# Medicare Improvements for Patients and Providers Act of 2008/Title I/Subtitle C/Part II
## PART II — OTHER PAYMENT AND COVERAGE IMPROVEMENTS
### Sec. 141. Extension of Exceptions Process for Medicare Therapy Caps.

    Section 1833(g)(5) of the Social Security Act (42 U.S.C. 1395l(g)(5)), as amended by section 105 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is amended by striking ``June 30, 2008´´ and inserting ``December 31, 2009´´.

### Sec. 142. Extension of Payment Rule for Brachytherapy and Therapeutic Radiopharmaceuticals.

    Section 1833(t)(16)(C) of the Social Security Act (42 U.S.C. 1395l(t)(16)(C)), as amended by section 106 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is amended by striking ``July 1, 2008´´ each place it appears and inserting ``January 1, 2010´´.

### Sec. 143. Speech-Language Pathology Services.

    (a) In General.—
       Section 1861(ll) of the Social Security Act (42 U.S.C. 1395x(ll)) is amended—
          (1) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and
          (2) by inserting after paragraph (1) the following new paragraph:
             ``(2) The term ‘outpatient speech-language pathology services’ has the meaning given the term ‘outpatient physical therapy services’ in subsection (p), except that in applying such subsection—
                ``(A) ‘speech-language pathology’ shall be substituted for ‘physical therapy’ each place it appears; and
                ``(B) ‘speech-language pathologist’ shall be substituted for ‘physical therapist’ each place it appears.´´.
    (b) Conforming Amendments.—
          (1) Section 1832(a)(2)(C) of the Social Security Act (42 U.S.C. 1395k(a)(2)(C)) is amended—
                (A) by striking ``and outpatient´´ and inserting ``, outpatient´´; and
                (B) by inserting before the semicolon at the end the following: ``, and outpatient speech-language pathology services (other than services to which the second sentence of section 1861(p) applies through the application of section 1861(ll)(2))´´.
          (2) Subparagraphs (A) and (B) of section 1833(a)(8) of the Social Security Act (42 U.S.C. 1395l(a)(8)) are each amended by striking ``(which includes outpatient speech-language pathology services)´´ and inserting ``, outpatient speech-language pathology services,´´.
          (3) Section 1833(g)(1) of the Social Security Act (42 U.S.C. 1395l(g)(1)) is amended—
                (A) by inserting ``and speech-language pathology services of the type described in such section through the application of section 1861(ll)(2)´´ after ``1861(p)´´; and
                (B) by inserting ``and speech-language pathology services´´ after ``and physical therapy services´´.
          (4) The second sentence of section 1835(a) of the Social Security Act (42 U.S.C. 1395n(a)) is amended—
                (A) by striking ``section 1861(g)´´ and inserting ``subsection (g) or (ll)(2) of section 1861´´ each place it appears; and
                (B) by inserting ``or outpatient speech-language pathology services, respectively´´ after ``occupational therapy services´´.
          (5) Section 1861(p) of the Social Security Act (42 U.S.C. 1395x(p)) is amended by striking the fourth sentence.
          (6) Section 1861(s)(2)(D) of the Social Security Act (42 U.S.C. 1395x(s)(2)(D)) is amended by inserting ``, outpatient speech-language pathology services,´´ after ``physical therapy services´´.
          (7) Section 1862(a)(20) of the Social Security Act (42 U.S.C. 1395y(a)(20)) is amended—
                (A) by striking ``outpatient occupational therapy services or outpatient physical therapy services´´ and inserting ``outpatient physical therapy services, outpatient speech-language pathology services, or outpatient occupational therapy services´´; and
                (B) by striking ``section 1861(g)´´ and inserting ``subsection (g) or (ll)(2) of section 1861´´.
          (8) Section 1866(e)(1) of the Social Security Act (42 U.S.C. 1395cc(e)(1)) is amended—
                (A) by striking ``section 1861(g)´´ and inserting ``subsection (g) or (ll)(2) of section 1861´´ the first two places it appears;
                (B) by striking ``defined) or´´ and inserting ``defined),´´; and
                (C) by inserting before the semicolon at the end the following: ``, or (through the operation of section 1861(ll)(2)) with respect to the furnishing of outpatient speech-language pathology ´´.
          (9) Section 1877(h)(6) of the Social Security Act (42 U.S.C. 1395nn(h)(6)) is amended by adding at the end the following new subparagraph:
             ``(L) Outpatient speech-language pathology services.´´.
    (c) Effective Date.—
       The amendments made by this section shall apply to services furnished on or after July 1, 2009.
    (d) Construction.—
       Nothing in this section shall be construed to affect existing regulations and policies of the Centers for Medicare & Medicaid Services that require physician oversight of care as a condition of payment for speech-language pathology services under PART B of the Medicare program.

### Sec. 144. Payment and Coverage Improvements for Patients with Chronic Obstructive Pulmonary Disease and Other Conditions.

