I 

108TH CONGRESS 

1ST SESSION H. R. 1622

To amend title XVIII of the Social Security Act and otherwise revise the 

Medicare Program to reform the method of paying for covered drugs, 

drug administration services, and chemotherapy support services. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 3, 2003

Mr. NORWOOD (for himself and Mrs. CAPPS) introduced the following bill; 

which was referred to the Committee on Energy and Commerce, and in 

addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL

To amend title XVIII of the Social Security Act and otherwise revise the Medicare Program to reform the method 

of paying for covered drugs, drug administration services, 

and chemotherapy support services.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Quality Cancer Care 

5 Preservation Act’’.
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1 SEC. 2. MEDICARE PAYMENT FOR DRUGS AND 

2 BIOLOGICALS. 

3 (a) IN GENERAL.—Section 1842(o)(1) of the Social 

4 Security Act (42 U.S.C. 1395u(o)(1)) is amended by strik5 ing ‘‘95 percent of the average wholesale price’’ and insert6 ing ‘‘the payment amount specified in section 

7 1834(n)(2)’’. 

8 (b) DETERMINATION OF PAYMENT AMOUNT.—Sec9 tion 1834 of such Act (42 U.S.C. 1395m) is amended by 

10 adding at the end the following new subsection: 

11 ‘‘(n) PAYMENT FOR DRUGS AND BIOLOGICALS.—

12 ‘‘(1) REPORTS BY MANUFACTURERS.—

13 ‘‘(A) IN GENERAL.—Every drug manufac14 turer shall report to the Secretary, in the man15 ner prescribed in this paragraph, its average 

16 sales price (as defined in subparagraph (B)) in 

17 the United States during each calendar quarter 

18 for drugs and biologicals covered under this 

19 part. 

20 ‘‘(B) DEFINITIONS.—For purposes of this 

21 subsection—

22 ‘‘(i) the term ‘manufacturer’ means, 

23 with respect to a drug or biological, the en24 tity identified by the Labeler Code portion 

25 of the National Drug Code of such drug or 

26 biological; and 
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1 ‘‘(ii) the term ‘average sales price’ 

2 means the weighted average of all final 

3 sales prices to all purchasers, excluding 

4 sales specified in subparagraph (C). 

5 In determining such average sales prices, such 

6 prices shall be net of volume discounts, 

7 chargebacks, short-dated product discounts, 

8 free goods contingent on purchases, rebates 

9 (other than those made or authorized under 

10 section 1927), and all other price concessions 

11 that result in a reduction of the ultimate cost 

12 to the purchaser. 

13 ‘‘(C) CONSIDERATION IN CALCULATION OF

14 AVERAGE SALES PRICES.—The calculation of 

15 average sales price under this subsection shall 

16 not include—

17 ‘‘(i) prices that are excluded from the 

18 calculation of ‘best price’ under section 

19 1927(c)(1)(C); 

20 ‘‘(ii) prices offered to entities that are 

21 considered under subparagraph (B)(i) to 

22 be the manufacturers of the drugs or 

23 biologicals involved; 
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1 ‘‘(iii) prices offered by a manufacturer 

2 to a hospital, nursing facility, hospice, or 

3 health maintenance organization; 

4 ‘‘(iv) prices to governmental entities; 

5 and 

6 ‘‘(v) nominal prices offered to bona 

7 fide charitable organizations. 

8 ‘‘(D) QUARTERLY REPORTS.—Each manu9 facturer shall submit the report required by 

10 subparagraph (A) to the Secretary by electronic 

11 means no later than 30 days after the end of 

12 a calendar quarter with respect to sales that oc13 curred during such quarter. The Secretary shall 

14 prescribe the format and other requirements for 

15 the report. 

16 ‘‘(E) ENFORCEMENT.—

17 ‘‘(i) FAILURE TO TIMELY REPORT.—

18 The Secretary may impose a civil monetary 

19 penalty in an amount not to exceed 

20 $100,000 on a manufacturer that fails to 

21 provide the information required under this 

22 paragraph on a timely basis and in the 

23 manner required. 

24 ‘‘(ii) FALSE INFORMATION.—For each 

25 item of false information, the Secretary 
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1 may impose a civil money penalty in an 

2 amount not to exceed $100,000 on a man3 ufacturer that knowingly provides false in4 formation under this paragraph. 

