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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2614 Introduced in Senate (IS)]

108th CONGRESS
  2d Session
                                S. 2614

To amend title XVIII of the Social Security Act to improve the benefits 
 under the medicare program for beneficiaries with kidney disease, and 
                          for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              July 7, 2004

  Mr. Conrad (for himself and Mr. Santorum) 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 benefits 
 under the medicare program for beneficiaries with kidney disease, and 
                          for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``ESRD Modernization 
Act of 2004''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
         TITLE I--MODERNIZING THE MEDICARE ESRD PAYMENT SYSTEM

Sec. 101. Establishment of annual update framework for the medicare 
                            ESRD composite rate.
  TITLE II--PATIENT EDUCATION, QUALITY, ACCESS AND SAFETY INITIATIVES

Sec. 201. Support of public and patient education initiatives regarding 
                            kidney disease.
Sec. 202. Medicare coverage of kidney disease patient education 
                            services.
Sec. 203. Blood flow monitoring demonstration projects.
          TITLE III--FINANCING AND COVERAGE FOR ESRD PATIENTS

Sec. 301. Improving the home dialysis benefit.
Sec. 302. Institute of Medicine evaluation and report on home dialysis.
                    TITLE IV--SUSTAINABLE ECONOMICS

Sec. 401. Modification of physician surgical reimbursement for dialysis 
                            access procedures to align incentives for 
                            cost and quality.
Sec. 402. Demonstration project for outcomes-based ESRD reimbursement 
                            system.
Sec. 403. GAO study and report on impact of G-codes.

         TITLE I--MODERNIZING THE MEDICARE ESRD PAYMENT SYSTEM

SEC. 101. ESTABLISHMENT OF ANNUAL UPDATE FRAMEWORK FOR THE MEDICARE 
              ESRD COMPOSITE RATE.

    (a) In General.--Section 1881(b)(12)(F) of the Social Security Act 
(42 U.S.C. 1395rr(b)(12)(F)), as added by section 623(d) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108-173; 117 Stat. 2313), is amended to read as follows:
    ``(F) Beginning with 2006, the Secretary shall annually increase 
the basic case-mix adjusted payment amounts established under this 
paragraph--
            ``(i) with respect to the composite rate component of the 
        basic case-mix adjusted system described in subparagraph 
        (B)(i), by the ESRD market basket percentage increase (as 
        defined in paragraph (14)(A) and including any additional 
        factors that may increase costs described in paragraph (14)(B)) 
        above such composite rate payment amounts for such services 
        furnished on December 31 of the previous year; and
            ``(ii) with respect to the component of the basic case-mix 
        adjusted system described in clause (ii) of subparagraph (B), 
        by--
                    ``(I) applying the estimated growth in expenditures 
                for drugs and biologicals (including erythropoietin) 
                that are separately billable to such component; and
                    ``(II) converting the amount determined in 
                subclause (I) to an increase applicable to the basic 
                case-mix adjusted payment amounts established under 
                such subparagraph.''.
    (b) ESRD Market Basket Percentage Increase Defined.--Section 
1881(b) of the Social Security Act (42 U.S.C. 1395rr(b)), as amended by 
section 623(d) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2313) is 
amended by adding at the end the following new paragraph:
    ``(14)(A) For purposes of this title, the term `ESRD market basket 
percentage increase' means, with respect to a calendar year, the 
percentage (estimated by the Secretary before the beginning of such 
year) by which--
            ``(i) the cost of the mix of goods and services included in 
        the provision of dialysis services (including the costs 
        described in subparagraph (D)) that is determined based on an 
        index of appropriately weighted indicators of changes in wages 
        and prices which are representative of the mix of goods and 
        services included in such dialysis services for the calendar 
        year; exceeds
            ``(ii) the cost of such mix of goods and services for the 
        preceding calendar year.
    ``(B) In addition to determining the percentage update under 
subparagraph (A), the Secretary shall also take into account any change 
in the costs of furnishing the mix of goods and services described in 
such subparagraph resulting from--
            ``(i) the adoption of scientific and technological 
        innovations used to provide dialysis services;
            ``(ii) changes in the manner or method of delivering 
        dialysis services;
            ``(iii) productivity improvements in the provision of 
        dialysis services; and
            ``(iv) any other relevant factor.
    ``(C) The Secretary shall annually review and update the items and 
services included in the mix of goods and services used to determine 
the percentage under subparagraph (A).
    ``(D) The costs described in this subparagraph include--
            ``(i) labor costs, including direct patient care costs and 
        administrative labor costs, vacation and holiday pay, payroll 
        taxes, and employee benefits;
            ``(ii) other direct costs, including drugs, supplies, and 
        laboratory fees;
            ``(iii) overhead costs, including medical director fees, 
        temporary services, general and administrative costs, interest 
        expenses, and bad debt;
            ``(iv) capital costs, including rent, real estate taxes, 
        depreciation, utilities, repairs, and maintenance; and
            ``(v) such other allowable costs as the Secretary may 
        specify.''.

