Laws: Cases and Codes : U.S. Code : Title 42 : Section 1395l
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U.S. Code as of:
01/19/04
Section 1395l. Payment of benefits
(a) Amounts
Except as provided in section 1395mm of this title, and subject
to the succeeding provisions of this section, there shall be paid
from the Federal Supplementary Medical Insurance Trust Fund, in the
case of each individual who is covered under the insurance program
established by this part and incurs expenses for services with
respect to which benefits are payable under this part, amounts
equal to -
(1) in the case of services described in section 1395k(a)(1) of
this title - 80 percent of the reasonable charges for the
services; except that (A) an organization which provides medical
and other health services (or arranges for their availability) on
a prepayment basis (and either is sponsored by a union or
employer, or does not provide, or arrange for the provision of,
any inpatient hospital services) may elect to be paid 80 percent
of the reasonable cost of services for which payment may be made
under this part on behalf of individuals enrolled in such
organization in lieu of 80 percent of the reasonable charges for
such services if the organization undertakes to charge such
individuals no more than 20 percent of such reasonable cost plus
any amounts payable by them as a result of subsection (b) of this
section, (B) with respect to items and services described in
section 1395x(s)(10)(A) of this title, the amounts paid shall be
100 percent of the reasonable charges for such items and
services, (C) with respect to expenses incurred for those
physicians' services for which payment may be made under this
part that are described in section 1395y(a)(4) of this title, the
amounts paid shall be subject to such limitations as may be
prescribed by regulations, (D) with respect to clinical
diagnostic laboratory tests for which payment is made under this
part (i) on the basis of a fee schedule under subsection (h)(1)
of this section or section 1395m(d)(1) of this title, the amount
paid shall be equal to 80 percent (or 100 percent, in the case of
such tests for which payment is made on an assignment-related
basis) of the lesser of the amount determined under such fee
schedule, the limitation amount for that test determined under
subsection (h)(4)(B) of this section, or the amount of the
charges billed for the tests, (ii) on the basis of a negotiated
rate established under subsection (h)(6) of this section, the
amount paid shall be equal to 100 percent of such negotiated
rate, or (iii) on the basis of a rate established under a
demonstration project under section 1395w-3(e) of this title, the
amount paid shall be equal to 100 percent of such rate, (E) with
respect to services furnished to individuals who have been
determined to have end stage renal disease, the amounts paid
shall be determined subject to the provisions of section 1395rr
of this title, (F) with respect to clinical social worker
services under section 1395x(s)(2)(N) of this title, the amounts
paid shall be 80 percent of the lesser of (i) the actual charge
for the services or (ii) 75 percent of the amount determined for
payment of a psychologist under clause (L), (G) with respect to
facility services furnished in connection with a surgical
procedure specified pursuant to subsection (i)(1)(A) of this
section and furnished to an individual in an ambulatory surgical
center described in such subsection, for services furnished
beginning with the implementation date of a revised payment
system for such services in such facilities specified in
subsection (i)(2)(D) of this section, the amounts paid shall be
80 percent of the lesser of the actual charge for the services or
the amount determined by the Secretary under such revised payment
system, (H) with respect to services of a certified registered
nurse anesthetist under section 1395x(s)(11) of this title, the
amounts paid shall be 80 percent of the least of the actual
charge, the prevailing charge that would be recognized (or, for
services furnished on or after January 1, 1992, the fee schedule
amount provided under section 1395w-4 of this title) if the
services had been performed by an anesthesiologist, or the fee
schedule for such services established by the Secretary in
accordance with subsection (l) of this section, (I) with respect
to covered items (described in section 1395m(a)(13) of this
title), the amounts paid shall be the amounts described in
section 1395m(a)(1) of this title, and )1(! (J) with respect to
expenses incurred for radiologist services (as defined in section
1395m(b)(6) of this title), subject to section 1395w-4 of this
title, the amounts paid shall be 80 percent of the lesser of the
actual charge for the services or the amount provided under the
fee schedule established under section 1395m(b) of this title,
(K) with respect to certified nurse-midwife services under
section 1395x(s)(2)(L) of this title, the amounts paid shall be
80 percent of the lesser of the actual charge for the services or
the amount determined by a fee schedule established by the
Secretary for the purposes of this subparagraph (but in no event
shall such fee schedule exceed 65 percent of the prevailing
charge that would be allowed for the same service performed by a
physician, or, for services furnished on or after January 1,
1992, 65 percent of the fee schedule amount provided under
section 1395w-4 of this title for the same service performed by a
physician), (L) with respect to qualified psychologist services
under section 1395x(s)(2)(M) of this title, the amounts paid
shall be 80 percent of the lesser of the actual charge for the
services or the amount determined by a fee schedule established
by the Secretary for the purposes of this subparagraph, (M) with
respect to prosthetic devices and orthotics and prosthetics (as
defined in section 1395m(h)(4) of this title), the amounts paid
shall be the amounts described in section 1395m(h)(1) of this
title, (N) with respect to expenses incurred for physicians'
services (as defined in section 1395w-4(j)(3) of this title), the
amounts paid shall be 80 percent of the payment basis determined
under section 1395w-4(a)(1) of this title, (O) with respect to
services described in section 1395x(s)(2)(K) of this title
(relating to services furnished by physician assistants, nurse
practitioners, or clinic nurse specialists), the amounts paid
shall be equal to 80 percent of (i) the lesser of the actual
charge or 85 percent of the fee schedule amount provided under
section 1395w-4 of this title, or (ii) in the case of services as
an assistant at surgery, the lesser of the actual charge or 85
percent of the amount that would otherwise be recognized if
performed by a physician who is serving as an assistant at
surgery, (P) with respect to surgical dressings, the amounts paid
shall be the amounts determined under section 1395m(i) of this
title, (Q) with respect to items or services for which fee
schedules are established pursuant to section 1395u(s) of this
title, the amounts paid shall be 80 percent of the lesser of the
actual charge or the fee schedule established in such section,
(R) with respect to ambulance services, (i) the amounts paid
shall be 80 percent of the lesser of the actual charge for the
services or the amount determined by a fee schedule established
by the Secretary under section 1395m(l) of this title and (ii)
with respect to ambulance services described in section
1395m(l)(8) of this title, the amounts paid shall be the amounts
determined under section 1395m(g) of this title for outpatient
critical access hospital services, (S) with respect to drugs and
biologicals (including intravenous immune globulin (as defined in
section 1395x(zz) of this title)) not paid on a cost or
prospective payment basis as otherwise provided in this part
(other than items and services described in subparagraph (B)),
the amounts paid shall be 80 percent of the lesser of the actual
charge or the payment amount established in section 1395u(o) of
this title (or, if applicable, under section 1395w-3, 1395w-3a,
or 1395w-3b of this title), (T) with respect to medical nutrition
therapy services (as defined in section 1395x(vv) of this title),
the amount paid shall be 80 percent of the lesser of the actual
charge for the services or 85 percent of the amount determined
under the fee schedule established under section 1395w-4(b) of
this title for the same services if furnished by a physician, (U)
with respect to facility fees described in section 1395m(m)(2)(B)
of this title, the amounts paid shall be 80 percent of the lesser
of the actual charge or the amounts specified in such section,
and (V) notwithstanding subparagraphs (I) (relating to durable
medical equipment), (M) (relating to prosthetic devices and
orthotics and prosthetics), and (Q) (relating to 1395u(s) items),
with respect to competitively priced items and services
(described in section 1395w-3(a)(2) of this title) that are
furnished in a competitive area, the amounts paid shall be the
amounts described in section 1395w-3(b)(5) of this title;
(2) in the case of services described in section 1395k(a)(2) of
this title (except those services described in subparagraphs (C),
(D), (E), (F), (G), (H), and (I) of such section and unless
otherwise specified in section 1395rr of this title) -
(A) with respect to home health services (other than a
covered osteoporosis drug) (as defined in section 1395x(kk) of
this title), the amount determined under the prospective
payment system under section 1395fff of this title;
(B) with respect to other items and services (except those
described in subparagraph (C), (D), or (E) of this paragraph
and except as may be provided in section 1395ww of this title
or section 1395yy(e)(9) of this title) -
(i) furnished before January 1, 1999, the lesser of -
(I) the reasonable cost of such services, as determined
under section 1395x(v) of this title, or
(II) the customary charges with respect to such services,
less the amount a provider may charge as described in clause
(ii) of section 1395cc(a)(2)(A) of this title, but in no case
may the payment for such other services exceed 80 percent of
such reasonable cost, or
(ii) if such services are furnished before January 1, 1999,
by a public provider of services, or by another provider
which demonstrates to the satisfaction of the Secretary that
a significant portion of its patients are low-income (and
requests that payment be made under this clause), free of
charge or at nominal charges to the public, 80 percent of the
amount determined in accordance with section 1395f(b)(2) of
this title, or
(iii) if such services are furnished on or after January 1,
1999, the amount determined under subsection (t) of this
section, or
(iv) if (and for so long as) the conditions described in
section 1395f(b)(3) of this title are met, the amounts
determined under the reimbursement system described in such
section;
(C) with respect to services described in the second sentence
of section 1395x(p) of this title, 80 percent of the reasonable
charges for such services;
(D) with respect to clinical diagnostic laboratory tests for
which payment is made under this part (i) on the basis of a fee
schedule determined under subsection (h)(1) of this section or
section 1395m(d)(1) of this title, the amount paid shall be
equal to 80 percent (or 100 percent, in the case of such tests
for which payment is made on an assignment-related basis or to
a provider having an agreement under section 1395cc of this
title) of the lesser of the amount determined under such fee
schedule, the limitation amount for that test determined under
subsection (h)(4)(B) of this section, or the amount of the
charges billed for the tests, or (ii) on the basis of a
negotiated rate established under subsection (h)(6) of this
section, the amount paid shall be equal to 100 percent of such
negotiated rate for such tests;
(E) with respect to -
(i) outpatient hospital radiology services (including
diagnostic and therapeutic radiology, nuclear medicine and
CAT scan procedures, magnetic resonance imaging, and
ultrasound and other imaging services, but excluding
screening mammography and, for services furnished on or after
January 1, 2005, diagnostic mammography), and
(ii) effective for procedures performed on or after October
1, 1989, diagnostic procedures (as defined by the Secretary)
described in section 1395x(s)(3) of this title (other than
diagnostic x-ray tests and diagnostic laboratory tests),
the amount determined under subsection (n) of this section or,
for services or procedures performed on or after January 1,
1999, subsection (t) of this section;
(F) with respect to a covered osteoporosis drug (as defined
in section 1395x(kk) of this title) furnished by a home health
agency, 80 percent of the reasonable cost of such service, as
determined under section 1395x(v) of this title; and
(G) with respect to items and services described in section
1395x(s)(10)(A) of this title, the lesser of -
(i) the reasonable cost of such services, as determined
under section 1395x(v) of this title, or
(ii) the customary charges with respect to such services,
or, if such services are furnished by a public provider of
services, or by another provider which demonstrates to the
satisfaction of the Secretary that a significant portion of its
patients are low-income (and requests that payment be made
under this provision), free of charge or at nominal charges to
the public, the amount determined in accordance with section
1395f(b)(2) of this title;
(3) in the case of services described in section 1395k(a)(2)(D)
of this title, the costs which are reasonable and related to the
cost of furnishing such services or which are based on such other
tests of reasonableness as the Secretary may prescribe in
regulations, including those authorized under section
1395x(v)(1)(A) of this title, less the amount a provider may
charge as described in clause (ii) of section 1395cc(a)(2)(A) of
this title, but in no case may the payment for such services
(other than for items and services described in section
1395x(s)(10)(A) of this title) exceed 80 percent of such costs;
(4) in the case of facility services described in section
1395k(a)(2)(F) of this title, and outpatient hospital facility
services furnished in connection with surgical procedures
specified by the Secretary pursuant to subsection (i)(1)(A) of
this section, the applicable amount as determined under paragraph
(2) or (3) of subsection (i) of this section or subsection (t) of
this section;
(5) in the case of covered items (described in section
1395m(a)(13) of this title) the amounts described in section
1395m(a)(1) of this title;
(6) in the case of outpatient critical access hospital
services, the amounts described in section 1395m(g) of this
title;
(7) in the case of prosthetic devices and orthotics and
prosthetics (as described in section 1395m(h)(4) of this title),
the amounts described in section 1395m(h) of this title;
(8) in the case of -
(A) outpatient physical therapy services (which includes
outpatient speech-language pathology services) and outpatient
occupational therapy services furnished -
(i) by a rehabilitation agency, public health agency,
clinic, comprehensive outpatient rehabilitation facility, or
skilled nursing facility,
(ii) by a home health agency to an individual who is not
homebound, or
(iii) by another entity under an arrangement with an entity
described in clause (i) or (ii); and
(B) outpatient physical therapy services (which includes
outpatient speech-language pathology services) and outpatient
occupational therapy services furnished -
(i) by a hospital to an outpatient or to a hospital
inpatient who is entitled to benefits under part A of this
subchapter but has exhausted benefits for inpatient hospital
services during a spell of illness or is not so entitled to
benefits under part A of this subchapter, or
(ii) by another entity under an arrangement with a hospital
described in clause (i),
the amounts described in section 1395m(k) of this title; and
(9) in the case of services described in section 1395k(a)(2)(E)
of this title that are not described in paragraph (8), the
amounts described in section 1395m(k) of this title.
