II

106TH CONGRESS

2D SESSION S. 3082

To amend title XVIII of the Social Security Act to improve the manner

in which new medical technologies are made available to Medicare beneficiaries under the Medicare Program, and for other purposes.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 20, 2000

Mr. HATCH introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To amend title XVIII of the Social Security Act to improve

the manner in which new medical technologies are made

available to Medicare beneficiaries under the Medicare

Program, and for other purposes.

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Medicare Access to Technology Act of 2000’’.

6 (b) TABLE OF CONTENTS.—The table of contents of

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Annual reports on national coverage determinations.

Sec. 3. Improvements to the medicare advisory committee process.
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Sec. 4. Inclusion on MedPAC of an individual with expertise in new medical devices.

Sec. 5. Annual adjustments to medicare payment systems for changes in technology and medical practice.

Sec. 6. Annual reports on elimination of barriers to use of new medical devices

in hospital outpatient settings.

Sec. 7. Clarification of standard for coverage of drugs and biologicals.

Sec. 8. Process for making and implementing HCPCS coding modifications.

Sec. 9. Retention of HCPCS level III codes.

Sec. 10. Process for making and implementing ICD–9–CM coding modifications.

Sec. 11. Establishment of procedures for medicare coding and payment determinations for new clinical diagnostic laboratory tests and other

items on a fee schedule.

1 SEC. 2. ANNUAL REPORTS ON NATIONAL COVERAGE DE2 TERMINATIONS.

3 (a) ANNUAL REPORTS.—Not later than December 1

4 of each year, beginning in 2001, the Secretary of Health

5 and Human Services shall submit to Congress a report

6 that sets forth a detailed compilation of the actual time

7 periods that were necessary to complete and fully imple8 ment any national coverage determinations that were

9 made in the previous fiscal year for items, services, or

10 medical devices not previously covered as a benefit under

11 title XVIII of the Social Security Act (42 U.S.C. 1395

12 et seq.), including, with respect to each new item, service,

13 or medical device, a statement of the time taken by the

14 Secretary to make the necessary coverage, coding, and

15 payment determinations, including the time taken to com16 plete each significant step in the process of making such

17 determinations.

18 (b) PUBLICATION OF REPORTS ON THE INTERNET.—

19 The Secretary of Health and Human Services shall pub-
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1 lish each report submitted under subsection (a) on the

2 medicare Internet site of the Department of Health and

3 Human Services.

4 SEC. 3. IMPROVEMENTS TO THE MEDICARE ADVISORY

5 COMMITTEE PROCESS.

6 Section 1114 of the Social Security Act (42 U.S.C.

7 1314) is amended by adding at the end the following new

8 subsection:

9 ‘‘(i)(1) Any advisory committee appointed under sub10 section (f) to advise the Secretary on matters relating to

11 the interpretation, application, or implementation of sec12 tion 1862(a)(1) shall assure the full participation of a

13 nonvoting member in the deliberations of the advisory

14 committee, and shall provide such nonvoting member ac15 cess to all information and data made available to voting

16 members of the advisory committee, other than informa17 tion that—

18 ‘‘(A) is exempt from disclosure pursuant to sub19 section (a) of section 552 of title 5, United States

20 Code, by reason of subsection (b)(4) of such section

21 (relating to trade secrets); and

22 ‘‘(B) the Secretary determines would present a

23 conflict of interest relating to such nonvoting mem24 ber.
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1 ‘‘(2) If an advisory committee described in paragraph

2 (1) organizes into panels of experts according to types of

3 items or services considered by the advisory committee,

4 any such panel of experts may report any recommendation

5 with respect to such items or services directly to the Sec6 retary without the prior approval of the advisory com7 mittee or an executive committee thereof.’’.

8 SEC. 4. INCLUSION ON MEDPAC OF AN INDIVIDUAL WITH

9 EXPERTISE IN NEW MEDICAL DEVICES.

10 (a) IN GENERAL.—Section 1805(c)(2)(B) of the So11 cial Security Act (42 U.S.C. 1395b–6(c)(2)(B)) is amend12 ed by inserting ‘‘individuals with national recognition for

13 their expertise in the development for market of new med14 ical items, services, and devices,’’ after ‘‘other health pro15 fessionals,’’.

