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115th Congress    }                                 {    Rept. 115-764
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                 {           Part 1

======================================================================



 
             MEDICARE AND OPIOID SAFE TREATMENT ACT OF 2018

                                _______
                                

                 June 19, 2018.--Ordered to be printed

                                _______
                                

Mr. Brady of Texas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 5776]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 5776) to amend title XVIII to provide for Medicare 
coverage of certain services furnished by opioid treatment 
programs, and for other purposes, having considered the same, 
report favorably thereon with amendments and recommend that the 
bill as amended do pass.

                                CONTENTS

                                                                   Page
 I. SUMMARY AND BACKGROUND............................................7
        A. Purpose and Summary...................................     7
        B. Background and Need for Legislation...................     8
        C. Legislative History...................................     8
II. EXPLANATION OF THE BILL...........................................9
        A. Medicare and Opioid Safe Treatment Act................     9
III.VOTES OF THE COMMITTEE...........................................11

IV. BUDGET EFFECTS OF THE BILL.......................................12
        A. Committee Estimate of Budgetary Effects...............    12
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures Budget Authority........................    12
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................    12
 V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......20
        A. Committee Oversight Findings and Recommendations......    20
        B. Statement of General Performance Goals and Objectives.    20
        C. Information Relating to Unfunded Mandates.............    20
        D. Congressional Earmarks, Limited Tax Benefits, and 
            Limited Tariff Benefits..............................    20
        E. Duplication of Federal Programs.......................    20
        F. Disclosure of Directed Rule Makings...................    20
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............21
        A. Text of Existing Law Amended or Repealed by the Bill, 
            as Reported..........................................    21
        B. Changes in Existing Law Proposed by the Bill, as 
            Reported.............................................    21

    The amendments are as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Medicare and Opioid Safe Treatment Act 
of 2018'' or the ``MOST Act of 2018''.

SEC. 2. MEDICARE COVERAGE OF CERTAIN SERVICES FURNISHED BY OPIOID 
                    TREATMENT PROGRAMS.

  (a) Coverage.--Section 1861(s)(2) of the Social Security Act (42 
U.S.C. 1395x(s)(2)) is amended--
          (1) in subparagraph (FF), by striking at the end ``and'';
          (2) in subparagraph (GG), by inserting at the end ``; and''; 
        and
          (3) by adding at the end the following new subparagraph:
                  ``(HH) opioid use disorder treatment services (as 
                defined in subsection (jjj)).''.
  (b) Opioid Use Disorder Treatment Services and Opioid Treatment 
Program Defined.--Section 1861 of the Social Security Act is amended by 
adding at the end the following new subsection:
  ``(jjj) Opioid Use Disorder Treatment Services; Opioid Treatment 
Program.--
          ``(1) Opioid use disorder treatment services.--The term 
        `opioid use disorder treatment services' means items and 
        services that are furnished by an opioid treatment program for 
        the treatment of opioid use disorder, including--
                  ``(A) opioid agonist and antagonist treatment 
                medications (including oral, injected, or implanted 
                versions) that are approved by the Food and Drug 
                Administration under section 505 of the Federal Food, 
                Drug and Cosmetic Act for use in the treatment of 
                opioid use disorder;
                  ``(B) dispensing and administration of such 
                medications, if applicable;
                  ``(C) substance use counseling by a professional to 
                the extent authorized under State law to furnish such 
                services;
                  ``(D) individual and group therapy with a physician 
                or psychologist (or other mental health professional to 
                the extent authorized under State law);
                  ``(E) toxicology testing, and
                  ``(F) other items and services that the Secretary 
                determines are appropriate (other than meals or 
                transportation).
          ``(2) Opioid treatment program.--The term `opioid treatment 
        program' means an entity that is opioid treatment program (as 
        defined in section 8.2 of title 42 of the Code of Federal 
        Regulations, or any successor regulation) that--
                  ``(A) is enrolled under section 1866(j);
                  ``(B) has in effect a certification by the Substance 
                Abuse and Mental Health Services Administration for 
                such a program;
                  ``(C) is accredited by an accrediting body approved 
                by the Substance Abuse and Mental Health Services 
                Administration; and
                  ``(D) meets such additional conditions as the 
                Secretary may find necessary to ensure--
                          ``(i) the health and safety of individuals 
                        being furnished services under such program; 
                        and
                          ``(ii) the effective and efficient furnishing 
                        of such services.''.
  (c) Payment.--
          (1) In general.--Section 1833(a)(1) of the Social Security 
        Act (42 U.S.C. 1395l(a)(1)) is amended--
                  (A) by striking ``and (BB)'' and inserting ``(BB)''; 
                and
                  (B) by inserting before the semicolon at the end the 
                following ``, and (CC) with respect to opioid use 
                disorder treatment services furnished during an episode 
                of care, the amount paid shall be equal to the amount 
                payable under section 1834(w) less any copayment 
                required as specified by the Secretary''.
          (2) Payment determination.--Section 1834 of the Social 
        Security Act (42 U.S.C. 1395m) is amended by adding at the end 
        the following new subsection:
  ``(w) Opioid Use Disorder Treatment Services.--
          ``(1) In general.--The Secretary shall pay to an opioid 
        treatment program (as defined in paragraph (2) of section 
        1861(jjj)) an amount that is equal to 100 percent of a bundled 
        payment under this part for opioid use disorder treatment 
        services (as defined in paragraph (1) of such section) that are 
        furnished by such program to an individual during an episode of 
        care (as defined by the Secretary) beginning on or after 
        January 1, 2020. The Secretary shall ensure, as determined 
        appropriate by the Secretary, that no duplicative payments are 
        made under this part or part D for items and services furnished 
        by an opioid treatment program.
          ``(2) Considerations.--The Secretary may implement this 
        subsection through one or more bundles based on the type of 
        medication provided (such as buprenorphine, methadone, 
        naltrexone, or a new innovative drug), the frequency of 
        services, the scope of services furnished, characteristics of 
        the individuals furnished such services, or other factors as 
        the Secretary determine appropriate. In developing such 
        bundles, the Secretary may consider payment rates paid to 
        opioid treatment programs for comparable services under State 
        plans under title XIX or under the TRICARE program under 
        chapter 55 of title 10 of the United States Code.
          ``(3) Annual updates.--The Secretary shall provide an update 
        each year to the bundled payment amounts under this 
        subsection.''.
  (d) Including Opioid Treatment Programs as Medicare Providers.--
Section 1866(e) of the Social Security Act (42 U.S.C. 1395cc(e)) is 
amended--
          (1) in paragraph (1), by striking at the end ``and'';
          (2) in paragraph (2), by striking the period at the end and 
        inserting ``; and''; and
          (3) by adding at the end the following new paragraph:
          ``(3) opioid treatment programs (as defined in paragraph (2) 
        of section 1861(jjj)), but only with respect to the furnishing 
        of opioid use disorder treatment services (as defined in 
        paragraph (1) of such section).''.

SEC. 3. REVIEW AND ADJUSTMENT OF PAYMENTS UNDER THE MEDICARE OUTPATIENT 
                    PROSPECTIVE PAYMENT SYSTEM TO AVOID FINANCIAL 
                    INCENTIVES TO USE OPIOIDS INSTEAD OF NON-OPIOID 
                    ALTERNATIVE TREATMENTS.

  (a) Outpatient Prospective Payment System.--Section 1833(t) of the 
Social Security Act (42 U.S.C. 1395l(t)) is amended by adding at the 
end the following new paragraph:
          ``(22) Review and revisions of payments for non-opioid 
        alternative treatments.--
                  ``(A) In general.--With respect to payments made 
                under this subsection for covered OPD services (or 
                groups of services), including covered OPD services 
                assigned to a comprehensive ambulatory payment 
                classification, the Secretary--
                          ``(i) shall, as soon as practicable, conduct 
                        a review (part of which may include a request 
                        for information) of payments for opioids and 
                        evidence-based non-opioid alternatives for pain 
                        management (including drugs and devices, nerve 
                        blocks, surgical injections, and 
                        neuromodulation) with a goal of ensuring that 
                        there are not financial incentives to use 
                        opioids instead of non-opioid alternatives;
                          ``(ii) may, as the Secretary determines 
                        appropriate, conduct subsequent reviews of such 
                        payments; and
                          ``(iii) shall consider the extent to which 
                        revisions under this subsection to such 
                        payments (such as the creation of additional 
                        groups of covered OPD services to classify 
                        separately those procedures that utilize 
                        opioids and non-opioid alternatives for pain 
                        management) would reduce payment incentives to 
                        use opioids instead of non-opioid alternatives 
                        for pain management.
                  ``(B) Priority.--In conducting the review under 
                clause (i) of subparagraph (A) and considering 
                revisions under clause (iii) of such subparagraph, the 
                Secretary shall focus on covered OPD services (or 
                groups of services) assigned to a comprehensive 
                ambulatory payment classification, ambulatory payment 
                classifications that primarily include surgical 
                services, and other services determined by the 
                Secretary which generally involve treatment for pain 
                management.
                  ``(C) Revisions.--If the Secretary identifies 
                revisions to payments pursuant to subparagraph 
                (A)(iii), the Secretary shall, as determined 
                appropriate, begin making such revisions for services 
                furnished on or after January 1, 2020. Revisions under 
                the previous sentence shall be treated as adjustments 
                for purposes of application of paragraph (9)(B).
                  ``(D) Rules of construction.--Nothing in this 
                paragraph shall be construed to preclude the 
                Secretary--
                          ``(i) from conducting a demonstration before 
                        making the revisions described in subparagraph 
                        (C); or
                          ``(ii) prior to implementation of this 
                        paragraph, from changing payments under this 
                        subsection for covered OPD services (or groups 
                        of services) which include opioids or non-
                        opioid alternatives for pain management.''.
  (b) Ambulatory Surgical Centers.--Section 1833(i) of the Social 
Security Act (42 U.S.C. 1395l(i)) is amended by adding at the end the 
following new paragraph:
  ``(8) The Secretary shall conduct a similar type of review as 
required under paragraph (22) of section 1833(t)), including the second 
sentence of subparagraph (C) of such paragraph, to payment for services 
under this subsection, and make such revisions under this paragraph, in 
an appropriate manner (as determined by the Secretary).''.

SEC. 4. EXPANDING ACCESS UNDER THE MEDICARE PROGRAM TO ADDICTION 
                    TREATMENT IN FEDERALLY QUALIFIED HEALTH CENTERS AND 
                    RURAL HEALTH CLINICS.

  (a) Federally Qualified Health Centers.--Section 1834(o) of the 
Social Security Act (42 U.S.C. 1395m(o)) is amended by adding at the 
end the following new paragraph:
          ``(3) Additional payments for certain fqhcs with physicians 
        or other practitioners receiving data 2000 waivers.--
                  ``(A) In general.--In the case of a Federally 
                qualified health center with respect to which, 
                beginning on or after January 1, 2019, Federally-
                qualified health center services (as defined in section 
                1861(aa)(3)) are furnished for the treatment of opioid 
                use disorder by a physician or practitioner who meets 
                the requirements described in subparagraph (C) the 
                Secretary shall, subject to availability of funds under 
                subparagraph (D), make a payment (at such time and in 
                such manner as specified by the Secretary) to such 
                Federally qualified health center after receiving and 
                approving an application submitted by such Federally 
                qualified health center under subparagraph (B). Such a 
                payment shall be in an amount determined by the 
                Secretary, based on an estimate of the average costs of 
                training for purposes of receiving a waiver described 
                in subparagraph (C)(ii). Such a payment may be made 
                only one time with respect to each such physician or 
                practitioner.
                  ``(B) Application.--In order to receive a payment 
                described in subparagraph (A), a Federally-qualified 
                health center shall submit to the Secretary an 
                application for such a payment at such time, in such 
                manner, and containing such information as specified by 
                the Secretary. A Federally-qualified health center may 
                apply for such a payment for each physician or 
                practitioner described in subparagraph (A) furnishing 
                services described in such subparagraph at such center.
                  ``(C) Requirements.--For purposes of subparagraph 
                (A), the requirements described in this subparagraph, 
                with respect to a physician or practitioner, are the 
                following:
                          ``(i) The physician or practitioner is 
                        employed by or working under contract with a 
                        Federally qualified health center described in 
                        subparagraph (A) that submits an application 
                        under subparagraph (B).
                          ``(ii) The physician or practitioner first 
                        receives a waiver under section 303(g) of the 
                        Controlled Substances Acton or after January 1, 
                        2019.
                  ``(D) Funding.--For purposes of making payments under 
                this paragraph, there are appropriated, out of amounts 
                in the Treasury not otherwise appropriated, $6,000,000, 
                which shall remain available until expended.''.
  (b) Rural Health Clinic.--Section 1833 of the Social Security Act (42 
U.S.C. 1395l) is amended--
          (1) by redesignating the subsection (z) relating to medical 
        review of spinal subluxation services as subsection (aa); and
          (2) by adding at the end the following new subsection:
  ``(bb) Additional Payments for Certain Rural Health Clinics With 
Physicians or Practitioners Receiving DATA 2000 Waivers.--
          ``(1) In general.--In the case of a rural health clinic with 
        respect to which, beginning on or after January 1, 2019, rural 
        health clinic services (as defined in section 1861(aa)(1)) are 
        furnished for the treatment of opioid use disorder by a 
        physician or practitioner who meets the requirements described 
        in paragraph (3), the Secretary shall, subject to availability 
        of funds under paragraph (4), make a payment (at such time and 
        in such manner as specified by the Secretary) to such rural 
        health clinic after receiving and approving an application 
        described in paragraph (2). Such payment shall be in an amount 
        determined by the Secretary, based on an estimate of the 
        average costs of training for purposes of receiving a waiver 
        described in paragraph (3)(B). Such payment may be made only 
        one time with respect to each such physician or practitioner.
          ``(2) Application.--In order to receive a payment described 
        in paragraph (1), a rural health clinic shall submit to the 
        Secretary an application for such a payment at such time, in 
        such manner, and containing such information as specified by 
        the Secretary. A rural health clinic may apply for such a 
        payment for each physician or practitioner described in 
        paragraph (1) furnishing services described in such paragraph 
        at such clinic.
          ``(3) Requirements.--For purposes of paragraph (1), the 
        requirements described in this paragraph, with respect to a 
        physician or practitioner, are the following:
                  ``(A) The physician or practitioner is employed by or 
                working under contract with a rural health clinic 
                described in paragraph (1) that submits an application 
                under paragraph (2).
                  ``(B) The physician or practitioner first receives a 
                waiver under section 303(g) of the Controlled 
                Substances Acton or after January 1, 2019.
          ``(4) Funding.--For purposes of making payments under this 
        subsection, there are appropriated, out of amounts in the 
        Treasury not otherwise appropriated, $2,000,000, which shall 
        remain available until expended.''.

SEC. 5. STUDYING THE AVAILABILITY OF SUPPLEMENTAL BENEFITS DESIGNED TO 
                    TREAT OR PREVENT SUBSTANCE USE DISORDERS UNDER 
                    MEDICARE ADVANTAGE PLANS.

  (a) In General.--Not later than 2 years after the date of the 
enactment of this Act, the Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall submit to Congress 
a report on the availability of supplemental health care benefits (as 
described in section 1852(a)(3)(A) of the Social Security Act (42 
U.S.C. 1395w-22(a)(3)(A))) designed to treat or prevent substance use 
disorders under Medicare Advantage plans offered under part C of title 
XVIII of such Act. Such report shall include the analysis described in 
subsection (c) and any differences in the availability of such benefits 
under specialized MA plans for special needs individuals (as defined in 
section 1859(b)(6) of such Act (42 U.S.C. 1395w-28(b)(6))) offered to 
individuals entitled to medical assistance under title XIX of such Act 
and other such Medicare Advantage plans.
  (b) Consultation.--The Secretary shall develop the report described 
in subsection (a) in consultation with relevant stakeholders, 
including--
          (1) individuals entitled to benefits under part A or enrolled 
        under part B of title XVIII of the Social Security Act;
          (2) entities who advocate on behalf of such individuals;
          (3) Medicare Advantage organizations;
          (4) pharmacy benefit managers; and
          (5) providers of services and suppliers (as such terms are 
        defined in section 1861 of such Act (42 U.S.C. 1395x)).
  (c) Contents.--The report described in subsection (a) shall include 
an analysis on the following:
          (1) The extent to which plans described in such subsection 
        offer supplemental health care benefits relating to coverage 
        of--
                  (A) medication-assisted treatments for opioid use, 
                substance use disorder counseling, peer recovery 
                support services, or other forms of substance use 
                disorder treatments (whether furnished in an inpatient 
                or outpatient setting); and
                  (B) non-opioid alternatives for the treatment of 
                pain.
          (2) Challenges associated with such plans offering 
        supplemental health care benefits relating to coverage of items 
        and services described in subparagraph (A) or (B) of paragraph 
        (1).
          (3) The impact, if any, of increasing the applicable rebate 
        percentage determined under section 1854(b)(1)(C) of the Social 
        Security Act (42 U.S.C. 1395w-24(b)(1)(C)) for plans offering 
        such benefits relating to such coverage would have on the 
        availability of such benefits relating to such coverage offered 
        under Medicare Advantage plans.
          (4) Potential ways to improve upon such coverage or to 
        incentivize such plans to offer additional supplemental health 
        care benefits relating to such coverage.

SEC. 6. CLINICAL PSYCHOLOGIST SERVICES MODELS UNDER THE CENTER FOR 
                    MEDICARE AND MEDICAID INNOVATION; GAO STUDY AND 
                    REPORT.

  (a) CMI Models.--Section 1115A(b)(2)(B) of the Social Security Act 
(42 U.S.C. 1315a(b)(2)(B) is amended by adding at the end the following 
new clauses:
                          ``(xxv) Supporting ways to familiarize 
                        individuals with the availability of coverage 
                        under part B of title XVIII for qualified 
                        psychologist services (as defined in section 
                        1861(ii)).
                          ``(xxvi) Exploring ways to avoid unnecessary 
                        hospitalizations or emergency department visits 
                        for mental and behavioral health services (such 
                        as for treating depression) through use of a 
                        24-hour, 7-day a week help line that may inform 
                        individuals about the availability of treatment 
                        options, including the availability of 
                        qualified psychologist services (as defined in 
                        section 1861(ii)).''.
  (b) GAO Study and Report.--Not later than 18 months after the date of 
the enactment of this Act, the Comptroller General of the United States 
shall conduct a study, and submit to Congress a report, on mental and 
behavioral health services under the Medicare program under title XVIII 
of the Social Security Act, including an examination of the following:
          (1) Information about services furnished by psychiatrists, 
        clinical psychologists, and other professionals.
          (2) Information about ways that Medicare beneficiaries 
        familiarize themselves about the availability of Medicare 
        payment for qualified psychologist services (as defined in 
        section 1861(ii) of the Social Security Act (42 U.S.C. 
        1395x(ii)) and ways that the provision of such information 
        could be improved.

SEC. 7. PAIN MANAGEMENT STUDY.

  (a) In General.--Not later than 1 year after the date of enactment of 
this Act, the Secretary of Health and Human Services (referred to in 
this section as the ``Secretary'') shall conduct a study and submit to 
the Committee on Ways and Means and the Committee on Energy and 
Commerce of the House of Representatives and the Committee on Finance 
of the Senate a report containing recommendations on whether and how 
payment to providers and suppliers of services and coverage related to 
the use of multi-disciplinary, evidence-based, non-opioid treatments 
for acute and chronic pain management for individuals entitled to 
benefits under part A or enrolled under part B of title XVIII of the 
Social Security Act should be revised. The Secretary shall make such 
report available on the public website of the Centers for Medicare & 
Medicaid Services.
  (b) Consultation.--In developing the report described in subsection 
(a), the Secretary shall consult with--
          (1) relevant agencies within the Department of Health and 
        Human Services;
          (2) licensed and practicing osteopathic and allopathic 
        physicians, behavioral health practitioners, physician 
        assistants, nurse practitioners, dentists, pharmacists, and 
        other providers of health services;
          (3) providers and suppliers of services (as such terms are 
        defined in section 1861 of the Social Security Act (42 U.S.C. 
        1395x));
          (4) substance abuse and mental health professional 
        organizations;
          (5) pain management professional organizations and advocacy 
        entities, including individuals who personally suffer chronic 
        pain;
          (6) medical professional organizations and medical specialty 
        organizations;
          (7) licensed health care providers who furnish alternative 
        pain management services;
          (8) organizations with expertise in the development of 
        innovative medical technologies for pain management;
          (9) beneficiary advocacy organizations; and
          (10) other organizations with expertise in the assessment, 
        diagnosis, treatment, and management of pain, as determined 
        appropriate by the Secretary.
  (c) Contents.--The report described in subsection (a) shall include 
the following:
          (1) The recommendations described in subsection (d).
          (2) The impact analysis described in subsection (e).
          (3) An assessment of pain management guidance published by 
        the Federal Government that may be relevant to coverage 
        determinations or other coverage requirements under title XVIII 
        of the Social Security Act. Such assessment shall consider 
        incorporating into such guidance relevant elements of the ``Va/
        DoD Clinical Practice Guideline for Opioid Therapy for Chronic 
        Pain'' published in February 2017 by the Department of Veterans 
        Affairs and Department of Defense, including adoption of 
        elements of the Department of Defense and Veterans 
        Administration pain rating scale.
          (4) An evaluation of the following:
                  (A) Barriers inhibiting individuals entitled to 
                benefits under part A or enrolled under part B of such 
                title from accessing treatments and technologies 
                described in subparagraphs (A) through (F) of paragraph 
                (5).
                  (B) Potential legislative and administrative changes 
                under such title to improve individuals' access to 
                items and services currently covered under such title 
                and used for the treatment of pain, such as cognitive 
                behavioral interventions, physical therapy, 
                occupational therapy, physical medicine, and 
                chiropractic therapy, and other pain treatments 
                services furnished in a hospital or post-acute care 
                setting.
                  (C) Costs and benefits associated with potential 
                expansion of coverage under such title to include items 
                and services not covered under such title that may be 
                used for the treatment of pain, such as acupuncture, 
                therapeutic massage, and items and services furnished 
                by integrated pain management programs.
          (5) An analysis on payment and coverage under title XVIII of 
        the Social Security Act with respect to the following:
                  (A) Evidence-based treatments and technologies for 
                chronic or acute pain, including such treatments that 
                are covered, not covered, or have limited coverage 
                under such title.
                  (B) Evidence-based treatments and technologies that 
                monitor substance use withdrawal and prevent overdoses 
                of opioids.
                  (C) Evidence-based treatments and technologies that 
                treat substance use disorders.
                  (D) Items and services furnished by practitioners 
                through a multi-disciplinary treatment model for pain 
                management, including the patient-centered medical 
                home.
                  (E) Medical devices, non-opioid based drugs, and 
                other therapies (including interventional and 
                integrative pain therapies) approved or cleared by the 
                Food and Drug Administration for the treatment of pain.
                  (F) Items and services furnished to beneficiaries 
                with psychiatric disorders, substance use disorders, or 
                who are at risk of suicide, or have comorbidities and 
                require consultation or management of pain with one or 
                more specialists in pain management, mental health, or 
                addiction treatment.
  (d) Recommendations.--The recommendations described in this 
subsection are, with respect to individuals entitled to benefits under 
part A or enrolled under part B of title XVIII of the Social Security 
Act, legislative and administrative recommendations on the following:
          (1) Options for additional coverage of pain management 
        therapies without the use of opioids, including interventional 
        pain therapies, and options to augment opioid therapy with 
        other clinical and complementary, integrative health services 
        to minimize the risk of substance use disorder, including in a 
        hospital setting.
          (2) Options for coverage and payment modifications of medical 
        devices and non-opioid based pharmacological and non-
        pharmacological therapies (including interventional and 
        integrative pain therapies) approved or cleared by the Food and 
        Drug Administration for the treatment of pain as an alternative 
        or augment to opioid therapy.
          (3) Treatment strategies for beneficiaries with psychiatric 
        disorders, substance use disorders, or who are at risk of 
        suicide, and treatment strategies to address health disparities 
        related to opioid use and opioid abuse treatment.
          (4) Treatment strategies for beneficiaries with comorbidities 
        who require a consultation or comanagement of pain with one or 
        more specialists in pain management, mental health, or 
        addiction treatment, including in a hospital setting.
          (5) Coadministration of opioids and other drugs, particularly 
        benzodiazepines.
          (6) Appropriate case management for beneficiaries who 
        transition between inpatient and outpatient hospital settings, 
        or between opioid therapy to non-opioid therapy, which may 
        include the use of care transition plans.
          (7) Outreach activities designed to educate providers of 
        services and suppliers under the Medicare program and 
        individuals entitled to benefits under part A or under part B 
        of such title on alternative, non-opioid therapies to manage 
        and treat acute and chronic pain.
          (8) Creation of a beneficiary education tool on alternatives 
        to opioids for chronic pain management.
  (e) Impact Analysis.--The impact analysis described in this 
subsection consists of an analysis of any potential effects 
implementing the recommendations described in subsection (d) would 
have--
          (1) on expenditures under the Medicare program; and
          (2) on preventing or reducing opioid addiction for 
        individuals receiving benefits under the Medicare program.

    Amend the title so as to read:
    A bill to amend title XVIII to provide for Medicare 
coverage of certain services furnished by opioid treatment 
programs, and for other purposes.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The bill, H.R. 5776, the ``Medicare and Opioid Safe 
Treatment (MOST) Act of 2018,'' as ordered reported by the 
Committee on Ways and Means on May 16, 2018, increases 
treatment coverage in Medicare for individuals suffering from 
opioid use disorder.

                 B. Background and Need for Legislation

    Although overdose rates are highest for people ages 25 to 
54, the opioid epidemic has also had dramatic effects on 
Medicare beneficiaries. A July 2017 Department of Health and 
Human Services (HHS) Office of the Inspector General (OIG) 
report found that one-third of Part D beneficiaries received an 
opioid prescription in 2016, costing the program $4.1 billion 
and representing 79.4 million prescriptions. Currently, 
Medicare covers substance use treatment when it is ``medically 
necessary,'' but there are still significant gaps in access to 
treatment and services for some Medicare beneficiaries at risk 
for or suffering from opioid use disorder. Specifically, 
Medicare covers Medication-Assisted Treatment (MAT), the 
evidence-based long-term treatment approach for opioid use 
disorders that combines medication with counseling and 
behavioral therapies, if prescribed in an inpatient setting 
only. Medicare generally does not cover such medications 
prescribed or dispensed to patients in an outpatient setting, 
resulting in coverage gaps for many beneficiaries.
    There may also be coverage gaps or barriers to coverage for 
certain non-opioid pain management treatments in the Medicare 
program. Providers often have a choice regarding the types of 
medicines or other items used in a procedure for a patient, and 
Medicare payments should be neutral, encouraging providers to 
select the items and services most appropriate for a given 
patient not based on reimbursement rates. Sometimes, payment 
incentives in Medicare become misaligned, potentially providing 
a financial incentive to choose one item over another.
    The MOST Act fills coverage gaps for substance use disorder 
treatment and explores the potential for perverse incentives to 
prescribing opioids.

                         C. Legislative History


Background

    H.R. 5776 was introduced on May 11, 2018, and was referred 
to the Committee on Ways and Means and additionally the 
Committee on Energy and Commerce.

Committee hearings

    On January 17, 2018, the Subcommittee on Oversight held a 
hearing on the current landscape and CMS actions to prevent 
opioid misuse.
    On February 6, 2018, the Subcommittee on Health held a 
hearing on removing barriers to prevent and treat opioid abuse 
and dependence in Medicare.
    On April 12, 2018, the Subcommittee on Human Resources held 
a hearing on local perspectives on the jobs gap that discussed 
problems the opioid epidemic is creating in finding qualified 
workers.
    On April 25, 2018, the Subcommittee on Trade held a hearing 
on stopping the flow of synthetic opioids in the international 
mail system.

Committee action

    The Committee on Ways and Means marked up H.R. 5776, the 
``Medicare and Opioid Safe Treatment (MOST) Act of 2018,'' on 
May 16, 2018, and ordered the bill, as amended, favorably 
reported (with a quorum being present).

                      II. EXPLANATION OF THE BILL


               A. Medicare and Opioid Safe Treatment Act


                              PRESENT LAW

    Currently, Medicare covers substance use treatment when it 
is ``medically necessary,'' but there are still significant 
gaps in access to treatment and services for some Medicare 
beneficiaries at risk for or suffering from opioid use 
disorder. Medicare covers MAT, the evidence-based long-term 
treatment approach for opioid use disorders that combines 
medication with counseling and behavioral therapies, if 
prescribed in an inpatient setting only. Medicare generally 
does not cover such medications prescribed or dispensed to 
patients in an outpatient setting, resulting in coverage gaps 
for many beneficiaries.

                           REASONS FOR CHANGE

    Although overdose rates are highest for people ages 25 to 
54, the opioid epidemic has also had dramatic effects on 
Medicare beneficiaries. A July 2017 HHS OIG report found that 
one-third of Part D beneficiaries received an opioid 
prescription in 2016, costing the program $4.1 billion and 
representing 79.4 million prescriptions.
    There may also be coverage gaps or barriers to coverage for 
certain non-opioid pain management treatments in the Medicare 
program. Providers often have a choice regarding the types of 
medicines or other items used in a procedure for a patient, and 
Medicare payments should be neutral, encouraging providers to 
select the items and services most appropriate for a given 
patient--not based on reimbursement rates. Sometimes, payment 
incentives in Medicare become misaligned, potentially providing 
a financial incentive to choose one treatment over another.

                       EXPLANATION OF PROVISIONS

    Section 1: This section states the short title as the 
``Medicare and Opioid Safe Treatment (MOST) Act of 2018.''
    Section 2: Medicare Coverage of Certain Services Furnished 
by Opioid Treatment Programs (OTPs).
    This section would expand Medicare coverage to include OTPs 
for the purposes of delivering MAT--including with methadone--
to Medicare beneficiaries. Medicare will pay OTPs through 
bundled payments for services, including necessary medications, 
counseling, and testing.
    Section 3: Review and Adjustment of Payments under the 
Medicare Outpatient Prospective Payment System to Avoid 
Financial Incentives to Use Opioids Instead of Non-Opioid 
Alternative Treatments.
    This section would require the Secretary of the HHS to 
review Medicare's payments made through the Outpatient 
Prospective Payment System (OPPS) and payments to ambulatory 
surgery centers (ASCs) to ensure there are no financial 
incentives to use opioids instead of evidence-based non-opioid 
alternatives. Under the OPPS, the Secretary will focus 
primarily on payments made through Ambulatory Payment 
Classifications (APCs) and Complex Ambulatory Payment 
Classifications (C-APCs) that primarily include surgical 
services. If the Secretary identifies financial incentives to 
use opioids instead of evidence-based non-opioid alternatives, 
the Secretary will make such revisions to OPPS and ASC payments 
through rulemaking. The Secretary may also make changes to 
these payment systems through a demonstration.
    When the Secretary conducts the review of the OPPS and ASC 
payment systems to achieve the goal of ensuring that there are 
not financial incentives to use opioids instead of non-opioid 
alternatives, or improve the appropriate use of or access to 
such non-opioid alternative treatments, the Committee expects 
the Secretary to examine, among other possible options, 
creating additional groups of covered outpatient department 
services that use non-opioid alternative treatments. CMS should 
consider differences in structure and function of such 
treatments that impact pain relief, cost-effectiveness, patient 
safety, and whether it reduces dependence on opioids.
    Section 4: Expanding Access under the Medicare Program to 
Addiction Treatment in Federally Qualified Health Centers and 
Rural Health Centers.
    This section would provide payments to Federally Qualified 
Health Centers (FQHCs) and Rural Health Centers (RHCs) to 
offset the cost of their providers receiving training to become 
Drug Addiction Treatment Act of 2000 (DATA 2000) compliant. 
This means that providers who work in FQHCs and RHCs and 
receive training to provide MAT can get reimbursed for that 
training.
    Section 5: Studying the Availability of Supplemental 
Benefits Designed to Treat or Prevent Substance Use Disorders 
under Medicare Advantage Plans.
    No later than two years after the date of enactment, the 
Secretary of HHS is required to evaluate the extent to which MA 
plans offer MAT and cover non-opioid alternative treatments not 
otherwise covered under Medicare FFS as part of a supplemental 
benefit.
    Consultation: The Secretary is required to develop the 
report in consultation with relevant stakeholders.
    Content: The report is required to include an analysis of 
the extent to which plans offer supplemental health care 
benefits relating to the coverage of (1) medication assisted 
treatments for opioid use, substance use disorder counseling, 
peer recovery support services, or other forms of substance use 
disorder treatments and (2) non-opioid alternatives for the 
treatment of pain. The Committee's intent is not to limit the 
types of treatments being analyzed to treat pain. The Secretary 
may include non-pharmacologic therapies such as physical 
therapy.
    The report must also analyze the challenges associated with 
plans offering supplemental health care benefits relating to 
coverage of these items and services and the impact of 
increasing the applicable rebate percentage to incentivize 
coverage or availability of such benefits.
    Lastly, the report is required to provide recommendations 
to improve upon such coverage or to incentivize plans to offer 
these types of additional supplemental health care benefits.
    Section 6: Clinical Psychologist Services Models under the 
Center for Medicare and Medicaid Innovation; GAO Study and 
Report.
    This section would direct the Secretary of HHS, under the 
Center for Medicare & Medicaid Innovation, to educate patients 
on the availability of psychologist services and explore the 
use of hotlines to reduce unnecessary hospitalizations in 
Medicare. This provision also mandates the Comptroller General 
of the United States to issue a report on mental and behavioral 
health under the Medicare program with information about 
services offered by psychiatrists, clinical psychologists, and 
other professionals.
    Section 7: Pain Management Study.
    This section would require the Secretary of HHS to issue a 
report, in consultation with relevant stakeholders, containing 
options for improving payment and coverage for multi-
disciplinary, evidence-based, non-opioid treatments for acute 
and chronic pain management for Medicare FFS beneficiaries. The 
report will also include: (1) an assessment of costs and 
benefits of potential expansion of pain management coverage; 
(2) options for improving treatment strategies and case 
management for various high-risk patient populations; and (3) 
options for improving and disseminating pain management 
education tools. It will also consider relevant elements of the 
``VA/DoD Clinical Practice Guideline for Opioid Therapy for 
Chronic Pain,'' published in February 2017 by the Department of 
Veterans Affairs and Department of Defense for updates of HHS 
guidance.

                             EFFECTIVE DATE

    Section 2: Beginning on or after January 1, 2020.
    Section 3: Upon date of enactment, with the Secretary 
making revisions on or after January 1, 2020.
    Section 4: Beginning January 1, 2019.
    Section 5: No later than two years after the date of 
enactment.
    Section 6: Not later than 18 months after the date of the 
enactment of this Act.
    Section 7: Not later than 1 year after the date of the 
enactment of this Act.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the votes of the Committee on Ways and Means in its 
consideration of H.R. 5776, the MOST Act of 2018, on May 16, 
2018.
    The Chairman's amendment in the nature of a substitute was 
adopted by a voice vote (with a quorum being present).
    The bill, H.R. 5776, was ordered favorably reported as 
amended by voice vote (with a quorum being present).

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of the bill, H.R. 5776, as 
reported. The Committee agrees with the estimate prepared by 
the Congressional Budget Office (CBO), which is included below.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority. The 
Committee states further that the bill involves no new or 
increased tax expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 6, 2018.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for the opioid-related 
legislation ordered to be reported on May 16, 2018.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Tom Bradley.
            Sincerely,
                                             Mark P. Hadley
                                        (For Keith Hall, Director).
    Enclosure.

Opioid Legislation

    Summary: On May 16, 2018, the House Committee on Ways and 
Means ordered seven bills to be reported related to the 
nation's response to the opioid epidemic. Generally, the bills 
would:
           Expand Medicare coverage of treatment for 
        opioid use disorder;
           Give Medicare providers and health plans 
        additional tools to curtail inappropriate prescribing 
        and use of opioids;
           Require the completion of studies and 
        reports related to opioid use and misuse in Medicare; 
        and
           Require the United States Postal Service and 
        Customs and Border Protection (CBP) to reduce illegal 
        shipment of opioids across international borders.
    Because the bills are related, CBO is publishing a single 
comprehensive document that includes estimates for each piece 
of legislation.
    CBO estimates that enacting four of the bills would affect 
direct spending; therefore, pay-as-you-go procedures apply for 
those bills. None of the bills would affect revenues.
    CBO estimates that although enacting one bill of the seven 
included in this document (H.R. 5776) would increase net direct 
spending and on-budget deficits over the four consecutive 10-
year periods beginning in 2029, those effects would not exceed 
the threshold established by the Congress for long-term costs. 
CBO estimates that none of the remaining bills would increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2029.
    None of the bills contain intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
(UMRA).
    Estimated cost to the Federal Government: The estimates in 
this document do not include the effects of interactions among 
the bills. If all seven bills were combined and enacted as one 
piece of legislation, the budgetary effects would be different 
from the sum of the estimates in this document, although CBO 
expects that those differences would be small. The effects of 
this legislation fall within functions 550 (health), 570 
(Medicare), and 750 (administration of justice).
    Basis of estimate: For this estimate, CBO assumes that all 
of the legislation will be enacted late in 2018 and that 
authorized and estimated amounts will be appropriated each 
year. Outlays for discretionary programs are estimated based on 
historical spending patterns for similar programs.

Uncertainty

    CBO aims to produce estimates that generally reflect the 
middle of a range of the most likely budgetary outcomes that 
would result if the legislation was enacted. Because data on 
the utilization of mental health and substance abuse treatment 
under Medicaid and Medicare is scarce, CBO cannot precisely 
predict how patients or providers would respond to some policy 
changes or what budgetary effects would result. In addition, 
several of the bills would give the Department of Health and 
Human Services (HHS) considerable latitude in designing and 
implementing policies. Budgetary effects could differ from 
those provided in CBO's analyses depending on those decisions.

Direct Spending

    Table 1 lists the four bills included in this estimate that 
would affect direct spending.
    H.R. 5676, the Stop Excessive Narcotics in our Retirement 
Communities Protection Act of 2018, would allow prescription 
drug plans to suspend payments to pharmacies while fraud 
investigations are pending. CBO expects that enacting the 
legislation would reduce payments by those plans to phannacies 
and result in lower premiums for benefits under Medicare's Part 
D. CBO estimates that the reduction in premiums would lower 
federal spending for Part D by $9 million over the 2019-2028 
period.

                                                    TABLE 1.--ESTIMATED CHANGES IN MANDATORY SPENDING
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          By fiscal year, in millions of dollars--
                                  ----------------------------------------------------------------------------------------------------------------------
                                                                                                                                                  2019-
                                     2018     2019     2020     2021     2022     2023     2024     2025     2026     2027     2028   2019-2023    2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      INCREASES OR DECREASES (-) IN DIRECT SPENDING
 
H.R. 5676, Stop Excessive
 Narcotics in our Retirement
 Communities Protection Act of
 2018:
    Budget Authority.............        0        0       -1       -1       -1       -1       -1       -1       -1       -1       -1        -4        -9
    Outlays......................        0        0       -1       -1       -1       -1       -1       -1       -1       -1       -1        -4        -9
H.R. 5773, Preventing Addiction
 for Susceptible Seniors Act of
 2018:a
    Budget Authority.............        0        0        0       -6       -7       -7       -7       -8       -9       -9      -11       -20       -64
    Outlays......................        0        0        0       -6       -7       -7       -7       -8       -9       -9      -11       -20       -64
H.R. 5776, the Medicare and
 Opioid Safe Treatment Act of
 2018:a
    Budget Authority.............        0        8        0       20       20       25       30       30       35       35       40        73       243
    Outlays......................        0        2        4       22       20       25       30       30       35       35       40        73       243
H.R. 5788, Securing the
 International Mail Against
 Opioids Act of 2018:a
    Budget Authority.............        0        0        *        *        *        *        *        *        *        *        *         *         *
    Outlays......................        0        0        *        *        *        *        *        *        *        *        *         *         *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual amounts may not sum to totals because of rounding * = between -$500,000 and $500,000
a This bill also would affect spending subject to appropriation.

    H.R. 5773, the Preventing Addiction for Susceptible Seniors 
Act of 2018, would require Part D prescription drug plans to 
provide drug management programs for Medicare beneficiaries who 
are at risk for prescription drug abuse. (Under current law, 
Part D plans are permitted but not required to establish such 
programs as of 2019.) Based on an analysis of the number of 
plans currently providing those programs, CBO estimates that 
enacting H.R. 5773 would lower federal spending by $64 million 
over the 2019-2028 period by reducing the number of 
prescriptions filled and Medicare's payments for controlled 
substances.
    Two provisions of H.R. 5773 would have no significant 
budgetary effect; they are described later in this document.
    H.R. 5776, the Medicare and Opioid Safe Treatment Act of 
2018, would appropriate $8 million in 2019, which would be 
available until expended, for Federally Qualified Health 
Centers and Rural Health Clinics to support training in the 
treatment of opioid use disorder. CBO expects that $8 million 
would be spent between 2019 and 2021.
    H.R. 5776 also would expand the availability of medication-
assisted treatment (MAT) for Medicare beneficiaries with opioid 
use disorder. The bill would allow treatment programs certified 
by the Substance Abuse and Mental Health Services 
Administration (SAMHSA) to become Medicare-participating 
providers.\1\ H.R. 5776 also would direct the Secretary of HHS 
to create a new schedule of bundled payments for MAT through 
certified programs and grant the Secretary considerable 
discretion for defining bundles and establishing payment rates.
---------------------------------------------------------------------------
    \1\MAT combines behavioral therapy and pharmaceutical treatment for 
substance use disorders. Under current law, methadone (an opioid used 
to treat and manage dependence on other drugs, such as heroin) can be 
dispensed only by SAMHSA-certified treatment programs, which do not 
participate in Medicare. Other drugs used in MAT, including 
buprenorphine and naltrexone, can be dispensed more widely.
---------------------------------------------------------------------------
    CBO projects that, beginning in 2021, about 3,000 Medicare 
beneficiaries who would not be treated for opioid abuse under 
current law would newly enroll each year in treatment offered 
by SAMHSA-certified programs and that the annual cost per 
participant would range from about $6,000 to about $10,000, 
depending largely on the medications dispensed and the period 
for which beneficiaries adhered to the protocol. CBO's 
projection of the number of beneficiaries who would receive 
treatment takes into consideration the number of beneficiaries 
estimated to have opioid-use disorder, the number already 
receiving some form of treatment, and the availability of 
providers to treat those who newly enroll in MAT. To develop a 
per capita treatment cost, CBO analyzed rates for MAT paid by 
other payers, as well as Medicare spending for health care 
services typically used by people receiving MAT. CBO estimates 
that the new MAT benefit would increase direct spending by $235 
million over the 2019-2028 period.
    CBO estimates that enacting H.R. 5776 would increase net 
Medicare spending by $243 million over the 2019-2028 period. 
(If enacted, H.R. 5776 would also affect spending subject to 
appropriation; CBO has not completed an estimate of that 
amount.)
    H.R. 5788, the Securing the International Mail Against 
Opioids Act of 2018, would establish a new fee for certain 
items mailed to the United States from overseas, beginning 
January 1, 2020. Initially, the fee for most such items would 
be one dollar, but the amount could be adjusted annually 
thereafter. Using information provided by CBP, CBO estimates 
that about $100 million in new fees would be collected over the 
2020-2028 period. The collections would be divided equally 
between CBP and the Postal Service and spent by those agencies 
on activities related to the processing of inbound mail. CBO 
estimates that the net effect on federal spending in each year 
would be insignificant. (If enacted, H.R. 5788 would also 
affect spending subject to appropriation; those effects are 
described below.)

Spending subject to appropriation

    For this document, CBO has grouped bills with spending that 
would be subject to appropriation into three general 
categories:
           Bills with provisions that would have no 
        budgetary effect;
           Bills with provisions for which CBO has 
        estimated an authorization of appropriations (see Table 
        2); and
           Bills with provisions that would affect 
        spending subject to appropriation for which CBO has not 
        yet completed an estimate.
    No Budgetary Effect. CBO estimates that three of the bills 
have provisions that would not significantly affect direct 
spending, revenues, or spending subject to appropriation.
    H.R. 5773, the Preventing Addiction for Susceptible Seniors 
Act of 2018, would require health care professionals to submit 
prior authorization requests electronically, starting on 
January 1, 2021, for drugs covered under Medicare Part D. 
Taking into account that many prescribers already use 
electronic methods to submit such requests, CBO estimates that 
enacting that Section 3 of H.R. 5773 would not significantly 
affect direct spending for Part D.
    Section 5 of that bill would expand medication therapy 
management programs under Medicare Part D to include 
beneficiaries who are at risk for prescription drug abuse. 
Because relatively few beneficiaries would be affected by this 
provision, CBO estimates that its enactment would not 
significantly affect direct spending for Part D.
    Section 6 of that bill would require the Secretary of HHS 
on an annual basis to identify high prescribers of opioids and 
furnish them with information about proper prescribing methods. 
Because HHS already has the capacity to meet those 
requirements, CBO estimates that enacting that provision would 
not impose additional administrative costs on the agency.
    H.R. 5775, the Providing Reliable Options for Patients and 
Educational Resources Act of 2018, would require prescription 
drug plans that provide coverage under Medicare Part D to 
furnish information to beneficiaries about the risks of opioid 
use and the availability of alternative treatments for pain. 
The bill also would require Medicare Advantage plans and 
prescription drug plans to provide information regarding safe 
disposal of controlled substances in home health risk 
assessments and medication therapy management programs, 
respectively. In CBO's estimation, neither proposal would have 
a budgetary effect because those activities would not impose 
significant administrative costs on plans or federal agencies.
    In addition, H.R. 5775 would restrict the use of certain 
pain-related questions on the Hospital Consumer Assessment of 
Healthcare Providers and Systems (HCAHPS) survey, which is 
administered by the Centers for Medicare & Medicaid Services 
(CMS). The survey is one measure used in CMS's Hospital Value-
Based Purchasing (VBP) Program, which adjusts payments to acute 
care hospitals on the basis of the quality of care they provide 
to Medicare beneficiaries. Because the VBP program is funded by 
reducing base payments to all hospitals, CBO estimates that 
changing the HCAHPS survey would not affect the total amount 
paid by Medicare.
    H.R. 5776, the Medicare and Opioid Safe Treatment Act of 
2018, in section 3, would require CMS, beginning on January 1, 
2020, to review and possibly modify payments made through 
Medicare's Hospital Outpatient Prospective Payment System for 
certain opioid and nonopioid pain management treatments and 
technologies. CMS could revise payments if the Secretary of HHS 
determined that there was a financial incentive to use opioids 
in place of nonopioid medications. The budget neutrality 
requirement under current law would apply to such revisions, 
and the rest of the payment rates within the system would be 
subject to offsetting adjustments. Because the changes would be 
made in a budget-neutral manner, CBO estimates that this 
provision would have no budgetary effect.
    Section 6 of H.R. 5776 would explicitly authorize the 
Center for Medicare and Medicaid Innovation (CMMI) to test 
approaches for expanding beneficiaries' awareness of 
psychological services and to help those beneficiaries curtail 
use of hospital-based mental health or behavioral health 
services. Because CMMI already has that authority, CBO 
estimates that enacting the legislation would not affect 
federal spending.
    Estimated Authorizations. Table 2 shows CBO's estimates of 
the authorization of appropriations for provisions in four 
bills. For those estimates, CBO assumes that appropriated funds 
would be available to implement those provisions.
    H.R. 5723, the Expanding Oversight of Opioid Prescribing 
and Payment Act of 2018, would require the Medicare Payment 
Advisory Commission to report to the Congress on payments for 
pain treatment, incentives for prescribing opioids in inpatient 
and outpatient settings, and documented tracking of opioid use 
from Medicare claims data. CBO estimates that producing such a 
report would cost less than $500,000 over the 2019-2023 period.

          TABLE 2.--ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR BILLS WITH ESTIMATED AUTHORIZATIONS
----------------------------------------------------------------------------------------------------------------
                                                                By fiscal year, in millions of dollars--
                                                      ----------------------------------------------------------
                                                        2018    2019    2020    2021    2022    2023   2019-2023
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
H.R. 5723, Expanding Oversight of Opioid Prescribing
 and Payment Act of 2018:
    Estimated Authorization Level....................       0       *       0       0       0       0         *
    Estimated Outlays................................       0       *       0       0       0       0         *
H.R. 5773, Preventing Addiction for Susceptible
 Seniors Act of 2018:a
    Estimated Authorization Level....................       0       2       2       2       2       2         9
    Estimated Outlays................................       0       2       2       2       2       2         9
H.R. 5776, Medicare and Opioid Safe Treatment Act of
 2018:a
    Estimated Authorization Level....................       0       1       0       0       0       0         1
    Estimated Outlays................................       0       1       0       0       0       0         1
H.R. 5788, Securing the International Mail Against
 Opioids Act of 2018:a
    Estimated Authorization Level....................       0     100       0       0       0       0       100
    Estimated Outlays................................       0      40      40      20       0       0       100
----------------------------------------------------------------------------------------------------------------
Annual amounts may not sum to totals because of rounding. * = between zero and $500,000
aThis bill also would affect mandatory spending.

    H.R. 5773, the Preventing Addiction for Susceptible Seniors 
Act of 2018, would require the Secretary of HHS to establish a 
secure Internet portal to allow HHS, Medicare Advantage plans, 
and Medicare Part D plans to exchange information about fraud, 
waste, and abuse among providers and suppliers no later than 
two years after enactment. H.R. 5773 also would require 
organizations with Medicare Advantage contracts to submit 
information on investigations related to providers suspected of 
prescribing large volumes of opioids through a process 
established by the Secretary no later than January 2021. Based 
on historical spending patterns for similar activities, CBO 
estimates that implementing H.R. 5773 would cost approximately 
$9 million over the 2019-2023 period.
    H.R. 5776, the Medicare and Opioid Safe Treatment Act of 
2018, would direct the Secretary of HHS to report to the 
Congress on the availability of supplemental benefits to pay 
for treatment or prevention of substance abuse among enrollees 
in Medicare Advantage plans. The Secretary also would report on 
coverage of and payment for pain treatment and substance use 
disorders under Medicare. CBO estimates that producing those 
reports would cost $1 million over five years.
    H.R. 5788, the Securing the International Mail Against 
Opioids Act of 2018, would direct the Postal Service, CBP, and 
other federal agencies to collaborate to develop technology to 
detect opioids and other drugs that enter the United States in 
the mail. Using information provided by CBP, CBO estimates that 
it would cost roughly $100 million over the 2019-2021 period to 
deploy drug detection systems at international mail facilities.
    Other Authorizations. CBO has determined that provisions in 
two bills--H.R. 5774, Combating Opioid Abuse for Care in 
Hospitals Act of 2018; and H.R. 5776, the Medicare and Safe 
Opioid Treatment Act of 2018--would increase authorization 
levels, but has not completed estimates of amounts. Any 
spending that would result from those authorizations would be 
subject to future appropriation action.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. Four of the bills discussed in this document contain 
direct spending and are subject to pay-as-you-go procedures. 
Details about the amount of direct spending in those bills can 
be found in Table 1.
    Increase in Long-term direct spending and deficits: CBO 
estimates that although enacting H.R. 5776, the Medicare and 
Opioid Safe Treatment Act of 2018, would increase net direct 
spending and on-budget deficits over the four consecutive 10-
year periods beginning in 2029, those effects would not exceed 
the threshold established by the Congress for long-term costs 
($2.5 billion for net direct spending and $5 billion for on-
budget deficits). CBO estimates that none of the remaining 
bills would increase net direct spending or on-budget deficits 
in any of the four consecutive 10-year periods beginning in 
2029.
    Mandates: None of the bills contains intergovernmental or 
private-sector mandates as defined in UMRA.
    Previous CBO estimate: On June 6, 2018, CBO issued an 
estimate for 59 opioid-related bills ordered reported by the 
House Committee on Energy and Commerce on May 9 and May 17, 
2018. Several of those bills contain provisions that are 
identical or similar to those in the legislation ordered 
reported by the Committee on Ways and Means, and for those 
provisions, CBO's estimates are the same.
    In particular, several sections in H.R. 5773, the 
Preventing Addiction for Susceptible Seniors Act of 2018, 
contain provisions that are identical or similar to those in 
five bills listed in the other estimate:
           Section 2, which would require prescription 
        drug plans to implement drug management programs, is 
        identical to a provision in H.R. 5675.
           Section 3, regarding electronic prior 
        authorization for prescriptions under Medicare's Part 
        D, is similar to a provision in H.R. 4841.
           Section 4, which would mandate the creation 
        of a new Internet portal to allow various stakeholders 
        to exchange information, is identical to a provision in 
        H.R. 5715.
           Section 5, which would expand medication 
        therapy management, is the same as a provision in H.R. 
        5684.
           Section 6, regarding prescriber 
        notification, is identical to H.R. 5716.
    In addition, in this estimate, a provision related to 
Medicare beneficiary education in section 2 of H.R. 5775, the 
Providing Reliable Options for Patients and Educational 
Resources Act of 2018, is the same as a provision in H.R. 5686, 
the Medicare Clear Health Options in Care for Enrollees Act of 
2018, in CBO's estimate for the Committee on Energy and 
Commerce.
    Estimate prepared by: Federal costs--Medicare: Philippa 
Haven, Lori Housman, Jamease Kowalczyk, Lara Robillard, Sarah 
Sajewski, Colin Yee, and Rebecca Yip; U.S. Postal Service and 
Customs and Border Protection: Mark Grabowicz; Mandates: Andrew 
Laughlin; Fact Checking: Zachary Byrum and Kate Kelly.
    Estimate reviewed by: Tom Bradley, Chief, Health Systems 
and Medicare Cost Estimates Unit; Kim P. Cawley, Chief, Natural 
Resources Cost Estimates Unit; Susan Willie, Chief, Mandates 
Unit; Leo Lex, Deputy Assistant Director for Budget Analysis; 
Theresa A. Gullo, Assistant Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the Committee made findings and 
recommendations that are reflected in this report.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizes funding is required.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

  D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill, and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                   E. Duplication of Federal Programs

    In compliance with Sec. 3(g)(2) of H. Res. 5 (114th 
Congress), the Committee states that no provision of the bill 
establishes or reauthorizes: (1) a program of the Federal 
Government known to be duplicative of another Federal program; 
(2) a program included in any report from the Government 
Accountability Office to Congress pursuant to section 21 of 
Public Law 111-139; or (3) a program related to a program 
identified in the most recent Catalog of Federal Domestic 
Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                 F. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed by the bill, as reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                          SOCIAL SECURITY ACT




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     TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE 
                             SIMPLIFICATION


Part A--General Provisions

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              center for medicare and medicaid innovation

  Sec. 1115A. (a) Center for Medicare and Medicaid Innovation 
Established.--
          (1) In general.--There is created within the Centers 
        for Medicare & Medicaid Services a Center for Medicare 
        and Medicaid Innovation (in this section referred to as 
        the ``CMI'') to carry out the duties described in this 
        section. The purpose of the CMI is to test innovative 
        payment and service delivery models to reduce program 
        expenditures under the applicable titles while 
        preserving or enhancing the quality of care furnished 
        to individuals under such titles. In selecting such 
        models, the Secretary shall give preference to models 
        that also improve the coordination, quality, and 
        efficiency of health care services furnished to 
        applicable individuals defined in paragraph (4)(A).
          (2) Deadline.--The Secretary shall ensure that the 
        CMI is carrying out the duties described in this 
        section by not later than January 1, 2011.
          (3) Consultation.--In carrying out the duties under 
        this section, the CMI shall consult representatives of 
        relevant Federal agencies, and clinical and analytical 
        experts with expertise in medicine and health care 
        management. The CMI shall use open door forums or other 
        mechanisms to seek input from interested parties.
          (4) Definitions.--In this section:
                  (A) Applicable individual.--The term 
                ``applicable individual'' means--
                          (i) an individual who is entitled to, 
                        or enrolled for, benefits under part A 
                        of title XVIII or enrolled for benefits 
                        under part B of such title;
                          (ii) an individual who is eligible 
                        for medical assistance under title XIX, 
                        under a State plan or waiver; or
                          (iii) an individual who meets the 
                        criteria of both clauses (i) and (ii).
                  (B) Applicable title.--The term ``applicable 
                title'' means title XVIII, title XIX, or both.
          (5) Testing within certain geographic areas.--For 
        purposes of testing payment and service delivery models 
        under this section, the Secretary may elect to limit 
        testing of a model to certain geographic areas.
  (b) Testing of Models (Phase I).--
          (1) In general.--The CMI shall test payment and 
        service delivery models in accordance with selection 
        criteria under paragraph (2) to determine the effect of 
        applying such models under the applicable title (as 
        defined in subsection (a)(4)(B)) on program 
        expenditures under such titles and the quality of care 
        received by individuals receiving benefits under such 
        title.
          (2) Selection of models to be tested.--
                  (A) In general.--The Secretary shall select 
                models to be tested from models where the 
                Secretary determines that there is evidence 
                that the model addresses a defined population 
                for which there are deficits in care leading to 
                poor clinical outcomes or potentially avoidable 
                expenditures. The Secretary shall focus on 
                models expected to reduce program costs under 
                the applicable title while preserving or 
                enhancing the quality of care received by 
                individuals receiving benefits under such 
                title. The models selected under this 
                subparagraph may include, but are not limited 
                to, the models described in subparagraph (B).
                  (B) Opportunities.--The models described in 
                this subparagraph are the following models:
                          (i) Promoting broad payment and 
                        practice reform in primary care, 
                        including patient-centered medical home 
                        models for high-need applicable 
                        individuals, medical homes that address 
                        women's unique health care needs, and 
                        models that transition primary care 
                        practices away from fee-for-service 
                        based reimbursement and toward 
                        comprehensive payment or salary-based 
                        payment.
                          (ii) Contracting directly with groups 
                        of providers of services and suppliers 
                        to promote innovative care delivery 
                        models, such as through risk-based 
                        comprehensive payment or salary-based 
                        payment.
                          (iii) Utilizing geriatric assessments 
                        and comprehensive care plans to 
                        coordinate the care (including through 
                        interdisciplinary teams) of applicable 
                        individuals with multiple chronic 
                        conditions and at least one of the 
                        following:
                                  (I) An inability to perform 2 
                                or more activities of daily 
                                living.
                                  (II) Cognitive impairment, 
                                including dementia.
                          (iv) Promote care coordination 
                        between providers of services and 
                        suppliers that transition health care 
                        providers away from fee-for-service 
                        based reimbursement and toward salary-
                        based payment.
                          (v) Supporting care coordination for 
                        chronically-ill applicable individuals 
                        at high risk of hospitalization through 
                        a health information technology-enabled 
                        provider network that includes care 
                        coordinators, a chronic disease 
                        registry, and home tele-health 
                        technology.
                          (vi) Varying payment to physicians 
                        who order advanced diagnostic imaging 
                        services (as defined in section 
                        1834(e)(1)(B)) according to the 
                        physician's adherence to 
                        appropriateness criteria for the 
                        ordering of such services, as 
                        determined in consultation with 
                        physician specialty groups and other 
                        relevant stakeholders.
                          (vii) Utilizing medication therapy 
                        management services, such as those 
                        described in section 935 of the Public 
                        Health Service Act.
                          (viii) Establishing community-based 
                        health teams to support small-practice 
                        medical homes by assisting the primary 
                        care practitioner in chronic care 
                        management, including patient self-
                        management, activities.
                          (ix) Assisting applicable individuals 
                        in making informed health care choices 
                        by paying providers of services and 
                        suppliers for using patient decision-
                        support tools, including tools that 
                        meet the standards developed and 
                        identified under section 936(c)(2)(A) 
                        of the Public Health Service Act, that 
                        improve applicable individual and 
                        caregiver understanding of medical 
                        treatment options.
                          (x) Allowing States to test and 
                        evaluate fully integrating care for 
                        dual eligible individuals in the State, 
                        including the management and oversight 
                        of all funds under the applicable 
                        titles with respect to such 
                        individuals.
                          (xi) Allowing States to test and 
                        evaluate systems of all-payer payment 
                        reform for the medical care of 
                        residents of the State, including dual 
                        eligible individuals.
                          (xii) Aligning nationally recognized, 
                        evidence-based guidelines of cancer 
                        care with payment incentives under 
                        title XVIII in the areas of treatment 
                        planning and follow-up care planning 
                        for applicable individuals described in 
                        clause (i) or (iii) of subsection 
                        (a)(4)(A) with cancer, including the 
                        identification of gaps in applicable 
                        quality measures.
                          (xiii) Improving post-acute care 
                        through continuing care hospitals that 
                        offer inpatient rehabilitation, long-
                        term care hospitals, and home health or 
                        skilled nursing care during an 
                        inpatient stay and the 30 days 
                        immediately following discharge.
                          (xiv) Funding home health providers 
                        who offer chronic care management 
                        services to applicable individuals in 
                        cooperation with interdisciplinary 
                        teams.
                          (xv) Promoting improved quality and 
                        reduced cost by developing a 
                        collaborative of high-quality, low-cost 
                        health care institutions that is 
                        responsible for--
                                  (I) developing, documenting, 
                                and disseminating best 
                                practices and proven care 
                                methods;
                                  (II) implementing such best 
                                practices and proven care 
                                methods within such 
                                institutions to demonstrate 
                                further improvements in quality 
                                and efficiency; and
                                  (III) providing assistance to 
                                other health care institutions 
                                on how best to employ such best 
                                practices and proven care 
                                methods to improve health care 
                                quality and lower costs.
                          (xvi) Facilitate inpatient care, 
                        including intensive care, of 
                        hospitalized applicable individuals at 
                        their local hospital through the use of 
                        electronic monitoring by specialists, 
                        including intensivists and critical 
                        care specialists, based at integrated 
                        health systems.
                          (xvii) Promoting greater efficiencies 
                        and timely access to outpatient 
                        services (such as outpatient physical 
                        therapy services) through models that 
                        do not require a physician or other 
                        health professional to refer the 
                        service or be involved in establishing 
                        the plan of care for the service, when 
                        such service is furnished by a health 
                        professional who has the authority to 
                        furnish the service under existing 
                        State law.
                          (xviii) Establishing comprehensive 
                        payments to Healthcare Innovation 
                        Zones, consisting of groups of 
                        providers that include a teaching 
                        hospital, physicians, and other 
                        clinical entities, that, through their 
                        structure, operations, and joint-
                        activity deliver a full spectrum of 
                        integrated and comprehensive health 
                        care services to applicable individuals 
                        while also incorporating innovative 
                        methods for the clinical training of 
                        future health care professionals.
                          (xix) Utilizing, in particular in 
                        entities located in medically 
                        underserved areas and facilities of the 
                        Indian Health Service (whether operated 
                        by such Service or by an Indian tribe 
                        or tribal organization (as those terms 
                        are defined in section 4 of the Indian 
                        Health Care Improvement Act)), 
                        telehealth services--
                                  (I) in treating behavioral 
                                health issues (such as post-
                                traumatic stress disorder) and 
                                stroke; and
                                  (II) to improve the capacity 
                                of non-medical providers and 
                                non-specialized medical 
                                providers to provide health 
                                services for patients with 
                                chronic complex conditions.
                          (xx) Utilizing a diverse network of 
                        providers of services and suppliers to 
                        improve care coordination for 
                        applicable individuals described in 
                        subsection (a)(4)(A)(i) with 2 or more 
                        chronic conditions and a history of 
                        prior-year hospitalization through 
                        interventions developed under the 
                        Medicare Coordinated Care Demonstration 
                        Project under section 4016 of the 
                        Balanced Budget Act of 1997 (42 U.S.C. 
                        1395b-1 note).
                          (xxi) Focusing primarily on 
                        physicians' services (as defined in 
                        section 1848(j)(3)) furnished by 
                        physicians who are not primary care 
                        practitioners.
                          (xxii) Focusing on practices of 15 or 
                        fewer professionals.
                          (xxiii) Focusing on risk-based models 
                        for small physician practices which may 
                        involve two-sided risk and prospective 
                        patient assignment, and which examine 
                        risk-adjusted decreases in mortality 
                        rates, hospital readmissions rates, and 
                        other relevant and appropriate clinical 
                        measures.
                          (xxiv) Focusing primarily on title 
                        XIX, working in conjunction with the 
                        Center for Medicaid and CHIP Services.
                          (xxv) Supporting ways to familiarize 
                        individuals with the availability of 
                        coverage under part B of title XVIII 
                        for qualified psychologist services (as 
                        defined in section 1861(ii)).
                          (xxvi) Exploring ways to avoid 
                        unnecessary hospitalizations or 
                        emergency department visits for mental 
                        and behavioral health services (such as 
                        for treating depression) through use of 
                        a 24-hour, 7-day a week help line that 
                        may inform individuals about the 
                        availability of treatment options, 
                        including the availability of qualified 
                        psychologist services (as defined in 
                        section 1861(ii)).
                  (C) Additional factors for consideration.--In 
                selecting models for testing under subparagraph 
                (A), the CMI may consider the following 
                additional factors:
                          (i) Whether the model includes a 
                        regular process for monitoring and 
                        updating patient care plans in a manner 
                        that is consistent with the needs and 
                        preferences of applicable individuals.
                          (ii) Whether the model places the 
                        applicable individual, including family 
                        members and other informal caregivers 
                        of the applicable individual, at the 
                        center of the care team of the 
                        applicable individual.
                          (iii) Whether the model provides for 
                        in-person contact with applicable 
                        individuals.
                          (iv) Whether the model utilizes 
                        technology, such as electronic health 
                        records and patient-based remote 
                        monitoring systems, to coordinate care 
                        over time and across settings.
                          (v) Whether the model provides for 
                        the maintenance of a close relationship 
                        between care coordinators, primary care 
                        practitioners, specialist physicians, 
                        community-based organizations, and 
                        other providers of services and 
                        suppliers.
                          (vi) Whether the model relies on a 
                        team-based approach to interventions, 
                        such as comprehensive care assessments, 
                        care planning, and self-management 
                        coaching.
                          (vii) Whether, under the model, 
                        providers of services and suppliers are 
                        able to share information with 
                        patients, caregivers, and other 
                        providers of services and suppliers on 
                        a real time basis.
                          (viii) Whether the model demonstrates 
                        effective linkage with other public 
                        sector payers, private sector payers, 
                        or statewide payment models.
          (3) Budget neutrality.--
                  (A) Initial period.--The Secretary shall not 
                require, as a condition for testing a model 
                under paragraph (1), that the design of such 
                model ensure that such model is budget neutral 
                initially with respect to expenditures under 
                the applicable title.
                  (B) Termination or modification.--The 
                Secretary shall terminate or modify the design 
                and implementation of a model unless the 
                Secretary determines (and the Chief Actuary of 
                the Centers for Medicare & Medicaid Services, 
                with respect to program spending under the 
                applicable title, certifies), after testing has 
                begun, that the model is expected to--
                          (i) improve the quality of care (as 
                        determined by the Administrator of the 
                        Centers for Medicare & Medicaid 
                        Services) without increasing spending 
                        under the applicable title;
                          (ii) reduce spending under the 
                        applicable title without reducing the 
                        quality of care; or
                          (iii) improve the quality of care and 
                        reduce spending.
                Such termination may occur at any time after 
                such testing has begun and before completion of 
                the testing.
          (4) Evaluation.--
                  (A) In general.--The Secretary shall conduct 
                an evaluation of each model tested under this 
                subsection. Such evaluation shall include an 
                analysis of--
                          (i) the quality of care furnished 
                        under the model, including the 
                        measurement of patient-level outcomes 
                        and patient-centeredness criteria 
                        determined appropriate by the 
                        Secretary; and
                          (ii) the changes in spending under 
                        the applicable titles by reason of the 
                        model.
                  (B) Information.--The Secretary shall make 
                the results of each evaluation under this 
                paragraph available to the public in a timely 
                fashion and may establish requirements for 
                States and other entities participating in the 
                testing of models under this section to collect 
                and report information that the Secretary 
                determines is necessary to monitor and evaluate 
                such models.
                  (C) Measure selection.--To the extent 
                feasible, the Secretary shall select measures 
                under this paragraph that reflect national 
                priorities for quality improvement and patient-
                centered care consistent with the measures 
                described in 1890(b)(7)(B).
  (c) Expansion of Models (Phase II).--Taking into account the 
evaluation under subsection (b)(4), the Secretary may, through 
rulemaking, expand (including implementation on a nationwide 
basis) the duration and the scope of a model that is being 
tested under subsection (b) or a demonstration project under 
section 1866C, to the extent determined appropriate by the 
Secretary, if--
          (1) the Secretary determines that such expansion is 
        expected to--
                  (A) reduce spending under applicable title 
                without reducing the quality of care; or
                  (B) improve the quality of patient care 
                without increasing spending;
          (2) the Chief Actuary of the Centers for Medicare & 
        Medicaid Services certifies that such expansion would 
        reduce (or would not result in any increase in) net 
        program spending under applicable titles; and
          (3) the Secretary determines that such expansion 
        would not deny or limit the coverage or provision of 
        benefits under the applicable title for applicable 
        individuals.
In determining which models or demonstration projects to expand 
under the preceding sentence, the Secretary shall focus on 
models and demonstration projects that improve the quality of 
patient care and reduce spending.
  (d) Implementation.--
          (1) Waiver authority.--The Secretary may waive such 
        requirements of titles XI and XVIII and of sections 
        1902(a)(1), 1902(a)(13), 1903(m)(2)(A)(iii), and 1934 
        (other than subsections (b)(1)(A) and (c)(5) of such 
        section) as may be necessary solely for purposes of 
        carrying out this section with respect to testing 
        models described in subsection (b).
          (2) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, 
        section 1878, or otherwise of--
                  (A) the selection of models for testing or 
                expansion under this section;
                  (B) the selection of organizations, sites, or 
                participants to test those models selected;
                  (C) the elements, parameters, scope, and 
                duration of such models for testing or 
                dissemination;
                  (D) determinations regarding budget 
                neutrality under subsection (b)(3);
                  (E) the termination or modification of the 
                design and implementation of a model under 
                subsection (b)(3)(B); and
                  (F) determinations about expansion of the 
                duration and scope of a model under subsection 
                (c), including the determination that a model 
                is not expected to meet criteria described in 
                paragraph (1) or (2) of such subsection.
          (3) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to the testing and 
        evaluation of models or expansion of such models under 
        this section.
  (e) Application to CHIP.--The Center may carry out activities 
under this section with respect to title XXI in the same manner 
as provided under this section with respect to the program 
under the applicable titles.
  (f) Funding.--
          (1) In general.--There are appropriated, from amounts 
        in the Treasury not otherwise appropriated--
                  (A) $5,000,000 for the design, 
                implementation, and evaluation of models under 
                subsection (b) for fiscal year 2010;
                  (B) $10,000,000,000 for the activities 
                initiated under this section for the period of 
                fiscal years 2011 through 2019; and
                  (C) the amount described in subparagraph (B) 
                for the activities initiated under this section 
                for each subsequent 10-year fiscal period 
                (beginning with the 10-year fiscal period 
                beginning with fiscal year 2020).
        Amounts appropriated under the preceding sentence shall 
        remain available until expended.
          (2) Use of certain funds.--Out of amounts 
        appropriated under subparagraphs (B) and (C) of 
        paragraph (1), not less than $25,000,000 shall be made 
        available each such fiscal year to design, implement, 
        and evaluate models under subsection (b).
  (g) Report to Congress.--Beginning in 2012, and not less than 
once every other year thereafter, the Secretary shall submit to 
Congress a report on activities under this section. Each such 
report shall describe the models tested under subsection (b), 
including the number of individuals described in subsection 
(a)(4)(A)(i) and of individuals described in subsection 
(a)(4)(A)(ii) participating in such models and payments made 
under applicable titles for services on behalf of such 
individuals, any models chosen for expansion under subsection 
(c), and the results from evaluations under subsection (b)(4). 
In addition, each such report shall provide such 
recommendations as the Secretary determines are appropriate for 
legislative action to facilitate the development and expansion 
of successful payment models.