(b) Deductible provision
Before applying subsection (a) of this section with respect to
expenses incurred by an individual during any calendar year, the
total amount of the expenses incurred by such individual during
such year (which would, except for this subsection, constitute
incurred expenses from which benefits payable under subsection (a)
of this section are determinable) shall be reduced by a deductible
of $75 for calendar years before 1991, $100 for 1991 through 2004,
$110 for 2005, and for a subsequent year the amount of such
deductible for the previous year increased by the annual percentage
increase in the monthly actuarial rate under section 1395r(a)(1) of
this title ending with such subsequent year (rounded to the nearest
$1); except that (1) such total amount shall not include expenses
incurred for items and services described in section
1395x(s)(10)(A) of this title, (2) such deductible shall not apply
with respect to home health services (other than a covered
osteoporosis drug (as defined in section 1395x(kk) of this title)),
(3) such deductible shall not apply with respect to clinical
diagnostic laboratory tests for which payment is made under this
part (A) under subsection (a)(1)(D)(i) or (a)(2)(D)(i) of this
section on an assignment-related basis, or to a provider having an
agreement under section 1395cc of this title, or (B) on the basis
of a negotiated rate determined under subsection (h)(6) of this
section, (4) such deductible shall not apply to Federally qualified
health center services, (5) such deductible shall not apply with
respect to screening mammography (as described in section 1395x(jj)
of this title), and (6) such deductible shall not apply with
respect to screening pap smear and screening pelvic exam (as
described in section 1395x(nn) of this title). The total amount of
the expenses incurred by an individual as determined under the
preceding sentence shall, after the reduction specified in such
sentence, be further reduced by an amount equal to the expenses
incurred for the first three pints of whole blood (or equivalent
quantities of packed red blood cells, as defined under regulations)
furnished to the individual during the calendar year, except that
such deductible for such blood shall in accordance with regulations
be appropriately reduced to the extent that there has been a
replacement of such blood (or equivalent quantities of packed red
blood cells, as so defined); and for such purposes blood (or
equivalent quantities of packed red blood cells, as so defined)
furnished such individual shall be deemed replaced when the
institution or other person furnishing such blood (or such
equivalent quantities of packed red blood cells, as so defined) is
given one pint of blood for each pint of blood (or equivalent
quantities of packed red blood cells, as so defined) furnished such
individual with respect to which a deduction is made under this
sentence. The deductible under the previous sentence for blood or
blood cells furnished an individual in a year shall be reduced to
the extent that a deductible has been imposed under section
1395e(a)(2) of this title to blood or blood cells furnished the
individual in the year.
(c) Mental disorders
Notwithstanding any other provision of this part, with respect to
expenses incurred in any calendar year in connection with the
treatment of mental, psychoneurotic, and personality disorders of
an individual who is not an inpatient of a hospital at the time
such expenses are incurred, there shall be considered as incurred
expenses for purposes of subsections (a) and (b) of this section
only 62 1/2 percent of such expenses. For purposes of this
subsection, the term "treatment" does not include brief office
visits (as defined by the Secretary) for the sole purpose of
monitoring or changing drug prescriptions used in the treatment of
such disorders or partial hospitalization services that are not
directly provided by a physician.
(d) Nonduplication of payments
No payment may be made under this part with respect to any
services furnished an individual to the extent that such individual
is entitled (or would be entitled except for section 1395e of this
title) to have payment made with respect to such services under
part A of this subchapter.
(e) Information for determination of amounts due
No payment shall be made to any provider of services or other
person under this part unless there has been furnished such
information as may be necessary in order to determine the amounts
due such provider or other person under this part for the period
with respect to which the amounts are being paid or for any prior
period.
(f) Maximum rate of payment per visit for independent rural health
clinics
In establishing limits under subsection (a) of this section on
payment for rural health clinic services provided by rural health
clinics (other than such clinics in hospitals with less than 50
beds), the Secretary shall establish such limit, for services
provided -
(1) in 1988, after March 31, at $46 per visit, and
(2) in a subsequent year, at the limit established under this
subsection for the previous year increased by the percentage
increase in the MEI (as defined in section 1395u(i)(3) of this
title) applicable to primary care services (as defined in section
1395u(i)(4) of this title) furnished as of the first day of that
year.
(g) Physical therapy services
(1) Subject to paragraph (4), in the case of physical therapy
services of the type described in section 1395x(p) of this title,
but not described in subsection (a)(8)(B) of this section, and
physical therapy services of such type which are furnished by a
physician or as incident to physicians' services, with respect to
expenses incurred in any calendar year, no more than the amount
specified in paragraph (2) for the year shall be considered as
incurred expenses for purposes of subsections (a) and (b) of this
section.
(2) The amount specified in this paragraph -
(A) for 1999, 2000, and 2001, is $1,500, and
(B) for a subsequent year is the amount specified in this
paragraph for the preceding year increased by the percentage
increase in the MEI (as defined in section 1395u(i)(3) of this
title) for such subsequent year;
except that if an increase under subparagraph (B) for a year is not
a multiple of $10, it shall be rounded to the nearest multiple of
$10.
(3) Subject to paragraph (4), in the case of occupational therapy
services (of the type that are described in section 1395x(p) of
this title (but not described in subsection (a)(8)(B) of this
section) through the operation of section 1395x(g) of this title
and of such type which are furnished by a physician or as incident
to physicians' services), with respect to expenses incurred in any
calendar year, no more than the amount specified in paragraph (2)
for the year shall be considered as incurred expenses for purposes
of subsections (a) and (b) of this section.
(4) This subsection shall not apply to expenses incurred with
respect to services furnished during 2000, 2001, 2002, 2004, and
2005.
(h) Fee schedules for clinical diagnostic laboratory tests;
percentage of prevailing charge level; nominal fee for samples;
adjustments; recipients of payments; negotiated payment rate
(1)(A) Subject to section 1395m(d)(1) of this title, the
Secretary shall establish fee schedules for clinical diagnostic
laboratory tests (including prostate cancer screening tests under
section 1395x(oo) of this title consisting of prostate-specific
antigen blood tests) for which payment is made under this part,
other than such tests performed by a provider of services for an
inpatient of such provider.
(B) In the case of clinical diagnostic laboratory tests performed
by a physician or by a laboratory (other than tests performed by a
qualified hospital laboratory (as defined in subparagraph (D)) for
outpatients of such hospital), the fee schedules established under
subparagraph (A) shall be established on a regional, statewide, or
carrier service area basis (as the Secretary may determine to be
appropriate) for tests furnished on or after July 1, 1984.
(C) In the case of clinical diagnostic laboratory tests performed
by a qualified hospital laboratory (as defined in subparagraph (D))
for outpatients of such hospital, the fee schedules established
under subparagraph (A) shall be established on a regional,
statewide, or carrier service area basis (as the Secretary may
determine to be appropriate) for tests furnished on or after July
1, 1984.
(D) In this subsection, the term "qualified hospital laboratory"
means a hospital laboratory, in a sole community hospital (as
defined in section 1395ww(d)(5)(D)(iii) of this title), which
provides some clinical diagnostic laboratory tests 24 hours a day
in order to serve a hospital emergency room which is available to
provide services 24 hours a day and 7 days a week.
(2)(A)(i) Except as provided in paragraph (4), the Secretary
shall set the fee schedules at 60 percent (or, in the case of a
test performed by a qualified hospital laboratory (as defined in
paragraph (1)(D)) for outpatients of such hospital, 62 percent) of
the prevailing charge level determined pursuant to the third and
fourth sentences of section 1395u(b)(3) of this title for similar
clinical diagnostic laboratory tests for the applicable region,
State, or area for the 12-month period beginning July 1, 1984,
adjusted annually (to become effective on January 1 of each year)
by a percentage increase or decrease equal to the percentage
increase or decrease in the Consumer Price Index for All Urban
Consumers (United States city average), and subject to such other
adjustments as the Secretary determines are justified by
technological changes.
