[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4986 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 4986

 To amend part B of title XVIII of the Social Security Act to improve 
    payments for physicians' services and other outpatient services 
     furnished under the Medicare Program, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 21, 2002

  Mr. Tauzin introduced the following bill; which was referred to the 
 Committee on Energy and Commerce, and in addition to the Committee on 
   Ways and Means, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend part B of title XVIII of the Social Security Act to improve 
    payments for physicians' services and other outpatient services 
     furnished under the Medicare Program, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

                 TITLE V--PROVISIONS RELATING TO PART B

                    Subtitle A--Physicians' Services

SEC. 501. REVISION OF UPDATES FOR PHYSICIANS' SERVICES.

    (a) Update for 2003 Through 2005.--
            (1) In general.--Section 1848(d) (42 U.S.C. 1395w-4(d)) is 
        amended by adding at the end the following new paragraphs:
            ``(5) Update for 2003.--The update to the single conversion 
        factor established in paragraph (1)(C) for 2003 is 2 percent.
            ``(6) Special rules for update for 2004 and 2005.--The 
        following rules apply in determining the update adjustment 
        factors under paragraph (4)(B) for 2004 and 2005:
                    ``(A) Use of 2002 data in determining allowable 
                costs.--
                            ``(i) The reference in clause (ii)(I) of 
                        such paragraph to April 1, 1996, is deemed to 
                        be a reference to January 1, 2002.
                            ``(ii) The allowed expenditures for 2002 is 
                        deemed to be equal to the actual expenditures 
                        for physicians' services furnished during 2002, 
                        as estimated by the Secretary.
                    ``(B) 1 percentage point increase in gdp under 
                sgr.--The annual average percentage growth in real 
                gross domestic product per capita under subsection 
                (f)(2)(C) for each of 2003, 2004, and 2005 is deemed to 
                be increased by 1 percentage point.''.
            (2) Conforming amendment.--Paragraph (4)(B) of such section 
        is amended, in the matter before clause (i), by inserting ``and 
        paragraph (6)'' after ``subparagraph (D)''.
            (3) Not treated as change in law and regulation in 
        sustainable growth rate determination.--The amendments made by 
        this subsection shall not be treated as a change in law for 
        purposes of applying section 1848(f)(2)(D) of the Social 
        Security Act (42 U.S.C. 1395w-4(f)(2)(D)).
    (b) Use of 10-Year Rolling Average in Computing Gross Domestic 
Product.--
            (1) In general.--Section 1848(f)(2)(C) (42 U.S.C. 1395w-
        4(f)(2)(C)) is amended--
                    (A) by striking ``projected'' and inserting 
                ``annual average''; and
                    (B) by striking ``from the previous applicable 
                period to the applicable period involved'' and 
                inserting ``during the 10-year period ending with the 
                applicable period involved''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to computations of the sustainable growth rate for 
        years beginning with 2002.
    (c) Elimination of Transitional Adjustment.--Section 1848(d)(4)(F) 
(42 U.S.C. 1395w-4(d)(4)(F)) is amended by striking ``subparagraph 
(A)'' and all that follows and inserting ``subparagraph (A), for each 
of 2001 and 2002, of -0.2 percent.''
    (d) GAO Study of Medicare Payment for Inhalation Therapy.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study to examine the adequacy of current 
        reimbursements for inhalation therapy under the medicare 
        program.
            (2) Report.--Not later than May 1, 2003, the Comptroller 
        General shall submit to Congress a report on the study 
        conducted under paragraph (1).

SEC. 502. STUDIES ON ACCESS TO PHYSICIANS' SERVICES.

