I
103D CONGRESS
1ST SESSION
H. R. 475
To amend title XVIII of the Social Security Act to provide for improved
quality and cost control mechanisms to ensure the proper and prudent
purchasing of durable medical equipment under the medicare program,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 6, 1993
Mr. PANETTA introduced the following bill; which was referred jointly to the
Committees on Ways and Means, and Energy and Commerce
A BILL
To amend title XVIII of the Social Security Act to provide
for improved quality and cost control mechanisms to
ensure the proper and prudent purchasing of durable
medical equipment under the medicare program, and for
other purposes.
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 Durable
Medical Equipment Patient Protection Act of 1993’’.
SEC. 2. RESTRICTIONS ON CARRIERS.
(a) LIMIT ON NUMBER OF REGIONAL CARRIERS;
PROHIBITION AGAINST CARRIER FORUM SHOPPING.—
Section 1834(a)(12) of the Social Security Act (42 U.S.C.
1395m(a)(12)) is amended to read as follows:
‘‘(12) 
USE
OF
CARRIERS
TO
PROCESS
CLAIMS.—
‘‘(A) DESIGNATION
OF
REGIONAL
CAR-
RIERS.—The Secretary may designate, by regu-
lation under section 1842, one carrier for one
or more entire regions (but not more than 5 for
all regions) to process all claims within the re-
gion for covered items under this section.
‘‘(B) 
PROHIBITION
AGAINST
CARRIER
FORUM SHOPPING.—(i) No supplier of a cov-
ered item may present or cause to be presented
a claim for payment under this part unless such
claim is presented to the appropriate carrier.
‘‘(ii) For purposes of clause (i), the term
‘appropriate carrier’ means the carrier having
jurisdiction over the geographic area of the resi-
dence of the patient to whom the item is fur-
nished, except that—
‘‘(I) in the case of a patient who re-
sides not more than 60 miles from a geo-
graphic area over which a second carrier
has jurisdiction, such term may include the
second carrier;
‘‘(II) in the case of a patient who, at
the time the item that is the subject of the
claim is furnished, is temporarily residing
in a geographic area other than the area of
the patient’s residence, such term may in-
clude the carrier having jurisdiction over
the geographic area in which the patient
temporarily resides; and
‘‘(III) such term may include any
other carrier considered by the Secretary
to be the most appropriate carrier with re-
spect to the claim (based on the need to ef-
ficiently administer the processing of the
claim).’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply with respect to contracts with
carriers for items furnished on or after January 1, 1994.
SEC. 3. TREATMENT OF CERTAIN ITEMS AS COVERED
ITEMS; USING REASONABLE COST AS BASIS
FOR DETERMINING PAYMENT AMOUNTS.
(a) TREATMENT OF CERTAIN ITEMS AS COVERED
ITEMS.—
(1) IN GENERAL.—Section 1861(n) of the So-
cial Security Act (42 U.S.C. 1395x(n)) is amended
by striking ‘‘iron lungs’’ and inserting ‘‘ostomy sup-
plies, tracheostomy supplies, urologicals, surgical
dressings and splints, casts, and other devices used
for reduction of fractures and dislocations, iron
lungs’’.
(2) TREATMENT
AS
INEXPENSIVE
AND
ROU-
TINELY PURCHASED ITEMS.—Section 1834(a)(2)(A)
of such Act (42 U.S.C. 1395m(a)(2)(A)) is amended
(A) by striking ‘‘or’’ at the end of clause
(i);
(B) by striking the comma at the end of
clause (ii) and inserting ‘‘, or’’; and
(C) by inserting after clause (ii) the follow-
ing new clause:
‘‘(iii) which consists of an ostomy sup-
ply, tracheostomy supply, urological, or
surgical dressing or splint, cast, or other
device used for reduction of fractures and
dislocations,’’.
(3) CONFORMING AMENDMENTS.—(A) Section
1834(h)(4)(C) 
of 
such 
Act 
(42 
U.S.C.
1395m(h)(4)(C)) is amended by striking ‘‘, catheter
supplies’’ and all that follows through ‘‘ostomy care’’
and inserting ‘‘and catheter supplies’’.
(B) Section 1861(s) of such Act (42 U.S.C.
1395x(s)) is amended—
(i) by striking paragraph (5); and
(ii) in paragraph (9), by striking the semi-
colon at the end and inserting the following: ‘‘,
but not including ostomy supplies, tracheostomy
supplies, or urologicals;’’.
(4) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to items furnished on
or after January 1, 1994.
(b) STUDY OF FEASIBILITY OF BASING PAYMENT
AMOUNTS ON REASONABLE COSTS.—
(1) STUDY.—The Secretary of Health and
Human Services, in consultation with carriers under
part B of the medicare program and representatives
of suppliers of durable medical equipment under the
program, shall conduct a study of the feasibility and
desirability of basing payment amounts for covered
items of durable medical equipment, prosthetic de-
vices, and orthotics and prosthetics under such pro-
gram on the reasonable costs of such items.
(2) REPORT.—Not later than January 1, 1995,
the Secretary shall submit a report on the study
conducted under paragraph (1) to Congress, and
shall include in the report any recommendations con-
sidered appropriate by the Secretary for changes in
the manner in which payment amounts are deter-
mined under the medicare program for the items
that are the subject of the study.
