2000 
[DOCID: f:s1066is.txt]






107th CONGRESS
  1st Session
                                S. 1066

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.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             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

_______________________________________________________________________

                                 A BILL


 
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) Notw
1d27
ithstanding 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.
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