[Congressional Record Volume 147, Number 86 (Wednesday, June 20, 2001)]
[Senate]
[Pages S6519-S6521]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself and Mr. Kerry):
  S. 1066. A bill to amend title XVIII of the Social Security Act to 
establish procedures for determining payment amounts for new clinical 
diagnostic laboratory tests for which payment is made under the 
Medicare Program; to the Committee on Finance.
  Mr. HATCH. Mr. President, I rise to introduce the Medicare Patient 
Access to Preventive and Diagnostic Tests Act. This bipartisan 
legislation will establish new procedures under Medicare for 
determining the coding and payment amounts for clinical diagnostic 
laboratory tests. I am pleased to have my colleague, Senator John 
Kerry, as the lead Democratic sponsor of this bill. Similar legislation 
has been introduced in the House of Representatives by Congresswoman 
Jennifer Dunn and Congressman Jim McDermott. 
  Innovative clinical laboratory tests help save lives and reduce 
health care costs by detecting diseases, such as cancer, heart attacks, 
and kidney failure in their early stages, when they are more treatable. 
However, there are serious flaws in the way that the Center for 
Medicare and Medicaid Services, CMS, formally known as HCFA, currently 
sets reimbursement rates for diagnostic tests.
  This cumbersome bureaucratic system makes it difficult for physicians 
and laboratories to offer these diagnostic tests to their patients who 
need them. Due to institutionalized flaws in the current Medicare 
reimbursement system, revolutionary and innovative diagnostic tests may 
not benefit patients for years to come. In addition, it has been shown 
that lower laboratory payments correlate with lower utilization. The 
payment rates vary significantly from region to region and State to 
State.
  For example, in my home State of Utah, a patient is sent for blood 
work to test for kidney disease. Based upon the 2001 Medicare Lab 
Reimbursement schedule, the Utah lab would receive $2.12 for performing 
the test. However, labs in Arizona, Nevada, Montana, New Mexico and 
Wyoming, would receive $6.33 to perform the same test. This makes no 
economic or medical sense to me.
  A recent Institute of Medicine, IoM, report stated that Medicare 
payments for outpatient clinical laboratory services should be based on 
a single, rational fee schedule. Medicare should account for market-
based factors such as local labor costs and prices for goods and 
services in establishing the fee schedule. In addition, CMS should 
provide opportunities for stakeholder input and develop better 
communication with contractors while policies are being developed and 
after these policies are adopted.
  Our bill, based upon the principles of this IoM report, would require 
CMS to establish a national fee schedule for new and current tests, 
based upon an open, transparent, and rational public process for 
incorporating new tests, as well as to provide clear explanations of 
the reasoning behind its reimbursement decisions. This new process 
would be based upon science based methodologies for setting prices for 
new technologies that are designed to establish fair and appropriate 
payment levels for these items and services.
  CMS's procedures would provide that the payment amount for tests 
would be established under either the so-called gap-filling or cross-
walking methodologies, and they would specify the rules for deciding 
which methodology will be used and how it will be employed. In 
particular, the legislation would require that if a new test is 
clinically similar to a test for which a fee schedule amount has 
already been established, through cross-walking, CMS will pay the same 
fee schedule amount for the new test. In determining whether tests are 
clinically similar, CMS will not take into account economic factors.
  Finally, this new process would provide a mechanism for any 
laboratory or other stakeholder to challenge CMS fee schedule 
decisions. The cost of these changes is small in light of the 
significant impact on improving the quality of patient care.
  I hope my colleagues will join me in cosponsoring this bill. The 
laudable goal of this bipartisan legislation is to establish an open 
and transparent public process for incorporating new laboratory tests 
into the Medicare program. Many seniors currently do not have full 
access to the medical care they need due to the antiquated process for 
assigning billing codes and setting reimbursement rates. We need to 
bridge the gap between seniors and the life-saving lab tests they need 
to preserve their health and promote their well-being.
  I ask my colleagues to join with me in supporting this legislation 
and ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1066

       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 Patient Access to 
     Preventive and Diagnostic Tests Act''.

