II 

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. 

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 ‘‘ESRD Modernization Act of 2004’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—MODERNIZING THE MEDICARE ESRD PAYMENT SYSTEM 
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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. 

1 TITLE I—MODERNIZING THE 

2 MEDICARE ESRD PAYMENT 

3 SYSTEM 

4 SEC. 101. ESTABLISHMENT OF ANNUAL UPDATE FRAME5 WORK FOR THE MEDICARE ESRD COMPOSITE 

6 RATE. 

7 (a) IN GENERAL.—Section 1881(b)(12)(F) of the So8 cial Security Act (42 U.S.C. 1395rr(b)(12)(F)), as added 

9 by section 623(d) of the Medicare Prescription Drug, Im10 provement, and Modernization Act of 2003 (Public Law 

11 108–173; 117 Stat. 2313), is amended to read as follows: 

12 ‘‘(F) Beginning with 2006, the Secretary shall annu13 ally increase the basic case-mix adjusted payment amounts 

14 established under this paragraph— 
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1 ‘‘(i) with respect to the composite rate compo2 nent of the basic case-mix adjusted system described 

3 in subparagraph (B)(i), by the ESRD market basket 

4 percentage increase (as defined in paragraph 

5 (14)(A) and including any additional factors that 

6 may increase costs described in paragraph (14)(B)) 

7 above such composite rate payment amounts for 

8 such services furnished on December 31 of the pre9 vious year; and 

10 ‘‘(ii) with respect to the component of the basic 

11 case-mix adjusted system described in clause (ii) of 

12 subparagraph (B), by— 

13 ‘‘(I) applying the estimated growth in ex14 penditures for drugs and biologicals (including 

15 erythropoietin) that are separately billable to 

16 such component; and 

17 ‘‘(II) converting the amount determined in 

18 subclause (I) to an increase applicable to the 

19 basic case-mix adjusted payment amounts es20 tablished under such subparagraph.’’. 

21 (b) ESRD MARKET BASKET PERCENTAGE INCREASE

22 DEFINED.—Section 1881(b) of the Social Security Act 

23 (42 U.S.C. 1395rr(b)), as amended by section 623(d) of 

24 the Medicare Prescription Drug, Improvement, and Mod25 ernization Act of 2003 (Public Law 108–173; 117 Stat. 
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1 2313) is amended by adding at the end the following new 

2 paragraph: 

3 ‘‘(14)(A) For purposes of this title, the term ‘ESRD 

4 market basket percentage increase’ means, with respect to 

5 a calendar year, the percentage (estimated by the Sec6 retary before the beginning of such year) by which— 

7 ‘‘(i) the cost of the mix of goods and services 

8 included in the provision of dialysis services (includ9 ing the costs described in subparagraph (D)) that is 

10 determined based on an index of appropriately 

11 weighted indicators of changes in wages and prices 

12 which are representative of the mix of goods and 

13 services included in such dialysis services for the cal14 endar year; exceeds 

15 ‘‘(ii) the cost of such mix of goods and services 

16 for the preceding calendar year. 

17 ‘‘(B) In addition to determining the percentage up18 date under subparagraph (A), the Secretary shall also take 

19 into account any change in the costs of furnishing the mix 

20 of goods and services described in such subparagraph re21 sulting from— 

22 ‘‘(i) the adoption of scientific and technological 

23 innovations used to provide dialysis services; 

24 ‘‘(ii) changes in the manner or method of deliv25 ering dialysis services; 
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1 ‘‘(iii) productivity improvements in the provi2 sion of dialysis services; and 

3 ‘‘(iv) any other relevant factor. 

4 ‘‘(C) The Secretary shall annually review and update 

5 the items and services included in the mix of goods and 

6 services used to determine the percentage under subpara7 graph (A). 

