individual is considered to be ``terminally ill'' if the individual has a medical prognosis that the individual's life expectancy is 6 months or less. (B) The term ``attending physician'' means, with respect to an individual, the physician (as defined in subsection (r)(1)), the nurse practitioner (as defined in subsection (aa)(5)), or the physician assistant (as defined in such subsection), who may be employed by a hospice program, whom the individual identifies as having the most significant role in the determination and delivery of medical care to the individual at the time the individual makes an election to receive hospice care. (4)(A) An entity which is certified as a provider of services other than a hospice program shall be considered, for purposes of certification as a hospice program, to have met any requirements under paragraph (2) which are also the same requirements for certification as such other type of provider. The Secretary shall coordinate surveys for determining certification under this title so as to provide, to the extent feasible, for simultaneous surveys of an entity which seeks to be certified as a hospice program and as a provider of services of another type. (B) Any entity which is certified as a hospice program and as a provider of another type shall have separate provider agreements under section 1866 and shall file separate cost reports with respect to costs incurred in providing hospice care and in providing other services and items under this title. (C) Any entity that is certified as a hospice program shall be subject to a standard survey by an appropriate State or local survey agency, or an approved accreditation agency, as determined by the Secretary, not less frequently than once every 36 months beginning 6 months after the date of the enactment of this subparagraph and ending September 30, 2025. (5)(A) The Secretary may waive the requirements of paragraph (2)(A)(ii)(I) for an agency or organization with respect to all or part of the nursing care described in paragraph (1)(A) if such agency or organization-- (i) is located in an area which is not an urbanized area (as defined by the Bureau of the Census); (ii) was in operation on or before January 1, 1983; and (iii) has demonstrated a good faith effort (as determined by the Secretary) to hire a sufficient number of nurses to provide such nursing care directly. (B) Any waiver, which is in such form and containing such information as the Secretary may require and which is requested by an agency or organization under subparagraph (A) or (C), shall be deemed to be granted unless such request is denied by the Secretary within 60 days after the date such request is received by the Secretary. The granting of a waiver under subparagraph (A) or (C) shall not preclude the granting of any subsequent waiver request should such a waiver again become necessary. (C) The Secretary may waive the requirements of paragraph (2)(A)(i) and (2)(A)(ii) for an agency or organization with respect to the services described in paragraph (1)(B) and, with respect to dietary counseling, paragraph (1)(H), if such agency or organization-- (i) is located in an area which is not an urbanized area (as defined by the Bureau of Census), and (ii) demonstrates to the satisfaction of the Secretary that the agency or organization has been unable, despite diligent efforts, to recruit appropriate personnel. (D) In extraordinary, exigent, or other non-routine circumstances, such as unanticipated periods of high patient loads, staffing shortages due to illness or other events, or temporary travel of a patient outside a hospice program's service area, a hospice program may enter into arrangements with another hospice program for the provision by that other program of services described in paragraph (2)(A)(ii)(I). The provisions of paragraph (2)(A)(ii)(II) shall apply with respect to the services provided under such arrangements. (E) A hospice program may provide services described in paragraph (1)(A) other than directly by the program if the services are highly specialized services of a registered professional nurse and are provided non-routinely and so infrequently so that the provision of such services directly would be impracticable and prohibitively expensive. Discharge Planning Process (ee)(1) A discharge planning process of a hospital shall be considered sufficient if it is applicable to services furnished by the hospital to individuals entitled to benefits under this title and if it meets the guidelines and standards established by the Secretary under paragraph (2). (2) The Secretary shall develop guidelines and standards for the discharge planning process in order to ensure a timely and smooth transition to the most appropriate type of and setting for post-hospital or rehabilitative care. The guidelines and standards shall include the following: (A) The hospital must identify, at an early stage of hospitalization, those patients who are likely to suffer adverse health consequences upon discharge in the absence of adequate discharge planning. (B) Hospitals must provide a discharge planning evaluation for patients identified under subparagraph (A) and for other patients upon the request of the patient, patient's representative, or patient's physician. (C) Any discharge planning evaluation must be made on a timely basis to ensure that appropriate arrangements for post-hospital care will be made before discharge and to avoid unnecessary delays in discharge. (D) A discharge planning evaluation must include an evaluation of a patient's likely need for appropriate post-hospital services, including hospice care and post-hospital extended care services, and the availability of those services, including the availability of home health services through individuals and entities that participate in the program under this title and that serve the area in which the patient resides and that request to be listed by the hospital as available and, in the case of individuals who are likely to need post-hospital extended care services, the availability of such services through facilities that participate in the program under this title and that serve the area in which the patient resides. (E) The discharge planning evaluation must be included in the patient's medical record for use in establishing an appropriate discharge plan and the results of the evaluation must be discussed with the patient (or the patient's representative). (F) Upon the request of a patient's physician, the hospital must arrange for the development and initial implementation of a discharge plan for the patient. (G) Any discharge planning evaluation or discharge plan required under this paragraph must be developed by, or under the supervision of, a registered professional nurse, social worker, or other appropriately qualified personnel. (H) Consistent with section 1802, the discharge plan shall-- (i) not specify or otherwise limit the qualified provider which may provide post- hospital home health services, and (ii) identify (in a form and manner specified by the Secretary) any entity to whom the individual is referred in which the hospital has a disclosable financial interest (as specified by the Secretary consistent with section 1866(a)(1)(S)) or which has such an interest in the hospital. (3) With respect to a discharge plan for an individual who is enrolled with a Medicare+Choice organization under a Medicare+Choice plan and is furnished inpatient hospital services by a hospital under a contract with the organization-- (A) the discharge planning evaluation under paragraph (2)(D) is not required to include information on the availability of home health services through individuals and entities which do not have a contract with the organization; and (B) notwithstanding subparagraph (H)(i), the plan may specify or limit the provider (or providers) of post- hospital home health services or other post-hospital services under the plan. Partial Hospitalization Services (ff)(1) 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, (C) services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients, (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 training and educational activities are closely and clearly related to 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) A program described in this paragraph is a program which is furnished by a hospital to its outpatients or by a community mental health center (as defined in subparagraph (B)), and which is a distinct and organized intensive ambulatory treatment service offering less than 24-hour-daily care other than in an individual's home or in an inpatient or residential setting. (B) For purposes of subparagraph (A), the term ``community mental health center'' means an entity that-- (i)(I) provides the mental health services described in section 1913(c)(1) of the Public Health Service Act; or (II) in the case of an entity operating in a State that by law precludes the entity from providing itself the service described in subparagraph (E) of such section, provides for such service by contract with an approved organization or entity (as determined by the Secretary); (ii) meets applicable licensing or certification requirements for community mental health centers in the State in which it is located; (iii) provides at least 40 percent of its services to individuals who are not eligible for benefits under this title; and (iv) meets such additional conditions as the Secretary shall specify to ensure (I) the health and safety of individuals being furnished such services, (II) the effective and efficient furnishing of such services, and (III) the compliance of such entity with the criteria described in section 1931(c)(1) of the Public Health Service Act. Certified Nurse-Midwife Services (gg)(1) 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 the nurse-midwife's 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 physicians' 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. Clinical Social Worker; Clinical Social Worker Services (hh)(1) The term ``clinical social worker'' means an individual who-- (A) possesses a master's or doctor's degree in social work; (B) after obtaining such degree has performed at least 2 years of supervised clinical social work; and (C)(i) is licensed or certified as a clinical social worker by the State in which the services are performed, or (ii) 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-master's degree supervised clinical social work practice under the supervision of a master's level social worker in an appropriate setting (as determined by the Secretary), and (II) meets such other criteria as the Secretary establishes. (2) The term ``clinical social worker services'' means services performed by a clinical social worker (as defined in paragraph (1)) for the diagnosis and treatment of mental illnesses (other than services furnished to an inpatient of a hospital and other than services furnished to an inpatient of a skilled nursing facility which the facility is required to provide as a requirement for participation) which the clinical social worker is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) of the State in which such services are performed as would otherwise be covered if furnished by a physician or as an incident to a physician's professional service. Qualified Psychologist Services (ii) 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) 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. Screening Mammography (jj) The term ``screening mammography'' means a radiologic procedure provided to a woman for the purpose of early detection of breast cancer and includes a physician's interpretation of the results of the procedure. Covered Osteoporosis Drug (kk) The term ``covered osteoporosis drug'' means an injectable drug approved for the treatment of post-menopausal osteoporosis provided to an individual by a home health agency if, in accordance with regulations promulgated by the Secretary-- (1) the individual's attending physician certifies that the individual has suffered a bone fracture related to post-menopausal osteoporosis and that the individual is unable to learn the skills needed to self-administer such drug or is otherwise physically or mentally incapable of self-administering such drug; and (2) the individual is confined to the individual's home (except when receiving items and services referred to in subsection (m)(7)). Speech-Language Pathology Services; Audiology Services (ll)(1) The term ``speech-language pathology services'' means such speech, language, and related function assessment and rehabilitation services furnished by a qualified speech- language pathologist as the speech-language pathologist 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. (2) The term ``outpatient speech-language pathology services'' has the meaning given the term ``outpatient physical therapy services'' in subsection (p), except that in applying such subsection-- (A) ``speech-language pathology'' shall be substituted for ``physical therapy'' each place it appears; and (B) ``speech-language pathologist'' shall be substituted for ``physical therapist'' each place it appears. (3) The term ``audiology services'' means such hearing and balance assessment services furnished by a qualified audiologist as the audiologist 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. (4) In this subsection: (A) The term ``qualified speech-language pathologist'' means an individual with a master's or doctoral degree in speech-language pathology who-- (i) is licensed as a speech-language pathologist by the State in which the individual furnishes such services, or (ii) in the case of an individual who furnishes services in a State which does not license speech-language pathologists, has successfully completed 350 clock hours of supervised clinical practicum (or is in the process of accumulating such supervised clinical experience), performed not less than 9 months of supervised full-time speech-language pathology services after obtaining a master's or doctoral degree in speech-language pathology or a related field, and successfully completed a national examination in speech-language pathology approved by the Secretary. (B) The term ``qualified audiologist'' means an individual with a master's or doctoral degree in audiology who-- (i) is licensed as an audiologist by the State in which the individual furnishes such services, or (ii) in the case of an individual who furnishes services in a State which does not license audiologists, has successfully completed 350 clock hours of supervised clinical practicum (or is in the process of accumulating such supervised clinical experience), performed not less than 9 months of supervised full-time audiology services after obtaining a master's or doctoral degree in audiology or a related field, and successfully completed a national examination in audiology approved by the Secretary. Critical Access Hospital; Critical Access Hospital Services (mm)(1) The term ``critical access hospital'' means a facility certified by the Secretary as a critical access hospital under section 1820(e). (2) The term ``inpatient critical access hospital services'' means items and services, furnished to an inpatient of a critical access hospital by such facility, that would be inpatient hospital services if furnished to an inpatient of a hospital by a hospital. (3) The term ``outpatient critical access hospital services'' means medical and other health services furnished by a critical access hospital on an outpatient basis. Screening Pap Smear; Screening Pelvic Exam (nn)(1) The term ``screening pap smear'' means a diagnostic laboratory test consisting of a routine exfoliative cytology test (Papanicolaou test) provided to a woman for the purpose of early detection of cervical or vaginal cancer and includes a physician's interpretation of the results of the test, if the individual involved has not had such a test during the preceding 2 years, or during the preceding year in the case of a woman described in paragraph (3). (2) The term ``screening pelvic exam'' means a pelvic examination provided to a woman if the woman involved has not had such an examination during