  TITLE II--PATIENT EDUCATION, QUALITY, ACCESS AND SAFETY INITIATIVES

SEC. 201. SUPPORT OF PUBLIC AND PATIENT EDUCATION INITIATIVES REGARDING 
              KIDNEY DISEASE.

    (a) Chronic Kidney Disease Demonstration Projects.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        establish demonstration projects to--
                    (A) increase public awareness about the factors 
                that lead to chronic kidney disease, how to prevent it, 
                how to treat it, and how to avoid kidney failure; and
                    (B) enhance surveillance systems and expand 
                research to better assess the prevalence and incidence 
                of chronic kidney disease.
            (2) Scope and duration.--
                    (A) Scope.--The Secretary shall select at least 3 
                States in which to conduct demonstration projects under 
                this subsection. In selecting the States under this 
                subparagraph, the Secretary shall take into account the 
                size of the population of medicare beneficiaries with 
                end-stage renal disease and ensure the participation of 
                individuals who reside in rural and urban areas.
                    (B) Duration.--The demonstration projects under 
                this subsection shall be conducted for a period that is 
                not longer than 5 years that begins on January 1, 2006.
            (3) Evaluation and report.--
                    (A) Evaluation.--The Secretary shall conduct an 
                evaluation of the demonstration projects conducted 
                under this subsection.
                    (B) Report.--Not later than 6 months after the date 
                on which the demonstration projects under this 
                subsection are completed, the Secretary shall submit to 
                Congress a report on the evaluation conducted under 
                subparagraph (A) together with recommendations for such 
                legislation and administrative action as the Secretary 
                determines appropriate.
            (4) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection $2,000,000 for 
        each of fiscal years 2006 through 2010.
    (b) ESRD Self-Management Demonstration Projects.--
            (1) In general.--The Secretary shall establish 
        demonstration projects to enable individuals with end-stage 
        renal disease to develop self-management skills.
            (2) Scope and duration.--
                    (A) Scope.--The Secretary shall select at least 3 
                States in which to conduct demonstration projects under 
                this subsection. In selecting the States under this 
                subparagraph, the Secretary shall take into account the 
                size of the population of medicare beneficiaries with 
                end-stage renal disease and ensure the participation of 
                individuals who reside in rural and urban areas.
                    (B) Duration.--The demonstration projects under 
                this section shall be conducted for a period that is 
                not longer than 5 years that begins on January 1, 2006.
            (3) Evaluation and report.--
                    (A) Evaluation.--The Secretary shall conduct an 
                evaluation of the demonstration projects conducted 
                under this subsection.
                    (B) Report.--Not later than 6 months after the date 
                on which the demonstration projects under this 
                subsection are completed, the Secretary shall submit to 
                Congress a report on the evaluation conducted under 
                subparagraph (A) together with recommendations for such 
                legislation and administrative action as the Secretary 
                determines appropriate.
            (4) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection $2,000,000 for 
        each of fiscal years 2006 through 2010.

SEC. 202. MEDICARE COVERAGE OF KIDNEY DISEASE PATIENT EDUCATION 
              SERVICES.

    (a) Coverage of Kidney Disease Education Services.--
            (1) Coverage.--Section 1861(s)(2) of the Social Security 
        Act (42 U.S.C. 1395x), as amended by section 642(a)(1) of the 
        Medicare Prescription Drug, Improvement, and Modernization Act 
        of 2003 (Public Law 108-173; 117 Stat. 2322), is amended--
                    (A) in subparagraph (Y), by striking ``and'' after 
                the semicolon at the end;
                    (B) in subparagraph (Z), by adding ``and'' after 
                the semicolon at the end; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(AA) kidney disease education services (as defined in 
        subsection (bbb));''.
            (2) Services described.--Section 1861 of the Social 
        Security Act (42 U.S.C. 1395x), as amended by section 706(b) of 
        the Medicare Prescription Drug, Improvement, and Modernization 
        Act of 2003 (Public Law 108-173; 117 Stat. 2339), is amended by 
        adding at the end the following new subsection:

                  ``Kidney Disease Education Services

    ``(bbb)(1) The term `kidney disease education services' means 
educational services that are--
            ``(A) furnished to an individual with kidney disease who, 
        according to accepted clinical guidelines identified by the 
        Secretary, will require dialysis or a kidney transplant;
            ``(B) furnished, upon the referral of the physician 
        managing the individual's kidney condition, by a qualified 
        person (as defined in paragraph (2)); and
            ``(C) designed--
                    ``(i) to provide comprehensive information 
                regarding--
                            ``(I) the management of co-morbidities;
                            ``(II) the prevention of uremic 
                        complications; and
                            ``(III) each option for renal replacement 
                        therapy (including home and in-center, as well 
                        as vascular access options and 
                        transplantation); and
                    ``(ii) to ensure that the individual has the 
                opportunity to actively participate in the choice of 
                therapy.
    ``(2) The term `qualified person' means--
            ``(A) a physician (as described in subsection (r)(1));
            ``(B) an individual who--
                    ``(i) is--
                            ``(I) a registered nurse;
                            ``(II) a registered dietitian or nutrition 
                        professional (as defined in subsection 
                        (vv)(2));
                            ``(III) a clinical social worker (as 
                        defined in subsection (hh)(1));
                            ``(IV) a physician assistant, nurse 
                        practitioner, or clinical nurse specialist (as 
                        those terms are defined in subsection (aa)(5)); 
                        or
                            ``(V) a transplant coordinator; and
                    ``(ii) meets such requirements related to 
                experience and other qualifications that the Secretary 
                finds necessary and appropriate for furnishing the 
                services described in paragraph (1); or
            ``(C) a renal dialysis facility subject to the requirements 
        of section 1881(b)(1) with personnel who--
                    ``(i) provide the services described in paragraph 
                (1); and
                    ``(ii) meet the requirements of subparagraph (A) or 
                (B).
    ``(3) The Secretary shall develop the requirements under paragraphs 
(1)(C)(i) and (2)(B)(ii) after consulting with physicians, health 
educators, professional organizations, accrediting organizations, 
kidney patient organizations, dialysis facilities, transplant centers, 
network organizations described in section 1881(c)(2), and other 
knowledgeable persons.
    ``(4) In promulgating regulations to carry out this subsection, the 
Secretary shall ensure that each beneficiary who is entitled to kidney 
disease education services under this title receives such services in a 
timely manner to maximize the benefit of those services.
    ``(5) The Secretary shall monitor the implementation of this 
subsection to ensure that beneficiaries who are eligible for kidney 
disease education services receive such services in the manner 
described in paragraph (4).
    ``(6) No individual shall be eligible to be provided more than 6 
sessions of kidney disease education services under this title.''.
            (3) Payment under physician fee schedule.--Section 
        1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-
        4(j)(3)), as amended by section 611(c) of the Medicare 
        Prescription Drug, Improvement, and Modernization Act of 2003 
        (Public Law 108-173; 117 Stat. 2304), is amended by inserting 
        ``(2)(AA),'' after ``(2)(W),''.
            (4) Payment to renal dialysis facilities.--Section 1881(b) 
        of the Social Security Act (42 U.S.C. 1395rr(b)), as amended by 
        section 2(b), is amended by adding at the end the following new 
        paragraph:
            ``(15) For purposes of paragraph (12), the single composite 
        weighted formulas determined under such paragraph shall not 
        take into account the amount of payment for kidney disease 
        education services (as defined in section 1861(bbb)). Instead, 
        payment for such services shall be made to the renal dialysis 
        facility on an assignment-related basis under section 1848.''.
            (5) Limitation on number of sessions.--Section 1862(a)(1) 
        of the Social Security Act (42 U.S.C. 1395y(a)(1)), as amended 
        by section 613(c) of the Medicare Prescription Drug, 
        Improvement, and Modernization Act of 2003 (Public Law 108-173; 
        117 Stat. 2306), is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (L);
                    (B) by striking the semicolon at the end of 
                subparagraph (M) and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(N) in the case of kidney disease education services (as 
        defined in section 1861(bbb)), which are performed in excess of 
        the number of sessions covered under such section;''.
            (6) Annual report to congress.--Not later than April 1, 
        2005, and annually thereafter, the Secretary of Health and 
        Human Services (in this section referred to as the 
        ``Secretary'') shall submit to Congress a report on the number 
        of medicare beneficiaries who are entitled to kidney disease 
        education services (as defined in section 1861(bbb) of the 
        Social Security Act, as added by paragraph (1)) under title 
        XVIII of such Act and who receive such services, together with 
        such recommendations for legislative and administrative action 
        as the Secretary determines to be appropriate to fulfill the 
        legislative intent that resulted in the enactment of that 
        subsection.
    (b) Effective Date.--The amendments made by this section shall 
apply to services furnished on and after January 1, 2006.