8 ‘‘(D) The costs described in this subparagraph in9 clude— 

10 ‘‘(i) labor costs, including direct patient care 

11 costs and administrative labor costs, vacation and 

12 holiday pay, payroll taxes, and employee benefits; 

13 ‘‘(ii) other direct costs, including drugs, sup14 plies, and laboratory fees; 

15 ‘‘(iii) overhead costs, including medical director 

16 fees, temporary services, general and administrative 

17 costs, interest expenses, and bad debt; 

18 ‘‘(iv) capital costs, including rent, real estate 

19 taxes, depreciation, utilities, repairs, and mainte20 nance; and 

21 ‘‘(v) such other allowable costs as the Secretary 

22 may specify.’’. 
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1 TITLE II—PATIENT EDUCATION, 

2 QUALITY, ACCESS AND SAFE3 TY INITIATIVES 

4 SEC. 201. SUPPORT OF PUBLIC AND PATIENT EDUCATION 

5 INITIATIVES REGARDING KIDNEY DISEASE. 

6 (a) CHRONIC KIDNEY DISEASE DEMONSTRATION

7 PROJECTS.— 

8 (1) IN GENERAL.—The Secretary of Health and 

9 Human Services (in this section referred to as the 

10 ‘‘Secretary’’) shall establish demonstration projects 

11 to— 

12 (A) increase public awareness about the 

13 factors that lead to chronic kidney disease, how 

14 to prevent it, how to treat it, and how to avoid 

15 kidney failure; and 

16 (B) enhance surveillance systems and ex17 pand research to better assess the prevalence 

18 and incidence of chronic kidney disease. 

19 (2) SCOPE AND DURATION.— 

20 (A) SCOPE.—The Secretary shall select at 

21 least 3 States in which to conduct demonstra22 tion projects under this subsection. In selecting 

23 the States under this subparagraph, the Sec24 retary shall take into account the size of the 

25 population of medicare beneficiaries with end- 
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1 stage renal disease and ensure the participation 

2 of individuals who reside in rural and urban 

3 areas. 

4 (B) DURATION.—The demonstration 

5 projects under this subsection shall be con6 ducted for a period that is not longer than 5 

7 years that begins on January 1, 2006. 

8 (3) EVALUATION AND REPORT.— 

9 (A) EVALUATION.—The Secretary shall 

10 conduct an evaluation of the demonstration 

11 projects conducted under this subsection. 

12 (B) REPORT.—Not later than 6 months 

13 after the date on which the demonstration 

14 projects under this subsection are completed, 

15 the Secretary shall submit to Congress a report 

16 on the evaluation conducted under subpara17 graph (A) together with recommendations for 

18 such legislation and administrative action as the 

19 Secretary determines appropriate. 

20 (4) AUTHORIZATION OF APPROPRIATIONS.— 

21 There are authorized to be appropriated to carry out 

22 this subsection $2,000,000 for each of fiscal years 

23 2006 through 2010. 

24 (b) ESRD SELF-MANAGEMENT DEMONSTRATION

25 PROJECTS.— 
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1 (1) IN GENERAL.—The Secretary shall establish 

2 demonstration projects to enable individuals with 

3 end-stage renal disease to develop self-management 

4 skills. 

5 (2) SCOPE AND DURATION.— 

6 (A) SCOPE.—The Secretary shall select at 

7 least 3 States in which to conduct demonstra8 tion projects under this subsection. In selecting 

9 the States under this subparagraph, the Sec10 retary shall take into account the size of the 

11 population of medicare beneficiaries with end12 stage renal disease and ensure the participation 

13 of individuals who reside in rural and urban 

14 areas. 

15 (B) DURATION.—The demonstration 

16 projects under this section shall be conducted 

17 for a period that is not longer than 5 years that 

18 begins on January 1, 2006. 

19 (3) EVALUATION AND REPORT.— 

20 (A) EVALUATION.—The Secretary shall 

21 conduct an evaluation of the demonstration 

22 projects conducted under this subsection. 

23 (B) REPORT.—Not later than 6 months 

24 after the date on which the demonstration 

25 projects under this subsection are completed, 
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1 the Secretary shall submit to Congress a report 

2 on the evaluation conducted under subpara3 graph (A) together with recommendations for 

4 such legislation and administrative action as the 

5 Secretary determines appropriate. 

6 (4) AUTHORIZATION OF APPROPRIATIONS.— 

7 There are authorized to be appropriated to carry out 

8 this subsection $2,000,000 for each of fiscal years 

9 2006 through 2010. 

