[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2404 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2404

  To amend title XVIII of the Social Security Act to improve payments 
          under the Medicare clinical laboratory fee schedule.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            December 3, 2007

  Mr. Schumer introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend title XVIII of the Social Security Act to improve payments 
          under the Medicare clinical laboratory fee schedule.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare Advanced 
Laboratory Diagnostics Act of 2007''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title and table of contents.
  TITLE I--DEMONSTRATION PROJECT FOR NEW PAYMENT RATE-SETTING PROCESS

Sec. 101. Establishment of Medicare demonstration project to evaluate 
                            new approaches to coding and payment for 
                            certain molecular diagnostic tests.
   TITLE II--CHANGES TO THE MEDICARE CLINICAL LABORATORY FEE SCHEDULE

Sec. 201. Fee schedule and national limitation amounts for clinical 
                            diagnostic laboratory tests.
Sec. 202. Issuance of regulations on gap-filling for Medicare fee 
                            schedule for clinical diagnostic laboratory 
                            tests.
Sec. 203. Increased transparency of process for determining fee 
                            schedule amounts for new tests.
Sec. 204. Advance notice of clinical diagnostic laboratory test amounts 
                            being considered for adjustment under 
                            inherent reasonableness authority.

  TITLE I--DEMONSTRATION PROJECT FOR NEW PAYMENT RATE-SETTING PROCESS

SEC. 101. ESTABLISHMENT OF MEDICARE DEMONSTRATION PROJECT TO EVALUATE 
              NEW APPROACHES TO CODING AND PAYMENT FOR CERTAIN 
              MOLECULAR DIAGNOSTIC TESTS.