(ii) Notwithstanding clause (i) -
(I) any change in the fee schedules which would have become
effective under this subsection for tests furnished on or after
January 1, 1988, shall not be effective for tests furnished
during the 3-month period beginning on January 1, 1988,
(II) the Secretary shall not adjust the fee schedules under
clause (i) to take into account any increase in the consumer
price index for 1988,
(III) the annual adjustment in the fee schedules determined
under clause (i) for each of the years 1991, 1992, and 1993 shall
be 2 percent, and
(IV) the annual adjustment in the fee schedules determined
under clause (i) for each of the years 1994 and 1995, 1998
through 2002, and 2004 through 2008 shall be 0 percent.
(iii) In establishing fee schedules under clause (i) with respect
to automated tests and tests (other than cytopathology tests) which
before July 1, 1984, the Secretary made subject to a limit based on
lowest charge levels under the sixth sentence of section
1395u(b)(3) of this title performed after March 31, 1988, the
Secretary shall reduce by 8.3 percent the fee schedules otherwise
established for 1988, and such reduced fee schedules shall serve as
the base for 1989 and subsequent years.
(B) The Secretary may make further adjustments or exceptions to
the fee schedules to assure adequate reimbursement of (i) emergency
laboratory tests needed for the provision of bona fide emergency
services, and (ii) certain low volume high-cost tests where highly
sophisticated equipment or extremely skilled personnel are
necessary to assure quality.
(3) In addition to the amounts provided under the fee schedules,
the Secretary shall provide for and establish (A) a nominal fee to
cover the appropriate costs in collecting the sample on which a
clinical diagnostic laboratory test was performed and for which
payment is made under this part, except that not more than one such
fee may be provided under this paragraph with respect to samples
collected in the same encounter, and (B) a fee to cover the
transportation and personnel expenses for trained personnel to
travel to the location of an individual to collect the sample,
except that such a fee may be provided only with respect to an
individual who is homebound or an inpatient in an inpatient
facility (other than a hospital). In establishing a fee to cover
the transportation and personnel expenses for trained personnel to
travel to the location of an individual to collect a sample, the
Secretary shall provide a method for computing the fee based on the
number of miles traveled and the personnel costs associated with
the collection of each individual sample, but the Secretary shall
only be required to apply such method in the case of tests
furnished during the period beginning on April 1, 1989, and ending
on December 31, 1990, by a laboratory that establishes to the
satisfaction of the Secretary (based on data for the 12-month
period ending June 30, 1988) that (i) the laboratory is dependent
upon payments under this subchapter for at least 80 percent of its
collected revenues for clinical diagnostic laboratory tests, (ii)
at least 85 percent of its gross revenues for such tests are
attributable to tests performed with respect to individuals who are
homebound or who are residents in a nursing facility, and (iii) the
laboratory provided such tests for residents in nursing facilities
representing at least 20 percent of the number of such facilities
in the State in which the laboratory is located.
(4)(A) In establishing any fee schedule under this subsection,
the Secretary may provide for an adjustment to take into account,
with respect to the portion of the expenses of clinical diagnostic
laboratory tests attributable to wages, the relative difference
between a region's or local area's wage rates and the wage rate
presumed in the data on which the schedule is based.
(B) For purposes of subsections (a)(1)(D)(i) and (a)(2)(D)(i) of
this section, the limitation amount for a clinical diagnostic
laboratory test performed -
(i) on or after July 1, 1986, and before April 1, 1988, is
equal to 115 percent of the median of all the fee schedules
established for that test for that laboratory setting under
paragraph (1),
(ii) after March 31, 1988, and before January 1, 1990, is equal
to the median of all the fee schedules established for that test
for that laboratory setting under paragraph (1),
(iii) after December 31, 1989, and before January 1, 1991, is
equal to 93 percent of the median of all the fee schedules
established for that test for that laboratory setting under
paragraph (1),
(iv) after December 31, 1990, and before January 1, 1994, is
equal to 88 percent of such median,
(v) after December 31, 1993, and before January 1, 1995, is
equal to 84 percent of such median,
(vi) after December 31, 1994, and before January 1, 1996, is
equal to 80 percent of such median,
(vii) after December 31, 1995, and before January 1, 1998, is
equal to 76 percent of such median, and
(viii) after December 31, 1997, is equal to 74 percent of such
median (or 100 percent of such median in the case of a clinical
diagnostic laboratory test performed on or after January 1, 2001,
that the Secretary determines is a new test for which no
limitation amount has previously been established under this
subparagraph).
(5)(A) In the case of a bill or request for payment for a
clinical diagnostic laboratory test for which payment may otherwise
be made under this part on an assignment-related basis or under a
provider agreement under section 1395cc of this title, payment may
be made only to the person or entity which performed or supervised
the performance of such test; except that -
(i) if a physician performed or supervised the performance of
such test, payment may be made to another physician with whom he
shares his practice,
(ii) in the case of a test performed at the request of a
laboratory by another laboratory, payment may be made to the
referring laboratory but only if -
(I) the referring laboratory is located in, or is part of, a
rural hospital,
(II) the referring laboratory is wholly owned by the entity
performing such test, the referring laboratory wholly owns the
entity performing such test, or both the referring laboratory
and the entity performing such test are wholly-owned by a third
entity, or
(III) not more than 30 percent of the clinical diagnostic
laboratory tests for which such referring laboratory (but not
including a laboratory described in subclause (II)),)2(!
receives requests for testing during the year in which the test
is performed )2(! are performed by another laboratory, and
(iii) in the case of a clinical diagnostic laboratory test
provided under an arrangement (as defined in section 1395x(w)(1)
of this title) made by a hospital, critical access hospital, or
skilled nursing facility, payment shall be made to the hospital
or skilled nursing facility.
(B) In the case of such a bill or request for payment for a
clinical diagnostic laboratory test for which payment may otherwise
be made under this part, and which is not described in subparagraph
(A), payment may be made to the beneficiary only on the basis of
the itemized bill of the person or entity which performed or
supervised the performance of the test.
(C) Payment for a clinical diagnostic laboratory test, including
a test performed in a physician's office but excluding a test
performed by a rural health clinic may only be made on an
assignment-related basis or to a provider of services with an
agreement in effect under section 1395cc of this title.
(D) A person may not bill for a clinical diagnostic laboratory
test, including a test performed in a physician's office but
excluding a test performed by a rural health clinic, other than on
an assignment-related basis. If a person knowingly and willfully
and on a repeated basis bills for a clinical diagnostic laboratory
test in violation of the previous sentence, the Secretary may apply
sanctions against the person in the same manner as the Secretary
may apply sanctions against a physician in accordance with
paragraph (2) of section 1395u(j) of this title in the same manner
such paragraphs apply )3(! with respect to a physician. Paragraph
(4) of such section shall apply in this subparagraph in the same
manner as such paragraph applies to such section.
(6) In the case of any diagnostic laboratory test payment for
which is not made on the basis of a fee schedule under paragraph
(1), the Secretary may establish a payment rate which is acceptable
to the person or entity performing the test and which would be
considered the full charge for such tests. Such negotiated rate
shall be limited to an amount not in excess of the total payment
that would have been made for the services in the absence of such
rate.
(7) Notwithstanding paragraphs (1) and (4), the Secretary shall
establish a national minimum payment amount under this subsection
for a diagnostic or screening pap smear laboratory test (including
all cervical cancer screening technologies that have been approved
by the Food and Drug Administration as a primary screening method
for detection of cervical cancer) equal to $14.60 for tests
furnished in 2000. For such tests furnished in subsequent years,
such national minimum payment amount shall be adjusted annually as
provided in paragraph (2).
(8)(A) The Secretary shall establish by regulation procedures for
determining the basis for, and amount of, payment under this
subsection for any clinical diagnostic laboratory test with respect
to which a new or substantially revised HCPCS code is assigned on
or after January 1, 2005 (in this paragraph referred to as "new
tests").
(B) Determinations under subparagraph (A) shall be made only
after the Secretary -
(i) makes available to the public (through an Internet website
and other appropriate mechanisms) a list that includes any such
test for which establishment of a payment amount under this
subsection is being considered for a year;
(ii) on the same day such list is made available, causes to
have published in the Federal Register notice of a meeting to
receive comments and recommendations (and data on which
recommendations are based) from the public on the appropriate
basis under this subsection for establishing payment amounts for
the tests on such list;
(iii) not less than 30 days after publication of such notice
convenes a meeting, that includes representatives of officials of
the Centers for Medicare & Medicaid Services involved in
determining payment amounts, to receive such comments and
recommendations (and data on which the recommendations are
based);
(iv) taking into account the comments and recommendations (and
accompanying data) received at such meeting, develops and makes
available to the public (through an Internet website and other
appropriate mechanisms) a list of proposed determinations with
respect to the appropriate basis for establishing a payment
amount under this subsection for each such code, together with an
explanation of the reasons for each such determination, the data
on which the determinations are based, and a request for public
written comments on the proposed determination; and
(v) taking into account the comments received during the public
comment period, develops and makes available to the public
(through an Internet website and other appropriate mechanisms) a
list of final determinations of the payment amounts for such
tests under this subsection, together with the rationale for each
such determination, the data on which the determinations are
based, and responses to comments and suggestions received from
the public.
(C) Under the procedures established pursuant to subparagraph
(A), the Secretary shall -
(i) set forth the criteria for making determinations under
subparagraph (A); and
(ii) make available to the public the data (other than
proprietary data) considered in making such determinations.
(D) The Secretary may convene such further public meetings to
receive public comments on payment amounts for new tests under this
subsection as the Secretary deems appropriate.
(E) For purposes of this paragraph:
(i) The term "HCPCS" refers to the Health Care Procedure Coding
System.
(ii) A code shall be considered to be "substantially revised"
if there is a substantive change to the definition of the test or
procedure to which the code applies (such as a new analyte or a
new methodology for measuring an existing analyte-specific test).
(i) Outpatient surgery
(1) The Secretary shall, in consultation with appropriate medical
organizations -
(A) specify those surgical procedures which are appropriately
(when considered in terms of the proper utilization of hospital
inpatient facilities) performed on an inpatient basis in a
hospital but which also can be performed safely on an ambulatory
basis in an ambulatory surgical center (meeting the standards
specified under section 1395k(a)(2)(F)(i) of this title),
critical access hospital, or hospital outpatient department, and
(B) specify those surgical procedures which are appropriately
(when considered in terms of the proper utilization of hospital
inpatient facilities) performed on an inpatient basis in a
hospital but which also can be performed safely on an ambulatory
basis in a physician's office.