the preceding 2 years, or during the preceding year in the case of a woman described in paragraph (3), and includes a clinical breast examination. (3) A woman described in this paragraph is a woman who-- (A) is of childbearing age and has had a test described in this subsection during any of the preceding 3 years that indicated the presence of cervical or vaginal cancer or other abnormality; or (B) is at high risk of developing cervical or vaginal cancer (as determined pursuant to factors identified by the Secretary). Prostate Cancer Screening Tests (oo)(1) The term ``prostate cancer screening test'' means a test that consists of any (or all) of the procedures described in paragraph (2) provided for the purpose of early detection of prostate cancer to a man over 50 years of age who has not had such a test during the preceding year. (2) The procedures described in this paragraph are as follows: (A) A digital rectal examination. (B) A prostate-specific antigen blood test. (C) For years beginning after 2002, such other procedures as the Secretary finds appropriate for the purpose of early detection of prostate cancer, taking into account changes in technology and standards of medical practice, availability, effectiveness, costs, and such other factors as the Secretary considers appropriate. Colorectal Cancer Screening Tests (pp)(1) The term ``colorectal cancer screening test'' means any of the following procedures furnished to an individual for the purpose of early detection of colorectal cancer: (A) Screening fecal-occult blood test. (B) Screening flexible sigmoidoscopy. (C) Screening colonoscopy. (D) Such other tests or procedures, and modifications to tests and procedures under this subsection, with such frequency and payment limits, as the Secretary determines appropriate, in consultation with appropriate organizations. (2) An ``individual at high risk for colorectal cancer'' is an individual who, because of family history, prior experience of cancer or precursor neoplastic polyps, a history of chronic digestive disease condition (including inflammatory bowel disease, Crohn's Disease, or ulcerative colitis), the presence of any appropriate recognized gene markers for colorectal cancer, or other predisposing factors, faces a high risk for colorectal cancer. Diabetes Outpatient Self-Management Training Services (qq)(1) The term ``diabetes outpatient self-management training services'' means educational and training services furnished (at such times as the Secretary determines appropriate) to an individual with diabetes by a certified provider (as described in paragraph (2)(A)) in an outpatient setting by an individual or entity who meets the quality standards described in paragraph (2)(B), but only if the physician who is managing the individual's diabetic condition certifies that such services are needed under a comprehensive plan of care related to the individual's diabetic condition to ensure therapy compliance or to provide the individual with necessary skills and knowledge (including skills related to the self-administration of injectable drugs) to participate in the management of the individual's condition. (2) In paragraph (1)-- (A) a ``certified provider'' is a physician, or other individual or entity designated by the Secretary, that, in addition to providing diabetes outpatient self- management training services, provides other items or services for which payment may be made under this title; and (B) a physician, or such other individual or entity, meets the quality standards described in this paragraph if the physician, or individual or entity, meets quality standards established by the Secretary, except that the physician or other individual or entity shall be deemed to have met such standards if the physician or other individual or entity meets applicable standards originally established by the National Diabetes Advisory Board and subsequently revised by organizations who participated in the establishment of standards by such Board, or is recognized by an organization that represents individuals (including individuals under this title) with diabetes as meeting standards for furnishing the services. Bone Mass Measurement (rr)(1) The term ``bone mass measurement'' means a radiologic or radioisotopic procedure or other procedure approved by the Food and Drug Administration performed on a qualified individual (as defined in paragraph (2)) for the purpose of identifying bone mass or detecting bone loss or determining bone quality, and includes a physician's interpretation of the results of the procedure. (2) For purposes of this subsection, the term ``qualified individual'' means an individual who is (in accordance with regulations prescribed by the Secretary)-- (A) an estrogen-deficient woman at clinical risk for osteoporosis; (B) an individual with vertebral abnormalities; (C) an individual receiving long-term glucocorticoid steroid therapy; (D) an individual with primary hyperparathyroidism; or (E) an individual being monitored to assess the response to or efficacy of an approved osteoporosis drug therapy. (3) The Secretary shall establish such standards regarding the frequency with which a qualified individual shall be eligible to be provided benefits for bone mass measurement under this title. Religious Nonmedical Health Care Institution (ss)(1) The term ``religious nonmedical health care institution'' means an institution that-- (A) is described in subsection (c)(3) of section 501 of the Internal Revenue Code of 1986 and is exempt from taxes under subsection (a) of such section; (B) is lawfully operated under all applicable Federal, State, and local laws and regulations; (C) provides only nonmedical nursing items and services exclusively to patients who choose to rely solely upon a religious method of healing and for whom the acceptance of medical health services would be inconsistent with their religious beliefs; (D) provides such nonmedical items and services exclusively through nonmedical nursing personnel who are experienced in caring for the physical needs of such patients; (E) provides such nonmedical items and services to inpatients on a 24-hour basis; (F) on the basis of its religious beliefs, does not provide through its personnel or otherwise medical items and services (including any medical screening, examination, diagnosis, prognosis, treatment, or the administration of drugs) for its patients; (G)(i) is not owned by, under common ownership with, or has an ownership interest in, a provider of medical treatment or services; (ii) is not affiliated with-- (I) a provider of medical treatment or services, or (II) an individual who has an ownership interest in a provider of medical treatment or services; (H) has in effect a utilization review plan which-- (i) provides for the review of admissions to the institution, of the duration of stays therein, of cases of continuous extended duration, and of the items and services furnished by the institution, (ii) requires that such reviews be made by an appropriate committee of the institution that includes the individuals responsible for overall administration and for supervision of nursing personnel at the institution, (iii) provides that records be maintained of the meetings, decisions, and actions of such committee, and (iv) meets such other requirements as the Secretary finds necessary to establish an effective utilization review plan; (I) provides the Secretary with such information as the Secretary may require to implement section 1821, including information relating to quality of care and coverage determinations; and (J) meets such other requirements as the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services in the institution. (2) To the extent that the Secretary finds that the accreditation of an institution by a State, regional, or national agency or association provides reasonable assurances that any or all of the requirements of paragraph (1) are met or exceeded, the Secretary may treat such institution as meeting the condition or conditions with respect to which the Secretary made such finding. (3)(A)(i) In administering this subsection and section 1821, the Secretary shall not require any patient of a religious nonmedical health care institution to undergo medical screening, examination, diagnosis, prognosis, or treatment or to accept any other medical health care service, if such patient (or legal representative of the patient) objects thereto on religious grounds. (ii) Clause (i) shall not be construed as preventing the Secretary from requiring under section 1821(a)(2) the provision of sufficient information regarding an individual's condition as a condition for receipt of benefits under part A for services provided in such an institution. (B)(i) In administering this subsection and section 1821, the Secretary shall not subject a religious nonmedical health care institution or its personnel to any medical supervision, regulation, or control, insofar as such supervision, regulation, or control would be contrary to the religious beliefs observed by the institution or such personnel. (ii) Clause (i) shall not be construed as preventing the Secretary from reviewing items and services billed by the institution to the extent the Secretary determines such review to be necessary to determine whether such items and services were not covered under part A, are excessive, or are fraudulent. (4)(A) For purposes of paragraph (1)(G)(i), an ownership interest of less than 5 percent shall not be taken into account. (B) For purposes of paragraph (1)(G)(ii), none of the following shall be considered to create an affiliation: (i) An individual serving as an uncompensated director, trustee, officer, or other member of the governing body of a religious nonmedical health care institution. (ii) An individual who is a director, trustee, officer, employee, or staff member of a religious nonmedical health care institution having a family relationship with an individual who is affiliated with (or has an ownership interest in) a provider of medical treatment or services. (iii) An individual or entity furnishing goods or services as a vendor to both providers of medical treatment or services and religious nonmedical health care institutions. Post-Institutional Home Health Services; Home Health Spell of Illness (tt)(1) The term ``post-institutional home health services'' means home health services furnished to an individual-- (A) after discharge from a hospital or critical access hospital in which the individual was an inpatient for not less than 3 consecutive days before such discharge if such home health services were initiated within 14 days after the date of such discharge; or (B) after discharge from a skilled nursing facility in which the individual was provided post-hospital extended care services if such home health services were initiated within 14 days after the date of such discharge. (2) The term ``home health spell of illness'' with respect to any individual means a period of consecutive days-- (A) beginning with the first day (not included in a previous home health spell of illness) (i) on which such individual is furnished post-institutional home health services, and (ii) which occurs in a month for which the individual is entitled to benefits under part A, and (B) ending with the close of the first period of 60 consecutive days thereafter on each of which the individual is neither an inpatient of a hospital or critical access hospital nor an inpatient of a facility described in section 1819(a)(1) or subsection (y)(1) nor provided home health services. Screening for Glaucoma (uu) The term ``screening for glaucoma'' means a dilated eye examination with an intraocular pressure measurement, and a direct ophthalmoscopy or a slit-lamp biomicroscopic examination for the early detection of glaucoma which is furnished by or under the direct supervision of an optometrist or ophthalmologist who is legally authorized to furnish such services under State law (or the State regulatory mechanism provided by State law) of the State in which the services are furnished, as would otherwise be covered if furnished by a physician or as an incident to a physician's professional service, if the individual involved has not had such an examination in the preceding year. Medical Nutrition Therapy Services; Registered Dietitian or Nutrition Professional (vv)(1) The term ``medical nutrition therapy services'' means nutritional diagnostic, therapy, and counseling services for the purpose of disease management which are furnished by a registered dietitian or nutrition professional (as defined in paragraph (2)) pursuant to a referral by a physician (as defined in subsection (r)(1)). (2) Subject to paragraph (3), the term ``registered dietitian or nutrition professional'' means an individual who-- (A) holds a baccalaureate or higher degree granted by a regionally accredited college or university in the United States (or an equivalent foreign degree) with completion of the academic requirements of a program in nutrition or dietetics, as accredited by an appropriate national accreditation organization recognized by the Secretary for this purpose; (B) has completed at least 900 hours of supervised dietetics practice under the supervision of a registered dietitian or nutrition professional; and (C)(i) is licensed or certified as a dietitian or nutrition professional by the State in which the services are performed; or (ii) in the case of an individual in a State that does not provide for such licensure or certification, meets such other criteria as the Secretary establishes. (3) Subparagraphs (A) and (B) of paragraph (2) shall not apply in the case of an individual who, as of the date of the enactment of this subsection, is licensed or certified as a dietitian or nutrition professional by the State in which medical nutrition therapy services are performed. Initial Preventive Physical Examination (ww)(1) The term ``initial preventive physical examination'' means physicians' services consisting of a physical examination (including measurement of height, weight body mass index,, and blood pressure) with the goal of health promotion and disease detection and includes education, counseling, and referral with respect to screening and other preventive services described in paragraph (2), end-of-life planning (as defined in paragraph (3)) upon the agreement with the individual, and the furnishing of a review of any current opioid prescriptions (as defined in paragraph (4)), but does not include clinical laboratory tests. (2) The screening and other preventive services described in this paragraph include the following: (A) Pneumococcal, influenza, and hepatitis B vaccine and administration under subsection (s)(10). (B) Screening mammography as defined in subsection (jj). (C) Screening pap smear and screening pelvic exam as defined in subsection (nn). (D) Prostate cancer screening tests as defined in subsection (oo). (E) Colorectal cancer screening tests as defined in subsection (pp). (F) Diabetes outpatient self-management training services as defined in subsection (qq)(1). (G) Bone mass measurement as defined in subsection (rr). (H) Screening for glaucoma as defined in subsection (uu). (I) Medical nutrition therapy services as defined in subsection (vv). (J) Cardiovascular screening blood tests as defined in subsection (xx)(1). (K) Diabetes screening tests as defined in subsection (yy). (L) Ultrasound screening for abdominal aortic aneurysm as defined in section 1861(bbb). (M) An electrocardiogram. (N) Screening for potential substance use disorders. (O) Additional preventive services (as defined in subsection (ddd)(1)). (3) For purposes of paragraph (1), the term ``end-of-life planning'' means verbal or written information regarding-- (A) an individual's ability to prepare an advance directive in the case that an injury or illness causes the individual to be unable to make health care decisions; and (B) whether or not the physician is willing to follow the individual's wishes as expressed in an advance directive. (4) For purposes of paragraph (1), the term ``a review of any current opioid prescriptions'' means, with respect to an individual