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TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

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   Part B--Supplementary Medical Insurance Benefits for the Aged and 
Disabled

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                          PAYMENT OF BENEFITS

  Sec. 1833  . (a) Except as provided in section 1876, 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 1832(a)(1)--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), 
(B) with respect to items and services described in section 
1861(s)(10)(A), 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 1862(a)(4), 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)(I) on the basis of a fee 
schedule under subsection (h)(1) (for tests furnished before 
January 1, 2017) or section 1834(d)(1), 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), or the amount of the charges billed for the tests, 
or (II) undersection 1834A (for tests furnished on or after 
January1, 2017), the amount paid shall be equal to 80 
percent(or 100 percent, in the case of such tests for 
whichpayment is made on an assignment-related basis) ofthe 
lesser of the amount determined under such sectionor the amount 
of the charges billed for the tests, or (ii) for tests 
furnished before January 1, 2017,on the basis of a negotiated 
rate established under subsection (h)(6), the amount paid shall 
be equal to 100 percent of such negotiated 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 
1881,(F) with respect to clinical social worker services under 
section 1861(s)(2)(N), 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) 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), 
                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 1861(s)(11), 
        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 1848) 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), (I) with respect to covered items 
        (described in section 1834(a)(13)), the amounts paid 
        shall be the amounts described in section 1834(a)(1), 
        and(J) with respect to expenses incurred for 
        radiologist services (as defined in section 
        1834(b)(6)), subject to section 1848, 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 1834(b), (K) with 
        respect to certified nurse-midwife services under 
        section 1861(s)(2)(L), 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 (or 100 percent for 
        services furnished on or after January 1, 2011) of the 
        fee schedule amount provided under section 1848 for the 
        same service performed by a physician), (L) with 
        respect to qualified psychologist services under 
        section 1861(s)(2)(M), 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 
        1834(h)(4)), the amounts paid shall be the amounts 
        described in section 1834(h)(1), (N) with respect to 
        expenses incurred for physicians' services (as defined 
        in section 1848(j)(3)) other than personalized 
        prevention plan services (as defined in section 
        1861(hhh)(1)), the amounts paid shall be 80 percent of 
        the payment basis determined under section 1848(a)(1), 
        (O) with respect to services described in section 
        1861(s)(2)(K) (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 1848, 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 1834(i), (Q) with 
        respect to items or services for which fee schedules 
        are established pursuant to section 1842(s), 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 1834(l) and (ii) with respect 
        to ambulance services described in section 1834(l)(8), 
        the amounts paid shall be the amounts determined under 
        section 1834(g) for outpatient critical access hospital 
        services, (S) with respect to drugs and biologicals 
        (including intravenous immune globulin (as defined in 
        section 1861(zz))) 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 1842(o) (or, if applicable, under section 1847, 
        1847A, or 1847B), (T) with respect to medical nutrition 
        therapy services (as defined in section 1861(vv)), the 
        amount paid shall be 80 percent (or 100 percent if such 
        services are recommended with a grade of A or B by the 
        United States Preventive Services Task Force for any 
        indication or population and are appropriate for the 
        individual) of the lesser of the actual charge for the 
        services or 85 percent of the amount determined under 
        the fee schedule established under section 1848(b) for 
        the same services if furnished by a physician, (U) with 
        respect to facility fees described in section 
        1834(m)(2)(B), the amounts paid shall be 80 percent of 
        the lesser of the actual charge or the amounts 
        specified in such section, (V) notwithstanding 
        subparagraphs (I) (relating to durable medical 
        equipment), (M) (relating to prosthetic devices and 
        orthotics and prosthetics), and (Q) (relating to 
        1842(s) items), with respect to competitively priced 
        items and services (described in section 1847(a)(2)) 
        that are furnished in a competitive area, the amounts 
        paid shall be the amounts described in section 
        1847(b)(5), (W) with respect to additional preventive 
        services (as defined in section 1861(ddd)(1)), the 
        amount paid shall be (i) in the case of such services 
        which are clinical diagnostic laboratory tests, the 
        amount determined under subparagraph (D) (if such 
        subparagraph were applied, by substituting ``100 
        percent'' for ``80 percent''), and (ii) in the case of 
        all other such services, 100 percent of the lesser of 
        the actual charge for the service or the amount 
        determined under a fee schedule established by the 
        Secretary for purposes of this subparagraph, (X) with 
        respect to personalized prevention plan services (as 
        defined in section 1861(hhh)(1)), the amount paid shall 
        be 100 percent of the lesser of the actual charge for 
        the services or the amount determined under the payment 
        basis determined under section 1848, (Y) with respect 
        to preventive services described in subparagraphs (A) 
        and (B) of section 1861(ddd)(3) that are appropriate 
        for the individual and, in the case of such services 
        described in subparagraph (A), are recommended with a 
        grade of A or B by the United States Preventive 
        Services Task Force for any indication or population, 
        the amount paid shall be 100 percent of (i) except as 
        provided in clause (ii), the lesser of the actual 
        charge for the services or the amount determined under 
        the fee schedule that applies to such services under 
        this part, and (ii) in the case of such services that 
        are covered OPD services (as defined in subsection 
        (t)(1)(B)), the amount determined under subsection (t), 
        (Z) with respect to Federally qualified health center 
        services for which payment is made under section 
        1834(o), the amounts paid shall be 80 percent of the 
        lesser of the actual charge or the amount determined 
        under such section, (AA) with respect to an applicable 
        disposable device (as defined in paragraph (2) of 
        section 1834(s)) furnished to an individual pursuant to 
        paragraph (1) of such section, the amount paid shall be 
        equal to 80 percent of the lesser of the actual charge 
        or the amount determined under paragraph (3) of such 
        section, [and (BB)] (BB) with respect to home infusion 
        therapy, the amount paid shall be an amount equal to 80 
        percent of the lesser of the actual charge for the 
        services or the amount determined under section 
        1834(u), and (CC) with respect to opioid use disorder 
        treatment services furnished during an episode of care, 
        the amount paid shall be equal to the amount payable 
        under section 1834(w) less any copayment required as 
        specified by the Secretary ;
          (2) in the case of services described in section 
        1832(a)(2) (except those services described in 
        subparagraphs (C), (D), (E), (F), (G), (H), and (I) of 
        such section and unless otherwise specified in section 
        1881)--
                  (A) with respect to home health services 
                (other than a covered osteoporosis drug) (as 
                defined in section 1861(kk)), the amount 
                determined under the prospective payment system 
                under section 1895;
                  (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 1886 or section 
                1888(e)(9))--
                          (i) furnished before January 1, 1999, 
                        the lesser of--
                                  (I) the reasonable cost of 
                                such services, as determined 
                                under section 1861(v), or
                                  (II) the customary charges 
                                with respect to such 
                                services,--less the amount a 
                                provider may charge as 
                                described in clause (ii) of 
                                section 1866(a)(2)(A), 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 
                        1814(b)(2), or
                          (iii) if such services are furnished 
                        on or after January 1, 1999, the amount 
                        determined under subsection (t), or
                          (iv) if (and for so long as) the 
                        conditions described in section 
                        1814(b)(3) 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 1861(p), 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)(I)on the basis of a fee 
                schedule determined under subsection(h)(1) (for 
                tests furnished before January 1, 2017) or 
                section 1834(d)(1), 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 1866) of the 
                lesser of the amount determined under such fee 
                schedule, the limitation amount for that test 
                determined under subsection (h)(4)(B), or the 
                amount of the charges billed for the tests, or 
                (II) under section 1834A (for tests furnished 
                on or after January 1, 2017), 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 
                1866) of the lesser of the amount determined 
                under such section or the amount of the charges 
                billed for the tests, or (ii) for tests 
                furnished before January 1, 2017, on the basis 
                of a negotiated rate established under 
                subsection (h)(6), 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 
                        1861(s)(3) (other than diagnostic x-ray 
                        tests and diagnostic laboratory tests),
                the amount determined under subsection (n) or, 
                for services or procedures performed on or 
                after January 1, 1999, subsection (t);
                  (F) with respect to a covered osteoporosis 
                drug (as defined in section 1861(kk)) furnished 
                by a home health agency, 80 percent of the 
                reasonable cost of such service, as determined 
                under section 1861(v);
                  (G) with respect to items and services 
                described in section 1861(s)(10)(A), the lesser 
                of--
                          (i) the reasonable cost of such 
                        services, as determined under section 
                        1861(v), or
                          (ii) the customary charges with 
                        respect to such services; and
                  (H) with respect to personalized prevention 
                plan services (as defined in section 
                1861(hhh)(1)) furnished by an outpatient 
                department of a hospital, the amount determined 
                under paragraph (1)(X),
                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 
                1814(b)(2);
          (3) in the case of services described in section 
        1832(a)(2)(D)--
                  (A) except as provided in subparagraph (B), 
                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 
                1861(v)(1)(A), less the amount a provider may 
                charge as described in clause (ii) of section 
                1866(a)(2)(A), but in no case may the payment 
                for such services (other than for items and 
                services described in section 1861(s)(10)(A)) 
                exceed 80 percent of such costs; or
                  (B) with respect to the services described in 
                clause (ii) of section 1832(a)(2)(D) that are 
                furnished to an individual enrolled with a MA 
                plan under part C pursuant to a written 
                agreement described in section 1853(a)(4), the 
                amount (if any) by which--
                          (i) the amount of payment that would 
                        have otherwise been provided (I) under 
                        subparagraph (A) (calculated as if 
                        ``100 percent'' were substituted for 
                        ``80 percent'' in such subparagraph) 
                        for such services if the individual had 
                        not been so enrolled, or (II) in the 
                        case of such services furnished on or 
                        after the implementation date of the 
                        prospective payment system under 
                        section 1834(o), under such section 
                        (calculated as if ``100 percent'' were 
                        substituted for ``80 percent'' in such 
                        section) for such services if the 
                        individual had not been so enrolled; 
                        exceeds
                          (ii) the amount of the payments 
                        received under such written agreement 
                        for such services (not including any 
                        financial incentives provided for in 
                        such agreement such as risk pool 
                        payments, bonuses, or withholds),
                less the amount the federally qualified health 
                center may charge as described in section 
                1857(e)(3)(B);
          (4) in the case of facility services described in 
        section 1832(a)(2)(F), and outpatient hospital facility 
        services furnished in connection with surgical 
        procedures specified by the Secretary pursuant to 
        section 1833(i)(1)(A), the applicable amount as 
        determined under paragraph (2) or (3) of subsection (i) 
        or subsection (t);
          (5) in the case of covered items (described in 
        section 1834(a)(13)) the amounts described in section 
        1834(a)(1);
          (6) in the case of outpatient critical access 
        hospital services, the amounts described in section 
        1834(g);
          (7) in the case of prosthetic devices and orthotics 
        and prosthetics (as described in section 1834(h)(4)), 
        the amounts described in section 1834(h);
          (8) in the case of--
                  (A) outpatient physical therapy services, 
                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, 
                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 but has 
                        exhausted benefits for inpatient 
                        hospital services during a spell of 
                        illness or is not so entitled to 
                        benefits under part A, or
                          (ii) by another entity under an 
                        arrangement with a hospital described 
                        in clause (i),
        the amounts described in section 1834(k); and
          (9) in the case of services described in section 
        1832(a)(2)(E) that are not described in paragraph (8), 
        the amounts described in section 1834(k).
         Paragraph (3)(A) shall not apply to Federally 
        qualified health center services furnished on or after 
        the implementation date of the prospective payment 
        system under section 1834(0).
  (b) Before applying subsection (a) 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) 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 
1839(a)(1) ending with such subsequent year (rounded to the 
nearest $1); except that (1) such total amount shall not 
include expenses incurred for preventive services described in 
subparagraph (A) of section 1861(ddd)(3) that are recommended 
with a grade of A or B by the United States Preventive Services 
Task Force for any indication or population and are appropriate 
for the individual., (2) such deductible shall not apply with 
respect to home health services (other than a covered 
osteoporosis drug (as defined in section 1861(kk))), (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) on an assignment-
related basis, or to a provider having an agreement under 
section 1866, or (B) for tests furnished before January 1, 
2017,on the basis of a negotiated rate determined under 
subsection (h)(6), (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 1861(jj)), (6) such deductible shall not 
apply with respect to screening pap smear and screening pelvic 
exam (as described in section 1861(nn)), (7) such deductible 
shall not apply with respect to ultrasound screening for 
abdominal aortic aneurysm (as defined in section 1861(bbb)), 
(8) such deductible shall not apply with respect to colorectal 
cancer screening tests (as described in section 1861(pp)(1)), 
(9) such deductible shall not apply with respect to an initial 
preventive physical examination (as defined in section 
1861(ww)), and (10) such deductible shall not apply with 
respect to personalized prevention plan services (as defined in 
section 1861(hhh)(1)). 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 1813(a)(2) to blood or blood cells furnished the 
individual in the year. Paragraph (1) of the first sentence of 
this subsection shall apply with respect to a colorectal cancer 
screening test regardless of the code that is billed for the 
establishment of a diagnosis as a result of the test, or for 
the removal of tissue or other matter or other procedure that 
is furnished in connection with, as a result of, and in the 
same clinical encounter as the screening test.
  (c)(1) Notwithstanding any other provision of this part, with 
respect to expenses incurred in a 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)--
          (A) for expenses incurred in years prior to 2010, 
        only 62\1/2\ percent of such expenses;
          (B) for expenses incurred in 2010 or 2011, only 68\3/
        4\ percent of such expenses;
          (C) for expenses incurred in 2012, only 75 percent of 
        such expenses;
          (D) for expenses incurred in 2013, only 81\1/4\ 
        percent of such expenses; and
          (E) for expenses incurred in 2014 or any subsequent 
        calendar year, 100 percent of such expenses.
  (2) For purposes of subparagraphs (A) through (D) of 
paragraph (1), 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) 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 
1813) to have payment made with respect to such services under 
part A.
  (e) 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) In establishing limits under subsection (a) 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 1842(i)(3)) applicable to primary care services 
        (as defined in section 1842(i)(4)) furnished as of the 
        first day of that year.
  (g)(1)(A) Subject to paragraphs (4) and (5), in the case of 
physical therapy services of the type described in section 
1861(p) and speech-language pathology services of the type 
described in such section through the application of section 
1861(ll)(2), but (except as provided in paragraph (6)) not 
described in subsection (a)(8)(B), and physical therapy 
services and speech-language pathology 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). The preceding sentence 
shall not apply to expenses incurred with respect to services 
furnished after December 31, 2017.
  (B) With respect to services furnished during 2018 or a 
subsequent year, in the case of physical therapy services of 
the type described in section 1861(p), speech-language 
pathology services of the type described in such section 
through the application of section 1861(ll)(2), and physical 
therapy services and speech-language pathology 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, any amount that is more than the amount 
specified in paragraph (2) for the year shall not be considered 
as incurred expenses for purposes of subsections (a) and (b) 
unless the applicable requirements of paragraph (7) are met.
  (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 
        1842(i)(3)) 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)(A) Subject to paragraphs (4) and (5), in the case of 
occupational therapy services (of the type that are described 
in section 1861(p) (but (except as provided in paragraph (6)) 
not described in subsection (a)(8)(B)) through the operation of 
section 1861(g) 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). The preceding sentence shall not apply to expenses 
incurred with respect to services furnished after December 31, 
2017.
  (B) With respect to services furnished during 2018 or a 
subsequent year, in the case of occupational therapy services 
(of the type that are described in section 1861(p) through the 
operation of section 1861(g) 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, any amount that is more than the amount specified in 
paragraph (2) for the year shall not be considered as incurred 
expenses for purposes of subsections (a) and (b) unless the 
applicable requirements of paragraph (7) are met.
  (4) This subsection shall not apply to expenses incurred with 
respect to services furnished during 2000, 2001, 2002, 2004, 
and 2005.
  (5)(A) With respect to expenses incurred during the period 
beginning on January 1, 2006, and ending on December 31, 2017, 
for services, the Secretary shall implement a process under 
which an individual enrolled under this part may, upon request 
of the individual or a person on behalf of the individual, 
obtain an exception from the uniform dollar limitation 
specified in paragraph (2), for services described in 
paragraphs (1) and (3) if the provision of such services is 
determined to be medically necessary and if the requirement of 
subparagraph (B) is met. Under such process, if the Secretary 
does not make a decision on such a request for an exception 
within 10 business days of the date of the Secretary's receipt 
of the request made in accordance with such requirement, the 
Secretary shall be deemed to have found the services to be 
medically necessary.
  (B) In the case of outpatient therapy services for which an 
exception is requested under the first sentence of subparagraph 
(A), the claim for such services shall contain an appropriate 
modifier (such as the KX modifier used as of the date of the 
enactment of this subparagraph) indicating that such services 
are medically necessary as justified by appropriate 
documentation in the medical record involved.
  (C)(i) In applying this paragraph with respect to a request 
for an exception with respect to expenses that would be 
incurred for outpatient therapy services (including services 
described in subsection (a)(8)(B)) that would exceed the 
threshold described in clause (ii) for a year, the request for 
such an exception, for services furnished on or after October 
1, 2012, shall be subject to a manual medical review process 
that, subject to subparagraph (E), is similar to the manual 
medical review process used for certain exceptions under this 
paragraph in 2006.
  (ii) The threshold under this clause for a year is $3,700. 
Such threshold shall be applied separately--
          (I) for physical therapy services and speech-language 
        pathology services; and
          (II) for occupational therapy services.
  (E)(i) In place of the manual medical review process under 
subparagraph (C)(i), the Secretary shall implement a process 
for medical review under this subparagraph under which the 
Secretary shall identify and conduct medical review for 
services described in subparagraph (C)(i) furnished by a 
provider of services or supplier (in this subparagraph referred 
to as a ``therapy provider'') using such factors as the 
Secretary determines to be appropriate.
  (ii) Such factors may include the following:
          (I) The therapy provider has had a high claims denial 
        percentage for therapy services under this part or is 
        less compliant with applicable requirements under this 
        title.
          (II) The therapy provider has a pattern of billing 
        for therapy services under this part that is aberrant 
        compared to peers or otherwise has questionable billing 
        practices for such services, such as billing medically 
        unlikely units of services in a day.
          (III) The therapy provider is newly enrolled under 
        this title or has not previously furnished therapy 
        services under this part.
          (IV) The services are furnished to treat a type of 
        medical condition.
          (V) The therapy provider is part of group that 
        includes another therapy provider identified using the 
        factors determined under this subparagraph.
  (iii) For purposes of carrying out this subparagraph, the 
Secretary shall provide for the transfer, from the Federal 
Supplementary Medical Insurance Trust Fund under section 1841, 
of $5,000,000 to the Centers for Medicare & Medicaid Services 
Program Management Account for fiscal years 2015 and 2016, to 
remain available until expended. Such funds may not be used by 
a contractor under section 1893(h) for medical reviews under 
this subparagraph.
  (iv) The targeted review process under this subparagraph 
shall not apply to services for which expenses are incurred 
beyond the period for which the exceptions process under 
subparagraph (A) is implemented, except as such process is 
applied under paragraph (7)(B).
  (6)(A) In applying paragraphs (1) and (3) to services 
furnished during the period beginning not later than October 1, 
2012, and ending on December 31, 2017, the exclusion of 
services described in subsection (a)(8)(B) from the uniform 
dollar limitation specified in paragraph (2) shall not apply to 
such services furnished during 2012 through 2017.
  (B)(i) With respect to outpatient therapy services furnished 
beginning on or after January 1, 2013, and before January 1, 
2014, for which payment is made under section 1834(g), the 
Secretary shall count toward the uniform dollar limitations 
described in paragraphs (1) and (3) and the threshold described 
in paragraph (5)(C) the amount that would be payable under this 
part if such services were paid under section 1834(k)(1)(B) 
instead of being paid under section 1834(g).
  (ii) Nothing in clause (i) shall be construed as changing the 
method of payment for outpatient therapy services under section 
1834(g).
  (7) For purposes of paragraphs (1)(B) and (3)(B), with 
respect to services described in such paragraphs, the 
requirements described in this paragraph are as follows:
          (A) Inclusion of appropriate modifier.--The claim for 
        such services contains an appropriate modifier (such as 
        the KX modifier described in paragraph (5)(B)) 
        indicating that such services are medically necessary 
        as justified by appropriate documentation in the 
        medical record involved.
          (B) Targeted medical review for certain services 
        above threshold.--
                  (i) In general.--In the case where expenses 
                that would be incurred for such services would 
                exceed the threshold described in clause (ii) 
                for the year, such services shall be subject to 
                the process for medical review implemented 
                under paragraph (5)(E).
                  (ii) Threshold.--The threshold under this 
                clause for--
                          (I) a year before 2028, is $3,000;
                          (II) 2028, is the amount specified in 
                        subclause (I) increased by the 
                        percentage increase in the MEI (as 
                        defined in section 1842(i)(3)) for 
                        2028; and
                          (III) a subsequent year, is the 
                        amount specified in this clause for the 
                        preceding year increased by the 
                        percentage increase in the MEI (as 
                        defined in section 1842(i)(3)) for such 
                        subsequent year;
                except that if an increase under subclause (II) 
                or (III) for a year is not a multiple of $10, 
                it shall be rounded to the nearest multiple of 
                $10.
                  (iii) Application.--The threshold under 
                clause (ii) shall be applied separately--
                          (I) for physical therapy services and 
                        speech-language pathology services; and
                          (II) for occupational therapy 
                        services.
                  (iv) Funding.--For purposes of carrying out 
                this subparagraph, the Secretary shall provide 
                for the transfer, from the Federal 
                Supplementary Medical Insurance Trust Fund 
                under section 1841 to the Centers for Medicare 
                & Medicaid Services Program Management Account, 
                of $5,000,000 for each fiscal year beginning 
                with fiscal year 2018, to remain available 
                until expended. Such funds may not be used by a 
                contractor under section 1893(h) for medical 
                reviews under this subparagraph.
  (8) With respect to services furnished on or after January 1, 
2013, where payment may not be made as a result of application 
of paragraphs (1) and (3), section 1879 shall apply in the same 
manner as such section applies to a denial that is made by 
reason of section 1862(a)(1).
  (h)(1)(A) Subject to section 1834(d)(1), the Secretary shall 
establish fee schedules for clinical diagnostic laboratory 
tests (including prostate cancer screening tests under section 
1861(oo) 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 1886(d)(5)(D)(iii)), 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 clause (v), subparagraph (B), 
and 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 1842(b)(3) 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, subject to 
clause (iv), 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) minus, for 
each of the years 2009 and 2010, 0.5 percentage points, and, 
for tests furnished before the dateof enactment of section 
1834A, 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 1842(b)(3) 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.
  (iv) After determining the adjustment to the fee schedules 
under clause (i), the Secretary shall reduce such adjustment--
          (I) for 2011 and each subsequent year, by the 
        productivity adjustment described in section 
        1886(b)(3)(B)(xi)(II); and
          (II) for each of 2011 through 2015, by 1.75 
        percentage points.
Subclause (I) shall not apply in a year where the adjustment to 
the fee schedules determined under clause (i) is 0.0 or a 
percentage decrease for a year. The application of the 
productivity adjustment under subclause (I) shall not result in 
an adjustment to the fee schedules under clause (i) being less 
than 0.0 for a year. The application of subclause (II) may 
result in an adjustment to the fee schedules under clause (i) 
being less than 0.0 for a year, and may result in payment rates 
for a year being less than such payment rates for the preceding 
year.
  (v) The Secretary shall reduce by 2 percent the fee schedules 
otherwise determined under clause (i) for 2013, and such 
reduced fee schedules shall serve as the base for 2014 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 (for tests furnished before January 1, 2017)or under 
section 1834A (for tests furnished on or afterJanuary 1, 2017), 
subject to subsection (b)(5) of such section, 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 title 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), 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 1866, 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)), 
                receives requests for testing during the year 
                in which the test is performed are performed by 
                another laboratory, and
          (iii) in the case of a clinical diagnostic laboratory 
        test provided under an arrangement (as defined in 
        section 1861(w)(1)) 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 1866.
  (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 1842(j) in the same manner such paragraphs apply 
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) For tests furnished before January 1, 2017, inthe 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)and section 1834A, 
the Secretary shall establish a national minimum payment amount 
under this part 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).
  (9) Notwithstanding any other provision in this part, in the 
case of any diagnostic laboratory test for HbA1c that is 
labeled by the Food and Drug Administration for home use and is 
furnished on or after April 1, 2008, the payment rate for such 
test shall be the payment rate established under this part for 
a glycated hemoglobin test (identified as of October 1, 2007, 
by HCPCS code 83036 (and any succeeding codes)).
  (i)(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 1832(a)(2)(F)(i)), 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), subject to 
subparagraph (E), 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 title 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 title 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 and taking into account reduced expenditures 
that would apply if subparagraph (E) were to continue to 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) The Secretary may implement such system in a manner so 
as to provide for a reduction in any annual update for failure 
to report on quality measures in accordance with paragraph (7).
          (v) In implementing the system described in clause 
        (i) for 2011 and each subsequent year, any annual 
        update under such system for the year, after 
        application of clause (iv), shall be reduced by the 
        productivity adjustment described in section 
        1886(b)(3)(B)(xi)(II). The application of the preceding 
        sentence may result in such update being less than 0.0 
        for a year, and may result in payment rates under the 
        system described in clause (i) for a year being less 
        than such payment rates for the preceding year.
  (vi) There shall be no administrative or judicial review 
under section 1869, 1878, or otherwise, of the classification 
system, the relative weights, payment amounts, and the 
geographic adjustment factor, if any, under this subparagraph.
  (E) With respect to surgical procedures furnished on or after 
January 1, 2007, and before the effective date of the 
implementation of a revised payment system under subparagraph 
(D), if--
          (i) the standard overhead amount under subparagraph 
        (A) for a facility service for such procedure, without 
        the application of any geographic adjustment, exceeds
          (ii) the Medicare OPD fee schedule amount established 
        under the prospective payment system for hospital 
        outpatient department services under paragraph (3)(D) 
        of section 1833(t) for such service for such year, 
        determined without regard to geographic adjustment 
        under paragraph (2)(D) of such section,
the Secretary shall substitute under subparagraph (A) the 
amount described in clause (ii) for the standard overhead 
amount for such service referred to in clause (i).
  (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); 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 1866(a)(2)(A).
  (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 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 1832(a)(2)(F)(i), 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 1128A (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 
1128A(a).
  (7)(A) For purposes of paragraph (2)(D)(iv), the Secretary 
may provide, in the case of an ambulatory surgical center that 
does not submit, to the Secretary in accordance with this 
paragraph, data required to be submitted on measures selected 
under this paragraph with respect to a year, any annual 
increase provided under the system established under paragraph 
(2)(D) for such year shall be reduced by 2.0 percentage points. 
A reduction under this subparagraph shall apply only with 
respect to the year involved and the Secretary shall not take 
into account such reduction in computing any annual increase 
factor for a subsequent year.
  (B) Except as the Secretary may otherwise provide, the 
provisions of subparagraphs (B), (C), (D), and (E) of paragraph 
(17) of section 1833(t) shall apply with respect to services of 
ambulatory surgical centers under this paragraph in a similar 
manner to the manner in which they apply under such paragraph 
and, for purposes of this subparagraph, any reference to a 
hospital, outpatient setting, or outpatient hospital services 
is deemed a reference to an ambulatory surgical center, the 
setting of such a center, or services of such a center, 
respectively.
  (8) The Secretary shall conduct a similar type of review as 
required under paragraph (22) of section 1833(t)), including 
the second sentence of subparagraph (C) of such paragraph, to 
payment for services under this subsection, and make such 
revisions under this paragraph, in an appropriate manner (as 
determined by the Secretary).
  (j) 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 
1842(b)(3)(B)(ii) 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) With respect to services described in section 
1861(s)(10)(B), 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)(1)(A) The Secretary shall establish a fee schedule for 
services of certified registered nurse anesthetists under 
section 1861(s)(11).
  (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 title for those services plus 
applicable coinsurance in 1989 will equal the estimated total 
amount which would be paid under this title for those services 
in 1989 if the services were included as inpatient hospital 
services and payment for such services was made under part A 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 title 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 1842(b)(3).
  (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 1848(d) for physician 
                anesthesia services for that year;
          (ii) the payment areas to be used shall be the fee 
        schedule areas used under section 1848 (or, in the case 
        of services furnished during 1991, the localities used 
        under section 1842(b)) 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--
                  (I) in the case of services furnished in 
                1991, the geographic work index value and the 
                geographic practice cost index value specified 
                in section 1842(q)(1)(B) 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 
                1848,
        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 1848).
  (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 1848(a)(5)(B) 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 
(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 title.
  (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 1842(j)(1)(D).
  (m)(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 
332(a)(1)(A) of the Public Health Service Act) 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 1842(b)(6)) (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).
  (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 1869, section 1878, 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)(1)(A) 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) 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) 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), 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)), or (for procedures described 
        in subsection (a)(2)(E)(ii)), 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) furnished on or 
        after January 1, 1989) 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 
        1842(b), less the amount a provider may charge as 
        described in clause (ii) of section 1866(a)(2)(A).
  (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) 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)(1) In the case of shoes described in section 
1861(s)(12)--
          (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).
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 1834(h).
  (B) The Secretary may establish payment amounts for shoes and 
inserts that are lower than the amount established under 
section 1834(h) 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 1861(s)(12) 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 1834(h), 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 title, the term ``shoes'' includes, except for 
purposes of subparagraphs (A)(ii) and (B) of paragraph (2), 
inserts for extra-depth shoes.
  (q)(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 1877) 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 Act for a 
        period not to exceed 5 years, in accordance with the 
        procedures of subsections (c), (f), and (g) of section 
        1128.
The provisions of section 1128A (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 1128A(a).
  (r)(1) With respect to services described in section 
1861(s)(2)(K)(ii) (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 
1919(a)), 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 1861(s)(2)(K)(ii) 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 title.
  (s) The Secretary may not provide for payment under 
subsection (a)(1)(A) with respect to an organization unless the 
organization provides assurances satisfactory to the Secretary 
that the organization meets the requirement of section 1866(f) 
(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 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 1861(s);
                          (iv) does not include any therapy 
                        services described in subsection (a)(8) 
                        or ambulance services, for which 
                        payment is made under a fee schedule 
                        described in section 1834(k) or section 
                        1834(l) and does not include screening 
                        mammography (as defined in section 
                        1861(jj)), diagnostic mammography, or 
                        personalized prevention plan services 
                        (as defined in section 1861(hhh)(1)); 
                        and
                          (v) does not include applicable items 
                        and services (as defined in 
                        subparagraph (A) of paragraph (21)) 
                        that are furnished on or after January 
                        1, 2017, by an off-campus outpatient 
                        department of a provider (as defined in 
                        subparagraph (B) of such paragraph).
          (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) subject to paragraph (19), 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 and 
                for stranded and non-stranded devices furnished 
                on or after July 1, 2007.
        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 526 of 
        the Federal Food, Drug and Cosmetic Act.
          (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 section 1833(b) 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 
                        section 1833(b) 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, subject to paragraph (17) 
                        and subparagraph (F) of this paragraph, 
                        the ``OPD fee schedule increase 
                        factor'' for services furnished in a 
                        year is equal to the market basket 
                        percentage increase applicable under 
                        section 1886(b)(3)(B)(iii) 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.
                  (F) Productivity and other adjustment.--After 
                determining the OPD fee schedule increase 
                factor under subparagraph (C)(iv), the 
                Secretary shall reduce such increase factor--
                          (i) for 2012 and subsequent years, by 
                        the productivity adjustment described 
                        in section 1886(b)(3)(B)(xi)(II); and
                          (ii) for each of 2010 through 2019, 
                        by the adjustment described in 
                        subparagraph (G).
                The application of this subparagraph may result 
                in the increase factor under subparagraph 
                (C)(iv) being less than 0.0 for a year, and may 
                result in payment rates under the payment 
                system under this subsection for a year being 
                less than such payment rates for the preceding 
                year.
                  (G) Other adjustment.--For purposes of 
                subparagraph (F)(ii), the adjustment described 
                in this subparagraph is--
                          (i) for each of 2010 and 2011, 0.25 
                        percentage point;
                          (ii) for each of 2012 and 2013, 0.1 
                        percentage point;
                          (iii) for 2014, 0.3 percentage point;
                          (iv) for each of 2015 and 2016, 0.2 
                        percentage point; and
                          (v) for each of 2017, 2018, and 2019, 
                        0.75 percentage point.
          (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 section 1833(b), 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 526 of the Federal Food, Drug 
                        and Cosmetic Act 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 
                                515 of the Federal Food, Drug, 
                                and Cosmetic Act has been 
                                approved with respect to the 
                                device, or the device has been 
                                cleared for market under 
                                section 510(k) of such Act, or 
                                the device is exempt from the 
                                requirements of section 510(k) 
                                of such Act pursuant to 
                                subsection (l) or (m) of 
                                section 510 of such Act or 
                                section 520(g) of such Act.
                        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.--Subject 
                        to subparagraph (G), 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) subject to subparagraph (H), in 
                        the case of a drug or biological, the 
                        amount by which the amount determined 
                        under section 1842(o) (or if the drug 
                        or biological is covered under a 
                        competitive acquisition contract under 
                        section 1847B, 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. This clause 
                        shall not apply for 2018.
                          (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 the date 
                        of enactment of the Medicare 
                        Prescription Drug, Improvement, and 
                        Modernization Act of 2003 unless--
                                  (I) such application was 
                                being made to such drug or 
                                biological prior to such date 
                                of enactment; 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 title.
                          (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.
                  (G) Pass-through extension for certain drugs 
                and biologicals.--In the case of a drug or 
                biological whose period of pass-through status 
                under this paragraph ended on December 31, 
                2017, and for which payment under this 
                subsection was packaged into a payment for a 
                covered OPD service (or group of services) 
                furnished beginning January 1, 2018, such pass-
                through status shall be extended for a 2-year 
                period beginning on October 1, 2018.
                  (H) Temporary payment rule for certain drugs 
                and biologicals.--In the case of a drug or 
                biological whose period of pass-through status 
                under this paragraph ended on December 31, 
                2017, and for which payment under this 
                subsection was packaged into a payment for a 
                covered OPD service (or group of services) 
                furnished beginning January 1, 2018, the 
                payment amount for such drug or biological 
                under this subsection that is furnished during 
                the period beginning on October 1, 2018, and 
                ending on March 31, 2019, shall be the greater 
                of--
                          (i) the payment amount that would 
                        otherwise apply under subparagraph 
                        (D)(i) for such drug or biological 
                        during such period; or
                          (ii) the payment amount that applied 
                        under such subparagraph (D)(i) for such 
                        drug or biological on December 31, 
                        2017.
                  (I) Special payment adjustment rules for last 
                quarter of 2018.--In the case of a drug or 
                biological whose period of pass-through status 
                under this paragraph ended on December 31, 
                2017, and for which payment under this 
                subsection was packaged into a payment amount 
                for a covered OPD service (or group of 
                services) beginning January 1, 2018, the 
                following rules shall apply with respect to 
                payment amounts under this subsection for 
                covered a OPD service (or group of services) 
                furnished during the period beginning on 
                October 1, 2018, and ending on December 31, 
                2018:
                          (i) The Secretary shall remove the 
                        packaged costs of such drug or 
                        biological (as determined by the 
                        Secretary) from the payment amount 
                        under this subsection for the covered 
                        OPD service (or group of services) with 
                        which it is packaged.
                          (ii) The Secretary shall not make any 
                        adjustments to payment amounts under 
                        this subsection for a covered OPD 
                        service (or group of services) for 
                        which no costs were removed under 
                        clause (i).
          (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.--(I) 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 1886(d)(5)(D)(iii)) 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) In the case of a hospital 
                        located in a rural area and that has 
                        not more than 100 beds and that is not 
                        a sole community hospital (as defined 
                        in section 1886(d)(5)(D)(iii)), for 
                        covered OPD services furnished on or 
                        after January 1, 2006, and before 
                        January 1, 2013, for which the PPS 
                        amount is less than the pre-BBA amount, 
                        the amount of payment under this 
                        subsection shall be increased by the 
                        applicable percentage of the amount of 
                        such difference. For purposes of the 
                        preceding sentence, the applicable 
                        percentage shall be 95 percent with 
                        respect to covered OPD services 
                        furnished in 2006, 90 percent with 
                        respect to such services furnished in 
                        2007, and 85 percent with respect to 
                        such services furnished in 2008, 2009, 
                        2010, 2011, or 2012.
                          (III) In the case of a sole community 
                        hospital (as defined in section 
                        1886(d)(5)(D)(iii)) that has not more 
                        than 100 beds, for covered OPD services 
                        furnished on or after January 1, 2009, 
                        and before January 1, 2013, for which 
                        the PPS amount is less than the pre-BBA 
                        amount, the amount of payment under 
                        this subsection shall be increased by 
                        85 percent of the amount of such 
                        difference. In the case of covered OPD 
                        services furnished on or after January 
                        1, 2010, and before March 1, 2012, the 
                        preceding sentence shall be applied 
                        without regard to the 100-bed 
                        limitation.
                          (ii) Permanent treatment for cancer 
                        hospitals and children's hospitals.--In 
                        the case of a hospital described in 
                        clause (iii) or (v) of section 
                        1886(d)(1)(B), 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 title for such services (determined 
                without regard to this paragraph), including 
                amounts payable as copayment under paragraph 
                (8), coinsurance under section 
                1866(a)(2)(A)(ii), and the deductible under 
                section 1833(b).
                  (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 1813(b) 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 section 1833(b).
                  (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 1861(v)(1)(U), or, if applicable, the fee 
        schedule established under section 1834(l).
          (11) Special rules for certain hospitals.--In the 
        case of hospitals described in clause (iii) or (v) of 
        section 1886(d)(1)(B)--
                  (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 1869, 
        1878, 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 into account the 
                                hospital acquisition cost 
                                survey data under subparagraph 
                                (D); or
                                  (II) if hospital acquisition 
                                cost data are not available, 
                                the average price for the drug 
                                in the year established under 
                                section 1842(o), section 1847A, 
                                or section 1847B, as the case 
                                may be, as calculated and 
                                adjusted by the Secretary as 
                                necessary for purposes of this 
                                paragraph.
                  (B) Specified covered outpatient drug 
                defined.--
                          (i) In general.--In this paragraph, 
                        the term ``specified covered outpatient 
                        drug'' means, subject to clause (ii), a 
                        covered outpatient drug (as defined in 
                        section 1927(k)(2)) for which a 
                        separate ambulatory payment 
                        classification group (APC) has been 
                        established and that is--
                                  (I) a radiopharmaceutical; or
                                  (II) a drug or biological for 
                                which payment was made under 
                                paragraph (6) (relating to 
                                pass-through payments) on or 
                                before December 31, 2002.
                          (ii) Exception.--Such term does not 
                        include--
                                  (I) a drug or biological for 
                                which payment is first made on 
                                or after January 1, 2003, under 
                                paragraph (6);
                                  (II) a drug or biological for 
                                which a temporary HCPCS code 
                                has not been assigned; or
                                  (III) during 2004 and 2005, 
                                an orphan drug (as designated 
                                by the Secretary).
                  (C) Payment for designated orphan drugs 
                during 2004 and 2005.--The amount of payment 
                under this subsection for an orphan drug 
                designated by the Secretary under subparagraph 
                (B)(ii)(III) that is furnished as part of a 
                covered OPD service (or group of services) 
                during 2004 and 2005 shall equal such amount as 
                the Secretary may specify.
                  (D) Acquisition cost survey for hospital 
                outpatient drugs.--
                          (i) Annual gao surveys in 2004 and 
                        2005.--
                                  (I) In general.--The 
                                Comptroller General of the 
                                United States shall conduct a 
                                survey in each of 2004 and 2005 
                                to determine the hospital 
                                acquisition cost for each 
                                specified covered outpatient 
                                drug. Not later than April 1, 
                                2005, the Comptroller General 
                                shall furnish data from such 
                                surveys to the Secretary for 
                                use in setting the payment 
                                rates under subparagraph (A) 
                                for 2006.
                                  (II) Recommendations.--Upon 
                                the completion of such surveys, 
                                the Comptroller General shall 
                                recommend to the Secretary the 
                                frequency and methodology of 
                                subsequent surveys to be 
                                conducted by the Secretary 
                                under clause (ii).
                          (ii) Subsequent secretarial 
                        surveys.--The Secretary, taking into 
                        account such recommendations, shall 
                        conduct periodic subsequent surveys to 
                        determine the hospital acquisition cost 
                        for each specified covered outpatient 
                        drug for use in setting the payment 
                        rates under subparagraph (A).
                          (iii) Survey requirements.--The 
                        surveys conducted under clauses (i) and 
                        (ii) shall have a large sample of 
                        hospitals that is sufficient to 
                        generate a statistically significant 
                        estimate of the average hospital 
                        acquisition cost for each specified 
                        covered outpatient drug. With respect 
                        to the surveys conducted under clause 
                        (i), the Comptroller General shall 
                        report to Congress on the justification 
                        for the size of the sample used in 
                        order to assure the validity of such 
                        estimates.
                          (iv) Differentiation in cost.--In 
                        conducting surveys under clause (i), 
                        the Comptroller General shall determine 
                        and report to Congress if there is (and 
                        the extent of any) variation in 
                        hospital acquisition costs for drugs 
                        among hospitals based on the volume of 
                        covered OPD services performed by such 
                        hospitals or other relevant 
                        characteristics of such hospitals (as 
                        defined by the Comptroller General).
                          (v) Comment on proposed rates.--Not 
                        later than 30 days after the date the 
                        Secretary promulgated proposed rules 
                        setting forth the payment rates under 
                        subparagraph (A) for 2006, the 
                        Comptroller General shall evaluate such 
                        proposed rates and submit to Congress a 
                        report regarding the appropriateness of 
                        such rates based on the surveys the 
                        Comptroller General has conducted under 
                        clause (i).
                  (E) Adjustment in payment rates for overhead 
                costs.--
                          (i) Medpac report on drug apc 
                        design.--The Medicare Payment Advisory 
                        Commission shall submit to the 
                        Secretary, not later than July 1, 2005, 
                        a report on adjustment of payment for 
                        ambulatory payment classifications for 
                        specified covered outpatient drugs to 
                        take into account overhead and related 
                        expenses, such as pharmacy services and 
                        handling costs. Such report shall 
                        include--
                                  (I) a description and 
                                analysis of the data available 
                                with regard to such expenses;
                                  (II) a recommendation as to 
                                whether such a payment 
                                adjustment should be made; and
                                  (III) if such adjustment 
                                should be made, a 
                                recommendation regarding the 
                                methodology for making such an 
                                adjustment.
                          (ii) Adjustment authorized.--The 
                        Secretary may adjust the weights for 
                        ambulatory payment classifications for 
                        specified covered outpatient drugs to 
                        take into account the recommendations 
                        contained in the report submitted under 
                        clause (i).
                  (F) Classes of drugs.--For purposes of this 
                paragraph:
                          (i) Sole source drugs.--The term 
                        ``sole source drug'' means--
                                  (I) a biological product (as 
                                defined under section 
                                1861(t)(1)); or
                                  (II) a single source drug (as 
                                defined in section 
                                1927(k)(7)(A)(iv)).
                          (ii) Innovator multiple source 
                        drugs.--The term ``innovator multiple 
                        source drug'' has the meaning given 
                        such term in section 1927(k)(7)(A)(ii).
                          (iii) Noninnovator multiple source 
                        drugs.--The term ``noninnovator 
                        multiple source drug'' has the meaning 
                        given such term in section 
                        1927(k)(7)(A)(iii).
                  (G) Reference average wholesale price.--The 
                term ``reference average wholesale price'' 
                means, with respect to a specified covered 
                outpatient drug, the average wholesale price 
                for the drug as determined under section 
                1842(o) as of May 1, 2003.
                  (H) Inapplicability of expenditures in 
                determining conversion, weighting, and other 
                adjustment factors.--Additional expenditures 
                resulting from this paragraph shall not be 
                taken into account in establishing the 
                conversion, weighting, and other adjustment 
                factors for 2004 and 2005 under paragraph (9), 
                but shall be taken into account for subsequent 
                years.
          (15) Payment for new drugs and biologicals until 
        hcpcs code assigned.--With respect to payment under 
        this part for an outpatient drug or biological that is 
        covered under this part and is furnished as part of 
        covered OPD services for which a HCPCS code has not 
        been assigned, the amount provided for payment for such 
        drug or biological under this part shall be equal to 95 
        percent of the average wholesale price for the drug or 
        biological.
          (16) Miscellaneous provisions.--
                  (A) Application of reclassification of 
                certain hospitals.--If a hospital is being 
                treated as being located in a rural area under 
                section 1886(d)(8)(E), that hospital shall be 
                treated under this subsection as being located 
                in that rural area.
                  (B) Threshold for establishment of separate 
                apcs for drugs.--The Secretary shall reduce the 
                threshold for the establishment of separate 
                ambulatory payment classification groups (APCs) 
                with respect to drugs or biologicals to $50 per 
                administration for drugs and biologicals 
                furnished in 2005 and 2006.
                  (C) Payment for devices of brachytherapy and 
                therapeutic radiopharmaceuticals at charges 
                adjusted to cost.--Notwithstanding the 
                preceding provisions of this subsection, for a 
                device of brachytherapy consisting of a seed or 
                seeds (or radioactive source) furnished on or 
                after January 1, 2004, and before January 1, 
                2010, and for therapeutic radiopharmaceuticals 
                furnished on or after January 1, 2008, and 
                before January 1, 2010, the payment basis for 
                the device or therapeutic radiopharmaceutical 
                under this subsection shall be equal to the 
                hospital's charges for each device or 
                therapeutic radiopharmaceutical furnished, 
                adjusted to cost. Charges for such devices or 
                therapeutic radiopharmaceuticals shall not be 
                included in determining any outlier payment 
                under this subsection.
                  (D) Special payment rule.--
                          (i) In general.--In the case of 
                        covered OPD services furnished on or 
                        after April 1, 2013, in a hospital 
                        described in clause (ii), if--
                                  (I) the payment rate that 
                                would otherwise apply under 
                                this subsection for 
                                stereotactic radiosurgery, 
                                complete course of treatment of 
                                cranial lesion(s) consisting of 
                                1 session that is multi-source 
                                Cobalt 60 based (identified as 
                                of January 1, 2013, by HCPCS 
                                code 77371 (and any succeeding 
                                code) and reimbursed as of such 
                                date under APC 0127 (and any 
                                succeeding classification 
                                group)); exceeds
                                  (II) the payment rate that 
                                would otherwise apply under 
                                this subsection for linear 
                                accelerator based stereotactic 
                                radiosurgery, complete course 
                                of therapy in one session 
                                (identified as of January 1, 
                                2013, by HCPCS code G0173 (and 
                                any succeeding code) and 
                                reimbursed as of such date 
                                under APC 0067 (and any 
                                succeeding classification 
                                group)),
                        the payment rate for the service 
                        described in subclause (I) shall be 
                        reduced to an amount equal to the 
                        payment rate for the service described 
                        in subclause (II).
                          (ii) Hospital described.--A hospital 
                        described in this clause is a hospital 
                        that is not--
                                  (I) located in a rural area 
                                (as defined in section 
                                1886(d)(2)(D));
                                  (II) classified as a rural 
                                referral center under section 
                                1886(d)(5)(C); or
                                  (III) a sole community 
                                hospital (as defined in section 
                                1886(d)(5)(D)(iii)).
                          (iii) Not budget neutral.--In making 
                        any budget neutrality adjustments under 
                        this subsection for 2013 (with respect 
                        to covered OPD services furnished on or 
                        after April 1, 2013, and before January 
                        1, 2014) or a subsequent year, the 
                        Secretary shall not take into account 
                        the reduced expenditures that result 
                        from the application of this 
                        subparagraph.
                  (E) Application of appropriate use criteria 
                for certain imaging services.--For provisions 
                relating to the application of appropriate use 
                criteria for certain imaging services, see 
                section 1834(q).
                  (F) Payment incentive for the transition from 
                traditional x-ray imaging to digital 
                radiography.--Notwithstanding the previous 
                provisions of this subsection:
                          (i) Limitation on payment for film x-
                        ray imaging services.--In the case of 
                        an imaging service that is an X-ray 
                        taken using film and that is furnished 
                        during 2017 or a subsequent year, the 
                        payment amount for such service 
                        (including the X-ray component of a 
                        packaged service) that would otherwise 
                        be determined under this section 
                        (without application of this paragraph 
                        and before application of any other 
                        adjustment under this subsection) for 
                        such year shall be reduced by 20 
                        percent.
                          (ii) Phased-in limitation on payment 
                        for computed radiography imaging 
                        services.--In the case of an imaging 
                        service that is an X-ray taken using 
                        computed radiography technology (as 
                        defined in section 1848(b)(9)(C))--
                                  (I) in the case of such a 
                                service furnished during 2018, 
                                2019, 2020, 2021, or 2022, the 
                                payment amount for such service 
                                (including the X-ray component 
                                of a packaged service) that 
                                would otherwise be determined 
                                under this section (without 
                                application of this paragraph 
                                and before application of any 
                                other adjustment under this 
                                subsection) for such year shall 
                                be reduced by 7 percent; and
                                  (II) in the case of such a 
                                service furnished during 2023 
                                or a subsequent year, the 
                                payment amount for such service 
                                (including the X-ray component 
                                of a packaged service) that 
                                would otherwise be determined 
                                under this section (without 
                                application of this paragraph 
                                and before application of any 
                                other adjustment under this 
                                subsection) for such year shall 
                                be reduced by 10 percent.
                          (iii) Application without regard to 
                        budget neutrality.--The reductions made 
                        under this subparagraph--
                                  (I) shall not be considered 
                                an adjustment under paragraph 
                                (2)(E); and
                                  (II) shall not be implemented 
                                in a budget neutral manner.
                          (iv) Implementation.--In order to 
                        implement this subparagraph, the 
                        Secretary shall adopt appropriate 
                        mechanisms which may include use of 
                        modifiers.
          (17) Quality reporting.--
                  (A) Reduction in update for failure to 
                report.--
                          (i) In general.--For purposes of 
                        paragraph (3)(C)(iv) for 2009 and each 
                        subsequent year, in the case of a 
                        subsection (d) hospital (as defined in 
                        section 1886(d)(1)(B)) that does not 
                        submit, to the Secretary in accordance 
                        with this paragraph, data required to 
                        be submitted on measures selected under 
                        this paragraph with respect to such a 
                        year, the OPD fee schedule increase 
                        factor under paragraph (3)(C)(iv) for 
                        such year shall be reduced by 2.0 
                        percentage points.
                          (ii) Non-cumulative application.--A 
                        reduction under this subparagraph shall 
                        apply only with respect to the year 
                        involved and the Secretary shall not 
                        take into account such reduction in 
                        computing the OPD fee schedule increase 
                        factor for a subsequent year.
                  (B) Form and manner of submission.--Each 
                subsection (d) hospital shall submit data on 
                measures selected under this paragraph to the 
                Secretary in a form and manner, and at a time, 
                specified by the Secretary for purposes of this 
                paragraph.
                  (C) Development of outpatient measures.--
                          (i) In general.--The Secretary shall 
                        develop measures that the Secretary 
                        determines to be appropriate for the 
                        measurement of the quality of care 
                        (including medication errors) furnished 
                        by hospitals in outpatient settings and 
                        that reflect consensus among affected 
                        parties and, to the extent feasible and 
                        practicable, shall include measures set 
                        forth by one or more national consensus 
                        building entities.
                          (ii) Construction.--Nothing in this 
                        paragraph shall be construed as 
                        preventing the Secretary from selecting 
                        measures that are the same as (or a 
                        subset of) the measures for which data 
                        are required to be submitted under 
                        section 1886(b)(3)(B)(viii).
                  (D) Replacement of measures.--For purposes of 
                this paragraph, the Secretary may replace any 
                measures or indicators in appropriate cases, 
                such as where all hospitals are effectively in 
                compliance or the measures or indicators have 
                been subsequently shown not to represent the 
                best clinical practice.
                  (E) Availability of data.--The Secretary 
                shall establish procedures for making data 
                submitted under this paragraph available to the 
                public. Such procedures shall ensure that a 
                hospital has the opportunity to review the data 
                that are to be made public with respect to the 
                hospital prior to such data being made public. 
                The Secretary shall report quality measures of 
                process, structure, outcome, patients' 
                perspectives on care, efficiency, and costs of 
                care that relate to services furnished in 
                outpatient settings in hospitals on the 
                Internet website of the Centers for Medicare & 
                Medicaid Services.
          (18) Authorization of adjustment for cancer 
        hospitals.--
                  (A) Study.--The Secretary shall conduct a 
                study to determine if, under the system under 
                this subsection, costs incurred by hospitals 
                described in section 1886(d)(1)(B)(v) with 
                respect to ambulatory payment classification 
                groups exceed those costs incurred by other 
                hospitals furnishing services under this 
                subsection (as determined appropriate by the 
                Secretary). In conducting the study under this 
                subparagraph, the Secretary shall take into 
                consideration the cost of drugs and biologicals 
                incurred by such hospitals.
                  (B) Authorization of adjustment.--Insofar as 
                the Secretary determines under subparagraph (A) 
                that costs incurred by hospitals described in 
                section 1886(d)(1)(B)(v) exceed those costs 
                incurred by other hospitals furnishing services 
                under this subsection, the Secretary shall, 
                subject to subparagraph (C), provide for an 
                appropriate adjustment under paragraph (2)(E) 
                to reflect those higher costs effective for 
                services furnished on or after January 1, 2011.
                  (C) Target pcr adjustment.--In applying 
                section 419.43(i) of title 42 of the Code of 
                Federal Regulations to implement the 
                appropriate adjustment under this paragraph for 
                services furnished on or after January 1, 2018, 
                the Secretary shall use a target PCR that is 
                1.0 percentage points less than the target PCR 
                that would otherwise apply. In addition to the 
                percentage point reduction under the previous 
                sentence, the Secretary may consider making an 
                additional percentage point reduction to such 
                target PCR that takes into account payment 
                rates for applicable items and services 
                described in paragraph (21)(C) other than for 
                services furnished by hospitals described in 
                section 1886(d)(1)(B)(v). In making any budget 
                neutrality adjustments under this subsection 
                for 2018 or a subsequent year, the Secretary 
                shall not take into account the reduced 
                expenditures that result from the application 
                of this subparagraph.
          (19) Floor on area wage adjustment factor for 
        hospital outpatient department services in frontier 
        states.--
                  (A) In general.--Subject to subparagraph (B), 
                with respect to covered OPD services furnished 
                on or after January 1, 2011, the area wage 
                adjustment factor applicable under the payment 
                system established under this subsection to any 
                hospital outpatient department which is located 
                in a frontier State (as defined in section 
                1886(d)(3)(E)(iii)(II)) may not be less than 
                1.00. The preceding sentence shall not be 
                applied in a budget neutral manner.
                  (B) Limitation.--This paragraph shall not 
                apply to any hospital outpatient department 
                located in a State that receives a non-labor 
                related share adjustment under section 
                1886(d)(5)(H).
          (20) Not budget neutral application of reduced 
        expenditures resulting from quality incentives for 
        computed tomography.--The Secretary shall not take into 
        account the reduced expenditures that result from the 
        application of section 1834(p) in making any budget 
        neutrality adjustments this subsection.
          (21) Services furnished by an off-campus outpatient 
        department of a provider.--
                  (A) Applicable items and services.--For 
                purposes of paragraph (1)(B)(v) and this 
                paragraph, the term ``applicable items and 
                services'' means items and services other than 
                items and services furnished by a dedicated 
                emergency department (as defined in section 
                489.24(b) of title 42 of the Code of Federal 
                Regulations).
                  (B) Off-campus outpatient department of a 
                provider.--
                          (i) In general.--For purposes of 
                        paragraph (1)(B)(v) and this paragraph, 
                        subject to the subsequent provisions of 
                        this subparagraph, the term ``off-
                        campus outpatient department of a 
                        provider'' means a department of a 
                        provider (as defined in section 
                        413.65(a)(2) of title 42 of the Code of 
                        Federal Regulations, as in effect as of 
                        the date of the enactment of this 
                        paragraph) that is not located--
                                  (I) on the campus (as defined 
                                in such section 413.65(a)(2)) 
                                of such provider; or
                                  (II) within the distance 
                                (described in such definition 
                                of campus) from a remote 
                                location of a hospital facility 
                                (as defined in such section 
                                413.65(a)(2)).
                          (ii) Exception.--For purposes of 
                        paragraph (1)(B)(v) and this paragraph, 
                        the term ``off-campus outpatient 
                        department of a provider'' shall not 
                        include a department of a provider (as 
                        so defined) that was billing under this 
                        subsection with respect to covered OPD 
                        services furnished prior to the date of 
                        the enactment of this paragraph.
                          (iii) Deemed treatment for 2017.--For 
                        purposes of applying clause (ii) with 
                        respect to applicable items and 
                        services furnished during 2017, a 
                        department of a provider (as so 
                        defined) not described in such clause 
                        is deemed to be billing under this 
                        subsection with respect to covered OPD 
                        services furnished prior to November 2, 
                        2015, if the Secretary received from 
                        the provider prior to December 2, 2015, 
                        an attestation (pursuant to section 
                        413.65(b)(3) of title 42 of the Code of 
                        Federal Regulations) that such 
                        department was a department of a 
                        provider (as so defined).
                          (iv) Alternative exception beginning 
                        with 2018.--For purposes of paragraph 
                        (1)(B)(v) and this paragraph with 
                        respect to applicable items and 
                        services furnished during 2018 or a 
                        subsequent year, the term ``off-campus 
                        outpatient department of a provider'' 
                        also shall not include a department of 
                        a provider (as so defined) that is not 
                        described in clause (ii) if--
                                  (I) the Secretary receives 
                                from the provider an 
                                attestation (pursuant to such 
                                section 413.65(b)(3)) not later 
                                than December 31, 2016 (or, if 
                                later, 60 days after the date 
                                of the enactment of this 
                                clause), that such department 
                                met the requirements of a 
                                department of a provider 
                                specified in section 413.65 of 
                                title 42 of the Code of Federal 
                                Regulations;
                                  (II) the provider includes 
                                such department as part of the 
                                provider on its enrollment form 
                                in accordance with the 
                                enrollment process under 
                                section 1866(j); and
                                  (III) the department met the 
                                mid-build requirement of clause 
                                (v) and the Secretary receives, 
                                not later than 60 days after 
                                the date of the enactment of 
                                this clause, from the chief 
                                executive officer or chief 
                                operating officer of the 
                                provider a written 
                                certification that the 
                                department met such 
                                requirement.
                          (v) Mid-build requirement 
                        described.--The mid-build requirement 
                        of this clause is, with respect to a 
                        department of a provider, that before 
                        November 2, 2015, the provider had a 
                        binding written agreement with an 
                        outside unrelated party for the actual 
                        construction of such department.
                          (vi) Exclusion for certain cancer 
                        hospitals.--For purposes of paragraph 
                        (1)(B)(v) and this paragraph with 
                        respect to applicable items and 
                        services furnished during 2017 or a 
                        subsequent year, the term ``off-campus 
                        outpatient department of a provider'' 
                        also shall not include a department of 
                        a provider (as so defined) that is not 
                        described in clause (ii) if the 
                        provider is a hospital described in 
                        section 1886(d)(1)(B)(v) and--
                                  (I) in the case of a 
                                department that met the 
                                requirements of section 413.65 
                                of title 42 of the Code of 
                                Federal Regulations after 
                                November 1, 2015, and before 
                                the date of the enactment of 
                                this clause, the Secretary 
                                receives from the provider an 
                                attestation that such 
                                department met such 
                                requirements not later than 60 
                                days after such date of 
                                enactment; or
                                  (II) in the case of a 
                                department that meets such 
                                requirements after such date of 
                                enactment, the Secretary 
                                receives from the provider an 
                                attestation that such 
                                department meets such 
                                requirements not later than 60 
                                days after the date such 
                                requirements are first met with 
                                respect to such department.
                          (vii) Audit.--Not later than December 
                        31, 2018, the Secretary shall audit the 
                        compliance with requirements of clause 
                        (iv) with respect to each department of 
                        a provider to which such clause 
                        applies. Not later than 2 years after 
                        the date the Secretary receives an 
                        attestation under clause (vi) relating 
                        to compliance of a department of a 
                        provider with requirements referred to 
                        in such clause, the Secretary shall 
                        audit the compliance with such 
                        requirements with respect to the 
                        department. If the Secretary finds as a 
                        result of an audit under this clause 
                        that the applicable requirements were 
                        not met with respect to such 
                        department, the department shall not be 
                        excluded from the term ``off-campus 
                        outpatient department of a provider'' 
                        under such clause.
                          (viii) Implementation.--For purposes 
                        of implementing clauses (iii) through 
                        (vii):
                                  (I) Notwithstanding any other 
                                provision of law, the Secretary 
                                may implement such clauses by 
                                program instruction or 
                                otherwise.
                                  (II) Subchapter I of chapter 
                                35 of title 44, United States 
                                Code, shall not apply.
                                  (III) For purposes of 
                                carrying out this subparagraph 
                                with respect to clauses (iii) 
                                and (iv) (and clause (vii) 
                                insofar as it relates to clause 
                                (iv)), $10,000,000 shall be 
                                available from the Federal 
                                Supplementary Medical Insurance 
                                Trust Fund under section 1841, 
                                to remain available until 
                                December 31, 2018. For purposes 
                                of carrying out this 
                                subparagraph with respect to 
                                clause (vi) (and clause (vii) 
                                insofar as it relates to such 
                                clause), $2,000,000 shall be 
                                available from the Federal 
                                Supplementary Medical Insurance 
                                Trust Fund under section 1841, 
                                to remain available until 
                                expended.
                  (C) Availability of payment under other 
                payment systems.--Payments for applicable items 
                and services furnished by an off-campus 
                outpatient department of a provider that are 
                described in paragraph (1)(B)(v) shall be made 
                under the applicable payment system under this 
                part (other than under this subsection) if the 
                requirements for such payment are otherwise 
                met.
                  (D) Information needed for implementation.--
                Each hospital shall provide to the Secretary 
                such information as the Secretary determines 
                appropriate to implement this paragraph and 
                paragraph (1)(B)(v) (which may include 
                reporting of information on a hospital claim 
                using a code or modifier and reporting 
                information about off-campus outpatient 
                departments of a provider on the enrollment 
                form described in section 1866(j)).
                  (E) Limitations.--There shall be no 
                administrative or judicial review under section 
                1869, section 1878, or otherwise of the 
                following:
                          (i) The determination of the 
                        applicable items and services under 
                        subparagraph (A) and applicable payment 
                        systems under subparagraph (C).
                          (ii) The determination of whether a 
                        department of a provider meets the term 
                        described in subparagraph (B).
                          (iii) Any information that hospitals 
                        are required to report pursuant to 
                        subparagraph (D).
                          (iv) The determination of an audit 
                        under subparagraph (B)(vii).
          (22) Review and revisions of payments for non-opioid 
        alternative treatments.--
                  (A) In general.--With respect to payments 
                made under this subsection for covered OPD 
                services (or groups of services), including 
                covered OPD services assigned to a 
                comprehensive ambulatory payment 
                classification, the Secretary--
                          (i) shall, as soon as practicable, 
                        conduct a review (part of which may 
                        include a request for information) of 
                        payments for opioids and evidence-based 
                        non-opioid alternatives for pain 
                        management (including drugs and 
                        devices, nerve blocks, surgical 
                        injections, and neuromodulation) with a 
                        goal of ensuring that there are not 
                        financial incentives to use opioids 
                        instead of non-opioid alternatives;
                          (ii) may, as the Secretary determines 
                        appropriate, conduct subsequent reviews 
                        of such payments; and
                          (iii) shall consider the extent to 
                        which revisions under this subsection 
                        to such payments (such as the creation 
                        of additional groups of covered OPD 
                        services to classify separately those 
                        procedures that utilize opioids and 
                        non-opioid alternatives for pain 
                        management) would reduce payment 
                        incentives to use opioids instead of 
                        non-opioid alternatives for pain 
                        management.
                  (B) Priority.--In conducting the review under 
                clause (i) of subparagraph (A) and considering 
                revisions under clause (iii) of such 
                subparagraph, the Secretary shall focus on 
                covered OPD services (or groups of services) 
                assigned to a comprehensive ambulatory payment 
                classification, ambulatory payment 
                classifications that primarily include surgical 
                services, and other services determined by the 
                Secretary which generally involve treatment for 
                pain management.
                  (C) Revisions.--If the Secretary identifies 
                revisions to payments pursuant to subparagraph 
                (A)(iii), the Secretary shall, as determined 
                appropriate, begin making such revisions for 
                services furnished on or after January 1, 2020. 
                Revisions under the previous sentence shall be 
                treated as adjustments for purposes of 
                application of paragraph (9)(B).
                  (D) Rules of construction.--Nothing in this 
                paragraph shall be construed to preclude the 
                Secretary--
                          (i) from conducting a demonstration 
                        before making the revisions described 
                        in subparagraph (C); or
                          (ii) prior to implementation of this 
                        paragraph, from changing payments under 
                        this subsection for covered OPD 
                        services (or groups of services) which 
                        include opioids or non-opioid 
                        alternatives for pain management.
  (u) Incentive Payments for Physician Scarcity Areas.--
          (1) In general.--In the case of physicians' services 
        furnished on or after January 1, 2005, and before July 
        1, 2008--
                  (A) by a primary care physician in a primary 
                care scarcity county (identified under 
                paragraph (4)); or
                  (B) by a physician who is not a primary care 
                physician in a specialist care scarcity county 
                (as so identified),
        in addition to the amount of payment that would 
        otherwise be made for such services under this part, 
        there also shall be paid an amount equal to 5 percent 
        of the payment amount for the service under this part.
          (2) Determination of ratios of physicians to medicare 
        beneficiaries in area.--Based upon available data, the 
        Secretary shall establish for each county or equivalent 
        area in the United States, the following:
                  (A) Number of physicians practicing in the 
                area.--The number of physicians who furnish 
                physicians' services in the active practice of 
                medicine or osteopathy in that county or area, 
                other than physicians whose practice is 
                exclusively for the Federal Government, 
                physicians who are retired, or physicians who 
                only provide administrative services. Of such 
                number, the number of such physicians who are--
                          (i) primary care physicians; or
                          (ii) physicians who are not primary 
                        care physicians.
                  (B) Number of medicare beneficiaries residing 
                in the area.--The number of individuals who are 
                residing in the county and are entitled to 
                benefits under part A or enrolled under this 
                part, or both (in this subsection referred to 
                as ``individuals'').
                  (C) Determination of ratios.--
                          (i) Primary care ratio.--The ratio 
                        (in this paragraph referred to as the 
                        ``primary care ratio'') of the number 
                        of primary care physicians (determined 
                        under subparagraph (A)(i)), to the 
                        number of individuals determined under 
                        subparagraph (B).
                          (ii) Specialist care ratio.--The 
                        ratio (in this paragraph referred to as 
                        the ``specialist care ratio'') of the 
                        number of other physicians (determined 
                        under subparagraph (A)(ii)), to the 
                        number of individuals determined under 
                        subparagraph (B).
          (3) Ranking of counties.--The Secretary shall rank 
        each such county or area based separately on its 
        primary care ratio and its specialist care ratio.
          (4) Identification of counties.--
                  (A) In general.--The Secretary shall 
                identify--
                          (i) those counties and areas (in this 
                        paragraph referred to as ``primary care 
                        scarcity counties'') with the lowest 
                        primary care ratios that represent, if 
                        each such county or area were weighted 
                        by the number of individuals determined 
                        under paragraph (2)(B), an aggregate 
                        total of 20 percent of the total of the 
                        individuals determined under such 
                        paragraph; and
                          (ii) those counties and areas (in 
                        this subsection referred to as 
                        ``specialist care scarcity counties'') 
                        with the lowest specialist care ratios 
                        that represent, if each such county or 
                        area were weighted by the number of 
                        individuals determined under paragraph 
                        (2)(B), an aggregate total of 20 
                        percent of the total of the individuals 
                        determined under such paragraph.
                  (B) Periodic revisions.--The Secretary shall 
                periodically revise the counties or areas 
                identified in subparagraph (A) (but not less 
                often than once every three years) unless the 
                Secretary determines that there is no new data 
                available on the number of physicians 
                practicing in the county or area or the number 
                of individuals residing in the county or area, 
                as identified in paragraph (2).
                  (C) Identification of counties where service 
                is furnished.--For purposes of paying the 
                additional amount specified in paragraph (1), 
                if the Secretary uses the 5-digit postal ZIP 
                Code where the service is furnished, the 
                dominant county of the postal ZIP Code (as 
                determined by the United States Postal Service, 
                or otherwise) shall be used to determine 
                whether the postal ZIP Code is in a scarcity 
                county identified in subparagraph (A) or 
                revised in subparagraph (B).
                  (D) Special rule.--With respect to 
                physicians' services furnished on or after 
                January 1, 2008, and before July 1, 2008, for 
                purposes of this subsection, the Secretary 
                shall use the primary care scarcity counties 
                and the specialty care scarcity counties (as 
                identified under the preceding provisions of 
                this paragraph) that the Secretary was using 
                under this subsection with respect to 
                physicians' services furnished on December 31, 
                2007.
                  (E) Judicial review.--There shall be no 
                administrative or judicial review under section 
                1869, 1878, or otherwise, respecting--
                          116.(i) the identification of a 
                        county or area;
                          (ii) the assignment of a specialty of 
                        any physician under this paragraph;
                          (iii) the assignment of a physician 
                        to a county under paragraph (2); or
                          (iv) the assignment of a postal ZIP 
                        Code to a county or other area under 
                        this subsection.
          (5) Rural census tracts.--To the extent feasible, the 
        Secretary shall treat a rural census tract of a 
        metropolitan statistical area (as determined under the 
        most recent modification of the Goldsmith Modification, 
        originally published in the Federal Register on 
        February 27, 1992 (57 Fed. Reg. 6725)), as an 
        equivalent area for purposes of qualifying as a primary 
        care scarcity county or specialist care scarcity county 
        under this subsection.
          (6) Physician Defined.--For purposes of this 
        paragraph, the term ``physician'' means a physician 
        described in section 1861(r)(1) and the term ``primary 
        care physician'' means a physician who is identified in 
        the available data as a general practitioner, family 
        practice practitioner, general internist, or 
        obstetrician or gynecologist.
          (7) Publication of list of counties; posting on 
        website.--With respect to a year for which a county or 
        area is identified or revised under paragraph (4), the 
        Secretary shall identify such counties or areas as part 
        of the proposed and final rule to implement the 
        physician fee schedule under section 1848 for the 
        applicable year. The Secretary shall post the list of 
        counties identified or revised under paragraph (4) on 
        the Internet website of the Centers for Medicare & 
        Medicaid Services.
  (v) Increase of FQHC Payment Limits.--In the case of services 
furnished by Federally qualified health centers (as defined in 
section 1861(aa)(4)), the Secretary shall establish payment 
limits with respect to such services under this part for 
services furnished--
          (1) in 2010, at the limits otherwise established 
        under this part for such year increased by $5; and
          (2) in a subsequent year, at the limits established 
        under this subsection for the previous year increased 
        by the percentage increase in the MEI (as defined in 
        section 1842(i)(3)) for such subsequent year.
  (w) Methods of Payment.--The Secretary may develop 
alternative methods of payment for items and services provided 
under clinical trials and comparative effectiveness studies 
sponsored or supported by an agency of the Department of Health 
and Human Services, as determined by the Secretary, to those 
that would otherwise apply under this section, to the extent 
such alternative methods are necessary to preserve the 
scientific validity of such trials or studies, such as in the 
case where masking the identity of interventions from patients 
and investigators is necessary to comply with the particular 
trial or study design.
  (x) Incentive Payments for Primary Care Services.--
          (1) In general.--In the case of primary care services 
        furnished on or after January 1, 2011, and before 
        January 1, 2016, by a primary care practitioner, in 
        addition to the amount of payment that would otherwise 
        be made for such services under this part, there also 
        shall be paid (on a monthly or quarterly basis) an 
        amount equal to 10 percent of the payment amount for 
        the service under this part.
          (2) Definitions.--In this subsection:
                  (A) Primary care practitioner.--The term 
                ``primary care practitioner'' means an 
                individual--
                          (i) who--
                                  (I) is a physician (as 
                                described in section 
                                1861(r)(1)) who has a primary 
                                specialty designation of family 
                                medicine, internal medicine, 
                                geriatric medicine, or 
                                pediatric medicine; or
                                  (II) is a nurse practitioner, 
                                clinical nurse specialist, or 
                                physician assistant (as those 
                                terms are defined in section 
                                1861(aa)(5)); and
                          (ii) for whom primary care services 
                        accounted for at least 60 percent of 
                        the allowed charges under this part for 
                        such physician or practitioner in a 
                        prior period as determined appropriate 
                        by the Secretary.
                  (B) Primary care services.--The term 
                ``primary care services'' means services 
                identified, as of January 1, 2009, by the 
                following HCPCS codes (and as subsequently 
                modified by the Secretary):
                          (i) 99201 through 99215.
                          (ii) 99304 through 99340.
                          (iii) 99341 through 99350.
          (3) Coordination with other payments.--The amount of 
        the additional payment for a service under this 
        subsection and subsection (m) shall be determined 
        without regard to any additional payment for the 
        service under subsection (m) and this subsection, 
        respectively. The amount of the additional payment for 
        a service under this subsection and subsection (z) 
        shall be determined without regard to any additional 
        payment for the service under subsection (z) and this 
        subsection, respectively.
          (4) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, 
        1878, or otherwise, respecting the identification of 
        primary care practitioners under this subsection.
  (y) Incentive Payments for Major Surgical Procedures 
Furnished in Health Professional Shortage Areas.--
          (1) In general.--In the case of major surgical 
        procedures furnished on or after January 1, 2011, and 
        before January 1, 2016, by a general surgeon in an area 
        that is designated (under section 332(a)(1)(A) of the 
        Public Health Service Act) as a health professional 
        shortage area as identified by the Secretary prior to 
        the beginning of the year involved, in addition to the 
        amount of payment that would otherwise be made for such 
        services under this part, there also shall be paid (on 
        a monthly or quarterly basis) an amount equal to 10 
        percent of the payment amount for the service under 
        this part.
          (2) Definitions.--In this subsection:
                  (A) General surgeon.--In this subsection, the 
                term ``general surgeon'' means a physician (as 
                described in section 1861(r)(1)) who has 
                designated CMS specialty code 02-General 
                Surgery as their primary specialty code in the 
                physician's enrollment under section 1866(j).
                  (B) Major surgical procedures.--The term 
                ``major surgical procedures'' means physicians' 
                services which are surgical procedures for 
                which a 10-day or 90-day global period is used 
                for payment under the fee schedule under 
                section 1848(b).
          (3) Coordination with other payments.--The amount of 
        the additional payment for a service under this 
        subsection and subsection (m) shall be determined 
        without regard to any additional payment for the 
        service under subsection (m) and this subsection, 
        respectively. The amount of the additional payment for 
        a service under this subsection and subsection (z) 
        shall be determined without regard to any additional 
        payment for the service under subsection (z) and this 
        subsection, respectively.
          (4) Application.--The provisions of paragraph (2) and 
        (4) of subsection (m) shall apply to the determination 
        of additional payments under this subsection in the 
        same manner as such provisions apply to the 
        determination of additional payments under subsection 
        (m).
  (z) Incentive Payments for Participation in Eligible 
Alternative Payment Models.--
          (1) Payment incentive.--
                  (A) In general.--In the case of covered 
                professional services furnished by an eligible 
                professional during a year that is in the 
                period beginning with 2019 and ending with 2024 
                and for which the professional is a qualifying 
                APM participant with respect to such year, in 
                addition to the amount of payment that would 
                otherwise be made for such covered professional 
                services under this part for such year, there 
                also shall be paid to such professional an 
                amount equal to 5 percent of the estimated 
                aggregate payment amounts for such covered 
                professional services under this part for the 
                preceding year. For purposes of the previous 
                sentence, the payment amount for the preceding 
                year may be an estimation for the full 
                preceding year based on a period of such 
                preceding year that is less than the full year. 
                The Secretary shall establish policies to 
                implement this subparagraph in cases in which 
                payment for covered professional services 
                furnished by a qualifying APM participant in an 
                alternative payment model--
                          (i) is made to an eligible 
                        alternative payment entity rather than 
                        directly to the qualifying APM 
                        participant; or
                          (ii) is made on a basis other than a 
                        fee-for-service basis (such as payment 
                        on a capitated basis).
                  (B) Form of payment.--Payments under this 
                subsection shall be made in a lump sum, on an 
                annual basis, as soon as practicable.
                  (C) Treatment of payment incentive.--Payments 
                under this subsection shall not be taken into 
                account for purposes of determining actual 
                expenditures under an alternative payment model 
                and for purposes of determining or rebasing any 
                benchmarks used under the alternative payment 
                model.
                  (D) Coordination.--The amount of the 
                additional payment under this subsection or 
                subsection (m) shall be determined without 
                regard to any additional payment under 
                subsection (m) and this subsection, 
                respectively. The amount of the additional 
                payment under this subsection or subsection (x) 
                shall be determined without regard to any 
                additional payment under subsection (x) and 
                this subsection, respectively. The amount of 
                the additional payment under this subsection or 
                subsection (y) shall be determined without 
                regard to any additional payment under 
                subsection (y) and this subsection, 
                respectively.
          (2) Qualifying apm participant.--For purposes of this 
        subsection, the term ``qualifying APM participant'' 
        means the following:
                  (A) 2019 and 2020.--With respect to 2019 and 
                2020, an eligible professional for whom the 
                Secretary determines that at least 25 percent 
                of payments under this part for covered 
                professional services furnished by such 
                professional during the most recent period for 
                which data are available (which may be less 
                than a year) were attributable to such services 
                furnished under this part through an eligible 
                alternative payment entity.
                  (B) 2021 and 2022.--With respect to 2021 and 
                2022, an eligible professional described in 
                either of the following clauses:
                          (i) Medicare payment threshold 
                        option.--An eligible professional for 
                        whom the Secretary determines that at 
                        least 50 percent of payments under this 
                        part for covered professional services 
                        furnished by such professional during 
                        the most recent period for which data 
                        are available (which may be less than a 
                        year) were attributable to such 
                        services furnished under this part 
                        through an eligible alternative payment 
                        entity.
                          (ii) Combination all-payer and 
                        medicare payment threshold option.--An 
                        eligible professional--
                                  (I) for whom the Secretary 
                                determines, with respect to 
                                items and services furnished by 
                                such professional during the 
                                most recent period for which 
                                data are available (which may 
                                be less than a year), that at 
                                least 50 percent of the sum 
                                of--
                                          (aa) payments 
                                        described in clause 
                                        (i); and
                                          (bb) all other 
                                        payments, regardless of 
                                        payer (other than 
                                        payments made by the 
                                        Secretary of Defense or 
                                        the Secretary of 
                                        Veterans Affairs and 
                                        other than payments 
                                        made under title XIX in 
                                        a State in which no 
                                        medical home or 
                                        alternative payment 
                                        model is available 
                                        under the State program 
                                        under that title),
                                meet the requirement described 
                                in clause (iii)(I) with respect 
                                to payments described in item 
                                (aa) and meet the requirement 
                                described in clause (iii)(II) 
                                with respect to payments 
                                described in item (bb);
                                  (II) for whom the Secretary 
                                determines at least 25 percent 
                                of payments under this part for 
                                covered professional services 
                                furnished by such professional 
                                during the most recent period 
                                for which data are available 
                                (which may be less than a year) 
                                were attributable to such 
                                services furnished under this 
                                part through an eligible 
                                alternative payment entity; and
                                  (III) who provides to the 
                                Secretary such information as 
                                is necessary for the Secretary 
                                to make a determination under 
                                subclause (I), with respect to 
                                such professional.
                          (iii) Requirement.--For purposes of 
                        clause (ii)(I)--
                                  (I) the requirement described 
                                in this subclause, with respect 
                                to payments described in item 
                                (aa) of such clause, is that 
                                such payments are made to an 
                                eligible alternative payment 
                                entity; and
                                  (II) the requirement 
                                described in this subclause, 
                                with respect to payments 
                                described in item (bb) of such 
                                clause, is that such payments 
                                are made under arrangements in 
                                which--
                                          (aa) quality measures 
                                        comparable to measures 
                                        under the performance 
                                        category described in 
                                        section 
                                        1848(q)(2)(B)(i) apply;
                                          (bb) certified EHR 
                                        technology is used; and
                                          (cc) the eligible 
                                        professional 
                                        participates in an 
                                        entity that--
                                                  (AA) bears 
                                                more than 
                                                nominal 
                                                financial risk 
                                                if actual 
                                                aggregate 
                                                expenditures 
                                                exceeds 
                                                expected 
                                                aggregate 
                                                expenditures; 
                                                or
                                                  (BB) with 
                                                respect to 
                                                beneficiaries 
                                                under title 
                                                XIX, is a 
                                                medical home 
                                                that meets 
                                                criteria 
                                                comparable to 
                                                medical homes 
                                                expanded under 
                                                section 
                                                1115A(c).
                  (C) Beginning in 2023.--With respect to 2023 
                and each subsequent year, an eligible 
                professional described in either of the 
                following clauses:
                          (i) Medicare payment threshold 
                        option.--An eligible professional for 
                        whom the Secretary determines that at 
                        least 75 percent of payments under this 
                        part for covered professional services 
                        furnished by such professional during 
                        the most recent period for which data 
                        are available (which may be less than a 
                        year) were attributable to such 
                        services furnished under this part 
                        through an eligible alternative payment 
                        entity.
                          (ii) Combination all-payer and 
                        medicare payment threshold option.--An 
                        eligible professional--
                                  (I) for whom the Secretary 
                                determines, with respect to 
                                items and services furnished by 
                                such professional during the 
                                most recent period for which 
                                data are available (which may 
                                be less than a year), that at 
                                least 75 percent of the sum 
                                of--
                                          (aa) payments 
                                        described in clause 
                                        (i); and
                                          (bb) all other 
                                        payments, regardless of 
                                        payer (other than 
                                        payments made by the 
                                        Secretary of Defense or 
                                        the Secretary of 
                                        Veterans Affairs and 
                                        other than payments 
                                        made under title XIX in 
                                        a State in which no 
                                        medical home or 
                                        alternative payment 
                                        model is available 
                                        under the State program 
                                        under that title),
                                meet the requirement described 
                                in clause (iii)(I) with respect 
                                to payments described in item 
                                (aa) and meet the requirement 
                                described in clause (iii)(II) 
                                with respect to payments 
                                described in item (bb);
                                  (II) for whom the Secretary 
                                determines at least 25 percent 
                                of payments under this part for 
                                covered professional services 
                                furnished by such professional 
                                during the most recent period 
                                for which data are available 
                                (which may be less than a year) 
                                were attributable to such 
                                services furnished under this 
                                part through an eligible 
                                alternative payment entity; and
                                  (III) who provides to the 
                                Secretary such information as 
                                is necessary for the Secretary 
                                to make a determination under 
                                subclause (I), with respect to 
                                such professional.
                          (iii) Requirement.--For purposes of 
                        clause (ii)(I)--
                                  (I) the requirement described 
                                in this subclause, with respect 
                                to payments described in item 
                                (aa) of such clause, is that 
                                such payments are made to an 
                                eligible alternative payment 
                                entity; and
                                  (II) the requirement 
                                described in this subclause, 
                                with respect to payments 
                                described in item (bb) of such 
                                clause, is that such payments 
                                are made under arrangements in 
                                which--
                                          (aa) quality measures 
                                        comparable to measures 
                                        under the performance 
                                        category described in 
                                        section 
                                        1848(q)(2)(B)(i) apply;
                                          (bb) certified EHR 
                                        technology is used; and
                                          (cc) the eligible 
                                        professional 
                                        participates in an 
                                        entity that--
                                                  (AA) bears 
                                                more than 
                                                nominal 
                                                financial risk 
                                                if actual 
                                                aggregate 
                                                expenditures 
                                                exceeds 
                                                expected 
                                                aggregate 
                                                expenditures; 
                                                or
                                                  (BB) with 
                                                respect to 
                                                beneficiaries 
                                                under title 
                                                XIX, is a 
                                                medical home 
                                                that meets 
                                                criteria 
                                                comparable to 
                                                medical homes 
                                                expanded under 
                                                section 
                                                1115A(c).
                  (D) Use of patient approach.--The Secretary 
                may base the determination of whether an 
                eligible professional is a qualifying APM 
                participant under this subsection and the 
                determination of whether an eligible 
                professional is a partial qualifying APM 
                participant under section 1848(q)(1)(C)(iii) by 
                using counts of patients in lieu of using 
                payments and using the same or similar 
                percentage criteria (as specified in this 
                subsection and such section, respectively), as 
                the Secretary determines appropriate.
          (3) Additional definitions.--In this subsection:
                  (A) Covered professional services.--The term 
                ``covered professional services'' has the 
                meaning given that term in section 
                1848(k)(3)(A).
                  (B) Eligible professional.--The term 
                ``eligible professional'' has the meaning given 
                that term in section 1848(k)(3)(B) and includes 
                a group that includes such professionals.
                  (C) Alternative payment model (apm).--The 
                term ``alternative payment model'' means, other 
                than for purposes of subparagraphs 
                (B)(ii)(I)(bb) and (C)(ii)(I)(bb) of paragraph 
                (2), any of the following:
                          (i) A model under section 1115A 
                        (other than a health care innovation 
                        award).
                          (ii) The shared savings program under 
                        section 1899.
                          (iii) A demonstration under section 
                        1866C.
                          (iv) A demonstration required by 
                        Federal law.
                  (D) Eligible alternative payment entity.--The 
                term ``eligible alternative payment entity'' 
                means, with respect to a year, an entity that--
                          (i) participates in an alternative 
                        payment model that--
                                  (I) requires participants in 
                                such model to use certified EHR 
                                technology (as defined in 
                                subsection (o)(4)); and
                                  (II) provides for payment for 
                                covered professional services 
                                based on quality measures 
                                comparable to measures under 
                                the performance category 
                                described in section 
                                1848(q)(2)(B)(i); and
                          (ii)(I) bears financial risk for 
                        monetary losses under such alternative 
                        payment model that are in excess of a 
                        nominal amount; or
                          (II) is a medical home expanded under 
                        section 1115A(c).
          (4) Limitation.--There shall be no administrative or 
        judicial review under section 1869, 1878, or otherwise, 
        of the following:
                  (A) The determination that an eligible 
                professional is a qualifying APM participant 
                under paragraph (2) and the determination that 
                an entity is an eligible alternative payment 
                entity under paragraph (3)(D).
                  (B) The determination of the amount of the 5 
                percent payment incentive under paragraph 
                (1)(A), including any estimation as part of 
                such determination.
  [(z)] (aa) Medical Review of Spinal Subluxation Services.--
          (1) In general.--The Secretary shall implement a 
        process for the medical review (as described in 
        paragraph (2)) of treatment by a chiropractor described 
        in section 1861(r)(5) by means of manual manipulation 
        of the spine to correct a subluxation (as described in 
        such section) of an individual who is enrolled under 
        this part and apply such process to such services 
        furnished on or after January 1, 2017, focusing on 
        services such as--
                  (A) services furnished by a such a 
                chiropractor whose pattern of billing is 
                aberrant compared to peers; and
                  (B) services furnished by such a chiropractor 
                who, in a prior period, has a services denial 
                percentage in the 85th percentile or greater, 
                taking into consideration the extent that 
                service denials are overturned on appeal.
          (2) Medical review.--
                  (A) Prior authorization medical review.--
                          (i) In general.--Subject to clause 
                        (ii), the Secretary shall use prior 
                        authorization medical review for 
                        services described in paragraph (1) 
                        that are furnished to an individual by 
                        a chiropractor described in section 
                        1861(r)(5) that are part of an episode 
                        of treatment that includes more than 12 
                        services. For purposes of the preceding 
                        sentence, an episode of treatment shall 
                        be determined by the underlying cause 
                        that justifies the need for services, 
                        such as a diagnosis code.
                          (ii) Ending application of prior 
                        authorization medical review.--The 
                        Secretary shall end the application of 
                        prior authorization medical review 
                        under clause (i) to services described 
                        in paragraph (1) by such a chiropractor 
                        if the Secretary determines that the 
                        chiropractor has a low denial rate 
                        under such prior authorization medical 
                        review. The Secretary may subsequently 
                        reapply prior authorization medical 
                        review to such chiropractor if the 
                        Secretary determines it to be 
                        appropriate and the chiropractor has, 
                        in the time period subsequent to the 
                        determination by the Secretary of a low 
                        denial rate with respect to the 
                        chiropractor, furnished such services 
                        described in paragraph (1).
                          (iii) Early request for prior 
                        authorization review permitted.--
                        Nothing in this subsection shall be 
                        construed to prevent such a 
                        chiropractor from requesting prior 
                        authorization for services described in 
                        paragraph (1) that are to be furnished 
                        to an individual before the 
                        chiropractor furnishes the twelfth such 
                        service to such individual for an 
                        episode of treatment.
                  (B) Type of review.--The Secretary may use 
                pre-payment review or post-payment review of 
                services described in section 1861(r)(5) that 
                are not subject to prior authorization medical 
                review under subparagraph (A).
                  (C) Relationship to law enforcement 
                activities.--The Secretary may determine that 
                medical review under this subsection does not 
                apply in the case where potential fraud may be 
                involved.
          (3) No payment without prior authorization.--With 
        respect to a service described in paragraph (1) for 
        which prior authorization medical review under this 
        subsection applies, the following shall apply:
                  (A) Prior authorization determination.--The 
                Secretary shall make a determination, prior to 
                the service being furnished, of whether the 
                service would or would not meet the applicable 
                requirements of section 1862(a)(1)(A).
                  (B) Denial of payment.--Subject to paragraph 
                (5), no payment may be made under this part for 
                the service unless the Secretary determines 
                pursuant to subparagraph (A) that the service 
                would meet the applicable requirements of such 
                section 1862(a)(1)(A).
          (4) Submission of information.--A chiropractor 
        described in section 1861(r)(5) may submit the 
        information necessary for medical review by fax, by 
        mail, or by electronic means. The Secretary shall make 
        available the electronic means described in the 
        preceding sentence as soon as practicable.
          (5) Timeliness.--If the Secretary does not make a 
        prior authorization determination under paragraph 
        (3)(A) within 14 business days of the date of the 
        receipt of medical documentation needed to make such 
        determination, paragraph (3)(B) shall not apply.
          (6) Application of limitation on beneficiary 
        liability.--Where payment may not be made as a result 
        of the application of paragraph (2)(B), section 1879 
        shall apply in the same manner as such section applies 
        to a denial that is made by reason of section 
        1862(a)(1).
          (7) Review by contractors.--The medical review 
        described in paragraph (2) may be conducted by medicare 
        administrative contractors pursuant to section 
        1874A(a)(4)(G) or by any other contractor determined 
        appropriate by the Secretary that is not a recovery 
        audit contractor.
          (8) Multiple services.--The Secretary shall, where 
        practicable, apply the medical review under this 
        subsection in a manner so as to allow an individual 
        described in paragraph (1) to obtain, at a single time 
        rather than on a service-by-service basis, an 
        authorization in accordance with paragraph (3)(A) for 
        multiple services.
          (9) Construction.--With respect to a service 
        described in paragraph (1) that has been affirmed by 
        medical review under this subsection, nothing in this 
        subsection shall be construed to preclude the 
        subsequent denial of a claim for such service that does 
        not meet other applicable requirements under this Act.
          (10) Implementation.--
                  (A) Authority.--The Secretary may implement 
                the provisions of this subsection by interim 
                final rule with comment period.
                  (B) Administration.--Chapter 35 of title 44, 
                United States Code, shall not apply to medical 
                review under this subsection.
  (bb) Additional Payments for Certain Rural Health Clinics 
With Physicians or Practitioners Receiving DATA 2000 Waivers.--
          (1) In general.--In the case of a rural health clinic 
        with respect to which, beginning on or after January 1, 
        2019, rural health clinic services (as defined in 
        section 1861(aa)(1)) are furnished for the treatment of 
        opioid use disorder by a physician or practitioner who 
        meets the requirements described in paragraph (3), the 
        Secretary shall, subject to availability of funds under 
        paragraph (4), make a payment (at such time and in such 
        manner as specified by the Secretary) to such rural 
        health clinic after receiving and approving an 
        application described in paragraph (2). Such payment 
        shall be in an amount determined by the Secretary, 
        based on an estimate of the average costs of training 
        for purposes of receiving a waiver described in 
        paragraph (3)(B). Such payment may be made only one 
        time with respect to each such physician or 
        practitioner.
          (2) Application.--In order to receive a payment 
        described in paragraph (1), a rural health clinic shall 
        submit to the Secretary an application for such a 
        payment at such time, in such manner, and containing 
        such information as specified by the Secretary. A rural 
        health clinic may apply for such a payment for each 
        physician or practitioner described in paragraph (1) 
        furnishing services described in such paragraph at such 
        clinic.
          (3) Requirements.--For purposes of paragraph (1), the 
        requirements described in this paragraph, with respect 
        to a physician or practitioner, are the following:
                  (A) The physician or practitioner is employed 
                by or working under contract with a rural 
                health clinic described in paragraph (1) that 
                submits an application under paragraph (2).
                  (B) The physician or practitioner first 
                receives a waiver under section 303(g) of the 
                Controlled Substances Acton or after January 1, 
                2019.
          (4) Funding.--For purposes of making payments under 
        this subsection, there are appropriated, out of amounts 
        in the Treasury not otherwise appropriated, $2,000,000, 
        which shall remain available until expended.

