I 

109TH CONGRESS 

2D SESSION H. R. 5369 

To amend title XVIII of the Social Security Act to improve payments under 

the Medicare clinical laboratory fee schedule. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 11, 2006 

Mr. FERGUSON (for himself, Mr. ENGLISH of Pennsylvania, Mr. RUSH, and 

Mr. THOMPSON of California) 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 to improve 

payments under the Medicare clinical laboratory fee schedule. 

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 AND TABLE OF CONTENTS. 

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

5 ‘‘Medicare Clinical Laboratory Fee Schedule Improvement 

6 Act of 2006’’. 

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

8 this Act is as follows: 


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Sec. 1. Short title and table of contents. 

TITLE I—NEAR-TERM CHANGES 

Sec. 101. Fee schedule and national limitation amounts for clinical diagnostic 

laboratory tests. 

Sec. 102. Issuance of regulations on gap-filling for medicare fee schedule for 

clinical diagnostic laboratory tests. 

Sec. 103. Increased transparency of process for determining fee schedule 

amounts for new tests. 

Sec. 104. Advance notice of clinical diagnostic laboratory test amounts being 

considered for adjustment under inherent reasonableness authority. 

TITLE II—FUTURE REFORM 

Sec. 201. Establishment of medicare demonstration project to evaluate new 

approaches to coding and payment for certain molecular diagnostic tests. 

1 TITLE I—NEAR-TERM CHANGES 

2 SEC. 101. FEE SCHEDULE AND NATIONAL LIMITATION 

3 AMOUNTS FOR CLINICAL DIAGNOSTIC LAB4 ORATORY TESTS. 

5 (a) IN GENERAL.—Section 1833(h) of the Social Se6 curity Act (42 U.S.C. 1395l(h)) is amended by adding at 

7 the end the following new paragraph: 

8 ‘‘(9)(A) For purposes of this paragraph: 

9 ‘‘(i) The term ‘an amount determined under 

10 this subsection’ means, with respect to a clinical lab11 oratory test, the fee schedule amount determined 

12 under paragraph (2)(A)(i) for the test or the limita13 tion amount determined under paragraph (4)(B) for 

14 the test. 

15 ‘‘(ii) The terms ‘appropriate medicare adminis16 trative contractor’ and ‘medicare administrative conVerDate Aug 31 2005 00:23 May 14, 2006 Jkt 049196 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5369.IH H5369

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1 tractor’ have the meaning given to such terms under 

2 section 1874A(a)(3). 

3 ‘‘(iii) The term ‘erroneous decision’ means, with 

4 respect to the determination of an amount deter5 mined under this subsection, any decision, calcula6 tion, judgment or other action by the Secretary or 

7 a medicare administrative contractor that, based 

8 upon consideration of currently known facts, needs 

9 to be modified to produce a fair and equitable pay10 ment amount, except that such term does not in11 clude typographical or clerical errors. 

12 ‘‘(iv) The term ‘non-governmental party’ in13 cludes— 

14 ‘‘(I) a provider of services (as defined in 

15 section 1861(u)) that furnishes clinical diag16 nostic laboratory tests for which payment may 

17 be made under this subsection; 

18 ‘‘(II) a supplier (as defined in section 

19 1861(d)) that furnishes such tests; and 

20 ‘‘(III) a manufacturer of a test or of any 

21 supplies or equipment that are used in per22 forming such test. 

23 ‘‘(B) An amount determined under this subsection 

24 may be changed solely on the basis of— 


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1 ‘‘(i) in the case of a change other than a change 

2 to correct an erroneous decision in determining such 

3 amount, the authority provided by the preceding 

4 provisions of this subsection, section 1842(b)(8), or 

5 any regulations, manual instructions, or other regu6 latory guidance implementing such provisions; or 

7 ‘‘(ii) in the case of a change to correct an erro8 neous decision in determining such an amount, the 

9 authority provided by subparagraphs (C), (D), and 

10 (E). 