5 ‘‘(iii) MANNER OF IMPOSITION OF

6 CIVIL MONETARY PENALTIES.—The provi7 sions in section 1128A (other than sub8 sections (a) and (b)) shall apply to a civil 

9 monetary penalty under this subparagraph 

10 in the same manner as such provisions 

11 apply to a penalty or proceeding under sec12 tion 1128A(a). 

13 ‘‘(F) CONFIDENTIALITY OF INFORMA14 TION.—Notwithstanding any other provision of 

15 law, information disclosed by manufacturers 

16 under this paragraph is confidential and shall 

17 not be disclosed by the Secretary in any form 

18 other than as specifically authorized by this 

19 subsection. 

20 ‘‘(2) CALCULATION OF PAYMENT AMOUNT.—

21 ‘‘(A) IN GENERAL.—Except as otherwise 

22 provided in this paragraph, the payment 

23 amount for a drug or biological furnished dur24 ing a calendar quarter shall be 120 percent of 

25 the average sales price of the drug or biological
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1 for the second preceding calendar quarter as 

2 determined under paragraph (1). 

3 ‘‘(B) METHODOLOGY.—In determining 

4 payment amounts under subparagraph (A), the 

5 Secretary may, in the Secretary’s discretion, 

6 use either the average sales price for each drug 

7 or biological by specific drug or biological, or a 

8 cumulative average sales price based on sales 

9 data for all versions of a multiple-source drug 

10 that the Secretary, acting through the Food 

11 and Drug Administration, has determined are 

12 therapeutically equivalent (as evidenced by ‘A’ 

13 ratings in the publication Approved Drug Prod14 ucts with Therapeutic Equivalence Evalua15 tions). 

16 ‘‘(C) INCREASE TO REFLECT ADDITIONAL

17 COSTS ATTRIBUTABLE TO STATE AND LOCAL

18 TAXES.—In the case of a drug or biological that 

19 was subject to a State or local sales tax or 

20 gross receipts tax when administered or dis21 pensed, the payment amount determined under 

22 subparagraph (A) shall be increased by the 

23 amount of such tax paid with respect to such 

24 drug or biological. 
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1 ‘‘(D) SUBSTITUTION OF HIGHER PAYMENT

2 AMOUNT.—If a physician’s, supplier’s, or any 

3 other person’s claim for payment for services 

4 under this Act documents that the price paid 

5 for a drug or biological was greater than the 

6 payment amount determined under subpara7 graph (A), the actual amount paid shall be sub8 stituted for the payment amount determined 

9 under subparagraph (A), unless the Secretary 

10 determines that the actual amount paid was un11 reasonable under the circumstances. 

12 ‘‘(E) INCREASE FOR BAD DEBT AND CER13 TAIN OTHER COSTS.—Upon the submission of 

14 supporting information, the Secretary shall 

15 make an additional payment to a physician or 

16 supplier to cover—

17 ‘‘(i) uncollectible deductibles and coin18 surance due from Medicare beneficiaries 

19 with respect to drugs and biologicals fur20 nished to such beneficiaries; and 

21 ‘‘(ii) costs incurred in procuring and 

22 billing for drugs and biologicals furnished 

23 to Medicare beneficiaries.’’. 
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1 SEC. 3. MEDICARE PAYMENT FOR DRUG ADMINISTRATION 

2 SERVICES. 

3 (a) GENERAL.—The Secretary of Health and Human 

4 Services (hereafter in this Act referred to as ‘‘the Sec5 retary’’) shall revise the practice expense relative value 

6 units for drug administration services for years beginning 

7 with the year 2005 in accordance with this section. For 

8 purposes of this section, ‘‘drug administration services’’ 

9 includes chemotherapy administration services, thera10 peutic and diagnostic infusions and injections, and such 

11 other services as the Secretary specifies. 

12 (b) DIRECT COSTS EQUAL TO 100 PERCENT OF

13 CPEP ESTIMATES.—Using the information, including es14 timates of clinical staff time, developed in the clinical prac15 tice expert panel process, including refinements by Amer16 ican Medical Association committees, the Secretary shall 

17 estimate the costs of the nursing and other clinical staff, 

18 supplies, and procedure-specific equipment (exceeding a 

19 cost specified by the Secretary) used in furnishing each 

20 type of drug administration service. The Secretary shall 

21 utilize without revision the minutes of clinical staff time 

22 determined in such process. The Secretary shall convert 

23 the information from such process to estimated costs by 

24 applying the most current available data on staff salary, 

25 supply, and equipment costs, and such costs shall be up-
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1 dated to 2005 based on estimated changes in prices since 

2 the date of such data. 

