A bill to amend title XVIII of the Social Security Act and otherwise revise the Medicare Program to reform the method of paying for covered drugs, drug administration services, and chemotherapy support services.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Quality Cancer Care Preservation 
Act''.

SEC. 2. MEDICARE PAYMENT FOR DRUGS AND BIOLOGICALS.

    (a) In General.--Section 1842(o)(1) of the Social Security Act (42 
U.S.C. 1395u(o)(1)) is amended by striking ``95 percent of the average 
wholesale price'' and inserting ``the payment amount specified in 
section 1834(n)(2)''.
    (b) Determination of Payment Amount.--Section 1834 of such Act (42 
U.S.C. 1395m) is amended by adding at the end the following new 
subsection:
    ``(n) Payment for Drugs and Biologicals.--
            ``(1) Reports by manufacturers.--
                    ``(A) In general.--Every drug manufacturer shall 
                report to the Secretary, in the manner prescribed in 
                this paragraph, its average sales price (as defined in 
                subparagraph (B)) in the United States during each 
                calendar quarter for drugs and biologicals covered 
                under this part.
                    ``(B) Definitions.--For purposes of this 
                subsection--
                            ``(i) the term `manufacturer' means, with 
                        respect to a drug or biological, the entity 
                        identified by the Labeler Code portion of the 
                        National Drug Code of such drug or biological; 
                        and
                            ``(ii) the term `average sales price' means 
                        the weighted average of all final sales prices 
                        to all purchasers, excluding sales specified in 
                        subparagraph (C).
                In determining such average sales prices, such prices 
                shall be net of volume discounts, chargebacks, short-
                dated product discounts, free goods contingent on 
                purchases, rebates (other than those made or authorized 
                under section 1927), and all other price concessions 
                that result in a reduction of the ultimate cost to the 
                purchaser.
                    ``(C) Consideration in calculation of average sales 
                prices.--The calculation of average sales price under 
                this subsection shall not include--
                            ``(i) prices that are excluded from the 
                        calculation of `best price' under section 
                        1927(c)(1)(C);
                            ``(ii) prices offered to entities that are 
                        considered under subparagraph (B)(i) to be the 
                        manufacturers of the drugs or biologicals 
                        involved;
                            ``(iii) prices offered by a manufacturer to 
                        a hospital, nursing facility, hospice, or 
                        health maintenance organization;
                            ``(iv) prices to governmental entities; and
                            ``(v) nominal prices offered to bona fide 
                        charitable organizations.
                    ``(D) Quarterly reports.--Each manufacturer shall 
                submit the report required by subparagraph (A) to the 
                Secretary by electronic means no later than 30 days 
                after the end of a calendar quarter with respect to 
                sales that occurred during such quarter. The Secretary 
                shall prescribe the format and other requirements for 
                the report.
                    ``(E) Enforcement.--
                            ``(i) Failure to timely report.--The 
                        Secretary may impose a civil monetary penalty 
                        in an amount not to exceed $100,000 on a 
                        manufacturer that fails to provide the 
                        information required under this paragraph on a 
                        timely basis and in the manner required.
                            ``(ii) False information.--For each item of 
                        false information, the Secretary may impose a 
                        civil money penalty in an amount not to exceed 
                        $100,000 on a manufacturer that knowingly 
                        provides false information under this 
                        paragraph.
                            ``(iii) Manner of imposition of civil 
                        monetary penalties.--The provisions in section 
                        1128A (other than subsections (a) and (b)) 
                        shall apply to a civil monetary penalty under 
                        this subparagraph in the same manner as such 
                        provisions apply to a penalty or proceeding 
                        under section 1128A(a).
                    ``(F) Confidentiality of information.--
                Notwithstanding any other provision of law, information 
                disclosed by manufacturers under this paragraph is 
                confidential and shall not be disclosed by the 
                Secretary in any form other than as specifically 
                authorized by this subsection.
            ``(2) Calculation of payment amount.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the payment amount for a drug or 
                biological furnished during a calendar quarter shall be 
                120 percent of the average sales price of the drug or 
                biological for the second preceding calendar quarter as 
determined under paragraph (1).
                    ``(B) Methodology.--In determining payment amounts 
                under subparagraph (A), the Secretary may, in the 
                Secretary's discretion, use either the average sales 
                price for each drug or biological by specific drug or 
                biological, or a cumulative average sales price based 
                on sales data for all versions of a multiple-source 
                drug that the Secretary, acting through the Food and 
                Drug Administration, has determined are therapeutically 
                equivalent (as evidenced by `A' ratings in the 
                publication Approved Drug Products with Therapeutic 
                Equivalence Evaluations).
                    ``(C) Increase to reflect additional costs 
                attributable to state and local taxes.--In the case of 
                a drug or biological that was subject to a State or 
                local sales tax or gross receipts tax when administered 
                or dispensed, the payment amount determined under 
                subparagraph (A) shall be increased by the amount of 
                such tax paid with respect to such drug or biological.
                    ``(D) Substitution of higher payment amount.--If a 
                physician's, supplier's, or any other person's claim 
                for payment for services under this Act documents that 
                the price paid for a drug or biological was greater 
                than the payment amount determined under subparagraph 
                (A), the actual amount paid shall be substituted for 
                the payment amount determined under subparagraph (A), 
                unless the Secretary determines that the actual amount 
                paid was unreasonable under the circumstances.
                    ``(E) Increase for bad debt and certain other 
                costs.--Upon the submission of supporting information, 
                the Secretary shall make an additional payment to a 
                physician or supplier to cover--
                            ``(i) uncollectible deductibles and 
                        coinsurance due from Medicare beneficiaries 
                        with respect to drugs and biologicals furnished 
                        to such beneficiaries; and
                            ``(ii) costs incurred in procuring and 
                        billing for drugs and biologicals furnished to 
                        Medicare beneficiaries.''.