10 SEC. 202. MEDICARE COVERAGE OF KIDNEY DISEASE PA11 TIENT EDUCATION SERVICES. 

12 (a) COVERAGE OF KIDNEY DISEASE EDUCATION

13 SERVICES.— 

14 (1) COVERAGE.—Section 1861(s)(2) of the So15 cial Security Act (42 U.S.C. 1395x), as amended by 

16 section 642(a)(1) of the Medicare Prescription Drug, 

17 Improvement, and Modernization Act of 2003 (Pub18 lic Law 108–173; 117 Stat. 2322), is amended— 

19 (A) in subparagraph (Y), by striking 

20 ‘‘and’’ after the semicolon at the end; 

21 (B) in subparagraph (Z), by adding ‘‘and’’ 

22 after the semicolon at the end; and 

23 (C) by adding at the end the following new 

24 subparagraph: 
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1 ‘‘(AA) kidney disease education services (as de2 fined in subsection (bbb));’’. 

3 (2) SERVICES DESCRIBED.—Section 1861 of 

4 the Social Security Act (42 U.S.C. 1395x), as 

5 amended by section 706(b) of the Medicare Prescrip6 tion Drug, Improvement, and Modernization Act of 

7 2003 (Public Law 108–173; 117 Stat. 2339), is 

8 amended by adding at the end the following new 

9 subsection: 

10 ‘‘Kidney Disease Education Services 

11 ‘‘(bbb)(1) The term ‘kidney disease education serv12 ices’ means educational services that are— 

13 ‘‘(A) furnished to an individual with kidney dis14 ease who, according to accepted clinical guidelines 

15 identified by the Secretary, will require dialysis or a 

16 kidney transplant; 

17 ‘‘(B) furnished, upon the referral of the physi18 cian managing the individual’s kidney condition, by 

19 a qualified person (as defined in paragraph (2)); and 

20 ‘‘(C) designed— 

21 ‘‘(i) to provide comprehensive information 

22 regarding— 

23 ‘‘(I) the management of co24 morbidities; 
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1 ‘‘(II) the prevention of uremic com2 plications; and 

3 ‘‘(III) each option for renal replace4 ment therapy (including home and in-cen5 ter, as well as vascular access options and 

6 transplantation); and 

7 ‘‘(ii) to ensure that the individual has the 

8 opportunity to actively participate in the choice 

9 of therapy. 

10 ‘‘(2) The term ‘qualified person’ means— 

11 ‘‘(A) a physician (as described in subsection 

12 (r)(1)); 

13 ‘‘(B) an individual who— 

14 ‘‘(i) is— 

15 ‘‘(I) a registered nurse; 

16 ‘‘(II) a registered dietitian or nutri17 tion professional (as defined in subsection 

18 (vv)(2)); 

19 ‘‘(III) a clinical social worker (as de20 fined in subsection (hh)(1)); 

21 ‘‘(IV) a physician assistant, nurse 

22 practitioner, or clinical nurse specialist (as 

23 those terms are defined in subsection 

24 (aa)(5)); or 

25 ‘‘(V) a transplant coordinator; and 
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1 ‘‘(ii) meets such requirements related to 

2 experience and other qualifications that the 

3 Secretary finds necessary and appropriate for 

4 furnishing the services described in paragraph 

5 (1); or 

6 ‘‘(C) a renal dialysis facility subject to the re7 quirements of section 1881(b)(1) with personnel 

8 who— 

9 ‘‘(i) provide the services described in para10 graph (1); and 

11 ‘‘(ii) meet the requirements of subpara12 graph (A) or (B). 

13 ‘‘(3) The Secretary shall develop the requirements 

14 under paragraphs (1)(C)(i) and (2)(B)(ii) after consulting 

15 with physicians, health educators, professional organiza16 tions, accrediting organizations, kidney patient organiza17 tions, dialysis facilities, transplant centers, network orga18 nizations described in section 1881(c)(2), and other 

19 knowledgeable persons. 

20 ‘‘(4) In promulgating regulations to carry out this 

21 subsection, the Secretary shall ensure that each bene22 ficiary who is entitled to kidney disease education services 

23 under this title receives such services in a timely manner 

24 to maximize the benefit of those services. 
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1 ‘‘(5) The Secretary shall monitor the implementation 

2 of this subsection to ensure that beneficiaries who are eli3 gible for kidney disease education services receive such 

4 services in the manner described in paragraph (4). 

5 ‘‘(6) No individual shall be eligible to be provided 

6 more than 6 sessions of kidney disease education services 

7 under this title.’’. 

