SEC. 302. PAYMENT FOR DURABLE MEDICAL EQUIPMENT; COMPETITIVE
ACQUISITION OF CERTAIN ITEMS AND SERVICES.
(a) QUALITY ENHANCEMENT AND FRAUD REDUCTION-
(1) ESTABLISHMENT OF QUALITY STANDARDS
AND ACCREDITATION REQUIREMENTS FOR DURABLE MEDICAL EQUIPMENT SUPPLIERS- Section
1834(a) (42 U.S.C. 1395m(a)) is amended--
(A) by transferring paragraph
(17), as added by section 4551(c)(1) of the Balanced Budget Act of 1997
(111 Stat. 458), to the end of such section and redesignating such paragraph
as paragraph (19); and
(B) by adding at the end the
following new paragraph:
`(20) IDENTIFICATION OF QUALITY STANDARDS-
`(A) IN GENERAL- Subject to subparagraph (C), the Secretary shall
establish and implement quality standards for suppliers of items and
services described in subparagraph (D) to be applied by recognized
independent accreditation organizations (as designated under subparagraph
(B)) and with which such suppliers shall be required to comply in order
to--
`(i) furnish any such item or service for which payment is made
under this part; and
`(ii) receive or retain a provider or supplier number used to submit
claims for reimbursement for any such item or service for which payment
may be made under this title.
`(B) DESIGNATION OF INDEPENDENT ACCREDITATION ORGANIZATIONS- Not later
than the date that is 1 year after the date on which the Secretary
implements the quality standards under subparagraph (A), notwithstanding
section 1865(b), the Secretary shall designate and approve one or more
independent accreditation organizations for purposes of such
subparagraph.
`(C) QUALITY STANDARDS- The quality standards described in
subparagraph (A) may not be less stringent than the quality standards that
would otherwise apply if this paragraph did not apply and shall include
consumer services standards.
`(D) ITEMS AND SERVICES DESCRIBED- The items and services described in
this subparagraph are the following items and services, as the Secretary
determines appropriate:
`(i) Covered items (as defined in paragraph (13)) for which payment
may otherwise be made under this subsection.
`(ii) Prosthetic devices and orthotics and prosthetics described in
section 1834(h)(4).
`(iii) Items and services described in section
1842(s)(2).
`(E) IMPLEMENTATION- The Secretary may establish by program
instruction or otherwise the quality standards under this paragraph, after
consultation with representatives of relevant parties. Such standards
shall be applied prospectively and shall be published on the Internet
website of the Centers for Medicare & Medicaid Services.'.
(2) ESTABLISHMENT OF CLINICAL CONDITIONS
OF COVERAGE STANDARDS FOR ITEMS OF DURABLE MEDICAL EQUIPMENT- Section 1834(a)(1)
(42 U.S.C. 1395m(a)(1)) is amended by adding at the end the following new
subparagraph:
`(E) CLINICAL CONDITIONS FOR COVERAGE-
`(i) IN GENERAL- The Secretary shall establish standards for
clinical conditions for payment for covered items under this
subsection.
`(ii) REQUIREMENTS- The standards established under clause (i) shall
include the specification of types or classes of covered items that
require, as a condition of payment under this subsection, a face-to-face
examination of the individual by a physician (as defined in section
1861(r)(1)), a physician assistant, nurse practitioner, or a clinical
nurse specialist (as those terms are defined in section 1861(aa)(5)) and
a prescription for the item.
`(iii) PRIORITY OF ESTABLISHMENT OF STANDARDS- In establishing the
standards under this subparagraph, the Secretary shall first establish
standards for those covered items for which the Secretary determines
there has been a proliferation of use, consistent findings of charges
for covered items that are not delivered, or consistent findings of
falsification of documentation to provide for payment of such covered
items under this part.
`(iv) STANDARDS FOR POWER WHEELCHAIRS- Effective on the date of the
enactment of this subparagraph, in the case of a covered item consisting
of a motorized or power wheelchair for an individual, payment may not be
made for such covered item unless a physician (as defined in section
1861(r)(1)), a physician assistant, nurse practitioner, or a clinical
nurse specialist (as those terms are defined in section 1861(aa)(5)) has
conducted a face-to-face examination of the individual and written a
prescription for the item.
