[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5234 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 5234

  To amend title XVIII of the Social Security Act to provide for fair 
payments under the Medicare hospital outpatient department prospective 
                            payment system.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 25, 2002

Mr. Sessions (for himself, Mr. Dingell, Mr. Brown of Ohio, and Mr. Burr 
of North Carolina) 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 title XVIII of the Social Security Act to provide for fair 
payments under the Medicare hospital outpatient department prospective 
                            payment system.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare Hospital 
Outpatient Department Fair Payment Act of 2002''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Ensuring adequate OPD fee schedule amounts for clinic and 
                            emergency visits.
Sec. 3. Limitation of pro rata reductions to pass-through payments.
Sec. 4. Clarifying application of OPD fee schedule increase factor.
Sec. 5. Limitation on budget neutrality adjustment for annual revisions 
                            to system components.
Sec. 6. Outlier payments.
Sec. 7. Adjustment to limit decline in payment.
Sec. 8. Special increase in certain relative payment weights.
Sec. 9. Permanent extension of provider-based status.

SEC. 2. ENSURING ADEQUATE OPD FEE SCHEDULE AMOUNTS FOR CLINIC AND 
              EMERGENCY VISITS.

    (a) In General.--Section 1833(t) of the Social Security Act (42 
U.S.C. 1395l(t)) is amended--
            (1) in paragraph (3)(C)(ii)--
                    (A) by striking ``paragraph (8)(B)'' and inserting 
                ``paragraphs (11)(B) and (13)(A)(i)''; and
                    (B) by striking ``clause (iii)'' and inserting 
                ``clause (iv)'';
            (2) in paragraph (3)(C)(iii), by inserting ``, paragraph 
        (11)(B), or paragraph (13)(B)'' after ``this subparagraph'';
            (3) in paragraph (3)(D)--
                    (A) in clause (i), by striking ``conversion factor 
                computed under subparagraph (C) for the year'' and 
                inserting ``applicable conversion factor computed under 
                subparagraph (C), paragraph (11)(B), or paragraph 
                (13)(B) for the year (or portion thereof)''; and
                    (B) in clause (ii), by inserting ``, paragraph 
                (9)(A), or paragraph (13)(C)'' after ``paragraph 
                (2)(C)'';
            (4) in paragraph (9), by striking subparagraph (B) and 
        inserting the following new subparagraph:
                    ``(B) Budget neutrality adjustment.--
                            ``(i) In general.--If the Secretary makes 
                        revisions under subparagraph (A), then the 
                        revisions 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 (including expenditures attributable to 
                        the special rules specified in paragraph (13)) 
                        that would have been made if the revisions had 
                        not been made.
                            ``(ii) Exemption from reduction.--The 
                        relative payment weights determined under 
                        paragraph (13)(C) and the conversion factor 
                        computed under paragraph (13)(B) shall not be 
                        reduced by any budget neutrality adjustment 
                        made pursuant to this subparagraph.''; and
            (5) by redesignating paragraph (13) as paragraph (14) and 
        by inserting after paragraph (12) the following new paragraph:
            ``(13) Special rules for calculating medicare opd fee 
        schedule amount for clinic and emergency visits.--
                    ``(A) In general.--In computing the medicare OPD 
                fee schedule amount under paragraph (3)(D) for covered 
                OPD services that are furnished on or after April 1, 
                2002, and classified within a group established or 
                revised under paragraph (2)(B) or (9)(A), respectively, 
                for clinic or emergency visits (as described in 
                subparagraph (D)), the Secretary shall--
                            ``(i) substitute for the conversion factor 
                        calculated under paragraph (3)(C) the 
                        conversion factor calculated under subparagraph 
                        (B); and
                            ``(ii) substitute for the relative payment 
                        weight established or revised under paragraph 
                        (2)(C) or (9)(A), respectively, the relative 
                        payment weight determined under subparagraph 
                        (C) for such group.
                    ``(B) Calculation of conversion factor.--For 
                purposes of subparagraph (A)(i), the conversion factor 
                calculated under this subparagraph is--
                            ``(i) for services furnished on or after 
                        April 1, 2002, and before January 1, 2003, an 
                        amount equal to 112.82 percent of the 
                        conversion factor specified for such period in 
                        the final rule published on March 1, 2002 (67 
                        Fed. Reg. 9556 et seq.; entitled `Medicare 
                        Program; Correction of Certain Calendar Year 
                        2002 Payment Rates Under the Hospital 
                        Outpatient Prospective Payment System and the 
