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SECTION 1. SHORT TITLE.

This Act may be cited as the ''Medicare Orthotics and Prosthetics
Improvement Act of 2008''.

SEC. 2. MODIFICATION OF REQUIREMENTS APPLICABLE UNDER MEDICARE TO
DESIGNATION OF ACCREDITATION ORGANIZATIONS FOR SUPPLIERS
OF PROSTHETIC DEVICES AND ORTHOTICS AND PROSTHETICS.

(a) In General.--Section 1834(a)(20)(B) of the Social Security Act
(42 U.S.C. 1395m(a)(20)(B)) is amended--
(1) by striking ''Not later than'' and inserting ''(i) in
general.--Subject to clause (ii), not later than'' with the
same indentation as the clause added by paragraph (2); and
(2) by adding at the end the following new clause:
''(ii) Special requirements for
accreditation of prosthetic devices and
orthotics and prosthetics.--For purposes of
applying quality standards under subparagraph
(A) for suppliers of items and services
described in subparagraph (D)(ii), the
Secretary shall designate and approve an
independent accreditation organization under
clause (i) only if such organization is a Board
or program described in subsection
(h)(1)(F)(iv). Not later than January 1, 2009,
the Secretary shall ensure that at least one
independent accreditation organization is
designated and approved in accordance with this
clause.''.
(b) Effective Date.--An organization must satisfy the requirement
of section 1834(a)(20)(B)(ii), as added by subsection (a)(2), not later
than January 1, 2009, regardless of whether such organization is
designated or approved as an independent accreditation organization
before, on, or after the date of the enactment of this Act.

SEC. 3. APPLICATION OF EXISTING ACCREDITATION AND LICENSURE
REQUIREMENTS FOR CERTAIN PROSTHETICS AND CUSTOM-
FABRICATED ORTHOTICS TO PROSTHETIC DEVICES AND ORTHOTICS
AND PROSTHETICS.

(a) In General.--Section 1834(h)(1)(F) of the Social Security Act
(42 U.S.C. 1395m(h)(1)(F)) is amended--
(1) in the heading, by striking ''Special payment rules for
certain prosthetics and custom-fabricated orthotics'' and
inserting ''Payment rules'';
(2) in clause (i), by striking ''an item of custom-
fabricated orthotics described in clause (ii) or for an item of
prosthetics unless such item is'' and inserting ''a prosthetic
device or an item of orthotics or prosthetics, including an
item of custom-fabricated orthotics described in clause (ii),
unless such device or item, respectively, is'';
(3) in clause (ii)(II), by striking ''a list of items to
which this subparagraph applies'' and inserting ''a list of
items for purposes of clause (i)''; and
(4) in clause (iii)(III), by striking ''to provide or
manage the provision of prosthetics and custom-designed or -
fabricated orthotics'' and inserting ''to provide or manage the
provision of prosthetics and orthotics (and custom-designed or
-fabricated orthotics, in the case of an item described in
clause (iii))''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to devices and items furnished on or after January 1, 2009.

SEC. 4. REPORTS.

(a) Report on Enforcing New Licensing and Accreditation
Requirements.--Not later than 18 months after the date of the enactment
of this Act, the Secretary of Health and Human Services shall submit to
Congress a report on the steps taken by the Department of Health and
Human Services to ensure that the State licensure and accreditation
requirements under section 1834(h)(1)(I) of the Social Security Act, as
added by section 3, are enforced. Such report shall include a
determination of the extent to which payments for prosthetic devices
and orthotics and prosthetics under the Medicare program under title
XVIII of such Act are made only to those providers of services and
suppliers that meet the relevant accreditation and licensure
requirements under such section, as well as a determination of whether
additional steps are needed.
(b) Report on Fraud and Abuse.--Not later than 30 months after the
date of the enactment of this Act, the Secretary of Health and Human
Services shall submit to Congress a report on the effect of the
requirements under subsection (a)(20)(B)(ii) of section 1834 of the
Social Security Act (42 U.S.C. 1395m), as added by section 2, and
subsection (h)(1)(I) of such section, as added by section 3, on the
occurrence of fraud and abuse under the Medicare program under title
XVIII of such Act, with respect to prosthetic devices and orthotics and
prosthetics for which payment is made under such program.

SEC. 5. MODIFICATION OF MEDICARE PAYMENT METHODOLOGY FOR PROSTHETIC
DEVICES AND ORTHOTICS AND PROSTHETICS.

