(ii)in the caseof a medical device, the amount by which the hospitals chargesfor the device, adjusted to cost, exceeds the portion of the otherwiseapplicable medicare OPD fee schedule that the Secretary determinesis associated with the device.(E)Limit on aggregate annual adjustment.(i)Ingeneral.[116]The total of the additional paymentsmade under this paragraph for covered OPD services furnished in ayear (as estimated by the Secretary before the beginning of the year)may not exceed the applicable percentage (specified in clause (ii))of the total program payments estimated to be made under this subsectionfor all covered OPD services furnished in that year. If this paragraphis first applied to less than a full year, the previous sentence shallapply only to the portion of such year. This clause shall not applyfor 2018.(ii)Applicablepercentage.For purposes of clause (i),the term applicable percentage means(I)for a year(or portion of a year) before 2004, 2.5 percent; and(II)for 2004and thereafter, a percentage specified by the Secretary up to (butnot to exceed) 2.0 percent.(iii)Uniform prospective reduction if aggregate limit projected to beexceeded.If the Secretary estimatesbefore the beginning of a year that the amount of the additional paymentsunder this paragraph for the year (or portion thereof) as determinedunder clause (i) without regard to this clause will exceed the limitestablished under such clause, the Secretary shall reduce pro ratathe amount of each of the additional payments under this paragraphfor that year (or portion thereof) in order to ensure that the aggregateadditional payments under this paragraph (as so estimated) do notexceed such limit.(F)Limitation of application of functional equivalence standard.(i)Ingeneral.The Secretary may not publishregulations that apply a functional equivalence standard to a drugor biological under this paragraph.(ii)Application.Clause (i) shall apply to the application of a functional equivalencestandard to a drug or biological on or after the date of enactmentof the Medicare Prescription Drug, Improvement, and ModernizationAct of 2003 unless(I)such applicationwas being made to such drug or biological prior to such date of enactment;and(II)the Secretaryapplies such standard to such drug or biological only for the purposeof determining eligibility of such drug or biological for additionalpayments under this paragraph and not for the purpose of any otherpayments under this title.(iii)Rule of construction.Nothing in thissubparagraph shall be construed to effect the Secretarys authorityto deem a particular drug to be identical to another drug if the 2products are pharmaceutically equivalent and bioequivalent, as determinedby the Commissioner of Food and Drugs.(G)Pass-through extension for certain drugs and biologicals.In the case of a drug or biological whose period of pass-throughstatus under this paragraph ended on December 31, 2017, and for whichpayment under this subsection was packaged into a payment for a coveredOPD service (or group of services) furnished beginning January 1,2018, such pass-through status shall be extended for a 2-year periodbeginning on October 1, 2018.[117](H)Temporary payment rule for certain drugs and biologicals.In the case of a drug or biological whose period of pass-throughstatus under this paragraph ended on December 31, 2017, and for whichpayment under this subsection was packaged into a payment for a coveredOPD service (or group of services) furnished beginning January 1,2018, the payment amount for such drug or biological under this subsectionthat is furnished during the period beginning on October 1, 2018,and ending on March 31, 2019, shall be the greater of(i)the payment amountthat would otherwise apply under subparagraph (D)(i) for such drugor biological during such period; or(ii)the paymentamount that applied under such subparagraph (D)(i) for such drug orbiological on December 31, 2017.[118](I)Special payment adjustment rules for last quarter of 2018.In the case of a drug or biological whose period of pass-throughstatus under this paragraph ended on December 31, 2017, and for whichpayment under this subsection was packaged into a payment amount fora covered OPD service (or group of services) beginning January 1,2018, the following rules shall apply with respect to payment amountsunder this subsection for covered a OPD service (or group of services)furnished during the period beginning on October 1, 2018, and endingon December 31, 2018:(i)The Secretaryshall remove the packaged costs of such drug or biological (as determinedby the Secretary) from the payment amount under this subsection forthe covered OPD service (or group of services) with which it is packaged.(ii)The Secretaryshall not make any adjustments to payment amounts under this subsectionfor a covered OPD service (or group of services) for which no costswere removed under clause (i).[119](J)Additional pass-throughextension and special payment adjustment rule for certain diagnosticradiopharmaceuticals.[120]In the case of a drug or biological furnished in the contextof a clinical study on diagnostic imaging tests approved under a coveragewith evidence development determination whose period of passthroughstatus under this paragraph concluded on December 31, 2018, and forwhich payment under this subsection was packaged into a payment fora covered OPD service (or group of services) furnished beginning January1, 2019, the Secretary shall(i) extend such pass-through status forsuch drug or biological for the 9-month period beginning on January1, 2020;(ii) remove, during such period, the packagedcosts of such drug or biological (as determined by the Secretary)from the payment amount under this subsection for the covered OPDservice (or group of services) with which it is packaged; and(iii) not make any adjustments to paymentamounts under this subsection for a covered OPD service (or groupof services) for which no costs were removed under clause (ii).