    (a) Coverage of Pulmonary and Cardiac Rehabilitation.—
          (1) In General.—
             Section 1861 of the Social Security Act (42 U.S.C. 1395x), as amended by section 101(a), is amended—
                (A) in subsection (s)(2)—
                      (i) in subparagraph (AA), by striking ``and´´ at the end;
                      (ii) by adding at the end the following new subparagraphs:
                         ``(CC) items and services furnished under a cardiac rehabilitation program (as defined in subsection (eee)(1)) or under a pulmonary rehabilitation program (as defined in subsection (fff)(1)); and
                         ``(DD) items and services furnished under an intensive cardiac rehabilitation program (as defined in subsection (eee)(4));´´; and
                (B) by adding at the end the following new subsections:
                   ``(eee) Cardiac rehabilitation program; intensive cardiac rehabilitation program
                      ``(1) The term ‘cardiac rehabilitation program’ means a physician-supervised program (as described in paragraph (2)) that furnishes the items and services described in paragraph (3).
                      ``(2) A program described in this paragraph is a program under which—
                         ``(A) items and services under the program are delivered—
                            ``(i) in a physician’s office;
                            ``(ii) in a hospital on an outpatient basis; or
                            ``(iii) in other settings determined appropriate by the Secretary.
                         ``(B) a physician is immediately available and accessible for medical consultation and medical emergencies at all times items and services are being furnished under the program, except that, in the case of items and services furnished under such a program in a hospital, such availability shall be presumed; and
                         ``(C) individualized treatment is furnished under a written plan established, reviewed, and signed by a physician every 30 days that describes—
                            ``(i) the individual’s diagnosis;
                            ``(ii) the type, amount, frequency, and duration of the items and services furnished under the plan; and
                            ``(iii) the goals set for the individual under the plan.
                      ``(3) The items and services described in this paragraph are—
                         ``(A) physician-prescribed exercise;
                         ``(B) cardiac risk factor modification, including education, counseling, and behavioral intervention (to the extent such education, counseling, and behavioral intervention is closely related to the individual’s care and treatment and is tailored to the individual’s needs);
                         ``(C) psychosocial assessment;
                         ``(D) outcomes assessment; and
                         ``(E) such other items and services as the Secretary may determine, but only if such items and services are—
                            ``(i) reasonable and necessary for the diagnosis or active treatment of the individual’s condition;
                            ``(ii) reasonably expected to improve or maintain the individual’s condition and functional level; and
                            ``(iii) furnished under such guidelines relating to the frequency and duration of such items and services as the Secretary shall establish, taking into account accepted norms of medical practice and the reasonable expectation of improvement of the individual.
                      ``(4)(A) The term ‘intensive cardiac rehabilitation program’ means a physician-supervised program (as described in paragraph (2)) that furnishes the items and services described in paragraph (3) and has shown, in peer-reviewed published research, that it accomplished—
                            ``(i) one or more of the following:
                               ``(I) positively affected the progression of coronary heart disease; or
                               ``(II) reduced the need for coronary bypass surgery; or
                               ``(III) reduced the need for percutaneous coronary interventions; and
                            ``(ii) a statistically significant reduction in 5 or more of the following measures from their level before receipt of cardiac rehabilitation services to their level after receipt of such services:
                               ``(I) low density lipoprotein;
                               ``(II) triglycerides;
                               ``(III) body mass index;
                               ``(IV) systolic blood pressure;
                               ``(V) diastolic blood pressure; or
                               ``(VI) the need for cholesterol, blood pressure, and diabetes medications.
                         ``(B) To be eligible for an intensive cardiac rehabilitation program, an individual must have—
                            ``(i) had an acute myocardial infarction within the preceding 12 months;
                            ``(ii) had coronary bypass surgery;
                            ``(iii) stable angina pectoris;
                            ``(iv) had heart valve repair or replacement;
                            ``(v) had percutaneous transluminal coronary angioplasty (PTCA) or coronary stenting; or
                            ``(vi) had a heart or heart-lung transplant.
                         ``(C) An intensive cardiac rehabilitation program may be provided in a series of 72 one-hour sessions (as defined in section 1848(b)(5)), up to 6 sessions per day, over a period of up to 18 weeks.
                      ``(5) The Secretary shall establish standards to ensure that a physician with expertise in the management of individuals with cardiac pathophysiology who is licensed to practice medicine in the State in which a cardiac rehabilitation program (or the intensive cardiac rehabilitation program, as the case may be) is offered—
                         ``(A) is responsible for such program; and
                         ``(B) in consultation with appropriate staff, is involved substantially in directing the progress of individual in the program.
                   ``(fff) Pulmonary rehabilitation program
                      ``(1) The term ‘pulmonary rehabilitation program’ means a physician-supervised program (as described in subsection (eee)(2) with respect to a program under this subsection) that furnishes the items and services described in paragraph (2).
                      ``(2) The items and services described in this paragraph are—
                         ``(A) physician-prescribed exercise;
                         ``(B) education or training (to the extent the education or training is closely and clearly related to the individual’s care and treatment and is tailored to such individual’s needs);
                         ``(C) psychosocial assessment;
                         ``(D) outcomes assessment; and
                         ``(E) such other items and services as the Secretary may determine, but only if such items and services are—
                            ``(i) reasonable and necessary for the diagnosis or active treatment of the individual’s condition;
                            ``(ii) reasonably expected to improve or maintain the individual’s condition and functional level; and
                            ``(iii) furnished under such guidelines relating to the frequency and duration of such items and services as the Secretary shall establish, taking into account accepted norms of medical practice and the reasonable expectation of improvement of the individual.
                      ``(3) The Secretary shall establish standards to ensure that a physician with expertise in the management of individuals with respiratory pathophysiology who is licensed to practice medicine in the State in which a pulmonary rehabilitation program is offered—
                         ``(A) is responsible for such program; and
                         ``(B) in consultation with appropriate staff, is involved substantially in directing the progress of individual in the program.´´.
          (2) Payment for Intensive Cardiac Rehabilitation Programs.—
                (A) Inclusion in Physician Fee Schedule.—
                   Section 1848(j)(3) of the Social Security Act (42 U.S.C. 1395w–4(j)(3)) is amended by inserting ``(2)(DD),´´ after ``(2)(AA),´´.
                (B) Conforming Amendment.—
                   Section 1848(b) of the Social Security Act (42 U.S.C. 1395w–4(b)) is amended by adding at the end the following new paragraph:
                      ``(5) Treatment of intensive cardiac rehabilitation program.—
                         ``(A) In general.—In the case of an intensive cardiac rehabilitation program described in section 1861(eee)(4), the Secretary shall substitute the Medicare OPD fee schedule amount established under the prospective payment system for hospital outpatient department service under paragraph (3)(D) of section 1833(t) for cardiac rehabilitation (under HCPCS codes 93797 and 93798 for calendar year 2007, or any succeeding HCPCS codes for cardiac rehabilitation).
                         ``(B) Definition of session.—Each of the services described in subparagraphs (A) through (E) of section 1861(eee)(3), when furnished for one hour, is a separate session of intensive cardiac rehabilitation.
                         ``(C) Multiple sessions per day.—Payment may be made for up to 6 sessions per day of the series of 72 one-hour sessions of intensive cardiac rehabilitation services described in section 1861(eee)(4)(B).´´.
          (3) Effective Date.—
             The amendments made by this subsection shall apply to items and services furnished on or after January 1, 2010.
    (b) Repeal of Transfer of Ownership of Oxygen Equipment.—
          (1) In General.—
             Section 1834(a)(5)(F) of the Social Security Act (42 U.S.C. 1395m(a)(5)(F)) is amended—
                (A) in the heading, by striking ``OWNERSHIP OF EQUIPMENT´´ and inserting ``RENTAL CAP´´; and
                (B) by striking clause (ii) and inserting the following:
                   ``(ii) Payments and rules after rental cap.—After the 36th continuous month during which payment is made for the equipment under this paragraph—
                      ``(I) the supplier furnishing such equipment under this subsection shall continue to furnish the equipment during any period of medical need for the remainder of the reasonable useful lifetime of the equipment, as determined by the Secretary;
                      ``(II) payments for oxygen shall continue to be made in the amount recognized for oxygen under paragraph (9) for the period of medical need; and
                   ``(III) maintenance and servicing payments shall, if the Secretary determines such payments are reasonable and necessary, be made (for parts and labor not covered by the supplier's or manufacturer's warranty, as determined by the Secretary to be appropriate for the equipment), and such payments shall be in an amount determined to be appropriate by the Secretary.´´.
          (2) Effective Date.—
             The amendments made by paragraph (1) shall take effect on January 1, 2009

### Sec. 145. Clinical Laboratory Tests.

    (a) Repeal of Medicare Competitive Bidding Demonstration Project for Clinical Laboratory Services.—
          (1) In General.—
             Section 1847 of the Social Security Act (42 U.S.C. 1395w–3) is amended by striking subsection (e).
          (2) Conforming Amendments.—
             Section 1833(a)(1)(D) of the Social Security Act (42 U.S.C. 1395l(a)(1)(D)) is amended—
                (A) by inserting ``or´´ before ``(ii)´´; and
                (B) by striking ``or (iii) on the basis´´ and all that follows before the comma at the end.
          (3) Effective Date.—
             The amendments made by this subsection shall take effect on the date of the enactment of this Act.
    (b) Clinical Laboratory Test Fee Schedule Update Adjustment.—
       Section 1833(h)(2)(A)(i) of the Social Security Act (42 U.S.C. 1395l(h)(2)(A)(ii)) is amended by inserting ``minus, for each of the years 2009 through 2013, 0.5 percentage points´´ after ``city average)´´.

### Sec. 146. Improved Access to Ambulance Services.

    (a) Extension of Increased Medicare Payments for Ground Ambulance Services.—
       Section 1834(l)(13) of the Social Security Act (42 U.S.C. 1395m(l)(13)) is amended—
          (1) in subparagraph (A)—
                (A) in the matter preceding clause (i), by inserting ``and for such services furnished on or after July 1, 2008, and before January 1, 2010´´ after ``2007,´´;
                (B) in clause (i), by inserting ``(or 3 percent if such service is furnished on or after July 1, 2008, and before January 1, 2010)´´ after ``2 percent´´; and
                (C) in clause (ii), by inserting ``(or 2 percent if such service is furnished on or after July 1, 2008, and before January 1, 2010)´´ after ``1 percent´´; and
          (2) in subparagraph (B)—
                (A) in the heading, by striking ``2006´´ and inserting ``applicable period´´; and
                (B) by inserting ``applicable´´ before ``period´´.
    (b) Air Ambulance Payment Improvements.—
          (1) Treatment of certain areas for payment for air ambulance services under the ambulance fee schedule.—
             Notwithstanding any other provision of law, for purposes of making payments under section 1834(l) of the Social Security Act (42 U.S.C. 1395m(l)) for air ambulance services furnished during the period beginning on July 1, 2008, and ending on December 31, 2009, any area that was designated as a rural area for purposes of making payments under such section for air ambulance services furnished on December 31, 2006, shall be treated as a rural area for purposes of making payments under such section for air ambulance services furnished during such period.
          (2) Clarification regarding satisfaction of requirement of medically necessary.—
                (A) In General.—
                   Section 1834(l)(14)(B)(i) of the Social Security Act (42 U.S.C. 1395m(l)(14)(B)(i)) is amended by striking ``reasonably determines or certifies´´ and inserting ``certifies or reasonably determines´´.
                (B) Effective Date.—
                   The amendment made by subparagraph (A) shall apply to services furnished on or after the date of the enactment of this Act.

