I 
108TH CONGRESS 
1ST SESSION H. R. 1622
To amend title XVIII of the Social Security Act and otherwise revise the 
Medicare Program to reform the method of paying for covered drugs, 
drug administration services, and chemotherapy support services. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 3, 2003
Mr. NORWOOD (for himself and Mrs. CAPPS) 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 subse-
quently 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 and other-
wise revise the Medicare Program to reform the method 
of paying for covered drugs, drug administration services, 
and chemotherapy support services.
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 ‘‘Quality Cancer Care 
Preservation Act’’.
SEC. 
2. 
MEDICARE 
PAYMENT 
FOR 
DRUGS 
AND 
BIOLOGICALS. 
(a) IN GENERAL.—Section 1842(o)(1) of the Social 
Security Act (42 U.S.C. 1395u(o)(1)) is amended by strik-
ing ‘‘95 percent of the average wholesale price’’ and insert-
ing 
‘‘the 
payment 
amount 
specified 
in 
section 
1834(n)(2)’’. 
(b) DETERMINATION OF PAYMENT AMOUNT.—Sec-
tion 1834 of such Act (42 U.S.C. 1395m) is amended by 
adding at the end the following new subsection: 
‘‘(n) PAYMENT FOR DRUGS AND BIOLOGICALS.—
‘‘(1) REPORTS BY MANUFACTURERS.—
‘‘(A) IN GENERAL.—Every drug manufac-
turer shall report to the Secretary, in the man-
ner prescribed in this paragraph, its average 
sales price (as defined in subparagraph (B)) in 
the United States during each calendar quarter 
for drugs and biologicals covered under this 
part. 
‘‘(B) DEFINITIONS.—For purposes of this 
subsection—
‘‘(i) the term ‘manufacturer’ means, 
with respect to a drug or biological, the en-
tity identified by the Labeler Code portion 
of the National Drug Code of such drug or 
biological; and
‘‘(ii) the term ‘average sales price’ 
means the weighted average of all final 
sales prices to all purchasers, excluding 
sales specified in subparagraph (C). 
In determining such average sales prices, such 
prices shall be net of volume discounts, 
chargebacks, short-dated product discounts, 
free goods contingent on purchases, rebates 
(other than those made or authorized under 
section 1927), and all other price concessions 
that result in a reduction of the ultimate cost 
to the purchaser. 
‘‘(C) CONSIDERATION IN CALCULATION OF 
AVERAGE
SALES
PRICES.—The calculation of 
average sales price under this subsection shall 
not include—
‘‘(i) prices that are excluded from the 
calculation of ‘best price’ under section 
1927(c)(1)(C); 
‘‘(ii) prices offered to entities that are 
considered under subparagraph (B)(i) to 
be the manufacturers of the drugs or 
biologicals involved;
‘‘(iii) prices offered by a manufacturer 
to a hospital, nursing facility, hospice, or 
health maintenance organization; 
‘‘(iv) prices to governmental entities; 
and 
‘‘(v) nominal prices offered to bona 
fide charitable organizations. 
‘‘(D) QUARTERLY REPORTS.—Each manu-
facturer shall submit the report required by 
subparagraph (A) to the Secretary by electronic 
means no later than 30 days after the end of 
a calendar quarter with respect to sales that oc-
curred during such quarter. The Secretary shall 
prescribe the format and other requirements for 
the report. 
‘‘(E) ENFORCEMENT.—
‘‘(i) FAILURE TO TIMELY REPORT.—
The Secretary may impose a civil monetary 
penalty in an amount not to exceed 
$100,000 on a manufacturer that fails to 
provide the information required under this 
paragraph on a timely basis and in the 
manner required. 
‘‘(ii) FALSE INFORMATION.—For each 
item of false information, the Secretary
may impose a civil money penalty in an 
amount not to exceed $100,000 on a man-
ufacturer that knowingly provides false in-
formation under this paragraph. 
‘‘(iii) MANNER
OF
IMPOSITION
OF 
CIVIL MONETARY PENALTIES.—The provi-
sions in section 1128A (other than sub-
sections (a) and (b)) shall apply to a civil 
monetary penalty under this subparagraph 
in the same manner as such provisions 
apply to a penalty or proceeding under sec-
tion 1128A(a). 
‘‘(F) 
CONFIDENTIALITY
OF
INFORMA-
TION.—Notwithstanding any other provision of 
law, information disclosed by manufacturers 
under this paragraph is confidential and shall 
not be disclosed by the Secretary in any form 
other than as specifically authorized by this 
subsection. 
‘‘(2) CALCULATION OF PAYMENT AMOUNT.—
‘‘(A) IN GENERAL.—Except as otherwise 
provided in this paragraph, the payment 
amount for a drug or biological furnished dur-
ing a calendar quarter shall be 120 percent of 
the average sales price of the drug or biological
for the second preceding calendar quarter as 
determined under paragraph (1). 
