IB
Union Calendar No. 332
107TH CONGRESS
2D SESSION
H. R. 4986
[Report No. 107–549, Part 1]
To amend part B of title XVIII of the Social Security Act to improve
payments for physicians’ services and other outpatient services furnished
under the medicare program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 21, 2002
Mr. TAUZIN 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 juris-
diction of the committee concerned
JUNE 26, 2002
Reported from the Committee on Energy and Commerce
JUNE 26, 2002
Referral to the Committee on Ways and Means extended for a period ending
not later than June 28, 2002
JUNE 28, 2002
Committee on Ways and Means discharged; committed to the Committee of
the Whole House on the State of the Union and ordered to be printed
A BILL
To amend part B of title XVIII of the Social Security
Act to improve payments for physicians’ services and
other outpatient services furnished 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,
TITLE V—PROVISIONS
RELATING TO PART B
Subtitle A—Physicians’ Services
SEC. 501. REVISION OF UPDATES FOR PHYSICIANS’ SERV-
ICES.
(a) UPDATE FOR 2003 THROUGH 2005.—
(1) IN GENERAL.—Section 1848(d) (42 U.S.C.
1395w–4(d)) is amended by adding at the end the
following new paragraphs:
‘‘(5) UPDATE
FOR
2003.—The update to the
single conversion factor established in paragraph
(1)(C) for 2003 is 2 percent.
‘‘(6) SPECIAL
RULES
FOR
UPDATE
FOR
2004
AND 2005.—The following rules apply in determining
the update adjustment factors under paragraph
(4)(B) for 2004 and 2005:
‘‘(A) USE OF 2002 DATA IN DETERMINING
ALLOWABLE COSTS.—
‘‘(i) The reference in clause (ii)(I) of
such paragraph to April 1, 1996, is
deemed to be a reference to January 1,
2002.
‘‘(ii) The allowed expenditures for
2002 is deemed to be equal to the actual
expenditures for physicians’ services fur-
nished during 2002, as estimated by the
Secretary.
‘‘(B) 1 PERCENTAGE POINT INCREASE IN
GDP UNDER SGR.—The annual average percent-
age growth in real gross domestic product per
capita under subsection (f)(2)(C) for each of
2003, 2004, and 2005 is deemed to be in-
creased by 1 percentage point.’’.
(2) 
CONFORMING
AMENDMENT.—Paragraph
(4)(B) of such section is amended, in the matter be-
fore clause (i), by inserting ‘‘and paragraph (6)’’
after ‘‘subparagraph (D)’’.
(3) NOT TREATED AS CHANGE IN LAW AND
REGULATION IN SUSTAINABLE GROWTH RATE DE-
TERMINATION.—The amendments made by this sub-
section shall not be treated as a change in law for
purposes of applying section 1848(f)(2)(D) of the
Social Security Act (42 U.S.C. 1395w–4(f)(2)(D)).
(b) USE OF 10-YEAR ROLLING AVERAGE IN COM-
PUTING GROSS DOMESTIC PRODUCT.—
(1) IN
GENERAL.—Section 1848(f)(2)(C) (42
U.S.C. 1395w–4(f)(2)(C)) is amended—
(A) by striking ‘‘projected’’ and inserting
‘‘annual average’’; and
(B) by striking ‘‘from the previous applica-
ble period to the applicable period involved’’
and inserting ‘‘during the 10-year period ending
with the applicable period involved’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall apply to computations of the
sustainable growth rate for years beginning with
2002.
(c) ELIMINATION OF TRANSITIONAL ADJUSTMENT.—
Section 1848(d)(4)(F) (42 U.S.C. 1395w–4(d)(4)(F)) is
amended by striking ‘‘subparagraph (A)’’ and all that fol-
lows and inserting ‘‘subparagraph (A), for each of 2001
and 2002, of ¥0.2 percent.’’
(d) GAO STUDY OF MEDICARE PAYMENT FOR INHA-
LATION THERAPY.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study to examine the
adequacy of current reimbursements for inhalation
therapy under the medicare program.
(2) REPORT.—Not later than May 1, 2003, the
Comptroller General shall submit to Congress a re-
port on the study conducted under paragraph (1).
SEC. 502. STUDIES ON ACCESS TO PHYSICIANS’ SERVICES.
