I

107TH CONGRESS

1ST SESSION H. R. 1798

To amend title XVIII of the Social Security Act to establish procedures

for determining payment amounts for new clinical diagnostic laboratory

tests for which payment is made under the Medicare Program.

IN THE HOUSE OF REPRESENTATIVES

MAY 10, 2001

Ms. DUNN of Washington (for herself, Mr. EHRLICH, Mr. MCDERMOTT, and

Mr. RAMSTAD) 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 establish

procedures for determining payment amounts for new

clinical diagnostic laboratory tests for which payment

is made under the Medicare Program.

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 ‘‘Medicare Patient Ac5 cess to Preventive and Diagnostic Tests Act’’.
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1 SEC. 2. CODING AND PAYMENT PROCEDURES FOR NEW

2 CLINICAL DIAGNOSTIC LABORATORY TESTS

3 UNDER MEDICARE.

4 (a) DETERMINING PAYMENT BASIS FOR NEW LAB

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

6 U.S.C. 1395l(h)) is amended by adding at the end the fol7 lowing:

8 ‘‘(9)(A) The Secretary shall establish proce9 dures for determining the basis for, and amount of,

10 payment under this subsection for any clinical diag11 nostic laboratory test with respect to which a new or

12 substantially revised HCPCS code is assigned on or

13 after January 1, 2002 (hereinafter in this paragraph

14 and paragraph (10) referred to as ‘new tests’). Such

15 procedures shall provide that—

16 ‘‘(i) the payment amount for such a test

17 will be established only on—

18 ‘‘(I) the basis described in paragraph

19 (10)(A); or

20 ‘‘(II) the basis described in paragraph

21 (10)(B); and

22 ‘‘(ii) the Secretary will determine whether

23 the payment amount for such a test is estab24 lished on the basis described in paragraph

25 (10)(A) or the basis described in paragraph

26 (10)(B) only after the process described in sub-
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1 paragraph (B) has been completed with respect

2 to such test.

3 ‘‘(B) Determinations under subparagraph

4 (A)(ii) shall be made only after the Secretary—

5 ‘‘(i) makes available to the public (through

6 an Internet site and other appropriate mecha7 nisms) a list that includes any such test for

8 which establishment of a payment amount

9 under paragraph (10) is being considered for a

10 year;

11 ‘‘(ii) on the same day such list is made

12 available, causes to have published in the Fed13 eral Register notice of a meeting to receive

14 comments and recommendations from the pub15 lic on the appropriate basis under paragraph

16 (10) for establishing payment amounts for the

17 tests on such list;

18 ‘‘(iii) not less than 30 days after publica19 tion of such notice, convenes a meeting to re20 ceive such comments and recommendations,

21 with such meeting—

22 ‘‘(I) including representatives of all

23 entities within the Health Care Financing

24 Administration (hereinafter in this para25 graph referred to as ‘HCFA’) that will be
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1 involved in determining the basis on which

2 payment amounts will be established for

3 such tests under paragraph (10) and im4 plementing such determinations;

5 ‘‘(II) encouraging the participation of

6 interested parties, including beneficiaries,

7 device manufacturers, clinical laboratories,

8 laboratory professionals, pathologists, and

9 prescribing physicians, through outreach

10 activities; and

11 ‘‘(III) affording opportunities for

12 interactive dialogue between representa13 tives of HCFA and the public;

14 ‘‘(iv) makes minutes of such meeting avail15 able to the public (through an Internet site and

16 other appropriate mechanisms) not later than

17 15 calendar days after such meeting;

18 ‘‘(v) taking into account the comments and

19 recommendations received at such meeting, de20 velops and makes available to the public

21 (through an Internet site and other appropriate

22 mechanisms) a list of proposed determinations

23 with respect to the appropriate basis for estab24 lishing a payment amount under paragraph

25 (10) for each such code, together with an expla-
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1 nation of the reasons for each such determina2 tion, and the data on which the determination

3 is based;

4 ‘‘(vi) on the same day such list is made

5 available, causes to have published in the Fed6 eral Register notice of a public meeting to re7 ceive comments and recommendations from the

8 public on the proposed determinations;

9 ‘‘(vii) not later than August 1 of each year,

10 but at least 30 days after publication of such

11 notice, convenes a meeting to receive such com12 ments and recommendations, with such meeting

13 being conducted in the same manner as the

14 meeting under clause (iii);

15 ‘‘(viii) makes a transcript of such meeting

16 available to the public (through an Internet site

17 and other appropriate mechanisms) as soon as

18 is practicable after such meeting; and

19 ‘‘(ix) taking into account the comments

20 and recommendations received at such meeting,

21 develops and makes available to the public

22 (through an Internet site and other appropriate

23 mechanisms) a list of final determinations of

24 whether the payment amount for such tests will

25 be determined on the basis described in para-
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1 graph (10)(A) or the basis described in para2 graph (10)(B), together with the rationale for

3 each such determination, the data on which the

4 determination is based, and responses to com5 ments and suggestions received from the public.

