[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6761 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6761

  To require the Secretary of Health and Human Services to enter into 
negotiated rulemaking to modernize the Medicare part B fee schedule for 
                 clinical diagnostic laboratory tests.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 31, 2008

Mr. Stupak (for himself and Mr. Burgess) 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 require the Secretary of Health and Human Services to enter into 
negotiated rulemaking to modernize the Medicare part B fee schedule for 
                 clinical diagnostic laboratory tests.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Clinical Diagnostic 
Laboratory Fee Schedule Modernization Act of 2008''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds the following:
            (1) The fee schedule for clinical diagnostic laboratory 
        tests under part B of the Medicare program was developed in 
        1984 based on the local prevailing fees charged in 1983.
            (2) The cost of clinical diagnostic laboratory tests, 
        laboratory equipment, supplies, and medical professional staff 
        has increased exponentially in recent years.
            (3) Clinical laboratories are currently reimbursed at 
        levels below those provided in 1984 when adjusted for 
        inflation.
            (4) The fee schedule for clinical diagnostic laboratory 
        tests is the last Medicare fee schedule that has not been made 
        reliant on prospective payment or relative value as the primary 
        payment methodology.
            (5) Clinical laboratories provide vital information that 
        influences 70 percent of all patient care decisions.
    (b) Purpose.--The purpose of this Act is--
            (1) to ensure Medicare beneficiary access to the best 
        laboratory services and most advanced testing available;
            (2) to modernize the fee schedule for clinical diagnostic 
        laboratory tests under part B of the Medicare program to 
        reflect the increased cost and enhanced technology involved in 
        laboratory testing and to reflect accurately and equitably the 
        value of such testing to the health care system;
            (3) to involve relevant stakeholders in the clinical 
        laboratory industry in the process of such fee schedule 
        modernization, including Medicare beneficiaries, health care 
        providers, and laboratories; and
            (4) to create mechanisms for periodic revisions and 
        inflationary updates to the fee schedule for clinical 
        diagnostic laboratory tests in order to reflect market 
        conditions.

SEC. 3. PROCESS FOR THE MODERNIZATION OF THE FEE SCHEDULE FOR CLINICAL 
              DIAGNOSTIC LABORATORY TESTS.