    (a) Establishment of Demonstration.--
            (1) Demonstration of new approaches to coding and 
        payment.--The Secretary of Health and Human Services (in this 
        section referred to as the ``Secretary'') shall establish a 
        demonstration project under this section (in this section 
        referred to as the ``demonstration'') to evaluate new 
        approaches to coding and payment under the Medicare program for 
        clinical diagnostic laboratory tests included in the 
        demonstration (in this section referred to as ``included 
        tests'').
            (2) Duration.--The demonstration and any payment amounts 
        assigned under the demonstration shall apply solely to claims 
        submitted for included tests during the 12-calendar-quarter 
        period that begins with the first day of the first calendar 
        quarter to begin at least 250 days after the date of the 
        enactment of this Act.
            (3) Scope.--The demonstration shall apply on a national 
        basis to included tests in all settings for which payment for 
        such tests would (but for the demonstration) be made under the 
        fee schedules and limitation amounts established under section 
        1833(h) of the Social Security Act (42 U.S.C. 1395l(h)).
            (4)  Issuance of temporary hcpcs codes; continued 
        application of such codes.--The Secretary shall issue a 
        temporary code or codes under the Health Care Procedure Coding 
        System (HCPCS) when needed for an included test, and such code 
        or codes--
                    (A) shall continue to apply to the test until a 
                permanent code or codes is assigned; and
                    (B) shall not cease to apply solely because the 
                demonstration ends.
    (b) Included Tests.--
            (1) Eligible tests.--A clinical diagnostic laboratory test 
        is eligible to be an included test under the demonstration if--
                    (A) the test is a new or existing molecular 
                diagnostic test that (but for its inclusion in the 
                demonstration) could be paid under the fee schedules 
                and national limitation amount established under 
                section 1833(h) of the Social Security Act (42 U.S.C. 
                1395l(h)) for the test; and
                    (B) there is the prospect--
                            (i) for wide usage of the test in multiple 
                        geographic areas; and
                            (ii) that development of a new code, or 
                        payment, or both, for the test under the 
                        demonstration will result in reduced 
                        administrative complexity and improved 
                        efficiency.
            (2) Included tests.--A clinical diagnostic laboratory test 
        shall be treated as an included test if--
                    (A) an interested party submits a request to the 
                standing panel established under subsection (c) that 
                the test be included in the demonstration; and
                    (B) the standing panel determines that the test is 
                an eligible test under paragraph (1).
            (3) Definitions.--For purposes of this section--
                    (A) the term ``molecular diagnostic test'' means a 
                clinical diagnostic laboratory test performed on 
                deoxyribonucleic (DNA), ribonucleic acid (RNA), or 
                protein that is drawn from a human being or from a 
                disease-causing organism for genomic or proteomic 
                analysis; and
                    (B) the term ``interested party'' means, with 
                respect to a request for inclusion of molecular 
                diagnostic test in the demonstration, an individual 
                entitled to benefits under title XVIII of the Social 
                Security Act, a manufacturer of the test, a clinical 
                laboratory offering the test, a professional society, 
                the Centers for Medicare & Medicaid Services, a private 
                payer for such test, and a physician or other health 
                care practitioner.
    (c) Standing Panel.--
            (1) Appointment.--Not later than 60 days after the date of 
        the enactment of this section, the Secretary shall appoint a 
        standing panel (in this section referred to as the ``standing 
        panel'' or ``panel'') to determine whether a test is an 
        included test and make recommendations to the Secretary on the 
        appropriate coding of, and payment for, designated clinical 
        diagnostic laboratory tests under the demonstration.
            (2) Composition of panel.--
                    (A) In general.--The standing panel shall be 
                comprised of 12 members. Two of such members shall be 
                non-voting representatives of the Administrator of the 
                Centers for Medicare & Medicaid Services. The Secretary 
                shall appoint the other 10 members from--
                            (i) organizations representing large 
                        clinical laboratories;
                            (ii) organizations representing small 
                        clinical laboratories;
                            (iii) organizations representing physicians 
                        with expertise in clinical diagnostic 
                        laboratory tests;
                            (iv) organizations representing 
                        nonphysician laboratorians with expertise in 
                        such tests;
                            (v) organizations representing 
                        manufacturers of such tests;
                            (vi) organizations representing individuals 
                        entitled to benefits under title XVIII of the 
                        Social Security Act;
                            (vii) organizations representing private 
                        payers for such tests (but not more than one 
                        member may be appointed to represent such 
                        organizations);
                            (viii) individuals with expertise in 
                        measuring resource utilization by clinical 
                        laboratories in performing tests; and
                            (ix) individuals with other relevant 
                        expertise.
                    (B) Terms of office.--Each member of the panel 
                shall be appointed for the life of the panel, except 
                that any individual appointed to fill a vacancy shall 
                be appointed for the remainder of the term of the 
                individual who is being replaced. Any vacancy shall be 
                filled in the same manner, and with a representative of 