The lists of procedures established under subparagraphs (A) and (B)
shall be reviewed and updated not less often than every 2 years, in
consultation with appropriate trade and professional organizations.
(2)(A) For services furnished prior to the implementation of the
system described in subparagraph (D), the amount of payment to be
made for facility services furnished in connection with a surgical
procedure specified pursuant to paragraph (1)(A) and furnished to
an individual in an ambulatory surgical center described in such
paragraph shall be equal to 80 percent of a standard overhead
amount established by the Secretary (with respect to each such
procedure) on the basis of the Secretary's estimate of a fair fee
which -
(i) takes into account the costs incurred by such centers, or
classes of centers, generally in providing services furnished in
connection with the performance of such procedure, as determined
in accordance with a survey (based upon a representative sample
of procedures and facilities) of the actual audited costs
incurred by such centers in providing such services,
(ii) takes such costs into account in such a manner as will
assure that the performance of the procedure in such a center
will result in substantially less amounts paid under this
subchapter than would have been paid if the procedure had been
performed on an inpatient basis in a hospital, and
(iii) in the case of insertion of an intraocular lens during or
subsequent to cataract surgery includes payment which is
reasonable and related to the cost of acquiring the class of lens
involved.
Each amount so established shall be reviewed and updated not later
than July 1, 1987, and annually thereafter to take account of
varying conditions in different areas.
(B) The amount of payment to be made under this part for facility
services furnished, in connection with a surgical procedure
specified pursuant to paragraph (1)(B), in a physician's office
shall be equal to 80 percent of a standard overhead amount
established by the Secretary (with respect to each such procedure)
on the basis of the Secretary's estimate of a fair fee which -
(i) takes into account additional costs, not usually included
in the professional fee, incurred by physicians in securing,
maintaining, and staffing the facilities and ancillary services
appropriate for the performance of such procedure in the
physician's office, and
(ii) takes such items into account in such a manner which will
assure that the performance of such procedure in the physician's
office will result in substantially less amounts paid under this
subchapter than would have been paid if the services had been
furnished on an inpatient basis in a hospital.
Each amount so established shall be reviewed and updated not later
than July 1, 1987, and annually thereafter to take account of
varying conditions in different areas.
(C)(i) Notwithstanding the second sentence of each of
subparagraphs (A) and (B), except as otherwise specified in clauses
(ii), (iii), and (iv), if the Secretary has not updated amounts
established under such subparagraphs or under subparagraph (D),
with respect to facility services furnished during a fiscal year
(beginning with fiscal year 1986 or a calendar year (beginning with
2006)), such amounts shall be increased by the percentage increase
in the Consumer Price Index for all urban consumers (U.S. city
average) as estimated by the Secretary for the 12-month period
ending with the midpoint of the year involved.
(ii) In each of the fiscal years 1998 through 2002, the increase
under this subparagraph shall be reduced (but not below zero) by
2.0 percentage points.
(iii) In fiscal year 2004, beginning with April 1, 2004, the
increase under this subparagraph shall be the Consumer Price Index
for all urban consumers (U.S. city average) as estimated by the
Secretary for the 12-month period ending with March 31, 2003, minus
3.0 percentage points.
(iv) In fiscal year 2005, the last quarter of calendar year 2005,
and each of calendar years 2006 through 2009, the increase under
this subparagraph shall be 0 percent.
(D)(i) Taking into account the recommendations in the report
under section 626(d) of Medicare Prescription Drug, Improvement,
and Modernization Act of 2003, the Secretary shall implement a
revised payment system for payment of surgical services furnished
in ambulatory surgical centers.
(ii) In the year the system described in clause (i) is
implemented, such system shall be designed to result in the same
aggregate amount of expenditures for such services as would be made
if this subparagraph did not apply, as estimated by the Secretary.
(iii) The Secretary shall implement the system described in
clause (i) for periods in a manner so that it is first effective
beginning on or after January 1, 2006, and not later than January
1, 2008.
(iv) There shall be no administrative or judicial review under
section 1395ff, 1395oo of this title, or otherwise, of the
classification system, the relative weights, payment amounts, and
the geographic adjustment factor, if any, under this subparagraph.
(3)(A) The aggregate amount of the payments to be made under this
part for outpatient hospital facility services or critical access
hospital services furnished before January 1, 1999, in connection
with surgical procedures specified under paragraph (1)(A) shall be
equal to the lesser of -
(i) the amount determined with respect to such services under
subsection (a)(2)(B) of this section; or
(ii) the blend amount (described in subparagraph (B)).
(B)(i) The blend amount for a cost reporting period is the sum of
-
(I) the cost proportion (as defined in clause (ii)(I)) of the
amount described in subparagraph (A)(i), and
(II) the ASC proportion (as defined in clause (ii)(II)) of the
standard overhead amount payable with respect to the same
surgical procedure as if it were provided in an ambulatory
surgical center in the same area, as determined under paragraph
(2)(A), less the amount a provider may charge as described in
clause (ii) of section 1395cc(a)(2)(A) of this title.
(ii) Subject to paragraph (4), in this paragraph:
(I) The term "cost proportion" means 75 percent for cost
reporting periods beginning in fiscal year 1988, 50 percent for
portions of cost reporting periods beginning on or after October
1, 1988, and ending on or before December 31, 1990, and 42
percent for portions of cost reporting periods beginning on or
after January 1, 1991.
(II) The term "ASC proportion" means 25 percent for cost
reporting periods beginning in fiscal year 1988, 50 percent for
portions of cost reporting periods beginning on or after October
1, 1988, and ending on or before December 31, 1990, and 58
percent for portions of cost reporting periods beginning on or
after January 1, 1991.
(4)(A) In the case of a hospital that -
(i) makes application to the Secretary and demonstrates that it
specializes in eye services or eye and ear services (as
determined by the Secretary),
(ii) receives more than 30 percent of its total revenues from
outpatient services, and
(iii) on October 1, 1987 -
(I) was an eye specialty hospital or an eye and ear specialty
hospital, or
(II) was operated as an eye or eye and ear unit (as defined
in subparagraph (B)) of a general acute care hospital which, on
the date of the application described in clause (i), operates
less than 20 percent of the beds that the hospital operated on
October 1, 1987, and has sold or otherwise disposed of a
substantial portion of the hospital's other acute care
operations,
the cost proportion and ASC proportion in effect under subclauses
(I) and (II) of paragraph (3)(B)(ii) for cost reporting periods
beginning in fiscal year 1988 shall remain in effect for cost
reporting periods beginning on or after October 1, 1988, and before
January 1, 1995.
(B) For purposes of this )4(! subparagraph (A)(iii)(II), the term
"eye or eye and ear unit" means a physically separate or distinct
unit containing separate surgical suites devoted solely to eye or
eye and ear services.
(5)(A) The Secretary is authorized to provide by regulations that
in the case of a surgical procedure, specified by the Secretary
pursuant to paragraph (1)(A), performed in an ambulatory surgical
center described in such paragraph, there shall be paid (in lieu of
any amounts otherwise payable under this part) with respect to the
facility services furnished by such center and with respect to all
related services (including physicians' services, laboratory,
X-ray, and diagnostic services) a single all-inclusive fee
established pursuant to subparagraph (B), if all parties furnishing
all such services agree to accept such fee (to be divided among the
parties involved in such manner as they shall have previously
agreed upon) as full payment for the services furnished.
(B) In implementing this paragraph, the Secretary shall establish
with respect to each surgical procedure specified pursuant to
paragraph (1)(A) the amount of the all-inclusive fee for such
procedure, taking into account such factors as may be appropriate.
The amount so established with respect to any surgical procedure
shall be reviewed periodically and may be adjusted by the
Secretary, when appropriate, to take account of varying conditions
in different areas.
(6) Any person, including a facility having an agreement under
section 1395k(a)(2)(F)(i) of this title, who knowingly and
willfully presents, or causes to be presented, a bill or request
for payment, for an intraocular lens inserted during or subsequent
to cataract surgery for which payment may be made under paragraph
(2)(A)(iii), is subject to a civil money penalty of not to exceed
$2,000. The provisions of section 1320a-7a of this title (other
than subsections (a) and (b)) shall apply to a civil money penalty
under the previous sentence in the same manner as such provisions
apply to a penalty or proceeding under section 1320a-7a(a) of this
title.
(j) Accrual of interest on balance of excess or deficit not paid
Whenever a final determination is made that the amount of payment
made under this part either to a provider of services or to another
person pursuant to an assignment under section 1395u(b)(3)(B)(ii)
of this title was in excess of or less than the amount of payment
that is due, and payment of such excess or deficit is not made (or
effected by offset) within 30 days of the date of the
determination, interest shall accrue on the balance of such excess
or deficit not paid or offset (to the extent that the balance is
owed by or owing to the provider) at a rate determined in
accordance with the regulations of the Secretary of the Treasury
applicable to charges for late payments.
(k) Hepatitis B vaccine
With respect to services described in section 1395x(s)(10)(B) of
this title, the Secretary may provide, instead of the amount of
payment otherwise provided under this part, for payment of such an
amount or amounts as reasonably reflects the general cost of
efficiently providing such services.
(l) Fee schedule for services of certified registered nurse
anesthetists
(1)(A) The Secretary shall establish a fee schedule for services
of certified registered nurse anesthetists under section
1395x(s)(11) of this title.
(B) In establishing the fee schedule under this paragraph the
Secretary may utilize a system of time units, a system of base and
time units, or any appropriate methodology.
(C) The provisions of this subsection shall not apply to certain
services furnished in certain hospitals in rural areas under the
provisions of section 9320(k) of the Omnibus Budget Reconciliation
Act of 1986, as amended by section 6132 of the Omnibus Budget
Reconciliation Act of 1989.
(2) Except as provided in paragraph (3), the fee schedule
established under paragraph (1) shall be initially based on audited
data from cost reporting periods ending in fiscal year 1985 and
such other data as the Secretary determines necessary.
(3)(A) In establishing the initial fee schedule for those
services, the Secretary shall adjust the fee schedule to the extent
necessary to ensure that the estimated total amount which will be
paid under this subchapter for those services plus applicable
coinsurance in 1989 will equal the estimated total amount which
would be paid under this subchapter for those services in 1989 if
the services were included as inpatient hospital services and
payment for such services was made under part A of this subchapter
in the same manner as payment was made in fiscal year 1987,
adjusted to take into account changes in prices and technology
relating to the administration of anesthesia.