    (a) GAO Study on Beneficiary Access to Physicians' Services.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study on access of medicare beneficiaries to 
        physicians' services under the medicare program. The study 
        shall include--
                    (A) an assessment of the use by beneficiaries of 
                such services through an analysis of claims submitted 
                by physicians for such services under part B of the 
                medicare program;
                    (B) an examination of changes in the use by 
                beneficiaries of physicians' services over time;
                    (C) an examination of the extent to which 
                physicians are not accepting new medicare beneficiaries 
                as patients.
            (2) Report.--Not later than 1 year after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        Congress a report on the study conducted under paragraph (1). 
        The report shall include a determination whether--
                    (A) data from claims submitted by physicians under 
                part B of the medicare program indicate potential 
                access problems for medicare beneficiaries in certain 
                geographic areas; and
                    (B) access by medicare beneficiaries to physicians' 
                services may have improved, remained constant, or 
                deteriorated over time.
    (b) Study and Report on Supply of Physicians.--
            (1) Study.--The Secretary shall request the Institute of 
        Medicine of the National Academy of Sciences to conduct a study 
        on the adequacy of the supply of physicians (including 
        specialists) in the United States and the factors that affect 
        such supply.
            (2) Report to congress.--Not later than 2 years after the 
        date of enactment of this section, the Secretary shall submit 
        to Congress a report on the results of the study described in 
        paragraph (1), including any recommendations for legislation.

SEC. 503. MEDPAC REPORT ON PAYMENT FOR PHYSICIANS' SERVICES.

    Not later than 1 year after the date of the enactment of this Act, 
the Medicare Payment Advisory Commission shall submit to Congress a 
report on the effect of refinements to the practice expense component 
of payments for physicians' services in the case of services for which 
there are no physician work relative value units, after the transition 
to a full resource-based payment system in 2002, under section 1848 of 
the Social Security Act (42 U.S.C. 1395w-4). Such report shall examine 
the following matters by physician specialty:
            (1) The effect of such refinements on payment for 
        physicians' services.
            (2) The interaction of the practice expense component with 
        other components of and adjustments to payment for physicians' 
        services under such section.
            (3) The appropriateness of the amount of compensation by 
        reason of such refinements.
            (4) The effect of such refinements on access to care by 
        medicare beneficiaries to physicians' services.
            (5) The effect of such refinements on physician 
        participation under the medicare program.

SEC. 504. PHYSICIAN FEE SCHEDULE WAGE INDEX REVISION.

    (a) In General.--Notwithstanding any other provision of law, for 
purposes of payment under the physician fee schedule under section 1848 
of the Social Security Act (42 U.S.C. 1395w-4) for physicians' services 
furnished during 2004, in no case may the work geographic index 
otherwise calculated under section 1848(e)(1)(A)(iii) of such Act (42 
U.S.C. 1395w-4(e)(1)(A)(iii)) be less than 0.985.
    (b) Exemption From Limitation on Annual Adjustments.--The increase 
in expenditures attributable to subsection (a) during 2004 shall not be 
taken into account in applying section 1848(c)(2)(B)(ii)(II) of such 
Act (42 U.S.C. 1395w-4(c)(2)(B)(ii)(II)) for that year.
    (c) GAO Report.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study to evaluate the following:
                    (A) The economic basis of the current methodology 
                for geographic adjustment of the work component of the 
                physician payment rate under the physician fee schedule 
                under section 1848 of the Social Security Act (42 
                U.S.C. 1395w-4).
                    (B) Whether the adjustment under subsection (a) 
                should be continued, and whether there is an economic 
                basis for the continuation of such adjustment, in those 
                areas in which the adjustment applies.
                    (C) The effect of the methodology on physician 
                location and retention in areas affected by such 
                adjustment.
                    (D) The differences in recruitment costs and 
                retention rates for physicians, including specialists, 
                between large urban areas and other areas.
                    (E) The mobility of physicians, including 
                specialists, over the last decade.
                    (F) The effect of raising the floor of the 
                geographic index to a value of 1.0 for adjustment of 
                the work component.
            (2) Report.--The Comptroller General shall submit to 
        Congress a report on the study conducted under paragraph (1) by 
        not later than 1 year after the date of the enactment of this 
        Act.

                       Subtitle B--Other Services

SEC. 511. COMPETITIVE ACQUISITION OF CERTAIN ITEMS AND SERVICES.