                        Pro Rata Reduction on Transitional Pass-Through 
                        Payments; Correction of Technical and 
                        Typographical Errors') and not taking into 
                        account any subsequent amendments to such final 
                        rule; and
                            ``(ii) for services furnished in a year 
                        beginning after December 31, 2002, the 
                        conversion factor computed under this 
                        subparagraph for the previous year (or in 
the case of 2003, for the previous 9 months) increased by the OPD fee 
schedule increase factor specified under paragraph (3)(C)(iv) for the 
year involved.
                    ``(C) Determination of relative payment weights.--
                For purposes of subparagraph (A)(ii), the relative 
                payment weight determined under this subparagraph for a 
                covered OPD service that is classified within such a 
                group is--
                            ``(i) for services furnished on or after 
                        April 1, 2002, and before January 1, 2003, the 
                        relative payment weight specified for such 
                        group for such period in Addendum A of the 
                        final rule published on March 1, 2002 (67 Fed. 
                        Reg. 9556 et seq.; entitled `Medicare Program; 
                        Correction of Certain Calendar Year 2002 
                        Payment Rates Under the Hospital Outpatient 
                        Prospective Payment System and the Pro Rata 
                        Reduction on Transitional Pass-Through 
                        Payments; Correction of Technical and 
                        Typographical Errors') and not taking into 
                        account any subsequent amendments to such final 
                        rule; and
                            ``(ii) for services furnished in a year 
                        beginning on or after January 1, 2003--
                                    ``(I) for ambulatory patient 
                                classification group 0601 (relating to 
                                mid-level clinic visits), or a 
                                successor to such group, the relative 
                                payment weight specified for such group 
                                in the final rule referred to in clause 
                                (i); and
                                    ``(II) other ambulatory patient 
                                classification groups described in 
                                subparagraph (D), the relative payment 
                                weight established or revised under 
                                paragraph (2)(C) or (9)(A), 
                                respectively, for such group for such 
                                year (but without regard to any budget 
                                neutrality adjustment under paragraph 
                                (9)(B)).
                    ``(D) Groups for clinic and emergency visits.--For 
                purposes of this paragraph, the groups established or 
                revised under paragraph (2)(B) or (9)(A), respectively, 
                for clinic and emergency visits are ambulatory patient 
                classification groups 0600, 0601, 0602, 0610, 0611, and 
                0612 as defined for purposes of the final rule referred 
                to in subparagraph (C)(i) (and any successors to such 
                groups).''.
    (b) Limitation on Secretarial Authority.--Notwithstanding section 
1833(t) of the Social Security Act (42 U.S.C. 1395l(t)), the Secretary 
of Health and Human Services may not make any adjustment under--
            (1) paragraph (2)(F), (3)(C)(iii), (9)(B), or (9)(C) of 
        section 1833(t) of the Social Security Act (42 U.S.C. 
        1395l(t)); or
            (2) any other provision of such section;
to ensure that the amendments made by subsection (a) do not cause the 
estimated amount of expenditures under part B of title XVIII of such 
Act (42 U.S.C. 1395j et seq.) to exceed the estimated amount of 
expenditures that would have been made under such part but for such 
amendments.
    (c) Periodic Lump-Sum Retroactive Payments.--The Secretary of 
Health and Human Services shall, not later than 60 days after the date 
of enactment of this Act (and at least every 90 days thereafter until 
the amendments made by subsection (a) are implemented)--
            (1) estimate, for each hospital furnishing services for 
        which payment may be made under section 1833(t) of the Social 
        Security Act (42 U.S.C. 1395l(t)) on or after April 1, 2002--
                    (A) the total amount of additional payments under 
                such section that would have been made to such hospital 
                as of the date of such estimate if such amendments had 
                been implemented as of such date; and
                    (B) the total amount of additional payments under 
                such section that have actually been made to such 
                hospital as of the date of such estimate (including any 
                amounts paid pursuant to this subsection); and
            (2) make a lump-sum payment to such hospital equal to the 
        amount by which the amount estimated under paragraph (1)(A) 
        exceeds the amount estimated under paragraph (1)(B).

SEC. 3. LIMITATION OF PRO RATA REDUCTIONS TO PASS-THROUGH PAYMENTS.