(B) The Secretary shall also reduce the prevailing charge of
physicians for medical direction of a certified registered nurse
anesthetist, or the fee schedule for services of certified
registered nurse anesthetists, or both, to the extent necessary to
ensure that the estimated total amount which will be paid under
this subchapter plus applicable coinsurance for such medical
direction and such services in 1989 and 1990 will not exceed the
estimated total amount which would have been paid plus applicable
coinsurance but for the enactment of the amendments made by section
9320 of the Omnibus Budget Reconciliation Act of 1986. A reduced
prevailing charge under this subparagraph shall become the
prevailing charge but for subsequent years for purposes of applying
the economic index under the fourth sentence of section 1395u(b)(3)
of this title.
(4)(A) Except as provided in subparagraphs (C) and (D), in
determining the amount paid under the fee schedule under this
subsection for services furnished on or after January 1, 1991, by a
certified registered nurse anesthetist who is not medically
directed -
(i) the conversion factor shall be -
(I) for services furnished in 1991, $15.50,
(II) for services furnished in 1992, $15.75,
(III) for services furnished in 1993, $16.00,
(IV) for services furnished in 1994, $16.25,
(V) for services furnished in 1995, $16.50,
(VI) for services furnished in 1996, $16.75, and
(VII) for services furnished in calendar years after 1996,
the previous year's conversion factor increased by the update
determined under section 1395w-4(d) of this title for physician
anesthesia services for that year;
(ii) the payment areas to be used shall be the fee schedule
areas used under section 1395w-4 of this title (or, in the case
of services furnished during 1991, the localities used under
section 1395u(b) of this title) for purposes of computing
payments for physicians' services that are anesthesia services;
(iii) the geographic adjustment factors to be applied to the
conversion factor under clause (i) for services in a fee schedule
area or locality is - )5(!
(I) in the case of services furnished in 1991, the geographic
work index value and the geographic practice cost index value
specified in section 1395u(q)(1)(B) of this title for
physicians' services that are anesthesia services furnished in
the area or locality, and
(II) in the case of services furnished after 1991, the
geographic work index value, the geographic practice cost index
value, and the geographic malpractice index value used for
determining payments for physicians' services that are
anesthesia services under section 1395w-4 of this title,
with 70 percent of the conversion factor treated as attributable
to work and 30 percent as attributable to overhead for services
furnished in 1991 (and the portions attributable to work,
practice expenses, and malpractice expenses in 1992 and
thereafter being the same as is applied under section 1395w-4 of
this title).
(B)(i) Except as provided in clause (ii) and subparagraph (D), in
determining the amount paid under the fee schedule under this
subsection for services furnished on or after January 1, 1991, and
before January 1, 1994, by a certified registered nurse anesthetist
who is medically directed, the Secretary shall apply the same
methodology specified in subparagraph (A).
(ii) The conversion factor used under clause (i) shall be -
(I) for services furnished in 1991, $10.50,
(II) for services furnished in 1992, $10.75, and
(III) for services furnished in 1993, $11.00.
(iii) In the case of services of a certified registered nurse
anesthetist who is medically directed or medically supervised by a
physician which are furnished on or after January 1, 1994, the fee
schedule amount shall be one-half of the amount described in
section 1395w-4(a)(5)(B) of this title with respect to the
physician.
(C) Notwithstanding subclauses (I) through (V) of subparagraph
(A)(i) -
(i) in the case of a 1990 conversion factor that is greater
than $16.50, the conversion factor for a calendar year after 1990
and before 1996 shall be the 1990 conversion factor reduced by
the product of the last digit of the calendar year and one-fifth
of the amount by which the 1990 conversion factor exceeds $16.50;
and
(ii) in the case of a 1990 conversion factor that is greater
than $15.49 but less than $16.51, the conversion factor for a
calendar year after 1990 and before 1996 shall be the greater of
-
(I) the 1990 conversion factor, or
(II) the conversion factor specified in subparagraph (A)(i)
for the year involved.
(D) Notwithstanding subparagraph (C), in no case may the
conversion factor used to determine payment for services in a fee
schedule area or locality under this subsection, as adjusted by the
adjustment factors specified in subparagraphs )6(! (A)(iii), exceed
the conversion factor used to determine the amount paid for
physicians' services that are anesthesia services in the area or
locality.
(5)(A) Payment for the services of a certified registered nurse
anesthetist (for which payment may otherwise be made under this
part) may be made on the basis of a claim or request for payment
presented by the certified registered nurse anesthetist furnishing
such services, or by a hospital, critical access hospital,
physician, group practice, or ambulatory surgical center with which
the certified registered nurse anesthetist furnishing such services
has an employment or contractual relationship that provides for
payment to be made under this part for such services to such
hospital, critical access hospital, physician, group practice, or
ambulatory surgical center.
(B) No hospital or critical access hospital that presents a claim
or request for payment for services of a certified nurse
anesthetist under this part may treat any uncollected coinsurance
amount imposed under this part with respect to such services as a
bad debt of such hospital or critical access hospital for purposes
of this subchapter.
(6) If an adjustment under paragraph (3)(B) results in a
reduction in the reasonable charge for a physicians' service and a
nonparticipating physician furnishes the service to an individual
entitled to benefits under this part after the effective date of
the reduction, the physician's actual charge is subject to a limit
under section 1395u(j)(1)(D) of this title.
(m) Incentive payments for physicians' services furnished in
underserved areas
(1) In the case of physicians' services furnished in a year to an
individual, who is covered under the insurance program established
by this part and who incurs expenses for such services, in an area
that is designated (under section 254e(a)(1)(A) of this title) as a
health professional shortage area as identified by the Secretary
prior to the beginning of such year, in addition to the amount
otherwise paid under this part, there also shall be paid to the
physician (or to an employer or facility in the cases described in
clause (A) of section 1395u(b)(6) of this title) (on a monthly or
quarterly basis) from the Federal Supplementary Medical Insurance
Trust Fund an amount equal to 10 percent of the payment amount for
the service under this part.
(2) For each health professional shortage area identified in
paragraph (1) that consists of an entire county, the Secretary
shall provide for the additional payment under paragraph (1)
without any requirement on the physician to identify the health
professional shortage area involved. The Secretary may implement
the previous sentence using the method specified in subsection
(u)(4)(C) of this section.
(3) The Secretary shall post on the Internet website of the
Centers for Medicare & Medicaid Services a list of the health
professional shortage areas identified in paragraph (1) that
consist of a partial county to facilitate the additional payment
under paragraph (1) in such areas.
(4) There shall be no administrative or judicial review under
section 1395ff of this title, section 1395oo of this title, or
otherwise, respecting -
(A) the identification of a county or area;
(B) the assignment of a specialty of any physician under this
paragraph;
(C) the assignment of a physician to a county under this
subsection; or
(D) the assignment of a postal ZIP Code to a county or other
area under this subsection.
(n) Payments to hospital outpatient departments for radiology;
amount; definitions
(1)(A) )7(! The aggregate amount of the payments to be made for
all or part of a cost reporting period for services described in
subsection (a)(2)(E)(i) of this section furnished under this part
on or after October 1, 1988, and before January 1, 1999, and for
services described in subsection (a)(2)(E)(ii) of this section
furnished under this part on or after October 1, 1989, and before
January 1, 1999, shall be equal to the lesser of -
(i) the amount determined with respect to such services under
subsection (a)(2)(B) of this section, or
(ii) the blend amount for radiology services and diagnostic
procedures determined in accordance with subparagraph (B).
(B)(i) The blend amount for radiology services and diagnostic
procedures for a cost reporting period is the sum of -
(I) the cost proportion (as defined in clause (ii)) of the
amount described in subparagraph (A)(i); and
(II) the charge proportion (as defined in clause (ii)(II)) of
62 percent (for services described in subsection (a)(2)(E)(i) of
this section), or (for procedures described in subsection
(a)(2)(E)(ii) of this section), 42 percent or such other percent
established by the Secretary (or carriers acting pursuant to
guidelines issued by the Secretary) based on prevailing charges
established with actual charge data, of the prevailing charge or
(for services described in subsection (a)(2)(E)(i) of this
section furnished on or after April 1, 1989 and for services
described in subsection (a)(2)(E)(ii) of this section furnished
on or after January 1, 1992) the fee schedule amount established
for participating physicians for the same services as if they
were furnished in a physician's office in the same locality as
determined under section 1395u(b) of this title (or, in the case
of services furnished on or after January 1, 1992, under section
1395w-4 of this title), less the amount a provider may charge as
described in clause (ii) of section 1395cc(a)(2)(A) of this
title.
(ii) In this subparagraph:
(I) The term "cost proportion" means 50 percent, except that
such term means 65 percent in the case of outpatient radiology
services for portions of cost reporting periods which occur in
fiscal year 1989 and in the case of diagnostic procedures
described in subsection (a)(2)(E)(ii) of this section for
portions of cost reporting periods which occur in fiscal year
1990, and such term means 42 percent in the case of outpatient
radiology services for portions of cost reporting periods
beginning on or after January 1, 1991.
(II) The term "charge proportion" means 100 percent minus the
cost proportion.
(o) Limitation on benefit for payment for therapeutic shoes for
individuals with severe diabetic foot disease
(1) In the case of shoes described in section 1395x(s)(12) of
this title -
(A) no payment may be made under this part, with respect to any
individual for any year, for the furnishing of -
(i) more than one pair of custom molded shoes (including
inserts provided with such shoes) and 2 additional pairs of
inserts for such shoes, or
(ii) more than one pair of extra-depth shoes (not including
inserts provided with such shoes) and 3 pairs of inserts for
such shoes, and
(B) with respect to expenses incurred in any calendar year, no
more than the amount of payment applicable under paragraph (2)
shall be considered as incurred expenses for purposes of
subsections (a) and (b) of this section.
Payment for shoes (or inserts) under this part shall be considered
to include payment for any expenses for the fitting of such shoes
(or inserts).
(2)(A) Except as provided by the Secretary under subparagraphs
(B) and (C), the amount of payment under this paragraph for custom
molded shoes, extra-depth shoes, and inserts shall be the amount
determined for such items by the Secretary under section 1395m(h)
of this title.
(B) The Secretary may establish payment amounts for shoes and
inserts that are lower than the amount established under section
1395m(h) of this title if the Secretary finds that shoes and
inserts of an appropriate quality are readily available at or below
the amount established under such section.
(C) In accordance with procedures established by the Secretary,
an individual entitled to benefits with respect to shoes described
in section 1395x(s)(12) of this title may substitute modification
of such shoes instead of obtaining one (or more, as specified by
the Secretary) pair of inserts (other than the original pair of
inserts with respect to such shoes). In such case, the Secretary
shall substitute, for the payment amount established under section
1395m(h) of this title, a payment amount that the Secretary
estimates will assure that there is no net increase in expenditures
under this subsection as a result of this subparagraph.