    (a) In General.--Section 1847 (42 U.S.C. 1395w-3) is amended to 
read as follows:

        ``competitive acquisition of certain items and services

    ``Sec. 1847. (a) Establishment of Competitive Acquisition 
Programs.--
            ``(1) Implementation of programs.--
                    ``(A) In general.--The Secretary shall establish 
                and implement programs under which competitive 
                acquisition areas are established throughout the United 
                States for contract award purposes for the furnishing 
                under this part of competitively priced items and 
services (described in paragraph (2)) for which payment is made under 
this part. Such areas may differ for different items and services.
                    ``(B) Phased-in implementation.--The programs shall 
                be phased-in among competitive acquisition areas over a 
                period of not longer than 3 years in a manner so that 
                the competition under the programs occurs in--
                            ``(i) at least \1/3\ of such areas in 2004; 
                        and
                            ``(ii) at least \2/3\ of such areas in 
                        2005.
                    ``(C) Waiver of certain provisions.--In carrying 
                out the programs, the Secretary may waive such 
                provisions of the Federal Acquisition Regulation as are 
                necessary for the efficient implementation of this 
                section, other than provisions relating to 
                confidentiality of information and such other 
                provisions as the Secretary determines appropriate.
            ``(2) Items and services described.--The items and services 
        referred to in paragraph (1) are the following:
                    ``(A) Durable medical equipment and inhalation 
                drugs used in connection with durable medical 
                equipment.--Covered items (as defined in section 
                1834(a)(13)) for which payment is otherwise made under 
                section 1834(a), other than items used in infusion, and 
                inhalation drugs used in conjunction with durable 
                medical equipment.
                    ``(B) Off-the-shelf orthotics.--Orthotics 
                (described in section 1861(s)(9)) for which payment is 
                otherwise made under section 1834(h) which require 
                minimal self-adjustment for appropriate use and does 
                not require expertise in trimming, bending, molding, 
                assembling, or customizing to fit to the patient.
            ``(3) Exemption authority.--In carrying out the programs 
        under this section, the Secretary may exempt--
                    ``(A) areas that are not competitive due to low 
                population density; and
                    ``(B) items and services for which the application 
                of competitive acquisition is not likely to result in 
                significant savings.
    ``(b) Program Requirements.--
            ``(1) In general.--The Secretary shall conduct a 
        competition among entities supplying items and services 
        described in subsection (a)(2) for each competitive acquisition 
        area in which the program is implemented under subsection (a) 
        with respect to such items and services.
            ``(2) Conditions for awarding contract.--
                    ``(A) In general.--The Secretary may not award a 
                contract to any entity under the competition conducted 
                in an competitive acquisition area pursuant to 
                paragraph (1) to furnish such items or services unless 
                the Secretary finds all of the following:
                            ``(i) The entity meets quality and 
                        financial standards specified by the Secretary 
                        or developed by accreditation entities or 
                        organizations recognized by the Secretary.
                            ``(ii) The total amounts to be paid under 
                        the contract (including costs associated with 
                        the administration of the contract) are 
                        expected to be less than the total amounts that 
                        would otherwise be paid.
                            ``(iii) Beneficiary access to a choice of 
                        multiple suppliers in the area is maintained.
                            ``(iv) Beneficiary liability is limited to 
                        the applicable percentage of contract award 
                        price.
                    ``(B) Quality standards.--The quality standards 
                specified under subparagraph (A)(i) shall not be less 
                than the quality standards that would otherwise apply 
                if this section did not apply and shall include 
                consumer services standards. The Secretary shall 
                consult with an expert outside advisory panel composed 
                of an appropriate selection of representatives of 
                physicians, practitioners, and suppliers to review (and 
                advise the Secretary concerning) such quality 
                standards.
            ``(3) Contents of contract.--
                    ``(A) In general.--A contract entered into with an 
                entity under the competition conducted pursuant to 
                paragraph (1) is subject to terms and conditions that 
                the Secretary may specify.
                    ``(B) Term of contracts.--The Secretary shall rebid 
                contracts under this section not less often than once 
                every 3 years.
            ``(4) Limit on number of contractors.--
                    ``(A) In general.--The Secretary may limit the 
                number of contractors in a competitive acquisition area 
                to the number needed to meet projected demand for items 
                and services covered under the contracts. In awarding 
                contracts, the Secretary shall take into account the 
                ability bidding entities to furnish items or services 
                in sufficient quantities to meet the anticipated needs 
                of beneficiaries for such items or services in the 
                geographic area covered under the contract on a timely 
                basis.
                    ``(B) Multiple winners.--The Secretary shall award 
                contracts to more than one entity submitting a bid in 
                each area for an item or service.
            ``(5) Participating contractors.--Payment shall not be made 
        for items and services described in subsection (a)(2) furnished 
        by a contractor and for which competition is conducted under 
        this section unless--
                    ``(A) the contractor has submitted a bid for such 
                items and services under this section; and
                    ``(B) the Secretary has awarded a contract to the 
                contractor for such items and services under this 
                section.
            ``(6) Authority to contract for education, outreach and 
        complaint services.--The Secretary may enter into a contract 
        with an appropriate entity to address complaints from 
        beneficiaries who receive items and services from an entity 
        with a contract under this section and to conduct appropriate 
        education of and outreach to such beneficiaries with respect to 
        the program.
    ``(c) Annual Reports.--The Secretary shall submit to Congress an 
annual management report on the programs under this section. Each such 
report shall include information on savings, reductions in cost-
sharing, access to items and services, and beneficiary satisfaction.
    ``(d) Demonstration Project for Clinical Laboratory Services.--
            ``(1) In general.--The Secretary shall conduct a 
        demonstration project on the application of competitive 
        acquisition under this section to clinical diagnostic 
        laboratory tests--
                    ``(A) for which payment is otherwise made under 
                section 1833(h) or 1834(d)(1) (relating to colorectal 
                cancer screening tests); and
                    ``(B) which are furnished without a face-to-face 
                encounter between the individual and the hospital or 
                physician ordering the tests.
            ``(2) Terms and conditions.--Such project shall be under 
        the same conditions as are applicable to items and services 
        described in subsection (a)(2).
            ``(3) Report.--The Secretary shall submit to Congress--
                    ``(A) an initial report on the project not later 
                than December 31, 2004; and
                    ``(B) such progress and final reports on the 
                project after such date as the Secretary determines 
                appropriate.''.
    (b) Continuation of Certain Demonstration Projects.--
Notwithstanding the amendment made by subsection (a), with respect to 
demonstration projects implemented by the Secretary under section 1847 
of the Social Security Act (42 U.S.C. 1395w-3) (relating to the 
establishment of competitive acquisition areas) that was in effect on 
the day before the date of the enactment of this Act, each such 
demonstration project may continue under the same terms and conditions 
applicable under that section as in effect on that date.
    (c) Report on Differences in Payment for Laboratory Services.--Not 
later than 18 months after the date of the enactment of this Act, the 
Comptroller General of the United States shall submit to Congress a 
report that analyzes differences in reimbursement between public and 
private payors for clinical diagnostic laboratory services.

