PRICING PROGRAM; ADVISORY COMMITTEE REPORT AND 
MONITORING.— 
‘‘(1) AUCTION EXPERT.— 
‘‘(A) IN GENERAL.—The Secretary shall, 
not later than 3 months after the date of the 
enactment of this section, through the Office of 
the Assistant Secretary for Planning and Eval-
uation, enter into a contract with an individual 
to serve as the auction expert to assist in the 
design, development, implementation and func-
tioning of the auction to be conducted pursuant 
to subsection (b). The auction expert shall re-
port and be accountable to the Secretary. 
‘‘(B) SELECTION
OF
AUCTION
EXPERT; 
TERM; ACCESS TO INFORMATION.— 
‘‘(i) COMPETITIVE PROCESS.—The se-
lection of the individual to serve as the 
auction expert under subparagraph (A) 
shall be undertaken through a competitive 
process. 
‘‘(ii) QUALIFICATIONS.—An individual 
may not be selected as the auction expert 
unless the individual— 
‘‘(I) has appropriate educational 
credentials; and 
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‘‘(II) has experience in imple-
menting auctions of similar complexity 
in government programs. 
‘‘(iii) DISQUALIFICATIONS.—An indi-
vidual may not be selected as the auction 
expert if such individual— 
‘‘(I) is a current government em-
ployee; 
‘‘(II) is a former employee of the 
Centers for Medicare & Medicaid 
Services who had any responsibilities 
with respect to the program under 
section 1847; or 
‘‘(III) is a current or former con-
tractor for the Centers for Medicare & 
Medicaid Services that participated in 
the implementation of the competitive 
acquisition program under section 
1847(a). 
‘‘(iv) TERM OF CONTRACT.—The con-
tract for the initial auction expert under 
this paragraph shall be for a period of 4 
years and thereafter such contract may be 
renewed for additional periods of 4 years 
or another auction expert selected. 
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‘‘(v) ACCESS TO INFORMATION.—The 
Secretary shall make available to the auc-
tion expert all applicable information (in-
cluding confidential information) on the 
relevant markets. 
‘‘(2) MARKET MONITOR.— 
‘‘(A) IN GENERAL.—The Secretary shall, 
not later than 3 months after the date of the 
enactment of this section, through the Office of 
the Assistant Secretary for Planning and Eval-
uation, enter into a contract with an individual 
to serve as the market monitor to monitor the 
design, development, and functioning of the 
auction to be conducted under subsection (b). 
The market monitor shall report and be ac-
countable to the Secretary. 
‘‘(B) SELECTION
OF
MARKET
MONITOR; 
TERM
OF
CONTRACT; ACCESS
TO
INFORMA-
TION.—The provisions of subparagraph (B) of 
paragraph (1) shall apply with respect to the 
market monitor in the same manner as they 
apply with respect to the auction expert. 
‘‘(C) FUNCTIONS OF MARKET MONITOR.— 
‘‘(i) PUBLIC COMMENTS ON AUCTION 
DESIGN.—The market monitor shall pro-
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vide public comments on the auction de-
sign developed under subsection (c) within 
one month of the date of its publication. 
‘‘(ii) PARTICIPATE
IN
DESIGN
CON-
FERENCE.—The market monitor shall par-
ticipate in the design conference and, at 
the conference, provide a presentation on 
the auction design. 
‘‘(iii) REVIEW
OF
FINAL
DESIGN.— 
The market monitor shall review the final 
auction design recommendations submitted 
under subsection (c)(2)(D) and, within one 
month of the release of such recommenda-
tions, provide public comment on them. 
‘‘(iv) ANNUAL REPORT.—The market 
monitor shall provide an annual report to 
Congress on the operation and functioning 
of the market pricing program. Each such 
report shall include information on— 
‘‘(I) potential problems with the 
program; 
‘‘(II) recommended solutions to 
problems identified pursuant to sub-
clause (I); 
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‘‘(III) the appropriateness of 
HCPCS codes selected for auctions; 
‘‘(IV) an evaluation on the ability 
of individuals eligible for benefits 
under this part to obtain items and 
services subject to the market pricing 
program; 
‘‘(V) any adverse health effects 
resulting from implementation of the 
program; 
‘‘(VI) any material deterioration 
in the quality of items and services 
provided under the program; 
‘‘(VII) the costs of any prevent-
able hospitalizations for market priced 
items and services; 
‘‘(VIII) any negative business 
consequences to the supplier of any 
market priced items and services oc-
curring as a result of errors made in 
the conduct of the program; and 
‘‘(IX) any other effects identified 
by the market monitor. 