(3) In this subchapter, the term "shoes" includes, except for
purposes of subparagraphs (A)(ii) and (B) of paragraph (2), inserts
for extra-depth shoes.
(p) Repealed. Pub. L. 103-432, title I, Sec. 123(b)(2)(A)(ii), Oct.
31, 1994, 108 Stat. 4411
(q) Requests for payment to include information on referring
physician
(1) Each request for payment, or bill submitted, for an item or
service furnished by an entity for which payment may be made under
this part and for which the entity knows or has reason to believe
there has been a referral by a referring physician (within the
meaning of section 1395nn of this title) shall include the name and
unique physician identification number for the referring physician.
(2)(A) In the case of a request for payment for an item or
service furnished by an entity under this part on an
assignment-related basis and for which information is required to
be provided under paragraph (1) but not included, payment may be
denied under this part.
(B) In the case of a request for payment for an item or service
furnished by an entity under this part not submitted on an
assignment-related basis and for which information is required to
be provided under paragraph (1) but not included -
(i) if the entity knowingly and willfully fails to provide such
information promptly upon request of the Secretary or a carrier,
the entity may be subject to a civil money penalty in an amount
not to exceed $2,000, and
(ii) if the entity knowingly, willfully, and in repeated cases
fails, after being notified by the Secretary of the obligations
and requirements of this subsection to provide the information
required under paragraph (1), the entity may be subject to
exclusion from participation in the programs under this chapter
for a period not to exceed 5 years, in accordance with the
procedures of subsections (c), (f), and (g) of section 1320a-7 of
this title.
The provisions of section 1320a-7a of this title (other than
subsections (a) and (b)) shall apply to civil money penalties under
clause (i) in the same manner as they apply to a penalty or
proceeding under section 1320a-7a(a) of this title.
(r) Cap on prevailing charge; billing on assignment-related basis
(1) With respect to services described in section
1395x(s)(2)(K)(ii) of this title (relating to nurse practitioner or
clinical nurse specialist services), payment may be made on the
basis of a claim or request for payment presented by the nurse
practitioner or clinical nurse specialist furnishing such services,
or by a hospital, critical access hospital, skilled nursing
facility or nursing facility (as defined in section 1396r(a) of
this title), physician, group practice, or ambulatory surgical
center with which the nurse practitioner or clinical nurse
specialist has an employment or contractual relationship that
provides for payment to be made under this part for such services
to such hospital, physician, group practice, or ambulatory surgical
center.
(2) No hospital or critical access hospital that presents a claim
or request for payment under this part for services described in
section 1395x(s)(2)(K)(ii) of this title may treat any uncollected
coinsurance amount imposed under this part with respect to such
services as a bad debt of such hospital for purposes of this
subchapter.
(s) Other prepaid organizations
The Secretary may not provide for payment under subsection
(a)(1)(A) of this section with respect to an organization unless
the organization provides assurances satisfactory to the Secretary
that the organization meets the requirement of section 1395cc(f) of
this title (relating to maintaining written policies and procedures
respecting advance directives).
(t) Prospective payment system for hospital outpatient department
services
(1) Amount of payment
(A) In general
With respect to covered OPD services (as defined in
subparagraph (B)) furnished during a year beginning with 1999,
the amount of payment under this part shall be determined under
a prospective payment system established by the Secretary in
accordance with this subsection.
(B) Definition of covered OPD services
For purposes of this subsection, the term "covered OPD
services" -
(i) means hospital outpatient services designated by the
Secretary;
(ii) subject to clause (iv), includes inpatient hospital
services designated by the Secretary that are covered under
this part and furnished to a hospital inpatient who (I) is
entitled to benefits under part A of this subchapter but has
exhausted benefits for inpatient hospital services during a
spell of illness, or (II) is not so entitled;
(iii) includes implantable items described in paragraph
(3), (6), or (8) of section 1395x(s) of this title; but
(iv) does not include any therapy services described in
subsection (a)(8) of this section or ambulance services, for
which payment is made under a fee schedule described in
section 1395m(k) of this title or section 1395m(l) of this
title and does not include screening mammography (as defined
in section 1395x(jj) of this title) and diagnostic
mammography.
(2) System requirements
Under the payment system -
(A) the Secretary shall develop a classification system for
covered OPD services;
(B) the Secretary may establish groups of covered OPD
services, within the classification system described in
subparagraph (A), so that services classified within each group
are comparable clinically and with respect to the use of
resources and so that an implantable item is classified to the
group that includes the service to which the item relates;
(C) the Secretary shall, using data on claims from 1996 and
using data from the most recent available cost reports,
establish relative payment weights for covered OPD services
(and any groups of such services described in subparagraph (B))
based on median (or, at the election of the Secretary, mean)
hospital costs and shall determine projections of the frequency
of utilization of each such service (or group of services) in
1999;
(D) the Secretary shall determine a wage adjustment factor to
adjust the portion of payment and coinsurance attributable to
labor-related costs for relative differences in labor and
labor-related costs across geographic regions in a budget
neutral manner;
(E) the Secretary shall establish, in a budget neutral
manner, outlier adjustments under paragraph (5) and
transitional pass-through payments under paragraph (6) and
other adjustments as determined to be necessary to ensure
equitable payments, such as adjustments for certain classes of
hospitals;
(F) the Secretary shall develop a method for controlling
unnecessary increases in the volume of covered OPD services;
(G) the Secretary shall create additional groups of covered
OPD services that classify separately those procedures that
utilize contrast agents from those that do not; and
(H) with respect to devices of brachytherapy consisting of a
seed or seeds (or radioactive source), the Secretary shall
create additional groups of covered OPD services that classify
such devices separately from the other services (or group of
services) paid for under this subsection in a manner reflecting
the number, isotope, and radioactive intensity of such devices
furnished, including separate groups for palladium-103 and
iodine-125 devices.
For purposes of subparagraph (B), items and services within a
group shall not be treated as "comparable with respect to the use
of resources" if the highest median cost (or mean cost, if
elected by the Secretary under subparagraph (C)) for an item or
service within the group is more than 2 times greater than the
lowest median cost (or mean cost, if so elected) for an item or
service within the group; except that the Secretary may make
exceptions in unusual cases, such as low volume items and
services, but may not make such an exception in the case of a
drug or biological that has been designated as an orphan drug
under section 360bb of title 21.
(3) Calculation of base amounts
(A) Aggregate amounts that would be payable if deductibles were
disregarded
The Secretary shall estimate the sum of -
(i) the total amounts that would be payable from the Trust
Fund under this part for covered OPD services in 1999,
determined without regard to this subsection, as though the
deductible under subsection (b) of this section did not
apply, and
(ii) the total amounts of copayments estimated to be paid
under this subsection by beneficiaries to hospitals for
covered OPD services in 1999, as though the deductible under
subsection (b) of this section did not apply.
(B) Unadjusted copayment amount
(i) In general
For purposes of this subsection, subject to clause (ii),
the "unadjusted copayment amount" applicable to a covered OPD
service (or group of such services) is 20 percent of the
national median of the charges for the service (or services
within the group) furnished during 1996, updated to 1999
using the Secretary's estimate of charge growth during the
period.
(ii) Adjusted to be 20 percent when fully phased in
If the pre-deductible payment percentage for a covered OPD
service (or group of such services) furnished in a year would
be equal to or exceed 80 percent, then the unadjusted
copayment amount shall be 20 percent of amount determined
under subparagraph (D).
(iii) Rules for new services
The Secretary shall establish rules for establishment of an
unadjusted copayment amount for a covered OPD service not
furnished during 1996, based upon its classification within a
group of such services.
(C) Calculation of conversion factors
(i) For 1999
(I) In general
The Secretary shall establish a 1999 conversion factor
for determining the medicare OPD fee schedule amounts for
each covered OPD service (or group of such services)
furnished in 1999. Such conversion factor shall be
established on the basis of the weights and frequencies
described in paragraph (2)(C) and in such a manner that the
sum for all services and groups of the products (described
in subclause (II) for each such service or group) equals
the total projected amount described in subparagraph (A).
(II) Product described
The Secretary shall determine for each service or group
the product of the medicare OPD fee schedule amounts
(taking into account appropriate adjustments described in
paragraphs (2)(D) and (2)(E)) and the estimated frequencies
for such service or group.
(ii) Subsequent years
Subject to paragraph (8)(B), the Secretary shall establish
a conversion factor for covered OPD services furnished in
subsequent years in an amount equal to the conversion factor
established under this subparagraph and applicable to such
services furnished in the previous year increased by the OPD
fee schedule increase factor specified under clause (iv) for
the year involved.
(iii) Adjustment for service mix changes
Insofar as the Secretary determines that the adjustments
for service mix under paragraph (2) for a previous year (or
estimates that such adjustments for a future year) did (or
are likely to) result in a change in aggregate payments under
this subsection during the year that are a result of changes
in the coding or classification of covered OPD services that
do not reflect real changes in service mix, the Secretary may
adjust the conversion factor computed under this subparagraph
for subsequent years so as to eliminate the effect of such
coding or classification changes.
(iv) OPD fee schedule increase factor
For purposes of this subparagraph, the "OPD fee schedule
increase factor" for services furnished in a year is equal to
the market basket percentage increase applicable under
section 1395ww(b)(3)(B)(iii) of this title to hospital
discharges occurring during the fiscal year ending in such
year, reduced by 1 percentage point for such factor for
services furnished in each of 2000 and 2002. In applying the
previous sentence for years beginning with 2000, the
Secretary may substitute for the market basket percentage
increase an annual percentage increase that is computed and
applied with respect to covered OPD services furnished in a
year in the same manner as the market basket percentage
increase is determined and applied to inpatient hospital
services for discharges occurring in a fiscal year.
(D) Calculation of medicare OPD fee schedule amounts
The Secretary shall compute a medicare OPD fee schedule
amount for each covered OPD service (or group of such services)
furnished in a year, in an amount equal to the product of -
(i) the conversion factor computed under subparagraph (C)
for the year, and
(ii) the relative payment weight (determined under
paragraph (2)(C)) for the service or group.
(E) Pre-deductible payment percentage
The pre-deductible payment percentage for a covered OPD
service (or group of such services) furnished in a year is
equal to the ratio of -
(i) the medicare OPD fee schedule amount established under
subparagraph (D) for the year, minus the unadjusted copayment
amount determined under subparagraph (B) for the service or
group, to
(ii) the medicare OPD fee schedule amount determined under
subparagraph (D) for the year for such service or group.
