[Congressional Record Volume 143, Number 152 (Tuesday, November 4, 1997)]
[Senate]
[Pages S11685-S11686]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself and Mr. Breaux):
  S. 1362. A bill to promote the use of universal product members on 
claim forms used for reimbursement under the medicare program; to the 
Committee on Finance.


           THE MEDICARE UNIVERSAL PRODUCT NUMBER ACT OF 1997

  Mr. GRASSLEY. Mr. President, on behalf of Senator Breaux and myself, 
I am introducing legislation today to require the use of universal 
product numbers [UPNs] for all durable medical equipment [DME] Medicare 
purchases. The purpose of this legislation is to improve the Health 
Care Financing Administration's [HCFA] ability to track and to 
appropriately assess the value of the durable medical equipment it pays 
for under the Medicare Program. Very simply, our bill will ensure 
Medicare gets what it pays for.
  According to an interim report by the General Accounting Office [GAO] 
and the Office of Inspector General's review of billing practices for 
specific medical supplies, the Medicare program is often paying greater 
than the market price for durable medical equipment and Medicare 
beneficiaries are not receiving the quality of care they should. HCFA 
currently does not require DME suppliers to identify specific products 
on their Medicare claims. Therefore it does not know for which products 
it is paying. HCFA's billing codes often cover a broad range of 
products of various types, qualities and market prices. For example, 
the GAO found that one Medicare billing code is used by the industry 
for more than 200 different urological catheters, with many of these 
products varying significantly in price, use, and quality.
  Medicare's inability to accurately track and price medical equipment 
and supplies it purchases could be remedied with the use of product 
specific codes known as bar codes or universal product numbers [UPN's]. 
These codes are similar to the codes you see on products you purchase 
at the grocery store. Use of such bar codes is already being required 
by the Department of Defense and several large private sector 
purchasing groups. The industry strongly supports such an initiative as 
well. I am submitting several letters of endorsement for the record on 
behalf of the National Association of Medical Equipment Services and 
the Health Industry Distributors Association.
  This bill represents a common-sense approach. It will improve the way 
Medicare monitors and reimburses suppliers for medical equipment and 
supplies. Patients will receive better care.

[[Page S11686]]

 And the Federal Government will save money. I ask that my colleagues 
on both sides of the aisle support this legislation which I am 
introducing today with my friend and colleague, Senator Breaux.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1362

       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 Universal Product 
     Number Act of 1997''.

     SEC. 2. UNIVERSAL PRODUCT NUMBERS ON CLAIMS FORMS FOR 
                   REIMBURSEMENT UNDER THE MEDICARE PROGRAM.

       (a) Accommodation of UPNs on Medicare Electronic Claims 
     Forms.--Not later than February 1, 2000, all electronic 
     claims forms developed or used by the Secretary of Health and 
     Human Services for reimbursement under the medicare program 
     under title XVIII of the Social Security Act (42 U.S.C. 1395 
     et seq.) pursuant to part C of title XI of that Act (42 
     U.S.C. 1320d et seq.) or any other law shall accommodate the 
     use of universal product numbers (as defined in section 
     1897(a)(2) of that Act (as added by subsection (b))) for 
     covered items (as defined in section 1834(a)(13) of that Act 
     (42 U.S.C. 1395m(a)(13))).
       (b) Requirement for Payment of Claims.--Title XVIII of the 
     Social Security Act (42 U.S.C. 1395 et seq.) (as amended by 
     section 4015 of the Balanced Budget Act of 1997 (Public Law 
     105-33; 111 Stat. 337)) is amended by adding at the end the 
     following:


                   ``use of universal product numbers

       Sec. 1897. (a) Definitions.--In this section:
       ``(1) Covered item.--The term `covered item' has the 
     meaning given that term in section 1834(a)(13).
       ``(2) Universal product number.--The term `universal 
     product number' means a number that is--
       ``(A) affixed by the manufacturer to each individual 
     covered item that uniquely identifies the item at each 
     packaging level; and
       ``(B) based on commercially acceptable identification 
     standards established by the Uniform Code Council--
     International Article Numbering System and the Health 
     Industry Business Communication Council.
       ``(b) In General.--No payment shall be made under this 
     title for any claim for reimbursement for any covered item 
     unless the claim contains the universal product number of the 
     covered item.''.
       (c) Development and Implementation of Procedures.--From the 
     information obtained by the use of universal product numbers 
     (as defined in section 1897(a)(2) of the Social Security Act 
     (as added by section 2(b))) on claims for reimbursement under 
     the medicare program, the Secretary of Health and Human 
     Services, in consultation with interested parties, shall 
     periodically review the covered items billed under the Health 
     Care Financing Administration Common Procedure Coding System 
     and adjust such coding system to ensure that functionally 
     equivalent covered items are billed and reimbursed under the 
     same codes.
       (d) Effective Date.--The amendment made by subsection (b) 
     shall apply to claims for reimbursement submitted on and 
     after February 1, 2001.