SEC. 3. MEDICARE PAYMENT FOR DRUG ADMINISTRATION SERVICES.

    (a) General.--The Secretary of Health and Human Services (hereafter 
in this Act referred to as ``the Secretary'') shall revise the practice 
expense relative value units for drug administration services for years 
beginning with the year 2005 in accordance with this section. For 
purposes of this section, ``drug administration services'' includes 
chemotherapy administration services, therapeutic and diagnostic 
infusions and injections, and such other services as the Secretary 
specifies.
    (b) Direct Costs Equal to 100 Percent of CPEP Estimates.--Using the 
information, including estimates of clinical staff time, developed in 
the clinical practice expert panel process, including refinements by 
American Medical Association committees, the Secretary shall estimate 
the costs of the nursing and other clinical staff, supplies, and 
procedure-specific equipment (exceeding a cost specified by the 
Secretary) used in furnishing each type of drug administration service. 
The Secretary shall utilize without revision the minutes of clinical 
staff time determined in such process. The Secretary shall convert the 
information from such process to estimated costs by applying the most 
current available data on staff salary, supply, and equipment costs, 
and such costs shall be updated to 2005 based on estimated changes in 
prices since the date of such data.
    (c) Total Practice Expenses.--The Secretary shall estimate the 
total practice expenses of each drug administration service by assuming 
that the direct costs for the service determined under subsection (b) 
are 33.2 percent of such total practice expenses.
    (d) Conversion to Relative Value Units.--The Secretary shall 
convert the total practice expenses determined under subsection (c) to 
practice expense relative value units for each drug administration 
service by dividing such expenses by the conversion factor that will be 
in effect for the physician fee schedule for 2005. The relative value 
units as so determined shall be used in determining the fee schedule 
amounts paid for drug administration services under section 1848 of the 
Social Security Act (42 U.S.C. 1395w-4).
    (e) Updates.--For years after 2005, the relative values determined 
under subsection (d) shall continue in effect except that the Secretary 
shall revise them as necessary to maintain their accuracy, provided 
that such revisions are consistent with the methodology set forth in 
this section.
    (f) Multiple Pushes.--In establishing the payment amounts under 
this section, the Secretary shall establish the payment amount for 
intravenous chemotherapy administration by push technique based on the 
administration of a single drug. The Secretary shall make the same 
payment for each additional drug administered by push technique during 
the same encounter, except to the extent that the Secretary finds that 
the cost of administering additional drugs is less than the cost of 
administering the first drug.