(4) Medicare payment amount
The amount of payment made from the Trust Fund under this part
for a covered OPD service (and such services classified within a
group) furnished in a year is determined, subject to paragraph
(7), as follows:
(A) Fee schedule adjustments
The medicare OPD fee schedule amount (computed under
paragraph (3)(D)) for the service or group and year is adjusted
for relative differences in the cost of labor and other factors
determined by the Secretary, as computed under paragraphs
(2)(D) and (2)(E).
(B) Subtract applicable deductible
Reduce the adjusted amount determined under subparagraph (A)
by the amount of the deductible under subsection (b) of this
section, to the extent applicable.
(C) Apply payment proportion to remainder
The amount of payment is the amount so determined under
subparagraph (B) multiplied by the pre-deductible payment
percentage (as determined under paragraph (3)(E)) for the
service or group and year involved, plus the amount of any
reduction in the copayment amount attributable to paragraph
(8)(C).
(5) Outlier adjustment
(A) In general
Subject to subparagraph (D), the Secretary shall provide for
an additional payment for each covered OPD service (or group of
services) for which a hospital's charges, adjusted to cost,
exceed -
(i) a fixed multiple of the sum of -
(I) the applicable medicare OPD fee schedule amount
determined under paragraph (3)(D), as adjusted under
paragraph (4)(A) (other than for adjustments under this
paragraph or paragraph (6)); and
(II) any transitional pass-through payment under
paragraph (6); and
(ii) at the option of the Secretary, such fixed dollar
amount as the Secretary may establish.
(B) Amount of adjustment
The amount of the additional payment under subparagraph (A)
shall be determined by the Secretary and shall approximate the
marginal cost of care beyond the applicable cutoff point under
such subparagraph.
(C) Limit on aggregate outlier adjustments
(i) In general
The total of the additional payments made under this
paragraph for covered OPD services furnished in a year (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 subsection for all covered OPD services furnished
in that year. If this paragraph is first applied to less than
a full year, the previous sentence shall apply only to the
portion of such year.
(ii) Applicable percentage
For purposes of clause (i), the term "applicable
percentage" means a percentage specified by the Secretary up
to (but not to exceed) -
(I) for a year (or portion of a year) before 2004, 2.5
percent; and
(II) for 2004 and thereafter, 3.0 percent.
(D) Transitional authority
In applying subparagraph (A) for covered OPD services
furnished before January 1, 2002, the Secretary may -
(i) apply such subparagraph to a bill for such services
related to an outpatient encounter (rather than for a
specific service or group of services) using OPD fee schedule
amounts and transitional pass-through payments covered under
the bill; and
(ii) use an appropriate cost-to-charge ratio for the
hospital involved (as determined by the Secretary), rather
than for specific departments within the hospital.
(E) Exclusion of separate drug and biological APCS from outlier
payments
No additional payment shall be made under subparagraph (A) in
the case of ambulatory payment classification groups
established separately for drugs or biologicals.
(6) Transitional pass-through for additional costs of innovative
medical devices, drugs, and biologicals
(A) In general
The Secretary shall provide for an additional payment under
this paragraph for any of the following that are provided as
part of a covered OPD service (or group of services):
(i) Current orphan drugs
A drug or biological that is used for a rare disease or
condition with respect to which the drug or biological has
been designated as an orphan drug under section 360bb of
title 21 if payment for the drug or biological as an
outpatient hospital service under this part was being made on
the first date that the system under this subsection is
implemented.
(ii) Current cancer therapy drugs and biologicals and
brachytherapy
A drug or biological that is used in cancer therapy,
including (but not limited to) a chemotherapeutic agent, an
antiemetic, a hematopoietic growth factor, a colony
stimulating factor, a biological response modifier, a
bisphosphonate, and a device of brachytherapy or temperature
monitored cryoablation, if payment for such drug, biological,
or device as an outpatient hospital service under this part
was being made on such first date.
(iii) Current radiopharmaceutical drugs and biological
products
A radiopharmaceutical drug or biological product used in
diagnostic, monitoring, and therapeutic nuclear medicine
procedures if payment for the drug or biological as an
outpatient hospital service under this part was being made on
such first date.
(iv) New medical devices, drugs, and biologicals
A medical device, drug, or biological not described in
clause (i), (ii), or (iii) if -
(I) payment for the device, drug, or biological as an
outpatient hospital service under this part was not being
made as of December 31, 1996; and
(II) the cost of the drug or biological or the average
cost of the category of devices is not insignificant in
relation to the OPD fee schedule amount (as calculated
under paragraph (3)(D)) payable for the service (or group
of services) involved.
(B) Use of categories in determining eligibility of a device
for pass-through payments
The following provisions apply for purposes of determining
whether a medical device qualifies for additional payments
under clause (ii) or (iv) of subparagraph (A):
(i) Establishment of initial categories
(I) In general
The Secretary shall initially establish under this clause
categories of medical devices based on type of device by
April 1, 2001. Such categories shall be established in a
manner such that each medical device that meets the
requirements of clause (ii) or (iv) of subparagraph (A) as
of January 1, 2001, is included in such a category and no
such device is included in more than one category. For
purposes of the preceding sentence, whether a medical
device meets such requirements as of such date shall be
determined on the basis of the program memoranda issued
before such date.
(II) Authorization of implementation other than through
regulations
The categories may be established under this clause by
program memorandum or otherwise, after consultation with
groups representing hospitals, manufacturers of medical
devices, and other affected parties.
(ii) Establishing criteria for additional categories
(I) In general
The Secretary shall establish criteria that will be used
for creation of additional categories (other than those
established under clause (i)) through rulemaking (which may
include use of an interim final rule with comment period).
(II) Standard
Such categories shall be established under this clause in
a manner such that no medical device is described by more
than one category. Such criteria shall include a test of
whether the average cost of devices that would be included
in a category and are in use at the time the category is
established is not insignificant, as described in
subparagraph (A)(iv)(II).
(III) Deadline
Criteria shall first be established under this clause by
July 1, 2001. The Secretary may establish in compelling
circumstances categories under this clause before the date
such criteria are established.
(IV) Adding categories
The Secretary shall promptly establish a new category of
medical devices under this clause for any medical device
that meets the requirements of subparagraph (A)(iv) and for
which none of the categories in effect (or that were
previously in effect) is appropriate.
(iii) Period for which category is in effect
A category of medical devices established under clause (i)
or (ii) shall be in effect for a period of at least 2 years,
but not more than 3 years, that begins -
(I) in the case of a category established under clause
(i), on the first date on which payment was made under this
paragraph for any device described by such category
(including payments made during the period before April 1,
2001); and
(II) in the case of any other category, on the first date
on which payment is made under this paragraph for any
medical device that is described by such category.
(iv) Requirements treated as met
A medical device shall be treated as meeting the
requirements of subparagraph (A)(iv), regardless of whether
the device meets the requirement of subclause (I) of such
subparagraph, if -
(I) the device is described by a category established and
in effect under clause (i); or
(II) the device is described by a category established
and in effect under clause (ii) and an application under
section 360e of title 21 has been approved with respect to
the device, or the device has been cleared for market under
section 360(k) of title 21, or the device is exempt from
the requirements of section 360(k) of title 21 pursuant to
subsection (l) or (m) of section 360 of title 21 or section
360j(g) of title 21.
Nothing in this clause shall be construed as requiring an
application or prior approval (other than that described in
subclause (II)) in order for a covered device described by a
category to qualify for payment under this paragraph.
(C) Limited period of payment
(i) Drugs and biologicals
The payment under this paragraph with respect to a drug or
biological shall only apply during a period of at least 2
years, but not more than 3 years, that begins -
(I) on the first date this subsection is implemented in
the case of a drug or biological described in clause (i),
(ii), or (iii) of subparagraph (A) and in the case of a
drug or biological described in subparagraph (A)(iv) and
for which payment under this part is made as an outpatient
hospital service before such first date; or
(II) in the case of a drug or biological described in
subparagraph (A)(iv) not described in subclause (I), on the
first date on which payment is made under this part for the
drug or biological as an outpatient hospital service.
(ii) Medical devices
Payment shall be made under this paragraph with respect to
a medical device only if such device -
(I) is described by a category of medical devices
established and in effect under subparagraph (B); and
(II) is provided as part of a service (or group of
services) paid for under this subsection and provided
during the period for which such category is in effect
under such subparagraph.
(D) Amount of additional payment
Subject to subparagraph (E)(iii), the amount of the payment
under this paragraph with respect to a device, drug, or
biological provided as part of a covered OPD service is -
(i) in the case of a drug or biological, the amount by
which the amount determined under section 1395u(o) of this
title (or if the drug or biological is covered under a
competitive acquisition contract under section 1395w-3b of
this title, an amount determined by the Secretary equal to
the average price for the drug or biological for all
competitive acquisition areas and year established under such
section as calculated and adjusted by the Secretary for
purposes of this paragraph) for the drug or biological
exceeds the portion of the otherwise applicable medicare OPD
fee schedule that the Secretary determines is associated with
the drug or biological; or
(ii) in the case of a medical device, the amount by which
the hospital's charges for the device, adjusted to cost,
exceeds the portion of the otherwise applicable medicare OPD
fee schedule that the Secretary determines is associated with
the device.
(E) Limit on aggregate annual adjustment
(i) In general
The total of the additional payments made under this
paragraph for covered OPD services furnished in a year (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 subsection for all covered OPD services furnished
in that year. If this paragraph is first applied to less than
a full year, the previous sentence shall apply only to the
portion of such year.
(ii) Applicable percentage
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 2004 and thereafter, a percentage specified by
the Secretary up to (but not to exceed) 2.0 percent.
(iii) Uniform prospective reduction if aggregate limit
projected to be exceeded
If the Secretary estimates before the beginning of a year
that the amount of the additional payments under this
paragraph for the year (or portion thereof) as determined
under clause (i) without regard to this clause will exceed
the limit established under such clause, the Secretary shall
reduce pro rata the amount of each of the additional payments
under this paragraph for that year (or portion thereof) in
order to ensure that the aggregate additional payments under
this paragraph (as so estimated) do not exceed such limit.
(F) Limitation of application of functional equivalence
standard
(i) In general
The Secretary may not publish regulations that apply a
functional equivalence standard to a drug or biological under
this paragraph.
(ii) Application
Clause (i) shall apply to the application of a functional
equivalence standard to a drug or biological on or after
December 8, 2003, unless -
(I) such application was being made to such drug or
biological prior to December 8, 2003; and
(II) the Secretary applies such standard to such drug or
biological only for the purpose of determining eligibility
of such drug or biological for additional payments under
this paragraph and not for the purpose of any other
payments under this subchapter.