    (a) In General.--Section 1833(t)(6)(E) of the Social Security Act 
(42 U.S.C. 1395l(t)(6)(E)) is amended--
            (1) in clause (i), by striking ``The total'' and inserting 
        ``Subject to clause (iv), the total'';
            (2) in clause (iii), by striking ``If the Secretary'' and 
        inserting ``Subject to clause (iv), if the Secretary''; and
            (3) by adding at the end the following new clause:
                            ``(iv) Limitation on pro rata reductions.--
                        Notwithstanding clauses (i), (ii), and (iii), 
                        the Secretary may not reduce the additional 
                        payments that would otherwise be made under 
                        this paragraph (but for this subparagraph) for 
                        items and services furnished on or after April 
                        1, 2002, by a percentage that exceeds 20.0 
                        percent.''.
    (b) Periodic Lump-Sum Retroactive Payments.--The Secretary of 
Health and Human Services shall, not later than 60 days after the date 
of enactment of this Act (and at least every 90 days thereafter until 
clause (iv) of section 1833(t)(6)(E) of the Social Security Act (as 
added by subsection (a)(3)) is implemented)--
            (1) estimate, for each hospital furnishing services for 
        which payment may be made under section 1833(t) of the Social 
        Security Act (42 U.S.C. 1395l(t)) on or after April 1, 2002--
                    (A) the total amount of additional payments under 
                paragraph (6) of such section that would have been made 
                to such hospital as of the date of such estimate if 
                such clause had been implemented as of such date; and
                    (B) the total amount of additional payments under 
                such paragraph that have actually been made to such 
                hospital as of the date of such estimate (including any 
                amounts paid pursuant to this subsection); and
            (2) make a lump-sum payment to such hospital equal to the 
        amount by which the amount estimated under paragraph (1)(A) 
        exceeds the amount estimated under paragraph (1)(B).

SEC. 4. CLARIFYING APPLICATION OF OPD FEE SCHEDULE INCREASE FACTOR.

    Section 1833(t)(3)(C)(iv) of the Social Security Act (42 U.S.C. 
1395l(t)(3)(C)(iv)) is amended by adding at the end the following new 
sentence: ``Effective for years beginning with 2002, the OPD fee 
schedule increase factor for a year shall take effect on January 1 of 
such year, and nothing in this subsection shall be construed as 
authorizing the Secretary to delay the date on which such increase 
factor takes effect by reason of any delay in implementing the 
revisions authorized by paragraph (9)(A) for such year or for any other 
reason.''.

SEC. 5. LIMITATION ON BUDGET NEUTRALITY ADJUSTMENT FOR ANNUAL REVISIONS 
              TO SYSTEM COMPONENTS.

    Section 1833(t)(9)(B) of the Social Security Act (42 U.S.C. 
1395l(t)(9)(B)), as amended by section 2(a)(4), is amended--
            (1) in clause (i), by striking ``If the Secretary'' and 
        inserting ``Subject to clause (iii), if the Secretary''; and
            (2) by adding at the end the following new clause:
                            ``(iii) Limitation on adjustment.--For 
                        years after 2001, the budget neutrality 
                        adjustment under this subparagraph may not 
                        reduce the payments that would otherwise be 
                        made under this part but for this subparagraph 
                        by more than 2.0 percent.''.

SEC. 6. OUTLIER PAYMENTS.

    Section 1833(t)(5) of the Social Security Act (42 U.S.C. 
1395l(t)(5)) is amended--
            (1) in subparagraph (C)--
                    (A) in clause (i), by striking ``exceed the 
                applicable'' and inserting ``exceed a percentage 
                specified by the Secretary that is not less than the 
                applicable minimum percentage or greater than the 
                applicable maximum''; and
                    (B) by striking clause (ii) and inserting the 
                following new clause:
                            ``(ii) Applicable percentages.--For 
                        purposes of clause (i)--
                                    ``(I) the term `applicable minimum 
                                percentage' for a year means zero 
                                percent for years before 2003 and 2.0 
                                percent for years after 2002; and
                                    ``(II) the term `applicable maximum 
                                percentage' for a year means 2.5 
                                percent for years before 2003 and 3.0 
                                percent for years after 2002.''; and
            (2) in subparagraph (D)--
                    (A) in the heading, by striking ``Transitional 
                authority'' and inserting ``Flexibility''; and
                    (B) in the matter preceding clause (i), by striking 
                ``for covered OPD services furnished before January 1, 
                2002,''.

SEC. 7. ADJUSTMENT TO LIMIT DECLINE IN PAYMENT.