### Sec. 147. Extension and Expansion of the Medicare Hold Harmless Provision Under the Prospective Payment System for Hospital Outpatient Department (HOPD) Services for Certain Hospitals.

    Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 1395l(t)(7)(D)(i)) is amended—
          (1) in subclause (II)—
                (A) in the first sentence, by striking ``2009´´ and inserting ``2010´´; and
                (B) by striking the second sentence and inserting the following new sentence: ``For purposes of the preceding sentence, the applicable percentage shall be 95 percent with respect to covered OPD services furnished in 2006, 90 percent with respect to such services furnished in 2007, and 85 percent with respect to such services furnished in 2008 or 2009.´´; and
          (2) by adding at the end the following new subclause:
             ``(III) In the case of a sole community hospital (as defined in section 1886(d)(5)(D)(iii)) that has not more than 100 beds, for covered OPD services furnished on or after January 1, 2009, and before January 1, 2010, for which the PPS amount is less than the pre-BBA amount, the amount of payment under this subsection shall be increased by 85 percent of the amount of such difference.´´.

### Sec. 148. Clarification of Payment for Clinical Laboratory Tests Furnished by Critical Access Hospitals.

    (a) In General.—
       Section 1834(g)(4) of the Social Security Act (42 U.S.C. 1395m(g)(4)) is amended—
          (1) in the heading, by striking ``no beneficiary cost-sharing for´´ and inserting ``treatment of´´; and
          (2) by adding at the end the following new sentence: ``For purposes of the preceding sentence and section 1861(mm)(3), clinical diagnostic laboratory services furnished by a critical access hospital shall be treated as being furnished as part of outpatient critical access services without regard to whether the individual with respect to whom such services are furnished is physically present in the critical access hospital, or in a skilled nursing facility or a clinic (including a rural health clinic) that is operated by a critical access hospital, at the time the specimen is collected.´´.
    (b) Effective Date.—
       The amendments made by subsection (a) shall apply to services furnished on or after July 1, 2009.

### Sec. 149. Adding Certain Entities as Originating Sites for Payment of TeleHealth Services.

    (a) In General.—
       Section 1834(m)(4)(C)(ii) of the Social Security Act (42 U.S.C. 1395m(m)(4)(C)(ii)) is amended by adding at the end the following new subclauses:
          ``(VI) A hospital-based or critical access hospital-based renal dialysis center (including satellites).
          ``(VII) A skilled nursing facility (as defined in section 1819(a)).
          ``(VIII) A community mental health center (as defined in section 1861(ff)(3)(B)).´´.
    (b) Conforming Amendment.—
       Section 1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by inserting ``telehealth services furnished under section 1834(m)(4)(C)(ii)(VII),´´ after ``section 1861(s)(2),´´.
    (c) Effective Date.—
       The amendments made by this section shall apply to services furnished on or after January 1, 2009.

### Sec. 150. MedPAC Study and Report on Improving Chronic Care Demonstration Programs.

    (a) Study.—
       The Medicare Payment Advisory Commission (in this section referred to as the ``Commission´´) shall conduct a study on the feasability and advisability of establishing a Medicare Chronic Care Practice Research Network that would serve as a standing network of providers testing new models of care coordination and other care approaches for chronically ill beneficiaries, including the initiation, operation, evaluation, and, if appropriate, expansion of such models to the broader Medicare patient population. In conducting such study, the Commission shall take into account the structure, implementation, and results of prior and existing care coordination and disease management demonstrations and pilots, including the Medicare Coordinated Care Demonstration Project under section 4016 of the Balanced Budget Act of 1997 (42 U.S.C. 1395b–1 note) and the chronic care improvement programs under section 1807 of the Social Security Act (42 U.S.C. 1395b–8), commonly known to as ``Medicare Health Support´´.
    (b) Report.—
       Not later than June 15, 2009, the Commission shall submit to Congress a report containing the results of the study conducted under subsection (a).

### Sec. 151. Increase of FQHC Payment Limits.

    (a) In General.—
       Section 1833 of the Social Security Act (42 U.S.C. 1395l) is amended by adding at the end the following new subsection:
          ``(v) Increase of FQHC payment limits.—In the case of services furnished by Federally qualified health centers (as defined in section 1861(aa)(4)), the Secretary shall establish payment limits with respect to such services under this part for services furnished—
             ``(1) in 2010, at the limits otherwise established under this part for such year increased by $5; and
             ``(2) in a subsequent year, at the limits established under this subsection for the previous year increased by the percentage increase in the MEI (as defined in section 1842(i)(3)) for such subsequent year.´´.
    (b) Study and report on the effects and adequacy of the Medicare Federally qualified health center payment structure.—
          (1) Study.—
             The Comptroller General of the United States shall conduct a study to determine whether the structure for payments for services furnished by Federally qualified health centers (as defined in section 1861(aa)(4) of the Social Security Act (42 U.S.C. 1395x(aa)(4)) under part B of title XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) adequately reimburses Federally qualified health centers for the care furnished to Medicare beneficiaries. In conducting such study, the Comptroller General shall—
                (A) use the most current cost report data available;
                (B) examine the effects of the payment limits established with respect to such services under such part B on the ability of Federally qualified health centers to furnish care to Medicare beneficiaries; and
                (C) examine the cost of furnishing services covered under the Medicare program as of the date of the enactment of this Act that were not covered under such program as of the date on which the Secretary determined the payment rate for Federally qualified health centers in 1991.
          (2) Report.—
             Not later than 15 months after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on the study conducted under paragraph (1), together with recommendations for such legislation and administrative action the Comptroller General determines appropriate, taking into consideration the structure and adequacy of the prospective payment methodology used to make payments to Federally qualified health centers under the Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).

### Sec. 152. Kidney Disease Education and Awareness Provisions.

    (a) Chronic kidney disease initiatives.—
       Part P of title III of the Public Health Service Act (42 U.S.C. 280g et seq.) is amended by adding at the end the following new section:

##### ``SEC. 399R. Chronic kidney disease initiatives.

             ``(a) In general.—The Secretary shall establish pilot projects to—
                ``(1) increase public and medical community awareness (particularly of those who treat patients with diabetes and hypertension) regarding chronic kidney disease, focusing on prevention;
                ``(2) increase screening for chronic kidney disease, focusing on Medicare beneficiaries at risk of chronic kidney disease; and
                ``(3) enhance surveillance systems to better assess the prevalence and incidence of chronic kidney disease.
             ``(b) Scope and duration.—
                ``(1) Scope.—The Secretary shall select at least 3 States in which to conduct pilot projects under this section.
                ``(2) Duration.—The pilot projects under this section shall be conducted for a period that is not longer than 5 years and shall begin on January 1, 2009.
             ``(c) Evaluation and report.—The Comptroller General of the United States shall conduct an evaluation of the pilot projects conducted under this section. Not later than 12 months after the date on which the pilot projects are completed, the Comptroller General shall submit to Congress a report on the evaluation.
             ``(d) Authorization of appropriations.—There are authorized to be appropriated such sums as may be necessary for the purpose of carrying out this section.´´.
    (b) Medicare coverage of kidney disease patient education services.—
          (1) Coverage of kidney disease education services.—
                (A) Coverage.—
                   Section 1861(s)(2) of the Social Security Act (42 U.S.C. 1395x(s)(2)), as amended by section 144(a), is amended—
                      (i) in subparagraph (CC), by striking ``and´´ after the semicolon at the end;
                      (ii) in subparagraph (DD), by adding ``and´´ after the semicolon at the end; and
                      (iii) by adding at the end the following new subparagraph:
                         ``(EE) kidney disease education services (as defined in subsection (ggg));´´.
                (B) Services Described.—
                   Section 1861 of the Social Security Act (42 U.S.C. 1395x), as amended by section 144(a), is amended by adding at the end the following new subsection:
                      ``(ggg) Kidney disease education services
                         ``(1) The term ‘kidney disease education services’ means educational services that are—
                            ``(A) furnished to an individual with stage IV chronic kidney disease who, according to accepted clinical guidelines identified by the Secretary, will require dialysis or a kidney transplant;
                            ``(B) furnished, upon the referral of the physician managing the individual's kidney condition, by a qualified person (as defined in paragraph (2)); and
                            ``(C) designed—
                               ``(i) to provide comprehensive information (consistent with the standards set under paragraph (3)) regarding—
                                  ``(I) the management of comorbidities, including for purposes of delaying the need for dialysis;
                               ``(II) the prevention of uremic complications; and
                               ``(III) each option for renal replacement therapy (including hemodialysis and peritoneal dialysis at home and in-center as well as vascular access options and transplantation);
                            ``(ii) to ensure that the individual has the opportunity to actively participate in the choice of therapy; and
                            ``(iii) to be tailored to meet the needs of the individual involved.
                      ``(2)(A) The term ‘qualified person’ means—
                            ``(i) a physician (as defined in section 1861(r)(1)) or a physician assistant, nurse practitioner, or clinical nurse specialist (as defined in section 1861(aa)(5)), who furnishes services for which payment may be made under the fee schedule established under section 1848; and
                            ``(ii) a provider of services located in a rural area (as defined in section 1886(d)(2)(D)).
                         ``(B) Such term does not include a provider of services (other than a provider of services described in subparagraph (A)(ii)) or a renal dialysis facility.
                      ``(3) The Secretary shall set standards for the content of such information to be provided under paragraph (1)(C)(i) after consulting with physicians, other health professionals, health educators, professional organizations, accrediting organizations, kidney patient organizations, dialysis facilities, transplant centers, network organizations described in section 1881(c)(2), and other knowledgeable persons. To the extent possible the Secretary shall consult with persons or entities described in the previous sentence, other than a dialysis facility, that has not received industry funding from a drug or biological manufacturer or dialysis facility.
                      ``(4) No individual shall be furnished more than 6 sessions of kidney disease education services under this title.´´.
                (C) Payment under the physician fee schedule.—
                   Section 1848(j)(3) of the Social Security Act (42 U.S.C. 1395w–4(j)(3)), as amended by section 144(b), is amended by inserting ``(2)(EE),´´ after ``(2)(DD),´´.
                (D) Limitation on number of sessions.—
                   Section 1862(a)(1) of the Social Security Act (42 U.S.C. 1395y(a)(1)) is amended—
                      (i) in subparagraph (M), by striking ``and´´ at the end;
                      (ii) in subparagraph (N), by striking the semicolon at the end and inserting ``, and´´; and
                      (iii) by adding at the end the following new subparagraph:
                         ``(O) in the case of kidney disease education services (as defined in paragraph (1) of section 1861(ggg)), which are furnished in excess of the number of sessions covered under paragraph (4) of such section;´´.
          (2) Effective Date.—
             The amendments made by this subsection shall apply to services furnished on or after January 1, 2010.