(iii) Rule of construction
Nothing in this subparagraph shall be construed to effect
the Secretary's authority to deem a particular drug to be
identical to another drug if the 2 products are
pharmaceutically equivalent and bioequivalent, as determined
by the Commissioner of Food and Drugs.
(7) Transitional adjustment to limit decline in payment
(A) Before 2002
Subject to subparagraph (D), for covered OPD services
furnished before January 1, 2002, for which 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 increased by 80
percent of the amount of such difference;
(ii) at least 80 percent, but less than 90 percent, of the
pre-BBA amount, the amount of payment under this subsection
shall be increased by the amount by 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 least 70 percent, but less than 80 percent, of the
pre-BBA amount, the amount of payment under this subsection
shall be increased by the amount by 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 70 percent of the pre-BBA amount, the amount
of payment under this subsection shall be increased by 21
percent of the pre-BBA amount.
(B) 2002
Subject to 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 payment under this subsection
shall be increased by 70 percent of the amount of such
difference;
(ii) at least 80 percent, but less than 90 percent, of the
pre-BBA amount, the amount of payment under this subsection
shall be increased by the amount by 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 than 80 percent of the pre-BBA amount, the
amount of payment under this subsection shall be increased by
13 percent of the pre-BBA amount.
(C) 2003
Subject to 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 payment under this subsection
shall be increased by 60 percent of the amount of such
difference; or
(ii) less than 90 percent of the pre-BBA amount, the amount
of payment under this subsection shall be increased by 6
percent of the pre-BBA amount.
(D) Hold harmless provisions
(i) Temporary treatment for certain rural hospitals
In the case of a hospital located in a rural area and that
has not more than 100 beds or a sole community hospital (as
defined in section 1395ww(d)(5)(D)(iii) of this title)
located in a rural area, for covered OPD services furnished
before January 1, 2006, for which the PPS amount is less than
the pre-BBA amount, the amount of payment under this
subsection shall be increased by the amount of such
difference.
(ii) Permanent treatment for cancer hospitals and children's
hospitals
In the case of a hospital described in clause (iii) or (v)
of section 1395ww(d)(1)(B) of this title, for covered OPD
services for which the PPS amount is less than the pre-BBA
amount, the amount of payment under this subsection shall be
increased by the amount of such difference.
(E) PPS amount defined
In this paragraph, the term "PPS amount" means, with respect
to covered OPD services, the amount payable under this
subchapter for such services (determined without regard to this
paragraph), including amounts payable as copayment under
paragraph (8), coinsurance under section 1395cc(a)(2)(A)(ii) of
this title, and the deductible under subsection (b) of this
section.
(F) Pre-BBA amount defined
(i) In general
In this paragraph, the "pre-BBA amount" means, with respect
to covered OPD services furnished by a hospital in a year, an
amount equal to the product of the reasonable cost of the
hospital for such services for the portions of the hospital's
cost reporting period (or periods) occurring in the year and
the base OPD payment-to-cost ratio for the hospital (as
defined in clause (ii)).
(ii) Base payment-to-cost ratio defined
For purposes of this subparagraph, the "base
payment-to-cost ratio" for a hospital means the ratio of -
(I) the hospital's reimbursement under this part for
covered OPD services furnished during the cost reporting
period ending in 1996 (or in the case of a hospital that
did not submit a cost report for such period, during the
first subsequent cost reporting period ending before 2001
for which the hospital submitted a cost report), including
any reimbursement for such 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
amendments made by section 4521 of the Balanced Budget Act of
1997 were in effect in 1996.
(G) Interim payments
The Secretary shall make payments under this paragraph to
hospitals on an interim basis, subject to retrospective
adjustments based on settled cost reports.
(H) No effect on copayments
Nothing in this paragraph shall be construed to affect the
unadjusted copayment amount described in paragraph (3)(B) or
the copayment amount under paragraph (8).
(I) Application without regard to budget neutrality
The additional payments made under this paragraph -
(i) shall not be considered an adjustment under paragraph
(2)(E); and
(ii) shall not be implemented in a budget neutral manner.
(8) Copayment amount
(A) In general
Except as provided in subparagraphs (B) and (C), the
copayment amount under this subsection is the amount by which
the amount described in paragraph (4)(B) exceeds the amount of
payment determined under paragraph (4)(C).
(B) Election to offer reduced copayment amount
The Secretary shall establish a procedure under which a
hospital, before the beginning of a year (beginning with 1999),
may elect to reduce the copayment amount otherwise established
under subparagraph (A) for some or all covered OPD services to
an amount that is not less than 20 percent of the medicare OPD
fee schedule amount (computed under paragraph (3)(D)) for the
service involved. Under such procedures, such reduced copayment
amount may not be further reduced or increased during the year
involved and the hospital may disseminate information on the
reduction of copayment amount effected under this subparagraph.
(C) Limitation on copayment amount
(i) To inpatient hospital deductible amount
In no case shall the copayment amount for a procedure
performed in a year exceed the amount of the inpatient
hospital deductible established under section 1395e(b) of
this title for that year.
(ii) To specified percentage
The Secretary shall reduce the national unadjusted
copayment amount for a covered OPD service (or group of such
services) furnished in a year in a manner so that the
effective copayment rate (determined on a national unadjusted
basis) for that service in the year does not exceed the
following percentage:
(I) For procedures performed in 2001, on or after April
1, 2001, 57 percent.
(II) For procedures performed in 2002 or 2003, 55
percent.
(III) For procedures performed in 2004, 50 percent.
(IV) For procedures performed in 2005, 45 percent.
(V) For procedures performed in 2006 and thereafter, 40
percent.
(D) No impact on deductibles
Nothing in this paragraph shall be construed as affecting a
hospital's authority to waive the charging of a deductible
under subsection (b) of this section.
(E) Computation ignoring outlier and pass-through adjustments
The copayment amount shall be computed under subparagraph (A)
as if the adjustments under paragraphs (5) and (6) (and any
adjustment made under paragraph (2)(E) in relation to such
adjustments) had not occurred.
(9) Periodic review and adjustments components of prospective
payment system
(A) Periodic review
The Secretary shall review not less often than annually and
revise the groups, the relative payment weights, and the wage
and other adjustments described in paragraph (2) to take into
account changes in medical practice, changes in technology, the
addition of new services, new cost data, and other relevant
information and factors. The Secretary shall consult with an
expert outside advisory panel composed of an appropriate
selection of representatives of providers to review (and advise
the Secretary concerning) the clinical integrity of the groups
and weights. Such panel may use data collected or developed by
entities and organizations (other than the Department of Health
and Human Services) in conducting such review.
(B) Budget neutrality adjustment
If the Secretary makes adjustments under subparagraph (A),
then the adjustments for a year may not cause the estimated
amount of expenditures under this part for the year to increase
or decrease from the estimated amount of expenditures under
this part that would have been made if the adjustments had not
been made. In determining adjustments under the preceding
sentence for 2004 and 2005, the Secretary shall not take into
account under this subparagraph or paragraph (2)(E) any
expenditures that would not have been made but for the
application of paragraph (14).
(C) Update factor
If the Secretary determines under methodologies described in
paragraph (2)(F) that the volume of services paid for under
this subsection increased beyond amounts established through
those methodologies, the Secretary may appropriately adjust the
update to the conversion factor otherwise applicable in a
subsequent year.
(10) Special rule for ambulance services
The Secretary shall pay for hospital outpatient services that
are ambulance services on the basis described in section
1395x(v)(1)(U) of this title, or, if applicable, the fee schedule
established under section 1395m(l) of this title.
(11) Special rules for certain hospitals
In the case of hospitals described in clause (iii) or (v) of
section 1395ww(d)(1)(B) of this title -
(A) the system under this subsection shall not apply to
covered OPD services furnished before January 1, 2000; and
(B) the Secretary may establish a separate conversion factor
for such services in a manner that specifically takes into
account the unique costs incurred by such hospitals by virtue
of their patient population and service intensity.
(12) Limitation on review
There shall be no administrative or judicial review under
section 1395ff of this title, 1395oo of this title, or otherwise
of -
(A) the development of the classification system under
paragraph (2), including the establishment of groups and
relative payment weights for covered OPD services, of wage
adjustment factors, other adjustments, and methods described in
paragraph (2)(F);
(B) the calculation of base amounts under paragraph (3);
(C) periodic adjustments made under paragraph (6);
(D) the establishment of a separate conversion factor under
paragraph (8)(B); and
(E) the determination of the fixed multiple, or a fixed
dollar cutoff amount, the marginal cost of care, or applicable
percentage under paragraph (5) or the determination of
insignificance of cost, the duration of the additional
payments, the determination and deletion of initial and new
categories (consistent with subparagraphs (B) and (C) of
paragraph (6)), the portion of the medicare OPD fee schedule
amount associated with particular devices, drugs, or
biologicals, and the application of any pro rata reduction
under paragraph (6).
(13) Authorization of adjustment for rural hospitals
(A) Study
The Secretary shall conduct a study to determine if, under
the system under this subsection, costs incurred by hospitals
located in rural areas by ambulatory payment classification
groups (APCs) exceed those costs incurred by hospitals located
in urban areas.
(B) Authorization of adjustment
Insofar as the Secretary determines under subparagraph (A)
that costs incurred by hospitals located in rural areas exceed
those costs incurred by hospitals located in urban areas, the
Secretary shall provide for an appropriate adjustment under
paragraph (2)(E) to reflect those higher costs by January 1,
2006.
(14) Drug APC payment rates
(A) In general
The amount of payment under this subsection for a specified
covered outpatient drug (defined in subparagraph (B)) that is
furnished as part of a covered OPD service (or group of
services) -
(i) in 2004, in the case of -
(I) a sole source drug shall in no case be less than 88
percent, or exceed 95 percent, of the reference average
wholesale price for the drug;
(II) an innovator multiple source drug shall in no case
exceed 68 percent of the reference average wholesale price
for the drug; or
(III) a noninnovator multiple source drug shall in no
case exceed 46 percent of the reference average wholesale
price for the drug;
(ii) in 2005, in the case of -
(I) a sole source drug shall in no case be less than 83
percent, or exceed 95 percent, of the reference average
wholesale price for the drug;
(II) an innovator multiple source drug shall in no case
exceed 68 percent of the reference average wholesale price
for the drug; or
(III) a noninnovator multiple source drug shall in no
case exceed 46 percent of the reference average wholesale
price for the drug; or
(iii) in a subsequent year, shall be equal, subject to
subparagraph (E) -
(I) to the average acquisition cost for the drug for that
year (which, at the option of the Secretary, may vary by
hospital group (as defined by the Secretary based on volume
of covered OPD services or other relevant
characteristics)), as determined by the Secretary taking
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