11 ‘‘(C) Any erroneous decision in determining an 

12 amount under this subsection may be corrected only if— 

13 ‘‘(i) a non-governmental party submits a re14 quest under subparagraph (D) or (E) for correction 

15 of the erroneous decision; and 

16 ‘‘(ii) such party demonstrates, to an appro17 priate medicare administrative contractor under sub18 paragraph (D) or the Secretary under subparagraph 

19 (E), that an erroneous decision clearly was made. 

20 ‘‘(D)(i) Any non-governmental party may request (in 

21 such form and manner as the Secretary may require) that 

22 the appropriate medicare administrative contractor change 

23 a fee schedule amount determined under paragraph 

24 (2)(A)(i) to correct an erroneous decision in determining 

25 such amount. 


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1 ‘‘(ii) Any request under this subparagraph shall in2 clude a statement of the basis for the non-governmental 

3 party’s belief that an erroneous decision was made in de4 termining such amount, together with supporting evidence 

5 and a description of any additional data (other than data 

6 already in the possession of the appropriate medicare ad7 ministrative contractor) that— 

8 ‘‘(I) is or may be in the possession of the Sec9 retary or another medicare administrative con10 tractor; and 

11 ‘‘(II) is necessary to demonstrate that such an 

12 erroneous decision exists. 

13 ‘‘(iii) If the Secretary or another medicare adminis14 trative contractor is identified as possessing or potentially 

15 possessing additional data identified by a non-govern16 mental party in a request under this subparagraph, the 

17 Secretary or such contractor, as the case may be, shall 

18 make available to the non-governmental party within 30 

19 days after the date of the submission of the request any 

20 data in their possession that meet the description of the 

21 additional data identified in such request, with appro22 priate safeguards to protect confidential and proprietary 

23 information. 

24 ‘‘(iv) If additional data are made available to a non25 governmental party under clause (iii), such party may 


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1 amend its request under this subparagraph to incorporate 

2 such data within 30 days after the date such data are 

3 made available to such party. 

4 ‘‘(v) An appropriate medicare administrative con5 tractor to which a request is submitted under this sub6 paragraph shall make a determination with respect to 

7 whether to correct the decision that is identified as erro8 neous in the request not later than 60 days after the date 

9 of the submission of such request, or if later, the date of 

10 the submission of an amended request under clause (iv). 

11 Such contractor shall determine that the non-govern12 mental party submitting the request— 

13 ‘‘(I) has demonstrated that an erroneous deci14 sion clearly was made, correct such erroneous deci15 sion, and increase the fee schedule amount as of the 

16 first day of the next calendar quarter to reflect the 

17 correction of such erroneous decision; or 

18 ‘‘(II) has failed to demonstrate that an erro19 neous decision clearly was made and decline to 

20 change the fee schedule amount, 

21 and shall provide to the non-governmental party a written 

22 explanation of the basis for such determination. 

23 ‘‘(vi) An appropriate medicare administrative con24 tractor to which a request is submitted under this sub25 paragraph may not reduce a fee schedule amount pursuVerDate Aug 31 2005 00:23 May 14, 2006 Jkt 049196 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5369.IH H5369

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1 ant to such request, and may reduce such an amount only 

2 pursuant to section 1842(b)(8). 

3 ‘‘(E)(i) Any non-governmental party may request (in 

4 such form and manner as the Secretary may require) that 

5 the Secretary— 

6 ‘‘(I) reverse a determination of a medicare ad7 ministrative contractor under subparagraph (D) that 

8 is adverse to the non-governmental party requesting 

9 it; 

10 ‘‘(II) correct an erroneous decision in the deter11 mination of a limitation amount under paragraph 

12 (4)(B); or 

13 ‘‘(III) reverse a determination referred to in 

14 subclause (I) and correct an erroneous decision re15 ferred to in subclause (II). 

16 ‘‘(ii) Any request under this subparagraph shall in17 clude a statement of the basis for the non-governmental 

18 party’s belief that an erroneous decision was made in de19 termining such amount, together with supporting evidence 

20 and a description of any additional data (other than data 

21 already in the possession of the Secretary or the appro22 priate medicare administrative contractor reviewing the 

23 request under subparagraph (D)) that– 


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1 ‘‘(I) are or may be in the possession of the Sec2 retary or an another medicare administrative con3 tractor; and 

4 ‘‘(II) are necessary to demonstrate that such an 

5 erroneous decision exists. 

