Medicare Waste and Abuse Reduction Act of 1995

Summary: Medicare Waste and Abuse Reduction Act of 1995 - ProhibitsMedicare reimbursement of charges for tickets to sporting or other entertainment events, gifts or donations, and other specified items. 
Amends title XVIII (Medicare) of the Social Security Act to direct the Secretary of Health and Human Services to establish competitive acquisition areas within metropolitan statistical areas, based on the availability and accessibility of suppliers and the probable savings to be realized.  Requires:  (1) competitive bidding for durable medical equipment and supplies; and (2) reductions in excessive payments for oxygen and certain other items, in specified circumstances, in order to reduce waste and abuse in the program.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Waste and Abuse Reduction 
Act of 1995''.

SEC. 2. PROHIBITING UNNECESSARY AND WASTEFUL MEDICARE PAYMENTS FOR 
              CERTAIN ITEMS.

    Notwithstanding any other provision of law, regulation or payment 
policy, the following categories of charges shall not be reimbursable 
under title XVIII of the Social Security Act:
            (a) tickets to sporting or other entertainment events,
            (b) gifts or donations,
            (c) costs related to team sports,
            (d) personal use of automobiles,
            (e) costs for fines and penalties resulting from violations 
        of Federal, State or local laws or regulations, and
            (f) tuition or fees for spouses or dependents of providers 
        of services, their employees or contractors.

SEC. 3. COMPETITIVE BIDDING TO REDUCE WASTEFUL MEDICARE PAYMENTS FOR 
              DURABLE MEDICAL EQUIPMENT AND MEDICAL SUPPLIES.

    (a) General Rule.--Part B of title XVIII of the Social Security Act 
is amended by inserting after section 1846 the following:

            ``competition acquisition for items and services

    ``Sec. 1847. (a) Establishment of Bidding Areas.--
            ``(1) In general.--The Secretary shall establish 
        competitive acquisition areas for the purpose of awarding a 
        contract or contracts for the furnishing under this part of the 
        items and services described in subsection (c) on or after 
        January 1, 1996. The Secretary may establish different 
        competitive acquisition areas under this subsection for 
        different classes of items and services under this part.
            ``(2) Criteria for establishment.--The competitive 
        acquisition areas established under paragraph (1) shall--
                    ``(A) initially be, or be within, metropolitan 
                statistical areas;
                    ``(B) be chosen based on the availability and 
                accessibility of suppliers and the probable savings to 
                be realized by the use of competitive bidding in the 
                furnishing of items and services in the area; and
                    ``(C) be chosen so as to not reduce access to such 
                items and services to individuals residing in rural and 
                other underserved areas.
    ``(b) Awarding of Contracts in Areas.--
            ``(1) In general.--The Secretary shall conduct a 
        competition among individuals and entities supplying items and 
        services under this part for each competitive acquisition area 
        established under subsection (a) for each class of items and 
        services.
            ``(2) Conditions for awarding contract.--The Secretary may 
        not award a contract to any individual or entity under the 
        competition conducted pursuant to paragraph (1) to furnish an 
        item or service under this part unless the Secretary finds that 
        the individual or entity--
                    ``(A) meets quality standards specified by the 
                Secretary for the furnishing of such item or service; 
                and
                    ``(B) offers to furnish a total quantity of such 
                item or service that is sufficient to meet
                 the expected need within the competitive acquisition 
area and to assure that access to such items and services to 
individuals residing in rural and other underserved areas is not 
reduced.
            ``(3) Contents of contract.--A contract entered into with 
        an individual or entity under the competition conducted 
        pursuant to paragraph (1) shall specify (for all of the items 
        and services within a class)--
                    ``(A) the quantity of items and services the entity 
                shall provide; and
                    ``(B) such other terms and conditions as the 
                Secretary may require.
    ``(c) Services Described.--The items and services to which the 
provisions of this section shall apply are as follows:
            ``(1) Durable medical equipment and medical supplies.
            ``(2) Oxygen and oxygen equipment.
            ``(3) Such other items and services for which the Secretary 
        determines that the use of competitive acquisition under this 
        section will be appropriate and cost-effective.''.
    (b) Items and Services To Be Furnished Only Through Competitive 
Acquisition.--Section 1862(a) (42 U.S.C. 1395y(a)), as amended by 
section 4034(b)(4), is amended--
            (1) by striking ``or'' at the end of paragraph (14);
            (2) by striking the period at the end of paragraph (15) and 
        inserting ``; or''; and
            (3) by inserting after paragraph (15) the following new 
        paragraph:
            ``(16) where such expenses are for an item or service 
        furnished in a competitive acquisition area (as established by 
        the Secretary under section 1847(a)) by an individual or entity 
        other than the supplier with whom the Secretary has entered 
        into a contract under section 1847(b) for the furnishing of 
        such item or service in that area, unless the Secretary finds 
        that such expenses were incurred in a case of urgent need.''.
    (c) Reduction in Payment Amounts if Competitive Acquisition Fails 
To Achieve Minimum Reduction in Payments.--Notwithstanding any other 
provision of title XVIII of the Social Security Act, if the 
establishment of competitive acquisition areas under section 1847 of 
such Act (as added by subsection (a)) and the limitation of coverage 
for items and services under part B of such title to items and services 
furnished by providers with competitive acquisitions contracts under 
such section does not result in a reduction of at least 10 percent (20 
percent for oxygen and oxygen equipment) in the projected payment 
amount that would have applied to the item or service under part B if 
the item or service had not been furnished through competitive 
acquisition under such section, the Secretary shall reduce the payment 
amount by such percentage as the Secretary determines necessary to 
result in such a reduction.
    (d) Effective Date.--The amendments made by this section shall 
apply to items and services furnished under part B of title XVIII of 
the Social Security Act on or after January 1, 1996.

SEC. 4. INTERIM REDUCTION IN EXCESSIVE PAYMENTS FOR OXYGEN.

    Section 1834(a)(1)(D) is amended by adding the following sentence 
at the end: ``With respect to oxygen and oxygen equipment furnished 
between October 1, 1995 and January 1, 1996, the Secretary shall reduce 
the payment amount applied under subparagraph (B)(ii) for such items by 
20 percent.''.

SEC. 5. REDUCING EXCESSIVE BILLINGS FOR CERTAIN ITEMS.

    Section 1834(a)(15)(A) is amended by striking ``scooters.'' and 
adding ``scooters, orthotic body jackets, and incontinence supplies.''

SEC. 6. IMPROVED CARRIER AUTHORITY TO REDUCE EXCESSIVE MEDICARE 
              PAYMENTS.

    (a) General Rule.--Section 1834(a)(10)(B) is amended by striking 
``paragraphs (8) and (9)'' and all that follows through the end of the 
sentence and inserting ``section 1842(b)(8) to covered items and 
suppliers of such items and payments under this subsection as such 
provisions (relating only to determinations of grossly excessive 
payment amounts) apply to items and services and entities and a 
reasonable charge under section 1842(b)''.
    (b) Repeal of Obsolete Provisions.--
            (1) Section 1842(b)(8) is amended--
                    (A) by striking subparagraphs (B) and (C),
                    (B) by striking the subparagraph designation 
                ``(A)'', and
                    (C) by redesignating clauses (i) and (ii) as (A) 
                and (B), respectively.
            (2) Section 1842(b)(9) is repealed.