‘‘(3) RECONSTITUTION
OF
AND
REPORT
BY 
PROGRAM ADVISORY COMMITTEE.— 
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‘‘(A) IN GENERAL.—With respect to the 
Program Advisory and Oversight Committee es-
tablished 
under 
section 
1847(c), 
notwith-
standing paragraphs (4) and (5) of such section 
and for the purposes of preparing the report 
under subparagraph (B) of this paragraph, the 
Secretary shall reconstitute the Committee and 
extend the terms of its members (and its termi-
nation date) through December 31, 2014, and 
the provisions of the Federal Advisory Com-
mittee Act (5 U.S.C. App.) shall apply to the 
reconstituted Committee. 
‘‘(B) REPORT.—Not later than December 
31, 2014, such Committee shall submit to the 
Congress a report on the market pricing pro-
gram. The report shall include information on 
the design of the market pricing program and 
access to and quality of market priced items 
and services. 
‘‘(4) ONGOING MONITORING BY SECRETARY.— 
The Secretary shall monitor the effects of the mar-
ket pricing program to guard against the occurrence 
of any negative effects specified in paragraph 
(2)(C)(iv). Such monitoring shall include public 
availability of the number of suppliers providing 
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market priced items and services in an eligible mar-
ket area during each year of the operation of the 
market pricing program.’’. 
SEC. 3. TERMINATION AND TRANSITION FROM DMEPOS 
COMPETITIVE BIDDING PROGRAM. 
(a) TERMINATION
OF COMPETITIVE ACQUISITION 
PROGRAM.—Section 1847(a)(1) of the Social Security Act 
(42 U.S.C. 1395w–3(a)(1)) is amended— 
(1) in subparagraph (B), by striking ‘‘The pro-
grams’’ and inserting ‘‘Subject to subparagraph (G), 
the programs’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(G) TERMINATION OF PROGRAM; TRANSI-
TION.— 
‘‘(i) NO
ADDITIONAL
COMPETITION 
ROUNDS.—Notwithstanding subparagraph 
(B), the competition under this section 
shall end with round 1. The Secretary shall 
take no further action to implement round 
2 of the competitive acquisition program, 
the national mail order competitive acquisi-
tion program, or any subsequent round of 
the competitive acquisition program under 
this section. 
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‘‘(ii) CONTRACT TERMINATION.—The 
contracts awarded under this section be-
fore the date of the enactment of this sub-
paragraph shall terminate on June 30, 
2013, and no payment shall be made under 
this title after such date based on such a 
contract. To the extent that any damages 
may be applicable as a result of the termi-
nation of such contracts, such damages 
shall be payable from the Federal Supple-
mentary Medical Insurance Trust Fund 
under section 1841. Nothing in this clause 
shall be construed to provide an inde-
pendent cause of action or right to admin-
istrative or judicial review with regard to 
the 
termination 
provided 
under 
this 
clause.’’. 
(b) TRANSITIONAL PAYMENT RULES.— 
(1) PAYMENT FOR DURABLE MEDICAL EQUIP-
MENT.—Section 1834(a)(1)(F) of the Social Secu-
rity Act (42 U.S.C. 1395m(a)(1)(F)) is amended— 
(A) in clause (i)— 
(i) by inserting ‘‘and before July 1, 
2013,’’ after ‘‘January 1, 2011,’’; and 
(ii) by adding ‘‘and’’ at the end; 
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(B) in clause (ii)— 
(i) by striking ‘‘(and, in the case of 
covered items’’ and all that follows through 
‘‘subject to clause (iii) shall)’’; and 
(ii) by striking ‘‘; and’’ at the end and 
inserting a period; and 
(C) by striking clause (iii). 