    (a) In General.--Pursuant to the provisions of this Act and 
consistent with the elements described in subsection (b), the Secretary 
of Health and Human Services shall--
            (1) establish under section 4(a) a negotiated rulemaking 
        committee to negotiate and develop a proposed rule for a 
        Medicare modernized clinical diagnostic laboratory fee schedule 
        (as defined in section 7(3));
            (2) not later than 24 months after the date of the 
        enactment of this Act and pursuant to such negotiated 
        rulemaking process, submit to Congress a report under section 
        4(f)(2)(B) relating to such Medicare modernized clinical 
        diagnostic fee schedule; and
            (3) promulgate under section 5 final regulations 
        establishing such Medicare modernized clinical diagnostic fee 
        schedule.
    (b) Elements To Consider.--The Medicare modernized clinical 
diagnostic laboratory fee schedule developed pursuant to this Act shall 
provide, to the greatest extent possible, for access by all individuals 
enrolled in part B of title XVIII of the Social Security Act to quality 
laboratory services in all settings and establish a new single, 
rational, and national fee schedule for clinical diagnostic laboratory 
tests under such part that incorporates the following elements:
            (1) A primary base payment rate computed in accordance with 
        the following:
                    (A) The payment rate is value-based on appropriate 
                resource allocations to the administration of clinical 
                laboratory tests for overall patient care management 
                and based on potential cost-savings to the Medicare 
                program under such title XVIII resulting from the 
                administration of clinical laboratory tests.
                    (B) The payment rate takes into account industry-
                wide clinical laboratory practice expenses, including 
                liability costs and costs of collection and 
                transportation of specimens.
            (2) An adjustment to the primary base payment rate to take 
        into account variations in the cost of furnishing such 
        services--
                    (A) among various geographic areas;
                    (B) among various types of clinical laboratory 
                settings for comparable services; and
                    (C) to various populations of individuals enrolled 
                in part B of such title, including such populations 
                served by skilled nursing facilities, such populations 
                served by hospital outpatient departments, and such 
                populations served by physician offices.
            (3) A mechanism to periodically revise the fee schedule for 
        years subsequent to the first year in which the fee schedule is 
        implemented that includes the following components:
                    (A) The mechanism is sufficiently adaptable to 
                incorporate new clinical laboratory tests and 
                technology into the fee schedule in a timely manner.
                    (B) The mechanism periodically and appropriately 
                revises clinical laboratory reimbursement to reflect 
                the evolution of costs, value, and utilization of such 
                tests.
                    (C) The mechanism is not based on an arbitrary cap.
                    (D) The mechanism provides for revisions to the fee 
                schedule at least once every five years, but not more 
                frequently than annually.
                    (E) The mechanism provides for input from relevant 
                stakeholders, including patients, health care 
                providers, and clinical laboratories.
            (4) For the first year for which the fee schedule is 
        implemented, the fee schedule shall be designed to result in 
        the same amount of aggregate payments under such schedule for 
        clinical laboratory services furnished during such year for 
        which payment is made under part B of the Social Security Act 
        as would have been made under section 1833(h) of such Act for 
        such services if this section had not been enacted (taking into 
        account annual adjustments under paragraph (2) of such section, 
        the annual addition of new tests under paragraph (8) of such 
        section, and any other utilization increases that would have 
        been recognized under such section).
            (5) A mechanism to provide for automatic annual 
        inflationary updates to the fee schedule for each fiscal year 
        after the first fiscal year for which the fee schedule is 
        implemented.
            (6) A transition period to phase in the application of the 
        payment rates under the fee schedule based on blended payment 
        rates between such fee schedule and the fee schedule in effect 
        on the day before the date of the enactment of this Act under 
        section 1833(h) of the Social Security Act for clinical 
        laboratory services, which is to be provided in an efficient 
        and fair manner.
            (7) The fee schedule shall provide for greater 
        administrative simplicity and efficiency by eliminating or 
        reducing the number of differential payment rates in existence 
        on the day before the date of the enactment of this Act under 
        section 1833(h) of the Social Security Act for clinical 
        diagnostic laboratory tests.
            (8) The fee schedule does not utilize beneficiary cost 
        sharing.

SEC. 4. ESTABLISHMENT AND DUTIES OF NEGOTIATED RULEMAKING COMMITTEE.