(a) GAO STUDY ON BENEFICIARY ACCESS TO PHYSI-
CIANS’ SERVICES.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study on access of
medicare beneficiaries to physicians’ services under
the medicare program. The study shall include—
(A) an assessment of the use by bene-
ficiaries of such services through an analysis of
claims submitted by physicians for such services
under part B of the medicare program;
(B) an examination of changes in the use
by beneficiaries of physicians’ services over
time;
(C) an examination of the extent to which
physicians are not accepting new medicare
beneficiaries as patients.
(2) REPORT.—Not later than 1 year after the
date of the enactment of this Act, the Comptroller
General shall submit to Congress a report on the
study conducted under paragraph (1). The report
shall include a determination whether—
(A) data from claims submitted by physi-
cians under part B of the medicare program in-
dicate potential access problems for medicare
beneficiaries in certain geographic areas; and
(B) access by medicare beneficiaries to
physicians’ services may have improved, re-
mained constant, or deteriorated over time.
(b) STUDY
AND REPORT
ON SUPPLY
OF PHYSI-
CIANS.—
(1) STUDY.—The Secretary shall request the
Institute of Medicine of the National Academy of
Sciences to conduct a study on the adequacy of the
supply of physicians (including specialists) in the
United States and the factors that affect such sup-
ply.
(2) REPORT TO CONGRESS.—Not later than 2
years after the date of enactment of this section, the
Secretary shall submit to Congress a report on the
results of the study described in paragraph (1), in-
cluding any recommendations for legislation.
SEC. 503. MEDPAC REPORT ON PAYMENT FOR PHYSICIANS’
SERVICES.
Not later than 1 year after the date of the enactment
of this Act, the Medicare Payment Advisory Commission
shall submit to Congress a report on the effect of refine-
ments to the practice expense component of payments for
physicians’ services in the case of services for which there
are no physician work relative value units, after the transi-
tion to a full resource-based payment system in 2002,
under section 1848 of the Social Security Act (42 U.S.C.
1395w–4). Such report shall examine the following mat-
ters by physician specialty:
(1) The effect of such refinements on payment
for physicians’ services.
(2) The interaction of the practice expense com-
ponent with other components of and adjustments to
payment for physicians’ services under such section.
(3) The appropriateness of the amount of com-
pensation by reason of such refinements.
(4) The effect of such refinements on access to
care by medicare beneficiaries to physicians’ serv-
ices.
(5) The effect of such refinements on physician
participation under the medicare program.
SEC. 504. PHYSICIAN FEE SCHEDULE WAGE INDEX REVI-
SION.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, for purposes of payment under the physician
fee schedule under section 1848 of the Social Security Act
(42 U.S.C. 1395w–4) for physicians’ services furnished
during 2004, in no case may the work geographic index
otherwise calculated under section 1848(e)(1)(A)(iii) of
such Act (42 U.S.C. 1395w–4(e)(1)(A)(iii)) be less than
0.985.
(b) EXEMPTION FROM LIMITATION ON ANNUAL AD-
JUSTMENTS.—The increase in expenditures attributable to
subsection (a) during 2004 shall not be taken into account
in applying section 1848(c)(2)(B)(ii)(II) of such Act (42
U.S.C. 1395w–4(c)(2)(B)(ii)(II)) for that year.
(c) GAO REPORT.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study to evaluate the
following:
(A) The economic basis of the current
methodology for geographic adjustment of the
work component of the physician payment rate
under the physician fee schedule under section
1848 of the Social Security Act (42 U.S.C.
1395w–4).
(B) Whether the adjustment under sub-
section (a) should be continued, and whether
there is an economic basis for the continuation
of such adjustment, in those areas in which the
adjustment applies.
(C) The effect of the methodology on phy-
sician location and retention in areas affected
by such adjustment.
(D) The differences in recruitment costs
and retention rates for physicians, including
specialists, between large urban areas and other
areas.
(E) The mobility of physicians, including
specialists, over the last decade.
(F) The effect of raising the floor of the
geographic index to a value of 1.0 for adjust-
ment of the work component.
(2) REPORT.—The Comptroller General shall
submit to Congress a report on the study conducted
under paragraph (1) by not later than 1 year after
the date of the enactment of this Act.
Subtitle B—Other Services
SEC. 511. COMPETITIVE ACQUISITION OF CERTAIN ITEMS
AND SERVICES.