16 (b) EFFECTIVE DATE.—The amendment made by

17 subsection (a) applies with respect to members appointed

18 to the Medicare Payment Advisory Commission on or after

19 the date of the enactment of this Act.

20 SEC. 5. ANNUAL ADJUSTMENTS TO MEDICARE PAYMENT

21 SYSTEMS FOR CHANGES IN TECHNOLOGY

22 AND MEDICAL PRACTICE.

23 (a) IN GENERAL.—Title XVIII of the Social Security

24 Act (42 U.S.C. 1395 et seq.) is amended by inserting after

25 section 1888 the following new section:
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1 ‘‘ANNUAL ADJUSTMENTS TO MEDICARE PAYMENT SYS2 TEMS FOR CHANGES IN TECHNOLOGY AND MEDICAL

3 PRACTICE

4 ‘‘SEC. 1889. (a) IN GENERAL.—

5 ‘‘(1) ASC, MFS, AND INPATIENT PPS.—Not6 withstanding any other provision of this title, the

7 Secretary shall adjust the appropriate elements of

8 the payment systems established under sections

9 1833(i)(2)(A), 1848, and 1886(d) (including relative

10 payment weights, relative value units, weighting fac11 tors, diagnosis-related group classifications, and as12 signments to diagnosis-related groups) at least an13 nually to ensure that payments under such systems

14 appropriately reflect changes in medical technology

15 and medical practice affecting the items and services

16 for which payment may be made under such sys17 tems.

18 ‘‘(2) OP PPS.—For a provision requiring ad19 justments to the elements of the outpatient prospec20 tive payment system at least annually, see section

21 1833(t)(9)(A).

22 ‘‘(b) RULES FOR DETERMINING ADJUSTMENTS.—

23 Except as provided in subsection (c), the provisions of sec24 tion 1833(i)(2)(A), section 1848(c)(2)(B), and section

25 1886(d)(4)(C) shall apply to the annual adjustments re-
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1 quired by this section in the same manner and to the same

2 extent as they apply to the periodic adjustments of relative

3 payment weights, relative value units, weighting factors,

4 diagnosis-related group classifications, and assignments to

5 diagnosis-related groups, respectively, that are authorized

6 or required by such sections.

7 ‘‘(c) USE OF INTERNAL DATA COLLECTED BY THE

8 SECRETARY.—

9 ‘‘(1) IN GENERAL.—In determining the adjust10 ments required by this section and section

11 1833(t)(9)(A), the Secretary may not—

12 ‘‘(A) decline to make an adjustment that is

13 based on data collected by the Secretary in the

14 administration of the program established

15 under this title if the data reflect a representa16 tive sample of cases that is statistically valid;

17 and

18 ‘‘(B) establish a uniform period of time

19 (such as one year) from which such data must

20 be drawn.

21 ‘‘(2) DEADLINE FOR SUPPLYING INTERNAL

22 DATA.—The Secretary shall establish a reasonable

23 deadline for the submission of data collected by the

24 Secretary to be used in making the adjustments re25 quired by this section or section 1833(t)(9)(A). In
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1 no event may the deadline established under this

2 paragraph be more than seven months before the

3 first day of the provider payment update period for

4 which the adjustment or adjustments to which the

5 data relate would be effective.

6 ‘‘(d) USE OF EXTERNAL DATA.—

7 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

8 in determining the adjustments required by this sec9 tion and section 1833(t)(9)(A), the Secretary shall

10 utilize data other than data collected by the Sec11 retary in the administration of the program estab12 lished under this title if—

13 ‘‘(A) data collected by the Secretary in the

14 administration of such program are not avail15 able at the time such adjustments are being de16 termined; and

17 ‘‘(B) such other data are reliable and

18 verifiable.

