SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Ambulatory Surgical Center Medicare 
Payment Modernization Act of 2007''.

SEC. 2. MEDICARE PAYMENT FOR AMBULATORY SURGICAL CENTER SERVICES.

    (a) In General.--Section 1833(i) of the Social Security Act (42 
U.S.C. 1395l(i)) is amended to read as follows:
    ``(i)(1) Payment shall be made under this part in the amount 
specified under paragraph (2) for facility services furnished to an 
individual in an ambulatory surgical center (meeting the standards 
specified under section 1832(a)(2)(F)(i)) in connection with any 
outpatient surgical procedure covered under this part as a hospital 
outpatient department service, except for those procedures that the 
Secretary designates, in consultation with appropriate trade and 
professional organizations (including those having direct experience 
with ambulatory surgical centers), as posing a significant safety risk 
or requiring an overnight stay when performed in ambulatory surgical 
centers. Absent an identifiable safety risk specific to the performance 
of a particular procedure in an ambulatory surgical center, the 
Secretary shall presume that an outpatient surgical procedure covered 
under this part as a hospital outpatient department service does not 
pose a significant safety risk when performed in ambulatory surgical 
centers. Not less frequently than once every two years the Secretary 
shall review and, may, after public comment, make appropriate 
adjustments to this list of procedures excluded from coverage when 
performed in ambulatory surgical centers as the Secretary deems 
necessary.
    ``(2)(A) Subject to subparagraphs (B), (C), and (D), the amount of 
payment to be made under this subsection for facility services 
furnished to an individual in an ambulatory surgical center in 
accordance with paragraph (1) shall be equal to 75 percent of the fee 
schedule amount determined under paragraph (3)(A) of subsection (t) for 
payment of the same service furnished in hospital outpatient 
departments, as adjusted under paragraphs (4)(A), (6), and (15) of such 
subsection, less a 20 percent beneficiary copayment.
    ``(B) For covered ambulatory surgical center services furnished on 
or after January 1, 2008, and before January 1, 2012, for which the 
ambulatory surgical center payment amount payable under this subsection 
in 2007 (in this subsection referred to as the `2007 ASC payment 
amount') is less than 75 percent of the hospital OPD fee schedule 
amount under subsection (t) in 2007 for the same services, the amount 
of payment under this subsection shall be calculated as follows:
            ``(i) For services furnished during 2008, the amount shall 
        be equal to the sum of--
                    ``(I) 80 percent of the 2007 ASC payment amount, as 
                increased by the market basket percentage increase 
                applicable under subsection (t)(3)(C)(iv) for OPD 
                services occurring during the fiscal year ending in 
                such year; and
                    ``(II) 20 percent of the payment amount under 
                paragraph (2)(A) for 2008.
            ``(ii) For services furnished during 2009, the amount shall 
        be equal to the sum of--
                    ``(I) 60 percent of the 2007 ASC payment amount as 
                increased under clause (i)(I) and as further increased 
                by the market basket percentage increase applicable 
                under subsection (t)(3)(C)(iv) for OPD services 
                occurring during the fiscal year ending in such year; 
                and
                    ``(II) 40 percent of the payment amount under 
                paragraph (2)(A) for 2009.
            ``(iii) For services furnished during 2010, the amount 
        shall be equal to the sum of--
                    ``(I) 40 percent of the 2007 ASC payment amount as 
                increased under clauses (i)(I) and (ii)(I) and as 
                further increased by the market basket percentage 
                increase applicable under subsection (t)(3)(C)(iv) for 
                OPD services occurring during the fiscal year ending in 
                such year; and
                    ``(II) 60 percent of the payment amount under 
                paragraph (2)(A) for 2010.
            ``(iv) For services furnished during 2011, the amount shall 
        be equal to the sum of--
                    ``(I) 20 percent of the 2007 ASC payment amount as 
                increased under clauses (i)(I), (ii)(I), and (iii)(I) 
                and as further increased by the market basket 
                percentage increase applicable under subsection 
                (t)(3)(C)(iv) for OPD services occurring during the 
                fiscal year ending in such year; and
                    ``(II) 80 percent of the payment amount under 