SEC. 512. PAYMENT FOR AMBULANCE SERVICES.

    (a) Phase-In Providing Floor Using Blend of Fee Schedule and 
Regional Fee Schedules.--Section 1834(l) (42 U.S.C. 1395m(l)) is 
amended--
            (1) in paragraph (2)(E), by inserting ``consistent with 
        paragraph (10)'' after ``in an efficient and fair manner'';
            (2) by redesignating the paragraph (8) added by section 
        221(a) of BIPA as paragraph (9); and
            (3) by adding at the end the following new paragraph:
            ``(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 service furnished in a year 
        before January 1, 2007, the portion of the payment amount that 
        is based on the fee schedule shall not be less than the 
        following blended rate of the fee schedule under paragraph (1) 
        and of a regional fee schedule for the region involved:
                    ``(A) For 2003, 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 2004, 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 2005, 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 2006, the blended rate shall be based 80 
                percent on the fee schedule under paragraph (1) and 20 
                percent on the regional fee schedule.
        For purposes of this paragraph, the Secretary shall establish a 
        regional fee schedule for each of the 9 Census divisions 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.''.
    (b) Adjustment in Payment for Certain Long Trips.--Section 1834(l), 
as amended by subsection (a), is further amended by adding at the end 
the following new paragraph:
            ``(11) Adjustment in payment for certain long trips.--In 
        the case of ground ambulance services furnished on or after 
        January 1, 2003, and before January 1, 2008, 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 such miles.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to ambulance services furnished on or after January 1, 2003.