(c) GUIDELINES FOR DETERMINING MEDICAL EF-
FECTIVENESS
AND
PERMITTING
PAYMENT
FOR
UP-
GRADED ITEMS.—Not later than January 1, 1995, the
Secretary of Health and Human Services shall establish
and publish updated guidelines for carriers under part B
of the medicare program that describe the conditions
under which—
(1) covered items of durable medical equipment,
prosthetic devices, and orthotics and prosthetics
shall be considered medically effective when fur-
nished to an elderly patient and when furnished to
a disabled patient; and
(2) a supplier of such items may furnish a pa-
tient with an item in excess of or more expensive
than the standard version of the item for which pay-
ment may be made under the program.
SEC. 4. CERTIFICATION AND DISCLOSURE REQUIREMENTS
FOR 
SUPPLIERS 
OF 
DURABLE 
MEDICAL
EQUIPMENT.
(a) MANDATORY SUPPLIER CERTIFICATION.—
(1) IN GENERAL.—Section 1834(a) of the So-
cial Security Act (42 U.S.C. 1395m(a)) is amended
by adding at the end the following new paragraph:
‘‘(17) CERTIFICATION OF SUPPLIERS.—
‘‘(A) IN GENERAL.—Notwithstanding any
other provision of this Act, no payment may be
made under this part for any covered item fur-
nished during a year (beginning with 1994) by
any supplier unless the Secretary certifies (or
has certified during the 4 years preceding the
year) that the supplier meets the certification
standards established under subparagraph (B).
‘‘(B) ESTABLISHMENT OF STANDARDS.—
The Secretary shall establish and publish cer-
tification standards for suppliers on the basis of
such criteria as the Secretary considers appro-
priate, and shall include in the standards a re-
quirement that the supplier furnish the Sec-
retary with the following information:
‘‘(i) Whether the items furnished by
the supplier are purchased, warehoused,
and shipped directly by the supplier or
under arrangements with other suppliers.
‘‘(ii) The identity of subcontracting or
subsidiary entities or entities with which
the provider is doing business which are
advertising or marketing firms directly or
indirectly involved in furnishing covered
items to individuals entitled to benefits
under this title.
‘‘(iii) A description of all items and
services furnished by the supplier to indi-
viduals eligible for benefits under this title
and to providers of services or other enti-
ties furnishing items and services for which
payment may be made under this title.
‘‘(iv) A list of all States and counties
in which individuals reside to whom the
supplier furnishes items or services for
which payment is made under this title or
under a State plan for medical assistance
under title XIX.
‘‘(v) Any additional information the
Secretary considers appropriate.
‘‘(C) FEES
AUTHORIZED
FOR
CERTIFI-
CATION.—The Secretary of Health and Human
Services may require a supplier to make a pay-
ment of an administrative fee (not to exceed
$100) with respect to a certification or renewal
of a certification under this paragraph. Any
fees collected by the Secretary pursuant to this
subparagraph shall be deposited in the Federal
Supplementary Medical Insurance Trust Fund
and shall be available only for the administra-
tion of this part.
‘‘(D) WAIVER
OF
REQUIREMENTS
FOR
CERTAIN
SUPPLIERS.—The 
Secretary 
may
waive or modify any of the certification stand-
ards established under subparagraph (B) or the
payment of a fee required under subparagraph
(C) with respect to a supplier if the Secretary
determines that the majority of the items fur-
nished by the supplier are inexpensive or rou-
tinely purchased items under paragraph (2) or
that less than 25 percent of the supplier’s an-
nual gross revenues is attributable to the fur-
nishing of covered items under this title.’’.
(2) 
CONFORMING
AMENDMENT.—Section
1834(h)(3) of such Act (42 U.S.C. 1395m(h)(3)) is
amended by striking ‘‘Paragraph (12)’’ and insert-
ing ‘‘Paragraphs (12) and (17)’’.
(b) PROHIBITION AGAINST ISSUANCE OF MULTIPLE
PROVIDER NUMBERS.—Section 1834(a)(12) of such Act
(42 U.S.C. 1395m(a)(12)), as amended by section 2(a),
is further amended by adding at the end the following new
subparagraph:
‘‘(C) PROHIBITION AGAINST ISSUANCE OF
MULTIPLE
PROVIDER
NUMBERS.—A carrier
may not issue more than one provider number
to a supplier of a covered item unless the issu-
ance of multiple provider numbers is appro-
priate because of significant differences among
the items the supplier furnishes or the geo-
graphic regions the provider serves. Nothing in
the previous sentence shall be construed to pro-
hibit a carrier from issuing a new provider
number to a supplier to replace an inactive or
obsolete provider number.’’.
(c) LIMITATION ON EMPLOYMENT RELATIONSHIPS
CONSIDERED BONA FIDE FOR EXEMPTION FROM ANTI-
KICKBACK REQUIREMENTS.—Section 1128B(b)(3)(B) of
such Act (42 U.S.C. 1320a–7b(b)(3)(B)) is amended by
striking the semicolon at the end and inserting the follow-
ing: ‘‘, except that any employment relationship between
an employee of a nursing facility and a supplier of covered
items under section 1834(a) or items described in section