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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Medicare Patient Ac-
cess to Preventive and Diagnostic Tests Act’’.
SEC. 2. CODING AND PAYMENT PROCEDURES FOR NEW
CLINICAL DIAGNOSTIC LABORATORY TESTS
UNDER MEDICARE.
(a) DETERMINING PAYMENT BASIS FOR NEW LAB
TESTS.—Section 1833(h) of the Social Security Act (42
U.S.C. 1395l(h)) is amended by adding at the end the fol-
lowing:
‘‘(9)(A) The Secretary shall establish proce-
dures for determining the basis for, and amount of,
payment under this subsection for any clinical diag-
nostic laboratory test with respect to which a new or
substantially revised HCPCS code is assigned on or
after January 1, 2002 (hereinafter in this paragraph
and paragraph (10) referred to as ‘new tests’). Such
procedures shall provide that—
‘‘(i) the payment amount for such a test
will be established only on—
‘‘(I) the basis described in paragraph
(10)(A); or
‘‘(II) the basis described in paragraph
(10)(B); and
‘‘(ii) the Secretary will determine whether
the payment amount for such a test is estab-
lished on the basis described in paragraph
(10)(A) or the basis described in paragraph
(10)(B) only after the process described in sub-
paragraph (B) has been completed with respect
to such test.
‘‘(B) 
Determinations 
under 
subparagraph
(A)(ii) shall be made only after the Secretary—
‘‘(i) makes available to the public (through
an Internet site and other appropriate mecha-
nisms) a list that includes any such test for
which establishment of a payment amount
under paragraph (10) is being considered for a
year;
‘‘(ii) on the same day such list is made
available, causes to have published in the Fed-
eral Register notice of a meeting to receive
comments and recommendations from the pub-
lic on the appropriate basis under paragraph
(10) for establishing payment amounts for the
tests on such list;
‘‘(iii) not less than 30 days after publica-
tion of such notice, convenes a meeting to re-
ceive such comments and recommendations,
with such meeting—
‘‘(I) including representatives of all
entities within the Health Care Financing
Administration (hereinafter in this para-
graph referred to as ‘HCFA’) that will be
involved in determining the basis on which
payment amounts will be established for
such tests under paragraph (10) and im-
plementing such determinations;
‘‘(II) encouraging the participation of
interested parties, including beneficiaries,
device manufacturers, clinical laboratories,
laboratory professionals, pathologists, and
prescribing physicians, through outreach
activities; and
‘‘(III) 
affording 
opportunities 
for
interactive dialogue between representa-
tives of HCFA and the public;
‘‘(iv) makes minutes of such meeting avail-
able to the public (through an Internet site and
other appropriate mechanisms) not later than
15 calendar days after such meeting;
‘‘(v) taking into account the comments and
recommendations received at such meeting, de-
velops and makes available to the public
(through an Internet site and other appropriate
mechanisms) a list of proposed determinations
with respect to the appropriate basis for estab-
lishing a payment amount under paragraph
(10) for each such code, together with an expla-
nation of the reasons for each such determina-
tion, and the data on which the determination
is based;
‘‘(vi) on the same day such list is made
available, causes to have published in the Fed-
eral Register notice of a public meeting to re-
ceive comments and recommendations from the
public on the proposed determinations;
‘‘(vii) not later than August 1 of each year,
but at least 30 days after publication of such
notice, convenes a meeting to receive such com-
ments and recommendations, with such meeting
being conducted in the same manner as the
meeting under clause (iii);
‘‘(viii) makes a transcript of such meeting
available to the public (through an Internet site
and other appropriate mechanisms) as soon as
is practicable after such meeting; and
‘‘(ix) taking into account the comments
and recommendations received at such meeting,
develops and makes available to the public
(through an Internet site and other appropriate
mechanisms) a list of final determinations of
whether the payment amount for such tests will
be determined on the basis described in para-
graph (10)(A) or the basis described in para-
graph (10)(B), together with the rationale for
each such determination, the data on which the
determination is based, and responses to com-
ments and suggestions received from the public.