6 ‘‘(C) Under the procedures established pursuant

7 to subparagraph (A), the Secretary shall—

8 ‘‘(i) identify the rules and assumptions to

9 be applied by the Secretary in considering and

10 making determinations of whether the payment

11 amount for a new test should be established on

12 the basis described in paragraph (10)(A) or the

13 basis described in paragraph (10)(B);

14 ‘‘(ii) make available to the public the data

15 (other than proprietary data) considered in

16 making such determinations; and

17 ‘‘(iii) provide for a mechanism under

18 which—

19 ‘‘(I) an interested party may request

20 an administrative review of an adverse de21 termination;

22 ‘‘(II) upon the request of an inter23 ested party, an administrative review is

24 conducted with respect to an adverse deter25 mination; and
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1 ‘‘(III) such determination is revised,

2 as necessary, to reflect the results of such

3 review.

4 ‘‘(D) For purposes of this paragraph and

5 paragraph (10)—

6 ‘‘(i) the term ‘HCPCS’ refers to the

7 Health Care Financing Administration

8 Common Procedure Coding System; and

9 ‘‘(ii) a code shall be considered to be

10 ‘substantially revised’ if there is a sub11 stantive change to the definition of the test

12 or procedure to which the code applies

13 (such as a new analyte or a new method14 ology for measuring an existing analyte15 specific test).

16 ‘‘(10)(A) Notwithstanding paragraphs (1), (2),

17 and (4), if a new test is clinically similar to a test

18 for which a fee schedule amount has been estab19 lished under paragraph (5), the Secretary shall pay

20 the same fee schedule amount for the new test. In

21 determining whether tests are clinically similar for

22 purposes of this paragraph, the Secretary may not

23 take into account economic factors.

24 ‘‘(B)(i) Notwithstanding paragraphs (1), (2),

25 (4), and (5), if a new test is not clinically similar to
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1 a test for which a fee schedule has been established

2 under paragraph (5), payment under this subsection

3 for such test shall be made on the basis of the lesser

4 of—

5 ‘‘(I) the actual charge for the test; or

6 ‘‘(II) an amount equal to 60 percent (or in

7 the case of a test performed by a qualified hos8 pital (as defined in paragraph (1)(D)) for out9 patients of such hospital, 62 percent) of the

10 prevailing charge level determined pursuant to

11 the third and fourth sentences of section

12 1842(b)(3) for the test for a locality or area for

13 the year (determined without regard to the year

14 referred to in paragraph (2)(A)(i), or any na15 tional limitation amount under paragraph

16 (4)(B), and adjusted annually by the percent17 age increase or decrease under paragraph

18 (2)(A)(i));

19 until the beginning of the third full calendar year

20 that begins on or after the date on which an

21 HCPCS code is first assigned with respect to such

22 test, or, if later, the beginning of the first calendar

23 year that begins on or after the date on which the

24 Secretary determines that there are sufficient claims
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1 data to establish a fee schedule amount pursuant to

2 clause (ii).

3 ‘‘(ii) Notwithstanding paragraphs (2) and (4),

4 and (5), the fee schedule amount for a clinical diag5 nostic laboratory test described in clause (i) that is

6 performed—

7 ‘‘(I) during the first calendar year after

8 clause (i) ceases to apply to such test, shall be

9 an amount equal to the national limitation

10 amount that the Secretary determines (con11 sistent with clause (iii)) would have applied to

12 such test under paragraph (4)(B)(viii) during

13 the preceding calendar year, adjusted by the

14 percentage increase or decrease determined

15 under paragraph (2)(A)(i) for such first cal16 endar year; and

17 ‘‘(II) during a subsequent year, is the fee

18 schedule amount determined under this clause

19 for the preceding year, adjusted by the percent20 age increase or decrease that applies under

21 paragraph (5)(A) for such year.

22 ‘‘(iii) For purposes of clause (ii)(I), the national

23 limitation amount for a test shall be set at 100 per24 cent of the median of the payment amounts deter25 mined under clause (ii)(I) for all payment localities
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1 or areas for the last calendar year for which pay2 ment for such test was determined under clause (i).