6 ‘‘(iii) If the Secretary or another medicare adminis7 trative contractor is identified as possessing or potentially 

8 possessing additional data identified by a non-govern9 mental party in a request under this subparagraph, the 

10 Secretary or such contractor, as the case may be, shall 

11 make available to the non-governmental party within 30 

12 days after the date of the submission of the request any 

13 data in their possession that meet the description of the 

14 additional data identified in such request, with appro15 priate safeguards to protect confidential and proprietary 

16 information. 

17 ‘‘(iv) If additional data are made available to a non18 governmental party under clause (iii), such party may 

19 amend its request under this subparagraph to incorporate 

20 such data within 30 days after the date such data are 

21 made available to such party. 

22 ‘‘(v) The Secretary shall make a determination of 

23 whether to correct the erroneous decision that is the sub24 ject of a request submitted under this subparagraph not 

25 later than 60 days after the date of the submission of such 


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1 request, or if later, the submission of an amended request 

2 under clause (iv). The Secretary shall determine that the 

3 non-governmental party submitting the request— 

4 ‘‘(I) has demonstrated that an erroneous deci5 sion clearly was made, correct such erroneous deci6 sion, and increase the fee schedule amount as of the 

7 first day of the next calendar quarter to reflect the 

8 correction of such erroneous decision; or 

9 ‘‘(II) has failed to demonstrate that an erro10 neous decision clearly was made and decline to 

11 change the fee schedule amount or national limita12 tion amount, as the case may be, 

13 and shall provide to the non-governmental party with a 

14 written explanation of the basis for such determination. 

15 ‘‘(vi) The Secretary may not reduce a fee schedule 

16 amount pursuant to a request under this subparagraph 

17 and may reduce such an amount only pursuant to section 

18 1842(b)(8). 

19 ‘‘(F)(i) There shall be no administrative or judicial 

20 review under section 1869, 1878, or otherwise of any de21 termination made under subparagraph (D) or (E). 

22 ‘‘(ii) Nothing in this paragraph shall be construed as 

23 precluding administrative or judicial review of determina24 tions of the amount of benefits that are available to a 

25 Medicare beneficiary in a particular case.’’. 


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

2 subsection (a) shall take effect on the date of the enact3 ment of this Act and shall apply to requests for corrections 

4 submitted on or after such date, without regard to whether 

5 final regulations to carry out such amendment have been 

6 issued. 

7 SEC. 102. ISSUANCE OF REGULATIONS ON GAP-FILLING 

8 FOR MEDICARE FEE SCHEDULE FOR CLIN9 ICAL DIAGNOSTIC LABORATORY TESTS. 

10 Not later than one year after the date of the enact11 ment of this Act, the Secretary of Health and Human 

12 Services shall issue final regulations specifying how an ap13 propriate medicare administrative contractor (as defined 

14 in section 1874A(a)(3)(B) of the Social Security Act (42 

15 U.S.C. 1395kk–1(a)(3)(B)) shall apply a gap-filling meth16 odology in determining fee schedule amounts established 

17 under section 1833(h)(2)(A)(i) of such Act (42 U.S.C. 

18 1395l(h)(2)(A)(i)). Such regulations shall specify— 

19 (1) a process for ensuring that the resulting fee 

20 schedule amounts are fair, including a description of 

21 the types of data to be collected for use in such 

22 methodology and the minimum requirements such 

23 data shall meet in order to ensure that the data are 

24 valid, meaningful, and unbiased; 


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1 (2) the principles to be employed to ensure that 

2 such data are statistically significant and alter3 natives to follow if statistically significant data are 

4 unavailable; 

5 (3) the principles to be followed in using data 

6 to calculate fee schedule amounts, including prin7 ciples for excluding data that do not meet the re8 quirements of paragraph (1) and (2); 

9 (4) the methods the Secretary will use to over10 see the application of a gap filling methodology by 

11 such contractors and the remedies that will be avail12 able in cases in which such a contractor fails to com13 ply with regulatory requirements; and 

14 (5) a process that provides opportunities for the 

15 public to participate in the development of fee sched16 ule amounts through the application of gap-filling 

17 methodologies, including release to the public of data 

18 collection protocols and the data derived from such 

19 protocols with an opportunity for public comment 

20 thereon. 