determined to have a current prescription for opioids-- (A) a review of the potential risk factors to the individual for opioid use disorder; (B) an evaluation of the individual's severity of pain and current treatment plan; (C) the provision of information on non-opioid treatment options; and (D) a referral to a specialist, as appropriate. Cardiovascular Screening Blood Test (xx)(1) The term ``cardiovascular screening blood test'' means a blood test for the early detection of cardiovascular disease (or abnormalities associated with an elevated risk of cardiovascular disease) that tests for the following: (A) Cholesterol levels and other lipid or triglyceride levels. (B) Such other indications associated with the presence of, or an elevated risk for, cardiovascular disease as the Secretary may approve for all individuals (or for some individuals determined by the Secretary to be at risk for cardiovascular disease), including indications measured by noninvasive testing. The Secretary may not approve an indication under subparagraph (B) for any individual unless a blood test for such is recommended by the United States Preventive Services Task Force. (2) The Secretary shall establish standards, in consultation with appropriate organizations, regarding the frequency for each type of cardiovascular screening blood tests, except that such frequency may not be more often than once every 2 years. Diabetes Screening Tests (yy)(1) The term ``diabetes screening tests'' means testing furnished to an individual at risk for diabetes (as defined in paragraph (2)) for the purpose of early detection of diabetes, including-- (A) a fasting plasma glucose test; and (B) such other tests, and modifications to tests, as the Secretary determines appropriate, in consultation with appropriate organizations. (2) For purposes of paragraph (1), the term ``individual at risk for diabetes'' means an individual who has any of the following risk factors for diabetes: (A) Hypertension. (B) Dyslipidemia. (C) Obesity, defined as a body mass index greater than or equal to 30 kg/m2. (D) Previous identification of an elevated impaired fasting glucose. (E) Previous identification of impaired glucose tolerance. (F) A risk factor consisting of at least 2 of the following characteristics: (i) Overweight, defined as a body mass index greater than 25, but less than 30, kg/ m2. (ii) A family history of diabetes. (iii) A history of gestational diabetes mellitus or delivery of a baby weighing greater than 9 pounds. (iv) 65 years of age or older. (3) The Secretary shall establish standards, in consultation with appropriate organizations, regarding the frequency of diabetes screening tests, except that such frequency may not be more often than twice within the 12-month period following the date of the most recent diabetes screening test of that individual. Intravenous Immune Globulin (zz) The term ``intravenous immune globulin'' means an approved pooled plasma derivative for the treatment in the patient's home of a patient with a diagnosed primary immune deficiency disease, but not including items or services related to the administration of the derivative, if a physician determines administration of the derivative in the patient's home is medically appropriate. Extended Care in Religious Nonmedical Health Care Institutions (aaa)(1) The term ``home health agency'' also includes a religious nonmedical health care institution (as defined in subsection (ss)(1)), but only with respect to items and services ordinarily furnished by such an institution to individuals in their homes, and that are comparable to items and services furnished to individuals by a home health agency that is not religious nonmedical health care institution. (2)(A) Subject to subparagraphs (B), payment may be made with respect to services provided by such an institution only to such extent and under such conditions, limitations, and requirements (in addition to or in lieu of the conditions, limitations, and requirements otherwise applicable) as may be provided in regulations consistent with section 1821. (B) Notwithstanding any other provision of this title, payment may not be made under subparagraph (A)-- (i) in a year insofar as such payments exceed $700,000; and (ii) after December 31, 2006. Ultrasound Screening for Abdominal Aortic Aneurysm (bbb) The term ``ultrasound screening for abdominal aortic aneurysm'' means-- (1) a procedure using sound waves (or such other procedures using alternative technologies, of commensurate accuracy and cost, that the Secretary may specify) provided for the early detection of abdominal aortic aneurysm; and (2) includes a physician's interpretation of the results of the procedure. Long-Term Care Hospital (ccc) The term ``long-term care hospital'' means a hospital which-- (1) is primarily engaged in providing inpatient services, by or under the supervision of a physician, to Medicare beneficiaries whose medically complex conditions require a long hospital stay and programs of care provided by a long-term care hospital; (2) has an average inpatient length of stay (as determined by the Secretary) of greater than 25 days, or meets the requirements of clause (II) of section 1886(d)(1)(B)(iv); (3) satisfies the requirements of subsection (e); and (4) meets the following facility criteria: (A) the institution has a patient review process, documented in the patient medical record, that screens patients prior to admission for appropriateness of admission to a long-term care hospital, validates within 48 hours of admission that patients meet admission criteria for long-term care hospitals, regularly evaluates patients throughout their stay for continuation of care in a long-term care hospital, and assesses the available discharge options when patients no longer meet such continued stay criteria; (B) the institution has active physician involvement with patients during their treatment through an organized medical staff, physician-directed treatment with physician on- site availability on a daily basis to review patient progress, and consulting physicians on call and capable of being at the patient's side within a moderate period of time, as determined by the Secretary; and (C) the institution has interdisciplinary team treatment for patients, requiring interdisciplinary teams of health care professionals, including physicians, to prepare and carry out an individualized treatment plan for each patient. Additional Preventive Services; Preventive Services (ddd)(1) The term ``additional preventive services'' means services not described in subparagraph (A) or (C) of paragraph (3) that identify medical conditions or risk factors and that the Secretary determines are-- (A) reasonable and necessary for the prevention or early detection of an illness or disability; (B) recommended with a grade of A or B by the United States Preventive Services Task Force; and (C) appropriate for individuals entitled to benefits under part A or enrolled under part B. (2) In making determinations under paragraph (1) regarding the coverage of a new service, the Secretary shall use the process for making national coverage determinations (as defined in section 1869(f)(1)(B)) under this title. As part of the use of such process, the Secretary may conduct an assessment of the relation between predicted outcomes and the expenditures for such service and may take into account the results of such assessment in making such determination. (3) The term ``preventive services'' means the following: (A) The screening and preventive services described in subsection (ww)(2) (other than the service described in subparagraph (M) of such subsection). (B) An initial preventive physical examination (as defined in subsection (ww)). (C) Personalized prevention plan services (as defined in subsection (hhh)(1)). Cardiac Rehabilitation Program; Intensive Cardiac Rehabilitation Program (eee)(1) The term ``cardiac rehabilitation program'' means a program (as described in paragraph (2)) that furnishes the items and services described in paragraph (3) under the supervision of a physician (as defined in subsection (r)(1)) or a physician assistant, nurse practitioner, or clinical nurse specialist (as those terms are defined in subsection (aa)(5)). (2) A program described in this paragraph is a program under which-- (A) items and services under the program are delivered-- (i) in a physician's office; (ii) in a hospital on an outpatient basis; or (iii) in other settings determined appropriate by the Secretary; (B) a physician (as defined in subsection (r)(1)) or a physician assistant, nurse practitioner, or clinical nurse specialist (as those terms are defined in subsection (aa)(5)) is immediately available and accessible for medical consultation and medical emergencies at all times items and services are being furnished under the program, except that, in the case of items and services furnished under such a program in a hospital, such availability shall be presumed; and (C) individualized treatment is furnished under a written plan established, reviewed, and signed by a physician every 30 days that describes-- (i) the individual's diagnosis; (ii) the type, amount, frequency, and duration of the items and services furnished under the plan; and (iii) the goals set for the individual under the plan. (3) The items and services described in this paragraph are-- (A) physician-prescribed exercise; (B) cardiac risk factor modification, including education, counseling, and behavioral intervention (to the extent such education, counseling, and behavioral intervention is closely related to the individual's care and treatment and is tailored to the individual's needs); (C) psychosocial assessment; (D) outcomes assessment; and (E) such other items and services as the Secretary may determine, but only if such items and services are-- (i) reasonable and necessary for the diagnosis or active treatment of the individual's condition; (ii) reasonably expected to improve or maintain the individual's condition and functional level; and (iii) furnished under such guidelines relating to the frequency and duration of such items and services as the Secretary shall establish, taking into account accepted norms of medical practice and the reasonable expectation of improvement of the individual. (4)(A) The term ``intensive cardiac rehabilitation program'' means a program (as described in paragraph (2)) that furnishes the items and services described in paragraph (3) under the supervision of a physician (as defined in subsection (r)(1)) or a physician assistant, nurse practitioner, or clinical nurse specialist (as those terms are defined in subsection (aa)(5)) and has shown, in peer-reviewed published research, that it accomplished-- (i) one or more of the following: (I) positively affected the progression of coronary heart disease; or (II) reduced the need for coronary bypass surgery; or (III) reduced the need for percutaneous coronary interventions; and (ii) a statistically significant reduction in 5 or more of the following measures from their level before receipt of cardiac rehabilitation services to their level after receipt of such services: (I) low density lipoprotein; (II) triglycerides; (III) body mass index; (IV) systolic blood pressure; (V) diastolic blood pressure; or (VI) the need for cholesterol, blood pressure, and diabetes medications. (B) To be eligible for an intensive cardiac rehabilitation program, an individual must have-- (i) had an acute myocardial infarction within the preceding 12 months; (ii) had coronary bypass surgery; (iii) stable angina pectoris; (iv) had heart valve repair or replacement; (v) had percutaneous transluminal coronary angioplasty (PTCA) or coronary stenting; (vi) had a heart or heart-lung transplant; (vii) stable, chronic heart failure (defined as patients with left ventricular ejection fraction of 35 percent or less and New York Heart Association (NYHA) class II to IV symptoms despite being on optimal heart failure therapy for at least 6 weeks); or (viii) any additional condition for which the Secretary has determined that a cardiac rehabilitation program shall be covered, unless the Secretary determines, using the same process used to determine that the condition is covered for a cardiac rehabilitation program, that such coverage is not supported by the clinical evidence. (C) An intensive cardiac rehabilitation program may be provided in a series of 72 one-hour sessions (as defined in section 1848(b)(5)), up to 6 sessions per day, over a period of up to 18 weeks. (5) The Secretary shall establish standards to ensure that a physician with expertise in the management of individuals with cardiac pathophysiology who is licensed to practice medicine in the State in which a cardiac rehabilitation program (or the intensive cardiac rehabilitation program, as the case may be) is offered-- (A) is responsible for such program; and (B) in consultation with appropriate staff, is involved substantially in directing the progress of individual in the program. Pulmonary Rehabilitation Program (fff)(1) The term ``pulmonary rehabilitation program'' means a program (as described in subsection (eee)(2) with respect to a program under this subsection) that furnishes the items and services described in paragraph (2) under the supervision of a physician (as defined in subsection (r)(1)) or a physician assistant, nurse practitioner, or clinical nurse specialist (as those terms are defined in subsection (aa)(5)). (2) The items and services described in this paragraph are-- (A) physician-prescribed exercise; (B) education or training (to the extent the education or training is closely and clearly related to the individual's care and treatment and is tailored to such individual's needs); (C) psychosocial assessment; (D) outcomes assessment; and (E) such other items and services as the Secretary may determine, but only if such items and services are-- (i) reasonable and necessary for the diagnosis or active treatment of the individual's condition; (ii) reasonably expected to improve or maintain the individual's condition and functional level; and (iii) furnished under such guidelines relating to the frequency and duration of such items and services as the Secretary shall establish, taking into account accepted norms of medical practice and the reasonable expectation of improvement of the individual. (3) The Secretary shall establish standards to ensure that a physician with expertise in the management of individuals with respiratory pathophysiology who is licensed to practice medicine in the State in which a pulmonary rehabilitation program is offered-- (A) is responsible for such program; and (B) in consultation with appropriate staff, is involved substantially in directing the progress of individual in the program. Kidney Disease Education Services (ggg)(1) The term ``kidney disease education services'' means educational services that are-- (A) furnished to an individual with stage IV chronic kidney disease who, according to accepted clinical guidelines identified by the Secretary, will require dialysis or a kidney transplant; (B) furnished, upon the referral of the physician managing the individual's kidney condition, by a qualified person (as defined in paragraph (2)); and (C) designed-- (i) to provide comprehensive information (consistent with the standards set under paragraph (3)) regarding-- (I) the management of comorbidities, including for purposes of delaying the need for dialysis; (II) the prevention of uremic complications; and (III) each option for renal replacement therapy (including hemodialysis and peritoneal dialysis at home and in-center as well as vascular access options and transplantation); (ii) to ensure that the individual has the opportunity to actively participate in the choice of therapy; and (iii) to be tailored to meet the needs of the individual involved. (2)(A) The term ``qualified person'' means-- (i) a physician (as defined in section 1861(r)(1)) or a physician assistant, nurse practitioner, or clinical nurse specialist (as defined in section 1861(aa)(5)), who furnishes services for which payment may be made under the fee schedule established under section 