`(v) LIMITATION ON PAYMENT FOR COVERED ITEMS- Payment may not be
made for a covered item under this subsection unless the item meets any
standards established under this subparagraph for clinical condition of
coverage.'.
(b) COMPETITIVE ACQUISITION-
(1) 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--
`(i) shall be phased in among competitive acquisition areas in a
manner so that the competition under the programs occurs
in--
`(I) 10 of the largest metropolitan statistical areas in
2007;
`(II) 80 of the largest metropolitan statistical areas in 2009;
and
`(III) additional areas after 2009; and
`(ii) may be phased in first among the highest cost and highest
volume items and services or those items and services that the Secretary
determines have the largest savings potential.
`(C) WAIVER OF CERTAIN PROVISIONS- In carrying out the programs, the
Secretary may waive such provisions of the Federal Acquisition Regulation
as are necessary for the efficient implementation of this section, other
than provisions relating to confidentiality of information and such other
provisions as the Secretary determines appropriate.
`(2) ITEMS AND SERVICES DESCRIBED- The items and services referred to in
paragraph (1) are the following:
`(A) DURABLE MEDICAL EQUIPMENT AND MEDICAL SUPPLIES- Covered items (as
defined in section 1834(a)(13)) for which payment would otherwise be made
under section 1834(a), including items used in infusion and drugs (other
than inhalation drugs) and supplies used in conjunction with durable
medical equipment, but excluding class III devices under the Federal Food,
Drug, and Cosmetic Act.
`(B) OTHER EQUIPMENT AND SUPPLIES- Items and services described in
section 1842(s)(2)(D), other than parenteral nutrients, equipment, and
supplies.
`(C) OFF-THE-SHELF ORTHOTICS- Orthotics described in section
1861(s)(9) for which payment would otherwise be made under section 1834(h)
which require minimal self-adjustment for appropriate use and do not
require expertise in trimming, bending, molding, assembling, or
customizing to fit to the individual.
`(3) EXCEPTION AUTHORITY- In carrying out the programs under this
section, the Secretary may exempt--
`(A) 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
`(B) items and services for which the application of competitive
acquisition is not likely to result in significant savings.
`(4) SPECIAL RULE FOR CERTAIN RENTED ITEMS OF DURABLE MEDICAL EQUIPMENT
AND OXYGEN- In the case of a covered item for which payment is made on a
rental basis under section 1834(a) and in the case of payment for oxygen
under section 1834(a)(5), the Secretary shall establish a process by which
rental agreements for the covered items and supply arrangements with oxygen
suppliers entered into before the application of the competitive acquisition
program under this section for the item may be continued notwithstanding
this section. In the case of any such continuation, the supplier involved
shall provide for appropriate servicing and replacement, as required under
section 1834(a).
`(5) PHYSICIAN AUTHORIZATION-
`(A) IN GENERAL- With respect to items or services included within a
particular HCPCS code, the Secretary may establish a process for certain
items and services under which a physician may prescribe a particular
brand or mode of delivery of an item or service within such code if the
physician determines that use of the particular item or service would
avoid an adverse medical outcome on the individual, as determined by the
Secretary.
`(B) NO EFFECT ON PAYMENT AMOUNT- A prescription under subparagraph
(A) shall not affect the amount of payment otherwise applicable for the
item or service under the code involved.
`(6) APPLICATION- For each competitive acquisition area in which the
program is implemented under this subsection with respect to items and
services, the payment basis determined under the competition conducted under
subsection (b) shall be substituted for the payment basis otherwise applied
under section 1834(a), section 1834(h), or section 1842(s), as
appropriate.
`(b) PROGRAM REQUIREMENTS-
`(1) IN GENERAL- The Secretary shall conduct 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 acquisition area
pursuant to paragraph (1) to furnish such items or services unless the
Secretary finds all of the following:
`(i) The entity meets applicable quality standards specified by the
Secretary under section 1834(a)(20).
`(ii) The entity meets applicable financial standards specified by
the Secretary, taking into account the needs of small
providers.
`(iii) The total amounts to be paid to contractors in a competitive
acquisition area are expected to be less than the total amounts that
would otherwise be paid.
`(iv) Access of individuals to a choice of multiple suppliers in the
area is maintained.