21 SEC. 103. INCREASED TRANSPARENCY OF PROCESS FOR 

22 DETERMINING FEE SCHEDULE AMOUNTS 

23 FOR NEW TESTS. 

24 Section 1833(h)(8) of the Social Security Act (42 

25 U.S.C. 1395l(h)(8) is amended— 


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1 (1) in subparagraph (B)(iii), by inserting ‘‘to be 

2 conducted in an inter-active format,’’ after ‘‘meet3 ing,’’; 

4 (2) in subparagraph (B)(iv)— 

5 (A) by inserting ‘‘(I)’’ after ‘‘meeting,’’; 

6 (B) by striking ‘‘determination,’’ and in7 serting ‘‘determination and’’; and 

8 (C) by striking ‘‘a request for’’ and insert9 ing ‘‘(II) publishes in the Federal Register a 

10 notice of a period of not less than 60 days dur11 ing which the Secretary will receive’’; and 

12 (3) in subparagraph (C), by striking ‘‘Under 

13 the procedures’’ and inserting ‘‘In the regulations’’. 

14 SEC. 104. ADVANCE NOTICE OF CLINICAL DIAGNOSTIC LAB15 ORATORY TEST AMOUNTS BEING CONSID16 ERED FOR ADJUSTMENT UNDER INHERENT 

17 REASONABLENESS AUTHORITY. 

18 (a) LIMIT ON INHERENT REASONABLENESS AU19 THORITY.—Section 1842(b)(9)(A) of the Social Security 

20 Act (42 U.S.C. 1395u(b)(9)(A)) is amended by adding at 

21 the end the following: ‘‘Before publishing a proposed no22 tice under subparagraph (B) with respect to any clinical 

23 diagnostic laboratory test being considered for adjustment 

24 under paragraph (8), advance notice that such test is 

25 being considered for such an adjustment shall be provided 


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1 to non-governmental parties (as defined in section 

2 1833(h)(9)(A)(iv)) at the meeting required by section 

3 1833(h)(8)(B)(iii), together with an opportunity for such 

4 representatives and other individuals to make oral com5 ments on the appropriateness of such an adjustment for 

6 such test.’’. 

7 (b) CONFORMING CHANGE.—Section 1833(h)(8)(B) 

8 of such Act (42 U.S.C. 1395l(h)(8)(B)) is amended by 

9 adding at the end the following: 

10 ‘‘At the meeting required by clause (iii), the Secretary 

11 shall provide advance notice of inherent reasonableness ad12 justments under section 1842(b)(8) that are being consid13 ered for clinical diagnostic laboratory tests, and afford an 

14 opportunity for non-governmental parties (as defined 

15 1833(h)(9)(A)(iv)) at the meeting to comment orally on 

16 the appropriateness of such an adjustment.’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall become effective on January 1, 2007, 

19 and shall apply to inherent reasonableness adjustments 

20 that have not been proposed as of such date. 


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1 TITLE II—FUTURE REFORM 

2 SEC. 201. ESTABLISHMENT OF MEDICARE DEMONSTRATION 

3 PROJECT TO EVALUATE NEW APPROACHES 

4 TO CODING AND PAYMENT FOR CERTAIN MO5 LECULAR DIAGNOSTIC TESTS. 

6 (a) ESTABLISHMENT OF DEMONSTRATION.— 

7 (1) DEMONSTRATION OF NEW APPROACHES TO

8 CODING AND PAYMENT.—The Secretary of Health 

9 and Human Services (in this section referred to as 

10 the ‘‘Secretary’’) shall establish a demonstration 

11 project under this section (in this section referred to 

12 as the ‘‘demonstration’’) to evaluate new approaches 

13 to coding and payment under the medicare program 

14 for clinical diagnostic laboratory tests included in 

15 the demonstration (in this section referred to as ‘‘in16 cluded tests’’). 