19 ‘‘(2) EXTERNAL DATA FACILITATING THE USE

20 OF INTERNAL DATA.—

21 ‘‘(A) IN GENERAL.—In determining the

22 adjustments required by this section and section

23 1833(t)(9)(A), the Secretary may not—
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1 ‘‘(i) decline to use data other than

2 data collected by the Secretary if such

3 other data—

4 ‘‘(I) enable the Secretary to iden5 tify or refine data collected by the

6 Secretary for use in making such an

7 adjustment; and

8 ‘‘(II) are based on a representa9 tive sample of cases that is statis10 tically valid; or

11 ‘‘(ii) establish a uniform period of

12 time (such as one year) from which such

13 data must be drawn.

14 ‘‘(B) SPECIAL RULE.—

15 ‘‘(i) WAIVER OF REQUIREMENT FOR

16 INDIVIDUAL AUTHORIZATION FOR DISCLO17 SURE OF PROTECTED HEALTH INFORMA18 TION.—Notwithstanding any other provi19 sion of law, individual authorization is not

20 required for disclosure of protected health

21 information to—

22 ‘‘(I) a government agency or pri23 vate payer; or
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1 ‘‘(II) a private entity for the pur2 pose of disclosure to such an agency

3 or payer,

4 for inclusion in data systems of the agency

5 or payer for use in the formulation of cov6 erage, coding, and payment policies of the

7 agency or payer.

8 ‘‘(ii) CONSTRUCTION.—Nothing in

9 clause (i) shall be construed as authorizing

10 the disclosure or use of such information

11 by such an agency, payer, or entity for any

12 other purpose.

13 ‘‘(3) ALTERNATIVE SOURCES OF DATA.—In de14 termining the adjustments required by this section

15 and section 1833(t)(9)(A), the Secretary shall use

16 data, that otherwise meet the requirements of this

17 subsection, collected by (or on behalf of)—

18 ‘‘(A) private payers;

19 ‘‘(B) manufacturers of medical tech20 nologies;

21 ‘‘(C) suppliers;

22 ‘‘(D) groups representing physicians and

23 other health care professionals;

24 ‘‘(E) groups representing providers;

25 ‘‘(F) clinical trials; and
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1 ‘‘(G) such other sources as the Secretary

2 determines to be appropriate.

3 ‘‘(4) CLARIFICATION.—Nothing in this title

4 shall be construed as—

5 ‘‘(A) requiring the Secretary to identify all

6 claims submitted under a payment system es7 tablished under section 1833(i)(2)(A), section

8 1833(t), section 1848, or section 1886(d) in9 volving the use of a medical technology before

10 the Secretary may make the adjustments under

11 this section (or under section 1833(i)(2)(A),

12 section 1833(t), section 1848, or section

13 1886(d)) with respect to such technology; or

14 ‘‘(B) authorizing the Secretary to defer ac15 tion on such an adjustment until all such claims

16 are identifiable.

17 ‘‘(5) DEADLINE FOR SUPPLYING EXTERNAL

18 DATA.—The Secretary shall establish a reasonable

19 deadline for the submission of data other than data

20 collected by the Secretary to be used in making the

21 adjustments required by this section or section

22 1833(t)(9)(A). In no event may the deadline estab23 lished under this paragraph be more than 9 months

24 before the first day of the provider payment update
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1 period for which the adjustment or adjustments to

2 which the data relate would be effective.

3 ‘‘(e) TIMING OF ADJUSTMENTS.—

4 ‘‘(1) IN GENERAL.—The annual adjustments

5 required by this section shall—

6 ‘‘(A) apply to provider payment update pe7 riods beginning on or after October 1, 2001;

8 and

9 ‘‘(B) be described in the proposed and

10 final rules published by the Secretary with re11 spect to changes to a payment system estab12 lished under section 1833(i)(2)(A), 1848, or

13 1886(d) for the provider payment update period

14 to which they relate, together with a description

15 of the data on which such adjustments are

16 based.

17 ‘‘(2) DEFINITION.—For purposes of this sec18 tion, the term ‘provider payment update period’

19 means—

20 ‘‘(A) in the case of the payment system es21 tablished under section 1833(i)(2)(A) or section

22 1848, a calendar year; and

23 ‘‘(B) in the case of the payment system es24 tablished under section 1886(d), a fiscal year

25 beginning on October 1.’’.
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1 (b) CONFORMING AMENDMENTS.—

2 (1) AMBULATORY SURGICAL CENTERS.—Section

3 1833(i)(2)(A) of the Social Security Act (42 U.S.C.