                the same category under subparagraph (A), as the 
                individual being replaced.
            (3) Rules governing panel.--
                    (A) In general.--The panel shall elect its chair. A 
                quorum shall be required to conduct the business of the 
                panel, and eight members of the panel shall constitute 
                a quorum.
                    (B) Compensation.--While serving on the business of 
                the panel (including travel time), a member of the 
                panel shall be entitled to compensation at the per diem 
                equivalent rate provided for level IV of the Executive 
                Schedule under section 5315 of title 5, United States 
                Code, and while so serving away from home and the 
                member's regular place of business, a member may be 
                allowed travel expenses as authorized by the chair of 
                the panel.
                    (C) Staffing.--
                            (i) Detailing.--The panel may seek such 
                        assistance and support of its duties from 
                        appropriate Federal departments and agencies.
                            (ii) Outside experts.--The panel may retain 
                        the services of such outside experts as are 
                        necessary for the evaluation of a request under 
                        this section, and such experts shall not be 
                        voting members of the panel.
                    (D) Meetings.--The panel shall meet at the call of 
                the chair and at such intervals (which shall not be 
                less than quarterly) as may be necessary for the 
                conduct of its business. The agenda of each meeting and 
                a notice of its date shall be published at least 30 
                days before the date the meeting occurs, and, except as 
                provided in subparagraph (E), meetings of the panel 
                shall be open to the public.
                    (E) FACA.--The Federal Advisory Committee Act (5 
                U.S.C. App.) shall not apply to the panel, but the 
                panel may close any portion of a meeting that could be 
                closed if such Act applied.
                    (F) Termination of panel.--The panel shall 
                terminate not more than 180 days after the close of the 
                demonstration.
    (d) Form and Content of Requests for Inclusion in the 
Demonstration.--A request for inclusion of a clinical diagnostic 
laboratory test in the demonstration shall be submitted in such form, 
and shall contain such information as the standing panel may require, 
including at least--
            (1) any coding and payment determinations requested with 
        respect to the test; and
            (2) any documentation in support of--
                    (A) the eligibility of the test for inclusion in 
                the demonstration; and
                    (B) any coding and payment determinations requested 
                with respect to the test, including data on the typical 
                resources necessary to perform the test.
        The Secretary shall cause to have published in the Federal 
        Register and on an appropriate Internet site public notice of 
        each such request. Such information shall be supplied to the 
        Secretary by the standing panel.
    (e) Criteria for Evaluating Requests for Determinations in Coding 
and Payment.--
            (1) In general.--In determining whether a requested payment 
        determination should be granted, and what the new payment 
        amount for a test should be, the standing panel (in making its 
        recommendations to the Secretary) and the Secretary (in 
        determining whether to grant such a determination) shall take 
        into account typical resources necessary to perform the test, 
        the expected impact of the test on, and value of the test to, 
        patient care management, and such other factors as the standing 
        panel and the Secretary, respectively, determine to be relevant 
        to the determination.
            (2) Standing panel.--Not later than 180 days after the 
        appointment of all of the members of the panel, the panel 
        shall, after consultation with the Secretary, establish and 
        make available to the public--
                    (A) standards and parameters for determining 
                whether to recommend to the Secretary a coding or 
                payment determination specified in a request for 
                inclusion of a test in the demonstration, which shall 
                include a listing of data elements necessary to support 
                a request and a standardized procedure for collecting 
                and submitting data to the panel on typical resources 
                necessary to perform a test;
                    (B) policies and procedures for protecting the 
                confidentiality of financial and other proprietary data 
                submitted to the panel in support of a request; and
                    (C) resource intervals or resource bands (as 
                described in subsection (g)(1)) that the panel 
                recommends that the Secretary should use for the 
                assignment of included tests under the demonstration.
            (3) Secretarial determinations.--The Secretary shall 
        develop and make available to public on an Internet site 
        guidance documents on the standards and parameters that will be 
        applied in making Secretarial determinations and on the 
        resource intervals or resource bands to be used under the 
        demonstration and on whether to grant a request for a payment 
        or coding determination. Such guidance documents shall be 
        developed, which shall be made available to the public at least 
        10 days before the beginning of the demonstration, in a manner 
        similar to the manner in which guidance documents are developed 
        under section 701(h) of the Federal Food, Drug, and Cosmetic 
        Act (21 U.S.C. 371(h)).
            (4) Authority to recommend revisions to, and to revise, 
        resource intervals or resource bands.--Nothing in this section 
        shall be construed as limiting the authority of the standing 
        panel to recommend, or the Secretary to adopt, new resource 
        intervals or resource bands to accommodate changes in 
        technology.
    (f) Review Process.--
            (1) Requests for inclusion in demonstration.--An interested 
        party may submit a request for inclusion of a test in the 
        demonstration to the standing panel at any time during a 
        calendar year for which the demonstration is in effect, except 
        that the standing panel may decline to review and make 