        SPECIAL PAYMENT RULES FOR PARTICULAR ITEMS AND SERVICES

  Sec. 1834. (a) Payment for Durable Medical Equipment.--
          (1) General rule for payment.--
                  (A) In general.--With respect to a covered 
                item (as defined in paragraph (13)) for which 
                payment is determined under this subsection, 
                payment shall be made in the frequency 
                specified in paragraphs (2) through (7) and in 
                an amount equal to 80 percent of the payment 
                basis described in subparagraph (B).
                  (B) Payment basis.--Subject to subparagraph 
                (F)(i), the payment basis described in this 
                subparagraph is the lesser of--
                          (i) the actual charge for the item, 
                        or
                          (ii) the payment amount recognized 
                        under paragraphs (2) through (7) of 
                        this subsection for the item;
                except that clause (i) shall not apply if the 
                covered item is furnished by a public home 
                health agency (or by another home health agency 
                which demonstrates to the satisfaction of the 
                Secretary that a significant portion of its 
                patients are low income) free of charge or at 
                nominal charges to the public.
                  (C) Exclusive payment rule.--Subject to 
                subparagraph (F)(ii), this subsection shall 
                constitute the exclusive provision of this 
                title for payment for covered items under this 
                part or under part A to a home health agency.
                  (D) Reduction in fee schedules for certain 
                items.--With respect to a seat-lift chair or 
                transcutaneous electrical nerve stimulator 
                furnished on or after April 1, 1990, the 
                Secretary shall reduce the payment amount 
                applied under subparagraph (B)(ii) for such an 
                item by 15 percent, and, in the case of a 
                transcutaneous electrical nerve stimulator 
                furnished on or after January 1, 1991, the 
                Secretary shall further reduce such payment 
                amount (as previously reduced) by 45 percent.
                  (E) Clinical conditions for coverage.--
                          (i) In general.--The Secretary shall 
                        establish standards for clinical 
                        conditions for payment for covered 
                        items under this subsection.
                          (ii) Requirements.--The standards 
                        established under clause (i) shall 
                        include the specification of types or 
                        classes of covered items that require, 
                        as a condition of payment under this 
                        subsection, a face-to-face examination 
                        of the individual by a physician (as 
                        defined in section 1861(r)), a 
                        physician assistant, nurse 
                        practitioner, or a clinical nurse 
                        specialist (as those terms are defined 
                        in section 1861(aa)(5)) and a 
                        prescription for the item.
                          (iii) Priority of establishment of 
                        standards.--In establishing the 
                        standards under this subparagraph, the 
                        Secretary shall first establish 
                        standards for those covered items for 
                        which the Secretary determines there 
                        has been a proliferation of use, 
                        consistent findings of charges for 
                        covered items that are not delivered, 
                        or consistent findings of falsification 
                        of documentation to provide for payment 
                        of such covered items under this part.
                          (iv) Standards for power 
                        wheelchairs.--Effective on the date of 
                        the enactment of this subparagraph, in 
                        the case of a covered item consisting 
                        of a motorized or power wheelchair for 
                        an individual, payment may not be made 
                        for such covered item unless a 
                        physician (as defined in section 
                        1861(r)(1)), a physician assistant, 
                        nurse practitioner, or a clinical nurse 
                        specialist (as those terms are defined 
                        in section 1861(aa)(5)) has conducted a 
                        face-to-face examination of the 
                        individual and written a prescription 
                        for the item.
                          (v) Limitation on payment for covered 
                        items.--Payment may not be made for a 
                        covered item under this subsection 
                        unless the item meets any standards 
                        established under this subparagraph for 
                        clinical condition of coverage.
                  (F) Application of competitive acquisition; 
                limitation of inherent reasonableness 
                authority.--In the case of covered items 
                furnished on or after January 1, 2011, subject 
                to subparagraphs (G) and (H), that are included 
                in a competitive acquisition program in a 
                competitive acquisition area under section 
                1847(a)--
                          (i) the payment basis under this 
                        subsection for such items and services 
                        furnished in such area shall be the 
                        payment basis determined under such 
                        competitive acquisition program;
                          (ii) the Secretary may (and, in the 
                        case of covered items furnished on or 
                        after January 1, 2016, subject to 
                        clause (iii), shall) use information on 
                        the payment determined under such 
                        competitive acquisition programs to 
                        adjust the payment amount otherwise 
                        recognized under subparagraph (B)(ii) 
                        for an area that is not a competitive 
                        acquisition area under section 1847 and 
                        in the case of such adjustment, 
                        paragraph (10)(B) shall not be applied; 
                        and
                          (iii) in the case of covered items 
                        furnished on or after January 1, 2016, 
                        the Secretary shall continue to make 
                        such adjustments described in clause 
                        (ii) as, under such competitive 
                        acquisition programs, additional 
                        covered items are phased in or 
                        information is updated as contracts 
                        under section 1847 are recompeted in 
                        accordance with section 1847(b)(3)(B).
                  (G) Use of information on competitive bid 
                rates.--The Secretary shall specify by 
                regulation the methodology to be used in 
                applying the provisions of subparagraph (F)(ii) 
                and subsection (h)(1)(H)(ii). In promulgating 
                such regulation, the Secretary shall consider 
                the costs of items and services in areas in 
                which such provisions would be applied compared 
                to the payment rates for such items and 
                services in competitive acquisition areas.In 
                the case of items and services furnished on or 
                after January 1, 2019, in making any 
                adjustments under clause (ii) or (iii) of 
                subparagraph (F), under subsection 
                (h)(1)(H)(ii), or under section 1842(s)(3)(B), 
                the Secretary shall--
                          (i) solicit and take into account 
                        stakeholder input; and
                          (ii) take into account the highest 
                        amount bid by a winning supplier in a 
                        competitive acquisition area and a 
                        comparison of each of the following 
                        with respect to non-competitive 
                        acquisition areas and competitive 
                        acquisition areas:
                                  (I) The average travel 
                                distance and cost associated 
                                with furnishing items and 
                                services in the area.
                                  (II) The average volume of 
                                items and services furnished by 
                                suppliers in the area.
                                  (III) The number of suppliers 
                                in the area.
                  (H) Diabetic supplies.--
                          (i) In general.--On or after the date 
                        described in clause (ii), the payment 
                        amount under this part for diabetic 
                        supplies, including testing strips, 
                        that are non-mail order items (as 
                        defined by the Secretary) shall be 
                        equal to the single payment amounts 
                        established under the national mail 
                        order competition for diabetic supplies 
                        under section 1847.
                          (ii) Date described.--The date 
                        described in this clause is the date of 
                        the implementation of the single 
                        payment amounts under the national mail 
                        order competition for diabetic supplies 
                        under section 1847.
                  (I) Treatment of vacuum erection systems.--
                Effective for items and services furnished on 
                and after July 1, 2015, vacuum erection systems 
                described as prosthetic devices described in 
                section 1861(s)(8) shall be treated in the same 
                manner as erectile dysfunction drugs are 
                treated for purposes of section 1860D-
                2(e)(2)(A).
          (2) Payment for inexpensive and other routinely 
        purchased durable medical equipment.--
                  (A) In general.--Payment for an item of 
                durable medical equipment (as defined in 
                paragraph (13))--
                          (i) the purchase price of which does 
                        not exceed $150,
                          (ii) which the Secretary determines 
                        is acquired at least 75 percent of the 
                        time by purchase,
                          (iii) which is an accessory used in 
                        conjunction with a nebulizer, 
                        aspirator, or a ventilator excluded 
                        under paragraph (3)(A), or
                          (iv) in the case of devices furnished 
                        on or after October 1, 2015, which 
                        serves as a speech generating device or 
                        which is an accessory that is needed 
                        for the individual to effectively 
                        utilize such a device,
                shall be made on a rental basis or in a lump-
                sum amount for the purchase of the item. The 
                payment amount recognized for purchase or 
                rental of such equipment is the amount 
                specified in subparagraph (B) for purchase or 
                rental, except that the total amount of 
                payments with respect to an item may not exceed 
                the payment amount specified in subparagraph 
                (B) with respect to the purchase of the item.
                  (B) Payment amount.--For purposes of 
                subparagraph (A), the amount specified in this 
                subparagraph, with respect to the purchase or 
                rental of an item furnished in a carrier 
                service area--
                          (i) in 1989 and in 1990 is the 
                        average reasonable charge in the area 
                        for the purchase or rental, 
                        respectively, of the item for the 12-
                        month period ending on June 30, 1987, 
                        increased by the percentage increase in 
                        the consumer price index for all urban 
                        consumers (U.S. city average) for the 
                        6-month period ending with December 
                        1987;
                          (ii) in 1991 is the sum of (I) 67 
                        percent of the local payment amount for 
                        the item or device computed under 
                        subparagraph (C)(i)(I) for 1991, and 
                        (II) 33 percent of the national limited 
                        payment amount for the item or device 
                        computed under subparagraph (C)(ii) for 
                        1991;
                          (iii) in 1992 is the sum of (I) 33 
                        percent of the local payment amount for 
                        the item or device computed under 
                        subparagraph (C)(i)(II) for 1992, and 
                        (II) 67 percent of the national limited 
                        payment amount for the item or device 
                        computed under subparagraph (C)(ii) for 
                        1992; and
                          (iv) in 1993 and each subsequent year 
                        is the national limited payment amount 
                        for the item or device computed under 
                        subparagraph (C)(ii) for that year 
                        (reduced by 10 percent, in the case of 
                        a blood glucose testing strip furnished 
                        after 1997 for an individual with 
                        diabetes).
                  (C) Computation of local payment amount and 
                national limited payment amount.--For purposes 
                of subparagraph (B)--
                          (i) the local payment amount for an 
                        item or device for a year is equal to--
                                  (I) for 1991, the amount 
                                specified in subparagraph 
                                (B)(i) for 1990 increased by 
                                the covered item update for 
                                1991, and
                                  (II) for 1992, 1993, and 1994 
                                the amount determined under 
                                this clause for the preceding 
                                year increased by the covered 
                                item update for the year; and
                          (ii) the national limited payment 
                        amount for an item or device for a year 
                        is equal to--
                                  (I) for 1991, the local 
                                payment amount determined under 
                                clause (i) for such item or 
                                device for that year, except 
                                that the national limited 
                                payment amount may not exceed 
                                100 percent of the weighted 
                                average of all local payment 
                                amounts determined under such 
                                clause for such item for that 
                                year and may not be less than 
                                85 percent of the weighted 
                                average of all local payment 
                                amounts determined under such 
                                clause for such item,
                                  (II) for 1992 and 1993, the 
                                amount determined under this 
                                clause for the preceding year 
                                increased by the covered item 
                                update for such subsequent 
                                year,
                                  (III) for 1994, the local 
                                payment amount determined under 
                                clause (i) for such item or 
                                device for that year, except 
                                that the national limited 
                                payment amount may not exceed 
                                100 percent of the median of 
                                all local payment amounts 
                                determined under such clause 
                                for such item for that year and 
                                may not be less than 85 percent 
                                of the median of all local 
                                payment amounts determined 
                                under such clause for such item 
                                or device for that year, and
                                  (IV) for each subsequent 
                                year, the amount determined 
                                under this clause for the 
                                preceding year increased by the 
                                covered item update for such 
                                subsequent year.
          (3) Payment for items requiring frequent and 
        substantial servicing.--
                  (A) In general.--Payment for a covered item 
                (such as IPPB machines and ventilators, 
                excluding ventilators that are either 
                continuous airway pressure devices or 
                intermittent assist devices with continuous 
                airway pressure devices) for which there must 
                be frequent and substantial servicing in order 
                to avoid risk to the patient's health shall be 
                made on a monthly basis for the rental of the 
                item and the amount recognized is the amount 
                specified in subparagraph (B).
                  (B) Payment amount.--For purposes of 
                subparagraph (A), the amount specified in this 
                subparagraph, with respect to an item or device 
                furnished in a carrier service area--
                          (i) in 1989 and in 1990 is the 
                        average reasonable charge in the area 
                        for the rental of the item or device 
                        for the 12-month period ending with 
                        June 1987, increased by the percentage 
                        increase in the consumer price index 
                        for all urban consumers (U.S. city 
                        average) for the 6-month period ending 
                        with December 1987;
                          (ii) in 1991 is the sum of (I) 67 
                        percent of the local payment amount for 
                        the item or device computed under 
                        subparagraph (C)(i)(I) for 1991, and 
                        (II) 33 percent of the national limited 
                        payment amount for the item or device 
                        computed under subparagraph (C)(ii) for 
                        1991;
                          (iii) in 1992 is the sum of (I) 33 
                        percent of the local payment amount for 
                        the item or device computed under 
                        subparagraph (C)(i)(II) for 1992, and 
                        (II) 67 percent of the national limited 
                        payment amount for the item or device 
                        computed under subparagraph (C)(ii) for 
                        1992; and
                          (iv) in 1993 and each subsequent year 
                        is the national limited payment amount 
                        for the item or device computed under 
                        subparagraph (C)(ii) for that year.
                  (C) Computation of local payment amount and 
                national limited payment amount.--For purposes 
                of subparagraph (B)--
                          (i) the local payment amount for an 
                        item or device for a year is equal to--
                                  (I) for 1991, the amount 
                                specified in subparagraph 
                                (B)(i) for 1990 increased by 
                                the covered item update for 
                                1991, and
                                  (II) for 1992, 1993, and 1994 
                                the amount determined under 
                                this clause for the preceding 
                                year increased by the covered 
                                item update for the year; and
                          (ii) the national limited payment 
                        amount for an item or device for a year 
                        is equal to--
                                  (I) for 1991, the local 
                                payment amount determined under 
                                clause (i) for such item or 
                                device for that year, except 
                                that the national limited 
                                payment amount may not exceed 
                                100 percent of the weighted 
                                average of all local payment 
                                amounts determined under such 
                                clause for such item for that 
                                year and may not be less than 
                                85 percent of the weighted 
                                average of all local payment 
                                amounts determined under such 
                                clause for such item,
                                  (II) for 1992 and 1993, the 
                                amount determined under this 
                                clause for the preceding year 
                                increased by the covered item 
                                update for such subsequent 
                                year,
                                  (III) for 1994, the local 
                                payment amount determined under 
                                clause (i) for such item or 
                                device for that year, except 
                                that the national limited 
                                payment amount may not exceed 
                                100 percent of the median of 
                                all local payment amounts 
                                determined under such clause 
                                for such item for that year and 
                                may not be less than 85 percent 
                                of the median of all local 
                                payment amounts determined 
                                under such clause for such item 
                                or device for that year, and
                                  (IV) for each subsequent 
                                year, the amount determined 
                                under this clause for the 
                                preceding year increased by the 
                                covered item update for such 
                                subsequent year.
          (4) Payment for certain customized items.--Payment 
        with respect to a covered item that is uniquely 
        constructed or substantially modified to meet the 
        specific needs of an individual patient, and for that 
        reason cannot be grouped with similar items for 
        purposes of payment under this title, shall be made in 
        a lump-sum amount (A) for the purchase of the item in a 
        payment amount based upon the carrier's individual 
        consideration for that item, and (B) for the reasonable 
        and necessary maintenance and servicing for parts and 
        labor not covered by the supplier's or manufacturer's 
        warranty, when necessary during the period of medical 
        need, and the amount recognized for such maintenance 
        and servicing shall be paid on a lump-sum, as needed 
        basis based upon the carrier's individual consideration 
        for that item. In the case of a wheelchair furnished on 
        or after January 1, 1992, the wheelchair shall be 
        treated as a customized item for purposes of this 
        paragraph if the wheelchair has been measured, fitted, 
        or adapted in consideration of the patient's body size, 
        disability, period of need, or intended use, and has 
        been assembled by a supplier or ordered from a 
        manufacturer who makes available customized features, 
        modifications, or components for wheelchairs that are 
        intended for an individual patient's use in accordance 
        with instructions from the patient's physician.
          (5) Payment for oxygen and oxygen equipment.--
                  (A) In general.--Payment for oxygen and 
                oxygen equipment shall be made on a monthly 
                basis in the monthly payment amount recognized 
                under paragraph (9) for oxygen and oxygen 
                equipment (other than portable oxygen 
                equipment), subject to subparagraphs (B), (C), 
                (E), and (F).
                  (B) Add-on for portable oxygen equipment.--
                When portable oxygen equipment is used, but 
                subject to subparagraph (D), the payment amount 
                recognized under subparagraph (A) shall be 
                increased by the monthly payment amount 
                recognized under paragraph (9) for portable 
                oxygen equipment.
                  (C) Volume adjustment.--When the attending 
                physician prescribes an oxygen flow rate--
                          (i) exceeding 4 liters per minute, 
                        the payment amount recognized under 
                        subparagraph (A), subject to 
                        subparagraph (D), shall be increased by 
                        50 percent, or
                          (ii) of less than 1 liter per minute, 
                        the payment amount recognized under 
                        subparagraph (A) shall be decreased by 
                        50 percent.
                  (D) Limit on adjustment.--When portable 
                oxygen equipment is used and the attending 
                physician prescribes an oxygen flow rate 
                exceeding 4 liters per minute, there shall only 
                be an increase under either subparagraph (B) or 
                (C), whichever increase is larger, and not 
                under both such subparagraphs.
                  (E) Recertification for patients receiving 
                home oxygen therapy.--In the case of a patient 
                receiving home oxygen therapy services who, at 
                the time such services are initiated, has an 
                initial arterial blood gas value at or above a 
                partial pressure of 56 or an arterial oxygen 
                saturation at or above 89 percent (or such 
                other values, pressures, or criteria as the 
                Secretary may specify) no payment may be made 
                under this part for such services after the 
                expiration of the 90-day period that begins on 
                the date the patient first receives such 
                services unless the patient's attending 
                physician certifies that, on the basis of a 
                follow-up test of the patient's arterial blood 
                gas value or arterial oxygen saturation 
                conducted during the final 30 days of such 90-
                day period, there is a medical need for the 
                patient to continue to receive such services.
                  (F) Rental Cap.--
                          (i) In general.--Payment for oxygen 
                        equipment (including portable oxygen 
                        equipment) under this paragraph may not 
                        extend over a period of continuous use 
                        (as determined by the Secretary) of 
                        longer than 36 months.
                          (ii) Payments and rules after rental 
                        cap.--After the 36th continuous month 
                        during which payment is made for the 
                        equipment under this paragraph--
                                  (I) the supplier furnishing 
                                such equipment under this 
                                subsection shall continue to 
                                furnish the equipment during 
                                any period of medical need for 
                                the remainder of the reasonable 
                                useful lifetime of the 
                                equipment, as determined by the 
                                Secretary;
                                  (II) payments for oxygen 
                                shall continue to be made in 
                                the amount recognized for 
                                oxygen under paragraph (9) for 
                                the period of medical need; and
                                  (III) maintenance and 
                                servicing payments shall, if 
                                the Secretary determines such 
                                payments are reasonable and 
                                necessary, be made (for parts 
                                and labor not covered by the 
                                supplier's or manufacturer's 
                                warranty, as determined by the 
                                Secretary to be appropriate for 
                                the equipment), and such 
                                payments shall be in an amount 
                                determined to be appropriate by 
                                the Secretary.
          (6) Payment for other covered items (other than 
        durable medical equipment).--Payment for other covered 
        items (other than durable medical equipment and other 
        covered items described in paragraph (3), (4), or (5)) 
        shall be made in a lump-sum amount for the purchase of 
        the item in the amount of the purchase price recognized 
        under paragraph (8).
          (7) Payment for other items of durable medical 
        equipment.--
                  (A) Payment.--In the case of an item of 
                durable medical equipment not described in 
                paragraphs (2) through (6), the following rules 
                shall apply:
                          (i) Rental.--
                                  (I) In general.--Except as 
                                provided in clause (iii), 
                                payment for the item shall be 
                                made on a monthly basis for the 
                                rental of the item during the 
                                period of medical need (but 
                                payments under this clause may 
                                not extend over a period of 
                                continuous use (as determined 
                                by the Secretary) of longer 
                                than 13 months).
                                  (II) Payment amount.--Subject 
                                to subclause (III) and 
                                subparagraph (B), the amount 
                                recognized for the item, for 
                                each of the first 3 months of 
                                such period, is 10 percent of 
                                the purchase price recognized 
                                under paragraph (8) with 
                                respect to the item, and, for 
                                each of the remaining months of 
                                such period, is 7.5 percent of 
                                such purchase price.
                                  (III) Special rule for power-
                                driven wheelchairs.--For 
                                purposes of payment for power-
                                driven wheelchairs, subclause 
                                (II) shall be applied by 
                                substituting ``15 percent'' and 
                                ``6 percent'' for ``10 
                                percent'' and ``7.5 percent'', 
                                respectively.
                          (ii) Ownership after rental.--On the 
                        first day that begins after the 13th 
                        continuous month during which payment 
                        is made for the rental of an item under 
                        clause (i), the supplier of the item 
                        shall transfer title to the item to the 
                        individual.
                          (iii) Purchase agreement option for 
                        complex, rehabilitative power-driven 
                        wheelchairs.--In the case of a complex, 
                        rehabilitative power-driven wheelchair, 
                        at the time the supplier furnishes the 
                        item, the supplier shall offer the 
                        individual the option to purchase the 
                        item, and payment for such item shall 
                        be made on a lump-sum basis if the 
                        individual exercises such option.
                          (iv) Maintenance and servicing.--
                        After the supplier transfers title to 
                        the item under clause (ii) or in the 
                        case of a power-driven wheelchair for 
                        which a purchase agreement has been 
                        entered into under clause (iii), 
                        maintenance and servicing payments 
                        shall, if the Secretary determines such 
                        payments are reasonable and necessary, 
                        be made (for parts and labor not 
                        covered by the supplier's or 
                        manufacturer's warranty, as determined 
                        by the Secretary to be appropriate for 
                        the particular type of durable medical 
                        equipment), and such payments shall be 
                        in an amount determined to be 
                        appropriate by the Secretary.
                  (B) Range for rental amounts.--
                          (i) For 1989.--For items furnished 
                        during 1989, the payment amount 
                        recognized under subparagraph (A)(i) 
                        shall not be more than 115 percent, and 
                        shall not be less than 85 percent, of 
                        the prevailing charge established for 
                        rental of the item in January 1987, 
                        increased by the percentage increase in 
                        the consumer price index for all urban 
                        consumers (U.S. city average) for the 
                        6-month period ending with December 
                        1987.
                          (ii) For 1990.--For items furnished 
                        during 1990, clause (i) shall apply in 
                        the same manner as it applies to items 
                        furnished during 1989.
                  (C) Replacement of items.--
                          (i) Establishment of reasonable 
                        useful lifetime.--In accordance with 
                        clause (iii), the Secretary shall 
                        determine and establish a reasonable 
                        useful lifetime for items of durable 
                        medical equipment for which payment may 
                        be made under this paragraph.
                          (ii) Payment for replacement items.--
                        If the reasonable lifetime of such an 
                        item, as so established, has been 
                        reached during a continuous period of 
                        medical need, or the carrier determines 
                        that the item is lost or irreparably 
                        damaged, the patient may elect to have 
                        payment for an item serving as a 
                        replacement for such item made--
                                  (I) on a monthly basis for 
                                the rental of the replacement 
                                item in accordance with 
                                subparagraph (A); or
                                  (II) in the case of an item 
                                for which a purchase agreement 
                                has been entered into under 
                                subparagraph (A)(iii), in a 
                                lump-sum amount for the 
                                purchase of the item.
                          (iii) Length of reasonable useful 
                        lifetime.--The reasonable useful 
                        lifetime of an item of durable medical 
                        equipment under this subparagraph shall 
                        be equal to 5 years, except that, if 
                        the Secretary determines that, on the 
                        basis of prior experience in making 
                        payments for such an item under this 
                        title, a reasonable useful lifetime of 
                        5 years is not appropriate with respect 
                        to a particular item, the Secretary 
                        shall establish an alternative 
                        reasonable lifetime for such item.
          (8) Purchase price recognized for miscellaneous 
        devices and items.--For purposes of paragraphs (6) and 
        (7), the amount that is recognized under this paragraph 
        as the purchase price for a covered item is the amount 
        described in subparagraph (C) of this paragraph, 
        determined as follows:
                  (A) Computation of local purchase price.--
                Each carrier under section 1842 shall compute a 
                base local purchase price for the item as 
                follows:
                          (i) The carrier shall compute a base 
                        local purchase price, for each item 
                        described--
                                  (I) in paragraph (6) equal to 
                                the average reasonable charge 
                                in the locality for the 
                                purchase of the item for the 
                                12-month period ending with 
                                June 1987, or
                                  (II) in paragraph (7) equal 
                                to the average of the purchase 
                                prices on the claims submitted 
                                on an assignment-related basis 
                                for the unused item supplied 
                                during the 6-month period 
                                ending with December 1986.
                          (ii) The carrier shall compute a 
                        local purchase price, with respect to 
                        the furnishing of each particular 
                        item--
                                  (I) in 1989 and 1990, equal 
                                to the base local purchase 
                                price computed under clause (i) 
                                increased by the percentage 
                                increase in the consumer price 
                                index for all urban consumers 
                                (U.S. city average) for the 6-
                                month period ending with 
                                December 1987,
                                  (II) in 1991, equal to the 
                                local purchase price computed 
                                under this clause for the 
                                previous year, increased by the 
                                covered item update for 1991, 
                                and decreased by the percentage 
                                by which the average of the 
                                reasonable charges for claims 
                                paid for all items described in 
                                paragraph (7) is lower than the 
                                average of the purchase prices 
                                submitted for such items during 
                                the final 9 months of 1988; or
                                  (III) in 1992, 1993, and 1994 
                                equal to the local purchase 
                                price computed under this 
                                clause for the previous year 
                                increased by the covered item 
                                update for the year.
                  (B) Computation of national limited purchase 
                price.--With respect to the furnishing of a 
                particular item in a year, the Secretary shall 
                compute a national limited purchase price--
                          (i) for 1991, equal to the local 
                        purchase price computed under 
                        subparagraph (A)(ii) for the item for 
                        the year, except that such national 
                        limited purchase price may not exceed 
                        100 percent of the weighted average of 
                        all local purchase prices for the item 
                        computed under such subparagraph for 
                        the year, and may not be less than 85 
                        percent of the weighted average of all 
                        local purchase prices for the item 
                        computed under such subparagraph for 
                        the year;
                          (ii) for 1992 and 1993, the amount 
                        determined under this subparagraph for 
                        the preceding year increased by the 
                        covered item update for such subsequent 
                        year;
                          (iii) for 1994, the local purchase 
                        price computed under subparagraph 
                        (A)(ii) for the item for the year, 
                        except that such national limited 
                        purchase price may not exceed 100 
                        percent of the median of all local 
                        purchase prices computed for the item 
                        under such subparagraph for the year 
                        and may not be less than 85 percent of 
                        the median of all local purchase prices 
                        computed under such subparagraph for 
                        the item for the year; and
                          (iv) for each subsequent year, equal 
                        to the amount determined under this 
                        subparagraph for the preceding year 
                        increased by the covered item update 
                        for such subsequent year.
                  (C) Purchase price recognized.--For purposes 
                of paragraphs (6) and (7), the amount that is 
                recognized under this paragraph as the purchase 
                price for each item furnished--
                          (i) in 1989 or 1990, is 100 percent 
                        of the local purchase price computed 
                        under subparagraph (A)(ii)(I);
                          (ii) in 1991, is the sum of (I) 67 
                        percent of the local purchase price 
                        computed under subparagraph (A)(ii)(II) 
                        for 1991, and (II) 33 percent of the 
                        national limited purchase price 
                        computed under subparagraph (B) for 
                        1991;
                          (iii) in 1992, is the sum of (I) 33 
                        percent of the local purchase price 
                        computed under subparagraph 
                        (A)(ii)(III) for 1992, and (II) 67 
                        percent of the national limited 
                        purchase price computed under 
                        subparagraph (B) for 1992; and
                          (iv) in 1993 or a subsequent year, is 
                        the national limited purchase price 
                        computed under subparagraph (B) for 
                        that year.
          (9) Monthly payment amount recognized with respect to 
        oxygen and oxygen equipment.--For purposes of paragraph 
        (5), the amount that is recognized under this paragraph 
        for payment for oxygen and oxygen equipment is the 
        monthly payment amount described in subparagraph (C) of 
        this paragraph. Such amount shall be computed 
        separately (i) for all items of oxygen and oxygen 
        equipment (other than portable oxygen equipment) and 
        (ii) for portable oxygen equipment (each such group 
        referred to in this paragraph as an ``item'').
                  (A) Computation of local monthly payment 
                rate.--Each carrier under this section shall 
                compute a base local payment rate for each item 
                as follows:
                          (i) The carrier shall compute a base 
                        local average monthly payment rate per 
                        beneficiary as an amount equal to (I) 
                        the total reasonable charges for the 
                        item during the 12-month period ending 
                        with December 1986, divided by (II) the 
                        total number of months for all 
                        beneficiaries receiving the item in the 
                        area during the 12-month period for 
                        which the carrier made payment for the 
                        item under this title.
                          (ii) The carrier shall compute a 
                        local average monthly payment rate for 
                        the item applicable--
                                  (I) to 1989 and 1990, equal 
                                to 95 percent of the base local 
                                average monthly payment rate 
                                computed under clause (i) for 
                                the item increased by the 
                                percentage increase in the 
                                consumer price index for all 
                                urban consumers (U.S. city 
                                average) for the 6-month period 
                                ending with December 1987, or
                                  (II) to 1991, 1992, 1993, and 
                                1994 equal to the local average 
                                monthly payment rate computed 
                                under this clause for the item 
                                for the previous year increased 
                                by the covered item increase 
                                for the year.
                  (B) Computation of national limited monthly 
                payment rate.--With respect to the furnishing 
                of an item in a year, the Secretary shall 
                compute a national limited monthly payment rate 
                equal to--
                          (i) for 1991, the local monthly 
                        payment rate computed under 
                        subparagraph (A)(ii)(II) for the item 
                        for the year, except that such national 
                        limited monthly payment rate may not 
                        exceed 100 percent of the weighted 
                        average of all local monthly payment 
                        rates computed for the item under such 
                        subparagraph for the year, and may not 
                        be less than 85 percent of the weighted 
                        average of all local monthly payment 
                        rates computed for the item under such 
                        subparagraph for the year;
                          (ii) for 1992 and 1993, the amount 
                        determined under this subparagraph for 
                        the preceding year increased by the 
                        covered item update for such subsequent 
                        year;
                          (iii) for 1994, the local monthly 
                        payment rate computed under 
                        subparagraph (A)(ii) for the item for 
                        the year, except that such national 
                        limited monthly payment rate may not 
                        exceed 100 percent of the median of all 
                        local monthly payment rates computed 
                        for the item under such subparagraph 
                        for the year and may not be less than 
                        85 percent of the median of all local 
                        monthly payment rates computed for the 
                        item under such subparagraph for the 
                        year;
                          (iv) for 1995, 1996, and 1997, equal 
                        to the amount determined under this 
                        subparagraph for the preceding year 
                        increased by the covered item update 
                        for such subsequent year;
                          (v) for 1998, 75 percent of the 
                        amount determined under this 
                        subparagraph for 1997; and
                          (vi) for 1999 and each subsequent 
                        year, 70 percent of the amount 
                        determined under this subparagraph for 
                        1997.
                  (C) Monthly payment amount recognized.--For 
                purposes of paragraph (5), the amount that is 
                recognized under this paragraph as the base 
                monthly payment amount for each item 
                furnished--
                          (i) in 1989 and in 1990, is 100 
                        percent of the local average monthly 
                        payment rate computed under 
                        subparagraph (A)(ii) for the item;
                          (ii) in 1991, is the sum of (I) 67 
                        percent of the local average monthly 
                        payment rate computed under 
                        subparagraph (A)(ii)(II) for the item 
                        for 1991, and (II) 33 percent of the 
                        national limited monthly payment rate 
                        computed under subparagraph (B)(i) for 
                        the item for 1991;
                          (iii) in 1992, is the sum of (I) 33 
                        percent of the local average monthly 
                        payment rate computed under 
                        subparagraph (A)(ii)(II) for the item 
                        for 1992, and (II) 67 percent of the 
                        national limited monthly payment rate 
                        computed under subparagraph (B)(ii) for 
                        the item for 1992; and
                          (iv) in a subsequent year, is the 
                        national limited monthly payment rate 
                        computed under subparagraph (B) for the 
                        item for that year.
          (10) Exceptions and adjustments.--
                  (A) Areas outside continental united 
                states.--Exceptions to the amounts recognized 
                under the previous provisions of this 
                subsection shall be made to take into account 
                the unique circumstances of covered items 
                furnished in Alaska, Hawaii, or Puerto Rico.
                  (B) Adjustment for inherent reasonableness.--
                The Secretary is authorized to apply the 
                provisions of paragraphs (8) and (9) of section 
                1842(b) to covered items and suppliers of such 
                items and payments under this subsection in an 
                area and with respect to covered items and 
                services for which the Secretary does not make 
                a payment amount adjustment under paragraph 
                (1)(F).
                  (C) Transcutaneous electrical nerve 
                stimulator (tens).--In order to permit an 
                attending physician time to determine whether 
                the purchase of a transcutaneous electrical 
                nerve stimulator is medically appropriate for a 
                particular patient, the Secretary may determine 
                an appropriate payment amount for the initial 
                rental of such item for a period of not more 
                than 2 months. If such item is subsequently 
                purchased, the payment amount with respect to 
                such purchase is the payment amount determined 
                under paragraph (2).
          (11) Improper billing and requirement of physician 
        order.--
                  (A) Improper billing for certain rental 
                items.--Notwithstanding any other provision of 
                this title, a supplier of a covered item for 
                which payment is made under this subsection and 
                which is furnished on a rental basis shall 
                continue to supply the item without charge 
                (other than a charge provided under this 
                subsection for the maintenance and servicing of 
                the item) after rental payments may no longer 
                be made under this subsection. If a supplier 
                knowingly and willfully violates the previous 
                sentence, the Secretary may apply sanctions 
                against the supplier under section 1842(j)(2) 
                in the same manner such sanctions may apply 
                with respect to a physician.
                  (B) Requirement of physician order.--
                          (i) In general.--The Secretary is 
                        authorized to require, for specified 
                        covered items, that payment may be made 
                        under this subsection with respect to 
                        the item only if a physician enrolled 
                        under section 1866(j) or an eligible 
                        professional under section 
                        1848(k)(3)(B) that is enrolled under 
                        section 1866(j) has communicated to the 
                        supplier, before delivery of the item, 
                        a written order for the item.
                          (ii) Requirement for face to face 
                        encounter.--The Secretary shall require 
                        that such an order be written pursuant 
                        to a physician, a physician assistant, 
                        a nurse practitioner, or a clinical 
                        nurse specialist (as those terms are 
                        defined in section 1861(aa)(5)) 
                        documenting such physician, physician 
                        assistant, practitioner, or specialist 
                        has had a face-to-face encounter 
                        (including through use of telehealth 
                        under subsection (m) and other than 
                        with respect to encounters that are 
                        incident to services involved) with the 
                        individual involved during the 6-month 
                        period preceding such written order, or 
                        other reasonable timeframe as 
                        determined by the Secretary.
          (12) Regional carriers.--The Secretary may designate, 
        by regulation under section 1842, one carrier for one 
        or more entire regions to process all claims within the 
        region for covered items under this section.
          (13) Covered item.--In this subsection, the term 
        ``covered item'' means durable medical equipment (as 
        defined in section 1861(n)), including such equipment 
        described in section 1861(m)(5), but not including 
        implantable items for which payment may be made under 
        section 1833(t).
          (14) Covered item update.--In this subsection, the 
        term ``covered item update'' means, with respect to a 
        year--
                  (A) for 1991 and 1992, the percentage 
                increase in the consumer price index for all 
                urban consumers (U.S. city average) for the 12-
                month period ending with June of the previous 
                year reduced by 1 percentage point;
                  (B) for 1993, 1994, 1995, 1996, and 1997, the 
                percentage increase in the consumer price index 
                for all urban consumers (U.S. city average) for 
                the 12-month period ending with June of the 
                previous year;
                  (C) for each of the years 1998 through 2000, 
                0 percentage points;
                  (D) for 2001, the percentage increase in the 
                consumer price index for all urban consumers 
                (U.S. city average) for the 12-month period 
                ending with June 2000;
                  (E) for 2002, 0 percentage points;
                  (F) for 2003, the percentage increase in the 
                consumer price index for all urban consumers 
                (U.S. urban average) for the 12-month period 
                ending with June of 2002;
                  (G) for 2004 through 2006--
                          (i) subject to clause (ii), in the 
                        case of class III medical devices 
                        described in section 513(a)(1)(C) of 
                        the Federal Food, Drug, and Cosmetic 
                        Act (21 U.S.C. 360(c)(1)(C)), the 
                        percentage increase described in 
                        subparagraph (B) for the year involved; 
                        and
                          (ii) in the case of covered items not 
                        described in clause (i), 0 percentage 
                        points;
                  (H) for 2007--
                          (i) subject to clause (ii), in the 
                        case of class III medical devices 
                        described in section 513(a)(1)(C) of 
                        the Federal Food, Drug, and Cosmetic 
                        Act (21 U.S.C. 360(c)(1)(C)), the 
                        percentage change determined by the 
                        Secretary to be appropriate taking into 
                        account recommendations contained in 
                        the report of the Comptroller General 
                        of the United States under section 
                        302(c)(1)(B) of the Medicare 
                        Prescription Drug, Improvement, and 
                        Modernization Act of 2003; and
                          (ii) in the case of covered items not 
                        described in clause (i), 0 percentage 
                        points;
                  (I) for 2008--
                          (i) subject to clause (ii), in the 
                        case of class III medical devices 
                        described in section 513(a)(1)(C) of 
                        the Federal Food, Drug, and Cosmetic 
                        Act (21 U.S.C. 360(c)(1)(C)), the 
                        percentage increase described in 
                        subparagraph (B) (as applied to the 
                        payment amount for 2007 determined 
                        after the application of the percentage 
                        change under subparagraph (H)(i)); and
                          (ii) in the case of covered items not 
                        described in clause (i), 0 percentage 
                        points;
                  (J) for 2009--
                          (i) in the case of items and services 
                        furnished in any geographic area, if 
                        such items or services were selected 
                        for competitive acquisition in any area 
                        under the competitive acquisition 
                        program under section 
                        1847(a)(1)(B)(i)(I) before July 1, 
                        2008, including related accessories but 
                        only if furnished with such items and 
                        services selected for such competition 
                        and diabetic supplies but only if 
                        furnished through mail order, - 9.5 
                        percent; or
                          (ii) in the case of other items and 
                        services, the percentage increase in 
                        the consumer price index for all urban 
                        consumers (U.S. urban average) for the 
                        12-month period ending with June 2008;
                  (K) for 2010, the percentage increase in the 
                consumer price index for all urban consumers 
                (U.S. urban average) for the 12-month period 
                ending with June of the previous year; and
                  (L) for 2011 and each subsequent year--
                          (i) the percentage increase in the 
                        consumer price index for all urban 
                        consumers (United States city average) 
                        for the 12-month period ending with 
                        June of the previous year, reduced by--
                          (ii) the productivity adjustment 
                        described in section 
                        1886(b)(3)(B)(xi)(II).
        The application of subparagraph (L)(ii) may result in 
        the covered item update under this paragraph being less 
        than 0.0 for a year, and may result in payment rates 
        under this subsection for a year being less than such 
        payment rates for the preceding year.
          (15) Advance determinations of coverage for certain 
        items.--
                  (A) Development of lists of items by 
                secretary.--The Secretary may develop and 
                periodically update a list of items for which 
                payment may be made under this subsection that 
                the Secretary determines, on the basis of prior 
                payment experience, are frequently subject to 
                unnecessary utilization throughout a carrier's 
                entire service area or a portion of such area.
                  (B) Development of lists of suppliers by 
                secretary.--The Secretary may develop and 
                periodically update a list of suppliers of 
                items for which payment may be made under this 
                subsection with respect to whom--
                          (i) the Secretary has found that a 
                        substantial number of claims for 
                        payment under this part for items 
                        furnished by the supplier have been 
                        denied on the basis of the application 
                        of section 1862(a)(1); or
                          (ii) the Secretary has identified a 
                        pattern of overutilization resulting 
                        from the business practice of the 
                        supplier.
                  (C) Determinations of coverage in advance.--A 
                carrier shall determine in advance of delivery 
                of an item whether payment for the item may not 
                be made because the item is not covered or 
                because of the application of section 
                1862(a)(1) if--
                          (i) the item is included on the list 
                        developed by the Secretary under 
                        subparagraph (A);
                          (ii) the item is furnished by a 
                        supplier included on the list developed 
                        by the Secretary under subparagraph 
                        (B); or
                          (iii) the item is a customized item 
                        (other than inexpensive items specified 
                        by the Secretary) and the patient to 
                        whom the item is to be furnished or the 
                        supplier requests that such advance 
                        determination be made.
          (16) Disclosure of information and surety bond.--The 
        Secretary shall not provide for the issuance (or 
        renewal) of a provider number for a supplier of durable 
        medical equipment, for purposes of payment under this 
        part for durable medical equipment furnished by the 
        supplier, unless the supplier provides the Secretary on 
        a continuing basis--
                  (A) with--
                          (i) full and complete information as 
                        to the identity of each person with an 
                        ownership or control interest (as 
                        defined in section 1124(a)(3)) in the 
                        supplier or in any subcontractor (as 
                        defined by the Secretary in 
                        regulations) in which the supplier 
                        directly or indirectly has a 5 percent 
                        or more ownership interest; and
                          (ii) to the extent determined to be 
                        feasible under regulations of the 
                        Secretary, the name of any disclosing 
                        entity (as defined in section 
                        1124(a)(2)) with respect to which a 
                        person with such an ownership or 
                        control interest in the supplier is a 
                        person with such an ownership or 
                        control interest in the disclosing 
                        entity; and
                  (B) with a surety bond in a form specified by 
                the Secretary and in an amount that is not less 
                than $50,000 that the Secretary determines is 
                commensurate with the volume of the billing of 
                the supplier.
        The Secretary may waive the requirement of a bond under 
        subparagraph (B) in the case of a supplier that 
        provides a comparable surety bond under State law. The 
        Secretary, at the Secretary's discretion, may impose 
        the requirements of the first sentence with respect to 
        some or all providers of items or services under part A 
        or some or all suppliers or other persons (other than 
        physicians or other practitioners, as defined in 
        section 1842(b)(18)(C)) who furnish items or services 
        under this part.
          (17) Prohibition against unsolicited telephone 
        contacts by suppliers.--
                  (A) In general.--A supplier of a covered item 
                under this subsection may not contact an 
                individual enrolled under this part by 
                telephone regarding the furnishing of a covered 
                item to the individual unless 1 of the 
                following applies:
                          (i) The individual has given written 
                        permission to the supplier to make 
                        contact by telephone regarding the 
                        furnishing of a covered item.
                          (ii) The supplier has furnished a 
                        covered item to the individual and the 
                        supplier is contacting the individual 
                        only regarding the furnishing of such 
                        covered item.
                          (iii) If the contact is regarding the 
                        furnishing of a covered item other than 
                        a covered item already furnished to the 
                        individual, the supplier has furnished 
                        at least 1 covered item to the 
                        individual during the 15-month period 
                        preceding the date on which the 
                        supplier makes such contact.
                  (B) Prohibiting payment for items furnished 
                subsequent to unsolicited contacts.--If a 
                supplier knowingly contacts an individual in 
                violation of subparagraph (A), no payment may 
                be made under this part for any item 
                subsequently furnished to the individual by the 
                supplier.
                  (C) Exclusion from program for suppliers 
                engaging in pattern of unsolicited contacts.--
                If a supplier knowingly contacts individuals in 
                violation of subparagraph (A) to such an extent 
                that the supplier's conduct establishes a 
                pattern of contacts in violation of such 
                subparagraph, the Secretary shall exclude the 
                supplier from participation in the programs 
                under this Act, in accordance with the 
                procedures set forth in subsections (c), (f), 
                and (g) of section 1128.
          (18) Refund of amounts collected for certain 
        disallowed items.--
                  (A) In general.--If a nonparticipating 
                supplier furnishes to an individual enrolled 
                under this part a covered item for which no 
                payment may be made under this part by reason 
                of paragraph (17)(B), the supplier shall refund 
                on a timely basis to the patient (and shall be 
                liable to the patient for) any amounts 
                collected from the patient for the item, 
                unless--
                          (i) the supplier establishes that the 
                        supplier did not know and could not 
                        reasonably have been expected to know 
                        that payment may not be made for the 
                        item by reason of paragraph (17)(B), or
                          (ii) before the item was furnished, 
                        the patient was informed that payment 
                        under this part may not be made for 
                        that item and the patient has agreed to 
                        pay for that item.
                  (B) Sanctions.--If a supplier knowingly and 
                willfully fails to make refunds in violation of 
                subparagraph (A), the Secretary may apply 
                sanctions against the supplier in accordance 
                with section 1842(j)(2).
                  (C) Notice.--Each carrier with a contract in 
                effect under this part with respect to 
                suppliers of covered items shall send any 
                notice of denial of payment for covered items 
                by reason of paragraph (17)(B) and for which 
                payment is not requested on an assignment-
                related basis to the supplier and the patient 
                involved.
                  (D) Timely basis defined.--A refund under 
                subparagraph (A) is considered to be on a 
                timely basis only if--
                          (i) in the case of a supplier who 
                        does not request reconsideration or 
                        seek appeal on a timely basis, the 
                        refund is made within 30 days after the 
                        date the supplier receives a denial 
                        notice under subparagraph (C), or
                          (ii) in the case in which such a 
                        reconsideration or appeal is taken, the 
                        refund is made within 15 days after the 
                        date the supplier receives notice of an 
                        adverse determination on 
                        reconsideration or appeal.
          (19) Certain upgraded items.--
                  (A) Individual's right to choose upgraded 
                item.--Notwithstanding any other provision of 
                this title, the Secretary may issue regulations 
                under which an individual may purchase or rent 
                from a supplier an item of upgraded durable 
                medical equipment for which payment would be 
                made under this subsection if the item were a 
                standard item.
                  (B) Payments to supplier.--In the case of the 
                purchase or rental of an upgraded item under 
                subparagraph (A)--
                          (i) the supplier shall receive 
                        payment under this subsection with 
                        respect to such item as if such item 
                        were a standard item; and
                          (ii) the individual purchasing or 
                        renting the item shall pay the supplier 
                        an amount equal to the difference 
                        between the supplier's charge and the 
                        amount under clause (i).
                In no event may the supplier's charge for an 
                upgraded item exceed the applicable fee 
                schedule amount (if any) for such item.
                  (C) Consumer protection safeguards.--Any 
                regulations under subparagraph (A) shall 
                provide for consumer protection standards with 
                respect to the furnishing of upgraded equipment 
                under subparagraph (A). Such regulations shall 
                provide for--
                          (i) determination of fair market 
                        prices with respect to an upgraded 
                        item;
                          (ii) full disclosure of the 
                        availability and price of standard 
                        items and proof of receipt of such 
                        disclosure information by the 
                        beneficiary before the furnishing of 
                        the upgraded item;
                          (iii) conditions of participation for 
                        suppliers in the billing arrangement;
                          (iv) sanctions of suppliers who are 
                        determined to engage in coercive or 
                        abusive practices, including exclusion; 
                        and
                          (v) such other safeguards as the 
                        Secretary determines are necessary.
          (20) Identification of quality standards.--
                  (A) In general.--Subject to subparagraph (C), 
                the Secretary shall establish and implement 
                quality standards for suppliers of items and 
                services described in subparagraph (D) to be 
                applied by recognized independent accreditation 
                organizations (as designated under subparagraph 
                (B)) and with which such suppliers shall be 
                required to comply in order to--
                          (i) furnish any such item or service 
                        for which payment is made under this 
                        part; and
                          (ii) receive or retain a provider or 
                        supplier number used to submit claims 
                        for reimbursement for any such item or 
                        service for which payment may be made 
                        under this title.
                  (B) Designation of independent accreditation 
                organizations.--Not later than the date that is 
                1 year after the date on which the Secretary 
                implements the quality standards under 
                subparagraph (A), notwithstanding section 
                1865(a), the Secretary shall designate and 
                approve one or more independent accreditation 
                organizations for purposes of such 
                subparagraph.
                  (C) Quality standards.--The quality standards 
                described in subparagraph (A) may not be less 
                stringent than the quality standards that would 
                otherwise apply if this paragraph did not apply 
                and shall include consumer services standards.
                  (D) Items and services described.--The items 
                and services described in this subparagraph are 
                the following items and services, as the 
                Secretary determines appropriate:
                          (i) Covered items (as defined in 
                        paragraph (13)) for which payment may 
                        otherwise be made under this 
                        subsection.
                          (ii) Prosthetic devices and orthotics 
                        and prosthetics described in section 
                        1834(h)(4).
                          (iii) Items and services described in 
                        section 1842(s)(2).
                  (E) Implementation.--The Secretary may 
                establish by program instruction or otherwise 
                the quality standards under this paragraph, 
                including subparagraph (F), after consultation 
                with representatives of relevant parties. Such 
                standards shall be applied prospectively and 
                shall be published on the Internet website of 
                the Centers for Medicare & Medicaid Services.
                  (F) Application of accreditation 
                requirement.--In implementing quality standards 
                under this paragraph--
                          (i) subject to clause (ii) and 
                        subparagraph (G), the Secretary shall 
                        require suppliers furnishing items and 
                        services described in subparagraph (D) 
                        on or after October 1, 2009, directly 
                        or as a subcontractor for another 
                        entity, to have submitted to the 
                        Secretary evidence of accreditation by 
                        an accreditation organization 
                        designated under subparagraph (B) as 
                        meeting applicable quality standards, 
                        except that the Secretary shall not 
                        require under this clause pharmacies to 
                        obtain such accreditation before 
                        January 1, 2010, except that the 
                        Secretary shall not require a pharmacy 
                        to have submitted to the Secretary such 
                        evidence of accreditation prior to 
                        January 1, 2011; and
                          (ii) in applying such standards and 
                        the accreditation requirement of clause 
                        (i) with respect to eligible 
                        professionals (as defined in section 
                        1848(k)(3)(B)), and including such 
                        other persons, such as orthotists and 
                        prosthetists, as specified by the 
                        Secretary, furnishing such items and 
                        services--
                                  (I) such standards and 
                                accreditation requirement shall 
                                not apply to such professionals 
                                and persons unless the 
                                Secretary determines that the 
                                standards being applied are 
                                designed specifically to be 
                                applied to such professionals 
                                and persons; and
                                  (II) the Secretary may exempt 
                                such professionals and persons 
                                from such standards and 
                                requirement if the Secretary 
                                determines that licensing, 
                                accreditation, or other 
                                mandatory quality requirements 
                                apply to such professionals and 
                                persons with respect to the 
                                furnishing of such items and 
                                services.
                  (G) Application of accreditation requirement 
                to certain pharmacies.--
                          (i) In general.--With respect to 
                        items and services furnished on or 
                        after January 1, 2011, in implementing 
                        quality standards under this 
                        paragraph--
                                  (I) subject to subclause 
                                (II), in applying such 
                                standards and the accreditation 
                                requirement of subparagraph 
                                (F)(i) with respect to 
                                pharmacies described in clause 
                                (ii) furnishing such items and 
                                services, such standards and 
                                accreditation requirement shall 
                                not apply to such pharmacies; 
                                and
                                  (II) the Secretary may apply 
                                to such pharmacies an 
                                alternative accreditation 
                                requirement established by the 
                                Secretary if the Secretary 
                                determines such alternative 
                                accreditation requirement is 
                                more appropriate for such 
                                pharmacies.
                          (ii) Pharmacies described.--A 
                        pharmacy described in this clause is a 
                        pharmacy that meets each of the 
                        following criteria:
                                  (I) The total billings by the 
                                pharmacy for such items and 
                                services under this title are 
                                less than 5 percent of total 
                                pharmacy sales, as determined 
                                based on the average total 
                                pharmacy sales for the previous 
                                3 calendar years, 3 fiscal 
                                years, or other yearly period 
                                specified by the Secretary.
                                  (II) The pharmacy has been 
                                enrolled under section 1866(j) 
                                as a supplier of durable 
                                medical equipment, prosthetics, 
                                orthotics, and supplies, has 
                                been issued (which may include 
                                the renewal of) a provider 
                                number for at least 5 years, 
                                and for which a final adverse 
                                action (as defined in section 
                                424.57(a) of title 42, Code of 
                                Federal Regulations) has not 
                                been imposed in the past 5 
                                years.
                                  (III) The pharmacy submits to 
                                the Secretary an attestation, 
                                in a form and manner, and at a 
                                time, specified by the 
                                Secretary, that the pharmacy 
                                meets the criteria described in 
                                subclauses (I) and (II). Such 
                                attestation shall be subject to 
                                section 1001 of title 18, 
                                United States Code.
                                  (IV) The pharmacy agrees to 
                                submit materials as requested 
                                by the Secretary, or during the 
                                course of an audit conducted on 
                                a random sample of pharmacies 
                                selected annually, to verify 
                                that the pharmacy meets the 
                                criteria described in 
                                subclauses (I) and (II). 
                                Materials submitted under the 
                                preceding sentence shall 
                                include a certification by an 
                                accountant on behalf of the 
                                pharmacy or the submission of 
                                tax returns filed by the 
                                pharmacy during the relevant 
                                periods, as requested by the 
                                Secretary.
          (21) Special payment rule for specified items and 
        supplies.--
                  (A) In general.--Notwithstanding the 
                preceding provisions of this subsection, for 
                specified items and supplies (described in 
                subparagraph (B)) furnished during 2005, the 
                payment amount otherwise determined under this 
                subsection for such specified items and 
                supplies shall be reduced by the percentage 
                difference between--
                          (i) the amount of payment otherwise 
                        determined for the specified item or 
                        supply under this subsection for 2002, 
                        and
                          (ii) the amount of payment for the 
                        specified item or supply under chapter 
                        89 of title 5, United States Code, as 
                        identified in the column entitled 
                        ``Median FEHP Price'' in the table 
                        entitled ``SUMMARY OF MEDICARE PRICES 
                        COMPARED TO VA, MEDICAID, RETAIL, AND 
                        FEHP PRICES FOR 16 ITEMS'' included in 
                        the Testimony of the Inspector General 
                        before the Senate Committee on 
                        Appropriations, June 12, 2002, or any 
                        subsequent report by the Inspector 
                        General.
                  (B) Specified item or supply described.--For 
                purposes of subparagraph (A), a specified item 
                or supply means oxygen and oxygen equipment, 
                standard wheelchairs (including standard power 
                wheelchairs), nebulizers, diabetic supplies 
                consisting of lancets and testing strips, 
                hospital beds, and air mattresses, but only if 
                the HCPCS code for the item or supply is 
                identified in a table referred to in 
                subparagraph (A)(ii).
                  (C) Application of update to special payment 
                amount.--The covered item update under 
                paragraph (14) for specified items and supplies 
                for 2006 and each subsequent year shall be 
                applied to the payment amount under 
                subparagraph (A) unless payment is made for 
                such items and supplies under section 1847.
          (22) Special payment rule for diabetic supplies.--
        Notwithstanding the preceding provisions of this 
        subsection, for purposes of determining the payment 
        amount under this subsection for diabetic supplies 
        furnished on or after the first day of the calendar 
        quarter during 2013 that is at least 30 days after the 
        date of the enactment of this paragraph and before the 
        date described in paragraph (1)(H)(ii), the Secretary 
        shall recalculate and apply the covered item update 
        under paragraph (14) as if subparagraph (J)(i) of such 
        paragraph was amended by striking ``but only if 
        furnished through mail order''.
  (b) Fee Schedules for Radiologist Services.--
          (1) Development.--The Secretary shall develop--
                  (A) a relative value scale to serve as the 
                basis for the payment for radiologist services 
                under this part, and
                  (B) using such scale and appropriate 
                conversion factors and subject to subsection 
                (c)(1)(A), fee schedules (on a regional, 
                statewide, locality, or carrier service area 
                basis) for payment for radiologist services 
                under this part, to be implemented for such 
                services furnished during 1989.
          (2) Consultation.--In carrying out paragraph (1), the 
        Secretary shall regularly consult closely with the 
        Physician Payment Review Commission, the American 
        College of Radiology, and other organizations 
        representing physicians or suppliers who furnish 
        radiologist services and shall share with them the data 
        and data analysis being used to make the determinations 
        under paragraph (1), including data on variations in 
        current medicare payments by geographic area, and by 
        service and physician specialty.