8 (3) PAYMENT UNDER PHYSICIAN FEE SCHED9 ULE.—Section 1848(j)(3) of the Social Security Act 

10 (42 U.S.C. 1395w–4(j)(3)), as amended by section 

11 611(c) of the Medicare Prescription Drug, Improve12 ment, and Modernization Act of 2003 (Public Law 

13 108–173; 117 Stat. 2304), is amended by inserting 

14 ‘‘(2)(AA),’’ after ‘‘(2)(W),’’. 

15 (4) PAYMENT TO RENAL DIALYSIS FACILI16 TIES.—Section 1881(b) of the Social Security Act 

17 (42 U.S.C. 1395rr(b)), as amended by section 2(b), 

18 is amended by adding at the end the following new 

19 paragraph: 

20 ‘‘(15) For purposes of paragraph (12), the sin21 gle composite weighted formulas determined under 

22 such paragraph shall not take into account the 

23 amount of payment for kidney disease education 

24 services (as defined in section 1861(bbb)). Instead, 

25 payment for such services shall be made to the renal 
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1 dialysis facility on an assignment-related basis under 

2 section 1848.’’. 

3 (5) LIMITATION ON NUMBER OF SESSIONS.— 

4 Section 1862(a)(1) of the Social Security Act (42 

5 U.S.C. 1395y(a)(1)), as amended by section 613(c) 

6 of the Medicare Prescription Drug, Improvement, 

7 and Modernization Act of 2003 (Public Law 108– 

8 173; 117 Stat. 2306), is amended— 

9 (A) by striking ‘‘and’’ at the end of sub10 paragraph (L); 

11 (B) by striking the semicolon at the end of 

12 subparagraph (M) and inserting ‘‘, and’’; and 

13 (C) by adding at the end the following new 

14 subparagraph: 

15 ‘‘(N) in the case of kidney disease education 

16 services (as defined in section 1861(bbb)), which are 

17 performed in excess of the number of sessions cov18 ered under such section;’’. 

19 (6) ANNUAL REPORT TO CONGRESS.—Not later 

20 than April 1, 2005, and annually thereafter, the 

21 Secretary of Health and Human Services (in this 

22 section referred to as the ‘‘Secretary’’) shall submit 

23 to Congress a report on the number of medicare 

24 beneficiaries who are entitled to kidney disease edu25 cation services (as defined in section 1861(bbb) of 
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1 the Social Security Act, as added by paragraph (1)) 

2 under title XVIII of such Act and who receive such 

3 services, together with such recommendations for 

4 legislative and administrative action as the Secretary 

5 determines to be appropriate to fulfill the legislative 

6 intent that resulted in the enactment of that sub7 section. 

8 (b) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to services furnished on and after 

10 January 1, 2006. 

11 SEC. 203. BLOOD FLOW MONITORING DEMONSTRATION 

12 PROJECTS. 

13 (a) ESTABLISHMENT.—The Secretary of Health and 

14 Human Services (in this section referred to as the ‘‘Sec15 retary’’) shall establish demonstration projects to evaluate 

16 how blood flow monitoring affects the quality and cost of 

17 care for medicare beneficiaries with end-stage renal dis18 ease. 

19 (b) DURATION.—The demonstration projects under 

20 this section shall be conducted for a period of not longer 

21 than 5 years that begins on January 1, 2006. 

22 (c) EVALUATION AND REPORT.— 

23 (1) EVALUATION.—The Secretary shall conduct 

24 an evaluation of the demonstration projects con25 ducted under this section. 
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1 (2) REPORT.—Not later than 6 months after 

2 the date on which the demonstration projects under 

3 this section are completed, the Secretary shall sub4 mit to Congress a report on the evaluation con5 ducted under paragraph (1) together with rec6 ommendations for such legislation and administra7 tive action as the Secretary determines appropriate. 

8 (d) WAIVER AUTHORITY.—The Secretary shall waive 

9 compliance with the requirements of title XVIII of the So10 cial Security Act (42 U.S.C. 1395 et seq.) to such extent 

11 and for such period as the Secretary determines is nec12 essary to conduct the demonstration projects. 

13 (e) AUTHORIZATION OF APPROPRIATIONS.— 

14 (1) IN GENERAL.—Payments for the costs of 

15 carrying out the demonstration project under this 

16 section shall be made from the Federal Supple17 mentary Medical Insurance Trust Fund under sec18 tion 1841 of such Act (42 U.S.C. 1395t). 