1848; and (ii) a provider of services located in a rural area (as defined in section 1886(d)(2)(D)). (B) Such term does not include a provider of services (other than a provider of services described in subparagraph (A)(ii)) or a renal dialysis facility. (3) The Secretary shall set standards for the content of such information to be provided under paragraph (1)(C)(i) after consulting with physicians, other health professionals, health educators, professional organizations, accrediting organizations, kidney patient organizations, dialysis facilities, transplant centers, network organizations described in section 1881(c)(2), and other knowledgeable persons. To the extent possible the Secretary shall consult with persons or entities described in the previous sentence, other than a dialysis facility, that has not received industry funding from a drug or biological manufacturer or dialysis facility. (4) No individual shall be furnished more than 6 sessions of kidney disease education services under this title. Annual Wellness Visit (hhh)(1) The term ``personalized prevention plan services'' means the creation of a plan for an individual-- (A) that includes a health risk assessment (that meets the guidelines established by the Secretary under paragraph (4)(A)) of the individual that is completed prior to or as part of the same visit with a health professional described in paragraph (3); and (B) that-- (i) takes into account the results of the health risk assessment; and (ii) may contain the elements described in paragraph (2). (2) Subject to paragraph (4)(H), the elements described in this paragraph are the following: (A) The establishment of, or an update to, the individual's medical and family history. (B) A list of current providers and suppliers that are regularly involved in providing medical care to the individual (including a list of all prescribed medications). (C) A measurement of height, weight, body mass index (or waist circumference, if appropriate), blood pressure, and other routine measurements. (D) Detection of any cognitive impairment. (E) The establishment of, or an update to, the following: (i) A screening schedule for the next 5 to 10 years, as appropriate, based on recommendations of the United States Preventive Services Task Force and the Advisory Committee on Immunization Practices, and the individual's health status, screening history, and age- appropriate preventive services covered under this title. (ii) A list of risk factors and conditions for which primary, secondary, or tertiary prevention interventions are recommended or are underway, including any mental health conditions or any such risk factors or conditions that have been identified through an initial preventive physical examination (as described under subsection (ww)(1)), and a list of treatment options and their associated risks and benefits. (F) The furnishing of personalized health advice and a referral, as appropriate, to health education or preventive counseling services or programs aimed at reducing identified risk factors and improving self- management, or community-based lifestyle interventions to reduce health risks and promote self-management and wellness, including weight loss, physical activity, smoking cessation, fall prevention, and nutrition. (G) Screening for potential substance use disorders and referral for treatment as appropriate. (H) The furnishing of a review of any current opioid prescriptions (as defined in subsection (ww)(4)). (I) Any other element determined appropriate by the Secretary. (3) A health professional described in this paragraph is-- (A) a physician; (B) a practitioner described in clause (i) of section 1842(b)(18)(C); or (C) a medical professional (including a health educator, registered dietitian, or nutrition professional) or a team of medical professionals, as determined appropriate by the Secretary, under the supervision of a physician. (4)(A) For purposes of paragraph (1)(A), the Secretary, not later than 1 year after the date of enactment of this subsection, shall establish publicly available guidelines for health risk assessments. Such guidelines shall be developed in consultation with relevant groups and entities and shall provide that a health risk assessment-- (i) identify chronic diseases, injury risks, modifiable risk factors, and urgent health needs of the individual; and (ii) may be furnished-- (I) through an interactive telephonic or web- based program that meets the standards established under subparagraph (B); (II) during an encounter with a health care professional; (III) through community-based prevention programs; or (IV) through any other means the Secretary determines appropriate to maximize accessibility and ease of use by beneficiaries, while ensuring the privacy of such beneficiaries. (B) Not later than 1 year after the date of enactment of this subsection, the Secretary shall establish standards for interactive telephonic or web-based programs used to furnish health risk assessments under subparagraph (A)(ii)(I). The Secretary may utilize any health risk assessment developed under section 4004(f) of the Patient Protection and Affordable Care Act as part of the requirement to develop a personalized prevention plan to comply with this subparagraph. (C)(i) Not later than 18 months after the date of enactment of this subsection, the Secretary shall develop and make available to the public a health risk assessment model. Such model shall meet the guidelines under subparagraph (A) and may be used to meet the requirement under paragraph (1)(A). (ii) Any health risk assessment that meets the guidelines under subparagraph (A) and is approved by the Secretary may be used to meet the requirement under paragraph (1)(A). (D) The Secretary may coordinate with community-based entities (including State Health Insurance Programs, Area Agencies on Aging, Aging and Disability Resource Centers, and the Administration on Aging) to-- (i) ensure that health risk assessments are accessible to beneficiaries; and (ii) provide appropriate support for the completion of health risk assessments by beneficiaries. (E) The Secretary shall establish procedures to make beneficiaries and providers aware of the requirement that a beneficiary complete a health risk assessment prior to or at the same time as receiving personalized prevention plan services. (F) To the extent practicable, the Secretary shall encourage the use of, integration with, and coordination of health information technology (including use of technology that is compatible with electronic medical records and personal health records) and may experiment with the use of personalized technology to aid in the development of self-management skills and management of and adherence to provider recommendations in order to improve the health status of beneficiaries. (G) A beneficiary shall be eligible to receive only an initial preventive physical examination (as defined under subsection (ww)(1)) during the 12-month period after the date that the beneficiary's coverage begins under part B and shall be eligible to receive personalized prevention plan services under this subsection each year thereafter provided that the beneficiary has not received either an initial preventive physical examination or personalized prevention plan services within the preceding 12-month period. (H) The Secretary shall issue guidance that-- (i) identifies elements under paragraph (2) that are required to be provided to a beneficiary as part of their first visit for personalized prevention plan services; and (ii) establishes a yearly schedule for appropriate provision of such elements thereafter. (iii) Home Infusion Therapy.--(1) The term ``home infusion therapy'' means the items and services described in paragraph (2) furnished by a qualified home infusion therapy supplier (as defined in paragraph (3)(D)) which are furnished in the individual's home (as defined in paragraph (3)(B)) to an individual-- (A) who is under the care of an applicable provider (as defined in paragraph (3)(A)); and (B) with respect to whom a plan prescribing the type, amount, and duration of infusion therapy services that are to be furnished such individual has been established by a physician (as defined in subsection (r)(1)) and is periodically reviewed by a physician (as so defined) in coordination with the furnishing of home infusion drugs (as defined in paragraph (3)(C)) under part B. (2) The items and services described in this paragraph are the following: (A) Professional services, including nursing services, furnished in accordance with the plan. (B) Training and education (not otherwise paid for as durable medical equipment (as defined in subsection (n)), remote monitoring, and monitoring services for the provision of home infusion therapy and home infusion drugs furnished by a qualified home infusion therapy supplier. (3) For purposes of this subsection: (A) The term ``applicable provider'' means-- (i) a physician; (ii) a nurse practitioner; and (iii) a physician assistant. (B) The term ``home'' means a place of residence used as the home of an individual (as defined for purposes of subsection (n)). (C) The term ``home infusion drug'' means a parenteral drug or biological administered intravenously, or subcutaneously for an administration period of 15 minutes or more, in the home of an individual through a pump that is an item of durable medical equipment (as defined in subsection (n)). Such term does not include the following: (i) Insulin pump systems. (ii) A self-administered drug or biological on a self-administered drug exclusion list. (D)(i) The term ``qualified home infusion therapy supplier'' means a pharmacy, physician, or other provider of services or supplier licensed by the State in which the pharmacy, physician, or provider or services or supplier furnishes items or services and that-- (I) furnishes infusion therapy to individuals with acute or chronic conditions requiring administration of home infusion drugs; (II) ensures the safe and effective provision and administration of home infusion therapy on a 7-day-a-week, 24-hour-a-day basis; (III) is accredited by an organization designated by the Secretary pursuant to section 1834(u)(5); and (IV) meets such other requirements as the Secretary determines appropriate, taking into account the standards of care for home infusion therapy established by Medicare Advantage plans under part C and in the private sector. (ii) A qualified home infusion therapy supplier may subcontract with a pharmacy, physician, provider of services, or supplier to meet the requirements of this subparagraph. (jjj) Opioid Use Disorder Treatment Services; Opioid Treatment Program.-- (1) Opioid use disorder treatment services.--The term ``opioid use disorder treatment services'' means items and services that are furnished by an opioid treatment program for the treatment of opioid use disorder, including-- (A) opioid agonist and antagonist treatment medications (including oral, injected, or implanted versions) that are approved by the Food and Drug Administration under section 505 of the Federal Food, Drug, and Cosmetic Act for use in the treatment of opioid use disorder; (B) dispensing and administration of such medications, if applicable; (C) substance use counseling by a professional to the extent authorized under State law to furnish such services; (D) individual and group therapy with a physician or psychologist (or other mental health professional to the extent authorized under State law); (E) toxicology testing, and (F) other items and services that the Secretary determines are appropriate (but in no event to include meals or transportation). (2) Opioid treatment program.--The term ``opioid treatment program'' means an entity that is an opioid treatment program (as defined in section 8.2 of title 42 of the Code of Federal Regulations, or any successor regulation) that-- (A) is enrolled under section 1866(j); (B) has in effect a certification by the Substance Abuse and Mental Health Services Administration for such a program; (C) is accredited by an accrediting body approved by the Substance Abuse and Mental Health Services Administration; and (D) meets such additional conditions as the Secretary may find necessary to ensure-- (i) the health and safety of individuals being furnished services under such program; and (ii) the effective and efficient furnishing of such services. (kkk) Prostate Cancer DNA Specimen Provenance Assay Test.-- The term ``prostate cancer DNA Specimen Provenance Assay Test'' (DSPA test) means a test that, after a determination of cancer in one or more prostate biopsy specimens obtained from an individual, assesses the identity of the DNA in such specimens by comparing such DNA with the DNA that was separately taken from such individual at the time of the biopsy. exclusions from coverage and medicare as secondary payer Sec. 1862. (a) Notwithstanding any other provision of this title, no payment may be made under part A or part B for any expenses incurred for items or services-- (1)(A) which, except for items and services described in a succeeding subparagraph or additional preventive services (as described in section 1861(ddd)(1)), are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, (B) in the case of items and services described in section 1861(s)(10), which are not reasonable and necessary for the prevention of illness, (C) in the case of hospice care, which are not reasonable and necessary for the palliation or management of terminal illness, (D) in the case of clinical care items and services provided with the concurrence of the Secretary and with respect to research and experimentation conducted by, or under contract with, the Medicare Payment Advisory Commission or the Secretary, which are not reasonable and necessary to carry out the purposes of section 1886(e)(6), (E) in the case of research conducted pursuant to section 1142, which is not reasonable and necessary to carry out the purposes of that section, (F) in the case of screening mammography, which is performed more frequently than is covered under section 1834(c)(2) or which is not conducted by a facility described in section 1834(c)(1)(B), in the case of screening pap smear and screening pelvic exam, which is performed more frequently than is provided under section 1861(nn), and, in the case of screening for glaucoma, which is performed more frequently than is provided under section 1861(uu), (G) in the case of prostate cancer screening tests (as defined in section 1861(oo)), which are performed more frequently than is covered under such section, (H) in the case of colorectal cancer screening tests, which are performed more frequently than is covered under section 1834(d), (I) the frequency and duration of home health services which are in excess of normative guidelines that the Secretary shall establish by regulation, (J) in the case of a drug or biological specified in section 1847A(c)(6)(C) for which payment is made under part B that is furnished in a competitive area under section 1847B, that is not furnished by an entity under a contract under such section, (K) in the case of an initial preventive physical examination, which is performed more than 1 year after the date the individual's first coverage period begins under part B, (L) in the case of cardiovascular screening blood tests (as defined in section 1861(xx)(1)), which are performed more frequently than is covered under section 1861(xx)(2), (M) in the case of a diabetes screening test (as defined in section 1861(yy)(1)), which is performed more frequently than is covered under section 1861(yy)(3), (N) in the case of ultrasound screening for abdominal aortic aneurysm which is performed more frequently than is provided for under section 1861(s)(2)(AA), (O) in the case of kidney disease education services (as defined in paragraph (1) of section 1861(ggg)), which are furnished in excess of the number of sessions covered under paragraph (4) of such section, [and] (P) in the case of personalized prevention plan services (as defined in section 1861(hhh)(1)), which are performed more frequently than is covered under such section[;], and (Q) in the case of a prostate