17 (2) DURATION.—The demonstration and any 

18 payment amounts assigned under the demonstration 

19 shall apply solely to claims submitted for included 

20 tests during the 12-calendar-quarter period that be21 gins with the first day of the first calendar quarter 

22 to begin at least 250 days after the date of the en23 actment of this Act. 

24 (3) SCOPE.—The demonstration shall apply on 

25 a national basis to included tests in all settings for 


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1 which payment for such tests would (but for the 

2 demonstration) be made under the fee schedules and 

3 limitation amounts established under section 

4 1833(h) of the Social Security Act (42 U.S.C. 

5 1395l(h)). 

6 (4) ISSUANCE OF TEMPORARY HCPCS CODES; 

7 CONTINUED APPLICATION OF SUCH CODES.—The 

8 Secretary shall issue a temporary code or codes 

9 under the Health Care Procedure Coding System 

10 (HCPCS) when needed for an included test, and 

11 such code or codes— 

12 (A) shall continue to apply to the test until 

13 a permanent code or codes is assigned; and 

14 (B) shall not cease to apply solely because 

15 the demonstration ends. 

16 (b) INCLUDED TESTS.— 

17 (1) ELIGIBLE TESTS.—A clinical diagnostic lab18 oratory test is eligible to be an included test under 

19 the demonstration if— 

20 (A) the test is a new or existing molecular 

21 diagnostic test that (but for its inclusion in the 

22 demonstration) could be paid under the fee 

23 schedules and national limitation amount estab24 lished under section 1833(h) of the Social Secu25 rity Act (42 U.S.C. 1395l(h)) for the test; and 


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1 (B) there is the prospect— 

2 (i) for wide usage of the test in mul3 tiple geographic areas; and 

4 (ii) that development of a new code, 

5 or payment, or both, for the test under the 

6 demonstration will result in reduced ad7 ministrative complexity and improved effi8 ciency. 

9 (2) INCLUDED TESTS.—A clinical diagnostic 

10 laboratory test shall be treated as an included test 

11 if— 

12 (A) an interested party submits a request 

13 to the standing panel established under sub14 section (c) that the test be included in the dem15 onstration; and 

16 (B) the standing panel determines that the 

17 test is an eligible test under paragraph (1); or 

18 (3) DEFINITIONS.—For purposes of this sec19 tion— 

20 (A) the term ‘‘molecular diagnostic test’’ 

21 means a clinical diagnostic laboratory test per22 formed on deoxyribonucleic (DNA), ribonucleic 

23 acid (RNA), or protein that is drawn from a 

24 human being or from a disease-causing orga25 nism; and 


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1 (B) the term ‘‘interested party’’ means, 

2 with respect to a request for inclusion of molec3 ular diagnostic test in the demonstration, an in4 dividual entitled to benefits under title XVIII of 

5 the Social Security Act, a manufacturer of the 

6 test, a clinical laboratory offering the test, a 

7 professional society, the Centers for Medicare & 

8 Medicaid Services, a private payer for such test, 

9 and a physician or other health care practi10 tioner. 

11 (c) STANDING PANEL.— 

12 (1) APPOINTMENT.—Not later than 60 days 

13 after the date of the enactment of this section, the 

14 Secretary shall appoint a standing panel (in this sec15 tion referred to as the ‘‘standing panel’’ or ‘‘panel’’) 

16 to determine whether a test is an included test and 

17 make recommendations to the Secretary on the ap18 propriate coding of, and payment for, designated 

19 clinical diagnostic laboratory tests under the dem20 onstration. 

21 (2) COMPOSITION OF PANEL.— 

22 (A) IN GENERAL.—The standing panel 

23 shall be comprised of 12 members. Two of such 

24 members shall be non-voting representatives of 

25 the Administrator of the Centers for Medicare 


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1 & Medicaid Services. The Secretary shall ap2 point the other 10 members from— 

3 (i) organizations representing large 

4 clinical laboratories; 

5 (ii) organizations representing small 

6 clinical laboratories; 

7 (iii) organizations representing physi8 cians with expertise in clinical diagnostic 

9 laboratory tests; 

10 (iv) organizations representing other 

11 health professionals with expertise in such 

12 tests; 

13 (v) organizations representing manu14 facturers of such tests; 

15 (vi) organizations representing indi16 viduals entitled to benefits under title 

17 XVIII of the Social Security Act; 

18 (vii) organizations representing pri19 vate payers for such tests (but not more 

20 than one member may be appointed to rep21 resent such organizations); 

22 (viii) individuals with expertise in clin23 ical laboratory cost accounting (both macro 

24 and micro); and 


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1 (ix) individuals with other relevant ex2 pertise. 