3 ‘‘(iv) Nothing in clause (ii) shall be construed

4 as prohibiting the Secretary from applying (or au5 thorizing the application of) the comparability provi6 sions of the first sentence of such section 1842(b)(3)

7 with respect to amounts determined under such

8 clause.’’.

9 (b) ESTABLISHMENT OF NATIONAL FEE SCHEDULE

10 AMOUNTS.—

11 (1) IN GENERAL.—Section 1833(h) of the So12 cial Security Act, as amended by subsection (a), is

13 further amended—

14 (A) in paragraph (2), by striking ‘‘para15 graph (4)’’ and inserting in lieu thereof ‘‘para16 graphs (4), (5), and (10)’’;

17 (B) in paragraph (4)(B)(viii), by inserting

18 ‘‘and before January 1, 2002,’’ after ‘‘Decem19 ber 31, 1997,’’;

20 (C) by redesignating paragraphs (5), (6),

21 and (7), as paragraphs (6), (7), and (8), re22 spectively; and

23 (D) by inserting after paragraph (4) the

24 following:
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1 ‘‘(5) Notwithstanding paragraphs (2) and (4),

2 the Secretary shall set the fee schedule amount for

3 a test (other than a test to which paragraph

4 (10)(B)) applies) at—

5 ‘‘(A) for tests performed during 2002, an

6 amount equal to the national limitation amount

7 for that test for 2001, and adjusted by the per8 centage increase or decrease determined under

9 paragraph (2)(A)(i) for such year; and

10 ‘‘(B) for tests performed during a year

11 after 2002, the amount determined under this

12 subparagraph for the preceding year, adjusted

13 by the percentage increase or decrease deter14 mined under paragraph (2)(A)(i) for such

15 year.’’.

16 (2) CONFORMING CHANGES.—Section 1833(a)

17 of the Social Security Act (42 U.S.C. 1395l(a)) is

18 amended—

19 (A) in paragraph (1)(D)(i), by striking

20 ‘‘the limitation amount for that test determined

21 under subsection (h)(4)(B),’’; and

22 (B) in paragraph (2)(D)(i), by striking

23 ‘‘the limitation amount for that test determined

24 under subsection (h)(4)(B),’’.
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1 (c) MECHANISM FOR REVIEW OF ADEQUACY OF PAY2 MENT AMOUNTS.—Section 1833(h) of the Social Security

3 Act, as amended by subsections (a) and (b), is further

4 amended by adding at the end the following:

5 ‘‘(11) The Secretary shall establish a mecha6 nism under which—

7 ‘‘(A) an interested party may request a

8 timely review of the adequacy of the existing

9 payment amount under this subsection fee for

10 a particular test; and

11 ‘‘(B) upon the receipt of such a request, a

12 timely review is carried out.’’.

13 (d) USE OF INHERENT REASONABLENESS AUTHOR14 ITY.—Section 1842(b)(8) of the Social Security Act (42

15 U.S.C. 1395u(b)(8)) is amended by adding at the end the

16 following:

17 ‘‘(E)(i) The Secretary may not delegate

18 the authority to make determinations with re19 spect to clinical diagnostic laboratory tests

20 under this paragraph to a regional office of the

21 Health Care Financing Administration or to an

22 entity with a contract under subsection (a).

23 ‘‘(ii) In making determinations with re24 spect to clinical diagnostic laboratory tests

25 under this paragraph, the Secretary—
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1 ‘‘(I) shall base such determinations on

2 data from affected payment localities and

3 all sites of care; and

4 ‘‘(II) may not use a methodology that

5 assigns undue weight to the prevailing

6 charge levels for any one type of entity

7 with a contract under subsection (a).’’.

8 (e) PROHIBITION.—The Secretary may not assign a

9 code for a new clinical diagnostic laboratory test that dif10 fers from the code recommended by the American Medical

11 Association Common Procedure Terminology Editorial

12 Panel and results in lower payment than would be made

13 if the Secretary accepted such recommendation solely on

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

15 by a laboratory with a certificate of waiver under section

16 353(d)(2) of the Public Health Service Act (42 U.S.C.

17 263a(d)(2)).

18 (f) EFFECTIVE DATES.—

19 (1) ESTABLISHMENT OF PROCEDURES.—The

20 Secretary of Health and Human Services shall es21 tablish the procedures required to implement para22 graphs (9), (10), and (11) of section 1833(h) of the

23 Social Security Act (42 U.S.C. 1395l(h)), as added

24 by this section, by not later than October 1, 2001.
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1 (2) INHERENT REASONABLENESS; CODE AS2 SIGNMENT.—The amendments made by subsections

3 (d) and (e) shall apply to determinations made on or

4 after the date of the enactment of this Act.

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