cancer DNA Specimen Provenance Assay test (DSPA test) (as defined in section 1861(kkk)), unless such test is furnished on or after January 1, 2021, and before January 1, 2026, and such test is ordered by the physician who furnished the prostate cancer biopsy that obtained the specimen tested; (2) for which the individual furnished such items or services has no legal obligation to pay, and which no other person (by reason of such individual's membership in a prepayment plan or otherwise) has a legal obligation to provide or pay for, except in the case of Federally qualified health center services; (3) which are paid for directly or indirectly by a governmental entity (other than under this Act and other than under a health benefits or insurance plan established for employees of such an entity), except in the case of rural health clinic services, as defined in section 1861(aa)(1), in the case of Federally qualified health center services, as defined in section 1861(aa)(3), in the case of services for which payment may be made under section 1880(e), and in such other cases as the Secretary may specify; (4) which are not provided within the United States (except for inpatient hospital services furnished outside the United States under the conditions described in section 1814(f) and, subject to such conditions, limitations, and requirements as are provided under or pursuant to this title, physicians' services and ambulance services furnished an individual in conjunction with such inpatient hospital services but only for the period during which such inpatient hospital services were furnished); (5) which are required as a result of war, or of an act of war, occurring after the effective date of such individual's current coverage under such part; (6) which constitute personal comfort items (except, in the case of hospice care, as is otherwise permitted under paragraph (1)(C)); (7) where such expenses are for routine physical checkups, eyeglasses (other than eyewear described in section 1861(s)(8)) or eye examinations for the purpose of prescribing, fitting, or changing eyeglasses, procedures performed (during the course of any eye examination) to determine the refractive state of the eyes, hearing aids or examinations therefor, or immunizations (except as otherwise allowed under section 1861(s)(10) and subparagraph (B), (F), (G), (H), (K), or (P) of paragraph (1)); (8) where such expenses are for orthopedic shoes or other supportive devices for the feet, other than shoes furnished pursuant to section 1861(s)(12); (9) where such expenses are for custodial care (except, in the case of hospice care, as is otherwise permitted under paragraph (1)(C)); (10) where such expenses are for cosmetic surgery or are incurred in connection therewith, except as required for the prompt repair of accidental injury or for improvement of the functioning of a malformed body member; (11) where such expenses constitute charges imposed by immediate relatives of such individual or members of his household; (12) where such expenses are for services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth, except that payment may be made under part A in the case of inpatient hospital services in connection with the provision of such dental services if the individual, because of his underlying medical condition and clinical status or because of the severity of the dental procedure, requires hospitalization in connection with the provision of such services; (13) where such expenses are for-- (A) the treatment of flat foot conditions and the prescription of supportive devices therefor, (B) the treatment of subluxations of the foot, or (C) routine foot care (including the cutting or removal of corns or calluses, the trimming of nails, and other routine hygienic care); (14) which are other than physicians' services (as defined in regulations promulgated specifically for purposes of this paragraph), services described by section 1861(s)(2)(K), certified nurse-midwife services, qualified psychologist services, and services of a certified registered nurse anesthetist, and which are furnished to an individual who is a patient of a hospital or critical access hospital by an entity other than the hospital or critical access hospital, unless the services are furnished under arrangements (as defined in section 1861(w)(1)) with the entity made by the hospital or critical access hospital; (15)(A) which are for services of an assistant at surgery in a cataract operation (including subsequent insertion of an intraocular lens) unless, before the surgery is performed, the appropriate quality improvement organization (under part B of title XI) or a carrier under section 1842 has approved of the use of such an assistant in the surgical procedure based on the existence of a complicating medical condition, or (B) which are for services of an assistant at surgery to which section 1848(i)(2)(B) applies; (16) in the case in which funds may not be used for such items and services under the Assisted Suicide Funding Restriction Act of 1997; (17) where the expenses are for an item or service furnished in a competitive acquisition area (as established by the Secretary under section 1847(a)) by an entity other than an entity with which the Secretary has entered into a contract under section 1847(b) for the furnishing of such an item or service in that area, unless the Secretary finds that the expenses were incurred in a case of urgent need, or in other circumstances specified by the Secretary; (18) which are covered skilled nursing facility services described in section 1888(e)(2)(A)(i) and which are furnished to an individual who is a resident of a skilled nursing facility during a period in which the resident is provided covered post-hospital extended care services (or, for services described in section 1861(s)(2)(D), which are furnished to such an individual without regard to such period), by an entity other than the skilled nursing facility, unless the services are furnished under arrangements (as defined in section 1861(w)(1)) with the entity made by the skilled nursing facility; (19) which are for items or services which are furnished pursuant to a private contract described in section 1802(b); (20) in the case of outpatient physical therapy services, outpatient speech-language pathology services, or outpatient occupational therapy services furnished as an incident to a physician's professional services (as described in section 1861(s)(2)(A)), that do not meet the standards and conditions (other than any licensing requirement specified by the Secretary) under the second sentence of section 1861(p) (or under such sentence through the operation of subsection (g) or (ll)(2) of section 1861) as such standards and conditions would apply to such therapy services if furnished by a therapist; (21) where such expenses are for home health services (including medical supplies described in section 1861(m)(5), but excluding durable medical equipment to the extent provided for in such section) furnished to an individual who is under a plan of care of the home health agency if the claim for payment for such services is not submitted by the agency; (22) subject to subsection (h), for which a claim is submitted other than in an electronic form specified by the Secretary; (23) which are the technical component of advanced diagnostic imaging services described in section 1834(e)(1)(B) for which payment is made under the fee schedule established under section 1848(b) and that are furnished by a supplier (as defined in section 1861(d)), if such supplier is not accredited by an accreditation organization designated by the Secretary under section 1834(e)(2)(B); (24) where such expenses are for renal dialysis services (as defined in subparagraph (B) of section 1881(b)(14)) for which payment is made under such section unless such payment is made under such section to a provider of services or a renal dialysis facility for such services; or (25) not later than January 1, 2014, for which the payment is other than by electronic funds transfer (EFT) or an electronic remittance in a form as specified in ASC X12 835 Health Care Payment and Remittance Advice or subsequent standard. Paragraph (7) shall not apply to Federally qualified health center services described in section 1861(aa)(3)(B). In making a national coverage determination (as defined in paragraph (1)(B) of section 1869(f)) the Secretary shall ensure consistent with subsection (l) that the public is afforded notice and opportunity to comment prior to implementation by the Secretary of the determination; meetings of advisory committees with respect to the determination are made on the record; in making the determination, the Secretary has considered applicable information (including clinical experience and medical, technical, and scientific evidence) with respect to the subject matter of the determination; and in the determination, provide a clear statement of the basis for the determination (including responses to comments received from the public), the assumptions underlying that basis, and make available to the public the data (other than proprietary data) considered in making the determination. (b) Medicare as Secondary Payer.-- (1) Requirements of group health plans.-- (A) Working aged under group health plans.-- (i) In general.--A group health plan-- (I) may not take into account that an individual (or the individual's spouse) who is covered under the plan by virtue of the individual's current employment status with an employer is entitled to benefits under this title under section 226(a), and (II) shall provide that any individual age 65 or older (and the spouse age 65 or older of any individual) who has current employment status with an employer shall be entitled to the same benefits under the plan under the same conditions as any such individual (or spouse) under age 65. (ii) Exclusion of group health plan of a small employer.--Clause (i) shall not apply to a group health plan unless the plan is a plan of, or contributed to by, an employer that has 20 or more employees for each working day in each of 20 or more calendar weeks in the current calendar year or the preceding calendar year. (iii) Exception for small employers in multiemployer or multiple employer group health plans.--Clause (i) also shall not apply with respect to individuals enrolled in a multiemployer or multiple employer group health plan if the coverage of the individuals under the plan is by virtue of current employment status with an employer that does not have 20 or more individuals in current employment status for each working day in each of 20 or more calendar weeks in the current calendar year and the preceding calendar year; except that the exception provided in this clause shall only apply if the plan elects treatment under this clause. (iv) Exception for individuals with end stage renal disease.--Subparagraph (C) shall apply instead of clause (i) to an item or service furnished in a month to an individual if for the month the individual is, or (without regard to entitlement under section 226) would upon application be, entitled to benefits under section 226A. (v) Group health plan defined.--In this subparagraph, and subparagraph (C), the term ``group health plan'' has the meaning given such term in section 5000(b)(1) of the Internal Revenue Code of 1986, without regard to section 5000(d) of such Code (B) Disabled individuals in large group health plans.-- (i) In general.--A large group health plan (as defined in clause (iii)) may not take into account that an individual (or a member of the individual's family) who is covered under the plan by virtue of the individual's current employment status with an employer is entitled to benefits under this title under section 226(b). (ii) Exception for individuals with end stage renal disease.--Subparagraph (C) shall apply instead of clause (i) to an item or service furnished in a month to an individual if for the month the individual is, or (without regard to entitlement under section 226) would upon application be, entitled to benefits under section 226A. (iii) Large Group Health Plan Defined.--In this subparagraph, the term ``large group health plan'' has the meaning given such term in section 5000(b)(2) of the Internal Revenue Code of 1986, without regard to section 5000(d) of such Code. (C) Individuals with end stage renal disease.--A group health plan (as defined in subparagraph (A)(v))-- (i) may not take into account that an individual is entitled to or eligible for benefits under this title under section 226A during the 12-month period which begins with the first month in which the individual becomes entitled to benefits under part A under the provisions of section 226A, or, if earlier, the first month in which the individual would have been entitled to benefits under such part under the provisions of section 226A if the individual had filed an application for such benefits; and (ii) may not differentiate in the benefits it provides between individuals having end stage renal disease and other individuals covered by such plan on the basis of the existence of end stage renal disease, the need for renal dialysis, or in any other manner; except that clause (ii) shall not prohibit a plan from paying benefits secondary to this title when an individual is entitled to or eligible for benefits under this title under section 226A after the end of the 12-month period described in clause (i). Effective for items and services furnished on or after February 1, 1991, and before the date of enactment of the Balanced Budget Act of 1997 (with respect to periods beginning on or after February 1, 1990), this subparagraph shall be applied by substituting ``18- month'' for ``12- month'' each place it appears. Effective for items and services furnished on or after the date of enactment of the Balanced Budget Act of 1997, (with respect to periods beginning on or after the date that is 18 months prior to such date), clauses (i) and (ii) shall be applied by substituting ``30-month'' for ``12-month'' each place it appears. (D) Treatment of certain members of religious orders.--In this subsection, an individual shall not be considered to be employed, or an employee, with respect to the performance of services as a member of a religious order which are considered employment only by virtue of an election made by the religious order under section 3121(r) of the Internal Revenue Code of 1986. (E) General Provisions.--For purposes of this subsection: (i) Aggregation Rules.-- (I) All employers treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 shall be treated as a single employer. (II) All employees of the members of an affiliated service group (as defined in section 414(m) of such Code) shall be treated as employed by a single employer. (III) Leased employees (as defined in section 414(n)(2) of such Code) shall be treated as employees of the person for whom they perform services to the extent they are so treated under section 414(n) of such Code. In applying sections of the Internal Revenue Code of 1986 under this clause, the Secretary shall rely upon regulations and decisions of the Secretary of the Treasury respecting such sections. (ii) Current employment status defined.--An individual has ``current employment status'' with an employer if the individual is an employee, is the employer, or is associated with the employer in a business relationship. (iii) Treatment of self-employed persons as employers.--The term ``employer'' includes a self-employed person. (F) Limitation on beneficiary liability.--An individual who is entitled to benefits under this title and is furnished an item or service for which such benefits are incorrectly paid is not liable for repayment of such benefits under this paragraph unless payment of such benefits was made to the individual. (2) Medicare secondary payer.-- (A) In general.