### Sec. 153. Renal Dialysis Provisions.

    (a) Composite Rate.—
          (1) Update.—
             Section 1881(b)(12)(G) of the Social Security Act (42 U.S.C. 1395rr(b)(12)(G)) is amended—
                (A) in clause (i), by striking ``and´´ at the end;
                (B) in clause (ii)—
                      (i) by inserting ``and before January 1, 2009,´´ after ``April 1, 2007,´´; and
                      (ii) by striking the period at the end and inserting a semicolon; and
                (C) by adding at the end the following new clauses:
                   ``(iii) furnished on or after January 1, 2009, and before January 1, 2010, by 1.0 percent above the amount of such composite rate component for such services furnished on December 31, 2008; and
                   ``(iv) furnished on or after January 1, 2010, by 1.0 percent above the amount of such composite rate component for such services furnished on December 31, 2009.´´.
          (2) Site Neutral Composite Rate.—
             Section 1881(b)(12)(A) of the Social Security Act (42 U.S.C. 1395rr(b)(12)(A)) is amended by adding at the end the following new sentence: ``Under such system, the payment rate for dialysis services furnished on or after January 1, 2009, by providers of services shall be the same as the payment rate (computed without regard to this sentence) for such services furnished by renal dialysis facilities, and in applying the geographic index under subparagraph (D) to providers of services, the labor share shall be based on the labor share otherwise applied for renal dialysis facilities.´´.
    (b) Development of ESRD Bundled Payment System.—
          (1) In General.—
             Section 1881(b) of the Social Security Act (42 U.S.C. 1395rr(b)) is amended by adding at the end the following new paragraph:
                ``(14)(A)(i) Subject to subparagraph (E), for services furnished on or after January 1, 2011, the Secretary shall implement a payment system under which a single payment is made under this title to a provider of services or a renal dialysis facility for renal dialysis services (as defined in subparagraph (B)) in lieu of any other payment (including a payment adjustment under paragraph (12)(B)(ii)) and for such services and items furnished pursuant to paragraph (4).
                      ``(ii) In implementing the system under this paragraph the Secretary shall ensure that the estimated total amount of payments under this title for 2011 for renal dialysis services shall equal 98 percent of the estimated total amount of payments for renal dialysis services, including payments under paragraph (12)(B)(ii), that would have been made under this title with respect to services furnished in 2011 if such system had not been implemented. In making the estimation under subclause (I), the Secretary shall use per patient utilization data from 2007, 2008, or 2009, whichever has the lowest per patient utilization.
                   ``(B) For purposes of this paragraph, the term ‘renal dialysis services’ includes—
                      ``(i) items and services included in the composite rate for renal dialysis services as of December 31, 2010;
                      ``(ii) erythropoiesis stimulating agents and any oral form of such agents that are furnished to individuals for the treatment of end stage renal disease;
                      ``(iii) other drugs and biologicals that are furnished to individuals for the treatment of end stage renal disease and for which payment was (before the application of this paragraph) made separately under this title, and any oral equivalent form of such drug or biological; and
                      ``(iv) diagnostic laboratory tests and other items and services not described in clause (i) that are furnished to individuals for the treatment of end stage renal disease.
                   ``Such term does not include vaccines.
                   ``(C) The system under this paragraph may provide for payment on the basis of services furnished during a week or month or such other appropriate unit of payment as the Secretary specifies.
                   ``(D) Such system—
                      ``(i) shall include a payment adjustment based on case mix that may take into account patient weight, body mass index, comorbidities, length of time on dialysis, age, race, ethnicity, and other appropriate factors;
                      ``(ii) shall include a payment adjustment for high cost outliers due to unusual variations in the type or amount of medically necessary care, including variations in the amount of erythropoiesis stimulating agents necessary for anemia management;
                      ``(iii) shall include a payment adjustment that reflects the extent to which costs incurred by low-volume facilities (as defined by the Secretary) in furnishing renal dialysis services exceed the costs incurred by other facilities in furnishing such services, and for payment for renal dialysis services furnished on or after January 1, 2011, and before January 1, 2014, such payment adjustment shall not be less than 10 percent; and
                      ``(iv) may include such other payment adjustments as the Secretary determines appropriate, such as a payment adjustment—
                         ``(I) for pediatric providers of services and renal dialysis facilities;
                         ``(II) by a geographic index, such as the index referred to in paragraph (12)(D), as the Secretary determines to be appropriate; and
                         ``(III) for providers of services or renal dialysis facilities located in rural areas.
                      ``The Secretary shall take into consideration the unique treatment needs of children and young adults in establishing such system.
                   ``(E)(i) The Secretary shall provide for a four-year phase-in (in equal increments) of the payment amount under the payment system under this paragraph, with such payment amount being fully implemented for renal dialysis services furnished on or after January 1, 2014.
                      ``(ii) A provider of services or renal dialysis facility may make a one-time election to be excluded from the phase-in under clause (i) and be paid entirely based on the payment amount under the payment system under this paragraph. Such an election shall be made prior to January 1, 2011, in a form and manner specified by the Secretary, and is final and may not be rescinded.
                      ``(iii) The Secretary shall make an adjustment to the payments under this paragraph for years during which the phase-in under clause (i) is applicable so that the estimated total amount of payments under this paragraph, including payments under this subparagraph, shall equal the estimated total amount of payments that would otherwise occur under this paragraph without such phase-in.
                   ``(F)(i) Subject to clause (ii), beginning in 2012, the Secretary shall annually increase payment amounts established under this paragraph by an ESRD market basket percentage increase factor for a bundled payment system for renal dialysis services that reflects changes over time in the prices of an appropriate mix of goods and services included in renal dialysis services minus 1.0 percentage point.
                      ``(ii) For years during which a phase-in of the payment system pursuant to subparagraph (E) is applicable, the following rules shall apply to the portion of the payment under the system that is based on the payment of the composite rate that would otherwise apply if the system under this paragraph had not been enacted:
                         ``(I) The update under clause (i) shall not apply.
                         ``(II) The Secretary shall annually increase such composite rate by the ESRD market basket percentage increase factor described in clause (i) minus 1.0 percentage point.
                   ``(G) There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of the determination of payment amounts under subparagraph (A), the establishment of an appropriate unit of payment under subparagraph (C), the identification of renal dialysis services included in the bundled payment, the adjustments under subparagraph (D), the application of the phase-in under subparagraph (E), and the establishment of the market basket percentage increase factors under subparagraph (F).
                   ``(H) Erythropoiesis stimulating agents and other drugs and biologicals shall be treated as prescribed and dispensed or administered and available only under part B if they are—
                      ``(i) furnished to an individual for the treatment of end stage renal disease; and
                      ``(ii) included in subparagraph (B) for purposes of payment under this paragraph.´´.
          (2) Prohibition of Unbundling.—
             Section 1862(a) of the Social Security Act (42 U.S.C. 1395y(a)), as amended by section 135(a)(2), is amended—
                (A) in paragraph (22), by striking ``or´´ at the end;
                (B) in paragraph (23), by striking the period at the end and inserting ``; or´´; and
                (C) by inserting after paragraph (23) the following new paragraph:
                   ``(24) where such expenses are for renal dialysis services (as defined in subparagraph (B) of section 1881(b)(14)) for which payment is made under such section unless such payment is made under such section to a provider of services or a renal dialysis facility for such services.´´.
          (3) Conforming Amendments.—
                (A) Section 1881(b) of the Social Security Act (42 U.S.C. 1395rr(b)) is amended—
                      (i) in paragraph (12)(A), by striking ``In lieu of payment´´ and inserting ``Subject to paragraph (14), in lieu of payment´´;
                      (ii) in the second sentence of paragraph (12)(F)—
                            (I) by inserting ``or paragraph (14)´´ after ``this paragraph´´; and
                            (II) by inserting ``or under the system under paragraph (14)´´ after ``subparagraph (B)´´; and
                      (iii) in paragraph (13)—
                            (I) in subparagraph (A), in the matter preceding clause (i), by striking ``The payment amounts´´ and inserting ``Subject to paragraph (14), the payment amounts´´; and
                            (II) in subparagraph (B)—
                               (aa) in clause (i), by striking ``(i)´´ after ``(B)´´ and by inserting ``, subject to paragraph (14)´´ before the period at the end; and
                               (bb) by striking clause (ii).
                (B) Section 1861(s)(2)(F) of the Social Security Act (42 U.S.C. 1395x(s)(2)(F)) is amended by inserting ``, and, for items and services furnished on or after January 1, 2011, renal dialysis services (as defined in section 1881(b)(14)(B))´´ before the semicolon at the end.
                (C) Section 623(e) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (42 U.S.C. 1395rr note) is repealed.
          (4) Rule of Construction.—
