To amend title XVIII of the Social Security Act to provide for equitable payments for health care services furnished to Medicare beneficiaries in hospital outpatient departments, and for other purposes.

Summary: Beneficiary Access to Care Act of 2002 - Amends title XVIII (Medicare) of the Social Security Act with respect to the prospective payment system for hospital outpatient department (OPD) services and: (1) duration of the period for which transitional, pass-through payments are made for drugs and biologicals; (2) ambulatory payment classifications for drugs and biologicals after the period of transitional pass-through payments; and (3) elimination of the limit on reductions for transitional, pass-through payments for drugs and biologicals.Directs the Comptroller General to study and report to Congress on pharmacy services used to provide cancer drug therapies in hospital outpatient departments.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Beneficiary Access to Care Act of 
2002''.

SEC. 2. FINDINGS.

    The Congress finds and declares that--
            (1) payments for drugs and biologicals under the Medicare 
        outpatient hospital prospective payment system should be based 
        on all of the costs of delivering outpatient pharmacy therapy 
        (involving the drug or biological) in the outpatient hospital 
        setting, including (but not limited to) acquisition costs, and 
        the costs associated with storage, handling, processing, 
        quality control, disposal, and pharmacy overhead should be 
        fully accounted for under such system;
            (2) the payment rates proposed in Centers for Medicare & 
        Medicaid Services, Medicare Program; Changes to the Hospital 
        Outpatient Prospective Payment System and Calendar Year 2003 
        Payment Rates; and Changes to Payment Suspension for Unified 
        Cost Report; Proposed Rule, (67 Federal Register 52092 et seq. 
        (August 9, 2002)) do not fully reflect such costs;
            (3) the methodology implied by the statute establishing 
        such system and used by the Centers for Medicare & Medicaid 
        Services to estimate acquisition costs is flawed because it 
        derives such estimates from what hospitals charged for 
        individual products on patient bills without appropriate 
        adjustment for hospital charging practices;
            (4) this methodology substantially underestimates the 
        acquisition costs of newer, more expensive drugs and 
        biologicals;
            (5) the methodology used to develop such rates produces 
        erratic and unreliable results, with--
                    (A) the payment rate for one product increasing 700 
                percent and the rates for many others exceeding 100 
                percent of their average wholesale price (AWP), and
                    (B) the payment rates for nine drugs and 
                biologicals used in cancer therapy experiencing rate 
                reductions of between 50 and 90 percent;
            (6) beneficiary access may be jeopardized in the outpatient 
        hospital setting for those drugs and biologicals for which 
        program payments are substantially below the costs of 
        delivering them; and
            (7) the payment rates proposed for most drugs and 
        biologicals under such system for calendar year 2003 are less 
        than the payment rates established for them in 2002, with the 
        payment reductions exceeding 30 percent in most cases.

SEC. 3. DURATION OF PERIOD FOR WHICH TRANSITIONAL, PASS-THROUGH 
              PAYMENTS ARE MADE FOR DRUGS AND BIOLOGICALS.

    (a) Continuation if Data Collected in 2 to 3 Year Period Are 
Inadequate.--Section 1833(t)(6) of the Social Security Act (42 U.S.C. 
1395l(t)(6)) is amended--
            (1) in subparagraph (C)(i), by striking ``The payment'' and 
        inserting ``Except as provided in subparagraph (F), the 
        payment''; and
            (2) by adding at the end the following:
                    ``(F) Extension of period of payment.--
                            ``(i) In general.--Notwithstanding the 3-
                        year limitation specified in subparagraph 
                        (C)(i), in the case of a drug or biological for 
                        which additional payments under this paragraph 
                        would (but for this subparagraph) cease to be 
                        made by reason of such limitation, such 
                        additional payments shall continue to be made 
                        with respect to the drug or biological during 
                        the period that begins with the last day of the 
                        period of payment under subparagraph (C)(i) and 
                        ends on a date specified by the Secretary that 
                        is no earlier than January 1 of the first 
                        calendar year beginning on or after the date on 
                        which the Secretary has met each of the 
                        requirements of clause (ii).
                            ``(ii) Requirements.--The requirements of 
                        this clause are that the Secretary--
                                    ``(I) engage an appropriate outside 
                                contractor with substantial expertise 
                                and experience in the methodology of 
                                prospective payment systems to study 
                                and report to the Secretary 
                                alternatives to the methodology used by 
                                the Centers for Medicare & Medicaid 
                                Services for determining the relative 
                                weights under paragraphs (2)(C) and (9) 
                                so that the relative weights more 
                                accurately and equitably reflect the 
                                variation in costs among items and 
                                services;
                                    ``(II) make public the report 
                                prepared under subclause (I) together 
                                with the Secretary's recommendations 
                                for changes in the methodology, and 
                                provide for a public comment period of 
                                at least 90 days on such report;
                                    ``(III) find and certify that 
                                adequate data are available reflecting 
                                all of the costs of delivering 
                                outpatient pharmacy therapy (involving 
                                the drug or biological) in the 
                                outpatient hospital setting, including 
                                acquisition, storage, handling, 
                                processing, quality control, disposal, 
                                and pharmacy overhead costs;
                                    ``(IV) find and certify that 
                                methodology used to determine relative 
                                payment weights for drugs and 
                                biologicals, when used with such data, 
                                produces a medicare OPD fee schedule 
                                payment amount that accurately and 
                                equitably reflects such costs;
                                    ``(V) report such findings to the 
                                Congress and release to the public the 
                                data used to support such findings;
                                    ``(VI) publish (on a date that is 
                                no earlier than 180 days after the 
                                requirements of subclause (V) have been 
                                met) a notice of proposed rulemaking on 
                                a relative payment weight to be used to 
                                determine the medicare OPD fee schedule 
                                payment amount for the drug or 
                                biological under this subsection, with 
                                a period for public comment of at least 
                                90 days; and
                                    ``(VII) taking into account the 
                                comments received during the comment 
                                period for such notice, publish a final 
                                rule establishing a relative payment 
                                weight for the drug or biological.''.
    (b) Effective Date.--The amendments made by subsection (a) shall be 
effective as if included in the enactment of the Medicare, Medicaid, 
and SCHIP Balanced Budget Refinement Act of 1999.