--Payment under this title may not be made, except as provided in subparagraph (B), with respect to any item or service to the extent that-- (i) payment has been made, or can reasonably be expected to be made, with respect to the item or service as required under paragraph (1), or (ii) payment has been made or can reasonably be expected to be made under a workmen's compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self- insured plan) or under no fault insurance. In the subsection, the term ``primary plan'' means a group health plan or large group health plan, to the extent that clause (i) applies, and a workmen's compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance, to the extent that clause (ii) applies. An entity that engages in a business, trade, or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part. (B) Conditional payment.-- (i) Authority to make conditional payment.--The Secretary may make payment under this title with respect to an item or service if a primary plan described in subparagraph (A)(ii) has not made or cannot reasonably be expected to make payment with respect to such item or service promptly (as determined in accordance with regulations). Any such payment by the Secretary shall be conditioned on reimbursement to the appropriate Trust Fund in accordance with the succeeding provisions of this subsection. (ii) Repayment required.--Subject to paragraph (9), a primary plan, and an entity that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any payment made by the Secretary under this title with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service. A primary plan's responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient's compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan's insured, or by other means. If reimbursement is not made to the appropriate Trust Fund before the expiration of the 60-day period that begins on the date notice of, or information related to, a primary plan's responsibility for such payment or other information is received, the Secretary may charge interest (beginning with the date on which the notice or other information is received) on the amount of the reimbursement until reimbursement is made (at a rate determined by the Secretary in accordance with regulations of the Secretary of the Treasury applicable to charges for late payments). (iii) Action by united states.--In order to recover payment made under this title for an item or service, the United States may bring an action against any or all entities that are or were required or responsible (directly, as an insurer or self-insurer, as a third-party administrator, as an employer that sponsors or contributes to a group health plan, or large group health plan, or otherwise) to make payment with respect to the same item or service (or any portion thereof) under a primary plan. The United States may, in accordance with paragraph (3)(A) collect double damages against any such entity. In addition, the United States may recover under this clause from any entity that has received payment from a primary plan or from the proceeds of a primary plan's payment to any entity. The United States may not recover from a third- party administrator under this clause in cases where the third-party administrator would not be able to recover the amount at issue from the employer or group health plan and is not employed by or under contract with the employer or group health plan at the time the action for recovery is initiated by the United States or for whom it provides administrative services due to the insolvency or bankruptcy of the employer or plan. An action may not be brought by the United States under this clause with respect to payment owed unless the complaint is filed not later than 3 years after the date of the receipt of notice of a settlement, judgment, award, or other payment made pursuant to paragraph (8) relating to such payment owed. (iv) Subrogation rights.--The United States shall be subrogated (to the extent of payment made under this title for such an item or service) to any right under this subsection of an individual or any other entity to payment with respect to such item or service under a primary plan. (v) Waiver of rights.--The Secretary may waive (in whole or in part) the provisions of this subparagraph in the case of an individual claim if the Secretary determines that the waiver is in the best interests of the program established under this title. (vi) Claims-filing period.-- Notwithstanding any other time limits that may exist for filing a claim under an employer group health plan, the United States may seek to recover conditional payments in accordance with this subparagraph where the request for payment is submitted to the entity required or responsible under this subsection to pay with respect to the item or service (or any portion thereof) under a primary plan within the 3-year period beginning on the date on which the item or service was furnished. (vii) Use of website to determine final conditional reimbursement amount.-- (I) Notice to secretary of expected date of a settlement, judgment, etc.--In the case of a payment made by the Secretary pursuant to clause (i) for items and services provided to the claimant, the claimant or applicable plan (as defined in paragraph (8)(F)) may at any time beginning 120 days before the reasonably expected date of a settlement, judgment, award, or other payment, notify the Secretary that a payment is reasonably expected and the expected date of such payment. (II) Secretarial providing access to claims information through a website.--The Secretary shall maintain and make available to individuals to whom items and services are furnished under this title (and to authorized family or other representatives recognized under regulations and to an applicable plan which has obtained the consent of the individual) access to information on the claims for such items and services (including payment amounts for such claims), including those claims that relate to a potential settlement, judgment, award, or other payment. Such access shall be provided to an individual, representative, or plan through a website that requires a password to gain access to the information. The Secretary shall update the information on claims and payments on such website in as timely a manner as possible but not later than 15 days after the date that payment is made. Information related to claims and payments subject to the notice under subclause (I) shall be maintained and made available consistent with the following: (aa) The information shall be as complete as possible and shall include provider or supplier name, diagnosis codes (if any), dates of service, and conditional payment amounts. (bb) The information accurately identifies those claims and payments that are related to a potential settlement, judgment, award, or other payment to which the provisions of this subsection apply. (cc) The website provides a method for the receipt of secure electronic communications with the individual, representative, or plan involved. (dd) The website provides that information is transmitted from the website in a form that includes an official time and date that the information is transmitted. (ee) The website shall permit the individual, representative, or plan to download a statement of reimbursement amounts (in this clause referred to as a ``statement of reimbursement amount'') on payments for claims under this title relating to a potential settlement, judgment, award, or other payment. (III) Use of timely web download as basis for final conditional amount.--If an individual (or other claimant or applicable plan with the consent of the individual) obtains a statement of reimbursement amount from the website during the protected period as defined in subclause (V) and the related settlement, judgment, award or other payment is made during such period, then the last statement of reimbursement amount that is downloaded during such period and within 3 business days before the date of the settlement, judgment, award, or other payment shall constitute the final conditional amount subject to recovery under clause (ii) related to such settlement, judgment, award, or other payment. (IV) Resolution of discrepancies.--If the individual (or authorized representative) believes there is a discrepancy with the statement of reimbursement amount, the Secretary shall provide a timely process to resolve the discrepancy. Under such process the individual (or representative) must provide documentation explaining the discrepancy and a proposal to resolve such discrepancy. Within 11 business days after the date of receipt of such documentation, the Secretary shall determine whether there is a reasonable basis to include or remove claims on the statement of reimbursement. If the Secretary does not make such determination within the 11 business-day period, then the proposal to resolve the discrepancy shall be accepted. If the Secretary determines within such period that there is not a reasonable basis to include or remove claims on the statement of reimbursement, the proposal shall be rejected. If the Secretary determines within such period that there is a reasonable basis to conclude there is a discrepancy, the Secretary must respond in a timely manner by agreeing to the proposal to resolve the discrepancy or by providing documentation showing with good cause why the Secretary is not agreeing to such proposal and establishing an alternate discrepancy resolution. In no case shall the process under this subclause be treated as an appeals process or as establishing a right of appeal for a statement of reimbursement amount and there shall be no administrative or judicial review of the Secretary's determinations under this subclause. (V) Protected period.--In subclause (III), the term ``protected period'' means, with respect to a settlement, judgment, award or other payment relating to an injury or incident, the portion (if any) of the period beginning on the date of notice under subclause (I) with respect to such settlement, judgment, award, or other payment that is after the end of a Secretarial response period beginning on the date of such notice to the Secretary. Such Secretarial response period shall be a period of 65 days, except that such period may be extended by the Secretary for a period of an additional 30 days if the Secretary determines that additional time is required to address claims for which payment has been made. Such Secretarial response period shall be extended and shall not include any days for any part of which the Secretary determines (in accordance with regulations) that there was a failure in the claims and payment posting system and the failure was justified due to exceptional circumstances (as defined in such regulations). Such regulations shall define exceptional circumstances in a manner so that not more than 1 percent of the repayment obligations under this subclause would qualify as exceptional circumstances. (VI) Effective date.--The Secretary shall promulgate final regulations to carry out this clause not later than 9 months after the date of the enactment of this clause. (VII) Website including successor technology.--In this clause, the term ``website'' includes any successor technology. (viii) Right of appeal for secondary payer determinations relating to liability insurance (including self- insurance), no fault insurance, and workers' compensation laws and plans.-- The Secretary shall promulgate regulations establishing a right of appeal and appeals process, with respect to any determination under this subsection for a payment made under this title for an item or service for which the Secretary is seeking to recover conditional payments from an applicable plan (as defined in paragraph (8)(F)) that is a primary plan under subsection (A)(ii), under which the applicable plan involved, or an attorney, agent, or third party administrator on behalf of such plan, may appeal such determination. The individual furnished such an item or service shall be notified of the plan's intent to appeal such determination (C) Treatment of questionnaires.--The Secretary may not fail to make payment under subparagraph (A) solely on the ground that an individual failed to complete a questionnaire concerning the existence of a primary plan. (3) Enforcement.-- (A) Private cause of action.--There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A). (B) Reference to excise tax with respect to nonconforming group health plans.--For provision imposing an excise tax with respect to nonconforming group health plans, see section 5000 of the Internal Revenue Code of 1986. (C) Prohibition of financial incentives not to enroll in a group health plan or a large group health plan.--It is unlawful for an employer or other entity to offer any financial or other incentive for an individual entitled to benefits under this title not to enroll (or to terminate enrollment) under a group health plan or a large group health plan which would (in the case of such enrollment) be a primary plan (as defined in paragraph (2)(A)). Any entity that violates the previous sentence is subject to a civil money penalty of not to exceed $5,000 for each such violation. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). (4) Coordination of benefits.--Where payment for an item or service by a primary plan is less than the amount of the charge for such item or service and is not payment in full, payment may be made under this title (without regard to deductibles and coinsurance under this title) for the remainder of such charge, but-- (A) payment under this title may not exceed an amount which would be payable under this title for such item or service if paragraph (2)(A) did not apply; and (B) payment under this title, when combined with the amount payable under the primary plan, may not exceed-- (i) in the case of an item or service payment for which is determined under this title on the basis of reasonable cost (or other cost-related basis) or under section 1886, the amount which would be payable under this title on such basis, and (ii) in the case of an item or service for which payment is authorized under this title on another basis-- (I) the amount which would be payable under the primary plan (without regard to deductibles and coinsurance under such plan), or (II) the reasonable charge or other amount which would be payable under this title (without regard to deductibles and coinsurance under this title), whichever is greater. (5) Identification of secondary payer situations.-- (A) Requesting matching information.-- (i) Commissioner of social security.--The Commissioner of Social Security shall, not less often that annually, transmit to the Secretary of the Treasury a list of the names and TINs of medicare beneficiaries (as defined in section 6103(l)(12) of the Internal Revenue Code of 1986) and request that the Secretary disclose to the Commissioner the information described in subparagraph (A) of such section. (ii) Administrator.--The Administrator of the Centers for Medicare & Medicaid Services shall request, not less often than annually, the Commissioner of the Social Security Administration to disclose to the Administrator the information described in subparagraph (B) of section 6103(l)(12) of the Internal Revenue Code of 1986. (B) Disclosure to fiscal intermediaries and carriers.--In addition to any other information provided under this title to fiscal intermediaries and carriers, the Administrator shall disclose to such intermediaries and carriers (or to such a single intermediary or carrier as the Secretary may designate) the information received under subparagraph (A) for purposes of carrying out this subsection. (C) Contacting employers.-- (i) In general.--With respect to each individual (in this subparagraph referred to as an ``employee'') who was furnished a written statement under section 6051 of the Internal Revenue Code of 1986 by a qualified employer (as defined in section 6103(l)(12)(E)(iii) of such Code), as disclosed under subparagraph (B), the appropriate fiscal intermediary or carrier shall contact the employer in order to determine during what period the employee or employee's spouse may be (or have been) covered under a group health plan of the employer and the nature of the coverage that is or was provided under the plan (including the name, address, and identifying number of the plan). (ii) Employer response.