‘‘(B) 
METHODOLOGY.—In 
determining 
payment amounts under subparagraph (A), the 
Secretary may, in the Secretary’s discretion, 
use either the average sales price for each drug 
or biological by specific drug or biological, or a 
cumulative average sales price based on sales 
data for all versions of a multiple-source drug 
that the Secretary, acting through the Food 
and Drug Administration, has determined are 
therapeutically equivalent (as evidenced by ‘A’ 
ratings in the publication Approved Drug Prod-
ucts with Therapeutic Equivalence Evalua-
tions). 
‘‘(C) INCREASE TO REFLECT ADDITIONAL 
COSTS
ATTRIBUTABLE
TO
STATE
AND
LOCAL 
TAXES.—In the case of a drug or biological that 
was subject to a State or local sales tax or 
gross receipts tax when administered or dis-
pensed, the payment amount determined under 
subparagraph (A) shall be increased by the 
amount of such tax paid with respect to such 
drug or biological.
‘‘(D) SUBSTITUTION OF HIGHER PAYMENT 
AMOUNT.—If a physician’s, supplier’s, or any 
other person’s claim for payment for services 
under this Act documents that the price paid 
for a drug or biological was greater than the 
payment amount determined under subpara-
graph (A), the actual amount paid shall be sub-
stituted for the payment amount determined 
under subparagraph (A), unless the Secretary 
determines that the actual amount paid was un-
reasonable under the circumstances. 
‘‘(E) INCREASE FOR BAD DEBT AND CER-
TAIN OTHER COSTS.—Upon the submission of 
supporting information, the Secretary shall 
make an additional payment to a physician or 
supplier to cover—
‘‘(i) uncollectible deductibles and coin-
surance due from Medicare beneficiaries 
with respect to drugs and biologicals fur-
nished to such beneficiaries; and 
‘‘(ii) costs incurred in procuring and 
billing for drugs and biologicals furnished 
to Medicare beneficiaries.’’.
SEC. 3. MEDICARE PAYMENT FOR DRUG ADMINISTRATION 
SERVICES. 
(a) GENERAL.—The Secretary of Health and Human 
Services (hereafter in this Act referred to as ‘‘the Sec-
retary’’) shall revise the practice expense relative value 
units for drug administration services for years beginning 
with the year 2005 in accordance with this section. For 
purposes of this section, ‘‘drug administration services’’ 
includes chemotherapy administration services, thera-
peutic and diagnostic infusions and injections, and such 
other services as the Secretary specifies. 
(b) DIRECT COSTS EQUAL
TO 100 PERCENT
OF 
CPEP ESTIMATES.—Using the information, including es-
timates of clinical staff time, developed in the clinical prac-
tice expert panel process, including refinements by Amer-
ican Medical Association committees, the Secretary shall 
estimate the costs of the nursing and other clinical staff, 
supplies, and procedure-specific equipment (exceeding a 
cost specified by the Secretary) used in furnishing each 
type of drug administration service. The Secretary shall 
utilize without revision the minutes of clinical staff time 
determined in such process. The Secretary shall convert 
the information from such process to estimated costs by 
applying the most current available data on staff salary, 
supply, and equipment costs, and such costs shall be up-
dated to 2005 based on estimated changes in prices since 
the date of such data. 
(c) TOTAL PRACTICE EXPENSES.—The Secretary 
shall estimate the total practice expenses of each drug ad-
ministration service by assuming that the direct costs for 
the service determined under subsection (b) are 33.2 per-
cent of such total practice expenses. 
(d) CONVERSION TO RELATIVE VALUE UNITS.—The 
Secretary shall convert the total practice expenses deter-
mined under subsection (c) to practice expense relative 
value units for each drug administration service by divid-
ing such expenses by the conversion factor that will be 
in effect for the physician fee schedule for 2005. The rel-
ative value units as so determined shall be used in deter-
mining the fee schedule amounts paid for drug administra-
tion services under section 1848 of the Social Security Act 
(42 U.S.C. 1395w–4). 
(e) UPDATES.—For years after 2005, the relative val-
ues determined under subsection (d) shall continue in ef-
fect except that the Secretary shall revise them as nec-
essary to maintain their accuracy, provided that such revi-
sions are consistent with the methodology set forth in this 
section. 
(f) MULTIPLE PUSHES.—In establishing the payment 
amounts under this section, the Secretary shall establish
the payment amount for intravenous chemotherapy ad-
ministration by push technique based on the administra-
tion of a single drug. The Secretary shall make the same 
payment for each additional drug administered by push 
technique during the same encounter, except to the extent 
that the Secretary finds that the cost of administering ad-
ditional drugs is less than the cost of administering the 
first drug. 
SEC. 4. PAYMENTS FOR CHEMOTHERAPY SUPPORT SERV-
ICES. 
(a) GENERAL.—Beginning in the year 2005, the Sec-
retary shall recognize and make payments under section 
1848 of the Social Security Act (42 U.S.C. 1395w–4) for 
chemotherapy support services furnished incident to physi-
cians’ services. For the purposes of this section, ‘‘chemo-
therapy support services’’ are services furnished by the 
staff of physicians to patients undergoing treatment for 
cancer that were not included in the computation of clin-
ical staff costs under section 3(b). Such services include 
social worker services, nutrition counseling, psychosocial 
services, and similar services. 