(a) IN GENERAL.—Section 1847 (42 U.S.C. 1395w–
3) is amended to read as follows:
‘‘COMPETITIVE ACQUISITION OF CERTAIN ITEMS AND
SERVICES
‘‘SEC. 1847. (a) ESTABLISHMENT OF COMPETITIVE
ACQUISITION PROGRAMS.—
‘‘(1) IMPLEMENTATION OF PROGRAMS.—
‘‘(A) IN
GENERAL.—The Secretary shall
establish and implement programs under which
competitive acquisition areas are established
throughout the United States for contract
award purposes for the furnishing under this
part of competitively priced items and services
(described in paragraph (2)) for which payment
is made under this part. Such areas may differ
for different items and services.
‘‘(B) PHASED-IN IMPLEMENTATION.—The
programs shall be phased-in among competitive
acquisition areas over a period of not longer
than 3 years in a manner so that the competi-
tion under the programs occurs in—
‘‘(i) at least 1⁄3 of such areas in 2004;
and
‘‘(ii) at least 2⁄3 of such areas in
2005.
‘‘(C) WAIVER OF CERTAIN PROVISIONS.—
In carrying out the programs, the Secretary
may waive such provisions of the Federal Ac-
quisition Regulation as are necessary for the ef-
ficient implementation of this section, other
than provisions relating to confidentiality of in-
formation and such other provisions as the Sec-
retary determines appropriate.
‘‘(2) ITEMS AND SERVICES DESCRIBED.—The
items and services referred to in paragraph (1) are
the following:
‘‘(A) DURABLE MEDICAL EQUIPMENT AND
INHALATION
DRUGS
USED
IN
CONNECTION
WITH
DURABLE
MEDICAL
EQUIPMENT.—Cov-
ered items (as defined in section 1834(a)(13))
for which payment is otherwise made under sec-
tion 1834(a), other than items used in infusion,
and inhalation drugs used in conjunction with
durable medical equipment.
‘‘(B) 
OFF-THE-SHELF
ORTHOTICS.—
Orthotics (described in section 1861(s)(9)) for
which payment is otherwise made under section
1834(h) which require minimal self-adjustment
for appropriate use and does not require exper-
tise in trimming, bending, molding, assembling,
or customizing to fit to the patient.
‘‘(3) EXEMPTION AUTHORITY.—In carrying out
the programs under this section, the Secretary may
exempt—
‘‘(A) areas that are not competitive due to
low population density; and
‘‘(B) items and services for which the ap-
plication of competitive acquisition is not likely
to result in significant savings.
‘‘(b) PROGRAM REQUIREMENTS.—
‘‘(1) IN GENERAL.—The Secretary shall con-
duct a competition among entities supplying items
and services described in subsection (a)(2) for each
competitive acquisition area in which the program is
implemented under subsection (a) with respect to
such items and services.
‘‘(2) CONDITIONS FOR AWARDING CONTRACT.—
‘‘(A) IN
GENERAL.—The Secretary may
not award a contract to any entity under the
competition conducted in an competitive acqui-
sition area pursuant to paragraph (1) to fur-
nish such items or services unless the Secretary
finds all of the following:
‘‘(i) The entity meets quality and fi-
nancial standards specified by the Sec-
retary or developed by accreditation enti-
ties or organizations recognized by the Sec-
retary.
‘‘(ii) The total amounts to be paid
under the contract (including costs associ-
ated with the administration of the con-
tract) are expected to be less than the total
amounts that would otherwise be paid.
‘‘(iii) Beneficiary access to a choice of
multiple suppliers in the area is main-
tained.
‘‘(iv) Beneficiary liability is limited to
the applicable percentage of contract
award price.
‘‘(B) QUALITY STANDARDS.—The quality
standards specified under subparagraph (A)(i)
shall not be less than the quality standards that
would otherwise apply if this section did not
apply and shall include consumer services
standards. The Secretary shall consult with an
expert outside advisory panel composed of an
appropriate selection of representatives of phy-
sicians, practitioners, and suppliers to review
(and advise the Secretary concerning) such
quality standards.
‘‘(3) CONTENTS OF CONTRACT.—
‘‘(A) IN
GENERAL.—A contract entered
into with an entity under the competition con-
ducted pursuant to paragraph (1) is subject to
terms and conditions that the Secretary may
specify.
