[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2066 Introduced in House (IH)]
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115th CONGRESS
1st Session
H. R. 2066
To prevent abusive billing of ancillary services to the Medicare
program, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 6, 2017
Ms. Speier (for herself and Ms. Titus) 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 prevent abusive billing of ancillary services to 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,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Promoting Integrity in Medicare Act
of 2017'' or ``PIMA of 2017''.
SEC. 2. FINDINGS; PURPOSES.
(a) Findings.--Congress finds the following:
(1) Recent studies by the Government Accountability Office
(GAO) examining self-referral practices in advanced diagnostic
imaging and anatomic pathology determined that financial
incentives were the most likely cause of increases in self-
referrals.
(2) For advanced diagnostic imaging, GAO stated that
``providers who self-referred made 400,000 more referrals for
advanced imaging services than they would have if they were not
self-referring'', at a cost of ``more than $100 million'' in
2010.
(3) For anatomic pathology, GAO found that ``self-referring
providers likely referred over 918,000 more anatomic pathology
services'' than they would have if they were not self-
referring, costing Medicare approximately $69,000,000 more in
2010 than if self-referral was not permitted.
(4) For radiation oncology, GAO found that intensity
modulated radiation therapy (IMRT) utilization among self-
referring groups increased by 356 percent, with overall
increases in IMRT utilization rates and spending due entirely
to services performed by limited-specialty groups. The GAO
concluded that ``the higher use of IMRT by self-referring
providers results in higher costs for Medicare and
beneficiaries. To the extent that treatment decisions are
driven by providers' financial interest and not by patient
preference, these increased costs are difficult to justify''.
(5) For physical therapy, GAO found that ``in the year a
provider began to self-refer, physical therapy service
referrals increased at a higher rate relative to non-self-
referring providers of the same specialty''.
(6) Noting the rapid growth of services covered by the in-
office ancillary services (IOAS) exception and evidence that
these services are sometimes furnished inappropriately by
referring physicians, the Medicare Payment Advisory Commission
(MedPAC) stated that physician self-referral of ancillary
services creates incentives to increase volume under Medicare's
current fee-for-service payment systems and the rapid volume
growth contributes to Medicare's rising financial burden on
taxpayers and beneficiaries.
(7) The President's Fiscal Year 2017 Budget includes the
change to remove the four services: advanced diagnostic
imaging, anatomic pathology, radiation oncology, and physical
therapy from the IOAS exception to the Stark Law and cited the
change as generating a savings score of $4,980,000,000 over 10
years. The nonpartisan Congressional Budget Office's analysis
of the President's Fiscal Year 2017 Budget listed the change as
generating a savings of $3,300,000,000 over 10 years.
(8) According to the Centers for Medicare & Medicaid
Services, a key rationale for the IOAS exception was to permit
physicians to provide ancillary services in their offices to
better inform diagnosis and treatment decisions at the time of
the patient's initial office visit.
(9) It is necessary, therefore, to distinguish between
services and procedures that were intended to be covered by the
IOAS exception, such as routine clinical laboratory services or
simple x-rays that are provided during the patient's initial
office visit, and other health care services which were clearly
not envisioned to be covered by that exception because they
cannot be performed during the patient's initial office visit.
(10) According to a 2010 Health Affairs study, less than 10
percent of CT, MRI, and Nuclear Medicine scans take place on
the same day as the initial patient office visit.
(11) According to a 2012 Health Affairs study, urologists'
self-referrals for anatomic pathology services of biopsy
specimens is linked to increased use and volume billed along
with a lower detection of prostate cancer.
(12) According to an October 2011 Laboratory Economics
report, there has been an increase in the number of anatomic
pathology specimen units billed to the Medicare part B program
from 2006 through 2010, specifically for CPT Code 88305, and
the rate of increase billed by physician offices for this
service is accelerating at a far greater pace than the rest of
the provider segments.
(13) According to a 2013 American Academy of Dermatology
Pathology Billing paper, arrangements involving the split of
the technical and professional components of anatomic pathology
services among different providers may endanger patient safety
and undermine quality of care.
(14) In November 2012, Bloomberg News released an
investigative report that scrutinized ordeals faced by
California prostate cancer patients treated by a urology clinic
that owns radiation therapy equipment. The report found that
physician self-referral resulted in a detrimental impact on
patient care and drove up health care costs in the Medicare
program. The Wall Street Journal, the Washington Post, and the
Baltimore Sun have also published investigations showing that
urology groups owning radiation therapy machines have
utilization rates that rise quickly and are well above national
norms for radiation therapy treatment of prostate cancer.