`(B) TIMELY IMPLEMENTATION OF PROGRAM- Any delay in the implementation
of quality standards under section 1834(a)(20) or delay in the receipt of
advice from the program oversight committee established under subsection
(c) shall not delay the implementation of the competitive acquisition
program under this section.
`(3) CONTENTS OF CONTRACT-
`(A) IN GENERAL- A contract entered into with an entity under the
competition conducted pursuant to paragraph (1) is subject to terms and
conditions that the Secretary may specify.
`(B) TERM OF CONTRACTS- The Secretary shall recompete 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 of bidding
entities to furnish items or services in sufficient quantities to meet the
anticipated needs of individuals 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 multiple
entities submitting bids in each area for an item or service.
`(5) PAYMENT-
`(A) IN GENERAL- Payment under this part for competitively priced
items and services described in subsection (a)(2) shall be based on bids
submitted and accepted under this section for such items and services.
Based on such bids the Secretary shall determine a single payment amount
for each item or service in each competitive acquisition area.
`(B) REDUCED BENEFICIARY COST-SHARING-
`(i) APPLICATION OF COINSURANCE- Payment under this section for
items and services shall be in an amount equal to 80 percent of the
payment basis described in subparagraph (A).
`(ii) APPLICATION OF DEDUCTIBLE- Before applying clause (i), the
individual shall be required to meet the deductible described in section
1833(b).
`(C) PAYMENT ON ASSIGNMENT-RELATED BASIS- Payment for any item or
service furnished by the entity may only be made under this section on an
assignment-related basis.
`(D) CONSTRUCTION- Nothing in this section shall be construed as
precluding the use of an advanced beneficiary notice with respect to a
competitively priced item and service.
`(6) PARTICIPATING CONTRACTORS-
`(A) IN GENERAL- Except as provided in subsection (a)(4), 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 section unless--
`(i) the contractor has submitted a bid for such items and services
under this section; and
`(ii) the Secretary has awarded a contract to the contractor for
such items and services under this section.
`(B) BID DEFINED- In this section, the term `bid' means an offer to
furnish an item or service for a particular price and time period that
includes, where appropriate, any services that are attendant to the
furnishing of the item or service.
`(C) RULES FOR MERGERS AND ACQUISITIONS- In applying subparagraph (A)
to a contractor, the contractor shall include a successor entity in the
case of a merger or acquisition, if the successor entity assumes such
contract along with any liabilities that may have occurred
thereunder.
`(D) PROTECTION OF SMALL SUPPLIERS- In developing procedures relating
to bids and the awarding of contracts under this section, the Secretary
shall take appropriate steps to ensure that small suppliers of items and
services have an opportunity to be considered for participation in the
program under this section.
`(7) CONSIDERATION IN DETERMINING CATEGORIES FOR BIDS- The Secretary may
consider the clinical efficiency and value of specific items within codes,
including whether some items have a greater therapeutic advantage to
individuals.
`(8) AUTHORITY TO CONTRACT FOR EDUCATION, MONITORING, OUTREACH, AND
COMPLAINT SERVICES- The Secretary may enter into contracts with appropriate
entities to address complaints from individuals who receive items and
services from an entity with a contract under this section and to conduct
appropriate education of and outreach to such individuals and monitoring
quality of services with respect to the program.
`(9) AUTHORITY TO CONTRACT FOR IMPLEMENTATION- The Secretary may
contract with appropriate entities to implement the competitive bidding
program under this section.
`(10) NO ADMINISTRATIVE OR JUDICIAL REVIEW- There shall be no
administrative or judicial review under section 1869, section 1878, or
otherwise, of--
`(A) the establishment of payment amounts under paragraph
(5);
`(B) the awarding of contracts under this section;
`(C) the designation of competitive acquisition areas under subsection
(a)(1)(A);
`(D) the phased-in implementation under subsection (a)(1)(B);
`(E) the selection of items and services for competitive acquisition
under subsection (a)(2); or
`(F) the bidding structure and number of contractors selected under
this section.
`(c) PROGRAM ADVISORY AND OVERSIGHT COMMITTEE-
`(1) ESTABLISHMENT- The Secretary shall establish a Program Advisory and
Oversight Committee (hereinafter in this section referred to as the
`Committee').
`(2) MEMBERSHIP; TERMS- The Committee shall consist of such members as
the Secretary may appoint who shall serve for such term as the Secretary may
specify.