4 1395l(i)(2)(A)) is amended by striking ‘‘Each’’ in

5 the second sentence thereof and inserting ‘‘Subject

6 to section 1889, each’’.

7 (2) PHYSICIAN PAYMENT.—Section

8 1848(c)(2)(B)(i) of such Act (42 U.S.C. 1395w–

9 4(c)(2)(B)(i)) is amended by striking ‘‘The’’ and in10 serting ‘‘Subject to section 1889, the’’.

11 (3) INPATIENT HOSPITAL PROSPECTIVE PAY12 MENT SYSTEM.—Section 1886(d)(4)(C)(i) of such

13 Act (42 U.S.C. 1395ww(d)(4)(C)(i)) is amended by

14 striking ‘‘The’’ and inserting ‘‘Subject to section

15 1889, the’’.

16 SEC. 6. ANNUAL REPORTS ON ELIMINATION OF BARRIERS

17 TO USE OF NEW MEDICAL DEVICES IN HOS18 PITAL OUTPATIENT SETTINGS.

19 (a) REPORT BY SECRETARY ON ACCESS TO DE20 VICES.—Section 1833(t)(13) of the Social Security Act

21 (42 U.S.C. 1395l(t)(13)) is amended by adding at the end

22 the following new subparagraph:

23 ‘‘(B) REPORT ON ACCESS TO DEVICES.—

24 Not later than December 1 of each year begin25 ning with 2001, the Secretary shall submit to
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1 Congress a report on access of individuals fur2 nished covered OPD services (as defined in

3 paragraph (1)(B)) to medical devices in con4 junction with such services. Such report shall

5 include an analysis of the impact of paragraph

6 (6)(A) in making new devices available in hos7 pital outpatient departments, the extent to

8 which barriers to such availability have been

9 overcome by reason of such paragraph, the im10 pact of including or excluding a device under

11 the payment system established by this sub12 section on beneficiary access to such device, and

13 a description of efforts by the Secretary to in14 crease the use and availability of such devices

15 in such departments. For purposes of this sub16 paragraph, the term ‘device’ means any item

17 that is treated as a device under section 201(h)

18 of the Federal Food, Drug, and Cosmetic Act.’’.

19 (b) MEDPAC REPORT ON NEW DEVICES.—Section

20 1805(b)(2)(C) of the Social Security Act (42 U.S.C.

21 1395b–6(b)(2)(C)) is amended by adding at the end the

22 following: ‘‘In conducting such review, the Commission

23 shall monitor medicare beneficiary access to medical de24 vices for which payment is made under section 1833(t)

25 in hospital outpatient departments, shall assess the impact
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1 of paragraph (6)(A) of such section in making new devices

2 available in such departments, the extent to which barriers

3 to such availability have been overcome by reason of such

4 paragraph, and the impact of including or excluding a de5 vice under the payment system established by section

6 1833(t) on beneficiary access to such device, and shall

7 make any recommendations the Commission determines

8 would increase availability of such devices to individuals

9 entitled to benefits under this title. For purposes of this

10 subparagraph, the term ‘device’ means any item that is

11 treated as a device under section 201(h) of the Federal

12 Food, Drug, and Cosmetic Act.’’.

13 SEC. 7. CLARIFICATION OF STANDARD FOR COVERAGE OF

14 DRUGS AND BIOLOGICALS.

15 (a) IN GENERAL.—Section 1862(a) of the Social Se16 curity Act (42 U.S.C. 1395y(a)) is amended by adding at

17 the end the following: ‘‘A drug or biological may not be

18 excluded from coverage under this title by reason of para19 graph (1)(A) if the drug or biological has been approved

20 by the Food and Drug Administration and is prescribed

21 for a use that has been approved by the Food and Drug

22 Administration or that is supported by one or more cita23 tions that are included (or approved for inclusion) in one

24 or more of the compendia referred to in section

25 1861(t)(2)(B)(ii)(I).’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to coverage determinations

3 made on or after the date of enactment of this Act.