‘‘(B) TERM
OF
CONTRACTS.—The Sec-
retary shall rebid contracts under this section
not less often than once every 3 years.
‘‘(4) LIMIT ON NUMBER OF CONTRACTORS.—
‘‘(A) IN
GENERAL.—The Secretary may
limit the number of contractors in a competitive
acquisition area to the number needed to meet
projected demand for items and services covered
under the contracts. In awarding contracts, the
Secretary shall take into account the ability bid-
ding entities to furnish items or services in suf-
ficient quantities to meet the anticipated needs
of beneficiaries for such items or services in the
geographic area covered under the contract on
a timely basis.
‘‘(B) MULTIPLE WINNERS.—The Secretary
shall award contracts to more than one entity
submitting a bid in each area for an item or
service.
‘‘(5) PARTICIPATING CONTRACTORS.—Payment
shall not be made for items and services described
in subsection (a)(2) furnished by a contractor and
for which competition is conducted under this sec-
tion unless—
‘‘(A) the contractor has submitted a bid
for such items and services under this section;
and
‘‘(B) the Secretary has awarded a contract
to the contractor for such items and services
under this section.
‘‘(6) AUTHORITY
TO
CONTRACT
FOR
EDU-
CATION, OUTREACH
AND
COMPLAINT
SERVICES.—
The Secretary may enter into a contract with an ap-
propriate entity to address complaints from bene-
ficiaries who receive items and services from an enti-
ty with a contract under this section and to conduct
appropriate education of and outreach to such bene-
ficiaries with respect to the program.
‘‘(c) ANNUAL REPORTS.—The Secretary shall submit
to Congress an annual management report on the pro-
grams under this section. Each such report shall include
information on savings, reductions in cost-sharing, access
to items and services, and beneficiary satisfaction.
‘‘(d) DEMONSTRATION PROJECT FOR CLINICAL LAB-
ORATORY SERVICES.—
‘‘(1) IN GENERAL.—The Secretary shall con-
duct a demonstration project on the application of
competitive acquisition under this section to clinical
diagnostic laboratory tests—
‘‘(A) for which payment is otherwise made
under section 1833(h) or 1834(d)(1) (relating
to colorectal cancer screening tests); and
‘‘(B) which are furnished without a face-
to-face encounter between the individual and
the hospital or physician ordering the tests.
‘‘(2) TERMS
AND
CONDITIONS.—Such project
shall be under the same conditions as are applicable
to items and services described in subsection (a)(2).
‘‘(3) REPORT.—The Secretary shall submit to
Congress—
‘‘(A) an initial report on the project not
later than December 31, 2004; and
‘‘(B) such progress and final reports on
the project after such date as the Secretary de-
termines appropriate.’’.
(b) CONTINUATION OF CERTAIN DEMONSTRATION
PROJECTS.—Notwithstanding the amendment made by
subsection (a), with respect to demonstration projects im-
plemented by the Secretary under section 1847 of the So-
cial Security Act (42 U.S.C. 1395w–3) (relating to the es-
tablishment of competitive acquisition areas) that was in
effect on the day before the date of the enactment of this
Act, each such demonstration project may continue under
the same terms and conditions applicable under that sec-
tion as in effect on that date.
(c) REPORT
ON DIFFERENCES
IN PAYMENT
FOR
LABORATORY SERVICES.—Not later than 18 months after
the date of the enactment of this Act, the Comptroller
General of the United States shall submit to Congress a
report that analyzes differences in reimbursement between
public and private payors for clinical diagnostic laboratory
services.
SEC. 512. PAYMENT FOR AMBULANCE SERVICES.
(a) PHASE-IN PROVIDING FLOOR USING BLEND OF
FEE SCHEDULE AND REGIONAL FEE SCHEDULES.—Sec-
tion 1834(l) (42 U.S.C. 1395m(l)) is amended—
(1) in paragraph (2)(E), by inserting ‘‘con-
sistent with paragraph (10)’’ after ‘‘in an efficient
and fair manner’’;
(2) by redesignating the paragraph (8) added
by section 221(a) of BIPA as paragraph (9); and
(3) by adding at the end the following new
paragraph:
‘‘(10) PHASE-IN
PROVIDING
FLOOR
USING
BLEND
OF
FEE
SCHEDULE
AND
REGIONAL
FEE
SCHEDULES.—In carrying out the phase-in under
paragraph (2)(E) for each level of service furnished
in a year before January 1, 2007, the portion of the
payment amount that is based on the fee schedule
shall not be less than the following blended rate of
the fee schedule under paragraph (1) and of a re-
gional fee schedule for the region involved:
‘‘(A) For 2003, the blended rate shall be
based 20 percent on the fee schedule under
paragraph (1) and 80 percent on the regional
fee schedule.