--Within 30 days of the date of receipt of the inquiry, the employer shall notify the intermediary or carrier making the inquiry as to the determinations described in clause (i). An employer (other than a Federal or other governmental entity) who willfully or repeatedly fails to provide timely and accurate notice in accordance with the previous sentence shall be subject to a civil money penalty of not to exceed $1,000 for each individual with respect to which such an inquiry is made. The provision of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). (D) Obtaining information from beneficiaries.--Before an individual applies for benefits under part A or enrolls under part B, the Administrator shall mail the individual a questionnaire to obtain information on whether the individual is covered under a primary plan and the nature of the coverage provided under the plan, including the name, address, and identifying number of the plan. (E) End date.--The provisions of this paragraph shall not apply to information required to be provided on or after July 1, 2016. (6) Screening requirements for providers and suppliers.-- (A) In general.--Notwithstanding any other provision of this title, no payment may be made for any item or service furnished under part B unless the entity furnishing such item or service completes (to the best of its knowledge and on the basis of information obtained from the individual to whom the item or service is furnished) the portion of the claim form relating to the availability of other health benefit plans. (B) Penalties.--An entity that knowingly, willfully, and repeatedly fails to complete a claim form in accordance with subparagraph (A) or provides inaccurate information relating to the availability of other health benefit plans on a claim form under such subparagraph shall be subject to a civil money penalty of not to exceed $2,000 for each such incident. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). (7) Required submission of information by group health plans.-- (A) Requirement.--On and after the first day of the first calendar quarter beginning after the date that is 1 year after the date of the enactment of this paragraph, an entity serving as an insurer or third party administrator for a group health plan, as defined in paragraph (1)(A)(v), and, in the case of a group health plan that is self-insured and self- administered, a plan administrator or fiduciary, shall-- (i) secure from the plan sponsor and plan participants such information as the Secretary shall specify for the purpose of identifying situations where the group health plan is or has been-- (I) a primary plan to the program under this title; or (II) for calendar quarters beginning on or after January 1, 2020, a primary payer with respect to benefits relating to prescription drug coverage under part D; and (ii) submit such information to the Secretary in a form and manner (including frequency) specified by the Secretary. (B) Enforcement.-- (i) In general.--An entity, a plan administrator, or a fiduciary described in subparagraph (A) that fails to comply with the requirements under such subparagraph shall be subject to a civil money penalty of $1,000 for each day of noncompliance for each individual for which the information under such subparagraph should have been submitted. The provisions of subsections (e) and (k) of section 1128A shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). A civil money penalty under this clause shall be in addition to any other penalties prescribed by law and in addition to any Medicare secondary payer claim under this title with respect to an individual. (ii) Deposit of amounts collected.-- Any amounts collected pursuant to clause (i) shall be deposited in the Federal Hospital Insurance Trust Fund under section 1817. (C) Sharing of information.--Notwithstanding any other provision of law, under terms and conditions established by the Secretary, the Secretary-- (i) shall share information on entitlement under Part A and enrollment under Part B under this title with entities, plan administrators, and fiduciaries described in subparagraph (A); (ii) may share the entitlement and enrollment information described in clause (i) with entities and persons not described in such clause; and (iii) may share information collected under this paragraph as necessary for purposes of the proper coordination of benefits. (D) Implementation.--Notwithstanding any other provision of law, the Secretary may implement this paragraph by program instruction or otherwise. (8) Required submission of information by or on behalf of liability insurance (including self- insurance), no fault insurance, and workers' compensation laws and plans.-- (A) Requirement.--On and after the first day of the first calendar quarter beginning after the date that is 18 months after the date of the enactment of this paragraph, an applicable plan shall-- (i) determine whether a claimant (including an individual whose claim is unresolved) is entitled to benefits under the program under this title on any basis; and (ii) if the claimant is determined to be so entitled, submit the information described in subparagraph (B) with respect to the claimant to the Secretary in a form and manner (including frequency) specified by the Secretary. (B) Required information.--The information described in this subparagraph is-- (i) the identity of the claimant for which the determination under subparagraph (A) was made; and (ii) such other information as the Secretary shall specify in order to enable the Secretary to make an appropriate determination concerning coordination of benefits, including any applicable recovery claim. Not later than 18 months after the date of enactment of this sentence, the Secretary shall modify the reporting requirements under this paragraph so that an applicable plan in complying with such requirements is permitted but not required to access or report to the Secretary beneficiary social security account numbers or health identification claim numbers, except that the deadline for such modification shall be extended by one or more periods (specified by the Secretary) of up to 1 year each if the Secretary notifies the committees of jurisdiction of the House of Representatives and of the Senate that the prior deadline for such modification, without such extension, threatens patient privacy or the integrity of the secondary payer program under this subsection. Any such deadline extension notice shall include information on the progress being made in implementing such modification and the anticipated implementation date for such modification. (C) Timing.--Information shall be submitted under subparagraph (A)(ii) within a time specified by the Secretary after the claim is resolved through a settlement, judgment, award, or other payment (regardless of whether or not there is a determination or admission of liability). (D) Claimant.--For purposes of subparagraph (A), the term ``claimant'' includes-- (i) an individual filing a claim directly against the applicable plan; and (ii) an individual filing a claim against an individual or entity insured or covered by the applicable plan. (E) Enforcement.-- (i) In general.--An applicable plan that fails to comply with the requirements under subparagraph (A) with respect to any claimant may be subject to a civil money penalty of up to $1,000 for each day of noncompliance with respect to each claimant. The provisions of subsections (e) and (k) of section 1128A shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). A civil money penalty under this clause shall be in addition to any other penalties prescribed by law and in addition to any Medicare secondary payer claim under this title with respect to an individual. (ii) Deposit of amounts collected.-- Any amounts collected pursuant to clause (i) shall be deposited in the Federal Hospital Insurance Trust Fund. (F) Applicable plan.--In this paragraph, the term ``applicable plan'' means the following laws, plans, or other arrangements, including the fiduciary or administrator for such law, plan, or arrangement: (i) Liability insurance (including self-insurance). (ii) No fault insurance. (iii) Workers' compensation laws or plans. (G) Sharing of information.--The Secretary may share information collected under this paragraph as necessary for purposes of the proper coordination of benefits. (H) Implementation.--Notwithstanding any other provision of law, the Secretary may implement this paragraph by program instruction or otherwise. (I) Regulations.--Not later than 60 days after the date of the enactment of this subparagraph, the Secretary shall publish a notice in the Federal Register soliciting proposals, which will be accepted during a 60- day period, for the specification of practices for which sanctions will and will not be imposed under subparagraph (E), including not imposing sanctions for good faith efforts to identify a beneficiary pursuant to this paragraph under an applicable entity responsible for reporting information. After considering the proposals so submitted, the Secretary, in consultation with the Attorney General, shall publish in the Federal Register, including a 60-day period for comment, proposed specified practices for which such sanctions will and will not be imposed. After considering any public comments received during such period, the Secretary shall issue final rules specifying such practices. (9) Exception.-- (A) In general.--Clause (ii) of paragraph (2)(B) and any reporting required by paragraph (8) shall not apply with respect to any settlement, judgment, award, or other payment by an applicable plan arising from liability insurance (including self-insurance) and from alleged physical trauma-based incidents (excluding alleged ingestion, implantation, or exposure cases) constituting a total payment obligation to a claimant of not more than the single threshold amount calculated by the Secretary under subparagraph (B) for the year involved. (B) Annual computation of threshold.-- (i) In general.--Not later than November 15 before each year, the Secretary shall calculate and publish a single threshold amount for settlements, judgments, awards, or other payments for obligations arising from liability insurance (including self-insurance) and for alleged physical trauma-based incidents (excluding alleged ingestion, implantation, or exposure cases) subject to this section for that year. The annual single threshold amount for a year shall be set such that the estimated average amount to be credited to the Medicare trust funds of collections of conditional payments from such settlements, judgments, awards, or other payments arising from liability insurance (including self- insurance) and for such alleged incidents subject to this section shall equal the estimated cost of collection incurred by the United States (including payments made to contractors) for a conditional payment arising from liability insurance (including self-insurance) and for such alleged incidents subject to this section for the year. At the time of calculating, but before publishing, the single threshold amount for 2014, the Secretary shall inform, and seek review of, the Comptroller General of the United States with regard to such amount. (ii) Publication.--The Secretary shall include, as part of such publication for a year-- (I) the estimated cost of collection incurred by the United States (including payments made to contractors) for a conditional payment arising from liability insurance (including self- insurance) and for such alleged incidents; and (II) a summary of the methodology and data used by the Secretary in computing such threshold amount and such cost of collection. (C) Exclusion of ongoing expenses.--For purposes of this paragraph and with respect to a settlement, judgment, award, or other payment not otherwise addressed in clause (ii) of paragraph (2)(B) that includes ongoing responsibility for medical payments (excluding settlements, judgments, awards, or other payments made by a workers' compensation law or plan or no fault insurance), the amount utilized for calculation of the threshold described in subparagraph (A) shall include only the cumulative value of the medical payments made under this title. (D) Report to congress.--Not later than November 15 before each year, the Secretary shall submit to the Congress a report on the single threshold amount for settlements, judgments, awards, or other payments for conditional payment obligations arising from liability insurance (including self-insurance) and alleged incidents described in subparagraph (A) for that year and on the establishment and application of similar thresholds for such payments for conditional payment obligations arising from worker compensation cases and from no fault insurance cases subject to this section for the year. For each such report, the Secretary shall-- (i) calculate the threshold amount by using the methodology applicable to certain liability claims described in subparagraph (B); and (ii) include a summary of the methodology and data used in calculating each threshold amount and the amount of estimated savings under this title achieved by the Secretary implementing each such threshold. (c) No payment may be made under part B for any expenses incurred for-- (1) a drug product-- (A) which is described in section 107(c)(3) of the Drug Amendments of 1962, (B) which may be dispensed only upon prescription, (C) for which the Secretary has issued a notice of an opportunity for a hearing under subsection (e) of section 505 of the Federal Food, Drug, and Cosmetic Act on a proposed order of the Secretary to withdraw approval of an application for such drug product under such section because the Secretary has determined that the drug is less than effective for all conditions of use prescribed, recommended, or suggested in its labeling, and (D) for which the Secretary has not determined there is a compelling justification for its medical need; and (2) any other drug product-- (A) which is identical, related, or similar (as determined in accordance with section 310.6 of title 21 of the Code of Federal Regulations) to a drug product described in paragraph (1), and (B) for which the Secretary has not determined there is a compelling justification for its medical need, until such time as the Secretary withdraws such proposed order. (d) For purposes of subsection (a)(1)(A), in the case of any item or service that is required to be provided pursuant to section 1867 to an individual who is entitled to benefits under this title, determinations as to whether the item or service is reasonable and necessary shall be made on the basis of the information available to the treating physician or practitioner (including the patient's presenting symptoms or complaint) at the time the item or service was ordered or furnished by the physician or practitioner (and not on the patient's principal diagnosis). When making such determinations with respect to such an item or service, the Secretary shall not consider the frequency with which the item or service was provided to the patient before or after the time of the admission or visit. (e)(1) No payment may be made under this title with respect to any item or service (other than an emergency item or service, not including items or services furnished in an emergency room of a hospital) furnished-- (A) by an individual or entity during the period when such individual or entity is excluded pursuant to section 1128, 1128A, 1156 or 1842(j)(2) from participation in the program under this title; or (B) at the medical direction or on the prescription of a physician during the period when he is excluded pursuant to section 1128, 1128A, 1156 or 1842(j)(2) from participation in the program under this title and when the person furnishing such item or service knew or had reason to know of the exclusion (after a reasonable time period after reasonable notice has been furnished to the person). (2) Where an individual eligible for benefits under this title submits a claim for payment for items or services furnished by an individual or entity excluded from participation in the programs under this title, pursuant to section 1128, 1128A, 