SEC. 513. 2-YEAR EXTENSION OF MORATORIUM ON THERAPY CAPS; PROVISIONS 
              RELATING TO REPORTS.

    (a) 2-Year Extension of Moratorium on Therapy Caps.--Section 
1833(g)(4) (42 U.S.C. 1395l(g)(4)) is amended by striking ``and 2002'' 
and inserting ``2002, 2003, and 2004''.
    (b) Prompt Submission of Overdue Reports on Payment and Utilization 
of Outpatient Therapy Services.--Not later than December 31, 2002, the 
Secretary shall submit to Congress the reports required under section 
4541(d)(2) of the Balanced Budget Act of 1997 (relating to alternatives 
to a single annual dollar cap on outpatient therapy) and under section 
221(d) of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
Act of 1999 (relating to utilization patterns for outpatient therapy).
    (c) Identification of Conditions and Diseases Justifying Waiver of 
Therapy Cap.--
            (1) Study.--The Secretary shall request the Institute of 
        Medicine of the National Academy of Sciences to identify 
        conditions or diseases that should justify conducting an 
        assessment of the need to waive the therapy caps under section 
        1833(g)(4) of the Social Security Act (42 U.S.C. 1395l(g)(4)).
            (2) Reports to congress.--Not later than September 1, 2003, 
        the Secretary shall submit to Congress a preliminary report on 
        the conditions and diseases identified under paragraph (1) and 
        not later than December 31, 2003, a final report on the 
        conditions and diseases so identified.
    (d) GAO Study of Patient Access to Physical Therapist Services.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study on access to physical therapist services 
        in States authorizing such services without a physician 
        referral and in States that require such a physician referral. 
        The study shall--
                    (A) examine the use of and referral patterns for 
                physical therapist services for patients age 50 and 
                older in States that authorize such services without a 
                physician referral and in States that require such a 
                physician referral;
                    (B) examine the use of and referral patterns for 
                physical therapist services for patients who are 
                medicare beneficiaries;
                    (C) examine the delivery of physical therapists' 
                services within the facilities of Department of 
                Defense; and
                    (D) analyze the potential impact on medicare 
                beneficiaries and on expenditures under the medicare 
                program of eliminating the need for a physician 
                referral for physical therapist services under the 
                medicare program.
            (2) Report.--The Comptroller General shall submit to 
        Congress a report on the study conducted under paragraph (1) by 
        not later than 1 year after the date of the enactment of this 
        Act.

SEC. 514. ACCELERATED IMPLEMENTATION OF 20 PERCENT COINSURANCE FOR 
              HOSPITAL OUTPATIENT DEPARTMENT (OPD) SERVICES; OTHER OPD 
              PROVISIONS.

    (a) Accelerated Implementation of Coinsurance Reductions.--Section 
1833(t)(8)(C)(ii) (42 U.S.C. 1395l(t)(8)(C)(ii)) is amended by striking 
subclauses (III) through (V) and inserting the following:
                                    ``(III) For procedures performed in 
                                2004, 45 percent.
                                    ``(IV) For procedures performed in 
                                2005, 40 percent.
                                    ``(V) For procedures performed in 
                                2006, 2007, 2008 and 2009, 35 percent.
                                    ``(VI) For procedures performed in 
                                2010, 30 percent.
                                    ``(VII) For procedures performed in 
                                2011, 25 percent.
                                    ``(VIII) For procedures performed 
                                in 2012 and thereafter, 20 percent.''.
    (b) Treatment of Temperature Monitored Cryoablation.--
            (1) In general.--Section 1833(t)(6)(A)(ii) (42 U.S.C. 
        1395l(t)(6)(A)(ii)) is amended by striking ``or temperature 
        monitored cryoablation''.
            (2) Effective date.--The amendment made by paragraph (1) 
        applies to payment for services furnished on or after January 
        1, 2003.

SEC. 515. COVERAGE OF AN INITIAL PREVENTIVE PHYSICAL EXAMINATION.