3 (B) TERMS OF OFFICE.—Each member of 

4 the panel shall be appointed for the life of the 

5 panel, except that any individual appointed to 

6 fill a vacancy shall be appointed for the remain7 der of the term of the individual who is being 

8 replaced. Any vacancy shall be filled in the 

9 same manner, and with a representative of the 

10 same category under subparagraph (A), as the 

11 individual being replaced. 

12 (3) RULES GOVERNING PANEL.— 

13 (A) IN GENERAL.—The panel shall elect its 

14 chair. A quorum shall be required to conduct 

15 the business of the panel, and eight members of 

16 the panel shall constitute a quorum. 

17 (B) COMPENSATION.—While serving on 

18 the business of the panel (including travel 

19 time), a member of the panel shall be entitled 

20 to compensation at the per diem equivalent rate 

21 provided for level IV of the Executive Schedule 

22 under section 5315 of title 5, United States 

23 Code, and while so serving away from home and 

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1 ber may be allowed travel expenses as author2 ized by the chair of the panel. 

3 (C) STAFFING.— 

4 (i) DETAILING.—The panel may seek 

5 such assistance and support of its duties 

6 from appropriate Federal Departments 

7 and agencies. 

8 (ii) OUTSIDE EXPERTS.—The panel 

9 may retain the services of such outside ex10 perts as are necessary for the evaluation of 

11 a request under this section, and such ex12 perts shall not be voting members of the 

13 panel. 

14 (D) MEETINGS.—The panel shall meet at 

15 the call of the chair and at such intervals 

16 (which shall not be less than quarterly) as may 

17 be necessary for the conduct of its business. 

18 The agenda of each meeting and a notice of its 

19 date shall be published at least 30 days before 

20 the date the meeting occurs, and, except as pro21 vided in subparagraph (E), meetings of the 

22 panel shall be open to the public. 

23 (E) FACA.—The Federal Advisory Com24 mittee Act (5 U.S.C. App.) shall not apply to 

25 the panel, but the panel may close any portion 


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1 of a meeting that could be closed if such Act 

2 applied. 

3 (F) TERMINATION OF PANEL.—The panel 

4 shall terminate not more than 180 days after 

5 the close of the demonstration. 

6 (d) FORM AND CONTENT OF REQUESTS FOR INCLU7 SION IN THE DEMONSTRATION.—A request for inclusion 

8 of a clinical diagnostic laboratory test in the demonstra9 tion shall be submitted in such form, and shall contain 

10 such information as the standing panel may require, in11 cluding at least— 

12 (1) any coding and payment determinations re13 quested with respect to the test; and 

14 (2) any documentation in support of— 

15 (A) the eligibility of the test for inclusion 

16 in the demonstration; and 

17 (B) any coding and payment determina18 tions requested with respect to the test, includ19 ing data on the typical direct and indirect lab20 oratory costs (including test acquisition costs) 

21 of the test. 

22 The Secretary shall cause to have published in the 

23 Federal Register and on an appropriate internet site 

24 public notice of each such request. Such information 


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1 shall be supplied to the Secretary by the standing 

2 panel. 

3 (e) CRITERIA FOR EVALUATING REQUESTS FOR DE4 TERMINATIONS IN CODING AND PAYMENT.— 

5 (1) IN GENERAL.—In determining whether a 

6 requested payment determination should be granted, 

7 and what the new payment amount for a test should 

8 be, the standing panel (in making its recommenda9 tions to the Secretary) and the Secretary (in deter10 mining whether to grant such a determination) shall 

11 take into account typical direct and indirect labora12 tory costs (including test acquisition costs), the ex13 pected impact of the test on patient care manage14 ment, and such other factors as the standing panel 

15 and the Secretary, respectively, determine to be rel16 evant to the determination. 