‘‘(C) Under the procedures established pursuant
to subparagraph (A), the Secretary shall—
‘‘(i) identify the rules and assumptions to
be applied by the Secretary in considering and
making determinations of whether the payment
amount for a new test should be established on
the basis described in paragraph (10)(A) or the
basis described in paragraph (10)(B);
‘‘(ii) make available to the public the data
(other than proprietary data) considered in
making such determinations; and
‘‘(iii) provide for a mechanism under
which—
‘‘(I) an interested party may request
an administrative review of an adverse de-
termination;
‘‘(II) upon the request of an inter-
ested party, an administrative review is
conducted with respect to an adverse deter-
mination; and
‘‘(III) such determination is revised,
as necessary, to reflect the results of such
review.
‘‘(D) For purposes of this paragraph and
paragraph (10)—
‘‘(i) the term ‘HCPCS’ refers to the
Health Care Financing Administration
Common Procedure Coding System; and
‘‘(ii) a code shall be considered to be
‘substantially revised’ if there is a sub-
stantive change to the definition of the test
or procedure to which the code applies
(such as a new analyte or a new method-
ology for measuring an existing analyte-
specific test).
‘‘(10)(A) Notwithstanding paragraphs (1), (2),
and (4), if a new test is clinically similar to a test
for which a fee schedule amount has been estab-
lished under paragraph (5), the Secretary shall pay
the same fee schedule amount for the new test. In
determining whether tests are clinically similar for
purposes of this paragraph, the Secretary may not
take into account economic factors.
‘‘(B)(i) Notwithstanding paragraphs (1), (2),
(4), and (5), if a new test is not clinically similar to
a test for which a fee schedule has been established
under paragraph (5), payment under this subsection
for such test shall be made on the basis of the lesser
of—
‘‘(I) the actual charge for the test; or
‘‘(II) an amount equal to 60 percent (or in
the case of a test performed by a qualified hos-
pital (as defined in paragraph (1)(D)) for out-
patients of such hospital, 62 percent) of the
prevailing charge level determined pursuant to
the third and fourth sentences of section
1842(b)(3) for the test for a locality or area for
the year (determined without regard to the year
referred to in paragraph (2)(A)(i), or any na-
tional limitation amount under paragraph
(4)(B), and adjusted annually by the percent-
age increase or decrease under paragraph
(2)(A)(i));
until the beginning of the third full calendar year
that begins on or after the date on which an
HCPCS code is first assigned with respect to such
test, or, if later, the beginning of the first calendar
year that begins on or after the date on which the
Secretary determines that there are sufficient claims
data to establish a fee schedule amount pursuant to
clause (ii).
‘‘(ii) Notwithstanding paragraphs (2) and (4),
and (5), the fee schedule amount for a clinical diag-
nostic laboratory test described in clause (i) that is
performed—
‘‘(I) during the first calendar year after
clause (i) ceases to apply to such test, shall be
an amount equal to the national limitation
amount that the Secretary determines (con-
sistent with clause (iii)) would have applied to
such test under paragraph (4)(B)(viii) during
the preceding calendar year, adjusted by the
percentage increase or decrease determined
under paragraph (2)(A)(i) for such first cal-
endar year; and
‘‘(II) during a subsequent year, is the fee
schedule amount determined under this clause
for the preceding year, adjusted by the percent-
age increase or decrease that applies under
paragraph (5)(A) for such year.
‘‘(iii) For purposes of clause (ii)(I), the national
limitation amount for a test shall be set at 100 per-
cent of the median of the payment amounts deter-
mined under clause (ii)(I) for all payment localities
or areas for the last calendar year for which pay-
ment for such test was determined under clause (i).
‘‘(iv) Nothing in clause (ii) shall be construed
as prohibiting the Secretary from applying (or au-
thorizing the application of) the comparability provi-
sions of the first sentence of such section 1842(b)(3)
with respect to amounts determined under such
clause.’’.
