I 

108TH CONGRESS 

1ST SESSION H. R. 569

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 

FEBRUARY 5, 2003

Ms. DUNN (for herself, Mr. MCDERMOTT, Mr. RAMSTAD, Mr. DEUTSCH, and 

Mr. FERGUSON) 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 of 2003’’. 
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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, 2004 (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 (including the 

15 data upon which such recommendations are 

16 based) from the public on the appropriate basis 

17 under paragraph (10) for establishing payment 

18 amounts for the tests on such list; 

19 ‘‘(iii) not less than 30 days after publica20 tion of such notice, convenes a meeting to re21 ceive such comments and recommendations, 

22 with such meeting—

23 ‘‘(I) including representatives of all 

24 entities within the Centers for Medicare & 

25 Medicaid Services (hereinafter in this para-
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1 graph referred to as ‘CMS’) that will be

2 involved in determining the basis on which 

3 payment amounts will be established for 

4 such tests under paragraph (10) and im5 plementing such determinations; 

6 ‘‘(II) encouraging the participation of 

7 interested parties, including beneficiaries, 

8 device manufacturers, clinical laboratories, 

9 laboratory professionals, pathologists, and 

10 prescribing physicians, through outreach 

11 activities; and 

12 ‘‘(III) affording opportunities for 

13 interactive dialogue between representa14 tives of CMS and the public; and 

15 ‘‘(iv) taking into account the comments 

16 and recommendations received at such meeting, 

17 develops and makes available to the public 

18 (through an Internet site and other appropriate 

19 mechanisms) a list of proposed determinations 

20 with respect to the appropriate basis for estab21 lishing a payment amount under paragraph 

22 (10) for each such code, together with an expla23 nation of the reasons for each such determina24 tion, and the data on which the determination 

25 is based. 
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1 The Secretary may convene such further public 

2 meetings to receive public comment on payment 

3 amounts for new tests under this subsection as the 

4 Secretary determines appropriate. 

5 ‘‘(C) Under the procedures established pursuant 

6 to subparagraph (A), the Secretary shall—

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

8 be applied by the Secretary in considering and 

9 making determinations of whether the payment 

10 amount for a new test should be established on 

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

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

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

14 (other than proprietary data) considered in 

15 making such determinations; and 

16 ‘‘(iii) provide for a mechanism under 

17 which—

18 ‘‘(I) an interested party may request 

19 an administrative review of an adverse de20 termination; 

21 ‘‘(II) upon the request of an inter22 ested party, an administrative review is 

23 conducted with respect to an adverse deter24 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 Healthcare Common Procedure Coding 

8 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, 2004,’’ 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 2004, an 

6 amount equal to the national limitation amount 

7 for that test for 2003, 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 2004, 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) PROHIBITION ON ASSIGNMENT OF CERTAIN NEW

14 CODES.—The Secretary may not assign a code for a new 

15 clinical diagnostic laboratory test that differs from the 

16 code recommended by the American Medical Association 

17 Common Procedure Terminology Editorial Panel and re18 sults in lower payment than would be made if the Sec19 retary accepted such recommendation solely on the basis 

20 that the test is a test that may be performed by a labora21 tory with a certificate of waiver under section 353(d)(2) 

22 of the Public Health Service Act (42 U.S.C. 263a(d)(2)). 

23 (e) PROHIBITION ON APPLICATION OF LEAST COST24 LY ALTERNATIVE TO FEE SCHEDULE.—Section 1833(h) 

25 of the Social Security Act, as amended by subsections (a), 
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1 (b), and (c), is further amended by adding at the end the 

2 following: 

3 ‘‘(12) Notwithstanding any other provision of 

4 this title, the Secretary may not substitute for the 

5 fee schedule amount otherwise established under this 

6 subsection for a test a least costly alternative fee 

7 schedule amount for the test.’’. 

8 (f) EFFECTIVE DATES.—

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

10 Human Services shall establish the procedures re11 quired to implement paragraphs (9), (10), and (11) 

12 of section 1833(h) of the Social Security Act (42 

13 U.S.C. 1395l(h)), as added by this section, by not 

14 later than October 1, 2003. 

15 (2) PROHIBITIONS.—(A) Subsection (d) shall 

16 apply to code assignment determinations made on or 

17 after the date of the enactment of this Act. 

18 (B) The amendment made by subsection (e) 

19 shall apply to tests furnished on or after the date of 

20 the enactment of this Act without regard to whether 

21 a determination to substitute a least costly alter22 native fee schedule amount for a test was made be23 fore, on, or after such date.

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