        recommendations or determinations with respect to any request 
        that would result in a requested coding or payment 
        determination being effective for a period of less than 4 
        calendar quarters.
            (2) Recommendations of standing panel.--The standing panel 
        shall review each request for a coding or payment determination 
        that is made with respect to an included test. Applying the 
        standards and parameters developed under subsection (e)(2)(A), 
        the panel shall make a recommendation to the Secretary with 
        respect to each requested determination.
            (3) Secretarial determinations.--
                    (A) Quarterly determinations.--The Secretary shall 
                make determinations on whether to grant requested 
                coding and payment determinations on a quarterly basis, 
                but is not required to make such a determination for 
                every request made (or with respect to which a 
                recommendation is received from the standing panel) 
                during a particular quarter.
                    (B) Time frames for determinations.--Determinations 
                of the Secretary shall be made in a timely manner in 
                accordance with time frames developed by the standing 
                panel taking into account factors such as when a 
                request (and a recommendation with respect to the 
                request) is made during a quarter, the particular type 
                of test involved, and the staffing and resources that 
                may be required to review the request.
    (g)  Payment Methodology.--
            (1)  In general.--Included tests shall be paid in 
        accordance with a methodology, developed by the standing panel, 
        that establishes resource intervals or resource bands in a 
        manner similar to those that are used as new technology 
        ambulatory payment classification groups for hospital 
        outpatient services under section 1833(t) of the Social 
        Security Act (42 U.S.C. 1395l(t)), with a test being assigned 
        to the interval or band that most closely approximates the 
        typical resources necessary for a laboratory to perform the 
        test. Tests that are included tests for purposes of this 
        section shall be excluded from any demonstration project under 
        section 1847(e) of such Act (42 U.S.C. 1395w-3(e)).
            (2) Panel recommendations; secretarial determinations.--
                    (A) Recommendations; secretarial determinations.--
                The standing panel shall recommend to the Secretary a 
                resource interval or resource band to which an included 
                test should be assigned, and the Secretary may assign 
                such test to such band or interval or to another band 
                or interval the Secretary determines to more closely 
                approximate the typical resources necessary to perform 
                the test.
                    (B) Explanation of determination that differs from 
                recommendation.--If the Secretary assigns a test to an 
                interval or band other than that recommended by the 
                standing panel, the Secretary shall provide a detailed 
                written explanation of the reasons for determining that 
                such other interval or band is more appropriate.
            (3) Effective date of secretarial determination.--A 
        determination by the Secretary with respect to a coding or 
        payment determination for an included test shall become 
        effective as of the first day of the calendar quarter following 
        the calendar quarter in which the determination is made.
            (4) Periodic look-backs of interval or band assignments.--
        At the request of the interested party that submitted the 
        initial request for a test to be included in the demonstration 
        or of a member of the standing panel, the standing panel may 
        review the appropriateness of the payment interval or band to 
        which the test is assigned and make a recommendation to the 
        Secretary that the assignment be changed. The Secretary may 
        accept or reject such recommendation, and if the recommendation 
        is rejected, the Secretary shall provide a detailed explanation 
        of the reasons for such rejection.
            (5) Publication of determinations.--The Secretary shall 
        publish determinations under this subsection in a timely manner 
        on an appropriate Internet site.
    (h) Reports to Congress.--
            (1) In general.--The Secretary shall submit interim and 
        final reports on the demonstration to the Committees on Ways 
        and Means and Energy and Commerce of the House of 
        Representatives and the Committee on Finance of the Senate. The 
        interim report shall be submitted not later than the close of 
        the second year of the demonstration, and the final report 
        shall be submitted not later than 180 days after the close of 
        the demonstration.
            (2) Content of reports.--The reports submitted under 
        paragraph (1) shall include interim and final--
                    (A) determinations on whether coding and payment 
                assignments under the demonstration provide for--
                            (i) more equitable and accurate payment for 
                        included tests; and
                            (ii) reduced administrative complexity, 
                        improved efficiency, and improved access to 
                        care; and
                    (B) recommendations on--
                            (i) whether the alternative mechanism for 
                        determining payment and coding for included 
                        tests should be continued for such tests beyond 
                        the 12-calendar-quarter period the 
                        demonstration is in effect; and
                            (ii) whether the application of such 
                        mechanism should be expanded to include other 
                        new clinical diagnostic laboratory tests for 
                        which payment would otherwise be made under the 
                        fee schedules and limits established under 
                        section 1833(h) of the Social Security Act (42 
                        U.S.C. 1395l(h)).
            (3) Comments by standing panel.--The standing panel shall 
        submit comments to the committees referred to in paragraph (1) 
        on the interim and final reports of the Secretary.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated for each of fiscal years 2008 through 2013, such sums as 
may be necessary to carry out this section.