3 (c) TOTAL PRACTICE EXPENSES.—The Secretary 

4 shall estimate the total practice expenses of each drug ad5 ministration service by assuming that the direct costs for 

6 the service determined under subsection (b) are 33.2 per7 cent of such total practice expenses. 

8 (d) CONVERSION TO RELATIVE VALUE UNITS.—The 

9 Secretary shall convert the total practice expenses deter10 mined under subsection (c) to practice expense relative 

11 value units for each drug administration service by divid12 ing such expenses by the conversion factor that will be 

13 in effect for the physician fee schedule for 2005. The rel14 ative value units as so determined shall be used in deter15 mining the fee schedule amounts paid for drug administra16 tion services under section 1848 of the Social Security Act 

17 (42 U.S.C. 1395w–4). 

18 (e) UPDATES.—For years after 2005, the relative val19 ues determined under subsection (d) shall continue in ef20 fect except that the Secretary shall revise them as nec21 essary to maintain their accuracy, provided that such revi22 sions are consistent with the methodology set forth in this 

23 section. 

24 (f) MULTIPLE PUSHES.—In establishing the payment 

25 amounts under this section, the Secretary shall establish
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1 the payment amount for intravenous chemotherapy ad2 ministration by push technique based on the administra3 tion of a single drug. The Secretary shall make the same 

4 payment for each additional drug administered by push 

5 technique during the same encounter, except to the extent 

6 that the Secretary finds that the cost of administering ad7 ditional drugs is less than the cost of administering the 

8 first drug. 

9 SEC. 4. PAYMENTS FOR CHEMOTHERAPY SUPPORT SERV10 ICES. 

11 (a) GENERAL.—Beginning in the year 2005, the Sec12 retary shall recognize and make payments under section 

13 1848 of the Social Security Act (42 U.S.C. 1395w–4) for 

14 chemotherapy support services furnished incident to physi15 cians’ services. For the purposes of this section, ‘‘chemo16 therapy support services’’ are services furnished by the 

17 staff of physicians to patients undergoing treatment for 

18 cancer that were not included in the computation of clin19 ical staff costs under section 3(b). Such services include 

20 social worker services, nutrition counseling, psychosocial 

21 services, and similar services. 

22 (b) DIRECT COSTS.—The Secretary shall estimate 

23 the cost of the salary and benefits of staff furnishing 

24 chemotherapy support services as they are provided in on25 cology practices that furnish these services to cancer pa-
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1 tients in a manner that is considered to be high quality 

2 care. The estimate shall be based on the weekly cost of 

3 such services per patient receiving chemotherapy. 

4 (c) TOTAL COSTS.—The Secretary shall estimate the 

5 total practice expenses of chemotherapy support services 

6 by assuming that the direct costs for the service deter7 mined under subsection (b) are 33.2 percent of such total 

8 practice expenses. 

9 (d) CONVERSION TO RELATIVE VALUE UNITS.—The 

10 Secretary shall convert the total practice expenses deter11 mined under subsection (c) to practice expense relative 

12 value units for chemotherapy support services by dividing 

13 such expenses by the conversion factor that will be in ef14 fect for the physician fee schedule for 2005. The relative 

15 value units as so determined shall be used in determining 

16 the fee schedule amounts paid for chemotherapy support 

17 services under such section 1848. 

18 (e) UPDATES.—For the years after 2005, the relative 

19 values determined under subsection (d) shall continue in 

20 effect except that the Secretary shall revise them as nec21 essary to maintain their accuracy, provided that such revi22 sions are consistent with the methodology set forth in this 

23 section. 
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1 SEC. 5. CANCER THERAPY MANAGEMENT SERVICES. 

2 The Secretary shall recognize and establish a pay3 ment amount for the service of cancer therapy manage4 ment to account for the greater pre-service and post-serv5 ice work associated with visits and consultations con6 ducted by physicians treating cancer patients compared to 

7 typical visits and consultations. The payment amount may 

8 vary by the level and type of the related visit or consulta9 tion. 