SEC. 203. BLOOD FLOW MONITORING DEMONSTRATION PROJECTS.

    (a) Establishment.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall establish 
demonstration projects to evaluate how blood flow monitoring affects 
the quality and cost of care for medicare beneficiaries with end-stage 
renal disease.
    (b) Duration.--The demonstration projects under this section shall 
be conducted for a period of not longer than 5 years that begins on 
January 1, 2006.
    (c) Evaluation and Report.--
            (1) Evaluation.--The Secretary shall conduct an evaluation 
        of the demonstration projects conducted under this section.
            (2) Report.--Not later than 6 months after the date on 
        which the demonstration projects under this section are 
        completed, the Secretary shall submit to Congress a report on 
        the evaluation conducted under paragraph (1) together with 
        recommendations for such legislation and administrative action 
        as the Secretary determines appropriate.
    (d) Waiver Authority.--The Secretary shall waive compliance with 
the requirements of title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) to such extent and for such period as the Secretary 
determines is necessary to conduct the demonstration projects.
    (e) Authorization of Appropriations.--
            (1) In general.--Payments for the costs of carrying out the 
        demonstration project under this section shall be made from the 
        Federal Supplementary Medical Insurance Trust Fund under 
        section 1841 of such Act (42 U.S.C. 1395t).
            (2) Amount.--There are authorized to be appropriated from 
        such Trust Fund $1,000,000 for each of fiscal years 2006 
        through 2010 to carry out this section.

          TITLE III--FINANCING AND COVERAGE FOR ESRD PATIENTS

SEC. 301. IMPROVING THE HOME DIALYSIS BENEFIT.

    (a) In General.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall provide 
appropriate incentives to improve the home dialysis benefit for 
individuals on behalf of whom payment may be made under section 1881 of 
the Social Security Act (42 U.S.C. 1395rr).
    (b) Considerations.--In developing the incentives under subsection 
(a), the Secretary shall consider revising the fee schedule for 
physicians' services under section 1848 of the Social Security Act (42 
U.S.C. 1395w-4) so that the amount paid for services related to end-
stage renal disease furnished to home dialysis patients is equal to the 
amount paid for services related to end-stage renal disease furnished 
to other patients with 4 or more face-to-face physician visits per 
month.

SEC. 302. INSTITUTE OF MEDICINE EVALUATION AND REPORT ON HOME DIALYSIS.

    (a) Evaluation.--
            (1) In general.--Not later than the date that is 2 months 
        after the date of enactment of this Act, the Secretary of 
        Health and Human Services (in this section referred to as the 
        ``Secretary'') shall enter into an arrangement under which the 
        Institute of Medicine of the National Academy of Sciences (in 
        this section referred to as the ``Institute'') shall conduct an 
        evaluation of the barriers that exist to increasing the number 
        of individuals with end-stage renal disease who elect to 
        receive home dialysis services under the medicare program under 
        title XVIII of the Social Security Act (42 U.S.C. 1395 et 
        seq.).
            (2) Specific matters evaluated.--In conducting the 
        evaluation under paragraph (1), the Institute shall--
                    (A) compare current medicare home dialysis payments 
                with current in-center and hospital dialysis payments;
                    (B) catalogue and evaluate the incentives and 
                disincentives in the current reimbursement system that 
                influence whether patients receive home dialysis 
                services;
                    (C) evaluate patient education services and how 
                such services impact the treatment choices made by 
                patients; and
                    (D) consider such other matters as the Institute 
                determines appropriate.
            (3) Scope of review.--The Institute shall consider a 
        variety of perspectives, including the perspectives of 
        physicians, other health care professionals, hospitals, 
        dialysis facilities, health plans, purchasers, and patients.
    (b) Report.--Not later than the date that is 18 months after the 
date of enactment of this Act, the Institute shall submit to the 
Secretary and appropriate committees of Congress a report on the 
evaluation conducted under subsection (a)(1) describing the findings of 
such evaluation and recommendations for implementing incentives to 
encourage patients to elect to receive home dialysis services under the 
medicare program.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for purposes of conducting 
the evaluation and preparing the report required by this section.

