To amend title XVIII of the Social Security Act to establish procedures for determining payment amounts for new clinical diagnostic laboratory tests for which payment is made under the medicare program.

June 20, 2001

Mr. HATCH (for himself and Mr. KERRY) introduced the following bill; which was read twice and referred to the Committee on Finance

To amend title XVIII of the Social Security Act to establish procedures for determining payment amounts for new clinical diagnostic laboratory tests for which payment is made under the medicare program.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Medicare Patient Access to Preventive and Diagnostic Tests Act'.

SEC. 2. CODING AND PAYMENT PROCEDURES FOR NEW CLINICAL DIAGNOSTIC LABORATORY TESTS UNDER MEDICARE.

(a) DETERMINING PAYMENT BASIS FOR NEW LAB TESTS- Section 1833(h) of the Social Security Act (42 U.S.C. 1395l(h)) is amended by adding at the end the following new paragraph:

`(9)(A) The Secretary shall establish 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, 2002 (in this subsection referred to as `new tests'). Such procedures shall provide that--

`(i) the payment amount for such a test will be established only on--

`(I) the basis described in paragraph (10)(A); or

`(II) the basis described in paragraph (10)(B); and

`(ii) the Secretary shall determine whether the payment amount for such a test is established on the basis described in paragraph (10)(A) or the basis described in paragraph (10)(B) only after the process described in subparagraph (B) has been completed with respect to such test.

`(B) Determinations under subparagraph (A)(ii) shall be made only after the Secretary--

`(i) makes available to the public (through an Internet site and other appropriate mechanisms) a list that includes any such test for which the establishment of a payment amount under paragraph (10) 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 from the public on the appropriate basis under paragraph (10) for establishing payment amounts for the tests on such list;

`(iii) not less than 30 calendar days after publication of such notice, convenes a meeting to receive such comments and recommendations, with such meeting--

`(I) including representatives of each entity within the Health Care Financing Administration (in this paragraph referred to as `HCFA') that will be involved in determining the basis on which payment amounts will be established for such tests under paragraph (10) and implementing such determinations;

`(II) encouraging the participation of interested parties, including beneficiaries, device manufacturers, clinical laboratories, laboratory professionals, pathologists, and prescribing physicians, through outreach activities; and

`(III) affording opportunities for interactive dialogue between representatives of HCFA and the public;

`(iv) makes minutes of such meeting available to the public (through an Internet site and other appropriate mechanisms) not later than 15 calendar days after such meeting; -

`(v) taking into account the comments and recommendations received at such meeting, develops and makes available to the public (through an Internet site and other appropriate mechanisms) a list of proposed determinations with respect to the appropriate basis for establishing a payment amount under paragraph (10) for each such code, together with an explanation of the reasons for each such determination, and the data on which the determination is based;

`(vi) on the same day such list is made available, causes to have published in the Federal Register notice of a public meeting to receive comments and recommendations from the public on the proposed determinations;

`(vii) not later than August 1 of each year, but at least 30 calendar days after publication of such notice, convenes a meeting to receive such comments and recommendations, with such meeting being conducted in the same manner as the meeting under clause (iii);

`(viii) makes a transcript of such meeting available to the public (through an Internet site and other appropriate mechanisms) as soon as is practicable after such meeting; and

`(ix) taking into account the comments and recommendations received at such meeting, develops and makes available to the public (through an Internet site and other appropriate mechanisms) a list of final determinations of whether the payment amount for such tests will be determined on the basis described in paragraph (10)(A) or the basis described in paragraph (10)(B), together with the rationale for each such determination, the data on which the determination is based, and responses to comments and suggestions received from the public.

`(C) Under the procedures established pursuant to subparagraph (A), the Secretary shall--

`(i) identify the rules and assumptions to be applied by the Secretary in considering and making determinations of whether the payment amount for a new test should be established on the basis described in paragraph (10)(A) or the basis described in paragraph (10)(B);

`(ii) make available to the public the data (other than proprietary data) considered in making such determinations; and

`(iii) provide for a mechanism under which--

`(I) an interested party may request an administrative review of an adverse determination;

`(II) upon the request of an interested party, an administrative review is conducted with respect to an adverse determination; and

`(III) such determination is revised, as necessary, to reflect the results of such review.

`(D) For purposes of this subsection--

`(i) the term `HCPCS' refers to the Health Care Financing Administration Common Procedure Coding System; and

`(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).

`(10)(A) Notwithstanding paragraphs (1), (2), and (4), if a new test is clinically similar to a test for which a fee schedule amount has been established under paragraph (5), the Secretary shall pay the same fee schedule amount for the new test.

`(B)(i) Notwithstanding paragraphs (1), (2), (4), and (5), if a new test is not clinically similar to a test for which a fee schedule has been established under paragraph (5), payment under this subsection for such test shall be made on the basis of the lesser of--

`(I) the actual charge for the test; or

`(II) an amount equal to 60 percent (or in the case of a test performed by a qualified hospital (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 the test for a locality or area for the year (determined without regard to the year referred to in paragraph (2)(A)(i), or any national limitation amount under paragraph (4)(B), and adjusted annually by the percentage increase or decrease under paragraph (2)(A)(i));

until the beginning of the third full calendar year that begins on or after the date on which an HCPCS code is first assigned with respect to such test, or, if later, the beginning of the first calendar year that begins on or after the date on which the Secretary determines that there are sufficient claims data to establish a fee schedule amount pursuant to clause (ii).

