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(D) analyze the potential impact on medicare
beneficiaries and on expenditures under the medicare
program of eliminating the need for a physician refer-
ral for physical therapist services under the medicare
program.
(2) REPORT.—The Comptroller General shall submit
to Congress a report on the study conducted under para-
graph (1) by not later than 1 year after the date of the
enactment of this Act.
SEC. 514. ACCELERATED IMPLEMENTATION OF 20 PER-
CENT COINSURANCE FOR HOSPITAL OUT-
PATIENT 
DEPARTMENT 
(OPD) 
SERVICES;
OTHER OPD PROVISIONS.
(a) ACCELERATED IMPLEMENTATION
OF COINSURANCE
REDUCTIONS.—Section 
1833(t)(8)(C)(ii) 
(42 
U.S.C.
1395l(t)(8)(C)(ii)) is amended by striking subclauses (III)
through (V) and inserting the following:
‘‘(III) For procedures performed in 2004,
45 percent.
‘‘(IV) For procedures performed in 2005,
40 percent.
‘‘(V) For procedures performed in 2006,
2007, 2008 and 2009, 35 percent.
‘‘(VI) For procedures performed in 2010,
30 percent.
‘‘(VII) For procedures performed in 2011,
25 percent.
‘‘(VIII) For procedures performed in 2012
and thereafter, 20 percent.’’.
(b) 
TREATMENT
OF
TEMPERATURE
MONITORED
CRYOABLATION.—
(1) IN
GENERAL.—Section 1833(t)(6)(A)(ii) (42
U.S.C. 1395l(t)(6)(A)(ii)) is amended by striking ‘‘or tem-
perature monitored cryoablation’’.
(2) EFFECTIVE
DATE.—The amendment made by
paragraph (1) applies to payment for services furnished on
or after January 1, 2003.
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SEC. 515. COVERAGE OF AN INITIAL PREVENTIVE PHYS-
ICAL EXAMINATION.
(a) 
COVERAGE.—Section 
1861(s)(2) 
(42 
U.S.C.
1395x(s)(2)), is amended—
(1) in subparagraph (U), by striking ‘‘and’’ at the
end;
(2) in subparagraph (V), by inserting ‘‘and’’ at the
end; and
(3) by adding at the end the following new subpara-
graph:
‘‘(W) an initial preventive physical examination (as
defined in subsection (ww));’’.
(b) SERVICES DESCRIBED.—Section 1861 (42 U.S.C.
1395x) is amended by adding at the end the following new sub-
section:
‘‘Initial Preventive Physical Examination
‘‘(ww) The term ‘initial preventive physical examination’
means physicians’ services consisting of a physical examination
with the goal of health promotion and disease detection and in-
cludes items and services specified by the Secretary in regula-
tions.’’.
(c) 
PAYMENT
AS
PHYSICIANS’ 
SERVICES.—Section
1848(j)(3) (42 U.S.C. 1395w–4(j)(3)) by inserting ‘‘(2)(W),’’
after ‘‘(2)(S),’’.
(d) OTHER CONFORMING AMENDMENTS.—Section 1862(a)
(42 U.S.C. 1395y(a)) is amended—
(1) in paragraph (1)—
(A) by striking ‘‘and’’ at the end of subparagraph
(H);
(B) by striking the semicolon at the end of sub-
paragraph (I) and inserting ‘‘, and’’; and
(C) by adding at the end the following new sub-
paragraph:
‘‘(J) in the case of an initial preventive physical exam-
ination, which is performed not later than 6 months after
the date the individual’s first coverage period begins under
part B;’’; and
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(2) in paragraph (7), by striking ‘‘or (H)’’ and insert-
ing ‘‘(H), or (J)’’.
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to services furnished on or after January 1,
2004, but only for individuals whose coverage period begins on
or after such date.
SEC. 516. RENAL DIALYSIS SERVICES.
(a) REPORT ON DIFFERENCES IN COSTS IN DIFFERENT
SETTINGS.—Not later than 1 year after the date of the enact-
ment of this Act, the Comptroller General of the United States
shall submit to Congress a report containing—
(1) an analysis of the differences in costs of providing
renal dialysis services under the medicare program in home
settings and in facility settings;
(2) an assessment of the percentage of overhead costs
in home settings and in facility settings; and
(3) an evaluation of whether the charges for home di-
alysis supplies and equipment are reasonable and nec-
essary.