SEC. 4. PAYMENTS FOR CHEMOTHERAPY SUPPORT SERVICES.

    (a) General.--Beginning in the year 2005, the Secretary shall 
recognize and make payments under section 1848 of the Social Security 
Act (42 U.S.C. 1395w-4) for chemotherapy support services furnished 
incident to physicians' services. For the purposes of this section, 
``chemotherapy support services'' are services furnished by the staff 
of physicians to patients undergoing treatment for cancer that were not 
included in the computation of clinical staff costs under section 3(b). 
Such services include social worker services, nutrition counseling, 
psychosocial services, and similar services.
    (b) Direct Costs.--The Secretary shall estimate the cost of the 
salary and benefits of staff furnishing chemotherapy support services 
as they are provided in oncology practices that furnish these services 
to cancer patients in a manner that is considered to be high quality 
care. The estimate shall be based on the weekly cost of such services 
per patient receiving chemotherapy.
    (c) Total Costs.--The Secretary shall estimate the total practice 
expenses of chemotherapy support services by assuming that the direct 
costs for the service determined under subsection (b) are 33.2 percent 
of such total practice expenses.
    (d) Conversion to Relative Value Units.--The Secretary shall 
convert the total practice expenses determined under subsection (c) to 
practice expense relative value units for chemotherapy support services 
by dividing such expenses by the conversion factor that will be in 
effect for the physician fee schedule for 2005. The relative value 
units as so determined shall be used in determining the fee schedule 
amounts paid for chemotherapy support services under such section 1848.
    (e) Updates.--For the years after 2005, the relative values 
determined under subsection (d) shall continue in effect except that 
the Secretary shall revise them as necessary to maintain their 
accuracy, provided that such revisions are consistent with the 
methodology set forth in this section.

SEC. 5. CANCER THERAPY MANAGEMENT SERVICES.

    The Secretary shall recognize and establish a payment amount for 
the service of cancer therapy management to account for the greater 
pre-service and post-service work associated with visits and 
consultations conducted by physicians treating cancer patients compared 
to typical visits and consultations. The payment amount may vary by the 
level and type of the related visit or consultation.

SEC. 6. OTHER SERVICES WITHOUT PHYSICIAN WORK RELATIVE VALUE UNITS.

    The Secretary shall develop a revised methodology for determining 
the payment amounts for services that are paid under the fee schedule 
established by section 1848 of the Social Security Act (42 U.S.C. 
1395w-4) and that do not have physician work relative value units, 
including radiation oncology services. Such methodology shall result in 
payment amounts that fully cover the costs of furnishing such services. 
Until such time as the methodology for such services is revised and 
implemented, all such services shall be protected from further payment 
cuts due to factors such as shifts in utilization or removal of any one 
specialty's services that are paid under the fee schedule established 
by such section 1848 and that do not have physician work relative value 
units.

SEC. 7. PHYSICIAN SUPERVISION OF SERVICES.

    Section 1834 of the Social Security Act (42 U.S.C. 1395m), as 
amended by section 2, is further amended by adding at the end the 
following new subsection:
    ``(o) Supervision Requirements.--If the Secretary requires direct 
supervision of a service by a physician, that supervision requirement 
may be fulfilled by one or more physicians other than the physician who 
ordered the service. If the supervising physician is different from the 
ordering physician for a particular service, the ordering physician may 
nevertheless bill for such service provided that the medical records 
for the service involved identify the supervising physician or 
physicians.''.

SEC. 8. REPORT TO CONGRESS.