          (3) Considerations.--In developing the relative value 
        scale and fee schedules under paragraph (1), the 
        Secretary--
                  (A) shall take into consideration variations 
                in the cost of furnishing such services among 
                geographic areas and among different sites 
                where services are furnished, and
                  (B) may also take into consideration such 
                other factors respecting the manner in which 
                physicians in different specialties furnish 
                such services as may be appropriate to assure 
                that payment amounts are equitable and designed 
                to promote effective and efficient provision of 
                radiologist services by physicians in the 
                different specialties.
          (4) Savings.--
                  (A) Budget neutral fee schedules.--The 
                Secretary shall develop preliminary fee 
                schedules for 1989, which are designed to 
                result in the same amount of aggregate payments 
                (net of any coinsurance and deductibles under 
                sections 1833(a)(1)(J) and 1833(b)) for 
                radiologist services furnished in 1989 as would 
                have been made if this subsection had not been 
                enacted.
                  (B) Initial savings.--The fee schedules 
                established for payment purposes under this 
                subsection for services furnished in 1989 shall 
                be 97 percent of the amounts permitted under 
                these preliminary fee schedules developed under 
                subparagraph (A).
                  (C)  1990 fee schedules.--For radiologist 
                services (other than portable X-ray services) 
                furnished under this part during 1990, after 
                March 31 of such year, the conversion factors 
                used under this subsection shall be 96 percent 
                of the conversion factors that applied under 
                this subsection as of December 31, 1989.
                  (D)  1991 fee schedules.--For radiologist 
                services (other than portable X-ray services) 
                furnished under this part during 1991, the 
                conversion factors used in a locality under 
                this subsection shall, subject to clause (vii), 
                be reduced to the adjusted conversion factor 
                for the locality determined as follows:
                          (i) National weighted average 
                        conversion factor.--The Secretary shall 
                        estimate the national weighted average 
                        of the conversion factors used under 
                        this subsection for services furnished 
                        during 1990 beginning on April 1, using 
                        the best available data.
                          (ii) Reduced national weighted 
                        average.--The national weighted average 
                        estimated under clause (i) shall be 
                        reduced by 13 percent.
                          (iii) Computation of 1990 locality 
                        index relative to national average.--
                        The Secretary shall establish an index 
                        which reflects, for each locality, the 
                        ratio of the conversion factor used in 
                        the locality under this subsection to 
                        the national weighted average estimated 
                        under clause (i).
                          (iv) Adjusted conversion factor.--The 
                        adjusted conversion factor for the 
                        professional or technical component of 
                        a service in a locality is the sum of 
                        \1/2\ of the locally-adjusted amount 
                        determined under clause (v) and \1/2\ 
                        of the GPCI-adjusted amount determined 
                        under clause (vi).
                          (v) Locally-adjusted amount.--For 
                        purposes of clause (iv), the locally 
                        adjusted amount determined under this 
                        clause is the product of (I) the 
                        national weighted average conversion 
                        factor computed under clause (ii), and 
                        (II) the index value established under 
                        clause (iii) for the locality.
                          (vi) GPCI-adjusted amount.--For 
                        purposes of clause (iv), the GPCI-
                        adjusted amount determined under this 
                        clause is the sum of--
                                  (I) the product of (a) the 
                                portion of the reduced national 
                                weighted average conversion 
                                factor computed under clause 
                                (ii) which is attributable to 
                                physician work and (b) the 
                                geographic work index value for 
                                the locality (specified in 
                                Addendum C to the Model Fee 
                                Schedule for Physician Services 
                                (published on September 4, 
                                1990, 55 Federal Register pp. 
                                36238-36243)); and
                                  (II) the product of (a) the 
                                remaining portion of the 
                                reduced national weighted 
                                average conversion factor 
                                computed under clause (ii), and 
                                (b) the geographic practice 
                                cost index value specified in 
                                section 1842(b)(14)(C)(iv) for 
                                the locality.
                        In applying this clause with respect to 
                        the professional component of a 
                        service, 80 percent of the conversion 
                        factor shall be considered to be 
                        attributable to physician work and with 
                        respect to the technical component of 
                        the service, 0 percent shall be 
                        considered to be attributable to 
                        physician work.
                          (vii) Limits on conversion factor.--
                        The conversion factor to be applied to 
                        a locality to the professional or 
                        technical component of a service shall 
                        not be reduced under this subparagraph 
                        by more than 9.5 percent below the 
                        conversion factor applied in the 
                        locality under subparagraph (C) to such 
                        component, but in no case shall the 
                        conversion factor be less than 60 
                        percent of the national weighted 
                        average of the conversion factors 
                        (computed under clause (i)).
                  (E) Rule for certain scanning services.--In 
                the case of the technical components of 
                magnetic resonance imaging (MRI) services and 
                computer assisted tomography (CAT) services 
                furnished after December 31, 1990, the amount 
                otherwise payable shall be reduced by 10 
                percent.
                  (F) Subsequent updating.--For radiologist 
                services furnished in subsequent years, the fee 
                schedules shall be the schedules for the 
                previous year updated by the percentage 
                increase in the MEI (as defined in section 
                1842(i)(3)) for the year.
                  (G) Nonparticipating physicians and 
                suppliers.--Each fee schedule so established 
                shall provide that the payment rate recognized 
                for nonparticipating physicians and suppliers 
                is equal to the appropriate percent (as defined 
                in section 1842(b)(4)(A)(iv)) of the payment 
                rate recognized for participating physicians 
                and suppliers.
          (5) Limiting charges of nonparticipating physicians 
        and suppliers.--
                  (A) In general.--In the case of radiologist 
                services furnished after January 1, 1989, for 
                which payment is made under a fee schedule 
                under this subsection, if a nonparticipating 
                physician or supplier furnishes the service to 
                an individual entitled to benefits under this 
                part, the physician or supplier may not charge 
                the individual more than the limiting charge 
                (as defined in subparagraph (B)).
                  (B) Limiting charge defined.--In subparagraph 
                (A), the term ``limiting charge'' means, with 
                respect to a service furnished--
                          (i) in 1989, 125 percent of the 
                        amount specified for the service in the 
                        appropriate fee schedule established 
                        under paragraph (1),
                          (ii) in 1990, 120 percent of the 
                        amount specified for the service in the 
                        appropriate fee schedule established 
                        under paragraph (1), and
                          (iii) after 1990, 115 percent of the 
                        amount specified for the service in the 
                        appropriate fee schedule established 
                        under paragraph (1).
                  (C) Enforcement.--If a physician or supplier 
                knowingly and willfully bills in violation of 
                subparagraph (A), the Secretary may apply 
                sanctions against such physician or supplier in 
                accordance with section 1842(j)(2) in the same 
                manner as such sanctions may apply to a 
                physician.
          (6) Radiologist services defined.--For the purposes 
        of this subsection and section 1833(a)(1)(J), the term 
        ``radiologist services'' only includes radiology 
        services performed by, or under the direction or 
        supervision of, a physician--
                  (A) who is certified, or eligible to be 
                certified, by the American Board of Radiology, 
                or
                  (B) for whom radiology services account for 
                at least 50 percent of the total amount of 
                charges made under this part.
  (c) Payment and Standards for Screening Mammography.--
          (1) In general.--With respect to expenses incurred 
        for screening mammography (as defined in section 
        1861(jj)), payment may be made only--
                  (A) for screening mammography conducted 
                consistent with the frequency permitted under 
                paragraph (2); and
                  (B) if the screening mammography is conducted 
                by a facility that has a certificate (or 
                provisional certificate) issued under section 
                354 of the Public Health Service Act.
          (2) Frequency covered.--
                  (A) In general.--Subject to revision by the 
                Secretary under subparagraph (B)--
                          (i) no payment may be made under this 
                        part for screening mammography 
                        performed on a woman under 35 years of 
                        age;
                          (ii) payment may be made under this 
                        part for only one screening mammography 
                        performed on a woman over 34 years of 
                        age, but under 40 years of age; and
                          (iii) in the case of a woman over 39 
                        years of age, payment may not be made 
                        under this part for screening 
                        mammography performed within 11 months 
                        following the month in which a previous 
                        screening mammography was performed.
                  (B) Revision of frequency.--
                          (i) Review.--The Secretary, in 
                        consultation with the Director of the 
                        National Cancer Institute, shall review 
                        periodically the appropriate frequency 
                        for performing screening mammography, 
                        based on age and such other factors as 
                        the Secretary believes to be pertinent.
                          (ii) Revision of frequency.--The 
                        Secretary, taking into consideration 
                        the review made under clause (i), may 
                        revise from time to time the frequency 
                        with which screening mammography may be 
                        paid for under this subsection.
  (d) Frequency Limits and Payment for Colorectal Cancer 
Screening Tests.--
          (1) Screening fecal-occult blood tests.--
                  (A) Payment amount.--The payment amount for 
                colorectal cancer screening tests consisting of 
                screening fecal-occult blood tests is equal to 
                the payment amount established for diagnostic 
                fecal-occult blood tests under section 1833(h).
                  (B) Frequency limit.--No payment may be made 
                under this part for a colorectal cancer 
                screening test consisting of a screening fecal-
                occult blood test--
                          (i) if the individual is under 50 
                        years of age; or
                          (ii) if the test is performed within 
                        the 11 months after a previous 
                        screening fecal-occult blood test.
          (2) Screening flexible sigmoidoscopies.--
                  (A) Fee schedule.--With respect to colorectal 
                cancer screening tests consisting of screening 
                flexible sigmoidoscopies, payment under section 
                1848 shall be consistent with payment under 
                such section for similar or related services.
                  (B) Payment limit.--In the case of screening 
                flexible sigmoidoscopy services, payment under 
                this part shall not exceed such amount as the 
                Secretary specifies, based upon the rates 
                recognized for diagnostic flexible 
                sigmoidoscopy services.
                  (C) Facility payment limit.--
                          (i) In general.--Notwithstanding 
                        subsections (i)(2)(A) and (t) of 
                        section 1833, in the case of screening 
                        flexible sigmoidoscopy services 
                        furnished on or after January 1, 1999, 
                        that--
                                  (I) in accordance with 
                                regulations, may be performed 
                                in an ambulatory surgical 
                                center and for which the 
                                Secretary permits ambulatory 
                                surgical center payments under 
                                this part, and
                                  (II) are performed in an 
                                ambulatory surgical center or 
                                hospital outpatient department,
                        payment under this part shall be based 
                        on the lesser of the amount under the 
                        fee schedule that would apply to such 
                        services if they were performed in a 
                        hospital outpatient department in an 
                        area or the amount under the fee 
                        schedule that would apply to such 
                        services if they were performed in an 
                        ambulatory surgical center in the same 
                        area.
                          (ii) Limitation on coinsurance.--
                        Notwithstanding any other provision of 
                        this title, in the case of a 
                        beneficiary who receives the services 
                        described in clause (i)--
                                  (I) in computing the amount 
                                of any applicable copayment, 
                                the computation of such 
                                coinsurance shall be based upon 
                                the fee schedule under which 
                                payment is made for the 
                                services, and
                                  (II) the amount of such 
                                coinsurance is equal to 25 
                                percent of the payment amount 
                                under the fee schedule 
                                described in subclause (I).
                  (D) Special rule for detected lesions.--If 
                during the course of such screening flexible 
                sigmoidoscopy, a lesion or growth is detected 
                which results in a biopsy or removal of the 
                lesion or growth, payment under this part shall 
                not be made for the screening flexible 
                sigmoidoscopy but shall be made for the 
                procedure classified as a flexible 
                sigmoidoscopy with such biopsy or removal.
                  (E) Frequency limit.--No payment may be made 
                under this part for a colorectal cancer 
                screening test consisting of a screening 
                flexible sigmoidoscopy--
                          (i) if the individual is under 50 
                        years of age; or
                          (ii) if the procedure is performed 
                        within the 47 months after a previous 
                        screening flexible sigmoidoscopy or, in 
                        the case of an individual who is not at 
                        high risk for colorectal cancer, if the 
                        procedure is performed within the 119 
                        months after a previous screening 
                        colonoscopy.
          (3) Screening colonoscopy.--
                  (A) Fee schedule.--With respect to colorectal 
                cancer screening test consisting of a screening 
                colonoscopy, payment under section 1848 shall 
                be consistent with payment amounts under such 
                section for similar or related services.
                  (B) Payment limit.--In the case of screening 
                colonoscopy services, payment under this part 
                shall not exceed such amount as the Secretary 
                specifies, based upon the rates recognized for 
                diagnostic colonoscopy services.
                  (C) Facility payment limit.--
                          (i) In general.--Notwithstanding 
                        subsections (i)(2)(A) and (t) of 
                        section 1833, in the case of screening 
                        colonoscopy services furnished on or 
                        after January 1, 1999, that are 
                        performed in an ambulatory surgical 
                        center or a hospital outpatient 
                        department, payment under this part 
                        shall be based on the lesser of the 
                        amount under the fee schedule that 
                        would apply to such services if they 
                        were performed in a hospital outpatient 
                        department in an area or the amount 
                        under the fee schedule that would apply 
                        to such services if they were performed 
                        in an ambulatory surgical center in the 
                        same area.
                          (ii) Limitation on coinsurance.--
                        Notwithstanding any other provision of 
                        this title, in the case of a 
                        beneficiary who receives the services 
                        described in clause (i)--
                                  (I) in computing the amount 
                                of any applicable coinsurance, 
                                the computation of such 
                                coinsurance shall be based upon 
                                the fee schedule under which 
                                payment is made for the 
                                services, and
                                  (II) the amount of such 
                                coinsurance is equal to 25 
                                percent of the payment amount 
                                under the fee schedule 
                                described in subclause (I).
                  (D) Special rule for detected lesions.--If 
                during the course of such screening 
                colonoscopy, a lesion or growth is detected 
                which results in a biopsy or removal of the 
                lesion or growth, payment under this part shall 
                not be made for the screening colonoscopy but 
                shall be made for the procedure classified as a 
                colonoscopy with such biopsy or removal.
                  (E) Frequency limit.--No payment may be made 
                under this part for a colorectal cancer 
                screening test consisting of a screening 
                colonoscopy for individuals at high risk for 
                colorectal cancer if the procedure is performed 
                within the 23 months after a previous screening 
                colonoscopy or for other individuals if the 
                procedure is performed within the 119 months 
                after a previous screening colonoscopy or 
                within 47 months after a previous screening 
                flexible sigmoidoscopy.
  (e) Accreditation Requirement for Advanced Diagnostic Imaging 
Services.--
          (1) In general.--
                  (A) In general.--Beginning with January 1, 
                2012, with respect to the technical component 
                of advanced diagnostic imaging services for 
                which payment is made under the fee schedule 
                established under section 1848(b) and that are 
                furnished by a supplier, payment may only be 
                made if such supplier is accredited by an 
                accreditation organization designated by the 
                Secretary under paragraph (2)(B)(i).
                  (B) Advanced diagnostic imaging services 
                defined.--In this subsection, the term 
                ``advanced diagnostic imaging services'' 
                includes--
                          (i) diagnostic magnetic resonance 
                        imaging, computed tomography, and 
                        nuclear medicine (including positron 
                        emission tomography); and
                          (ii) such other diagnostic imaging 
                        services, including services described 
                        in section 1848(b)(4)(B) (excluding X-
                        ray, ultrasound, and fluoroscopy), as 
                        specified by the Secretary in 
                        consultation with physician specialty 
                        organizations and other stakeholders.
                  (C) Supplier defined.--In this subsection, 
                the term ``supplier'' has the meaning given 
                such term in section 1861(d).
          (2) Accreditation organizations.--
                  (A) Factors for designation of accreditation 
                organizations.--The Secretary shall consider 
                the following factors in designating 
                accreditation organizations under subparagraph 
                (B)(i) and in reviewing and modifying the list 
                of accreditation organizations designated 
                pursuant to subparagraph (C):
                          (i) The ability of the organization 
                        to conduct timely reviews of 
                        accreditation applications.
                          (ii) Whether the organization has 
                        established a process for the timely 
                        integration of new advanced diagnostic 
                        imaging services into the 
                        organization's accreditation program.
                          (iii) Whether the organization uses 
                        random site visits, site audits, or 
                        other strategies for ensuring 
                        accredited suppliers maintain adherence 
                        to the criteria described in paragraph 
                        (3).
                          (iv) The ability of the organization 
                        to take into account the capacities of 
                        suppliers located in a rural area (as 
                        defined in section 1886(d)(2)(D)).
                          (v) Whether the organization has 
                        established reasonable fees to be 
                        charged to suppliers applying for 
                        accreditation.
                          (vi) Such other factors as the 
                        Secretary determines appropriate.
                  (B) Designation.--Not later than January 1, 
                2010, the Secretary shall designate 
                organizations to accredit suppliers furnishing 
                the technical component of advanced diagnostic 
                imaging services. The list of accreditation 
                organizations so designated may be modified 
                pursuant to subparagraph (C).
                  (C) Review and modification of list of 
                accreditation organizations.--
                          (i) In general.--The Secretary shall 
                        review the list of accreditation 
                        organizations designated under 
                        subparagraph (B) taking into account 
                        the factors under subparagraph (A). 
                        Taking into account the results of such 
                        review, the Secretary may, by 
                        regulation, modify the list of 
                        accreditation organizations designated 
                        under subparagraph (B).
                          (ii) Special rule for accreditations 
                        done prior to removal from list of 
                        designated accreditation 
                        organizations.--In the case where the 
                        Secretary removes an organization from 
                        the list of accreditation organizations 
                        designated under subparagraph (B), any 
                        supplier that is accredited by the 
                        organization during the period 
                        beginning on the date on which the 
                        organization is designated as an 
                        accreditation organization under 
                        subparagraph (B) and ending on the date 
                        on which the organization is removed 
                        from such list shall be considered to 
                        have been accredited by an organization 
                        designated by the Secretary under 
                        subparagraph (B) for the remaining 
                        period such accreditation is in effect.
          (3) Criteria for accreditation.--The Secretary shall 
        establish procedures to ensure that the criteria used 
        by an accreditation organization designated under 
        paragraph (2)(B) to evaluate a supplier that furnishes 
        the technical component of advanced diagnostic imaging 
        services for the purpose of accreditation of such 
        supplier is specific to each imaging modality. Such 
        criteria shall include--
                  (A) standards for qualifications of medical 
                personnel who are not physicians and who 
                furnish the technical component of advanced 
                diagnostic imaging services;
                  (B) standards for qualifications and 
                responsibilities of medical directors and 
                supervising physicians, including standards 
                that recognize the considerations described in 
                paragraph (4);
                  (C) procedures to ensure that equipment used 
                in furnishing the technical component of 
                advanced diagnostic imaging services meets 
                performance specifications;
                  (D) standards that require the supplier have 
                procedures in place to ensure the safety of 
                persons who furnish the technical component of 
                advanced diagnostic imaging services and 
                individuals to whom such services are 
                furnished;
                  (E) standards that require the establishment 
                and maintenance of a quality assurance and 
                quality control program by the supplier that is 
                adequate and appropriate to ensure the 
                reliability, clarity, and accuracy of the 
                technical quality of diagnostic images produced 
                by such supplier; and
                  (F) any other standards or procedures the 
                Secretary determines appropriate.
          (4) Recognition in standards for the evaluation of 
        medical directors and supervising physicians.--The 
        standards described in paragraph (3)(B) shall recognize 
        whether a medical director or supervising physician--
                  (A) in a particular specialty receives 
                training in advanced diagnostic imaging 
                services in a residency program;
                  (B) has attained, through experience, the 
                necessary expertise to be a medical director or 
                a supervising physician;
                  (C) has completed any continuing medical 
                education courses relating to such services; or
                  (D) has met such other standards as the 
                Secretary determines appropriate.
          (5) Rule for accreditations made prior to 
        designation.--In the case of a supplier that is 
        accredited before January 1, 2010, by an accreditation 
        organization designated by the Secretary under 
        paragraph (2)(B) as of January 1, 2010, such supplier 
        shall be considered to have been accredited by an 
        organization designated by the Secretary under such 
        paragraph as of January 1, 2012, for the remaining 
        period such accreditation is in effect.
  (f) Reduction in Payments for Physician Pathology Services 
During 1991.--
          (1) In general.--For physician pathology services 
        furnished under this part during 1991, the prevailing 
        charges used in a locality under this part shall be 7 
        percent below the prevailing charges used in the 
        locality under this part in 1990 after March 31.
          (2) Limitation.--The prevailing charge for the 
        technical and professional components of an physician 
        pathology service furnished by a physician through an 
        independent laboratory shall not be reduced pursuant to 
        paragraph (1) to the extent that such reduction would 
        reduce such prevailing charge below 115 percent of the 
        prevailing charge for the professional component of 
        such service when furnished by a hospital-based 
        physician in the same locality. For purposes of the 
        preceding sentence, an independent laboratory is a 
        laboratory that is independent of a hospital and 
        separate from the attending or consulting physicians' 
        office.
  (g) Payment for Outpatient Critical Access Hospital 
Services.--
          (1) In general.--The amount of payment for outpatient 
        critical access hospital services of a critical access 
        hospital is equal to 101 percent of the reasonable 
        costs of the hospital in providing such services, 
        unless the hospital makes the election under paragraph 
        (2).
          (2) Election of cost-based hospital outpatient 
        service payment plus fee schedule for professional 
        services.--A critical access hospital may elect to be 
        paid for outpatient critical access hospital services 
        amounts equal to the sum of the following, less the 
        amount that such hospital may charge as described in 
        section 1866(a)(2)(A):
                  (A) Facility fee.--With respect to facility 
                services, not including any services for which 
                payment may be made under subparagraph (B), 101 
                percent of the reasonable costs of the critical 
                access hospital in providing such services.
                  (B) Fee schedule for professional services.--
                With respect to professional services otherwise 
                included within outpatient critical access 
                hospital services, 115 percent of such amounts 
                as would otherwise be paid under this part if 
                such services were not included in outpatient 
                critical access hospital services. Subsections 
                (x) and (y) of section 1833 shall not be taken 
                into account in determining the amounts that 
                would otherwise be paid pursuant to the 
                preceding sentence.
        The Secretary may not require, as a condition for 
        applying subparagraph (B) with respect to a critical 
        access hospital, that each physician or other 
        practitioner providing professional services in the 
        hospital must assign billing rights with respect to 
        such services, except that such subparagraph shall not 
        apply to those physicians and practitioners who have 
        not assigned such billing rights.
          (3) Disregarding charges.--The payment amounts under 
        this subsection shall be determined without regard to 
        the amount of the customary or other charge.
          (4) Treatment of clinical diagnostic laboratory 
        services.--No coinsurance, deductible, copayment, or 
        other cost-sharing otherwise applicable under this part 
        shall apply with respect to clinical diagnostic 
        laboratory services furnished as an outpatient critical 
        access hospital service. Nothing in this title shall be 
        construed as providing for payment for clinical 
        diagnostic laboratory services furnished as part of 
        outpatient critical access hospital services, other 
        than on the basis described in this subsection. For 
        purposes of the preceding sentence and section 
        1861(mm)(3), clinical diagnostic laboratory services 
        furnished by a critical access hospital shall be 
        treated as being furnished as part of outpatient 
        critical access services without regard to whether the 
        individual with respect to whom such services are 
        furnished is physically present in the critical access 
        hospital, or in a skilled nursing facility or a clinic 
        (including a rural health clinic) that is operated by a 
        critical access hospital, at the time the specimen is 
        collected.
          (5) Coverage of costs for certain emergency room on-
        call providers.--In determining the reasonable costs of 
        outpatient critical access hospital services under 
        paragraphs (1) and (2)(A), the Secretary shall 
        recognize as allowable costs, amounts (as defined by 
        the Secretary) for reasonable compensation and related 
        costs for physicians, physician assistants, nurse 
        practitioners, and clinical nurse specialists who are 
        on-call (as defined by the Secretary) to provide 
        emergency services but who are not present on the 
        premises of the critical access hospital involved, and 
        are not otherwise furnishing services covered under 
        this title and are not on-call at any other provider or 
        facility.
  (h) Payment for Prosthetic Devices and Orthotics and 
Prosthetics.--
          (1) General rule for payment.--
                  (A) In general.--Payment under this 
                subsection for prosthetic devices and orthotics 
                and prosthetics shall be made in a lump-sum 
                amount for the purchase of the item in an 
                amount equal to 80 percent of the payment basis 
                described in subparagraph (B).
                  (B) Payment basis.--Except as provided in 
                subparagraphs (C), (E), and (H)(i), the payment 
                basis described in this subparagraph is the 
                lesser of--
                          (i) the actual charge for the item; 
                        or
                          (ii) the amount recognized under 
                        paragraph (2) as the purchase price for 
                        the item.
                  (C) Exception for certain public home health 
                agencies.--Subparagraph (B)(i) shall not apply 
                to an item furnished by a public home health 
                agency (or by another home health agency which 
                demonstrates to the satisfaction of the 
                Secretary that a significant portion of its 
                patients are low income) free of charge or at 
                nominal charges to the public.
                  (D) Exclusive payment rule.--Subject to 
                subparagraph (H)(ii), this subsection shall 
                constitute the exclusive provision of this 
                title for payment for prosthetic devices, 
                orthotics, and prosthetics under this part or 
                under part A to a home health agency.
                  (E) Exception for certain items.--Payment for 
                ostomy supplies, tracheostomy supplies, and 
                urologicals shall be made in accordance with 
                subparagraphs (B) and (C) of section 
                1834(a)(2).
                  (F) Special payment rules for certain 
                prosthetics and custom-fabricated orthotics.--
                          (i) In general.--No payment shall be 
                        made under this subsection for an item 
                        of custom-fabricated orthotics 
                        described in clause (ii) or for an item 
                        of prosthetics unless such item is--
                                  (I) furnished by a qualified 
                                practitioner; and
                                  (II) fabricated by a 
                                qualified practitioner or a 
                                qualified supplier at a 
                                facility that meets such 
                                criteria as the Secretary 
                                determines appropriate.
                          (ii) Description of custom-fabricated 
                        item.--
                                  (I) In general.--An item 
                                described in this clause is an 
                                item of custom-fabricated 
                                orthotics that requires 
                                education, training, and 
                                experience to custom-fabricate 
                                and that is included in a list 
                                established by the Secretary in 
                                subclause (II). Such an item 
                                does not include shoes and shoe 
                                inserts.
                                  (II) List of items.--The 
                                Secretary, in consultation with 
                                appropriate experts in 
                                orthotics (including national 
                                organizations representing 
                                manufacturers of orthotics), 
                                shall establish and update as 
                                appropriate a list of items to 
                                which this subparagraph 
                                applies. No item may be 
                                included in such list unless 
                                the item is individually 
                                fabricated for the patient over 
                                a positive model of the 
                                patient.
                          (iii) Qualified practitioner 
                        defined.--In this subparagraph, the 
                        term ``qualified practitioner'' means a 
                        physician or other individual who--
                                  (I) is a qualified physical 
                                therapist or a qualified 
                                occupational therapist;
                                  (II) in the case of a State 
                                that provides for the licensing 
                                of orthotics and prosthetics, 
                                is licensed in orthotics or 
                                prosthetics by the State in 
                                which the item is supplied; or
                                  (III) in the case of a State 
                                that does not provide for the 
                                licensing of orthotics and 
                                prosthetics, is specifically 
                                trained and educated to provide 
                                or manage the provision of 
                                prosthetics and custom-designed 
                                or -fabricated orthotics, and 
                                is certified by the American 
                                Board for Certification in 
                                Orthotics and Prosthetics, Inc. 
                                or by the Board for Orthotist/
                                Prosthetist Certification, or 
                                is credentialed and approved by 
                                a program that the Secretary 
                                determines, in consultation 
                                with appropriate experts in 
                                orthotics and prosthetics, has 
                                training and education 
                                standards that are necessary to 
                                provide such prosthetics and 
                                orthotics.
                          (iv) Qualified supplier defined.--In 
                        this subparagraph, the term ``qualified 
                        supplier'' means any entity that is 
                        accredited by the American Board for 
                        Certification in Orthotics and 
                        Prosthetics, Inc. or by the Board for 
                        Orthotist/Prosthetist Certification, or 
                        accredited and approved by a program 
                        that the Secretary determines has 
                        accreditation and approval standards 
                        that are essentially equivalent to 
                        those of such Board.
                  (G) Replacement of prosthetic devices and 
                parts.--
                          (i) In general.--Payment shall be 
                        made for the replacement of prosthetic 
                        devices which are artificial limbs, or 
                        for the replacement of any part of such 
                        devices, without regard to continuous 
                        use or useful lifetime restrictions if 
                        an ordering physician determines that 
                        the provision of a replacement device, 
                        or a replacement part of such a device, 
                        is necessary because of any of the 
                        following:
                                  (I) A change in the 
                                physiological condition of the 
                                patient.
                                  (II) An irreparable change in 
                                the condition of the device, or 
                                in a part of the device.
                                  (III) The condition of the 
                                device, or the part of the 
                                device, requires repairs and 
                                the cost of such repairs would 
                                be more than 60 percent of the 
                                cost of a replacement device, 
                                or, as the case may be, of the 
                                part being replaced.
                          (ii) Confirmation may be required if 
                        device or part being replaced is less 
                        than 3 years old.--If a physician 
                        determines that a replacement device, 
                        or a replacement part, is necessary 
                        pursuant to clause (i)--
                                  (I) such determination shall 
                                be controlling; and
                                  (II) such replacement device 
                                or part shall be deemed to be 
                                reasonable and necessary for 
                                purposes of section 
                                1862(a)(1)(A);
                        except that if the device, or part, 
                        being replaced is less than 3 years old 
                        (calculated from the date on which the 
                        beneficiary began to use the device or 
                        part), the Secretary may also require 
                        confirmation of necessity of the 
                        replacement device or replacement part, 
                        as the case may be.
                  (H) Application of competitive acquisition to 
                orthotics; limitation of inherent 
                reasonableness authority.--In the case of 
                orthotics described in paragraph (2)(C) of 
                section 1847(a) furnished on or after January 
                1, 2009, subject to subsection (a)(1)(G), that 
                are included in a competitive acquisition 
                program in a competitive acquisition area under 
                such section--
                          (i) the payment basis under this 
                        subsection for such orthotics furnished 
                        in such area shall be the payment basis 
                        determined under such competitive 
                        acquisition program; and
                          (ii) subject to subsection (a)(1)(G), 
                        the Secretary may use information on 
                        the payment determined under such 
                        competitive acquisition programs to 
                        adjust the payment amount otherwise 
                        recognized under subparagraph (B)(ii) 
                        for an area that is not a competitive 
                        acquisition area under section 1847, 
                        and in the case of such adjustment, 
                        paragraphs (8) and (9) of section 
                        1842(b) shall not be applied.
          (2) Purchase price recognized.--For purposes of 
        paragraph (1), the amount that is recognized under this 
        paragraph as the purchase price for prosthetic devices, 
        orthotics, and prosthetics is the amount described in 
        subparagraph (C) of this paragraph, determined as 
        follows:
                  (A) Computation of local purchase price.--
                Each carrier under section 1842 shall compute a 
                base local purchase price for the item as 
                follows:
                          (i) The carrier shall compute a base 
                        local purchase price for each item 
                        equal to the average reasonable charge 
                        in the locality for the purchase of the 
                        item for the 12-month period ending 
                        with June 1987.
                          (ii) The carrier shall compute a 
                        local purchase price, with respect to 
                        the furnishing of each particular 
                        item--
                                  (I) in 1989 and 1990, equal 
                                to the base local purchase 
                                price computed under clause (i) 
                                increased by the percentage 
                                increase in the consumer price 
                                index for all urban consumers 
                                (United States city average) 
                                for the 6-month period ending 
                                with December 1987, or
                                  (II) in 1991, 1992 or 1993, 
                                equal to the local purchase 
                                price computed under this 
                                clause for the previous year 
                                increased by the applicable 
                                percentage increase for the 
                                year.
                  (B) Computation of regional purchase price.--
                With respect to the furnishing of a particular 
                item in each region (as defined by the 
                Secretary), the Secretary shall compute a 
                regional purchase price--
                          (i) for 1992, equal to the average 
                        (weighted by relative volume of all 
                        claims among carriers) of the local 
                        purchase prices for the carriers in the 
                        region computed under subparagraph 
                        (A)(ii)(II) for the year, and
                          (ii) for each subsequent year, equal 
                        to the regional purchase price computed 
                        under this subparagraph for the 
                        previous year increased by the 
                        applicable percentage increase for the 
                        year.
                  (C) Purchase price recognized.--For purposes 
                of paragraph (1) and subject to subparagraph 
                (D), the amount that is recognized under this 
                paragraph as the purchase price for each item 
                furnished--
                          (i) in 1989, 1990, or 1991, is 100 
                        percent of the local purchase price 
                        computed under subparagraph (A)(ii);
                          (ii) in 1992, is the sum of (I) 75 
                        percent of the local purchase price 
                        computed under subparagraph (A)(ii)(II) 
                        for 1992, and (II) 25 percent of the 
                        regional purchase price computed under 
                        subparagraph (B) for 1992;
                          (iii) in 1993, is the sum of (I) 50 
                        percent of the local purchase price 
                        computed under subparagraph (A)(ii)(II) 
                        for 1993, and (II) 50 percent of the 
                        regional purchase price computed under 
                        subparagraph (B) for 1993; and
                          (iv) in 1994 or a subsequent year, is 
                        the regional purchase price computed 
                        under subparagraph (B) for that year.
                  (D) Range on amount recognized.--The amount 
                that is recognized under subparagraph (C) as 
                the purchase price for an item furnished--
                          (i) in 1992, may not exceed 125 
                        percent, and may not be lower than 85 
                        percent, of the average of the purchase 
                        prices recognized under such 
                        subparagraph for all the carrier 
                        service areas in the United States in 
                        that year; and
                          (ii) in a subsequent year, may not 
                        exceed 120 percent, and may not be 
                        lower than 90 percent, of the average 
                        of the purchase prices recognized under 
                        such subparagraph for all the carrier 
                        service areas in the United States in 
                        that year.
          (3) Applicability of certain provisions relating to 
        durable medical equipment.--Paragraphs (12) and (17) 
        and subparagraphs (A) and (B) of paragraph (10) and 
        paragraph (11) of subsection (a) shall apply to 
        prosthetic devices, orthotics, and prosthetics in the 
        same manner as such provisions apply to covered items 
        under such subsection.
          (4) Definitions.--In this subsection--
                  (A) the term ``applicable percentage 
                increase'' means--
                          (i) for 1991, 0 percent;
                          (ii) for 1992 and 1993, the 
                        percentage increase in the consumer 
                        price index for all urban consumers 
                        (United States city average) for the 
                        12-month period ending with June of the 
                        previous year;
                          (iii) for 1994 and 1995, 0 percent;
                          (iv) for 1996 and 1997, the 
                        percentage increase in the consumer 
                        price index for all urban consumers 
                        (United States city average) for the 
                        12-month period ending with June of the 
                        previous year;
                          (v) for each of the years 1998 
                        through 2000, 1 percent;
                          (vi) for 2001, the percentage 
                        increase in the consumer price index 
                        for all urban consumers (U.S. city 
                        average) for the 12-month period ending 
                        with June 2000;
                          (vii) for 2002, 1 percent;
                          (viii) for 2003, the percentage 
                        increase in the consumer price index 
                        for all urban consumers (United States 
                        city average) for the 12-month period 
                        ending with June of the previous year;
                          (ix) for 2004, 2005, and 2006, 0 
                        percent;
                          (x) for for each of 2007 through 
                        2010, the percentage increase in the 
                        consumer price index for all urban 
                        consumers (United States city average) 
                        for the 12-month period ending with 
                        June of the previous year; and
                          (xi) for 2011 and each subsequent 
                        year--
                                  (I) the percentage increase 
                                in the consumer price index for 
                                all urban consumers (United 
                                States city average) for the 
                                12-month period ending with 
                                June of the previous year, 
                                reduced by--
                                  (II) the productivity 
                                adjustment described in section 
                                1886(b)(3)(B)(xi)(II).
                  (B) the term ``prosthetic devices'' has the 
                meaning given such term in section 1861(s)(8), 
                except that such term does not include 
                parenteral and enteral nutrition nutrients, 
                supplies, and equipment and does not include an 
                implantable item for which payment may be made 
                under section 1833(t); and
                  (C) the term ``orthotics and prosthetics'' 
                has the meaning given such term in section 
                1861(s)(9) (and includes shoes described in 
                section 1861(s)(12)), but does not include 
                intraocular lenses or medical supplies 
                (including catheters, catheter supplies, ostomy 
                bags, and supplies related to ostomy care) 
                furnished by a home health agency under section 
                1861(m)(5).
        The application of subparagraph (A)(xi)(II) may result 
        in the applicable percentage increase under 
        subparagraph (A) being less than 0.0 for a year, and 
        may result in payment rates under this subsection for a 
        year being less than such payment rates for the 
        preceding year.
          (5) Documentation created by orthotists and 
        prosthetists.--For purposes of determining the 
        reasonableness and medical necessity of orthotics and 
        prosthetics, documentation created by an orthotist or 
        prosthetist shall be considered part of the 
        individual's medical record to support documentation 
        created by eligible professionals described in section 
        1848(k)(3)(B).
  (i) Payment for Surgical Dressings.--
          (1) In general.--Payment under this subsection for 
        surgical dressings (described in section 1861(s)(5)) 
        shall be made in a lump sum amount for the purchase of 
        the item in an amount equal to 80 percent of the lesser 
        of--
                  (A) the actual charge for the item; or
                  (B) a payment amount determined in accordance 
                with the methodology described in subparagraphs 
                (B) and (C) of subsection (a)(2) (except that 
                in applying such methodology, the national 
                limited payment amount referred to in such 
                subparagraphs shall be initially computed based 
                on local payment amounts using average 
                reasonable charges for the 12-month period 
                ending December 31, 1992, increased by the 
                covered item updates described in such 
                subsection for 1993 and 1994).
          (2) Exceptions.--Paragraph (1) shall not apply to 
        surgical dressings that are--
                  (A) furnished as an incident to a physician's 
                professional service; or
                  (B) furnished by a home health agency.
  (j) Requirements for Suppliers of Medical Equipment and 
Supplies.--
          (1) Issuance and renewal of supplier number.--
                  (A) Payment.--Except as provided in 
                subparagraph (C), no payment may be made under 
                this part after the date of the enactment of 
                the Social Security Act Amendments of 1994 for 
                items furnished by a supplier of medical 
                equipment and supplies unless such supplier 
                obtains (and renews at such intervals as the 
                Secretary may require) a supplier number.
                  (B) Standards for possessing a supplier 
                number.--A supplier may not obtain a supplier 
                number unless--
                          (i) for medical equipment and 
                        supplies furnished on or after the date 
                        of the enactment of the Social Security 
                        Act Amendments of 1994 and before 
                        January 1, 1996, the supplier meets 
                        standards prescribed by the Secretary 
                        in regulations issued on June 18, 1992; 
                        and
                          (ii) for medical equipment and 
                        supplies furnished on or after January 
                        1, 1996, the supplier meets revised 
                        standards prescribed by the Secretary 
                        (in consultation with representatives 
                        of suppliers of medical equipment and 
                        supplies, carriers, and consumers) that 
                        shall include requirements that the 
                        supplier--
                                  (I) comply with all 
                                applicable State and Federal 
                                licensure and regulatory 
                                requirements;
                                  (II) maintain a physical 
                                facility on an appropriate 
                                site;
                                  (III) have proof of 
                                appropriate liability 
                                insurance; and
                                  (IV) meet such other 
                                requirements as the Secretary 
                                may specify.
                  (C) Exception for items furnished as incident 
                to a physician's service.--Subparagraph (A) 
                shall not apply with respect to medical 
                equipment and supplies furnished incident to a 
                physician's service.
                  (D) Prohibition against multiple supplier 
                numbers.--The Secretary may not issue more than 
                one supplier number to any supplier of medical 
                equipment and supplies unless the issuance of 
                more than one number is appropriate to identify 
                subsidiary or regional entities under the 
                supplier's ownership or control.
                  (E) Prohibition against delegation of 
                supplier determinations.--The Secretary may not 
                delegate (other than by contract under section 
                1842) the responsibility to determine whether 
                suppliers meet the standards necessary to 
                obtain a supplier number.
          (2) Certificates of medical necessity.--
                  (A) Limitation on information provided by 
                suppliers on certificates of medical 
                necessity.--
                          (i) In general.--Effective 60 days 
                        after the date of the enactment of the 
                        Social Security Act Amendments of 1994, 
                        a supplier of medical equipment and 
                        supplies may distribute to physicians, 
                        or to individuals entitled to benefits 
                        under this part, a certificate of 
                        medical necessity for commercial 
                        purposes which contains no more than 
                        the following information completed by 
                        the supplier:
                                  (I) An identification of the 
                                supplier and the beneficiary to 
                                whom such medical equipment and 
                                supplies are furnished.
                                  (II) A description of such 
                                medical equipment and supplies.
                                  (III) Any product code 
                                identifying such medical 
                                equipment and supplies.
                                  (IV) Any other administrative 
                                information (other than 
                                information relating to the 
                                beneficiary's medical 
                                condition) identified by the 
                                Secretary.
                          (ii) Information on payment amount 
                        and charges.--If a supplier distributes 
                        a certificate of medical necessity 
                        containing any of the information 
                        permitted to be supplied under clause 
                        (i), the supplier shall also list on 
                        the certificate of medical necessity 
                        the fee schedule amount and the 
                        supplier's charge for the medical 
                        equipment or supplies being furnished 
                        prior to distribution of such 
                        certificate to the physician.
                          (iii) Penalty.--Any supplier of 
                        medical equipment and supplies who 
                        knowingly and willfully distributes a 
                        certificate of medical necessity in 
                        violation of clause (i) or fails to 
                        provide the information required under 
                        clause (ii) is subject to a civil money 
                        penalty in an amount not to exceed 
                        $1,000 for each such certificate of 
                        medical necessity so distributed. The 
                        provisions of section 1128A (other than 
                        subsections (a) and (b)) shall apply to 
                        civil money penalties under this 
                        subparagraph in the same manner as they 
                        apply to a penalty or proceeding under 
                        section 1128A(a).
                  (B) Definition.--For purposes of this 
                paragraph, the term ``certificate of medical 
                necessity'' means a form or other document 
                containing information required by the carrier 
                to be submitted to show that an item is 
                reasonable and necessary for the diagnosis or 
                treatment of illness or injury or to improve 
                the functioning of a malformed body member.
          (3) Coverage and review criteria.--The Secretary 
        shall annually review the coverage and utilization of 
        items of medical equipment and supplies to determine 
        whether such items should be made subject to coverage 
        and utilization review criteria, and if appropriate, 
        shall develop and apply such criteria to such items.
          (4) Limitation on patient liability.--If a supplier 
        of medical equipment and supplies (as defined in 
        paragraph (5))--
                  (A) furnishes an item or service to a 
                beneficiary for which no payment may be made by 
                reason of paragraph (1);
                  (B) furnishes an item or service to a 
                beneficiary for which payment is denied in 
                advance under subsection (a)(15); or
                  (C) furnishes an item or service to a 
                beneficiary for which payment is denied under 
                section 1862(a)(1);
        any expenses incurred for items and services furnished 
        to an individual by such a supplier not on an assigned 
        basis shall be the responsibility of such supplier. The 
        individual shall have no financial responsibility for 
        such expenses and the supplier shall refund on a timely 
        basis to the individual (and shall be liable to the 
        individual for) any amounts collected from the 
        individual for such items or services. The provisions 
        of subsection (a)(18) shall apply to refunds required 
        under the previous sentence in the same manner as such 
        provisions apply to refunds under such subsection.
          (5) Definition.--The term ``medical equipment and 
        supplies'' means--
                  (A) durable medical equipment (as defined in 
                section 1861(n));
                  (B) prosthetic devices (as described in 
                section 1861(s)(8));
                  (C) orthotics and prosthetics (as described 
                in section 1861(s)(9));
                  (D) surgical dressings (as described in 
                section 1861(s)(5));
                  (E) such other items as the Secretary may 
                determine; and
                  (F) for purposes of paragraphs (1) and (3)--
                          (i) home dialysis supplies and 
                        equipment (as described in section 
                        1861(s)(2)(F)),
                          (ii) immunosuppressive drugs (as 
                        described in section 1861(s)(2)(J)),
                          (iii) therapeutic shoes for diabetics 
                        (as described in section 1861(s)(12)),
                          (iv) oral drugs prescribed for use as 
                        an anticancer therapeutic agent (as 
                        described in section 1861(s)(2)(Q)), 
                        and
                          (v) self-administered erythropoetin 
                        (as described in section 
                        1861(s)(2)(P)).
  (k) Payment for Outpatient Therapy Services and Comprehensive 
Outpatient Rehabilitation Services.--
          (1) In general.--With respect to services described 
        in section 1833(a)(8) or 1833(a)(9) for which payment 
        is determined under this subsection, the payment basis 
        shall be--
                  (A) for services furnished during 1998, the 
                amount determined under paragraph (2); or
                  (B) for services furnished during a 
                subsequent year, 80 percent of the lesser of--
                          (i) the actual charge for the 
                        services, or
                          (ii) the applicable fee schedule 
                        amount (as defined in paragraph (3)) 
                        for the services.
          (2) Payment in 1998 based upon adjusted reasonable 
        costs.--The amount under this paragraph for services is 
        the lesser of--
                  (A) the charges imposed for the services, or
                  (B) the adjusted reasonable costs (as defined 
                in paragraph (4)) for the services,
        less 20 percent of the amount of the charges imposed 
        for such services.
          (3) Applicable fee schedule amount.--In this 
        subsection, the term ``applicable fee schedule amount'' 
        means, with respect to services furnished in a year, 
        the amount determined under the fee schedule 
        established under section 1848 for such services 
        furnished during the year or, if there is no such fee 
        schedule established for such services, the amount 
        determined under the fee schedule established for such 
        comparable services as the Secretary specifies.
          (4) Adjusted reasonable costs.--In paragraph (2), the 
        term ``adjusted reasonable costs'' means, with respect 
        to any services, reasonable costs determined for such 
        services, reduced by 10 percent. The 10-percent 
        reduction shall not apply to services described in 
        section 1833(a)(8)(B) (relating to services provided by 
        hospitals).
          (5) Uniform coding.--For claims for services 
        submitted on or after April 1, 1998, for which the 
        amount of payment is determined under this subsection, 
        the claim shall include a code (or codes) under a 
        uniform coding system specified by the Secretary that 
        identifies the services furnished.
          (6) Restraint on billing.--The provisions of 
        subparagraphs (A) and (B) of section 1842(b)(18) shall 
        apply to therapy services for which payment is made 
        under this subsection in the same manner as they apply 
        to services provided by a practitioner described in 
        section 1842(b)(18)(C).
          (7) Adjustment in discount for certain multiple 
        therapy services.--In the case of therapy services 
        furnished on or after April 1, 2013, and for which 
        payment is made under this subsection pursuant to the 
        applicable fee schedule amount (as defined in paragraph 
        (3)), instead of the 25 percent multiple procedure 
        payment reduction specified in the final rule published 
        by the Secretary in the Federal Register on November 
        29, 2010, the reduction percentage shall be 50 percent.
  (l) Establishment of Fee Schedule for Ambulance Services.--
          (1) In general.--The Secretary shall establish a fee 
        schedule for payment for ambulance services whether 
        provided directly by a supplier or provider or under 
        arrangement with a provider under this part through a 
        negotiated rulemaking process described in title 5, 
        United States Code, and in accordance with the 
        requirements of this subsection.
          (2) Considerations.--In establishing such fee 
        schedule, the Secretary shall--
                  (A) establish mechanisms to control increases 
                in expenditures for ambulance services under 
                this part;
                  (B) establish definitions for ambulance 
                services which link payments to the type of 
                services provided;
                  (C) consider appropriate regional and 
                operational differences;
                  (D) consider adjustments to payment rates to 
                account for inflation and other relevant 
                factors; and
                  (E) phase in the application of the payment 
                rates under the fee schedule in an efficient 
                and fair manner consistent with paragraph (11), 
                except that such phase-in shall provide for 
                full payment of any national mileage rate for 
                ambulance services provided by suppliers that 
                are paid by carriers in any of the 50 States 
                where payment by a carrier for such services 
                for all such suppliers in such State did not, 
                prior to the implementation of the fee 
                schedule, include a separate amount for all 
                mileage within the county from which the 
                beneficiary is transported.
          (3) Savings.--In establishing such fee schedule, the 
        Secretary shall--
                  (A) ensure that the aggregate amount of 
                payments made for ambulance services under this 
                part during 2000 does not exceed the aggregate 
                amount of payments which would have been made 
                for such services under this part during such 
                year if the amendments made by section 4531(a) 
                of the Balanced Budget Act of 1997 continued in 
                effect, except that in making such 
                determination the Secretary shall assume an 
                update in such payments for 2002 equal to 
                percentage increase in the consumer price index 
                for all urban consumers (U.S. city average) for 
                the 12-month period ending with June of the 
                previous year reduced in the case of 2002 by 
                1.0 percentage points;
                  (B) set the payment amounts provided under 
                the fee schedule for services furnished in 2001 
                and each subsequent year at amounts equal to 
                the payment amounts under the fee schedule for 
                services furnished during the previous year, 
                increased, subject to subparagraph (C) and the 
                succeeding sentence of this paragraph, by the 
                percentage increase in the consumer price index 
                for all urban consumers (U.S. city average) for 
                the 12-month period ending with June of the 
                previous year reduced in the case of 2002 by 
                1.0 percentage points; and
                  (C) for 2011 and each subsequent year, after 
                determining the percentage increase under 
                subparagraph (B) for the year, reduce such 
                percentage increase by the productivity 
                adjustment described in section 
                1886(b)(3)(B)(xi)(II).
        The application of subparagraph (C) may result in the 
        percentage increase under subparagraph (B) being less 
        than 0.0 for a year, and may result in payment rates 
        under the fee schedule under this subsection for a year 
        being less than such payment rates for the preceding 
        year.
          (4) Consultation.--In establishing the fee schedule 
        for ambulance services under this subsection, the 
        Secretary shall consult with various national 
        organizations representing individuals and entities who 
        furnish and regulate ambulance services and share with 
        such organizations relevant data in establishing such 
        schedule.
          (5) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869 or 
        otherwise of the amounts established under the fee 
        schedule for ambulance services under this subsection, 
        including matters described in paragraph (2).
          (6) Restraint on billing.--The provisions of 
        subparagraphs (A) and (B) of section 1842(b)(18) shall 
        apply to ambulance services for which payment is made 
        under this subsection in the same manner as they apply 
        to services provided by a practitioner described in 
        section 1842(b)(18)(C).
          (7) Coding system.--The Secretary may require the 
        claim for any services for which the amount of payment 
        is determined under this subsection to include a code 
        (or codes) under a uniform coding system specified by 
        the Secretary that identifies the services furnished.
          (8) Services furnished by critical access 
        hospitals.--Notwithstanding any other provision of this 
        subsection, the Secretary shall pay 101 percent of the 
        reasonable costs incurred in furnishing ambulance 
        services if such services are furnished--
                  (A) by a critical access hospital (as defined 
                in section 1861(mm)(1)), or
                  (B) by an entity that is owned and operated 
                by a critical access hospital,
        but only if the critical access hospital or entity is 
        the only provider or supplier of ambulance services 
        that is located within a 35-mile drive of such critical 
        access hospital.
          (9) Transitional assistance for rural providers.--In 
        the case of ground ambulance services furnished on or 
        after July 1, 2001, and before January 1, 2004, for 
        which the transportation originates in a rural area (as 
        defined in section 1886(d)(2)(D)) or in a rural census 
        tract of a metropolitan statistical area (as determined 
        under the most recent modification of the Goldsmith 
        Modification, originally published in the Federal 
        Register on February 27, 1992 (57 Fed. Reg. 6725)), the 
        fee schedule established under this subsection shall 
        provide that, with respect to the payment rate for 
        mileage for a trip above 17 miles, and up to 50 miles, 
        the rate otherwise established shall be increased by 
        not less than \1/2\ of the additional payment per mile 
        established for the first 17 miles of such a trip 
        originating in a rural area.
          (10) Phase-in providing floor using blend of fee 
        schedule and regional fee schedules.--In carrying out 
        the phase-in under paragraph (2)(E) for each level of 
        ground service furnished in a year, the portion of the 
        payment amount that is based on the fee schedule shall 
        be the greater of the amount determined under such fee 
        schedule (without regard to this paragraph) or the 
        following blended rate of the fee schedule under 
        paragraph (1) and of a regional fee schedule for the 
        region involved:
                  (A) For 2004 (for services furnished on or 
                after July 1, 2004), the blended rate shall be 
                based 20 percent on the fee schedule under 
                paragraph (1) and 80 percent on the regional 
                fee schedule.
                  (B) For 2005, the blended rate shall be based 
                40 percent on the fee schedule under paragraph 
                (1) and 60 percent on the regional fee 
                schedule.
                  (C) For 2006, the blended rate shall be based 
                60 percent on the fee schedule under paragraph 
                (1) and 40 percent on the regional fee 
                schedule.
                  (D) For 2007, 2008, and 2009, the blended 
                rate shall be based 80 percent on the fee 
                schedule under paragraph (1) and 20 percent on 
                the regional fee schedule.
                  (E) For 2010 and each succeeding year, the 
                blended rate shall be based 100 percent on the 
                fee schedule under paragraph (1).
        For purposes of this paragraph, the Secretary shall 
        establish a regional fee schedule for each of the nine 
        census divisions (referred to in section 1886(d)(2)) 
        using the methodology (used in establishing the fee 
        schedule under paragraph (1)) to calculate a regional 
        conversion factor and a regional mileage payment rate 
        and using the same payment adjustments and the same 
        relative value units as used in the fee schedule under 
        such paragraph.
          (11) Adjustment in payment for certain long trips.--
        In the case of ground ambulance services furnished on 
        or after July 1, 2004, and before January 1, 2009, 
        regardless of where the transportation originates, the 
        fee schedule established under this subsection shall 
        provide that, with respect to the payment rate for 
        mileage for a trip above 50 miles the per mile rate 
        otherwise established shall be increased by \1/4\ of 
        the payment per mile otherwise applicable to miles in 
        excess of 50 miles in such trip.
          (12) Assistance for rural providers furnishing 
        services in low population density areas.--
                  (A) In general.--In the case of ground 
                ambulance services furnished on or after July 
                1, 2004, and before January 1, 2023, for which 
                the transportation originates in a qualified 
                rural area (identified under subparagraph 
                (B)(iii)), the Secretary shall provide for a 
                percent increase in the base rate of the fee 
                schedule for a trip established under this 
                subsection. In establishing such percent 
                increase, the Secretary shall estimate the 
                average cost per trip for such services (not 
                taking into account mileage) in the lowest 
                quartile as compared to the average cost per 
                trip for such services (not taking into account 
                mileage) in the highest quartile of all rural 
                county populations.
                  (B) Identification of qualified rural 
                areas.--
                          (i) Determination of population 
                        density in area.--Based upon data from 
                        the United States decennial census for 
                        the year 2000, the Secretary shall 
                        determine, for each rural area, the 
                        population density for that area.
                          (ii) Ranking of areas.--The Secretary 
                        shall rank each such area based on such 
                        population density.
                          (iii) Identification of qualified 
                        rural areas.--The Secretary shall 
                        identify those areas (in subparagraph 
                        (A) referred to as ``qualified rural 
                        areas'') with the lowest population 
                        densities that represent, if each such 
                        area were weighted by the population of 
                        such area (as used in computing such 
                        population densities), an aggregate 
                        total of 25 percent of the total of the 
                        population of all such areas.
                          (iv) Rural area.--For purposes of 
                        this paragraph, the term ``rural area'' 
                        has the meaning given such term in 
                        section 1886(d)(2)(D). If feasible, the 
                        Secretary shall treat a rural census 
                        tract of a metropolitan statistical 
                        area (as determined under the most 
                        recent modification of the Goldsmith 
                        Modification, originally published in 
                        the Federal Register on February 27, 
                        1992 (57 Fed. Reg. 6725) as a rural 
                        area for purposes of this paragraph.
                          (v) Judicial review.--There shall be 
                        no administrative or judicial review 
                        under section 1869, 1878, or otherwise, 
                        respecting the identification of an 
                        area under this subparagraph.
          (13) Temporary increase for ground ambulance 
        services.--
                  (A) In general.--After computing the rates 
                with respect to ground ambulance services under 
                the other applicable provisions of this 
                subsection, in the case of such services 
                furnished on or after July 1, 2004, and before 
                January 1, 2007, and for such services 
                furnished on or after July 1, 2008, and before 
                January 1, 2023, for which the transportation 
                originates in--
                          (i) a rural area described in 
                        paragraph (9) or in a rural census 
                        tract described in such paragraph, the 
                        fee schedule established under this 
                        section shall provide that the rate for 
                        the service otherwise established, 
                        after the application of any increase 
                        under paragraphs (11) and (12), shall 
                        be increased by 2 percent (or 3 percent 
                        if such service is furnished on or 
                        after July 1, 2008, and before January 
                        1, 2023); and
                          (ii) an area not described in clause 
                        (i), the fee schedule established under 
                        this subsection shall provide that the 
                        rate for the service otherwise 
                        established, after the application of 
                        any increase under paragraph (11), 
                        shall be increased by 1 percent (or 2 
                        percent if such service is furnished on 
                        or after July 1, 2008, and before 
                        January 1, 2023).
                  (B) Application of increased payments after 
                applicable period.--The increased payments 
                under subparagraph (A) shall not be taken into 
                account in calculating payments for services 
                furnished after the applicable period specified 
                in such subparagraph.
          (14) Providing appropriate coverage of rural air 
        ambulance services.--
                  (A) In general.--The regulations described in 
                section 1861(s)(7) shall provide, to the extent 
                that any ambulance services (whether ground or 
                air) may be covered under such section, that a 
                rural air ambulance service (as defined in 
                subparagraph (C)) is reimbursed under this 
                subsection at the air ambulance rate if the air 
                ambulance service--
                          (i) is reasonable and necessary based 
                        on the health condition of the 
                        individual being transported at or 
                        immediately prior to the time of the 
                        transport; and
                          (ii) complies with equipment and crew 
                        requirements established by the 
                        Secretary.
                  (B) Satisfaction of requirement of medically 
                necessary.--The requirement of subparagraph 
                (A)(i) is deemed to be met for a rural air 
                ambulance service if--
                          (i) subject to subparagraph (D), such 
                        service is requested by a physician or 
                        other qualified medical personnel (as 
                        specified by the Secretary) who 
                        certifies or reasonably determines that 
                        the individual's condition is such that 
                        the time needed to transport the 
                        individual by land or the instability 
                        of transportation by land poses a 
                        threat to the individual's survival or 
                        seriously endangers the individual's 
                        health; or
                          (ii) such service is furnished 
                        pursuant to a protocol that is 
                        established by a State or regional 
                        emergency medical service (EMS) agency 
                        and recognized or approved by the 
                        Secretary under which the use of an air 
                        ambulance is recommended, if such 
                        agency does not have an ownership 
                        interest in the entity furnishing such 
                        service.
                  (C) Rural air ambulance service defined.--For 
                purposes of this paragraph, the term ``rural 
                air ambulance service'' means fixed wing and 
                rotary wing air ambulance service in which the 
                point of pick up of the individual occurs in a 