10 SEC. 6. OTHER SERVICES WITHOUT PHYSICIAN WORK REL11 ATIVE VALUE UNITS. 

12 The Secretary shall develop a revised methodology for 

13 determining the payment amounts for services that are 

14 paid under the fee schedule established by section 1848 

15 of the Social Security Act (42 U.S.C. 1395w–4) and that 

16 do not have physician work relative value units, including 

17 radiation oncology services. Such methodology shall result 

18 in payment amounts that fully cover the costs of fur19 nishing such services. Until such time as the methodology 

20 for such services is revised and implemented, all such serv21 ices shall be protected from further payment cuts due to 

22 factors such as shifts in utilization or removal of any one 

23 specialty’s services that are paid under the fee schedule 

24 established by such section 1848 and that do not have 

25 physician work relative value units.
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1 SEC. 7. PHYSICIAN SUPERVISION OF SERVICES. 

2 Section 1834 of the Social Security Act (42 U.S.C. 

3 1395m), as amended by section 2, is further amended by 

4 adding at the end the following new subsection: 

5 ‘‘(o) SUPERVISION REQUIREMENTS.—If the Sec6 retary requires direct supervision of a service by a physi7 cian, that supervision requirement may be fulfilled by one 

8 or more physicians other than the physician who ordered 

9 the service. If the supervising physician is different from 

10 the ordering physician for a particular service, the order11 ing physician may nevertheless bill for such service pro12 vided that the medical records for the service involved 

13 identify the supervising physician or physicians.’’. 

14 SEC. 8. REPORT TO CONGRESS. 

15 No later than April 1, 2004, the Secretary shall sub16 mit to Congress a report on the payment amounts that 

17 are projected to be adopted under sections 2, 3, 4, and 

18 5 of this Act. 

19 SEC. 9. INSTITUTE OF MEDICINE STUDY. 

20 (a) GENERAL.—The Secretary of Health and Human 

21 Services shall request the Institute of Medicine to conduct 

22 the study described in this section. 

23 (b) BASELINE STUDY.—The first phase of the study 

24 shall include the following objectives: 

25 (1) An assessment of the extent to which the 

26 current Medicare payment system, prior to imple-
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1 mentation of the amendments made by this Act, fa2 cilitates appropriate access to care by cancer pa3 tients in the various treatment settings. 

4 (2) The identification of the comprehensive 

5 range of services furnished to cancer patients in the 

6 outpatient setting, including support services such as 

7 psychosocial services and counseling, and rec8 ommendations regarding the types of services that 

9 ought to be furnished to Medicare patients with can10 cer. 

11 (3) A discussion of the practice standards nec12 essary to assure the safe provision of services to can13 cer patients. 

14 (4) An analysis of the extent to which the cur15 rent Medicare payment system supports the role of 

16 nurses in the provision of oncology services and rec17 ommendations for any necessary improvements in 

18 the payment system in that respect. 

19 (5) The development of a framework for assess20 ing how the amendments made by this act affect the 

21 provision of care to Medicare patients with cancer in 

22 the various treatment settings. 

23 (c) SECOND PHASE OF STUDY.—After the implemen24 tation of the amendments made by this Act, the study 

25 shall determine whether and how those amendments af-
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1 fected the provision of care to Medicare patients with can2 cer. 

3 (d) CONSULTATION.—The Institute of Medicine shall 

4 consult with the National Cancer Policy Board and organi5 zations representing cancer patients and survivors, 

6 oncologists, oncology nurses, social workers, cancer cen7 ters, and other healthcare professionals who treat cancer 

8 patients in planning and carrying out this study. 

9 (e) DUE DATES.—

10 (1) The study required by subsection (b) shall 

11 be submitted to the Congress and the Secretary of 

12 Health and Human Services no later than June 30, 

13 2004. 

14 (2) The study required by subsection (c) shall 

15 be submitted to the Congress and the Secretary of 

16 Health and Human Services no later than December 

17 31, 2006. 

18 SEC. 10. EFFECTIVE DATES. 

19 (a) GENERAL.—Except as provided in this section, 

20 the provisions of this Act shall apply to drugs, biologicals, 

21 and services furnished on or after January 1, 2005. 

22 (b) REPORTS FROM MANUFACTURERS.—The first re23 port by manufacturers required by the provisions of sec24 tion 2 shall be submitted no later than October 30, 2004, 
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1 with respect to sales that occurred in the quarter ending 

2 September 30, 2004. 

3 (c) SUPERVISION OF SERVICES.—The amendment 

4 made by section 7 shall be effective upon enactment. 

5 (d) SERVICES OTHER THAN DRUG ADMINISTRA6 TION.—The Secretary shall implement the requirements 

7 of section 6 no later than January 1, 2005.

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