    No later than April 1, 2004, the Secretary shall submit to Congress 
a report on the payment amounts that are projected to be adopted under 
sections 2, 3, 4, and 5 of this Act.

SEC. 9. INSTITUTE OF MEDICINE STUDY.

    (a) General.--The Secretary of Health and Human Services shall 
request the Institute of Medicine to conduct the study described in 
this section.
    (b) Baseline Study.--The first phase of the study shall include the 
following objectives:
            (1) An assessment of the extent to which the current 
        Medicare payment system, prior to implementation of the 
        amendments made by this Act, facilitates appropriate access to 
        care by cancer patients in the various treatment settings.
            (2) The identification of the comprehensive range of 
        services furnished to cancer patients in the outpatient 
        setting, including support services such as psychosocial 
        services and counseling, and recommendations regarding the 
        types of services that ought to be furnished to Medicare 
        patients with cancer.
            (3) A discussion of the practice standards necessary to 
        assure the safe provision of services to cancer patients.
            (4) An analysis of the extent to which the current Medicare 
        payment system supports the role of nurses in the provision of 
        oncology services and recommendations for any necessary 
        improvements in the payment system in that respect.
            (5) The development of a framework for assessing how the 
        amendments made by this act affect the provision of care to 
        Medicare patients with cancer in the various treatment 
        settings.
    (c) Second Phase of Study.--After the implementation of the 
amendments made by this Act, the study shall determine whether and how 
those amendments affected the provision of care to Medicare patients 
with cancer.
    (d) Consultation.--The Institute of Medicine shall consult with the 
National Cancer Policy Board and organizations representing cancer 
patients and survivors, oncologists, oncology nurses, social workers, 
cancer centers, and other healthcare professionals who treat cancer 
patients in planning and carrying out this study.
    (e) Due Dates.--
            (1) The study required by subsection (b) shall be submitted 
        to the Congress and the Secretary of Health and Human Services 
        no later than June 30, 2004.
            (2) The study required by subsection (c) shall be submitted 
        to the Congress and the Secretary of Health and Human Services 
        no later than December 31, 2006.

SEC. 10. EFFECTIVE DATES.

    (a) General.--Except as provided in this section, the provisions of 
this Act shall apply to drugs, biologicals, and services furnished on 
or after January 1, 2005.
    (b) Reports From Manufacturers.--The first report by manufacturers 
required by the provisions of section 2 shall be submitted no later 
than October 30, 2004, with respect to sales that occurred in the 
quarter ending September 30, 2004.
    (c) Supervision of Services.--The amendment made by section 7 shall 
be effective upon enactment.
    (d) Services Other Than Drug Administration.--The Secretary shall 
implement the requirements of section 6 no later than January 1, 2005.

Summary: Quality Cancer Care Preservation Act - Amends part B of title XVIII (Medicare) of the Social Security Act (SSA) to revise the payment amount for covered drugs and biologicals furnished during a calendar quarter that are not paid on a cost or prospective payment basis. Changes such amount from 95 percent of the average wholesale price to 120 percent of the average sales price of the drug or biological for the second preceding calendar quarter. Requires drug manufacturers to report average sales prices each calendar quarter for covered drugs and biologicals. Directs the Secretary of Health and Human Services to: (1) revise the practice expense relative value units for drug administration services in accordance with this Act to determine the units to be used in determining the fee schedule amounts paid for drug administration services under the Medicare program. (2) recognize and make payments under Medicare for chemotherapy support services furnished incident to physicians' services. (3) recognize and establish a payment amount for the service of cancer therapy management to account for the greater pre-service and post-service work associated with visits and consultations conducted by physicians treating cancer patients compared to typical visits and consultations. And (4) develop a revised methodology for determining the payment amounts for services that are paid under the Medicare fee schedule and that do not have physician work relative value units, including radiation oncology services. Amends SSA title XVIII to provide that if the Secretary requires direct supervision of a service by a physician, that supervision requirement may be fulfilled by one or more physicians other than the physician who ordered the service.