     SEC. 2. CODING AND PAYMENT PROCEDURES FOR NEW CLINICAL 
                   DIAGNOSTIC LABORATORY TESTS UNDER MEDICARE.

       (a) Determining Payment Basis for New Lab Tests.--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) The Secretary shall establish procedures for 
     determining the basis for, and amount of, payment under this 
     subsection for any clinical diagnostic laboratory test with 
     respect to which a new or substantially revised HCPCS code is 
     assigned on or after January 1, 2002 (in this subsection 
     referred to as `new tests'). Such procedures shall provide 
     that--
       ``(i) the payment amount for such a test will be 
     established only on--
       ``(I) the basis described in paragraph (10)(A); or

[[Page S6520]]

       ``(II) the basis described in paragraph (10)(B); and
       ``(ii) the Secretary shall determine whether the payment 
     amount for such a test is established on the basis described 
     in paragraph (10)(A) or the basis described in paragraph 
     (10)(B) only after the process described in subparagraph (B) 
     has been completed with respect to such test.
       ``(B) Determinations under subparagraph (A)(ii) shall be 
     made only after the Secretary--
       ``(i) makes available to the public (through an Internet 
     site and other appropriate mechanisms) a list that includes 
     any such test for which the establishment of a payment amount 
     under paragraph (10) is being considered for a year;
       ``(ii) on the same day such list is made available, causes 
     to have published in the Federal Register notice of a meeting 
     to receive comments and recommendations from the public on 
     the appropriate basis under paragraph (10) for establishing 
     payment amounts for the tests on such list;
       ``(iii) not less than 30 calendar days after publication of 
     such notice, convenes a meeting to receive such comments and 
     recommendations, with such meeting--
       ``(I) including representatives of each entity within the 
     Health Care Financing Administration (in this paragraph 
     referred to as `HCFA') that will be involved in determining 
     the basis on which payment amounts will be established for 
     such tests under paragraph (10) and implementing such 
     determinations;
       ``(II) encouraging the participation of interested parties, 
     including beneficiaries, device manufacturers, clinical 
     laboratories, laboratory professionals, pathologists, and 
     prescribing physicians, through outreach activities; and
       ``(III) affording opportunities for interactive dialogue 
     between representatives of HCFA and the public;
       ``(iv) makes minutes of such meeting available to the 
     public (through an Internet site and other appropriate 
     mechanisms) not later than 15 calendar days after such 
     meeting; -
       ``(v) taking into account the comments and recommendations 
     received at such meeting, develops and makes available to the 
     public (through an Internet site and other appropriate 
     mechanisms) a list of proposed determinations with respect to 
     the appropriate basis for establishing a payment amount under 
     paragraph (10) for each such code, together with an 
     explanation of the reasons for each such determination, and 
     the data on which the determination is based;
       ``(vi) on the same day such list is made available, causes 
     to have published in the Federal Register notice of a public 
     meeting to receive comments and recommendations from the 
     public on the proposed determinations;
       ``(vii) not later than August 1 of each year, but at least 
     30 calendar days after publication of such notice, convenes a 
     meeting to receive such comments and recommendations, with 
     such meeting being conducted in the same manner as the 
     meeting under clause (iii);
       ``(viii) makes a transcript of such meeting available to 
     the public (through an Internet site and other appropriate 
     mechanisms) as soon as is practicable after such meeting; and
       ``(ix) taking into account the comments and recommendations 
     received at such meeting, develops and makes available to the 
     public (through an Internet site and other appropriate 
     mechanisms) a list of final determinations of whether the 
     payment amount for such tests will be determined on the basis 
     described in paragraph (10)(A) or the basis described in 
     paragraph (10)(B), together with the rationale for each such 
     determination, the data on which the determination is based, 
     and responses to comments and suggestions received from the 
     public.
       ``(C) Under the procedures established pursuant to 
     subparagraph (A), the Secretary shall--
       ``(i) identify the rules and assumptions to be applied by 
     the Secretary in considering and making determinations of 
     whether the payment amount for a new test should be 
     established on the basis described in paragraph (10)(A) or 
     the basis described in paragraph (10)(B);
       ``(ii) make available to the public the data (other than 
     proprietary data) considered in making such determinations; 
     and
       ``(iii) provide for a mechanism under which--
       ``(I) an interested party may request an administrative 
     review of an adverse determination;
       ``(II) upon the request of an interested party, an 
     administrative review is conducted with respect to an adverse 
     determination; and
       ``(III) such determination is revised, as necessary, to 
     reflect the results of such review.
       ``(D) For purposes of this subsection--
       ``(i) the term `HCPCS' refers to the Health Care Financing 
     Administration Common Procedure Coding System; and
       ``(ii) a code shall be considered to be `substantially 
     revised' if there is a substantive change to the definition 
     of the test or procedure to which the code applies (such as a 
     new analyte or a new methodology for measuring an existing 