   TITLE II--CHANGES TO THE MEDICARE CLINICAL LABORATORY FEE SCHEDULE

SEC. 201. FEE SCHEDULE AND NATIONAL LIMITATION AMOUNTS FOR CLINICAL 
              DIAGNOSTIC LABORATORY TESTS.

    (a) In General.--Section 1833(h) of the Social Security Act (42 
U.S.C. 1395l(h)) is amended by adding at the end the following new 
paragraph:
    ``(9)(A) For purposes of this paragraph:
            ``(i) The term `an amount determined under this subsection' 
        means, with respect to a clinical laboratory test, the fee 
        schedule amount determined under paragraph (2)(A)(i) for the 
        test or the limitation amount determined under paragraph (4)(B) 
        for the test.
            ``(ii) The terms `appropriate medicare administrative 
        contractor' and `medicare administrative contractor' have the 
        meaning given to such terms under section 1874A(a)(3).
            ``(iii) The term `erroneous decision' means, with respect 
        to the determination of an amount determined under this 
        subsection, any decision, calculation, judgment or other action 
        by the Secretary or a medicare administrative contractor that, 
        based upon consideration of currently known facts, needs to be 
        modified to produce a fair and equitable payment amount, except 
        that such term does not include typographical or clerical 
        errors.
            ``(iv) The term `non-governmental party' includes--
                    ``(I) a provider of services (as defined in section 
                1861(u)) that furnishes clinical diagnostic laboratory 
                tests for which payment may be made under this 
                subsection;
                    ``(II) a supplier (as defined in section 1861(d)) 
                that furnishes such tests; and
                    ``(III) a manufacturer of a test or of any supplies 
                or equipment that are used in performing such test.
    ``(B) An amount determined under this subsection may be changed 
solely on the basis of--
            ``(i) in the case of a change other than a change to 
        correct an erroneous decision in determining such amount, the 
        authority provided by the preceding provisions of this 
        subsection, section 1842(b)(8), or any regulations, manual 
        instructions, or other regulatory guidance implementing such 
        provisions; or
            ``(ii) in the case of a change to correct an erroneous 
        decision in determining such an amount, the authority provided 
        by subparagraphs (C), (D), and (E).
    ``(C) Any erroneous decision in determining an amount under this 
subsection may be corrected only if--
            ``(i) a non-governmental party submits a request under 
        subparagraph (D) or (E) for correction of the erroneous 
        decision; and
            ``(ii) such party demonstrates, to an appropriate medicare 
        administrative contractor under subparagraph (D) or the 
        Secretary under subparagraph (E), that an erroneous decision 
        clearly was made.
    ``(D)(i) Any non-governmental party may request (in such form and 
manner as the Secretary may require) that the appropriate medicare 
administrative contractor change a fee schedule amount determined under 
paragraph (2)(A)(i) to correct an erroneous decision in determining 
such amount.
    ``(ii) Any request under this subparagraph shall include a 
statement of the basis for the non-governmental party's belief that an 
erroneous decision was made in determining such amount, together with 
supporting evidence and a description of any additional data (other 
than data already in the possession of the appropriate medicare 
administrative contractor) that--
            ``(I) is or may be in the possession of the Secretary or 
        another medicare administrative contractor; and
            ``(II) is necessary to demonstrate that such an erroneous 
        decision exists.
    ``(iii) If the Secretary or another medicare administrative 
contractor is identified as possessing or potentially possessing 
additional data identified by a non-governmental party in a request 
under this subparagraph, the Secretary or such contractor, as the case 
may be, shall make available to the non-governmental party within 30 
days after the date of the submission of the request any data in their 
possession that meet the description of the additional data identified 
in such request, with appropriate safeguards to protect confidential 
and proprietary information.
    ``(iv) If additional data are made available to a non-governmental 
party under clause (iii), such party may amend its request under this 
subparagraph to incorporate such data within 30 days after the date 
such data are made available to such party.
    ``(v) An appropriate medicare administrative contractor to which a 
request is submitted under this subparagraph shall make a determination 