SEC. 4. AMBULATORY PAYMENT CLASSIFICATIONS FOR DRUGS AND BIOLOGICALS 
              AFTER PERIOD OF TRANSITIONAL PASS-THROUGH PAYMENTS.

    (a) In General.--Section 1833(t)(2) of the Social Security Act (42 
U.S.C. 1395l(t)(2) is amended--
            (1) by striking ``and'' at the end of subparagraph (F);
            (2) striking the period at the end of subparagraph (G) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(H) the Secretary shall, in determining the 
                amount of payment under this subsection for a drug or 
                biological furnished on or after the date on which 
                transitional, pass-through payments under paragraph (6) 
                cease to be made with respect to the drug or 
                biological--
                            ``(i) treat the drug and biological as a 
                        separate group of covered OPD services; and
                            ``(ii) to the greatest extent practicable, 
                        use the same designation for such group as was 
                        used for the group to which the drug or 
                        biological was assigned during the period for 
                        which transitional, pass-through payments were 
                        made with respect to the drug or biological.''.
    (b) Effective Date.--The amendments made by subsection (a) shall be 
effective as if included in the enactment of the Medicare, Medicaid, 
and SCHIP Balanced Budget Refinement Act of 1999.

SEC. 5. STUDY OF PHARMACY SERVICES USED TO PROVIDE CANCER DRUG 
              THERAPIES IN HOSPITAL OUTPATIENT SETTING.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study of payments under part B of title XVIII of the Social 
Security Act for pharmacy service costs and related costs that are 
incurred in acquiring chemotherapy and supportive care drugs and 
providing these therapies to cancer patients in hospital outpatient 
departments. The study shall--
            (1) identify pharmacy costs, including the costs of 
        storage, handling, processing, quality control, disposal, 
        compliance with safety protocols and regulations, establishing 
        dosage regimens that avoid drug interactions and 
        contraindications, and pharmacy overhead;
            (2) include a review of the adequacy of the current payment 
        methodology for pharmacy service costs and related costs; and
            (3) identify any changes to that methodology that are 
        necessary to ensure recognition of and appropriate payment for 
        all of the services and functions inherent in the provision of 
        cancer treatment in hospital outpatient settings.
    (b) Report to Congress.--Not later than 12 months after the date of 
the enactment of this Act, the Comptroller General shall submit to 
Congress a report on the results of the study under subsection (a), 
including any recommendations for legislation that is necessary to 
implement the changes identified under subsection (a)(3).

SEC. 6. LIMIT ON REDUCTIONS FOR TRANSITIONAL, PASS-THROUGH PAYMENTS FOR 
              DRUGS AND BIOLOGICALS.

    Section 1833(t)(6)(E) of the Social Security Act (42 U.S.C. 
1395l(t)(6)(E)) is amended--
            (1) in clause (i)--
                    (A) by striking ``In general.--''and inserting 
                ``Years before 2003.--'';
                    (B) by striking ``in a year'' and inserting ``in a 
                year before 2003''; and
                    (C) by striking ``clause (ii))'' and inserting 
                ``clause (iv))'';
            (2) by striking clause (ii) and redesignating clause (iii) 
        as clause (ii); and
            (3) by adding at the end the following:
                            ``(iii) Years after 2002.--Before the 
                        beginning of 2003 and each subsequent year, the 
                        Secretary shall estimate the total of the 
                        additional payments to be made under this 
                        paragraph for covered OPD services furnished in 
                        the year (determined without regard to any 
                        limitation on the total amount of such 
                        payments) and shall adjust the conversion 
                        factor established under paragraph (3)(C) for 
                        the year by a budget neutrality percentage 
                        that, notwithstanding paragraph (2)(E), does 
                        not exceed the lesser of--
                                    ``(I) the ratio (expressed as a 
                                percentage) of the Secretary's estimate 
                                of such total additional payments for 
                                such year to the Secretary's estimate 
                                of the total payments to be made under 
                                this subsection for all covered OPD 
                                services furnished in that year; or
                                    ``(II) the applicable percentage 
                                (specified in clause (iv)) for that 
                                year.
                            ``(iv) Applicable percentage.--For purposes 
                        of clauses (i) and (iii), the term `applicable 
                        percentage' means--
                                    ``(I) for a year (or portion of a 
                                year) before 2004, 2.5 percent; and
                                    ``(II) for 2004 and each subsequent 
                                year, a percentage specified by the 
                                Secretary up to (but not to exceed) 2.0 
                                percent.''.