                paragraph (2)(A) for 2011.
    ``(C) For covered ambulatory surgical center services for which the 
2007 ASC payment amount is greater than 75 percent of the hospital OPD 
fee schedule amount under subsection (t) in 2007 for the same services, 
the amount of payment under this subsection shall be the greater of the 
2007 ASC payment amount or--
            ``(i) for services furnished in 2008, the payment amount 
        under subparagraph (B)(i);
            ``(ii) for services furnished in 2009, the payment amount 
        under subparagraph (B)(ii);
            ``(iii) for services furnished in 2010, the payment amount 
        under subparagraph (B)(iii);
            ``(iv) for services furnished in 2011, the payment amount 
        under subparagraph (B)(iv); or
            ``(v) in 2012 and subsequent years, the payment amount 
        under subparagraph (A),
but in no case in excess of the then applicable hospital OPD fee 
schedule amount.
            ``(D)(i) Notwithstanding subparagraphs (A), (B), and (C), 
        if a facility service furnished to an individual in an 
        ambulatory surgical center includes an implantable medical 
        device, the amount of payment for that service shall be equal 
        to the sum of--
                    ``(I) 100 percent of the hospital OPD fee schedule 
                amount that the Secretary determines is associated with 
                the device; and
                    ``(II) 75 percent of non-device-related component 
                of the OPD fee schedule amount;
        less a 20 percent beneficiary copayment.
            ``(ii) For purposes of clause (i), the term `implantable 
        medical device' includes devices that--
                    ``(I) are an integral and subordinate part of the 
                procedure performed;
                    ``(II) are used for 1 patient only;
                    ``(III) are single use;
                    ``(IV) come into contact with human tissue; and
                    ``(V) are surgically implanted or inserted, whether 
                or not the device remains with the patient when the 
                patient is released from the ambulatory surgical 
                center..''.
    (b) Conforming Amendments.--
            (1) Section 1832(a)(2)(F)(i) of such Act (42 U.S.C. 
        1395k(a)(2)(F)(i)) is amended--
                    (A) by striking ``section 1833(i)(1)(A)'' and 
                inserting ``section 1833(i)(1)'';
                    (B) by striking ``the standard overhead amount as 
                determined under section 1833(i)(2)(A)'' and inserting 
                ``the amount determined under section 1833(i)(2)''; and
                    (C) by striking all that follows ``as full payment 
                for such services'' and inserting ``, or''.
            (2) Section 1833(a)(1)(G) of such Act (42 U.S.C. 
        1395l(a)(1)(G)) is amended--
                    (A) by striking ``subsection (i)(1)(A)'' and 
                inserting ``subsection (i)(1)'';
                    (B) by striking ``for services furnished 
                beginning'' and all that follows through ``subsection 
                (i)(2)(D)''; and
                    (C) by striking ``such revised payment system'' and 
                inserting ``under subsection (i)(2)''.
            (3) Section 1833(a)(4) of such Act (42 U.S.C. 1395l(a)(4)) 
        is amended--
                    (A) by striking ``section 1833(i)(1)(A)'' and 
                inserting ``subsection (i)(1)''; and
                    (B) by striking ``paragraph (2) or (3) of 
                subsection (i)'' and inserting ``subsection (i)(1)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to ambulatory surgical center services furnished on or after 
January 1, 2008.

SEC. 3. CLARIFYING STATE LICENSURE AUTHORITY.

    (a) In General.--Section 1832(a)(2)(F)(i) of the Social Security 
Act (42 U.S.C. 1395k(a)(2)(F)(i)) is amended by inserting ``, except 
that such standards shall not preclude the provision of surgical 
services to individuals not covered under the program under this part 
if such services are permitted to be performed in such a center under 
applicable State licensure laws'' after ``performed in an ambulatory 
surgical center (which meets health, safety, and other standards 
specified by the Secretary in regulations''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.
Ambulatory Surgical Center Medicare Payment Modernization Act of 2007 - Amends title XVIII (Medicare) of the Social Security Act to revise the requirements and the formula for payments for services, including an implantable medical device, furnished to individuals in ambulatory surgical centers.
A bill to amend title XVIII of the Social Security Act to modernize payments for ambulatory surgical centers under the Medicare Program.