Medicare Durable Medical Equipment Patient Protection Act of 1993

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 carriers.--The 
                Secretary may designate, by regulation 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 region for covered items under this section.
                    ``(B) Prohibition against carrier forum shopping.--
                (i) No supplier of a covered 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 residence 
                of the patient to whom the item is furnished, except 
                that--
                            ``(I) in the case of a patient who resides 
                        not more than 60 miles from a geographic 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 include 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 respect to the 
                        claim (based on the need to efficiently 
                        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 Social Security Act 
        (42 U.S.C. 1395x(n)) is amended by striking ``iron lungs'' and 
        inserting ``ostomy supplies, 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 routinely 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 following 
                new clause:
                            ``(iii) which consists of an ostomy supply, 
                        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 semicolon 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 devices, and orthotics 
        and prosthetics under such program 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 considered appropriate by the Secretary for 
        changes in the manner in which payment amounts are determined 
        under the medicare program for the items that are the subject 
        of the study.
    (c) Guidelines for Determining Medical Effectiveness and Permitting 
Payment for Upgraded 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 furnished to an elderly patient and 
        when furnished to a disabled patient; and
            (2) a supplier of such items may furnish a patient with an 
        item in excess of or more expensive than the standard version 
        of the item for which payment 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 Social 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 furnished 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 certification standards for 
                suppliers on the basis of such criteria as the 
                Secretary considers appropriate, and shall include in 
                the standards a requirement that the supplier furnish 
                the Secretary 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 
                        individuals eligible for benefits under this 
                        title and to providers of services or other 
                        entities 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 certification.--The 
                Secretary of Health and Human Services may require a 
                supplier to make a payment 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 administration of this part.
                    ``(D) Waiver of requirements for certain 
                suppliers.--The Secretary may waive or modify any of 
                the certification standards 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 
                furnished by the supplier are inexpensive or routinely 
                purchased items under paragraph (2) or that less than 
                25 percent of the supplier's annual gross revenues is 
                attributable to the furnishing 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 inserting ``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 issuance of multiple provider numbers is 
                appropriate because of significant differences among 
                the items the supplier furnishes or the geographic 
                regions the provider serves. Nothing in the previous 
                sentence shall be construed to prohibit 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 following: ``, 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 1834(h) shall not be considered a bona fide employment 
relationship for purposes of this subparagraph;''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to items or services furnished on or after January 
1, 1994.

SEC. 5. PRIOR APPROVAL AUTHORIZED FOR ITEMS FURNISHED BY SUPPLIERS 
              ENGAGED IN FRAUD OR OTHER ABUSIVE PRACTICES.

    (a) In General.--Section 1834(a) of the Social Security Act (42 
U.S.C. 1395m(a)), as amended by section 4(a), is further amended by 
adding at the end the following new paragraph:
            ``(18) Carrier determinations of items furnished by certain 
        suppliers in advance.--
                    ``(A) Development of list of suppliers by 
                secretary.--The Secretary shall develop and 
                periodically update a list of suppliers that the 
                Secretary determines (on the basis of criteria 
                developed and published by the Secretary in 
                consultation with representatives of suppliers, which 
                may include prior payment experience)--
                            ``(i) have engaged in activities which make 
                        the suppliers subject to a civil monetary 
                        penalty under section 1128A or to a criminal 
                        penalty under section 1128B;
                            ``(ii) have furnished a substantial number 
                        of items for which payment was not made because 
                        of the application of section 1862(a)(1); or
                            ``(iii) have engaged in a pattern of 
                        overutilization of items.
                    ``(B) Determinations of coverage in advance.--A 
                carrier shall determine in advance whether payment for 
                an item furnished by a supplier included on the list 
                developed by the Secretary under subparagraph (A) may 
                not be made because of the application of section 
                1862(a)(1).''.
    (b) Conforming Amendment.--Section 1834(h)(3) of such Act (42 
U.S.C. 1395m(h)(3)), as amended by section 4(a)(2), is amended by 
striking ``(12) and (17)'' and inserting ``(12), (15), (17), and 
(18)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 1994.

SEC. 6. STUDY OF IMPACT OF REFORMS ON ACCESS TO AND COSTS OF DURABLE 
              MEDICAL EQUIPMENT FOR MEDICARE BENEFICIARIES.