4 SEC. 8. PROCESS FOR MAKING AND IMPLEMENTING HCPCS

5 CODING MODIFICATIONS.

6 (a) IN GENERAL.—Notwithstanding any other provi7 sion of title XVIII of the Social Security Act (42 U.S.C.

8 1395 et seq.), the Secretary of Health and Human Serv9 ices shall—

10 (1) not later than 30 days after the receipt of

11 a written request of a product sponsor, assign a

12 temporary code to a drug or device reviewed by the

13 Food and Drug Administration;

14 (2) accept recommendations for HCPCS level II

15 code modifications from the public throughout the

16 year;

17 (3) cause determinations on such recommenda18 tions to be made within 30 days after receipt of the

19 recommendation; and

20 (4) incorporate modifications to HCPCS level II

21 codes that are approved during the 3 months pre22 ceding the last month of a calendar quarter into the

23 payment systems established under such title (in24 cluding the medicare fee schedule data base) not
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1 later than the first day of the following calendar

2 quarter.

3 (b) ELIMINATION OF REQUIREMENT FOR MAR4 KETING EXPERIENCE.—Notwithstanding any other provi5 sion of title XVIII of the Social Security Act, the Sec6 retary of Health and Human Services may not require a

7 minimum period of marketing experience with respect to

8 a drug or device as a condition of consideration or ap9 proval of a recommendation for an HCPCS level II modi10 fication for such drug or device.

11 (c) DEFINITION.—For purposes of this section, the

12 term ‘‘HCPCS level II code modification’’ means any

13 change to the alphanumeric codes for items not included

14 in level I or level III of the Health Care Financing Admin15 istration Common Procedure Coding System (HCPCS).

16 (d) REPORT.—Not later than 180 days after the date

17 of the enactment of this Act, the Secretary of Health and

18 Human Services shall submit to Congress a report on the

19 feasibility and desirability of opening meetings of the

20 Alpha-Numeric Editorial Panel of the Department of

21 Health and Human Services to the public. If the Secretary

22 determines that opening such meetings to the public is not

23 feasible or desirable, the Secretary shall include in the re24 port a detailed explanation of the reasons for such deter25 mination.
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1 (e) EFFECTIVE DATE.—The provisions of this section

2 take effect on January 1, 2001.

3 SEC. 9. RETENTION OF HCPCS LEVEL III CODES.

4 (a) IN GENERAL.—The Secretary of Health and

5 Human Services shall maintain and continue the use of

6 level III codes of the HCPCS coding system (as such sys7 tem was in effect on June 1, 1999), and shall make such

8 codes available to the public.

9 (b) DEFINITION.—For purposes of this section, the

10 term ‘‘HCPCS Level III codes’’ means the alphanumeric

11 codes for local use under the Health Care Financing Ad12 ministration Common Procedure Coding System

13 (HCPCS).

14 SEC. 10. PROCESS FOR MAKING AND IMPLEMENTING ICD–

15 9–CM CODING MODIFICATIONS.

16 (a) IN GENERAL.—Notwithstanding any other provi17 sion of title XVIII of the Social Security Act (42 U.S.C.

18 1395 et seq.), with respect to payments for inpatient hos19 pital services under section 1886 of such Act (42 U.S.C.

20 1395ww), the Secretary of Health and Human Services

21 shall—

22 (1) not later than 30 days after the receipt of

23 a written request of a product sponsor, assign a

24 temporary code to a drug or device reviewed by the

25 Food and Drug Administration;
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1 (2) accept recommendations for ICD–9–CM

2 code modifications from the public throughout the

3 year;

4 (3) cause determinations on such recommenda5 tions to be made within 30 days after receipt of the

6 recommendation; and

7 (4) incorporate modifications to ICD–9–CM

8 codes that are approved during the 3 months pre9 ceding the last month of a calendar quarter into the

10 payment systems established under such title (in11 cluding the medicare fee schedule data base) not

12 later than the first day of the following calendar

13 quarter.