Section 1834(h) of the Social Security Act (42 U.S.C. 1395m(h)) is
amended--
(1) in paragraph (1)(B), by striking ''and (H)(i)'' and
inserting ''(H)(i), and paragraph (5)''; and
(2) by adding at the end the following new paragraph:
''(5) Modification of payment methodology to account for
practitioner qualifications and complexity of care.--
''(A) In general.--The Secretary shall modify the
payment basis under paragraph (1)(B) for prosthetic
devices and orthotics and prosthetics in a manner that
links the complexity of the respective item and the
qualifications of the individual or entity furnishing
and fabricating such respective item in determining the
payment basis for such item. Such modifications shall
be implemented in a manner that provides for the
application of such modifications to items furnished on
or after January 1, 2009. Such modifications shall be
designed to result in the same aggregate amount of
expenditures for prosthetic devices and orthotics and
prosthetics under this section for a year as would be
made if this subparagraph did not apply, as estimated
by the Secretary.
''(B) Assignment of billing codes.--For purposes of
subparagraph (A), in modifying the payment basis under
paragraph (1)(B), the Secretary shall utilize and
incorporate the '2008 Orthotics and Prosthetics
Tripartite Document' a multi-organization compilation
of HCPCS codes to assign specific billing codes to the
category of orthotics and prosthetics care described in
each of clauses (i) through (iv) of subparagraph (C)
using the provider qualification designation for each
HCPCS code as stated in such document.
''(C) Categories of orthotics and prosthetics care
described.--
''(i) Custom-fabricated category.--The
category of orthotics and prosthetics care
described in this clause is a category for
custom-fabricated devices that are made from
detailed measurements, images, or models in
accordance with a prescription and that can
only be utilized by a specific intended
patient. The provider qualification designation
for the category shall reflect the following:
''(I) The category of care involves
the highest level of complexity with
substantial clinical risk.
''(II) The category of care
requires a practitioner who is
credentialed, certified, or licensed in
orthotics or prosthetics, respectively,
to insure the comprehensive provision
of orthotic care or prosthetic care,
respectively. Such care shall be based
on sound clinical judgment and
technical expertise based on the
practitioner's education and clinical
training, in order to allow the
practitioner to determine the device
parameters and design, fabrication
process, and functional purpose
specific to the needs of the patient to
maximize optimal clinical outcomes.
''(ii) Custom-fitted high.--The category of
orthotics and prosthetics care described in
this clause is a category for prefabricated
devices that are manufactured with no specific
patient in mind, but that are appropriately
sized, adapted, modified, and configured (with
the required tools and equipment) to a specific
patient in accordance with a prescription. The
provider qualification designation for the
category shall reflect the following:
''(I) The category of care involves
moderate to high complexity with
substantial clinical risk.
''(II) The category of care
requires a practitioner who is
credentialed, certified, or licensed in
orthotics or prosthetics or a related
field in which orthotics or prosthetics
is the primary focus of the course of
study, to insure the appropriate
provision of orthotic care or
prosthetic care, respectively. Such
care shall be based on sound clinical
judgment and technical expertise based
on the practitioner's education and
clinical training, in order to allow
the practitioner to determine the
appropriate device relative to the
diagnosis and specific to the needs of
the patient to maximize optimal
clinical outcomes.
''(iii) Custom-fitted low.--The category of
orthotics and prosthetics care described in
this clause is a category for prefabricated
devices that are manufactured with no specific
patient in mind, but that are appropriately
sized and adjusted to a specific patient in
accordance with a prescription. The provider
qualification designation for the category
shall reflect the following:
''(I) The category of care involves
a low level of complexity and low
clinical risk.
''(II) The category of care
requires a supplier that is
credentialed, certified, or licensed
within a limited scope of practice to
insure appropriate provision of
orthotic care. The supplier's education
and training shall insure that basic
clinical knowledge and technical
expertise is available to confirm
successful fit and device compliance
with the prescription.
''(iv) Off-the-shelf.--The category of
orthotics and prosthetics care described in
this clause is a category for prefabricated
devices that require minimal self adjustment
for appropriate use. The provider qualification
designation for the category shall reflect that
such devices do not require expertise in
trimming, bending, molding, assembling, or
customizing to fit the patient and that no
formal credentialing, clinical education, or
technical training is required to dispense such
devices.
''(D) Consultation.--In modifying the payment
basis, the Secretary shall consult with appropriate
experts in orthotics and prosthetics, including
practitioners that furnish devices and items within the
categories of prosthetics and orthotics care described
in subparagraph (C).''.
Output:
Medicare Orthotics and Prosthetics Improvement Act of 2008 - Amends title XVIII (Medicare) of the Social Security Act with respect to recognized independent accreditation organizations which apply quality standards to which suppliers of items and services relating to prosthetic devices and orthotics and prosthetics.

Directs the Secretary of Health and Human Services (HHS) to designate and approve an independent accreditation organization for such purposes only if it is the American Board for Certification in Orthotics and Prosthetics, Inc., the Board for Orthotist/Prosthetist Certification, or a program that the Secretary determines has accreditation and approval standards essentially equivalent to those of such a Board.

Requires application to prosthetic devices and orthotics and prosthetics generally of existing accreditation and licensure requirements for certain prosthetics and custom-fabricated orthotics.

Directs the Secretary to report to Congress on: (1) the steps taken by the Department of HHS to ensure that such licensure and accreditation requirements are enforced; and (2) the effect of the requirements of this Act on the occurrence of fraud and abuse under the Medicare program with respect to prosthetic devices and orthotics and prosthetics.

Modifies the Medicare payment methodology for prosthetic devices and orthotics and prosthetics to account for practitioner qualifications and complexity of care.