    (a) Establishment.--Not later than 30 days after the date of the 
enactment of this Act, the Secretary shall publish a notice in the 
Federal Register of intent to establish a negotiated rulemaking 
committee (in this Act referred to as the ``Committee'') in accordance 
with subchapter III of chapter 5 of title 5, United States Code (5 
U.S.C. 561 et seq.) and this section to negotiate and develop a 
proposed rule for a Medicare modernized clinical diagnostic laboratory 
fee schedule (as defined in section 7(3)). Not later than 60 days after 
the day on which such notice of intent is published, the Secretary 
shall appoint members to the Committee in accordance with subsection 
(b).
    (b) Composition of Committee.--
            (1) In general.--Notwithstanding section 565(b) of title 5, 
        United States Code, the Committee shall be composed of 15 
        voting members appointed pursuant to paragraph (2) and 2 
        nonvoting members appointed pursuant to paragraph (3).
            (2) Voting members.--The Secretary shall appoint as voting 
        members of the Committee one individual from each of the 
        following categories:
                    (A) Organizations primarily representing 
                independent clinical laboratories operating in more 
                than two States.
                    (B) Organizations primarily representing 
                independent clinical laboratories operating in no more 
                than two States.
                    (C) Organizations representing hospitals that 
                perform clinical diagnostic laboratory tests.
                    (D) Organizations representing physicians with 
                expertise in clinical diagnostic laboratory tests.
                    (E) Organizations representing non-physicians with 
                expertise in clinical diagnostic laboratory tests.
                    (F) Organizations representing manufacturers of 
                equipment designed for clinical diagnostic laboratory 
                tests.
                    (G) Organizations representing individuals enrolled 
                under part B of title XVIII of the Social Security Act.
                    (H) Organizations representing private payers for 
                clinical diagnostic laboratory tests.
                    (I) Individuals with expertise in measuring 
                resource utilization by clinical diagnostic 
                laboratories in performing tests.
                    (J) Individuals with backgrounds in health 
                economics with the ability to quantify the value of 
                clinical diagnostic laboratory tests.
                    (K) Organizations representing patients.
                    (L) Physicians or clinicians who prescribe clinical 
                diagnostic laboratory tests.
                    (M) Physicians or clinicians who perform point-of-
                care tests in their offices.
                    (N) Organizations representing individuals with 
                scientific background and experience in clinical 
                laboratory health care services.
                    (O) Organizations representing managers or 
                supervisors of clinical laboratories.
            (3) Nonvoting members.--The Secretary shall appoint two 
        nonvoting members to the Committee.
    (c) Duties of Committee.--The Committee shall negotiate and attempt 
to reach a consensus (as defined in section 562(2) of title 5, United 
States Code) concerning a proposed rule with respect to establishing a 
Medicare modernized clinical diagnostic laboratory fee schedule and any 
other matter the committee determines is relevant to the proposed rule. 
In its negotiations, the Committee shall take into account the purpose 
described in section 2(b), the elements listed in section 3(b), and the 
input of relevant stakeholders.
    (d) Term; Vacancies.--
            (1) Term.--Each member of the Committee shall be appointed 
        for the life of the Committee.
            (2) Vacancies.--A vacancy on the Committee shall be filled 
        in the same manner in which the original appointment was made.
    (e) Administrative Provisions.--
            (1) Quorum.--A quorum shall be required to conduct the 
        business of the Committee. Nine members of the Committee shall 
        constitute a quorum.
            (2) Facilitator.--Not later than 30 days after the date on 
        which all members of the Committee are appointed, a facilitator 
        for the negotiations of the Committee shall be approved or 
        selected in accordance with section 566(c) of title 5, United 
        States Code. The facilitator shall be a voting member of the 
        Committee.
            (3) Meetings.--The Committee shall meet at the call of the 
        facilitator approved or selected under paragraph (2), the 
        Secretary, or a quorum of the members of the Committee.
            (4) Compensation.--The members of the Committee may be 
        compensated in accordance with section 568(c) of title 5, 
        United States Code.
            (5) Staffing.--
                    (A) Detailing.--Any Federal Government employee may 
                be detailed to the Committee without reimbursement from 
                the Committee, and such detailee shall retain the 
                rights, status, and privileges of their regular 
                employment without interruption.
                    (B) Technical assistance.--If authorized by the 
                Secretary and approved by a majority of the Committee, 
                the Committee may retain the services of experts and 
                consultants under section 3109(b) of title 5, United 
                States Code, but at rates not to exceed the daily 
                equivalent of the annual rate of basic pay for level IV 
                of the Executive Schedule under section 5315 of such 
                title.
            (6) Applicability of faca.--The Federal Advisory Committee 
        Act (5 U.S.C. App.) shall apply to the Committee in accordance 