(7)Transitionaladjustment to limit decline in payment.(A)Before 2002.Subject to subparagraph(D), for covered OPD services furnished before January 1, 2002, forwhich the PPS amount (as defined in subparagraph (E)) is(i)at least 90 percent,but less than 100 percent, of the pre-BBA amount (as defined in subparagraph(F)), the amount of payment under this subsection shall be increasedby 80 percent of the amount of such difference;(ii)at least 80percent, but less than 90 percent, of the pre-BBA amount, the amountof payment under this subsection shall be increased by the amountby which (I) the product of 0.71 and the pre-BBA amount, exceeds (II)the product of 0.70 and the PPS amount;(iii)at least70 percent, but less than 80 percent, of the pre-BBA amount, the amountof payment under this subsection shall be increased by the amountby which (I) the product of 0.63 and the pre-BBA amount, exceeds (II)the product of 0.60 and the PPS amount; or(iv)less than 70percent of the pre-BBA amount, the amount of payment under this subsectionshall be increased by 21 percent of the pre-BBA amount.(B)2002.Subjectto subparagraph (D), for covered OPD services furnished during 2002,for which the PPS amount is(i)at least 90 percent,but less than 100 percent, of the pre-BBA amount, the amount of paymentunder this subsection shall be increased by 70 percent of the amountof such difference;(ii)at least 80percent, but less than 90 percent, of the pre-BBA amount, the amountof payment under this subsection shall be increased by the amountby which (I) the product of 0.61 and the pre-BBA amount, exceeds (II)the product of 0.60 and the PPS amount; or(iii)less than80 percent of the pre-BBA amount, the amount of payment under thissubsection shall be increased by 13 percent of the pre-BBA amount.(C)2003.Subjectto subparagraph (D), for covered OPD services furnished during 2003,for which the PPS amount is(i)at least 90 percent,but less than 100 percent, of the pre-BBA amount, the amount of paymentunder this subsection shall be increased by 60 percent of the amountof such difference; or(ii)less than 90percent of the pre-BBA amount, the amount of payment under this subsectionshall be increased by 6 percent of the pre-BBA amount.(D)Hold harmless provisions.(i)Temporarytreatment for certain rural hospitals.(I)In the caseof a hospital located in a rural area and that has not more than 100beds or a sole community hospital (as defined in section 1886(d)(5)(D)(iii)) located in a rural area , for covered OPD services furnished beforeJanuary 1, 2006, for which the PPS amount is less than the pre-BBAamount, the amount of payment under this subsection shall be increasedby the amount of such difference.(II)In thecase of a hospital located in a rural area and that has not more than100 beds and that is not a sole community hospital (as defined insection 1886(d)(5)(D)(iii)), for covered OPD services furnished on or after January 1, 2006,and before January 1, 2013[121], for which the PPS amount is less than the pre-BBA amount,the amount of payment under this subsection shall be increased bythe applicable percentage of the amount of such difference. For purposesof the preceding sentence, the applicable percentage shall be 95 percentwith respect to covered OPD services furnished in 2006, 90 percentwith respect to such services furnished in 2007, and 85 percent withrespect to such services furnished in 2008, 2009, 2010, 2011, or 2012[122].(III)In thecase of a sole community hospital (as defined in section 1886(d)(5)(D)(iii)) that has not more than 100 beds, for covered OPD services furnishedon or after January 1, 2009, and before January 1, 2013, for which[123]the PPS amount is less than the pre-BBA amount, the amountof payment under this subsection shall be increased by 85 percentof the amount of such difference. In the case of covered OPD servicesfurnished on or after January 1, 2010, and before January 1, 2013,the preceding[124]sentence shall be applied without regard to the 100-bedlimitation.(ii)Permanenttreatment for cancer hospitals and childrens hospitals.In the case of a hospital described in section clause (iii)or (v) of 1886(d)(1)(B), for covered OPD services for which the PPS amount is less thanthe pre-BBA amount, the amount of payment under this subsection shallbe increased by the amount of such difference.(E)PPS amountdefined.In this paragraph, the term PPS amount means, with respect to covered OPD services, the amount payableunder this title for such services (determined without regard to thisparagraph), including amounts payable as copayment under paragraph(8), coinsurance under section 1866(a)(2)(A)(ii), and the deductibleunder section 1833(b).(F)Pre-BBA amount defined.(i)Ingeneral.In this paragraph, the pre-BBA amount means, with respect to covered OPD servicesfurnished by a hospital in a year, an amount equal to the productof the reasonable cost of the hospital for such services for the portionsof the hospitals cost reporting period (or periods) occurringin the year and the base OPD payment-to-cost ratio for the hospital(as defined in clause (ii)).(ii)Basepayment-to-cost-ratio defined.For purposesof this subparagraph, the base payment-to-cost ratio for a hospital means the ratio of(I)the hospitalsreimbursement under this part for covered OPD services furnished duringthe cost reporting period ending in 1996 (or in the case of a hospitalthat did not submit a cost report for such period, during the firstsubsequent cost reporting period ending before 2001 for which thehospital submitted a cost report), including any reimbursement forsuch services through cost-sharing described in subparagraph (E),to (II) the reasonable cost of such services for such period.The Secretary shall determine such ratios as if the amendmentsmade by section 4521 of the Balanced Budget Act of 1997[125]werein effect in 1996.(G)Interim payments.The Secretary shallmake payments under this paragraph to hospitals on an interim basis,subject to retrospective adjustments based on settled cost reports.(H)