17 (2) STANDING PANEL.—Not later than 180 

18 days after the appointment of all of the members of 

19 the panel, the panel shall, after consultation with the 

20 Secretary, establish and make available to the pub21 lic— 

22 (A) standards and parameters for deter23 mining whether to recommend to the Secretary 

24 a coding or payment determination specified in 

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1 onstration, which shall include a listing of data 

2 elements necessary to support a request and a 

3 standardized procedure for collecting and sub4 mitting data on typical costs to the panel; 

5 (B) policies and procedures for protecting 

6 the confidentiality of financial and other propri7 etary data submitted to the panel in support of 

8 a request; and 

9 (C) cost intervals or cost bands (as de10 scribed in subsection (g)(1)) that the panel rec11 ommends that the Secretary should use for the 

12 assignment of included tests under the dem13 onstration. 

14 (3) SECRETARIAL DETERMINATIONS.—The Sec15 retary shall develop and make available to public on 

16 an internet site guidance documents on the stand17 ards and parameters that will be applied in making 

18 Secretarial determinations and on the cost intervals 

19 or cost bands to be used under the demonstration 

20 and on whether to grant a request for a payment or 

21 coding determination. Such guidance documents 

22 shall be developed, which shall be made available to 

23 the public at least 10 days before the beginning of 

24 the demonstration, in a manner similar to the man25 ner in which guidance documents are developed 


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1 under section 701(h) of the Federal Food, Drug, 

2 and Cosmetic Act (21 U.S.C. 371(h)). 

3 (4) AUTHORITY TO RECOMMEND REVISIONS TO, 

4 AND TO REVISE, COST INTERVALS OR COST

5 BANDS.—Nothing in this section shall be construed 

6 as limiting the authority of the standing panel to 

7 recommend, or the Secretary to adopt, new cost in8 tervals or cost bands to accommodate changes in 

9 technology. 

10 (f) REVIEW PROCESS.— 

11 (1) REQUESTS FOR INCLUSION IN DEMONSTRA12 TION.—An interested party may submit a request 

13 for inclusion of a test in the demonstration to the 

14 standing panel at any time during a calendar year 

15 for which the demonstration is in effect, except that 

16 the standing panel may decline to review and make 

17 recommendations or determinations with respect to 

18 any request that would result in a requested coding 

19 or payment determination being effective for a pe20 riod of less than 4 calendar quarters. 

21 (2) RECOMMENDATIONS OF STANDING

22 PANEL.—The standing panel shall review each re23 quest for a coding or payment determination that is 

24 made with respect to an included test. Applying the 

25 standards and parameters developed under subVerDate Aug 31 2005 00:23 May 14, 2006 Jkt 049196 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H5369.IH H5369

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1 section (e)(2)(A), the panel shall make a rec2 ommendation to the Secretary with respect to each 

3 requested determination. 

4 (3) SECRETARIAL DETERMINATIONS.— 

5 (A) QUARTERLY DETERMINATIONS.—The 

6 Secretary shall make determinations on whether 

7 to grant requested coding and payment deter8 minations on a quarterly basis, but is not re9 quired to make such a determination for every 

10 request made (or with respect to which a rec11 ommendation is received from the standing 

12 panel) during a particular quarter. 

13 (B) TIME FRAMES FOR DETERMINA14 TIONS.—Determinations of the Secretary shall 

15 be made in a timely manner in accordance with 

16 time frames developed by the standing panel 

17 taking into account factors such as when a re18 quest (and a recommendation with respect to 

19 the request) is made during a quarter, the par20 ticular type of test involved, and the staffing 

21 and resources that may be required to review 

22 the request. 

23 (g) PAYMENT METHODOLOGY.— 

24 (1) IN GENERAL.—Included tests shall be paid 

25 in accordance with a methodology, developed by the 


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1 standing panel, that establishes cost intervals or cost 

2 bands in a manner similar to those that are used as 

3 new technology ambulatory payment classification 

4 groups for hospital outpatient services under section 

5 1833(t) of the Social Security Act (42 U.S.C. 

