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‘‘beginning with 2000’’ the following: ‘‘and 
ending with 2007’’. 
(e) REPORTS
ON EXPENDITURES
FOR PART B 
DRUGS
AND
CLINICAL
DIAGNOSTIC
LABORATORY 
TESTS.— 
(1) REPORTING REQUIREMENT.—The Secretary 
of Health and Human Services shall include infor-
mation in the annual physician fee schedule pro-
posed rule on the change in the annual rate of 
growth of actual expenditures for clinical diagnostic 
laboratory tests or drugs, biologicals, and radio-
pharmaceuticals for which payment is made under 
part B of title XVIII of the Social Security Act. 
(2) 
RECOMMENDATIONS.—The 
report 
sub-
mitted under paragraph (1) shall include an analysis 
of the reasons for such excess expenditures and rec-
ommendations for addressing them in the future. 
SEC. 302. IMPROVING ACCURACY OF RELATIVE VALUES 
UNDER 
THE 
MEDICARE 
PHYSICIAN 
FEE 
SCHEDULE. 
(a) 
USE
OF
EXPERT
PANEL
TO
IDENTIFY 
MISVALUED PHYSICIANS’ SERVICES.—Section 1848(c) of 
the Social Security Act (42 U.S.C. 1395w(c)) is amended 
by adding at the end the following new paragraph: 
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‘‘(7) USE
OF
EXPERT
PANEL
TO
IDENTIFY 
MISVALUED PHYSICIANS’ SERVICES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish an expert panel (in this paragraph re-
ferred to as the ‘expert panel’)— 
‘‘(i) to identify, through data analysis, 
physicians’ services for which the relative 
value under this subsection is potentially 
misvalued, particularly those services for 
which such relative value may be over-
valued; 
‘‘(ii) 
to 
assess 
whether 
those 
misvalued services warrant review using 
existing processes (referred to in para-
graph (2)(J)(ii)) for the consideration of 
coding changes; and 
‘‘(iii) to advise the Secretary con-
cerning the exercise of authority under 
clauses (ii)(III) and (vi) of paragraph 
(2)(B). 
‘‘(B) COMPOSITION
OF
PANEL.—The ex-
pert panel shall be appointed by the Secretary 
and composed of— 
‘‘(i) members with expertise in med-
ical economics and technology diffusion; 
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‘‘(ii) members with clinical expertise; 
‘‘(iii) physicians, particularly physi-
cians (such as a physician employed by the 
Veterans Administration or a physician 
who has a full time faculty appointment at 
a medical school) who are not directly af-
fected by changes in the physician fee 
schedule under this section; 
‘‘(iv) carrier medical directors; and 
‘‘(v) representatives of private payor 
health plans. 
‘‘(C) APPOINTMENT CONSIDERATIONS.—In 
appointing members to the expert panel, the 
Secretary shall assure racial and ethnic diver-
sity on the panel and may consider appointing 
a liaison from organizations with experience in 
the consideration of coding changes to the 
panel.’’. 
(b) EXAMINATION OF SERVICES WITH SUBSTANTIAL 
CHANGES.—Such section is further amended by adding at 
the end the following new paragraph: 
‘‘(8) EXAMINATION
OF
SERVICES
WITH
SUB-
STANTIAL CHANGES.—The Secretary, in consultation 
with the expert panel under paragraph (7), shall— 
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‘‘(A) conduct a five-year review of physi-
cians’ services in conjunction with the RUC 5- 
year review, particularly for services that have 
experienced substantial changes in length of 
stay, site of service, volume, practice expense, 
or other factors that may indicate changes in 
physician work; 
‘‘(B) identify new services to determine if 
they are likely to experience a reduction in rel-
ative value over time and forward a list of the 
services so identified for such five-year review; 
and 
‘‘(C) for physicians’ services that are oth-
erwise unreviewed under the process the Sec-
retary has established, periodically review a 
sample of relative value units within different 
types of services to assess the accuracy of the 
relative values contained in the Medicare physi-
cian fee schedule.’’. 
(c) AUTHORITY TO REDUCE WORK COMPONENT FOR 
SERVICES WITH ACCELERATED VOLUME GROWTH.— 
(1) IN GENERAL.—Paragraph (2)(B) of such 
section is amended— 
(A) in clause (v), by adding at the end the 
following new subclause: 
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‘‘(III) REDUCTIONS
IN
WORK 
VALUE UNITS FOR SERVICES WITH AC-
CELERATED
VOLUME
GROWTH.—Ef-
fective January 1, 2009, reduced ex-
penditures 
attributable 
to 
clause 
(vi).’’; and 
(B) by adding at the end the following new 
clauses: 
‘‘(vi) AUTHORIZING
REDUCTION
IN 
WORK VALUE UNITS FOR SERVICES WITH 
ACCELERATED
VOLUME
GROWTH.—The 
Secretary may provide (without using ex-
isting processes the Secretary has estab-
lished for review of relative value) for a re-
duction in the work value units for a par-
ticular physician’s service if the annual 
rate of growth in the expenditures for such 
service for which payment is made under 
this part for individuals for 2006 or a sub-
sequent year exceeds the average annual 
rate of growth in expenditures of all physi-
cians’ services for which payment is made 
under this part by more than 10 percent-
age points for such year. 
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‘‘(vii) CONSULTATION
WITH
EXPERT 
PANEL
AND
BASED
ON
CLINICAL
EVI-
DENCE.—The Secretary shall exercise au-
thority under clauses (ii)(III) and (vi) in 
consultation with the expert panel estab-
lished under paragraph (7) and shall take 
into account clinical evidence supporting or 
refuting the merits of such accelerated 
growth.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply with respect to pay-
ment for services furnished on or after January 1, 
2009. 
(d) ADJUSTMENT
AUTHORITY
FOR
EFFICIENCY 
GAINS FOR NEW PROCEDURES.—Paragraph (2)(B)(ii) of 
such section is amended by adding at the end the following 
new subclause: 
‘‘(III) ADJUSTMENT AUTHORITY 
FOR
EFFICIENCY
GAINS
FOR
NEW 
PROCEDURES.—In carrying out sub-
clauses (I) and (II), the Secretary 
may apply a methodology, based on 
supporting 
evidence, 
under 
which 
there is imposed a reduction over a 
period of years in specified relative 
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