             Nothing in this subsection or the amendments made by this subsection shall be construed as authorizing or requiring the Secretary of Health and Human Services to make payments under the payment system implemented under paragraph (14)(A)(i) of section 1881(b) of the Social Security Act (42 U.S.C. 1395rr(b)), as added by paragraph (1), for any unrecovered amount for any bad debt attributable to deductible and coinsurance on items and services not included in the basic case-mix adjusted composite rate under paragraph (12) of such section as in effect before the date of the enactment of this Act.
    (c) Quality Incentives in the End-Stage Renal Disease Program.—
       Section 1881 of the Social Security Act (42 U.S.C. 1395rr) is amended by adding at the end the following new subsection:
          ``(h) Quality incentives in the end-stage renal disease program.—
             ``(1) Quality incentives.—
                ``(A) In general.—With respect to renal dialysis services (as defined in subsection (b)(14)(B)) furnished on or after January 1, 2012, in the case of a provider of services or a renal dialysis facility that does not meet the requirement described in subparagraph (B) with respect to the year, payments otherwise made to such provider or facility under the system under subsection (b)(14) for such services shall be reduced by up to 2.0 percent, as determined appropriate by the Secretary.
                ``(B) Requirement.—The requirement described in this subparagraph is that the provider or facility meets (or exceeds) the total performance score under paragraph (3) with respect to performance standards established by the Secretary with respect to measures specified in paragraph (2).
                ``(C) No effect in subsequent years.—The reduction under subparagraph (A) shall apply only with respect to the year involved, and the Secretary shall not take into account such reduction in computing the single payment amount under the system under paragraph (14) in a subsequent year.
             ``(2) Measures.—
                ``(A) In general.—The measures specified under this paragraph with respect to the year involved shall include—
                   ``(i) measures on anemia management that reflect the labeling approved by the Food and Drug Administration for such management and measures on dialysis adequacy;
                   ``(ii) to the extent feasible, such measure (or measures) of patient satisfaction as the Secretary shall specify; and
                   ``(iii) such other measures as the Secretary specifies, including, to the extent feasible, measures on—
                      ``(I) iron management;
                      ``(II) bone mineral metabolism; and
                      ``(III) vascular access, including for maximizing the placement of arterial venous fistula.
                ``(B) Use of endorsed measures.—
                   ``(i) In general.—Subject to clause (ii), any measure specified by the Secretary under subparagraph (A)(iii) must have been endorsed by the entity with a contract under section 1890(a).
                   ``(ii) Exception.—In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a), the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary.
                ``(C) Updating measures.—The Secretary shall establish a process for updating the measures specified under subparagraph (A) in consultation with interested parties.
                ``(D) Consideration.—In specifying measures under subparagraph (A), the Secretary shall consider the availability of measures that address the unique treatment needs of children and young adults with kidney failure.
             ``(3) Performance scores.—
                ``(A) Total performance score.—
                   ``(i) In general.—Subject to clause (ii), the Secretary shall develop a methodology for assessing the total performance of each provider of services and renal dialysis facility based on performance standards with respect to the measures selected under paragraph (2) for a performance period established under paragraph (4)(D) (in this subsection referred to as the ‘total performance score’).
                   ``(ii) Application.—For providers of services and renal dialysis facilities that do not meet (or exceed) the total performance score established by the Secretary, the Secretary shall ensure that the application of the methodology developed under clause (i) results in an appropriate distribution of reductions in payment under paragraph (1) among providers and facilities achieving different levels of total performance scores, with providers and facilities achieving the lowest total performance scores receiving the largest reduction in payment under paragraph (1)(A).
                   ``(iii) Weighting of measures.—In calculating the total performance score, the Secretary shall weight the scores with respect to individual measures calculated under subparagraph (B) to reflect priorities for quality improvement, such as weighting scores to ensure that providers of services and renal dialysis facilities have strong incentives to meet or exceed anemia management and dialysis adequacy performance standards, as determined appropriate by the Secretary.
                ``(B) Performance score with respect to individual measures.—The Secretary shall also calculate separate performance scores for each measure, including for dialysis adequacy and anemia management.
             ``(4) Performance standards.—
                ``(A) Establishment.—Subject to subparagraph (E), the Secretary shall establish performance standards with respect to measures selected under paragraph (2) for a performance period with respect to a year (as established under subparagraph (D)).
                ``(B) Achievement and improvement.—The performance standards established under subparagraph (A) shall include levels of achievement and improvement, as determined appropriate by the Secretary.
                ``(C) Timing.—The Secretary shall establish the performance standards under subparagraph (A) prior to the beginning of the performance period for the year involved.
                ``(D) Performance period.—The Secretary shall establish the performance period with respect to a year. Such performance period shall occur prior to the beginning of such year.
                ``(E) Special rule.—The Secretary shall initially use as the performance standard for the measures specified under paragraph (2)(A)(i) for a provider of services or a renal dialysis facility the lesser of—
                   ``(i) the performance of such provider or facility for such measures in the year selected by the Secretary under the second sentence of subsection (b)(14)(A)(ii); or
                   ``(ii) a performance standard based on the national performance rates for such measures in a period determined by the Secretary.
             ``(5) Limitation on review.—There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of the following:
                ``(A) The determination of the amount of the payment reduction under paragraph (1).
                ``(B) The establishment of the performance standards and the performance period under paragraph (4).
                ``(C) The specification of measures under paragraph (2).
                ``(D) The methodology developed under paragraph (3) that is used to calculate total performance scores and performance scores for individual measures.
             ``(6) Public reporting.—
                ``(A) In general.—The Secretary shall establish procedures for making information regarding performance under this subsection available to the public, including—
                   ``(i) the total performance score achieved by the provider of services or renal dialysis facility under paragraph (3) and appropriate comparisons of providers of services and renal dialysis facilities to the national average with respect to such scores; and
                   ``(ii) the performance score achieved by the provider or facility with respect to individual measures.
                ``(B) Opportunity to review.—The procedures established under subparagraph (A) shall ensure that a provider of services and a renal dialysis facility has the opportunity to review the information that is to be made public with respect to the provider or facility prior to such data being made public.
                ``(C) Certificates.—
                   ``(i) In general.—The Secretary shall provide certificates to providers of services and renal dialysis facilities who furnish renal dialysis services under this section to display in patient areas. The certificate shall indicate the total performance score achieved by the provider or facility under paragraph (3).
                   ``(ii) Display.—Each facility or provider receiving a certificate under clause (i) shall prominently display the certificate at the provider or facility.
                ``(D) Web-based list.—The Secretary shall establish a list of providers of services and renal dialysis facilities who furnish renal dialysis services under this section that indicates the total performance score and the performance score for individual measures achieved by the provider and facility under paragraph (3). Such information shall be posted on the Internet website of the Centers for Medicare & Medicaid Services in an easily understandable format.´´.
    (d) GAO Report on ESRD Bundling System and Quality Initiative.—
       Not later than March 1, 2013, the Comptroller General of the United States shall submit to Congress a report on the implementation of the payment system under subsection (b)(14) of section 1881 of the Social Security Act (as added by subsection (b)) for renal dialysis services and related services (defined in subparagraph (B) of such subsection (b)(14)) and the quality initiative under subsection (h) of such section 1881 (as added by subsection (b)). Such report shall include the following information:
          (1) The changes in utilization rates for erythropoiesis stimulating agents.
          (2) The mode of administering such agents, including information on the proportion of individuals receiving such agents intravenously as compared to subcutaneously.
          (3) An analysis of the payment adjustment under subparagraph (D)(iii) of such subsection (b)(14), including an examination of the extent to which costs incurred by rural, low-volume providers and facilities (as defined by the Secretary) in furnishing renal dialysis services exceed the costs incurred by other providers and facilities in furnishing such services, and a recommendation regarding the appropriateness of such adjustment.
          (4) The changes, if any, in utilization rates of drugs and biologicals that the Secretary identifies under subparagraph (B)(iii) of such subsection (b)(14), and any oral equivalent or oral substitutable forms of such drugs and biologicals or of drugs and biologicals described in clause (ii), that have occurred after implementation of the payment system under such subsection (b)(14).
          (5) Any other information or recommendations for legislative and administrative actions determined appropriate by the Comptroller General.