1156, 1160 (as in effect on September 2, 1982), 1842(j)(2), 1862(d) (as in effect on the date of the enactment of the Medicare and Medicaid Patient and Program Protection Act of 1987), or l866, and such beneficiary did not know or have reason to know that such individual or entity was so excluded, then, to the extent permitted by this title, and notwithstanding such exclusion, payment shall be made for such items or services. In each such case the Secretary shall notify the beneficiary of the exclusion of the individual or entity furnishing the items or services. Payment shall not be made for items or services furnished by an excluded individual or entity to a beneficiary after a reasonable time (as determined by the Secretary in regulations) after the Secretary has notified the beneficiary of the exclusion of that individual or entity. (f) The Secretary shall establish utilization guidelines for the determination of whether or not payment may be made, consistent with paragraph (1)(A) of subsection (a), under part A or part B for expenses incurred with respect to the provision of home health services, and shall provide for the implementation of such guidelines through a process of selective postpayment coverage review by intermediaries or otherwise. (g) The Secretary shall, in making the determinations under paragraphs (1) and (9) of subsection (a), and for the purposes of promoting the effective, efficient, and economical delivery of health care services, and of promoting the quality of services of the type for which payment may be made under this title, enter into contracts with quality improvement organizations pursuant to part B of title XI of this Act. (h)(1) The Secretary-- (A) shall waive the application of subsection (a)(22) in cases in which-- (i) there is no method available for the submission of claims in an electronic form; or (ii) the entity submitting the claim is a small provider of services or supplier; and (B) may waive the application of such subsection in such unusual cases as the Secretary finds appropriate. (2) For purposes of this subsection, the term ``small provider of services or supplier'' means-- (A) a provider of services with fewer than 25 full- time equivalent employees; or (B) a physician, practitioner, facility, or supplier (other than provider of services) with fewer than 10 full-time equivalent employees. (i) In order to supplement the activities of the Medicare Payment Advisory Commission under section 1886(e) in assessing the safety, efficacy, and cost-effectiveness of new and existing medical procedures, the Secretary may carry out, or award grants or contracts for, original research and experimentation of the type described in clause (ii) of section 1886(e)(6)(E) with respect to such a procedure if the Secretary finds that-- (1) such procedure is not of sufficient commercial value to justify research and experimentation by a commercial organization; (2) research and experimentation with respect to such procedure is not of a type that may appropriately be carried out by an institute, division, or bureau of the National Institutes of Health; and (3) such procedure has the potential to be more cost- effective in the treatment of a condition than procedures currently in use with respect to such condition. (j)(1) Any advisory committee appointed to advise the Secretary on matters relating to the interpretation, application, or implementation of subsection (a)(1) shall assure the full participation of a nonvoting member in the deliberations of the advisory committee, and shall provide such nonvoting member access to all information and data made available to voting members of the advisory committee, other than information that-- (A) is exempt from disclosure pursuant to subsection (a) of section 552 of title 5, United States Code, by reason of subsection (b)(4) of such section (relating to trade secrets); or (B) the Secretary determines would present a conflict of interest relating to such nonvoting member. (2) If an advisory committee described in paragraph (1) organizes into panels of experts according to types of items or services considered by the advisory committee, any such panel of experts may report any recommendation with respect to such items or services directly to the Secretary without the prior approval of the advisory committee or an executive committee thereof. (k)(1) Subject to paragraph (2), a group health plan (as defined in subsection (a)(1)(A)(v)) providing supplemental or secondary coverage to individuals also entitled to services under this title shall not require a medicare claims determination under this title for dental benefits specifically excluded under subsection (a)(12) as a condition of making a claims determination for such benefits under the group health plan. (2) A group health plan may require a claims determination under this title in cases involving or appearing to involve inpatient dental hospital services or dental services expressly covered under this title pursuant to actions taken by the Secretary. (l) National and Local Coverage Determination Process.-- (1) Factors and evidence used in making national coverage determinations.--The Secretary shall make available to the public the factors considered in making national coverage determinations of whether an item or service is reasonable and necessary. The Secretary shall develop guidance documents to carry out this paragraph in a manner similar to the development of guidance documents under section 701(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 371(h)). (2) Timeframe for decisions on requests for national coverage determinations.--In the case of a request for a national coverage determination that-- (A) does not require a technology assessment from an outside entity or deliberation from the Medicare Coverage Advisory Committee, the decision on the request shall be made not later than 6 months after the date of the request; or (B) requires such an assessment or deliberation and in which a clinical trial is not requested, the decision on the request shall be made not later than 9 months after the date of the request. (3) Process for public comment in national coverage determinations.-- (A) Period for proposed decision.--Not later than the end of the 6-month period (or 9-month period for requests described in paragraph (2)(B)) that begins on the date a request for a national coverage determination is made, the Secretary shall make a draft of proposed decision on the request available to the public through the Internet website of the Centers for Medicare & Medicaid Services or other appropriate means. (B) 30-day period for public comment.-- Beginning on the date the Secretary makes a draft of the proposed decision available under subparagraph (A), the Secretary shall provide a 30-day period for public comment on such draft. (C) 60-day period for final decision.--Not later than 60 days after the conclusion of the 30-day period referred to under subparagraph (B), the Secretary shall-- (i) make a final decision on the request; (ii) include in such final decision summaries of the public comments received and responses to such comments; (iii) make available to the public the clinical evidence and other data used in making such a decision when the decision differs from the recommendations of the Medicare Coverage Advisory Committee; and (iv) in the case of a final decision under clause (i) to grant the request for the national coverage determination, the Secretary shall assign a temporary or permanent code (whether existing or unclassified) and implement the coding change. (4) Consultation with outside experts in certain national coverage determinations.--With respect to a request for a national coverage determination for which there is not a review by the Medicare Coverage Advisory Committee, the Secretary shall consult with appropriate outside clinical experts. (5) Local coverage determination process.-- (A) Plan to promote consistency of coverage determinations.--The Secretary shall develop a plan to evaluate new local coverage determinations to determine which determinations should be adopted nationally and to what extent greater consistency can be achieved among local coverage determinations. (B) Consultation.--The Secretary shall require the fiscal intermediaries or carriers providing services within the same area to consult on all new local coverage determinations within the area. (C) Dissemination of information.--The Secretary should serve as a center to disseminate information on local coverage determinations among fiscal intermediaries and carriers to reduce duplication of effort. (D) Local coverage determinations.--The Secretary shall require each Medicare administrative contractor that develops a local coverage determination to make available on the Internet website of such contractor and on the Medicare Internet website, at least 45 days before the effective date of such determination, the following information: (i) Such determination in its entirety. (ii) Where and when the proposed determination was first made public. (iii) Hyperlinks to the proposed determination and a response to comments submitted to the contractor with respect to such proposed determination. (iv) A summary of evidence that was considered by the contractor during the development of such determination and a list of the sources of such evidence. (v) An explanation of the rationale that supports such determination. (6) National and local coverage determination defined.--For purposes of this subsection-- (A) National coverage determination.--The term ``national coverage determination'' means a determination by the Secretary with respect to whether or not a particular item or service is covered nationally under this title. (B) Local coverage determination.--The term ``local coverage determination'' has the meaning given that in section 1869(f)(2)(B). (m) Coverage of Routine Costs Associated With Certain Clinical Trials of Category A Devices.-- (1) In general.--In the case of an individual entitled to benefits under part A, or enrolled under part B, or both who participates in a category A clinical trial, the Secretary shall not exclude under subsection (a)(1) payment for coverage of routine costs of care (as defined by the Secretary) furnished to such individual in the trial. (2) Category a clinical trial.--For purposes of paragraph (1), a ``category A clinical trial'' means a trial of a medical device if-- (A) the trial is of an experimental/ investigational (category A) medical device (as defined in regulations under section 405.201(b) of title 42, Code of Federal Regulations (as in effect as of September 1, 2003)); (B) the trial meets criteria established by the Secretary to ensure that the trial conforms to appropriate scientific and ethical standards; and (C) in the case of a trial initiated before January 1, 2010, the device involved in the trial has been determined by the Secretary to be intended for use in the diagnosis, monitoring, or treatment of an immediately life-threatening disease or condition. (n) Requirement of a Surety Bond for Certain Providers of Services and Suppliers.-- (1) In general.--The Secretary may require a provider of services or supplier described in paragraph (2) to provide the Secretary on a continuing basis with a surety bond in a form specified by the Secretary in an amount (not less than $50,000) that the Secretary determines is commensurate with the volume of the billing of the provider of services or supplier. The Secretary may waive the requirement of a bond under the preceding sentence in the case of a provider of services or supplier that provides a comparable surety bond under State law. (2) Provider of services or supplier described.--A provider of services or supplier described in this paragraph is a provider of services or supplier the Secretary determines appropriate based on the level of risk involved with respect to the provider of services or supplier, and consistent with the surety bond requirements under sections 1834(a)(16)(B) and 1861(o)(7)(C). (o) Suspension of Payments Pending Investigation of Credible Allegations of Fraud.-- (1) In general.--The Secretary may suspend payments to a provider of services or supplier under this title pending an investigation of a credible allegation of fraud against the provider of services or supplier, unless the Secretary determines there is good cause not to suspend such payments. (2) Consultation.--The Secretary shall consult with the Inspector General of the Department of Health and Human Services in determining whether there is a credible allegation of fraud against a provider of services or supplier. (3) Promulgation of regulations.--The Secretary shall promulgate regulations to carry out this subsection, section 1860D-12(b)(7) (including as applied pursuant to section 1857(f)(3)(D)), and section 1903(i)(2)(C). (4) Credible allegation of fraud.--In carrying out this subsection, section 1860D-12(b)(7) (including as applied pursuant to section 1857(f)(3)(D)), and section 1903(i)(2)(C), a fraud hotline tip (as defined by the Secretary) without further evidence shall not be treated as sufficient evidence for a credible allegation of fraud. * * * * * * * medicare improvement fund Sec. 1898. (a) Establishment.--The Secretary shall establish under this title a Medicare Improvement Fund (in this section referred to as the `Fund') which shall be available to the Secretary to make improvements under the original Medicare fee-for-service program under parts A and B for individuals entitled to, or enrolled for, benefits under part or enrolled under part B including adjustments to payments for items and services furnished by providers of services and suppliers under such original Medicare fee-for-service program. (b) Funding.-- (1) In general.--There shall be available to the Fund, for expenditures from the Fund for services furnished [during and after fiscal year 2021, $0] during and after fiscal year 2024, $5,000,000. (2) Payment from trust funds.--The amount specified under paragraph (1) shall be available to the Fund, as expenditures are made from the Fund, from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund in such proportion as the Secretary determines appropriate. (3) Funding limitation.--Amounts in the Fund shall be available in advance of appropriations but only if the total amount obligated from the Fund does not exceed the amount available to the Fund under paragraph (1). The Secretary may obligate funds from the Fund only if the Secretary determines (and the Chief Actuary of the Centers for Medicare & Medicaid Services and the appropriate budget officer certify) that there are available in the Fund sufficient amounts to cover all such obligations incurred consistent with the previous sentence. (4) No effect on payments in subsequent years.--In the case that expenditures from the Fund are applied to, or otherwise affect, a payment rate for an item or service under this title for a year, the payment rate for such item or service shall be computed for a subsequent year as if such application or effect had never occurred. * * * * * * * ---------- PUBLIC LAW 113-198 SECTION 1. EXTENSION OF ENFORCEMENT INSTRUCTION ON SUPERVISION REQUIREMENTS FOR OUTPATIENT THERAPEUTIC SERVICES IN CRITICAL ACCESS AND SMALL RURAL HOSPITALS THROUGH [2017] 2021. The Secretary of Health and Human Services shall continue to apply through calendar years 2014, 2015, 2016, [and 2017], 2017, 2020, and 2021 the enforcement instruction described in the notice of the Centers for Medicare & Medicaid Services entitled ``Enforcement Instruction on Supervision Requirements for Outpatient Therapeutic Services in Critical Access and Small Rural Hospitals for CY 2013'', dated November 1, 2012 (providing for an exception to the restatement and clarification under the final rulemaking changes to the Medicare hospital outpatient prospective payment system and calendar year 2009 payment rates (published in the Federal Register on November 18, 2008, 73 Fed. Reg. 68702 through 68704) with respect to requirements for direct supervision by physicians for therapeutic hospital outpatient services). * * * * * * * [all]