‘‘(B) For 2004, the blended rate shall be
based 40 percent on the fee schedule under
paragraph (1) and 60 percent on the regional
fee schedule.
‘‘(C) For 2005, the blended rate shall be
based 60 percent on the fee schedule under
paragraph (1) and 40 percent on the regional
fee schedule.
‘‘(D) For 2006, the blended rate shall be
based 80 percent on the fee schedule under
paragraph (1) and 20 percent on the regional
fee schedule.
For purposes of this paragraph, the Secretary shall
establish a regional fee schedule for each of the 9
Census divisions using the methodology (used in es-
tablishing the fee schedule under paragraph (1)) to
calculate a regional conversion factor and a regional
mileage payment rate and using the same payment
adjustments and the same relative value units as
used in the fee schedule under such paragraph.’’.
(b) ADJUSTMENT IN PAYMENT FOR CERTAIN LONG
TRIPS.—Section 1834(l), as amended by subsection (a),
is further amended by adding at the end the following new
paragraph:
‘‘(11) ADJUSTMENT IN PAYMENT FOR CERTAIN
LONG
TRIPS.—In the case of ground ambulance
services furnished on or after January 1, 2003, and
before January 1, 2008, regardless of where the
transportation originates, the fee schedule estab-
lished under this subsection shall provide that, with
respect to the payment rate for mileage for a trip
above 50 miles the per mile rate otherwise estab-
lished shall be increased by 1⁄4 of the payment per
mile otherwise applicable to such miles.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to ambulance services furnished
on or after January 1, 2003.
SEC. 513. 2-YEAR EXTENSION OF MORATORIUM ON THER-
APY CAPS; PROVISIONS RELATING TO RE-
PORTS.
(a) 2-YEAR EXTENSION OF MORATORIUM ON THER-
APY CAPS.—Section 1833(g)(4) (42 U.S.C. 1395l(g)(4))
is amended by striking ‘‘and 2002’’ and inserting ‘‘2002,
2003, and 2004’’.
(b) PROMPT SUBMISSION OF OVERDUE REPORTS ON
PAYMENT AND UTILIZATION OF OUTPATIENT THERAPY
SERVICES.—Not later than December 31, 2002, the Sec-
retary shall submit to Congress the reports required under
section 4541(d)(2) of the Balanced Budget Act of 1997
(relating to alternatives to a single annual dollar cap on
outpatient therapy) and under section 221(d) of the Medi-
care, Medicaid, and SCHIP Balanced Budget Refinement
Act of 1999 (relating to utilization patterns for outpatient
therapy).
(c) IDENTIFICATION OF CONDITIONS AND DISEASES
JUSTIFYING WAIVER OF THERAPY CAP.—
(1) STUDY.—The Secretary shall request the
Institute of Medicine of the National Academy of
Sciences to identify conditions or diseases that
should justify conducting an assessment of the need
to waive the therapy caps under section 1833(g)(4)
of the Social Security Act (42 U.S.C. 1395l(g)(4)).
(2) REPORTS TO CONGRESS.—Not later than
September 1, 2003, the Secretary shall submit to
Congress a preliminary report on the conditions and
diseases identified under paragraph (1) and not later
than December 31, 2003, a final report on the con-
ditions and diseases so identified.
(d) GAO STUDY OF PATIENT ACCESS TO PHYSICAL
THERAPIST SERVICES.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study on access to
physical therapist services in States authorizing such
services without a physician referral and in States
that require such a physician referral. The study
shall—
(A) examine the use of and referral pat-
terns for physical therapist services for patients
age 50 and older in States that authorize such
services without a physician referral and in
States that require such a physician referral;
(B) examine the use of and referral pat-
terns for physical therapist services for patients
who are medicare beneficiaries; and
(C) examine the delivery of physical thera-
pists’ services within the facilities of Depart-
ment of Defense; and
(D) analyze the potential impact on medi-
care beneficiaries and on expenditures under
the medicare program of eliminating the need
for a physician referral for physical therapist
services under the medicare program.