     analyte-specific test).
       ``(10)(A) Notwithstanding paragraphs (1), (2), and (4), if 
     a new test is clinically similar to a test for which a fee 
     schedule amount has been established under paragraph (5), the 
     Secretary shall pay the same fee schedule amount for the new 
     test.
       ``(B)(i) Notwithstanding paragraphs (1), (2), (4), and (5), 
     if a new test is not clinically similar to a test for which a 
     fee schedule has been established under paragraph (5), 
     payment under this subsection for such test shall be made on 
     the basis of the lesser of--
       ``(I) the actual charge for the test; or
       ``(II) an amount equal to 60 percent (or in the case of a 
     test performed by a qualified hospital (as defined in 
     paragraph (1)(D)) for outpatients of such hospital, 62 
     percent) of the prevailing charge level determined pursuant 
     to the third and fourth sentences of section 1842(b)(3) for 
     the test for a locality or area for the year (determined 
     without regard to the year referred to in paragraph 
     (2)(A)(i), or any national limitation amount under paragraph 
     (4)(B), and adjusted annually by the percentage increase or 
     decrease under paragraph (2)(A)(i));
     until the beginning of the third full calendar year that 
     begins on or after the date on which an HCPCS code is first 
     assigned with respect to such test, or, if later, the 
     beginning of the first calendar year that begins on or after 
     the date on which the Secretary determines that there are 
     sufficient claims data to establish a fee schedule amount 
     pursuant to clause (ii).
       ``(ii) Notwithstanding paragraphs (2), (4), and (5), the 
     fee schedule amount for a clinical diagnostic laboratory test 
     described in clause (i) that is performed--
       ``(I) during the first calendar year after clause (i) 
     ceases to apply to such test, shall be an amount equal to the 
     national limitation amount that the Secretary determines 
     (consistent with clause (iii)) would have applied to such 
     test under paragraph (4)(B)(viii) during the preceding 
     calendar year, adjusted by the percentage increase or 
     decrease determined under paragraph (2)(A)(i) for such first 
     calendar year; and
       ``(II) during a subsequent year, is the fee schedule amount 
     determined under this clause for the preceding year, adjusted 
     by the percentage increase or decrease that applies under 
     paragraph (5)(A) for such year.
       ``(iii) For purposes of clause (ii)(I), the national 
     limitation amount for a test shall be set at 100 percent of 
     the median of the payment amounts determined under clause 
     (ii)(I) for all payment localities or areas for the last 
     calendar year for which payment for such test was determined 
     under clause (i).
       ``(iv) Nothing in clause (ii) shall be construed as 
     prohibiting the Secretary from applying (or authorizing the 
     application of) the comparability provisions of the first 
     sentence of such section 1842(b)(3) with respect to amounts 
     determined under such clause.''.
       (b) Establishment of National Fee Schedule Amounts.--
       (1) In general.--Section 1833(h) of the Social Security 
     Act, as amended by subsection (a), is amended--
       (A) in paragraph (2), by striking ``paragraph (4)'' and 
     inserting ``paragraphs (4), (5), and (10)'';----
       (B) in paragraph (4)(B)(viii), by inserting ``and before 
     January 1, 2002,'' after ``December 31, 1997,'';
       (C) by redesignating paragraphs (5), (6), and (7), as 
     paragraphs (6), (7), and (8), respectively; and
       (D) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Notwithstanding paragraphs (2) and (4), the Secretary 
     shall set the fee schedule amount for a test (other than a 
     test to which paragraph (10)(B) applies) at--
       ``(A) for tests performed during 2002, an amount equal to 
     the national limitation amount for that test for 2001, and 
     adjusted by the percentage increase or decrease determined 
     under paragraph (2)(A)(i) for such year; and
       ``(B) for tests performed during a year after 2002, the 
     amount determined under this subparagraph for the preceding 
     year, adjusted by the percentage increase or decrease 
     determined under paragraph (2)(A)(i) for such year.''.
       (2) Conforming amendments.--Paragraphs (1)(D)(i) and 
     (2)(D)(i) of section 1833(a) of the Social Security Act (42 
     U.S.C. 1395l(a)) are each amended by striking ``the 
     limitation amount for that test determined under subsection 
     (h)(4)(B),''.
       (c) Mechanism for Review of Adequacy of Payment Amounts.--
     Section 1833(h) of the Social Security Act (42 U.S.C. 
     1395l(h)), as amended by subsection (b), is amended by adding 
     at the end the following:
       ``(11) The Secretary shall establish a mechanism under 
     which--
       ``(A) an interested party may request a timely review of 
     the adequacy of the existing payment amount under this 
     subsection for a particular test; and
       ``(B) upon the receipt of such a request, a timely review 
     is carried out.''.
       (d) Use of Inherent Reasonableness Authority.--Section 
     1842(b)(8) of the Social Security Act (42 U.S.C. 1395u(b)(8)) 
     is amended by adding at the end the following:
       ``(E)(i) The Secretary may not delegate the authority to 
     make determinations with respect to clinical diagnostic 
     laboratory tests under this paragraph to a regional office of 
     the Health Care Financing Administration or to an entity with 
     a contract under subsection (a).
       ``(ii) In making determinations with respect to clinical 
     diagnostic laboratory tests under this paragraph, the 
     Secretary--
       ``(I) shall base such determinations on data from affected 
     payment localities and all sites of care; and
       ``(II) may not use a methodology that assigns undue weight 
     to the prevailing charge