(2) AWARDS TO QUALIFIED SUPPLIERS NOT SE-
LECTED IN COMPETITIVE ACQUISITION PROGRAM.— 
Section 1847(b)(4) of such Act (42 U.S.C. 1395w– 
3(b)(4)) is amended— 
(A) by striking ‘‘The Secretary may limit’’ 
and inserting ‘‘Subject to subparagraph (C), 
the Secretary may limit’’; and 
(B) by adding at the end thereof the fol-
lowing new subparagraph: 
‘‘(C) NON-CONTRACTED
SUPPLIERS
IN 
COMPETITIVE
ACQUISITION
PROGRAM.—Begin-
ning on the date of the enactment of this sub-
paragraph and until the date of implementation 
of the market pricing program under section 
1847C, the limit under subparagraph (A) shall 
not apply and the Secretary shall award a con-
tract to any entity that— 
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‘‘(i) submitted a bid in the competitive 
acquisition program; 
‘‘(ii) meets financial and quality 
standards and is otherwise qualified but 
was not awarded a contract under such 
program because the entity’s bid was above 
the pricing threshold to provide such items 
and services in a competitive acquisition 
area; and 
‘‘(iii) accepts the price established 
under such program as payment in full.’’. 
(3) 
PAYMENT
FOR
OFF-THE-SHELF 
ORTHOTICS.—Section 
1834(h)(1) 
(42 
U.S.C. 
1395m(h)(1)) is amended by adding at the end the 
following new subparagraph: 
‘‘(I) APPLICATION
OF
MARKET
PRICING 
PROGRAM; LIMITATION OF INHERENT REASON-
ABLENESS
AUTHORITY.—In 
the 
case 
of 
orthotics described in subsection (b)(1)(K) of 
section 1847C furnished on or after July 1, 
2013, in an eligible market area, that are in-
cluded in a market pricing program under such 
section— 
‘‘(i) the payment basis under this sub-
section for such orthotics furnished in such 
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area shall be the payment basis determined 
under such market pricing program; and 
‘‘(ii) paragraphs (8) and (9) of section 
1842(b) shall not be applied.’’. 
(c) CONFORMING AMENDMENTS TO MARKET PRIC-
ING POLICY.— 
(1) IN GENERAL.—Section 1834(a)(1) of the 
Social Security Act (42 U.S.C. 1395m(a)(1)) is 
amended by adding at the end the following new 
subparagraph: 
‘‘(H) APPLICATION
OF
MARKET
PRICING 
PROGRAM; LIMITATION OF INHERENT REASON-
ABLENESS AUTHORITY.— 
‘‘(i) IN GENERAL.—In the case of cov-
ered items or off-the-shelf orthotics fur-
nished on or after January 1, 2014, sub-
ject to subparagraph (G), that are included 
in a market pricing program in an eligible 
market area under section 1847C— 
‘‘(I) the payment basis under this 
subsection in an eligible market area 
for the 2 items and services described 
in section 1847C(b)(1) that are se-
lected for auction in such area pursu-
ant to section 1847C(d)(2) shall be 
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the amount determined under the auc-
tion conducted in such eligible market 
area; 
‘‘(II) the payment basis under 
this subsection in an eligible market 
area for the items and services de-
scribed in section 1847C(b)(1) that 
are not selected for auction in such 
area pursuant to section 1847C(d)(2) 
shall be the amount determined pur-
suant to an auction for those items 
that is conducted in another eligible 
market area, and adjusted by the fac-
tor 
described 
in 
section 
1847C(d)(7)(B)(iv); 
‘‘(III) during the term of any 
contract awarded pursuant to section 
1847C(d)(6) for an item and service 
described in subclause (I), the Sec-
retary may not adjust the payment 
rate 
determined 
in 
section 
1847(b)(13)(G) to take into account 
the effects of a later-conducted auc-
tion during that two-year contract pe-
riod; 
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‘‘(IV) at the termination of a 
contract 
awarded 
under 
section 
1847C(d)(6) for an item or service de-
scribed in subclause (I), the Secretary 
shall adjust the payment rate applica-
ble under such contract to take into 
account the effects of a later-con-
ducted auction; and 
‘‘(V) with respect to payment 
amounts applicable pursuant to sub-
clause (II), the Secretary shall adjust 
the payment rate annually. 