                rural area (as defined in section 
                1886(d)(2)(D)) or in a rural census tract of a 
                metropolitan statistical area (as determined 
                under the most recent modification of the 
                Goldsmith Modification, originally published in 
                the Federal Register on February 27, 1992 (57 
                Fed. Reg. 6725)).
                  (D) Limitation.--
                          (i) In general.--Subparagraph (B)(i) 
                        shall not apply if there is a financial 
                        or employment relationship between the 
                        person requesting the rural air 
                        ambulance service and the entity 
                        furnishing the ambulance service, or an 
                        entity under common ownership with the 
                        entity furnishing the air ambulance 
                        service, or a financial relationship 
                        between an immediate family member of 
                        such requester and such an entity.
                          (ii) Exception.--Where a hospital and 
                        the entity furnishing rural air 
                        ambulance services are under common 
                        ownership, clause (i) shall not apply 
                        to remuneration (through employment or 
                        other relationship) by the hospital of 
                        the requester or immediate family 
                        member if the remuneration is for 
                        provider-based physician services 
                        furnished in a hospital (as described 
                        in section 1887) which are reimbursed 
                        under part A and the amount of the 
                        remuneration is unrelated directly or 
                        indirectly to the provision of rural 
                        air ambulance services.
          (15) Payment adjustment for non-emergency ambulance 
        transports for esrd beneficiaries.--The fee schedule 
        amount otherwise applicable under the preceding 
        provisions of this subsection shall be reduced by 10 
        percent for ambulance services furnished during the 
        period beginning on October 1, 2013, and ending on 
        September 30, 2018, and by 23 percent for such services 
        furnished on or after October 1, 2018, consisting of 
        non-emergency basic life support services involving 
        transport of an individual with end-stage renal disease 
        for renal dialysis services (as described in section 
        1881(b)(14)(B)) furnished other than on an emergency 
        basis by a provider of services or a renal dialysis 
        facility.
          (16) Prior authorization for repetitive scheduled 
        non-emergent ambulance transports.--
                  (A) In general.--Beginning January 1, 2017, 
                if the expansion to all States of the model of 
                prior authorization described in paragraph (2) 
                of section 515(a) of the Medicare Access and 
                CHIP Reauthorization Act of 2015 meets the 
                requirements described in paragraphs (1) 
                through (3) of section 1115A(c), then the 
                Secretary shall expand such model to all 
                States.
                  (B) Funding.--The Secretary shall use funds 
                made available under section 1893(h)(10) to 
                carry out this paragraph.
                  (C) Clarification regarding budget 
                neutrality.--Nothing in this paragraph may be 
                construed to limit or modify the application of 
                section 1115A(b)(3)(B) to models described in 
                such section, including with respect to the 
                model described in subparagraph (A) and 
                expanded beginning on January 1, 2017, under 
                such subparagraph.
          (17) Submission of cost and other information.--
                  (A) Development of data collection system.--
                The Secretary shall develop a data collection 
                system (which may include use of a cost survey) 
                to collect cost, revenue, utilization, and 
                other information determined appropriate by the 
                Secretary with respect to providers of services 
                (in this paragraph referred to as 
                ``providers'') and suppliers of ground 
                ambulance services. Such system shall be 
                designed to collect information--
                          (i) needed to evaluate the extent to 
                        which reported costs relate to payment 
                        rates under this subsection;
                          (ii) on the utilization of capital 
                        equipment and ambulance capacity, 
                        including information consistent with 
                        the type of information described in 
                        section 1121(a); and
                          (iii) on different types of ground 
                        ambulance services furnished in 
                        different geographic locations, 
                        including rural areas and low 
                        population density areas described in 
                        paragraph (12).
                  (B) Specification of data collection 
                system.--
                          (i) In general.--The Secretary 
                        shall--
                                  (I) not later than December 
                                31, 2019, specify the data 
                                collection system under 
                                subparagraph (A); and
                                  (II) identify the providers 
                                and suppliers of ground 
                                ambulance services that would 
                                be required to submit 
                                information under such data 
                                collection system, including 
                                the representative sample 
                                described in clause (ii).
                          (ii) Determination of representative 
                        sample.--
                                  (I) In general.--Not later 
                                than December 31, 2019, with 
                                respect to the data collection 
                                for the first year under such 
                                system, and for each subsequent 
                                year through 2024, the 
                                Secretary shall determine a 
                                representative sample to submit 
                                information under the data 
                                collection system.
                                  (II) Requirements.--The 
                                sample under subclause (I) 
                                shall be representative of the 
                                different types of providers 
                                and suppliers of ground 
                                ambulance services (such as 
                                those providers and suppliers 
                                that are part of an emergency 
                                service or part of a government 
                                organization) and the 
                                geographic locations in which 
                                ground ambulance services are 
                                furnished (such as urban, 
                                rural, and low population 
                                density areas).
                                  (III) Limitation.--The 
                                Secretary shall not include an 
                                individual provider or supplier 
                                of ground ambulance services in 
                                the sample under subclause (I) 
                                in 2 consecutive years, to the 
                                extent practicable.
                  (C) Reporting of cost information.--For each 
                year, a provider or supplier of ground 
                ambulance services identified by the Secretary 
                under subparagraph (B)(i)(II) as being required 
                to submit information under the data collection 
                system with respect to a period for the year 
                shall submit to the Secretary information 
                specified under the system. Such information 
                shall be submitted in a form and manner, and at 
                a time, specified by the Secretary for purposes 
                of this subparagraph.
                  (D) Payment reduction for failure to 
                report.--
                          (i) In general.--Beginning January 1, 
                        2022, subject to clause (ii), a 10 
                        percent reduction to payments under 
                        this subsection shall be made for the 
                        applicable period (as defined in clause 
                        (ii)) to a provider or supplier of 
                        ground ambulance services that--
                                  (I) is required to submit 
                                information under the data 
                                collection system with respect 
                                to a period under subparagraph 
                                (C); and
                                  (II) does not sufficiently 
                                submit such information, as 
                                determined by the Secretary.
                          (ii) Applicable period defined.--For 
                        purposes of clause (i), the term 
                        ``applicable period'' means, with 
                        respect to a provider or supplier of 
                        ground ambulance services, a year 
                        specified by the Secretary not more 
                        than 2 years after the end of the 
                        period with respect to which the 
                        Secretary has made a determination 
                        under clause (i)(II) that the provider 
                        or supplier of ground ambulance 
                        services failed to sufficiently submit 
                        information under the data collection 
                        system.
                          (iii) Hardship exemption.--The 
                        Secretary may exempt a provider or 
                        supplier from the payment reduction 
                        under clause (i) with respect to an 
                        applicable period in the event of 
                        significant hardship, such as a natural 
                        disaster, bankruptcy, or other similar 
                        situation that the Secretary determines 
                        interfered with the ability of the 
                        provider or supplier of ground 
                        ambulance services to submit such 
                        information in a timely manner for the 
                        specified period.
                          (iv) Informal review.--The Secretary 
                        shall establish a process under which a 
                        provider or supplier of ground 
                        ambulance services may seek an informal 
                        review of a determination that the 
                        provider or supplier is subject to the 
                        payment reduction under clause (i).
                  (E) Ongoing data collection.--
                          (i) Revision of data collection 
                        system.--The Secretary may, as the 
                        Secretary determines appropriate and, 
                        if available, taking into consideration 
                        the report (or reports) under 
                        subparagraph (F), revise the data 
                        collection system under subparagraph 
                        (A).
                          (ii) Subsequent data collection.--In 
                        order to continue to evaluate the 
                        extent to which reported costs relate 
                        to payment rates under this subsection 
                        and for other purposes the Secretary 
                        deems appropriate, the Secretary shall 
                        require providers and suppliers of 
                        ground ambulance services to submit 
                        information for years after 2024 as the 
                        Secretary determines appropriate, but 
                        in no case less often than once every 3 
                        years.
                  (F) Ground ambulance data collection system 
                study.--
                          (i) In general.--Not later than March 
                        15, 2023, and as determined necessary 
                        by the Medicare Payment Advisory 
                        Commission thereafter, such Commission 
                        shall assess, and submit to Congress a 
                        report on, information submitted by 
                        providers and suppliers of ground 
                        ambulance services through the data 
                        collection system under subparagraph 
                        (A), the adequacy of payments for 
                        ground ambulance services under this 
                        subsection, and geographic variations 
                        in the cost of furnishing such 
                        services.
                          (ii) Contents.--A report under clause 
                        (i) shall contain the following:
                                  (I) An analysis of 
                                information submitted through 
                                the data collection system.
                                  (II) An analysis of any 
                                burden on providers and 
                                suppliers of ground ambulance 
                                services associated with the 
                                data collection system.
                                  (III) A recommendation as to 
                                whether information should 
                                continue to be submitted 
                                through such data collection 
                                system or if such system should 
                                be revised under subparagraph 
                                (E)(i).
                                  (IV) Other information 
                                determined appropriate by the 
                                Commission.
                  (G) Public availability.--The Secretary shall 
                post information on the results of the data 
                collection under this paragraph on the Internet 
                website of the Centers for Medicare & Medicaid 
                Services, as determined appropriate by the 
                Secretary.
                  (H) Implementation.--The Secretary shall 
                implement this paragraph through notice and 
                comment rulemaking.
                  (I) Administration.--Chapter 35 of title 44, 
                United States Code, shall not apply to the 
                collection of information required under this 
                subsection.
                  (J) Limitations on review.--There shall be no 
                administrative or judicial review under section 
                1869, section 1878, or otherwise of the data 
                collection system or identification of 
                respondents under this paragraph.
                  (K) Funding for implementation.--For purposes 
                of carrying out subparagraph (A), the Secretary 
                shall provide for the transfer, from the 
                Federal Supplementary Medical Insurance Trust 
                Fund under section 1841, of $15,000,000 to the 
                Centers for Medicare & Medicaid Services 
                Program Management Account for fiscal year 
                2018. Amounts transferred under this 
                subparagraph shall remain available until 
                expended.
  (m) Payment for Telehealth Services.--
          (1) In general.--The Secretary shall pay for 
        telehealth services that are furnished via a 
        telecommunications system by a physician (as defined in 
        section 1861(r)) or a practitioner (described in 
        section 1842(b)(18)(C)) to an eligible telehealth 
        individual enrolled under this part notwithstanding 
        that the individual physician or practitioner providing 
        the telehealth service is not at the same location as 
        the beneficiary. For purposes of the preceding 
        sentence, in the case of any Federal telemedicine 
        demonstration program conducted in Alaska or Hawaii, 
        the term ``telecommunications system'' includes store-
        and-forward technologies that provide for the 
        asynchronous transmission of health care information in 
        single or multimedia formats.
          (2) Payment amount.--
                  (A) Distant site.--The Secretary shall pay to 
                a physician or practitioner located at a 
                distant site that furnishes a telehealth 
                service to an eligible telehealth individual an 
                amount equal to the amount that such physician 
                or practitioner would have been paid under this 
                title had such service been furnished without 
                the use of a telecommunications system.
                  (B) Facility fee for originating site.--
                          (i) In general.--Subject to clause 
                        (ii), with respect to a telehealth 
                        service, subject to section 
                        1833(a)(1)(U), there shall be paid to 
                        the originating site a facility fee 
                        equal to--
                                  (I) for the period beginning 
                                on October 1, 2001, and ending 
                                on December 31, 2001, and for 
                                2002, $20; and
                                  (II) for a subsequent year, 
                                the facility fee specified in 
                                subclause (I) or this subclause 
                                for the preceding year 
                                increased by the percentage 
                                increase in the MEI (as defined 
                                in section 1842(i)(3)) for such 
                                subsequent year.
                          (ii) No facility fee if originating 
                        site for home dialysis therapy is the 
                        home.--No facility fee shall be paid 
                        under this subparagraph to an 
                        originating site described in paragraph 
                        (4)(C)(ii)(X).
                  (C) Telepresenter not required.--Nothing in 
                this subsection shall be construed as requiring 
                an eligible telehealth individual to be 
                presented by a physician or practitioner at the 
                originating site for the furnishing of a 
                service via a telecommunications system, unless 
                it is medically necessary (as determined by the 
                physician or practitioner at the distant site).
          (3) Limitation on beneficiary charges.--
                  (A) Physician and practitioner.--The 
                provisions of section 1848(g) and subparagraphs 
                (A) and (B) of section 1842(b)(18) shall apply 
                to a physician or practitioner receiving 
                payment under this subsection in the same 
                manner as they apply to physicians or 
                practitioners under such sections.
                  (B) Originating site.--The provisions of 
                section 1842(b)(18) shall apply to originating 
                sites receiving a facility fee in the same 
                manner as they apply to practitioners under 
                such section.
          (4) Definitions.--For purposes of this subsection:
                  (A) Distant site.--The term ``distant site'' 
                means the site at which the physician or 
                practitioner is located at the time the service 
                is provided via a telecommunications system.
                  (B) Eligible telehealth individual.--The term 
                ``eligible telehealth individual'' means an 
                individual enrolled under this part who 
                receives a telehealth service furnished at an 
                originating site.
                  (C) Originating site.--
                          (i) In general.--Except as provided 
                        in paragraph (6), the term``originating 
                        site'' means only those sites described 
                        in clause (ii) at which the eligible 
                        telehealth individual is located at the 
                        time the service is furnished via a 
                        telecommunications system and only if 
                        such site is located--
                                  (I) in an area that is 
                                designated as a rural health 
                                professional shortage area 
                                under section 332(a)(1)(A) of 
                                the Public Health Service Act 
                                (42 U.S.C. 254e(a)(1)(A));
                                  (II) in a county that is not 
                                included in a Metropolitan 
                                Statistical Area; or
                                  (III) from an entity that 
                                participates in a Federal 
                                telemedicine demonstration 
                                project that has been approved 
                                by (or receives funding from) 
                                the Secretary of Health and 
                                Human Services as of December 
                                31, 2000.
                          (ii) Sites described.--The sites 
                        referred to in clause (i) are the 
                        following sites:
                                  (I) The office of a physician 
                                or practitioner.
                                  (II) A critical access 
                                hospital (as defined in section 
                                1861(mm)(1)).
                                  (III) A rural health clinic 
                                (as defined in section 
                                1861(aa)(2)).
                                  (IV) A Federally qualified 
                                health center (as defined in 
                                section 1861(aa)(4)).
                                  (V) A hospital (as defined in 
                                section 1861(e)).
                                  (VI) A hospital-based or 
                                critical access hospital-based 
                                renal dialysis center 
                                (including satellites).
                                  (VII) A skilled nursing 
                                facility (as defined in section 
                                1819(a)).
                                  (VIII) A community mental 
                                health center (as defined in 
                                section 1861(ff)(3)(B)).
                                  (IX) A renal dialysis 
                                facility, but only for purposes 
                                of section 1881(b)(3)(B).
                                  (X) The home of an 
                                individual, but only for 
                                purposes of section 
                                1881(b)(3)(B).
                  (D) Physician.--The term ``physician'' has 
                the meaning given that term in section 1861(r).
                  (E) Practitioner.--The term ``practitioner'' 
                has the meaning given that term in section 
                1842(b)(18)(C).
                  (F) Telehealth service.--
                          (i) In general.--The term 
                        ``telehealth service'' means 
                        professional consultations, office 
                        visits, and office psychiatry services 
                        (identified as of July 1, 2000, by 
                        HCPCS codes 99241-99275, 99201-99215, 
                        90804-90809, and 90862 (and as 
                        subsequently modified by the 
                        Secretary)), and any additional service 
                        specified by the Secretary.
                          (ii) Yearly update.--The Secretary 
                        shall establish a process that 
                        provides, on an annual basis, for the 
                        addition or deletion of services (and 
                        HCPCS codes), as appropriate, to those 
                        specified in clause (i) for authorized 
                        payment under paragraph (1).
          (5) Treatment of home dialysis monthly esrd-related 
        visit.--The geographic requirements described in 
        paragraph (4)(C)(i) shall not apply with respect to 
        telehealth services furnished on or after January 1, 
        2019, for purposes of section 1881(b)(3)(B), at an 
        originating site described in subclause (VI), (IX), or 
        (X) of paragraph (4)(C)(ii).
          (6) Treatment of stroke telehealth services.--
                  (A) Non-application of originating site 
                requirements.--The requirements described in 
                paragraph (4)(C) shall not apply with respect 
                to telehealth services furnished on or after 
                January 1, 2019, for purposes of diagnosis, 
                evaluation, or treatment of symptoms of an 
                acute stroke, as determined by the Secretary.
                  (B) Inclusion of certain sites.--With respect 
                to telehealth services described in 
                subparagraph (A), the term ``originating site'' 
                shall include any hospital (as defined in 
                section 1861(e)) or critical access hospital 
                (as defined in section 1861(mm)(1)), any mobile 
                stroke unit (as defined by the Secretary), or 
                any other site determined appropriate by the 
                Secretary, at which the eligible telehealth 
                individual is located at the time the service 
                is furnished via a telecommunications system.
                  (C) No originating site facility fee for new 
                sites.--No facility fee shall be paid under 
                paragraph (2)(B) to an originating site with 
                respect to a telehealth service described in 
                subparagraph (A) if the originating site does 
                not otherwise meet the requirements for an 
                originating site under paragraph (4)(C).
  (n) Authority To Modify or Eliminate Coverage of Certain 
Preventive Services.--Notwithstanding any other provision of 
this title, effective beginning on January 1, 2010, if the 
Secretary determines appropriate, the Secretary may--
          (1) modify--
                  (A) the coverage of any preventive service 
                described in subparagraph (A) of section 
                1861(ddd)(3) to the extent that such 
                modification is consistent with the 
                recommendations of the United States Preventive 
                Services Task Force; and
                  (B) the services included in the initial 
                preventive physical examination described in 
                subparagraph (B) of such section; and
          (2) provide that no payment shall be made under this 
        title for a preventive service described in 
        subparagraph (A) of such section that has not received 
        a grade of A, B, C, or I by such Task Force.
  (o) Development and Implementation of Prospective Payment 
System.--
          (1) Development.--
                  (A) In general.--The Secretary shall develop 
                a prospective payment system for payment for 
                Federally qualified health center services 
                furnished by Federally qualified health centers 
                under this title. Such system shall include a 
                process for appropriately describing the 
                services furnished by Federally qualified 
                health centers and shall establish payment 
                rates for specific payment codes based on such 
                appropriate descriptions of services. Such 
                system shall be established to take into 
                account the type, intensity, and duration of 
                services furnished by Federally qualified 
                health centers. Such system may include 
                adjustments, including geographic adjustments, 
                determined appropriate by the Secretary.
                  (B) Collection of data and evaluation.--By 
                not later than January 1, 2011, the Secretary 
                shall require Federally qualified health 
                centers to submit to the Secretary such 
                information as the Secretary may require in 
                order to develop and implement the prospective 
                payment system under this subsection, including 
                the reporting of services using HCPCS codes.
          (2) Implementation.--
                  (A) In general.--Notwithstanding section 
                1833(a)(3)(A), the Secretary shall provide, for 
                cost reporting periods beginning on or after 
                October 1, 2014, for payments of prospective 
                payment rates for Federally qualified health 
                center services furnished by Federally 
                qualified health centers under this title in 
                accordance with the prospective payment system 
                developed by the Secretary under paragraph (1).
                  (B) Payments.--
                          (i) Initial payments.--The Secretary 
                        shall implement such prospective 
                        payment system so that the estimated 
                        aggregate amount of prospective payment 
                        rates (determined prior to the 
                        application of section 1833(a)(1)(Z)) 
                        under this title for Federally 
                        qualified health center services in the 
                        first year that such system is 
                        implemented is equal to 100 percent of 
                        the estimated amount of reasonable 
                        costs (determined without the 
                        application of a per visit payment 
                        limit or productivity screen and prior 
                        to the application of section 
                        1866(a)(2)(A)(ii)) that would have 
                        occurred for such services under this 
                        title in such year if the system had 
                        not been implemented.
                          (ii) Payments in subsequent years.--
                        Payment rates in years after the year 
                        of implementation of such system shall 
                        be the payment rates in the previous 
                        year increased--
                                  (I) in the first year after 
                                implementation of such system, 
                                by the percentage increase in 
                                the MEI (as defined in section 
                                1842(i)(3)) for the year 
                                involved; and
                                  (II) in subsequent years, by 
                                the percentage increase in a 
                                market basket of Federally 
                                qualified health center goods 
                                and services as promulgated 
                                through regulations, or if such 
                                an index is not available, by 
                                the percentage increase in the 
                                MEI (as defined in section 
                                1842(i)(3)) for the year 
                                involved.
                  (C) Preparation for pps implementation.--
                Notwithstanding any other provision of law, the 
                Secretary may establish and implement by 
                program instruction or otherwise the payment 
                codes to be used under the prospective payment 
                system under this section.
          (3) Additional payments for certain fqhcs with 
        physicians or other practitioners receiving data 2000 
        waivers.--
                  (A) In general.--In the case of a Federally 
                qualified health center with respect to which, 
                beginning on or after January 1, 2019, 
                Federally-qualified health center services (as 
                defined in section 1861(aa)(3)) are furnished 
                for the treatment of opioid use disorder by a 
                physician or practitioner who meets the 
                requirements described in subparagraph (C) the 
                Secretary shall, subject to availability of 
                funds under subparagraph (D), make a payment 
                (at such time and in such manner as specified 
                by the Secretary) to such Federally qualified 
                health center after receiving and approving an 
                application submitted by such Federally 
                qualified health center under subparagraph (B). 
                Such a payment shall be in an amount determined 
                by the Secretary, based on an estimate of the 
                average costs of training for purposes of 
                receiving a waiver described in subparagraph 
                (C)(ii). Such a payment may be made only one 
                time with respect to each such physician or 
                practitioner.
                  (B) Application.--In order to receive a 
                payment described in subparagraph (A), a 
                Federally-qualified health center shall submit 
                to the Secretary an application for such a 
                payment at such time, in such manner, and 
                containing such information as specified by the 
                Secretary. A Federally-qualified health center 
                may apply for such a payment for each physician 
                or practitioner described in subparagraph (A) 
                furnishing services described in such 
                subparagraph at such center.
                  (C) Requirements.--For purposes of 
                subparagraph (A), the requirements described in 
                this subparagraph, with respect to a physician 
                or practitioner, are the following:
                          (i) The physician or practitioner is 
                        employed by or working under contract 
                        with a Federally qualified health 
                        center described in subparagraph (A) 
                        that submits an application under 
                        subparagraph (B).
                          (ii) The physician or practitioner 
                        first receives a waiver under section 
                        303(g) of the Controlled Substances 
                        Acton or after January 1, 2019.
                  (D) Funding.--For purposes of making payments 
                under this paragraph, there are appropriated, 
                out of amounts in the Treasury not otherwise 
                appropriated, $6,000,000, which shall remain 
                available until expended.
  (p) Quality Incentives To Promote Patient Safety and Public 
Health in Computed Tomography.--
          (1) Quality incentives.--In the case of an applicable 
        computed tomography service (as defined in paragraph 
        (2)) for which payment is made under an applicable 
        payment system (as defined in paragraph (3)) and that 
        is furnished on or after January 1, 2016, using 
        equipment that is not consistent with the CT equipment 
        standard (described in paragraph (4)), the payment 
        amount for such service shall be reduced by the 
        applicable percentage (as defined in paragraph (5)).
          (2) Applicable computed tomography services 
        defined.--In this subsection, the term ``applicable 
        computed tomography service'' means a service billed 
        using diagnostic radiological imaging codes for 
        computed tomography (identified as of January 1, 2014, 
        by HCPCS codes 70450-70498, 71250-71275, 72125-72133, 
        72191-72194, 73200-73206, 73700-73706, 74150-74178, 
        74261-74263, and 75571-75574 (and any succeeding 
        codes).
          (3) Applicable payment system defined.--In this 
        subsection, the term ``applicable payment system'' 
        means the following:
                  (A) The technical component and the technical 
                component of the global fee under the fee 
                schedule established under section 1848(b).
                  (B) The prospective payment system for 
                hospital outpatient department services under 
                section 1833(t).
          (4) Consistency with ct equipment standard.--In this 
        subsection, the term ``not consistent with the CT 
        equipment standard'' means, with respect to an 
        applicable computed tomography service, that the 
        service was furnished using equipment that does not 
        meet each of the attributes of the National Electrical 
        Manufacturers Association (NEMA) Standard XR-29-2013, 
        entitled ``Standard Attributes on CT Equipment Related 
        to Dose Optimization and Management''. Through 
        rulemaking, the Secretary may apply successor 
        standards.
          (5) Applicable percentage defined.--In this 
        subsection, the term ``applicable percentage'' means--
                  (A) for 2016, 5 percent; and
                  (B) for 2017 and subsequent years, 15 
                percent.
          (6) Implementation.--
                  (A) Information.--The Secretary shall require 
                that information be provided and attested to by 
                a supplier and a hospital outpatient department 
                that indicates whether an applicable computed 
                tomography service was furnished that was not 
                consistent with the CT equipment standard 
                (described in paragraph (4)). Such information 
                may be included on a claim and may be a 
                modifier. Such information shall be verified, 
                as appropriate, as part of the periodic 
                accreditation of suppliers under section 
                1834(e) and hospitals under section 1865(a).
                  (B) Administration.--Chapter 35 of title 44, 
                United States Code, shall not apply to 
                information described in subparagraph (A).
  (q) Recognizing Appropriate Use Criteria for Certain Imaging 
Services.--
          (1) Program established.--
                  (A) In general.--The Secretary shall 
                establish a program to promote the use of 
                appropriate use criteria (as defined in 
                subparagraph (B)) for applicable imaging 
                services (as defined in subparagraph (C)) 
                furnished in an applicable setting (as defined 
                in subparagraph (D)) by ordering professionals 
                and furnishing professionals (as defined in 
                subparagraphs (E) and (F), respectively).
                  (B) Appropriate use criteria defined.--In 
                this subsection, the term ``appropriate use 
                criteria'' means criteria, only developed or 
                endorsed by national professional medical 
                specialty societies or other provider-led 
                entities, to assist ordering professionals and 
                furnishing professionals in making the most 
                appropriate treatment decision for a specific 
                clinical condition for an individual. To the 
                extent feasible, such criteria shall be 
                evidence-based.
                  (C) Applicable imaging service defined.--In 
                this subsection, the term ``applicable imaging 
                service'' means an advanced diagnostic imaging 
                service (as defined in subsection (e)(1)(B)) 
                for which the Secretary determines--
                          (i) one or more applicable 
                        appropriate use criteria specified 
                        under paragraph (2) apply;
                          (ii) there are one or more qualified 
                        clinical decision support mechanisms 
                        listed under paragraph (3)(C); and
                          (iii) one or more of such mechanisms 
                        is available free of charge.
                  (D) Applicable setting defined.--In this 
                subsection, the term ``applicable setting'' 
                means a physician's office, a hospital 
                outpatient department (including an emergency 
                department), an ambulatory surgical center, and 
                any other provider-led outpatient setting 
                determined appropriate by the Secretary.
                  (E) Ordering professional defined.--In this 
                subsection, the term ``ordering professional'' 
                means a physician (as defined in section 
                1861(r)) or a practitioner described in section 
                1842(b)(18)(C) who orders an applicable imaging 
                service.
                  (F) Furnishing professional defined.--In this 
                subsection, the term ``furnishing 
                professional'' means a physician (as defined in 
                section 1861(r)) or a practitioner described in 
                section 1842(b)(18)(C) who furnishes an 
                applicable imaging service.
          (2) Establishment of applicable appropriate use 
        criteria.--
                  (A) In general.--Not later than November 15, 
                2015, the Secretary shall through rulemaking, 
                and in consultation with physicians, 
                practitioners, and other stakeholders, specify 
                applicable appropriate use criteria for 
                applicable imaging services only from among 
                appropriate use criteria developed or endorsed 
                by national professional medical specialty 
                societies or other provider-led entities.
                  (B) Considerations.--In specifying applicable 
                appropriate use criteria under subparagraph 
                (A), the Secretary shall take into account 
                whether the criteria--
                          (i) have stakeholder consensus;
                          (ii) are scientifically valid and 
                        evidence based; and
                          (iii) are based on studies that are 
                        published and reviewable by 
                        stakeholders.
                  (C) Revisions.--The Secretary shall review, 
                on an annual basis, the specified applicable 
                appropriate use criteria to determine if there 
                is a need to update or revise (as appropriate) 
                such specification of applicable appropriate 
                use criteria and make such updates or revisions 
                through rulemaking.
                  (D) Treatment of multiple applicable 
                appropriate use criteria.--In the case where 
                the Secretary determines that more than one 
                appropriate use criterion applies with respect 
                to an applicable imaging service, the Secretary 
                shall apply one or more applicable appropriate 
                use criteria under this paragraph for the 
                service.
          (3) Mechanisms for consultation with applicable 
        appropriate use criteria.--
                  (A) Identification of mechanisms to consult 
                with applicable appropriate use criteria.--
                          (i) In general.--The Secretary shall 
                        specify qualified clinical decision 
                        support mechanisms that could be used 
                        by ordering professionals to consult 
                        with applicable appropriate use 
                        criteria for applicable imaging 
                        services.
                          (ii) Consultation.--The Secretary 
                        shall consult with physicians, 
                        practitioners, health care technology 
                        experts, and other stakeholders in 
                        specifying mechanisms under this 
                        paragraph.
                          (iii) Inclusion of certain 
                        mechanisms.--Mechanisms specified under 
                        this paragraph may include any or all 
                        of the following that meet the 
                        requirements described in subparagraph 
                        (B)(ii):
                                  (I) Use of clinical decision 
                                support modules in certified 
                                EHR technology (as defined in 
                                section 1848(o)(4)).
                                  (II) Use of private sector 
                                clinical decision support 
                                mechanisms that are independent 
                                from certified EHR technology, 
                                which may include use of 
                                clinical decision support 
                                mechanisms available from 
                                medical specialty 
                                organizations.
                                  (III) Use of a clinical 
                                decision support mechanism 
                                established by the Secretary.
                  (B) Qualified clinical decision support 
                mechanisms.--
                          (i) In general.--For purposes of this 
                        subsection, a qualified clinical 
                        decision support mechanism is a 
                        mechanism that the Secretary determines 
                        meets the requirements described in 
                        clause (ii).
                          (ii) Requirements.--The requirements 
                        described in this clause are the 
                        following:
                                  (I) The mechanism makes 
                                available to the ordering 
                                professional applicable 
                                appropriate use criteria 
                                specified under paragraph (2) 
                                and the supporting 
                                documentation for the 
                                applicable imaging service 
                                ordered.
                                  (II) In the case where there 
                                is more than one applicable 
                                appropriate use criterion 
                                specified under such paragraph 
                                for an applicable imaging 
                                service, the mechanism 
                                indicates the criteria that it 
                                uses for the service.
                                  (III) The mechanism 
                                determines the extent to which 
                                an applicable imaging service 
                                ordered is consistent with the 
                                applicable appropriate use 
                                criteria so specified.
                                  (IV) The mechanism generates 
                                and provides to the ordering 
                                professional a certification or 
                                documentation that documents 
                                that the qualified clinical 
                                decision support mechanism was 
                                consulted by the ordering 
                                professional.
                                  (V) The mechanism is updated 
                                on a timely basis to reflect 
                                revisions to the specification 
                                of applicable appropriate use 
                                criteria under such paragraph.
                                  (VI) The mechanism meets 
                                privacy and security standards 
                                under applicable provisions of 
                                law.
                                  (VII) The mechanism performs 
                                such other functions as 
                                specified by the Secretary, 
                                which may include a requirement 
                                to provide aggregate feedback 
                                to the ordering professional.
                  (C) List of mechanisms for consultation with 
                applicable appropriate use criteria.--
                          (i) Initial list.--Not later than 
                        April 1, 2016, the Secretary shall 
                        publish a list of mechanisms specified 
                        under this paragraph.
                          (ii) Periodic updating of list.--The 
                        Secretary shall identify on an annual 
                        basis the list of qualified clinical 
                        decision support mechanisms specified 
                        under this paragraph.
          (4) Consultation with applicable appropriate use 
        criteria.--
                  (A) Consultation by ordering professional.--
                Beginning with January 1, 2017, subject to 
                subparagraph (C), with respect to an applicable 
                imaging service ordered by an ordering 
                professional that would be furnished in an 
                applicable setting and paid for under an 
                applicable payment system (as defined in 
                subparagraph (D)), an ordering professional 
                shall--
                          (i) consult with a qualified decision 
                        support mechanism listed under 
                        paragraph (3)(C); and
                          (ii) provide to the furnishing 
                        professional the information described 
                        in clauses (i) through (iii) of 
                        subparagraph (B).
                  (B) Reporting by furnishing professional.--
                Beginning with January 1, 2017, subject to 
                subparagraph (C), with respect to an applicable 
                imaging service furnished in an applicable 
                setting and paid for under an applicable 
                payment system (as defined in subparagraph 
                (D)), payment for such service may only be made 
                if the claim for the service includes the 
                following:
                          (i) Information about which qualified 
                        clinical decision support mechanism was 
                        consulted by the ordering professional 
                        for the service.
                          (ii) Information regarding--
                                  (I) whether the service 
                                ordered would adhere to the 
                                applicable appropriate use 
                                criteria specified under 
                                paragraph (2);
                                  (II) whether the service 
                                ordered would not adhere to 
                                such criteria; or
                                  (III) whether such criteria 
                                was not applicable to the 
                                service ordered.
                          (iii) The national provider 
                        identifier of the ordering professional 
                        (if different from the furnishing 
                        professional).
                  (C) Exceptions.--The provisions of 
                subparagraphs (A) and (B) and paragraph (6)(A) 
                shall not apply to the following:
                          (i) Emergency services.--An 
                        applicable imaging service ordered for 
                        an individual with an emergency medical 
                        condition (as defined in section 
                        1867(e)(1)).
                          (ii) Inpatient services.--An 
                        applicable imaging service ordered for 
                        an inpatient and for which payment is 
                        made under part A.
                          (iii) Significant hardship.--An 
                        applicable imaging service ordered by 
                        an ordering professional who the 
                        Secretary may, on a case-by-case basis, 
                        exempt from the application of such 
                        provisions if the Secretary determines, 
                        subject to annual renewal, that 
                        consultation with applicable 
                        appropriate use criteria would result 
                        in a significant hardship, such as in 
                        the case of a professional who 
                        practices in a rural area without 
                        sufficient Internet access.
                  (D) Applicable payment system defined.--In 
                this subsection, the term ``applicable payment 
                system'' means the following:
                          (i) The physician fee schedule 
                        established under section 1848(b).
                          (ii) The prospective payment system 
                        for hospital outpatient department 
                        services under section 1833(t).
                          (iii) The ambulatory surgical center 
                        payment systems under section 1833(i).
          (5) Identification of outlier ordering 
        professionals.--
                  (A) In general.--With respect to applicable 
                imaging services furnished beginning with 2017, 
                the Secretary shall determine, on an annual 
                basis, no more than five percent of the total 
                number of ordering professionals who are 
                outlier ordering professionals.
                  (B) Outlier ordering professionals.--The 
                determination of an outlier ordering 
                professional shall--
                          (i) be based on low adherence to 
                        applicable appropriate use criteria 
                        specified under paragraph (2), which 
                        may be based on comparison to other 
                        ordering professionals; and
                          (ii) include data for ordering 
                        professionals for whom prior 
                        authorization under paragraph (6)(A) 
                        applies.
                  (C) Use of two years of data.--The Secretary 
                shall use two years of data to identify outlier 
                ordering professionals under this paragraph.
                  (D) Process.--The Secretary shall establish a 
                process for determining when an outlier 
                ordering professional is no longer an outlier 
                ordering professional.
                  (E) Consultation with stakeholders.--The 
                Secretary shall consult with physicians, 
                practitioners and other stakeholders in 
                developing methods to identify outlier ordering 
                professionals under this paragraph.
          (6) Prior authorization for ordering professionals 
        who are outliers.--
                  (A) In general.--Beginning January 1, 2020, 
                subject to paragraph (4)(C), with respect to 
                services furnished during a year, the Secretary 
                shall, for a period determined appropriate by 
                the Secretary, apply prior authorization for 
                applicable imaging services that are ordered by 
                an outlier ordering professional identified 
                under paragraph (5).
                  (B) Appropriate use criteria in prior 
                authorization.--In applying prior authorization 
                under subparagraph (A), the Secretary shall 
                utilize only the applicable appropriate use 
                criteria specified under this subsection.
                  (C) Funding.--For purposes of carrying out 
                this paragraph, the Secretary shall provide for 
                the transfer, from the Federal Supplementary 
                Medical Insurance Trust Fund under section 
                1841, of $5,000,000 to the Centers for Medicare 
                & Medicaid Services Program Management Account 
                for each of fiscal years 2019 through 2021. 
                Amounts transferred under the preceding 
                sentence shall remain available until expended.
          (7) Construction.--Nothing in this subsection shall 
        be construed as granting the Secretary the authority to 
        develop or initiate the development of clinical 
        practice guidelines or appropriate use criteria.
  (r) Payment for Renal Dialysis Services for Individuals With 
Acute Kidney Injury.--
          (1) Payment rate.--In the case of renal dialysis 
        services (as defined in subparagraph (B) of section 
        1881(b)(14)) furnished under this part by a renal 
        dialysis facility or provider of services paid under 
        such section during a year (beginning with 2017) to an 
        individual with acute kidney injury (as defined in 
        paragraph (2)), the amount of payment under this part 
        for such services shall be the base rate for renal 
        dialysis services determined for such year under such 
        section, as adjusted by any applicable geographic 
        adjustment factor applied under subparagraph 
        (D)(iv)(II) of such section and may be adjusted by the 
        Secretary (on a budget neutral basis for payments under 
        this paragraph) by any other adjustment factor under 
        subparagraph (D) of such section.
          (2) Individual with acute kidney injury defined.--In 
        this subsection, the term ``individual with acute 
        kidney injury'' means an individual who has acute loss 
        of renal function and does not receive renal dialysis 
        services for which payment is made under section 
        1881(b)(14).
  (s) Payment for Applicable Disposable Devices.--
          (1) Separate payment.--The Secretary shall make a 
        payment (separate from the payments otherwise made 
        under section 1895) in the amount established under 
        paragraph (3) to a home health agency for an applicable 
        disposable device (as defined in paragraph (2)) when 
        furnished on or after January 1, 2017, to an individual 
        who receives home health services for which payment is 
        made under section 1895(b).
          (2) Applicable disposable device.--In this 
        subsection, the term applicable disposable device means 
        a disposable device that, as determined by the 
        Secretary, is--
                  (A) a disposable negative pressure wound 
                therapy device that is an integrated system 
                comprised of a non-manual vacuum pump, a 
                receptacle for collecting exudate, and 
                dressings for the purposes of wound therapy; 
                and
                  (B) a substitute for, and used in lieu of, a 
                negative pressure wound therapy durable medical 
                equipment item that is an integrated system of 
                a negative pressure vacuum pump, a separate 
                exudate collection canister, and dressings that 
                would otherwise be covered for individuals for 
                such wound therapy.
          (3) Payment amount.--The separate payment amount 
        established under this paragraph for an applicable 
        disposable device for a year shall be equal to the 
        amount of the payment that would be made under section 
        1833(t) (relating to payment for covered OPD services) 
        for the year for the Level I Healthcare Common 
        Procedure Coding System (HCPCS) code for which the 
        description for a professional service includes the 
        furnishing of such device.
  (t) Site-of-Service Price Transparency.--
          (1) In general.--In order to facilitate price 
        transparency with respect to items and services for 
        which payment may be made either to a hospital 
        outpatient department or to an ambulatory surgical 
        center under this title, the Secretary shall, for 2018 
        and each year thereafter, make available to the public 
        via a searchable Internet website, with respect to an 
        appropriate number of such items and services--
                  (A) the estimated payment amount for the item 
                or service under the outpatient department fee 
                schedule under subsection (t) of section 1833 
                and the ambulatory surgical center payment 
                system under subsection (i) of such section; 
                and
                  (B) the estimated amount of beneficiary 
                liability applicable to the item or service.
          (2) Calculation of estimated beneficiary liability.--
        For purposes of paragraph (1)(B), the estimated amount 
        of beneficiary liability, with respect to an item or 
        service, is the amount for such item or service for 
        which an individual who does not have coverage under a 
        Medicare supplemental policy certified under section 
        1882 or any other supplemental insurance coverage is 
        responsible.
          (3) Implementation.--In carrying out this subsection, 
        the Secretary--
                  (A) shall include in the notice described in 
                section 1804(a) a notification of the 
                availability of the estimated amounts made 
                available under paragraph (1); and
                  (B) may utilize mechanisms in existence on 
                the date of enactment of this subsection, such 
                as the portion of the Internet website of the 
                Centers for Medicare & Medicaid Services on 
                which information comparing physician 
                performance is posted (commonly referred to as 
                the Physician Compare Internet website), to 
                make available such estimated amounts under 
                such paragraph.
          (4) Funding.--For purposes of implementing this 
        subsection, the Secretary shall provide for the 
        transfer, from the Federal Supplementary Medical 
        Insurance Trust Fund under section 1841 to the Centers 
        for Medicare & Medicaid Services Program Management 
        Account, of $6,000,000 for fiscal year 2017, to remain 
        available until expended.
  (u) Payment and Related Requirements for Home Infusion 
Therapy.--
          (1) Payment.--
                  (A) Single payment.--
                          (i) In general.--Subject to clause 
                        (iii) and subparagraphs (B) and (C), 
                        the Secretary shall implement a payment 
                        system under which a single payment is 
                        made under this title to a qualified 
                        home infusion therapy supplier for 
                        items and services described in 
                        subparagraphs (A) and (B) of section 
                        1861(iii)(2)) furnished by a qualified 
                        home infusion therapy supplier (as 
                        defined in section 1861(iii)(3)(D)) in 
                        coordination with the furnishing of 
                        home infusion drugs (as defined in 
                        section 1861(iii)(3)(C)) under this 
                        part.
                          (ii) Unit of single payment.--A unit 
                        of single payment under the payment 
                        system implemented under this 
                        subparagraph is for each infusion drug 
                        administration calendar day in the 
                        individual's home. The Secretary shall, 
                        as appropriate, establish single 
                        payment amounts for types of infusion 
                        therapy, including to take into account 
                        variation in utilization of nursing 
                        services by therapy type.
                          (iii) Limitation.--The single payment 
                        amount determined under this 
                        subparagraph after application of 
                        subparagraph (B) and paragraph (3) 
                        shall not exceed the amount determined 
                        under the fee schedule under section 
                        1848 for infusion therapy services 
                        furnished in a calendar day if 
                        furnished in a physician office 
                        setting, except such single payment 
                        shall not reflect more than 5 hours of 
                        infusion for a particular therapy in a 
                        calendar day.
                  (B) Required adjustments.--The Secretary 
                shall adjust the single payment amount 
                determined under subparagraph (A) for home 
                infusion therapy services under section 
                1861(iii)(1) to reflect other factors such as--
                          (i) a geographic wage index and other 
                        costs that may vary by region; and
                          (ii) patient acuity and complexity of 
                        drug administration.
                  (C) Discretionary adjustments.--
                          (i) In general.--Subject to clause 
                        (ii), the Secretary may adjust the 
                        single payment amount determined under 
                        subparagraph (A) (after application of 
                        subparagraph (B)) to reflect outlier 
                        situations and other factors as the 
                        Secretary determines appropriate.
                          (ii) Requirement of budget 
                        neutrality.--Any adjustment under this 
                        subparagraph shall be made in a budget 
                        neutral manner.
          (2) Considerations.--In developing the payment system 
        under this subsection, the Secretary may consider the 
        costs of furnishing infusion therapy in the home, 
        consult with home infusion therapy suppliers, consider 
        payment amounts for similar items and services under 
        this part and part A, and consider payment amounts 
        established by Medicare Advantage plans under part C 
        and in the private insurance market for home infusion 
        therapy (including average per treatment day payment 
        amounts by type of home infusion therapy).
          (3) Annual updates.--
                  (A) In general.--Subject to subparagraph (B), 
                the Secretary shall update the single payment 
                amount under this subsection from year to year 
                beginning in 2022 by increasing the single 
                payment amount from the prior year by the 
                percentage increase in the Consumer Price Index 
                for all urban consumers (United States city 
                average) for the 12-month period ending with 
                June of the preceding year.
                  (B) Adjustment.--For each year, the Secretary 
                shall reduce the percentage increase described 
                in subparagraph (A) by the productivity 
                adjustment described in section 
                1886(b)(3)(B)(xi)(II). The application of the 
                preceding sentence may result in a percentage 
                being less than 0.0 for a year, and may result 
                in payment being less than such payment rates 
                for the preceding year.
          (4) Authority to apply prior authorization.--The 
        Secretary may, as determined appropriate by the 
        Secretary, apply prior authorization for home infusion 
        therapy services under section 1861(iii)(1).
          (5) Accreditation of qualified home infusion therapy 
        suppliers.--
                  (A) Factors for designation of accreditation 
                organizations.--The Secretary shall consider 
                the following factors in designating 
                accreditation organizations under subparagraph 
                (B) and in reviewing and modifying the list of 
                accreditation organizations designated pursuant 
                to subparagraph (C):
                          (i) The ability of the organization 
                        to conduct timely reviews of 
                        accreditation applications.
                          (ii) The ability of the organization 
                        to take into account the capacities of 
                        suppliers located in a rural area (as 
                        defined in section 1886(d)(2)(D)).
                          (iii) Whether the organization has 
                        established reasonable fees to be 
                        charged to suppliers applying for 
                        accreditation.
                          (iv) Such other factors as the 
                        Secretary determines appropriate.
                  (B) Designation.--Not later than January 1, 
                2021, the Secretary shall designate 
                organizations to accredit suppliers furnishing 
                home infusion therapy. The list of 
                accreditation organizations so designated may 
                be modified pursuant to subparagraph (C).
                  (C) Review and modification of list of 
                accreditation organizations.--
                          (i) In general.--The Secretary shall 
                        review the list of accreditation 
                        organizations designated under 
                        subparagraph (B) taking into account 
                        the factors under subparagraph (A). 
                        Taking into account the results of such 
                        review, the Secretary may, by 
                        regulation, modify the list of 
                        accreditation organizations designated 
                        under subparagraph (B).
                          (ii) Special rule for accreditations 
                        done prior to removal from list of 
                        designated accreditation 
                        organizations.--In the case where the 
                        Secretary removes an organization from 
                        the list of accreditation organizations 
                        designated under subparagraph (B), any 
                        supplier that is accredited by the 
                        organization during the period 
                        beginning on the date on which the 
                        organization is designated as an 
                        accreditation organization under 
                        subparagraph (B) and ending on the date 
                        on which the organization is removed 
                        from such list shall be considered to 
                        have been accredited by an organization 
                        designated by the Secretary under 
                        subparagraph (B) for the remaining 
                        period such accreditation is in effect.
                  (D) Rule for accreditations made prior to 
                designation.--In the case of a supplier that is 
                accredited before January 1, 2021, by an 
                accreditation organization designated by the 
                Secretary under subparagraph (B) as of January 
                1, 2019, such supplier shall be considered to 
                have been accredited by an organization 
                designated by the Secretary under such 
                paragraph as of January 1, 2023, for the 
                remaining period such accreditation is in 
                effect.
          (6) Notification of infusion therapy options 
        available prior to furnishing home infusion therapy.--
        Prior to the furnishing of home infusion therapy to an 
        individual, the physician who establishes the plan 
        described in section 1861(iii)(1) for the individual 
        shall provide notification (in a form, manner, and 
        frequency determined appropriate by the Secretary) of 
        the options available (such as home, physician's 
        office, hospital outpatient department) for the 
        furnishing of infusion therapy under this part.
          (7) Home infusion therapy services temporary 
        transitional payment.--
                  (A) Temporary transitional payment.--
                          (i) In general.--The Secretary shall, 
                        in accordance with the payment 
                        methodology described in subparagraph 
                        (B) and subject to the provisions of 
                        this paragraph, provide a home infusion 
                        therapy services temporary transitional 
                        payment under this part to an eligible 
                        home infusion supplier (as defined in 
                        subparagraph (F)) for items and 
                        services described in subparagraphs (A) 
                        and (B) of section 1861(iii)(2)) 
                        furnished during the period specified 
                        in clause (ii) by such supplier in 
                        coordination with the furnishing of 
                        transitional home infusion drugs (as 
                        defined in clause (iii)).
                          (ii) Period specified.--For purposes 
                        of clause (i), the period specified in 
                        this clause is the period beginning on 
                        January 1, 2019, and ending on the day 
                        before the date of the implementation 
                        of the payment system under paragraph 
                        (1)(A).
                          (iii) Transitional home infusion drug 
                        defined.--For purposes of this 
                        paragraph, the term ``transitional home 
                        infusion drug'' has the meaning given 
                        to the term ``home infusion drug'' 
                        under section 1861(iii)(3)(C)), except 
                        that clause (ii) of such section shall 
                        not apply if a drug described in such 
                        clause is identified in clauses (i), 
                        (ii), (iii) or (iv) of subparagraph (C) 
                        as of the date of the enactment of this 
                        paragraph.
                  (B) Payment methodology.--For purposes of 
                this paragraph, the Secretary shall establish a 
                payment methodology, with respect to items and 
                services described in subparagraph (A)(i). 
                Under such payment methodology the Secretary 
                shall--
                          (i) create the three payment 
                        categories described in clauses (i), 
                        (ii), and (iii) of subparagraph (C);
                          (ii) assign drugs to such categories, 
                        in accordance with such clauses;
                          (iii) assign appropriate Healthcare 
                        Common Procedure Coding System (HCPCS) 
                        codes to each payment category; and
                          (iv) establish a single payment 
                        amount for each such payment category, 
                        in accordance with subparagraph (D), 
                        for each infusion drug administration 
                        calendar day in the individual's home 
                        for drugs assigned to such category.
                  (C) Payment categories.--
                          (i) Payment category 1.--The 
                        Secretary shall create a payment 
                        category 1 and assign to such category 
                        drugs which are covered under the Local 
                        Coverage Determination on External 
                        Infusion Pumps (LCD number L33794) and 
                        billed with the following HCPCS codes 
                        (as identified as of January 1, 2018, 
                        and as subsequently modified by the 
                        Secretary): J0133, J0285, J0287, J0288, 
                        J0289, J0895, J1170, J1250, J1265, 
                        J1325, J1455, J1457, J1570, J2175, 
                        J2260, J2270, J2274, J2278, J3010, or 
                        J3285.
                          (ii) Payment category 2.--The 
                        Secretary shall create a payment 
                        category 2 and assign to such category 
                        drugs which are covered under such 
                        local coverage determination and billed 
                        with the following HCPCS codes (as 
                        identified as of January 1, 2018, and 
                        as subsequently modified by the 
                        Secretary): J1555 JB, J1559 JB, J1561 
                        JB, J1562 JB, J1569 JB, or J1575 JB.
                          (iii) Payment category 3.--The 
                        Secretary shall create a payment 
                        category 3 and assign to such category 
                        drugs which are covered under such 
                        local coverage determination and billed 
                        with the following HCPCS codes (as 
                        identified as of January 1, 2018, and 
                        as subsequently modified by the 
                        Secretary): J9000, J9039, J9040, J9065, 
                        J9100, J9190, J9200, J9360, or J9370.
                          (iv) Infusion drugs not otherwise 
                        included.--With respect to drugs that 
                        are not included in payment category 1, 
                        2, or 3 under clause (i), (ii), or 
                        (iii), respectively, the Secretary 
                        shall assign to the most appropriate of 
                        such categories, as determined by the 
                        Secretary, drugs which are--
                                  (I) covered under such local 
                                coverage determination and 
                                billed under HCPCS codes J7799 
                                or J7999 (as identified as of 
                                July 1, 2017, and as 
                                subsequently modified by the 
                                Secretary); or
                                  (II) billed under any code 
                                that is implemented after the 
                                date of the enactment of this 
                                paragraph and included in such 
                                local coverage determination or 
                                included in subregulatory 
                                guidance as a home infusion 
                                drug described in subparagraph 
                                (A)(i).
                  (D) Payment amounts.--
                          (i) In general.--Under the payment 
                        methodology, the Secretary shall pay 
                        eligible home infusion suppliers, with 
                        respect to items and services described 
                        in subparagraph (A)(i) furnished during 
                        the period described in subparagraph 
                        (A)(ii) by such supplier to an 
                        individual, at amounts equal to the 
                        amounts determined under the physician 
                        fee schedule established under section 
                        1848 for services furnished during the 
                        year for codes and units of such codes 
                        described in clauses (ii), (iii), and 
                        (iv) with respect to drugs included in 
                        the payment category under subparagraph 
                        (C) specified in the respective clause, 
                        determined without application of the 
                        geographic adjustment under subsection 
                        (e) of such section.
                          (ii) Payment amount for category 1.--
                        For purposes of clause (i), the codes 
                        and units described in this clause, 
                        with respect to drugs included in 
                        payment category 1 described in 
                        subparagraph (C)(i), are one unit of 
                        HCPCS code 96365 plus three units of 
                        HCPCS code 96366 (as identified as of 
                        January 1, 2018, and as subsequently 
                        modified by the Secretary).
                          (iii) Payment amount for category 
                        2.--For purposes of clause (i), the 
                        codes and units described in this 
                        clause, with respect to drugs included 
                        in payment category 2 described in 
                        subparagraph (C)(i), are one unit of 
                        HCPCS code 96369 plus three units of 
                        HCPCS code 96370 (as identified as of 
                        January 1, 2018, and as subsequently 
                        modified by the Secretary).
                          (iv) Payment amount for category 3.--
                        For purposes of clause (i), the codes 
                        and units described in this clause, 
                        with respect to drugs included in 
                        payment category 3 described in 
                        subparagraph (C)(i), are one unit of 
                        HCPCS code 96413 plus three units of 
                        HCPCS code 96415 (as identified as of 
                        January 1, 2018, and as subsequently 
                        modified by the Secretary).
                  (E) Clarifications.--
                          (i) Infusion drug administration 
                        day.--For purposes of this subsection, 
                        with respect to the furnishing of 
                        transitional home infusion drugs or 
                        home infusion drugs to an individual by 
                        an eligible home infusion supplier or a 
                        qualified home infusion therapy 
                        supplier, a reference to payment to 
                        such supplier for an infusion drug 
                        administration calendar day in the 
                        individual's home shall refer to 
                        payment only for the date on which 
                        professional services (as described in 
                        section 1861(iii)(2)(A)) were furnished 
                        to administer such drugs to such 
                        individual. For purposes of the 
                        previous sentence, an infusion drug 
                        administration calendar day shall 
                        include all such drugs administered to 
                        such individual on such day.
                          (ii) Treatment of multiple drugs 
                        administered on same infusion drug 
                        administration day.--In the case that 
                        an eligible home infusion supplier, 
                        with respect to an infusion drug 
                        administration calendar day in an 
                        individual's home, furnishes to such 
                        individual transitional home infusion 
                        drugs which are not all assigned to the 
                        same payment category under 
                        subparagraph (C), payment to such 
                        supplier for such infusion drug 
                        administration calendar day in the 
                        individual's home shall be a single 
                        payment equal to the amount of payment 
                        under this paragraph for the drug, 
                        among all such drugs so furnished to 
                        such individual during such calendar 
                        day, for which the highest payment 
                        would be made under this paragraph.
                  (F) Eligible home infusion suppliers.--In 
                this paragraph, the term ``eligible home 
                infusion supplier'' means a supplier that is 
                enrolled under this part as a pharmacy that 
                provides external infusion pumps and external 
                infusion pump supplies and that maintains all 
                pharmacy licensure requirements in the State in 
                which the applicable infusion drugs are 
                administered.
                  (G) Implementation.--Notwithstanding any 
                other provision of law, the Secretary may 
                implement this paragraph by program instruction 
                or otherwise.
  (v) Payment for Outpatient Physical Therapy Services and 
Outpatient Occupational Therapy Services Furnished by a Therapy 
Assistant.--
          (1) In general.--In the case of an outpatient 
        physical therapy service or outpatient occupational 
        therapy service furnished on or after January 1, 2022, 
        for which payment is made under section 1848 or 
        subsection (k), that is furnished in whole or in part 
        by a therapy assistant (as defined by the Secretary), 
        the amount of payment for such service shall be an 
        amount equal to 85 percent of the amount of payment 
        otherwise applicable for the service under this part. 
        Nothing in the preceding sentence shall be construed to 
        change applicable requirements with respect to such 
        services.
          (2) Use of modifier.--
                  (A) Establishment.--Not later than January 1, 
                2019, the Secretary shall establish a modifier 
                to indicate (in a form and manner specified by 
                the Secretary), in the case of an outpatient 
                physical therapy service or outpatient 
                occupational therapy service furnished in whole 
                or in part by a therapy assistant (as so 
                defined), that the service was furnished by a 
                therapy assistant.
                  (B) Required use.--Each request for payment, 
                or bill submitted, for an outpatient physical 
                therapy service or outpatient occupational 
                therapy service furnished in whole or in part 
                by a therapy assistant (as so defined) on or 
                after January 1, 2020, shall include the 
                modifier established under subparagraph (A) for 
                each such service.
          (3) Implementation.--The Secretary shall implement 
        this subsection through notice and comment rulemaking.
  (w) Opioid Use Disorder Treatment Services.--
          (1) In general.--The Secretary shall pay to an opioid 
        treatment program (as defined in paragraph (2) of 
        section 1861(jjj)) an amount that is equal to 100 
        percent of a bundled payment under this part for opioid 
        use disorder treatment services (as defined in 
        paragraph (1) of such section) that are furnished by 
        such program to an individual during an episode of care 
        (as defined by the Secretary) beginning on or after 
        January 1, 2020. The Secretary shall ensure, as 
        determined appropriate by the Secretary, that no 
        duplicative payments are made under this part or part D 
        for items and services furnished by an opioid treatment 
        program.
          (2) Considerations.--The Secretary may implement this 
        subsection through one or more bundles based on the 
        type of medication provided (such as buprenorphine, 
        methadone, naltrexone, or a new innovative drug), the 
        frequency of services, the scope of services furnished, 
        characteristics of the individuals furnished such 
        services, or other factors as the Secretary determine 
        appropriate. In developing such bundles, the Secretary 
        may consider payment rates paid to opioid treatment 
        programs for comparable services under State plans 
        under title XIX or under the TRICARE program under 
        chapter 55 of title 10 of the United States Code.
          (3) Annual updates.--The Secretary shall provide an 
        update each year to the bundled payment amounts under 
        this subsection.