`(3) DUTIES-
`(A) ADVICE- The Committee shall provide advice to the Secretary with
respect to the following functions:
`(i) The implementation of the program under this
section.
`(ii) The establishment of financial standards for purposes of
subsection (b)(2)(A)(ii).
`(iii) The establishment of requirements for collection of data for
the efficient management of the program.
`(iv) The development of proposals for efficient interaction among
manufacturers, providers of services, suppliers (as defined in section
1861(d)), and individuals.
`(v) The establishment of quality standards under section
1834(a)(20).
`(B) ADDITIONAL DUTIES- The Committee shall perform such additional
functions to assist the Secretary in carrying out this section as the
Secretary may specify.
`(4) INAPPLICABILITY OF FACA- The provisions of the Federal Advisory
Committee Act (5 U.S.C. App.) shall not apply.
`(5) TERMINATION- The Committee shall terminate on December 31,
2009.
`(d) REPORT- Not later than July 1, 2009, the Secretary shall submit to
Congress a report on the programs under this section. The report shall include
information on savings, reductions in cost-sharing, access to and quality of
items and services, and satisfaction of individuals.
`(e) DEMONSTRATION PROJECT FOR CLINICAL LABORATORY SERVICES-
`(1) IN GENERAL- The Secretary shall conduct a demonstration project on
the application of competitive acquisition under this section to clinical
diagnostic laboratory tests--
`(A) for which payment would otherwise be made under section 1833(h)
(other than for pap smear laboratory tests under paragraph (7) of such
section) or section 1834(d)(1) (relating to colorectal cancer screening
tests); and
`(B) which are furnished by entities that did not have a face-to-face
encounter with the individual.
`(2) TERMS AND CONDITIONS-
`(A) IN GENERAL- Except as provided in subparagraph (B), such project
shall be under the same conditions as are applicable to items and services
described in subsection (a)(2), excluding subsection (b)(5)(B) and other
conditions as the Secretary determines to be appropriate.
`(B) APPLICATION OF CLIA QUALITY STANDARDS- The quality standards
established by the Secretary under section 353 of the Public Health
Service Act for clinical diagnostic laboratory tests shall apply to such
tests under the demonstration project under this section in lieu of
quality standards described in subsection (b)(2)(A)(i).
`(3) REPORT- The Secretary shall submit to Congress--
`(A) an initial report on the project not later than December 31,
2005; and
`(B) such progress and final reports on the project after such date as
the Secretary determines appropriate.'.
(2) CONFORMING AMENDMENTS- Section
1833(a)(1) (42 U.S.C. 1395l(a)(1)) is amended--
(A) by striking `and (U)' and
inserting `(U)';
(B) by inserting before the
semicolon at the end the following: `, and (V) notwithstanding subparagraphs
(I) (relating to durable medical equipment), (M) (relating to prosthetic
devices and orthotics and prosthetics), and (Q) (relating to 1842(s) items),
with respect to competitively priced items and services (described in section
1847(a)(2)) that are furnished in a competitive area, the amounts paid shall
be the amounts described in section 1847(b)(5)'; and
(C) in clause (D)--
(i) by striking `or
(ii)' and inserting `(ii)'; and
(ii) by adding at
the end the following: `or (iii) on the basis of a rate established under
a demonstration project under section 1847(e), the amount paid shall be
equal to 100 percent of such rate,'.
(3) GAO REPORT ON IMPACT OF COMPETITIVE
ACQUISITION ON SUPPLIERS-
(A) STUDY- The Comptroller
General of the United States shall conduct a study on the impact of competitive
acquisition of durable medical equipment under section 1847 of the Social
Security Act, as amended by paragraph (1), on suppliers and manufacturers
of such equipment and on patients. Such study shall specifically examine
the impact of such competitive acquisition on access to, and quality of,
such equipment and service related to such equipment.
(B) REPORT- Not later than
January 1, 2009, the Comptroller General shall submit to Congress a report
on the study conducted under subparagraph (A) and shall include in the report
such recommendations as the Comptroller General determines appropriate.