(15) According to a 2010 MedPAC report, only 3 percent of
outpatient physical therapy services were provided on the same
day as an office visit, only 9 percent within 7 days of an
office visit, and only 14 percent within 14 days of an office
visit. These services are not integral to the physician's
initial diagnosis and do not improve patient convenience
because patients must return for physical therapy treatments.
(16) Those services intended to be covered under the IOAS
exception are not affected by this legislation.
(17) The exception to the ownership or investment
prohibition for rural providers in the ``Stark'' rule is not
affected by this legislation.
(b) Purposes.--The purposes of this Act are the following:
(1) Maintain the in-office ancillary services exception and
preserve its original intent by removing certain complex
services from the exception--specifically, advanced imaging,
anatomic pathology, radiation therapy, and physical therapy.
(2) Protect patients from misaligned provider financial
incentives.
(3) Protect Medicare resources by saving billions of
dollars.
(4) Accomplish the purposes described in paragraphs (1),
(2), and (3) in a manner that does not alter the existing
exception to the ownership or investment prohibition for rural
providers.
SEC. 3. LIMITATION ON APPLICATION OF PHYSICIANS' SERVICES AND IN-OFFICE
ANCILLARY SERVICES EXCEPTIONS.
(a) In General.--Section 1877(b) of the Social Security Act (42
U.S.C. 1395nn(b)) is amended--
(1) in paragraph (1), by inserting ``, other than specified
non-ancillary services,'' after ``section 1861(q))''; and
(2) in paragraph (2), by inserting ``, specified non-
ancillary services,'' after ``(excluding infusion pumps)''.
(b) Increase of Civil Money Penalties.--Section 1877(g) of the
Social Security Act (42 U.S.C. 1395nn(g)) is amended--
(1) in paragraph (3), by inserting ``, unless such bill or
claim included a bill or claim for a specified non-ancillary
service, in which case the civil money penalty shall be not
more than $25,000 for each such service'' before the period at
the end of the first sentence; and
(2) in paragraph (4), by inserting ``(or $150,000 if such
referrals are for specified non-ancillary services)'' after
``$100,000''.
(c) Enhanced Screening of Claims.--Section 1877(g) of the Social
Security Act (42 U.S.C. 1395nn(g)) is further amended by adding at the
end the following new paragraph:
``(7) Compliance review for specified non-ancillary
services.--
``(A) In general.--Not later than 180 days after
the date of the enactment of this paragraph, the
Secretary, in consultation with the Inspector General
of the Department of Health and Human Services, shall
review compliance with subsection (a)(1) with respect
to referrals for specified non-ancillary services in
accordance with procedures established by the
Secretary.
``(B) Factors in compliance review.--Such
procedures--
``(i) shall, for purposes of targeting
types of entities that the Secretary determines
represent a high risk of noncompliance with
subsection (a)(1) with respect to such billing
for such specified non-ancillary services,
apply different levels of review based on such
type; and
``(ii) may include prepayment reviews,
claims audits, focused medical review, and
computer algorithms designed to identify
payment or billing anomalies.''.
(d) Definition of Specified Non-Ancillary Services.--Section
1877(h) of the Social Security Act (42 U.S.C. 1395nn(h)) is amended by
adding at the end the following new paragraphs:
``(8) Specified non-ancillary services.--
``(A) Subject to subparagraph (B), the term
`specified non-ancillary service' means the following:
``(i) Anatomic pathology services, as
defined by the Secretary and including the
technical or professional component of the
following:
``(I) Surgical pathology.
``(II) Cytopathology.
``(III) Hematology.
``(IV) Blood banking.
``(V) Pathology consultation and
clinical laboratory interpretation
services.
``(ii) Radiation therapy services and
supplies, as defined by the Secretary.
``(iii) Advanced diagnostic imaging studies
(as defined in section 1834(e)(1)(B)).
``(iv) Physical therapy services (as
described in paragraph (6)(B)).
``(v) Any other service that the Secretary
has determined is not usually provided and
completed as part of the office visit to a
physician's office in which the service is
determined to be necessary.