(2) REPORT.—The Comptroller General shall
submit to Congress a report on the study conducted
under paragraph (1) by not later than 1 year after
the date of the enactment of this Act.
SEC. 514. ACCELERATED IMPLEMENTATION OF 20 PERCENT
COINSURANCE FOR HOSPITAL OUTPATIENT
DEPARTMENT (OPD) SERVICES; OTHER OPD
PROVISIONS.
(a) ACCELERATED IMPLEMENTATION OF COINSUR-
ANCE
REDUCTIONS.—Section 
1833(t)(8)(C)(ii) 
(42
U.S.C. 1395l(t)(8)(C)(ii)) is amended by striking sub-
clauses (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 
per-
formed 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 strik-
ing ‘‘or temperature monitored cryoablation’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) applies to payment for services
furnished on or after January 1, 2003.
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 sub-
paragraph:
‘‘(W) an initial preventive physical exam-
ination (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
subsection:
‘‘Initial Preventive Physical Examination
‘‘(ww) The term ‘initial preventive physical examina-
tion’ means physicians’ services consisting of a physical
examination with the goal of health promotion and disease
detection and includes items and services specified by the
Secretary in regulations.’’.
(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 sub-
paragraph (H);
(B) by striking the semicolon at the end of
subparagraph (I) and inserting ‘‘, and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(J) in the case of an initial preventive physical
examination, which is performed not later than 6
months after the date the individual’s first coverage
period begins under part B;’’; and
(2) in paragraph (7), by striking ‘‘or (H)’’ and
inserting ‘‘(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 DIF-
FERENT SETTINGS.—Not later than 1 year after the date
of the enactment 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 dialysis supplies and equipment are reasonable
and necessary.
(b) RESTORING COMPOSITE RATE EXCEPTIONS FOR
PEDIATRIC 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 subpara-
graph (D), in the case’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(D) INAPPLICABILITY TO PEDIATRIC FA-
CILITIES.—Subparagraphs (A) and (B) shall
not apply, as of October 1, 2002, to pediatric
facilities that do not have an exception rate de-
scribed in subparagraph (C) in effect on such
date. For purposes of this subparagraph, the
term ‘pediatric facility’ means a renal facility at
least 50 percent of whose patients are individ-
uals 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 Sec-
retary’’ and inserting ‘‘Subject to section 422(a)(2)
of the Medicare, Medicaid, and SCHIP Benefits Im-
provement 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 furnished in 2004, the composite payment
rate otherwise established under section 1881(b)(7) of
such Act (42 U.S.C. 1395rr(b)(7)) shall be increased by
1.2 percent.
SEC. 517. IMPROVED PAYMENT FOR CERTAIN MAMMOG-
RAPHY SERVICES.
(a) EXCLUSION FROM OPD FEE SCHEDULE.—Sec-
tion 1833(t)(1)(A)(iv) (42 U.S.C. 1395l(t)(1)(A)(iv)) is
amended by inserting before the period at the end the fol-
lowing: ‘‘and does not include screening mammography (as
defined in section 1861(jj)) and unilateral and bilateral
diagnostic mammography’’.
(b) ADJUSTMENT TO TECHNICAL COMPONENT.—For
diagnostic mammography performed on or after January
1, 2004, for which payment is made under the physician
fee schedule under section 1848 of the Social Security Act
(42 U.S.C. 1395w–4), the Secretary, based on the most
recent cost data available, shall provide for an appropriate
adjustment in the payment amount for the technical com-
ponent of the diagnostic mammography.
(c) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to mammography performed on
or after January 1, 2004.
Union Calendar No. 332
107TH CONGRESS
2D SESSION
H. R. 4986
[Report No. 107–549, Part 1]
A BILL
To amend part B of title XVIII of the Social Secu-
rity Act to improve payments for physicians’
services and other outpatient services furnished
under the medicare program, and for other pur-
poses.
JUNE 28, 2002
Committee on Ways and Means discharged; committed to
the Committee of the Whole House on the State of the
Union and ordered to be printed