        with section 565(a)(1) of title 5, United States Code.
    (f) Reports.--
            (1) Committee reports.--
                    (A) Interim reports.--
                            (i) Initial interim report.--Not later than 
                        6 months after the date on which members are 
                        required to be appointed to the Committee under 
                        subsection (a), the Committee shall submit to 
                        the Secretary an initial interim report on the 
                        Committee's progress in negotiating a proposed 
                        rule to establish a Medicare modernized 
                        clinical diagnostic laboratory fee schedule, 
                        including the Committee's preliminary 
                        determinations regarding the establishment of 
                        such fee schedule and including preliminary 
                        determinations on the information described in 
                        subparagraph (B).
                            (ii) Subsequent interim report.--The 
                        Committee shall submit to the Secretary a 
                        subsequent interim report, which shall include 
                        updates to the determinations made in the 
                        report submitted under clause (i). Such 
                        subsequent interim report shall be submitted 
                        not later than 12 months after the date on 
                        which members are required to be appointed to 
                        the Committee under subsection (a).
                            (iii) Exception.--An interim report 
                        described in this subparagraph is not required 
                        to be submitted in the case that a final report 
                        under subparagraph (B) is submitted before the 
                        date on which such interim report is required 
                        to be submitted under this subparagraph.
                    (B) Final report.--Not later than 18 months after 
                the date on which members are required to be appointed 
                to the Committee under subsection (a), the Committee 
                shall submit to the Secretary a final report, including 
                the following:
                            (i) If the Committee reaches consensus by 
                        such 18-month date on a proposed rule to 
                        establish a Medicare modernized clinical 
                        diagnostic laboratory fee schedule--
                                    (I) the consensus proposed rule 
                                reached by the Committee; and
                                    (II) the Committee's determination 
                                regarding the extent to which, and 
                                manner in which, the proposed fee 
                                schedule will achieve the purpose 
                                described in section 2(b) and address 
                                the elements described in section 3(b).
                            (ii) If the Committee fails to reach 
                        consensus by such 18-month date on a proposed 
                        rule to establish a Medicare modernized 
                        clinical diagnostic laboratory fee schedule--
                                    (I) any components of a fee 
                                schedule or other areas upon which 
                                consensus was achieved in accordance 
                                with the purpose described in section 
                                2(b) and the elements described in 
                                section 3(b); and
                                    (II) any components of a fee 
                                schedule or other areas upon which 
                                disagreement prevented consensus from 
                                being achieved in accordance with the 
                                purpose described in section 2(b) and 
                                the elements described in section 3(b).
            (2) Secretarial reports.--
                    (A) Interim reports.--Not later than 30 days after 
                the date of the submission of each interim report under 
                paragraph (1)(A), the Secretary shall submit to the 
                Committee on Energy and Commerce and the Committee on 
                Ways and Means of the House of Representatives and the 
                Committee on Finance of the Senate an interim report on 
                the progress of the negotiated rulemaking process under 
                this section to establish a Medicare modernized 
                clinical diagnostic laboratory fee schedule. Each such 
                report shall include the corresponding interim report 
                submitted by the Committee under such paragraph.
                    (B) Final report.--Not later 24 months after the 
                date of the enactment of this Act, the Secretary shall 
                submit to the Committee on Energy and Commerce and the 
                Committee on Ways and Means of the House of 
                Representatives and the Committee on Finance of the 
                Senate a final report, including--
                            (i) the final report of the Committee 
                        submitted under paragraph (1)(B); and
                            (ii) in the case that the Committee reaches 
                        a consensus on a proposed rule to establish a 
                        Medicare modernized clinical diagnostic 
                        laboratory fee schedule, the Secretary's 
                        proposed regulation to implement the proposed 
                        rule.
            (3) Public availability of reports.--The Secretary shall 
        make each report submitted under this subsection available to 
        the public on the official Internet website of the Department 
        of Health and Human Services.