``(B) The term `specified non-ancillary service'
does not include the following:
``(i) Any service that is furnished--
``(I) in an urban area (as defined
in section 1886(d)(2)(D)) to an
individual who resides in a rural area
(as defined in such section); and
``(II) to such individual in its
entirety on the same day as the day on
which, with respect to the condition
for which the service is furnished, the
initial office visit of the individual
for such condition occurs.
``(ii) Any service that is furnished--
``(I) by a provider of services or
supplier participating in an
accountable care organization that
participates in the shared savings
program established under section 1899;
and
``(II) to a Medicare fee-for-
service beneficiary (as defined in
section 1899(h)(3)) assigned to such
accountable care organization.
``(iii) Any service that is furnished by a
provider or supplier pursuant to the
participation of the provider or supplier in a
payment and service delivery model selected
under section 1115A(a).
``(iv) Any service that is provided by an
integrated health care delivery system.
``(9) Integrated health care.--The term `integrated health
care delivery system' means a group practice, as defined by the
Secretary, that--
``(A) consists of at least--
``(i) primary care physicians who provide
primary care services (as defined in section
1842(i)(4)); and
``(ii) seven or more different and distinct
physician specialties (not including
subspecialties) which are practiced by
physicians who are board certified in the
physician specialty associated with the
services that they provide;
``(B) is governed by a governing body that has made
a determination (and has documented such determination)
that the system is focused on--
``(i) promoting accountability for the
quality, cost, and overall care for individuals
entitled to benefits under part A or enrolled
in part B, including by managing and
coordinating care for such individuals; and
``(ii) encouraging investment in
infrastructure and redesigned care processes
for high quality and efficient service delivery
for patients, including individuals described
in clause (i); and
``(C) meets, with respect to the program under this
title, such cost reduction and quality goals as the
Secretary determines appropriate.''.
(e) Construction.--Nothing in this section (or the amendments made
by this section) shall be construed to affect the authority of the
Secretary of Health and Human Services to waive under section 1899 of
the Social Security Act (42 U.S.C. 1395jjj) the requirements imposed
under the provisions of this section (or such amendments) or to affect
the authority of the Secretary to implement the provisions under
section 1848(q) of such Act (42 U.S.C. 1395w-4(q)) (relating to the
eligible professionals Merit-Based Incentive Payment System under the
Medicare program) or section 1833(z) of such Act (42 U.S.C. 1395l(z))
(relating to incentive payments for participation in eligible
alternative payment models under such program).
(f) Effective Date.--The amendments made by this section shall
apply to items and services furnished on or after the first day of the
first month beginning more than 12 months after the date of the
enactment of this Act.
SEC. 4. CLARIFICATION OF CERTAIN ENTITIES SUBJECT TO STARK RULE AND
ANTI-MARKUP RULE.
Section 1877(h) of the Social Security Act (42 U.S.C. 1395nn(h)) is
further amended by adding at the end the following new paragraph:
``(9) Clarification of certain entities subject to anti-
markup rule.--In applying this section, the term `entity' shall
include a physician's practice when it bills under this title
for the technical component or the professional component of a
specified non-ancillary service, including when such service is
billed in compliance with section 1842(n)(1).''.
SEC. 5. CLARIFICATION OF SUPERVISION OF TECHNICAL COMPONENT OF ANATOMIC
PATHOLOGY SERVICES.
Section 1861(s)(17) of the Social Security Act (42 U.S.C.
1395x(s)(17)) is amended--
(1) by striking ``and'' at the end of subparagraph (A);
(2) by redesignating subparagraph (B) as subparagraph (C);
and
(3) by inserting after subparagraph (A) the following new
subparagraph:
``(B) with regard to the provision of the technical
component of anatomic pathology services, meets the
applicable supervision requirements for laboratories
certified in the subspecialty of histopathology,
pursuant to section 353 of the Public Health Service
Act; and''.
SEC. 6. EXEMPTION FROM BUDGET NEUTRALITY UNDER PHYSICIAN FEE SCHEDULE.
Section 1848(c)(2)(B)(v) of the Social Security Act (42 U.S.C.
1395w-4(c)(2)(B)(v)) is amended by adding at the end the following new
subclause:
``(VIII) Changes to limitations on
certain physician referrals.--Effective
for fee schedules established beginning
with 2018, reduced expenditures
attributable to the Promoting Integrity
in Medicare Act of 2017.''.
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