(b) DIRECT COSTS.—The Secretary shall estimate 
the cost of the salary and benefits of staff furnishing 
chemotherapy support services as they are provided in on-
cology practices that furnish these services to cancer pa-
tients in a manner that is considered to be high quality 
care. The estimate shall be based on the weekly cost of 
such services per patient receiving chemotherapy. 
(c) TOTAL COSTS.—The Secretary shall estimate the 
total practice expenses of chemotherapy support services 
by assuming that the direct costs for the service deter-
mined under subsection (b) are 33.2 percent of such total 
practice expenses. 
(d) CONVERSION TO RELATIVE VALUE UNITS.—The 
Secretary shall convert the total practice expenses deter-
mined under subsection (c) to practice expense relative 
value units for chemotherapy support services by dividing 
such expenses by the conversion factor that will be in ef-
fect for the physician fee schedule for 2005. The relative 
value units as so determined shall be used in determining 
the fee schedule amounts paid for chemotherapy support 
services under such section 1848. 
(e) UPDATES.—For the years after 2005, the relative 
values determined under subsection (d) shall continue in 
effect except that the Secretary shall revise them as nec-
essary to maintain their accuracy, provided that such revi-
sions are consistent with the methodology set forth in this 
section.
SEC. 7. PHYSICIAN SUPERVISION OF SERVICES. 
Section 1834 of the Social Security Act (42 U.S.C. 
1395m), as amended by section 2, is further amended by 
adding at the end the following new subsection: 
‘‘(o) SUPERVISION REQUIREMENTS.—If the Sec-
retary requires direct supervision of a service by a physi-
cian, that supervision requirement may be fulfilled by one 
or more physicians other than the physician who ordered 
the service. If the supervising physician is different from 
the ordering physician for a particular service, the order-
ing physician may nevertheless bill for such service pro-
vided that the medical records for the service involved 
identify the supervising physician or physicians.’’. 
SEC. 8. REPORT TO CONGRESS. 
No later than April 1, 2004, the Secretary shall sub-
mit to Congress a report on the payment amounts that 
are projected to be adopted under sections 2, 3, 4, and 
5 of this Act. 
SEC. 9. INSTITUTE OF MEDICINE STUDY. 
(a) GENERAL.—The Secretary of Health and Human 
Services shall request the Institute of Medicine to conduct 
the study described in this section. 
(b) BASELINE STUDY.—The first phase of the study 
shall include the following objectives: 
(1) An assessment of the extent to which the 
current Medicare payment system, prior to imple-
mentation of the amendments made by this Act, fa-
cilitates appropriate access to care by cancer pa-
tients in the various treatment settings. 
(2) The identification of the comprehensive 
range of services furnished to cancer patients in the 
outpatient setting, including support services such as 
psychosocial services and counseling, and rec-
ommendations regarding the types of services that 
ought to be furnished to Medicare patients with can-
cer. 
(3) A discussion of the practice standards nec-
essary to assure the safe provision of services to can-
cer patients. 
(4) An analysis of the extent to which the cur-
rent Medicare payment system supports the role of 
nurses in the provision of oncology services and rec-
ommendations for any necessary improvements in 
the payment system in that respect. 
(5) The development of a framework for assess-
ing how the amendments made by this act affect the 
provision of care to Medicare patients with cancer in 
the various treatment settings. 
(c) SECOND PHASE OF STUDY.—After the implemen-
tation of the amendments made by this Act, the study 
shall determine whether and how those amendments af-
fected the provision of care to Medicare patients with can-
cer. 
(d) CONSULTATION.—The Institute of Medicine shall 
consult with the National Cancer Policy Board and organi-
zations representing cancer patients and survivors, 
oncologists, oncology nurses, social workers, cancer cen-
ters, and other healthcare professionals who treat cancer 
patients in planning and carrying out this study. 
(e) DUE DATES.—
(1) The study required by subsection (b) shall 
be submitted to the Congress and the Secretary of 
Health and Human Services no later than June 30, 
2004. 
(2) The study required by subsection (c) shall 
be submitted to the Congress and the Secretary of 
Health and Human Services no later than December 
31, 2006. 
SEC. 10. EFFECTIVE DATES. 
(a) GENERAL.—Except as provided in this section, 
the provisions of this Act shall apply to drugs, biologicals, 
and services furnished on or after January 1, 2005. 
(b) REPORTS FROM MANUFACTURERS.—The first re-
port by manufacturers required by the provisions of sec-
tion 2 shall be submitted no later than October 30, 2004,
with respect to sales that occurred in the quarter ending 
September 30, 2004. 
(c) SUPERVISION
OF SERVICES.—The amendment 
made by section 7 shall be effective upon enactment. 
(d) SERVICES OTHER THAN DRUG ADMINISTRA-
TION.—The Secretary shall implement the requirements 
of section 6 no later than January 1, 2005.
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