14 (b) ELIMINATION OF REQUIREMENT FOR MAR15 KETING EXPERIENCE.—Notwithstanding any other provi16 sion of title XVIII of the Social Security Act, the Sec17 retary of Health and Human Services may not require a

18 minimum period of marketing experience with respect to

19 an item, service, or device for which payment is made

20 under such section 1886 as a condition of consideration

21 or approval of a recommendation for an ICD–9–CM modi22 fication for such item, service, or device.

23 (c) DEFINITION.—For purposes of this section, the

24 term ‘‘ICD–9–CM code modification’’ means any change

25 to the alphanumeric codes of the International Classifica-
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1 tion of Diseases, 9th Revision, Clinical Modification, ap2 plied under such section 1886.

3 (d) MEDPAC REPORT.—Not later than January 1,

4 2001, the Medicare Payment Advisory Commission estab5 lished under section 1805 of the Social Security Act (42

6 U.S.C. 1395b–6) shall submit to Congress a report on—

7 (1) the procedures used by the Health Care Fi8 nancing Administration to makes changes to the

9 classification system, diagnosis-related groups, and

10 weighting factors established under paragraph (4) of

11 section 1886(d) of such Act (42 U.S.C. 1395ww(d))

12 to incorporate new technologies and respond to

13 changes in technology;

14 (2) whether such procedures ensure that the

15 payments made under the prospective payment sys16 tem established under such section are appropriate

17 and timely for new technologies and provide appro18 priate and timely recognition of changes in the tech19 nology; and

20 (3) recommendations for such legislation and

21 administrative actions as the Commission considers

22 appropriate to promote the appropriate and timely

23 incorporation of new technologies and the recogni24 tion of changes in technology under such system.
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1 SEC. 11. ESTABLISHMENT OF PROCEDURES FOR MEDICARE

2 CODING AND PAYMENT DETERMINATIONS

3 FOR NEW CLINICAL DIAGNOSTIC LABORA4 TORY TESTS AND OTHER ITEMS ON A FEE

5 SCHEDULE.

6 (a) IN GENERAL.—Not later than one year after the

7 date of the enactment of this Act, the Secretary of Health

8 and Human Services shall establish procedures for coding

9 and payment determinations for the following categories

10 of items and services under part B of the title XVIII of

11 the Social Security Act (42 U.S.C. 1395 et seq.): new clin12 ical diagnostic laboratory tests and durable medical equip13 ment. Such procedures (which may vary for the 2 cat14 egories of items and services referred to in the preceding

15 sentence) shall provide for the following:

16 (1) Such procedures shall be clearly under17 standable and follow a predictable format. Any hear18 ings or meetings with respect to the determinations

19 shall be open to the public and provide for public

20 participation.

21 (2) Under the procedures, the Secretary shall

22 identify the rules and assumptions to be applied in

23 considering the coding or payment determination,

24 and shall provide the sources and types of data to

25 be used in making such determination.
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1 (3) Under the procedures, the Secretary shall

2 provide a clear statement of the basis for the deter3 mination.

4 (4) Under the procedures, the Secretary shall

5 make available to the public the data (other than

6 proprietary data) considered in making the deter7 mination.

8 (5) Under the procedures, the Secretary shall

9 consider and implement coding modifications under

10 procedures similar to those for HCPCS level II and

11 ICD–9–CM procedure and related codes.

12 (6) Under the procedures, the Secretary shall

13 provide for consistent instructions to carriers to

14 carry out their functions in setting prices for new

15 technologies that—

16 (A) are designed to establish fair and ap17 propriate payment levels reflecting market con18 ditions for such items and services; and

19 (B) in the case of clinical diagnostic lab20 oratory tests for which payment is made on a

21 fee schedule basis under title XVIII of the So22 cial Security Act, comply with the requirements

23 of section 1833(h)(8) of such Act (42 U.S.C.

24 1395l(h)(8)).
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1 (7) Under the procedures, the Secretary shall

2 provide a mechanism under which an interested

3 party may request a timely review of the adequacy

4 of the existing fee for a particular item or service,

5 and upon receipt of such a request that such timely

6 review is carried out.