SEC. 5. PROMULGATION OF FINAL REGULATIONS.

    (a) Committee Consensus.--If the Committee reaches a consensus 
under section 4 on a proposed rule to establish a Medicare modernized 
clinical diagnostic laboratory fee schedule, the Secretary shall use 
such proposed rule as the basis to promulgate a proposed regulation 
with comment period and, not later than 36 months after the date of the 
enactment of this Act, subsequent final regulations to apply to items 
and services furnished on or after the first January 1st following the 
date of the promulgation of such final regulations.
    (b) Lack of Committee Consensus.--If the Committee fails to reach a 
consensus under section 4 on a proposed rule to establish a Medicare 
modernized clinical diagnostic laboratory fee schedule, and legislation 
to establish such fee schedule is not enacted by the date that is 51 
months after the date of the enactment of this Act, the Secretary shall 
promulgate, not later than 57 months after the date of the enactment of 
this Act, final regulations to establish such fee schedule, taking into 
account the purpose described in section 2(b) and the elements 
described in section 3(b). Such final regulations shall apply to items 
and services furnished on or after the first January 1st following the 
date of the promulgation of such final regulations.

SEC. 6. REPORT BY MEDPAC.

    Not later than 39 months after the date of the enactment of this 
Act, the Medicare Payment Advisory Commission (MedPAC) shall submit to 
Congress a report, including the following recommendations:
            (1) Committee consensus.--In the case that the Committee 
        reaches consensus under section 4 on a proposed rule to 
        establish a Medicare modernized clinical diagnostic laboratory 
        fee schedule, with respect to the Secretary's proposed 
        regulation submitted under section 4(f)(2)(B)(ii) to implement 
        such proposed rule--
                    (A) whether the overall level of expenditures under 
                title XVIII of the Social Security Act for clinical 
                laboratory services under the revised fee schedule 
                under such proposed regulation are adequate to ensure 
                beneficiary access to high quality testing;
                    (B) whether the periodic revision and inflationary 
                update mechanisms in the proposed regulation are 
                adequate to ensure beneficiary access to high quality 
                testing; and
                    (C) possible future options in addressing 
                beneficiary cost sharing under part B of such title 
                that do not require clinical laboratories to collect 
                copays on every individual test.
            (2) Lack of committee consensus.--In the case that the 
        Committee does not reach consensus under section 4 on a 
        proposed rule to establish a Medicare modernized clinical 
        diagnostic laboratory fee schedule--
                    (A) how to modernize such clinical laboratory fee 
                schedule in accordance with the purpose described in 
                section 2(b) and the elements described in section 
                3(b), including with respect to such areas identified 
                in the report submitted under section 4(f)(1)(B)(ii) as 
                areas in which consensus was not reached by the 
                Committee;
                    (B) how to ensure the overall level of expenditures 
                under part B of title XVIII of such Act for clinical 
                laboratory services under a revised fee schedule are 
                adequate to ensure beneficiary access to high quality 
                testing;
                    (C) how to ensure that periodic revision and 
                inflationary update mechanisms in a proposed revised 
                fee schedule for clinical laboratory services are 
                adequate to ensure beneficiary access to high quality 
                testing; and
                    (D) possible future options in addressing 
                beneficiary cost sharing under such part that do not 
                require clinical laboratories to collect copays on 
                every individual test.

SEC. 7. DEFINITIONS.

    For purposes of this Act:
            (1) Committee.--The term ``Committee'' means the negotiated 
        rulemaking committee established under section 4(a).
            (2) Consensus.--The term ``consensus'' has the meaning 
        given such term under section 562(2) of title 5, United States 
        Code.
            (3) Medicare modernized clinical diagnostic laboratory fee 
        schedule.--The term ``Medicare modernized clinical diagnostic 
        laboratory fee schedule'' means a modernized fee schedule for 
        payment under part B of title XVIII of the Social Security Act 
        for clinical diagnostic laboratory tests, the payment for 
        which, as of the day before the date of the enactment of this 
        Act, is provided for under section 1833(h) of the Social 
        Security Act (42 U.S.C. 1395l(h)).
            (4) Negotiated rulemaking.--The term ``negotiated 
        rulemaking'' has the meaning given such term under section 
        562(6) of title 5, United States Code.
            (5) Negotiated rulemaking committee.--The term ``negotiated 
        rulemaking committee'' has the meaning given such term under 
        section 562(7) of title 5, United States Code.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
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