     SEC. 3. STUDY AND REPORTS TO CONGRESS.

       (a) Study.--The Secretary of Health and Human Services 
     shall conduct a study on the results of the implementation of 
     the provisions in subsections (a) and (c) of section 2 and 
     the amendment to the Social Security Act in subsection (b) of 
     that section.
       (b) Reports.--Not later than 6 months after the date of 
     enactment of this Act, and annually thereafter, the Secretary 
     of Health and Human Services shall submit a report to 
     Congress that contains a detailed description of the results 
     of the study conducted pursuant to subsection (a), together 
     with the Secretary's recommendations regarding the use of 
     universal product numbers (as defined in section 1897(a)(2) 
     of the Social Security Act (as added by section 2(b) of this 
     Act)) and the use of data obtained from the use of such 
     numbers.
                                                                    ____



                           Health Industry Distributors Assn.,

                                 Alexandria VA., November 3, 1997.
     Hon. Charles Grassley,
     Chairman, Special Committee on Aging,
     U.S. Senate, Washington, DC.
       Dear Senator Grassley: On behalf of the Health Industry 
     Distributors Association (HIDA), I would like to applaud your 
     support for the use of universal product number (UPNs) on 
     Medical billings. HIDA is the national trade association of 
     home care companies and medical products distribution firms. 
     Created in 1902, HIDA represents over 600 companies with 
     appropriately 2500 locations nationwide. HIDA Members provide 
     value-added distribution services to virtually every 
     hospital, physician's office, nursing facility, clinic, and 
     other health care cities across the country, as well as to a 
     growing number of home care patients.
       HIDA has long supported the use of UPN's for medical 
     products and supplies. UPNs provide a standard format for 
     identifying each individual product. UPNs are a major 
     enabling factor in the health industry's efforts to minimize 
     fraudulent billings and automate the distribution process. 
     The Department of Defense (DOD) has taken a leadership 
     position in promoting the implementation of the industry 
     standards of UPNs. As a part of their decision to use 
     commercial medical products distributors, the DOD has 
     mandated the use UPNs for all medical/surgical products 
     delivered to DOD facilities.
       HIDA believes that the Medicare Program could benefit 
     greatly from the use of UPNs. By cross-referencing each UPN 
     with the HCFA Common Procedure Coding System (HCPCS) and 
     requiring the UPN on each claim for durable medical 
     equipment, prosthetics, orthotics and supplies (DMEPOS), 
     Medicare's ability to track utilization and combat fraud and 
     abuse would be greatly enhanced. By using UPNs, the Medicare 
     system would be able to correctly identify product 
     utilization. As UPNs provide a unique, unambiguous means of 
     identifying each item of DMEPOS on the market, Medicare would 
     have a record of the exact product used by the beneficiary. 
     Trends in product utilization and claims for ``suspicious'' 
     items would be easily identifiable. HCPCS alone can not 
     provide this information as many products of varying quality 
     and cost are included in a single code.
       In addition, problems with ``upcoding'' could be greatly 
     reduced through the implementation of UPNs. Upcoding occurs 
     when a beneficiary receives a product of lesser cost/quality 
     than the HCPCS billed to Medicare. UPNs would correctly 
     identify the specific item of DMEPOS, thereby making it 
     impossible to misrepresent the cost and quality of the item. 
     Importantly, by addressing the problem of upcoding, the 
     Medicare Program would take great steps in assuring that 
     beneficiaries receive the exact items of DMEPOS that they 
     were intended to receive.
       HIDA firmly believes that the Medicare Program and DMEPOS 
     industry would benefit greatly from the use of UPNs. This 
     standard would not only increase Medicare's understanding of 
     what it pays for, but also assist in the effective 
     administration of the Program. If HIDA can provide any 
     further information or be of any assistance, please contact 
     Ms. Erin H. Bush, Associate Director of Government Relations 
     at (703) 838-6110.
       Again, thank you for your interest in this important 
     matter.
           Sincerely.

                                         Cara C. Bachenheimer,

                                 Executive Director, Home Care and
     Long Term Care Market Groups.
                                                                    ____

                                          National Association for


                                   Medical Equipment Services,

                                 Alexandria, VA, November 3, 1997.
     Hon. Charles Grassley,
     U.S. Senate, Special Committee on Aging.

     Hon. John Breaux,
     U.S. Senate, Special Committee on Aging.
       Dear Senators Grassley and Breaux: The National Association 
     for Medical Equipment Services appreciates your October 27 
     letter requesting comment on your draft bill concerning use 
     of uniform product number on home medical equipment. On 
     behalf of our 1,200 member companies, NAMES is pleased to 
     endorse this bill. We look forward to working with you as it 
     proceeds through the legislative process. And, once enacted, 
     we would hope the Administration would work with the industry 
     to implement this law appropriately.
           Sincerely,
                                         William D. Coughlan, CAE,
                            President and Chief Executive Officer.
                                 ______