    (a) Study.--
            (1) In general.--The Comptroller General shall conduct a 
        study of the impact of the amendments made by this Act on the 
        access of individuals enrolled under part B of the medicare 
        program to items of durable medical equipment under the program 
        and the costs imposed on such individuals under the program for 
        such items, and shall include in the study an analysis of the 
        impact of the amendments on individuals enrolled under part B 
        of the program who reside in rural areas.
            (2) Durable medical equipment defined.--For purposes of 
        paragraph (1), the term ``durable medical equipment'' means 
        covered items under section 1834(a) of the Social Security Act 
        and items described in section 1834(h) of such Act.
    (b) Report.--Not later than January 1, 1995, the Comptroller 
General shall submit a report to Congress on the study conducted under 
subsection (a), and shall include in the report any recommendations 
considered appropriate for legislative or regulatory changes to improve 
the access of medicare beneficiaries to items of durable medical 
equipment and to control the costs imposed on beneficiaries for such 
items under the medicare program, including recommendations to impose 
maximum allowable limits on the amounts suppliers of such items may 
charge beneficiaries in the same manner as the limits imposed under the 
program on the amounts physicians may charge beneficiaries for 
physicians' services.

SEC. 7. STUDY OF ITEMS FURNISHED TO RESIDENTS OF NURSING FACILITIES.

    (a) Study.--
            (1) In general.--The Comptroller General shall conduct a 
        study of the types, volume, and utilization of items of durable 
        medical equipment furnished under part B of the medicare 
        program to individuals residing in skilled nursing facilities 
        and intermediate care facilities, and shall include in the 
        study an analysis of the need to apply additional controls on 
        the utilization of such items by such individuals.
            (2) Durable medical equipment defined.--For purposes of 
        paragraph (1), the term ``durable medical equipment'' means 
        covered items under section 1834(a) of the Social Security Act 
        and items described in section 1834(h) of such Act.
    (b) Report.--Not later than January 1, 1995, the Comptroller 
General shall submit a report to Congress on the study conducted under 
subsection (a).

Summary: Medicare Durable Medical Equipment Patient Protection Act of 1993 - (Sec. 2) Amends title XVIII (Medicare) of the Social Security Act to direct the Secretary of Health and Human Services to designate no more than five regional carriers nationwide to process all claims for durable medical equipment (DME). 
Prohibits a supplier from presenting a claim for payment unless such claim is presented to the appropriate carrier (i.e., the carrier having jurisdiction over the geographic area of the residence of the patient to whom the item is furnished, with exceptions). 
(Sec. 3) Includes:  (1) within the definition of "DME" ostomy and tracheostomy supplies, urologicals, surgical dressings, and splints, casts, and other devices used for reduction of fractures and dislocations; and (2) such supplies in the category of inexpensive and other routinely purchased equipment for payment purposes. 
Directs the Secretary to:  (1) report to the Congress on the feasibility and desirability of basing payment amounts for covered items of DME, prosthetic devices, and orthotics and prosthetics on the reasonable costs of such items; and (2) publish updated guidelines for carriers describing conditions under which such items shall be considered medically effective when furnished to an elderly patient or a disabled patient, and under which a supplier may furnish a patient with an item in excess of, or more expensive than, the standard version for which payment may be made under the program. 
(Sec. 4) Specifies that no payment may be made unless the supplier meets specified certification standards. 
Directs the Secretary to establish certification standards for suppliers. 
Authorizes the Secretary to require  suppliers to pay an administrative fee and waive or modify certification standards or fee payment under certain circumstances. 
Prohibits a carrier from issuing more than one provider number to a supplier unless there are significant differences among the items the supplier furnishes or the geographic regions the provider serves. 
Provides that anti-kickback requirements shall not apply to amounts paid to employees for provision of covered items or services (as under current law), except that any employment relationship between an employee of a nursing facility and a supplier shall not be considered a bona fide employment relationship. 
(Sec. 5) Directs the Secretary to develop a list of suppliers determined to have:  (1) engaged in activities which subject them to specified civil or criminal monetary penalties; (2) furnished a substantial number of items for which payment was not made; or (3) engaged in a pattern of overutilization of items.  Requires carriers to determine in advance whether payment for an item furnished by a listed supplier may not be made because of coverage exclusions. 
(Secs. 6 and 7) Directs the Comptroller General to study and report to the Congress on:  (1) the impact of this Act on access to, and costs of, DME for Medicare beneficiaries; and (2) the types, volume, and utilization of DME furnished to Medicare beneficiaries residing in skilled nursing and intermediate care facilities.  Sets forth reporting requirements.