                    TITLE IV--SUSTAINABLE ECONOMICS

SEC. 401. MODIFICATION OF PHYSICIAN SURGICAL REIMBURSEMENT FOR DIALYSIS 
              ACCESS PROCEDURES TO ALIGN INCENTIVES FOR COST AND 
              QUALITY.

    (a) Full Coverage of Dialysis Access Procedures in the Ambulatory 
Surgical Center Setting.--Not later than January 1, 2006, the Secretary 
of Health and Human Services shall--
            (1) review the surgical procedures specified under section 
        1833(i)(1) of the Social Security Act (42 U.S.C. 1395l(i)(1)) 
        and evaluate whether to include in such procedures the full 
        range of dialysis access procedures, including all reasonable 
        and necessary intervention procedures for the repair and 
        maintenance of an individual's dialysis access, such as the 
        placement, insertion, and maintenance services related to 
        fistulas, synthetic grafts, tunnel catheters, and peritoneal 
        dialysis catheters; and
            (2) revise such units to reflect the findings of the 
        evaluation.
    (b) Revision of RBRVS To Reflect the Difficulty of Vascular Access 
Procedures.--Not later than January 1, 2006, the Secretary of Health 
and Human Services shall--
            (1) review the relative value units determined under 
        section 1848(c)(2) of the Social Security Act (42 U.S.C. 1395w-
        4(c)(2)) that are applicable with respect to physicians' 
        services for vascular access procedures; and
            (2) revise such units to accurately reflect the difficulty 
        of such procedures.

SEC. 402. DEMONSTRATION PROJECT FOR OUTCOMES-BASED ESRD REIMBURSEMENT 
              SYSTEM.

    (a) Establishment.--Subject to the succeeding provisions of this 
section, the Secretary of Health and Human Services (in this section 
referred to as the ``Secretary'') shall establish demonstration 
projects (in this section referred to as ``demonstration projects'') 
under which the Secretary shall evaluate methods that improve the 
quality of care provided to medicare beneficiaries with end-stage renal 
disease.
    (b) Outcomes-Based ESRD Reimbursement System.--
            (1) In general.--Under the demonstration projects, the 
        Secretary shall provide financial incentives to providers of 
        services and renal dialysis facilities that demonstrate 
        improved quality of care to such beneficiaries.
            (2) Consideration of outcomes and case-mix.--In determining 
        whether a provider or facility has demonstrated an improved 
        quality of care under paragraph (1), the Secretary shall take 
        into account the outcomes of individuals receiving services 
        from the provider or facility and the case-mix of the provider 
        or facility.
            (3) Incentives described.--The financial incentives 
        provided under paragraph (1) shall--
                    (A) reflect the interactions of payments under 
                parts A and B of title XVIII of the Social Security 
                Act; and
                    (B) recognize improvements based on high quality 
                outcomes during previous periods as well as recent 
                changes in performance to reward long-term 
                improvements.
    (c) Duration.--The Secretary shall conduct the demonstration 
program under this section for a period that is not longer than 5 years 
that begins on January 1, 2006.
    (d) Evaluation and Report.--
            (1) Evaluation.--The Secretary shall conduct an evaluation 
        of the demonstration projects conducted under this section.
            (2) Report.--Not later than 6 months after the date on 
        which the demonstration projects are completed, the Secretary 
        shall submit to Congress a report on the evaluation conducted 
        under paragraph (1) together with recommendations for such 
        legislation and administrative action as the Secretary 
        determines appropriate.
    (e) Waiver Authority.--The Secretary shall waive compliance with 
the requirements of title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) to such extent and for such period as the Secretary 
determines is necessary to conduct the demonstration projects.
    (f) Authorization of Appropriations.--
            (1) In general.--Payments for the costs of carrying out the 
        demonstration project under this section shall be made from the 
        Federal Supplementary Medical Insurance Trust Fund under 
        section 1841 of such Act (42 U.S.C. 1395t).
            (2) Amount.--There are authorized to be appropriated from 
        such Trust Fund such sums as may be necessary to carry out this 
        section.

SEC. 403. GAO STUDY AND REPORT ON IMPACT OF G-CODES.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on the impact of the temporary codes for nephrologists' 
services applicable under the fee schedule for physicians' services 
under section 1848 of the Social Security Act (commonly known as ``G-
codes'').
    (b) Report.--Not later than the date that is 6 months after the 
date of enactment of this Act, the Comptroller General shall submit to 
Congress a report on the study conducted under subsection (a) together 
with recommendations for such legislation and administrative action as 
the Comptroller General determines appropriate.
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