### Sec. 154. Delay In and Reform of Medicare DMEPOS Competitive Acquisition Program.

    (a) Temporary Delay and Reform.—
          (1) In General.—
             Section 1847(a)(1) of the Social Security Act (42 U.S.C. 1395w–3(a)(1)) is amended—
                (A) in paragraph (1)—
                      (i) in subparagraph (B)(i), in the matter before subclause (I), by inserting ``consistent with subparagraph (D)´´ after ``in a manner´´;
                      (ii) in subparagraph (B)(i)(II), by striking ``80 ´´ and ``in 2009´´ and inserting ``an additional 70´´ and ``in 2011´´, respectively;
                      (iii) in subparagraph (B)(i)(III), by striking ``after 2009´´ and inserting ``after 2011 (or, in the case of national mail order for items and services, after 2010)´´; and
                      (iv) by adding at the end the following new subparagraphs:
                         ``(D) Changes in competitive acquisition programs.—
                            ``(i) Round 1 of competitive acquisition program.—Notwithstanding subparagraph (B)(i)(I) and in implementing the first round of the competitive acquisition programs under this section—
                               ``(I) the contracts awarded under this section before the date of the enactment of this subparagraph are terminated, no payment shall be made under this title on or after the date of the enactment of this subparagraph based on such a contract, and, to the extent that any damages may be applicable as a result of the termination of such contracts, such damages shall be payable from the Federal Supplementary Medical Insurance Trust Fund under section 1841;
                               ``(II) the Secretary shall conduct the competition for such round in a manner so that it occurs in 2009 with respect to the same items and services and the same areas, except as provided in subclauses (III) and (IV);
                               ``(III) the Secretary shall exclude Puerto Rico so that such round of competition covers 9, instead of 10, of the largest metropolitan statistical areas; and
                               ``(IV) there shall be excluded negative pressure wound therapy items and services.
                            ``Nothing in subclause (I) shall be construed to provide an independent cause of action or right to administrative or judicial review with regard to the termination provided under such subclause.
                            ``(ii) Round 2 of competitive acquisition program.—In implementing the second round of the competitive acquisition programs under this section described in subparagraph (B)(i)(II)—
                               ``(I) the metropolitan statistical areas to be included shall be those metropolitan statistical areas selected by the Secretary for such round as of June 1, 2008; and
                               ``(II) the Secretary may subdivide metropolitan statistical areas with populations (based upon the most recent data from the Census Bureau) of at least 8,000,000 into separate areas for competitive acquisition purposes.
                            ``(iii) Exclusion of certain areas in subsequent rounds of competitive acquisition programs.—In implementing subsequent rounds of the competitive acquisition programs under this section, including under subparagraph (B)(i)(III), for competitions occurring before 2015, the Secretary shall exempt from the competitive acquisition program (other than national mail order) the following:
                               ``(I) Rural areas.
                               ``(II) Metropolitan statistical areas not selected under round 1 or round 2 with a population of less than 250,000.
                               ``(III) Areas with a low population density within a metropolitan statistical area that is otherwise selected, as determined for purposes of paragraph (3)(A).
                         ``(E) Verification by OIG.—The Inspector General of the Department of Health and Human Services shall, through post-award audit, survey, or otherwise, assess the process used by the Centers for Medicare & Medicaid Services to conduct competitive bidding and subsequent pricing determinations under this section that are the basis for pivotal bid amounts and single payment amounts for items and services in competitive bidding areas under rounds 1 and 2 of the competitive acquisition programs under this section and may continue to verify such calculations for subsequent rounds of such programs.
                         ``(F) Supplier feedback on missing financial documentation.—
                            ``(i) In general.—In the case of a bid where one or more covered documents in connection with such bid have been submitted not later than the covered document review date specified in clause (ii), the Secretary—
                               ``(I) shall provide, by not later than 45 days (in the case of the first round of the competitive acquisition programs as described in subparagraph (B)(i)(I)) or 90 days (in the case of a subsequent round of such programs) after the covered document review date, for notice to the bidder of all such documents that are missing as of the covered document review date; and
                               ``(II) may not reject the bid on the basis that any covered document is missing or has not been submitted on a timely basis, if all such missing documents identified in the notice provided to the bidder under subclause (I) are submitted to the Secretary not later than 10 business days after the date of such notice.
                            ``(ii) Covered document review date.—The covered document review date specified in this clause with respect to a competitive acquisition program is the later of—
                               ``(I) the date that is 30 days before the final date specified by the Secretary for submission of bids under such program; or
                               ``(II) the date that is 30 days after the first date specified by the Secretary for submission of bids under such program.
                            ``(iii) Limitations of process.—The process provided under this subparagraph—
                               ``(I) applies only to the timely submission of covered documents;
                               ``(II) does not apply to any determination as to the accuracy or completeness of covered documents submitted or whether such documents meet applicable requirements;
                               ``(III) shall not prevent the Secretary from rejecting a bid based on any basis not described in clause (i)(II); and
                               ``(IV) shall not be construed as permitting a bidder to change bidding amounts or to make other changes in a bid submission.
                            ``(iv) Covered document defined.—In this subparagraph, the term ‘covered document’ means a financial, tax, or other document required to be submitted by a bidder as part of an original bid submission under a competitive acquisition program in order to meet required financial standards. Such term does not include other documents, such as the bid itself or accreditation documentation.´´; and
                (B) in paragraph (2)(A), by inserting before the period at the end the following: ``and excluding certain complex rehabilitative power wheelchairs recognized by the Secretary as classified within group 3 or higher (and related accessories when furnished in connection with such wheelchairs)´´.
          (2) Budget neutral offset.—
                (A) In General.—
                   Section 1834(a)(14) of such Act (42 U.S.C. 1395m(a)(14)) is amended—
                      (i) by striking ``and´´ at the end of subparagraphs (H) and (I);
                      (ii) by redesignating subparagraph (J) as subparagraph (M); and
                      (iii) by inserting after subparagraph (I) the following new subparagraphs:
                         ``(J) for 2009—
                            ``(i) in the case of items and services furnished in any geographic area, if such items or services were selected for competitive acquisition in any area under the competitive acquisition program under section 1847(a)(1)(B)(i)(I) before July 1, 2008, including related accessories but only if furnished with such items and services selected for such competition and diabetic supplies but only if furnished through mail order, - 9.5 percent; or
                            ``(ii) in the case of other items and services, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June 2008;
                         ``(K) for 2010, 2011, 2012, and 2013, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June of the previous year;
                         ``(L) for 2014—
                            ``(i) in the case of items and services described in subparagraph (J)(i) for which a payment adjustment has not been made under subsection (a)(1)(F)(ii) in any previous year, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June 2013, plus 2.0 percentage points; or
                            ``(ii) in the case of other items and services, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June 2013; and´´.
                (B) Conforming treatment for certain items and services.—
                   The second sentence of section 1842(s)(1) of such Act (42 U.S.C. 1395u(s)(1)) is amended by striking ``except that´´ and all that follows and inserting the following: ``except that for items and services described in paragraph (2)(D)—
                      ``(A) for 2009 section 1834(a)(14)(J)(i) shall apply under this paragraph instead of the percentage increase otherwise applicable; and
                      ``(B) for 2014, if subparagraph (A) is applied to the items and services and there has not been a payment adjustment under paragraph (3)(B) for the items and services for any previous year, the percentage increase computed under section 1834(a)(14)(L)(i) shall apply instead of the percentage increase otherwise applicable.´´.
          (3) Conforming Delay.—
             Subsections (a)(1)(F) and (h)(1)(H) of section 1834 of the Social Security Act (42 U.S.C. 1395m) are each amended by striking ``January 1, 2009´´ and inserting ``January 1, 2011´´.
          (4) Considerations in application.—Section 1834 of such Act (42 U.S.C. 1395m) is amended—
                (A) in subsection (a)(1)—
                      (i) in subparagraph (F), by inserting ``subject to subparagraph (G),´´ before ``that are included´´; and
                      (ii) by adding at the end the following new subparagraph:
                         ``(G) Use of information on competitive bid rates.—The Secretary shall specify by regulation the methodology to be used in applying the provisions of subparagraph (F)(ii) and subsection (h)(1)(H)(ii). In promulgating such regulation, the Secretary shall consider the costs of items and services in areas in which such provisions would be applied compared to the payment rates for such items and services in competitive acquisition areas.´´; and
                (B) in subsection (h)(1)(H), by inserting ``subject to subsection (a)(1)(G),´´ before ``that are included´´.
    (b) Quality Standards.—
          (1) Application of accreditation requirement.—
                (A) In General.—
                   Section 1834(a)(20) of the Social Security Act (42 U.S.C. 1395m(a)(20)) is amended—
                      (i) in subparagraph (E), by inserting ``including subparagraph (F),´´ after ``under this paragraph,´´; and
                      (ii) by adding at the end the following new subparagraph:
                         ``(F) Application of accreditation requirement.—In implementing quality standards under this paragraph—
                            ``(i) subject to clause (ii), the Secretary shall require suppliers furnishing items and services described in subparagraph (D) on or after October 1, 2009, directly or as a subcontractor for another entity, to have submitted to the Secretary evidence of accreditation by an accreditation organization designated under subparagraph (B) as meeting applicable quality standards; and