(b) ESTABLISHMENT OF NATIONAL FEE SCHEDULE
AMOUNTS.—
(1) IN GENERAL.—Section 1833(h) of the So-
cial Security Act, as amended by subsection (a), is
further amended—
(A) in paragraph (2), by striking ‘‘para-
graph (4)’’ and inserting in lieu thereof ‘‘para-
graphs (4), (5), and (10)’’;
(B) in paragraph (4)(B)(viii), by inserting
‘‘and before January 1, 2002,’’ after ‘‘Decem-
ber 31, 1997,’’;
(C) by redesignating paragraphs (5), (6),
and (7), as paragraphs (6), (7), and (8), re-
spectively; and
(D) by inserting after paragraph (4) the
following:
‘‘(5) Notwithstanding paragraphs (2) and (4),
the Secretary shall set the fee schedule amount for
a test (other than a test to which paragraph
(10)(B)) applies) at—
‘‘(A) for tests performed during 2002, an
amount equal to the national limitation amount
for that test for 2001, and adjusted by the per-
centage increase or decrease determined under
paragraph (2)(A)(i) for such year; and
‘‘(B) for tests performed during a year
after 2002, the amount determined under this
subparagraph for the preceding year, adjusted
by the percentage increase or decrease deter-
mined under paragraph (2)(A)(i) for such
year.’’.
(2) CONFORMING CHANGES.—Section 1833(a)
of the Social Security Act (42 U.S.C. 1395l(a)) is
amended—
(A) in paragraph (1)(D)(i), by striking
‘‘the limitation amount for that test determined
under subsection (h)(4)(B),’’; and
(B) in paragraph (2)(D)(i), by striking
‘‘the limitation amount for that test determined
under subsection (h)(4)(B),’’.
(c) MECHANISM FOR REVIEW OF ADEQUACY OF PAY-
MENT AMOUNTS.—Section 1833(h) of the Social Security
Act, as amended by subsections (a) and (b), is further
amended by adding at the end the following:
‘‘(11) The Secretary shall establish a mecha-
nism under which—
‘‘(A) an interested party may request a
timely review of the adequacy of the existing
payment amount under this subsection fee for
a particular test; and
‘‘(B) upon the receipt of such a request, a
timely review is carried out.’’.
(d) USE OF INHERENT REASONABLENESS AUTHOR-
ITY.—Section 1842(b)(8) of the Social Security Act (42
U.S.C. 1395u(b)(8)) is amended by adding at the end the
following:
‘‘(E)(i) The Secretary may not delegate
the authority to make determinations with re-
spect to clinical diagnostic laboratory tests
under this paragraph to a regional office of the
Health Care Financing Administration or to an
entity with a contract under subsection (a).
‘‘(ii) In making determinations with re-
spect to clinical diagnostic laboratory tests
under this paragraph, the Secretary—
‘‘(I) shall base such determinations on
data from affected payment localities and
all sites of care; and
‘‘(II) may not use a methodology that
assigns undue weight to the prevailing
charge levels for any one type of entity
with a contract under subsection (a).’’.
(e) PROHIBITION.—The Secretary may not assign a
code for a new clinical diagnostic laboratory test that dif-
fers from the code recommended by the American Medical
Association Common Procedure Terminology Editorial
Panel and results in lower payment than would be made
if the Secretary accepted such recommendation solely on
the basis that the test is a test that may be performed
by a laboratory with a certificate of waiver under section
353(d)(2) of the Public Health Service Act (42 U.S.C.
263a(d)(2)).
(f) EFFECTIVE DATES.—
(1) ESTABLISHMENT
OF
PROCEDURES.—The
Secretary of Health and Human Services shall es-
tablish the procedures required to implement para-
graphs (9), (10), and (11) of section 1833(h) of the
Social Security Act (42 U.S.C. 1395l(h)), as added
by this section, by not later than October 1, 2001.
(2) INHERENT
REASONABLENESS; CODE
AS-
SIGNMENT.—The amendments made by subsections
(d) and (e) shall apply to determinations made on or
after the date of the enactment of this Act.
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