‘‘(ii) USE OF ADDITIONAL INFORMA-
TION.—The Secretary, after consultation 
with the auction expert under section 
1847C, may (and, in the case of covered 
items furnished on or after January 1, 
2016, shall) use information on the pay-
ment determined under such market pric-
ing program to adjust the payment amount 
otherwise recognized under subparagraph 
(B)(ii) for an area in which an auction has 
not been conducted pursuant to section 
1847C(a) and in the case of such adjust-
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ment, paragraph (10)(B) shall not be ap-
plied. 
‘‘(iii) CONTINUED
USE
OF
ADDI-
TIONAL INFORMATION.—In the case of cov-
ered items furnished on or after January 
1, 2016, the Secretary shall continue to 
make such adjustments described in clause 
(ii) as, under such market pricing pro-
gram, additional covered items are phased 
in or information is updated as contracts 
are renewed under such program.’’. 
(2) 
REGULATORY
AUTHORITY.—Section 
1834(a)(1)(G) of such Act (42 U.S.C. 1395w– 
3(a)(1)(G)) is amended— 
(A) by inserting ‘‘OR
MARKET
PRICING’’ 
before ‘‘RATES’’ in the subparagraph heading; 
(B) by striking ‘‘subparagraph (F)(ii)’’ 
and inserting ‘‘subparagraph (F)(ii), subpara-
graph (H)(iii),’’; and 
(C) by inserting ‘‘or eligible market areas 
in which an auction has been conducted, on or 
after the first day of the year specified in sec-
tion 1847C(a)(3)(A)’’ after ‘‘competitive acqui-
sition areas’’. 
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(d) NEGATIVE PRESSURE WOUND THERAPY STAND-
ARDS.—The Secretary of Health and Human Services, in 
consultation with relevant stakeholders (as defined in sec-
tion 1847C(c)(2)(A)(ii) of the Social Security Act, as 
added by section 1) shall develop standards for coverage 
and quality of negative pressure wound therapy items and 
services 
(within 
the 
meaning 
of 
section 
1847(a)(1)(D)(i)(IV) of such Act). 
SEC. 4. OFFSET THROUGH REDUCTIONS IN PROGRAM 
SPENDING. 
Section 1834(a)(14) of the Social Security Act (42 
U.S.C. 1395m(a)(14)) is amended— 
(1) in subparagraph (K), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (L)— 
(A) by striking ‘‘and each subsequent 
year’’; and 
(B) by striking the period at the end of 
clause (ii) and inserting ‘‘; and’’; 
(3) by inserting after subparagraph (L) the fol-
lowing new subparagraphs: 
‘‘(M) for 2012— 
‘‘(i) the percentage increase in the 
consumer price index for all urban con-
sumers (United States city average) for 
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the 12-month period ending with June of 
2011, reduced by— 
‘‘(ii) the productivity adjustment de-
scribed in section 1886(b)(3)(B)(xi)(II); 
‘‘(N) in 2013— 
‘‘(i) in the case of items and services 
described in section 1847C(b) furnished in 
any geographic area (including related ac-
cessories, but only if such accessories are 
furnished with such items and services), 
¥4.8 percent; and 
‘‘(ii) in the case of items and services 
not described clause (i), the amount speci-
fied in subparagraph (M); and 
‘‘(O) in 2014 and each subsequent year— 
‘‘(i) the percentage increase in the 
consumer price index for all urban con-
sumers (United States city average) for 
the 12-month period ending with June of 
the previous year, reduced by 
‘‘(ii) the productivity adjustment de-
scribed in section 1886(b)(3)(B)(xi)(II).’’; 
and 
(4) in the matter following subparagraph (O) 
(as added by paragraph (3)), by striking ‘‘subpara-
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graph (L)(ii)’’ and inserting in lieu thereof ‘‘clause 
(ii) of subparagraphs (L), (M), and (O)’’. 
Æ 
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