(c) TRANSITIONAL FREEZE-
(1) DME-
(A) IN GENERAL- Section 1834(a)(14)
(42 U.S.C. 1395m(a)(14)) is amended--
(i) in subparagraph
(E), by striking `and' at the end;
(ii) in subparagraph
(F)--
(I) by striking
`a subsequent year' and inserting `2003'; and
(II) by
striking `the previous year.' and inserting `2002;'; and
(iii) by adding
at the end the following new subparagraphs:
`(G) for 2004 through 2006--
`(i) subject to clause (ii), in the case of class III medical
devices described in section 513(a)(1)(C) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360(c)(1)(C)), the percentage increase described
in subparagraph (B) for the year involved; and
`(ii) in the case of covered items not described in clause (i), 0
percentage points;
`(H) for 2007--
`(i) subject to clause (ii), in the case of class III medical
devices described in section 513(a)(1)(C) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360(c)(1)(C)), the percentage change determined
by the Secretary to be appropriate taking into account recommendations
contained in the report of the Comptroller General of the United States
under section 302(c)(1)(B) of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003; and
`(ii) in the case of covered items not described in clause (i), 0
percentage points; and
`(I) for 2008--
`(i) subject to clause (ii), in the case of class III medical
devices described in section 513(a)(1)(C) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360(c)(1)(C)), the percentage increase described
in subparagraph (B) (as applied to the payment amount for 2007
determined after the application of the percentage change under
subparagraph (H)(i)); and
`(ii) in the case of covered items not described in clause (i), 0
percentage points; and
`(J) for a subsequent year, the percentage increase in the consumer
price index for all urban consumers (U.S. urban average) for the 12-month
period ending with June of the previous year.'.
(B) GAO REPORT ON CLASS III
MEDICAL DEVICES- Not later than March 1, 2006, the Comptroller General of
the United States shall submit to Congress, and transmit to the Secretary,
a report containing recommendations on the appropriate update percentage
under section 1834(a)(14) of the Social Security Act (42 U.S.C. 1395m(a)(14))
for class III medical devices described in section 513(a)(1)(C) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 360(a)(1)(C)) furnished to medicare
beneficiaries during 2007 and 2008.
(2) PAYMENT RULE FOR SPECIFIED ITEMS-
Section 1834(a) (42 U.S.C. 1395m(a)), as amended by subsection (a), is further
amended by adding at the end the following new paragraph:
`(21) SPECIAL PAYMENT RULE FOR SPECIFIED ITEMS AND SUPPLIES-
`(A) IN GENERAL- Notwithstanding the preceding provisions of this
subsection, for specified items and supplies (described in subparagraph
(B)) furnished during 2005, the payment amount otherwise determined under
this subsection for such specified items and supplies shall be reduced by
the percentage difference between--
`(i) the amount of payment otherwise determined for the specified
item or supply under this subsection for 2002, and
`(ii) the amount of payment for the specified item or supply under
chapter 89 of title 5, United States Code, as identified in the column
entitled `Median FEHP Price' in the table entitled `SUMMARY OF MEDICARE
PRICES COMPARED TO VA, MEDICAID, RETAIL, AND FEHP PRICES FOR 16 ITEMS'
included in the Testimony of the Inspector General before the Senate
Committee on Appropriations, June 12, 2002, or any subsequent report by
the Inspector General.
`(B) SPECIFIED ITEM OR SUPPLY DESCRIBED- For purposes of subparagraph
(A), a specified item or supply means oxygen and oxygen equipment,
standard wheelchairs (including standard power wheelchairs), nebulizers,
diabetic supplies consisting of lancets and testing strips, hospital beds,
and air mattresses, but only if the HCPCS code for the item or supply is
identified in a table referred to in subparagraph (A)(ii).
`(C) APPLICATION OF UPDATE TO SPECIAL PAYMENT AMOUNT- The covered item
update under paragraph (14) for specified items and supplies for 2006 and
each subsequent year shall be applied to the payment amount under
subparagraph (A) unless payment is made for such items and supplies under
section 1847.'.
(3) PROSTHETIC DEVICES AND ORTHOTICS
AND PROSTHETICS- Section 1834(h)(4)(A) (42 U.S.C. 1395m(h)(4)(A)) is amended--
(A) in clause (vii), by striking
`and' at the end;
(B) in clause (viii), by striking
`a subsequent year' and inserting `2003'; and
(C) by adding at the end the
following new clauses:
`(ix) for 2004, 2005, and 2006, 0 percent; and
`(x) for a subsequent year, the percentage increase in the consumer
price index for all urban consumers (United States city average) for the
12-month period ending with June of the previous year;'.