    Section 1833(t)(7) of the Social Security Act (42 U.S.C. 
1395l(t)(7)) is amended--
            (1) in the heading, by striking ``Transitional adjustment'' 
        and inserting ``Adjustment'';
            (2) in subparagraph (A)--
                    (A) in the heading, by striking ``Before 2002'' and 
                inserting ``In general'';
                    (B) in the matter preceding clause (i)--
                            (i) by striking ``subparagraph (D)'' and 
                        inserting ``subparagraph (B)'';
                            (ii) by striking ``furnished before January 
                        1, 2002,''; and
                            (iii) by striking ``subparagraph (E)'' and 
                        inserting ``subparagraph (C)''; and
                    (C) in clause (i), by striking ``subparagraph (F)'' 
                and inserting ``subparagraph (D)'';
            (3) by striking subparagraph (D) and inserting the 
        following new subparagraph:
                    ``(D) Hold harmless provisions.--
                            ``(i) Cancer, children's, and small rural 
                        hospitals.--In the case of a hospital that is 
                        described in clause (iii) or (v) of section 
                        1886(d)(1)(B) or is located in a rural area and 
                        has not more than 100 beds, for covered OPD 
                        services--
                                    ``(I) that are furnished on or 
                                after the date on which payment is 
                                first made under this subsection; and
                                    ``(II) for which the PPS amount is 
                                less than the pre-BBA amount (or for 
                                services furnished on or after January 
                                1, 2002, is less than the greater of 
                                the pre-BBA amount or the reasonable 
                                costs incurred in furnishing such 
                                services),
                        the amount of payment under this subsection 
                        shall be increased by the amount of such 
                        difference.
                            ``(ii) Eye and ear hospitals.--In the case 
                        of a hospital or unit described in subsection 
                        (i)(4), for covered OPD services--
                                    ``(I) that are furnished on or 
                                after January 1, 2002; and
                                    ``(II) for which the PPS amount is 
                                less than the greater of the base year 
                                amount (which for purposes of this 
                                subparagraph shall be determined in the 
                                same manner as the pre-BBA amount under 
                                subparagraph (D), except that clause 
                                (ii)(I) of such subparagraph shall be 
                                applied by substituting `2001' for 
                                `1996') or the reasonable costs 
                                incurred in furnishing such services,
                        the amount of payment under this subsection 
                        shall be increased by the amount of such 
                        difference.'';
            (4) in subparagraph (F)(ii)(I), by striking ``subparagraph 
        (E)'' and inserting ``subparagraph (C)''; and
            (5) by striking subparagraphs (B) and (C) and redesignating 
        subparagraphs (D), (E), (F), (G), (H), and (I) as subparagraphs 
        (B), (C), (D), (E), (F), and (G), respectively.

SEC. 8. SPECIAL INCREASE IN CERTAIN RELATIVE PAYMENT WEIGHTS.

    Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) is 
amended--
            (1) in paragraph (3)(D)(ii), as amended by section 
        2(a)(3)(B), by striking ``or paragraph (13)(C)'' and inserting 
        ``paragraph (13)(C), or paragraph (14)'';
            (2) in paragraph (9)(B)(i), as amended by section 2(a)(4), 
        by inserting ``determined without regard to expenditures made 
        by reason of the adjustments required by paragraph (14)'' after 
        ``paragraph (13)'';
            (3) in paragraph (12)(C), by striking ``paragraph (6)'' and 
        inserting ``paragraph (9) (including adjustments authorized by 
        paragraph (14))''; and
            (4) by redesignating paragraph (14) (as redesignated by 
        section 2(a)(5)) as paragraph (15) and by inserting after 
        paragraph (13) the following new paragraph:
            ``(14) Requirement to increase relative payment weights in 
        certain circumstances.--
                    ``(A) In general.--Notwithstanding the 
                methodologies specified for determining relative 
                payment weights described in paragraphs (2)(C) and 
                (9)(A), for years beginning with 2002, the Secretary 
                shall, as part of the revisions required by paragraph 
                (9)(A), increase the relative payment weight for any 
                group established or revised under paragraph (2)(C) or 
                (9)(A), respectively, above the weight that would 
                otherwise apply to such group under this subsection if 
                the Secretary determines that such an increase is 
                necessary to ensure that the medicare OPD fee schedule 
                amount for the group for the year is not less than 90 
                percent of the median costs for services classified 
                within the group.
                    ``(B) Priorities.--For purposes of providing for 
                increases under subparagraph (A), the Secretary shall 
                give priority first to preventive services, second to 
                cancer services, third to services for which the 
                medicare OPD fee schedule amount that would otherwise 
                apply is less the payment level under this title for 
                such services in other settings, and fourth to other 
                services.
                    ``(C) Data.--The Secretary may base increases under 
                subparagraph (A) on data from any source and is not 
                limited to data appropriate for estimating the costs 
                incurred by hospitals in furnishing such services.
                    ``(D) Aggregate expenditures.--Notwithstanding the 
                application of the percentage specified under 
                subparagraph (A), the Secretary shall provide for 
                increases under such subparagraph for each year so that 
                the estimated amount of additional expenditures 
                attributable to adjustments under such subparagraph is 
                not less than $1,000,000,000 in such year.''.

SEC. 9. PERMANENT EXTENSION OF PROVIDER-BASED STATUS.

    Paragraphs (1) and (2) of section 404(a) of the Medicare, Medicaid, 
and SCHIP Benefits Improvement and Protection Act of 2000 (113 Stat. 
2763A-506), as enacted into law by section 1(a)(6) of Public Law 106-
554, are each amended by striking ``until October 1, 2002''.
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