To amend part B of title XVIII of the Social Security Act to assure access to durable medical equipment under the Medicare Program.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Durable Medical Equipment 
Access Act of 2005''.

SEC. 2. BENEFICIARY PROTECTIONS.

    (a) Application of Quality Standards.--Section 1847(b)(2)(B) of the 
Social Security Act (42 U.S.C. 1395w-3(b)(2)(B)) is amended to read as 
follows:
                    ``(B) Application of quality standards and receipt 
                of advice from oversight committee.--The Secretary may 
                not award any contracts under the competitive 
                acquisition program under this section unless--
                            ``(i) the quality standards have been 
                        implemented under section 1834(a)(20); and
                            ``(ii) the Secretary has received advice 
                        from the program oversight committee 
                        established under subsection (c).''.
    (b) Requiring Use of Exemptions.--Section 1847(a)(3) of such Act 
(42 U.S.C. 1395w-3(a)(3)) is amended by striking ``may exempt'' and 
inserting ``shall exempt''.
    (c) Exemption of Smaller MSAs.--Section 1847(a)(3)(A) of such Act 
(42 U.S.C. 1395w-3(a)(3)(A)) is amended by inserting ``(including any 
metropolitan statistical area with a population of less than 500,000)'' 
after ``rural areas''.
    (d) Application of Federal Advisory Committee Act (FACA) to Program 
Advisory and Oversight Committee (PAOC).--Section 1847(c)(4) of such 
Act (42 U.S.C. 1395w-3(c)(4)) is amended to read as follows:
            ``(4) Applicability of faca.--The provisions of the Federal 
        Advisory Committee Act (5 U.S.C. App.) shall apply to the 
        Committee.''.
    (e) Effective Date.--The amendments made by this section shall be 
effective as if included in the enactment of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173).

SEC. 3. SMALL SUPPLIER PROTECTIONS.

    (a) Qualified Supplier Participation.--Section 1847(b) of the 
Social Security Act (42 U.S.C. 1395w-3(b)) is amended--
            (1) in paragraph (4)(A), by striking ``The Secretary may 
        limit'' and inserting ``Subject to paragraph (6)(D), the 
        Secretary may limit''; and
            (2) in paragraph (6)(D), by adding at the end the 
        following: ``Such appropriate steps shall include permitting 
        suppliers that are classified as small businesses under the 
        Small Business Act to continue to participate as suppliers at 
        the selected award price so long as they submit bids at less 
        than the fee schedule amount otherwise applicable to the items 
        and they otherwise comply with applicable program 
        requirements.''.
    (b) Restoration of Due Process.--Section 1847(b)(10) of such Act 
(42 U.S.C. 1395w-3(b)(10)) is amended--
            (1) by striking ``No administrative or judicial review'' 
        and inserting ``Restoration of appeal rights''; and
            (2) by striking ``There shall be no administrative or 
        judicial review under section 1869, section 1878, or otherwise 
        of'' and inserting ``Administrative and judicial review shall 
        only be available under section 1869 (and not otherwise) of''.
    (c) Application of Requirement for Significant Savings.--Section 
1847(a) of such Act (42 U.S.C. 1395w-3(a)) is amended--
            (1) in paragraph (3)(B), by inserting ``of at least 10 
        percent'' after ``significant savings''; and
            (2) in paragraph (1), by adding at the end the following 
        new subparagraph:
                    ``(D) Requirement for significant savings.--The 
                Secretary shall not implement a program under this 
                section with respect to an item or service unless the 
                Secretary demonstrates a probability of achieving 
                significant savings of at least 10 percent, compared to 
                the fee schedule in effect on January 1, 2006, by 
                including the item or service in the program.''.
    (d) Comparability Analysis.--Section 1834(a)(1) of such Act (42 
U.S.C. 1395m(a)(1)) is amended--
            (1) in subparagraph (F), by inserting ``subject to 
        subparagraph (G),'' after ``2009,''; and
            (2) by adding at the end the following new subparagraphs:
                    ``(G) Requirement for comparability analysis before 
                implementation.--The Secretary may not implement 
                subparagraph (F) with respect to the application of 
                rates in an area that is not a competitive acquisition 
                area under section 1847 unless the Secretary has 
                completed and published in the Federal Register a 
                comparability analysis to ensure the application is 
                appropriate. The comparability analysis shall include 
                at least an analysis of the relative costs of providing 
                the particular items and services in the respective 
                metropolitan statistical areas and an assessment of 
                whether application of the bid rate in an area that is 
                not a competitive acquisition area would adversely 
                impact beneficiary access to quality items and 
                services.
                    ``(H) Application of comparability analysis 
                requirement to certain other part b items and 
                services.--Subparagraph (G) shall also apply to the 
                implementation of section 1847(a) with respect to items 
                described in paragraph (2)(B) or (2)(C) of such section 
                that are furnished on or after January 1, 2009.''.
    (e) Effective Date.--The amendments made by this section shall be 
effective as if included in the enactment of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173).

Summary: Medicare Durable Medical Equipment Access Act of 2005 - Amends title XVIII (Medicare) of the Social Security Act to prohibit the Secretary of Health and Human Services from awarding any contracts under the competitive durable medical equipment items and services acquisition program unless: (1) the quality standards have been implemented; and (2) the Secretary has received advice from the program oversight committee.

Requires the Secretary (who currently is authorized), in carrying out competitive acquisition programs, to exempt: (1) rural areas and areas with low population density within urban areas that are not competitive, unless there is a significant national market through mail order for a particular item or service; and (2) items and services for which the application of competitive acquisition is not likely to result in significant savings. Adds to such exemptions smaller metropolitan statistical areas.

Modifies requirements for the protection of small suppliers in bidding and contracting. Requires the Secretary to permit suppliers classified as small businesses to continue to participate as suppliers at the selected award price so long as they submit bids at less than the fee schedule amount otherwise applicable to the items and they otherwise comply with applicable program requirements.

Provides for appeal rights (currently denied).

Requires the Secretary to exempt from competitive acquisition requirements items and services for which the application of competitive acquisition is not likely to result in significant savings of at least 10%.

Prohibits the Secretary from implementing a program with respect to an item or service unless the Secretary demonstrates a probability of achieving significant savings of at least 10%, compared to the fee schedule in effect on January 1, 2006, by including the item or service in the program.

Prohibits the Secretary from implementing certain requirements for the payment basis for covered items furnished after January 1, 2009, with respect to the application of rates in an area that is not a competitive acquisition area, unless the Secretary has completed and published in the Federal Register a comparability analysis to ensure the application is appropriate. Requires application of the comparability analysis requirement to certain other part B items and services.