(d) CONFORMING AMENDMENTS-
(1) DURABLE MEDICAL EQUIPMENT; LIMITATION
OF INHERENT REASONABLENESS AUTHORITY- Section 1834(a) (42 U.S.C. 1395m(a))
is amended--
(A) in paragraph (1)(B), by
striking `The payment basis' and inserting `Subject to subparagraph (F)(i),
the payment basis';
(B) in paragraph (1)(C), by
striking `This subsection' and inserting `Subject to subparagraph (F)(ii),
this subsection';
(C) by adding at the end of
paragraph (1) the following new subparagraph:
`(F) APPLICATION OF COMPETITIVE ACQUISITION; LIMITATION OF INHERENT
REASONABLENESS AUTHORITY- In the case of covered items furnished on or
after January 1, 2009, that are included in a competitive acquisition
program in a competitive acquisition area under section 1847(a)--
`(i) the payment basis under this subsection for such items and
services furnished in such area shall be the payment basis determined
under such competitive acquisition program; and
`(ii) the Secretary may use information on the payment determined
under such competitive acquisition programs to adjust the payment amount
otherwise recognized under subparagraph (B)(ii) for an area that is not
a competitive acquisition area under section 1847 and in the case of
such adjustment, paragraph (10)(B) shall not be applied.';
and
(D) in paragraph (10)(B), by
inserting `in an area and with respect to covered items and services for
which the Secretary does not make a payment amount adjustment under paragraph
(1)(F)' after `under this subsection'.
(2) OFF-THE-SHELF ORTHOTICS; LIMITATION
OF INHERENT REASONABLENESS AUTHORITY- Section 1834(h) (42 U.S.C. 1395m(h))
is amended--
(A) in paragraph (1)(B), by
striking `and (E)' and inserting `, (E), and (H)(i)';
(B) in paragraph (1)(D), by
striking `This subsection' and inserting `Subject to subparagraph (H)(ii),
this subsection'; and
(C) by adding at the end of
paragraph (1) the following new subparagraph:
`(H) APPLICATION OF COMPETITIVE ACQUISITION TO ORTHOTICS; LIMITATION
OF INHERENT REASONABLENESS AUTHORITY- In the case of orthotics described
in paragraph (2)(C) of section 1847(a) furnished on or after January 1,
2009, that are included in a competitive acquisition program in a
competitive acquisition area under such section--
`(i) the payment basis under this subsection for such orthotics
furnished in such area shall be the payment basis determined under such
competitive acquisition program; and
`(ii) the Secretary may use information on the payment determined
under such competitive acquisition programs to adjust the payment amount
otherwise recognized under subparagraph (B)(ii) for an area that is not
a competitive acquisition area under section 1847, and in the case of
such adjustment, paragraphs (8) and (9) of section 1842(b) shall not be
applied.'.
(3) OTHER ITEMS AND SERVICES; LIMITATION
OF INHERENT REASONABLENESS AUTHORITY- Section 1842(s) (42 U.S.C. 1395u(s))
is amended--
(A) in the first sentence of
paragraph (1), by striking `The Secretary' and inserting `Subject to paragraph
(3), the Secretary'; and
(B) by adding at the end the
following new paragraph:
`(3) In the case of items and services described in paragraph (2)(D) that
are included in a competitive acquisition program in a competitive acquisition
area under section 1847(a)--
`(A) the payment basis under this subsection for such items and services
furnished in such area shall be the payment basis determined under such
competitive acquisition program; and
`(B) the Secretary may use information on the payment determined under
such competitive acquisition programs to adjust the payment amount otherwise
applicable under paragraph (1) for an area that is not a competitive
acquisition area under section 1847, and in the case of such adjustment,
paragraphs (8) and (9) of section 1842(b) shall not be applied.'.
(e) REPORT ON ACTIVITIES OF SUPPLIERS- The
Inspector General of the Department of Health and Human Services shall conduct
a study to determine the extent to which (if any) suppliers of covered items
of durable medical equipment that are subject to the competitive acquisition
program under section 1847 of the Social Security Act, as amended by subsection
(a), are soliciting physicians to prescribe certain brands or modes of delivery
of covered items based on profitability. Not later than July 1, 2009, the Inspector
General shall submit to Congress a report on such study.