`(ii) Notwithstanding paragraphs (2), (4), and (5), the fee schedule amount for a clinical diagnostic laboratory test described in clause (i) that is performed--

`(I) during the first calendar year after clause (i) ceases to apply to such test, shall be an amount equal to the national limitation amount that the Secretary determines (consistent with clause (iii)) would have applied to such test under paragraph (4)(B)(viii) during the preceding calendar year, adjusted by the percentage increase or decrease determined under paragraph (2)(A)(i) for such first calendar year; and

`(II) during a subsequent year, is the fee schedule amount determined under this clause for the preceding year, adjusted by the percentage increase or decrease that applies under paragraph (5)(A) for such year.

`(iii) For purposes of clause (ii)(I), the national limitation amount for a test shall be set at 100 percent of the median of the payment amounts determined under clause (ii)(I) for all payment localities or areas for the last calendar year for which payment for such test was determined under clause (i).

`(iv) Nothing in clause (ii) shall be construed as prohibiting the Secretary from applying (or authorizing the application of) the comparability provisions of the first sentence of such section 1842(b)(3) with respect to amounts determined under such clause.'.

(b) ESTABLISHMENT OF NATIONAL FEE SCHEDULE AMOUNTS-

(1) IN GENERAL- Section 1833(h) of the Social Security Act, as amended by subsection (a), is amended--

(A) in paragraph (2), by striking `paragraph (4)' and inserting `paragraphs (4), (5), and (10)';----

(B) in paragraph (4)(B)(viii), by inserting `and before January 1, 2002,' after `December 31, 1997,';

(C) by redesignating paragraphs (5), (6), and (7), as paragraphs (6), (7), and (8), respectively; and

(D) by inserting after paragraph (4) the following new paragraph:

`(5) Notwithstanding paragraphs (2) and (4), the Secretary shall set the fee schedule amount for a test (other than a test to which paragraph (10)(B) applies) at--

`(A) for tests performed during 2002, an amount equal to the national limitation amount for that test for 2001, and adjusted by the percentage increase or decrease determined under paragraph (2)(A)(i) for such year; and

`(B) for tests performed during a year after 2002, the amount determined under this subparagraph for the preceding year, adjusted by the percentage increase or decrease determined under paragraph (2)(A)(i) for such year.'.

(2) CONFORMING AMENDMENTS- Paragraphs (1)(D)(i) and (2)(D)(i) of section 1833(a) of the Social Security Act (42 U.S.C. 1395l(a)) are each amended by striking `the limitation amount for that test determined under subsection (h)(4)(B),'.

(c) MECHANISM FOR REVIEW OF ADEQUACY OF PAYMENT AMOUNTS- Section 1833(h) of the Social Security Act (42 U.S.C. 1395l(h)), as amended by subsection (b), is amended by adding at the end the following:

`(11) The Secretary shall establish a mechanism under which--

`(A) an interested party may request a timely review of the adequacy of the existing payment amount under this subsection for a particular test; and

`(B) upon the receipt of such a request, a timely review is carried out.'.

(d) USE OF INHERENT REASONABLENESS AUTHORITY- Section 1842(b)(8) of the Social Security Act (42 U.S.C. 1395u(b)(8)) is amended by adding at the end the following:

`(E)(i) The Secretary may not delegate the authority to make determinations with respect to clinical diagnostic laboratory tests under this paragraph to a regional office of the Health Care Financing Administration or to an entity with a contract under subsection (a).

`(ii) In making determinations with respect to clinical diagnostic laboratory tests under this paragraph, the Secretary--

`(I) shall base such determinations on data from affected payment localities and all sites of care; and

`(II) may not use a methodology that assigns undue weight to the prevailing charge levels for any 1 type of entity with a contract under subsection (a).'.

(e) PROHIBITION- Section 1833(h) of the Social Security Act (42 U.S.C. 1395l(h)), as amended by subsection (c), is amended by adding at the end the following new paragraph:

`(12)(1) Notwithstanding the preceding provisions of this subsection, the Secretary may not establish a payment level for a new test that is lower than the level for an existing, clinically similar test solely on the basis that the new test may be performed by a laboratory with a certificate of waiver under section 353(d)(2) of the Public Health Service Act (42 U.S.C. 263a(d)(2)).

`(2) Nothing in paragraph (1) shall be construed to limit the authority of the Secretary to establish a payment level for a new test that is lower than the level for an existing, clinically similar test if such payment level is determined on a basis other than the basis described in such paragraph or on more than 1 basis.'.

(f) EFFECTIVE DATES-

(1) ESTABLISHMENT OF PROCEDURES- The Secretary of Health and Human Services shall establish the procedures required to implement paragraphs (9), (10), (11), and (12) of section 1833(h) of the Social Security Act (42 U.S.C. 1395l(h)), as added by this section, by not later than January 1, 2002.

(2) INHERENT REASONABLENESS- The amendments made by subsection (d) shall apply to determinations made on or after the date of enactment of this Act.

END