    (a) Coverage.--Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)), is 
amended--
            (1) in subparagraph (U), by striking ``and'' at the end;
            (2) in subparagraph (V), by inserting ``and'' at the end; 
        and
            (3) by adding at the end the following new subparagraph:
                    ``(W) an initial preventive physical examination 
                (as defined in subsection (ww));''.
    (b) Services Described.--Section 1861 (42 U.S.C. 1395x) is amended 
by adding at the end the following new subsection:

               ``Initial Preventive Physical Examination

    ``(ww) The term `initial preventive physical examination' means 
physicians' services consisting of a physical examination with the goal 
of health promotion and disease detection and includes items and 
services specified by the Secretary in regulations.''.
    (c) Payment as Physicians' Services.--Section 1848(j)(3) (42 U.S.C. 
1395w-4(j)(3)) by inserting ``(2)(W),'' after ``(2)(S),''.
    (d) Other Conforming Amendments.--Section 1862(a) (42 U.S.C. 
1395y(a)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``and'' at the end of subparagraph 
                (H);
                    (B) by striking the semicolon at the end of 
                subparagraph (I) and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(J) in the case of an initial preventive physical 
        examination, which is performed not later than 6 months after 
        the date the individual's first coverage period begins under 
        part B;''; and
            (2) in paragraph (7), by striking ``or (H)'' and inserting 
        ``(H), or (J)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2004, but only for 
individuals whose coverage period begins on or after such date.

SEC. 516. RENAL DIALYSIS SERVICES.

    (a) Report on Differences in Costs in Different Settings.--Not 
later than 1 year after the date of the enactment of this Act, the 
Comptroller General of the United States shall submit to Congress a 
report containing--
            (1) an analysis of the differences in costs of providing 
        renal dialysis services under the medicare program in home 
        settings and in facility settings;
            (2) an assessment of the percentage of overhead costs in 
        home settings and in facility settings; and
            (3) an evaluation of whether the charges for home dialysis 
        supplies and equipment are reasonable and necessary.
    (b) Restoring Composite Rate Exceptions for Pediatric Facilities.--
            (1) In general.--Section 422(a)(2) of BIPA is amended--
                    (A) in subparagraph (A), by striking ``and (C)'' 
                and inserting ``, (C), and (D)'';
                    (B) in subparagraph (B), by striking ``In the 
                case'' and inserting ``Subject to subparagraph (D), in 
                the case''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) Inapplicability to pediatric facilities.--
                Subparagraphs (A) and (B) shall not apply, as of 
                October 1, 2002, to pediatric facilities that do not 
                have an exception rate described in subparagraph (C) in 
                effect on such date. For purposes of this subparagraph, 
                the term `pediatric facility' means a renal facility at 
                least 50 percent of whose patients are individuals 
                under 18 years of age.''.
            (2) Conforming amendment.--The fourth sentence of section 
        1881(b)(7) (42 U.S.C. 1395rr(b)(7)) is amended by striking 
        ``The Secretary'' and inserting ``Subject to section 422(a)(2) 
        of the Medicare, Medicaid, and SCHIP Benefits Improvement and 
        Protection Act of 2000, the Secretary''.
    (c) Increase in Renal Dialysis Composite Rate for Services 
Furnished in 2004.--Notwithstanding any other provision of law, with 
respect to payment under part B of title XVIII of the Social Security 
Act for renal dialysis services furnished in 2004, the composite 
payment rate otherwise established under section 1881(b)(7) of such Act 
(42 U.S.C. 1395rr(b)(7)) shall be increased by 1.2 percent.

SEC. 517. IMPROVED PAYMENT FOR CERTAIN MAMMOGRAPHY SERVICES.

    (a) Exclusion From OPD Fee Schedule.--Section 1833(t)(1)(A)(iv) (42 
U.S.C. 1395l(t)(1)(A)(iv)) is amended by inserting before the period at 
the end the following: ``and does not include screening mammography (as 
defined in section 1861(jj)) and unilateral and bilateral diagnostic 
mammography''.
    (b) Adjustment to Technical Component.--For diagnostic mammography 
performed on or after January 1, 2004, for which payment is made under 
the physician fee schedule under section 1848 of the Social Security 
Act (42 U.S.C. 1395w-4), the Secretary, based on the most recent cost 
data available, shall provide for an appropriate adjustment in the 
payment amount for the technical component of the diagnostic 
mammography.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to mammography performed on or after January 1, 2004.
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