6 1395l(t)), with a test being assigned to the cost in7 terval or cost band that most closely approximates 

8 the typical direct and indirect costs (including test 

9 acquisition costs) of the test for a laboratory. Tests 

10 that are included tests for purposes of this section 

11 shall be excluded from any demonstration project 

12 under section 1847(e) of such Act (42 U.S.C. 

13 1395w–3(e)). 

14 (2) PANEL RECOMMENDATIONS; SECRETARIAL

15 DETERMINATIONS.— 

16 (A) RECOMMENDATIONS; SECRETARIAL

17 DETERMINATIONS.—The standing panel shall 

18 recommend to the Secretary a cost interval or 

19 cost band to which an included test should be 

20 assigned, and the Secretary may assign such 

21 test to such band or interval or to another band 

22 or interval the Secretary determines to more 

23 closely approximate the typical direct and indi24 rect costs (including test acquisition costs) of 

25 the test. 


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1 (B) EXPLANATION OF DETERMINATION

2 THAT DIFFERS FROM RECOMMENDATION.—If 

3 the Secretary assigns a test to a cost interval 

4 or band other than that recommended by the 

5 standing panel, the Secretary shall provide a 

6 detailed written explanation of the reasons for 

7 determining that such other interval or band is 

8 more appropriate. 

9 (3) EFFECTIVE DATE OF SECRETARIAL DETER10 MINATION.—A determination by the Secretary with 

11 respect to a coding or payment determination for an 

12 included test shall become effective as of the first 

13 day of the calendar quarter following the calendar 

14 quarter in which the determination is made. 

15 (4) PERIODIC LOOK-BACKS OF INTERVAL OR

16 BAND ASSIGNMENTS.—At the request of the inter17 ested party that submitted the initial request for a 

18 test to be included in the demonstration or of a 

19 member of the standing panel, the standing panel 

20 may review the appropriateness of the payment in21 terval or band to which the test is assigned and 

22 make a recommendation to the Secretary that the 

23 assignment be changed. The Secretary may accept 

24 or reject such recommendation, and if the rec25 ommendation is rejected, the Secretary shall provide 


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1 a detailed explanation of the reasons for such rejec2 tion. 

3 (5) PUBLICATION OF DETERMINATIONS.—The 

4 Secretary shall publish determinations under this 

5 subsection in a timely manner on an appropriate 

6 internet site. 

7 (h) REPORTS TO CONGRESS.— 

8 (1) IN GENERAL.—The Secretary shall submit 

9 interim and final reports on the demonstration to 

10 the Committees on Ways and Means and Energy 

11 and Commerce of the House of Representatives and 

12 the Committee on Finance of the Senate. The in13 terim report shall be submitted not later than the 

14 close of the second year of the demonstration, and 

15 the final report shall be submitted not later than 

16 180 days after the close of the demonstration. 

17 (2) CONTENT OF REPORTS.—The reports sub18 mitted under paragraph (1) shall include interim 

19 and final— 

20 (A) determinations on whether coding and 

21 payment assignments under the demonstration 

22 provide for— 

23 (i) more equitable and accurate pay24 ment for included tests; and 


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1 (ii) reduced administrative complexity, 

2 improved efficiency, and improved access 

3 to care; and 

4 (B) recommendations on— 

5 (i) whether the alternative mechanism 

6 for determining payment and coding for in7 cluded tests should be continued for such 

8 tests beyond the 12-calendar-quarter pe9 riod the demonstration is in effect; and 

10 (ii) whether the application of such 

11 mechanism should be expanded to include 

12 other new clinical diagnostic laboratory 

13 tests for which payment would otherwise 

14 be made under the fee schedules and limits 

15 established under section 1833(h) of the 

16 Social Security Act (42 U.S.C. 1395l(h)). 

17 (3) COMMENTS BY STANDING PANEL.—The 

18 standing panel shall submit comments to the com19 mittees referred to in paragraph (1) on the interim 

20 and final reports of the Secretary. 

21 (i) AUTHORIZATION OF APPROPRIATIONS.—There 

22 are authorized to be appropriated for each of fiscal years 

23 2007 through 2012, such sums as may be necessary to 

24 carry out this section. 

Æ 


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