(b) RESTORING COMPOSITE RATE EXCEPTIONS FOR PEDI-
ATRIC FACILITIES.—
(1) IN
GENERAL.—Section 422(a)(2) of BIPA is
amended—
(A) in subparagraph (A), by striking ‘‘and (C)’’
and inserting ‘‘, (C), and (D)’’;
(B) in subparagraph (B), by striking ‘‘In the
case’’ and inserting ‘‘Subject to subparagraph (D), in
the case’’; and
(C) by adding at the end the following new sub-
paragraph:
‘‘(D) INAPPLICABILITY
TO
PEDIATRIC
FACILI-
TIES.—Subparagraphs (A) and (B) shall not apply, as
of October 1, 2002, to pediatric facilities that do not
have an exception rate described in subparagraph (C)
in effect on such date. For purposes of this subpara-
graph, the term ‘pediatric facility’ means a renal facil-
121
ity at least 50 percent of whose patients are individuals
under 18 years of age.’’.
(2) CONFORMING AMENDMENT.—The fourth sentence
of section 1881(b)(7) (42 U.S.C. 1395rr(b)(7)) is amended
by striking ‘‘The Secretary’’ and inserting ‘‘Subject to sec-
tion 422(a)(2) of the Medicare, Medicaid, and SCHIP Ben-
efits Improvement and Protection Act of 2000, the Sec-
retary’’.
(c) INCREASE IN RENAL DIALYSIS COMPOSITE RATE FOR
SERVICES FURNISHED IN 2004.—Notwithstanding any other
provision of law, with respect to payment under part B of title
XVIII of the Social Security Act for renal dialysis services fur-
nished in 2004, the composite payment rate otherwise estab-
lished under section 1881(b)(7) of such Act (42 U.S.C.
1395rr(b)(7)) shall be increased by 1.2 percent.
TITLE VI—PROVISIONS RELATING
TO PARTS A AND B
Subtitle A—Home Health Services
SEC. 601. ELIMINATION OF 15 PERCENT REDUCTION IN
PAYMENT RATES UNDER THE PROSPECTIVE
PAYMENT SYSTEM.
(a) IN
GENERAL.—Section 1895(b)(3)(A) (42 U.S.C.
1395fff(b)(3)(A)) is amended to read as follows:
‘‘(A) INITIAL BASIS.—Under such system the Sec-
retary shall provide for computation of a standard pro-
spective payment amount (or amounts) as follows:
‘‘(i) Such amount (or amounts) shall initially
be based on the most current audited cost report
data available to the Secretary and shall be com-
puted in a manner so that the total amounts pay-
able under the system for fiscal year 2001 shall be
equal to the total amount that would have been
made if the system had not been in effect and if
section 1861(v)(1)(L)(ix) had not been enacted.
‘‘(ii) For fiscal year 2002 and for the first
quarter of fiscal year 2003, such amount (or
amounts) shall be equal to the amount (or
122
amounts) determined under this paragraph for the
previous fiscal year, updated under subparagraph
(B).
‘‘(iii) For 2003, such amount (or amounts)
shall be equal to the amount (or amounts) deter-
mined under this paragraph for fiscal year 2002,
updated under subparagraph (B) for 2003.
‘‘(iv) For 2004 and each subsequent year,
such amount (or amounts) shall be equal to the
amount (or amounts) determined under this para-
graph for the previous year, updated under sub-
paragraph (B).
Each such amount shall be standardized in a manner
that eliminates the effect of variations in relative case
mix and area wage adjustments among different home
health agencies in a budget neutral manner consistent
with the case mix and wage level adjustments provided
under paragraph (4)(A). Under the system, the Sec-
retary may recognize regional differences or differences
based upon whether or not the services or agency are
in an urbanized area.’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect as if included in the amendments
made by section 501 of the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000 (as enacted
into law by section 1(a)(6) of Public Law 106–554).
SEC. 602. ESTABLISHMENT OF REDUCED COPAYMENT
FOR A HOME HEALTH SERVICE EPISODE OF
CARE FOR CERTAIN BENEFICIARIES.
(a) PART A.—
(1) IN
GENERAL.—Section 1813(a) (42 U.S.C.
1395e(a)) is amended by adding at the end the following
new paragraph:
‘‘(5)(A)(i) Subject to clause (ii), the amount payable for
home health services furnished to the individual under this title
for each episode of care beginning in a year (beginning with