with respect to whether to correct the decision that is identified as 
erroneous in the request not later than 60 days after the date of the 
submission of such request, or if later, the date of the submission of 
an amended request under clause (iv). Such contractor shall determine 
that the non-governmental party submitting the request--
            ``(I) has demonstrated that an erroneous decision clearly 
        was made, correct such erroneous decision, and increase the fee 
        schedule amount as of the first day of the next calendar 
        quarter to reflect the correction of such erroneous decision; 
        or
            ``(II) has failed to demonstrate that an erroneous decision 
        clearly was made and decline to change the fee schedule amount,
and shall provide to the non-governmental party a written explanation 
of the basis for such determination.
    ``(vi) An appropriate medicare administrative contractor to which a 
request is submitted under this subparagraph may not reduce a fee 
schedule amount pursuant to such request, and may reduce such an amount 
only pursuant to section 1842(b)(8).
    ``(E)(i) Any non-governmental party may request (in such form and 
manner as the Secretary may require) that the Secretary--
            ``(I) reverse a determination of a medicare administrative 
        contractor under subparagraph (D) that is adverse to the non-
        governmental party requesting it;
            ``(II) correct an erroneous decision in the determination 
        of a limitation amount under paragraph (4)(B); or
            ``(III) reverse a determination referred to in subclause 
        (I) and correct an erroneous decision referred to in subclause 
        (II).
    ``(ii) Any request under this subparagraph shall include a 
statement of the basis for the non-governmental party's belief that an 
erroneous decision was made in determining such amount, together with 
supporting evidence and a description of any additional data (other 
than data already in the possession of the Secretary or the appropriate 
medicare administrative contractor reviewing the request under 
subparagraph (D)) that-
            ``(I) are or may be in the possession of the Secretary or 
        another medicare administrative contractor; and
            ``(II) are necessary to demonstrate that such an erroneous 
        decision exists.
    ``(iii) If the Secretary or another medicare administrative 
contractor is identified as possessing or potentially possessing 
additional data identified by a non-governmental party in a request 
under this subparagraph, the Secretary or such contractor, as the case 
may be, shall make available to the non-governmental party within 30 
days after the date of the submission of the request any data in their 
possession that meet the description of the additional data identified 
in such request, with appropriate safeguards to protect confidential 
and proprietary information.
    ``(iv) If additional data are made available to a non-governmental 
party under clause (iii), such party may amend its request under this 
subparagraph to incorporate such data within 30 days after the date 
such data are made available to such party.
    ``(v) The Secretary shall make a determination of whether to 
correct the erroneous decision that is the subject of a request 
submitted under this subparagraph not later than 60 days after the date 
of the submission of such request, or if later, the submission of an 
amended request under clause (iv). The Secretary shall determine that 
the non-governmental party submitting the request--
            ``(I) has demonstrated that an erroneous decision clearly 
        was made, correct such erroneous decision, and increase the fee 
        schedule amount as of the first day of the next calendar 
        quarter to reflect the correction of such erroneous decision; 
        or
            ``(II) has failed to demonstrate that an erroneous decision 
        clearly was made and decline to change the fee schedule amount 
        or national limitation amount, as the case may be,
and shall provide to the non-governmental party with a written 
explanation of the basis for such determination.
    ``(vi) The Secretary may not reduce a fee schedule amount pursuant 
to a request under this subparagraph and may reduce such an amount only 
pursuant to section 1842(b)(8).
    ``(F)(i) There shall be no administrative or judicial review under 
section 1869, 1878, or otherwise of any determination made under 
subparagraph (D) or (E).
    ``(ii) Nothing in this paragraph shall be construed as precluding 
administrative or judicial review of determinations of the amount of 
benefits that are available to a Medicare beneficiary in a particular 
case.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act and shall apply to 
requests for corrections submitted on or after such date, without 
regard to whether final regulations to carry out such amendment have 
been issued.