7 (8) Under the procedures, the Secretary shall

8 provide for a mechanism under which an interested

9 party may request administrative review of an ad10 verse coding or payment policy determination, and

11 shall provide for such review and, if necessary, revi12 sion of the determination.

13 (b) ESTABLISHING PAYMENT RATES FOR NEW LAB

14 TESTS.—Section 1833(h) of the Social Security Act (42

15 U.S.C. 1395l(h)) is amended by adding at the end the fol16 lowing:

17 ‘‘(8)(A) Notwithstanding paragraphs (1), (2), and

18 (4), in the case of a clinical diagnostic laboratory test with

19 respect to which a code is first assigned under the Health

20 Care Financing Administration Common Procedure Cod21 ing System (hereinafter referred to as ‘HCPCS’) on or

22 after January 1, 2001, the Secretary shall provide for the

23 establishment of payment rates in accordance with sub24 paragraph (B) or (C).
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1 ‘‘(B) In the case of a clinical diagnostic laboratory

2 test described in subparagraph (A) with respect to which

3 the Secretary proposes to base payment on the fee sched4 ule amounts determined under paragraph (1) and the na5 tional limitation amount determined under paragraph (4)

6 for one or more similar clinical diagnostic laboratory tests,

7 the Secretary shall—

8 ‘‘(i) cause to have published in the Federal

9 Register not later than July 1 of each calendar year

10 (beginning with calendar year 2001) the Secretary’s

11 proposal with respect to the appropriate fee schedule

12 amounts and national limitation amount for such

13 test for the following calendar year; and

14 ‘‘(ii) provide an opportunity for the public to

15 comment on such proposal.

16 ‘‘(C)(i) In the case of a clinical diagnostic laboratory

17 test described in subparagraph (A) with respect to which

18 payment is not determined in accordance with subpara19 graph (B)—

20 ‘‘(I) payment under this subsection shall be

21 made on the basis of the prevailing charge level for

22 the test for a locality or area (determined without

23 regard to the percentage limitation or the base year

24 referred to in paragraph (2)(A)); and
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1 ‘‘(II) the limitation amounts referred to in sub2 section (a)(1)(D)(i), subsection (a)(2)(D)(i), and

3 paragraph (4)(B) shall not apply,

4 until the beginning of the third full calendar year that be5 gins on or after the date on which an HCPCS code is

6 first assigned with respect to such test, or, if later, the

7 beginning of the first calendar year that begins on or after

8 the date on which the Secretary determines that there are

9 sufficient claims data to establish a limitation amount

10 under paragraph (4)(B).

11 ‘‘(ii) Notwithstanding paragraph (2)(A), the Sec12 retary shall—

13 ‘‘(I) set the fee schedules under paragraph (1)

14 for a clinical diagnostic laboratory test described in

15 clause (i) for any calendar year beginning after the

16 base year at 100 percent of the prevailing charge

17 level for such test for the applicable region, State,

18 or area for the base year, adjusted annually (to be19 come effective on January 1 of each year) by the

20 percentage increase or decrease in the Consumer

21 Price Index for All Urban Consumers (United States

22 city average), and subject to such other adjustments

23 as the Secretary determines are justified by techno24 logical changes; and
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1 ‘‘(II) determine the limitation amount referred

2 to in subsection (a)(1)(D)(i), subsection (a)(2)(D)(i),

3 and paragraph (4)(B) for such test based on the fee

4 schedules set under subclause (I).

5 ‘‘(iii) For purposes of clause (ii), the term ‘base year’

6 means, with respect to a clinical diagnostic laboratory test,

7 the last full calendar year during which payment for such

8 test was determined in accordance with clause (i).’’.

9 (c) PROHIBITION.—The Secretary may not assign a

10 code for a new clinical diagnostic laboratory test that dif11 fers from the code recommended by the American Medical

12 Association Common Procedure Terminology Editorial

13 Panel and results in lower payment than would be made

14 if the Secretary accepted such recommendation solely on

15 the basis that the test is a test that may be performed

16 by a laboratory with a certificate of waiver under section

17 353(d)(2) of the Public Health Service Act (42 U.S.C.

18 263a(d)(2)).

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