[[Page S6521]]

      levels for any 1 type of entity with a contract under 
     subsection (a).''.
       (e) Prohibition.--Section 1833(h) of the Social Security 
     Act (42 U.S.C. 1395l(h)), as amended by subsection (c), is 
     amended by adding at the end the following new paragraph:
       ``(12)(1) Notwithstanding the preceding provisions of this 
     subsection, the Secretary may not establish a payment level 
     for a new test that is lower than the level for an existing, 
     clinically similar test solely on the basis that the new test 
     may be performed by a laboratory with a certificate of waiver 
     under section 353(d)(2) of the Public Health Service Act (42 
     U.S.C. 263a(d)(2)).
       ``(2) Nothing in paragraph (1) shall be construed to limit 
     the authority of the Secretary to establish a payment level 
     for a new test that is lower than the level for an existing, 
     clinically similar test if such payment level is determined 
     on a basis other than the basis described in such paragraph 
     or on more than 1 basis.''.
       (f) Effective Dates.--
       (1) Establishment of procedures.--The Secretary of Health 
     and Human Services shall establish the procedures required to 
     implement paragraphs (9), (10), (11), and (12) of section 
     1833(h) of the Social Security Act (42 U.S.C. 1395l(h)), as 
     added by this section, by not later than January 1, 2002.
       (2) Inherent reasonableness.--The amendments made by 
     subsection (d) shall apply to determinations made on or after 
     the date of enactment of this Act.
                                 ______