SEC. 202. ISSUANCE OF REGULATIONS ON GAP-FILLING FOR MEDICARE FEE 
              SCHEDULE FOR CLINICAL DIAGNOSTIC LABORATORY TESTS.

    Not later than one year after the date of the enactment of this 
Act, the Secretary of Health and Human Services shall issue final 
regulations specifying how an appropriate medicare administrative 
contractor (as defined in section 1874A(a)(3)(B) of the Social Security 
Act (42 U.S.C. 1395kk-1(a)(3)(B)) shall apply a gap-filling methodology 
in determining fee schedule amounts established under section 
1833(h)(2)(A)(i) of such Act (42 U.S.C. 1395l(h)(2)(A)(i)). Such 
regulations shall specify--
            (1) a process for ensuring that the resulting fee schedule 
        amounts are fair, including a description of the types of data 
        to be collected for use in such methodology and the minimum 
        requirements such data shall meet in order to ensure that the 
        data are valid, meaningful, and unbiased;
            (2) the principles to be employed to ensure that such data 
        are statistically significant and alternatives to follow if 
        statistically significant data are unavailable;
            (3) the principles to be followed in using data to 
        calculate fee schedule amounts, including principles for 
        excluding data that do not meet the requirements of paragraph 
        (1) and (2);
            (4) the methods the Secretary will use to oversee the 
        application of a gap filling methodology by such contractors 
        and the remedies that will be available in cases in which such 
        a contractor fails to comply with regulatory requirements; and
            (5) a process that provides opportunities for the public to 
        participate in the development of fee schedule amounts through 
        the application of gap-filling methodologies, including release 
        to the public of data collection protocols and the data derived 
        from such protocols with an opportunity for public comment 
        thereon.

SEC. 203. INCREASED TRANSPARENCY OF PROCESS FOR DETERMINING FEE 
              SCHEDULE AMOUNTS FOR NEW TESTS.

    Section 1833(h)(8) of the Social Security Act (42 U.S.C. 
1395l(h)(8) is amended--
            (1) in subparagraph (B)(iii), by inserting ``to be 
        conducted in an inter-active format,'' after ``meeting,'';
            (2) in subparagraph (B)(iv)--
                    (A) by inserting ``(I)'' after ``meeting,'';
                    (B) by striking ``determination,'' and inserting 
                ``determination and''; and
                    (C) by striking ``a request for'' and inserting 
                ``(II) publishes in the Federal Register a notice of a 
                period of not less than 60 days during which the 
                Secretary will receive''; and
            (3) in subparagraph (C), by striking ``Under the 
        procedures'' and inserting ``In the regulations''.

SEC. 204. ADVANCE NOTICE OF CLINICAL DIAGNOSTIC LABORATORY TEST AMOUNTS 
              BEING CONSIDERED FOR ADJUSTMENT UNDER INHERENT 
              REASONABLENESS AUTHORITY.

    (a) Limit on Inherent Reasonableness Authority.--Section 
1842(b)(9)(A) of the Social Security Act (42 U.S.C. 1395u(b)(9)(A)) is 
amended by adding at the end the following: ``Before publishing a 
proposed notice under subparagraph (B) with respect to any clinical 
diagnostic laboratory test being considered for adjustment under 
paragraph (8), advance notice that such test is being considered for 
such an adjustment shall be provided to non-governmental parties (as 
defined in section 1833(h)(9)(A)(iv)) at the meeting required by 
section 1833(h)(8)(B)(iii), together with an opportunity for such 
representatives and other individuals to make oral comments on the 
appropriateness of such an adjustment for such test.''.
    (b) Conforming Change.--Section 1833(h)(8)(B) of such Act (42 
U.S.C. 1395l(h)(8)(B)) is amended by adding at the end the following:
``At the meeting required by clause (iii), the Secretary shall provide 
advance notice of inherent reasonableness adjustments under section 
1842(b)(8) that are being considered for clinical diagnostic laboratory 
tests, and afford an opportunity for non-governmental parties (as 
defined 1833(h)(9)(A)(iv)) at the meeting to comment orally on the 
appropriateness of such an adjustment.''.
    (c) Effective Date.--The amendments made by this section shall 
become effective on January 1, 2008, and shall apply to inherent 
reasonableness adjustments that have not been proposed as of such date.
                                 <all>