           *       *       *       *       *       *       *


                    Part E--Miscellaneous Provisions

              definitions of services, institutions, etc.

  Sec. 1861. For purposes of this title--

                            Spell of Illness

  (a) The term ``spell of illness'' with respect to any 
individual means a period of consecutive days--
          (1) beginning with the first day (not included in a 
        previous spell of illness) (A) on which such individual 
        is furnished inpatient hospital services, inpatient 
        critical access hospital services or extended care 
        services, and (B) which occurs in a month for which he 
        is entitled to benefits under part A, and
          (2) ending with the close of the first period of 60 
        consecutive days thereafter on each of which he is 
        neither an inpatient of a hospital or critical access 
        hospital nor an inpatient of a facility described in 
        section 1819(a)(1) or subsection (y)(1).

                      Inpatient Hospital Services

  (b) The term ``inpatient hospital services'' means the 
following items and services furnished to an inpatient of a 
hospital and (except as provided in paragraph (3)) by the 
hospital--
          (1) bed and board;
          (2) such nursing services and other related services, 
        such use of hospital facilities, and such medical 
        social services as are ordinarily furnished by the 
        hospital for the care and treatment of inpatients, and 
        such drugs, biologicals, supplies, appliances, and 
        equipment, for use in the hospital, as are ordinarily 
        furnished by such hospital for the care and treatment 
        of inpatients; and
          (3) such other diagnostic or therapeutic items or 
        services, furnished by the hospital or by others under 
        arrangements with them made by the hospital, as are 
        ordinarily furnished to inpatients either by such 
        hospital or by others under such arrangements;
excluding, however--
          (4) medical or surgical services provided by a 
        physician, resident, or intern, services described by 
        subsection (s)(2)(K), certified nurse-midwife services, 
        qualified psychologist services, and services of a 
        certified registered nurse anesthetist; and
          (5) the services of a private-duty nurse or other 
        private-duty attendant.
Paragraph (4) shall not apply to services provided in a 
hospital by--
          (6) an intern or a resident-in-training under a 
        teaching program approved by the Council on Medical 
        Education of the American Medical Association or, in 
        the case of an osteopathic hospital, approved by the 
        Committee on Hospitals of the Bureau of Professional 
        Education of the American Osteopathic Association, or, 
        in the case of services in a hospital or osteopathic 
        hospital by an intern or resident-in-training in the 
        field of dentistry, approved by the Council on Dental 
        Education of the American Dental Association, or in the 
        case of services in a hospital or osteopathic hospital 
        by an intern or resident-in-training in the field of 
        podiatry, approved by the Council on Podiatric Medical 
        Education of the American Podiatric Medical 
        Association; or
          (7) a physician where the hospital has a teaching 
        program approved as specified in paragraph (6), if (A) 
        the hospital elects to receive any payment due under 
        this title for reasonable costs of such services, and 
        (B) all physicians in such hospital agree not to bill 
        charges for professional services rendered in such 
        hospital to individuals covered under the insurance 
        program established by this title.

                Inpatient Psychiatric Hospital Services

  (c) The term ``inpatient psychiatric hospital services'' 
means inpatient hospital services furnished to an inpatient of 
a psychiatric hospital.

                                Supplier

  (d) The term ``supplier'' means, unless the context otherwise 
requires, a physician or other practitioner, a facility, or 
other entity (other than a provider of services) that furnishes 
items or services under this title.

                                Hospital

  (e) The term ``hospital'' (except for purposes of sections 
1814(d), 1814(f), and 1835(b), subsection (a)(2) of this 
section, paragraph (7) of this subsection, and subsection (i) 
of this section) means an institution which--
          (1) is primarily engaged in providing, by or under 
        the supervision of physicians, to inpatients (A) 
        diagnostic services and therapeutic services for 
        medical diagnosis, treatment, and care of injured, 
        disabled, or sick persons, or (B) rehabilitation 
        services for the rehabilitation of injured, disabled, 
        or sick persons;
          (2) maintains clinical records on all patients;
          (3) has bylaws in effect with respect to its staff of 
        physicians;
          (4) has a requirement that every patient with respect 
        to whom payment may be made under this title must be 
        under the care of a physician, except that a patient 
        receiving qualified psychologist services (as defined 
        in subsection (ii)) may be under the care of a clinical 
        psychologist with respect to such services to the 
        extent permitted under State law;
          (5) provides 24-hour nursing service rendered or 
        supervised by a registered professional nurse, and has 
        a licensed practical nurse or registered professional 
        nurse on duty at all times; except that until January 
        1, 1979, the Secretary is authorized to waive the 
        requirement of this paragraph for any one-year period 
        with respect to any institution, insofar as such 
        requirement relates to the provision of twenty-four-
        hour nursing service rendered or supervised by a 
        registered professional nurse (except that in any event 
        a registered professional nurse must be present on the 
        premises to render or supervise the nursing service 
        provided, during at least the regular daytime shift), 
        where immediately preceding such one-year period he 
        finds that--
                  (A) such institution is located in a rural 
                area and the supply of hospital services in 
                such area is not sufficient to meet the needs 
                of individuals residing therein,
                  (B) the failure of such institution to 
                qualify as a hospital would seriously reduce 
                the availability of such services to such 
                individuals, and
                  (C) such institution has made and continues 
                to make a good faith effort to comply with this 
                paragraph, but such compliance is impeded by 
                the lack of qualified nursing personnel in such 
                area;
          (6)(A) has in effect a hospital utilization review 
        plan which meets the requirements of subsection (k) and 
        (B) has in place a discharge planning process that 
        meets the requirements of subsection (ee);
          (7) in the case of an institution in any State in 
        which State or applicable local law provides for the 
        licensing of hospitals, (A) is licensed pursuant to 
        such law or (B) is approved, by the agency of such 
        State or locality responsible for licensing hospitals, 
        as meeting the standards established for such 
        licensing;
          (8) has in effect an overall plan and budget that 
        meets the requirements of subsection (z); and
          (9) meets such other requirements as the Secretary 
        finds necessary in the interest of the health and 
        safety of individuals who are furnished services in the 
        institution.
For purposes of subsection (a)(2), such term includes any 
institution which meets the requirements of paragraph (1) of 
this subsection. For purposes of sections 1814(d) and 1835(b) 
(including determination of whether an individual received 
inpatient hospital services or diagnostic services for purposes 
of such sections), section 1814(f)(2), and subsection (i) of 
this section, such term includes any institution which (i) 
meets the requirements of paragraphs (5) and (7) of this 
subsection, (ii) is not primarily engaged in providing the 
services described in section 1861(j)(1)(A) and (iii) is 
primarily engaged in providing, by or under the supervision of 
individuals referred to in paragraph (1) of section 1861(r), to 
inpatients diagnostic services and therapeutic services for 
medical diagnosis, treatment, and care of injured, disabled, or 
sick persons, or rehabilitation services for the rehabilitation 
of injured, disabled, or sick persons. For purposes of section 
1814(f)(1), such term includes an institution which (i) is a 
hospital for purposes of sections 1814(d), 1814(f)(2), and 
1835(b) and (ii) is accredited by a national accreditation body 
recognized by the Secretary under section 1865(a), or is 
accredited by or approved by a program of the country in which 
such institution is located if the Secretary finds the 
accreditation or comparable approval standards of such program 
to be essentially equivalent to those of such a national 
accreditation body.. Notwithstanding the preceding provisions 
of this subsection, such term shall not, except for purposes of 
subsection (a)(2), include any institution which is primarily 
for the care and treatment of mental diseases unless it is a 
psychiatric hospital (as defined in subsection (f)). The term 
``hospital'' also includes a religious nonmedical health care 
institution (as defined in subsection (ss)(1)), but only with 
respect to items and services ordinarily furnished by such 
institution to inpatients, and payment may be made with respect 
to services provided by or in such an institution only to such 
extent and under such conditions, limitations, and requirements 
(in addition to or in lieu of the conditions, limitations, and 
requirements otherwise applicable) as may be provided in 
regulations consistent with section 1821. For provisions 
deeming certain requirements of this subsection to be met in 
the case of accredited institutions, see section 1865. The term 
``hospital'' also includes a facility of fifty beds or less 
which is located in an area determined by the Secretary to meet 
the definition relating to a rural area described in 
subparagraph (A) of paragraph (5) of this subsection and which 
meets the other requirements of this subsection, except that--
          
          (A) with respect to the requirements for nursing 
        services applicable after December 31, 1978, such 
        requirements shall provide for temporary waiver of the 
        requirements, for such period as the Secretary deems 
        appropriate, where (i) the facility's failure to fully 
        comply with the requirements is attributable to a 
        temporary shortage of qualified nursing personnel in 
        the area in which the facility is located, (ii) a 
        registered professional nurse is present on the 
        premises to render or supervise the nursing service 
        provided during at least the regular daytime shift, and 
        (iii) the Secretary determines that the employment of 
        such nursing personnel as are available to the facility 
        during such temporary period will not adversely affect 
        the health and safety of patients;
          (B) with respect to the health and safety 
        requirements promulgated under paragraph (9), such 
        requirements shall be applied by the Secretary to a 
        facility herein defined in such manner as to assure 
        that personnel requirements take into account the 
        availability of technical personnel and the educational 
        opportunities for technical personnel in the area in 
        which such facility is located, and the scope of 
        services rendered by such facility; and the Secretary, 
        by regulations, shall provide for the continued 
        participation of such a facility where such personnel 
        requirements are not fully met, for such period as the 
        Secretary determines that (i) the facility is making 
        good faith efforts to fully comply with the personnel 
        requirements, (ii) the employment by the facility of 
        such personnel as are available to the facility will 
        not adversely affect the health and safety of patients, 
        and (iii) if the Secretary has determined that because 
        of the facility's waiver under this subparagraph the 
        facility should limit its scope of services in order 
        not to adversely affect the health and safety of the 
        facility's patients, the facility is so limiting the 
        scope of services it provides; and
          (C) with respect to the fire and safety requirements 
        promulgated under paragraph (9), the Secretary (i) may 
        waive, for such period as he deems appropriate, 
        specific provisions of such requirements which if 
        rigidly applied would result in unreasonable hardship 
        for such a facility and which, if not applied, would 
        not jeopardize the health and safety of patients, and 
        (ii) may accept a facility's compliance with all 
        applicable State codes relating to fire and safety in 
        lieu of compliance with the fire and safety 
        requirements promulgated under paragraph (9), if he 
        determines that such State has in effect fire and 
        safety codes, imposed by State law, which adequately 
        protect patients.
The term ``hospital'' does not include, unless the context 
otherwise requires, a critical access hospital (as defined in 
section 1861(mm)(1)).

                          Psychiatric Hospital

  (f) The term ``psychiatric hospital'' means an institution 
which--
          (1) is primarily engaged in providing, by or under 
        the supervision of a physician, psychiatric services 
        for the diagnosis and treatment of mentally ill 
        persons;
          (2) satisfies the requirements of paragraphs (3) 
        through (9) of subsection (e);
          (3) maintains clinical records on all patients and 
        maintains such records as the Secretary finds to be 
        necessary to determine the degree and intensity of the 
        treatment provided to individuals entitled to hospital 
        insurance benefits under part A; and
          (4) meets such staffing requirements as the Secretary 
        finds necessary for the institution to carry out an 
        active program of treatment for individuals who are 
        furnished services in the institution.
In the case of an institution which satisfies paragraphs (1) 
and (2) of the preceding sentence and which contains a distinct 
part which also satisfies paragraphs (3) and (4) of such 
sentence, such distinct part shall be considered to be a 
``psychiatric hospital''.

                Outpatient Occupational Therapy Services

  (g) The term ``outpatient occupational therapy services'' has 
the meaning given the term ``outpatient physical therapy 
services'' in subsection (p), except that ``occupational'' 
shall be substituted for ``physical'' each place it appears 
therein.

                         Extended Care Services

  (h) The term ``extended care services'' means the following 
items and services furnished to an inpatient of a skilled 
nursing facility and (except as provided in paragraphs (3), (6) 
and (7)) by such skilled nursing facility--
          (1) nursing care provided by or under the supervision 
        of a registered professional nurse;
          (2) bed and board in connection with the furnishing 
        of such nursing care;
          (3) physical or occupational therapy or speech-
        language pathology services furnished by the skilled 
        nursing facility or by others under arrangements with 
        them made by the facility;
          (4) medical social services;
          (5) such drugs, biologicals, supplies, appliances, 
        and equipment, furnished for use in the skilled nursing 
        facility, as are ordinarily furnished by such facility 
        for the care and treatment of inpatients;
          (6) medical services provided by an intern or 
        resident-in- training of a hospital with which the 
        facility has in effect a transfer agreement (meeting 
        the requirements of subsection (l)), under a teaching 
        program of such hospital approved as provided in the 
        last sentence of subsection (b), and other diagnostic 
        or therapeutic services provided by a hospital with 
        which the facility has such an agreement in effect; and
          (7) such other services necessary to the health of 
        the patients as are generally provided by skilled 
        nursing facilities, or by others under arrangements 
        with them made by the facility;
excluding, however, any item or service if it would not be 
included under subsection (b) if furnished to an inpatient of a 
hospital.

                  Post-Hospital Extended Care Services

  (i) The term ``post-hospital extended care services'' means 
extended care services furnished an individual after transfer 
from a hospital in which he was an inpatient for not less than 
3 consecutive days before his discharge from the hospital in 
connection with such transfer. For purposes of the preceding 
sentence, items and services shall be deemed to have been 
furnished to an individual after transfer from a hospital, and 
he shall be deemed to have been an inpatient in the hospital 
immediately before transfer therefrom, if he is admitted to the 
skilled nursing facility (A) within 30 days after discharge 
from such hospital, or (B) within such time as it would be 
medically appropriate to begin an active course of treatment, 
in the case of an individual whose condition is such that 
skilled nursing facility care would not be medically 
appropriate within 30 days after discharge from a hospital; and 
an individual shall be deemed not to have been discharged from 
a skilled nursing facility if, within 30 days after discharge 
therefrom, he is admitted to such facility or any other skilled 
nursing facility.

                        Skilled Nursing Facility

  (j) The term ``skilled nursing facility'' has the meaning 
given such term in section 1819(a).

                           Utilization Review

  (k) A utilization review plan of a hospital or skilled 
nursing facility shall be considered sufficient if it is 
applicable to services furnished by the institution to 
individuals entitled to insurance benefits under this title and 
if it provides--
          (1) for the review, on a sample or other basis, of 
        admissions to the institution, the duration of stays 
        therein, and the professional services (including drugs 
        and biologicals) furnished, (A) with respect to the 
        medical necessity of the services, and (B) for the 
        purpose of promoting the most efficient use of 
        available health facilities and services;
          (2) for such review to be made by either (A) a staff 
        committee of the institution composed of two or more 
        physicians (of which at least two must be physicians 
        described in subsection (r)(1) of this section), with 
        or without participation of other professional 
        personnel, or (B) a group outside the institution which 
        is similarly composed and (i) which is established by 
        the local medical society and some or all of the 
        hospitals and skilled nursing facilities in the 
        locality, or (ii) if (and for as long as) there has not 
        been established such a group which serves such 
        institution, which is established in such other manner 
        as may be approved by the Secretary;
          (3) for such review, in each case of inpatient 
        hospital services or extended care services furnished 
        to such an individual during a continuous period of 
        extended duration, as of such days of such period 
        (which may differ for different classes of cases) as 
        may be specified in regulations, with such review to be 
        made as promptly as possible, after each day so 
        specified, and in no event later than one week 
        following such day; and
          (4) for prompt notification to the institution, the 
        individual, and his attending physician of any finding 
        (made after opportunity for consultation to such 
        attending physician) by the physician members of such 
        committee or group that any further stay in the 
        institution is not medically necessary.
The review committee must be composed as provided in clause (B) 
of paragraph (2) rather than as provided in clause (A) of such 
paragraph in the case of any hospital or skilled nursing 
facility where, because of the small size of the institution, 
or (in the case of a skilled nursing facility) because of lack 
of an organized medical staff, or for such other reason or 
reasons as may be included in regulations, it is impracticable 
for the institution to have a properly functioning staff 
committee for the purposes of this subsection. If the Secretary 
determines that the utilization review procedures established 
pursuant to title XIX are superior in their effectiveness to 
the procedures required under this section, he may, to the 
extent that he deems it appropriate, require for purposes of 
this title that the procedures established pursuant to title 
XIX be utilized instead of the procedures required by this 
section.

    Agreements for Transfer Between Skilled Nursing Facilities and 
                               Hospitals

  (l) A hospital and a skilled nursing facility shall be 
considered to have a transfer agreement in effect if, by reason 
of a written agreement between them or (in case the two 
institutions are under common control) by reason of a written 
undertaking by the person or body which controls them, there is 
reasonable assurance that--
          (1) transfer of patients will be effected between the 
        hospital and the skilled nursing facility whenever such 
        transfer is medically appropriate as determined by the 
        attending physician; and
          (2) there will be interchange of medical and other 
        information necessary or useful in the care and 
        treatment of individuals transferred between the 
        institutions, or in determining whether such 
        individuals can be adequately cared for otherwise than 
        in either of such institutions.
Any skilled nursing facility which does not have such an 
agreement in effect, but which is found by a State agency (of 
the State in which such facility is situated) with which an 
agreement under section 1864 is in effect (or, in the case of a 
State in which no such agency has an agreement under section 
1864, by the Secretary) to have attempted in good faith to 
enter into such an agreement with a hospital sufficiently close 
to the facility to make feasible the transfer between them of 
patients and the information referred to in paragraph (2), 
shall be considered to have such an agreement in effect if and 
for so long as such agency (or the Secretary, as the case may 
be) finds that to do so is in the public interest and essential 
to assuring extended care services for persons in the community 
who are eligible for payments with respect to such services 
under this title.

                          Home Health Services

  (m) The term ``home health services'' means the following 
items and services furnished to an individual, who is under the 
care of a physician, by a home health agency or by others under 
arrangements with them made by such agency, under a plan (for 
furnishing such items and services to such individual) 
established and periodically reviewed by a physician, which 
items and services are, except as provided in paragraph (7), 
provided on a visiting basis in a place of residence used as 
such individual's home--
          (1) part-time or intermittent nursing care provided 
        by or under the supervision of a registered 
        professional nurse;
          (2) physical or occupational therapy or speech-
        language pathology services;
          (3) medical social services under the direction of a 
        physician;
          (4) to the extent permitted in regulations, part-time 
        or intermittent services of a home health aide who has 
        successfully completed a training program approved by 
        the Secretary;
          (5) medical supplies (including catheters, catheter 
        supplies, ostomy bags, and supplies related to ostomy 
        care, and a covered osteoporosis drug (as defined in 
        subsection (kk)), but excluding other drugs and 
        biologicals) and durable medical equipment and 
        applicable disposable devices (as defined in section 
        1834(s)(2)) while under such a plan;
          (6) in the case of a home health agency which is 
        affiliated or under common control with a hospital, 
        medical services provided by an intern or resident-in-
        training of such hospital, under a teaching program of 
        such hospital approved as provided in the last sentence 
        of subsection (b); and
          (7) any of the foregoing items and services which are 
        provided on an outpatient basis, under arrangements 
        made by the home health agency, at a hospital or 
        skilled nursing facility, or at a rehabilitation center 
        which meets such standards as may be prescribed in 
        regulations, and--
                  (A) the furnishing of which involves the use 
                of equipment of such a nature that the items 
                and services cannot readily be made available 
                to the individual in such place of residence, 
                or
                  (B) which are furnished at such facility 
                while he is there to receive any such item or 
                service described in clause (A),
        but not including transportation of the individual in 
        connection with any such item or service;
excluding, however, any item or service if it would not be 
included under subsection (b) if furnished to an inpatient of a 
hospital and home infusion therapy (as defined in subsection 
(iii)(i)). For purposes of paragraphs (1) and (4), the term 
``part-time or intermittent services'' means skilled nursing 
and home health aide services furnished any number of days per 
week as long as they are furnished (combined) less than 8 hours 
each day and 28 or fewer hours each week (or, subject to review 
on a case-by-case basis as to the need for care, less than 8 
hours each day and 35 or fewer hours per week). For purposes of 
sections 1814(a)(2)(C) and 1835(a)(2)(A), ``intermittent'' 
means skilled nursing care that is either provided or needed on 
fewer than 7 days each week, or less than 8 hours of each day 
for periods of 21 days or less (with extensions in exceptional 
circumstances when the need for additional care is finite and 
predictable).

                       Durable Medical Equipment

  (n) The term ``durable medical equipment'' includes iron 
lungs, oxygen tents, hospital beds, and wheelchairs (which may 
include a power-operated vehicle that may be appropriately used 
as a wheelchair, but only where the use of such a vehicle is 
determined to be necessary on the basis of the individual's 
medical and physical condition and the vehicle meets such 
safety requirements as the Secretary may prescribe) used in the 
patient's home (including an institution used as his home other 
than an institution that meets the requirements of subsection 
(e)(1) of this section or section 1819(a)(1)), whether 
furnished on a rental basis or purchased, and includes blood-
testing strips and blood glucose monitors for individuals with 
diabetes without regard to whether the individual has Type I or 
Type II diabetes or to the individual's use of insulin (as 
determined under standards established by the Secretary in 
consultation with the appropriate organizations) and eye 
tracking and gaze interaction accessories for speech generating 
devices furnished to individuals with a demonstrated medical 
need for such accessories; except that such term does not 
include such equipment furnished by a supplier who has used, 
for the demonstration and use of specific equipment, an 
individual who has not met such minimum training standards as 
the Secretary may establish with respect to the demonstration 
and use of such specific equipment. With respect to a seat-lift 
chair, such term includes only the seat-lift mechanism and does 
not include the chair.

                           Home Health Agency

  (o) The term ``home health agency'' means a public agency or 
private organization, or a subdivision of such an agency or 
organization, which--
          (1) is primarily engaged in providing skilled nursing 
        services and other therapeutic services;
          (2) has policies, established by a group of 
        professional personnel (associated with the agency or 
        organization), including one or more physicians and one 
        or more registered professional nurses, to govern the 
        services (referred to in paragraph (1)) which it 
        provides, and provides for supervision of such services 
        by a physician or registered professional nurse;
          (3) maintains clinical records on all patients;
          (4) in the case of an agency or organization in any 
        State in which State or applicable local law provides 
        for the licensing of agencies or organizations of this 
        nature, (A) is licensed pursuant to such law, or (B) is 
        approved, by the agency of such State or locality 
        responsible for licensing agencies or organizations of 
        this nature, as meeting the standards established for 
        such licensing;
          (5) has in effect an overall plan and budget that 
        meets the requirements of subsection (z);
          (6) meets the conditions of participation specified 
        in section 1891(a) and such other conditions of 
        participation as the Secretary may find necessary in 
        the interest of the health and safety of individuals 
        who are furnished services by such agency or 
        organization;
          (7) provides the Secretary with a surety bond--
                  (A) in a form specified by the Secretary and 
                in an amount that is not less than the minimum 
                of $50,000; and
                  (B) that the Secretary determines is 
                commensurate with the volume of payments to the 
                home health agency; and
          (8) meets such additional requirements (including 
        conditions relating to bonding or establishing of 
        escrow accounts as the Secretary finds necessary for 
        the financial security of the program) as the Secretary 
        finds necessary for the effective and efficient 
        operation of the program;
except that for purposes of part A such term shall not include 
any agency or organization which is primarily for the care and 
treatment of mental diseases. The Secretary may waive the 
requirement of a surety bond under paragraph (7) in the case of 
an agency or organization that provides a comparable surety 
bond under State law.

                  Outpatient Physical Therapy Services

  (p) The term ``outpatient physical therapy services'' means 
physical therapy services furnished by a provider of services, 
a clinic, rehabilitation agency, or a public health agency, or 
by others under an arrangement with, and under the supervision 
of, such provider, clinic, rehabilitation agency, or public 
health agency to an individual as an outpatient--
          (1) who is under the care of a physician (as defined 
        in paragraph (1), (3), or (4) of section 1861(r)), and
          (2) with respect to whom a plan prescribing the type, 
        amount, and duration of physical therapy services that 
        are to be furnished such individual has been 
        established by a physician (as so defined) or by a 
        qualified physical therapist and is periodically 
        reviewed by a physician (as so defined);
excluding, however--
          (3) any item or service if it would not be included 
        under subsection (b) if furnished to an inpatient of a 
        hospital; and
          (4) any such service--
                  (A) if furnished by a clinic or 
                rehabilitation agency, or by others under 
                arrangements with such clinic or agency, unless 
                such clinic or rehabilitation agency--
                          (i) provides an adequate program of 
                        physical therapy services for 
                        outpatients and has the facilities and 
                        personnel required for such program or 
                        required for the supervision of such a 
                        program, in accordance with such 
                        requirements as the Secretary may 
                        specify,
                          (ii) has policies, established by a 
                        group of professional personnel, 
                        including one or more physicians 
                        (associated with the clinic or 
                        rehabilitation agency) and one or more 
                        qualified physical therapists, to 
                        govern the services (referred to in 
                        clause (i)) it provides,
                          (iii) maintains clinical records on 
                        all patients,
                          (iv) if such clinic or agency is 
                        situated in a State in which State or 
                        applicable local law provides for the 
                        licensing of institutions of this 
                        nature, (I) is licensed pursuant to 
                        such law, or (II) is approved by the 
                        agency of such State or locality 
                        responsible for licensing institutions 
                        of this nature, as meeting the 
                        standards established for such 
                        licensing; and
                          (v) meets such other conditions 
                        relating to the health and safety of 
                        individuals who are furnished services 
                        by such clinic or agency on an 
                        outpatient basis, as the Secretary may 
                        find necessary, and provides the 
                        Secretary on a continuing basis with a 
                        surety bond in a form specified by the 
                        Secretary and in an amount that is not 
                        less than $50,000, or
                  (B) if furnished by a public health agency, 
                unless such agency meets such other conditions 
                relating to health and safety of individuals 
                who are furnished services by such agency on an 
                outpatient basis, as the Secretary may find 
                necessary.
The term ``outpatient physical therapy services'' also includes 
physical therapy services furnished an individual by a physical 
therapist (in his office or in such individual's home) who 
meets licensing and other standards prescribed by the Secretary 
in regulations, otherwise than under an arrangement with and 
under the supervision of a provider of services, clinic, 
rehabilitation agency, or public health agency, if the 
furnishing of such services meets such conditions relating to 
health and safety as the Secretary may find necessary. In 
addition, such term includes physical therapy services which 
meet the requirements of the first sentence of this subsection 
except that they are furnished to an individual as an inpatient 
of a hospital or extended care facility. Nothing in this 
subsection shall be construed as requiring, with respect to 
outpatients who are not entitled to benefits under this title, 
a physical therapist to provide outpatient physical therapy 
services only to outpatients who are under the care of a 
physician or pursuant to a plan of care established by a 
physician. The Secretary may waive the requirement of a surety 
bond under paragraph (4)(A)(v) in the case of a clinic or 
agency that provides a comparable surety bond under State law.

                          Physicians' Services

  (q) The term ``physicians' services'' means professional 
services performed by physicians, including surgery, 
consultation, and home, office, and institutional calls (but 
not including services described in subsection (b)(6)).

                               Physician

  (r) The term ``physician'', when used in connection with the 
performance of any function or action, means (1) a doctor of 
medicine or osteopathy legally authorized to practice medicine 
and surgery by the State in which he performs such function or 
action (including a physician within the meaning of section 
1101(a)(7)), (2) a doctor of dental surgery or of dental 
medicine who is legally authorized to practice dentistry by the 
State in which he performs such function and who is acting 
within the scope of his license when he performs such 
functions, (3) a doctor of podiatric medicine for the purposes 
of subsections (k), (m), (p)(1), and (s) of this section and 
sections 1814(a), 1832(a)(2)(F)(ii), and 1835 but only with 
respect to functions which he is legally authorized to perform 
as such by the State in which he performs them, (4) a doctor of 
optometry, but only for purposes of subsection (p)(1) and with 
respect to the provision of items or services described in 
subsection (s) which he is legally authorized to perform as a 
doctor of optometry by the State in which he performs them, or 
(5) a chiropractor who is licensed as such by the State (or in 
a State which does not license chiropractors as such, is 
legally authorized to perform the services of a chiropractor in 
the jurisdiction in which he performs such services), and who 
meets uniform minimum standards promulgated by the Secretary, 
but only for the purpose of sections 1861(s)(1) and 
1861(s)(2)(A) and only with respect to treatment by means of 
manual manipulation of the spine (to correct a subluxation) 
which he is legally authorized to perform by the State or 
jurisdiction in which such treatment is provided. For the 
purposes of section 1862(a)(4) and subject to the limitations 
and conditions provided in the previous sentence, such term 
includes a doctor of one of the arts, specified in such 
previous sentence, legally authorized to practice such art in 
the country in which the inpatient hospital services (referred 
to in such section 1862(a)(4)) are furnished.

                   Medical and Other Health Services

  (s) The term ``medical and other health services'' means any 
of the following items or services:
          (1) physicians' services;
          (2)(A) services and supplies (including drugs and 
        biologicals which are not usually self-administered by 
        the patient) furnished as an incident to a physician's 
        professional service, of kinds which are commonly 
        furnished in physicians' offices and are commonly 
        either rendered without charge or included in the 
        physicians' bills (or would have been so included but 
        for the application of section 1847B);
          (B) hospital services (including drugs and 
        biologicals which are not usually self-administered by 
        the patient) incident to physicians' services rendered 
        to outpatients and partial hospitalization services 
        incident to such services;
          (C) diagnostic services which are--
                  (i) furnished to an individual as an 
                outpatient by a hospital or by others under 
                arrangements with them made by a hospital, and
                  (ii) ordinarily furnished by such hospital 
                (or by others under such arrangements) to its 
                outpatients for the purpose of diagnostic 
                study;
          (D) outpatient physical therapy services, outpatient 
        speech-language pathology services, and outpatient 
        occupational therapy services;
          (E) rural health clinic services and Federally 
        qualified health center services;
          (F) home dialysis supplies and equipment, self-care 
        home dialysis support services, and institutional 
        dialysis services and supplies, and, for items and 
        services furnished on or after January 1, 2011, renal 
        dialysis services (as defined in section 
        1881(b)(14)(B)), including such renal dialysis services 
        furnished on or after January 1, 2017, by a renal 
        dialysis facility or provider of services paid under 
        section 1881(b)(14) to an individual with acute kidney 
        injury (as defined in section 1834(r)(2));
          (G) antigens (subject to quantity limitations 
        prescribed in regulations by the Secretary) prepared by 
        a physician, as defined in section 1861(r)(1), for a 
        particular patient, including antigens so prepared 
        which are forwarded to another qualified person 
        (including a rural health clinic) for administration to 
        such patient, from time to time, by or under the 
        supervision of another such physician;
          (H)(i) services furnished pursuant to a contract 
        under section 1876 to a member of an eligible 
        organization by a physician assistant or by a nurse 
        practitioner (as defined in subsection (aa)(5)) and 
        such services and supplies furnished as an incident to 
        his service to such a member as would otherwise be 
        covered under this part if furnished by a physician or 
        as an incident to a physician's service; and
          (ii) services furnished pursuant to a risk-sharing 
        contract under section 1876(g) to a member of an 
        eligible organization by a clinical psychologist (as 
        defined by the Secretary) or by a clinical social 
        worker (as defined in subsection (hh)(2)), and such 
        services and supplies furnished as an incident to such 
        clinical psychologist's services or clinical social 
        worker's services to such a member as would otherwise 
        be covered under this part if furnished by a physician 
        or as an incident to a physician's service;
          (I) blood clotting factors, for hemophilia patients 
        competent to use such factors to control bleeding 
        without medical or other supervision, and items related 
        to the administration of such factors, subject to 
        utilization controls deemed necessary by the Secretary 
        for the efficient use of such factors;
          (J) prescription drugs used in immunosuppressive 
        therapy furnished, to an individual who receives an 
        organ transplant for which payment is made under this 
        title;
          (K)(i) services which would be physicians' services 
        and services described in subsections (ww)(1) and (hhh) 
        if furnished by a physician (as defined in subsection 
        (r)(1)) and which are performed by a physician 
        assistant (as defined in subsection (aa)(5)) under the 
        supervision of a physician (as so defined) and which 
        the physician assistant is legally authorized to 
        perform by the State in which the services are 
        performed, and such services and supplies furnished as 
        incident to such services as would be covered under 
        subparagraph (A) if furnished incident to a physician's 
        professional service, but only if no facility or other 
        provider charges or is paid any amounts with respect to 
        the furnishing of such services,
          (ii) services which would be physicians' services and 
        services described in subsections (ww)(1) and (hhh) if 
        furnished by a physician (as defined in subsection 
        (r)(1)) and which are performed by a nurse practitioner 
        or clinical nurse specialist (as defined in subsection 
        (aa)(5)) working in collaboration (as defined in 
        subsection (aa)(6)) with a physician (as defined in 
        subsection (r)(1)) which the nurse practitioner or 
        clinical nurse specialist is legally authorized to 
        perform by the State in which the services are 
        performed, and such services and supplies furnished as 
        an incident to such services as would be covered under 
        subparagraph (A) if furnished incident to a physician's 
        professional service, but only if no facility or other 
        provider charges or is paid any amounts with respect to 
        the furnishing of such services;
          (L) certified nurse-midwife services;
          (M) qualified psychologist services;
          (N) clinical social worker services (as defined in 
        subsection (hh)(2));
          (O) erythropoietin for dialysis patients competent to 
        use such drug without medical or other supervision with 
        respect to the administration of such drug, subject to 
        methods and standards established by the Secretary by 
        regulation for the safe and effective use of such drug, 
        and items related to the administration of such drug;
          (P) prostate cancer screening tests (as defined in 
        subsection (oo));
          (Q) an oral drug (which is approved by the Federal 
        Food and Drug Administration) prescribed for use as an 
        anticancer chemotherapeutic agent for a given 
        indication, and containing an active ingredient (or 
        ingredients), which is the same indication and active 
        ingredient (or ingredients) as a drug which the carrier 
        determines would be covered pursuant to subparagraph 
        (A) or (B) if the drug could not be self-administered;
          (R) colorectal cancer screening tests (as defined in 
        subsection (pp));
          (S) diabetes outpatient self-management training 
        services (as defined in subsection (qq));
          (T) an oral drug (which is approved by the Federal 
        Food and Drug Administration) prescribed for use as an 
        acute anti-emetic used as part of an anticancer 
        chemotherapeutic regimen if the drug is administered by 
        a physician (or as prescribed by a physician)--
                  (i) for use immediately before, at, or within 
                48 hours after the time of the administration 
                of the anticancer chemotherapeutic agent; and
                  (ii) as a full replacement for the anti-
                emetic therapy which would otherwise be 
                administered intravenously;
          (U) screening for glaucoma (as defined in subsection 
        (uu)) for individuals determined to be at high risk for 
        glaucoma, individuals with a family history of glaucoma 
        and individuals with diabetes;
          (V) medical nutrition therapy services (as defined in 
        subsection (vv)(1)) in the case of a beneficiary with 
        diabetes or a renal disease who--
                  (i) has not received diabetes outpatient 
                self-management training services within a time 
                period determined by the Secretary;
                  (ii) is not receiving maintenance dialysis 
                for which payment is made under section 1881; 
                and
                  (iii) meets such other criteria determined by 
                the Secretary after consideration of protocols 
                established by dietitian or nutrition 
                professional organizations;
          (W) an initial preventive physical examination (as 
        defined in subsection (ww));
          (X) cardiovascular screening blood tests (as defined 
        in subsection (xx)(1));
          (Y) diabetes screening tests (as defined in 
        subsection (yy));
          (Z) intravenous immune globulin for the treatment of 
        primary immune deficiency diseases in the home (as 
        defined in subsection (zz));
          (AA) ultrasound screening for abdominal aortic 
        aneurysm (as defined in subsection (bbb)) for an 
        individual--
                  (i) who receives a referral for such an 
                ultrasound screening as a result of an initial 
                preventive physical examination (as defined in 
                section 1861(ww)(1));
                  (ii) who has not been previously furnished 
                such an ultrasound screening under this title; 
                and
                  (iii) who--
                          (I) has a family history of abdominal 
                        aortic aneurysm; or
                          (II) manifests risk factors included 
                        in a beneficiary category recommended 
                        for screening by the United States 
                        Preventive Services Task Force 
                        regarding abdominal aortic aneurysms;
          (BB) additional preventive services (described in 
        subsection (ddd)(1));
                  (CC) items and services furnished under a 
                cardiac rehabilitation program (as defined in 
                subsection (eee)(1)) or under a pulmonary 
                rehabilitation program (as defined in 
                subsection (fff)(1));
                  (DD) items and services furnished under an 
                intensive cardiac rehabilitation program (as 
                defined in subsection (eee)(4));
          (EE) kidney disease education services (as defined in 
        subsection (ggg));
          (FF) personalized prevention plan services (as 
        defined in subsection (hhh)); [and]
          (GG) home infusion therapy (as defined in subsection 
        (iii)(1)); and
          (HH) opioid use disorder treatment services (as 
        defined in subsection (jjj)).
          (3) diagnostic X-ray tests (including tests under the 
        supervision of a physician, furnished in a place of 
        residence used as the patient's home, if the 
        performance of such tests meets such conditions 
        relating to health and safety as the Secretary may find 
        necessary and including diagnostic mammography if 
        conducted by a facility that has a certificate (or 
        provisional certificate) issued under section 354 of 
        the Public Health Service Act), diagnostic laboratory 
        tests, and other diagnostic tests;
          (4) X-ray, radium, and radioactive isotope therapy, 
        including materials and services of technicians;
          (5) surgical dressings, and splints, casts, and other 
        devices used for reduction of fractures and 
        dislocations;
          (6) durable medical equipment;
          (7) ambulance service where the use of other methods 
        of transportation is contraindicated by the 
        individual's condition, but, subject to section 
        1834(l)(14), only to the extent provided in 
        regulations;
          (8) prosthetic devices (other than dental) which 
        replace all or part of an internal body organ 
        (including colostomy bags and supplies directly related 
        to colostomy care), including replacement of such 
        devices, and including one pair of conventional 
        eyeglasses or contact lenses furnished subsequent to 
        each cataract surgery with insertion of an intraocular 
        lens;
          (9) leg, arm, back, and neck braces, and artificial 
        legs, arms, and eyes, including replacements if 
        required because of a change in the patient's physical 
        condition;
          (10)(A) pneumococcal vaccine and its administration 
        and, subject to section 4071(b) of the Omnibus Budget 
        Reconciliation Act of 1987, influenza vaccine and its 
        administration; and
          (B) hepatitis B vaccine and its administration, 
        furnished to an individual who is at high or 
        intermediate risk of contracting hepatitis B (as 
        determined by the Secretary under regulations);
          (11) services of a certified registered nurse 
        anesthetist (as defined in subsection (bb));
          (12) subject to section 4072(e) of the Omnibus Budget 
        Reconciliation Act of 1987, extra-depth shoes with 
        inserts or custom molded shoes with inserts for an 
        individual with diabetes, if--
                  (A) the physician who is managing the 
                individual's diabetic condition (i) documents 
                that the individual has peripheral neuropathy 
                with evidence of callus formation, a history of 
                pre-ulcerative calluses, a history of previous 
                ulceration, foot deformity, or previous 
                amputation, or poor circulation, and (ii) 
                certifies that the individual needs such shoes 
                under a comprehensive plan of care related to 
                the individual's diabetic condition;
                  (B) the particular type of shoes are 
                prescribed by a podiatrist or other qualified 
                physician (as established by the Secretary); 
                and
                  (C) the shoes are fitted and furnished by a 
                podiatrist or other qualified individual (such 
                as a pedorthist or orthotist, as established by 
                the Secretary) who is not the physician 
                described in subparagraph (A) (unless the 
                Secretary finds that the physician is the only 
                such qualified individual in the area);
          (13) screening mammography (as defined in subsection 
        (jj));
          (14) screening pap smear and screening pelvic exam; 
        and
          (15) bone mass measurement (as defined in subsection 
        (rr)).
No diagnostic tests performed in any laboratory, including a 
laboratory that is part of a rural health clinic, or a hospital 
(which, for purposes of this sentence, means an institution 
considered a hospital for purposes of section 1814(d)) shall be 
included within paragraph (3) unless such laboratory--
          (16) if situated in any State in which State or 
        applicable local law provides for licensing of 
        establishments of this nature, (A) is licensed pursuant 
        to such law, or (B) is approved, by the agency of such 
        State or locality responsible for licensing 
        establishments of this nature, as meeting the standards 
        established for such licensing; and
          (17)(A) meets the certification requirements under 
        section 353 of the Public Health Service Act; and
          (B) meets such other conditions relating to the 
        health and safety of individuals with respect to whom 
        such tests are performed as the Secretary may find 
        necessary.
There shall be excluded from the diagnostic services specified 
in paragraph (2)(C) any item or service (except services 
referred to in paragraph (1)) which would not be included under 
subsection (b) if it were furnished to an inpatient of a 
hospital. None of the items and services referred to in the 
preceding paragraphs (other than paragraphs (1) and (2)(A)) of 
this subsection which are furnished to a patient of an 
institution which meets the definition of a hospital for 
purposes of section 1814(d) shall be included unless such other 
conditions are met as the Secretary may find necessary relating 
to health and safety of individuals with respect to whom such 
items and services are furnished.