19 (2) AMOUNT.—There are authorized to be ap20 propriated from such Trust Fund $1,000,000 for 

21 each of fiscal years 2006 through 2010 to carry out 

22 this section. 
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1 TITLE III—FINANCING AND 

2 COVERAGE FOR ESRD PATIENTS 

3 SEC. 301. IMPROVING THE HOME DIALYSIS BENEFIT. 

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

5 Human Services (in this section referred to as the ‘‘Sec6 retary’’) shall provide appropriate incentives to improve 

7 the home dialysis benefit for individuals on behalf of whom 

8 payment may be made under section 1881 of the Social 

9 Security Act (42 U.S.C. 1395rr). 

10 (b) CONSIDERATIONS.—In developing the incentives 

11 under subsection (a), the Secretary shall consider revising 

12 the fee schedule for physicians’ services under section 

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

14 that the amount paid for services related to end-stage 

15 renal disease furnished to home dialysis patients is equal 

16 to the amount paid for services related to end-stage renal 

17 disease furnished to other patients with 4 or more face18 to-face physician visits per month. 

19 SEC. 302. INSTITUTE OF MEDICINE EVALUATION AND RE20 PORT ON HOME DIALYSIS. 

21 (a) EVALUATION.— 

22 (1) IN GENERAL.—Not later than the date that 

23 is 2 months after the date of enactment of this Act, 

24 the Secretary of Health and Human Services (in this 

25 section referred to as the ‘‘Secretary’’) shall enter 
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1 into an arrangement under which the Institute of 

2 Medicine of the National Academy of Sciences (in 

3 this section referred to as the ‘‘Institute’’) shall con4 duct an evaluation of the barriers that exist to in5 creasing the number of individuals with end-stage 

6 renal disease who elect to receive home dialysis serv7 ices under the medicare program under title XVIII 

8 of the Social Security Act (42 U.S.C. 1395 et seq.). 

9 (2) SPECIFIC MATTERS EVALUATED.—In con10 ducting the evaluation under paragraph (1), the In11 stitute shall— 

12 (A) compare current medicare home dialy13 sis payments with current in-center and hos14 pital dialysis payments; 

15 (B) catalogue and evaluate the incentives 

16 and disincentives in the current reimbursement 

17 system that influence whether patients receive 

18 home dialysis services; 

19 (C) evaluate patient education services and 

20 how such services impact the treatment choices 

21 made by patients; and 

22 (D) consider such other matters as the In23 stitute determines appropriate. 

24 (3) SCOPE OF REVIEW.—The Institute shall 

25 consider a variety of perspectives, including the per-
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1 spectives of physicians, other health care profes2 sionals, hospitals, dialysis facilities, health plans, 

3 purchasers, and patients. 

4 (b) REPORT.—Not later than the date that is 18 

5 months after the date of enactment of this Act, the Insti6 tute shall submit to the Secretary and appropriate com7 mittees of Congress a report on the evaluation conducted 

8 under subsection (a)(1) describing the findings of such 

9 evaluation and recommendations for implementing incen10 tives to encourage patients to elect to receive home dialysis 

11 services under the medicare program. 

12 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

13 are authorized to be appropriated such sums as may be 

14 necessary for purposes of conducting the evaluation and 

15 preparing the report required by this section. 

16 TITLE IV—SUSTAINABLE 

17 ECONOMICS 

18 SEC. 401. MODIFICATION OF PHYSICIAN SURGICAL REIM19 BURSEMENT FOR DIALYSIS ACCESS PROCE20 DURES TO ALIGN INCENTIVES FOR COST AND 

21 QUALITY. 

22 (a) FULL COVERAGE OF DIALYSIS ACCESS PROCE23 DURES IN THE AMBULATORY SURGICAL CENTER SET24 TING.—Not later than January 1, 2006, the Secretary of 

25 Health and Human Services shall— 
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1 (1) review the surgical procedures specified 

2 under section 1833(i)(1) of the Social Security Act 

3 (42 U.S.C. 1395l(i)(1)) and evaluate whether to in4 clude in such procedures the full range of dialysis 

5 access procedures, including all reasonable and nec6 essary intervention procedures for the repair and 

7 maintenance of an individual’s dialysis access, such 

8 as the placement, insertion, and maintenance serv9 ices related to fistulas, synthetic grafts, tunnel cath10 eters, and peritoneal dialysis catheters; and 

11 (2) revise such units to reflect the findings of 

12 the evaluation. 

