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.

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:
            ``(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 (hereinafter in this 
        paragraph and paragraph (10) 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 will 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 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 days after publication of 
                such notice, convenes a meeting to receive such 
                comments and recommendations, with such meeting--
                            ``(I) including representatives of all 
                        entities within the Health Care Financing 
                        Administration (hereinafter 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 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 paragraph and paragraph 
                (10)--
                            ``(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. In determining whether tests are clinically similar for 
        purposes of this paragraph, the Secretary may not take into 
        account economic factors.
            ``(B)(i) Notwithstanding 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) and (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 further amended--
                    (A) in paragraph (2), by striking ``paragraph (4)'' 
                and inserting in lieu thereof ``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:
            ``(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 changes.--Section 1833(a) of the Social 
        Security Act (42 U.S.C. 1395l(a)) is amended--
                    (A) in paragraph (1)(D)(i), by striking ``the 
                limitation amount for that test determined under 
                subsection (h)(4)(B),''; and
                    (B) in paragraph (2)(D)(i), 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, as amended by subsections (a) and 
(b), is further 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 fee 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 one type of entity with a 
                        contract under subsection (a).''.
    (e) Prohibition.--The Secretary may not assign a code for a new 
clinical diagnostic laboratory test that differs from the code 
recommended by the American Medical Association Common Procedure 
Terminology Editorial Panel and results in lower payment than would be 
made if the Secretary accepted such recommendation solely on the basis 
that the test is a test that 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)).
    (f) Effective Dates.--
            (1) Establishment of procedures.--The Secretary of Health 
        and Human Services shall establish the procedures required to 
        implement paragraphs (9), (10), and (11) of section 1833(h) of 
        the Social Security Act (42 U.S.C. 1395l(h)), as added by this 
        section, by not later than October 1, 2001.
            (2) Inherent reasonableness; code assignment.--The 
        amendments made by subsections (d) and (e) shall apply to 
        determinations made on or after the date of the enactment of 
        this Act.

Summary: Medicare Patient Access to Preventive and Diagnostic Tests Act - Amends title XVIII (Medicare) of the Social Security Act to direct the Secretary of Health and Human Services to: (1) establish procedures for determining the basis for, and amount of, Medicare payment for any clinical diagnostic laboratory test with respect to which a new or substantially revised Health Care Financing Administration Common Procedure Coding System (HCPCS) code is assigned on or after January 1, 2002, (2) set the national fee schedule amounts for tests performed. (3) establish a mechanism for review of the adequacy of payment amounts for a particular test. And (4) prohibit the Secretary from delegating the authority to make determinations with respect to clinical diagnostic laboratory tests to a regional office of the Health Care Financing Administration or to a certain contracted entity. Prohibits the Secretary from assigning a code for a new clinical diagnostic laboratory test that differs from the code recommended by the American Medical Association Common Procedure Terminology Editorial Panel and results in lower payment than would be made if the Secretary accepted such recommendation solely on the basis that the test is a test that may be performed by a laboratory with a certificate of waiver under the Public Health Service Act.