                         Drugs and Biologicals

  (t)(1) The term ``drugs'' and the term ``biologicals'', 
except for purposes of subsection (m)(5) and paragraph (2), 
include only such drugs (including contrast agents) and 
biologicals, respectively, as are included (or approved for 
inclusion) in the United States Pharmacopoeia, the National 
Formulary, or the United States Homeopathic Pharmacopoeia, or 
in New Drugs or Accepted Dental Remedies (except for any drugs 
and biologicals unfavorably evaluated therein), or as are 
approved by the pharmacy and drug therapeutics committee (or 
equivalent committee) of the medical staff of the hospital 
furnishing such drugs and biologicals for use in such hospital.
  (2)(A) For purposes of paragraph (1), the term ``drugs'' also 
includes any drugs or biologicals used in an anticancer 
chemotherapeutic regimen for a medically accepted indication 
(as described in subparagraph (B)).
  (B) In subparagraph (A), the term ``medically accepted 
indication'', with respect to the use of a drug, includes any 
use which has been approved by the Food and Drug Administration 
for the drug, and includes another use of the drug if--
          (i) the drug has been approved by the Food and Drug 
        Administration; and
          (ii)(I) such use is supported by one or more 
        citations which are included (or approved for 
        inclusion) in one or more of the following compendia: 
        the American Hospital Formulary Service-Drug 
        Information, the American Medical Association Drug 
        Evaluations, the United States Pharmacopoeia-Drug 
        Information (or its successor publications), and other 
        authoritative compendia as identified by the Secretary, 
        unless the Secretary has determined that the use is not 
        medically appropriate or the use is identified as not 
        indicated in one or more such compendia, or
          (II) the carrier involved determines, based upon 
        guidance provided by the Secretary to carriers for 
        determining accepted uses of drugs, that such use is 
        medically accepted based on supportive clinical 
        evidence in peer reviewed medical literature appearing 
        in publications which have been identified for purposes 
        of this subclause by the Secretary.
The Secretary may revise the list of compendia in clause 
(ii)(I) as is appropriate for identifying medically accepted 
indications for drugs. On and after January 1, 2010, no 
compendia may be included on the list of compendia under this 
subparagraph unless the compendia has a publicly transparent 
process for evaluating therapies and for identifying potential 
conflicts of interests.

                          Provider of Services

  (u) The term ``provider of services'' means a hospital, 
critical access hospital, skilled nursing facility, 
comprehensive outpatient rehabilitation facility, home health 
agency, hospice program, or, for purposes of section 1814(g) 
and section 1835(e), a fund.

                            Reasonable Cost

  (v)(1)(A) The reasonable cost of any services shall be the 
cost actually incurred, excluding therefrom any part of 
incurred cost found to be unnecessary in the efficient delivery 
of needed health services, and shall be determined in 
accordance with regulations establishing the method or methods 
to be used, and the items to be included, in determining such 
costs for various types or classes of institutions, agencies, 
and services; except that in any case to which paragraph (2) or 
(3) applies, the amount of the payment determined under such 
paragraph with respect to the services involved shall be 
considered the reasonable cost of such services. In prescribing 
the regulations referred to in the preceding sentence, the 
Secretary shall consider, among other things, the principles 
generally applied by national organizations or established 
prepayment organizations (which have developed such principles) 
in computing the amount of payment, to be made by persons other 
than the recipients of services, to providers of services on 
account of services furnished to such recipients by such 
providers. Such regulations may provide for determination of 
the costs of services on a per diem, per unit, per capita, or 
other basis, may provide for using different methods in 
different circumstances, may provide for the use of estimates 
of costs of particular items or services, may provide for the 
establishment of limits on the direct or indirect overall 
incurred costs or incurred costs of specific items or services 
or groups of items or services to be recognized as reasonable 
based on estimates of the costs necessary in the efficient 
delivery of needed health services to individuals covered by 
the insurance programs established under this title, and may 
provide for the use of charges or a percentage of charges where 
this method reasonably reflects the costs. Such regulations 
shall (i) take into account both direct and indirect costs of 
providers of services (excluding therefrom any such costs, 
including standby costs, which are determined in accordance 
with regulations to be unnecessary in the efficient delivery of 
services covered by the insurance programs established under 
this title) in order that, under the methods of determining 
costs, the necessary costs of efficiently delivering covered 
services to individuals covered by the insurance programs 
established by this title will not be borne by individuals not 
so covered, and the costs with respect to individuals not so 
covered will not be borne by such insurance programs, and (ii) 
provide for the making of suitable retroactive corrective 
adjustments where, for a provider of services for any fiscal 
period, the aggregate reimbursement produced by the methods of 
determining costs proves to be either inadequate or excessive.
  (B) In the case of extended care services, the regulations 
under subparagraph (A) shall not include provision for specific 
recognition of a return on equity capital.
  (C) Where a hospital has an arrangement with a medical school 
under which the faculty of such school provides services at 
such hospital, an amount not in excess of the reasonable cost 
of such services to the medical school shall be included in 
determining the reasonable cost to the hospital of furnishing 
services--
          (i) for which payment may be made under part A, but 
        only if--
                  (I) payment for such services as furnished 
                under such arrangement would be made under part 
                A to the hospital had such services been 
                furnished by the hospital, and
                  (II) such hospital pays to the medical school 
                at least the reasonable cost of such services 
                to the medical school, or
          (ii) for which payment may be made under part B, but 
        only if such hospital pays to the medical school at 
        least the reasonable cost of such services to the 
        medical school.
  (D) Where (i) physicians furnish services which are either 
inpatient hospital services (including services in conjunction 
with the teaching programs of such hospital) by reason of 
paragraph (7) of subsection (b) or for which entitlement exists 
by reason of clause (II) of section 1832(a)(2)(B)(i), and (ii) 
such hospital (or medical school under arrangement with such 
hospital) incurs no actual cost in the furnishing of such 
services, the reasonable cost of such services shall (under 
regulations of the Secretary) be deemed to be the cost such 
hospital or medical school would have incurred had it paid a 
salary to such physicians rendering such services approximately 
equivalent to the average salary paid to all physicians 
employed by such hospital (or if such employment does not 
exist, or is minimal in such hospital, by similar hospitals in 
a geographic area of sufficient size to assure reasonable 
inclusion of sufficient physicians in development of such 
average salary).
  (E) Such regulations may, in the case of skilled nursing 
facilities in any State, provide for the use of rates, 
developed by the State in which such facilities are located, 
for the payment of the cost of skilled nursing facility 
services furnished under the State's plan approved under title 
XIX (and such rates may be increased by the Secretary on a 
class or size of institution or on a geographical basis by a 
percentage factor not in excess of 10 percent to take into 
account determinable items or services or other requirements 
under this title not otherwise included in the computation of 
such State rates), if the Secretary finds that such rates are 
reasonably related to (but not necessarily limited to) analyses 
undertaken by such State of costs of care in comparable 
facilities in such State. Notwithstanding the previous 
sentence, such regulations with respect to skilled nursing 
facilities shall take into account (in a manner consistent with 
subparagraph (A) and based on patient-days of services 
furnished) the costs (including the costs of services required 
to attain or maintain the highest practicable physical, mental, 
and psychosocial well-being of each resident eligible for 
benefits under this title) of such facilities complying with 
the requirements of subsections (b), (c), and (d) of section 
1819 (including the costs of conducting nurse aide training and 
competency evaluation programs and competency evaluation 
programs).
  (F) Such regulations shall require each provider of services 
(other than a fund) to make reports to the Secretary of 
information described in section 1121(a) in accordance with the 
uniform reporting system (established under such section) for 
that type of provider.
  (G)(i) In any case in which a hospital provides inpatient 
services to an individual that would constitute post-hospital 
extended care services if provided by a skilled nursing 
facility and a quality improvement organization (or, in the 
absence of such a qualified organization, the Secretary or such 
agent as the Secretary may designate) determines that inpatient 
hospital services for the individual are not medically 
necessary but post-hospital extended care services for the 
individual are medically necessary and such extended care 
services are not otherwise available to the individual (as 
determined in accordance with criteria established by the 
Secretary) at the time of such determination, payment for such 
services provided to the individual shall continue to be made 
under this title at the payment rate described in clause (ii) 
during the period in which--
          (I) such post-hospital extended care services for the 
        individual are medically necessary and not otherwise 
        available to the individual (as so determined),
          (II) inpatient hospital services for the individual 
        are not medically necessary, and
          (III) the individual is entitled to have payment made 
        for post-hospital extended care services under this 
        title,
except that if the Secretary determines that there is not an 
excess of hospital beds in such hospital and (subject to clause 
(iv)) there is not an excess of hospital beds in the area of 
such hospital, such payment shall be made (during such period) 
on the basis of the amount otherwise payable under part A with 
respect to inpatient hospital services.
  (ii)(I) Except as provided in subclause (II), the payment 
rate referred to in clause (i) is a rate equal to the estimated 
adjusted State-wide average rate per patient-day paid for 
services provided in skilled nursing facilities under the State 
plan approved under title XIX for the State in which such 
hospital is located, or, if the State in which the hospital is 
located does not have a State plan approved under title XIX, 
the estimated adjusted State-wide average allowable costs per 
patient-day for extended care services under this title in that 
State.
  (II) If a hospital has a unit which is a skilled nursing 
facility, the payment rate referred to in clause (i) for the 
hospital is a rate equal to the lesser of the rate described in 
subclause (I) or the allowable costs in effect under this title 
for extended care services provided to patients of such unit.
  (iii) Any day on which an individual receives inpatient 
services for which payment is made under this subparagraph 
shall, for purposes of this Act (other than this subparagraph), 
be deemed to be a day on which the individual received 
inpatient hospital services.
  (iv) In determining under clause (i), in the case of a public 
hospital, whether or not there is an excess of hospital beds in 
the area of such hospital, such determination shall be made on 
the basis of only the public hospitals (including the hospital) 
which are in the area of the hospital and which are under 
common ownership with that hospital.
  (H) In determining such reasonable cost with respect to home 
health agencies, the Secretary may not include--
          (i) any costs incurred in connection with bonding or 
        establishing an escrow account by any such agency as a 
        result of the surety bond requirement described in 
        subsection (o)(7) and the financial security 
        requirement described in subsection (o)(8);
          (ii) in the case of home health agencies to which the 
        surety bond requirement described in subsection (o)(7) 
        and the financial security requirement described in 
        subsection (o)(8) apply, any costs attributed to 
        interest charged such an agency in connection with 
        amounts borrowed by the agency to repay overpayments 
        made under this title to the agency, except that such 
        costs may be included in reasonable cost if the 
        Secretary determines that the agency was acting in good 
        faith in borrowing the amounts;
          (iii) in the case of contracts entered into by a home 
        health agency after the date of the enactment of this 
        subparagraph for the purpose of having services 
        furnished for or on behalf of such agency, any cost 
        incurred by such agency pursuant to any such contract 
        which is entered into for a period exceeding five 
        years; and
          (iv) in the case of contracts entered into by a home 
        health agency before the date of the enactment of this 
        subparagraph for the purpose of having services 
        furnished for or on behalf of such agency, any cost 
        incurred by such agency pursuant to any such contract, 
        which determines the amount payable by the home health 
        agency on the basis of a percentage of the agency's 
        reimbursement or claim for reimbursement for services 
        furnished by the agency, to the extent that such cost 
        exceeds the reasonable value of the services furnished 
        on behalf of such agency.
  (I) In determining such reasonable cost, the Secretary may 
not include any costs incurred by a provider with respect to 
any services furnished in connection with matters for which 
payment may be made under this title and furnished pursuant to 
a contract between the provider and any of its subcontractors 
which is entered into after the date of the enactment of this 
subparagraph and the value or cost of which is $10,000 or more 
over a twelve-month period unless the contract contains a 
clause to the effect that--
          (i) until the expiration of four years after the 
        furnishing of such services pursuant to such contract, 
        the subcontractor shall make available, upon written 
        request by the Secretary, or upon request by the 
        Comptroller General, or any of their duly authorized 
        representatives, the contract, and books, documents and 
        records of such subcontractor that are necessary to 
        certify the nature and extent of such costs, and
          (ii) if the subcontractor carries out any of the 
        duties of the contract through a subcontract, with a 
        value or cost of $10,000 or more over a twelve-month 
        period, with a related organization, such subcontract 
        shall contain a clause to the effect that until the 
        expiration of four years after the furnishing of such 
        services pursuant to such subcontract, the related 
        organization shall make available, upon written request 
        by the Secretary, or upon request by the Comptroller 
        General, or any of their duly authorized 
        representatives, the subcontract, and books, documents 
        and records of such organization that are necessary to 
        verify the nature and extent of such costs.
The Secretary shall prescribe in regulation criteria and 
procedures which the Secretary shall use in obtaining access to 
books, documents, and records under clauses required in 
contracts and subcontracts under this subparagraph.
  (J) Such regulations may not provide for any inpatient 
routine salary cost differential as a reimbursable cost for 
hospitals and skilled nursing facilities.
  (K)(i) The Secretary shall issue regulations that provide, to 
the extent feasible, for the establishment of limitations on 
the amount of any costs or charges that shall be considered 
reasonable with respect to services provided on an outpatient 
basis by hospitals (other than bona fide emergency services as 
defined in clause (ii)) or clinics (other than rural health 
clinics), which are reimbursed on a cost basis or on the basis 
of cost related charges, and by physicians utilizing such 
outpatient facilities. Such limitations shall be reasonably 
related to the charges in the same area for similar services 
provided in physicians' offices. Such regulations shall provide 
for exceptions to such limitations in cases where similar 
services are not generally available in physicians' offices in 
the area to individuals entitled to benefits under this title.
  (ii) For purposes of clause (i), the term ``bona fide 
emergency services'' means services provided in a hospital 
emergency room after the sudden onset of a medical condition 
manifesting itself by acute symptoms of sufficient severity 
(including severe pain) such that the absence of immediate 
medical attention could reasonably be expected to result in--
          (I) placing the patient's health in serious jeopardy;
          (II) serious impairment to bodily functions; or
          (III) serious dysfunction of any bodily organ or 
        part.
  (L)(i) The Secretary, in determining the amount of the 
payments that may be made under this title with respect to 
services furnished by home health agencies, may not recognize 
as reasonable (in the efficient delivery of such services) 
costs for the provision of such services by an agency to the 
extent these costs exceed (on the aggregate for the agency) for 
cost reporting periods beginning on or after--
          (I) July 1, 1985, and before July 1, 1986, 120 
        percent of the mean of the labor-related and nonlabor 
        per visit costs for freestanding home health agencies,
          (II) July 1, 1986, and before July 1, 1987, 115 
        percent of such mean,
          (III) July 1, 1987, and before October 1, 1997, 112 
        percent of such mean,
          (IV) October 1, 1997, and before October 1, 1998, 105 
        percent of the median of the labor-related and nonlabor 
        per visit costs for freestanding home health agencies, 
        or
          (V) October 1, 1998, 106 percent of such median.
  (ii) Effective for cost reporting periods beginning on or 
after July 1, 1986, such limitations shall be applied on an 
aggregate basis for the agency, rather than on a discipline 
specific basis. The Secretary may provide for such exemptions 
and exceptions to such limitation as he deems appropriate.
  (iii) Not later than July 1, 1991, and annually thereafter 
(but not for cost reporting periods beginning on or after July 
1, 1994, and before July 1, 1996, or on or after July 1, 1997, 
and before October 1, 1997), the Secretary shall establish 
limits under this subparagraph for cost reporting periods 
beginning on or after such date by utilizing the area wage 
index applicable under section 1886(d)(3)(E) and determined 
using the survey of the most recent available wages and wage-
related costs of hospitals located in the geographic area in 
which the home health service is furnished (determined without 
regard to whether such hospitals have been reclassified to a 
new geographic area pursuant to section 1886(d)(8)(B), a 
decision of the Medicare Geographic Classification Review Board 
under section 1886(d)(10), or a decision of the Secretary).
  (iv) In establishing limits under this subparagraph for cost 
reporting periods beginning after September 30, 1997, the 
Secretary shall not take into account any changes in the home 
health market basket, as determined by the Secretary, with 
respect to cost reporting periods which began on or after July 
1, 1994, and before July 1, 1996.
  (v) For services furnished by home health agencies for cost 
reporting periods beginning on or after October 1, 1997, 
subject to clause (viii)(I), the Secretary shall provide for an 
interim system of limits. Payment shall not exceed the costs 
determined under the preceding provisions of this subparagraph 
or, if lower, the product of--
          (I) an agency-specific per beneficiary annual 
        limitation calculated based 75 percent on 98 percent of 
        the reasonable costs (including nonroutine medical 
        supplies) for the agency's 12-month cost reporting 
        period ending during fiscal year 1994, and based 25 
        percent on 98 percent of the standardized regional 
        average of such costs for the agency's census division, 
        as applied to such agency, for cost reporting periods 
        ending during fiscal year 1994, such costs updated by 
        the home health market basket index; and
          (II) the agency's unduplicated census count of 
        patients (entitled to benefits under this title) for 
        the cost reporting period subject to the limitation.
  (vi) For services furnished by home health agencies for cost 
reporting periods beginning on or after October 1, 1997, the 
following rules apply:
          (I) For new providers and those providers without a 
        12-month cost reporting period ending in fiscal year 
        1994 subject to clauses (viii)(II) and (viii)(III), the 
        per beneficiary limitation shall be equal to the median 
        of these limits (or the Secretary's best estimates 
        thereof) applied to other home health agencies as 
        determined by the Secretary. A home health agency that 
        has altered its corporate structure or name shall not 
        be considered a new provider for this purpose.
          (II) For beneficiaries who use services furnished by 
        more than one home health agency, the per beneficiary 
        limitations shall be prorated among the agencies.
  (vii)(I) Not later than January 1, 1998, the Secretary shall 
establish per visit limits applicable for fiscal year 1998, and 
not later than April 1, 1998, the Secretary shall establish per 
beneficiary limits under clause (v)(I) for fiscal year 1998.
  (II) Not later than August 1 of each year (beginning in 1998) 
the Secretary shall establish the limits applicable under this 
subparagraph for services furnished during the fiscal year 
beginning October 1 of the year.
  (viii)(I) In the case of a provider with a 12-month cost 
reporting period ending in fiscal year 1994, if the limit 
imposed under clause (v) (determined without regard to this 
subclause) for a cost reporting period beginning during or 
after fiscal year 1999 is less than the median described in 
clause (vi)(I) (but determined as if any reference in clause 
(v) to ``98 percent'' were a reference to ``100 percent''), the 
limit otherwise imposed under clause (v) for such provider and 
period shall be increased by \1/3\ of such difference.
  (II) Subject to subclause (IV), for new providers and those 
providers without a 12-month cost reporting period ending in 
fiscal year 1994, but for which the first cost reporting period 
begins before fiscal year 1999, for cost reporting periods 
beginning during or after fiscal year 1999, the per beneficiary 
limitation described in clause (vi)(I) shall be equal to the 
median described in such clause (determined as if any reference 
in clause (v) to ``98 percent'' were a reference to ``100 
percent'').
  (III) Subject to subclause (IV), in the case of a new 
provider for which the first cost reporting period begins 
during or after fiscal year 1999, the limitation applied under 
clause (vi)(I) (but only with respect to such provider) shall 
be equal to 75 percent of the median described in clause 
(vi)(I).
  (IV) In the case of a new provider or a provider without a 
12-month cost reporting period ending in fiscal year 1994, 
subclause (II) shall apply, instead of subclause (III), to a 
home health agency which filed an application for home health 
agency provider status under this title before September 15, 
1998, or which was approved as a branch of its parent agency 
before such date and becomes a subunit of the parent agency or 
a separate agency on or after such date.
  (V) Each of the amounts specified in subclauses (I) through 
(III) are such amounts as adjusted under clause (iii) to 
reflect variations in wages among different areas.
  (ix) Notwithstanding the per beneficiary limit under clause 
(viii), if the limit imposed under clause (v) (determined 
without regard to this clause) for a cost reporting period 
beginning during or after fiscal year 2000 is less than the 
median described in clause (vi)(I) (but determined as if any 
reference in clause (v) to ``98 percent'' were a reference to 
``100 percent''), the limit otherwise imposed under clause (v) 
for such provider and period shall be increased by 2 percent.
  (x) Notwithstanding any other provision of this subparagraph, 
in updating any limit under this subparagraph by a home health 
market basket index for cost reporting periods beginning during 
each of fiscal years 2000, 2002, and 2003, the update otherwise 
provided shall be reduced by 1.1 percentage points. With 
respect to cost reporting periods beginning during fiscal year 
2001, the update to any limit under this subparagraph shall be 
the home health market basket index.
  (M) Such regulations shall provide that costs respecting care 
provided by a provider of services, pursuant to an assurance 
under title VI or XVI of the Public Health Service Act that the 
provider will make available a reasonable volume of services to 
persons unable to pay therefor, shall not be allowable as 
reasonable costs.
  (N) In determining such reasonable costs, costs incurred for 
activities directly related to influencing employees respecting 
unionization may not be included.
  (O)(i) In establishing an appropriate allowance for 
depreciation and for interest on capital indebtedness with 
respect to an asset of a provider of services which has 
undergone a change of ownership, such regulations shall 
provide, except as provided in clause (iii), that the valuation 
of the asset after such change of ownership shall be the 
historical cost of the asset, as recognized under this title, 
less depreciation allowed, to the owner of record as of the 
date of enactment of the Balanced Budget Act of 1997 (or, in 
the case of an asset not in existence as of that date, the 
first owner of record of the asset after that date).
  (ii) Such regulations shall not recognize, as reasonable in 
the provision of health care services, costs (including legal 
fees, accounting and administrative costs, travel costs, and 
the costs of feasibility studies) attributable to the 
negotiation or settlement of the sale or purchase of any 
capital asset (by acquisition or merger) for which any payment 
has previously been made under this title.
  (iii) In the case of the transfer of a hospital from 
ownership by a State to ownership by a nonprofit corporation 
without monetary consideration, the basis for capital 
allowances to the new owner shall be the book value of the 
hospital to the State at the time of the transfer.
  (P) If such regulations provide for the payment for a return 
on equity capital (other than with respect to costs of 
inpatient hospital services), the rate of return to be 
recognized, for determining the reasonable cost of services 
furnished in a cost reporting period, shall be equal to the 
average of the rates of interest, for each of the months any 
part of which is included in the period, on obligations issued 
for purchase by the Federal Hospital Insurance Trust Fund.
  (Q) Except as otherwise explicitly authorized, the Secretary 
is not authorized to limit the rate of increase on allowable 
costs of approved medical educational activities.
  (R) In determining such reasonable cost, costs incurred by a 
provider of services representing a beneficiary in an 
unsuccessful appeal of a determination described in section 
1869(b) shall not be allowable as reasonable costs.
  (S)(i) Such regulations shall not include provision for 
specific recognition of any return on equity capital with 
respect to hospital outpatient departments.
  (ii)(I) Such regulations shall provide that, in determining 
the amount of the payments that may be made under this title 
with respect to all the capital-related costs of outpatient 
hospital services, the Secretary shall reduce the amounts of 
such payments otherwise established under this title by 15 
percent for payments attributable to portions of cost reporting 
periods occurring during fiscal year 1990, by 15 percent for 
payments attributable to portions of cost reporting periods 
occurring during fiscal year 1991, and by 10 percent for 
payments attributable to portions of cost reporting periods 
occurring during fiscal years 1992 through 1999 and until the 
first date that the prospective payment system under section 
1833(t) is implemented.
  (II) The Secretary shall reduce the reasonable cost of 
outpatient hospital services (other than the capital-related 
costs of such services) otherwise determined pursuant to 
section 1833(a)(2)(B)(i)(I) by 5.8 percent for payments 
attributable to portions of cost reporting periods occurring 
during fiscal years 1991 through 1999 and until the first date 
that the prospective payment system under section 1833(t) is 
implemented.
  (III) Subclauses (I) and (II) shall not apply to payments 
with respect to the costs of hospital outpatient services 
provided by any hospital that is a sole community hospital (as 
defined in section 1886(d)(5)(D)(iii)) or a critical access 
hospital (as defined in section 1861(mm)(1)).
  (IV) In applying subclauses (I) and (II) to services for 
which payment is made on the basis of a blend amount under 
section 1833(i)(3)(A)(ii) or 1833(n)(1)(A)(ii), the costs 
reflected in the amounts described in sections 
1833(i)(3)(B)(i)(I) and 1833(n)(1)(B)(i)(I), respectively, 
shall be reduced in accordance with such subclause.
  (T) In determining such reasonable costs for hospitals, no 
reduction in copayments under section 1833(t)(8)(B) shall be 
treated as a bad debt and the amount of bad debts otherwise 
treated as allowable costs which are attributable to the 
deductibles and coinsurance amounts under this title shall be 
reduced--
          (i) for cost reporting periods beginning during 
        fiscal year 1998, by 25 percent of such amount 
        otherwise allowable,
          (ii) for cost reporting periods beginning during 
        fiscal year 1999, by 40 percent of such amount 
        otherwise allowable,
          (iii) for cost reporting periods beginning during 
        fiscal year 2000, by 45 percent of such amount 
        otherwise allowable,
          (iv) for cost reporting periods beginning during 
        fiscal years 2001 through 2012, by 30 percent of such 
        amount otherwise allowable, and
          (v) for cost reporting periods beginning during 
        fiscal year 2013 or a subsequent fiscal year, by 35 
        percent of such amount otherwise allowable.
  (U) In determining the reasonable cost of ambulance services 
(as described in subsection (s)(7)) provided during fiscal year 
1998, during fiscal year 1999, and during so much of fiscal 
year 2000 as precedes January 1, 2000, the Secretary shall not 
recognize the costs per trip in excess of costs recognized as 
reasonable for ambulance services provided on a per trip basis 
during the previous fiscal year (after application of this 
subparagraph), 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 fiscal year involved reduced by 
1.0 percentage point. For ambulance services provided after 
June 30, 1998, the Secretary may provide that claims for such 
services must include a code (or codes) under a uniform coding 
system specified by the Secretary that identifies the services 
furnished.
  (V) In determining such reasonable costs for skilled nursing 
facilities and (beginning with respect to cost reporting 
periods beginning during fiscal year 2013) for covered skilled 
nursing services described in section 1888(e)(2)(A) furnished 
by hospital providers of extended care services (as described 
in section 1883), the amount of bad debts otherwise treated as 
allowed costs which are attributable to the coinsurance amounts 
under this title for individuals who are entitled to benefits 
under part A and--
          (i) are not described in section 1935(c)(6)(A)(ii) 
        shall be reduced by--
          (I) for cost reporting periods beginning on or after 
        October 1, 2005, but before fiscal year 2013, 30 
        percent of such amount otherwise allowable; and
          (II) for cost reporting periods beginning during 
        fiscal year 2013 or a subsequent fiscal year, by 35 
        percent of such amount otherwise allowable.
          (ii) are described in such section--
          (I) for cost reporting periods beginning on or after 
        October 1, 2005, but before fiscal year 2013, shall not 
        be reduced;
          (II) for cost reporting periods beginning during 
        fiscal year 2013, shall be reduced by 12 percent of 
        such amount otherwise allowable;
          (III) for cost reporting periods beginning during 
        fiscal year 2014, shall be reduced by 24 percent of 
        such amount otherwise allowable; and
          (IV) for cost reporting periods beginning during a 
        subsequent fiscal year, shall be reduced by 35 percent 
        of such amount otherwise allowable.
  (W)(i) In determining such reasonable costs for providers 
described in clause (ii), the amount of bad debts otherwise 
treated as allowable costs which are attributable to 
deductibles and coinsurance amounts under this title shall be 
reduced--
          (I) for cost reporting periods beginning during 
        fiscal year 2013, by 12 percent of such amount 
        otherwise allowable;
          (II) for cost reporting periods beginning during 
        fiscal year 2014, by 24 percent of such amount 
        otherwise allowable; and
          (III) for cost reporting periods beginning during a 
        subsequent fiscal year, by 35 percent of such amount 
        otherwise allowable.
  (ii) A provider described in this clause is a provider of 
services not described in subparagraph (T) or (V), a supplier, 
or any other type of entity that receives payment for bad debts 
under the authority under subparagraph (A).
  (2)(A) If the bed and board furnished as part of inpatient 
hospital services (including inpatient tuberculosis hospital 
services and inpatient psychiatric hospital services) or post-
hospital extended care services is in accommodations more 
expensive than semi-private accommodations, the amount taken 
into account for purposes of payment under this title with 
respect to such services may not exceed the amount that would 
be taken into account with respect to such services if 
furnished in such semi-private accommodations unless the more 
expensive accommodations were required for medical reasons.
  (B) Where a provider of services which has an agreement in 
effect under this title furnishes to an individual items or 
services which are in excess of or more expensive than the 
items or services with respect to which payment may be made 
under part A or part B, as the case may be, the Secretary shall 
take into account for purposes of payment to such provider of 
services only the items or services with respect to which such 
payment may be made.
  (3) If the bed and board furnished as part of inpatient 
hospital services (including inpatient tuberculosis hospital 
services and inpatient psychiatric hospital services) or post-
hospital extended care services is in accommodations other 
than, but not more expensive than, semi-private accommodations 
and the use of such other accommodations rather than semi-
private accommodations was neither at the request of the 
patient nor for a reason which the Secretary determines is 
consistent with the purposes of this title, the amount of the 
payment with respect to such bed and board under part A shall 
be the amount otherwise payable under this title for such bed 
and board furnished in semi-private accommodations minus the 
difference between the charge customarily made by the hospital 
or skilled nursing facility for bed and board in semi-private 
accommodations and the charge customarily made by it for bed 
and board in the accommodations furnished.
  (4) If a provider of services furnishes items or services to 
an individual which are in excess of or more expensive than the 
items or services determined to be necessary in the efficient 
delivery of needed health services and charges are imposed for 
such more expensive items or services under the authority 
granted in section 1866(a)(2)(B)(ii), the amount of payment 
with respect to such items or services otherwise due such 
provider in any fiscal period shall be reduced to the extent 
that such payment plus such charges exceed the cost actually 
incurred for such items or services in the fiscal period in 
which such charges are imposed.
  (5)(A) Where physical therapy services, occupational therapy 
services, speech therapy services, or other therapy services or 
services of other health-related personnel (other than 
physicians) are furnished under an arrangement with a provider 
of services or other organization, specified in the first 
sentence of subsection (p) (including through the operation of 
subsection (g)) the amount included in any payment to such 
provider or other organization under this title as the 
reasonable cost of such services (as furnished under such 
arrangements) shall not exceed an amount equal to the salary 
which would reasonably have been paid for such services 
(together with any additional costs that would have been 
incurred by the provider or other organization) to the person 
performing them if they had been performed in an employment 
relationship with such provider or other organization (rather 
than under such arrangement) plus the cost of such other 
expenses (including a reasonable allowance for traveltime and 
other reasonable types of expense related to any differences in 
acceptable methods of organization for the provision of such 
therapy) incurred by such person, as the Secretary may in 
regulations determine to be appropriate.
  (B) Notwithstanding the provisions of subparagraph (A), if a 
provider of services or other organization specified in the 
first sentence of section 1861(p) requires the services of a 
therapist on a limited part-time basis, or only to perform 
intermittent services, the Secretary may make payment on the 
basis of a reasonable rate per unit of service, even though 
such rate is greater per unit of time than salary related 
amounts, where he finds that such greater payment is, in the 
aggregate, less than the amount that would have been paid if 
such organization had employed a therapist on a full- or part-
time salary basis.
  (6) For purposes of this subsection, the term ``semi-private 
accommodations'' means two-bed, three-bed, or four-bed 
accommodations.
  (7)(A) For limitation on Federal participation for capital 
expenditures which are out of conformity with a comprehensive 
plan of a State or areawide planning agency, see section 1122.
  (B) For further limitations on reasonable cost and 
determination of payment amounts for operating costs of 
inpatient hospital services and waivers for certain States, see 
section 1886.
  (C) For provisions restricting payment for provider-based 
physicians' services and for payments under certain percentage 
arrangements, see section 1887.
  (D) For further limitations on reasonable cost and 
determination of payment amounts for routine service costs of 
skilled nursing facilities, see subsections (a) through (c) of 
section 1888.
  (8) Items unrelated to patient care.--Reasonable costs do not 
include costs for the following--
          
          (i) entertainment, including tickets to sporting and 
        other entertainment events;
          (ii) gifts or donations;
          (iii) personal use of motor vehicles;
          (iv) costs for fines and penalties resulting from 
        violations of Federal, State, or local laws; and
          (v) education expenses for spouses or other 
        dependents of providers of services, their employees or 
        contractors.

                   Arrangements for Certain Services

  (w)(1) The term ``arrangements'' is limited to arrangements 
under which receipt of payment by the hospital, critical access 
hospital, skilled nursing facility, home health agency, or 
hospice program (whether in its own right or as agent), with 
respect to services for which an individual is entitled to have 
payment made under this title, discharges the liability of such 
individual or any other person to pay for the services.
  (2) Utilization review activities conducted, in accordance 
with the requirements of the program established under part B 
of title XI of the Social Security Act with respect to services 
furnished by a hospital or critical access hospital to patients 
insured under part A of this title or entitled to have payment 
made for such services under part B of this title or under a 
State plan approved under title XIX, by a quality improvement 
organization designated for the area in which such hospital or 
critical access hospital is located shall be deemed to have 
been conducted pursuant to arrangements between such hospital 
or critical access hospital and such organization under which 
such hospital or critical access hospital is obligated to pay 
to such organization, as a condition of receiving payment for 
hospital or critical access hospital services so furnished 
under this part or under such a State plan, such amount as is 
reasonably incurred and requested (as determined under 
regulations of the Secretary) by such organization in 
conducting such review activities with respect to services 
furnished by such hospital or critical access hospital to such 
patients.

                        State and United States

  (x) The terms ``State'' and ``United States'' have the 
meaning given to them by subsections (h) and (i), respectively, 
of section 210.

     Extended Care in Religious Nonmedical Health Care Institutions

  (y)(1) The term ``skilled nursing facility'' also includes a 
religious nonmedical health care institution (as defined in 
subsection (ss)(1)), but only (except for purposes of 
subsection (a)(2)) with respect to items and services 
ordinarily furnished by such an institution to inpatients, and 
payment may be made with respect to services provided by or in 
such an institution only to such extent and under such 
conditions, limitations, and requirements (in addition to or in 
lieu of the conditions, limitations, and requirements otherwise 
applicable) as may be provided in regulations consistent with 
section 1821.
  (2) Notwithstanding any other provision of this title, 
payment under part A may not be made for services furnished an 
individual in a skilled nursing facility to which paragraph (1) 
applies unless such individual elects, in accordance with 
regulations, for a spell of illness to have such services 
treated as post-hospital extended care services for purposes of 
such part; and payment under part A may not be made for post-
hospital extended care services--
          (A) furnished an individual during such spell of 
        illness in a skilled nursing facility to which 
        paragraph (1) applies after--
                  (i) such services have been furnished to him 
                in such a facility for 30 days during such 
                spell, or
                  (ii) such services have been furnished to him 
                during such spell in a skilled nursing facility 
                to which such paragraph does not apply; or
          (B) furnished an individual during such spell of 
        illness in a skilled nursing facility to which 
        paragraph (1) does not apply after such services have 
        been furnished to him during such spell in a skilled 
        nursing facility to which such paragraph applies.
  (3) The amount payable under part A for post-hospital 
extended care services furnished an individual during any spell 
of illness in a skilled nursing facility to which paragraph (1) 
applies shall be reduced by a coinsurance amount equal to one-
eighth of the inpatient hospital deductible for each day before 
the 31st day on which he is furnished such services in such a 
facility during such spell (and the reduction under this 
paragraph shall be in lieu of any reduction under section 
1813(a)(3)).
  (4) For purposes of subsection (i), the determination of 
whether services furnished by or in an institution described in 
paragraph (1) constitute post-hospital extended care services 
shall be made in accordance with and subject to such 
conditions, limitations, and requirements as may be provided in 
regulations.

                         Institutional Planning

  (z) An overall plan and budget of a hospital, skilled nursing 
facility, comprehensive outpatient rehabilitation facility, or 
home health agency shall be considered sufficient if it--
          (1) provides for an annual operating budget which 
        includes all anticipated income and expenses related to 
        items which would, under generally accepted accounting 
        principles, be considered income and expense items 
        (except that nothing in this paragraph shall require 
        that there be prepared, in connection with any budget, 
        an item-by-item identification of the components of 
        each type of anticipated expenditure or income);
          (2)(A) provides for a capital expenditures plan for 
        at least a 3-year period (including the year to which 
        the operating budget described in paragraph (1) is 
        applicable) which includes and identifies in detail the 
        anticipated sources of financing for, and the 
        objectives of, each anticipated expenditure in excess 
        of $600,000 (or such lesser amount as may be 
        established by the State under section 1122(g)(1) in 
        which the hospital is located) related to the 
        acquisition of land, the improvement of land, 
        buildings, and equipment, and the replacement, 
        modernization, and expansion of the buildings and 
        equipment which would, under generally accepted 
        accounting principles, be considered capital items;
          (B) provides that such plan is submitted to the 
        agency designated under section 1122(b), or if no such 
        agency is designated, to the appropriate health 
        planning agency in the State (but this subparagraph 
        shall not apply in the case of a facility exempt from 
        review under section 1122 by reason of section 
        1122(j));
          (3) provides for review and updating at least 
        annually; and
          (4) is prepared, under the direction of the governing 
        body of the institution or agency, by a committee 
        consisting of representatives of the governing body, 
        the administrative staff, and the medical staff (if 
        any) of the institution or agency.

  Rural Health Clinic Services and Federally Qualified Health Center 
                                Services

  (aa)(1) The term ``rural health clinic services'' means --
          (A) physicians' services and such services and 
        supplies as are covered under section 1861(s)(2)(A) if 
        furnished as an incident to a physician's professional 
        service and items and services described in section 
        1861(s)(10),
          (B) such services furnished by a physician assistant 
        or a nurse practitioner (as defined in paragraph (5)), 
        by a clinical psychologist (as defined by the 
        Secretary) or by a clinical social worker (as defined 
        in subsection (hh)(1)), and such services and supplies 
        furnished as an incident to his service as would 
        otherwise be covered if furnished by a physician or as 
        an incident to a physician's service, and
          (C) in the case of a rural health clinic located in 
        an area in which there exists a shortage of home health 
        agencies, part-time or intermittent nursing care and 
        related medical supplies (other than drugs and 
        biologicals) furnished by a registered professional 
        nurse or licensed practical nurse to a homebound 
        individual under a written plan of treatment (i) 
        established and periodically reviewed by a physician 
        described in paragraph (2)(B), or (ii) established by a 
        nurse practitioner or physician assistant and 
        periodically reviewed and approved by a physician 
        described in paragraph (2)(B),
when furnished to an individual as an outpatient of a rural 
health clinic.
  (2) The term ``rural health clinic'' means a facility which 
--
          (A) is primarily engaged in furnishing to outpatients 
        services described in subparagraphs (A) and (B) of 
        paragraph (1);
          (B) in the case of a facility which is not a 
        physician-directed clinic, has an arrangement 
        (consistent with the provisions of State and local law 
        relative to the practice, performance, and delivery of 
        health services) with one or more physicians (as 
        defined in subsection (r)(1)) under which provision is 
        made for the periodic review by such physicians of 
        covered services furnished by physician assistants and 
        nurse practitioners, the supervision and guidance by 
        such physicians of physician assistants and nurse 
        practitioners, the preparation by such physicians of 
        such medical orders for care and treatment of clinic 
        patients as may be necessary, and the availability of 
        such physicians for such referral of and consultation 
        for patients as is necessary and for advice and 
        assistance in the management of medical emergencies; 
        and, in the case of a physician-directed clinic, has 
        one or more of its staff physicians perform the 
        activities accomplished through such an arrangement;
          (C) maintains clinical records on all patients;
          (D) has arrangements with one or more hospitals, 
        having agreements in effect under section 1866, for the 
        referral and admission of patients requiring inpatient 
        services or such diagnostic or other specialized 
        services as are not available at the clinic;
          (E) has written policies, which are developed with 
        the advice of (and with provision for review of such 
        policies from time to time by) a group of professional 
        personnel, including one or more physicians and one or 
        more physician assistants or nurse practitioners, to 
        govern those services described in paragraph (1) which 
        it furnishes;
          (F) has a physician, physician assistant, or nurse 
        practitioner responsible for the execution of policies 
        described in subparagraph (E) and relating to the 
        provision of the clinic's services;
          (G) directly provides routine diagnostic services, 
        including clinical laboratory services, as prescribed 
        in regulations by the Secretary, and has prompt access 
        to additional diagnostic services from facilities 
        meeting requirements under this title;
          (H) in compliance with State and Federal law, has 
        available for administering to patients of the clinic 
        at least such drugs and biologicals as are determined 
        by the Secretary to be necessary for the treatment of 
        emergency cases (as defined in regulations) and has 
        appropriate procedures or arrangements for storing, 
        administering, and dispensing any drugs and 
        biologicals;
          (I) has a quality assessment and performance 
        improvement program, and appropriate procedures for 
        review of utilization of clinic services, as the 
        Secretary may specify;
          (J) has a nurse practitioner, a physician assistant, 
        or a certified nurse-midwife (as defined in subsection 
        (gg)) available to furnish patient care services not 
        less than 50 percent of the time the clinic operates; 
        and
          (K) meets such other requirements as the Secretary 
        may find necessary in the interest of the health and 
        safety of the individuals who are furnished services by 
        the clinic.
For the purposes of this title, such term includes only a 
facility which (i) is located in an area that is not an 
urbanized area (as defined by the Bureau of the Census) and in 
which there are insufficient numbers of needed health care 
practitioners (as determined by the Secretary), and that, 
within the previous 4-year period, has been designated by the 
chief executive officer of the State and certified by the 
Secretary as an area with a shortage of personal health 
services or designated by the Secretary either (I) as an area 
with a shortage of personal health services under section 
330(b)(3) or 1302(7) of the Public Health Service Act, (II) as 
a health professional shortage area described in section 
332(a)(1)(A) of that Act because of its shortage of primary 
medical care manpower, (III) as a high impact area described in 
section 329(a)(5) of that Act, of (IV) as an area which 
includes a population group which the Secretary determines has 
a health manpower shortage under section 332(a)(1)(B) of that 
Act, (ii) has filed an agreement with the Secretary by which it 
agrees not to charge any individual or other person for items 
or services for which such individual is entitled to have 
payment made under this title, except for the amount of any 
deductible or coinsurance amount imposed with respect to such 
items or services (not in excess of the amount customarily 
charged for such items and services by such clinic), pursuant 
to subsections (a) and (b) of section 1833, (iii) employs a 
physician assistant or nurse practitioner, and (iv) is not a 
rehabilitation agency or a facility which is primarily for the 
care and treatment of mental diseases. A facility that is in 
operation and qualifies as a rural health clinic under this 
title or title XIX and that subsequently fails to satisfy the 
requirement of clause (i) shall be considered, for purposes of 
this title and title XIX, as still satisfying the requirement 
of such clause if it is determined, in accordance with criteria 
established by the Secretary in regulations, to be essential to 
the delivery of primary care services that would otherwise be 
unavailable in the geographic area served by the clinic. If a 
State agency has determined under section 1864(a) that a 
facility is a rural health clinic and the facility has applied 
to the Secretary for approval as such a clinic, the Secretary 
shall notify the facility of the Secretary's approval or 
disapproval not later than 60 days after the date of the State 
agency determination or the application (whichever is later).
  (3) The term ``Federally qualified health center services'' 
means--
          (A) services of the type described in subparagraphs 
        (A) through (C) of paragraph (1) and preventive 
        services (as defined in section 1861(ddd)(3)); and
          (B) preventive primary health services that a center 
        is required to provide under section 330 of the Public 
        Health Service Act,
when furnished to an individual as an outpatient of a Federally 
qualified health center by the center or by a health care 
professional under contract with the center and, for this 
purpose, any reference to a rural health clinic or a physician 
described in paragraph (2)(B) is deemed a reference to a 
Federally qualified health center or a physician at the center, 
respectively.
  (4) The term ``Federally qualified health center'' means an 
entity which--
          (A)(i) is receiving a grant under section 330 of the 
        Public Health Service Act, or
          (ii)(I) is receiving funding from such a grant under 
        a contract with the recipient of such a grant, and (II) 
        meets the requirements to receive a grant under section 
        330 of such Act;
          (B) based on the recommendation of the Health 
        Resources and Services Administration within the Public 
        Health Service, is determined by the Secretary to meet 
        the requirements for receiving such a grant;
          (C) was treated by the Secretary, for purposes of 
        part B, as a comprehensive Federally funded health 
        center as of January 1, 1990; or
          (D) is an outpatient health program or facility 
        operated by a tribe or tribal organization under the 
        Indian Self-Determination Act or by an urban Indian 
        organization receiving funds under title V of the 
        Indian Health Care Improvement Act.
  (5)(A) The term ``physician assistant'' and the term ``nurse 
practitioner'' mean, for purposes of this title, a physician 
assistant or nurse practitioner who performs such services as 
such individual is legally authorized to perform (in the State 
in which the individual performs such services) in accordance 
with State law (or the State regulatory mechanism provided by 
State law), and who meets such training, education, and 
experience requirements (or any combination thereof) as the 
Secretary may prescribe in regulations.
  (B) The term ``clinical nurse specialist'' means, for 
purposes of this title, an individual who--
          (i) is a registered nurse and is licensed to practice 
        nursing in the State in which the clinical nurse 
        specialist services are performed; and
          (ii) holds a master's degree in a defined clinical 
        area of nursing from an accredited educational 
        institution.
  (6) The term ``collaboration'' means a process in which a 
nurse practitioner works with a physician to deliver health 
care services within the scope of the practitioner's 
professional expertise, with medical direction and appropriate 
supervision as provided for in jointly developed guidelines or 
other mechanisms as defined by the law of the State in which 
the services are performed.
  (7)(A) The Secretary shall waive for a 1-year period the 
requirements of paragraph (2) that a rural health clinic employ 
a physician assistant, nurse practitioner or certified nurse 
midwife or that such clinic require such providers to furnish 
services at least 50 percent of the time that the clinic 
operates for any facility that requests such waiver if the 
facility demonstrates that the facility has been unable, 
despite reasonable efforts, to hire a physician assistant, 
nurse practitioner, or certified nurse-midwife in the previous 
90-day period.
  (B) The Secretary may not grant such a waiver under 
subparagraph (A) to a facility if the request for the waiver is 
made less than 6 months after the date of the expiration of any 
previous such waiver for the facility, or if the facility has 
not yet been determined to meet the requirements (including 
subparagraph (J) of the first sentence of paragraph (2)) of a 
rural health clinic.
  (C) A waiver which is requested under this paragraph shall be 
deemed granted unless such request is denied by the Secretary 
within 60 days after the date such request is received.

          Services of a Certified Registered Nurse Anesthetist

  (bb)(1) The term ``services of a certified registered nurse 
anesthetist'' means anesthesia services and related care 
furnished by a certified registered nurse anesthetist (as 
defined in paragraph (2)) which the nurse anesthetist is 
legally authorized to perform as such by the State in which the 
services are furnished.
  (2) The term ``certified registered nurse anesthetist'' means 
a certified registered nurse anesthetist licensed by the State 
who meets such education, training, and other requirements 
relating to anesthesia services and related care as the 
Secretary may prescribe. In prescribing such requirements the 
Secretary may use the same requirements as those established by 
a national organization for the certification of nurse 
anesthetists. Such term also includes, as prescribed by the 
Secretary, an anesthesiologist assistant.

       Comprehensive Outpatient Rehabilitation Facility Services

  (cc)(1) The term ``comprehensive outpatient rehabilitation 
facility services'' means the following items and services 
furnished by a physician or other qualified professional 
personnel (as defined in regulations by the Secretary) to an 
individual who is an outpatient of a comprehensive outpatient 
rehabilitation facility under a plan (for furnishing such items 
and services to such individual) established and periodically 
reviewed by a physician--
          (A) physicians' services;
          (B) physical therapy, occupational therapy, speech-
        language pathology services, and respiratory therapy;
          (C) prosthetic and orthotic devices, including 
        testing, fitting, or training in the use of prosthetic 
        and orthotic devices;
          (D) social and psychological services;
          (E) nursing care provided by or under the supervision 
        of a registered professional nurse;
          (F) drugs and biologicals which cannot, as determined 
        in accordance with regulations, be self-administered;
          (G) supplies and durable medical equipment; and
          (H) such other items and services as are medically 
        necessary for the rehabilitation of the patient and are 
        ordinarily furnished by comprehensive outpatient 
        rehabilitation facilities,
excluding, however, any item or service if it would not be 
included under subsection (b) if furnished to an inpatient of a 
hospital. In the case of physical therapy, occupational 
therapy, and speech pathology services, there shall be no 
requirement that the item or service be furnished at any single 
fixed location if the item or service is furnished pursuant to 
such plan and payments are not otherwise made for the item or 
service under this title.
  (2) The term ``comprehensive outpatient rehabilitation 
facility'' means a facility which--
          (A) is primarily engaged in providing (by or under 
        the supervision of physicians) diagnostic, therapeutic, 
        and restorative services to outpatients for the 
        rehabilitation of injured, disabled, or sick persons;
          (B) provides at least the following comprehensive 
        outpatient rehabilitation services: (i) physicians' 
        services (rendered by physicians, as defined in section 
        1861(r)(1), who are available at the facility on a 
        full- or part-time basis); (ii) physical therapy; and 
        (iii) social or psychological services;
          (C) maintains clinical records on all patients;
          (D) has policies established by a group of 
        professional personnel (associated with the facility), 
        including one or more physicians defined in subsection 
        (r)(1) to govern the comprehensive outpatient 
        rehabilitation services it furnishes, and provides for 
        the carrying out of such policies by a full- or part-
        time physician referred to in subparagraph (B)(i);
          (E) has a requirement that every patient must be 
        under the care of a physician;
          (F) in the case of a facility in any State in which 
        State or applicable local law provides for the 
        licensing of facilities of this nature (i) is licensed 
        pursuant to such law, or (ii) is approved by the agency 
        of such State or locality, responsible for licensing 
        facilities of this nature, as meeting the standards 
        established for such licensing;
          (G) has in effect a utilization review plan in 
        accordance with regulations prescribed by the 
        Secretary;
          (H) has in effect an overall plan and budget that 
        meets the requirements of subsection (z);
          (I) provides the Secretary on a continuing basis with 
        a surety bond in a form specified by the Secretary and 
        in an amount that is not less than $50,000; and
          (J) meets such other conditions of participation as 
        the Secretary may find necessary in the interest of the 
        health and safety of individuals who are furnished 
        services by such facility, including conditions 
        concerning qualifications of personnel in these 
        facilities.
The Secretary may waive the requirement of a surety bond under 
subparagraph (I) in the case of a facility that provides a 
comparable surety bond under State law.

                     Hospice Care; Hospice Program

  (dd)(1) The term ``hospice care'' means the following items 
and services provided to a terminally ill individual by, or by 
others under arrangements made by, a hospice program under a 
written plan (for providing such care to such individual) 
established and periodically reviewed by the individual's 
attending physician and by the medical director (and by the 
interdisciplinary group described in paragraph (2)(B)) of the 
program--
          (A) nursing care provided by or under the supervision 
        of a registered professional nurse,
          (B) physical or occupational therapy, or speech-
        language pathology services,
          (C) medical social services under the direction of a 
        physician,
          (D)(i) services of a home health aide who has 
        successfully completed a training program approved by 
        the Secretary and (ii) homemaker services,
          (E) medical supplies (including drugs and 
        biologicals) and the use of medical appliances, while 
        under such a plan,
          (F) physicians' services,
          (G) short-term inpatient care (including both respite 
        care and procedures necessary for pain control and 
        acute and chronic symptom management) in an inpatient 
        facility meeting such conditions as the Secretary 
        determines to be appropriate to provide such care, but 
        such respite care may be provided only on an 
        intermittent, nonroutine, and occasional basis and may 
        not be provided consecutively over longer than five 
        days,
          (H) counseling (including dietary counseling) with 
        respect to care of the terminally ill individual and 
        adjustment to his death, and
          (I) any other item or service which is specified in 
        the plan and for which payment may otherwise be made 
        under this title.
The care and services described in subparagraphs (A) and (D) 
may be provided on a 24-hour, continuous basis only during 
periods of crisis (meeting criteria established by the 
Secretary) and only as necessary to maintain the terminally ill 
individual at home.
  (2) The term ``hospice program'' means a public agency or 
private organization (or a subdivision thereof) which--
          (A)(i) is primarily engaged in providing the care and 
        services described in paragraph (1) and makes such 
        services available (as needed) on a 24-hour basis and 
        which also provides bereavement counseling for the 
        immediate family of terminally ill individuals and 
        services described in section 1812(a)(5),
          (ii) provides for such care and services in 
        individuals' homes, on an outpatient basis, and on a 
        short-term inpatient basis, directly or under 
        arrangements made by the agency or organization, except 
        that--
                  (I) the agency or organization must routinely 
                provide directly substantially all of each of 
                the services described in subparagraphs (A), 
                (C), and (H) of paragraph (1), except as 
                otherwise provided in paragraph (5), and
                  (II) in the case of other services described 
                in paragraph (1) which are not provided 
                directly by the agency or organization, the 
                agency or organization must maintain 
                professional management responsibility for all 
                such services furnished to an individual, 
                regardless of the location or facility in which 
                such services are furnished; and
          (iii) provides assurances satisfactory to the 
        Secretary that the aggregate number of days of 
        inpatient care described in paragraph (1)(G) provided 
        in any 12-month period to individuals who have an 
        election in effect under section 1812(d) with respect 
        to that agency or organization does not exceed 20 
        percent of the aggregate number of days during that 
        period on which such elections for such individuals are 
        in effect;
          (B) has an interdisciplinary group of personnel 
        which--
                  (i) includes at least--
                          (I) one physician (as defined in 
                        subsection (r)(1)),
                          (II) one registered professional 
                        nurse, and
                          (III) one social worker,
        employed by or, in the case of a physician described in 
        subclause (I), under contract with the agency or 
        organization, and also includes at least one pastoral 
        or other counselor,
                  (ii) provides (or supervises the provision 
                of) the care and services described in 
                paragraph (1), and
                  (iii) establishes the policies governing the 
                provision of such care and services;
          (C) maintains central clinical records on all 
        patients;
          (D) does not discontinue the hospice care it provides 
        with respect to a patient because of the inability of 
        the patient to pay for such care;
          (E)(i) utilizes volunteers in its provision of care 
        and services in accordance with standards set by the 
        Secretary, which standards shall ensure a continuing 
        level of effort to utilize such volunteers, and (ii) 
        maintains records on the use of these volunteers and 
        the cost savings and expansion of care and services 
        achieved through the use of these volunteers;
          (F) in the case of an agency or organization in any 
        State in which State or applicable local law provides 
        for the licensing of agencies or organizations of this 
        nature, is licensed pursuant to such law; and
          (G) meets such other requirements as the Secretary 
        may find necessary in the interest of the health and 
        safety of the individuals who are provided care and 
        services by such agency or organization.
  (3)(A) An individual is considered to be ``terminally ill'' 
if the individual has a medical prognosis that the individual's 
life expectancy is 6 months or less.
  (B) The term ``attending physician'' means, with respect to 
an individual, the physician (as defined in subsection (r)(1)), 
the nurse practitioner (as defined in subsection (aa)(5)), or 
the physician assistant (as defined in such subsection), who 
may be employed by a hospice program, whom the individual 
identifies as having the most significant role in the 
determination and delivery of medical care to the individual at 
the time the individual makes an election to receive hospice 
care.
  (4)(A) An entity which is certified as a provider of services 
other than a hospice program shall be considered, for purposes 
of certification as a hospice program, to have met any 
requirements under paragraph (2) which are also the same 
requirements for certification as such other type of provider. 
The Secretary shall coordinate surveys for determining 
certification under this title so as to provide, to the extent 
feasible, for simultaneous surveys of an entity which seeks to 
be certified as a hospice program and as a provider of services 
of another type.
  (B) Any entity which is certified as a hospice program and as 
a provider of another type shall have separate provider 
agreements under section 1866 and shall file separate cost 
reports with respect to costs incurred in providing hospice 
care and in providing other services and items under this 
title.
  (C) Any entity that is certified as a hospice program shall 
be subject to a standard survey by an appropriate State or 
local survey agency, or an approved accreditation agency, as 
determined by the Secretary, not less frequently than once 
every 36 months beginning 6 months after the date of the 
enactment of this subparagraph and ending September 30, 2025.
  (5)(A) The Secretary may waive the requirements of paragraph 
(2)(A)(ii)(I) for an agency or organization with respect to all 
or part of the nursing care described in paragraph (1)(A) if 
such agency or organization--
          (i) is located in an area which is not an urbanized 
        area (as defined by the Bureau of the Census);
          (ii) was in operation on or before January 1, 1983; 
        and
          (iii) has demonstrated a good faith effort (as 
        determined by the Secretary) to hire a sufficient 
        number of nurses to provide such nursing care directly.
  (B) Any waiver, which is in such form and containing such 
information as the Secretary may require and which is requested 
by an agency or organization under subparagraph (A) or (C), 
shall be deemed to be granted unless such request is denied by 
the Secretary within 60 days after the date such request is 
received by the Secretary. The granting of a waiver under 
subparagraph (A) or (C) shall not preclude the granting of any 
subsequent waiver request should such a waiver again become 
necessary.
  (C) The Secretary may waive the requirements of paragraph 
(2)(A)(i) and (2)(A)(ii) for an agency or organization with 
respect to the services described in paragraph (1)(B) and, with 
respect to dietary counseling, paragraph (1)(H), if such agency 
or organization--
          (i) is located in an area which is not an urbanized 
        area (as defined by the Bureau of Census), and
          (ii) demonstrates to the satisfaction of the 
        Secretary that the agency or organization has been 
        unable, despite diligent efforts, to recruit 
        appropriate personnel.
  (D) In extraordinary, exigent, or other non-routine 
circumstances, such as unanticipated periods of high patient 
loads, staffing shortages due to illness or other events, or 
temporary travel of a patient outside a hospice program's 
service area, a hospice program may enter into arrangements 
with another hospice program for the provision by that other 
program of services described in paragraph (2)(A)(ii)(I). The 
provisions of paragraph (2)(A)(ii)(II) shall apply with respect 
to the services provided under such arrangements.
  (E) A hospice program may provide services described in 
paragraph (1)(A) other than directly by the program if the 
services are highly specialized services of a registered 
professional nurse and are provided non-routinely and so 
infrequently so that the provision of such services directly 
would be impracticable and prohibitively expensive.

                       Discharge Planning Process

  (ee)(1) A discharge planning process of a hospital shall be 
considered sufficient if it is applicable to services furnished 
by the hospital to individuals entitled to benefits under this 
title and if it meets the guidelines and standards established 
by the Secretary under paragraph (2).
  (2) The Secretary shall develop guidelines and standards for 
the discharge planning process in order to ensure a timely and 
smooth transition to the most appropriate type of and setting 
for post-hospital or rehabilitative care. The guidelines and 
standards shall include the following:
          (A) The hospital must identify, at an early stage of 
        hospitalization, those patients who are likely to 
        suffer adverse health consequences upon discharge in 
        the absence of adequate discharge planning.
          (B) Hospitals must provide a discharge planning 
        evaluation for patients identified under subparagraph 
        (A) and for other patients upon the request of the 
        patient, patient's representative, or patient's 
        physician.
          (C) Any discharge planning evaluation must be made on 
        a timely basis to ensure that appropriate arrangements 
        for post-hospital care will be made before discharge 
        and to avoid unnecessary delays in discharge.
          (D) A discharge planning evaluation must include an 
        evaluation of a patient's likely need for appropriate 
        post-hospital services, including hospice care and 
        post-hospital extended care services, and the 
        availability of those services, including the 
        availability of home health services through 
        individuals and entities that participate in the 
        program under this title and that serve the area in 
        which the patient resides and that request to be listed 
        by the hospital as available and, in the case of 
        individuals who are likely to need post-hospital 
        extended care services, the availability of such 
        services through facilities that participate in the 
        program under this title and that serve the area in 
        which the patient resides.
          (E) The discharge planning evaluation must be 
        included in the patient's medical record for use in 
        establishing an appropriate discharge plan and the 
        results of the evaluation must be discussed with the 
        patient (or the patient's representative).
          (F) Upon the request of a patient's physician, the 
        hospital must arrange for the development and initial 
        implementation of a discharge plan for the patient.
          (G) Any discharge planning evaluation or discharge 
        plan required under this paragraph must be developed 
        by, or under the supervision of, a registered 
        professional nurse, social worker, or other 
        appropriately qualified personnel.
          (H) Consistent with section 1802, the discharge plan 
        shall--
                  (i) not specify or otherwise limit the 
                qualified provider which may provide post-
                hospital home health services, and
                  (ii) identify (in a form and manner specified 
                by the Secretary) any entity to whom the 
                individual is referred in which the hospital 
                has a disclosable financial interest (as 
                specified by the Secretary consistent with 
                section 1866(a)(1)(S)) or which has such an 
                interest in the hospital.
  (3) With respect to a discharge plan for an individual who is 
enrolled with a Medicare+Choice organization under a 
Medicare+Choice plan and is furnished inpatient hospital 
services by a hospital under a contract with the organization--
          (A) the discharge planning evaluation under paragraph 
        (2)(D) is not required to include information on the 
        availability of home health services through 
        individuals and entities which do not have a contract 
        with the organization; and
          (B) notwithstanding subparagraph (H)(i), the plan may 
        specify or limit the provider (or providers) of post-
        hospital home health services or other post-hospital 
        services under the plan.