13 (b) REVISION OF RBRVS TO REFLECT THE DIF14 FICULTY OF VASCULAR ACCESS PROCEDURES.—Not later 

15 than January 1, 2006, the Secretary of Health and 

16 Human Services shall— 

17 (1) review the relative value units determined 

18 under section 1848(c)(2) of the Social Security Act 

19 (42 U.S.C. 1395w–4(c)(2)) that are applicable with 

20 respect to physicians’ services for vascular access 

21 procedures; and 

22 (2) revise such units to accurately reflect the 

23 difficulty of such procedures. 
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1 SEC. 402. DEMONSTRATION PROJECT FOR OUTCOMES2 BASED ESRD REIMBURSEMENT SYSTEM. 

3 (a) ESTABLISHMENT.—Subject to the succeeding 

4 provisions of this section, the Secretary of Health and 

5 Human Services (in this section referred to as the ‘‘Sec6 retary’’) shall establish demonstration projects (in this 

7 section referred to as ‘‘demonstration projects’’) under 

8 which the Secretary shall evaluate methods that improve 

9 the quality of care provided to medicare beneficiaries with 

10 end-stage renal disease. 

11 (b) OUTCOMES-BASED ESRD REIMBURSEMENT SYS12 TEM.— 

13 (1) IN GENERAL.—Under the demonstration 

14 projects, the Secretary shall provide financial incen15 tives to providers of services and renal dialysis facili16 ties that demonstrate improved quality of care to 

17 such beneficiaries. 

18 (2) CONSIDERATION OF OUTCOMES AND CASE19 MIX.—In determining whether a provider or facility 

20 has demonstrated an improved quality of care under 

21 paragraph (1), the Secretary shall take into account 

22 the outcomes of individuals receiving services from 

23 the provider or facility and the case-mix of the pro24 vider or facility. 

25 (3) INCENTIVES DESCRIBED.—The financial in26 centives provided under paragraph (1) shall— 
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1 (A) reflect the interactions of payments 

2 under parts A and B of title XVIII of the So3 cial Security Act; and 

4 (B) recognize improvements based on high 

5 quality outcomes during previous periods as 

6 well as recent changes in performance to re7 ward long-term improvements. 

8 (c) DURATION.—The Secretary shall conduct the 

9 demonstration program under this section for a period 

10 that is not longer than 5 years that begins on January 

11 1, 2006. 

12 (d) EVALUATION AND REPORT.— 

13 (1) EVALUATION.—The Secretary shall conduct 

14 an evaluation of the demonstration projects con15 ducted under this section. 

16 (2) REPORT.—Not later than 6 months after 

17 the date on which the demonstration projects are 

18 completed, the Secretary shall submit to Congress a 

19 report on the evaluation conducted under paragraph 

20 (1) together with recommendations for such legisla21 tion and administrative action as the Secretary de22 termines appropriate. 

23 (e) WAIVER AUTHORITY.—The Secretary shall waive 

24 compliance with the requirements of title XVIII of the So25 cial Security Act (42 U.S.C. 1395 et seq.) to such extent 
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1 and for such period as the Secretary determines is nec2 essary to conduct the demonstration projects. 

3 (f) AUTHORIZATION OF APPROPRIATIONS.— 

4 (1) IN GENERAL.—Payments for the costs of 

5 carrying out the demonstration project under this 

6 section shall be made from the Federal Supple7 mentary Medical Insurance Trust Fund under sec8 tion 1841 of such Act (42 U.S.C. 1395t). 

9 (2) AMOUNT.—There are authorized to be ap10 propriated from such Trust Fund such sums as may 

11 be necessary to carry out this section. 

12 SEC. 403. GAO STUDY AND REPORT ON IMPACT OF G13 CODES. 

14 (a) STUDY.—The Comptroller General of the United 

15 States shall conduct a study on the impact of the tem16 porary codes for nephrologists’ services applicable under 

17 the fee schedule for physicians’ services under section 

18 1848 of the Social Security Act (commonly known as ‘‘G19 codes’’). 

20 (b) REPORT.—Not later than the date that is 6 

21 months after the date of enactment of this Act, the Comp22 troller General shall submit to Congress a report on the 

23 study conducted under subsection (a) together with rec-
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1 ommendations for such legislation and administrative ac2 tion as the Comptroller General determines appropriate. 

Æ