                            ``(ii) in applying such standards and the accreditation requirement of clause (i) with respect to eligible professionals (as defined in section 1848(k)(3)(B)), and including such other persons, such as orthotists and prosthetists, as specified by the Secretary, furnishing such items and services—
                               ``(I) such standards and accreditation requirement shall not apply to such professionals and persons unless the Secretary determines that the standards being applied are designed specifically to be applied to such professionals and persons; and
                               ``(II) the Secretary may exempt such professionals and persons from such standards and requirement if the Secretary determines that licensing, accreditation, or other mandatory quality requirements apply to such professionals and persons with respect to the furnishing of such items and services.´´.
                (B) Construction.—
                   Section 1834(a)(20)(F)(ii) of the Social Security Act, as added by subparagraph (A), shall not be construed as preventing the Secretary of Health and Human Services from implementing the first round of competition under section 1847 of such Act on a timely basis.
          (2) Disclosure of Subcontractors Under Competitive Acquisition Program.—
             Section 1847(b)(3) of such Act (42 U.S.C. 1395w–3(b)(3)) is amended by adding at the end the following new subparagraph:
                ``(C) Disclosure of subcontractors.—
                   ``(i) Initial disclosure.—Not later than 10 days after the date a supplier enters into a contract with the Secretary under this section, such supplier shall disclose to the Secretary, in a form and manner specified by the Secretary, the information on—
                      ``(I) each subcontracting relationship that such supplier has in furnishing items and services under the contract; and
                      ``(II) whether each such subcontractor meets the requirement of section 1834(a)(20)(F)(i), if applicable to such subcontractor.
                   ``(ii) Subsequent disclosure.—Not later than 10 days after such a supplier subsequently enters into a subcontracting relationship described in clause (i)(II), such supplier shall disclose to the Secretary, in such form and manner, the information described in subclauses (I) and (II) of clause (i).´´.
          (3) Competitive Acquisition Ombudsman.—
             Such section is further amended by adding at the end the following new subsection:
                ``(f) Competitive acquisition ombudsman.—The Secretary shall provide for a competitive acquisition ombudsman within the Centers for Medicare & Medicaid Services in order to respond to complaints and inquiries made by suppliers and individuals relating to the application of the competitive acquisition program under this section. The ombudsman may be within the office of the Medicare Beneficiary Ombudsman appointed under section 1808(c). The ombudsman shall submit to Congress an annual report on the activities under this subsection, which report shall be coordinated with the report provided under section 1808(c)(2)(C).´´.
    (c) Change in Reports and Deadlines.—
          (1) GAO Report.—
             Section 302(b)(3) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173) is amended—
                (A) in subparagraph (A)—
                      (i) by inserting ``and as amended by section 2 of the Medicare DMEPOS Competitive Acquisition Reform Act of 2008´´ after ``as amended by paragraph (1)´´; and
                      (ii) by inserting before the period at the end the following: ``and the topics specified in subparagraph (C)´´;
                (B) in subparagraph (B), by striking ``Not later than January 1, 2009,´´ and inserting ``Not later than 1 year after the first date that payments are made under section 1847 of the Social Security Act,´´; and
                (C) by adding at the end the following new subparagraph:
                   ``(C) Topics.—The topics specified in this subparagraph, for the study under subparagraph (A) concerning the competitive acquisition program, are the following:
                      ``(i) Beneficiary access to items and services under the program, including the impact on such access of awarding contracts to bidders that—
                         ``(I) did not have a physical presence in an area where they received a contract; or
                         ``(II) had no previous experience providing the product category they were contracted to provide.
                      ``(ii) Beneficiary satisfaction with the program and cost savings to beneficiaries under the program.
                      ``(iii) Costs to suppliers of participating in the program and recommendations about ways to reduce those costs without compromising quality standards or savings to the Medicare program.
                      ``(iv) Impact of the program on small business suppliers.
                      ``(v) Analysis of the impact on utilization of different items and services paid within the same Healthcare Common Procedure Coding System (HCPCS) code.
                      ``(vi) Costs to the Centers for Medicare & Medicaid Services, including payments made to contractors, for administering the program compared with administration of a fee schedule, in comparison with the relative savings of the program.
                      ``(vii) Impact on access, Medicare spending, and beneficiary spending of any difference in treatment for diabetic testing supplies depending on how such supplies are furnished.
                      ``(viii) Such other topics as the Comptroller General determines to be appropriate.´´.
          (2) Delay in Other Deadlines.—
                (A) Program Advisory and Oversight Committee.—
                   Section 1847(c)(5) of the Social Security Act (42 U.S.C. 1395w–3(c)(5)) is amended by striking ``December 31, 2009´´ and inserting ``December 31, 2011´´.
                (B) Secretarial Report.—
                   Section 1847(d) of such Act (42 U.S.C. 1395w–3(d)) is amended by striking ``July 1, 2009´´ and inserting ``July 1, 2011´´.
                (C) IG Report.—
                   Section 302(e) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173) is amended by striking ``July 1, 2009´´ and inserting ``July 1, 2011´´.
          (3) Evaluation of Certain Code.—
             The Secretary of Health and Human Services shall evaluate the existing Health Care Common Procedure Coding System (HCPCS) codes for negative pressure wound therapy to ensure accurate reporting and billing for items and services under such codes. In carrying out such evaluation, the Secretary shall use an existing process, administered by the Durable Medical Equipment Medicare Administrative Contractors, for the consideration of coding changes and consider all relevant studies and information furnished pursuant to such process.
    (d) Other Provisions.—
          (1) Exemption from competitive acquisition for certain off-the-shelf orthotics.—
             Section 1847(a) of the Social Security Act (42 U.S.C. 1395w–3(a)) is amended by adding at the end the following new paragraph:
                ``(7) Exemption from competitive acquisition.—The programs under this section shall not apply to the following:
                   ``(A) Certain off-the-shelf orthotics.—Items and services described in paragraph (2)(C) if furnished—
                      ``(i) by a physician or other practitioner (as defined by the Secretary) to the physician’s or practitioner’s own patients as part of the physician’s or practitioner’s professional service; or
                      ``(ii) by a hospital to the hospital’s own patients during an admission or on the date of discharge.
                   ``(B) Certain durable medical equipment.—Those items and services described in paragraph (2)(A)—
                      ``(i) that are furnished by a hospital to the hospital’s own patients during an admission or on the date of discharge; and
                      ``(ii) to which such programs would not apply, as specified by the Secretary, if furnished by a physician to the physician’s own patients as part of the physician’s professional service.´´.
          (2) Correction in Face-to-Face Examination Requirement.—
             Section 1834(a)(1)(E)(ii) of such Act (42 U.S.C. 1395m(a)(1)(E)(ii)) is amended by striking ``1861(r)(1)´´ and inserting ``1861(r)´´.
          (3) Special Rule in Case of National Mail-order Competition for Diabetic Testing Strips.—
             Section 1847(b) of such Act (42 U.S.C. 1395w–3(b)) is amended—
                (A) by redesignating paragraph (10) as paragraph (11); and
                (B) by inserting after paragraph (9) the following new paragraph:
                   ``(10) Special rule in case of competition for diabetic testing strips.—
                      ``(A) In general.—With respect to the competitive acquisition program for diabetic testing strips conducted after the first round of the competitive acquisition programs, if an entity does not demonstrate to the Secretary that its bid covers types of diabetic testing strip products that, in the aggregate and taking into account volume for the different products, cover 50 percent (or such higher percentage as the Secretary may specify) of all such types of products, the Secretary shall reject such bid. The volume for such types of products may be determined in accordance with such data (which may be market based data) as the Secretary recognizes.
                      ``(B) Study of types of testing strip products.—Before 2011, the Inspector General of the Department of Health and Human Services shall conduct a study to determine the types of diabetic testing strip products by volume that could be used to make determinations pursuant to subparagraph (A) for the first competition under the competitive acquisition program described in such subparagraph and submit to the Secretary a report on the results of the study. The Inspector General shall also conduct such a study and submit such a report before the Secretary conducts a subsequent competitive acquistion program described in subparagraph (A).´´.
          (4) Other Conforming Amendments.—
             Section 1847(b)(11) of such Act, as redesignated by paragraph (3), is amended—
                (A) in subparagraph (C), by inserting ``and the identification of areas under subsection (a)(1)(D)(iii)´´ after ``(a)(1)(A)´´;
                (B) in subparagraph (D), by inserting ``and implementation of subsection (a)(1)(D)´´ after ``(a)(1)(B)´´;
                (C) in subparagraph (E), by striking ``or´´ at the end;
                (D) in subparagraph (F), by striking the period at the end and inserting ``; or´´; and
                (E) by adding at the end the following new subparagraph:
                   ``(G) the implementation of the special rule described in paragraph (10).´´.
          (5) Funding for Implementation.—
             In addition to funds otherwise available, for purposes of implementing the provisions of, and amendments made by, this section, other than the amendment made by subsection (c)(1) and other than section 1847(a)(1)(E) of the Social Security Act, the Secretary of Health and Human Services shall provide for the transfer from the Federal Supplementary Medical Insurance Trust Fund established under section 1841 of the Social Security Act (42 U.S.C. 1395t) to the Centers for Medicare & Medicaid Services Program Management Account of $20,000,000 for fiscal year 2008, and $25,000,000 for each of fiscal years 2009 through 2012. Amounts transferred under this paragraph for a fiscal year shall be available until expended.
    (e) Effective Date.—
       The amendments made by this section shall take effect as of June 30, 2008.