                    Partial Hospitalization Services

  (ff)(1) The term ``partial hospitalization services'' means 
the items and services described in paragraph (2) prescribed by 
a physician and provided under a program described in paragraph 
(3) under the supervision of a physician pursuant to an 
individualized, written plan of treatment established and 
periodically reviewed by a physician (in consultation with 
appropriate staff participating in such program), which plan 
sets forth the physician's diagnosis, the type, amount, 
frequency, and duration of the items and services provided 
under the plan, and the goals for treatment under the plan.
  (2) The items and services described in this paragraph are--
          (A) individual and group therapy with physicians or 
        psychologists (or other mental health professionals to 
        the extent authorized under State law),
          (B) occupational therapy requiring the skills of a 
        qualified occupational therapist,
          (C) services of social workers, trained psychiatric 
        nurses, and other staff trained to work with 
        psychiatric patients,
          (D) drugs and biologicals furnished for therapeutic 
        purposes (which cannot, as determined in accordance 
        with regulations, be self-administered),
          (E) individualized activity therapies that are not 
        primarily recreational or diversionary,
          (F) family counseling (the primary purpose of which 
        is treatment of the individual's condition),
          (G) patient training and education (to the extent 
        that training and educational activities are closely 
        and clearly related to individual's care and 
        treatment),
          (H) diagnostic services, and
          (I) such other items and services as the Secretary 
        may provide (but in no event to include meals and 
        transportation);
that are reasonable and necessary for the diagnosis or active 
treatment of the individual's condition, reasonably expected to 
improve or maintain the individual's condition and functional 
level and to prevent relapse or hospitalization, and furnished 
pursuant to such guidelines relating to frequency and duration 
of services as the Secretary shall by regulation establish 
(taking into account accepted norms of medical practice and the 
reasonable expectation of patient improvement).
  (3)(A) A program described in this paragraph is a program 
which is furnished by a hospital to its outpatients or by a 
community mental health center (as defined in subparagraph 
(B)), and which is a distinct and organized intensive 
ambulatory treatment service offering less than 24-hour-daily 
care other than in an individual's home or in an inpatient or 
residential setting.
  (B) For purposes of subparagraph (A), the term ``community 
mental health center'' means an entity that--
          (i)(I) provides the mental health services described 
        in section 1913(c)(1) of the Public Health Service Act; 
        or
          (II) in the case of an entity operating in a State 
        that by law precludes the entity from providing itself 
        the service described in subparagraph (E) of such 
        section, provides for such service by contract with an 
        approved organization or entity (as determined by the 
        Secretary);
          (ii) meets applicable licensing or certification 
        requirements for community mental health centers in the 
        State in which it is located;
          (iii) provides at least 40 percent of its services to 
        individuals who are not eligible for benefits under 
        this title; and
          (iv) meets such additional conditions as the 
        Secretary shall specify to ensure (I) the health and 
        safety of individuals being furnished such services, 
        (II) the effective and efficient furnishing of such 
        services, and (III) the compliance of such entity with 
        the criteria described in section 1931(c)(1) of the 
        Public Health Service Act.

                    Certified Nurse-Midwife Services

  (gg)(1) The term ``certified nurse-midwife services'' means 
such services furnished by a certified nurse-midwife (as 
defined in paragraph (2)) and such services and supplies 
furnished as an incident to the nurse-midwife's service which 
the certified nurse-midwife is legally authorized to perform 
under State law (or the State regulatory mechanism provided by 
State law) as would otherwise be covered if furnished by a 
physician or as an incident to a physicians' service.
  (2) The term ``certified nurse-midwife'' means a registered 
nurse who has successfully completed a program of study and 
clinical experience meeting guidelines prescribed by the 
Secretary, or has been certified by an organization recognized 
by the Secretary.

        Clinical Social Worker; Clinical Social Worker Services

  (hh)(1) The term ``clinical social worker'' means an 
individual who--
          (A) possesses a master's or doctor's degree in social 
        work;
          (B) after obtaining such degree has performed at 
        least 2 years of supervised clinical social work; and
          (C)(i) is licensed or certified as a clinical social 
        worker by the State in which the services are 
        performed, or
          (ii) in the case of an individual in a State which 
        does not provide for licensure or certification--
                  (I) has completed at least 2 years or 3,000 
                hours of post-master's degree supervised 
                clinical social work practice under the 
                supervision of a master's level social worker 
                in an appropriate setting (as determined by the 
                Secretary), and
                  (II) meets such other criteria as the 
                Secretary establishes.
  (2) The term ``clinical social worker services'' means 
services performed by a clinical social worker (as defined in 
paragraph (1)) for the diagnosis and treatment of mental 
illnesses (other than services furnished to an inpatient of a 
hospital and other than services furnished to an inpatient of a 
skilled nursing facility which the facility is required to 
provide as a requirement for participation) which the clinical 
social worker is legally authorized to perform under State law 
(or the State regulatory mechanism provided by State law) of 
the State in which such services are performed as would 
otherwise be covered if furnished by a physician or as an 
incident to a physician's professional service.

                    Qualified Psychologist Services

  (ii) The term ``qualified psychologist services'' means such 
services and such services and supplies furnished as an 
incident to his service furnished by a clinical psychologist 
(as defined by the Secretary) which the psychologist is legally 
authorized to perform under State law (or the State regulatory 
mechanism provided by State law) as would otherwise be covered 
if furnished by a physician or as an incident to a physician's 
service.

                         Screening Mammography

  (jj) The term ``screening mammography'' means a radiologic 
procedure provided to a woman for the purpose of early 
detection of breast cancer and includes a physician's 
interpretation of the results of the procedure.

                       Covered Osteoporosis Drug

  (kk) The term ``covered osteoporosis drug'' means an 
injectable drug approved for the treatment of post-menopausal 
osteoporosis provided to an individual by a home health agency 
if, in accordance with regulations promulgated by the 
Secretary--
          (1) the individual's attending physician certifies 
        that the individual has suffered a bone fracture 
        related to post-menopausal osteoporosis and that the 
        individual is unable to learn the skills needed to 
        self-administer such drug or is otherwise physically or 
        mentally incapable of self-administering such drug; and
          (2) the individual is confined to the individual's 
        home (except when receiving items and services referred 
        to in subsection (m)(7)).

         Speech-Language Pathology Services; Audiology Services

  (ll)(1) The term ``speech-language pathology services'' means 
such speech, language, and related function assessment and 
rehabilitation services furnished by a qualified speech-
language pathologist as the speech-language pathologist is 
legally authorized to perform under State law (or the State 
regulatory mechanism provided by State law) as would otherwise 
be covered if furnished by a physician.
  (2) The term ``outpatient speech-language pathology 
services'' has the meaning given the term ``outpatient physical 
therapy services'' in subsection (p), except that in applying 
such subsection--
          (A) ``speech-language pathology'' shall be 
        substituted for ``physical therapy'' each place it 
        appears; and
          (B) ``speech-language pathologist'' shall be 
        substituted for ``physical therapist'' each place it 
        appears.
  (3) The term ``audiology services'' means such hearing and 
balance assessment services furnished by a qualified 
audiologist as the audiologist is legally authorized to perform 
under State law (or the State regulatory mechanism provided by 
State law), as would otherwise be covered if furnished by a 
physician.
  (4) In this subsection:
          (A) The term ``qualified speech-language 
        pathologist'' means an individual with a master's or 
        doctoral degree in speech-language pathology who--
                  (i) is licensed as a speech-language 
                pathologist by the State in which the 
                individual furnishes such services, or
                  (ii) in the case of an individual who 
                furnishes services in a State which does not 
                license speech-language pathologists, has 
                successfully completed 350 clock hours of 
                supervised clinical practicum (or is in the 
                process of accumulating such supervised 
                clinical experience), performed not less than 9 
                months of supervised full-time speech-language 
                pathology services after obtaining a master's 
                or doctoral degree in speech-language pathology 
                or a related field, and successfully completed 
                a national examination in speech-language 
                pathology approved by the Secretary.
          (B) The term ``qualified audiologist'' means an 
        individual with a master's or doctoral degree in 
        audiology who--
                  (i) is licensed as an audiologist by the 
                State in which the individual furnishes such 
                services, or
                  (ii) in the case of an individual who 
                furnishes services in a State which does not 
                license audiologists, has successfully 
                completed 350 clock hours of supervised 
                clinical practicum (or is in the process of 
                accumulating such supervised clinical 
                experience), performed not less than 9 months 
                of supervised full-time audiology services 
                after obtaining a master's or doctoral degree 
                in audiology or a related field, and 
                successfully completed a national examination 
                in audiology approved by the Secretary.

      Critical Access Hospital; Critical Access Hospital Services

  (mm)(1) The term ``critical access hospital'' means a 
facility certified by the Secretary as a critical access 
hospital under section 1820(e).
  (2) The term ``inpatient critical access hospital services'' 
means items and services, furnished to an inpatient of a 
critical access hospital by such facility, that would be 
inpatient hospital services if furnished to an inpatient of a 
hospital by a hospital.
  (3) The term ``outpatient critical access hospital services'' 
means medical and other health services furnished by a critical 
access hospital on an outpatient basis.

               Screening Pap Smear; Screening Pelvic Exam

  (nn)(1) The term ``screening pap smear'' means a diagnostic 
laboratory test consisting of a routine exfoliative cytology 
test (Papanicolaou test) provided to a woman for the purpose of 
early detection of cervical or vaginal cancer and includes a 
physician's interpretation of the results of the test, if the 
individual involved has not had such a test during the 
preceding 2 years, or during the preceding year in the case of 
a woman described in paragraph (3).
  (2) The term ``screening pelvic exam'' means a pelvic 
examination provided to a woman if the woman involved has not 
had such an examination during the preceding 2 years, or during 
the preceding year in the case of a woman described in 
paragraph (3), and includes a clinical breast examination.
  (3) A woman described in this paragraph is a woman who--
          (A) is of childbearing age and has had a test 
        described in this subsection during any of the 
        preceding 3 years that indicated the presence of 
        cervical or vaginal cancer or other abnormality; or
          (B) is at high risk of developing cervical or vaginal 
        cancer (as determined pursuant to factors identified by 
        the Secretary).

                    Prostate Cancer Screening Tests

  (oo)(1) The term ``prostate cancer screening test'' means a 
test that consists of any (or all) of the procedures described 
in paragraph (2) provided for the purpose of early detection of 
prostate cancer to a man over 50 years of age who has not had 
such a test during the preceding year.
  (2) The procedures described in this paragraph are as 
follows:
          (A) A digital rectal examination.
          (B) A prostate-specific antigen blood test.
          (C) For years beginning after 2002, such other 
        procedures as the Secretary finds appropriate for the 
        purpose of early detection of prostate cancer, taking 
        into account changes in technology and standards of 
        medical practice, availability, effectiveness, costs, 
        and such other factors as the Secretary considers 
        appropriate.

                   Colorectal Cancer Screening Tests

  (pp)(1) The term ``colorectal cancer screening test'' means 
any of the following procedures furnished to an individual for 
the purpose of early detection of colorectal cancer:
          (A) Screening fecal-occult blood test.
          (B) Screening flexible sigmoidoscopy.
          (C) Screening colonoscopy.
          (D) Such other tests or procedures, and modifications 
        to tests and procedures under this subsection, with 
        such frequency and payment limits, as the Secretary 
        determines appropriate, in consultation with 
        appropriate organizations.
  (2) An ``individual at high risk for colorectal cancer'' is 
an individual who, because of family history, prior experience 
of cancer or precursor neoplastic polyps, a history of chronic 
digestive disease condition (including inflammatory bowel 
disease, Crohn's Disease, or ulcerative colitis), the presence 
of any appropriate recognized gene markers for colorectal 
cancer, or other predisposing factors, faces a high risk for 
colorectal cancer.

         Diabetes Outpatient Self-Management Training Services

  (qq)(1) The term ``diabetes outpatient self-management 
training services'' means educational and training services 
furnished (at such times as the Secretary determines 
appropriate) to an individual with diabetes by a certified 
provider (as described in paragraph (2)(A)) in an outpatient 
setting by an individual or entity who meets the quality 
standards described in paragraph (2)(B), but only if the 
physician who is managing the individual's diabetic condition 
certifies that such services are needed under a comprehensive 
plan of care related to the individual's diabetic condition to 
ensure therapy compliance or to provide the individual with 
necessary skills and knowledge (including skills related to the 
self-administration of injectable drugs) to participate in the 
management of the individual's condition.
  (2) In paragraph (1)--
          (A) a ``certified provider'' is a physician, or other 
        individual or entity designated by the Secretary, that, 
        in addition to providing diabetes outpatient self-
        management training services, provides other items or 
        services for which payment may be made under this 
        title; and
          (B) a physician, or such other individual or entity, 
        meets the quality standards described in this paragraph 
        if the physician, or individual or entity, meets 
        quality standards established by the Secretary, except 
        that the physician or other individual or entity shall 
        be deemed to have met such standards if the physician 
        or other individual or entity meets applicable 
        standards originally established by the National 
        Diabetes Advisory Board and subsequently revised by 
        organizations who participated in the establishment of 
        standards by such Board, or is recognized by an 
        organization that represents individuals (including 
        individuals under this title) with diabetes as meeting 
        standards for furnishing the services.

                         Bone Mass Measurement

  (rr)(1) The term ``bone mass measurement'' means a radiologic 
or radioisotopic procedure or other procedure approved by the 
Food and Drug Administration performed on a qualified 
individual (as defined in paragraph (2)) for the purpose of 
identifying bone mass or detecting bone loss or determining 
bone quality, and includes a physician's interpretation of the 
results of the procedure.
  (2) For purposes of this subsection, the term ``qualified 
individual'' means an individual who is (in accordance with 
regulations prescribed by the Secretary)--
          (A) an estrogen-deficient woman at clinical risk for 
        osteoporosis;
          (B) an individual with vertebral abnormalities;
          (C) an individual receiving long-term glucocorticoid 
        steroid therapy;
          (D) an individual with primary hyperparathyroidism; 
        or
          (E) an individual being monitored to assess the 
        response to or efficacy of an approved osteoporosis 
        drug therapy.
  (3) The Secretary shall establish such standards regarding 
the frequency with which a qualified individual shall be 
eligible to be provided benefits for bone mass measurement 
under this title.

              Religious Nonmedical Health Care Institution

  (ss)(1) The term ``religious nonmedical health care 
institution'' means an institution that--
                  (A) is described in subsection (c)(3) of 
                section 501 of the Internal Revenue Code of 
                1986 and is exempt from taxes under subsection 
                (a) of such section;
                  (B) is lawfully operated under all applicable 
                Federal, State, and local laws and regulations;
                  (C) provides only nonmedical nursing items 
                and services exclusively to patients who choose 
                to rely solely upon a religious method of 
                healing and for whom the acceptance of medical 
                health services would be inconsistent with 
                their religious beliefs;
                  (D) provides such nonmedical items and 
                services exclusively through nonmedical nursing 
                personnel who are experienced in caring for the 
                physical needs of such patients;
                  (E) provides such nonmedical items and 
                services to inpatients on a 24-hour basis;
                  (F) on the basis of its religious beliefs, 
                does not provide through its personnel or 
                otherwise medical items and services (including 
                any medical screening, examination, diagnosis, 
                prognosis, treatment, or the administration of 
                drugs) for its patients;
                  (G)(i) is not owned by, under common 
                ownership with, or has an ownership interest 
                in, a provider of medical treatment or 
                services;
                  (ii) is not affiliated with--
                          (I) a provider of medical treatment 
                        or services, or
                          (II) an individual who has an 
                        ownership interest in a provider of 
                        medical treatment or services;
                  (H) has in effect a utilization review plan 
                which--
                          (i) provides for the review of 
                        admissions to the institution, of the 
                        duration of stays therein, of cases of 
                        continuous extended duration, and of 
                        the items and services furnished by the 
                        institution,
                          (ii) requires that such reviews be 
                        made by an appropriate committee of the 
                        institution that includes the 
                        individuals responsible for overall 
                        administration and for supervision of 
                        nursing personnel at the institution,
                          (iii) provides that records be 
                        maintained of the meetings, decisions, 
                        and actions of such committee, and
                          (iv) meets such other requirements as 
                        the Secretary finds necessary to 
                        establish an effective utilization 
                        review plan;
                  (I) provides the Secretary with such 
                information as the Secretary may require to 
                implement section 1821, including information 
                relating to quality of care and coverage 
                determinations; and
                  (J) meets such other requirements as the 
                Secretary finds necessary in the interest of 
                the health and safety of individuals who are 
                furnished services in the institution.
  (2) To the extent that the Secretary finds that the 
accreditation of an institution by a State, regional, or 
national agency or association provides reasonable assurances 
that any or all of the requirements of paragraph (1) are met or 
exceeded, the Secretary may treat such institution as meeting 
the condition or conditions with respect to which the Secretary 
made such finding.
  (3)(A)(i) In administering this subsection and section 1821, 
the Secretary shall not require any patient of a religious 
nonmedical health care institution to undergo medical 
screening, examination, diagnosis, prognosis, or treatment or 
to accept any other medical health care service, if such 
patient (or legal representative of the patient) objects 
thereto on religious grounds.
  (ii) Clause (i) shall not be construed as preventing the 
Secretary from requiring under section 1821(a)(2) the provision 
of sufficient information regarding an individual's condition 
as a condition for receipt of benefits under part A for 
services provided in such an institution.
  (B)(i) In administering this subsection and section 1821, the 
Secretary shall not subject a religious nonmedical health care 
institution or its personnel to any medical supervision, 
regulation, or control, insofar as such supervision, 
regulation, or control would be contrary to the religious 
beliefs observed by the institution or such personnel.
  (ii) Clause (i) shall not be construed as preventing the 
Secretary from reviewing items and services billed by the 
institution to the extent the Secretary determines such review 
to be necessary to determine whether such items and services 
were not covered under part A, are excessive, or are 
fraudulent.
  (4)(A) For purposes of paragraph (1)(G)(i), an ownership 
interest of less than 5 percent shall not be taken into 
account.
  (B) For purposes of paragraph (1)(G)(ii), none of the 
following shall be considered to create an affiliation:
          (i) An individual serving as an uncompensated 
        director, trustee, officer, or other member of the 
        governing body of a religious nonmedical health care 
        institution.
          (ii) An individual who is a director, trustee, 
        officer, employee, or staff member of a religious 
        nonmedical health care institution having a family 
        relationship with an individual who is affiliated with 
        (or has an ownership interest in) a provider of medical 
        treatment or services.
          (iii) An individual or entity furnishing goods or 
        services as a vendor to both providers of medical 
        treatment or services and religious nonmedical health 
        care institutions.

 Post-Institutional Home Health Services; Home Health Spell of Illness

  (tt)(1) The term ``post-institutional home health services'' 
means home health services furnished to an individual--
          (A) after discharge from a hospital or critical 
        access hospital in which the individual was an 
        inpatient for not less than 3 consecutive days before 
        such discharge if such home health services were 
        initiated within 14 days after the date of such 
        discharge; or
          (B) after discharge from a skilled nursing facility 
        in which the individual was provided post-hospital 
        extended care services if such home health services 
        were initiated within 14 days after the date of such 
        discharge.
  (2) The term ``home health spell of illness'' with respect to 
any individual means a period of consecutive days--
          (A) beginning with the first day (not included in a 
        previous home health spell of illness) (i) on which 
        such individual is furnished post-institutional home 
        health services, and (ii) which occurs in a month for 
        which the individual is entitled to benefits under part 
        A, and
          (B) ending with the close of the first period of 60 
        consecutive days thereafter on each of which the 
        individual is neither an inpatient of a hospital or 
        critical access hospital nor an inpatient of a facility 
        described in section 1819(a)(1) or subsection (y)(1) 
        nor provided home health services.

                         Screening for Glaucoma

  (uu) The term ``screening for glaucoma'' means a dilated eye 
examination with an intraocular pressure measurement, and a 
direct ophthalmoscopy or a slit-lamp biomicroscopic examination 
for the early detection of glaucoma which is furnished by or 
under the direct supervision of an optometrist or 
ophthalmologist who is legally authorized to furnish such 
services under State law (or the State regulatory mechanism 
provided by State law) of the State in which the services are 
furnished, as would otherwise be covered if furnished by a 
physician or as an incident to a physician's professional 
service, if the individual involved has not had such an 
examination in the preceding year.

 Medical Nutrition Therapy Services; Registered Dietitian or Nutrition 
                              Professional

  (vv)(1) The term ``medical nutrition therapy services'' means 
nutritional diagnostic, therapy, and counseling services for 
the purpose of disease management which are furnished by a 
registered dietitian or nutrition professional (as defined in 
paragraph (2)) pursuant to a referral by a physician (as 
defined in subsection (r)(1)).
  (2) Subject to paragraph (3), the term ``registered dietitian 
or nutrition professional'' means an individual who--
          (A) holds a baccalaureate or higher degree granted by 
        a regionally accredited college or university in the 
        United States (or an equivalent foreign degree) with 
        completion of the academic requirements of a program in 
        nutrition or dietetics, as accredited by an appropriate 
        national accreditation organization recognized by the 
        Secretary for this purpose;
          (B) has completed at least 900 hours of supervised 
        dietetics practice under the supervision of a 
        registered dietitian or nutrition professional; and
          (C)(i) is licensed or certified as a dietitian or 
        nutrition professional by the State in which the 
        services are performed; or
          (ii) in the case of an individual in a State that 
        does not provide for such licensure or certification, 
        meets such other criteria as the Secretary establishes.
  (3) Subparagraphs (A) and (B) of paragraph (2) shall not 
apply in the case of an individual who, as of the date of the 
enactment of this subsection, is licensed or certified as a 
dietitian or nutrition professional by the State in which 
medical nutrition therapy services are performed.

                Initial Preventive Physical Examination

  (ww)(1) The term ``initial preventive physical examination'' 
means physicians' services consisting of a physical examination 
(including measurement of height, weight body mass index,, and 
blood pressure) with the goal of health promotion and disease 
detection and includes education, counseling, and referral with 
respect to screening and other preventive services described in 
paragraph (2) and end-of-life planning (as defined in paragraph 
(3)) upon the agreement with the individual, but does not 
include clinical laboratory tests.
  (2) The screening and other preventive services described in 
this paragraph include the following:
          (A) Pneumococcal, influenza, and hepatitis B vaccine 
        and administration under subsection (s)(10).
          (B) Screening mammography as defined in subsection 
        (jj).
          (C) Screening pap smear and screening pelvic exam as 
        defined in subsection (nn).
          (D) Prostate cancer screening tests as defined in 
        subsection (oo).
          (E) Colorectal cancer screening tests as defined in 
        subsection (pp).
          (F) Diabetes outpatient self-management training 
        services as defined in subsection (qq)(1).
          (G) Bone mass measurement as defined in subsection 
        (rr).
          (H) Screening for glaucoma as defined in subsection 
        (uu).
          (I) Medical nutrition therapy services as defined in 
        subsection (vv).
          (J) Cardiovascular screening blood tests as defined 
        in subsection (xx)(1).
          (K) Diabetes screening tests as defined in subsection 
        (yy).
          (L) Ultrasound screening for abdominal aortic 
        aneurysm as defined in section 1861(bbb).
          (M) An electrocardiogram.
          (N) Additional preventive services (as defined in 
        subsection (ddd)(1)).
  (3) For purposes of paragraph (1), the term ``end-of-life 
planning'' means verbal or written information regarding--
          (A) an individual's ability to prepare an advance 
        directive in the case that an injury or illness causes 
        the individual to be unable to make health care 
        decisions; and
          (B) whether or not the physician is willing to follow 
        the individual's wishes as expressed in an advance 
        directive.

                  Cardiovascular Screening Blood Test

  (xx)(1) The term ``cardiovascular screening blood test'' 
means a blood test for the early detection of cardiovascular 
disease (or abnormalities associated with an elevated risk of 
cardiovascular disease) that tests for the following:
          (A) Cholesterol levels and other lipid or 
        triglyceride levels.
          (B) Such other indications associated with the 
        presence of, or an elevated risk for, cardiovascular 
        disease as the Secretary may approve for all 
        individuals (or for some individuals determined by the 
        Secretary to be at risk for cardiovascular disease), 
        including indications measured by noninvasive testing.
The Secretary may not approve an indication under subparagraph 
(B) for any individual unless a blood test for such is 
recommended by the United States Preventive Services Task 
Force.
  (2) The Secretary shall establish standards, in consultation 
with appropriate organizations, regarding the frequency for 
each type of cardiovascular screening blood tests, except that 
such frequency may not be more often than once every 2 years.

                        Diabetes Screening Tests

  (yy)(1) The term ``diabetes screening tests'' means testing 
furnished to an individual at risk for diabetes (as defined in 
paragraph (2)) for the purpose of early detection of diabetes, 
including--
          (A) a fasting plasma glucose test; and
          (B) such other tests, and modifications to tests, as 
        the Secretary determines appropriate, in consultation 
        with appropriate organizations.
  (2) For purposes of paragraph (1), the term ``individual at 
risk for diabetes'' means an individual who has any of the 
following risk factors for diabetes:
          (A) Hypertension.
          (B) Dyslipidemia.
          (C) Obesity, defined as a body mass index greater 
        than or equal to 30 kg/m2.
          (D) Previous identification of an elevated impaired 
        fasting glucose.
          (E) Previous identification of impaired glucose 
        tolerance.
          (F) A risk factor consisting of at least 2 of the 
        following characteristics:
                  (i) Overweight, defined as a body mass index 
                greater than 25, but less than 30, kg/
                m2.
                  (ii) A family history of diabetes.
                  (iii) A history of gestational diabetes 
                mellitus or delivery of a baby weighing greater 
                than 9 pounds.
                  (iv) 65 years of age or older.
  (3) The Secretary shall establish standards, in consultation 
with appropriate organizations, regarding the frequency of 
diabetes screening tests, except that such frequency may not be 
more often than twice within the 12-month period following the 
date of the most recent diabetes screening test of that 
individual.

                      Intravenous Immune Globulin

  (zz) The term ``intravenous immune globulin'' means an 
approved pooled plasma derivative for the treatment in the 
patient's home of a patient with a diagnosed primary immune 
deficiency disease, but not including items or services related 
to the administration of the derivative, if a physician 
determines administration of the derivative in the patient's 
home is medically appropriate.

     Extended Care in Religious Nonmedical Health Care Institutions

  (aaa)(1) The term ``home health agency'' also includes a 
religious nonmedical health care institution (as defined in 
subsection (ss)(1)), but only with respect to items and 
services ordinarily furnished by such an institution to 
individuals in their homes, and that are comparable to items 
and services furnished to individuals by a home health agency 
that is not religious nonmedical health care institution.
  (2)(A) Subject to subparagraphs (B), payment may be made with 
respect to services provided by such an institution only to 
such extent and under such conditions, limitations, and 
requirements (in addition to or in lieu of the conditions, 
limitations, and requirements otherwise applicable) as may be 
provided in regulations consistent with section 1821.
  (B) Notwithstanding any other provision of this title, 
payment may not be made under subparagraph (A)--
          (i) in a year insofar as such payments exceed 
        $700,000; and
          (ii) after December 31, 2006.

           Ultrasound Screening for Abdominal Aortic Aneurysm

  (bbb) The term ``ultrasound screening for abdominal aortic 
aneurysm'' means--
          (1) a procedure using sound waves (or such other 
        procedures using alternative technologies, of 
        commensurate accuracy and cost, that the Secretary may 
        specify) provided for the early detection of abdominal 
        aortic aneurysm; and
          (2) includes a physician's interpretation of the 
        results of the procedure.

                        Long-Term Care Hospital

  (ccc) The term ``long-term care hospital'' means a hospital 
which--
          (1) is primarily engaged in providing inpatient 
        services, by or under the supervision of a physician, 
        to Medicare beneficiaries whose medically complex 
        conditions require a long hospital stay and programs of 
        care provided by a long-term care hospital;
          (2) has an average inpatient length of stay (as 
        determined by the Secretary) of greater than 25 days, 
        or meets the requirements of clause (II) of section 
        1886(d)(1)(B)(iv);
          (3) satisfies the requirements of subsection (e); and
          (4) meets the following facility criteria:
                  (A) the institution has a patient review 
                process, documented in the patient medical 
                record, that screens patients prior to 
                admission for appropriateness of admission to a 
                long-term care hospital, validates within 48 
                hours of admission that patients meet admission 
                criteria for long-term care hospitals, 
                regularly evaluates patients throughout their 
                stay for continuation of care in a long-term 
                care hospital, and assesses the available 
                discharge options when patients no longer meet 
                such continued stay criteria;
                  (B) the institution has active physician 
                involvement with patients during their 
                treatment through an organized medical staff, 
                physician-directed treatment with physician on-
                site availability on a daily basis to review 
                patient progress, and consulting physicians on 
                call and capable of being at the patient's side 
                within a moderate period of time, as determined 
                by the Secretary; and
                  (C) the institution has interdisciplinary 
                team treatment for patients, requiring 
                interdisciplinary teams of health care 
                professionals, including physicians, to prepare 
                and carry out an individualized treatment plan 
                for each patient.

          Additional Preventive Services; Preventive Services

  (ddd)(1) The term ``additional preventive services'' means 
services not described in subparagraph (A) or (C) of paragraph 
(3) that identify medical conditions or risk factors and that 
the Secretary determines are--
          (A) reasonable and necessary for the prevention or 
        early detection of an illness or disability;
          (B) recommended with a grade of A or B by the United 
        States Preventive Services Task Force; and
          (C) appropriate for individuals entitled to benefits 
        under part A or enrolled under part B.
  (2) In making determinations under paragraph (1) regarding 
the coverage of a new service, the Secretary shall use the 
process for making national coverage determinations (as defined 
in section 1869(f)(1)(B)) under this title. As part of the use 
of such process, the Secretary may conduct an assessment of the 
relation between predicted outcomes and the expenditures for 
such service and may take into account the results of such 
assessment in making such determination.
  (3) The term ``preventive services'' means the following:
          (A) The screening and preventive services described 
        in subsection (ww)(2) (other than the service described 
        in subparagraph (M) of such subsection).
          (B) An initial preventive physical examination (as 
        defined in subsection (ww)).
          (C) Personalized prevention plan services (as defined 
        in subsection (hhh)(1)).

   Cardiac Rehabilitation Program; Intensive Cardiac Rehabilitation 
                                Program

  (eee)(1) The term ``cardiac rehabilitation program'' means a 
program (as described in paragraph (2)) that furnishes the 
items and services described in paragraph (3) under the 
supervision of a physician (as defined in subsection (r)(1)) or 
a physician assistant, nurse practitioner, or clinical nurse 
specialist (as those terms are defined in subsection (aa)(5)).
  (2) A program described in this paragraph is a program under 
which--
          (A) items and services under the program are 
        delivered--
                  (i) in a physician's office;
                  (ii) in a hospital on an outpatient basis; or
                  (iii) in other settings determined 
                appropriate by the Secretary;
          (B) a physician (as defined in subsection (r)(1)) or 
        a physician assistant, nurse practitioner, or clinical 
        nurse specialist (as those terms are defined in 
        subsection (aa)(5)) is immediately available and 
        accessible for medical consultation and medical 
        emergencies at all times items and services are being 
        furnished under the program, except that, in the case 
        of items and services furnished under such a program in 
        a hospital, such availability shall be presumed; and
          (C) individualized treatment is furnished under a 
        written plan established, reviewed, and signed by a 
        physician every 30 days that describes--
                  (i) the individual's diagnosis;
                  (ii) the type, amount, frequency, and 
                duration of the items and services furnished 
                under the plan; and
                  (iii) the goals set for the individual under 
                the plan.
  (3) The items and services described in this paragraph are--
          (A) physician-prescribed exercise;
          (B) cardiac risk factor modification, including 
        education, counseling, and behavioral intervention (to 
        the extent such education, counseling, and behavioral 
        intervention is closely related to the individual's 
        care and treatment and is tailored to the individual's 
        needs);
          (C) psychosocial assessment;
          (D) outcomes assessment; and
          (E) such other items and services as the Secretary 
        may determine, but only if such items and services 
        are--
                  (i) reasonable and necessary for the 
                diagnosis or active treatment of the 
                individual's condition;
                  (ii) reasonably expected to improve or 
                maintain the individual's condition and 
                functional level; and
                  (iii) furnished under such guidelines 
                relating to the frequency and duration of such 
                items and services as the Secretary shall 
                establish, taking into account accepted norms 
                of medical practice and the reasonable 
                expectation of improvement of the individual.
  (4)(A) The term ``intensive cardiac rehabilitation program'' 
means a program (as described in paragraph (2)) that furnishes 
the items and services described in paragraph (3) under the 
supervision of a physician (as defined in subsection (r)(1)) or 
a physician assistant, nurse practitioner, or clinical nurse 
specialist (as those terms are defined in subsection (aa)(5)) 
and has shown, in peer-reviewed published research, that it 
accomplished--
          (i) one or more of the following:
                  (I) positively affected the progression of 
                coronary heart disease; or
                  (II) reduced the need for coronary bypass 
                surgery; or
                  (III) reduced the need for percutaneous 
                coronary interventions; and
          (ii) a statistically significant reduction in 5 or 
        more of the following measures from their level before 
        receipt of cardiac rehabilitation services to their 
        level after receipt of such services:
                  (I) low density lipoprotein;
                  (II) triglycerides;
                  (III) body mass index;
                  (IV) systolic blood pressure;
                  (V) diastolic blood pressure; or
                  (VI) the need for cholesterol, blood 
                pressure, and diabetes medications.
  (B) To be eligible for an intensive cardiac rehabilitation 
program, an individual must have--
          (i) had an acute myocardial infarction within the 
        preceding 12 months;
          (ii) had coronary bypass surgery;
          (iii) stable angina pectoris;
          (iv) had heart valve repair or replacement;
          (v) had percutaneous transluminal coronary 
        angioplasty (PTCA) or coronary stenting;
          (vi) had a heart or heart-lung transplant;
                  (vii) stable, chronic heart failure (defined 
                as patients with left ventricular ejection 
                fraction of 35 percent or less and New York 
                Heart Association (NYHA) class II to IV 
                symptoms despite being on optimal heart failure 
                therapy for at least 6 weeks); or
                  (viii) any additional condition for which the 
                Secretary has determined that a cardiac 
                rehabilitation program shall be covered, unless 
                the Secretary determines, using the same 
                process used to determine that the condition is 
                covered for a cardiac rehabilitation program, 
                that such coverage is not supported by the 
                clinical evidence.
  (C) An intensive cardiac rehabilitation program may be 
provided in a series of 72 one-hour sessions (as defined in 
section 1848(b)(5)), up to 6 sessions per day, over a period of 
up to 18 weeks.
  (5) The Secretary shall establish standards to ensure that a 
physician with expertise in the management of individuals with 
cardiac pathophysiology who is licensed to practice medicine in 
the State in which a cardiac rehabilitation program (or the 
intensive cardiac rehabilitation program, as the case may be) 
is offered--
          (A) is responsible for such program; and
          (B) in consultation with appropriate staff, is 
        involved substantially in directing the progress of 
        individual in the program.

                    Pulmonary Rehabilitation Program

  (fff)(1) The term ``pulmonary rehabilitation program'' means 
a program (as described in subsection (eee)(2) with respect to 
a program under this subsection) that furnishes the items and 
services described in paragraph (2) under the supervision of a 
physician (as defined in subsection (r)(1)) or a physician 
assistant, nurse practitioner, or clinical nurse specialist (as 
those terms are defined in subsection (aa)(5)).
  (2) The items and services described in this paragraph are--
          (A) physician-prescribed exercise;
          (B) education or training (to the extent the 
        education or training is closely and clearly related to 
        the individual's care and treatment and is tailored to 
        such individual's needs);
          (C) psychosocial assessment;
          (D) outcomes assessment; and
          (E) such other items and services as the Secretary 
        may determine, but only if such items and services 
        are--
                  (i) reasonable and necessary for the 
                diagnosis or active treatment of the 
                individual's condition;
                  (ii) reasonably expected to improve or 
                maintain the individual's condition and 
                functional level; and
                  (iii) furnished under such guidelines 
                relating to the frequency and duration of such 
                items and services as the Secretary shall 
                establish, taking into account accepted norms 
                of medical practice and the reasonable 
                expectation of improvement of the individual.
  (3) The Secretary shall establish standards to ensure that a 
physician with expertise in the management of individuals with 
respiratory pathophysiology who is licensed to practice 
medicine in the State in which a pulmonary rehabilitation 
program is offered--
          (A) is responsible for such program; and
          (B) in consultation with appropriate staff, is 
        involved substantially in directing the progress of 
        individual in the program.

                   Kidney Disease Education Services

  (ggg)(1) The term ``kidney disease education services'' means 
educational services that are--
          (A) furnished to an individual with stage IV chronic 
        kidney disease who, according to accepted clinical 
        guidelines identified by the Secretary, will require 
        dialysis or a kidney transplant;
          (B) furnished, upon the referral of the physician 
        managing the individual's kidney condition, by a 
        qualified person (as defined in paragraph (2)); and
          (C) designed--
                  (i) to provide comprehensive information 
                (consistent with the standards set under 
                paragraph (3)) regarding--
                          (I) the management of comorbidities, 
                        including for purposes of delaying the 
                        need for dialysis;
                          (II) the prevention of uremic 
                        complications; and
                          (III) each option for renal 
                        replacement therapy (including 
                        hemodialysis and peritoneal dialysis at 
                        home and in-center as well as vascular 
                        access options and transplantation);
                  (ii) to ensure that the individual has the 
                opportunity to actively participate in the 
                choice of therapy; and
                  (iii) to be tailored to meet the needs of the 
                individual involved.
  (2)(A) The term ``qualified person'' means--
          (i) a physician (as defined in section 1861(r)(1)) or 
        a physician assistant, nurse practitioner, or clinical 
        nurse specialist (as defined in section 1861(aa)(5)), 
        who furnishes services for which payment may be made 
        under the fee schedule established under section 1848; 
        and
          (ii) a provider of services located in a rural area 
        (as defined in section 1886(d)(2)(D)).
  (B) Such term does not include a provider of services (other 
than a provider of services described in subparagraph (A)(ii)) 
or a renal dialysis facility.
  (3) The Secretary shall set standards for the content of such 
information to be provided under paragraph (1)(C)(i) after 
consulting with physicians, other health professionals, health 
educators, professional organizations, accrediting 
organizations, kidney patient organizations, dialysis 
facilities, transplant centers, network organizations described 
in section 1881(c)(2), and other knowledgeable persons. To the 
extent possible the Secretary shall consult with persons or 
entities described in the previous sentence, other than a 
dialysis facility, that has not received industry funding from 
a drug or biological manufacturer or dialysis facility.
  (4) No individual shall be furnished more than 6 sessions of 
kidney disease education services under this title.

                         Annual Wellness Visit

  (hhh)(1) The term ``personalized prevention plan services'' 
means the creation of a plan for an individual--
          (A) that includes a health risk assessment (that 
        meets the guidelines established by the Secretary under 
        paragraph (4)(A)) of the individual that is completed 
        prior to or as part of the same visit with a health 
        professional described in paragraph (3); and
          (B) that--
                  (i) takes into account the results of the 
                health risk assessment; and
                  (ii) may contain the elements described in 
                paragraph (2).
  (2) Subject to paragraph (4)(H), the elements described in 
this paragraph are the following:
          (A) The establishment of, or an update to, the 
        individual's medical and family history.
          (B) A list of current providers and suppliers that 
        are regularly involved in providing medical care to the 
        individual (including a list of all prescribed 
        medications).
          (C) A measurement of height, weight, body mass index 
        (or waist circumference, if appropriate), blood 
        pressure, and other routine measurements.
          (D) Detection of any cognitive impairment.
          (E) The establishment of, or an update to, the 
        following:
                  (i) A screening schedule for the next 5 to 10 
                years, as appropriate, based on recommendations 
                of the United States Preventive Services Task 
                Force and the Advisory Committee on 
                Immunization Practices, and the individual's 
                health status, screening history, and age-
                appropriate preventive services covered under 
                this title.
                  (ii) A list of risk factors and conditions 
                for which primary, secondary, or tertiary 
                prevention interventions are recommended or are 
                underway, including any mental health 
                conditions or any such risk factors or 
                conditions that have been identified through an 
                initial preventive physical examination (as 
                described under subsection (ww)(1)), and a list 
                of treatment options and their associated risks 
                and benefits.
          (F) The furnishing of personalized health advice and 
        a referral, as appropriate, to health education or 
        preventive counseling services or programs aimed at 
        reducing identified risk factors and improving self-
        management, or community-based lifestyle interventions 
        to reduce health risks and promote self-management and 
        wellness, including weight loss, physical activity, 
        smoking cessation, fall prevention, and nutrition.
          (G) Any other element determined appropriate by the 
        Secretary.
  (3) A health professional described in this paragraph is--
          (A) a physician;
          (B) a practitioner described in clause (i) of section 
        1842(b)(18)(C); or
          (C) a medical professional (including a health 
        educator, registered dietitian, or nutrition 
        professional) or a team of medical professionals, as 
        determined appropriate by the Secretary, under the 
        supervision of a physician.
  (4)(A) For purposes of paragraph (1)(A), the Secretary, not 
later than 1 year after the date of enactment of this 
subsection, shall establish publicly available guidelines for 
health risk assessments. Such guidelines shall be developed in 
consultation with relevant groups and entities and shall 
provide that a health risk assessment--
          (i) identify chronic diseases, injury risks, 
        modifiable risk factors, and urgent health needs of the 
        individual; and
          (ii) may be furnished--
                  (I) through an interactive telephonic or web-
                based program that meets the standards 
                established under subparagraph (B);
                  (II) during an encounter with a health care 
                professional;
                  (III) through community-based prevention 
                programs; or
                  (IV) through any other means the Secretary 
                determines appropriate to maximize 
                accessibility and ease of use by beneficiaries, 
                while ensuring the privacy of such 
                beneficiaries.
  (B) Not later than 1 year after the date of enactment of this 
subsection, the Secretary shall establish standards for 
interactive telephonic or web-based programs used to furnish 
health risk assessments under subparagraph (A)(ii)(I). The 
Secretary may utilize any health risk assessment developed 
under section 4004(f) of the Patient Protection and Affordable 
Care Act as part of the requirement to develop a personalized 
prevention plan to comply with this subparagraph.
  (C)(i) Not later than 18 months after the date of enactment 
of this subsection, the Secretary shall develop and make 
available to the public a health risk assessment model. Such 
model shall meet the guidelines under subparagraph (A) and may 
be used to meet the requirement under paragraph (1)(A).
  (ii) Any health risk assessment that meets the guidelines 
under subparagraph (A) and is approved by the Secretary may be 
used to meet the requirement under paragraph (1)(A).
  (D) The Secretary may coordinate with community-based 
entities (including State Health Insurance Programs, Area 
Agencies on Aging, Aging and Disability Resource Centers, and 
the Administration on Aging) to--
          (i) ensure that health risk assessments are 
        accessible to beneficiaries; and
          (ii) provide appropriate support for the completion 
        of health risk assessments by beneficiaries.
  (E) The Secretary shall establish procedures to make 
beneficiaries and providers aware of the requirement that a 
beneficiary complete a health risk assessment prior to or at 
the same time as receiving personalized prevention plan 
services.
  (F) To the extent practicable, the Secretary shall encourage 
the use of, integration with, and coordination of health 
information technology (including use of technology that is 
compatible with electronic medical records and personal health 
records) and may experiment with the use of personalized 
technology to aid in the development of self-management skills 
and management of and adherence to provider recommendations in 
order to improve the health status of beneficiaries.
  (G) A beneficiary shall be eligible to receive only an 
initial preventive physical examination (as defined under 
subsection (ww)(1)) during the 12-month period after the date 
that the beneficiary's coverage begins under part B and shall 
be eligible to receive personalized prevention plan services 
under this subsection each year thereafter provided that the 
beneficiary has not received either an initial preventive 
physical examination or personalized prevention plan services 
within the preceding 12-month period.
  (H) The Secretary shall issue guidance that--
          (i) identifies elements under paragraph (2) that are 
        required to be provided to a beneficiary as part of 
        their first visit for personalized prevention plan 
        services; and
          (ii) establishes a yearly schedule for appropriate 
        provision of such elements thereafter.
  (iii) Home Infusion Therapy.--(1) The term ``home infusion 
therapy'' means the items and services described in paragraph 
(2) furnished by a qualified home infusion therapy supplier (as 
defined in paragraph (3)(D)) which are furnished in the 
individual's home (as defined in paragraph (3)(B)) to an 
individual--
          (A) who is under the care of an applicable provider 
        (as defined in paragraph (3)(A)); and
          (B) with respect to whom a plan prescribing the type, 
        amount, and duration of infusion therapy services that 
        are to be furnished such individual has been 
        established by a physician (as defined in subsection 
        (r)(1)) and is periodically reviewed by a physician (as 
        so defined) in coordination with the furnishing of home 
        infusion drugs (as defined in paragraph (3)(C)) under 
        part B.
  (2) The items and services described in this paragraph are 
the following:
          (A) Professional services, including nursing 
        services, furnished in accordance with the plan.
          (B) Training and education (not otherwise paid for as 
        durable medical equipment (as defined in subsection 
        (n)), remote monitoring, and monitoring services for 
        the provision of home infusion therapy and home 
        infusion drugs furnished by a qualified home infusion 
        therapy supplier.
  (3) For purposes of this subsection:
          (A) The term ``applicable provider'' means--
                  (i) a physician;
                  (ii) a nurse practitioner; and
                  (iii) a physician assistant.
          (B) The term ``home'' means a place of residence used 
        as the home of an individual (as defined for purposes 
        of subsection (n)).
          (C) The term ``home infusion drug'' means a 
        parenteral drug or biological administered 
        intravenously, or subcutaneously for an administration 
        period of 15 minutes or more, in the home of an 
        individual through a pump that is an item of durable 
        medical equipment (as defined in subsection (n)). Such 
        term does not include the following:
                  (i) Insulin pump systems.
                  (ii) A self-administered drug or biological 
                on a self-administered drug exclusion list.
          (D)(i) The term ``qualified home infusion therapy 
        supplier'' means a pharmacy, physician, or other 
        provider of services or supplier licensed by the State 
        in which the pharmacy, physician, or provider or 
        services or supplier furnishes items or services and 
        that--
                  (I) furnishes infusion therapy to individuals 
                with acute or chronic conditions requiring 
                administration of home infusion drugs;
                  (II) ensures the safe and effective provision 
                and administration of home infusion therapy on 
                a 7-day-a-week, 24-hour-a-day basis;
                  (III) is accredited by an organization 
                designated by the Secretary pursuant to section 
                1834(u)(5); and
                  (IV) meets such other requirements as the 
                Secretary determines appropriate, taking into 
                account the standards of care for home infusion 
                therapy established by Medicare Advantage plans 
                under part C and in the private sector.
          (ii) A qualified home infusion therapy supplier may 
        subcontract with a pharmacy, physician, provider of 
        services, or supplier to meet the requirements of this 
        subparagraph.
  (jjj) Opioid Use Disorder Treatment Services; Opioid 
Treatment Program.--
          (1) Opioid use disorder treatment services.--The term 
        ``opioid use disorder treatment services'' means items 
        and services that are furnished by an opioid treatment 
        program for the treatment of opioid use disorder, 
        including--
                  (A) opioid agonist and antagonist treatment 
                medications (including oral, injected, or 
                implanted versions) that are approved by the 
                Food and Drug Administration under section 505 
                of the Federal Food, Drug and Cosmetic Act for 
                use in the treatment of opioid use disorder;
                  (B) dispensing and administration of such 
                medications, if applicable;
                  (C) substance use counseling by a 
                professional to the extent authorized under 
                State law to furnish such services;
                  (D) individual and group therapy with a 
                physician or psychologist (or other mental 
                health professional to the extent authorized 
                under State law);
                  (E) toxicology testing, and
                  (F) other items and services that the 
                Secretary determines are appropriate (other 
                than meals or transportation).
          (2) Opioid treatment program.--The term ``opioid 
        treatment program'' means an entity that is opioid 
        treatment program (as defined in section 8.2 of title 
        42 of the Code of Federal Regulations, or any successor 
        regulation) that--
                  (A) is enrolled under section 1866(j);
                  (B) has in effect a certification by the 
                Substance Abuse and Mental Health Services 
                Administration for such a program;
                  (C) is accredited by an accrediting body 
                approved by the Substance Abuse and Mental 
                Health Services Administration; and
                  (D) meets such additional conditions as the 
                Secretary may find necessary to ensure--
                          (i) the health and safety of 
                        individuals being furnished services 
                        under such program; and
                          (ii) the effective and efficient 
                        furnishing of such services.

           *       *       *       *       *       *       *


      agreements with providers of services; enrollment processes

  Sec. 1866. (a)(1) Any provider of services (except a fund 
designated for purposes of section 1814(g) and section 1835(e)) 
shall be qualified to participate under this title and shall be 
eligible for payments under this title if it files with the 
Secretary an agreement--
          (A)(i) not to charge, except as provided in paragraph 
        (2), any individual or any other person for items or 
        services for which such individual is entitled to have 
        payment made under this title (or for which he would be 
        so entitled if such provider of services had complied 
        with the procedural and other requirements under or 
        pursuant to this title or for which such provider is 
        paid pursuant to the provisions of section 1814(e)), 
        and (ii) not to impose any charge that is prohibited 
        under section 1902(n)(3),
          (B) not to charge any individual or any other person 
        for items or services for which such individual is not 
        entitled to have payment made under this title because 
        payment for expenses incurred for such items or 
        services may not be made by reason of the provisions of 
        paragraph (1) or (9) of section 1862(a), but only if 
        (i) such individual was without fault in incurring such 
        expenses and (ii) the Secretary's determination that 
        such payment may not be made for such items and 
        services was made after the third year following the 
        year in which notice of such payment was sent to such 
        individual; except that the Secretary may reduce such 
        three-year period to not less than one year if he finds 
        such reduction is consistent with the objectives of 
        this title,
          (C) to make adequate provision for return (or other 
        disposition, in accordance with regulations) of any 
        moneys incorrectly collected from such individual or 
        other person,
          (D) to promptly notify the Secretary of its 
        employment of an individual who, at any time during the 
        year preceding such employment, was employed in a 
        managerial, accounting, auditing, or similar capacity 
        (as determined by the Secretary by regulation) by an 
        agency or organization which serves as a fiscal 
        intermediary or carrier (for purposes of part A or part 
        B, or both, of this title) with respect to the 
        provider,
          (E) to release data with respect to patients of such 
        provider upon request to an organization having a 
        contract with the Secretary under part B of title XI as 
        may be necessary (i) to allow such organization to 
        carry out its functions under such contract, or (ii) to 
        allow such organization to carry out similar review 
        functions under any contract the organization may have 
        with a private or public agency paying for health care 
        in the same area with respect to patients who authorize 
        release of such data for such purposes,
          (F)(i) in the case of hospitals which provide 
        inpatient hospital services for which payment may be 
        made under subsection (b), (c), or (d) of section 1886, 
        to maintain an agreement with a professional standards 
        review organization (if there is such an organization 
        in existence in the area in which the hospital is 
        located) or with a quality improvement organization 
        which has a contract with the Secretary under part B of 
        title XI for the area in which the hospital is located, 
        under which the organization will perform functions 
        under that part with respect to the review of the 
        validity of diagnostic information provided by such 
        hospital, the completeness, adequacy, and quality of 
        care provided, the appropriateness of admissions and 
        discharges, and the appropriateness of care provided 
        for which additional payments are sought under section 
        1886(d)(5), with respect to inpatient hospital services 
        for which payment may be made under part A of this 
        title (and for purposes of payment under this title, 
        the cost of such agreement to the hospital shall be 
        considered a cost incurred by such hospital in 
        providing inpatient services under part A, and (I) 
        shall be paid directly by the Secretary to such 
        organization on behalf of such hospital in accordance 
        with a rate per review established by the Secretary, 
        (II) shall be transferred from the Federal Hospital 
        Insurance Trust Fund, without regard to amounts 
        appropriated in advance in appropriation Acts, in the 
        same manner as transfers are made for payment for 
        services provided directly to beneficiaries, and (III) 
        shall not be less in the aggregate for a fiscal year 
        than the aggregate amount expended in fiscal year 1988 
        for direct and administrative costs (adjusted for 
        inflation and for any direct or administrative costs 
        incurred as a result of review functions added with 
        respect to a subsequent fiscal year) of such reviews),
          (ii) in the case of hospitals, critical access 
        hospitals, skilled nursing facilities, and home health 
        agencies, to maintain an agreement with a quality 
        improvement organization (which has a contract with the 
        Secretary under part B of title XI for the area in 
        which the hospital, facility, or agency is located) to 
        perform the functions described in paragraph (3)(A),
          (G) in the case of hospitals which provide inpatient 
        hospital services for which payment may be made under 
        subsection (b) or (d) of section 1886, not to charge 
        any individual or any other person for inpatient 
        hospital services for which such individual would be 
        entitled to have payment made under part A but for a 
        denial or reduction of payments under section 
        1886(f)(2),
          (H)(i) in the case of hospitals which provide 
        services for which payment may be made under this title 
        and in the case of critical access hospitals which 
        provide critical access hospital services, to have all 
        items and services (other than physicians' services as 
        defined in regulations for purposes of section 
        1862(a)(14), and other than services described by 
        section 1861(s)(2)(K), certified nurse-midwife 
        services, qualified psychologist services, and services 
        of a certified registered nurse anesthetist) (I) that 
        are furnished to an individual who is a patient of the 
        hospital, and (II) for which the individual is entitled 
        to have payment made under this title, furnished by the 
        hospital or otherwise under arrangements (as defined in 
        section 1861(w)(1)) made by the hospital,
          (ii) in the case of skilled nursing facilities which 
        provide covered skilled nursing facility services--
                  (I) that are furnished to an individual who 
                is a resident of the skilled nursing facility 
                during a period in which the resident is 
                provided covered post-hospital extended care 
                services (or, for services described in section 
                1861(s)(2)(D), that are furnished to such an 
                individual without regard to such period), and
                  (II) for which the individual is entitled to 
                have payment made under this title,
        to have items and services (other than services 
        described in section 1888(e)(2)(A)(ii)) furnished by 
        the skilled nursing facility or otherwise under 
        arrangements (as defined in section 1861(w)(1)) made by 
        the skilled nursing facility,
          (I) in the case of a hospital or critical access 
        hospital--
                  (i) to adopt and enforce a policy to ensure 
                compliance with the requirements of section 
                1867 and to meet the requirements of such 
                section,
                  (ii) to maintain medical and other records 
                related to individuals transferred to or from 
                the hospital for a period of five years from 
                the date of the transfer, and
                  (iii) to maintain a list of physicians who 
                are on call for duty after the initial 
                examination to provide treatment necessary to 
                stabilize an individual with an emergency 
                medical condition,
          (J) in the case of hospitals which provide inpatient 
        hospital services for which payment may be made under 
        this title, to be a participating provider of medical 
        care under any health plan contracted for under section 
        1079 or 1086 of title 10, or under section 613 of title 
        38, United States Code, in accordance with admission 
        practices, payment methodology, and amounts as 
        prescribed under joint regulations issued by the 
        Secretary and by the Secretaries of Defense and 
        Transportation, in implementation of sections 1079 and 
        1086 of title 10, United States Code,
          (K) not to charge any individual or any other person 
        for items or services for which payment under this 
        title is denied under section 1154(a)(2) by reason of a 
        determination under section 1154(a)(1)(B),
          (L) in the case of hospitals which provide inpatient 
        hospital services for which payment may be made under 
        this title, to be a participating provider of medical 
        care under section 603 of title 38, United States Code, 
        in accordance with such admission practices, and such 
        payment methodology and amounts, as are prescribed 
        under joint regulations issued by the Secretary and by 
        the Secretary of Veterans Affairs in implementation of 
        such section,
          (M) in the case of hospitals, to provide to each 
        individual who is entitled to benefits under part A (or 
        to a person acting on the individual's behalf), at or 
        about the time of the individual's admission as an 
        inpatient to the hospital, a written statement 
        (containing such language as the Secretary prescribes 
        consistent with this paragraph) which explains--
                  (i) the individual's rights to benefits for 
                inpatient hospital services and for post-
                hospital services under this title,
                  (ii) the circumstances under which such an 
                individual will and will not be liable for 
                charges for continued stay in the hospital,
                  (iii) the individual's right to appeal 
                denials of benefits for continued inpatient 
                hospital services, including the practical 
                steps to initiate such an appeal, and
                  (iv) the individual's liability for payment 
                for services if such a denial of benefits is 
                upheld on appeal,--and which provides such 
                additional information as the Secretary may 
                specify,
          (N) in the case of hospitals and critical access 
        hospitals--
                  (i) to make available to its patients the 
                directory or directories of participating 
                physicians (published under section 1842(h)(4)) 
                for the area served by the hospital or critical 
                access hospital,
                  (ii) if hospital personnel (including staff 
                of any emergency or outpatient department) 
                refer a patient to a nonparticipating physician 
                for further medical care on an outpatient 
                basis, the personnel must inform the patient 
                that the physician is a nonparticipating 
                physician and, whenever practicable, must 
                identify at least one qualified participating 
                physician who is listed in such a directory and 
                from whom the patient may receive the necessary 
                services,
                  (iii) to post conspicuously in any emergency 
                department a sign (in a form specified by the 
                Secretary) specifying rights of individuals 
                under section 1867 with respect to examination 
                and treatment for emergency medical conditions 
                and women in labor, and
                  (iv) to post conspicuously (in a form 
                specified by the Secretary) information 
                indicating whether or not the hospital 
                participates in the medicaid program under a 
                State plan approved under title XIX,
          (O) to accept as payment in full for services that 
        are covered under this title and are furnished to any 
        individual enrolled with a Medicare+Choice organization 
        under part C, with a PACE provider under section 1894 
        or 1934, or with an eligible organization with a risk-
        sharing contract under section 1876, under section 
        1876(i)(2)(A) (as in effect before February 1, 1985), 
        under section 402(a) of the Social Security Amendments 
        of 1967, or under section 222(a) of the Social Security 
        Amendments of 1972, which does not have a contract (or, 
        in the case of a PACE provider, contract or other 
        agreement) establishing payment amounts for services 
        furnished to members of the organization or PACE 
        program eligible individuals enrolled with the PACE 
        provider, the amounts that would be made as a payment 
        in full under this title (less any payments under 
        sections 1886(d)(11) and 1886(h)(3)(D)) if the 
        individuals were not so enrolled,
          (P) in the case of home health agencies which provide 
        home health services to individuals entitled to 
        benefits under this title who require catheters, 
        catheter supplies, ostomy bags, and supplies related to 
        ostomy car (described in section 1861(m)(5)), to offer 
        to furnish such supplies to such an individual as part 
        of their furnishing of home health services,
          (Q) in the case of hospitals, skilled nursing 
        facilities, home health agencies, and hospice programs, 
        to comply with the requirement of subsection (f) 
        (relating to maintaining written policies and 
        procedures respecting advance directives),
          (R) to contract only with a health care clearinghouse 
        (as defined in section 1171) that meets each standard 
        and implementation specification adopted or established 
        under part C of title XI on or after the date on which 
        the health care clearinghouse is required to comply 
        with the standard or specification,
          (S) in the case of a hospital that has a financial 
        interest (as specified by the Secretary in regulations) 
        in an entity to which individuals are referred as 
        described in section 1861(ee)(2)(H)(ii), or in which 
        such an entity has such a financial interest, or in 
        which another entity has such a financial interest 
        (directly or indirectly) with such hospital and such an 
        entity, to maintain and disclose to the Secretary (in a 
        form and manner specified by the Secretary) information 
        on--
                  (i) the nature of such financial interest,
                  (ii) the number of individuals who were 
                discharged from the hospital and who were 
                identified as requiring home health services, 
                and
                  (iii) the percentage of such individuals who 
                received such services from such provider (or 
                another such provider),
          (T) in the case of hospitals and critical access 
        hospitals, to furnish to the Secretary such data as the 
        Secretary determines appropriate pursuant to 
        subparagraph (E) of section 1886(d)(12) to carry out 
        such section,
          (U) in the case of hospitals which furnish inpatient 
        hospital services for which payment may be made under 
        this title, to be a participating provider of medical 
        care both--
                  (i) under the contract health services 
                program funded by the Indian Health Service and 
                operated by the Indian Health Service, an 
                Indian tribe, or tribal organization (as those 
                terms are defined in section 4 of the Indian 
                Health Care Improvement Act), with respect to 
                items and services that are covered under such 
                program and furnished to an individual eligible 
                for such items and services under such program; 
                and
                  (ii) under any program funded by the Indian 
                Health Service and operated by an urban Indian 
                organization with respect to the purchase of 
                items and services for an eligible urban Indian 
                (as those terms are defined in such section 4),
        in accordance with regulations promulgated by the 
        Secretary regarding admission practices, payment 
        methodology, and rates of payment (including the 
        acceptance of no more than such payment rate as payment 
        in full for such items and services,
          (V) in the case of hospitals that are not otherwise 
        subject to the Occupational Safety and Health Act of 
        1970 (or a State occupational safety and health plan 
        that is approved under 18(b) of such Act), to comply 
        with the Bloodborne Pathogens standard under section 
        1910.1030 of title 29 of the Code of Federal 
        Regulations (or as subsequently redesignated),
                  (W) in the case of a hospital described in 
                section 1886(d)(1)(B)(v), to report quality 
                data to the Secretary in accordance with 
                subsection (k),
                  (X) maintain and, upon request of the 
                Secretary, provide access to documentation 
                relating to written orders or requests for 
                payment for durable medical equipment, 
                certifications for home health services, or 
                referrals for other items or services written 
                or ordered by the provider under this title, as 
                specified by the Secretary, and
          (Y) beginning 12 months after the date of the 
        enactment of this subparagraph, in the case of a 
        hospital or critical access hospital, with respect to 
        each individual who receives observation services as an 
        outpatient at such hospital or critical access hospital 
        for more than 24 hours, to provide to such individual 
        not later than 36 hours after the time such individual 
        begins receiving such services (or, if sooner, upon 
        release)--
                  (i) such oral explanation of the written 
                notification described in clause (ii), and such 
                documentation of the provision